Rhode Island Ins. Co. of Providence, R.I., v. Holley

• Decision Date: 16 March 1933
• Docket Number: 6 Div. 88.
• Citation: 226 Ala. 320,146 So. 817
• Court: Alabama Supreme Court
• Parties: RHODE ISLAND INS. CO. OF PROVIDENCE, R. I., v. HOLLEY.

146 So. 817

226 Ala. 320

RHODE ISLAND INS. CO. OF PROVIDENCE, R. I., v. HOLLEY.

6 Div. 88.

Supreme Court of Alabama

March 16, 1933

Appeal from Circuit Court, Jefferson County; Gardner Goodwyn, Judge.

Action on a policy of fire insurance by Charles E. Holley against the Rhode Island Insurance Company of Providence, R.I. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Coleman Spain, Stewart & Davies, of Birmingham, for appellant.

Ross Bumgardner, Ross & Ross, of Bessemer, for appellee.

KNIGHT Justice.

Suit by Charles E. Holley, appellee, against Rhode Island Insurance Company upon a policy of fire insurance, whereby the appellant insured the appellee's household and kitchen furniture against loss or damage by fire. The suit was filed on August 5, 1931, and, on August the 29th thereafter, the defendant "appearing specially" for the purpose of filing pleas in abatement, and "for that purpose only," filed its plea in abatement of the suit. Thereafter the defendant, still limiting its appearance filed an additional plea in abatement.

The plaintiff filed demurrers to each of the defendant's pleas in abatement, but these demurrers were overruled by the court. Thereupon the plaintiff filed four separate replications to the pleas in abatement. The court sustained the defendant's demurrer to the plaintiff's second and third replications, but overruled it as to replication 4. In the first replication, the plaintiff simply joined issue on defendant's pleas in abatement, while, in the fourth, the plaintiff replied that the defendant had waived the "defense attempted to be set up in said plea in this: That one A. B. Frese, an agent or servant of the defendant, who was then and there acting within the line and scope of his employment and with full authority being thereunto duly authorized by the defendant on or about to-wit, June 23 or 24, 1931, in the city of Birmingham, Jefferson County, Alabama, over the telephone, and with full knowledge of all the facts set up in said pleas, informed the plaintiff that the defendant was denying liability on said policy upon the sole ground that the plaintiff set his home on fire to collect the insurance and that said Frese had a letter from the defendant to this effect, and to so notify the plaintiff."

It is insisted by appellant that the court erred in overruling its demurrer to plaintiff's fourth replication, and this ruling of the court is made the basis of appellant's first assignment of error.

It is first argued that the replication does not aver any fact showing that the "appellant ought to have been estopped by said denial of liability, and it is nowhere averred that the appellee was in any wise misled to his injury." The bringing of this suit no doubt resulted from the appellant's denial of liability.

In support of appellant's contention, we are referred to the case of Cassimus v. Scottish Union & National Ins. Co., 135 Ala. 256, 33 So. 163, 167.

In the Cassimus Case, it is true, we find an expression which would seem to lend support to appellant's contention. It is there said that "the fact that the defendant, upon receipt of notice and proof of loss, denied any liability under the policy, stating at the time wherein its conditions had been violated in only one particular, did not prevent it from afterwards setting up in defense other and different breaches of the conditions of the policy, when it is not shown that the plaintiff was misled to his injury by the claim of nonliability on the particular ground stated. This is what was attempted by replication numbered 1, and on this ground, if for no other, the demurrer was properly sustained."

However, the Cassimus Case, supra, on the point under consideration, has been departed from in our more recent decisions. In the case of Travelers' Ins. Co. v. Plaster, 210 Ala. 607, 98 So. 909, 911, Justice Sayre, in writing for the court, had occasion to refer to the Cassimus Case, and in doing so made it fully understood that the court did not approve what was said in that case, and that the principle there announced could not be followed. The learned justice then said: "And it must be conceded that there are decisions in other jurisdictions to the effect that the notice stipulated for is an absolute condition of liability that, no matter what is said or done between the parties, the insurer may defeat a recovery on the ground that notice has not been given as stipulated. But we do not concur in this statement of the rule of nonliability. The lack of the stipulated notice, if timely insisted upon, is a good defense because that is the meaning of the contract by which the parties are bound. But the lack of formal notice, of or notice within the time prescribed may be waived, and if, after a denial of liability on other grounds, the insured-or, in case of his death, his personal representative or the beneficiary named in the policy-proceeds to establish his claim by suit, it may be safely assumed that he thereby incurs trouble and expense to maintain his right on litigable grounds, the question of notice apart, because when called upon to concede or deny liability the insurer based its denial of liability on grounds other than the lack of notice; and so this court, in common with some others, has taken the broad ground that, when one specific ground of forfeiture is urged against the claim of insurance money, all other grounds are waived. National Ins. Co. v. Singleton, 193 Ala. 84, 69 So. 80; Security Ins. Co. v. Laird, 182 Ala. 121, 62 So. 182; Georgia Home Ins. Co. v. Allen, 128 Ala. 451, 30 So. 537; 32 C.J. 1354, note 2; Cooley's Briefs, supra [3531]."

We therefore hold that there is nothing of merit in appellant's above-stated insistence.

It is next urged that the replication was subject to demurrer for the reason that the alleged waiver was made after the time had elapsed for filing proof of loss. In support of this contention, appellant refers us to 26 Corpus Juris, p. 408, note 74. However, the exception to the general rule that a waiver may occur after the time for filing proof of loss is stated on page 408 of that volume, while the general rule is stated on pages 406 and 407. The rule is stated by the author as follows: "Sec. 522. k. Denial of Liability or Refusal to Pay: (1) In general. If insurer, within the time for presenting proofs of loss, denies liability or refuses to pay the loss, it thereby waives the necessity for proofs; and it is generally held that a denial of liability or a refusal to pay not predicated on the failure to furnish proofs is a waiver of any objection on that ground, irrespective of whether the denial precedes or follows the time within which proofs should have been furnished, although [page 408] there is authority to the effect that if such a denial or refusal is first made after expiration of the time for furnishing proofs, it does not waive the delay in furnishing them." (Italics supplied.)

Our court has placed itself in line with those cases which support the general rule, that the waiver may be invoked after the period for furnishing proof of loss has elapsed. Taber et al. v. Royal Ins. Co. et al., 124 Ala. 691, 26 So. 252. Indeed, in some jurisdictions, it is held that a denial of liability, although first made in insurer's plea or answer, constitutes a waiver of notice and proofs and defects therein. 26 Corpus Juris, p. 410, § 522.

However, the necessities of this case do not require that we shall go so far in our holding on the subject, and we do not, therefore, commit ourselves to that proposition. We hold, however, that the replication was not subject to the specific grounds of demurrer that the waiver could not be invoked because made after the lapse of sixty days.

It is next urged that the replication was defective because it does not show an unqualified denial of liability. A reading of the replication will show that there is no merit whatever in this contention by appellant.

It is finally urged against the sufficiency of the replication, that "a waiver requiring the filing of proof of loss does not waive the time that any sum becomes due under the policy."

In Joyce on Insurance, vol. 5, it is stated: "If the insurer denies liability under the policy and refuses to pay the amount of loss claimed, the provision that no suit can be brought upon the policy until a certain time after loss or after proofs are furnished is thereby waived, and the right of action upon the policy accrues immediately upon such refusal." (Italics supplied.) This text is directly supported by the following authorities in other jurisdictions: Jennings v. Brotherhood Accident Co., 44 Colo. 68, 96 P. 982, 18 L. R. A. (N. S.) 109, 130 Am. St Rep. 109; Norwich & N.Y. Transp. Co. v. Western Mass. Ins. Co., 34 Conn. 561, Fed. Cas. No. 10,363; Hoffecker v. New Castle County Mutual Ins. Co., 5 Houst. (Del.) 101; Williamsburg City Fire Ins. Co. v. Cary, 83 Ill. 453; Cobb v. Insurance Co. of North America, 11 Kan. 93; Allegre v. Maryland Ins. Co., 6 Har. & J. (Md.) 408, 14 Am. Dec. 289; Ph nix Ins. Co. v. Taylor, 5 Minn. 492 (Gil. 393); Landis v. Home Mutual Fire & M. Ins. Co., 56 Mo. 591; State Ins. Co. v. Maackens, 38 N. J. Law, 564; Clark Millinery Co. v. National Union Fire Ins., 160 N.C. 130, 75 S.E. 944, Ann. Cas. 1914C, 367; United Fireman's Ins. Co. v. Kukral, 7 Ohio Cir. Ct. R. 356; French v. Fidelity & Casualty Co., 135 Wis. 259, 115 N.W. 869, 17 L. R. A. (N. S.) 1011; Ph nix Ins. Co. v. Flowers (Ky.) 124 S.W. 403; Popa v. Northern Ins. Co. of New York, 192 Mich. 237, 158...