Cobb v. Insurance Co. of North America

• The opinion of - the court was delivered by Bbjsweb, J. i [97] 1. When right of action on policy insurance has matured. [96] The plaintiffs brought their action on a policy of fire insurance issued by defendant. Judgment was [97] entered in favor of the defendant on the pleadings, and of this judgment plaintiffs now complain. Two questions are presented for our consideration. First, Was the action prematurely brought? The policy provided that the loss should “be paid sixty days after due notice and proofs of the same, made by the assured and received at this office.” The petition was filed March 10th 1869. The answer alleged that proofs of loss were not received at the company’s office until January 26th 1869, less than sixty days prior to the commencement of the suit. The reply admitted this, but averred that subsequently, and on the 19th of February 1869, the defendant, after consulting with its western agent5 denied all liability under the policy, and “refused to pay the loss or any part of it on the ground that the circumstances attending the fire were such as to justify their refusal to pay the same,” and also requested that suit be brought in Kansas instead of Philadelphia. That' a stipulation like the one in question is valid, and that, when, the company recognizes or does not deny its liability under the policy for the loss, an action before the expiration of the stipulated time is prematurely brought, is well settled. • It is simply a contract for so much credit, and is no more to be questioned than a contract for like credit in the sale of goods. It is equally well settled that the right to notice and proofs 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 for the same, and places that denial and refusal upon grounds other than the failure to give notice or to furnish proofs, such denial and refusal avoid the necessity of-notice and proofs, and are a waiver of them. Vas v. Robinson, 9 Johns., 192; Thomas v. The Ocean Ins. Co., 6 Cow., 404; McMasters v. The Westchester Co. Mutual Ins. Co., 25 Wend., 379; O’Neal v. The Buffalo Fire Ins. Co., 3 Comst., 122; Peoria M. & F. Ins. Co. v. Whitehill, 25 Ill., 466; The President and Directors of the Ins. Co. of N. A. v. McDowell, 50 Ill., 120; Schenck v. The Mercer Co. M. & F. Ins. Co., 4 Zabr., 447; Graves v. The Washington M. Ins. Co., 12 Allen, 391; [98] Allyn v. The Maryland Ins. Co., 6 Har. & Johns., 408; Taylor v. Merchants Fire Ins. Co., 9 How., 390. It would seem to follow that when the company by denial of its liability relieves the assured from the necessity óf giving' notice and proofs, it also waives the right to claim sixty days from notice and proofs for payment. Shall it be permitted to deny all liability under the contract for the loss, and at the same time have all the benefits of the stipulations of the contract as to time and mode of payment? A distinction should perhaps be noticed to guard against misapprehension. A mere waiver by the company of one provision of the policy intended for its benefit is not a waiver of the others. It may for instance formally waive notice of proofs, and still be entitled to the sixty days after such waiver for payment. In such case the waiver stands simply in lieu of the notice and proofs, and the time begins to run from the waiver. In all this the company recognizes its ultimate liability for the loss, and simply relieves the assured from some one or more of the steps necessary to fix that liability. But a denial of all liability places the parties in a different attitude. In effect the company says to the assured, Notwithstanding you give us notice and furnish proofs, and wait the sixty days, and comply with all the provisions inserted in the policy for our benefit, still we shall not recognize your claim, nor pay for the loss. Why compel a party to do that for the company, which when done the company wholly disregards? After having done all, he is no nearer payment than before, and must still appeal to the courts. Counsel seeks to parallel, this with the case of a promissory note, and asks if, in case ■ the- company had given a note payable in sixty days, an action thereon in thirty days would not have been premature, even though the company, subsequently to the execution of the note, denied all liability thereon. The parallel is not good. The latter is wholly a unilateral contract, with rights and liabilities fixed and determined, and without anything for adjustment, and without occasion for act or waiver by either party. To change the liability requires a new prom [99] ise, not a denial or waiver. The decisions have all been in harmony with the views herein expressed. Columbia Ins. Co. v. Catlett, 12 Wheat, 392; Ætna Ins. Co. v. McGuire, 51 Ill., 312; Phillips v. Protection Ins. Co., 14 Mo., 220; Allyn v. Maryland Ins. Co., 6 Harris and Johns., 408; The N. & N. Y. Trans. Co. v. Western Mass. Ins. Co., 34 Conn., 561, or 6 Blatchford C. C., 241. Counsel contends that there is a distinction to be drawn between some at least of these cases and the present, in this, that in them the language of the stipulation was “sixty days after proof and adjustment,” while in this it is “after due notice and proofs made by the assured and received at this office” — as though the former required mutual action, and the latter only action on the part of the assured. Some of the cases cited are exactly parallel. In the Illinois case the language is, “after the loss shall have been ascertained and proved.” In the Missouri case, “after the loss shall have been ascertained and proved, and the proof received at the office.” And in the Connecticut case, “after sixty days from notice, and the furnishing of preliminary proofs of loss to the underwriters.” But even under the policy in this case there is to be mutuality of action. The proofs are for the purpose of an adjustment. The mere production of these proofs does not determine the amount of the loss. It. furnishes a basis.for the action of the parties in adjusting this amount as well as the extent of the liability of the company. We conclude then, that the action was not prematurely brought. / 2. Conditions of policy may be waived. What acts constitute waiver. Was the liability of the defendant destroyed by the additional insurance taken out on the stock of goods covered by this policy? The policy stipulated that it should be avoided if the assured made any other in-' . . 1 surance on the property “without notice to and consent of this company in writing.” The answer alleged a subsequent insurance without such notice and consent. The reply admits a subsequent insurance, and then alleges that this policy was originally for $6,000, but was reduced by defendant to $3,000; that at the time of such reduction- the [100] defendant in consideration thereof requested the assured to take out a policy of $3,000 in the Home Ins. Co.; that in pursuance thereof the assured took out such ■ policy, which was the additional insurance; that the defendant had due notice thereof, and that this policy was delivered to the defendant’s agents for the purpose of having this consent indorsed in writing, and the assured being ignorant of the mode of transacting such business relied wholly upon defendant and its agents to have the business correctly done; and that the defendant and its agents, contriving and intending to cheat and defraud the assured, negligently and fraudulently omitted to indorse the consent in writing. Upon these facts was the policy rendered null and void? It will be noticed that the reply alleges notice, and that the additional insurance was at the request, which implies the consent, of the defendant; so that to this extent the requirements of the policy were complied with. ' The only thing lacking is the written evidence of the consent. The clause requiring consent in writing is a condition for the benefit of the insurer. Like any other condition of a contract it may be waived by the party in whose favor it exists. By what kind of testimony such waiver must bo proved, is a question we need not consider. .Certain facts are alleged, and for the purpose of the case, as it now stands before us, must be taken as proved and true. Do these facts amount to a waiver? or perhaps more correctly, is the insurance company estopped by its conduct from insisting on a breach of this condition as a ground of forfeiture?. The defendant reduced its policy from $6,000 to $3,000, and requested the insured to take out a policy of $3,000 in a particular company; and when’ in obedience to this request he had taken out such policy, intending to 'cheat and defraud him, fraudulently omitted to indorse- its consent in writing upon the policy when presented, for that purpose. The question of the power of an agent does not come in here, for 'though some of the acts are alleged to have been done by and through an agent, yet the acts are all charged to have been the acts of the defendant. The case stands as [101] though the transactions were wholly between two individual principals. The company, when it requested the insured to take out the additional insurance, placed itself under obligations to give its consent in writing, and to do all other acts which might be necessary to prevent such additional insurance from injuriously affecting the rights of the insured in its own policy. It could not subject him to the labor, annoyance, and expense of taking out a new policy, and then refusing its consent insist that its policy was avoided, and the premium forfeited. The law will not tolerate such unconscionable dealing; and that which it .cannot do directly, by refusal, it cannot do indirectly by fraud. Upon this question therefore we hold against the defendant. These being the only questions presented for our consideration we shall be compelled to order a reversal of the judgment of the district court, and remand the case for further proceedings. It is perhaps fitting to say that there is another question upon which counsel informs us the decision of the district court was placed, but which somehow does not appear in the record as it comes to us. Of course, therefore, it would be improper for us to express any opinion concerning it. The judgment will be reversed. All the Justices concurring.