McCullough v. The Phoenix Ins. Company

• Decision Date: 31 January 1893
• Parties: McCullough et al. v. The Phoenix Insurance Company, Appellant
• Court: Missouri Supreme Court

21 S.W. 207

113 Mo. 606

McCullough et al. v. The Phoenix Insurance Company, Appellant

Supreme Court of Missouri, Second Division

January 31, 1893

Appeal from Howard Circuit Court.--Hon. John A. Hockaday, Judge.

Affirmed.

Campbell & Ryan for appellant.

(1) The provision of the policy pleaded in the answer respecting proofs of loss constituted in law a warranty, a condition precedent; a breach of which absolutely extinguished plaintiff's right to recover for any loss of property covered by the policy. Hence, proof by plaintiffs that they had complied with this condition and furnished defendant with such proof of loss was essential to their recovery in this case. Ins. Co. v. Kyle, 11 Mo. 278; Noonan v Ins. Co., 21 Mo. 81; Sims v. Ins. Co., 47 Mo 54; Erwin v. Ins. Co., 24 Mo.App. 145; Leigh v Ins. Co., 37 Mo.App. 542; Hicks v. Ins. Co., 6 Mo.App. 254; Johnson v. Ins. Co., 112 Mass. 49; Dolliver v. Ins. Co., 131 Mass. 39; O'Brien v. Ins. Co., 63 N.Y. 108; Ins. Co. v. Updegraff, 40 Pa. St. 311; Wood on Fire Insurance [2 Ed.] p. 954; May on Insurance [3 Ed.] sec. 460; Gould v. Ins. Co., 21 Insurance Law Journal (Mich.), 328, 330; Burlington Co. v. Ross, 21 Insurance Law Journal (Kan.), 799-803-4. (2) There could be no proof that defendant had waived compliance by plaintiffs of the condition requiring proofs of loss as no such waiver was pleaded; the plaintiffs having alleged performance of this condition, both in the petition and reply. Hence the court below erred in admitting the agreement to appraise offered by the plaintiffs for the purpose of proving waiver, against the specific objection of defendant. Ehrlich v. Ins. Co., 103 Mo. 231; Lanitz v. King, 93 Mo. 513; Nichols v. Larkin, 79 Mo. 265; Bank v. Hatch, 78 Mo. 13; Mohney v. Reed, 40 Mo.App. 99; Ray v. Boeteler, 40 Mo.App. 213; Eiseman v. Ins. Co., 74 Iowa 11; Bliss on Code Pleading [2 Ed.] sec. 302, p. 446; Ins. Co. v. Johnson, 21 Insurance Law Journal (1892), 911. (3) First. Should this court hold that this evidence of waiver was admissible under the pleadings, then we submit that the agreement to appraise did not tend to show waiver of proofs of loss, and defendant's objection on that ground should have been sustained. 2 Wood on Fire Insurance [2 Ed.] pp. 944, 973, 978-9. Cook v. Ins. Co., 70 Mo. 610; Noonan v. Ins. Co., 21 Mo. 81; Maddox v. Ins. Co., 39 Mo.App. 198; Leigh v. Ins. Co., 37 Mo.App. 542; Hanna v. Ins. Co., 36 Mo.App. 538; Colonias v. Ins. Co., 3 Mo.App. 56; Engebretson v. Ins. Co., 58 Wis. 301; Blossom v. Ins. Co., 64 N.Y. 162; Pettingill v. Hinks, 9 Gray, 169; Williams v. Ins. Co., 19 Insurance Law Journal, 26. Second. The rule being that waiver only takes place when there has been such conduct on the part of the insurer as creates an estoppel, "it does not arise by implication alone, nor except from some conduct by one party which leads or justly may lead, in reliance upon it, another party to believe a certain cause of action or non-action on his part will fulfill all his obligations to the first party, so that to allow the first party to disappoint the expectation or belief founded upon and induced by his conduct would be a fraud." May on Insurance [3 Ed.] sec. 507. Third. Mere silence by the defendant with respect to demanding proofs of loss could not be a waiver. Ins. Co. v. Kyle, 11 Mo. 278; Mueller v. Ins. Co., 82 Pa. St. 399; Ins. Co. v. Oates, 18 Insurance Law Journal, 761. (4) The defendant's objections to plaintiff's testimony concerning Spotts & Elkin should have been sustained. There was no evidence given, direct or inferential, that they were defendant's agents. Their statements made in letters claimed by plaintiff to have been written to him by them (and subsequently destroyed), were incompetent--as "the declarations of one who assumes to act as the agent of another, are not admissible to establish the agency." Mitchum v. Dunlap, 98 Mo. 418; Peck v. Ritchie, 66 Mo. 114; Diel v. Railroad, 38 Mo.App. 454; Francis v. Edwards, 77 N.C. 271. The judgment is without evidence to support it, and, therefore, although the action is at law, should be reversed by this court on appeal. Avery v. Fitzgerald, 94 Mo. 207; Garrett v. Greenwell, 92 Mo. 120; State v. Hunt, 91 Mo. 490; Blackwell v. Adams, 28 Mo.App. 61.

A. J. Herndon and Draffen & Williams for respondents.

(1) The policy does not provide that the proofs should be delivered at the home office of the defendant or to any particular officer or agent. It was therefore sufficient for the plaintiffs to submit such proofs to the defendant's agents at Fayette. Moore v. Ins. Co., 56 Mo. 343; 2 Wood on Fire Insurance [2 Ed.] sec. 439, p. 936; Scheiderer v. Ins. Co., 58 Wis. 13; Franklin v. Ins. Co., 42 Mo. 456. (2) There was evidence to show that Spotts & Elkin to whom plaintiffs' testimony showed that proofs of loss were delivered, were defendant's agents. The policy sued on was countersigned by Elkin as defendant's agent. "Notice of loss to the agent of the insurer is, in the absence of knowledge on the part of the assured of the revocation of his agency, notice to the insurer." 2 Wood on Fire Insurance, [2 Ed.] p. 929, note 1. (3) The plaintiff, Geo. T. McCullough, testified that he delivered to the defendant's agents at Fayette proofs of loss; that the papers were prepared by said agents. This was sufficient without evidence upon plaintiff's part as to the contents of the proofs. Hinkin v. Ins. Co., 50 N.Y. 657. (4) The proofs were made out by defendant's agents and upon its regular blanks, and after the same were received by said agents, it ought not to be heard now to say that they were not in proper form. Franklin v. Ins. Co., 42 Mo. 456; Sims v. Ins. Co., 47 Mo. 54. (5) It is immaterial, however, whether formal proofs of loss were made or not. The defendant clearly waived such proofs, if they were not made. (6) "When the insurer or its agent enters into an arbitration with the insured, before notice or proofs of loss have been served, the rule is that such submission is a waiver of notice or proofs of loss." Gale v. Ins. Co., 33 Mo.App. 664; Carroll v. Ins. Co., 13 P. 863; 2 Wood on Fire Insurance [2 Ed.] sec. 458, p. 1016; Mentz v. Ins. Co., 79 Pa. St. 478; Allemania Fire Ins. Co. v. Pittsburgh Exposition Society, 10 Cent. Rep. 292. (7) The defendant's objection that evidence of waiver was inadmissible under the pleadings is not well taken. The following cases sustain the ruling of the lower court: Ins. Co. v. Kyle, 11 Mo. 278; Russell v. Ins. Co., 55 Mo. 585; Schultz v. Ins. Co., 57 Mo. 331; Okey v. Ins. Co., 29 Mo.App. 105; Travis v. Ins. Co., 32 Mo.App. 198; Maddox v. Ins. Co., 39 Mo.App. 198; Roy v. Boteler, 40 Mo.App. 213. (8) The fact that the arbitrators failed to agree upon an appraisement cannot defeat this action. Bishop v. Ins. Co., 130 N.Y. 488; Uhrig v. Ins. Co., 101 N.Y. 362. The plaintiffs did all they were required to do in reference to the appraisement, and, even if the arbitration failed without fault upon the part of the arbitrators or of defendant, still when it could not be carried out, because of the disagreement of the arbitrators, as neither party required a new arbitration, the plaintiffs were entitled to bring this action. "A claimant under such a policy cannot be tied up forever without his fault and against his will by an ineffectual arbitration." Uhrig v. Ins. Co., 101 N.Y. 362. (9) The plaintiffs were not bound to await an appraisement before instituting their action, as the proof showed that the building insured was wholly destroyed. Under the statute in force when the policy was issued, the amount written in the policy was to be taken as the amount of the loss. Statutes of 1879, sec. 6009, p. 1180; Ins. Co. v. Leslie, 9 Am. Law. Rep. 45; Thompson v. Ins. Co., 43 Wis. 459; Barnard v. Ins. Co., 38 Mo.App. 106.

OPINION

Burgess, J.

Suit on a policy of insurance. Defendant insured plaintiffs, from noon on the twentieth of August, 1889, to noon on the twentieth of August, 1890, to the amount of $ 2,500, against loss or damage by fire to a dwelling house belonging to them in Howard county, Missouri. The building was destroyed by fire on the thirty-first of January, 1890.

The petition alleges that all the terms and conditions of the policy were complied with. The defense is bottomed on an alleged failure to comply with the conditions of the policy, which required "proof of loss" and also with another provision with reference to the appraisement of the amount of the loss or damage.

The policy contained the usual requirement, that the assured, in case of a fire, should give immediate notice and render a particular account of the loss, signed and sworn to. And also that the defendant company might examine the books of account and vouchers of the assured; make extracts from the same, and if required, that the assured should submit to one or more examinations, under oath, and sign same when reduced to writing; and until sixty days after the proofs, examinations and certificates should be rendered when an appraisal was required, the loss should not become payable.

The provision of the policy in reference to an appraisement is as follows:

"If differences of opinion arise between the parties hereto as to the amount of loss or damage, that question shall be referred to two disinterested men, each party to select one (and in case of disagreement, they to select a third), who shall ascertain, estimate and appraise the loss or damage, and the award of any two in writing shall be binding upon the parties hereto as to the amount of such loss or damage, and each party shall pay one half the expense of reference. When personal property is damaged, the assured shall put it in the best order possible, and make an inventory thereof, naming the quality and cost of each article...