Vesey v. Commercial Union Assur. Co.

• Decision Date: 21 December 1904
• Citation: 101 N.W. 1074,18 S.D. 632
• Parties: VESEY et al. v. COMMERCIAL UNION ASSUR. CO., LIMITED, OF LONDON, ENGLAND.
• Court: South Dakota Supreme Court

18 S.D. 632

101 N.W. 1074

VESEY et al.

v.COMMERCIAL UNION ASSUR. CO., LIMITED, OF LONDON, ENGLAND.

Supreme Court of South Dakota.

Dec. 21, 1904.

Appeal from Circuit Court, Lake County.

Action by Rena A. Vesey and another against the Commercial Union Assurance Company, Limited, of London. From a judgment in favor of plaintiffs, defendant appeals. Affirmed.U. S. G. Cherry (Sylvester G. Williams, of counsel), for appellant. J. H. Williamson and Bailey & Voorhees, for respondents.

CORSON, P. J.

This is an action upon an insurance policy. Findings and judgment were in favor of the plaintiffs, and the defendanthas appealed. Numerous errors are assigned, but the appellant, in its brief, has discussed only such as it seems to regard as important, and these will be considered in their order:

1. It is contended by the appellant that as the action was not commenced within one year, limited by the policy, the plaintiffs' claim is barred. There is a provision in the policy that no action can be maintained, unless commenced within 12 months next after the fire. It is conceded that the fire occurred, in which the property was destroyed, on the 7th day of August, 1900, and that the action was not commenced until in March, 1902, about 18 months after the fire; but the respondents insist that, under the provisions of section 1276 of the Civil Code, the stipulation in the policy is void. The section reads as follows: “Every stipulation or condition in a contract, by which any party thereto is restricted from enforcing his rights under the contract by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void.” This section is a literal copy of section 832 of the proposed Civil Code of New York, and the commissioners, in their note to that section, say: “The latter provision is new. The question involved has been variously decided in different tribunals, with a preponderance of opinion in favor of the right to limit the time of commencing actions, as a matter of law, but with frequent disapprobation of the practice.” And the commissioners, after citing a number of authorities, conclude: “The law itself, and the law alone, should regulate the limitations of actions.” Undoubtedly, as stated in the note by the commissioners, there is a conflict in the authorities at common law; and it is proper, therefore, that the question should be settled by express legislation, as has been done in this state. The stipulation, therefore, in the policy, under the provisions of the Code, is absolutely void. And this seems to have been the view taken by the Supreme Court of North Dakota in construing a similar provision in a policy under the same law. Johnson v. Ins. Co., 1 N. D. 167, 45 N. W. 799. It is contended by the appellant that as the form of the policy used was prepared by the State Auditor under the authority conferred by chapter 105, p. 174, of the Laws of 1893, the section above quoted was, in effect, repealed; but no authority was conferred upon the Auditor by that act to insert stipulations in the policy that were in conflict with the laws of the state.

2. It is further contended by the appellant that the proofs of loss were not furnished by the plaintiffs within 60 days, as required by the stipulation in the policy. Upon this subject the court found, by its seventh finding, that the proofs of loss were delivered to the agent who wrote and issued the policy within the 60 days. The court also found by its ninth finding that “upon the 23d day of September, 1899, the firm of Kennedy Bros. were the agents of the defendant at Madison, Lake county, South Dakota, and, as such agents, were authorized to solicit applications for fire insurance policies, and to write and deliver policies of insurance upon property situated in the said county of Lake, and do any and all acts proper, usual, and customary to be done by fire insurance agents.” From these findings the court concludes, as matter of law, that the proofs of loss were served within the time limited. These findings and this conclusion of law present clearly the question as to whether or not a delivery of the proofs of loss within the 60 days to the agent, Kennedy, who issued the policy, was a sufficient compliance with the terms of the same. The condition of the policy relied upon is as follows: “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 render a statement to this company, signed and sworn to by the said insured, stating” the facts required by the policy, constituting the proofs of loss. Nowhere in the policy does it appear from its terms where the proofs of loss must be served. It appears from the policy itself that the defendant company is a foreign corporation, having its home office in London, England, as shown by the heading of the policy, which is as follows:

+-----------------------------------------------------------------------------+
                ¦No. 100133.                                ¦$2400.00.                        ¦
                +-------------------------------------------+---------------------------------¦
                ¦United States Branch Cor.                  ¦Northwestern Dept.               ¦
                +-------------------------------------------+---------------------------------¦
                ¦Pine & Williams Sts.,                      ¦Equitable Building,              ¦
                +-------------------------------------------+---------------------------------¦
                ¦New York.                                  ¦Denver, Col.                     ¦
                +-----------------------------------------------------------------------------¦
                ¦Commercial Union Assurance Company, Limited, of London, England. Stock       ¦
                ¦Company.                                                                     ¦
                +-----------------------------------------------------------------------------+
                

It not being required by the terms of the policy that the notice should be given at any particular place or to any particular agent, we are of the opinion that it was sufficient to deliver the notice to the agent of the defendant company who issued the policy and countersigned the same.

This court, in McNamara v. Ins. Co., 1 S. D. 342, 47 N. W. 288, in speaking of the construction to be given contracts of insurance, says: “Courts will construe a contract of insurance liberally, so as to give it effect, rather than to make it void. Conditions which create forfeitures will be construed most strongly against the insurer. Only a stern legal necessity will induce such a construction as will nullify a policy.” This rule has been generally adhered to by this court in construing insurance policies and the conditions therein contained. It will be noticed that it was found by the court, and is clearly supported by the evidence, that Kennedy Bros. were agents of the defendant company authorized to solicit applications for fire insurance, write and deliver policies of insurance upon property situated in the said county of Lake, and to do any and all acts proper and customary to be done by fire insurance agents. The Kennedys, therefore, under the decisions of this court, were general agents of the appellant. South Bend Toy Mfg. Co. v. Ins. Co., 2 S. D. 17, 48 N. W. 310;Id., 3 S. D. 205, 52 N. W. 866;Harding v. Ins. Society, 10 S. D. 64, 71 N. W. 755. We are of the opinion, therefore, that the service of the proofs of loss upon C. B. Kennedy, one of the defendant's agents, as found by the court, was service upon the company. Especially is this so in the case of a foreign insurance corporation organized without the United States, and which, in its policy, has failed to state where, upon whom, or in what manner the notice of proofs shall be served. Authorities have been cited by the respective counsel showing that there is a conflict in the decisions upon this question, but we are inclined to hold that the view of the Supreme Court of Indiana in Ins. Co. v. Crutchfield, 108 Ind. 518, 9 N. E. 458, is the correct one. It appears from an examination of that case that the proofs of loss were served upon the agent of the company who had issued the policy, and the court held that such service was a compliance with the conditions of the policy. The learned court, in its opinion in that case, says: “In Phoenix Mut. Life Ins. Co. v. Hinesley, 75 Ind. 1, after quoting the rule on the subject of notice to an agent of a corporation as stated in the case last cited, the court said: ‘It seems to us that this rule of law is especially applicable to the agents of foreign insurance companies transacting the business of insurance for their companies in this state, and that it must be held that notice to such agents in relation to any business of insurance transacted by them for their companies is notice to such companies.’ Upon the points stated in this quotation, the case last cited has been approved and followed in Willcuts v. Northwestern Mutual Life Ins. Co., supra , and in Aetna Ins. Co. v. Shryer, 85 Ind. 362. We know of no good reason why it should not be held, also, where a condition of the policy, as in the one under consideration, requires that the assured shall render the particular account of his loss to the company, and not to any specified officer or person, or to any specified office or place, that the rendering of such particular account of his loss by the assured to the duly authorized agent of a foreign insurance company will constitute a sufficient compliance by the assured with the terms of such condition.” In speaking of the agent, the court says: “The policy of...