Farmers' Mut. Fire Ins. Co. v. Barr

• Citation: 94 Pa. 345
• Parties: The Farmers' Mutual Fire Ins. Co. v. Barr.
• Decision Date: 17 May 1880
• Court: United States State Supreme Court of Pennsylvania

94 Pa. 345

The Farmers' Mutual Fire Ins. Co. v. Barr.

Supreme Court of Pennsylvania.

May 17, 1880

May 6 1880

1. Where a condition of a policy of insurance requires suit to be brought within six months, and it is a part of the contract as contemplated by both parties at the time the risk was assumed, the insured cannot be released from this condition by a mistake in the policy as to the time when the risk commenced.

2. While the refusal of the company to recognise its liability may operate as a waiver of its right to insist on preliminary proof of loss, & c., it does not relieve the insured who claims the contract was in full force, when the fire occurred, from bringing suit within the six months. His failure to do so is a bar to any claim he may have against the company, and the result cannot be avoided by setting up the receipt given for the premium by the agent of the company and ignoring the terms and condition of the contract as it was contained in the policy of insurance.

Before MERCUR, GORDON, PAXSON, TRUNKEY and STERRETT, JJ.

SHARSWOOD C. J., and GREEN, J., absent.

Error to the Court of Common Pleas of Lancaster county: Of May Term 1880, No. 176.

Debt by John K. Barr and Hettie A. Barr, for the use of said Hettie against the Farmers' Mutual Fire Insurance Company of Pennsylvania, on a contract of insurance. Defendant pleaded nil debet.

The material facts were these: On May 3d 1870, John K. Barr signed an application to the Farmers' Mutual Fire Insurance Company of Pennsylvania for an insurance on his property to the amount of $8800. On May 31st 1870, he paid the company $48.80 as premium for his policy, which had been issued May 6th 1870. On May 19th 1873, a portion of the property insured was destroyed by fire. A day or two after the fire Barr called on John H. Zeller, an agent of the company, and was informed that the policy had expired. The company denied all liability, and refused to pay.

It alleged that in the fall of 1869 G. R. Hendrickson, who had become its agent, called upon Barr and solicited an extension of his insurance in the said company to the barn and other buildings on Barr's premises. Hendrickson at the same time made the necessary surveys. Barr, in the latter part of April 1870, signed an application, filled up then or subsequently by Hendrickson, for an insurance to the amount of $8800 upon all his buildings, to take effect, as the company alleged, on the 3d day of May 1870, the time of the expiration of a former policy. At the time of making the said application, Barr received from Hendrickson the following receipt or certificate:

" MUTUAL RATE.

2-cent Rev. Stamp.

This certifies that John K. Barr, of West Hempfield township, in the county of Lancaster, has made application to the Farmers' Mutual Insurance Company of Pennsylvania for insurance upon the property specified in said application to the amount of $8800. That he has given a note for $192.20 and has paid in addition $48.80, and that he will be insured upon the property specified in said application $8800 for three years from date if the same be approved by the directors.

Amount paid May 31st 1870.

$48.80. G. R. HENDRICKSON, Agent."

A policy of insurance, dated May 6th 1870, was issued by the company, insuring the property of Barr to the amount of $8800 for the term of three years, beginning at noon of the 3d day of May 1870, instead of 31st day of May 1870, as contemplated by the above contract of insurance. This policy of insurance was sent to Hendrickson, the agent, and by him forwarded to Barr by mail. Barr had the policy in his possession from the time it was sent him by Hendrickson until the 11th day of September 1871, on which day it was assigned to S. H. Reynolds, a liencreditor. On the 19th day of May 1873, while Barr was absent in New York, the fire occurred which destroyed a part of the property insured.

On the day after the fire Barr went to Mr. Zeller, who was then agent of the company, gave him notice of the loss, and was ready to make proof of its extent. Mr. Zeller informed Barr that he had received notice from the office of the company that he was not insured; that his insurance had run out, and showed him the books, and told him his policy had expired. This was the first intimation Barr had that there was any discrepancy between the dates of the policy and his contract of insurance as represented by the receipt.

On October 9th 1873, two attachments in execution were issued by judgment-creditors of Barr out of the Court of Common Pleas of Lancaster county to October Term 1873, in each of which the plaintiff in error was garnishee. After trial there was a verdict against the company in each case in favor of the attaching-creditors--in the first for $2748.76; in the second for $554.44. The judgments in these cases were afterwards affirmed by this court, and on June 20th 1878, the company paid these amounts and the costs.

On the 13th of March 1877, Barr assigned to his wife, Hettie Barr, all his " interest, right, title and claims" that he held against the company, and on the 11th of May 1877, this suit was brought. On the trial the plaintiff claimed the whole amount for which the destroyed property was insured, with interest, less the amounts paid to the attaching-creditors.

The twelfth condition annexed to the policy was as follows:

" It is furthermore hereby expressly provided that no suit or action of any kind against the company for the recovery of any claim upon, under or by virtue of this policy shall be sustainable in any court of law or equity, unless such suit or action shall be commenced within the term of six months next after the cause of action shall have accrued; and in case any such suit or action shall be commenced against said company, after the expiration of six months next after the cause of action shall have accrued, the lapse of time shall be taken and deemed as conclusive evidence against the validity of the claim thereby so attempted to be enforced."

The last condition annexed to the policy was as follows:

" The insurance under this policy shall cease at and from the time the property hereby insured shall be levied on or taken into possession or custody under any proceeding in law or equity; and should there, during the life of this policy, an encumbrance fall or be executed upon the property insured sufficient to reduce the real interest of the insured in the same to a sum only equal to or below the amount insured, and he neglect or fail to obtain the consent of the company thereto, then and in that case the policy shall be void."

The following assignments of error will show the questions raised in the court below.

1. The court (Patterson, A. L. J.), erred in their answer to the defendant's second point.

Point.--The plaintiff's loss having been sustained on May 19th 1873, and the defendant having immediately afterwards denied all liability therefor, whatever cause of action the plaintiff had, accrued at the end of three months from such denial, and this suit, brought May 11th 1877, more than six months after his alleged cause of action had accrued, is barred by the twelfth condition of the policy limiting the plaintiff's right to sustain an action to six months from the time his cause of action accrued, which condition is binding on plaintiff, and the verdict must be for the defendant.

Ans. " This point we decline to affirm."

2. The court erred in holding that the suit was not barred.

3. The court erred in overruling defendant's offer to prove that the actual cash value of the buildings destroyed by fire on the 19th of May 1873, and insured in this policy, was not over twelve hundred dollars, and that the actual cash value of the other property destroyed at that time, and covered by this insurance, was not over thirteen hundred dollars, making the entire loss not over twenty-five hundred dollars.

4. In overruling defendant's offer to show that the actual cash value of...