Gilbert v. Globe & Rutgers Fire Ins. Co. of New York

• Decision Date: 11 February 1919
• Citation: 91 Or. 59,178 P. 358
• Parties: GILBERT v. GLOBE & RUTGERS FIRE INS. CO. OF NEW YORK.
• Court: Oregon Supreme Court

178 P. 358

91 Or. 59

GILBERT v. GLOBE & RUTGERS FIRE INS. CO. OF NEW YORK.

Supreme Court of Oregon

February 11, 1919

In Banc.

Appeal from Circuit Court, Marion County; Percy R. Kelly, Judge.

On petition for rehearing. Petition denied.

For former opinion, see 174 P. 1161.

J. C Veazie, of Portland ( Veazie, McCourt & Veazie, of Portland, on the briefs), for appellant.

W. C Winslow and Carey F. Martin, both of Salem, for respondent.

BENSON J.

The petition for rehearing in this case very earnestly attacks the conclusion in the original opinion herein, which is expressed in these words:

"Assuming that the defendant was estopped to plead the time limitation, the estoppel was removed when the plaintiff was notified that the defendant denied liability and would contest his claim, and upon receipt of such notice the plaintiff then had a reasonable time within which to commence his action."

The opinion concludes that, since more than two years had elapsed thereafter before the action was commenced, plaintiff's right was barred. The question suggested by the opinion and the arguments upon the petition for rehearing did not assume a prominent position in the former hearing, and therefore we have since made a very careful investigation of the authorities which have at this time been cited by counsel.

Plaintiff argues that when a defendant has, by his own conduct, waived any of the requirements of a contract, that condition or limitation is out of the contract for all time, and cannot be revived. He also urges, as a sequence, that, when the period of the limitation fixed by the contract has been eliminated by the conduct of the defendant, there remains no limit other than the general statute of limitations, under which this action is not barred. In considering the authorities in support of this view, we may well keep in mind the somewhat elusive distinction between waiver and estoppel as illustrated in Kimball v. Horticultural Fire Relief, 79 Or. 133, 154 P. 578, a distinction which appears to be that a "waiver" is a voluntary relinquishment of a known right, while an "estoppel" consists of a preclusion which in law prevents a party from alleging or denying a fact in consequence of his own previous act, averment, or denial. Hence, if a party relinquishes a known right, awarded him by contract, he cannot, without the consent of his adversary reclaim it. But the ban of an estoppel may be lifted by the party against whom it is invoked, by the giving of proper notice. In the case at bar, we may assume that the defendant by the conduct of its agents, led the plaintiff to believe that his claim would not be contested, but would eventually be paid. So long as it maintained this attitude, the plaintiff was warranted in remaining quiescent; but, when defendant notified him that the policy claim would not be paid, the ban of the estoppel was raised, and the plaintiff could no longer plead that he was being deceived, by the tactics of the adversary.

With these principles in mind, let us examine the authorities cited by the appellant. The leading case relied upon is that of Semmes v. Hartford Insurance Co., 80 U.S. (13 Wall.) 158, 20 L.Ed. 490, in which the circumstances were of a sort which could occur only once in many generations. The plaintiff was a resident and citizen of Mississippi, and the defendant a corporation of Connecticut. The loss occurred in January, 1860, and the action was begun on October 31, 1866. The defendant relied upon a provision in the policy to the effect that--

"No suit for the recovery of any claim upon the same should be sustainable in any court unless such suit should be commenced within the term of twelve months next after any loss or damage should occur; and that in case any such suit should be commenced after the expiration of twelve months next after such loss or damage should have occurred, the lapse of time should be taken and deemed as conclusive evidence against the validity of the claim thereby so attempted to be enforced."

To this plea there was a replication of the diverse citizenship of the parties, and that the Civil War had prevented the prosecution of the suit within the time limited in the contract. Mr. Justice Miller delivered the opinion of the court, and apparently bases his reasoning and conclusion upon the second clause of the time limitation, as above set out, using this language:

"Now, this contract relates to the 12 months next succeeding * * * the loss, and the court has no right, as in the case of a statute, to construe it into a number of days equal to 12 months, to be made up of the days in a period of five years in which the plaintiff could lawfully have commenced his suit.

"So, also, if the plaintiff shows any reason which in law rebuts the presumption, which, on the failure to sue within 12 months, is, by the contract, made conclusive against the validity of the claim, that presumption is not revived again by the contract. It seems that, when once rebutted fully, nothing but a presumption of law or a presumption of fact could again revive it. * * * And though the plaintiff may show by his disability to sue a sufficient answer to the 12 months provided by the contract, he must still bring his suit within the reasonable time fixed by the legislative authority; that is, by the statute of limitations."

It will be at once observed that this case is widely different from the one at bar, in that there is no element in it, either of waiver or of estoppel. The failure to bring the action within the contract time was not attributable to either plaintiff or defendant, but to the unforeseen tragedy of civil war. This difference is emphasized by the fact that Mr. Justice Miller bases his conclusion upon that clause of the policy which makes the failure to sue within 12 months conclusive evidence of the invalidity of the claim, a clause which is not found in the policy which we are considering.

The next case which we are asked to consider is Illinois Live Stock Ins. Co. v. Baker, 153 Ill. 240, 38 N.E. 627. This case holds that hopes of payment held out to a plaintiff by an insurance company as an inducement not to sue within the time limited in the policy operate as a waiver of the limitation clause in the policy; that such waiver cannot be revoked, and that after such waiver the case rests upon the statutory limitation.

Next we have the case of Galloway v. Standard Fire Ins. Co., 45 W.Va. 237, 31 S.E. 969, from which we quote:

"Now, whether such promise continuing unexecuted for a time, and then ended by a refusal to perform it, leaving a part of the period reasonably sufficient for suit, would be a waiver of the clause, or merely suspend it from the promise to the refusal to fulfill it, I need not--do not--say. I do say, however, that where such promise stands for the whole period of the limitation, it is not a mere suspension, but a waiver of the clause of limitation."

The opinion cites with approval Semmes v. Hartford Ins. Co., and Illinois Live Stock Ins. Co. v. Baker, supra, and holds that the general statute of limitations controls.

Finally our attention is directed to Earnshaw v. Sun Mutual Aid Society, 68 Md. 465, 12 A. 884, 6 Am. St. Rep. 460. This case resembles that of Semmes v. Hartford Ins. Co., supra, in that there is no element of either waiver or estoppel; the delay in bringing the action having been accomplished by the act of a third party who commenced a suit to restrain the defendant from paying the money to plaintiffs, and secured a temporary restraining order which continued in force until the contract time limitation had expired. The opinion simply follows Semmes v. Hartford Insurance Co., supra, and bases its conclusion upon that authority.

Opposed to these, there is a strong line of authorities which hold to the view that such acts of the defendant as are indicated in the present case do not, in the strict sense, constitute a waiver, but a simple case of estoppel, the effect of which is to suspend the time limitation of the contract until the hour when the estoppel is removed by notice to the plaintiff that his claim is repudiated, at which moment the contract limitation again becomes effective, and gives the plaintiff 12 months from that date in which to begin his action. Among the authorities supporting this doctrine, we note 1 Wood on Limitations,§ 49, which says:

"If the insurer adjusts the loss, and promises to pay it within a specified time, the period covered by the promise is excluded from the limitation."

Joyce on Insurance, § 3207, says:

"A provision requiring suit to be brought within a certain time may be waived, and this waiver may be inferred from acts and conduct on the part of the insurer. And if the insured is induced by the acts of the officers or agents of the insurer to suspend for a certain time the performance of acts required on his part after loss, such time should be added to the time limited for bringing action."

The following cases support the doctrine thus formulated: Killips v. Putnam Fire Insurance Co., 28 Wis. 472, 9 Am. Rep. 506; Black v. Winnieshiek Insurance Co., 31 Wis. 74; Kentucky M. S. F. Co. v. Turner, 89 Ky. 665, 13 S.W. 104; Steel v. Phenix Insurance Co., 51 F. 715, 2 C. C. A. 463; Allemania Insurance Co. v. Peck, 33 Ill.App. 548; Fey v. I. O. O. F. M. L. Insurance Co., 120 Wis. 358, 98 N.W. 206; Voorheis v. People's M. B. Soc., 91 Mich. 469, 51 N.W. 1109. These authorities appear to us to be founded upon the better reasoning, and we therefore conclude that, plaintiff having failed to commence his action within 12 months after being notified that defendant repudiated his claim, the action is barred, and the petition for a rehearing must be denied.

McBRIDE C.J., and HARRIS and BEAN, JJ.,...