Savage v. Phœnix Insurance

Harwood, J.— Appellant’s counsel first insist that a party pleading a conditional contract, setting out its terms, and stating the cause of action thereon, cannot, after demurrer is sustained, upon leave of court allowing an amendment, “plead another and different contract, unconditional in its character and legal effect, showing a different cause of action from that originally stated.” This may be granted, and we do not see that the proposition is applicable to the case at bar. It is not pointed out how any such departure occurred in the pleadings filed in this case. The cause of action stated, whether completely or defectively, in the several complaints filed, is founded upon one and the same contract, namely, the alleged policy of insurance; and the purpose of the action is to recover the sum of $800, alleged to be due plaintiff by reason of said contract of insurance, and the — 466 — loss alleged. It is true the pleader in one complaint avers facts as to the performance of certain conditions of said policy on the part of plaintiff, and facts relied on to justify her delay in the performance of other conditions thereof, and also alleges facts concerning the conduct of defendant in relation to the alleged demauds of plaintiff on defendant in her attempt to obtain a settlement thereof, which are not alleged in the other complaints filed. But it does not follow therefrom that the cause of action stated is a “different cause of action from that originally stated.” Much space in the brief of appellant’s counsel is devoted to-a recitation of facts which they assert are admitted by reason of the averment of such facts in the answer, and the failure of plaintiff to properly deny the same in her replication. The pleadings in this case whereby the issues were finally settled (not including those which were superseded by filing amended pleadings) occupy sixty-four type-written pages of the record; the replication alone covering fourteen pages thereof. The material questions of issue, however, are not numerous, as plainly appears when these voluminous pleadings are carefully analyzed. After patient study of them, we cannot agree with counsel for appellant that the averments of the answer are not fully met by denials and the allegation of matters in avoidance in the replication. (Code Civ. Proc. §§ 109, 248; Swenson v. Kleinschmidt, 10 Mont. 478.) It is further contended by appellant that plaintiff cannot lawfully recover in this action, because the amount of the alleged loss was not fixed by arbitration and award, as provided by the terms of said policy, in the event of disagreement as to the amount of the loss. The clause of the policy pointed to reads as follows: “The amount of sound value and of damage to-the property, whether real or personal, covered by this policy, or any part thereof, may be determined by mutual agreement between the company and the assured, or, failing to agree, the same shall then, at the written request of either party, be submitted to competent and impartial arbitrators, one to be selected by each party, the two so chosen — in case of disagreement— to select a third, and the award of any two of whom, in writing, under oath, shall be binding and conclusive as to the amount of such loss or damage, but shall not determine the — 467 — validity of the contract, nor the liability of this company, nor any other question, except the amount of such loss or damage.” “It is furthermore hereby expressly provided and mutually agreed that no suit or action against this company for the recovery of any claim by virtue of this policy shall be sustainable in any court of law or chancery until after an award shall have been obtained, fixing the amount of such claim in the manner above provided.” These conditions were set forth in the answer, and it is averred therein “that no such award has been obtained, nor has defendant had an opportunity to obtain such an award,” because defendant “agreed with plaintiff that no such award could be made or obtained until after plaintiff had paid the premium aforesaid, and furnished defendant notice in writing forthwith of a claim for loss, nor until an inventory had been made, naming the quantity, quality, and cost of each article; and defendant avers that no premium hafe ever been paid, no notice was given forthwith in writing of any loss, nor has any inventory been made as aforesaid, nor has plaintiff done or performed any of the conditions precedent to be performed to entitle the plaintiff to an award under such proposed contract of insurance.” The defense that no arbitration or award was had fixing the • amount of said loss appears to be without force when considered.-, in connection with the facts shown in this case. It appears-• that very soon after said loss occurred, when plaintiff sought an adjustment and payment thereof, she was met by a denial . on the part of. defendant, through said agent Seyde, of all’ liá- - bility under said policy, and the assertion that said polieywas not in force when said loss happened. Defendant has constantly maintained that position, and consistently declined to entertain any claim of plaintff relating to said insurance, or to proceed in any manner, either by arbitration or otherwise,, towards an adjustment and settlement of said loss. Under these conditions, plaintiff could not obtain an award of the amount of said loss by arbitration by the mutual co-operation of both parties in choosing arbitrators and otherwise proceeding-as provided by the policy, and for this reason she is not prejudiced by the absence of such arbitration and award. Moreover, — 468 — the arbitration provided for in said policy was to take place when disagreement arose as to amount of loss. No such disagreement ever arose concerning the amount of the loss in question. The disagreement in this case was an absolute and unconditional denial of the existence of said alleged policy, or any liability thereon by defendant; while plaintiff maintained on her part that said policy was in force when said loss occurred, and that defendant was liable therefor to the amount stated in said policy. Defendant, consistently with the position it assumed as to said alleged policy, and its liability thereunder, repelled every effort made on the part of plaintiff to obtain an adjustment of said loss. It plainly appears from the attitude of the parties that the occasion for resorting to arbitration did not and could not arise while such attitudes were maintained. (Randall v. American Fire Ins. Co. 10 Mont. 340; 24 Am. St. Rep. 50, and cases cited.) The assertion of that defense appears strangely inconsistent and illogical when viewed in connection with other positions assumed by defendant in its answer, because insisting that arbitration should have been had to ascertain the amount of loss carries with it the implication that a contract of insurance existed; that defendant was liable in some amount; that merely an erroneous valuation of the property destroyed was made by plaintiff; and that defendant would have co-operated in seeking an agreement as to the amount of loss, and concurred in such arbitration, if necessary. These implications are in direct antagonism to the main ground of defense set up, namely, that the alleged policy of insurance was not in force. It is further contended by appellant that the condition of said policy was not fulfilled on the part of plaintiff in reference to giving notice of such loss to defendant. The policy required that “persons sustaining loss or damage by fire shall forthwith give notice in wilting to the company.” It is not pretended that notice was withheld, or that defendant did not have actual and immediate notice of said loss. The facts show that defendant had notice, through its said agent Seyde, at the place where said fire occurred, and had full knowledge of, and opportunity to investigate said loss; that plaintiff, in person and by her agent, immediately after said fire, communicated with defendant — 469 — through said agent Seyde concerning the policy in question, and the alleged loss thereunder, and submitted said policy to defendant, through said agent, but no written notice ivas then given. It further appears without dispute that defendant, through said agent, without waiting for formal written notice of said loss, interposed in the matter of plaintiff’s claim of insurance under said policy, and asserted to plaintiff that defendant was not liable under said policy, which plaintiff was claiming to exist between herself and defendant. These facts show that all reason for giving such notice in writing was removed by the presence and conduct of defendant in relation to the matter in question. (Clark v. New England etc. Ins. Co. 6 Cush. 342; 53 Am. Dec. 44.) It is a principle sanctioned by universal approval that even the force of law ceases when the reason therefor ceases. ■ Another principle is that notice required in proceedings of most solemn nature may be waived by appearance and participation of the parties concerned in the proceedings in question. Nevertheless, plaintiff, in seeking to carry out the requirements of said policy on her part, on or about the thirtieth day after said fire occurred, delivered to defendant, through said agent, a written notice of the occurrence of said loss. Defendant, through its general agents, Brown, Craig & Co., returned said papers, saying: “We received through Mr. Charles Seyde, agent for the Phoenix Insurance Company of Brooklyn, at Miles City, your letter to him, notifying him of the burniug of the property claimed by you as insured by said company under policy No. 94,415.” After thus receiving said paper, and referring to it as “notifying” said agent of said loss, defendant claims in its defense to this action that it was not such a notice. The claim that the company had no sufficient notice of said loss is, we think, without merit. The substantial issue in this case was whether or not the premium for said insurance had been paid by plaintiff. The pleadings on the part of plaintiff alleged the payment of the premium required by defendant for said policy. On the part of defendant it was denied that any consideration for the alleged insurance had been paid, and that for such delinquency the policy in question had been canceled before the fire. Upon — 470 — tliis issue the jury found for plaintiff, and there is evidence in the record sustaining that finding. The policy bears date August 4,1888, and it appears therefrom that it was first issued in consideration of $13.20; and it is recited in the policy that “the Phoenix Insurance Company of Brooklyn, New York, in consideration of the conditions, limitations, and requirements of this policy, hereinafter mentioned, and of the receipt by tin's company of $13.20, will indemnify Mary E. Savage of Livingston, Montana, agaiust loss or damage by fire to the following specified and located property, only to an amount not exceeding the actual cash value of the property herein described at the time of such loss, and in no event to exceed $800.” George Savage, plaintiff’s son, testified that some time during August, 1888, money was left with him by plaintiff’s husband, sufficient to pay said premium of $13.20 to said agent Seyde, and that he was requested to pay the same to said agent; that on the following morning after he received said money he went over and paid Mr. Seyde the amount, being something over $13. He testified that two or three weeks afterwards “they sent me money from Livingston, to pay the balance on the policy to Mr. Seyde. It was six or seven dollars; somewhere along there. I cannot state the amount. I went there and paid Mr. Seyde seven or eight dollars. He wanted to know if I wanted the policy. I told him, ‘ No,’ but that he could send it to Livingston.” This witness further testified that he did not know whether those payments were intended to apply on the policy in question or not. Charles W. Savage, husband of the plaintiff, testified that the policy in question was issued somewhere about the 1st of August, and was sent to him at Livingston. In the course of his testimony, he said: “I came down here [Miles City] during the latter part of August on business, and while here went to Mr. Seyde’s office to pay for this policy, but could not get in. Saw my son George. Told him I went to pay for that policy, and would leave the money with him, and told him to go and pay it. Gave him $15. I told him it was something about $14. Did not owe Seyde any premiums for insurance, except on this particular policy, at that time. About the latter part of August I received a letter from Mr. Seyde, stating that — 471 — the rate had been raised, and wanted the policy returned. I returned this policy to Mr. Seyde. He stated the amount had been raised, but I don’t remember the exact amount. I sent back the policy to Mr. Seyde, and a check payable to my son George for $10, and told him to pay whatever the premium was. The policy was returned to me some time during the month of September. This red ink indorsement was on the •face of it at that time.” A letter from said agent Seyde was identified by this witness as the one which accompanied the policy in question when it was first sent to Livingston, which letter was introduced in evidence, and reads as follows: “Your Phcenix policy No.1,029, on furniture in dwelling in rear of •store, expired on the 4th instant. Under instructions of Mr. George Savage, I have renewed the risk, and hand you enclosed ■new policy, No. 94,415. Your remittance of $45, of July 23d, came duly to hand. Many thanks.” Witness Charles W. Savage, in his testimony, explained that the remittance of $45, mentioned in said letter, had no relation to policy No. 94,415 in question in this case, but was in payment for another policy witness had received from said agent. In this connection the witness said: “I paid Mr. Seyde everything I owed him. That payment of $45, with other payments, settled everything I owed him.” In two instances, witness Charles W. Savage testifies that when said money was left with George Savage to pay the respective amounts called for as premium on the policy in dispute in this case, no other sum was owing to said agent for insurance policies issued to members of the Savage family at Livingston. This witness testifies that the money left witli George Savage to pay said agent was for the purpose of making the payments, required on the policy in question in this action, and, if no other money was owing to said agent on any other account at the time, by members of the Savage ■family at Livingston, these facts, which are not disputed by any testimony offered on the part of defendant, tend to show .that said payments, if made, were made upon the policy in dispute here, notwithstanding George Savage did not know •on what particular policy the payments were intended to apply. — 472 — The indorsement on the policy mentioned in the testimony of Charles W. Savage reads as follows: — “Indorsement: Miles City, Mont., Sept. 20, 1888. “The rate on this risk having been advanced to $2.75, the' receipt of $6.80 additional premium is hereby acknowledged. “Chas. W. Seyde, Agent.” This indorsement was said to have been made in red ink, and its terms positively declare the receipt of said sum of $6.80 as additional premium on said policy by said agent. With thisindorsement said policy was returned and delivered to plaintiff. According to.the testimony of agent Seyde, when he made and delivered this acknowledgment of receipt of said latter sum, neither that sum, nor the original sum of $13.20, premium first required, had been paid, and yet he indorsed on the policy a direct and positive acknowledgement of the receipt of said $6.80, and delivered the policy to plaintiff. This would seem to be a peculiar method of doing business if he was not paid said sum. His testimony is in direct conflict with the testimony of George Savage as to the payments which the latter asserts he made, and this is the principal conflict in the testimony offered in the case. George Savage testified that he paid the amounts required at two different times. Charles W. Savage testifies that he delivered those two sums to his son George, with direction to make said payments, and, in addition to this, it is shown without dispute that the policy, after receiving the indorsement acknowledging the receipt of $6.80 thereon, was forwarded to Livingston by said agent. This latter circumstance shown in evidence may have been the preponderating fact which drew the minds of the jury to the conclusion shown in. its verdict. Appellant argues that the premium on $800 insurance at the rate stated, $2.75 per hundred, would amount to $22, and plaintiff does not claim to have paid more than $20; therefore plaintiff did not pay the full amount of the premium at said rate required for said policy. That is true, and shows a mistake on the part of defendant through its agent Seyde. But it does not follow that the insurance fails because defendant did not charge as much premium therefor as it may have proposed to charge. If $13.20 was sufficient consideration for the issu — 473 — anee of the policy in the first instance, $6.80 additional premium would be sufficient consideration for the reissuance thereof. Counsel for appellant insists that it is shown by the evidence that said policy was canceled prior to the loss. The condition of the policy as to the termination thereof reads as follows; "This insurance may be terminated at any time at the request of the assured, in which case the company will retain only the customary short rates for the time the policy has been in force. The insurance may also be terminated at the option of the company, on giving notice to that effect, and refunding a ratable proportion of the premium for the unexpired term of the policy.” It is alleged in defendant’s answer that “on the seventh day of December, 1888, defendant, through its said agent, Charles W. Seyde, by registered letter, addressed to Charles W. Savage, agent and husband of the plaintiff, at Livingston, which letter was duly received by the plaintiff in this action, notified the plaintiff of the effect of her failure to pay the $22 agreed upon as before stated, and directed her attention to the cancellation conditions of her policy; but to pay said premium plaintiff then and there refused, and the same has not been paid.” This averment is not to the effect that said policy was canceled by defendant, by complying with its terms in that respect, but the averment is. that, in said communication to plaintiff, defendant “directed her attention to the cancellation conditions of her policy.” Moreover, it is admitted that defendant did not refund, or offer to refund, the amount of unearned premium, as part of the act of cancellation of said policy, if defendant intended to cancel the same. If the premium was paid, as found by the jury, the terms of the policy required defendant to refund a ratable proportion thereof, in order to terminate the policy; and it was not within the conditions of the policy to terminate it arbitrarily, without fulfilling that requirement, by calling the attention of the assured to the cancellation condition of the policy. Appellant contends that the court committed error, both in giving certain instructions to the jury, and in refusing to give others requested by appellant. We have carefully reviewed the instructions, and find that the law applicable to the case is fairly and fully presented to the jury in them. These instructions, we — 474 — observe, are very favorable to defendant, and we find no error an this branch of the case. Neither the assignments of error, nor the proposition that the verdict is unsupported by evidence, can be sustained. The judgment and the order overruling defendant’s motion for new trial will therefore be affirmed. Affirmed. Blake, C. J., and De Witt, J., concur.