Muse v. London Assur. Corp.

• Decision Date: 14 April 1891
• Citation: 13 S.E. 94,108 N.C. 240
• Parties: Muse et al. v. London Assur. Corp.
• Court: North Carolina Supreme Court

13 S.E. 94

108 N.C. 240

Muse et al. v. London Assur. Corp.

Supreme Court of North Carolina

April 14, 1891

Appeal from superior court, Moore county; Graves, Judge.

Action by John C. Muse and A. H. Muse against the London Assurance Corporation on an insurance policy. The property insured was destroyed by fire August 31, 1885, and on October 11, 1887 plaintiffs commenced suit to recover for the loss. The policy stipulated that "no suit or action against this corporation for the recovery of any claim by virtue of this policy shall be sustainable in any court of law or chancery unless such suit or action be commenced within twelve months next after the loss shall occur; and, should any suit or action be commenced after the expiration of the aforesaid twelve months, the lapse of time shall be taken and deemed conclusive evidence against the validity of such claim, any statute of limitation to the contrary notwithstanding." Code N.C. § 3076, provides that "no person licensed to do insurance business under this chapter shall limit the term within which any suit shall be brought against such person to a period less than one year from the time when the loss insured against shall occur." Defendant moved for judgment upon the face of the pleadings, which was denied and defendant appeals.

John W Hinsdale, for appellant.

J. C. Black and Haywood & Haywood, for appellees.

Avery J.

It seems to be established that a provision in a policy that the insured may bring suit within 12 months after the loss, and not later, being in the nature of a condition precedent, is not in contravention of the policy of statutes of limitation and will be upheld by the courts. May, Ins. § 478; O'Laughlin v. Insurance Co., 11 F. 280; Fullam v. Insurance Co., 7 Gray, 61; Wilson v. Insurance Co., 27 Vt. 99; Riddlesbarger v. Insurance Co., 7 Wall. 386; Gray v. Insurance Co., 1 Blackf. 280. The weight of authority sustains the position also that "the rights of the parties in such cases are fixed by the contract," and that the contract must be construed as requiring that the action which is prosecuted to judgment (not a suit begun previously) must be brought within 12 months after the loss occurs, unless the conduct of the insurer has been such as to amount to a waiver of the benefit of the condition. Riddlesbarger's Case, supra; Arthur v. Insurance Co., 78 N.Y. 462; McFarland v. Insurance Co., 6 W. Va. 437; and 2 Phil. Ins. § 1983. The condition that the suit shall be instituted, if at all, within a year after the loss has been sustained as reasonable and valid in part, at least, because the tendency of speedy investigations, while the evidence is fresh, is to prevent fraudulent practices. 4 Wait, Act. & Def. 86. But such stipulations operating as forfeitures are construed strictly, and comparatively slight evidences of waiver have been held sufficient to prevent their enforcement. Ripley v. Insurance Co., 29 Barb. 552; Ames v. Insurance Co., 14 N.Y. 253. There was nothing, however, in the conduct of the company or its agents that was calculated to mislead the plaintiff as to its purposes, and induce him to postpone instituting the action, nor was there evidence of evading service, or of any act showing a purpose on the part of the company to prevent or delay the bringing of the suit after the plaintiff determined to take more active steps. We think, therefore, that there was not, under the most liberal view of the law on that subject, sufficient evidence to go to the jury as tending to show a waiver. Insurance Co. v Hall, 12 Mich. 211; Ripley's and Arthur's Cases, supra. So far our views coincide fully with these expressed by the learned judge who presided in the court below. But we do not concur in the construction given by him to section 3076 of the Code, and in the consequent conclusions that the stipulation in the policy was void because it was in conflict with that statute. If, instead of prohibiting licensed insurance companies from stipulating that actions should begin within a shorter period that one year, the legislature had, by appending an additional subsection under section 156 of the Code, prescribed one year as the limit for bringing the action for a loss sustained by the assured, there would have been good ground for the contention that the right of action would still subsist for a year...