Williams v. Vermont Mutual Fire Insurance

The opinion of the court was delivered by Davis, J. A verdict having been returned for the plaintiffs, for one half of the amount of the loss sustained by them in the destruction of their saw-mill by fire, the other half having previously been allowed and paid to Bliss, one of the plaintiffs, exceptions were taken by the defendants to the directions given by the county court, in respect to the issues of fact formed upon the defendants’ second and third pleas. A farther exception was taken to the decision of the county court, that, in order to exempt the company-from responsibility, upon the allegation that Williams,- one of the plaintiffs, fraudulently set fire to the mill, and thus caused its destruction, the same amount of evidence was necessary, which would be requisite to convict, on trial of an indictment for the same offence, — which is now abandoned. As to the other point, it is obvious, that the bill of exceptions is so imperfect, that it fails to present, with any distinctness, the points of law to which counsel have directed our attention. The. court, it seems, upon proof by the plaintiffs of the [228] two votes in reference to this claim, adopted by the directors in January and August, 1844, decided that the plaintiffs were entitled to recover. The principal question raised in argument is, whether the plaintiffs commenced this action within the time limited by the seventh section of the act incorporating the company; which section requires the action to be brought either in the county of Washington, the central place of business of the company, or in the county where the plaintiffs reside, or in that in which the property destroyed was situated, which two last are here the same, at the term of the court next after the directors shall have disallowed the claim in whole, or in part, unless such term occur within sixty days from such disal-lowance, — in which contingency, the action may be brought at the next succeeding term. The loss in this case, it appears, happened on the second day of September, 1843, — and notice in writing was given to the proper officers on the 27th of the same month. On the fourth of January, 1844, the directors, at a regular meeting to take this claim into consideration, voted to disallow it entirely, on the avowed ground that Williams had been indicted for setting the mill on fire. Notice of this determination was given to the plaintiffs on the 10th of the same January. This action was commenced at the April Term, 1845, previous to which time, and subsequent to the passing of the vote aforesaid, two regular terms of the county court intervened, one in April and the other in September, the earliest of which was more than sixty days after that vote. It is obvious, then, if the proceedings of the board on that occasion are to be regarded as the ‘determination,’ at the next court after which the action was required to be brought, the plaintiffs were too late and cannot recover. The plaintiffs contend, that they are not so to be regarded, — that the subsequent resolution of the same body in August, allowing to Bliss, in consequence of this loss, the sum of $195, being one half thereof, after deducting half of the property saved, should be taken in connection therewith; and that, when thus viewed, it cannot be said that any final determination was made, as to how much the company were willing to pay, or whether any thing, until this last vote was adopted. Or at any rate, it is supposed that these last proceedings may be regarded as an acknowledgment, or renewal, of the original [229] liability, and thus afford, as in ordinary cases- under the statutes of limitation, a satisfactory answer to the plea. Taken by itself, no one can doubt that the vote of January 4th was, in form and substance, a full and distinct determination of the board of directors, within the meaning of the seventh section of the act of incorporation, as construed by this court in the case of Dutton v. The Vt. Mutual Fire Ins. Co., 17 Vt. 369. The claim was wholly disallowed, on the ground of a supposed fraudulent and felonious destruction of the property insured, by Williams, one of the plaintiffs. It is not doubted, but that the fact, if true, would afford a sufficient justification for the vote, and a complete defence to any action that might be brought upon the policy. There would be no necessity of showing that Bliss participated in the fraudulent act. The plaintiffs could have treated the vote as such, and have brought their action at the April term of the county court, 1844, if they elected to sue in Rutland county. They omitted to do so, and before the subsequent proceedings of August 7th were had, their right of action had been barred four months. If the claimants could have sued there, were they not bound to do so? But I apprehend the last vote cannot be considered as a reconsideration of the former one. It does not purport to be such. There is no intimation, that farther investigations into the facts of the case had induced a change of views, in respect to the ground on which the whole claim was rejected. The former- vote is referred to, but not rescinded, vacated, nor modified as a rejection of the joint legal claim of Bliss and Williams, the joint owners of the saw-mill destroyed. The directors, apparently upon equitable considerations, inasmuch as no imputations of fraud rested upon Bliss personally, and in a spirit of gratuitous liberality, decided to pay one half ot the loss to him individually. He could have had no legal claim upon the company in that form. If he made one in the form in which it was finally allowed, it was a proceeding wholly independent of all regular action under the policy, and could consequently' affect in no way any rights or interests depending upon it. .We cannot, therefore, regard this collateral proceeding as having any effect in restoring to the two partners any joint rights, which, through their own negligence, had been extinguished before that proceeding was had, [230] Still less reason is there for holding, that the vole of August can be regarded as an acknowledgment and revival of the claim sued, expressly, or by implication in consequence of payment of a part, supposing payment to have followed the vote, — as it doubtless did. Is there good ground for the opinion, that a cause of action of this kind is susceptible of renewal, when once barred, as matters of indebtedness are, under the ordinary statutes of limitation? No inconsiderable portion of the argument of the defendants’ counsel has been devoted to this point. Nothing decisive can be predicated in respect to it, from the language of the act, which is, that the party may bring an action at a court next to be holden, &c., and not afterwards, — language very nearly identical with that used in the general statutes of limitation. It is quite different from that em ployed in respect to the presentation of claims to commissioners upon an insolvent estate, where, if not presented by the time prescribed. they are declared to be forever barred. Accordingly it was determined in the case of Hunt v. Fay, Adm’r,7 Vt. 170, that a creditor residing in New Hampshire, where the intestate had resided, who had failed to present his claims there, while the commission was open, had lost all right to have them allowed under an ancillary administration in this state, — they being regarded as extinguished. Nor is the action founded upon a tort, or to be regarded in the light of a penalty, and for that reason incapable of renewal, as determined in Hunt v. Parker, 1 B. & Ald. 92; Oothout v. Thompson, 20 Johns. 277. The claim is founded in contract. It is, however, a contract of a peculiar description, resembling a wagering contract; in which the Insurance Company, for a small premium advanced, and afterwards annually renewed by instalments graduated according to the aggregate losses of all the insured, undertake to. indemnify each one to a stated amount, in the event of a casual loss by fire. The amount for which they may become responsible greatly exceeds the premium paid, or agreed to be paid; and the liability depends upon a contingency, over which neiiher party has any control. For whatever the company may eventually have to pay, they become liable by positive stipulation, rather than upon a principle of natural justice, growing out of an adequate consideration received. So far as this liability exceeds the premium paid and secured, it more nearly resembles a penalty, than a simple debt, and thus would moré [231] naturally fall into the class of cases, in which statutes prescribing a time within which suits shall be brought are construed as limitations upon the liability, rather than mere denials of a remedy. Other considerations, arising from the nature of these contracts, and the necessity of prompt and speedy adjustment of all losses claimed, in order that all necessary assessments may be made while those, on whom they are to be made, remain members of the company, would seem to point to a similar result. In addition to this, the case is quite analogous to those contracts, in which there is a positive stipulation to do some act, provided specific demand be made within a specified time, or provided some other precedent condition be performed. The limitation is contained in the very act of incorporation ; it is, in effect, a part of the contract between the whole company in the aggregate, and every individual member. In the event of a loss, which is not adjusted by the corporation to the satisfaction of the sufferer, and if no reference shall be agreed on, the former become liable to a suit at law, provided such suit be instituted within a short but definite period, adjusted to its business exigencies. If the prescribed time be suffered to elapse without suit, there remains no longer a legal liability in any form. There is no indebtedness, which, though by the operation of the statute incapable of being enforced by suit, may nevertheless be reanimated and invested with that quality, by an acknowledgment, or new promise. Such we believe to be the proper construction of this act. It is unnecessary, therefore, to inquire whether the circumstances, which trSnagired, in this instance, subsequent to the 4th of January, w'ere of a character, which, in the ordinary case of a debt, would remove the statute bar, either as an acknowledgement of the debt, or a part payment. For the same reason it is unnecessary to examine into the correctness of the ruling of the county court in respect to the issue formed upon the third plea. The judgment of the county court is reversed and a new trial granted.