190 N.Y. 12 | NY | 1907
This action was brought to recover upon a fire insurance policy issued by the defendant, which is a corporation incorporated under the provisions of chapter 362, Laws of 1880, entitled "An act to provide for the formation of county co-operative insurance companies." The 7th by-law of the defendant, which was printed in full on the policy, provided: "Where fire is used in any building upon the premises within one hundred feet of any insured building for the purpose of making sugar or stripping tobacco or curing hops or drying apples this association will not be liable for any loss resulting from such fire. Nor will this association be liable for any loss resulting from any open fire, built by the insured with his knowledge or consent, within fifty feet from any insured building." On April 24th, 1905, the plaintiff's buildings were destroyed by fire. The fire was caused by a spark from an open fire (bonfire) which the plaintiffs ignited to burn up rubbish and which fire was forty feet distant from the barn. Section 10 of the by-laws provided: "In case of loss by fire or lightning the loser shall give notice to the secretary and director of the subordinate grange and said director shall notify the directors of two adjoining granges within five days, whereupon the said directors shall proceed to examine the loss or damage and to adjust the same. In case the parties cannot agree then said directors shall notify the president, who shall call the board of directors together to adjust the same and their decision shall be final." Three of the defendant's board of directors went to the place of the fire for the purpose of adjusting the loss. They found that the fire was set within fifty feet of the barn and told Draper that they could not adjust the loss, but would make out proofs *15 of loss so they could be presented to the board of directors. Proofs of loss were made and verified by Draper and by him sent by mail to Welling, the secretary of the defendant. Thereafter a meeting of the board of directors was called and Potter, one of the directors, wrote to the plaintiff Draper informing him of the date of the meeting and stating that the directors desired him to be present. Draper went forty miles to Oswego, the place of the meeting, paying his fare both ways, attended the meeting, was examined as to the loss and told that he could be excused. No formal action in relation to the adjustment of the loss by the board of directors appears to have been taken. Nothing further was done and this action to recover the loss was commenced. At the close of the evidence the defendant moved to dismiss the complaint, which motion being denied and exception to that ruling taken, the cause was submitted to the jury, which found a verdict for the plaintiffs. The learned trial judge charged that lighting the bonfire was a breach of the condition of the policy and the plaintiffs could not recover unless the jury should find the defendant had waived that breach. He said: "It was a condition made for its benefit, and if, for one reason or another, it chose to say, `We will not defend ourselves because of the breach of that condition; we will allow you to build a fire as you did, and will pay you in case a loss results,' then the plaintiffs may recover notwithstanding the breach of that condition. Such a waiver may be made by express language to that effect, or the company may make such a waiver by acts from which the intention to waive may be inferred or from which a waiver follows as a legal result. Where, after knowledge of the forfeiture of a policy the insurer recognizes its continued validity, does acts based thereon, and requires the insured by virtue thereof to do some act or incur some trouble or expense, the forfeiture is as a matter of law waived, and such a waiver need not be based upon any new agreement or upon estoppel. It exists when there is an intention to waive unexpressed but clearly to be inferred from the circumstances, *16 or when there is no such intention in fact but the conduct of the insurer has misled the insured into acting upon a reasonable belief that the company has waived some provision of the policy." Waiver was the only issue submitted to the jury and to the submission of that issue the defendant excepted. The Appellate Division reversed the judgment entered upon the verdict and the order denying defendant's motion for a new trial, the order of reversal stating that it was made upon questions of law only, the facts having been examined and no error found therein.
The law as to what constitutes a waiver was correctly laid down by the trial judge substantially in the language used by this court in Kiernan v. Dutchess County Mut. Insurance Company
(
There is no evidence in the record to support such a claim. Shortly after the fire one of the plaintiffs was informed by the three directors who visited him that they could not adjust the loss because the fire was occasioned by a cause excepted from the policy. They directed the preparation of proofs of loss and referred him to the board of directors. This was the course of procedure prescribed by the by-laws. There was no misrepresentation by any of the officers of the defendant. The plaintiff knew how the fire was caused and his attention had been called *18 to the exceptions in the risks insured against. The expenditures incurred by him in preparing the proofs of loss and attending the meeting of the directors were made with full knowledge of the facts. It might have happened that the directors would allow or compromise his claim, at least, that was the only chance the plaintiffs had of being paid their loss in whole or in part. No expenses incurred in the plaintiffs' unsuccessful efforts can be justly charged to the action of the defendant.
The views we have expressed are supported by authorities in other states. In Knights, etc., v. Shoaf (
It has been suggested that, under the decision we are about to make, insurance companies, to avoid the law of waiver, will change the terms of their policies and, instead of inserting conditions the breach of which render a policy void, provide that in case of such a breach the policy shall not cover the loss. There is no such danger. A provision of the kind suggested would be just as much a forfeiture as if expressed in the form now in use, that the policy shall be void.
The order of the Appellate Division should be affirmed and judgment absolute entered against the plaintiffs on the stipulation, with costs in all courts.
GRAY, O'BRIEN, VANN, WERNER, WILLARD BARTLETT and CHASE, JJ., concur.
Ordered accordingly. *19