Maynard v. National Fire Ins. Co. of Hartford

• Decision Date: 12 February 1963
• Docket Number: No. 12168,12168
• Parties: Jess S. MAYNARD and Julia Maynard v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD. Jess S. MAYNARD and Julia Maynard v. WESTCHESTER FIRE INSURANCE COMPANY OF NEW YORK.
• Court: West Virginia Supreme Court

Page 443

129 S.E.2d 443

147 W.Va. 539

Jess S. MAYNARD and Julia Maynard v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD.

Jess S. MAYNARD and Julia Maynard v. WESTCHESTER FIRE INSURANCE COMPANY OF NEW YORK.

No. 12168.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 22, 1963.

Decided Feb. 12, 1963.

Syllabus by the Court.

1. The furnishing of a preliminary proof of loss as required by the conditions of a fire insurance policy is a condition precedent to any right of action by the insured thereon and, unless proof of loss is waived, an action on the policy does not accrue to the insured until after such proof of loss has been furnished.

2. Provisions of a policy of fire insurance pertaining to the requirement of preliminary proof of loss are for the benefit of the insurer and may be waived by it or by its duly authorized agent.

3. The burden is on the insured to prove compliance with the provisions of a fire insurance policy relative to proof of loss, or the waiver of such compliance, or the estoppel of the insurer to rely upon such policy provisions; and if the insured fails to establish the same by a preponderance of evidence, his action on the policy must fail.

4. Neither a mere insurance adjuster as such nor a mere soliciting agent of the insurer as such has authority to admit or deny liability of the insurer on a policy of fire insurance or to bind the insurer by waiver of the provisions of the policy relative to proof of loss or to bind the insurer by estoppel to assert and rely on such policy provisions.

5. The object of a proof of loss pursuant to the provisions of a fire insurance policy relative thereto is to give the insurer proper information as to facts which may render it liable. Such provisions are liberally construed and a reasonable and substantial compliance therewith by the insured is all that is required.

6. By reason of the statute known as the 'valued policy law', which in its present form appears as Section 9, Article 17 Chapter 33, Code, 1931, as amended, when a dwelling covered by a policy of fire insurance is totally destroyed by fire, the insurer is liable for the whole amount of insurance stated in the policy upon such dwelling, and such amount is treated as liquidated damages agreed upon by the parties.

7. Where a dwelling covered by a policy of fire insurance is totally destroyed by fire; prompt actual notice thereof is received by the insurer; an insurance adjuster soon thereafter goes to the scene of the fire where he investigates the circumstances and interrogates the insured; the insurer does not request or demand formal proof of loss; and where the insured owners and interrogated under oath by the insurer and the testimony thus elicited is reduced to writing and embraces substantially the same information which would be embodied in a formal proof of loss made pursuant to policy provisions, such formal proof of loss shall be deemed to have been waived by the insurer, and the insurer shall be estopped to rely upon a failure of the insured owners of the dwelling to submit such formal proof of loss.

8. 'An erroneous instruction to a jury, given for the plaintiff, is not prejudicial to the defendant, if, after all the evidence was adduced, it would have been the duty of the court, upon proper motion, to direct a verdict for the plaintiff.' Davis v. Chesapeake & O. Ry. Co., 61 W.Va. 246, pt. 1 syl. [56 S.E. 400, 9 L.R.A.,N.S., 993].

Jenkins & Jenkins, J. E. Jenkins, Jr., Huntington, for appellants.

Glyn Dial Ellis, Logan, for appellees.

CALHOUN, Judge.

This case involves an appeal from a final order of the Circuit Court of Logan County entered on August 9, 1961, by which judgment was awarded in favor of Jess S. Maynard and Julia Maynard, husband and wife, against Westchester Fire Insurance Company of New York for the sum of $5,000, in an action on a fire insurance policy covering a dwelling owned jointly by the plaintiffs; and by which order another judgment was awarded in favor of the same plaintiffs for $4,000 against National Fire Insurance Company of Hartford, Connecticut, in an action on a fire insurance policy covering household property and other contents of the dwelling.

The proceeding, instituted prior to the effective date of the Rules of Civil Procedure, was by notice of motion for judgment. The two insurance companies were joined as defendants in the same proceeding pursuant to the provisions at that time of Rule XII of the Rules of Practice for Trial Courts. On their appeal to this Court the defendants assign several errors, but primary reliance is based on an alleged failure of the plaintiffs to furnish to either defendant a proof of loss pursuant to the requirement in each of the insurance contracts.

Each of the two defendants filed in the trial court two special pleas by which reliance was placed upon certain identical provisions of the two insurance policies, such policies being standard fire insurance policies conforming to the provisions of Chapter 33, Article 17, Section 2, Code, 1931, as amended. In one plea reliance is placed on the following provision of the policies:

'Within sixty days after the loss, unless such time is extended in writing by this Company, the insured shall render to this Company a proof of loss, signed and sworn to by the insured, stating the knowledge and belief of the insured as to the following: the time and origin of the loss, the interest of the insured and of all others in the property, the actual cash value of each item thereof and the amount of loss thereto, all encumbrances thereon, all other contracts of insurance, whether valid or not, covering any of said property, any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this policy, by whom and for what purpose any building herein described and the several parts thereof were occupied at the time of loss and whether or not it then stood on leased ground, and shall furnish a copy of all the descriptions and schedules in all policies and, if required, verified plans and specifications of any building, fixtures or machinery destroyed or damaged.'

By another plea, each defendant places reliance upon the following language of the policies:

'When loss payable. The amount of loss for which this Company may be liable shall be payable sixty days after proof of loss, as herein provided, is received by this Company and ascertainment of the loss is made either by agreement between the insured and this Company expressed in writing or by the filing with this Company of an award as herein provided.

'Suit. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss.'

In response to the pleas filed by the defendants, respectively, the plaintiffs filed a plea of waiver and estoppel pursuant to Code, 1931, 56-4-22.

'Furnishing of the preliminary proofs of loss as required by the conditions of a policy of fire insurance is a condition precedent to any right of action thereon, and unless waived an action on the policy does not accrue to the insured until such proofs have been furnished.' Morris v. Dutchess Insurance Co., 67 W.Va. 368, pt. 3 syl., 68 S.E. 22; Morgan v. Insurance Company of North America, W.Va., pt. 1 syl., 122 S.E.2d 838. 'The burden of proving compliance with the necessary requirements of an insurance policy as to proofs of loss, or the waiver of such compliance on the part of the company, is on the insured; and, if he fails to establish the same by a preponderance of evidence, his action must fail.' Flanaghan v. Phenix Insurance Co., 42 W.Va. 426, syl., 26 S.E. 513; Chambers v. Great State Council, etc., 76 W.Va. 614, pt. 8 syl., 86 S.E. 467; Morgan v. Insurance Co. of North America, W.Va., pt. 2 syl., 122 S.E.2d 838. Failure 'to furnish such proof of loss, * * * within the given time does not wholly destroy all right of recovery, but only delays right of action; but action upon it cannot be brought until such proof is furnished.' Munson v. German-American Fire Ins. Co., 55 W.Va. 423, pt. 5 syl., 47 S.E. 160; Morgan v. Insurance Co. of North America, W.Va., 122 S.E.2d 838, 840; 10 M.J., Insurance, Section 205, pages 544-45; 45 C.J.S. Insurance § 982a(4)(d), page 1193. The effect of a failure to submit a timely proof of loss 'is to postpone right of action until such proof be furnished, but not to wholly destroy all right of recovery thereon.' S. M. Smith Ins. Agency v. Hamilton Fire Ins. Co., 69 W.Va. 129, pt. 6 syl., 71 S.E. 194. In a case involving policy provisions such as those involved in this case, 'a suit instituted within 60 days from date of filing verified proof of loss should be dismissed as prematurely instituted.' Rucker v. Fire Association of Philadelphia, 120 W.Va. 63, pt. 1 syl., 196 S.E. 494. The testimony indicates that the policies in this case were destroyed by fire, but such fact 'will not excuse compliance with the imperative requirements of the policy as to notice and proof of loss.' Munson v. German-American Ins. Co., 55 W.Va. 423, pt. 6 syl., 47 S.E. 160.

The policy requirement of proof of loss may be waived by the insurance company; 'and denial of all liability for a loss claimed under such policy operates as such waiver.' Rucker v. Fire Association of Philadelphia, 120 W.Va. 63, pt. 2 syl., 196 S.E. 494; Wade v. Mutual Benefit Health & Accident Ass'n, 115 W.Va. 694, pt. 6 syl., 177 S.E. 611; Hetzel v. Pacific Mutual Life Ins. Co., 108 W.Va. 22, pt. 1 syl., 150 S.E. 385; Houseman v. Home Ins. Co., 78 W.Va. 203, pt. 3 syl., 88 S.E. 1048, L.R.A.1917A, 299; 29A Am.Jur., Insurance, Section 1431, page 542. In a similar way a recognition of liability by the insurance company or its duly authorized agent may operate as a waiver of the policy provisions relative to proof...