Southern Fire Ins. Co. v. Knight

Decision Date10 July 1900
Citation36 S.E. 821,111 Ga. 622
PartiesSOUTHERN FIRE INS. CO. v. KNIGHT.
CourtGeorgia Supreme Court

Syllabus by the Court.

1. Where a policy of fire insurance set forth various requirements and conditions, a violation of which by the insured would operate as a forfeiture of the policy, and the same also contained a stipulation requiring the insured to furnish proofs of loss within 60 days after the fire, but did not make failure to do so a ground of forfeiture, and where under the terms of the policy, the insurer was not liable to make payment until after 60 days from the receipt of such proofs of loss, the policy further providing that no suit thereon should be brought, unless commenced within 12 months after the fire, held that, if the insured furnished the required proofs of loss in time for at least 60 days to elapse between the date upon which they were furnished and the expiration of the 12-months limitation, the policy was not forfeited by a failure to furnish such proofs within 60 days after the fire occurred.

2. "An invoice of goods purchased is not an inventory of stock, to be produced under the iron-safe clause of a fire policy."

3. A policy of fire insurance, the consideration for which is a premium payable in a gross sum, is entire and indivisible though the contract insures different classes of property in separate amounts. It follows from this that where such a policy insured both a building and a stock of merchandise therein contained, and provided that, in the event the insured failed to take an inventory of the goods at a time specified, "this policy shall be null and void from such date," a breach of this stipulation avoided the insurance on the building as well as on the stock of goods.

4. The plaintiffs' testimony showing affirmatively that they had failed to comply with the stipulation mentioned in the foregoing note, a motion to nonsuit should have been sustained.

Error from city court of Atlanta; A. E. Calhoun, Judge.

Action by M. A. & L. L. Knight against the Southern Fire Insurance Company. Judgment for plaintiffs. Defendant brings error. Reversed.

W. I Heyward, for plaintiff in error.

Jas. K. Hines, for defendants in error.

COBB J.

M. A. & L. L. Knight brought suit against the Southern Fire Insurance Company upon a policy of fire insurance. The case came on for trial, and at the conclusion of the testimony for the plaintiffs the defendant made a motion for a nonsuit, which the court overruled. The case proceeded to trial, and resulted in a verdict for the plaintiffs. The defendant brings the case here upon a bill of exceptions assigning error upon the refusal of the court to grant a nonsuit.

1. The policy which was the foundation of the action contained a clause which provided that, "if fire occur, the insured shall give immediate notice of any loss thereby, in writing, to this company, *** and within sixty days after the fire, unless such time is extended in writing by this company, shall" furnish proofs of loss, of a designated character. While it appears from the evidence that proofs of loss had been submitted to the company before suit was brought, they were not submitted until after the expiration of 60 days from the date of the fire, and the time for their submission was not extended by the company. The defendant contends that the failure on the part of the insured to furnish the proofs of loss within the time specified in the policy precludes a recovery thereon. It has been often held, and may now be considered as settled law, that if there is an express stipulation in a policy of fire insurance that the furnishing of proofs of loss within a specified time shall be a condition precedent to a recovery, or that a failure to submit the proofs within the time limited in the policy shall forfeit the same, such failure on the part of the insured will be fatal to his right to recover. See 13 Am. & Eng. Enc. Law (2d Ed.) 328, notes 7 and 8. There is not in the policy involved in the present investigation either a stipulation that the furnishing of proofs of loss within 60 days shall be a condition precedent to a recovery, or that the failure so to do shall operate as a forfeiture of the policy. While the decisions of the American courts are not entirely uniform on this question, the current of authority seems to be that in the absence of a stipulation providing that the furnishing of the proofs within a designated time shall be a condition precedent to recovery, or that the failure to submit the proofs within such time shall work a forfeiture of the policy, the failure so to do will operate simply to postpone the right of the insured to bring a suit until after he has furnished the proofs of loss required by the policy. This results from the familiar rule that forfeitures are not favored, and that a contract will not be construed to work a forfeiture unless it is manifest that it was the intention of the parties that it should have that effect. Especially would this be applicable in the case of a contract of insurance which contains many conditions, a failure to perform which are expressly stated to operate as a forfeiture of the contract, and which is silent as to the effect to be given to a failure to perform the condition relating to the furnishing of proofs of loss within a specified time. The policy is prepared by the insurer, and therefore must be construed most strongly against him. Mr. Joyce, in his work on Insurance (volume 4, § 3282), thus states the rule with reference to the failure to furnish the required proofs within the time designated: "If a policy of insurance provides that notice and proofs of loss are to be furnished within a certain time after loss has occurred, but does not impose a forfeiture for failure to furnish them within the time prescribed, and does impose forfeiture for a failure to comply with other provisions of the contract, the insured may, it is held, maintain an action, though he does not furnish proofs within the time designated, provided he does furnish them at some time prior to commencing the action upon the policy. And this has been held to be true even though the policy provides that no action can be maintained until after a full compliance with all the requirements thereof." The above quotation and the decision made in the present case will be found to be supported by the following cases: Steele v. Insurance Co. (Mich.) 53 N.W. 514, 18 L.R.A. 85; Hall v. Insurance Co. (Mich.) 51 N.W. 524; Tubbs v. Insurance Co., 84 Mich. 646, 48 N.W. 296; Rynalski v. Insurance Co., 96 Mich. 395, 55 N.W. 981; Insurance Co. v. Brown (Ky.) 29 S.W. 313; Vangindertaelen v. Insurance Co., 82 Wis. 112, 51 N.W. 1122, 33 Am.St.Rep. 29; Flatley v. Insurance Co., 95 Wis. 618, 70 N.W. 828; Kahnweiler v. Insurance Co. (C. C.) 57 F. 562; Insurance Co. v. Downs, 90 Ky. 236, 13 S.W. 882; Insurance Ass'n v. Evans, 102 Pa. St. 281; Taber v. Insurance Co. (Ala.) 26 So. 252; Rheims v. Insurance Co., 39 W.Va. 672, 20 S.E. 670; Shell v. Insurance Co., 60 Mo.App. 644; Insurance Co. v. Mattingly. 77 Tex. 162, 13 S.W. 1016.

It not being indispensable to a recovery on the policy that the proofs of loss should be submitted within 60 days, the question arises as to what lapse of time will preclude the plaintiffs from furnishing proofs of loss and asserting a liability under the policy. The answer to this is that, if the plaintiffs failed within a reasonable time after loss to furnish the proofs of loss, their right to make the proof would be gone, and their right to recover on the policy would consequently be at an end. What would be a reasonable time is to be determined by the peculiar facts of each case, and in determining this question a valid stipulation in the policy that no suit should be brought thereon after the lapse of a given time should be taken into consideration. The policy sued on in this case provides that "no suit or action on this policy for a recovery of any claim shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within twelve months after the fire." A stipulation of this character has been held by this court to be valid. Brooks v. Insurance Co., 99 Ga. 116, 24 S.E. 869, and cases cited; Graham v. Insurance Co., 106 Ga. 840, 32 S.E. 579. The policy contains a further stipulation that "the loss shall not become payable until sixty days after the" proofs of loss have been furnished. As each of these stipulations is valid, the insured must, in any event, have submitted their proofs of loss in such a time that at least 60 days would elapse between the date of the submission of such proofs and the time that suit should be brought, under the stipulation that suits to enforce the policy must be brought within 12 months from the date of the fire. In this connection, see Steele v. Insurance Co., supra; Insurance Co. v. Downs, supra; Insurance Co. v. Evans, supra; Rheims v. Insurance Co., supra. The proofs in the present case having been submitted more than 60 days before the expiration of 12 months from the date the fire occurred, the court properly refused to grant the nonsuit on account of a failure to submit the proofs within the time fixed in the policy, as it was a question for the jury whether a reasonable time for furnishing the proofs had elapsed between the date the fire occurred and the date that the proofs of loss were submitted.

This ruling is not in conflict with any former decision of this court. A number of decisions of this court can be found where the court dealt with the case as if the failure to submit proofs of loss within the time specified in the policy would preclude a recovery thereon, and there is in the language used in some of the opinions...

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