Opinion
December, 1895.
Lexow, Mackellar Wells, for appellants.
Carter, Hughes Dwight ( Arthur C. Rounds, of counsel), for respondent.
Stating the case in its essential elements only, it is this: The defendant Douglas R. Satterlee, as underwriter on a policy, insured the plaintiff against loss by fire; a loss occurring within the scope of the policy, he is sued as underwriter upon his promise of payment; and he demurs to the complaint as insufficient in substance. The policy, incorporated with the complaint, provides that "no action shall be brought by the insured to enforce the provisions of this policy except against the attorneys in fact as 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 responsibility hereunder."
The specific ground of demurrer is that an action against the attorneys in fact was a condition precedent to a right of action against the underwriters.
The provision of the policy, be it observed, is not that no action shall be brought against the defendant as underwriter until performance by the plaintiff of some condition precedent — the case to which President, etc., v. Pennsylvania Co. 50 N.Y. 250, and similar adjudications are applicable — but that in no event shall the defendant be sued for enforcement of his obligation. True, the defendant agrees to abide by the result of the action against the attorneys in fact as fixing his individual responsibility; but of what avail is such a stipulation? He is not the judgment debtor, and, of course, an execution cannot go against him upon the judgment against the attorneys. And, as no action may be brought against him, his agreement to abide the event of the suit against the attorneys is without legal sanction and dependent for performance on his own pleasure. A stipulation against enforcement of an obligation by judicial process is, in effect, an exemption from liability on the obligation; and upon principle, as well as by the adjudged cases, such a stipulation is void, and no answer to an action on the obligation. 1 Add. Cont. (3d Am. ed.) § 225; Jenkins Cent. Cases, p. 96, pl. 86; Furnivall v. Coombes, 6 Scott N.R. 522; Williams v. Hathaway, L.R. (6 Ch. Div.) 544.
It is urged, however, that provision for enforcing the obligation is supplied by the suit against the attorneys in fact; but these attorneys, as such, are not parties or privies to defendant's promise; and how can an action be maintained against a stranger to the contract? The attorneys neither made nor broke the promise, and for breach of contract only the delinquent promisor is responsible. Dicey Parties (2d Am. ed.), 223. The case is not of a contract with an agent for an undisclosed principal ( Meeker v. Claghorn, 44 N.Y. 349), but of a promise by the principal himself. Plainly, therefore, the provision for an action against the attorneys in fact is nugatory as an expedient for fulfillment of the defendant's obligation, and the plaintiff is still free to enforce his right by action against the defendant.
Again, a provision in a contract that the party breaking it shall not be answerable in an action is a stipulation for ousting the courts of jurisdiction, and as such is void upon grounds of public policy. Stephenson v. Ins. Co., 54 Maine, 70; Insurance Co. v. Morse, 20 Wall. 445, 451; 13 Am. Rep. 298, note; 25 id. 104, note; Prince, etc., Co. v. Lehmann, 5 L.R. Ann. 464; Nute v. Hamilton, etc., Ins. Co., 6 Gray, 174; Scott v. Avery, 5 H.L. Cas. 811, 847; Sanford v. Commercial, etc., Assn., 86 Hun, 380, 383; 147 N.Y. 326; 1 Add. Cont. (3d Am. ed.) § 258.
The defendant is not supported in his position by section 449 of the Code, which allows the trustee to sue, but does not suffer him to be sued; nor by section 1919, because it is not apparent that here is any such association or liability as the statute contemplates. McCabe v. Goodfellow, 133 N.Y. 89; Georgeson v. Caffrey, 24 N.Y.S. 971. Who shall be defendant in an action the law prescribes. And it is not competent to parties, by private convention, to supersede the legal provision. Sanford v. Association, 86 Hun, 380, 383; Evans v. Hooper, L.R. (1 Q.B. Div.) 45; Gray v. Pearson, L.R. (5 C.P.) 568; Hybart v. Parker, 4 C.B. (N.S.) 209.
Judgment and order affirmed, with leave to answer on payment of costs.
DALY, Ch. J., and BOOKSTAVER, J., concur.
Judgment and order affirmed, with leave to answer on payment of costs.