Smith v. Scottish Union & National Ins. Co.

• Decision Date: 21 October 1908
• Citation: 85 N.E. 841,200 Mass. 50
• Parties: SMITH SAME v. SCOTTISH UNION & NATIONAL INS. CO. SAME v. BOSTON INS. CO. SAME v. AGRICULTURAL INS. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

200 Mass. 50

85 N.E. 841

SMITH SAME v. SCOTTISH UNION & NATIONAL INS. CO. SAME v. BOSTON INS. CO. SAME v. AGRICULTURAL INS. CO.

Supreme Judicial Court of Massachusetts, Worcester.

October 21, 1908

Oct 21, 1908.

COUNSEL

Frank B. Smith T. H. Gage, Jr., and Frank F. Dresser, for plaintiff.

F. W Brown and Lindsey K. Foster, for defendant.

OPINION

SHELDON J.

1. In the first two of these cases the only question raised is whether the judge erred in refusing to rule, as requested by the defendant, that no statement in writing, signed and sworn to by the insured, was rendered to the company forthwith after the loss, as required by the terms of the policy; and that for this reason the plaintiff could not recover.

The policies were in the Massachusetts standard form, prescribed by Rev. Laws, c. 118, § 60 (see, now, St. 1907, p. 882, c. 576, § 60), and contained the stipulation that 'in case of any loss or damage under this policy, a statement in writing, signed and sworn to by the insured shall be forthwith rendered to the company, setting, forth the value of the property insured, the interest of the insured therein, all other insurance thereon, in detail, the purposes for which and the persons by whom the building insured, or containing the property insured, was used, and the time at which and manner in which the fire originated, so far as known to the insured.' Compliance with this stipulation is a condition precedent to the insurer's liability. Boruszewski v. Middlesex Assur. Co., 186 Mass. 589, 590, 72 N.E. 250, and cases there cited. And see Hatch v. United States Casualty Co., 197 Mass. 101, 83 N.E. 398, 14 L. R. A. (N.S.) 503.

The property insured by these policies was totally destroyed by fire on December 2, 1903, and the plaintiff learned of the fire on the afternoon of the next day. He signed and swore to written statements and delivered them on December 16, 1903, to one Crowell, an insurance broker, whom he supposed to be authorized to receive them, but who, it has been fould, had been really his own agent. Crowell returned these statements to the plaintiff on the ground that he had no authority to receive them; and new statements were signed and sworn to one December 21st, and furnished to the companies. The defendant in the first case, the Scottish Union & National Insurance Company, received its statement on the 23d, and the defendant in the second case, the Boston Insurance Company, received its statement on the 28th day of the same month.

The general rule to be applied in such a case was stated by the present Chief Justice in Parker v. Middlesex Assur. Co., 179 Mass. 528, 530, 61 N.E. 215, 216: 'The true meaning of such a requirement in a policy is that the statement shall be sent as soon as the exercise of reasonable diligence will enable the assured to send it. When it is contended that a statement was not sent in time under such a requirement, the inquiry always is whether the insured, whose duty it was under the contract to send the statement as soon as he reasonably could, has used due diligence to send it promptly. If there is no dispute in regard to the facts, what is due diligence is a question of law for the court.' And he adds (page 532 of 179 Mass., page 216 of 61 N. E.): 'The question whether there was due diligence has been submitted to a jury in cases where the evidence was doubtful or conflicting, and where upon the view of it most favorable to the plaintiff, the court would find due diligence.' See the cases there cited to these two propositions. The facts are of course in dispute, within the meaning of the rule just stated when, by reason of their complexity or because they did not upon their face require as matter of law an answer one way or the other as to the exercise of due diligence, this question must be decided by drawing an inference of fact from the primary facts shown. This was the rule laid down, after careful argument by distinguished counsel, in Haskins v. Hamilton Ins. Co., 5 Gray, 432, and stated by Taft, J., with very full citation of authorities in Hamilton v. Phoenix Ins. Co., 61 F. 379, 388, 9 C. C. A. 530. It is the general rule adopted when questions of due care of diligence have to be passed upon. Gavett v. Manchester & Lawrence R. R., 16 Gray, 501, 506, 77 Am. Dec. 422; Foster v. N. Y., N.H. & H. R. R., 187 Mass. 21, 25, 72 N.E. 331. In our opinion, this is the rule which should be followed in the case at bar.

In these cases, the facts bearing upon the question whether the plaintiff used due diligence in sending his statements to the defendants were not agreed upon, nor were they conceded at the trial. They were found by the justice upon all the evidence, and apparently were disputed until settled by his findings. They were in dispute within the meaning of the rule already stated. Did they also warrant the inference that the plaintiff under the circumstances of the case had used due diligence in sending his statements?

The plaintiff was the holder of the legal title to the property insured. In reality, he held this title for the benefit of the national bank of which he had been cashier and of which he was the official liquidator under winding up proceedings. The title had been acquired under foreclosure of a mortgage which had been given to the bank by one Taber, the former owner of the property; and it was understood between the parties that Taber was to have the property or its proceeds after the full amount due to the bank should have been paid. The insurance was upon the building and its contents, which included the furniture and fixtures of a summer hotel, apparently one of considerable size. The plaintiff was occupied with the affairs of the bank, to which as liquidator it was his official duty to attend, and was actually engaged in them every day in December. He knew nothing about the building or its contents, which might have been found to include numerous articles of furniture and fittings; and he left to Taber, who knew more about the building, the preparation of the statements. Taber was sick and confined to his house under a physician's care for some days. He was also delayed somewhat in getting from the architect the specifications of the building. But in spite of these circumstances statements were prepared and sworn to and delivered to Crowell on December 16th. Crowell, instead of forwarding them to the insurance companies, as from his former position as agent for the plaintiff it might have been expected that he would do, returned them, as has been stated, to the plaintiff. It has not been found when this was done, and no evidence on the subject appears in the report; but the judge might have drawn the inference that Crowell did not do this without having first conferred with the defendants. New statements were then prepared and given to the defendants, one 21, and one 26, days after the fire.

It is true of course that the plaintiff was not required by this clause in the policy to prepare and furnish a proof of loss. Boruszewski v. Middlesex Assur. Co., 186 Mass. 589 594, 72 N.E. 250; Towne v. Springfield Ins. Co., 145 Mass....