Webster v. State Mut. Fire Ins. Co.

• Decision Date: 11 March 1908
• Citation: 69 A. 319,81 Vt. 75
• Parties: WEBSTER v. STATE MUT. FIRE INS. CO.
• Court: Vermont Supreme Court

69 A. 319

81 Vt. 75

WEBSTER

v. STATE MUT. FIRE INS. CO.

Supreme Court of Vermont. Orange.

March 11, 1908.

Exceptions from Orange County Court; James M. Tyler, Judge.

Action by Ella G. Webster against the State Mutual Fire Insurance Company. From an interlocutory judgment overruling demurrers to plaintiff's amended replication to defendant's third, fourth, and fifth pleas, defendant brings exceptions. Affirmed, and cause remanded.

Argued before ROWELL, C. J., and MUNSON, WATSON, HASELTON, POWERS, and MILES, JJ.

Hunton & Stickney, for plaintiff. Butler & Moloney and Darling & Wilson, for defendant.

POWERS, J. This case comes before us on the defendant's exceptions to the judgment of the county court overruling the special demurrers to the plaintiff's amended replications to the defendant's third, fourth, and fifth pleas.

I. By the third plea it is alleged that, notwithstanding certain express conditions, stipulations, and agreements in the policy of insurance sued upon, the plaintiff failed to give immediate written notice to the defendant, and failed to make proper proofs of loss within the time limited in the policy. To this plea the plaintiff replies that within the specified time she in good faith gave the defendant a true, accurate list of the property, the value and loss thereon, and offered to furnish the defendant whatever further proof thereof it might require, which said list the defendant carried away and kept, without making any objection to the form or sufficiency thereof, either at that time or at any time in season for her to repair the error, if any, therein, and that the defendant then and there "waived the technical, literal requirements of said policy in that respect." To this replication the defendant demurs specially, on the ground (1) that it neither confesses and avoids, nor denies, the allegations of the plea; (2) that it is evasive and argumentative; (3) that the facts alleged therein do not of themselves constitute a waiver of the requirements referred to; and (4) that the replication attempts to put in issue, to be tried by the country, mere matter and inference of law—whether or not the defendant waived the requirements aforesaid.

(1) It is an elementary rule of pleading, as claimed by the defendant, that the pleader, if he does not demur, must either traverse or confess and avoid all the material allegations to which he makes answer. 1 Chitt. Pl. (14th Am. Ed.) 524a; Stephen, Pl. (Heard's Ed.) 138. But this rule has no application to pleadings in estoppel. Stephen, Pl. 219; Gould, Pl. c. 2, § 39. Such pleadings neither confess nor deny the truth of the allegations which they answer, but deny the right of the party to allege the facts. It is said that such pleas are not technically pleas in bar, though, like pleas in bar, they deny the right of action or defense, by denying the right to assert the facts. East St. Louis v. Flannigen, 34 Ill. App. 601. The issue which they present is not to determine the truth or validity of the particular facts pleaded, but the right and power of the party to insist upon them. So, if the plea under consideration is a plea in estoppel, it is not open to the first objection specified in the demurrer. The terms "waiver" and "estoppel," as applied to the law of insurance contracts, are usually used as meaning the same thing, and they are so used in many of our own cases. Courts have frequently asserted that they are convertible terms, as was done in Security Ins. Co. v. Fay, 22 Mich. 467, 7 Am. Rep., at page 674; Elliott v. Lycoming County Mut. Ins. Co., 66 Pa. 22, 5 Am. Rep., at page 325; Insurance Co. v. Wolff, 95 U. S. 326, 24 L. Ed. 387; United Firemen's Ins, Co. v. Thomas, 82 Fed. 406, 27 C. C. A. 42, 47 L. R. A. 450. A closer inspection of the matter, however, convinces us that they are essentially different. A waiver involves the act or conduct of one of the parties to the contract, only. An estoppel involves the act or conduct of both parties to the contract. McCormick v. Insurance Co., 86 Cal. 260, 24 Pac. 1003. A waiver is the intentional relinquishment of a known right. Donahue v. Insurance Co., 56 Vt. 374. It involves both knowledge and intent. An estoppel may arise where there is no intent to mislead. A waiver does not necessarily imply that one has been misled to his prejudice or into an altered position. Metcalf v. Phenix Ins. Co., 21 R. I. 307, 43 Atl. 541; Hanscom v. Home Ins. Co., 90 Me. 333, 38 Atl. 324; Washburn v. Life Ins. Co., 143 Ala. 485, 38 South. 1011; Queens Ins. Co. v. Young, 86 Ala. 424, 5 South. 116, 11 Am. St. Rep. 51. An estoppel always involves this element. A waiver may amount to an estoppel, but not necessarily so. Though the conduct of the insurer may not have misled the insured to his prejudice, yet if, with full knowledge, he intentionally elects not to take advantage of the forfeiture, the law, in its zeal to avert the forfeiture, will hold the insurer irrevocably bound as by an election to treat the contract as if no cause of forfeiture had occurred. And this election may be either express or implied.

We think the replication to the third plea must be considered to set up a waiver, rather than an estoppel. It commences with the usual precludi non, and concludes with a prayer for judgment for damages; while the proper commencement of a replication in estoppel is that "the defendant ought not to be admitted or received to plead" the matter set out in the plea, and it should conclude with a prayer for judgment "whether the defendant ought to be admitted and received, against his own conduct," etc., "to plead the plea," etc. Shelley v. Wright, Willes, 9, approved in Gray v. Pingry, 17 Vt. 419, 44 Am. Dec. 345. It lacks an essential element of estoppel—the reliance to her prejudice by the plaintiff upon the conduct of the defendant. The pleader alleges that the defendant "waived" the requirements of the policy, instead of alleging that the defendant is "estopped"—apparently having in mind the distinction herein pointed out. We can see no very good reason why a replication setting up a technical waiver should not be classed with those setting up a technical estoppel, and so not required by the rules of pleading to traverse or confess and avoid; but we think that this replication does sufficiently confess and avoid by implication, which is just as good as an express confession. Baker v. Sherman, 75 Vt. 88, 53 Atl. 330. The question is whether the language can fairly be construed as an admission of the facts alleged in the plea. Blood v. Adams, 33 "Vt. 52. As we have seen, the...