Brown v. Hartford Fire Ins.

The defendant moves for a judgment non obstante veredic-to. Such a judgment may be rendered in favor of the plaintiff when the cause of action shown by the declaration is confessed by the plea and no bar pleaded. But a defendant cannot have such a judgment. He can only move in arrest of judgment if the bar shown by the plea be sufficient, and the matter found by the verdict does not answer it. Smith v. Smith, 4 Wend. 468; Schermerhorn v. Schermerhorn, 5 Wend. 513; Bellows v. Shannon, 2 Hill, 86. Still, this motion may be treated as a motion by the defendant to arrest the judgment, as was observed by the court in the case above cited from 0 Wend. It is, in effect, a motion to arrest the judgment for the plaintiff, and render one for the defendant; and though the latter cannot be done, it is necessary to consider whether or not the former should be ordered.

The ground taken by the defendants’ counsel at the argument was, that as the first and third pleas showed a sufficient bar as against the plaintiffs, on the record, it was not competent for them by their replication to show that a third person had an equitable interest which ought not to be affected; that the award barred the action by these *382plaintiffs, and therefore barred it as it respects every third person, whatever his equitable interest might be, so long as he should pursue his rights in their names. The authorities cited show this to be the rule in Westminster Hall. Gibson v. Winter, 5 Ad. & E. [5 Barn. & Adol.] 96; Wilkinson v. Linds, 7 Mees. & W. 81; Phillips v. Clagett, 11 Mees. & W. 84. For though the courts of law there will protect the title of the equitable owner of a chose in action, by refusing to receive a plea which is in fraud of his rights, they will not allow those rights to be shown, by way of replication, to what is a good plea in bar of the action of the plaintiff, nor will they permit those rights to he relied on at the trial. But the practice, not only of the courts of the United States, but, I apprehend, of most other courts in this country, is otherwise. In Welch v. Mandeville, 1 Wheat. [14 U. S.] 233, the defendant pleaded a settlement with the plaintiff of a former suit for the same cause of action. The plaintiff replied an assignment of the claim to a third person, with notice thereof to the defendant before the alleged settlement, and that such third person was prosecuting this action for his own benefit in the name of the plaintiff. The defendant demurred. The supreme court held the replication good. A similar decision was made by Mr. Justice Washington in Corser v. Craig [Case No. 3,255], and by the supreme court of New York in Briggs v. Dorr, 19 Johns. 95. In Jones v. Witter, 13 Mass. 304, the supreme court of Massachusetts allowed the equitable title and notice of it to he shown at the trial, in answer to a defense of payment to the plaintiff on the record. In Warren v. Emerson [Case No. 17,195], this court allowed the defendant to avail himself of his equitable ownership of the claim to defeat the plaintiff’s action thereon. Many other cases might be cited, but these are sufficient to show that if it appears from the record that the suit is rightly brought in the name of the plaintiff, for the benefit of a third person, and is not passed as against him, the judgment should be rendered on the verdict, although as against the nominal plaintiff the action is barred.

The first question therefore is, whether it appears from the record that the suit is rightly brought in the name of the plaintiffs. The case shown by the declaration is, that the plaintiffs, as trustees for one Thomas Brown, being interested in certain goods, obtained a policy of insurance thereon, to be underwritten by the defendants, in consideration of a certain premium paid by the plaintiffs as such trustees; and by the policy the defendants promised the plaintiffs to make good the loss by fire which might happen to the goods by paying the amount of such loss to the said Thomas Brown; that a«loss had occurred, and had been duly notified to the defendants, and all conditions precedent stipulated by the policy complied with, but the defendants had not paid the loss to the plaintiffs. The question is, whether the plaintiffs can, upon this state of facts, maintain hn action in then own names to-recover the amount of the loss. It does not appear that they had any interest in the-property, or in the insurance, except as-trustees; they held the property and paid the premium in that capacity; by the express terms of the policy the amount of the loss was made payable to their cestui que-trust; and it is not averred that they were empowered by him to bring the action. Though it is sometimes true that where insurance is effected by an agent or trustee in his own name for his principal or cestui que trust, the former may maintain the action; he cannot do so where it appears he-has no interest in the insurance, and no-authority from his principal or cestui que trust to sue, and the policy expressly makes the money payable to the principal or cestui que trust. Reed v. Pacific Ins. Co., 1 Metc. [Mass.] 166. In such a case the sole beneficial promise is, at all events, made to the principal or cestui que trust; and though the-agent or trustee stands as nominally insured in the policy, yet the face of the policy, as well as the substantive facts dehors the policy, show that the right of action is not in him. And if the court were to render a judgment in favor of the agent or trustee, it could not be a bar to another action for-the amount of the same loss, brought by the-party to whom, upon the facts as well as upon the face of the policy, the money actually belongs.

I am therefore of opinion that it does not appear, upon the face of this record, that the plaintiffs had the legal right of action in their own .names, on this policy. I think the action should have been brought, in the case stated by the declaration, by the person to whom, by the terms of the policy, the money was payable, who alone was interested in the insurance, and who had not authorized the suit. See Jefferson Ins. Co. v. Cotheal, 7 Wend. 72; Farrow v. Commonwealth Ins. Co., 18 Pick. 53; 2 Phil. Ins. § 1971. But if this were otherwise, I do not think the plaintiffs’ claim to a judgment on this record could be sustained. If we assume that the plaintiffs, as trustees, were empowered to adjust and sue for this loss, without any further authority from their cestui que trust, how can we declare, upon this record, that they were not also empowered to refer to arbitrators the question, what amount was due. The selectmen of a town (Boston v. Brazer, 11 Mass. 449; Dix v. Dummerston, 19 Vt. 262), or the agents of a town appointed to prosecute or defend against a claim (Buckland v. Conway, 10 Mass. 390; Schoff v. Bloomfield, 8 Vt. 472), an executor, or administrator (Jones v. Deyer, 16 Ala. 221), or guardian (Weston v. Stuart, 2 Fair. 326; Weed v. Ellis, 3 Caines„ *383253), may submit to arbitration tbe matters under their charge. So it has been held by the supreme court (Alexandria Canal Co. v. Swann, 5 How. [46 U. S.] 83) that power to sue and be sued includes power to submit to arbitration; and that power to agree on the price of land embraces a power to arbitrate its price. Now the submission to arbitrators of the question what is due under a policy of insurance is not only a legal mode of ascertaining the amount, but it is not unusual in practice, and I do not remember ever seeing a policy of insurance which did not expressly stipulate for such submission. If, therefore, it be assumed that the plaintiffs, as trustees, had power to adjust and collect this loss, and to sustain a suit for it in their own names, how can I say, from anything which appears on this record, that they had not power to adjust the amount of the loss by an arbitration; and if they had, the failure to obtain the consent of the cestui que trust, which is the matter found by the jury, becomes immaterial, and the plea of a binding award remains unanswered.

There is one other view of the record. The plaintiffs insist that the award was not binding because the assent of the cestui que trust to the submission was not obtained. But they do not show any assent of the cestui que trust to this suit. Nothing appears to prevent him from instituting a suit at any moment in his own name to recover this loss. Upon the allegations of this record it was his interest which was covered, his money which was paid for the premium, and the loss is made payable to him. If the award was not binding for want of his consent, how can he be bound by a judgment in this case, no consent to have his right tried and determined in this action being shown?

Upon the whole matter, my opinion is that the judgment must be arrested.