Kelly v. Sun Fire Office

Opinion,

Me. Chief Justice Paxson :

The policy of insurance, on which this suit was brought in the court below, gave the defendant company the option to rebuild, or pay the amount of loss sustained, in case the property insured was destroyed by fire. The learned judge below conceded its right of option, but left it to the jury to find whether the company had lost its right by its delay in exercising it. The jury found the delay, and, if there was evidence upon this point sufficient to submit, the verdict must stand.

I do not understand the facts to be disputed. Those that are important are substantially as follows: The proofs of loss were forwarded to the adjuster about December 2d, and were l’eceived by him two days thereafter. On December 5th they were returned to the plaintiff, who sent them to the company with the corrections asked for, on the thirtieth of January. I find no contradiction of this testimony, and one of the papers which made up the corrections bears that date. They were received by Mr. Fellows, the adjuster, on February 1st. On February 28, 1890, the company served notice on the plaintiff of its intention to rebuild, and called upon him, under the terms of the policy, to furnish plans and specifications for that purpose. The plans and specifications were furnished, but the plaintiff alleged that the option of the company had not been exercised in time, and brought this suit, not upon a contrac b to rebuild, but for the loss under the policy.

I do not understand the ruling of the court below, or the argument of plaintiff’s counsel, to be based upon a denial of of any of the foregoing facts. On the contrary, it is assumed that the original proofs of loss were complete, and a full compliance with the conditions of the policy; that the additional proofs required by the company were unreasonable, and that the time limited for the option of the company commenced to run not later than December 5th. If they are right in this, the company has no defence.

There would have been more force in this position had the plaintiff elected to stand upon his original proofs. He did not do so, but proceeded to furnish the additional matters required. Granted that as to any of these matters he had a right to decline further information, he waived such right by furnishing it. We have repeatedly held that insurance companies may •waive the benefit of provisions in their policies by this course of dealing, and it is only fair that we should hold the assured to the same rule. The company, by the terms of its policy, had thirty days within which to exercise its option, after the completion of the proofs of loss. The proofs cannot bo said to have been completed until the thirtieth of January. This conclusively appears from the act of the plaintiff himself. Had he notified the company in December that he regarded his proofs as complete and would furnish no other, the company would not have been misled, but would have been put to its option, assuming that the proofs were sufficient.

We have not entered into the details of the proofs of loss, for the reason that we do not consider it necessary, under our view of the case. There is one matter, however, to which we will refer. It is not absolutely necessary to our decision, yet it is fairly raised and assigned as error. We do so, that the profession may not be misled.

The third assignment alleges that the court erred in the following portion of its charge: “ So far as the certificate of the magistrate is concerned, we are inclined, gentlemen, to relieve you of all consideration of that question. We think, in the case that has been presented to us here, in 109 Pa., the Supreme Court have intended to say — we understand them to say— that no insurance company has the right to require the production of such a certificate from a magistrate or a notary public. We hope they have meant to say this; for, although this in former years was held to be a condition precedent to recovery, it required sometimes of an insured that which was impossible for him to render, and no insurance company has any power over a magistrate or notary .public to require him to render such certificate. We think, so far as that certificate is concerned, that the proofs of loss were sufficient.”

The case above referred to by the learned judge was Universal Ins. Co. v. Block, 109 Pa. 535. The precise language in the opinion of the court in that case is as follows: “ The company had no right to require a public officer to act in the adjustment of its risks, and the neglect of the assured to even ask a certificate from that officer would have been no default.” If the learned judge below was misled by the foregoing, he has the consolation of knowing that the writer was equally misled in the recent case of Davis Shoe Co. v. Insurance Co., 138 Pa. 73, where he adopted the language referred to without much reflection, and in the stress of business. Fortunately, whether right or wrong, it has done no injury, as each of those cases was decided upon other sufficient grounds, and the remark may be regarded as dictum. The present seems a fitting time to examine the question, and see if the dictum is law. If not, it is our plain duty, as it is our pleasure, to say so promptly.

We do not think it was error to say that an insurance company “ had no right to require a public officer to act in the adjustment of its risks.” No such officer could be compelled to do so. This is plain enough. It does not follow that the parties to a policy of insurance may not contract that the insured shall procure a certificate from the nearest magistrate, notary, or other officer. Such contract is not forbidden by any law or rule of public policy. It may be a foolish contract on the part of the assured, but we do not reform men’s contracts because of their folly. In the case in hand, the plaintiff did not complain of this clause; on the contrary, he complied with it. While the right of a company to compel a public officer to adjust its loss cannot be successfully claimed, yet, where such a clause exists in a policy by the agreement of the parties, we are not prepared to adopt the expression in Universal Ins. Co. v. Block, that “ the neglect of the assured to even ask a certificate from that officer would have been no default.” We are not dealing with the case of an attempt on the part of the assured to obtain such a certificate, and the refusal of the officer to give it.

This is not a new question, and we are therefore spared an extended discussion of it. It is sufficient to refer to the authorities. In 2 Phillips on Insurance, 472, the rule is thus stated: “ Fire policies generally have a provision that the assured shall produce certain certificates respecting the loss, which vary considerably, as will appear from the instances to be given. It is, like all express conditions, always to be complied with, unless the right to demand the certificate is expressly or impliedly waived by the insurers.” This, I believe, is the rule in all the best books on insurance; it is certainly so in Flanders on Insurance, 2d ed., 586, and in Wood on Insurance, 710. It was also declared in the Court of King’s Bench, by Lord Kenyon, C. J., nearly a century ago, in Worsley v. Wood, 6 Term R. 710, and has continued to be the law of England to this day. In Columbia Ins. Co. v. Lawrence, 2 Pet. 25, Chief Justice Marshall sustained a similar provision, and when the same case came before the same court seven years later, the principle was affirmed by Mr. Justice Story: See 10 Pet. 507. The doctrine was squarely affirmed m Gilligan v. Insurance Co., 87 N. Y. 626; Johnson v. Insurance Co., 112 Mass. 49; Daniels v. Insurance Co., 50 Conn. 551. In our own cases of Commonwealth Ins. Co. v. Sennett, 41 Pa. 161, and Mueller v. Insurance Co., 87 Pa. 399, the same rule is recognized, and in the former case the opinion of Lord Kenyon in Worsley v. Wood, supra, is referred to with approval. The only cases cited against this overwhelming weight of authority were Universal Ins. Co. v. Block and Davis Shoe Co. v. Insurance Co., supra. The dictum of those cases must give way before such an unbroken line of decisions.

The moral to be drawn from this is that, in every instance it is wise to study a case with sufficient care to ascertain the very point decided, and not place too much reliance upon the illustrations of the judge who writes the opinion. They are sometimes drawn hastily from the means conveniently at hand, and necessarily, in our great pressure of business, without the examination and reflection which we give to the question decided. I may be allowed to point this moral, for the reason that it is, in part, at least, pointed at myself. #

It was urged on behalf of the plaintiff that the defendant company merely announced its election to rebuild, and has not in point of fact done so, nor has it attempted to do so. The answer to this is, that its right to rebuild was denied by the plaintiff, and such denial promptly followed by a suit. The company could not be required to pay and rebuild also.

Our conclusion is that the option to rebuild was exercised in time, and that this suit cannot be sustained.

Judgment reversed.