As an employee of the Oregon-Washington Railroad Navigation Company, the plaintiff was insured under a blanket policy of the defendant, The Continental Casualty Company, against injury by accident. By that instrument the defendant promised to pay half monthly wages of the employee for certain periods, under the following conditions expressed in the policy and applicable to the case presented:
"III. If the employee is disabled for more than seven days through bodily disease, or by reason of bodily injury incurred through violent, external and accidental means while he is not engaged in the actual performance of the duties of his occupation as such employee, but which in either case, wholly and continuously disables him from the performance of all the duties of his occupation, an indemnity consisting of half monthly wages of such employee for the period not exceeding 12 months, during which he shall be so disabled and in case of sickness shall also be confined to the house by reason of such disability. `Confined to the house' as here used means such confinement as will prevent leaving the house for any purpose of business or pleasure but not the leaving of it solely for medical treatment or healthful exercise in its immediate vicinity.
"IV. In the event of payment of indemnity under the last preceding paragraph by reason of disability resulting from bodily disease, if it shall further be that the employee has, within the time covered by the payments there given, become totally and permanently disabled for life from engaging in any work or occupation for wages or profit, an additional indemnity consisting of half monthly wages for a further period of 12 months.
"V. Indemnity shall, in no instance, be at a less rate than five dollars per week, nor shall it exceed in the aggregate twenty-five hundred dollars as a payment to any one employee as a result of any one *Page 601 accidental injury or of any one sickness. But one indemnity will be payable for disability resulting concurrently from accidental injury and disease, and all indemnity payments except those accrued, will cease at the death of the injured or sick employee.
"VI. Indemnity shall not be payable unless the employee or the employer shall give written notice to the Continental at its office in Chicago, Illinois, of the injury or sickness on which claim may be based, within twenty days after the date of the accident causing the injury or after the commencement of disability from sickness."
While the policy was in force with these conditions, the plaintiff fell on a slippery pavement in the City of Portland on December 16, 1922, while he was not engaged in the actual performance of his duties as employee and fractured his left hip. On December 30, 1922, he made his first report of the accident, in which he stated that while crossing the street he slipped on icy pavement and broke the femur of his left leg. A surgeon of the Oregon-Washington Railroad Navigation Company made a report on January 4, 1923, indorsed upon and accompanying the plaintiff's report of the accident, in which the former declared that the precise nature and extent of the injury was a fracture of the neck of the left femur, and that the plaintiff was walking on icy pavement and slipped and fell on the pavement. He also stated, in answer to this question: "Has claimant any chronic or constitutional disease or physical defect or infirmity; and if so, what?" "Yes, arteriosclerosis." Thereafter, on March 23, 1923, the plaintiff made a report of his continued disability, accompanied by a report of the purchasing agent of the railroad company, in which the latter stated that the accident happened because the claimant fell on the sidewalk. *Page 602 A surgeon of the railroad company reported the precise nature and extent of the injury as "fracture neck of femur (left); paralysis of left leg," likewise stating that the claimant had no chronic or constitutional disease or physical defect or infirmity. Again, on April 11, 1923, the plaintiff reported his continued disability, in which the purchasing agent reported that the claimant slipped and fell on the sidewalk, and the surgeon reported as before, "fracture neck of femur and paralysis of left leg," saying also that the claimant had arteriosclerosis. On May 17, 1923, a similar report was made by the plaintiff in which the agent said plaintiff "slipped and fell on sidewalk" and the surgeon reported "paralysis of left leg — fracture of neck of femur," likewise stating that the claimant had no chronic or constitutional disease or physical defect or infirmity. Again, on June 21, 1923, appended to the plaintiff's report of June 16th, the agent reported that the accident happened because the plaintiff "slipped and fell on sidewalk." The surgeon reported as before, "paralysis of left leg — fracture neck of femur," and that there was no chronic or constitutional disease or physical defect or infirmity. Again, on July 25, 1923, the plaintiff reported his disability and appended thereto, dated August 4th, the agent declared that the accident happened because the plaintiff "slipped on ice on street corner," and the surgeon reported "fracture of neck of femur; paralysis of left leg" and that there was no chronic or constitutional disease or physical defect or infirmity "except arteriosclerosis." On August 30, 1923, the agent reported in like terms that plaintiff "slipped and fell on sidewalk" and the surgeon reported "fracture of neck of femur; arteriosclerosis; partial paralysis." On September 25, 1923, appended *Page 603 to the plaintiff's statement of disability, the agent reported that plaintiff "slipped and fell on sidewalk," and the surgeon reported "fracture of neck of femur; arteriosclerosis." On October 19, 1923, the agent reported that plaintiff "slipped on sidewalk" and the surgeon reported the precise nature and extent of the injury to be "fracture of femur" and that he had no chronic or constitutional disease or physical defect or infirmity. To his report of November 26, 1923, the agent added, under date of December 3d, that the plaintiff "slipped on sidewalk, falling and fracturing hip," and the surgeon stated that the precise nature and extent of the injury was "fracture of neck of femur; paralysis of left leg" and that the claimant had no chronic or constitutional disease or physical defect or infirmity. Lastly, to a report of disability dated December 22, 1923, is appended the report of the agent under date of December 31, 1923, that the plaintiff "slipped and fell on sidewalk," and the surgeon, under date of December 26th, reported the precise nature and extent of the injury to be "fracture of head of femur (left) and paralysis of left leg" and that he had no chronic or constitutional disease or physical defect or infirmity.
With this record of his statements to the company, the plaintiff by his complaint alleged the execution and delivery of the policy of insurance; that it contained, among other things, the third and fourth clauses already quoted; declared he was receiving a salary of $235 per month, and goes on to state as follows:
"IV. "That on or about the 16th day of December, 1922, while said policy was in full force and effect, plaintiff *Page 604 became afflicted with a bodily disease, to wit: an affliction in the nature of a stroke of apoplexy due to high blood pressure, which brought about a paralysis of the left side of plaintiff's legs and body, and as a result thereof, plaintiff fell while walking on the streets of the city of Portland, and as a further direct result of said bodily disease plaintiff was disabled for more than seven days through bodily disease while not engaged in the actual performance of the duties of his occupation as an employee of the railroad company for which plaintiff was then and there working, and which was mentioned in said policy of insurance, and said disability continued for the full period of twelve months, and plaintiff was therefore confined to the house for said full period of twelve months as the same is defined in Paragraph II hereof, and plaintiff made proof of said disability according to the terms of said policy of insurance, and sufficient to satisfy defendant, and defendant proceeded to pay plaintiff indemnity for the period of eleven months under the terms of said policy, and within the time covered by said payments plaintiff became and was and is totally and permanently disabled for life from engaging in any work or occupation for wages or profit, and plaintiff heretofore duly made proof of such total and permanent disability, save and except that in the first proofs furnished to defendant, plaintiff inadvertently referred to his disability as resulting from said fall on the streets, but thereafter plaintiff furnished due and sufficient proof to defendant that his said disability resulted from said bodily disease hereinbefore mentioned, and did not result from accidental injury, and defendant prior to the commencement of this action, waived the making of more specific proof at the time of the commencement of said disability, and fully investigated plaintiff's claim of disability due to bodily disease, and has received full and complete advice and information in respect thereto, and said disability permanently and totally disables plaintiff for the balance *Page 605 of plaintiff's life from engaging in any work or occupation for wages or profit."
The plaintiff further avers, in substance, that the defendant paid to him during the year 1923 eleven payments of $117.50, making a total of $1,292.50, and claims thirteen additional payments of $117.50. The terms of the policy quoted in the complaint are admitted by the answer. The affliction with bodily disease is denied and the quoted portions of the complaint are likewise denied. The payments made are admitted but all the other allegations claiming additional payments are denied by the answer. By further answer the defendant alleges its corporate existence and the policy which it sets out in full as an exhibit to its answer, and makes these further allegations:
"III. "That the said plaintiff, George W. Saul, was an employee of the O.W.R. N. Company and on or about December 16, 1922, sustained an accidental injury to a fractured hip while slipping on a sidewalk, said accidental injury being what is termed as a non-occupational accident and entitling the said plaintiff to indemnity of one-half his monthly wage for a period of twelve months following the accidental injury.
"IV. "That in accordance with said accidental injury the plaintiff herein submitted proofs and in accordance with the terms of said policy contract and the rules of the defendant herein only for accidental injury and a claim was presented for accidental injury and payments made for a period of eleven months, and that a proof of loss in accordance with the procedure above outlined for the twelfth month was submitted by the plaintiff herein and a check in due course issued in accordance with said proof for the sum of *Page 606 $117.50, being the final payment due plaintiff on the said contract of insurance and proof submitted, and that plaintiff refused to accept said check or cash the same and defendant herein tenders into court the sum of $117.50 for full settlement of plaintiff's claim, in accordance with said contract above mentioned and the proofs of accidental injury hereinbefore submitted to the defendant herein, and that no proofs or notices in accordance with the contract of insurance has been submitted to the defendant herein covering the alleged claim of the plaintiff."
The reply denies all the allegations of the answer except as stated in the complaint and, as opposed to paragraphs III and IV of the answer above quoted, makes the following allegations:
"I. "That the disability suffered by him on or about December 16, 1922, was due to disease, as in his amended complaint herein set forth, and that proofs of said disability were furnished to said defendant satisfactory to it, and that while by inadvertence and error the proofs first furnished referred to said disability as a disability resulting from an accidental injury, subsequently thereto plaintiff furnished to defendant detailed proofs of the disability from which he suffered due to disease, and defendant being fully advised in the premises, fully investigated plaintiff's claim of disability due to disease and acted thereon and rejected plaintiff's claim upon the ground that his disability was in fact due to accident and waived any objection to the form of the original proofs of disability, and by reason thereof is now estopped from denying that the proofs furnished were not sufficient under the terms of said policy."
The court overruled the defendant's motion for nonsuit made at the close of the plaintiff's case and likewise denied its motion for directed verdict in its *Page 607 favor. The verdict of the jury was taken wherein it found in favor of the plaintiff in the sum of $1,527.50 with interest thereon at 6 per cent per annum from December 16, 1924, until paid. Upon this judgment was rendered and the defendant appeals.
The principal complaint against the decision is based upon the ruling of the court denying a nonsuit and refusing to direct a verdict for the defendant and further in admitting the testimony of the plaintiff about his mental and physical condition during the first few months he was in the hospital. Apparently this was designed to excuse him from making a correct report of the nature of his disability.
The new matter in the reply which undertakes to plead a waiver by the defendant of the conditions of the policy must be rejected. It has many times been held that if, in suing on a contract, the plaintiff relies upon any waiver of its conditions by the opposite party, he must state that waiver in his complaint, and not in his reply. In other words, the plaintiff must state the whole truth regarding his grievance in his complaint. He cannot, in his initial pleading, declare as upon a contract fully performed by him and afterward abandon that line of attack and rely upon waiver by the opposite party:Lillienthal v. Hotaling, 15 Or. 371 (15 P. 630); Deering v. Creighton, 9 Or. 118 (24 P. 198, 20 Am. St. Rep. 800);Bruce v. Phoenix Ins. Co., 24 Or. 486 (34 P. 16); LongCreek Bldg. Assn. v. State Ins. Co., 29 Or. 569 (46 P. 366);Hannan v. Greenfield, 36 Or. 97 (58 P. 888); Young v.Stickney, 46 Or. 101 (79 P. 345); Cranston v. West CoastLife Ins. Co., 63 Or. 427 (128 P. 427). *Page 608
Under the policy in question, indemnity, consisting of half monthly wages on account of something happening while employee is not engaged in the actual performance of all the duties of his occupation, may accrue from either of two sources: One where he is disabled through bodily disease and the other by reason of bodily injury incurred through violent, external and accidental means. His sickness must be so severe that he is confined to the house by reason thereof. There is no history of the case that the plaintiff was disabled for more than seven days through bodily disease at any time prior to the date when he fell on the sidewalk and fractured his hip. He made his claim on the basis of the fractured hip and continued that throughout the year, and, not until the twelfth payment was tendered him, did it occur to him or did he raise the question that he was entitled to an additional year's indemnity.
Looking to paragraph III of the policy, we ascertain that, whether this disability arises through bodily disease or by reason of bodily injury while the assured is not engaged in the actual performance of his duties, precisely the same indemnity attends the disability for 12 months. Paragraph IV provides indemnity supplemental to that described in the preceding section, but only in the event that the payment theretofore made was for disability resulting from bodily disease and, further, that it shall appear that within the time the payments have been thus given, the employee has become totally and permanently disabled. There is no supplemental indemnity unless payments have been made for bodily disease. "Were payments made for bodily disease?" The answer is "No." They were made upon the application of the plaintiff in every instance because of the accident *Page 609 of falling upon the sidewalk. No payment was made or claimed on account of bodily disease; hence, there is no basis under the terms of the policy for the supplemental indemnity. Moreover, it is provided in section VI of the policy that indemnity shall not be payable unless the employee or employer shall give written notice to the Continental at its office in Chicago, Illinois, of the injury or sickness on which claim may be based within twenty days after the date of the accident causing the injury or after the commencement of the disability from sickness. It is urged that the company must have known from the reports of the surgeon that the plaintiff was afflicted at one time with hemorrhoids and at other times with arteriosclerosis, but there is no showing in any of the notices that either of these diseases disabled the plaintiff. The question is not whether the defendant had notice of the existence of the diseases mentioned. The company may have known that fact from a variety of sources, but the question is: Did the plaintiff or his employer ever give notice to the company in writing that he claimed either these diseases to be the basis of his demand? The record is utterly barren of any written declaration of the kind. As said by Mr. Justice BELT in Keane v. City of Portland, 115 Or. 1, 9 (235 P. 677, 680):
"It will not suffice to say that plaintiffs had actual notice of said proceedings. Knowledge is not equivalent to statutory notice: Wright v. City of McMinnville, 59 Or. 397 (117 P. 298); Bitting v. Douglas Co., 24 Or. 406 (33 P. 981);Minard v. Douglas Co., 9 Or. 206; Rice v. Wellman, 5 Ohio C.C. 334."
In Jefferson Realty Co. v. Employers' Liability Assur.Corporation, 149 Ky. 741 (149 S.W. 1011), it is held: *Page 610
"In order to fix the liability of an insurer for an accident on an elevator insured against accident to passengers, reasonable compliance with a condition of the policy requiring that it be given notice of any accident within a reasonable time was essential, regardless of whether noncompliance prejudiced the insurer."
In that instance, there were four elevators in the building — two insured in one company and the other two in the defendant company. Under a mistaken impression that the injury occurred in one of the elevators insured by another company, that other company was notified of the accident and called upon to defend. It acquired all the information about the matter it could and interposed a defense, but further discovered that the claim involved was not included in any of its policies. All the information was at once turned over to the defendant named in the reported case, so that in fact it had actual knowledge of all the occurrences, but from another source than from the claimant. The court held that no matter how accurate knowledge the defendant had, yet the claimant could not dispense with the notice agreed upon by the contract between the parties irrespective of whether the insurer was prejudiced or not.
In Hatch v. United States Cas. Co., 197 Mass. 101 (83 N.E. 398, 125 Am. St. Rep. 332, 14 Ann. Cas. 290, 14 L.R.A. (N.S.) 503), the question was as to the sufficiency of the notice under a policy requiring notice to be given within 10 days of the event causing the injury. The court said:
"It is to be premised that the giving of this notice is not a condition subsequent, as it has been sometimes called. It is not simply a part of the rule of procedure for the enforcement of the liability of the defendant, as are the provisions of the fifth paragraph *Page 611 in this same policy, providing for proofs of loss. The promise to insure is not absolute, but conditional. The condition is that the notice, whatever it may be and by whomsoever or whenever given, shall be given. It is a condition precedent to the creation of liability or the life of the promise; or, to put it perhaps in a better way, the giving of the notice is one of the essentials of the cause of action. * *
"If it be said, as it sometimes is, that such a defense is purely technical, the answer (if one is needed) is that the provision for notice is of the essence of the contract, that it is manifestly an important provision for the protection of the insurer against fraudulent claims, and also against those which, although made in good faith, are not valid. It is a provision which tends to the elucidation of the truth when a claim for indemnity is made. It was one to which the insured agreed, and it is not unreasonable." Citing many precedents.
See, also, Johnson v. Maryland Cas. Co., 73 N.H. 259 (60 A. 1009, 111 Am. St. Rep. 609).
Barclay v. London Guarantee and Accident Co., 46 Colo. 558 (105 P. 865), distinguishes the case of United States CasualtyCo. v. Hanson, 20 Colo. App. 393 (79 P. 176), cited by Mr. Justice COSHOW, saying, as reported in the syllabus:
"The rule that every policy of insurance is to be interpreted favorably to the assured does not authorize the court to supplant the contract of the parties by one of its own making. The condition of a policy of accident insurance that `upon the occurrence of an accident, and also upon receipt of notice of any claim on account of an accident, the assured shall give immediate notice in writing of such accident or claim with the fullest information available,' to the insurer, is a condition precedent. Without such notice or notices, or a legal excuse for the failure to give it, the insurer cannot be charged." *Page 612
The question is not merely one of proof of loss. It is a question of whether or not the plaintiff performed the things required by the contract to be performed by him. He knew from the terms of the contract that the supplemental indemnity depended upon whether the payments made were upon the claim of disease or upon one of bodily injury, yet in every single instance in which he gave notice to the defendant he characterized it as caused by falling on the sidewalk. Nowhere does he intimate that any of the diseases, which were sometimes reported and again denied, were relied upon as the basis of his claim. Like charging an indorser on negotiable paper, it is here an element of the claim itself that notice be given in writing within 20 days that sickness was the basis of the claim. It may be admitted that the answers to the question about the existence of the diseases, sometimes positive and anon negative, would be solemn but not conclusive admissions against interest, if they were all the questions to be considered; but in none of the writings introduced in evidence is there any intimation that any disease was counted upon as a basis of the claim.
The judgment of the Circuit Court ought to be modified so as to allow the plaintiff judgment for the twelfth installment tendered on his claim, but allowing the defendant the costs and disbursements of the litigation in both courts.
McBRIDE, C.J., and BELT, J., concur in this opinion. *Page 613