Fidelity Phoenix Insurance Co. v. Vincent

• Decision Date: 29 May 1928
• Citation: 224 Ky. 769
• Parties: Fidelity Phoenix Insurance Company of New York v. Vincent.
• Court: United States State Supreme Court — District of Kentucky

Page 769

224 Ky. 769

Fidelity Phoenix Insurance Company of New York v. Vincent.

Court of Appeals of Kentucky.

Decided May 29, 1928.

1. Insurance. — In action on fire policy providing, in effect, that failure to furnish proof of loss should not work forfeiture of insurer's liability but that furnishing of such proof was condition precedent to right to institute action, held that it was necessary for insured to plead that he had furnished proof of loss.

2. Insurance. — In action on fire policy providing that proof of loss was condition precedent to insured's right to institute action, where insurer sought to plead defense under iron safe and inventory clause of policy, but that paragraph of answer was wholly insufficient to constitute defense because it did nothing further than plead that policy contained such clause, and failed to plead any facts constituting breach thereof, held that pleadings were not sufficient to constitute waiver of loss provisions of policy.

3. Insurance. — In action on fire policy providing that proof of loss by insured was condition precedent to right to institute action, evidence held insufficient to establish that, before action was instituted, insurer had denied all liability, thereby waiving proof of loss.

4. Insurance. — It cannot be said that, when an insurer declines to settle for loss on ground that proof of loss has not been furnished, he thereby waives provision of contract that proof of loss must be furnished.

5. Insurance. — In action on fire policy containing provision that proof of loss was condition precedent to right of insured to institute action, where action was instituted on same day on which non-waiver agreement was signed by parties, and before insurer had opportunity to make investigation of character of loss, held that proof of loss was not waived.

6. Insurance. — In action on policy providing that proof of loss is condition precedent to right to institute action on policy rather than condition precedent to liability under it, trial court should dismiss action brought prior to proof of loss and on day non-waiver agreement was entered into without prejudice as having been prematurely instituted.

Appeal from Edmonson Circuit Court.

GORDON & LAURENT, T.M. GALPHIN, JR., and LOGAN & VINCENT for appellant.

MILTON CLARK and LOGAN & McCOMBS for appellee.

OPINION OF THE COURT BY COMMISSIONER SANDIDGE.

Reversing.

Appellant issued and delivered to appellee a fire insurance policy insuring a frame store building, fixtures and stock of goods against loss by fire to a total amount of $2,600. The property insured was destroyed. This action was instituted to recover the full amount of the policy. There was a judgment for insured, and insurer appeals.

The proof of loss and other relative clauses of this insurance policy are so worded that failure to furnish proof of loss does not work a forfeiture of insurer's liability; but the furnishing of proof of loss is a condition precedent to the right to institute an action on the policy. Kenton Insurance Co. v. Downs, 90 Ky. 236, 13 S.W. 882, 12 Ky. Law Rep. 115, is perhaps the outstanding opinion from this court on this question. See, also, Germania Insurance Co. v. Ashby, 23 Ky. Law Rep. 1564, 65 S.W. 611, where the doctrine was succinctly written:

"Proof of loss is but a condition precedent to the action; it is not a condition upon which liability exists."

See, also, Kenton Insurance Co. v. Adkins, 12 Ky. Law Rep. 291; Phoenix Insurance Co. v. Creason, 14 Ky. Law Rep. 573; Am. Insurance Co. v. Heaverin, 16 Ky. Law Rep. 95; Orient Ins. Co. v. Clark, 22 Ky. Law Rep. 1066, 59 S.W. 863, 22 Ky. Law Rep. 1066; Continental Casualty Co. v. Waters, 30 Ky. Law Rep. 245, 97 S.W. 1103, 30 Ky. Law Rep. 243.

The distinction between the proof of loss clause of this policy and those of policies so worded that furnishing proof of loss must be held to be a condition precedent to liability was clearly defined in Standiford v. American Insurance Co., 208 Ky. 731, 271 S.W. 1042, which is perhaps the latest utterance of this court on the question. Hence the trial court properly sustained a general demurrer to the petition which failed to plead that insured had furnished proof of loss in conformity with the provisions of the policy. The amended petition cured the defect by pleading that, before the action was instituted, insured denied all liability, and thereby waived the proof of loss provision of the policy. Issue on this question was made by traverse of the allegations of the amended petition. This is the only issue made by the pleadings. It was admitted by appellee that he did not furnish proof of loss before instituting the action, and it was admitted by appellant that the property insured had been destroyed by fire, though it was denied that it was worth more than $500. Appellant sought to plead a defense under the iron safe and inventory clause of the policy, but this paragraph of the answer was wholly insufficient to constitute a defense, because it did nothing further than plead that the policy contained such a clause, which was quoted. It failed to plead any facts constituting a breach thereof. In this state of case the pleadings were not sufficient to constitute a waiver of the proof of loss provisions of the policy, within the rule written in Lancashire Insurance Co. v. Monroe, etc., 101 Ky. 12, 39 S. W. 434, 19 Ky. Law Rep. 204.

The question presented by the appeal then is: Was the evidence sufficient to establish that, before the action was instituted, appellant denied all liability, and hence waived the proof of loss provision of the policy? This court's careful consideration of the evidence has led to the conclusion that such is not the case. It cannot be said that, when an insurer declines to settle for a loss upon the ground that proof of loss had not been furnished, he thereby waives the provision of the contract that proof of loss must be furnished. The evidence of appellee himself, considered as a whole, establishes that appellant did nothing more than decline to settle this loss because appellee would not furnish proof of loss. On this question appellee testified that five days after the fire an adjuster for appellant visited the scene of the fire, and for what occurred his testimony is quoted:

"After he made himself acquainted with me, he demanded the invoice, and I said, `I am sorry to say it is gone, too,' and he said, `Do you mean to say it was burned?' and I said, `Yes,' and he said, `Where is your account file?' and I said, `It was burned, too,' and he says, `I am sorry to tell you, Mr. Vincent, but I can't pay it,' and I says, `That is too bad, for I am going to lose about $1,800 besides the policy,' and I said, `Is there no way that I can get this fixed?' and he said, `I don't know; I will have to take it up with the company,' and I said, `Can I write to the wholesale people and get the bills of goods that I have bought?' and he said, `You could do...