Stockton Combined Harvester & Agricultural Works v. American Fire Insurance Co.

California Supreme Court Jun 10, 1898 No. Sac. No. 260Published

Before: Chipman

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Holding. The court held that the plaintiff company maintained its right to recover under a compromise agreement despite changes in the status of a loss-payee mortgagee, and that the statute of limitations did not bar the action because the amended complaints did not change the original cause of action.

Issues

Whether the plaintiff company's right to recover was defeated by the loss-payee's lack of participation in the arbitration or the subsequent cessation of her interest.
Whether the statute of limitations barred the action where amended complaints clarified the parties' interests but relied on the same underlying policy and compromise agreement.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The cause of action we do not think was changed, and hence the statute of limitations did not apply.”

“The agreement, as finally alleged and as found, was that defendant agreed to pay plaintiff company.”

Synopsis

Eibe Insurance—Loss Payable to Mortgagee—Cessation of Interest— Supplemental Complaint—Parties—New Agreement with Owner.— Where a policy of fire insurance named the owner of the property as the insured, and stipulated for payment of loss to a mortgagee, and a supplemental complaint in an action upon a new agreement made by the insurance company with the owner to pay a specified sum as its proportionate share of an adjusted loss, showed that the mortgagee, who was a party coplaintiff, had ceased to have any interest in the property, and that the mortgage had been fully paid and discharged since the commencement of the action, it is not essential to a recovery by the owner of the property that such mortgagee should have been a party to the new agreement, it being sufficient that she joined in the action, and remained a party thereto, and would he estopped by the judgment therein in favor of the owner.

Id.—Amended and Supplemental Complaints—Statute of Limitations.— Where the amended and supplemental complaints set up the same policy and the same new agreement with the defendant by way of compromise that were set forth in the original complaint, the difference being that in the original complaint the new agreement was described as being with the plaintiffs, while in the amended and supplemental complaints it was described as being with the owner of the property, and the mortgage was alleged to have been satisfied in the supplemental complaint, the cause of action is not changed by the amended or supplemental complaint, and the statute of limitations does not apply as of the date of either of them, but only as of the date of the original complaint.

Id.—Interest of Mortgagee—Ratification—Pleading— Judgment—Parts in Interest.—The interest of the mortgagee was still the same, and she ratified or adopted the new agreement, so far as she was concerned, by joining in the action thereupon; and, the policy being payable to her by its terms, she was a proper party in all forms of the complaint; and when her mortgage was paid, it was proper so to state by supplemental complaint, in order that the judgment, if any, might be for the party in interest.

CHIPMAN, C. This cause is submitted on substantially the same transcript as Sacramento No. 262, Stockton etc. Works v. Glens Falls Ins. Co., ante, p. 167. Two points are presented in this case by appellant not raised in the Glens Falls Insurance Company case.

1. The policy names the plaintiff company as the insured, but stipulates for payment of loss to one Eliza B. Buckles. It is now claimed by defendant that the insurers entered into no new agreement with Mrs. Buckles, such as is relied upon by plaintiff in the other cases, and also in this, that Mrs Buckles was not a party to the submission to arbitration, and it nowhere appears that Arnold, arbitrator for plaintiff company, had authority to speak for her, or in fact did represent her.

The final draft of the complaint, to which there was a supplemental complaint, and also several amendments, showed that Mrs. Buckles no longer had any interest in the policy, and that the agreements relied upon were made with the plaintiff company. The finding 4 was that on March 14, 1888, there was a subsisting mortgage upon a portion of the property of twenty-[184]five thousand dollars to plaintiff Eliza B. Buckles, and “that the loss in said policy of insurance, if any, was made payable by its terms to the said Eliza B. Buckles,” and that since the commencement of the action it had been fully paid and discharged, and that her interest in the property had ceased, as alleged in the supplemental complaint.

The agreement, as finally alleged and as found, was that defendant agreed to pay plaintiff company. Mrs. Buckles was made coplaintiff because the loss was by the terms of the policy payable to her, but the insurance was on the company property. When she ceased to have any interest in the policy or property it was proper to so state by supplemental complaint, and we cannot- see that the plaintiff company lost its rights thereby. There is no allegation of a joint agreement, between defendant and plaintiff company and Mrs. Buckles, alleged in the complaint as finally amended. The allegation of the final amended complaint is: “That thereupon said defendant and said insurers covenanted and agreed with said plaintiff, said Stockton Combined Harvester and Agricultural Works, as an adjustment of the entire of said loss and damage, to pay to sa-id plaintiff, the Stockton Combined Harvester and Agricultural Works, .... and said defendant and said other insurers agreed to pay, and said plaintiff agreed to accept,” etc. Mrs. Buckles, however, remained a party plaintiff to the close of the action, which was not changed in any essential features by amendments to the complaint. If it was not true that the defendant agreed to pay her the amount according to the compromise, it did agree to pay the harvester company, and that liability was not changed by failure to prove that Mrs. Buckles took part in the agreement. She joined in the action and would be estopped by the judgment in it.

Stockton Combined Harvester & Agricultural Works v. American Fire Insurance Co.

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