Omaha Fire Insurance v. Dierks & White

Ragan, C. Dierks & White brought this suit in the district court of Holt county, against the Omaha Fire Insurance Company, to recover the value of certain live stock which they alleged they owned, which had been insured against loss or damage by fire by the insurance company, and which live stock had been destroyed by fire. Dierks & White had a verdict and judgment, and the insurance company brings the case here for review. 1. The first error assigned is “irregularity in the proceedings of the court and abuse of discretion, by which the defendant was prevented from having a fair trial.” This assignment is too indefinite for consideration and indeed is not referred to .in the briefs of counsel for the insurance company. 2. The second error is assigned in the following lan — 477 — guage: “Irregularity in the proceedings of the jury.’ This assignment is also too indefinite for review. 3. The third assignment is “ accident and surprise which ordinary prudence could not have guarded against in the evidence of the witness Dierks in testifying to a verbal release of a part of the- property from the mortgage.” This is one of the causes for a new trial permitted by the third subdivision of section 314 of the Code of Civil Procedure ; but section 317 of the same Code provides that such a ground for a new trial must be sustained by affidávits showing the truth of the ground alleged. This means that the affidavits showing the truth of the facts alleged for a new trial on the grounds of accident or surprise must be filed in and brought to the attention of the court below. The record contains no affidavit filed by the insurance company in the district court in support of a new trial on the grounds of accident or surprise. Affidavits which tend to show that the insurance company was taken by surprise in the trial of the case below have been filed in this court, but we cannot consider them. This as an appellate court is authorized by law to review the action of the district courts, but in doing so this court can pass upon no question which was not presented to and passed upon by the district court; nor will this court, for the purpose of determining whether the district court came to a correct conclusion, examine any evidence which was not presented to that court. 4. The fourth assignment of error is “ excessive damages, appearing to have been given under the influence of passion or prejudice;” and the fifth assignment is “ error in the assessment of the amount of recovery, it being in excess of the amount the plaintiffs were entitled to under the evidence.” Neither of these assignments are referred to in the briefs of counsel for the insurance company and are therefore considered waived. 5. The eighth assignment is “errors of law occurring at the trial and excepted to at the time by the defendant.” — 478 — This assignment is too indefinite and uncertain for review. 6. The ninth assignment is “ the court erred in each of the instructions given upon its own motion, and In each of the instructions given at the request of the plaintiffs, to which exception was taken at the time.” The charge of the district court contains twelve paragraphs or instructions, and the exception noted to these instructions by-counsel for the insurance company is in the following language : “ Comes now the defendant and excepts to the instructions numbered from one to seven inclusive given to the jury by the court on the trial of said cause.” In McReady v. Rogers, 1 Neb., 124, the exception taken to the charge of the court was in the following language: “ To all [of which charge,] and each and every part thereof,” the defendant, by his counsel, then and there excepted. Crounsb, J., speaking for the court of this exception, said: “ This firing at the flock will not do. It is a well established point of practice that when the charge of the court involves more than one single proposition a general exception to it will be unavailing, and if any portion of it be correct the whole will stand. Each specific portion of it which is claimed to be erroneous must be distinctly pointed out and specifically excepted to.” The rule as announced in that case has, so far as we know, never been consciously deviated from by this court, but has been time and again reaffirmed. Here the assignment of error is that the court erx’ed in giving each — evei’y one — of the instructions given by it on its own motion, but no attempt was made to except to more than seven of them, and since the assignment is in effect that the court erred in giving all the instructions which it did give, and all the intructious were not excepted to, the assignment of error cannot be considered for that reason. 7. The tenth assignment is “the court erred in giving each of the instructions given at the request of the plaintiff below.” If the district court gave any instructions., at the — 479 — request of Dierks & White they do not appear in the record. The only instructions in the record are 'those given by the court upon its own motion. 8. The sixth, seventh,’ and eleventh assignments of error are that the verdict is not sustained by the evidence, that the verdict is contrary to law, and that the court erred in overruling the motion of the insurance company for a new trial. The verdict of the jury is not contrary to the law, and the court did not err in overruling the motion for a new trial, if the verdict is sustained by sufficient evidence. Dierks & White pleaded in their petition that about the 5th of February, 1891, as provided by the policy, they gave notice of the loss in writing to the insurance company, and gave notice of said loss to one Wallace, the agent of the defendant nearest to where the loss occurred. This allegation of the petition was expressly denied by the insurance company. The insurance company, as an affirmative-defense to the action, pleaded that the insurance policy provided that if the insured property should be sold or incumbered without the consent of the insurance company indorsed on the policy, that the policy should thereupon-become void; and that before the fire Dierks & White, without the knowledge or consent of the insurance company, executed a chattel mortgage upon the property; and that “ said mortgage was a valid and subsisting lien upon said property so insured and upon the property claimed tn have been destroyed by said fire at the time of the fire on February 2,1891.” The reply of Dierks & White to this defense of the insurance company was as follows: “Denies the plaintiff mortgaged the property destroyed by fire, * * * and say that the policy sued upon covered personal property only and no particular property was insured by the policy sued on, * * * and denies that there was a valid or subsisting lien upon said property or any portion thereof at the time the same was destroyed by fire.” The issues of facts made by the pleadings were: (a) — 480 — The value of the property destroyed; (b) whether Dierks Ad White gave notice of the fire to the insurance company; (e) whether Dierks & White mortgaged the insured property without the consent of the insurance company prior to the fire; (d) whether the mortgage was a lien upon the insured property at the time it was destroyed by fire. The evidence sustains the value placed on the property by the jury; and the evidence in the record shows beyond dispute that the insured property or a part of it which was destroyed by fire was previous to its destruction incumbered by a chattel mortgage; and the evidence in the record is sufficient .to support the finding of the jury that such insured property at the time of its destruction by fire had been released from the lien created by the mortgage. In State Ins. Co. v. Schreck, 27 Neb., 527, it was held that where personal property was incumbered by a chattel mortgage after such property had been insured, and contrary to the provisions of the insurance policy, the insured could nevertheless recover for the value of the property destroyed if at the time of the property’s destruction it was free from the incumbrance. We adhere to and reaffirm the doctrine of that case. The eminent counsel for the insurance company does not controvert, as we understand him, the correctness of the decision in State Ins. Co. v. Schreck, supra, but his contention is that it was incompetent for Dierks & White under the issues made by the pleadings to prove that the mortgage made upon the insured property had been released. Counsel says that Dierks & White, instead of denying the execution of the mortgage and denying that the mortgage was a lien upon the insured property at the time of its destruction, should have pleaded by way of confession and avoidance that the mortgage was executed as alleged by the insurance company, but that prior to the destruction of the property by fire the mortgage had been — 481 — released. Assuming for the purposes of this case the correctness of the argument of counsel, the answer to it is that he has not assigned in his petition in error here that the court erred in admitting the. evidence offered by Dierks & White to show that the destroyed property was" ■unincumbered at the time of its destruction. If such evidence was incompetent under the pleadings, counsel for the insurance company should have objected to its introduction ■on that ground, and then specifically assigned the ruling of the district court in admitting such evidence in his petition in error. We have now to deal with the issue made by the pleadings, whether Dierks & White notified the insurance company of the destruction of the property by fire. The record does not disclose that Dierks & White themselves notified the insurance company, or its agent, that the property had been destroyed by fire. But one Josselyn, the secretary and manager of the insurance company, testified ■on the trial that the sole and only reason that the insurance company declined to pay the loss of Dierks & White was that the insurance company claimed that the insured property was incumbered by a mortgage at the time it-was destroyed; that the company was advised of the destruction of the property by fire within ten days after it happened; that he, Josselyn, received letters regarding the fire after it occurred; that Wallace and Mastic were the special or soliciting agents of the company through whom the insurance was negotiated ; that they resided at Ewing, Nebraska; and that he had received information through Wallace by letter of the destruction of the property. The argument of counsel for the insurance company is that the verdict of the jury lacks evidence to support it because Dierks & White pleaded that they notified the company -of the fire and failed to prove it. It appears from the evidence quoted above that the insurance company actually received notice of this fire and acted on that notice; that is, — 482 — they refused to pay the loss on the ground that the property at the time it was destroyed was incumbered. We are unable to see how the fact that Dierks & White failed to prove that they themselves gave the insurance company notice of the loss is, under the circumstances of this case, material, since it appears that the company had actual knowledge of the loss through its agents and acted on that knowledge, and we are by no means prepared to say that the verdict of the jury lacks evidence to support it on the ground that the allegation of Dierks & White that they notified the insurance company of the loss was not proved. It seems that if the insurance company actually knew of the fire at the time it occurred through one of its agents who was at the fire, or if it received through its agents within a reasonable time after the fire notice of its occurrence and acted on such notice, it would be sufficient. In other words, it does not seem that the insurance contract should be so technically construed as to compel the insured to furnish information to the insurer which the insurer already had. (Edwards v. Travelers’ Life Ins. Co., 20 Fed. Rep., 661; State Ins. Co. v. Schreck, 27 Neb., 527; Sandwich Mfg. Co. v. Feary, 40 Neb., 226.) But in the view we take of this case the issue made by the pleadings, whether Dierks & White notified the insurance company of the fire, was, at the time of the trial of this case, an immaterial one, because the insurance company resisted the payment of this loss, both by its pleading and evidence, on the ground that the insured property at the time of its destruction by fire was incumbered by a mortgage, and that therefore the policy at the time of the fire was not in force. This defense set up in the answer of the insurance company was, in effect, a plea of confession and avoidance. It in-effect admitted the execution and delivery of the policy, the receipt of the premium, the destruction of the insured property by fire, and the receipt by it of notice of the fire. This defense that the policy was not in force at the — 483 — time the loss occurred is utterly inconsistent with the defense of want of notice of the loss. All the authorities' agree that the provisions of an insurance policy requiring the insured to give notice of the destruction of the insured property and to furnish the insurer proofs of loss, may be waived by the conduct of the insurer; and in this case we think the insurance company, by placing its defense to this action on the ground that the policy sued upon was not in force at the time of the destruction of the property, waived the provision in the policy which required the insured to give it notice of the loss, and made that issue in this case wholly immaierial. In Cobb v. Ins. Co. of North America, 11 Kan., 93, it is said that the right of an insurance company to notice of loss is a right which the company may waive, and that when the company denies all liability for the loss and refuses to pay the same and places that denial and refusal! upon grounds other than the failure to give notice, such denial and refusal avoid the necessity of notice. We think, this is the correct rule. In California Ins. Co. v. Gracey, 15 Col., 70, the court in speaking of the point under consideration said: “Insurance policies uniformly contain the provision that the assured shall, in accordance with certain prescribed regulations, give notice and make proof of loss. It is universally held, we believe, that the absolute refusal of a company to-pay the loss in any event constitutes a waiver of the right to insist upon compliance with such provisions.” The same rule is announced in Missouri in Phillips v. Protection Ins. Co., 14 Mo., 221, where it was held that if the insurer refuse to pay because the insured failed to submit to an examination under oath, that the insurer could not afterwards insist on the failure of the insured to comply with other requirements of the policy. In Hartford Protection Ins. Co. v. Harmer, 2 O. St., 452, it is said: “Objections to the preliminary proofs will — 484 — ¡be considered as waived, if, after they are rendered, no specific objections are pointed out, and the assured is informed that his claim will be considered on the merits, and the claim is rejected finally, upon the ground that the company is not in any event liable to pay the loss.” (See, also, Globe Ins. Co. v. Boyle, 21 O. St., 119.) In Illinois the rule is: “ When an insurance company refuses to pay a loss, placing its refusal upon its non-liability in any event, it cannot insist, in defense of an action, that the preliminary proof was insufficient.” (Williamsburg City Fire Ins. Co. v. Cary, 83 Ill., 453; Peoria Marine & Fire Ins. Co. v. Whitehill, 25 Ill., 466; Ætna Ins. Co. v. Maguire, 51 Ill., 342; Lycoming Fire Ins. Co. v. Dunmore, 75 Ill., 14; Phœnix Ins. Co. v. Tucker, 92 Ill., 64.) In Blake v. Exchange Mutual Ins. Co. of Philadelphia, 78 Mass., 265, it was held: “If, after the preliminary proofs of a loss by fire under a policy of insurance, the officers of .an insurance company visit the premises and converse with the insured and make no reference to the preliminary proofs, or raise any objection to them, while any defect therein may be remedied, and refuse to pay on other and distinct grounds, the insurance company will be estopped to set up any defect in the preliminary proof, although the conditions made part of the policy give explicit directions about proofs of loss, and the policy provides that no condition, stipulation, covenant or clause in the policy shall be altered, annulled or waived, except by writing indorsed on or annexed to the policy and signed by the president or secretary.” The rule in Minnesota is stated as follows : “ Where an insurance company puts its refusal to pay a loss on another ground it is a waiver of objections to insufficiency in the proofs of loss required by the policy.” (Phœnix Ins. Co. v. Taylor, 5 Minn., 393; Newman v. Springfield Fire & Marine Ins. Co., 17 Minn., 98; Hand v. National Live Stock Ins. Co., 59 N. W. Rep. [Minn.], 538.) — 485 — In Parker v. Amazon Ins. Co., 34 Wis., 363, it was held : “ Where an insurer against fire, after a loss and before the time for furnishing proofs thereof has expired, denies all liability entirely upon other grounds than the want of such proofs, this is a waiver of the condition requiring proofs of loss to be made.” (Harriman v. Queen Ins. Co., 49 Wis., 71; McBride v. Republic Fire Ins. Co. 30 Wis., 562.) The supreme court of New Jersey, in State Ins. Co. v. Maackens, 38 N. J. Law, 564, states the rule as follows : “Receiving preliminary proofs without objection, and failure to object after a reasonable time, or refusal to pay on other grounds, is evidence of a waiver of the time of furnishing the preliminary proofs, and of defects therein.” The doctrine under consideration is also that of the supreme court of the United States. In Tayloe v. Merchants Fire Ins. Co. of Baltimore, 50 U. S., 390, the court, speaking to the point under consideration, said: “Another objection taken to the recovery is, that the usual preliminary proofs were not furnished according to the requirement of the seventh article of the conditions annexed to the policies of the company. These are required to be furnished within a reasonable time after the happening of the loss. The fire occurred on the 22d of December, 1844, and the preliminary proofs were not furnished till the 24th of November, 1845. This was doubtless too late, and the objection would have been fatal to the right of the complainant if the production of these proofs were essential to the recovery. But the answer is, that the ground upon which the company originally placed their resistance to the payment of the loss, and which is still mainly relied on as fatal to the proceedings, operated as a waiver of the necessity for the production of the preliminary proofs.” (See, also, Aurora Fire & Marine Ins. Co. v. Kranich, 36 Mich., 289; Batchelor v. People’s Fire Ins. Co., 40 Conn., 56; Carson v. German Ins. Co., 62 Ia., 433.) — 486 — In Phenix Ins. Co. v. Bachelder, 32 Neb., 490, Norval, J., speaking to a point analogous to the one under consideration, said: “ The company has at all times insisted, and now insists, that it was not liable for the loss, on the ground that the policy was not then in force by reason of the failure of the insured to pay his premium note. The plaintiff in error by denying all liability dispensed with the necessity of furnishing proofs of loss,” and cites, with approval, Carson v. German Ins. Co., 62 Ia., 433; Kansas Protective Union v. Whitt, 36 Kan., 760; King v. Hekla Ins. Co., 58 Wis., 508; Tayloe v. Merchants Fire Ins. Co. of Baltimore, 50 U. S., 390; Continental Ins. Co. v. Lippold, 3 Neb., 391. And the third point in the syllabus in Phenix Ins. Co. v. Bachelder, supra, declares: “The absolute denial by the insurer of all liability on the ground that the policy was not in force at the time of the loss, is a waiver of the preliminary proofs of loss required by the policy.” This case, while not directly in point, is analogous in principle to the one under consideration, and is supported by the overwhelming weight of authority. We do not mean to say; nor do we decide, that if a person insured shall neglect or refuse to give notice of a loss to tide company in accordance with the requirements of the policy, that the insurance company can never urge the failure of the insured to give it notice of the loss, or his failure to furnish proofs of loss as a defense to a suit upon the policy; but what we do decide is that when an insurance company is sued for a loss on a policy issued by it and places its defense to such suit on the ground that by reason of some act of the insured the policy was not in force at the date of the loss, that then in such action all issues made by the pleadings as to whether the insured gave notice of the loss, and whether he furnished the insurance company proofs of the loss, become immaterial. Counsel for the insurance company, in opposition to the rule here stated, cite us to Connell v. Milwaukee Mutual — 487 — Fire Ins. Co., 18 Wis., 407. But that ease is not in point here, because the defense of the insurance company was not based upon a contention that the policy was not in force .at the time the loss occurred; but the defense made was a technical one that the written notice of the loss was not furnished to the insurance company as provided by the policy. American Central Ins. Co. v. Hathaway, 23 Pac. Rep. [Kan.], 428, is another case cited by counsel for the insurance company; but that case is not in point. There the defense pleaded by the insurance company was a general denial, and the whole defense was that the insured did not notify the company of the loss nor furnish proofs of loss .as required by the policy. Home Ins. Co. v. Lindsey, 26 O. St., 348, is another case relied upon here by counsel for the insurance company; but this case is not in point. It merely holds that in an action upon a policy of insurance, which policy contains a condition that in case of loss proof thereof shall be made and delivered to the insurer within thirty days after the loss occurred, the petition must allege a performance of such condition, or a waiver thereof on the part of the insurer, or the petition would be bad on demurrer. A petition on a promissory note which failed to allege that the maker of the note executed and delivered it would doubtless be bad on demurrer; but if the .maker of the note answer, denying the execution and delivery of the note, and allege as a defense to the action that he had paid the note, then its execution and delivery would become immaterial issues in the case. Another case relied on by counsel is Farmers Ins. Co. v. Frick, 29 O. St., 466; but in that case the only point decided was: “In an action against an insurance company to recover the amount of a fire policy, a defense on the ground that the insured failed to make and furnish the insurer with the preliminary proofs of loss in the manner and within the time required by the policy, is not waived by setting — 488 — up and relying upon other defenses not inconsistent therewith.” It does not appear from the decision just what particular defenses the insurance company did interpose. The only two mentioned in the opinion are that the insured failed to give notice of the loss and cause of the fire, and failed to furnish the insurance company proofs of loss in the time and manner required by the policy. So that case is not in point here. Another case relied on by counsel is Blossom v. Lycoming Fire Ins. Co., 64 N. Y., 162; but the defense of the insurance company in that case was that the proof of loss had been furnished it too late, and the court held that proof of loss within the time prescribed by the policy was necessary to enable the insured to recover unless the insurance company had waived the proof of loss, and that there was no evidence of such waiver. Finally, it is insisted by counsel that German Ins. Co. v. Fairbank, 32 Neb., 750, is an authority against the rule announced above. It is said in that case: “In an action upon a policy which provides that the insured should furnish proofs of loss within a specified time after the loss occurred, it is necessary for the plaintiff to prove upon the trial that the proofs were made, or that the same were waived by the company.” The same doctrine was announced in the third point of the syllabus in German Ins. Co. v. Davis, 40 Neb., 700. But these cases are distinguishable from the one at bar. The question here is not whether it was necessary for the insured to plead and prove that he had furnished the necessary proofs of loss sustained in order to recover, but the question under consideration here is limited solely to the inquiry as to whether the issue made by the pleadings that the insured notified the insurance company that a loss had occurred, was a material one in view of the defense interposed to the action by the insurance company. The judgment of the district court is Affirmed.