Rucker. v. Fire Ass'n Of Philadelphia

• Decision Date: 05 April 1938
• Docket Number: (No. 8672)
• Citation: 120 W.Va. 63
• Parties: M. W. Rucker et al. v. Fire Association of Philadelphia
• Court: West Virginia Supreme Court

120 W.Va. 63

M. W. Rucker et al.

v.Fire Association of Philadelphia

(No. 8672)

Supreme Court of Appeals of West Virginia.

Submitted February 15, 1938.

Decided April 5, 1938.

1. Insurance

A provision in a policy of insurance that loss thereunder "shall in no event become payable until sixty (60) days after the notice, ascertainment, estimate and verified proof of loss herein required have been received" is reasonable and enforceable, and, in the absence of a showing of a waiver thereof by the insurer, a suit instituted within sixty days from the date of filing verified proof of loss should be dismissed as prematurely instituted.

2. Insurance

A provision in a policy of insurance that loss thereunder "shall in no event become payable until sixty (60) days after the notice, ascertainment, estimate and verified proof of loss herein required have been received" may be waived by the insurer; and denial of all liability for a loss claimed under such policy operates as such waiver.

Kenna, Judge, absent.

Error to Circuit Court, Harrison County.

Action in assumpsit by M. W. Rucker and others against the Fire Association of Philadelphia to recover on a policy of insurance covering fire, theft, and other perils, and issued to several of the plaintiffs on an automobile truck. To review a judgment setting aside the verdict of a jury in favor of the plaintiffs, the plaintiffs bring error.

Affirmed; remanded.

Strother & McDonald, for plaintiffs in error. Robinson & Stump and James W. Wilson, Jr., for defendant in error.

Fox, Judge:

M. W. Rucker, J. E. Rucker, the Community Savings and Loan Company and Clarksburg Reo Company com- plain of a judgment of the Circuit Court of Harrison County setting aside the verdict of a jury returned in their favor on a policy of insurance issued by the Fire Association of Philadelphia. The policy of insurance, covering fire, theft and many other perils, was issued to M. W. Rucker and J. E. Rucker on an automobile truck purchased by one of the insured from the Clarksburg Reo Company, for which notes were executed, and later transferred to the Community Savings and Loan Company. The action is one in assumpsit, and is based on the alleged theft of the truck.

The declaration filed is in statutory form, and the policy is exhibited therewith. The defendant filed specifications of defense by which it challenges the right of recovery upon the following grounds: (1) that the truck was not kept in a private garage as warranted by the insured; (2) that the provisions of the policy with respect to preserving the property after it was recovered following the theft, were not complied with; (3) that immediate notice of the loss was not given the defendant; (4) that the suit was instituted before the expiration of sixty days from the date when proof of loss was made, and that the action was, under the terms of the policy, prematurely instituted; and (5) that there was misrepresentation and fraud in that the date of the alleged loss, and the value of the truck, as of that date, was misrepresented. The plaintiffs, in an original and amended reply, specifically denied items one, two, three and five of defendant's specifications of defense, and as to item four thereof, covering the institution of the action before the expiration of sixty days from the filing of the verified proof of loss, plaintiffs alleged the waiver of said provision in that, after notice of loss was given to the defendant, it denied liability on the policy therefor. The case was tried on the pleadings thus filed. After the plaintiffs had completed their testimony, a motion was made by the defendant that a verdict be directed in its favor, on the grounds set up in its specifications of defense, and on the further ground that the evidence of the plaintiffs disclosed that, at the time of the loss complained of, the automobile was being used in violation of the limitation of use clause contained in the policy, providing:

"Unless otherwise provided by agreement in writing added hereto, and additional premium paid therefor, this Company shall not be liable for loss or damage * * * where the automobile described herein is being used as a public livery conveyance for carrying passengers for compensation; or where rented under contract or lease."

This clause was not set up in the specifications of defense filed by the defendant, and the plaintiffs objected to its consideration for that reason. Upon the consideration of the entire motion, the court overruled the same; whereupon, the defendant introduced its testimony, the case was submitted to the jury upon instructions, and a verdict for the plaintiffs returned.

The defendant then moved to set aside the verdict, and the trial court, after further consideration, sustained the motion on three grounds: (1) that the plaintiffs' evidence having disclosed a violation of the limitation of use clause of the policy, the defendant was not precluded from taking advantage of the defense thereof, notwithstanding its failure to specify such violation in its specifications of defense, and that, on the record, the verdict was not warranted; (2) that the plaintiffs' action was premature in that it was instituted before the expiration of sixty days from the date when verified proof of claim was filed; and that on the question of waiver by the defendant of the clause of the policy covering date of payment of loss, the verdict of the jury was against the plain preponderance of the evidence; and (3) that the evidence did not show that the immediate notice of loss required by the policy had been given.

We think the action was prematurely instituted. The contract between the parties provides:

"This Company shall not be held to have waived any provision or condition of this policy or any forfeiture thereof, by any requirement, act or proceeding on its part relating to the appraisal, or to any examination herein provided for; and the loss shall in no event become payable until sixty (60) days after the notice, ascertainment, estimate and verified proof of loss herein required have been received by this Company; and if appraisal is demanded, then not until sixty (60) days after an award has been made by the appraisers."

No question is raised as to the reasonableness of this provision, and it is treated as an enforceable one in all insurance cases where the waiver of such provision is relied upon for recovery. A similar provision is approved as to fire insurance companies in the statutory form therefor. Code, 33-4-7. We are assuming, therefore, that unless waived, such provision should be upheld. However, a definite denial of liability under the policy, involving a refusal to pay the loss sustained thereunder, has been held to waive this and kindred provisions in a policy, and an action may be maintained even though instituted within the period within which, under the policy, the loss was not payable. Morris v. Dutchess Insurance Company, 67 W. Va. 368, 68 S. E. 22; Pauley v. Insurance Office, 79 W. Va. 187, 90 S. E. 552, L. R. A. 1918 E, 473; Huff V. Insurance Company, 94 W. Va. 663, 119 S. E. 854; Hetzel V. Insurance Company, 108 W. Va. 22, 150 S. E. 385. In Crouch v. Insurance Company, 104 W. Va. 605, 140 S. E. 681, it was held that "a waiver of proof of loss is not defeated by a subsequent act of insured in attempting to furnish the same before bringing a suit on the policy", which supports the proposition that the actual filing of verified proof of loss, after there had been a definite denial of liability, would not have prevented the plaintiffs from relying upon such denial of liability to sustain their action within the sixtyday period. The record discloses that the contention of the plaintiffs is that there was denial of liability on or about May 5, 1934, and that formal proof of loss was filed on May 16th, and that this action was instituted on June 18th, following.

Thus the question of fact as to whether or not there was, on the part of the company, such denial of liability as amounted to a waiver of the policy provision that the loss was in no event payable until sixty days after proof of loss had been filed is raised. The first question presented is that of the authority of the adjusters to act for the company on that matter. We think that the adjusters were clothed with such authority, and that the letter of May 3, 1934, is conclusive evidence thereof. On May 1, 1934, the attorneys for the insured communicated by letter with the defendant with respect to the loss complained of, and on May 3rd, in reply to that letter, the defendant, acknowledging receipt of the same, stated that the claim therein mentioned had been "referred to the Fire Companies' Adjustment Bureau, Union Bank Building, in your city who are representing us in this connection," and the defendant cannot now be heard to say that the adjustment bureau therein referred to was not authorized to act for it. It is admitted on the record that W. D. Swearingen and C. C. Campbell, parties with...