Woodmen Accident Association v. Pratt

• Decision Date: 16 October 1901
• Docket Number: 9,765
• Parties: WOODMEN ACCIDENT ASSOCIATION v. WALTER D. PRATT, REVIVED IN THE NAME OF J. W. BYERS, ADMINISTRATOR
• Court: Nebraska Supreme Court

87 N.W. 546

62 Neb. 673

WOODMEN ACCIDENT ASSOCIATION v. WALTER D. PRATT, REVIVED IN THE NAME OF J. W. BYERS, ADMINISTRATOR

No. 9,765

Supreme Court of Nebraska

October 16, 1901

ERROR from the district court for Saline county. Tried below before HASTINGS, J. Affirmed.

AFFIRMED.

Talbot & Allen, for plaintiff in error.

Hastings & Sands, contra.

OPINION

HOLCOMB, J.

Plaintiff defendant in error, was the holder of an accident policy of insurance in defendant company, plaintiff in error. Having suffered an accident on the 17th day of October, 1895 resulting in an injury totally disabling him from pursuing his ordinary business or occupation for a considerable period of time and partially disabling him for yet a further period, the plaintiff brought an action against the defendant to recover on the policy of insurance according to its terms and conditions. For answer to the petition of the plaintiff the answer alleges: "That it [defendant company] is not liable to the plaintiff, and is not indebted to the plaintiff, in any sum on account of any pretended injury received as stated in plaintiff's petition or otherwise, because in said certificate issued by the defendant to the plaintiff and sued on herein, it is there stipulated that as a condition precedent to any liability thereunder, the plaintiff shall give a written notice to the defendant at its home office in Lincoln, Nebraska, of any injury received for which indemnity is claimed, within ten days from date of such injury, and that plaintiff failed to so notify said company and said company did not receive any notice of said injury for a long time subsequent to the expiration of said ten days."

To the defense thus pleaded the plaintiff alleges in his reply that:

"By reason of said injury and as a direct result thereof he became and was sick and distempered in mind and body, so much so that he was entirely deranged, out of his head and crazy from the time he received his said injury for more than four months next thereafter ensuing, and was sick in body as well, and was confined to his house wholly unable to attend to, or transact any kind of business or to give any direction or advise with any person concerning the same; that neither his wife nor any other member of his family knew of the existence of said policy mentioned and described in plaintiff's petition and by a mere accident, the wife of this plaintiff, on or about the 25th day of November, 1895, in looking over some of his papers, found the same and caused forthwith a notice in writing to be given said defendant of such accident, the time when it was received and the particulars concerning the same, as is in said policy provided, whereupon said defendant at once denied all liability on said policy and assigned as the sole and only reason therefor that the notice had not been given within ten days from the date said injury was received. When in truth and in fact this plaintiff by reason of his said injury and as a direct cause thereof was crazed and deranged and bereft of all reason and power to give said defendant said notice, but that said notice was so as aforesaid duly given so soon as the said policy was found and while this defendant was still bereft of sense and by reason of his said injury and before he had recovered his reasoning faculties."

On the issue thus raised by the pleadings, a trial was had to the court and jury resulting in a verdict and judgment in favor of plaintiff for the sum of $ 265.41. Defendant prosecutes error.

But two questions are presented for consideration and argued in briefs of counsel and they are: First, are the terms of the policy of indemnity as to notice to be given the company by the assured in case of accident and injury to him to be construed literally and to be actually complied with in the time stated as a condition precedent to a right of recovery; and second, if not, is the evidence sufficient to sustain the general finding of the jury that plaintiff was excusable in the present instance from the time of the accident until the notice was actually and in fact given.

The accident occurred on the 17th of October and the notice thereof was mailed to the defendant on the 29th of November, following, and received by it on the 30th, when acknowledgment thereof was made and the claim of the plaintiff denied and declined because the notice was not given within ten days as provided by the terms of the policy. The provision is as follows:

"Written notice shall be given the said association at Lincoln, Nebraska, within ten days of the date of the accident, and injury for which claim to indemnity or benefit is made, with full particulars thereof including statement of the time, place and cause of accident, the nature of the injury and the full name and address of the insured and beneficiary, and unless such notice and statement is received as aforesaid, all claims to indemnity or benefit under this certificate shall be forfeited to this association."

The defense is purely technical. The risk assumed by the insurer has not been increased or in anywise jeopardized by the failure of the insured to comply literally with the provisions for notice of the accident and the injury flowing therefrom. The insurer has received the stipulated consideration for the indemnity contracted for, and which the insured should not be deprived of after he receives an injury, save for his violation of the letter and spirit of the contract in respect of subsequent conditions to be performed as contemplated and intended by the parties thereto under well recognized and established rules of construction of contracts of the kind under consideration. A company of this character organized for the purpose of providing indemnity to those suffering injury and loss from accident should, and we assume does, have a higher mission than merely the collection of revenues. If the provision quoted must under all circumstances and regardless of conditions be absolutely and strictly complied with according to the letter thereof, then the contract can only be regarded as a snare and pitfall sure to entrap the unwary and deprive them of the protection and indemnity contracted for on their part in the best of faith and honesty of purpose. If the contract is legally incapable of any other construction than that contended for, requiring a literal and exact compliance as a condition precedent to be performed in the time mentioned, then if for eleven days the insured is irrational and deranged in his mind as a result of the accident, as he appears to have been, and therefore incapable of complying with this provision, he would be altogether debarred from relief and the failure would, on legal principles, be as fatal as would be the case if the time were forty-four days as in the present instance. Such a construction would be shocking to our sense of justice unconscionable and unreasonable. There is, presumably, pervading every contract a reason based upon something substantial, capable of conception and analysis by the human mind, for the terms and conditions mentioned and prescribed therein. It is well to note here that we are not considering a question of complying with conditions before loss or injury, such as the payments of assessments and dues at the time stipulated, observing requirements affecting the nature and desirability of the risk in order to continue a policy of insurance in force and effect. Such stipulations are and should be regarded as of the very essence of the contract and on their compliance depends the life and success of the company. Nor is it to be questioned seriously that the terms of a contract of the nature of those under consideration have a substantial basis and valid cause for their existence, in all respects reasonable in character and to be enforced, with proper qualifications and exceptions under certain circumstances, in all instances where the enforcement of the terms of the contract is invoked by one of the parties thereto. The reason for the notice required is made manifest by a reading of the provisions of the policy requiring the same to be given. It is for the purpose of advising the insurer of the accident and the injury resulting therefrom for which claim to indemnity is made, with full particulars as to time, place, and cause of accident, and the nature of the injury. With this information the company is better enabled to protect itself from fraud, imposition and demands unjust in character, and for which no legal liability exists. This is not only reasonable and proper but also commendable. It indicates good business judgment, prudence and foresight. But if this is the reason and object to be accomplished by the notice, as we apprehend will be cheerfully conceded, then it must have been the intention of the parties that the notice is not to be given until some person with knowledge of its requirements and mental capacity to act thereon is in a position to comply with its terms. It is not the notice of the accident alone that is the important information desired, but the particulars and circumstances surrounding the incident which is regarded and contracted for as of equal importance. How then ought this provision of the contract to be construed? Must it be by a hard and fast rule which admits of no deviation or qualification and for a failure to give the required notice during the time stated the policy is ipso facto forfeited, or can there be a legal excuse for failure to comply literally and with exactness with its terms which the law recognizes as valid and allows a recovery notwithstanding the failure of the insured to give the notice in the time stipulated? This court has frequently said that forfeiture clauses in contracts of the kind under consideration are not...