14 S.E. 783 | N.C. | 1892
Lead Opinion
after stating the case: In his first interview with the plaintiffs, soon after the fire, which occurred July 31st, 1888, the adjuster of the defendant told them that their “books were not straight, but he would give them time to straighen them, and would (then) adjust the loss.” Inside of the sixty days limit fixed in the policy, the plaintiffs forwarded proofs of loss, which seem now to have been sufficient, as no further objection is urged to them. After waiting for an acknowledgment of the receipt of proof of loss, or for some further statement of the objection to their books, until May, 1889, the plaintiffs seem to have determined upon aggressive action for the recovery of their demand against defendant. Meantime Spencer, the adjuster, says that he made no objection to the .proof of loss because it was not incumbent on him to do so.
So soon as the plaintiffs began to move, first, by insisting upon knowing the adjuster’s objection to a settlement, and then, on May 10th, 1889, by demanding, through their attorneys, of the president of the company the immediate payment of II 000, with interest from October 1st, 1888, the adjuster seemed to feel it incumbent on him to meet them with counter demands for duplicate bills of all of the tobacco received at the warehouse in January, 1887. When the plaintiffs had sent for these bills and met Spencer again, they were informed that he insisted, according to the stipulations in the policy, that he should have for examination duplicate bills of all tobacco received at the warehouse from January 1st, 1887, till July 31st, 1888. As the policy covered tobacco in the warehouse that was owned absolutely by plaintiffs, as well as that consigned to them to sell on commission, he contended that he had the right to compare the books and the duplicate bills. When told by the plaintiffs on June 1st, 1889 (eleven months after the loss was sustained), that it would then take them six months to comply with his new demand for duplicate bills for eighteen months instead
The enforcement of both conditions of the policy at the same time was not possible, and the question, therefore, naturally arises whether, by demanding compliance with the one stipulation, the agent of the company did not waive the right to insist upon the performance of any other, the enforcement of which was inconsistent with his own demand. It seems to us, that if the adjuster had a right to insist upon the production of the vouchers, or to. waive such proof as he deemed best for the company, such power necessarily involved
So it is well settled that, if instead of extending the time for filing proofs of loss, the adjuster, who is charged with the
In Muse v. Assurance Co., supra, this Court, following the current of authority, held that the stipulation that there should be a forfeiture unless suit should be brought within twelve months after the loss, operated as a contract which might be waived, and not as a statute of limitation. Indeed, in that case it was declared that plaintiff might have submitted to judgment of nonsuit and brought a new action within a year after such judgment, though after the expiration of twelve months from the fire, if the limit had been imposed by a statute instead of by contract. When the rights
We are aware that it is possible to find authority in support of a different view of this 'case from, that taken by us, but we prefer, as between conflicting opinions, to follow that line of authorities that does not leave an ignorant individual who has made an honest effort to perform his contract at the mercy of shrewd agents of corporations because of stipulations with which he has been bound hand and foot. We have no sympathy with any construction of contracts which would leave the Courts powerless in the presence of an acknowledged fraud, though it be perpetrated by hedging one about with restrictive conditions and forfeitures, so that pursue what course he will he runs counter to a stipulation which, if strictly enforced, is fa.tal to his recovery of the money justly due to him in consideration of the fact that he has paid, his premiums and comes before the Court with clean hands. Under such circumstances technical defences
We think for the reasons given that there was no error in the charge of the Court below of which the defendant had just cause of complaint. His Honor put upon the plaintiffs the burden of showing that the adjuster made the promise to pay for the purpose of inducing delay, and then taking advantage of it under the limitation stipulation, though we consider the demand of the adjuster for the performance of any condition that he had a right to insist on and which was inconsistent with the bringing of the action within the limited time a waiver of that stipulation. Ames v. Insurance Co., supra. It seems to us, also, that the Judge might have told the jury that if the stipulation was waived by the conduct and language of the adjuster; then the plaintiffs were left free from any restriction as to the time of bringing suit except such as was imposed by the statute of limitations. The waiver, which the jury found was made by the adjuster, grew out of his insisting upon proofs which it required an indefinite time to procure and furnish, and it must be construed to have been absolute and unconditional, not an extension of its operation while the proofs were being produced. If the right to demand the forfeiture was waived at all, it was by such conduct on the part of the adjuster as made it inequitable for the company to insist upon the stipulation, or in other words, it was because the defendant was estopped by its conduct from enforcing that clause of the contract then or afterwards. 2 May, § 505, and other authorities cited supra. If the defendant was estopped from enforcing the forfeiture by matter in pais such as the conduct of its agent, inconsistent with the right to demand a compliance with it, it is difficult to understand how the estoppel could operate to defer the enforcement instead of destroying the. right to insist upon it entirely.
Dissenting Opinion
(dissenting): The policy sued upon in this action contains this clause of agreement: “It is expressly covenanted by the parties hereto that no suit or action against this company for recovery of any claim by virtue of this policy shall be sustainable in any Court of law or chancery, unless commenced within twelve months next after the loss shall have occurred ; and should any suit or action be commenced against this company after the expiration of the aforesaid twelve months, the lapse of time shall be taken and admitted as conclusive evidence against the validity of such claim, any statute of limitation .to the contrary notwithstanding.” The Court has held that such agreement is valid and binding on the parties to it. Muse v. Assurance Co., 103 N. C., 240; Manufacturing Co. v. Assurance Co , 106 N. C., 28. The alleged loss of the plaintiff occurred on July 31, 1888, and more than twelve months next thereafter, to-wit, on the 4th of June, 1890, this action began. Hence, by the express agreement above set forth of the parties, the alleged cause of action is without any force or validity, and not actionable.
The plaintiffs allege, however, that their delay in bringing their action was induced by the defendant. “ And they further say that defendant ought not to be allowed to set up said limitation of forfeiture as a defence to this action, since the delay in bringing this suit was caused by the actions and promises of the defendant, which induced plaintiffs to believe that the said limitation would not be pleaded or relied on.”
But the policy contains this further clause of agreement: “And it is further expressly covenanted by the parties hereto that no officer, agent or representative of this company shall be held to have waived any of the terms and conditions of this policy, unless such waiver shall be endorsed hereon in writing.” This agreement does not conti’avene any principle or policy of the law. It is reasonable, and there is no legal reason why it is not valid. The parties might make it,
It is not alleged that the defendant or its agent fraudulently induced the plaintiffs to delay the bringing of their action, but simply that they were induced to do so by the defendant’s “ actions and promises.” It appears that the plaintiffs furnished their proof of loss. The defendant’s agent (the adjuster) insisted that they should furnish certain other evidence of the extent of their loss. But the plaintiffs did not ask the agent of the defendant to waive the lapse of time in writing on the policy or otherwise as they might have done; they said nothing on that subject, nor did the defendant or its agent intimate that he had any authority to do so, nor did he promise to do so. There was no evidence sufficient to go to the jury to prove such a waiver by act or promise in writing or otherwise. The evidence relied upon fairly interpreted gives rise to no more than conjecture or the merest inference, that ought not to be allowed to prevail to destroy a plain and express stipulation. If evidence of the waiver, other than a waiver in writing endorsed on the policy, could be competent at all, it should have been clear and distinct,
This case is'very different from Joyner v. Massey, 97 N. C., 148, and other like cases cited for the plaintiffs. In these cases the defendants expressly asked and induced the plaintiffs not to sue, and promised directly that they would hot plead the statute of limitations. The Court properly held that it would be unconscionable and a fraud upon the plaintiffs to allow the defendárits to avail themselves of that plea. But here .the defendant did riot request the plaintiffs not to sue, nor did it promise not to avail itself of the express agreement under consideration. In view of this agreement the waiver should have been clear and distinct, hot left to mere inference.
The Court instructed the jury that if the defendant’s agent on the 1st of June, 1889, required the plaintiffs to produ'ce certain duplicate warehouse' bills, the plaintiffs would be entitled to a reasonable time within which to procure and produce the same, and left it to them to determine what was such' reasonable' time. The view I have taken above renders it unnecessary for me to point out the error in this instruction. I deem it worth while, however, to say that what is reasonable time is not a question' of fact for the jury to determine, but is a question of law to be determined by the Court when the facts are found or admitted, and when the facts do not appear the Court should submit the evidence to the jury, instructing them that there would or would not be reasonable time accordingly as they might find the facts in view of varying aspects of the evidence. See Emry v. Railroad, 109 N. C., 589, and cases there cited. In my judgment there is error, and. there ought to be a new trial.
Per curiam. Affirmed.
Lead Opinion
MERRIMON, C. J., dissenting. The defendant rested its defense solely upon the stipulation contained in the policy that no suit brought for the recovery of any loss and founded upon the policy should be sustainable in any court unless instituted "within twelve calendar months next after the loss shall have accrued."
The policy contained, also, another stipulation, which is as follows:
"If required, the assured shall produce books of account, and other papers and vouchers, and exhibit the same for examination either at the office of the company or such other place as may be named by its agent, and permit extracts and copies thereof to be made, and shall also furnish the original or properly certified duplicate invoices of all property hereby insured, whether damaged or not damaged."
It is admitted that the plaintiffs paid all the premiums that were due up to the time when the building, together with "the stock of leaf tobacco (their own or on commission, or held in trust for others), contained in the four-story brick building" insured by the policy, were destroyed by fire on 31 July, 1888. It is also now agreed that the plaintiffs are entitled to recover, as the value of the tobacco burned, $1,000, if their right of recovery has not been forfeited under the conditions of the policy. (195)
ISSUES
1. Did the plaintiffs make proper proof of the loss in accordance with the terms of the policy? Ans.: Yes. *140
2. Was plaintiffs' action commenced within the time limited in the policy? Ans.: No.
3. Has the defendant duly waived the limitation clause of the policy? Ans.: Yes.
4. Is plaintiffs' action barred by their failure to commence their action within the period specified in the insurance policy? Ans.: No.
5. Was the failure to commence action by plaintiffs against defendant within the time specified caused by the inducements, actions, or promises of defendant? Ans.: Yes.
Thereupon, judgment was entered for plaintiffs, and defendant appealed. In his first interview with the plaintiffs, soon after the fire, which occurred 31 July, 1888, the adjuster of the defendant told them that their "books were not straight, but he would give them time to straighten them, and would (then) adjust the loss." Inside of the sixty days limit fixed in the policy the plaintiffs forwarded proofs of loss, which seem now to have been sufficient, as no further objection is urged to them. After waiting for an acknowledgment of the receipt of proof of loss, or for some further statement of the objection to their books, until May, 1889, the plaintiffs seem to have determined upon aggressive action for the recovery of their demand against defendant. Meantime Spencer, the adjuster, says that he made no objection to the proof of loss because it was not incumbent on him to do so.
So soon as the plaintiffs began to move, first, by insisting upon knowing the adjuster's objection to a settlement, and then, on 10 May, 1889, by demanding, through their attorneys, of the president of the company the immediate payment of $1,000, with interest from 1 October, 1888, the adjuster seemed to feel it incumbent on him to meet them with counter demands for duplicate bills of all of the tobacco received at the warehouse in January, 1887. When the plaintiffs had sent for these bills and met Spencer again, they were informed that he insisted, according to the stipulations in the policy, that he should have for examination duplicate bills of all tobacco received at the warehouse from 1 January, 1887, till 31 July, 1888. As the policy covered tobacco in the warehouse that was owned absolutely by plaintiffs, as well as that consigned to them to sell on commission, he contended that he had the right to compare the books and the duplicate bills. When told by the plaintiffs on 1 June, 1889 (eleven months after the loss was *141 sustained), that it would then take them six months to comply with his new demand for duplicate bills for eighteen months instead of for the months of January, 1887, only Spencer replied that plaintiffs must do the best they could and inform him when they (203) should get the bills, and he would adjust the loss. The plaintiffs, taking him at his word, began to get up duplicate bills; but, according to the uncontradicted testimony of R. L. Dibbrell, found it impossible to finish the work before 1 January, 1890. When they did inform the adjuster of their readiness to comply with his demands, they could not induce him to answer even a registered letter communicating the fact. He then claimed that while the plaintiffs were engaged in the vain effort to comply with a demand performed in accordance with one stipulation of the policy, they had forfeited their right of action under another stipulation, which restricted them in its exercise to twelve calendar months after the loss occurred. The adjuster had felt it incumbent on himself to warn them of the Scylla of defective proofs, but had carefully refrained from suggesting that, in avoiding that, they would be stranded on the Charybdis of delay in initiating suit. If they had brought their action when their counsel proposed to issue summons on 12 May, 1889, the defendant would have resisted their recovery, upon the ground that they had failed when "required" to "furnish original or properly certified invoices of all property insured." The original bills of tobacco bought by them or sent by customers for sale were destroyed, and duplicates could not be gotten in less than six months.
The enforcement of both conditions of the policy at the same time was not possible, and the question, therefore, naturally arises whether, by demanding compliance with the one stipulation, the agent of the company did not waive the right to insist upon the performance of any other, the enforcement of which was inconsistent with his own demand. It seems to us that if the adjuster had a right to insist upon the production of the vouchers, or to waive such proof as he deemed best for the company, such power necessarily involved the authority also to waive the requirement that the action should be brought before such papers could be obtained. Wherever a company empowers (204) an agent specially to do, or the scope of his agency permits him to do, any act inconsistent with the idea that the company will insist upon a forfeiture under a given condition in the policy, then such act when done by him must be construed as a waiver of the right to demand its enforcement. 2 May Ins., secs. 505 and 497. This principle has been distinctly recognized by this and other courts of the country so often that it ought not to be deemed necessary to cite authority in support of it. InGrubbs v. Insurance Co.,
So it is well settled that if, instead of extending the time for filing proofs of loss, the adjuster, who is charged with the duty of examining them, informs the assured before the expiration of the sixty days that he denies the justice of this claim and will not pay it, (206) such conduct, by implication, renders it unnecessary to make out a statement of loss, and is held to be a waiver of the requirement to furnish it, as well as of the condition that suit shall not be brought within that time. Insurance Co. v. Jacobs,
Counsel for defendant seem to have overlooked the fact that (207) the plaintiffs are not insisting that the defendant company, by the conduct or the words not reduced to writing of its authorized agents, could extend the operation of a statute of limitations, but that it could by language uttered and acts done by such agents, while in the line of duty, waive the exaction of a forfeiture, which is not favored by the *144 court. Says Judge Christiancy, in Insurance Co. v. Hall, 8 Cooley (Mich.), 211, in referring to a stipulation similar to that under consideration: "If valid at all, it was valid as a contract, not as a statute. A limitation fixed by statute is arbitrary and peremptory, admitting of no excuse for delay, beyond the period fixed, unless such excuse be recognized by the statute itself. But a limitation by contract (if valid) must, upon the principle governing contracts, be moreflexible in its nature, and liable to be defeated or extended by any act of the defendant which has prevented the plaintiff from bringing his action within the prescribed period." In that case it was held that the condition was waived by furnishing no opportunity to plaintiff to serve process just before the expiration of the twelve months. A case directly in point is Ames v. Insurance Co., supra, wherein, discussing the waiver of a similar condition that suit must be brought within six months, the court said: "The defendants had it in their power, by objecting to the proofs of loss and neglecting or refusing to file them, to extend the time in which they were required to pay beyond the period of six months after the occurrence of the loss, and in such case clearly it could not be pretended that the insured had stipulated away his right of action, but the defendants would be deemed to have waived the twelfth condition. In this case the proofs of loss were delivered to the defendant some nine days after the fire. They were retained without objection eighty-fivedays, or within five days of the time when the loss was due and payable by the ninth condition. It was then first suggested by the secretary (208) that the proofs were incomplete in not setting forth, as required, whether or not the insured property was encumbered. Seven days thereafter, and on 14 October, the plaintiff transmitted an affidavit to the company supplying the alleged defect. No further objection was heard from the defendants, but they had secured all that was probably desired — an extension of time for ninety days from 14 October, and put it out of the power of the plaintiff to successfully maintain an action commenced within six months after the loss occurred. He was told, in effect, that the defendant would insist on the terms of the ninth condition (which provided that suit could not be brought for ninety days after filing proof of loss) as to the time when the loss was due and payable, and that, if he commenced an action to avoid the bar prescribed by the twelfth condition, they should interpose the defense that by the contract the insurance money was not yet due and payable. It cannot be doubted that the defendants intended to and did waive the limitation stipulated by the twelfth condition." This opinion is cited with approval by leading text-writers and many of the courts. Says May (vol. 2, sec. 505), "Thus the insured is estopped to object to a failure to bring suit within the time limited by an offer *145 to pay the loss afterwards or when such failure is induced by the conduct of the insurer" — citing Ames' case to sustain the position.
In Muse v. Assurance Co., Supra, this Court, following the current of authority, held that the stipulation that there should be a forfeiture unless suit should be brought within twelve months after the loss operated as a contract which might be waived, and not as a statute of limitations. Indeed, in that case it was declared that plaintiff might have submitted to judgment of nonsuit and brought a new action within a year after such judgment, though after the expiration of twelve months from the fire, if the limit had been imposed by a statute instead of by contract. When the rights of Muse were declared lost because the principles applicable to the statute of limitations did (209) not apply to a contract, we are at a loss to understand how counsel can contend that in the case under consideration the plaintiffs have lost their right of action, because the bar of the statute of limitations cannot be extended except by an agreement in writing and upon consideration, or at any rate a direct promise not to plead it. Neither Joyner v. Massey,
The plaintiffs' counsel, on 10 May, 1889, demanded a settlement of the president, and the secretary replied, referring them to the adjuster, who had "the matter in hand" and would treat with them, thus waiving directly their right to arrange the matters in controversy, if such authority would otherwise have been exclusively in them, and holding the adjuster out to the plaintiffs as armed with full power to represent the company and treat with the plaintiffs or their attorneys in their stead (see letter of the secretary) as fully as they or either of them could do. The facts in our case, therefore, present a peculiar aspect, in that the adjuster is expressly clothed with plenary power in the conduct of the settlement, as far as the president and the secretary of the company could confer such authority. Considering Spencer then, as the representative of the president, and so held out by his letter, he had authority, either directly or by implication, as a general agent of the company, in the language ofChief Justice Smith, in Hornthal v. Insurance Co., supra, "to waive a forfeiture and dispense with what would otherwise cause it."
We are aware that it is possible to find authority in support of a different view of this case from that taken by us, but we prefer, as between conflicting opinions, to follow that line of authorities that does not leave an ignorant individual who has made an honest effort to perform his contract at the mercy of shrewd agents of corporations because of stipulations with which he has been bound hand and foot. We have no sympathy with any construction of contracts which would leave the courts powerless in the presence of an acknowledged fraud, though it be perpetrated by hedging one about with restrictive conditions and forfeitures, so that, pursue what course he will, he runs counter to a stipulation which, if strictly enforced, is fatal to his recovery of the money justly due to him in consideration of the fact that he has paid his premiums and comes before the court with clean hands. Under such circumstances technical defenses should be disregarded upon (211) slight evidence of a waiver of rights under them, in order to do substantial justice.
We think, for the reasons given, that there was no error in the charge of the court below of which the defendant had just cause of complaint. His Honor put upon the plaintiffs the burden of showing that the adjuster made the promise to pay for the purpose of inducing delay, and then taking advantage of it under the limitation stipulation, though we consider the demand of the adjuster for the performance of any condition that he had a right to insist on and which was inconsistent with the bringing of the action within the limited time a waiver of that stipulation. Ames v.Insurance Co., supra. It seems to us, also, that the judge might have told the jury that if the stipulation was *147 waived by the conduct and language of the adjuster, then the plaintiffs were left free from any restriction as to the time of bringing suit except such as was imposed by the statute of limitations. The waiver, which the jury found was made by the adjuster, grew out of his insisting upon proofs which it required an indefinite time to procure and furnish, and it must be construed to have been absolute and unconditional, not an extension of its operation while the proofs were being produced. If the right to demand the forfeiture was waived at all, it was by such conduct on the part of the adjuster as made it inequitable for the company to insist upon the stipulation, or, in other words, it was because the defendant was estopped by its conduct from enforcing that clause of the contract then or afterwards. 2 May, sec. 505, and other authorities cited supra. If the defendant was estopped from enforcing the forfeiture by matter in pais, such as the conduct of its agent, inconsistent with the right to demand a compliance with it, it is difficult to understand how the estoppel could operate to defer the enforcement instead of destroying the right to insist upon it entirely.
