McFarland v. Peabody Ins. Co. A. B. MqFarland

• Decision Date: 15 July 1873
• Citation: 6 W.Va. 425
• Court: West Virginia Supreme Court
• Parties: McFarland & Steele v. Peabody Insurance Co. A. B. MqFarland and John A. Steele, partners UNDER the FIRM NAME of McFaRLAND AND Steele, Plaintiffs in the action and Defendants in error against The Peabody Insurance Company, Defendant in the action and Plaintiff in Error.

6 W.Va. 425

McFarland & Steele

v. Peabody Insurance Co.A. B. MqFarland and John A. Steele, partnersUNDER the FIRM NAME of McFaRLAND ANDSteele, Plaintiffs in the action and Defendants in error against The Peabody Insurance Company, Defendant in the action andPlaintiff in Error.

Supreme Court of Appeals of West Virginia.

Decided July 15th, 1873.

Syllabus.

1. A provision in a policy of insurance that no action for loss or damage shall be sustainable, unless the same is brought within six months after the loss or damage shall occur, is valid.

2. The mere pendency of negotiations between the parties, or the fact that occasional interviews are had between the parties, in regard to the adjustment or settlement of a loss, will not in themselves operate as a waiver of the above provision, or be an equitable estoppel.

3. In a policy insuring "manufactured barrels, and materials for same," the word "materials" means such as are necessarily or usually or commonly employed in their manufacture; and benzine, being prohibited by the policy, is not included as an article insured, or covered by the above language, in the absence of proof; nor could an insurance company have presumptive knowledge, that benzine was an article necessarily or commonly used in the manufacture of barrels.

4. A., who is not the agent of the insurance company, applies on behalf of B., for an insurance, and is told to send a form or copy of a policy, and a policy would be sent him. a. makes out and sends on behalf of B. an application, referring to a diagram and description of the property, upon which the policy issues. Under these circumstances, the application is wholly the act of B., or his agent. And a failure to state that in a building referred to in said diagram, and contiguous to the insured property, and used by B. for painting barrels, benzine was kept and used, avoids the policy; such fact being material to the risk under the terms of the policy.

The case is stated in the opinion of the Court.

Wheat and Hutchinson for Plaintiff in error. Sands and Boggess for Defendants in error.

Pattll, Judge.

The Plaintiffs in this case brought suit on a policy of Insurance against the defendant, the Peabody Insurance Company, on the 22nd day of February 1871, being the day on which the writ of summons bears date. The property insured was situated in Parkersburg, West Virginia; and the policy of insurance bears date on the 24th day of February 1870, and was to continue in force for one year from that date, being unto the 24th day of February 1871.

The fire occurred on the 6th day of May 1870. Proofs of loss were made and sent to the company on the 16th day of May 1870, and by the terms of the policy, payment of losses was to be made in ninety days after the loss shall have been ascertained and proved.

The seventeenth condition of insurance, referred to in the body of said policy of insurance, expressly provided as follows:" That no suit or action against said company, for the recovery of any claim upon, under or by virtue of this policy shall be sustainable in any court of law or chancery, unless such suit or action shall be commenced; within the term of six months next after any loss or damage shall occur: and in case any such suit or action shall be commenced against said company after the expiration of six months next after such loss or damage shall have occurred, the lapse of time shall be taken and deemed as conclusive evidence against the validity of the claim thereby so attempted to be enforced."

The Defendant offered to file a special plea, setting out the above provision of the policy, and avering that the suit was not commenced until after the expiration of six montns after the loss became payable according to the terms and conditions of said policy.

To the filing of this plea, the Plaintiffs objected, and moved the Court to reject the same; the motion was overruled, and the Plaintiffs excepted, and prayed that their exception might be made a part of the record in this cause, which was accordingly done. And thereupon the Plaintiffs replied generally.

The Defendant also filed a second special plea, setting up the terms and provisions of said policy, as contained and specified in the fourth condition annexed thereto, requiring that the application for insurance must specify certain matters therein particularly referred to and mentioned, connected with the property to be issued, as well as of surrounding, contiguous property, and in case of goods or merchandize, whether or not they are of the description denominated hazardous, as extra hazardous, or included in the memorandum of special rates, and providing that a false discription, by the assured, of the building or its contents, or the omission to make known any fact meterial to the risk, shall render absolutely void the policy issued upon such description. The plea then avers that a certain one story building referred to in the application of the Plaintiffs, and the diagram thereto at-tached, on which the aforesaid policy was issued, and being within one hundred feet of the property insured, was occupied by the Plaintiffs for storing empty barrels in; and that at the time of, and before, the burning and destruction of the property insured, the said building was used and occupied by the Plaintiffs for the painting of empty barrels; and that there was in said building a barrel containing benzine, one of the products of petroleum. The plea further avers that by the terms of the eighth condition referred to in said policy, it is provided that Defendant should not be liable for damages occasioned by the use of camphene, or burning fluid, coal oil, petroleum or any of their products, by whatever name designated, unless otherwise specially provided. The plea further avers that the painting of barrels, and the keeping, using or storing of benzine, (one of the products of petroleum) ware facts material to the risk insured against by the Defendant under and by virtue of said policy; and the omission to state such facts in the application of the Plaintiffs for said insurance, renders said policy thereupon issued absolutely void.

To this plea the Plaintiffs replied generally, and upon these pleas and the general issue the trial was had. It being agreed that under the general replications to the several pleas, either party might give in evidence any matter or thing, which might have been specially pleaded. After the introduction of all the testimony on either side, the Defendant demurred to the evidence; and the Court being of opinion that the matters shown in evidence to the j ury were sufficient in law to maintain the issue on their part, judgment was rendered for the Plaintiffs for the amount of damages assessed by the jury in their verdict. From this judgment, thus rendered, by the Circuit Court on this 27th day of December 1871, the Defendant has appealed to this Court.

The first question arising upon this record, is the validity of the provision appearing in the seventeenth condition of the policy of insurance, which limits the time in which an action may be brought for the recovery of any claim upon, under or by virtue of said policy to six months next after any loss or damage shall occur.

"While this question is presented here for the first time in the history of this State, it is not new to the courts of many other States of the Union, where it has been expressly adjudicated and settled by their highest judicial tribunals. If this question was now presented, not only here but elsewhere, to the courts of the country for their determination, as an original question for the first time, it would be worthy of the gravest consideration. A reference now to the course of decisions on this subject is all that is intended. This question was first argued and decided in the Circuit Court of the United States for the second circuit at April term 1848, in the case of Cray vs. Hartford Fire Insurance Company, 1 Blachf. C. C, 280. The decision was rendered by Justice Nelson, sustaining the validity of a provision in the policy similar in its import to the one under consideration, and claiming that it was competent for the parties by a clause in their contract to limit the time within which an action should be brought, and that it interfered with no just rights or remedies of any other party.

In the case however of French vs. The Lafayette Insurance Company, 5 McLean C. C. 461, Justice McLean rendered a contrary decision, maintaining that such a provision was opposed to the policy of the law, and for other reasons stated in his opinion. I have seen it somewhere stated that he was not aware at the time of the decision of Justice Nelson, as he makes no allusion to it.

This case has been followed in Eagle Insurance Company vs. Lafayette Insurance Company by the Supreme Court of Indiana, reported in 9 Ind., 443. This is the only State in which this decision has been adopted. In the highest courts of all the other States, where the question has arisen, the validity of the provision has been maintained. Among these States are New York, Massachusetts, Vermont, Pennsylvania, Ohio and Illinois. Ames vs. New York Union Insurance Company, 14 N. Y., 253. Ripley vs. The Etna Insurance Company, 30 N. Y., 136. Jabez Amesbury and another vs. Bowditch Mutual Fire Insurance Company, 6 Gray (Mass.)...