Higson v. North River Ins. Co.

• Decision Date: 23 March 1910
• Citation: 67 S.E. 509,152 N.C. 206
• Parties: HIGSON et ux. v. NORTH RIVER INS. CO.
• Court: North Carolina Supreme Court

67 S.E. 509

152 N.C. 206

HIGSON et ux. v. NORTH RIVER INS. CO.

Supreme Court of North Carolina

March 23, 1910

Appeal from Superior Court, Pitt County, Guion, Judge.

Action by W. B. Higson and wife against the North River Insurance Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

An unqualified denial of liability by an insurer upon receipt of proofs of loss is a waiver of arbitration clause of the policy.

Moore & Long, for appellant.

Skinner & Whedbee, for appellees.

WALKER J.

This action was brought to recover the amount of a policy issued by the defendant to the plaintiff upon a steamboat. The ship was destroyed by fire, and the company denied its liability both before and after the suit was brought, for the reason that the husband of the feme plaintiff had caused the boat to be burned in order to secure the insurance. The following issues were submitted to the jury:

"(1) Was the feme plaintiff the owner of the steamer Isabelle described in the pleadings, at the time of her destruction by fire, as alleged in the complaint? Answer: Yes.

"(2) Did the plaintiff furnish and forward to the defendant proofs of loss of said steamer Isabelle within 60 days after the fire which destroyed the same, in accordance with the provisions of the policy set out in the pleadings? Answer: No.

"(3) Was this action instituted within 60 days after the furnishing of said proofs of loss, if any such were furnished, as provided for in said policy? Answer: No.

"(4) Prior to the institution of this action, did the plaintiff tender to, or demand of, the defendant the submission of the loss and an ascertainment thereof to arbitration and appraisal, as is provided in said policy? Answer: No.

"(5) Has the plaintiff complied with the said terms of the policy as conditions of her right to maintain this action? Answer: No.

"(6) Did the defendant, by its acts and declarations, made and done prior to the institution of this action, waive the duty of the plaintiff to comply with the conditions mentioned in issues numbered 2, 3, 4, and 5? Answer: Yes.

"(7) Did the defendant by its acts and declarations and the denials of liability, as set out in the answer verified and filed by it in this cause, waive the duty of the plaintiff to comply with the conditions mentioned in issues numbered 2, 3, 4, and 5? Answer: Yes.

"(8) In what amount is the defendant company indebted to the plaintiff by reason of the execution of the policy of insurance referred to in the complaint and answer, and the subsequent burning and loss of the said steamer Isabelle? Answer: $1,500, with interest from the date of this action."

It will be observed that the defendant did not tender any issue as to the very serious charge made against the plaintiff's husband, even if an affirmative finding upon such an issue would have acquitted the defendant company of liability, without any allegation and finding by the jury of collusion on her part. The sole question presented is whether the failure to give notice of the loss and to file proofs of the same are sufficient to defeat the plaintiff's recovery. The pleadings and the findings of the jury, under a very fair, impartial, and clear-cut charge from Judge Guion, shows conclusively that this cannot be so, if we are to be guided by the established principles of the law in such cases. The defendant does not come before this court in a way which entitles it to a favorable consideration of the case in its behalf. Insurance companies should deal honestly and fairly with their patrons, and, after they have received the premiums upon the risk undertaken by them, they should not attempt to avoid their responsibility by merely technical defenses, especially when those defenses are absolutely without any substantial merit. Their right to the trust and confidence of the public is necessarily based upon the public confidence in them. If they ask the public to trust them, they must at least not show themselves unworthy of this confidence. We must not be understood as condemning the general principle of insurance, as founded upon a false and unsafe confidence, but we do say that the integrity of the company which insures, and upon the faith of which it obtains the patronage of the public, should be sacredly maintained, otherwise insurance is but a "game of chance," depending for its value to the insured, upon the honesty and good management of individuals. We will always hold them to their contract, as written in their policies, without adhering too much to the letter, but looking to the substance of their undertaking.

Let us apply these general observations to the facts of this case. It must be conceded that the only defense which the insurance company pleads relates to the failure of the plaintiff, the insured, to file a notice and proof of loss, and yet prior to the bringing of the suit, and by its answer, too, the insurance company denied outright its liability upon the ground that the husband of the feme plaintiff had burned the boat; in other words, had committed an outrageous act of incendiarism. If this invalidated the policy, so that the plaintiff cannot recover upon it, why did not the defendant rely upon it and ask the jury under instructions from the court to pass upon an allegation which it deemed so vital in this litigation? But it did...