Smith v. Franklin Fire Insurance

MR. JUSTICE HOLLOWAY delivered the opinion of the court. This action was brought to recover upon a policy of fire insurance. Summons was issued and served, but defendant failed to appear within the time allowed by law, and its default was entered and a judgment rendered in favor of the [445] plaintiff for the amount claimed in the complaint. Thereafter the defendant moved the .court to set aside the default, vacate the judgment, and permit the defendant to file an answer, which was tendered. The grounds of the motion were that service of the summons was irregular and defective, and that the complaint does not state facts sufficient to constitute a cause of action. The motion was denied and defendant appealed from the judgment and from the order denying its motion. It is contended that the service of the summons was in-[1] effectual for any purpose, in that the proper person was not served, but, however this may be, any defect or irregularity in the service was cured by filing the motion, which constituted a general appearance on the part of the defendant. (Hinderager v. MacGinniss, ante, p. 312, 202 Pac. 200.) Further discussion of this subject is unnecessary. The policy in question contains many provisions, among which are the following: “If fire occur, the insured shall give [2] immediate notice of any loss thereby in writing to this company * * * and within sixty days after the fire, unless such time is extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating [then follows an enumeration of the facts which are to be included in the statement], * # * the loss shall not become payable until sixty (60) days after notice, ascertainment, estimate and satisfactory proof of the loss herein required, have been received by this company.” The policy provides, also, that the ascertainment or estimate of the amount of the loss shall be made by the insured and the insurance company, or, if they differ, by a board of appraisers, for the creation of which provision is made. A copy of the policy is attached to and made a part of the complaint, and it is insisted that the complaint fails to state a cause of action, in that it fails to allege that sixty days elapsed after notice and proof of loss were served upon the company, and after the amount of the loss was determined [446] as provided in the policy, and before the action was commenced. In the complaint it is alleged that the fire occurred on February 3, 1919, and that on February 24 plaintiff caused notice of the loss to be served upon the defendant. This action was commenced on April 30, and to determine that fact reference may be made to the record which discloses when the complaint was filed (Connecticut Mut. Life Ins. Co. v. McWhirter, 73 Fed. 444, 19 C. C. A. 519), so that it does appear affirmatively that more than sixty days elapsed after the service of notice of loss and before the complaint was filed. There is not any allegation in the complaint that proof of [3] loss — the verified statement mentioned above — was ever furnished at any time, or at all, or that the furnishing of the same was waived. Giving the notice and furnishing the proof are separate and distinct acts. The proof may, under certain circumstances, serve the purpose of notice, but a mere notice does not ordinarily supply the place of formal proof (26 C. J. 376), and however the two acts may be done, the performance of each is a condition precedent to the insured’s right to recover in the absence of waiver. (DaRin v. Casualty Co., 41 Mont. 175, 137 Am. St. Rep. 709, 27 L. R. A. (n. s.) 1164, 108 Pac. 649.) In order to avoid the force of the objection [4, 5] now under consideration, plaintiff relies upon the following allegation which appears in the complaint: “That the plaintiff has, at aE times, done and performed all of the stipulations, conditions and agreements stated in said policy to be performed on her part at the time and in the manner therein specified.” Section 6572 of the Eevised Codes provides: “In pleading the performance of conditions precedent in a contract, it is not necessary to state the facts showing such performance, but it may be stated generally that the party duly performed all the conditions on his part, and if such allegation be controverted, the party pleading must establish, on the trial, the fact showing such performance.” We think plaintiff complied substantially with the requirements of the statute (Ivanhoff v. Teale, 47 Mont. 115, 130 Pac. 972; Enterprise [447] Sheet Metal Works v. Schendel, 55 Mont. 42, 173 Pac. 1059), and the complaint must be held to set forth sufficiently the fact that all conditions precedent to be performed by the insured alone had been duly performed (Ackley v. Phenix Ins. Co., 25 Mont. 272, 64 Pac. 665). But full performance of the conditions precedent mentioned in the policy did not give to plaintiff an immediate right of action. By the very terms of the policy, the amount of the loss did not become due until the lapse of sixty days after the proof of loss was submitted, and therefore the fact that such period elapsed before the complaint was filed- must appear affirmatively. (Sutton v. Lowry, 39 Mont. 462, 104 Pac. 545; German Ins. Co. v. Hall, 1 Kan. App. 43, 41 Pac. 69; First Nat. Bank v. Dakota F. & M. Co., 6 S. D. 424, 61 N. W. 439; 5 Joyce on Insurance, 2d ed., sec. 3677.) The general rule is stated as follows: “If by the terms of the policy the loss is not payable until a specified time after loss occurs, or after notice and proof of loss, it is necessary to allege that this time has expired before the commencement of the action.” (11 Eney. PI. & Pr. 414.) The lapse of the sixty-day period is not a condition precedent which either party is required to or could perform. It merely fixes the time when the liability occasioned by the fire becomes enforceable for the first time, and for this reason the provisions of section 6572 above have no application here, and the fact that the designated period elapsed after proof of loss was furnished cannot be inferred from the general allegation above. (26 C. J. 496, Doyle v. Phoenix Ins. Co., 44 Cal. 264; Cowan v. Phoenix Ins. Co., 78 Cal. 181, 20 Pac. 408; Clemens v. American Fire Ins. Co., 70 App. Div. 435, 75 N. Y. Supp. 484; Carberry v. German Ins. Co., 51 Wis. 605, 8 N. W. 406.) Counsel for appellant insist that it was incumbent upon the [6,7] plaintiff also to disclose by the complaint that sixty days before the action was commenced the amount of the loss had been ascertained by one of the methods mentioned in the policy. Notwithstanding the apparently plain terms to that [448] effect, it would seem that such a construction of the policy is not admissible, for if it be adopted, then it would be within the power of the insurance company to postpone indefinitely plaintiff’s right to apply to the courts for relief by refusing or failing to join in any effort to adjust the loss. Since the insurance company must join in ascertaining the amount of the loss, it would appear not unreasonable to hold that the burden is upon it to disclose that sixty days had not elapsed after the loss was ascertained, if such was the fact, and advantage was sought to be taken of the fact (Randall v. Phoenix Ins. Co., 10 Mont. 362, 25 Pac. 960); but this is not material, for even under the authorities which seemingly sustain defendant’s position an allegation that plaintiff demanded adjustment, and that the insurer refused to participate, is sufficient (26 C. J. 494). In the complaint before us there is an attempt, however crude it may be, to plead a demand by plaintiff and a refusal by defendant. F'or the reason that plaintiff fails to disclose that sixty days had elapsed after proof of loss was furnished and before this action was commenced, the complaint does not state a cause of action, and will not support the judgment. The judgment and order are reversed and the cause is remanded to the district court, with directions to set aside the judgment, vacate the default, and permit the defendant to answer within such time as the court may direct. Reversed and remanded. Mr. Chief Justice Brantly and Associate Justices Reynolds, Cooper and Galen concur.