Stephens v. Phœnix Assurance Co.

Mr. Justice Freeman, after making the foregoing statement, delivered the opinion of the court. ■ Counsel for appellant state, in their brief that appellant did not, in her declaration, count upon the policies, which had before been surrendered to and were in the possession of appellee, but upon the insurance generally. The declaration alleged that the policies were “ not surrendered by said plaintiff or canceled,' but that the possession thereof was obtained by said defendant by the fraudulent representations made by said defendant and its agents and servants, and therefore plaintiff is unable to produce said policies.” It is charged that appellee’s agent, who was also agent for appellant, in the construction and care of her buildings which were burned, “ fraudulently and deceitfully represented to said plaintiff that she, the said plaintiff, had no claim against said defendant by reason of said loss by fire.” It is claimed that this being an action for fraud, the cause of action is thereby taken out of the provision in the policies limiting the time within which the action can be brought. The fraud which it is said was perpetrated by the appellee’s agent is, that “ he did not disclose the fact that if the agent retained the premium and continued the policy with a knowledge of non-occupancy the condition was waived.” The language of the policies in this respect is that they shall be void, if the buildings “ be or become vacant and unoccupied and so remain for ten days.” The meaning of this clearly is that the company insures the property with the agreement and upon the condition that, being vacant at the time, or becoming vacant at any future time while the policy continues in force, such vacancy shall not continue longer than ten days ; and if it does so continue longer than ten days, the policy shall then become void. We can not find in this any waiver of the condition with or without knowledge, but rather an express declaration that it is one of the conditions upon which the policy is issued. Newmarket Savings Bank v. Royal Ins. Co., 150 Mass. 374. It is true that such a policy may not necessarily become absolutely void by reason of the premises becoming vacant or unoccupied, and so remaining beyond the stipulated period. Germania Fire Ins. Co. v. Klewer, 129 Ill. 599-607. Nor is the company bound in case it learns of such vacancy, to declare the policy forfeited. It may waive the forfeiture. But such waiver of the right of forfeiture is not a waiver of the condition during the time the breach continues. Firemen’s Ins. Co. v. Horton, 170 Ill. 258-261; Coursin v. Penn. Ins. Co., 46 Pa. State, 323-330. If the loss occurs while the vacancy continues to exist, the company is not necessarily rendered liable because, knowing the fact, it has not meantime forfeited the policy. But if it does not exercise its right in this respect, and the premises are again occupied, and are not vacant or unoccupied when the loss occurs, the liability on the policy would again attach. Ins. Co. of North America v. Garland, 108 Ill. 220-226, and cases there cited. It is held in that case that the consent of the company to the transfer of the policy, with notice of the fact that it is then unoccupied, is not of itself in law a waiver of the condition. Nor is the retention of the unearned premium with knowledge of the condition violated by reason of the premises being vacant and unoccupied, to be regarded as a waiver of the condition, while the breach continues. The breach of condition may cease at any time, and the premises cease to be unoccupied, especially where, as in this case, the houses are for rent; and it is not conduct of which the assured ought to complain that the insurance company has not chosen to exercise its right to forfeit the policy because of the temporary breach of condition. It is conceded by appellee that had the condition been merely that the policy should become void if the building insured be or become vacant and unoccupied without the consent of the company, indorsed in writing, in such case if the agent should take the premium and issue the policy with full knowledge that such building is vacant and unoccupied, the company would be estopped to assert the condition as a bar to recovery. The consent of the company might in such case be presumed, and the indorsement of it in writing be considered waived. But such is not the condition in the case at bar. It appearing, then, that the property was vacant and unoccupied at the time of the fire, and had remained so for much more than the specified ten days, we are of opinion that appellee was not liable to the assured upon the policies in question. It follows that the statement to that effect made to appellant by the agent, Smith, was correct, and that no fraud or deception was thereby practiced upon appellant. Appellant was not, therefore, fraudulently induced to surrender and cancel her said policies by such representations, and we do not deem it necessary to discuss what would have been the effect of her release and waiver of interest in the policies had she then possessed any valid claim thereunder. She received the return premium, and surrendered and delivered the policies to the appellee as her own voluntary act with correct information as to her rights. The action in this case was not brought "within twelve months' after the lire, although the policies in controversy provide that no such action shall be sustainable unless commenced within that time. This clause is a valid and binding agreement between the parties, Phœnix Ins. Co., of Brooklyn, v. Lebcher, 20 Ill. App. 450; Johnson v. Humboldt Ins. Co., 91 Ill. 92. It does not appear that appellant ever waived the limitation or estopped itself from asserting such defense. The action is undoubtedly based upon the policies. The fact that the policies were not in the possession of appellant did not preclude her suing upon them within the time limited. Appellant was only liable, if at all, under the policies. If appellee had any claim it was upon the policies. The conditions were equally binding upon both parties to the contract. There is no evidence that the assured was ignorant of the condition. But in view of the conclusion as above stated, that appellee was not liable under the policies, it is unnecessary to extend the discussion upon this point. For the reasons indicated, the judgment of the Circuit Court must be affirmed.