Chandler v. St. Paul Fire & Marine Insurance Co.

• Decision Date: 12 October 1874
• Citation: 21 Minn. 85
• Court: Minnesota Supreme Court
• Parties: WILLIAM CHANDLER & others <I>vs.</I> ST. PAUL FIRE & MARINE INSURANCE COMPANY.

21 Minn. 85

WILLIAM CHANDLER & othersvs.

ST. PAUL FIRE & MARINE INSURANCE COMPANY.

Supreme Court of Minnesota.

October 12, 1874.

Appeal by defendant from an order of the court of common

pleas for Hennepin county, A. H. Young, J., presiding, refusing a new trial.

Harvey Officer, for appellant.

Cornell & Bradley, for respondents.

YOUNG, J.

By a policy issued April, 11, 1871, the defendant insured plaintiffs for the term of six months, against loss or damage by fire, to the amount of $5,000, "on their railroad ties piled along the line of the Northern Pacific Railroad from the Junction to the Red River of the North in Minnesota," agreeing to make good to the assured all loss, etc., "to be paid within sixty days after due notice and satisfactory proofs of the same." Between May 7 and 22, 1871, several thousand of the ties insured were destroyed by accidental fire. The plaintiffs gave immediate notice of the loss, and the defendant thereupon entered upon an investigation of the facts relating to the fire: a disagreement arose between the parties as to the actual number of ties burned, and some five months were consumed in fruitless negotiations on this subject. On April 8, 1872, the plaintiffs furnished the defendant with formal proofs of loss. This action was brought August 7, 1872, to recover the amount claimed to be due plaintiffs on the policy.

The policy contains the following condition, limiting the right of the assured to sue and recover for a loss: "It is expressly covenanted by the parties hereto that no suit or action against the company, for the recovery of any claim under or by virtue of this policy, shall be sustained in any court of law or chancery, unless commenced within the term of one year next after any claim shall occur; and in case such suit or action shall be commenced against the company, after the end of one year next after such loss or damage shall have occurred, the lapse of time shall be taken and admitted as conclusive evidence against the validity of the claim thereby attempted to be enforced, any statute of limitations to the contrary notwithstanding."

The first branch of this condition clearly sustains the plaintiffs' contention. The expression, "claim shall occur," obviously means claim shall "arise," or "accrue." No claim occurs or arises in favor of the assured upon the mere happening of the loss. The giving of notice, and the furnishing of satisfactory proofs, are conditions precedent to be performed by the assured before they are entitled to claim the stipulated indemnity; and not until sixty days after the performance of the last of these conditions, can their claim be enforced by suit. It is unnecessary to determine in this case whether, by the first branch of the condition, the time of limitation begins to run from the furnishing of proofs, or sixty days thereafter. It would seem, however, that the claim exists when notice has been given and proofs furnished, although it is not payable until the expiration of the sixty days.

The second branch of the condition as clearly provides that unless suit is brought within one year after the occurrence of the loss, the lapse of time shall be conclusive evidence against the validity of the claim. These two limitations cannot stand together. By the first, an action might be sustained, if commenced before June 8, 1873, or at any rate, if brought prior to April 9, 1873; but by the second, lapse of time would be a conclusive bar to such action, if brought after May 22, 1872. During the interval, an action might be maintained under the first limitation, but must be defeated by the second.

The two branches of the condition being thus inconsistent, and the whole being ambiguous, its meaning can only be ascertained by a resort to construction.

The language of the condition is the language of the company, and for any ambiguity in its terms the company is responsible. If the company has seen fit to express itself in terms that require interpretation, it cannot complain if any doubt as to the meaning of the condition is resolved in favor of the assured. The rule that words are to be taken most strongly against the party using them, is more applicable to the conditions and provisos of policies of insurance than to almost any other instruments. These policies are wholly prepared by the company issuing them, and should be drafted with the most scrupulous exactness. They should be absolutely free from ambiguity. "A policy ought to be so framed that he who runs can read. It ought to be framed with such deliberate care that no form of expression by which, on the one hand, the party assured can be caught, or by which, on the other, the company can be cheated, shall be found upon the face of it." Anderson v. Fitzgerald, 4 H. of L. Cas. 484, 510. This rule has been adopted in many cases involving the construction of exceptions, warranties and conditions precedent in policies. See Blackett v. Assurance Co., 2 Crompt & Jer. 244, 251; Notman v. Anchor Assurance Co., 4 C. B. (N. S.) 476, 481; Fitton v. Accidental Death Ins. Co., 17 Id....