Atlas Mutual Insurance v. Downing

Opinion by William W. Porter, J., This suit is upon a policy of reinsurance against loss by fire. Among the clauses contained in the policy is the following: “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 insured with all the foregoing requirements, nor unless commenced within twelve months next after the fire.” Fires occurred on May 7, 11, 13 and 17, 1896, and July 1, 1896. For these losses the plaintiff company alleges that it is now entitled to recover from the Philadelphia Mutual Fire Insurance Company of which the defendant is the receiver. The summons in the present case issued on April 14, 1899, nearly three years “ next after the fire ” which last occurred. The limitation of the time for the bringing of suit is a provision binding upon the parties to the policy: Flynn v. Peoples’ Ins. Co., 4 Pa. Superior Ct. 137. The condition is contained in one of the clauses of the printed form. It is claimed to have been waived by certain other provisions attached to the policy. The defendant denies this. The question before us is therefore not one of estoppel or waiver based upon acts or statements dehors the writing, but one of construction. The first attached or added provision relied upon as waiving the clause of limitation is “ subject to the same risks, valuations, privileges, conditions, assignments and mode of settlement as are or were or may be assumed or adopted by the reinsured company and to cover such property as may be protected by the said reinsured company, and loss to be paid at the same time.” Assuming the law to be that added or attached clauses inconsistent with formal and printed conditions must override the latter, we are of opinion that the clause just quoted does not relieve the plaintiff company from the obligation to bring suit “ within twelve months next after the fire.” The burden of the plaintiff’s argument is laid on the language, “subject to .... the mode of settlement .... assumed or adopted by the reinsured company ” and “ loss to be paid at the same time.” The words “ mode of settlement ” relate to manner of adjustment. There is no express reference to the time within which it shall be made, while there is express limitation of the time for bringing suit. To say that the loss shall be paid “ at the [310] same time ” does not necessarily stop the running of the period of limitation, since the right of action accrued to the plaintiff company when the loss was incurred and ascertained, not when payment was made: Goodrich’s & Hick’s Appeal, 109 Pa. 523; Fame Ins. Co.’s Appeal, 83 Pa. 396. It is true, as contended by the plaintiff company, that where the language of a policy will admit of two interpretations that must be adopted which most favors the assured (Teutonia, etc., Ins. Co. v. Mund, 102 Pa. 94), provided it be a reasonable construction: Commonwealth Ins. Co. v. Globe Mutual Ins. Co., 35 Pa. 475. If, therefore, the mode of settlement is one within the provisions of the policy, as, for example, under the clause providing for arbitration, and this agreed mode of settlement results in deferring the ascertainment of the amount of the loss until a time beyond the period of limitation for the bringing of the suit, the clause of limitation must be restrained in its application. In the present case, however, no postponement in the ascertainment of the loss appears to have been occasioned by any cause within the expressed provisions of the policy. For, conceding everything except that the limitation clause is wholly abrogated by the added clauses, — that is, giving to the added clauses the most favorable construction that the plaintiff can claim, — it does not follow that the plaintiff could maintain the present action, much less that it was entitled to judgment for the entire amount of the claim. It is to be noticed that the plaintiff does not allege in its statement of claim that any one of these losses was not actually adjusted and payable before the expiration of twelve months from the date of the loss. For aught that is alleged the losses were .due and payable at once. True, it does appear that two of them were not paid until after that time, but this is as far as the statement goes. It does not allege that adjustment of the losses, or even payment, was deferred by reason of any condition in its policy or mode of settlement adopted by it. So far as now appears, and this is as far as we are compelled to go in this stage of the case, there was no legal obstacle in the way of bringing suit, or instituting proceedings equivalent thereto, and therefore no reason for refusing'to give effect to the limitation clause. Nor is the obligation to sue within «the year shaken by the terms of the paper attached to the policy at the time of can [311] celation and payment of returned premium. It is therein stated, inter alia, that it is “ understood and agreed that said Phila. Mutual Fire Ins. Co. is liable for all losses that may have occurred prior to this date.” This agreement was executed subsequently to the dates of the fires referred to in the statement of claim. The paper is not an independent undertaking, but, as asserted by both parties, is a part of the policy sued upon and is to be so construed: Grier v. Northern Assurance Co., 183 Pa. 334. The policy remained in force in respect to losses already accrued. Among the express provisions of the policy is the limit of time for the bringing of suit. The plaintiff company alleges in its statement that suit was first brought on this claim on July 21, 1897. This was more than twelve months after the date of the last firev It is asserted that immediately after the suit was brought it was ascertained that the Philadelphia Mutual Fire Insurance Company had been dissolved by order of court on or about May 28,1897. It is now contended that the intervention of the dissolution stopped the running of the contractual limitation. It is apparent that the delay in bringing the first suit was not occasioned by the dissolution since the fact of dissolution was not known to the plaintiff until after suit brought. Furthermore there is an insufficiently explained delay of nearly two years in securing the appointment of a receiver who might be made a party defendant. We are of opinion that the allegation of failure to bring suit “ within twelve months next after the fire,” set up in the affidavit of defense, should have prevented the entry of judgment. Without passing upon the other averments of the affidavit we reverse the judgment of the court below and award a procedendo.