Johnson v. Lumber Insurance

GOODE, J. (after stating the facts). — The policy specified no particular place where, or person to whom the proof of loss should he delivered, but merely said proof should be rendered to the company in sixty days after the fire. Hence when the proof of loss was executed by Powell and left with Campbell on May 2d, it was received by the company in the meaning of the policy. [McCullough v. Insurance Co., 113 Mo. 606, 614.] The right of the insured to be paid the stipulated indemnity did not accrue until sixty days after the notice, ascertainment, estimate and satisfactory proof of the loss thereunder (i. e. the policy) had been received by the company. If an insurance company is dissatisfied with the proof of a loss furnished by the insured, he must be notified of the company’s objection and afforded an opportunity to make corrections, if enough is left of the period in which proof is to be furnished for notice to be given. [Probst v. Insurance Co., 64 Mo. App. 408; DeLand v. Id., 68 Mo. App. 277.] The company will not be heard to say the proof was unsatisfactory if it omits to inform the insured of defects so he may cure them; and especially is it precluded when its empowered agent adjusts the loss, makes out and approves the proof and assures the insured in the most positive terms the adjustment is ended and his loss will be paid at once, as happened in the instance at bar. [McCullough v. Insurance Co., 113 Mo. loc. cit. 615.] Defendant never advised the Fullerton-Powell Company the proof prepared by Lowe and approved by Campbell, was unsatisfactory. Instead of doing this defendant pursued a course outside its rights under the contract. It first demanded the privilege of inventorying the stock in the yard, an act not authorized in the policy; next asked Campbell to get an exact statement from the insured of the quantity, grades and kinds of lumber on hand when the fire happened; a request which, if Campbell preferred it, was not a demand for an examination according to the policy (Dougherty v. Ins. Co., 67 Mo. App. 526) and, moreover, [390] there was no evidence Campbell preferred it; for he was relied on to prove the fact and could not remember. Finally the company, without specifying objections to the proof of loss, demanded the insured withdraw it on pain of being called on to undergo an examination and produce books and papers. The demand for withdrawal was arbitrary, and defendant must be taken, under all the circumstances in proof, to have been given a satisfactory proof of loss on May 2d, so as to make the indemnity accrue sixty days later on July 2d. The facts we have recapitulated derive additional force from the further fact that Powell went to St. Louis at Campbell’s request to confer with defendant’s agent Lightner, and there furnished the latter all the information at hand, and, as far as appears, all Lightner wanted, regarding the value of the stock on hand when the fire occurred and the increase and diminution of it later; for Lightner, no more than Lowe, asked for an examination under oath. What defendant had been insisting on wa,s an inventory of the stock, partly in order to verify the statement in the proof prepared by Lowe of the quantity of lumber on hand at the date of the fire, and partly as a means of determining whether or not it would write another risk on the stock, and so far the insured had rejected no demand by the company which was within the contract. On May 27th, about a month after the fire, defendant wrote Campbell to make a second and different demand, already mentioned and disposed of: to-wit, for an exact statement of the quantity of lumber in the yard when the fire occurred, its kinds, grades and quantity and the extent of its diminution and increase in the two weeks following the fire. On June 11th, the first mention of a sworn statement occurred in a letter from the secretary to Campbell, but no time or date was fixed for this, or demand made within the terms of the policy. [Dougherty v. Insurance Co., supra.] Defendant then took a third position and notified Campbell defendant would demand a personal examination under oath and production of [391] the hooks and papers in accordance with one of the provisions of the policy, unless the insured would withdraw the proof of loss, and until the following Saturday would be allowed for withdrawal. The insured having refused to withdraw the proof of loss, on May 28th, two months after the fire, defendant notified him for the first time the company asked for an examination under oath and the production of books and papers. This notice was given by a letter written from New York, but the actual demand was not made until July 5th, or more than sixty days after the proof of loss had been turned over to defendant and when its liability had accrued. We think it is unnecessary to determine whether the aforesaid stipulation of the policy should be held, when construed in connection with other clauses, to call for an examination prior to the adjustment of the loss, or whether Campbell’s unequivocal promise to pay at once and take a discount, bound the company. All the authorities cited in support of the proposition that refusal of the insured to submit to an examination, works a forfeiture of his rights under the policy are distinguishable -from the present case in one or more important particulars; either the refusal held to defeat recovery was for an examination demanded first before the proof of loss was made and any subsequent delay occurred from the misconduct of the insured, as in Fleisch v. Insurance Co., 58 Mo. App. 596; or the proof was prepared by the insured and sent to the company and was not in the nature of an adjustment of the loss by an accredited agent of the company. In the present instance the proof was prepared for Powell’s signature by an adjuster appointed by defendant after an investigation of all the facts to his own satisfaction, was approved by Campbell, an agent of quite general powers including power to adjust losses, and was then executed by Powell. We do not say these circumstances would necessarily preclude a company from demanding an examination if the company believed mistake or fraud had occurred in the adjustment, [392] but neither is pleaded. But a demand to examine under oath must be reasonable as to place and time. [4 Cooley, Ins. Briefs, 3395; Fleisch v. Insurance Co., supra; Murphy v. Insurance Co., 61 Mo. App. 323; Am. Cent. Insurance Co. v. Simpson, 43 Ill. App. 98.] Defendant’s demand was entirely unreasonable, in view of the facts that Lowe might have availed himself of an examination while adjusting the loss and Lightner might have demanded one when Powell, at his own expense, met him in St. Louis; that formal demand was not made until, under the terms of the policy, it was the duty of defendant to pay the loss, if there had happened no exonerating breach of the contract by the insured, and none is alleged. To allow the company to stave off payment by taking time for investigation after liability had accrued, would abrogate the policy-holder’s right to be paid sixty days after satisfactory proof of loss was received by the company. [Aetna Ins. Co. v. Schacklett (Tex.), 57 S. W. 583.] As this contract appears to be an Illinois one, we have not applied our statute, which requires examinations to be conducted where the loss occurred (R. S. 1899, sec. 7976). The judgment is affirmed. All concur.