U.S. Fire Ins. Co. v. Smith

• Citation: 164 So. 70,231 Ala. 169
• Decision Date: 17 October 1935
• Docket Number: 7 Div. 340
• Parties: UNITED STATES FIRE INS. CO. et al. v. SMITH.
• Court: Supreme Court of Alabama

164 So. 70

231 Ala. 169

UNITED STATES FIRE INS. CO. et al. v. SMITH.

7 Div. 340

Supreme Court of Alabama

October 17, 1935

Rehearing Denied Nov. 7, 1935

Appeal from Circuit Court, Etowah County; Paul Speake, Judge.

Action on a policy of fire insurance by Thomas Smith against the United States Fire Insurance Company and the National Liberty Insurance Company. From a judgment for plaintiff, defendants appeal. Transferred from Court of Appeals.

Affirmed.

See also, United States Fire Ins. Co. v. Hecht, 164 So 65.

Replications setting up waiver of policy requirement for proof of loss by denial of liability held not demurrable on ground of failure to allege any facts on which to predicate waiver.

The following are special replications referred to in the opinion:

"2. For replication to said plea in abatement plaintiff avers that within sixty days after the occurrence of the fire involved in this suit, defendant sent or caused to be sent, an adjuster who had full authority to bind the defendant company, to investigate said loss and to adjust the same. And plaintiff avers that said adjuster, acting within the line and scope of his authority as such, and after making a full investigation of said loss, informed plaintiff that defendant was not liable to plaintiff by reason of said fire. Hence plaintiff avers that the defendant waived the matters set up in said plea of abatement and the same are of no effect and have no force and application in this cause.

"3. For replication to said plea in abatement, plaintiff says that within sixty days after the occurrence of the fire involved in this suit, and prior to the commencement of this suit, the defendant sent its adjuster, who had authority to bind defendant, to investigate the loss, and said adjuster, acting within the scope of the business intrusted to him by defendant, after being fully informed of all conditions touching defendant's liability under the policy, informed plaintiff that the defendant was not liable to him, on other grounds than that proof of loss was not made. And plaintiff avers that the defendant waived the matter set up in said plea of abatement and the same are of no effect and have no force and application in this cause; and that the defendant is estopped to plead the provisions of said policy as set out in said plea of abatement.

"4. For replication to said plea in abatement plaintiff says that within sixty days after the fire involved in this suit, and prior to the commencement of this suit and before the expiration of the time of making proof of loss the defendant declined and refused to pay the damages claimed under the terms of said policy, and denied that defendant was liable to plaintiff under the terms of said policy, and thereby waived compliance by plaintiff of the stipulations of said policy as set out in said plea.

"5. For replication to said plea in abatement, plaintiff says: that after the occurrence of the fire involved in this suit, and prior to the bringing of this suit, the defendant sent or caused to be sent an adjuster with full authority to bind defendant, to investigate the said loss and to adjust the same, and that said adjuster, while acting within the line and scope of his authority as such, made a full investigation of said loss and the matters pertaining thereto, questioned the plaintiff with reference to said loss and matters pertaining thereto and with reference to claim of plaintiff under said policy. Plaintiff avers that said adjuster, acting within the line and scope of his authority as such, and after making a full investigation of said loss, and within sixty days after the occurrence of the fire, and prior to the commencement of this suit, informed plaintiff that defendant would pay to plaintiff the sum of $900.79 in full settlement of its loss under said policy. Plaintiff avers that he agreed to said settlement.

"Plaintiff avers that he relied on the statements and representations of such adjuster, or agent, of the defendant and that he filed no proof of loss or other matters as set up in said plea in abatement prior to the bringing of this suit.

"Hence plaintiff avers that the defendant is estopped to plead the provision of said policy as set up in said plea of abatement, and that defendant waived the provisions of said policy as set out in said plea of abatement prior to the commencement of this suit.

"6. For replication to said plea in abatement, plaintiff says: that after the occurrence of the fire involved in this suit, and prior to the bringing of this suit, the defendant sent or caused to be sent, an adjuster with full authority to bind defendant, to investigate the said loss and to adjust the same, and that said adjuster, while acting within the line and scope of his authority as such, made a full investigation of said loss, and the matters pertaining thereto, questioned the plaintiff with reference to said loss and matters pertaining thereto and with reference to the claim of plaintiff under said policy.

"Plaintiff avers that said adjuster, acting within the line and scope of his authority as such, and after making a full investigation of said loss, and within sixty days after the occurrence of the fire, and prior to the commencement of this suit, informed plaintiff that the value of the house which was insured under the terms of said policy was $1,201.05 and that defendant would pay to plaintiff the sum of $900.79 in full settlement of its loss under said policy. Plaintiff avers that he agreed to said settlement.

"Plaintiff avers that he relied on the statements and representations of such adjuster or agent, of the defendant and that he filed no proof of loss or other matters as set up in said plea in abatement prior to the bringing of this suit.

"Hence plaintiff avers that the defendant is estopped to plead the provisions of said policy as set up in said plea of abatement, and that defendant waived the provisions of said policy as set out in said plea of abatement prior to the commencement of this suit."

The reinsurance agreement is as follows:

"It is the purpose of this contract to reinsure from May 20, 1932, the liability of the United States Fire Insurance Company as insurers under the several policies issued at its Gadsden, Alabama agency to such parties for such amounts and to such expirations as are mentioned in the schedule attached hereto and made a part of this policy.

"It is understood and agreed that any expenses, legal or otherwise arising from any loss which may occur under any of the policies herein mentioned shall be borne by the National Liberty Insurance Company and it is further understood and agreed that the said National Liberty Insurance Company is bound by the terms and conditions of the several policies of the United States Fire Insurance Company as herein mentioned, which are entirely reinsured. The purpose of this transaction being to relieve the said United States Fire Insurance Company from any and all claims for which it may become liable under its policies as per schedule attached hereto, written through its Gadsden, Alabama agency, any errors or omissions to be covered under this reinsurance policy from date thereof, provided prompt notice is given to the National Liberty Insurance Company and proper correction made by endorsement thereon.

"The National Liberty Insurance Company, is hereby empowered to cancel or endorse any or all of the policies hereby reinsured, or to make any other changes therein as may be in its opinion necessary or desirable, and in all respects to act as though said reinsurance policies enumerated in the aforesaid schedule the National Liberty Insurance Company agrees to take charge of and adjust and pay same without expense to the United States Fire Insurance Company.

"It is further understood that any reinsurance effected by the United States Fire Insurance Company on policies hereby reinsured is cancelled from date of this policy, May 20, 1932, and does not extend to the protection of the National Liberty Insurance Company.

"Attached to and forming part of policy No. 1.

"Cliff G. Key, State Agent."

Coleman, Spain, Stewart & Davies and Frank M. Young, all of Birmingham, and O.R. Hood, of Gadsden, for appellants.

Inzer, Davis & Martin, of Gadsden, for appellee.

KNIGHT Justice.

The liability, if any, against the defendant United States Fire Insurance Company rests upon a policy of fire insurance issued by it, covering a certain house owned by the plaintiff, in the city of Gadsden; and the other defendant, the National Liberty Insurance Company, is sought to be held by virtue of a contract of reinsurance, whereby the latter company reinsured the risk, and, in case of loss, agreed to take charge of and adjust and pay the same without expense to the United States Fire Insurance Company.

The contract of reinsurance is attached to, and made a part of each of the counts of the complaint.

It appears from the complaint, as amended, that the insured's home was destroyed by fire on November 10, 1932, and at that time the policy of insurance sued on was in force, as well as the said contract of reinsurance.

The defendants, each appearing specially for the purpose, filed separate pleas in abatement of the action. By their pleas the defendants sought to abate the action upon the ground that the policy contract provided that within sixty days after the fire, if one should occur, the insured should furnish to the insurer proof of loss, and that the amount for which the insurer might be liable would not become due and payable until sixty days "after due notice, ascertainment estimate and satisfactory proof of loss had been received by the company"; and in each of the pleas it was averred "that the plaintiff did not...