Marsh v. Northern Neck Mut. Fire Ass'n Of Va.

• Decision Date: 09 March 1911
• Citation: 70 S.E. 482,112 Va. 192
• Court: Virginia Supreme Court
• Parties: SMITH & MARSH. v. NORTHERN NECK MUT. FIRE ASS'N OF VIRGINIA.

70 S.E. 482

112 Va. 192

SMITH & MARSH.

v.NORTHERN NECK MUT. FIRE ASS'N OF VIRGINIA.

Supreme Court of Appeals of Virginia.

March 9, 1911.

1. Insurance (§ 610^*)—Action on Policy-Time within which Action Must be Brought—Statutes—Construction.

Act March 9,, 1906 (Acts 1906, c. 112) § 39, providing that no provision in any policy of insurance limiting the time within which a suit or action may be brought to less than one year after loss shall be valid, applies to policies issued before its passage, and is not wholly prospective in its operation.

[Ed. Note.—For other cases, see Insurance. Dec. Dig. § 610.*]

2. Constitutional Law (§ 113*)—Impairing Obligation of Contract.

While a contract is presumed to be made with reference to existing laws, such laws may be altered, amended, or repealed without affecting the binding force of the contract so long as a sufficient remedy is left for its enforcement.

[Ed. Note.—For other cases, see Constitutional Law, Cent. Dig. § 271; Dec. Dig. § 113.*]

3. Constitutional Law (§ 171*)—Impairing Obligation of Contract—Limitation of Actions.

Act March 9, 1906 (Acts 1906, c. 112) § 39, providing that no provision in any policy of insurance limiting the time within which a suit may be brought to less than one year after loss shall be valid, does not impair the obligation of an insurance contract made before the passage of the act, and requiring any action thereon to be brought within six months after loss, the Legislature having power to shorten the period of limitation, leaving always a reasonable time within which to invoke a remedy for a breach of contract, or to prolong the period where the right to plead it has not accrued.

[Ed. Note.—For other cases, see Constitutional Law, Dec. Dig. § 171.*]

Error to Circuit Court, Northumberland County.

Action by George H. Smith and another, partners trading as Smith & Marsh, against the Northern Neck Mutual Fire Association of Virginia. Judgment for defendant, and plaintiffs bring error. Reversed, and new trial granted.

R. O. Norris and T. J. Downing, for plaintiffs in error.

Asa S. Rice and Frank G. Newbill, for defendant in error.

KEITH, P. The firm of Smith & Marsh represent that on the 14th of March, 1908. they instituted an action of trespass on the case in assumpsit in the circuit court of Northumberland county against the North-em Neck Mutual Fire Association of Virginia, a corporation chartered under the laws of the state of Virginia, which resulted in a final judgment against them, which is before this court for review.

It appears that on the 18th of September, 1905, Smith & Marsh insured for two years a stock of merchandise in their storehouse at Miskimmon, in Northumberland county, against loss by fire with the defendant corporation; that on the 29th of August, 1907, the merchandise so insured was destroyed by fire, and on the 30th day of October, 1907, they instituted an action on the policy in the circuit court of Lancaster county, which was dismissed on their own motion on the 28th of March, 1908. On the 14th of March, 1908, they instituted their action of assumpsit in the clerk's office of the circuit court of Northumberland county, in which county the storehouse was situated, and on the 14th of June, 1909, the defendant corporation filed a special plea, setting out a clause in the policy, which provided that any action brought to enforce the policy must be brought within six months after the date of the loss, and averring that this action was barred by that clause, which special plea was sustained by the court upon demurrer, and the case was dismissed at plaintiffs' costs.

Three grounds of error are assigned to this ruling of the court: (1) That an action for the recovery of the insurance in accordance with the terms of the policy was instituted within six months from the day of the loss, and was continuously prosecuted from that time to the present; (2) that the special plea which was sustained by the court was not filed by the defendant until the 14th of June, 1909. and for that reason it is insisted that the plea was filed too late; (3) that the policy of insurance with the defendant was taken on the 18th of September, 1905, and was in force for two years from that date, that the loss occurred on the 29th of August, 1907, and at the time of the loss there was in force the following statute: "No condition in. or indorsed on, any policy of insurance, nor any restrictive provision thereof, shall be valid unless such condition or restrictive provision is printed in type as large as long primer or ten point type, or is written in pen and ink or typewriter, in or on the policy, and no provision in any policy of insurance limiting the time within which a suit or action may be brought to less than one year after loss shall be valid." This statute will be found in Acts Assem. 1900, p. 143, section 39 of an act approved March 9, 1906, entitled "An act concerning bureau of insurance, and insurance, " etc.

Our view of the third assignment of error being conclusive of the case, we shall not consider the first two assignments.

The policy was taken out on the 18th of September, 1905. It remained in force until the 18th of September, 1907. The loss occurred on the 29th of August, 1907, and the act to which we have referred was approved March 9, 1900. At the time the policy was issued, this contractual limitation was valid under the decisions of this court; but the Legislature saw fit, in the exercise of its police power, to declare such contracts to be unlawful, and declared that no provision in any policy of insurance limiting the time within which a suit or action may be brought to less than one year after loss shall be valid.

The first question which arises is: Does that act apply to policies of insurance which had been issued before its passage, or is it wholly prospective in its operation?

Upon this point we think the case is controlled by Town of Danville v. Pace, 25 Grat. 1. 18 Am. Rep. 663. The Legislature In March, 1873, passed an act which provided that "no corporation shall hereafter interpose the defense of usury in any action; nor shall any bond, note, debt or contract of such corporation be set aside, impaired or adjudged invalid by reason of anything contained in the laws prohibiting usury." Acts 1872-73, c. 213. The town of Danville insisted that it had the right to plead usury as to contracts entered into before the passage of this act, insisting that the act applied only to causes of action arising on contracts made after its adoption, relying upon the well-settled rule that statutes are to be construed as prospective in their operation, unless their language plainly shows the intention of the Legislature that they should have a retrospective effect. The court in its opinion, answering this position, says: "It will be observed that the words used are very comprehensive. 'No corporation shall hereafter interpose the defense of usury in any action.' The words, 'any action, ' necessarily include suits instituted before as well as after the passage of the act. There is nothing in the context to give them a more limited operation. The defense is prohibited in all cases. In order to adopt the construction insisted on by the defendant, other words must be incorporated into the body of the act, so as to make it read, 'no corporation shall hereafter interpose the defense of usury in any action upon a contract hereafter made.' " And the statute was held to apply to existing as well as to future obligations.

The statute under consideration is equally as comprehensive. "No provision in any policy of insurance limiting the time within which a suit or action may be brought to less than one year after loss shall be valid." There is nothing to indicate a purpose upon the part of the Legislature to limit the operation of this comprehensive language to policies thereafter to be issued. The injury was as great, the remedy as much needed withrespect to the one class as the other, and upon this phase of the case Town of Danville v. Pace seems to be conclusive.

But it is contended that it was not within the power of the Legislature to enact such a law with respect to policies theretofore issued.

It does not in our judgment impair the obligation of a contract. The policy was still in force when the statute was passed. The right of...