George v. Connecticut Fire Ins. Co.

On December 18, 1911, Joe George, one of the plaintiffs in error in this suit, sustained a loss by fire. The property so lost was insured under an insurance policy issued by the Connecticut Fire Insurance Company, of Hartford, Connecticut, a corporation, which is the defendant in error in this suit. On the 3rd day of January, 1912, Joe George assigned his interests under said policy to William George, who appears as the other plaintiff in error herein. Shortly after said loss, the insurance company demanded of Joe George that he submit to an examination pertaining to the property insured and the loss sustained by the fire, under the following provision of the insurance policy: "The insured shall also produce all the remains of the property hereby insured, whether damaged or not, and exhibit the same for examination and submit to examination under oath and subscribe to same, to any person named by the company." Joe George submitted to an examination under oath, but refused to answer certain questions demanded to be answered by the company. At the close of the said examination, the following colloquy took place between Joe George and the attorney for the insurance company: "Q. There is on file in the office of the register of deeds of Kay county, Oklahoma, chattel mortgage No. 45687, given by Joe George to Dan Bunnell, and covering four horses, eight cattle, three hogs, one wagon, one cultivator, and one buggy said mortgage being given to secure payment of the sum *Page 173 of $296.45. Did you give that mortgage? A. I have nothing to say. Q. Do you refuse to answer the question? A. I have nothing to say. Q. Then permit me to state to you that the Connecticut Fire Insurance Company here and now insists and demands that you answer said question and if you refuse to do so, such refusal must be under the pains and penalties provided in your insurance contract, No. 702538. Do you still refuse to answer the question? A. I have nothing to say. Q. Inasmuch as you refuse to answer my questions asked on behalf of said Connecticut Fire Insurance Company, I am unable to proceed further with this examination. Are you willing to sign the typewritten transcript of the proceedings here today? A. I do not refuse to answer any reasonable question that in any way pertains to the matter before us, and I am still ready to answer any questions propounded to me which in reason have any relation or bearing upon the insurance policy or property insured, but I do refuse to give the insurance company a complete history of my life and my family relations. I am willing to sign the said evidence as taken." This questioning shows the nature of said examination, and the attitude of the insurance company, also the attitude of the insured. After said examination, closing in the manner above stated and on, to wit, March 29, 1912, and within one year from the date of the fire, William George and Joe George filed suit in the county court of Kay county, state of Oklahoma, against the insurance company, defendant in error herein, upon said insurance policy to recover the loss incurred by reason of said fire. In said suit plaintiffs in error recovered judgment against the insurance company. From the judgment in the county court, the insurance company appealed to the Supreme Court and asked that said judgment be reversed and ordered dismissed by the Supreme Court for the reason that the insured, Joe George, had breached the provision of the insurance policy, heretofore quoted, by failing to answer certain of the questions propounded to Joe George in the examination, and in the manner shown by a portion of the examination given above. The Supreme Court sustained the contentions of the insurance company in said appeal, reversed the judgment of the county court, and ordered the dismissal of the suit of Joe and William George by the county court for the reason that Joe George, by refusing to answer the questions, had breached the examination provision of the policy as given above, and hence the suit was prematurely brought. The date of the opinion by the Supreme Court was the 19th day of November, 1915, and is found in 52 Okla. 432,153 P. 116, entitled Connecticut Fire Ins. Co. v. George et al. The following is the fifth paragraph of the syllabus of the case first decided by the Supreme Court: "5. In the application for an insurance policy, it was stated that the property was incumbered by chattel mortgage for $400. After the loss, there was found to be of record four chattel mortgages executed by the insured in a sum far in excess of $400, covering the same or similar property an that embraced in the policy. At the examination, the insured refused to answer whether or not he executed these mortgages. Held, the questions were pertinent and material to the issue, and the insured was precluded thereby from maintaining an action upon the policy until the questions were answered in an examination held according to the terms of the policy." On the 3rd day of January, 1916, in compliance with said mandate, the judge of the county court vacated and set aside the judgment procured by the plaintiffs in error herein against the defendant in error herein, the insurance company, and dismissed the action of the plaintiffs in error in the county court. On December 14, 1915, Joe George notified the attorneys of the Connecticut Fire Insurance Company, in writing, of his willingness to submit to an examination under oath, and in pursuance of the provisions of the insurance policy and the decision of the Supreme Court. The insurance company declined to accept the insured's offer for an examination, and on the 25th day of February, 1916, the insured filed a suit in the district court of Kay county, Oklahoma, against the insurance company, defendant in error, for the loss sustained by the fire, alleging the same cause of action that they did in the prior suit in the county court. On the 4th day of March, 1916, the defendant in error filed a demurrer to the plaintiffs in error's petition filed in the district court of Kay county and on the 23rd day of November, 1917, the judge of the district court of Kay county sustained the demurrer of the defendant in error to the petition of the plaintiffs in error. The cause is now in this court for review for alleged error of the trial court in sustaining said demurrer. The contentions of the defendant in error in said demurrer and the ruling of the trial court sustaining the same were based upon the following provision of the insurance policy: "No suit nor action on this policy for the recovery of any claim shall be sustained in *Page 174 any court of law or equity until after full compliance by assured with all the foregoing requirements, nor unless commenced within twelve months next after the loss occurred." The contentions of the defendant in error, in substance, were that the effect of the holding of the Supreme Court was that, since the assured had failed to comply with the provision as to the examination at the instance of the insurance company within the year, he thereby had no cause of action, and that the filing of the first suit was not a compliance with the above-quoted provision requiring suit to be filed within twelve months from date of fire, and that the second suit was not a continuation of the former suit and was based upon no cause of action, hence the trial court committed no error in sustaining the demurrer. The plaintiffs in error contend, in answer thereto, that the dismissal of the first suit by direction of the mandate of the Supreme Court justified them in filing their second suit, that they still had a cause of action subsisting in their favor and against the insurance company, and that their offer to comply with the provisions of the insurance policy and as directed by the Supreme Court and pertaining to an examination under oath, and the refusal of the company to accept said offer was sufficient to save the rights of the insured, and that the company waived said requirement and that said offer to submit to such examination being made within one year of the reversal of the cause in the Supreme Court and their cause not having been tried upon its merits, they had a right within one year to refile their suit and have said cause tried upon its merits. In support of this proposition, they invoked section 4662, Revised Laws of Oklahoma 1910, which reads as follows: "Limitation of New Action If any action be commenced within due time, and a judgment thereon for the plaintiff be reversed, or if the plaintiff fail in such action otherwise than upon the merits, and the time limited for the same shall have expired, the plaintiff, or, if he die, and the cause of action survive, his representatives, may commence a new action within one year after the reversal or failure." The holding of this court is that the contentions of the plaintiffs in error in the instant case are correct, and that the trial court committed error in sustaining the demurrer of the defendant in error, and that the plaintiffs in error were entitled to a trial upon the merits of their claim against the insurance company. We think the situation shown by this record brings the instant case within the above section of our statutes. The cause of action of the assured in the instant case arose at the time the fire occurred and the loss was sustained, and continues as a subsisting cause of action until barred by limitation. Shortly after the fire and after notice the insured appeared and submitted to an examination. The insured contends that by so doing he complied with the requirements of the policy, but which the insurance company contended was not a compliance therewith. Within one year after the loss the insured filed a suit. The insurance company contended in that suit that there was not a compliance with the provisions of the insurance policy and that the suit should be dismissed. The insured contended that he had complied. The trial court, on the first trial, sustained the contention of the insured and overruled the contention of the insurance company. Upon appeal to the Supreme Court, the contentions of the insurance company were sustained and those of the plaintiffs in error were overruled, and as a result of the holding of the Supreme Court the suit in the county court was dismissed. To such a situation section 4662, supra, is applicable. See the following authorities: Myers v. First Presbyterian Church of Perry, 11 Okla. 544, 69 P. 874; Wilson v. Wheeler, 28 Okla. 726, 115 P. 1117; Hatchell v. Hebeisen et al., 16 Okla. 223 82 P. 826; Myers v. Coonradt,28 Kan. 151; Taylor v. Miles, 5 Kan. 302; Scroggs et al. v. Tutt et al., 23 Kan. 127; McWhirt v. McKee, 6 Kan. 248; Seaton et al. v. Hixon et al. (Kan.) 12 P. 22; Smith v. Board of County Com'rs, Bourbon Co. (Kan.) 23 P. 642. We have examined the case of Giles v. Willmott (Fla.) 52 So. 287, and 81 So. 106, which the attorneys for the defendant in error discuss very extensively in their brief and hold to be in point. We find that it has no application to the case at bar. This was an action by a business solicitor for a division of commissions by real estate brokers. The facts appear to have been that the brokers were not to divide the commissions until they had received the same and they defended upon this theory in a suit by the solicitor, and the court merely held that the solicitor had no cause of action against the brokers until they received the commissions. If they never collected the commissions, they would not owe the solicitor anything. He might never have a cause of action. The condition precedent to the bringing of the suit inhered in the cause of action. Not so in the instant case. The cause of action arose, in the instant case, at the time of the loss. The following is the second paragraph of *Page 175 the syllabus of the case of Wever v. Pioneer Fire Ins. Co.,49 Okla. 546, 153 P. 1147: "Where a standard form of policy of fire insurance contains the provision that no suit or action shall be sustainable in any court of law or equity unless commenced within 12 months next after the fire, the period of limitation begins to run from the date of the fire, notwithstanding the policy also contains a provision that 'the loss shall not become payable until 60 days after the notice, ascertainment, estimate, and satisfactory proof of the loss herein required have been received by this company, including an award by appraisers when appraisal has been required." The contention of the defendant in error is that the opinion of this court in the former appeal destroys the cause of action of the plaintiffs in error. We do not think that the law as laid down by this court in the former appeal of this cause is such as to hold that the failure to comply with the requirements of the policy by the assured within one year destroyed said cause of action. And the holding of the court on the first appeal was not that a compliance with the condition of the policy that is in question herein inhered in the cause of action; in other words, that its breach destroyed the cause of action, or that its breach prevented a cause of action from arising in favor of the insured. The effect of the opinion was merely to hold a failure to comply prevented an enforcement of the cause of action until such a time as the condition had been complied with. The closing words of the 5th paragraph of the syllabus are as follows: "Held, the questions were pertinent and material to the issue, and the insured was precluded thereby from maintaining an action upon the policy until the questions were answered in an examination held according to the terms of the policy." If it had been the purpose of this court to hold in the first appeal that a failure to comply with the examination provision within one year would destroy the cause of action, the court would then have directed, no doubt, a different judgment than the one they did direct, fo the reason that the one year had expired at the time the opinion was handed down, and would, in that event, have directed a dismissal with prejudice. Section 4654, art. 2, Rev. Laws 1910, reads as follows: "Limitations Applicable. Civil actions can only be commenced within the periods prescribed in this article, after the cause of action shall have accrued; but where, in special cases, different limitation is prescribed by statute, the action shall be governed by such limitations." Under the above provision of the statutes it might be suggested that the standard policy provided for by our statute on Insurance, having this limitation provision included in it, would be a special case and a different limitation prescribed therein, and hence the tolling provision, relied upon by the plaintiffs in error in this case, would not apply thereto. The opinion rendered by Valentine, Justice, in the case of Beebe and Another v. Doster (Kan.) 14 P. 150, might be interpreted to hold section 4654 not applicable to this insurance provision, and being a special provision with a differing limitation, that the tolling provision did not apply. An investigation of that case, however, shows that it was applied to tax limitations pertaining to tax deeds and we do not think it is any way persuasive upon the determination of this matter. The following is the first paragraph of the syllabus of the case of Wever v. Pioneer Fire Ins. Co., 49 Okla. 546,153 P. 1146: "The provision in the standard form of fire insurance policy, provided for in section 3481, and contained in section 3482, Rev. Laws 1910, that 'no suit or action on this policy, for the recovery of any claim shall be sustainable in any court of law or equity until after full compliance by the assured with all the foregoing requirements, nor unless commenced within twelve months next after the fire,' is unambiguous, and in an action on the policy commenced more than 12 months after the date of the fire, will be enforced in accordance with the plain meaning of its terms where no extrinsic facts are alleged excusing delay in instituting the action." The law of this syllabus is to the effect that the limitation clause of the standard policy does not inhere in the cause of action, and may be relieved against upon a proper showing. There seems to be a conflict in the courts as to applying the tolling provision of a limitation statute, such as is provided in section 4654 of our Code of Civil Procedure, to limitations provided by contract or by special statute. In 17 R. C. L. 813, after stating that the tolling provision applies to the limitations provided in the Code of Civil Procedure, we find the following: "But as to whether a later action, brought after the period of limitation has expired, under a general permissive statute in that behalf, is saved from prescription by the bringing in due season of an earlier action for the same cause, when the parties have fixed by their contract, or a statute of particular application has prescribed, a special limitation, the courts differ." We find the following note to the case of Terre Haute I. R. Co. v. Zehner (Ind.) 3 L. R. A. (N. S.) 294: *Page 176 "As to whether a later action, brought after the period of limitation has expired, under a general permissive statute in that behalf, is saved from prescription by the bringing in due season of an earlier action for the same cause, when the parties have fixed by their contract, or a statute of particular application has prescribed, a special limitation, the courts differ Several, perhaps the majority, are of opinion that the saving statute does not apply. Some think it does. And, notwithstanding their numerical inferiority, the latter appear to have the better reason on their side." Here are some of the cases supporting the proposition that the permissive statute does not apply: Harrison v. Hartford F. Ins. Co., 102 Iowa, 112, 47 L. R. A. 709, 71 N.W. 220; Wilhelmi v. Des Moines Ins. Co., 103 Iowa, 532, 72 N.W. 685; Grier v. Northern Assur. Co., 183 Pa. 334, 39 A. 10; De Both v. Rich Hill Coal Min. Co., 141 Mo. 497, 42 S.W. 1081; Revelle v. St. Louds, I. M. S. R. Co., 74 Mo. 441; Gerren v. Hannibal St. J. R. Co., 60 Mo. 405; Parmeloe v. Savannah, F. W. R. Co., 78 Ga. 239, 2 S.E. 686. Some of those holding that it does apply are as follows: Titus v. Polle, 145 N.Y. 414,40 N.E. 228; Connolly v. Hyams, 176 N.Y. 403,68 N.E. 662; Meekins v. Norfolk S. R. Co., 131 N.C. 1, 42 S.E. 333; Hamilton v. Royal Ins. Co., 156 N.Y. 327, 50 N.E. 683, 42 L. R. A. 485; Hayden v. Pierce, 144 N.Y. 512. The first two cases cited above (the two Iowa cases) overrule the case of Jacobs v. St. Paul Fire Marine Ins. Co. (Iowa), found in 53 N.W. 101, which last case had held that the permission statute did apply to a conventional limitation. The case of Hamilton v. Royal Ins. Co., 156 N.Y. 327,50 N.E. 863, 42 L. R. A. 485, is a case well reasoned, involving virtually the same proportions involved in the instant case. The statutes of the state of New York fixed a standard policy, containing a similar provision to the standard policy of this state, and required the commencement of a suit within 12 months after the fire. The fire in the New York case happened on the 16th day of January, 1892. The summons was put in the hands of the sheriff for service on the 14th day of January, 1893, but was not served until the 17th day of January, 1893, one day over a year after the fire. The insured contended that the putting of the summons in the hands of the sheriff was a compliance with section 399 of the Code of Civil Procedure of New York, which section of the Code provides that an attempt to commence an action in a court of record is equivalent to a commencement of the action. The insurance company contended that the provisions of the Code of Civil Procedure did not apply to a limitation fixed in a contract by the parties, and that suit was not commenced until actual service was had upon the insurance company. If that rule was sustained, the suit was not begun in time under the stipulation provided in the contract for insurance. The court held that the Code of Civil Procedure applied, and that the putting of the summons in the hands of the sheriff commenced the suit and satisfied the provisions in the contract of insurance. The said case, quoting from page 487 of 42 L. R. A., states the following reasons for its holding: "Although it must be admitted that the precise question under consideration did not arise in either of the cases cited, still they involved the principle under discussion, and also plainly show that the opinion of this court was that the general provisions of chapter 4 apply as well to limitations prescribed by the written contract of the parties as to those where a different limitation is specially prescribed by law. The reasoning which shows the necessity for their application in one class of cases is equally applicable to the other, and the same rule should be applied to each. "It is obvious that by section 414 the Legislature intended to and did recognize the right of parties, by their written contracts, to prescribe a shorter limitation for its enforcement than that contained in the general limitations of the Code. It is equally clear that it intended to make the limitation prescribed by special statute, or by contract of the parties, a part of the general law controlling the limitation of actions, and to make all the rules of limitation recognized by that act subject to the general provisions of chapter 4. Any other rule would result in unsettling the law, and in many cases would work the greatest injustice. If those general provisions are not applicable to such a case, then we have a plain and definite system of law which governs one class of limitations, but no law of procedure whatsoever applicable to the other classes. "The language of section 399 is sufficiently broad to include the limitation in this case, as it declares that its provisions are applicable to each provision of the act which limits the time for commencing an action. When that section provides that a summons delivered to the sheriff of the proper county to be served is equivalent to the commencement of an action within the provisions of the act, it must have been intended to include limitations by contract, as that is one of its provisions limiting the time within which an action may be begun. Who, reading that statute, which plainly recognizes a limitation by contract would for a moment suppose that the *Page 177 delivery of a summons to the sheriff of the proper county with the intent that it should be actually served was not a commencement of the action in such a case. If it was not for the purpose of this statute that it should apply to such a case, then its effect is to create a snare to the unwary party and practitioner. "* * * What acknowledgment or new promise is necessary to relieve from the limitation? If these provisions do not apply to limitation by contract, then it necessarily follows that there is no law applicable to such a limitation or to regulate the procedure for its enforcement. When the parties entered into this agreement they have considered it in the light of the general provisions of the existing law relating to the subject. It must be presumed that the parties knew the law, and intended to make their contract in pursuance of it and that those general provisions were understood and considered by them when the policy was issued. Indeed, it would be unreasonable to suppose that when they provided for a shorter limitation it was not intended to be controlled and governed by the general provisions of the law relating to the subject, which were not in conflict with their agreement, especially when they are necessary to an orderly and uniform enforcement of the law." The defendant in error, in this case, cannot contend that this is a limitation provided by a private contract. As such, it would be void, since in contravention of the laws of this state. See the following Oklahoma cases: Keys Keys v. Williamsburg City Fire Ins., of Brooklyn, N.Y., 37 Okla. 482,132 P. 818; Seay v. Commercial Union Assurance Co., Limited, of London, Eng., 42 Okla. 83, 140 P. 1164. To uphold the same and invoke it, in this case, they must sustain it upon the ground that it is a statute of limitations provided by the Legislature of this state, and such we hold it to be. In the New York case that we have just cited, they held that even if the provision was held to be a limitation fixed by contract, the provisions of the Code of Civil Procedure and pertaining to limitations applied to it. But they held, as we hold in this case, that being provided in a standard policy fixed by the law of the state the provisions in the general Code as to limitations applied to it also, and in the sense that it was a statutory limitation. The language of the cited opinion then stated: "Practically, then, the limitation in this case was especially prescribed by law, and hence so directly within the principles of the decisions of the court in the Hayden and Litus Cases. Therefore, the conclusion that section 399 is applicable to and governs this case, and that the summons was served in time, and the action properly commenced, should be sustained both upon principle and authority." The New York case then takes up and discusses very fully the case of Wilkinson v. Insurance Company, 72 N.Y. 499, and holds that the ruling in that case does not contravene the ruling in the case we have been discussing. This is important for the reason that in the case of McElroy v. Continental Ins. Co. (Kan.) 29 P. 478, Simpson, Commissioner, refused to apply the tolling provision to an insurance policy containing the 12 months' limitation. He cites and quotes from the Wilkinson Case and seems to make it the main basis of the holding. We are disposed to follow the holding in the. New York case rather than the holding in the Kansas case, for the reason that we think it comports more with equity, right, and reason, and we do this notwithstanding the fact that our statutory limitations are adopted almost verbatim from the Kansas Code of Civil Procedure. Judge Sanborn refused to apply the tolling provision of the statute of this state in the case of Partee v. St. Louis S. F. R. Co., found in 204 Fed. Rep. 970. The tolling provision -was -sought to be applied to a special statutory cause of action which provided that an action must be commenced within two years after the wrongful act or death. The suit in that case was commenced within the two years, but failed otherwise than upon the merits. Another suit was begun after the expiration of the two years from the date of the wrong, and the circuit judge held that the cause of action had expired and that the limitation provided in the special statutory cause of action inhered in the cause of action, and that the cause expired with the limitation. Martin, Justice, who wrote the opinion in the New York case that we have been discussing, and cited above (Hamilton v. Royal Ins. Co., 156 N.Y. 327, 50 N.E. 683) differentiates the kind of a case that he was discussing and the kind of a case such as we have in the instant case, from the one like the one decided by Sanborn, Circuit Judge, in the following language: "Nor do we regard the decision in Hill v. Rensselaer County, Supervisors, (119 N.Y. 344), as adverse to or in conflict with the conclusion we have reached. In that case the right sought to be enforced was a special right for which a special remedy was given and a special limitation provided, and under the well-settled principle that where a new right is given or a new power conferred, by statute, and the means of executing *Page 178 it are granted, it can be executed in no other way than as provided by the statute, it was held that the limitation was so incorporated with the remedy as to become a part of it, and constituted a condition precedent to the maintenance of the action. It is doubtless true that where time is the essence of the right created, and a limitation as to the time of its enforcement is a part of the statute under which the right arises, so that there is no right of action independent of the limitation, the limitation extinguishes the right rather than affects the remedy, and such contracts are not subject to the exemptions contained in the statute of limitations. It was upon that principle that the Hill Case was decided, and it has no application to the case at bar." We have been unabie to discover that this court has ever decided the exact question involved herein, and it seems to be up to this court to set a precedent. There has been no case by this court that we have discovered, or that has been pointed out to us, that lays down a proposition that conflicts with our holding herein. If this court had established a precedent different from the holding made herein, and we knew what it was, we would be inclined to follow it. To repeat, not knowing of such a holding in conflict with our holding herein, our disposition is to follow the holding that appeals strongest to our view of the best reason for the rule. Our holding is that section 4662 applies in the instant case and that the plaintiffs in error have one year after the reversal of their suit by the Supreme Court in which to file the second suit; they having done so, the trial court committed error in sustaining the demurrer. This cause is, therefore, reversed and remanded with directions to overrule the demurrer and proceed to a trial of the cause. PITCHFORD, V. C. J., and McNEILL, MILLER, and NICHOLSON, JJ., concur. Supplemental Opinion, Sept 29, 1921.