Crouch v. Franklin Nat'l Ins. Co.

• Decision Date: 06 December 1927
• Docket Number: (No. C. C. 405)
• Citation: 104 W.Va. 605
• Parties: E. H. Crouch, etc. v. Franklin National Insurance Company
• Court: West Virginia Supreme Court

104 W.Va. 605

E. H. Crouch, etc.

v.Franklin National Insurance Company

(No. C. C. 405)

Supreme Court of Appeals of West Virginia.

Submitted November 29, 1927.

Decided December 6, 1927.

1. Appeal and Error Pleading Plaintiff's Plea or Written Statement, Showing Waiver, Estoppel, or Confession and Avoidance of Matters Stated in Defense to Action on Insurance Policy, is Demurrable, if Insufficient; Questions Arising on Demurrer to Plaintiff's Plea or Written Statement, Showing Waiver, Estoppel, or Confession and Avoidance of Matters Stated as Defense to Action on Fire Policy, May be Certified (Code, c. 125, §§ 61, 64, 65; c. 135, § 1).

A plea or statement in writing by the plaintiff, filed pursuant to section 65 of chapter 125 of the Code, specifying in general or specific terms the matters on which he intends to rely in waiver, estoppel or confession and avoidance of any matter which the defendant has stated by way of defense under section 64 of said chapter to plaintiff's action on a policy of insurance declared on in form provided by section 61 of said chapter, if not sufficient to constitute such waiver, may be met by defendant's demurrer thereto, and the questions arising thereon may be certified to this Court under section 1 of chapter 135 of the Code. (p. 608).

(Appeal and Error, 3 c. J. § 934a [Anno]; Insurance, 33 c. J. § 806.)

2. Insurance Insurance Adjuster's Inducing Belief That Proof of Loss Was Unnecessary Held Waiver of Formal Proof of Loss.

When an insurance adjuster, with authority from the insurer to represent it in respect to loss under its policy of insurance, demands of and receives from the insured all the information required by him and by the proof of loss clause in the policy, and enters into negotiations with the insured for settlement under the policy as if formal proof of loss had actually been furnished, and thereby induces the insured to believe that further proof of loss will not be required, such acts will amount to a waiver of such formal proof of loss. (p. 612.)

(Fire Insurance, 26 C. J. § 517.)

3. Same Waiver of Proof of Loss is Not Defeated by Subsequently Attempting to Furnish it Before Suing on Policy.

A waiver of proof of loss is not defeated by the subsequent act of the insured in attempting to furnish the same before bringing suit on the policy. (p. 613.)

(Fire Insurance, 26 C. J. § 505.)

4. Same Insured Need Not Demand Appraisal of Loss by Arbitrators Before Suing on Policy Providing for Arbitration.

Where an insurance policy provides that in case of failure of the company and the insured "to agree upon the amount of loss or damage, each shall, on the written demand of either," submit to arbitration in the manner provided, the insured is not bound to demand such appraisal as a condition precedent to instituting an action to recover for the loss under the policy. (p. 614.)

(Fire Insurance, 26 C. J. § 571.)

(Note: Parenthetical references by Editors, C. J. Cyc. Not part of Syllabi.)

Certified Questions from Circuit Court, Raleigh County.

Action by E. H. Crouch against the Franklin National Insurance Company. After overruling defendant's demurrer to and motion to strike out plaintiff's reply to a specification of defense, the trial court certified questions.

Affirmed.

Ward & Sanders, for plaintiff.

File, Goldsmith & Scherer and French, Easley & Easley, for defendant.

Mileer, Judge:

This action was brought for the loss occasioned to plaintiff by fire, to his lumber plant, covered by a policy of insurance issued by the defendant company. The declaration is in the short form provided for by section 61 of chapter 125 of the Code, with policy attached.

The defendant filed its specification of particular defense, pursuant to section 64 of said chapter, alleging that the plaintiff had rendered to defendant a proof of loss, as required by the policy, on May 31, 1927, and on July 13, 1927, instituted this action, less than sixty days after rendering the proof of loss, when the policy provides that: '' The amount of loss or damage for which this company may be liable shall be payable sixty days after proof of loss, as herein provided, is received by this company and ascertainment of the loss or damage is made either by agreement between insured and this company expressed in writing or by the filing with this company of an award as herein provided. 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, nor unless commenced within twelve months next after the fire;'' and it is further alleged that the parties having failed to agree upon the amount of defendant's liability under the policy, the matter should have been submitted to arbitration under the clause of the policy which provides that, if the insured and the company "fail to agree as to the amount of loss or damage, each shall, on the written demand of either, select a competent and disinterested appraiser," who, together with an umpire to be selected by them, are to appraise the loss or damage in accordance with the requirements of the policy.

To this specification of defense, plaintiff filed the reply provided for in section 65 of chapter 125, alleging waiver of the conditions of the policy requiring the rendering of a formal proof of loss. This plea alleges that on April 1, 1927, the day following the fire, plaintiff notified the defendant through its local agent, of his loss; that about the 5th or 6th day of April, the defendant authorized and directed the General Adjustment Bureau, of Bluefield, West Virginia, to represent it in respect to the loss under its policy of insurance, and through said authorized agent investigated the origin of the fire, and gave plaintiff permission and authority to sell any and all personal property damaged and not destroyed by the fire, for whatever price he could obtain for the same, to be credited on the loss, and to repair all buildings damaged and not destroyed, which the plaintiff immediately carried into effect; that at the request of the defendant, through said agent, plaintiff furnished its agent with a complete inventory of all the property, damaged and undamaged, mentioned in the policy, together with all the information required by the terms of the policy to be included in the proof of loss provided therein; that the defendant, through its said authorized agent, made a critical inquiry of plaintiff concerning all the property covered by the policy, and examined plaintiff's books and invoices in respect to the property; that by its conduct, through its authorized agent, the defendant led plaintiff to believe that it required no more formal proof of loss than that which he had given to it, as hereinbefore mentioned; that by the conduct of defendant, it thereby waived the stipulation, warranty or condition in said policy with respect to said proof of loss and any further formal proof thereof, and is now estopped to assert the same; that defendant's said agent and plaintiff attempted to agree on the amount of loss, but did not do so; that the defendant expressed no desire to arbitrate the difference between them as to said amount, and did not intimate that it would demand an appraisal until July 15, 1927, after the institution of this action; wherefore by its acts defendant waived the right to demand an appraisal, etc.

The circuit court overruled defendant's demurrer to and motion to strike out plaintiff's reply to the specification of defense, and certified to this Court the questions arising on said ruling.

On the hearing here plaintiff contends that his replication is not such a pleading as is contemplated by section 1 of chapter 135 of the Code, authorizing the certification to this Court of "any question arising upon the sufficiency of a summons or return of service, or challenge of the sufficiency of a pleading within the appellate jurisdiction of the supreme court of appeals," etc., in other words, that a demurrer or motion to strike will not lie to such a pleading. For this proposition we are cited to our cases of Capellar v. Insurance Co., 21 W. Ya. 576; Rosenthal Co. v. Insurance Co., 55 W. Va. 258; Tucker v. Insurance Co., 58 W. Va. 30; Seyler v. rance Co., 72 W. Va. 120, and Bush v. Insurance Co., 74 W. Va. 244.

By reference to the opinion in Bentley v. Insurance Co., 40 W. Va. 729, it will be found that the Court recognized the apparent conflict then existing in our decisions; and Judge Brannon calls attention to the fact that in Deitz v. Insurance Co., 31 W. Va 851, and Rheims v. Insurance Co., 39 W. Va. 672, the Court had held that the statements prescribed by sections 64 and 65 of chapter 125 of the Code, to be used when certain defenses are relied upon, were pleadings subject to demurrer, without mention of the Capellar case, and says that it "was overlooked, or passed sub silentio." And it was held in the Bentley ease that a demurrer would lie to defendant's statement which presented no defense to plaintiff's pleadings. We think the reasons given in the opinion in that case sufficiently convincing to dispose of this question finally. Judge Brannon clearly distinguishes "mere bills of particulars accompanying declarations in assumpsit and pleas of payment or bills of particulars under section 46, chapter 130 of the Code," from the statements and replies prescribed by sections 64 and 65 of chapter 125, holding that the statute has substituted the latter for the common-law pleadings. See, also Petit v. German Insurance Co., 98 Fed. 800, construing the same statute, where the Bentley case is cited and followed.

In Rosenthal Co. v. Insurance Co., supra, the defendant filed no statement pointing out the promissory warranties in the policy which it claimed defendant failed to observe; one that the insured should make an inventory of its stock of goods before the policy became effective, and the other that it should keep books of account...