Globe & Rutgers Fire Ins. Co. v. Stallard

• Decision Date: 04 January 1934
• Docket Number: No. 3511.,3511.
• Citation: 68 F.2d 237
• Parties: GLOBE & RUTGERS FIRE INS. CO. v. STALLARD et al.
• Court: U.S. Court of Appeals — Fourth Circuit

68 F.2d 237 (1934)

GLOBE & RUTGERS FIRE INS. CO. v. STALLARD et al.

No. 3511.

Circuit Court of Appeals, Fourth Circuit.

January 4, 1934.

Donald T. Stant, of Bristol, Va., for appellant.

Thomas L. Hutton, of Abingdon, Va., and J. P. Buchanan, of Marion, Va. (Hutton & Hutton and E. H. Moore, all of Abingdon, Va., on the brief), for appellees.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

PARKER, Circuit Judge.

This is an appeal from a judgment on a fire insurance policy. The insured was the plaintiff Stallard, his coplaintiffs, the Gilpins, being mortgagees of the insured property protected under the policy by an ordinary loss payable clause. The company pleaded two defenses: (1) Failure on the part of insured to file proofs of loss within sixty days as required by the terms of the policy, and (2) false swearing in the proofs of loss as finally filed. The exceptions cover the refusal to direct a verdict in favor of the company on the first of these defenses, and failure to charge the jury as requested with respect to the second. Although the policy was for $4,000, the court limited the recovery to $2,446.12 on the basis of a settlement made with another company which had issued a policy on the same property; and from the judgment rendered the company has appealed.

The policy covered a building used as a storehouse and hotel, on which there was another policy, written by the Federal Hardware & Implements Mutual Insurance Company, in the sum of $2,200. Both policies contained the usual three-fourths value and pro rata liability clauses. Fire which destroyed the building occurred August 27, 1930; and shortly thereafter insured made a settlement with an adjuster representing the Federal Company as to the amount due under the policy which it had issued. As preliminary to this settlement, an itemized estimate of the loss sustained in the destruction of the building was agreed on, which showed replacement cost at $6,481.17. From this was deducted agreed depreciation at 22 per cent., or $1,425, leaving an agreed sound value and loss of $5,055.32. On this amount, the total payable under the three-fourths value clause was $3,791.48, of which $1,345.36 was payable under the Federal policy and $2,446.12 under the policy of defendant.

Shortly after this settlement with the Federal, and within sixty days of the fire, insured attempted to reach a settlement with the adjuster of the defendant, who had been on the ground and adjusted the loss on a policy held by another company covering a stock of goods contained in the building. Defendant had issued two policies, the one here in suit covering the building, and another, in the sum of $3,000, covering the household and kitchen furniture therein contained. The adjuster was furnished by the insured with a copy of the estimate upon which the adjustment with the Federal had been made, and also with a list of the household and kitchen furniture. He made objection to items contained in the list last mentioned, but no objection to the estimate on the building. When he and insured could not agree on the furniture loss, insured asked about the building loss, and was told that "that would take care of itself." The adjuster testified that he was "satisfied as to the building, if the company was liable"; and, according to the testimony of the insured, he refused to settle the building loss merely because an agreement could not be reached as to the loss on the furniture. As insured was leaving the adjuster's office, the latter stated that he expected insured to comply with his policies, but said nothing to indicate that the statement furnished as to the building loss was not a sufficient compliance so far as that loss was concerned.

Some time after this disagreement, insured employed one O'Dell to assist him in collecting from the defendant on both policies; and O'Dell prepared an itemized estimate showing the building loss to be $12,508.16. On October 23d, insured wrote the company that he had been unable to get an adjustment on his policies; that he wished to appraise the loss under the appraisal clause: and that he had selected O'Dell to represent him in the appraisal. On October 25th the company answered this letter, saying that there had been no disagreement as to loss and that no proof of loss or sworn statement had been filed pursuant to the provision of the policies. While this letter referred to both policies, only the controversy with respect to the furniture loss was specifically mentioned and nothing was said directly with reference to the building loss, which insured had previously been told by the adjuster would take care of itself. On October 30th, insured again wrote the company, this time demanding an appraisal and inclosing a sworn itemized list of the furniture loss and an estimate signed by O'Dell of the building loss. On November 15th, the company replied, denying that insured had complied with the conditions of the policies or that there had been any disagreement as to sound value or any proofs of loss filed so far as it knew. Again there was no specific reference to the building loss or to the estimate furnished the adjuster upon which settlement had been made with the Federal Company.

On February 21, 1931, insured swore to proof of loss prepared by O'Dell and mailed it to the company. In this proof, the cash value of the property at the time of fire was stated to be $12,508.16; and attached thereto, as an exhibit, was the itemized statement of loss prepared by O'Dell. At the trial one witness for plaintiff testified that the building destroyed could be replaced with a new building for from $6,500 to $7,000. Another witness fixed the cost of replacement at from $7,000 to $8,000. A third fixed it at $7,930. It was undisputed that the building, with the furniture in it, and with the land upon which it was situate, had been purchased by insured for a price of $10,000, of which only $1,400 had been paid in cash. The provision of the policy with relation to false swearing is as follows:

"Fraud, misrepresentation, etc. This entire policy shall be void if the insured has concealed or misrepresented any material fact or circumstances concerning this insurance or the subject thereof; or in case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after a loss."

We think that the judge below was unquestionably right in refusing to direct a verdict for defendant on the ground of failure to furnish proofs of loss within the time required by the policy; for it clearly appeared that a detailed statement of loss had been furnished defendant's adjuster and that the facts were such as to make the question as to whether further proofs were waived a question for the jury to decide. The adjuster had been on the ground and investigated the loss; he presumably knew all about the ownership of the property and the lien upon it; he was furnished with an itemized statement of the loss upon which settlement with the other company had been made, to which he made no objection; he was thoroughly satisfied with the loss as so determined; and, when he insisted on negotiating with respect to the amount of the furniture loss and stated that the building loss would take care of itself, his language and conduct might well have been interpreted as meaning that the statements furnished with respect to the building loss were sufficient and that no further proofs with regard thereto were required. Neither the statement of the adjuster as insured was leaving his office, nor the general statements contained in the subsequent letters of the company were sufficient, we think, to absolutely negative the assurance given the insured with respect to the building loss; for he had been given to understand that the adjustment of that loss was refused, not because the proofs which he had furnished were not sufficient, but because he would not agree on the furniture loss. Under these circumstances, the question as to whether there was waiver of further proofs was one for the jury. Hartford Fire Ins. Co. v. Kiser (C. C. A. 4th) 64 F.(2d) 288, 290. The law on the subject is well settled. We had occasion to advert to it in the recent case of Niagara Fire Insurance Co. v. Raleigh Hardware Co. (C. C. A. 4th) 62 F.(2d) 705, 707, where we said:

"And we agree, also, that the defendants would be held to have waived the condition requiring that proofs of loss be furnished within sixty days, if failure to comply with such condition resulted in a forfeiture under the laws of West Virginia. They entered into negotiations with plaintiff looking to an adjustment of the loss. In the course of the negotiations they were furnished by plaintiff with plans and specifications of the burned building and other information usually contained in proofs of loss. By their investigation of the fire and through their dealings with plaintiff, they secured all the information which the proofs were designed to furnish; and the negotiations for an adjustment were, in the absence of notice to the contrary, sufficient ground for plaintiff's assuming that no further or more formal proofs of loss were necessary. Plaintiff's...