Concordia Ins. Co. v. School Dist. No. 98

• Decision Date: 14 May 1930
• Docket Number: No. 162,197-199.,162
• Citation: 40 F.2d 379
• Parties: CONCORDIA INS. CO. OF MILWAUKEE v. SCHOOL DIST. NO. 98 OF PAYNE COUNTY, OKL., and three other cases.
• Court: U.S. Court of Appeals — Tenth Circuit

40 F.2d 379 (1930)

CONCORDIA INS. CO. OF MILWAUKEE v. SCHOOL DIST. NO. 98 OF PAYNE COUNTY, OKL., and three other cases.

Nos. 162, 197-199.

Circuit Court of Appeals, Tenth Circuit.

April 18, 1930.

Rehearing Denied May 14, 1930.

F. A. Rittenhouse and Hal C. Thurman, both of Oklahoma City, Okl. (Frank E. Lee and John F. Webster, both of Oklahoma City, Okl., on the brief), for appellants.

Frank G. Anderson, of Oklahoma City, Okl. (Chester H. Lowry, of Stillwater, Okl., and R. M. Rainey, Streeter B. Flynn, and Rainey, Flynn, Green & Anderson, all of Oklahoma City, Okl., on the brief), for appellee.

Before LEWIS, PHILLIPS, and McDERMOTT, Circuit Judges.

LEWIS, Circuit Judge.

These appeals are from judgments on policies covering appellee's three-story brick school building, furniture and fixtures, and insuring the district against all loss or damage by fire. The policies were in the Oklahoma standard form. Comp. Okl. Stat. 1921, § 6767. The issues presented here are raised by demurrers to the amended complaints: (1) Whether the actions were instituted within the time limited by the policies, and (2) whether the requirement of the policies that insured should furnish written sworn proofs of loss was waived and insurers by their acts and conduct estopped to rely on that requirement. A third question, whether the court erred in allowing interest on the amounts recovered, is also presented.

Suits were brought in the State court within twelve months next after the fire, and then removed by appellants to the Federal court. After removal amended complaints were filed. It is contended by counsel for appellants that the amended complaints departed from the originals and stated new causes of action, and inasmuch as the amended complaints were not filed within the twelve months limited by the policies in which actions could be brought, the bar had fallen.

The only difference between the original and amended complaints is, the former alleged full compliance by appellee with all conditions and requirements of the policies to be kept and performed by it; whereas the latter alleged compliance by appellee with all conditions except the requirement it should furnish within sixty days after the fire sworn proof of loss; but as to that, it was alleged the insurers by their acts and conduct, specified in detail, had waived that requirement and estopped themselves. The acts and conduct on which the pleas of waiver and estoppel were based, had occurred prior to the time the actions were instituted in the State court; and of course appellants knew at all times that written and sworn proof of loss had not been furnished to them. It may be conceded, as we do (American Mills Co. v. Hoffman, 275 F. 285), that, if the amendments had abandoned the original causes of action on the policies and had set up entirely different and new causes of action, the point would be well taken, — more than twelve months having expired after the fire before the amendments were filed. But how can that contention be maintained when it clearly appears that the same wrong is made the subject of litigation in both original and amended complaints? In both originals and amendments plaintiff alleged the property insured was wholly destroyed by fire on January 2, 1926, that the policies issued by defendants insuring against loss or damage by fire were then in force and effect, that defendants had failed and refused to pay to plaintiff the loss sustained, and judgments were asked for the amounts named in the policies. The same relief was asked for the same breaches of the same contracts. A cause of action is the subject matter of controversy, the wrong of which a plaintiff complains and for which he asks relief. The Federal statute directing that amendments of pleadings be allowed (U. S. Code, Tit. 28, § 777 28 USCA § 777) is remedial in character and has at all times been liberally construed. The extent to which the courts have gone in this respect is illustrated in McDonald v. State of Nebraska (C. C. A.) 101 F. 171, and Mims v. Reid (C. C. A.) 275 F. 177. Moreover, it may be doubted whether good pleading requires a plaintiff to negative the performance of conditions subsequent to the loss to entitle him to recover. The supreme court of Oklahoma has held that it is necessary, Palatine Ins. Co. v. Lynn, 42 Okl. 486, 141 P. 1167; North British & Mercantile Ins. Co. v. Lucky Strike Oil & Gas Co., 70 Okl. 146, 173 P. 845, 22 A. L. R. 398; while the supreme court of New Mexico has held that such conditions go to defeat the liability of the insurer, are matters of defense and have no place in the declaration. Robinson v. Palatine Ins. Co., 11 N. M. 162, 66 P. 535. Again, appellants by their motions to make more definite and certain induced appellee to set up the pleas of waiver and estoppel. They moved that the plaintiff be required to state whether or not it furnished the defendants proofs of loss in the manner and form required by the policies. And then in their answers they plead those parts of the policies relating to furnishing the proofs of loss and alleged that those requirements had never been waived by appellants. Plaintiff's replies reiterated the waivers. The contention seems to be entirely without merit.

The next question goes to the sufficiency of appellee's pleas of waiver and estoppel. Those pleas are challenged as to both law and fact. As to the first it is said, oral waivers of proof of loss are conclusively precluded by the terms of the contracts; and as to the second, the pleas are bad in point of fact. As to the first, certain conditions of the policies are relied on. Those conditions and their requirements are these: If a fire occurred the insured was to give immediate notice of any loss thereby in writing to the company, and within sixty days after the fire render a statement to the company signed and sworn to by the insured stating his knowledge and belief as to the time and origin of the fire, the interest of insured and all others in the property, the cash value of each item and the amount of loss thereon, all encumbrances thereon, all other insurance, a copy of all descriptions and schedules in all policies, any changes in the title, use, occupation, location, possession or exposure of the property since the issuing of the policy, and by whom and for what purpose the building and its several parts were occupied at the time of the fire. That the company should not be held to have waived any provision or condition of the policy by any requirement, act or proceeding on its part relating to the appraisal or any examination provided for; and the loss shall not become payable until sixty days after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by the company, including an award by appraisers when appraisal has been required. No suit or action on the policy for the recovery of any claim shall be sustainable in any court until after full compliance by the insured with all the foregoing requirements, nor unless commenced within twelve months after the fire. In any matter relating to this insurance no person unless duly authorized in writing shall be deemed the agent of insurer. No officer, agent or other representative of the insurer shall have power to waive any provision or condition of the policy except such as by the terms of the policy may be the subject of agreement endorsed thereon or added thereto, and as to such provisions and conditions no officer, agent or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached thereto, nor shall any privilege or permission affecting the insurance under the policy exist or be claimed by the insured unless so written or attached.

The last noted provisions are aptly referable to certain contractual obligations assumed by the insurers in the policies. For instance, the policy granted permission to make certain alterations, improvements and repairs and prohibited the making of other and more substantial work upon the building unless permission to do so is specifically covered by endorsement attached to the policy; no gasoline in excess of a certain amount could be kept or used on the premises unless permitted by endorsement on the policy. The building could not be abandoned for school purposes for an indefinite period without written permission endorsed on the policy. Permission was granted to use artificial or natural gas for fuel or light only when supplied through Public Service gas pipes. These all appear to be conditions affecting the insurer's risk, contractual obligations, and could not be waived except in the manner required, that is, by endorsement in writing.

We pass now to a summary of the challenged pleas. The amended complaints alleged that on January 2, 1926, and within two or three hours after the fire had destroyed the building and furniture and fixtures therein, the plaintiff notified appellants' agents of the fire and the extent of the damage and destruction, with the request that they notify their companies. That within two or three days thereafter the appellants selected named persons to represent them and authorized such persons to investigate the fire and make estimates as to the value of the property destroyed and settle for the loss; that these adjusters for the insurers visited the scene of the fire and made examinations as to the value of the property destroyed and the circumstances surrounding the fire, and had plaintiff furnish them with the items of the property destroyed, the...