Embler v. Hartford Steam Boiler Inspection & Insurance

By the policy of insurance upon which this action is brought it is agreed that, in consideration of $375 paid by the pulp company, the insurance company, defendant, insures such pulp company, in the sum of $50,000, against all such immediate loss or damage as shall be caused to the property of persons specified, by explosion of either of its boilers, from October 12, 1891, to October 22, 1894, not exceeding in amount the sum insured. By a certificate attached to the policy and made a part of it, termed a “ special blanket,” it is further provided, in substance, that the pulp company is insured in the sum of $50,000 “ against loss or damage to property of every kind, wherever located, whether owned by the assured or by others, and for which the assured may be liable, resulting from the explosion or rupture of said steam boiler; also against loss of human life or injury to person, whether to the assured, to employees, or to any other person or persons, caused by such explosion or rupture, payable to the assured for the benefit of the injured person or persons, *189or their legal representatives in case of death, and not contingent upon the legal liability of the assured.” It is further provided that, in case of temporary injury, the liability of the insurance company shall not exceed fifty dollars per week, and in case of loss of life, their liability shall not exceed $5,000 for each life lost. It is also-further provided that in case of loss the damage to property shall be-first paid, and the remainder of the $50,000 only shall be applicable to loss of life or injury to person. It is provided in the policy itself that the loss by personal injury is to be based upon loss of wages of injured person, from the time of total disability.

It is by no means plain what the parties intended to accomplish by these provisions concerning loss of life, or injury to person, so-far as it applies to the employees of the assured, and I am in considerable doubt as to just what their contract upon that subject is.. It is plain, however, that whatever the agreement is, the only contracting parties are the insurance company and the pulp company. If, by their contract, so far as it extends to loss of life or injury to person, the sole purpose of such parties was to indemnify the pulp company against whatever loss should accrue to it by reason of the injury or death of its employee,, and if we may so construe the language which they have used, it is plain that the plaintiff cannot recover in this action, for the reasons so effectively stated by the trial judge. (See, also, French v. Vix, 143 N. Y. 90, 94.)

It 'is clear that, so far as injury to property is concerned, the contract is one of indemnity to the pulp company ; but it is urged by the plaintiff that, so far as it affects loss of life, the contract is not onecí indemnity. An insurance against loss of property by fire or otherwise is a contract of indemnity. A life insurance is not. It is “ a mere contract to pay a certain sum of money on the death of a person, in consideration of the due payment of a certain annuity for his life.” (Olmsted v. Keyes, 85 N. Y. 593, 598. See, also, Holmes v. Gilman, 138 id. 381.) And the plaintiff claims that the contract before us is of that character. The provision that payment, in case-of loss, is to be made “ to the assured for the benefit of the injured person or persons, or their legal representatives in case of death,”’ leads me to doubt whether the parties intended a mere indemnity to-the pulp company. So, also, the provision that payment was to be-mad e to the pulp company, without reference to its liability for the *190■injury, indicates that mere indemnity to it was not intended. If there was no liability from the pulp company to the person injured, it is difficult to see how any loss could accrue to such company against which indemnity could be needed, or upon which it could be estimated. So, also, if in no event the sum paid was to become the property of the pulp company — if such company was to receive it merely to the use of the injured person—-such a payment could not be considered as an indemnity to the pulp company, and we can hardly suppose it was intended as such.

But if the contract is to be considered as one by which the pulp company has insured the life of the deceased Provencha, the question arises whether it is a valid contract. “ A policy obtained by a party who has no interest in the subject of insurance is a mere wager policy.” (Ruse v. Mutual, etc., Ins. Co., 23 N. Y. 516, 523.) In Howard v. The Albany Ins. Co. (3 Den. 303) it is said, “ when the assured has no interest at the time the contract is made the policy is a mere wager,” etc. It may be that if the deceased Provencha had, at the time this contract was made, been under contract to the pulp company as its employee for a definite and unexpired term, so that the company would have then had a legal right to or an interest in his services, such company would have had such ■an interest in his life as would sustain a contract insuring it. But in the case .before us it does not even appear that, at the time of the contract, Provencha was an employee of the pulp company; nor ■does it appear that such company ever had any definite and continuing contract for his services. For aught that appears at the time of the contract he was an utter stranger to the company. And it is quite possible that at no time was he obligated to work for the company for a longer period than through the day. Under such circumstances the policy, so far as it undertakes to pay for the loss-of Provencha’s life, is a mere wager. It is invalid, and the pulp company could not recover anything upon it. No recovery could be had upon it by any person without proving that, at the time the policy was issued to the pulp company, such company had an insurable interest in Provencha’s life. (Ruse v. M. L. Ins. Co., above; cited.)

The act of 1892 (Chap. 690, § 55)Jias no application to the contract before us.

*191It is argued, however, that, because the policy provides that the payment to the pulp company is to be for the benefit of the person injured, such policy is not a wager, but a valid contract. I cannot see how that provision affects this question. Clearly, it was the pulp company that made the contract and procured the insurance. Even though the pulp company intended the insurance to be for the benefit of the person injured, the contract was still its contract. In no sense can it be said to have been the contract of the person injured, nor can the insurance be said to have been procured by the person injured. The pulp company did not assume to act as the agent for whomsoever .should be injured, so that the contract can be deemed to have been made with the person injured and for his own benefit. The provision that the payment is to be for the benefit of the injured person cannot be given any such force as that. The contract is in the name of the pulp company and the loss is payable to it, and there is no fact in the case authorizing the conclusion that it was contracting for any person other than itself. If the contract between it and the insurance company had been a valid one it might be that a trust would arise, as between the pulp company and the person injured, to hold the amount received to such person’s use. But conceding, as we must, that the insurance upon which this action is brought was obtained by the pulp company upon the life of a person in whom it had no interest, I am unable to see how any action can be maintained thereon by the pulp company or any one else.

I do not see how the rule laid down in Lawrence v. Fox (20 N. Y. 268) is important in this case. A man may insure his own life and provide that the loss be paid to a party in whom he has no. interest, and the beneficiary so named may recover on the policy the amount of the loss. (Olmsted v. Keyes, supra, 600.) But he may not insure the life of a person in whom he has no interest; and if he does, neither he nor the beneficiary named can recover upon it.

I conclude, therefore, that whether this contract be considered one of indemnity to the pulp company, or whether it be deemed an insurance upon the life of Proven cha, taken out by the pulp company, in neither view can this action be maintained.

Judgment affirmed, with costs.

All concurred, except Labdob, J., not sitting.

Judgment affirmed, with costs.