The main issue before the court is whether under the present rules governing civil practice in the Superior Court a defendant in an interpleader suit may file a counterclaim against the plaintiff on an independent liability.
On June 16, 1948, the plaintiffs, Jersey Insurance Company of New York and American Equitable Assurance Company, by their agent, Harry Christine, each issued a fire insurance policy in the amount of $5,000, of which $2,500 covered a building and $2,500, bar and restaurant furniture,
fixtures and equipment therein contained, owned by the defendants, John Altieri and others, individually and trading as Altieri's Restaurant. The policies were for a term of one year from June 16, 1948, and loss, if any, was made payable to the defendants, Waldo J. Dittmar and others as mortgagees. The policies contained the standard mortgagee clause, naming the Dittmars as mortgagees "as their interest may appear." The Altieris were indebted to the Dittmars in the sum of $28,000 secured by a mortgage on the real property and a chattel mortgage on the personal property, both dated June 7, 1946.
On July 22, 1947, the defendant, Washington Trust Company, hereinafter referred to as "the bank," lent the sum of $9,000 to the Altieris, secured by chattel mortgages covering goods and chattels contained in the building.
The real estate mortgage and the chattel mortgages contained the usual covenant that the mortgagors would keep the property insured against loss or damage by fire. The bank did not have an insurance policy or certificate of insurance protecting its interest, but on January 22, 1949, it secured from the same Harry Christine, agent for the plaintiffs and also a director of the bank, endorsements on the above-mentioned fire insurance policies, which, it is alleged, were intended to cover the interest of the bank as mortgagee of the chattels. The endorsements were on forms denominated "New Jersey Standard Mortgagee Clause (for use in connection with Mortgage interest in Real Estate)" and provided for payment of loss to "Washington Trust Company of Washington, N.J., as their interest may appear."
On March 16, 1949, the property was totally destroyed by fire and the full sum of the policies, namely $5,000 each, became due and payable. On that date there was due to the Dittmars on their real estate and chattel mortgages a sum greatly in excess of the insurance proceeds, namely, $24,500, together with interest, and there was due to the bank $7,931.09, with interest.
The plaintiffs have filed a complaint of interpleader, praying, inter alia , that the defendants interplead and settle among
themselves their respective rights to the proceeds of the insurance, that the defendants be restrained from instituting any proceedings to recover the proceeds of the respective insurance policies, and that the plaintiffs be discharged from all liability to the defendants. The moneys due under the policies have been deposited with the Clerk of this Court, and an order has issued directing the defendants to show cause why the relief sought by the plaintiffs should not be granted.
The Dittmars have filed an answer and a cross-claim, claiming the full sum of $10,000, and have moved for summary judgment in their favor. The bank has filed an answer demanding that the complaint be dismissed and has made application for leave to file a counterclaim against the plaintiffs, the object of which is to reform the endorsements on the policies so that the proceeds thereof to the extent of the amount due the bank shall be payable to it.
The issues before the court are: (1) Is the plaintiffs' complaint of interpleader maintainable, (2) may the bank file a counterclaim against the plaintiffs and (3) are the ...