Heidenreich v. Aetna Insurance

Opinion by Mr. Chief Justice Lord. 1. The record discloses that at the trial the defendant moved to reinstate that portion of its answer so stricken out, and also offered evidence in support of it; that the court overruled the motion, and refused to receive such evidence, and charged the jury that “it is admitted in this [76] case that the company did receive notice of this loss, and that it was in dne form as required by the policy.” The correctness of this instruction, and of the ruling upon the excluded evidence, is not questioned, if the portion of the answer referred to was properly stricken out. Our first inquiry, then, is whether the ruling of the trial court in striking out the said denials and the further defense that no notice or proof of loss had been given at any time as required by the terms of the policy, was error. The theory of the ruling was that the defendant, by its plea in abatement, admitted receiving due notice and proof of loss, and thereby waived any defect of form and substance in the same, and hence it was precluded from denying the allegation of notice and proof of loss, or affirmatively setting up that such notice or proof had not been given as required by the terms of the policy. The contention for the defendant is that a breach of the conditions of the policy prescribing what the notice should be, and what the proof of loss should embrace, was a defense in bar of the action, and could not be disposed of by the plea in abatement, the object of which was to show that the action was prematurely brought. It is no doubt true that the condition in the policy regarding notice and proof of loss is wholly for the benefit of the insurer. The insured contracts to perform it, and until he does so he has no cause of action against the insurer. But such condition being for the advantage of the insurer, it is in its option to waive any deficiency on the part of the insured in this respect. If there are any defects in the notice or proof of loss, to which the insurer objects, he should point them out, so that the insured shall have an opportunity to remove them, and perfect his proof. Good faith and fair dealing requires that this should be done, and if . not so pointed out, that the insurer should be deemed to have waived such defects, or be estopped from setting them up as a defense. [77] “Thelaw,” as Brown, J., said, “requires of the company-entire good faith and fair dealing in its transactions with the assured in reference to the proofs, and hence it is bound to point out any defects of a formal character therein, that the assured may have an opportunity to correct them, and, if it accepts those served within the time named in the policy, it will be deemed to have waived defects, and to receive them in the performance of the condition of the contract”: Armstrong v. Agricultural Insurance Company, 130 N. Y. 566, 29 N. E. 991. This rule is just and reasonable; it aims to prevent insurance companies from lulling their patrons, as Stone, C. J., said, “into false security, by which they may lose the means and opportunity of remedying defects in their preliminary proof”: Fire Insurance Companies v. Felrath, 77 Ala. 201, 54 Am. Rep. 58. Hence, in jiew of this duty of the insurer to the insured, any conduct or act of the company which may be taken as an acceptance of notice and proof of loss will be regarded as a waiver of its right to object thereto on account of defects therein. In the case at bar the defendant, by its plea in abatement, sought to show that the action was prematurely brought, by alleging that it was begun before the sixty days had elapsed after due notice of proof had been received by the company. By its express wording the plea admits that due notice and proof of loss had been given and received, and the only issue was as to the lapse of time after the receipt of the same. This issue was decided adversely to the defendant, whereupon it sought to defeat the action by its denials of notice and proof of loss, and alleging affirmatively that such notice and proof was defective in form and substance, and did not comply with the terms of the policy. It was the duty of the company, if it intended to insist upon notice and proof free from defects or deficiencies, to apprise the assured of their ex [78] istence, and afford the plaintiffs an opportunity to eliminate them. Certainly, if the company had done what in good faith it was required to do, and the plaintiffs had refused to amend the defective notice aud proof, it is hardly probable that it would have simply sought to abate the action, when it had a defense in bar of .it. Nor does the answer, including the portion stricken out, state that the notice and proof of loss were given, and that the defendant had pointed out the objections to them, thus showing that the plaintiffs had an opportunity of remedying the defects; yet the company availed itself of the benefit of a plea in abatement, admitted the notice and proof of loss were given and received, and by so pleading must be considered to have accepted them and thereby waived any and all objections to their sufficiency. We do not think, therefore, that there was any error in the ruling of the court in the particular under consideration. 2. The next assignment of error seeks to review the decision' of the court in sustaining the objection to a question asked of K. Heidenreich. The question was whether or not her husband had a power of attorney to act for her in managing her property. She had already testified that he had acted for her. The statement as to what was expected to be proven by the question shows that the answer would have been immaterial and irrelevant, for the reason, if there was a conspiracy or a wilful burning of the property by plaintiffs, or by any one with their consent or connivance, the facts should have been alleged, which was not done. Matters in defense cannot be proven unless they are pleaded. As to the question asked J. D. Heidenreich, we are not satisfied' that it comes within the rule laid down in article XII, Stephens’ Digest; and, like counsel, we have been unable to find any authority showing there was error in the ruling of the trial court. The next objection is to the following instruction: “I [79] instruct you that there was no evidence in this case tending to connect the plaintiffs with any acts of John or J. D. Heidenreich in regard to the fire in question.” The record discloses that there was some evidence offered on behalf of the company to the effect that the husband of one of the plaintiffs had threatened to set fire to the barn above mentioned, and to get rid of it; and some suspicious circumstances were shown respecting his conduct, with a view to showing that the fire was wilfully set by him to the barn. But there is no evidence tending to show that either of the plaintiffs had any knowledge of the same, or of any statement or act of J. D. and John Heidenreich, or either of them, which connected the plaintiffs with the fire. There being no error, it results that the judgment must be affirmed. Affirmed.