Opinion
April Term, 1900.
H.K. Coddington, for the appellant.
Lloyd McK. Garrison, for the respondent.
In the month of April, 1896, the defendant was associated with several other persons under the name of the People's Fire Lloyds in the city of New York, in the business of issuing policies of fire insurance. Their general manager and attorney in fact in that business was one Benjamin T. Rhoads, Jr. A policy of fire insurance was issued to James C. Bradford in the amount of $2,000 in April, 1896; it was signed by Benjamin T. Rhoads, Jr., and it contained among other things the provision that "no action shall be brought to enforce the provisions of this policy, except as against the General Manager as Attorney-in-Fact, and representing all of the Underwriters; and each of the Underwriters hereby agrees to abide the result of any suit so brought, as fixing his individual liability hereunder." A loss occurred under this policy on the 11th of July, 1896, and Bradford, after taking the necessary steps to entitle himself to recover, assigned the policy to the plaintiff, who brought an action against Rhoads as general manager and attorney in fact of all the underwriters, including the defendant in this action. Rhoads appeared and answered, and by his action there was put in issue the execution and delivery of the policy to Bradford; the agreement of the underwriters to insure him against loss by fire on the property specified, and to pay him in the event of such loss upon his complying with the terms of the policy, their proportionate share, to wit, one-seventeenth; the destruction of the premises by fire and the right of the insured to recover the full amount of the policy; the various steps taken by the insured to comply with the conditions of the policy, and the assignment in writing by Bradford to the plaintiff of the policy. All these matters were necessarily determined in favor of the plaintiff in the action against Rhoads as general manager and attorney in fact of the underwriters. Judgment was entered in that action against Rhoads for $2,597.16 in favor of the plaintiff, and an execution was issued against him which was returned wholly unsatisfied. This action was then begun against Jones to recover the amount of his individual liability as one of the underwriters, being one-seventeenth part, or $152.78. The action was tried before the court without a jury, and resulted in a judgment for the plaintiff for the amount claimed, with costs, from which this appeal is taken.
It is objected that the execution against Rhoads was not issued against the fund, but against him as general manager and attorney in fact, but this objection is of no importance. There is no requirement in the policy that an execution should be issued upon the judgment as a condition precedent to the action of the insured against the underwriters.
The complaint in this action alleges that the defendant, with sixteen other persons named, were associated together and doing business in the city of New York as individual underwriters of certain policies of insurance issued by their general manager and attorney in fact, Benjamin T. Rhoads, under the name and style of the People's Fire Lloyds in the city of New York. That allegation is not denied in the answer. The policy signed by Rhoads was put in evidence, and the plaintiff then proved the judgment which had been procured against Rhoads. It is objected that that judgment was not evidence against the defendant. But that objection does not need much consideration. When one agrees to be bound by the result of a suit against another party he puts himself in privity with that party and a judgment in the suit is evidence against him, although he was not a party to it in terms and had no notice of the action. ( Rapelye v. Prince, 4 Hill, 119; Douglass v. Howland, 24 Wend. 35, 50 et seq.)
The defendant insists that the policy upon which the action was brought was void because it was issued in violation of the provisions of section 54 of the Insurance Law (Laws of 1892, chap. 690). That section prescribes that no person, partnership or association of persons shall engage in the business of insurance, except as agents of a person or corporation authorized to do so, unless he or they shall have deposited with the Superintendent of Insurance securities of the same amount required of an insurance company, and shall have received from him a certificate to the effect that they have complied with the law. The plaintiff made no effort to prove that the law had been complied with or that any certificate had been issued to the defendant, and the defendant claims, therefore, that this policy was void. But in this regard also the defendant is concluded by the judgment against Rhoads. Strictly speaking, this action is not brought upon the policy to insure, but upon the agreement of the defendant to be bound by the judgment against Rhoads. But it may be conceded that if the policy was void any agreement to be liable either for the whole or any part of it was also void. So far as the execution, delivery and validity of that contract was concerned it was necessarily determined in favor of the plaintiff by the judgment against Rhoads, because no judgment could have gone against Rhoads in that case unless the policy upon which the action was brought was valid. This suit is brought upon precisely the same agreement, and, therefore, the judgment against Rhoads is conclusive against the defendant here, not only as to every matter which was actually litigated in that suit, but as to every fact which, if set up, would have constituted a defense upon the policy although it was not made use of. ( Cromwell v. County of Sac, 94 U.S. 361; Pray v. Hegeman, 98 N.Y. 351; Embury v. Conner, 3 id. 511.)
The objections taken in this action are, therefore, not well founded and the judgment must be affirmed, with costs to the respondent.
VAN BRUNT, P.J., PATTERSON, O'BRIEN and McLAUGHLIN, JJ., concurred.
Judgment affirmed, with costs.