Gage v. Conn. Fire Ins. Co.

• Decision Date: 15 October 1912
• Docket Number: Case Number: 2121
• Citation: 34 Okla. 744,127 P. 407,1912 OK 625
• Parties: GAGE v. CONNECTICUT FIRE INS. CO., OF HARTFORD, CONN.
• Court: Oklahoma Supreme Court

1912 OK 625

127 P. 407

34 Okla. 744

GAGE v. CONNECTICUT FIRE INS. CO., OF HARTFORD, CONN.

Case Number: 2121

Supreme Court of Oklahoma

Decided: October 15, 1912

Syllabus

¶0 1. INSURANCE--Tornado Policy--Right of Action. A tornado policy provided that the insurer should indemnify the insured against loss in a certain amount, not exceeding the cost of repairing or replacing the injured property, reserving to the insurer the option to repair, rebuild, or replace the property lost or damaged. After a loss the insurer notified the insured of its election to rebuild, but did nothing toward rebuilding. The insured sued upon the policy. Held that, while the election of the insurer was binding upon it, it did not discharge its liability under the policy; and that the action was properly brought.

2. SAME--Failure to Protect Property. Failure to protect the property after loss, caused by a cyclone, does not defeat the insured's right of action, but merely affects the amount of his recovery.

3. INSURANCE--Appraisement of Loss--Waiver. When the insurer elects to rebuild, then refuses to rebuild, then demands an appraise-merit, which the insured declines to accept, and the insured then reconsiders and offers to enter into an appraisement, which the insurer declines to accept, the right to an appraisement is waived.

4. PLEADING--Reply--Departure. When the plaintiff, in a suit upon a contract, alleges the performance by him of all conditions of the contract, the defendant, answering, charges the plaintiff with various breaches of the contract, and the plaintiff, for reply, admits failure to perform the contract as written, but pleads estoppel and waiver by the conduct of the defendant, the reply constitutes a departure; and the allegations at variance with the original petition should be stricken on motion.

E. B. Morgan, for plaintiff in error.

Scothorn, Caldwell & McRill, for defendant in error.

AMES, C.

¶1 The trial court sustained a demurrer to the plaintiff's evidence, and from this ruling this petition in error is prosecuted. The first question involved is whether or not, after the destruction of plaintiff's property by a cyclone, the election of the defendant to rebuild, instead of paying the loss, was a discharge of the policy of insurance, so that the plaintiff could not sue upon it. The suit was upon the policy, and the defendant contends that it elected to rebuild, in accordance with the terms of the policy, and that the election converted the insurance contract into a building contract' and that thereafter no action could be had upon the policy. After the loss the defendant elected to rebuild, and gave notice to the plaintiff, but after a few weeks notified the plaintiff of its refusal to rebuild. It had done nothing toward carrying out this agreement to rebuild, and yet it insists that the mere notice of its election discharged the insurance contract, and that the plaintiff's only cause of action was upon its liability by reason of its election. Its position is that its wholly unperformed election to rebuild prevents the plaintiff from suing upon the policy. We do not concur in this view. By the terms of the policy, it is provided:

"Connecticut Fire Insurance Company; in consideration of three & no-100 dollars premium, and of the requirements, limitations and conditions hereinafter contained, agrees to indemnify A.D. Gage against all such immediate loss or damage as may occur by windstorms, cyclones and tornadoes to an amount not exceeding the sum of six hundred dollars, * * * and * * * agrees to make good unto said assured all such loss or damage to the property insured, not exceeding the amount written opposite each item in above form, nor the actual cash value of said property, nor the interest of the assured therein, nor the cost of repairing or replacing the same. * * * And provided further, that it shall be optional with the company to repair, rebuild, or replace the property lost or damaged with other of like kind and quality within a reasonable time, giving notice of their intention so to do within sixty days after receipt of the proofs herein required."

¶2 The agreement of the company is to "indemnify" the plaintiff against loss to an amount not exceeding the face of the policy, nor the cost of replacing the building. For its own protection, the company reserves the right, instead of paying the money, to repair the building. It notifies the insured that it has elected to repair. It does nothing more. The insured brings suit upon the policy, and the company says it is not subject to suit on the policy, because it has elected to repair, but seems to overlook the fact that it has wholly neglected and refused to make the repairs. It is true that the election to repair is binding upon the company, and that the insured, in the event of the company's breach to repair, may sue for damages for breach of the building agreement. Morrell v. Irving Fire Insurance Co., 33 N.Y. 429, 88 Am. Dec. 396; Henderson v. Crescent Insurance Co., 48 La. Ann. 1176, 20 So. 658, 35 L.R.A. 385; Heilmann v. Westchester Fire Insurance Co., 75 N.Y. 7; Hartford Fire Insurance Co. v. Peebles' Hotel Co., 82 F. 546, 27 C.C.A. 223; 4 Joyce on Insurance, sec. 3163. While this election of the insurer is binding upon it, it does not follow that its election, wholly unperformed, is binding upon the insured, or that such unperformed election discharges its duty under the insurance contract, although there is conflict in the authorities on the subject. Morrell v. Irving Fire Insurance Co., 33 N.Y. 429, 88 Am. Dec. 396, supra, sustains the contention of the...