Warfield-Pratt-Howell Co. v. Williamson

84 N.E. 706, 233 Ill. 487

Opinion

Mr. Justice Vickers

delivered the opinion of the court:

Plaintiffs in error first contend that even if the policies were in full force at the time of the loss, defendant in error should have brought a separate action at law against each of the five or six hundred subscribers for the pro rata share" that each was liable to contribute to pay this loss. To this contention there is more than one sufficient answer. In the first place, the language as well as the spirit of clause (g) in the agreement shows plainly that the subscribers did not contemplate that, they would be required to bring five or six hundred suits at law in order to collect for a loss, or that they would be called upon to individually defend suits that might be brought against them by other subscribers for losses. The hardship and annoyance which such a rule would, impose on subscribers would deter them from becoming members of such an association and render the organization of associations of this character impracticable. The agreement provides that the manager shall “appear for the subscribers in case of any proceedings at law being taken against them in connection with any policy, and in their name defend, compromise or settle the same.” It is also the duty of the manager to collect all sums due the subscribers by virtue of their agreements, and it is equally his duty-to adjust and settle all losses out of the funds paid to him for that.purpose. It is. not disputed that.at the "time this bill was filed there were ample means on hand to pay this loss without calling upon the subscribers for contribution. It thus appears that by the very terms of the agreement itself the manager was authorized to represent all of the subscribers in any litigation that might be brought in which they were mutually concerned. The agreement clearly constituted the manager the agent of all the subscribers, to represent them, both in and out of court, in the settlement of any litigation or other difference that might arise. A suit against the manager in his representative capacity is, in effect, a suit against the subscribers, and a judgment or decree against him will bind them to the extent that they are liable to contribute toward its payment. We are clearly of the opinion that the manager represents all the subscribers, and that a judgment against him in an action at law or a decree in an action in equity is binding upon the indemnity company.

If there were no express clause in the agreement authorizing the manager to appear for and represent all the subscribers in litigation against the members, it would still" not be necessary, in an equitable proceeding against the association, to make all of its members parties and serve them with process. In such case the rule that all persons interested in the subject matter in controversy should be made, parties would not apply, but the case would be controlled by an exception to that rule, that where the parties are numerous and it is impracticable to bring them all before the court, service upon a part, to act for the other members of the association as well as for themselves, will be a sufficient service upon the whole. (Guilfoil v. Arthur, 158 Ill. 600; Fitspatrick v. Rutter, 160 id. 282; Story’s Eq. Pl. sec. 111.) There are many cases to be found where suits in equity have been sustained against voluntary unincorporated associations where service was had upon some agent, committee, manager or trustee, who in some sense might be said to represent the body of the membership.

In view of the fact that the manager in the case at bar is expressly authorized and empowered to represent the subscribers in all litigation that may arise in relation to any policy, we do not think that the jurisdiction of a court of equity can be sustained on the ground that it will prevent a mutiplicity of suits at law, since, as already pointed out, a multiplicity of suits is obviated by the express terms of the agreement.

Plaintiffs in error seek to maintain the proposition that since the relation of the parties, as well as the relief sought, is purely legal, equity has no jurisdiction. Defendent in error seeks to uphold the jurisdiction of equity on the ground that the case falls within the exclusive jurisdiction of a court of equity. Neither of these contentions is sound. In our opinion the case belongs to that class where both the primary rights and the relief sought are purely legal and therefore cognizable in a court of law, but of which a court of equity will take jurisdiction on the ground that, owing to the methods of procedure and the means available to carry its decrees into execution, its remedies are more adequate, complete and prompt than those afforded by a court of law. Defendant in error in the case at bar is the holder of six policies of insurance on which it claims a liability against plaintiffs in error on account of the loss of its goods by fire. There is nothing in the character of the rights or in the ultimate relief sought that distinguishes this case from any other claim under an insurance policy for loss. It would be a very unusual state of facts if one holding a fire insurance policy could not maintain an action at law thereon to recover for a loss. We see no reason for holding that the policies involved in this suit might not be sued on in a court of law. It does not follow, however, that because the case is one in which a remedy at law is afforded, equity will not also take jurisdiction of the same state of facts to afford the same redress. If the remedy in equity is more adequate because of some special circumstance of the situation, the jurisdiction of equity will be sustained. In the case at bar the ultimate relief sought is the satisfaction of a legal demand, but this demand is to be paid out of a particular fund created or to be created by contributions made by a large number of persons, which is either in the hands of the manager or is to be collected by him from the subscribers. It may become necessary, before the decree is satisfied, to require the manager to perform some or all of the personal duties which he has assumed in respect to the collection and disbursement of the funds of the indemnity company. If so, the procedure in courts of equity is peculiarly well adapted to enforce the performance of any personal act required of plaintiffs in error in order to obtain satisfaction of the decree. One of the oldest maxims of equity is that it acts in personam—not in rem. A decree- in chancery speaks in words of command to the defendant, but to carry it into effect some personal act of the defendant is required. For instance, equity determines that one party is the owner of the equitable title to land and decrees that a conveyance shall be made by the holder of the legal title thereof. Such a decree does not, ex proprio vigore, vest the title. The personal act of the defendant, or some one for him, in making the conveyance is necessary to carry the decree into effect. (1 Pom. sec. 428, et seq.) A court of equity has all the powers of a law court to enforce its decrees by an execution against the property of the defendant. In addition to the usual process of execution against the goods, chattels, lands and tenements of the defendant, a court of equity may, if necessary, attach the defendant and enforce a compliance with its decree by fine or imprisonment,—one or both,—or may direct a sequestration for disobedience to its decrees. (Hurd’s Stat. 1905, chap. 22, sec. 47.) By the flexibility of its procedure and the scope of remedies it is authorized to employ to secure satisfaction of its decrees, courts of equity are peculiarly well equipped to furnish complete and adequate relief in cases of this character. There is a legal obligation at the foundation of the suit, but difficulties may arise out of the manner in which the obligation rests upon the persons or property of plaintiffs in error or in the efficiency of the process belonging to the law court which makes the legal remedy inadequate. (Wylie v. Coxe, 15 How. 416; Barber v. Barber, 21 id. 582.) In Weymouth v. Boyer, 1 Ves. Jr. 416, Mr. Justice Buller says: “We have the authority of Lord Hardwicke that if a case was doubtful or the remedy at law difficult we would not pronounce against the equity jurisdiction. This same principle has been laid down by Lord Bathurst.” (See Society of Shakers v. Watson, 68 Fed. Rep. 630.) We have no doubt of the jurisdiction of a court of equity under the facts disclosed here.

Plaintiffs in error insist that the policies sued on were canceled by the letter of defendant in error written December 13, 1904. This contention cannot be sustained. Even if the letter relied on as effecting a cancellation is considered applicable to the policies issued to the Sioux City house, still such letter would not, ipso facto, cancel the policies, but would only work a cancellation at the expiration of thirty days, or prior to that time in case plaintiffs in error re-insured the risks or returned the premium and took up the policies. It is also to be noted that the letter of December 13 was only a notice of an intention to withdraw from the subscribership to the Indemnity Exchange. There was nothing said in the letter in regard to the cancellation of the policies. Policy No. 11,849, which was returned with the letter, was a policy designed as a renewal of a policy expiring on that date. This policy was never, in fact, in force, and if it had been it had nothing to do with the Sioux City property. The notice of an intention to withdraw as a subscriber would not, in and of itself, terminate unexpired policies., Under clause (f) of the agreement the manager, when requested by the subscriber, would at once discontinue further underwriting for him, and within thirty days thereafter it is provided all unexpired insurance shall be canceled or re-insured and the subscriber shall be paid by the committee his portion of all funds in their hands. After the receipt of the letter of December 13 nothing whatever was done by the plaintiffs in error until after the fire, when they sought to treat the policies as canceled. The occurrence of the fire fixed the liability of plaintiffs in error, and it was too late then to attempt to treat the policies as having been canceled on the 13th.

Finding no error in the record the judgment of the Appellate Court for the First District is affirmed.

Judgment affirmed.