General Accident, Fire & Life Assurance Co. v. Walker

Mayes, C.' J., delivered the opinion of the court. On the trial of this case the court gave a peremptory instruction to the jury to find for appellee in full amount sued for and to which he claimed to be entitled under the accident policy. It is contended by appellant that this was error, and hence an appeal is prosecuted. The only feature of this case which we desire to discuss is the effect which section 2575, Code of 1906, has upon that clause of the contract of insurance which limits the right of the insured to a recovery of only one-fifth of the insurance, unless written notice shall be served on the company at its office in Philadelphia, Pa., within ten days from the date of the happening of the accident rendering the company liable on the policy. It appears that Allen Walker procured an accident policy entitling him to the sum of one hundred dollars in case of accident resulting in a severance of either hand at or above the wrist. The accident insured against happened, and this policy was in full force at the time. Under a clause in the policy he became entitled to the sum of one hundred dollars. But there is another clause in the policy which provides that if written notice of accident or injury, etc., be not given to the corporation at its office in Philadelphia, Pa., within ten days after the accident happens, the assurance company shall only be liable to pay one-fifth of the amount which would otherwise be payable under the policy. It is contended on the part of appellant that this notice was not given, and because it was not given it is not liable to Walker, except for twenty dollars or one-fifth of the amount he would be entitled to, had he given the notice. We do not consider the question as to whether or not the assurance company waived this clause, deeming it unimportant in the light of the other question discussed in this opinion. The question which we should decide is the validity of this clause, when considered in connection with section 2575, Code of .1906. That a state has the right to regu [409] late the business of insurance, and provide the kind and character of insurance contracts which may be made, is beyond controversy. It is one of the most important police powers exercised by the state. Section 2575 of the Code provides that: “No company shall make any condition or stipulation in its insurance contract concerning the court or jurisdiction wherein any suit thereon may be brought,, nor shall they limit the time within which suit may be commenced to less than one year after the loss or injury, and any such condition or stipulation shall be void. ’ ’ The clause in the policy which requires written notice within ten days as a condition to liability on the part of the assurance company for the full amount named in the policy and for which the insured pays his premiums is in conflict with the statute above quoted. Under the terms of this policy Walker became entitled to recover the sum of one hundred dollars. The company contracted to pay this sum to him, and accepted his money for the premiums as a consideration for this contract. The risk which they insured against happened, and they now undertake to avoid payment of four-fifths of it on the ground that they did not receive written notice in ten days. The contract is plain in its terms, and no 'stipulation in the contract as to the time of giving the notice can reduce the liability which the company undertakes to assume, if the stipulation as to time be less than that which the statute prescribes. The clause under consideration is an attempt to evade the statute, or amounts to an evasion of it, if it should be enforced. The clause referred to in this policy is nothing but a limitation that no suit shall be entertained to recover the full amount of the policy, unless preliminary steps looking to the suit be commenced within ten' days from the accident, whereas the statute provides that there shall be no limit for less than a year. It is true that this condition excludes not all, but four-fifths, of the amount; but the principle is just the same as if it pro [410] vided that no suit should he begun to recover any part of the policy unless written notice should be given within the ten days. Any contract of insurance which undertakes to relieve the insurance company from the full responsibility on its contract by requiring any kind of notice for less than the time required by the statute is in conflict with section 2575, Code of 1906, and void. The reasonableness of the time within which the notice is required might play a part in this case, were it directly involved. Affirmed.