John Houran, Jr., Admr. v. the Preferred Accident Insurance Company of New York

• Citation: 195 A. 253,109 Vt. 258
• Parties: JOHN HOURAN, JR., ADMR. v. THE PREFERRED ACCIDENT INSURANCE COMPANY OF NEW YORK ET AL
• Decision Date: 02 November 1938
• Court: Vermont Supreme Court

195 A. 253

109 Vt. 258

JOHN HOURAN, JR., ADMR. v. THE PREFERRED ACCIDENT INSURANCE COMPANY OF NEW YORK ET AL

Supreme Court of Vermont

November 2, 1938

October Term, 1937.

Suit in Equity against Insurance Company to Enforce Judgment Against Insured---Finding as to Evidence of Notice of Accident---Notice of Accident Given Insurer by Injured Party---Reasonableness of Notice Question of Fact---Findings as to Notice Not Objectionable Because No Prejudice Claimed---Letters Held Not to Constitute Waiver of Notice---Delay in Giving Notice Explained or Excused---Whether Explained or Excused Question of Fact---Granting of Motion to Reopen Cause for Further Evidence a Matter of Discretion---Review of Matter of Discretion---County Court Rule 19, Par. 2, Motions for Continuance, Applicable in Chancery Proceedings---Denial of Motion to Reopen Cause Held Proper---Test as to Exercise of Discretion---Purpose of Notice of Accident Requirement---Cooperation Clause in Policy a Condition Subsequent---Pleading as to Conditions Subsequent and Precedent---Rule as to Burden of Proof---Effect of Failure to Give Notice of Accident as Required by Policy---Requirement as to Notice as of Essence of Contract---Requirement Not Unreasonable---When Requirement Held Condition Precedent and Effect Thereof---Refusal to Find Information as to Accident Not Obtainable Because Policy Not in Possession of Insured.

1. In suit in equity against insurance company to enforce unsatisfied judgment against person insured under liability policy issued by defendant, finding that only evidence bearing on notice of accident given to insurer was certain testimony as to truth of which chancellor was not convinced held without error, as against exception on ground that it was elsewhere found that attorney for plaintiff's intestate wrote to insurer's agent about six weeks after accident, since it was obvious that chancellor considered and made findings based upon other evidence of notice notwithstanding his use of phrase "only evidence."

2. Where it is sought to enforce against insurer under liability insurance policy unsatisfied judgment against insured, notice of accident given to insurer by injured party as beneficiary and party in interest, acting in behalf of insured, may be sufficient compliance with terms of policy requiring such notice, in absence of action by insured, but such notice must be reasonable, for injured party stands in shoes of insured and is subject to provisions of policy and to any defense which insurer might have raised against insured, whether right of action is conferred by statute or arises under clause in policy stipulating that proceeding brought by injured party against insurer, after judgment obtained against insured, shall be under terms thereof.

3. Whether notice of accident required to be given insurer under terms of liability insurance policy has been given with reasonable promptness is ordinarily question of fact for trier to decide upon relevant evidence.

4. In suit in equity against insurance company to enforce unsatisfied judgment against person insured under liability policy issued by defendant, where findings that no notice of accident was given by insured to company or any of its agents until date nearly five months after accident and that neither he, nor anyone in his behalf, gave such notice as soon as reasonably possible after accident, were excepted to on ground that no prejudice to insurer by reason of delay was claimed, it was not necessary for Supreme Court to examine testimony to determine whether notice given was reasonably prompt, and exceptions were unavailing.

5. In such suit, finding that defendant had not waived its right to insist upon compliance with condition of policy requiring notice of accident to be given as soon as reasonably possible held without error, as against exception on ground that defense of lack of proper notice was waived because not mentioned in letter from defendant's attorney to attorney for plaintiff's intestate advising that policy covering assured had not been found and that file would be closed unless further details as to coverage could be furnished since such letter could not be said to disclose intention of surrendering any defense and was not to be construed as standing alone when second letter written five days later advised that policy had been found and that insured did not give company proper notice of accident.

6. There may be circumstances that will explain or excuse delay in giving notice of accident required by policy of liability insurance and show it to be reasonably prompt, but failure to give earlier notice must not be due to forgetfulness or lack of diligence.

7. Question whether delay in giving notice required by policy of insurance is explained or excused is one of fact for trier to decide and burden of proof is upon party upon whom duty of giving notice has devolved.

8. In suit in equity against insurance company to enforce unsatisfied judgment against person insured under liability policy issued by defendant, where, after chancellor had filed findings of fact.

plaintiff filed motion to reopen cause for presentation of further evidence seeking to explain delay in giving defendant notice of accident required by policy granting of motion rested in sound discretion of chancellor and was not subject to review in absence of affirmative showing of failure to exercise, or abuse of, his discretion.

9. In reviewing question whether there was abuse of discretion in ruling below denying motion to reopen cause for presentation of further evidence, it was not result that Supreme Court might have reached, if it had been charged with duty of passing upon motion in first instance, that was to be considered, but Supreme Court was bound to look at situation as presented to trial court, in view of which its discretion was necessarily exercised.

10. County court rule 19, par. 2, requiring that motions for continuance be accompanied by affidavit stating reason therefor, etc., is applicable to hearings in chancery proceedings.

11. In suit in equity against insurance company to enforce unsatisfied judgment against person insured under liability policy issued by defendant, where plaintiff moved, after hearing was completed and chancellor had prepared findings to reopen cause for presentation of further evidence seeking to explain delay in giving defendant notice of accident required by policy, where motion was not supported by affidavits and showed that counsel must have been aware from outset of names of witnesses and of testimony they would give, and have appreciated its bearing on issue, where witnesses were, so far as appeared, available at hearing, where no claim was made that plaintiff was taken by surprise by introduction of evidence by defense, and where it could not be said upon record that plaintiff's case was so strong that he might reasonably have felt assured of favorable finding on issue as to notice, denial of motion held proper as within discretion of chancellor.

12. Test as to propriety of exercise of judicial discretion is whether discretion was exercised on grounds, or for reasons, clearly untenable, or to extent clearly unreasonable.

13. Purpose of requirement in liability insurance policy that insured in notice of accident give insurer information in respect thereto is to afford latter reasonable opportunity for investigation of facts rather than to give it full information on basis of which it might proceed to disposition of case.

14. Cooperation clause of liability insurance policy comes into effect after insurer has assumed its contract obligation and undertaken defense and is, therefore, a condition subsequent.

15. Breach of condition subsequent in insurance policy is matter of defense to be pleaded by defendant, and is thus distinguishable from condition precedent, performance of which must be alleged by plaintiff.

16. Fundamental rule as to burden of proof is that, whenever existence of any fact is necessary in order that party may make out his case or establish defense, burden is on such party to show existence of such fact.

17. Where, by terms of insurance contract, specified notice of accident given by or on behalf of insured to insurer, is made condition precedent to liability on part of latter, failure to give such notice will release insurer from obligations imposed by contract, although no prejudice may have resulted.

18. Provision in liability insurance contract requiring that notice of accident be given to insurer is of the essence of the contract, and is manifestly an important provision for protection of insurer against fraudulent claims and also against those which, though made in good faith, are not valid.

19. Provision in liability insurance contract requiring that notice of accident be given to insurer tends to elucidation of truth when claim for indemnity is made and is not unreasonable.

20. To constitute giving of notice of accident a condition precedent under liability insurance policy, a specific forfeiture clause is unnecessary, and it is enough if policy sets forth requirement as to notice under provision that liability thereunder is subject to following conditions.

21. In suit in equity against insurance company to enforce unsatisfied judgment against person insured under liability policy issued by defendant, where under provision that agreement was subject to following conditions policy provided that in event of accident written notice should be given to company or any of its authorized agents as soon as reasonably possible thereafter, etc., held that giving of notice was made condition precedent to liability on part of defendant by which insured and plaintiff's intestate were bound, that burden was upon plaintiff to...