Merchants' Mutual Insurance v. Lacroix

Walker, J.

This is an action on a policy of insurance, which contained the following clause, “Thatall claims under this policy are barred unless prosecuted within one year from date of loss.”

The petition was filed on the third of November, 1868, and it avers that the loss occurred on the eleventh of August, 1867.

The appellant, who was defendant in the district court, demurred to the petition on the eleventh of December, 1868. On the fifth of January, 1869, it filed an amended answer, setting up a special' limitation of the action under the seventeenth clause of the policy sued on. On the trial the parties waived a jury, and proceeded to trial by the court. The judge overruled the demurrer, disregarded the plea of limitation, and gave the appellee a judgment for $2178, from which judgment an appeal is brought to this court.

It is assigned for error that the plea of limitation was overruled, and although other errors are assigned, we deem it unnecessary to the decision of the case to discuss them. In Riddlesbargfer v. Hartford Insurance Company, 7 Wallace, 386, this question is decided on error to the Circuit Court of Missouri. The suit was on a $5000 policy, taken by the defendant on a brick building in Kansas City, in the State of Missouri. The building was destroyed by fire in the month of March, 1862. In the month of June following, the plaintiff brought his action on the policy in the Common Pleas *260Court of Kansas City. The defendant plead to the merits, and the cause was continued from term to> term, until June, 1864, when the plaintiff dismissed his action without prejudice, and within one year brought his action for a second time in the Court of Common Pleas for the county of St. Louis. From this-court the cause was transferred to the Circuit Court of the United States for the District of Missouri. The policy contained the following clause:

“ That no suit or action of any kind against said company for the recovery of any claim upon, under, or by virtue of the said policy, shall be sustainable in any court of law or chancery, unless such suit or action shall be commenced within the term of twelve months next after the loss or damage shall occur ; and in case-any suit or action shall be commenced against said company after the expiration of twelve months next after such loss or damage shall have occurred, the lapse of time shall be taken and deemed as conclusive evidence against the validity of such claim thereby so attempted to be enforced.”

The plaintiff here contended that he had kept his action alive by commencing suit in the Kansas City Court.

The statute of limitations of Missouri provides that if the plaintiff is non-suited in any action brought before the right is barred, he may commence his action-over again within one year from the date of non-suit.. The defendant demurred to the petition, the Circuit Court sustained the demurrer, and the case was taken on error to the Supreme Court of the United States,, where, it appears from the opinion delivered by Mr. Justice Field, that the court considered and decided two important questions which are also raised in the-case at bar.

*2611. Whether a contract for special limitation between insurer and insured must be regarded as a valid ■contract.

2. Whether, if valid, the condition was complied with under the limitation laws of Missouri.

The learned judge, considering the second question presented, remarks: “The objection to the condition is founded upon the notion that the limitation it prescribes contravenes the policy of the statute of limitations. This notion arises from a misconception of the nature and object of statutes of this character. They do not confer any right of action. They are enacted to restrict the period within which the right, otherwise unlimited, might be asserted. They are founded upon the general experience of mankind, that claims which are valid are not usually allowed to remain neglected. The lapse of years without any attempt to enforce a demand creates, therefore, a presumption against its •original validity, or that it has ceased to subsist. This presumption is made by these statutes a positive bar; and they thus become statutes of repose, protecting parties from prosecution of stale claims, when, by loss of evidence from death of some witnesses, and the imperfect recollection of others, or the destruction of documents, it might be impossible to establish the truth. The policy of these statutes is to encourage promptitude in the prosecution of remedies. They prescribe what is supposed to be a reasonable period for this purpose; but there is nothing in their language or object which inhibits parties from stipulating for a shorter period within which to assert their respective ■claims.”

This reasoning applies well to the present case. Such a contract in a policy of insurance is not against public policy, nor is it merged in the general limitation laws of the State.

*262The plaintiff’s right of action is not saved by the forty-third section of the twelfth article of the Constitution of 1869, nor is it in any way affected by the case of Bender v. Crawford, decided by this court at the present term. The authorities cited in appellant’s brief are so numerous that we will not refer to them, except, to say, that they utterly preclude all doubt upon the question herein raised, notwithstanding the very respectable authority found in 9. Indiana, 443, and & McLean; 461.

It is contended by the appellee’s counsel that the word “prosecuted,” used in the seventeenth clause of the policy sued on, should be understood as meaning something other than Us mota, and that the clause in the policy was sufficiently complied with by presentation of the loss, and demand of payment.

It is true the word “ prosecution ” usually denotes, the means adopted to bring offenders to legal punishment ; but that it may be used, and often so is, as synonimous with the words suit and action, there can be no doubt; and the similarity of the clause under consideration with like limitations in other policies which have been before the courts for adjudication, leaves no doubt upon our minds that the parties to this policy use the word as equivalent to suit or action.

We are, therefore, of the opinion that the failure of the appellee to bring his action within one year from the date of loss, is an effectual bar to all actions on his policy.

The judgment of the district court is reversed, and the cause dismissed.

Evans, P. J.

Being unable to bring my mind to concur in the conclusions of the court, I feel constrained to dissent, at least so far as the decision dismisses the cause.

*263The provision annexed to the policy of insurance, which the court adjudges an effectual bar to the appellee’s right of action, is as follows :

“All claims under this policy are barred, unless prosecuted within one year from the date of loss. .Ho-claim for loss to bear interest before judicial demand.”

How, pretermitting any criticism upon the terms, in which this provision is expressed, and without attempting to reconcile the seeming conflict of authorities, respecting limitation provisions in policies of insurance—which seeming discrepancy may have arisen by failing to keep in view the nature and effect of limitations established by statute, from those agreed upon by contract—we may concede that this provision was understood and intended by the parties to be an effectual bar to all suits not instituted within one year from the date of the loss; and we may concede further, that such limitation provisions are, upon grounds of public policy, to be upheld and enforced by the courts ; yet, it is a limitation by contract, flexible in its character, subject, like any other contract, to be altered or waived by the parties, at pleasure. If the appellant, through its officers or agents, contribnted to the delay of the prosecution of the claim, by holding out hopes of an amicable adjustment, or otherwise, then, it is suggested, neither law nor equity demands the enforcement of the limitation clause.

In the case of Peoria Marine and Fire Insurance Company v. Hall, 12 Mich., 211, the court say:

“If valid at all, it (the limitation clause) was valid as a contract and not as a statute. A limitation fixed by statute is arbitrary and peremptory, admitting of no excuse for delay beyond the period fixed, unless the excuse be recognized by the statute itself. But a limitation by contract (if valid) must, upon the principles *264governing contracts, be more flexible in its nature, and liable to be defeated or extended, by any act of the defendant, which has prevented the plaintiff from bringing his action within the prescribed period.”

In Grant et al. v. The Lexington Life, Fire and Marine Insurance Company, 5 Ind., 36, the court, in deciding upon a plea of limitation made by the company, say :

“ But the record shows clearly that the delay is the result to which the insurance company mainly contributed, by holding out hopes of an amicable adjustment. She should, therefore, not be permitted to take advantage of her own wrong. * * * * Insurance policies are to be liberally construed in favor of the assured, and an exception is to be strictly construed against the underwriters.”

In the case of Ripley v. The Ætna Insurance Company, 39 Barbour, S. C. Rep., 557, the court say :

“This court, at a general term, have decided that a stipulation requiring the assured to sue, if at all, in twelve months, although binding originally, may be waived by the language or conduct of the parties ; and the jury, on the second trial, having found that in the present instance there was such a waiver, we are now to inquire whether the finding, and the ruling which led to it, were warranted by the law and the testimony. A twelve months statute of limitations, although assented to by the parties, operates as a forfeiture. It is, therefore, to be construed strictly. Slight evidence of a waiver, as in other cases of forfeiture, will be sufficient to defeat its application.”

That there was at least slight evidence to show a waiver on the part of the appellants, will appear from an inspection of the record.

Charles De Blanc, secretary and agent of the company, in substance states: That the proofs of loss *265were regularly presented in due time by appellee, and mo objections made to their form. The claim was not paid, because the company desired to investigate the ■origin of the fire; and that payment for the first time was refused after appellee had been tried upon an indictment for arson (of the premises insured) and acquitted.

Mr. Sherwood, attorney, states that he prepared the proofs, etc., for Lecroix, as his counsel, and presented them to the president of the company, who, after examining them, made no objection to them, and said the loss would be investigated. Mr. Sherwood called a tsecond time on the same officer, and was told by him the origin of the fire would be inquired into. The president of the company advises Mr. Sherwood to sell at auction the remnant of Lecroix’s goods, as the best that can be done under the circumstances.

It nowhere appears that the officers of the company ever intimated a refusal to pay till after appellee’s trial and acquittal; but their acts and language amounted to •a substantial request of the appellee’s counsel not to bring suit till they should have time to investigate Into the origin of the fire, and an implied promise that if, upon that investigation, the appellee was found to be blameless, they would pay without suit. It is evident that, in compliance with that request, and relying upon that implied promise, the counsel of appellee delayed to bring suit within the prescribed time. The conduct of the appellant, as disclosed by the evidence, whether it amounts to a waiver, or occasioned the delay, is a question peculiarly within the province of a jury to determine, and there could be no grounds for -disturbing their verdict, for whichever party it may have been found. But, in this case, the jury being waived, the judge passed upon the facts as a jury. *266His finding is as conclusive as that of a jury, and stands, upon the same footing.

These acts contributing to the delay, as disclosed by the evidence, are facts, which it is the legitimate province of a jury to determine; and in the event of a jury* having been waived, it becomes the judge to pass upon, them as a jury.

If these acts by the appellant contributed to the delay, as disclosed by the evidence, and should have been so found by a jury, and so, also, by a judge sitting as a jury, this court, by a uniformity of ruling, would not feel authorized to disturb the finding, unless the evidence was against such finding, or none in favor of it.

But it is clear, that if the testimony produced on the trial did not establish the fact of acts of defendant contributing to the delay, it at least tends strongly to show them to have been such. Hence the finding of either judge or jury should not be disturbed ; and the judgment ought to be affirmed.

It is certainly true, that the court below may have decided this cause exclusively upon his view of the invalidity of such stipulations annexed to policies of insurance, and may not have considered the question, of waiver. If so, there is the most cogent reason why this court, in its judgment of reversal, do not dismiss the cause, but should remand the same, to be tried upon its merits by a jury.

Walker, J.

The opinion of the court in this case, heretofore rendered, is upon the rehearing reversed, so far as it dismisses the cause; and it is the opinion of the court that the judgment of the district court be reversed and the cause remanded.

Reversed and remanded.