Engleman v. Royal Ins. Co., Limited, of Liverpool, England

• Decision Date: 05 November 1935
• Docket Number: 3102.
• Citation: 51 P.2d 417,56 Nev. 319
• Parties: ENGLEMAN v. ROYAL INS. CO., LIMITED, OF LIVERPOOL, ENGLAND.
• Court: Nevada Supreme Court

51 P.2d 417

56 Nev. 319

ENGLEMAN v. ROYAL INS. CO., LIMITED, OF LIVERPOOL, ENGLAND.

No. 3102.

Supreme Court of Nevada

November 5, 1935

Appeal from District Court, Clark County; Wm. E. Orr, Judge.

Action by M. W. Engleman against the Royal Insurance Company Limited, of Liverpool, England. From a judgment for defendant and an order denying a new trial, plaintiff appeals.

Affirmed.

C. D Breeze and Harold M. Morse, both of Las Vegas, for appellant.

Thornton Menzies & Penney, of Los Angeles, Cal., and Henderson & Marshall, of Las Vegas, for respondent.

DUCKER Chief Justice.

This is an action on an insurance policy, brought by the plaintiff as assignee of the insured, to recover the sum of $2,000 damages caused by fire. The property insured, certain goods, wares and merchandise, consisted chiefly of pawnbroker's stock, business furniture, fixtures, and equipment, situated in a certain building in the city of Las Vegas. The fire occurred January 16, 1933, and it is alleged that said personal property described in the policy of insurance was destroyed. Compliance by the insured subsequent to the fire with each and every condition on his part to be performed, as provided for in the policy, is alleged.

The defense is based on several clauses of the policy. The court found in favor thereof and rendered judgment for defendant. This appeal is from the judgment and order denying a new trial.

The first clause of the policy involved, so far as its terms are material here, reads: "If fire occur the insured shall give immediate notice of any loss thereby in writing to this company; protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order; make a complete inventory of the same, stating the quantity and cost of each article and the amount claimed thereon; and, within sixty days after the fire, unless such time is extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to the time and origin of the fire; the interest of the insured and of all others in the property; the cash value of each item thereof and the amount of loss thereon; all other insurance, whether valid or not, covering any of said property. * * *"

The second and third clauses involved, read:

"This company shall not be held to have waived any provision or condition of this policy or any forfeiture thereof by any requirement, act, or proceeding on its part relating to the appraisal or to any examination herein 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 this company, including an award by appraisers when appraisals have been required."

"No suit or action on this policy for the recovery of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within 12 months after the fire."

The main question presented for determination is whether the judgment finds support in the evidence. Plaintiff contends that it does not (1) because full compliance with the terms and conditions of the policy was shown, and (2) because of waiver on the part of the defendant.

We are satisfied that the evidence, under the applicable rules of law, justified the trial court in finding for the defendant.

Seven days after the fire the insured executed a written assignment of the policy and his interest in all sums of money due him, or to become due him, from the defendant to plaintiff Engleman. On the 13th of March, 1933, plaintiff rendered to the defendant a written statement sworn to by him purporting to be a proof of loss. No proof of loss was ever made by insured, which, as noted, is required by a clause of the policy. Where the requirement in the policy is that insured furnish proofs of loss, he must comply therewith in order to recover on the policy. This is the rule in general, subject to a number of exceptions. It is stated in 26 C.J. 367: "However, it is a usual requirement of the policy that insured give notice and furnish proofs of loss, and compliance therewith is necessary to enable him to recover on the policy, unless the insurer has waived or become estopped to assert the condition, or unless the circumstances are such as to excuse insured's non compliance therewith."

In McGraw v. Germania Fire Ins. Co., 54 Mich. 145, 19 N.W. 927, 931, a leading case, the rule and some of its exceptions are thus stated:

"Under the policy in question, proofs of loss required by its terms is a condition precedent to a right of recovery; and in general they are to be signed and sworn to by the assured in person. But the clause in question is subject to exceptions; as where the owner is a non-resident, dead, or was insane or absent at the time when the loss occurred, and did not return in season to make the proofs, or that he did not possess the necessary information in reference to the matters required to be stated to make proofs, or that the objection as to their being made by the wrong person has been waived. See Wood, Ins. § 413. But where the assured can himself make the necessary proofs he should do so, or give a sufficient excuse for his failure; and ordinarily (though this is not essential) the reasons why the proofs were not made by the assured should be stated in the proofs of loss."

"As a general rule, subject to the exceptions hereafter noted, the proofs of loss should be furnished by the original insured, where the policy so required. The contract of insurance is made with him, and where the company issues to a person a policy which stipulates that the insured shall, in case of loss, make affidavit of that loss and of certain facts concerning it, the company has the right to insist that the oath, which under the conditions of the contract is obligatory upon him to take, he shall in fact take, in those cases where the insurer has dealt personally with the insured." 7 Couch, Encyclopedia of Insurance, § 1521, p. 5413; 5 Joyce on Insurance (2d Ed.) § 3302.

The decisions of state courts are in conflict on the question whether a failure by the insured to make proofs of loss within a stipulated time will bar a recovery. But there is no dissent from the rule that the insured must furnish proofs of loss where it is so stipulated, unless the insurer has waived the condition, or the case falls within some recognized exceptions. The reasons for the rule are well stated in Ostrander's Law of Fire Insurance, pages 288, 289:

"When, however, the policy particularly designates that proofs must be made by the person originally insured, unless the property covered has been sold and the policy assigned by the consent of the company, proofs cannot be made (in compliance with the terms of the policy), except by the person to whom the policy was issued.

If it is important to the underwriter that it may know the person it insures, so it is important that it may have an option in selecting the person with whom it will adjust claims for loss. Moral and business character are qualities of the highest consideration in either relation. Many fires result from fraud, and there has been a large number from purely accidental causes where the claimant for loss has resorted to schemes of deception and fraud in presenting his proofs stimulated with the hope of securing an adjustment by the computation of quantities or values on a fictitious basis. The insured, the owner of the property damaged or destroyed is the person with whom the insurer is dealing, and it has a right to receive his sworn declarations to traverse his statements and to challenge his good faith, when warranted in doing so. This has been clearly provided for in the policy, and to substitute as sufficient the estimates and declarations of another contemplates changes so radical and important in the performance of contract obligations as to imply an abandonment of the original intention of the parties. A contract of insurance is no where more personal than in respect to its provisions concerning the adjustment of claims. The insured must present his claim under oath; he must produce a magistrate's certificate as to his good faith, and if required must submit to a sworn examination. Each of these matters relates to the person of the insured, and the importance of this requirement is too obvious to require argument. The person insured may be fairly presumed to be in possession of the largest number of facts and the most reliable information in regard to the circumstances of the fire and the extent of the loss, and if there be a fraud suspected, the insurer...