Pentz and others vs. The Receivers of the Ætna Fire Insurance Company, 9 Paige Ch. 568

The Chancellor. I think the vice chancellor erred in supposing the verdict of the jury upon the assessment was conclusive evidence, between these parties, as to the actual amount of the loss which the petitioners had sustained. As between the petitioners and the city corporation it was conclusive. And as the insurance company could have no claim against the city of New-York except through the petitioners, and as being subrogated to their rights, it would be conclusive as between the corporation and that company. But the decision of the supreme court in the case of The City Fire Insurance Co. v. Corlies, (21 Wend.

Rep. 367,) shows that the insurers were liable to the assured to the extent of their policies, notwithstanding the blowing up of the buildings. The application for an assessment against the corporation was, therefore, for the benefit of the insurers to the extent of the insurance, and for the benefit of the petitioners for the residue of the loss.

And if the jury, without any fault on the part of the assured, should refuse to give the whole amount of the loss, either because they thought some part of the property would undoubtedly have been destroyed by the fire if the buildings had not been blown up, or for any other cause, there is no principle which can make that decision conclusive as to the actual extent of the loss as between the insurer and the assured.

The fact that a part of the property would unquestionably have been lost by the fire if the buildings had not been blown up, would be a good reason for not including that amount in the assessment against the city. But it would be no reason for excusing the insurers from bearing their proportion of that loss which was covered by the policy.

Again i the proceedings against the corporation being for the benefit of the insurers as well as of the assured, the latter were entitled to a deduction from the amount recovered from the city corporation on account of the necessary costs and expenses of litigating that assessment through all the courts; and the loss of interest, if any, which had been sustained without any fault on the part of the petitioners.

The claim against the underwriters must therefore be adjusted by ascertaining the whole extent of the loss, at the cash value of the buildings and goods at the time of the destruction thereof, including the interest thereon until the time when the money was recovered under the assessment, and then deducting therefrom the amount received as the proceeds of the assessment; and charging the insurers with a proportionate share of the costs and counsel fees of that litigation in proportion to the benefit it was to them in limiting their liability under the policies.

But in such a manner as in no event to charge the insurers with more than the amount of the two policies, and the interest thereon from the 25th of May, 1836; when the amount of the loss became due and payable by the underwriters. If the receivers and petitioners cannot agree upon an adjustment upon these principles, the referees must review their report and ascertain the amount due, and report the same to the vice chancellor ; to the end that a proper order may be made thereon for the payment of the distributive share of the petitioners out of the funds in the hands of the receivers.

No costs are allowed to either party on this appeal ; and the proceedings are to be remitted to the vice chancellor.