Central City Ins. Co. v. Oates

• Decision Date: 02 May 1889
• Citation: 86 Ala. 558,6 So. 83
• Parties: CENTRAL CITY INS. CO. v. OATES.
• Court: Alabama Supreme Court

6 So. 83

86 Ala. 558

CENTRAL CITY INS. CO. v. OATES.

Supreme Court of Alabama

May 2, 1889

Appeal from circuit court, Montgomery county; JOHN P. HUBBARD Judge.

This was an action brought by W. J. Oates against the Central City Insurance Company, and was founded on a policy of insurance issued by defendant to plaintiff on a stock of goods owned by him. Defendant pleaded the general issue, and by special pleas set up the defense that defendant had not fulfilled the conditions stipulated in the policy; had not forwarded to the company sworn proof of loss; and had not given the company a certificate of loss by a magistrate. Plaintiff filed his replication, and setting up waiver of such proof and certificate by the company, after having been given notice of the loss, on the ground that the company had made no objection to the notice as forwarded to them, and had not complained to plaintiff of not having received such proof and certificate, but that in the dealings of plaintiff with the agents of the company, and with the company itself, no objection was made as to plaintiff's failure to give such proof and certificate. Defendant demurred to this replication of plaintiff, on the ground that the facts, as set out constituted no waiver of the conditions of said policy. The court overruled this demurrer, and defendant duly excepted. Among many charges requested by defendant was the following "That if the jury believe the evidence they must find for the defendant. The court refused to give this charge, and defendant excepted. There was verdict and judgment for plaintiff, and defendant appeals.

Pettus & Pettus and Troy, Tompskins & London, for appellant.

Jones & Falkner, for appellee.

SOMERVILLE J.

The policy of insurance sued on, among other conditions, requires three important steps to be taken by the assured in the event of a loss by fire: (1) He must "forthwith give notice of said loss to the company in the city of Selma;" (2) "and, as soon as after as possible, [he must] render a particular account of such loss, signed and sworn to by him," (the assured), stating the origin of the fire, what other insurance he has, if any, his interest in the property, its value, and by whom and for what purpose it was occupied; (3) "he must produce the certificate of the nearest disinterested magistrate that such officer has examined the circumstances of the loss, and believes that it originated without fraud, and amounted to a specified sum." These three requirements, omitting for the present all mention of others, viz.: (1) notice of loss; (2) sworn proof of loss; (3) certificate of loss by a magistrate,-have uniformly been held by the courts to be conditions precedent in policies of insurance like the present one, and satisfactory evidence of compliance with them, in proper time, has been held to be an essential prerequisite to the right of recovery by the assured, unless such compliance is waived by the insurer. Wellcome v. Insurance Co., 2 Gray, 480; May, Ins. §§ 460, 466; Insurance Co. v. Felrath, 77 Ala. 194.

"Forthwith" in all such policies means without unnecessary delay, or with reasonable diligence, under the circumstances of the particular case. Insurance Co. v. Kyle, 11 Mo. 278.

It has been held in one case that delay of 11 days, and in another of 18 days, in giving notice of loss, is not a compliance with such a requirement, in the absence of excusatory facts explaining the delay. Trask v. Insurance Co., 29 Pa. St. 198; Edwards v. Insurance Co., 75 Pa. St. 380. Where the fire occurred on the 15th, and the plaintiffs, hearing of it on the 18th, gave notice by mail on the 23d, this was held to be a sufficient compliance with a condition requiring notice to be given "forthwith." Insurance Co. v. Insurance Co., 20 Barb. 468. And notice given on the morning after the fire was held sufficient in Hovey v. Insurance Co., 2 Duer, 554. The settled rule in all cases, however, is to construe such requirements liberally in favor of the assured, and strictly against the insurer. Insurance Co. v. Young, 58 Ala. 476; Insurance Co. v. Johnston, 80 Ala. 467, 2 South. Rep. 125.

It has been held, by this and other courts, that where preliminary proofs of loss are presented to the insurer in due time, and they are defective in any particular, these defects may be waived in either of two modes: (1) By a failure of the insurer to object to them on any ground within a reasonable time after receipt,-in other words, by undue length of silence after presentation; or (2) by putting their refusal to pay on any other specified ground than such defect of proof. The reason is that fair-dealing entitles the assured to be apprised of such defect, so that he may have an opportunity to remedy it before it is too late. Insurance Co. v. Felrath, 77 Ala. 194; Insurance Co. v. Crandall, 33 Ala. 9; Insurance Co. v. McDowell, 50 Ill. 120; Insurance Co. v. Kyle, supra; Insurance Co. v. Allen, 80 Ala. 571, 1 South. Rep. 202.

So there are cases decided by this and other courts which hold, and properly so, we think, that an entire failure to make any formal proof of loss may sometimes be excused on the principle of waiver or estoppel in pais. In Martin v. Insurance Co., 20 Pick. 389, no evidence was offered of any preliminary proofs before bringing the action, but only of an abandonment not accepted, and a demand of payment of the loss. The insurer refused to pay the loss solely on account of the unseaworthiness of the vessel, and in all their communications with the plaintiff made no objection to the want of proof. The court held that the refusal to pay on the ground specified was a fact from which the jury were authorized to infer a waiver of the proof of loss. On like principle, a waiver of preliminary proofs has been inferred from a distinct refusal of the company to pay because the assured had taken other insurance without notice, and "had in other ways acted unfairly." Insurance Co. v. Neve, 2 McMul. 237. And again, on the ground that no valid contract of insurance had ever been entered into because incomplete at the time of the loss, no objection being made to the want of such proofs. Tayloe v. Insurance Co., 9 How. 390; Insurance Co. v. Adler, 71 Ala. 518 Badger v. Insurance Co., 49 Wis. 400. The payment by the insurer of a part of the sum agreed to be paid by the policy in case of loss has also been held a waiver of the usual preliminary...