Harding v. Town of Townsend

Majority - Peck, J.

No, a defendant liable for an injury cannot reduce damages owed to the plaintiff by the amount the plaintiff received from an independent accident insurance policy. The court reasoned that there is no technical ground for such a defense, as the insurer and the defendant are not joint tortfeasors or joint debtors, and there is no legal privity between them. The insurance policy is collateral to the remedy against the defendant, having been procured solely by the plaintiff and at his expense, without any contribution from the defendant. As between the insurer and the defendant, the defendant—as the wrongdoer responsible for the breach of duty in maintaining safe highways—ought ultimately to bear the loss. It would be a "perversion of justice" to allow the wrongdoer to benefit from the injured party's prudence in obtaining insurance. Instead, the common principle is for the insurer, having paid the loss, to be subrogated to the insured’s rights against the wrongdoer. The court cited numerous analogous cases, including Mason v. Sainsbury and Clark v. The Inhabitants of the Hundred of Blythiny, which held that insurance payments do not reduce a defendant’s liability, and Yates v. Whyte and The Propeller Monticello v. Gilbert Mollison, which affirmed this principle in cases of collision damages. The court distinguished cases involving joint tortfeasors or actions under specific statutes (like the English wrongful death statute, where the recovery is for pecuniary loss to dependents rather than the deceased's direct injury), noting that even in those statutory contexts, the more reasonable doctrine is against reducing damages by life insurance proceeds, as supported by Althorp, Adm’r, v. Wolfe under a similar New York statute.