Mayor of New York v. Hamilton Fire Insurance

39 N.Y. 45 | NY | 1868

The defense in this case is based upon a non-compliance with the contract of limitations created by the tenth condition of the policy. In Roach v. The N.Y. Erie Ins. Co. (30 N.Y. 546), the condition in question was held to be valid. We are bound to hold in the same manner in the present case. In Ames v. N YUnion Ins. Co. (14 N.Y. 253), it was held that this condition might be waived by the acts and declarations of the parties, and that it had been waived by the parties in that case. The condition is extremely stringent. It is in derogation of the rights of the assured as given by the statute of limitations of the State. It is often not known or not considered by the assured, and should only be permitted to prevent a recovery, when its just and honest application would produce that result.

The cases above cited, also hold that this condition should be construed in connection with the other conditions of the policy, and so construed as to give the fullest possible effect to all.

The eleventh condition provides that "payment of losses shall be made in sixty days from the date of the adjustment of the preliminary proofs of loss."

The counsel for the appellants insist that the word "adjustment" is inaccurately used in this connection, that it is only appropriate in the settlement of marine losses, and then not by means of the action of parties themselves. This is not impossible. In the preceding condition, when it is said that "unless such suit or claim shall be commenced within the term of six months after any loss or damage shall accrue," the words "loss or damage" are not used with legal precision. "Within six months after the right of action shall have accrued" was, no doubt, what the parties intended. That construction would cut off five years and six months of the right to sue as given by law, and to hold that it extended as much farther as the right to serve and object to preliminary proofs might require, with sixty days added to that, would require of the sufferer very prompt action indeed, to enable him to receive any benefit from his policy.

But the condition gives the company sixty days from the date of the "adjustment of the preliminary proofs of loss by the parties" before the loss is payable. To "adjust," in its fair meaning, is to settle or bring to a satisfactory state, so that parties are agreed in the result (Webster). And that this is a fair reading in the present case, is evident from the use of the words "by the parties" at the close of the condition. The preliminary proofs are to be adjusted by the parties. The parties are to act upon them by negotiation, by statements on the one side, demands for correction or addition on the other, by compliance with such requests, until the parties agree. If they do not agree, it can hardly be termed an adjustment by the parties, although the law may itself determine the sufficiency of such proofs. In the present case the parties had not adjusted the proofs so recently as the 12th of February, 1859, when additional proofs were served, and possibly not as late as the 18th of that month, when the defendants made a demand of still further proofs. I infer that the plaintiffs relied upon their last proofs as sufficient, and refused to furnish any other, as the case contains no evidence of any further action in that respect. If, however, we fix the time when the preliminary proofs were complete, as on the 12th of February, 1859, the defendants were under no obligation to pay, and no suit could successfully be commenced against them until sixty days from that date. This is the period, in my judgment, at which the claim or right to sue becomes perfected against the company. At the end of these sixty days, the period of six months commences to run. This I understand to be the necessary result of the reasoning of Judge WRIGHT in Ames v. The Union Ins. Co. (supra, 264, 265). At this time, and not before, the plaintiffs could have commenced their action. The object was to compel an early litigation, within six months after the right to sue attached. The suit was commenced on the 16th of April, 1859, which, in my view of the case, was within four days of the time in which the plaintiffs would have been justified in instituting the proceeding. The preliminary proofs were first served on the 30th of November. No objection appears to have been made that they were not served in time. If the six months were counted from that date, a rule much too favorable to the defendants, the suit would still have been commenced in time.

Judgment should be affirmed, with costs.

Judgment affirmed.