Matthews v. American Cent. Ins. Co.

• Decision Date: 07 December 1897
• Citation: 48 N.E. 751,154 N.Y. 449
• Parties: MATTHEWS v. AMERICAN CENT. INS. CO.
• Court: New York Court of Appeals Court of Appeals

154 N.Y. 449

48 N.E. 751

MATTHEWS

v.AMERICAN CENT. INS. CO.

Court of Appeals of New York.

Dec. 7, 1897.

Appeal from supreme court, appellate division, Fourth department.

Action by William Matthews, as executor of the will of Caroline Silvernail, deceased, against the American Central Insurance Company. On the 1st of August, 1889, the defendant issued its policy of insurance, of the standard form, to Mrs. Caroline Silvernail, whereby it insured her dwelling house, barn, and the produce therein, against loss or damage by fire, to an amount not exceeding $1,050, for the term of three years from that day. On the 2d of December, 1891, Mrs. Silvernail died, leaving a will, in which the plaintiff was nominated as sole executor. The probate of her will was opposed by some of her heirs, and on the 20th of April, 1892, when the contest was still in progress before the surrogate, a fire occurred, which destroyed a portion of the property insured, both real and personal. On the 15th of May, 1894, the contest over the will resulted in its admission to probate, and the appointment of the plaintiff as executor. July 11, 1894, proofs of loss were sworn to by the plaintiff, and shortly thereafter mailed to the defendant, which received them at the home office, in St. Louis, July 23, 1894, and retained them, without objection. The loss not having been paid, on the 29th of October following this suit was commenced upon the policy. The defendant pleaded as defenses that the action was not begun within 12 months next after the fire, although there was a limitation by contract to that period, that written notice of the loss was not immediately given, and that proofs of loss were not furnished within 60 days after the fire, as required by the policy. Upon the trial, after the defendant's counsel had expressly stated that he did not ask to have any question submitted to the jury, the court, upon motion of the plaintiff, directed a verdict in his favor for the sum of $612, the admitted value of the property destroyed, with interest from the 23d of September, 1894, and ordered that the defendant's exceptions should be heard by the appellate division in the first instance, and that entry of judgment should in the meantime be suspended. The appellate division having, by a divided vote, sustained the exceptions and dismissed the complaint (41 N. Y. Supp. 304), the plaintiff appealed to this court. Modified.

John F. Parkhurst, for appellant.

I. Nelson Ames, for respondent.

VANN, J. (after stating the facts).

The policy in question provided that, if a fire should occur, ‘the insured’ should ‘give immediate notice of any loss thereby, in writing, to’ the company, and ‘within sixty days after the fire’ should furnish proofs of loss, ‘signed and sworn to by said insured.’ It further provided that the loss should not become payable until 60 days after the receipt by the company of the proofs of loss, and that ‘no suit or action on this policy, for the recovery of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within twelve months next after the fire.’ By a subsequent clause it was stipulated that, whenever the word ‘insured’ occurred in the policy, it should ‘be held to include the legal representatives of the insured,’ and, by a preceding clause, that any change in interest, title, or possession, ‘other than by death of the insured,’ should avoid the policy. As the fire occurred after the death of Mrs. Silvernail, ‘the insured’ at the date of the loss was either the person who in the course of time should be appointed by the surrogate to administer upon her estate, or the persons interested in her estate, who expected to share therein. 13 Am. & Eng. Enc. Law, 221; 21 Am. & Eng. Enc. Law, 18; Greenwood v. Holbrook, 111 N. Y. 465, 18 N. E. 711. As ‘legal representatives' are equivalent to ‘executors and administrators,’ where the subject-matter or context does not control the meaning, we will first proceed upon the assumption that on the death of the testatrix the words ‘the insured,’ as used in the policy, referred to the legal representative to be appointed by the surrogate. That person could not, in the nature of things, be known until the appointment was actually made, as in the case of testacy the executor nominated might die or decline, and in case of intestacy none of the persons entitled to the right of administration might accept the trust. The policy, although of the standard form, was prepared by insurers, who are presumed to have had their own interests primarily in view; and hence, when the meaning is doubtful, it should be construed most favorably to the insured, who had nothing to do with the preparation thereof. Rickerson v. Insurance Co., 149 N. Y. 307, 313,43 N. E. 856; Laws 1886, c. 488; Laws 1892, c. 690, § 121. Moreover, when a literal construction would lead to manifest injustice to the insured, and a liberal, but still reasonable, construction would prevent injustice, by not requiring an impossibility, the latter should be adopted, because the parties are presumed, when the language used by them permits, to have intended a reasonable, and not an unreasonable, result. Trippe v. Fund Soc., 140 N. Y. 23, 26,35 N. E. 316;McNally v. Insurance Co., 137 N. Y. 389, 33 N. E. 475. Hence, it cannot be held that the policy became of no value upon the death of Mrs. Silvernail, because at that moment she had, and of necessity could have, no legal representative to give immediate notice of a fire if one had occurred. So, when the fire actually occurred there was still no legal representative to give the notice specified, yet the liberal construction that always obtains with reference to the procedure after a loss does not permit us to hold that the policy became void because, under the circumstances then existing, the notice was not given at once. Paltrovitch v. Insurance Co., 143 N. Y. 73, 76,37 N. E. 639. As the policy provides for the effect of death, and includes under the head of ‘the insured’ the legal representative of the insured, the parties necessarily contemplated a period, longer or shorter in duration, depending upon circumstances, when there could be no one authorized to act for the estate. Hence the covenants that ‘the insured’ should give written notice immediately after the fire, and that within 60 days ‘the insured’ should sign, swear to, an deliver proofs of loss, are to be considered in the light of what may reasonably be presumed to have been within the contemplation of the parties, when they entered into those covenants, as to the possibility of literal performance in case of a fire after the death of the original ‘insured,’ and before any opportunity to have a legal representative appointed by the surrogate. The words ‘immediately after the fire,’ as used with reference to the preliminary notice, and ‘sixty days after the fire,’ as used with reference to the proofs of loss, are to be construed, not literally, in all cases, but in the light of what was reasonable and possible in the case in hand. Bennett v. Insurance Co., 67 N. Y. 274; Richards, Ins. § 160. The law does not require impossibilities. The disability to sue, caused by war, has been held to relieve a policy holder from the consequences of failing to bring suit within 12 months after a loss, as required by the policy, because compliance was impossible under the circumstances. Semmes v. Insurance Co., 13 Wall. 158. The same cause was held for the same reason to legally excuse the nonpayment of premiums upon a policy of life insurance as required by its terms. Cohen v. Insurance Co., 50 N. Y. 610. Still, as the covenants in question are essential to the safe conduct of the insurance business, in order to enable the insurer to promptly investigate the facts connected with a fire, and to provide for paying or defending, or for rebuilding, if it so elected, it is incumbent upon those interested in the policy to make reasonable efforts to see that the covenants are kept, and, within a reasonable time, to use such agencies as the law provides, in order that they may be kept, if possible. As was said by this court in Wheeler v. Insurance Co., 82 N. Y. 543, 550, with reference to the failure to pay premiums of life insurance, owing to the insanity of the insured and the infancy of the assignees of the policy: ‘After Vose became insane, he was not really the party in interest. He had assigned the policies to his children, and they were the parties interested therein, and to be affected by a failure to perform the condition of the contract. Although Vose was their guardian, if incapacitated by his insanity a competent person could have been appointed in his place; and hence his insanity was not necessarily an insuperable obstacle to their performance of the condition of the policy, and they were not relieved thereby.’ Those who expect to share in the proceeds of the policy when paid cannot not trifle with the subject, nor delay action that would naturally result in compliance with the requirements of the contract. If the appointment of an executor or administrator cannot, for any reason, be secured with ordinary promptness, it would not be a reasonable construction of the policy to cast all the risk and inconvenience of the delay upon the insurer, provided those interested in the estate could procure the appointment of a temporary representative, who, by taking the necessary steps, could keep the covenants entered into by the insured.

It is provided by section 2670 of the Code of Civil Procedure that on the application of a creditor, or a person interested in the estate, the surrogate may, in his discretion, issue to one or more suitable persons letters of temporary administration, where delay necessarily occurs in the granting of letters testamentary or of administration owing to a contest before the surrogate, arising on an...