Boyd v. Bankers & Shippers Ins. Co.

• Decision Date: 27 February 1957
• Docket Number: No. 666,666
• Citation: 245 N.C. 503,96 S.E.2d 703
• Court: North Carolina Supreme Court
• Parties: Arthur E. BOYD and wife, Mary M. Boyd, v. BANKERS & SHIPPERS INSURANCE COMPANY.

Page 703

96 S.E.2d 703

245 N.C. 503

Arthur E. BOYD and wife, Mary M. Boyd, v. BANKERS & SHIPPERS INSURANCE COMPANY.

No. 666

Supreme Court of North Carolina.

Feb. 27, 1957

Frank Freeman, Dobson, for plaintiffs appellants.

Wilson Barber, Mt. Airy, for defendant appellee.

WINBORNE, Chief Justice.

Is there error in the ruling of the trial court in granting defendant's motion for judgment as of nonsuit? Consideration of the pertinent acts of the General Assembly, and decided cases in respect thereto, leads to a negative answer.

The policy of insurance here involved is in form the 'Standard Fire Insurance Policy of the State of North Carolina' prescribed by the General Assembly, Section 14 of Chapter 378, 1945 Session Laws, by which G.S. § 58-176 and G.S. § 58-177, as they then appeared, were repealed and new sections of the same numbers were inserted. In the new G.S. § 58-176 the General Assembly has declared in pertinent part '(1) The printed form of a policy of fire insurance, as set forth in subsection three shall be known and designated as the 'Standard Fire Insurance Policy of the State of North Carolina.'

'(2) No policy or contract of fire insurance shall be made, issued or delivered by any insurer or by any agent or representative thereof, on any property in this State, unless it shall conform as to all provisions, stipulations, agreements and conditions, with such form of policy. * * *

'(3) The form of the standard fire insurance policy of the State of North Carolina * * * shall be as follows: * * * This policy is made and accepted subject to the foregoing provisions and stipulations and those hereinafter stated, which are hereby made a part of this policy, together with such other provisions, stipulations and agreements as may be added hereto, as provided in this policy.'

And among the stipulations set forth in such standard form of policy it is provided that when loss occurs, the insured shall file with insurer proof of loss, as therein prescribed and that 'No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss.'

In this connection the word 'inception' as defined by Webster means 'act or process of beginning; commencement; initiation. ' Hence as used above 'inception' necessarily means that the beginning, the commencement, the initiation of the loss was that caused by the fire.

Moreover, the General Assembly declared in the 1945 Act, Chapter 378, that 'All laws and clauses of laws in conflict with this Act are hereby repealed', and the Act became effective July 1, 1945.

And this Court in Meekins v. Aetna Ins. Co., 231 N.C. 452, 57 S.E.2d 777, 15 A.L.R. 2d 949, decided in 1951, in opinion by Denny, J., held in effect that the provision of the Standard Fire Insurance Policy of the State of North Carolina that an action to recover thereon must be commenced within twelve months next after the inception of the loss, unless a longer time for instituting suit has been agreed upon between the parties, and such agreement appears upon the face of the policy, is valid as a contractual limitation, and is binding upon and enforceable between the parties.

To like effect, in principle, are these decided cases: Holly v. London Assurance Co., 1915, 170 N.C. 4, 86 S.E. 694; Tatham & Co. v. Liverpool, London & Globe Ins. Co., 1921, 181 N.C. 434, 107 S.E. 450; Welch v. Phoenix Ins. Co., 1926, 192 N.C. 809, 136 S.E. 117; Midkiff v. North Carolina Home Ins. Co., 1929, 197 N.C. 139, 147 S.E. 812; Johnson v. Aetna Ins. Co., 1931, 201 N.C. 362, 160 S.E. 454; Rouse v. Old Colony Ins. Co., 1932, 203 N.C. 345, 166 S.E. 177; Zibelin v. Pawtucket Mut. Fire Ins. Co., 1948, 229 N.C. 567, 50 S.E. 2d 290.

In the Welch case, supra [192 N.C. 809, 136 S.E. 118], this Court in Per Curiam opinion referring to grounds upon which judgment of nonsuit may be sustained, stated that 'Failure of plaintiff, however, to commence the action within twelve months next after the fire, without allegation and proof of waiver or estoppel, precluding this defense, is sufficient,' adding 'decisions of this court are all to this effect,' citing Beard v. Sovereign Lodge, 1922, 184 N.C. 154, 113 S.E. 661, and other cases there enumerated.

In the Midkiff case, supra, this Court held that the terms and conditions of the standard form of a fire insurance policy, C.S. §§ 6436, 6437, and the stipulations as to a valid waiver thereof are valid and binding on the parties. Connor, J., opened the opinion of the Court by saying [197 N.C. 139, 147 S.E. 813]: 'When a policy of insurance, in the form prescribed by statute (C.S. § 6437), and known and designated as the Standard Fire Insurance Policy of North Carolina (C.S. § 6436), has been issued by an insurance company and accepted by the insured, and has thereby become effective for all purposes as their contract, the rights and liabilities of both the insurer and the insured, under the policy, must be ascertained and determined in accordance with its terms and provisions. These terms and provisions have been prescribed by statute, and are valid in all respects; they are just both the insurer and to the insured. Each is presumed to know all the terms, provisions, and conditions which are included in the policy. Both are ordinarily bound by them * * *. ' See also Johnson v. Aetna Ins. Co., 1931, 201 N.C. 362, 160 S.E. 454.

Moreover in Rouse v. Old Colony Ins. Co., supra, the judgment of the Court sustained the demurrer upon the ground that it appeared 'to the Court that the plaintiff did not institute his action on the policy sought to be recovered on within the twelve months next after the fire, and under the terms of said Standard Fire Insurance Policy of the State of North Carolina, the type of the policy sued on, it is required, as a condition precedent to the maintenance of any action for recovery thereon that such action shall be commenced within said period. ' And this Court, in Per Curiam opinion, affirming judgment below, declared: 'The decisions of this court are to the effect that the contractual limitation of twelve months in which to bring suit, inserted in a fire insurance policy by virtue of C.S. § 6437, is valid and binding,' citing Holly v. London Assurance Co., supra, and Tatham v. Liverpool, London & Globe Ins. Co., supra.

To like effect is Zibelin v. Pawtucket Mut. Fire Ins. Co., 1948, supra [229 N.C. 567, 50 S.E.2d 291], involving a standard fire insurance policy. There Devin, J., later C. J., summarizes: 'Unfortunately for the plaintiff, he failed to observe the terms of his policy and to comply with its plainly written provisions. The contract between the plaintiff and the Insurance Company embodied, in the standard form of fire insurance policy is one prescribed by statute G.S. § 58-177, and its provisions have been held by this court to be valid and just to insured and insurer. Greene v. Aetna Ins. Co., 196 N.C. 335, 145 S.E. 616. The rights and liabilities of both under the policy must be ascertained and determined in accord with its terms,' citing Lumber Mut. Cas. Ins. Co. v. Wells, 226 N.C. 574, 39 S.E.2d 741; Midkiff v. Dixie Fire Ins Co., supra; Muse v. London Assurance Company, 108 N.C. 240, 13 S.E. 94.

And it is worthy of note that the Federal District Court of Florida, Jacksonville Division, in case of Holderness v. Hamilton Fire Ins. Co. of New York, D.C.1944, 54 F.Supp. 145, interpreting the North Carolina statute, held that 'A provision in fire insurance policy, issued to North Carolina citizens on building in such state, that no action thereon shall be sustainable, unless commenced within 12 months after fire, is valid and enforceable in North Carolina, and hence bars action on policy in Florida after such time in absence of countervailing circumstances. ' See also Annotation 112 A.L.R. at page 1288; also 121 A.L.R. at pages 759 and 772. Annotation Contractual Limitation of Time for Suit.

Now in the light of contentions made by and for appellant on this appeal a brief history of the legislation in respect to the 'Standard Fire Insurance Policy of the State of North Carolina' may be appropriate and informative in reference to the many decisions of this Court pertaining to the subject.

The General Assembly of 1893, in Chapter 299, amended the insurance law then in effect in North Carolina so as to adopt, by reference, and provide for the exclusive use in this State the Standard Fire Insurance Policy prescribed under certain insurance law of the State of New York. But the act did not spell out the form of the policy.

Thereafter, in 1899, the General Assembly passed a comprehensive act, Chapter 54, entitled 'An act to regulate fire insurance and other companies. ' This act, under the sub-heading 'Fire Insurance', and in Section 43 declared that 'No fire insurance company shall issue fire insurance policies on property in this State other than those of standard form filed in the office of the insurance commissioners of the state, known and designated as the standard fire insurance policy of the state of North Carolina, except' (Exception not here pertinent); and in subsection f of Section 43 the form of such policy is prescribed and set out in detail.

And in Section 117 certain laws relating to insurance, among them Chapter 29 of The Code of 1883, and Chapter 299 Laws 1893, were repealed.

Moreover this act of 1899, as amended, was codified and incorporated as Chapter 100 entitled 'Insurance' in the Revisal of 1905 of North Carolina. And Sec. 43 of this act, P.L.1899 Chapter 54, became, in the main, Sections 4759, adopting standard fire insurance policy, and 4760, prescribing the form and conditions, stipulations and agreements of such standard form.

Next the General Assembly, by Sec. 9, Chapter 109, P.L.1915, amended the form and the provisions of...