926, 74 A.L.R. 701, which involved an action on a fire insurance policy which contained a provision limiting action thereon to one year after damages occur, which was in accord with the Mexican law where the policy was issued, an action was brought thereon in Texas after the year limit had expired. A Texas statute provided that the time limit in such policies could not be made less than two years. The Supreme Court, in an opinion by Justice Brandeis, held that the rights of insurers under the above provision in said contract, could not be abridged or affected by the Texas statute, and said, inter alia:
"The Texas statute as here construed and applied deprives the garnishees of property without due process of law.
* * *
"When, however, the parties have expressly agreed upon a time limit on their obligation, a statute which invalidates the agreement and directs enforcement of the contract after the time has expired increases their obligation and imposes a burden not contracted for."
If a statute or rule is capable of two constructions, one of which would render it constitutional, the other unconstitutional, the constitutional construction should be adopted. Anniston Mfg. Co. v. Davis, 301 U.S. 337, 57 S. Ct. 816, 81 L. Ed. 1143; Blodgett v. Holden, 275 U.S. 142, 148, 276 U.S. 594, 48 S. Ct. 105, 72 L. Ed. 206; Chippewa Indians of Minnesota v. United States, 301 U.S. 358, 376, 57 S. Ct. 826, 81 L. Ed. 1156; and National Labor Relations Board v. Fansteel Corporation, 306 U.S. 240, 265, 59 S. Ct. 490, 83 L. Ed. 627, 123 A.L.R. 599.
In Anniston Mfg. Co. v. Davis, supra, it is stated [ 301 U.S. 337, 57 S. Ct. 823, 81 L. Ed. 1143]: "We apply the familiar canon which makes it our duty, of two possible constructions, to adopt the one which will save and not destroy. We cannot attribute to Congress an intent to defy the Fifth Amendment or 'even to come so near to doing so as to raise a serious question of constitutional law.'"
This action could not have been brought against the Indemnity Company, nor could it have been joined as a party defendant before the "Rules of Civil Procedure" became effective because there was no authority therefor. Since the "Rules of Civil Procedure" became effective, it could not have been successfully separately sued or joined as a defendant, because the plaintiff did not have a cause of action against it. Such right of action could not arise until plaintiff had been paid the sum of $200,000 or a judgment had been procured in a court of competent jurisdiction against the Casualty Company in that amount.
I conclude that under the terms of the Indemnity Company bond to plaintiff, the payment to plaintiff of the sum of $200,000, or the procuring of a judgment against the Casualty Company in that amount, was a condition precedent to a right of action by the plaintiff against the Indemnity Company; that the covenant as to payment, or the procuring of judgment before the bringing of an action or proceedings against the Indemnity Company, vested a valuable substantive right in the Indemnity Company; that the Act of June 19, 1934, authorizing the adoption of the "Rules of Civil Procedure" protected the substantive rights of the Indemnity Company in this action against abridgment or modification; that to deprive the Indemnity Company of the covenant which plaintiff made that it could not bring any action or proceedings against the Indemnity Company until it had been paid the amount of the Casualty Company's bond, or judgment had been procured against the Casualty Company in said amount, would be equivalent to the taking of property without due process of law; that Rules 18(b) and 20(a) of the "Rules of Civil Procedure" can be and should be construed so as not to deprive the Indemnity Company of the aforesaid substantive right; and that the present action against The Home Indemnity Company should be dismissed without prejudice to plaintiff to bring action against the Indemnity Company after plaintiff has been paid the amount of the Casualty Company's bond, or judgment has been procured in said amount against the Casualty Company.
If the conclusion of the court is wrong and the contention of the plaintiff is correct, the result would be practically the same, as the court in the latter event would feel constrained to hold under Rule 20(b) that proceedings in this action as against the Indemnity Company should be postponed until judgment had been procured against the Casualty Company in the full amount of its bond, or the plaintiff had been paid the full amount thereof.
Let an order for judgment be prepared and submitted in accordance with the foregoing opinion.
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