Matthews v. American Central Insurance

Green, J.:

The insured died December 2, 1891. Fire occurred April 20, .1892. Will was contested, admitted to probate in May, 1894, and letters testamentary were thereupon issued to the plaintiff. Proofs of loss were sent' to the company before the expiration of sixty days from issuing of letters, but were not returned, and no attention was paid to the matter. (Not stated that even any notice of loss was ever sent.) Action brought October 29, 1894. Policy provides that no action shall be sustainable until after full compliance by the insured *343with all the foregoing requirements, nor unless commenced within twelve months.next after the fire.” The “foregoing requirements” are the usual conditions in fire insurance policies, providing for giving notice of the fire, making inventory, and, within sixty days after the f/re, furnishing proofs of loss, etc., etc. And then “ the loss shall not become payable until sixty days after the notice, ascertainment, estimate and satisfactory proof of the loss herein required have been received by this company,” etc. (This action was commenced within sixty days after furnishing proofs of loss.)

More than two years had elapsed since the fire before proofs of loss were furnished. Plaintiff’s excuse is that letters testamentary were not issued, and could not have been issued, to him as executor designated in the will, until the contest was determined and the will admitted to probate; and his demand is, that the court shall engraft in the policy a provision that, in case of the death of the insured, proofs of loss may be furnished within sixty days after the issuing of letters testamentary. The contract speaks for itself, and it is not within the power of the court to change, enlarge, modify or qualify its terms, dr to import into it provisions, conditions or exceptions which the parties háve not seen fit to make. The death of the insured was an event certain to happen, although uncertain as to the time of its occurrence, and yet the parties have omitted to provide for it. The court is asked to supply the omission, so as to extend the time for furnishing proofs of loss from sixty days to two years. This provision the insured failed to exact from the company, and the company has not consented to make this stipulation. Upon what principle, therefore, may the court proceed in disregarding, the express terms of the contract, waive the requirement that the proofs of loss shall be furnished within sixty days after the. fire, and hold that the company must accept the proofs if furnished within sixty days after issuing of the letters, though two years may have elapsed since the fire occurred ? Counsel has failed to point out any principle of law or doctrine of equity sanctioning such a power, or any authority.

Nor was there any legal excuse for omitting to furnish the proofs, for, although an executor may not maintain an action before letters issued, yet he derives his title from the will and not from the letters, and he is empowered to do everything and anything for the pres*344ervatión and protection of the estate before letters are issued. (Code, § 2613 ; Redf. Surr. [5th ed.] 108-110, -132, 453-455.)

He possessed the power (and, if he -intended to accept the trust and'qualify, it was his duty) tó have proceeded to furnish the proofs of loss, so"as to preserve and protect the estate and the interests of creditors, legatees and all others whom he represented. Consequently there was no légal excusó - for the omission to comply with this-condition: So he might llave obtained letters of temporary administration. (Code, § 26-70.) It is suggested that the surrogate might refuse . to exercise his discretion to 'appoint a temporary ádministratór. The'answer is that it is a fair presumption that the surrogate woiüd -not fail to-do any act' that-is shown, to be necessary for'the protection of the estate.

Again, it would seem that the' devisee- of the land/ being' the real party in-interest — and if there is no deficiency of personal assets for satisfaction of - creditors, the sole party in -interestwould' have the right to furnish proofs of loss, and the company would be bound to-accept them. If-the personal assets are- ample'for payment of' debts the heir or devisee is entitled to the proceeds of the insurance policy ;-if insufficient, then he-would be entitled to- the surplus, if any; remaining after-the payment of the debts.

It was held in Wyman v. Wyman (26 N. Y. 253, modifying Wyman v. Prosser, 36 Barb. 368) that the insurance- moneys belong to the heir or devisee, subject to the claims of creditors Upon a -deficiency of assets, and also to dower; that if is real assets- and not personal.; that the executor, etc., may sue upon the policy-by virtue of its terms, where it is payable to executor, administra-' tor and assigns. He may sue as - the “ -trusted of an express -trust,”although lie'may- not be entitled to hold the money as against the heir or devisee. If it is required' to pay creditors and there is a' surplus, the heir is entitled to it. It was not decided whether heir or devisee, as the real party (and perhaps the only party) in interest, could suei upon the policy. It seems not (Approved in Herkimer v. Rice, 21 N. Y. 163, 180-182; approved, also, in Culbertson v. Cox, 29 Minn. 309.)

It seems that payment to the heir would not protect the company against the claim of creditors.

Lappin v. Charter Oak Insurance Co. (58 Barb. 325); Lawrence *345v. Niagara Fire Ins. Co. (2 App. Div. 267). simply held that action may be brought by personal representatives:

■ It was decided in Nichols y‘. Day. (5 Law. Rep. Ann. [Penn.] 597) that, where the estate is insolvent, the ■ proceeds of the policy are applicable to the payment of debts and do. not go .to the heirs. _

.. If the personal assets are sufficient for the payment of - the debts, and the heir or devisee is entitled to the proceeds of the policy, the executor would receive the moneys as trustee for the heir or devisee alone; if the personal estate is insufficient. for the payment of the. debts,, the executor would be .trustee of the surplus. In either-case the heir or devisee would have a. beneficial interest, and it was his duty, if he desired to protect his interests, to furnish the proofs of loss, himself, or to take steps to .obtain the appointment of a temporary administrator to perform that duty. It does not appear’ that the existence of the policy was unknown to the plaintiff or to the devisee at the time of the fire, or. within, the sixty days thereafter. And since.the. insured had been dead four months prior to the fire, it may be assumed that the fact was discovered. Here, then, were laches, .both on the part of the plaintiff and the devisee, and no legal excuse appears. Under such circumstances, the obligation or liability of the company cannot be enlarged or extended for the benefit of persons who have “ slept ” upon their rights. The executor appointed by the. will and the devisee, the owner .of the building, cannot sit idly by for two years and then be allowed by the law (although not by the contract) to furnish the proofs as a full compliance with the condition that they must be furnished within sixty days after the fire.. There was negligence on the part of the owner of the building, who was the owner of the proceeds of the policy subject to the claims of creditors, and also laches on the part of the person authorized to-receive the money for his use. The insurer cannot be charged with responsibility for their, omissions. If the proofs had been furnished the company might have elected to rebuild. (Sherwood v. Agricultural Ins. Co., 10 Hun, 593; 73 N. Y. 447, post; Wheeler v. Connecticut Mut. L. Ins. Co., 16 Hun 317, post).

- In the case of Gamble v. Accident Assur. Co. (Ir. Rep. [4 C. L. 204]; S. 0., 2 Big. L. & Acc. Ins. Oases, 681) it was provided by the. policy *346that notice of accident should he delivered at the office of the Company, in London, within seven days after its occurrence, but owing to the sudden ’character of the accident and its resulting in instantaneous death,. there was- nobody capable of giving the requisite notice. Held, that the provision is not discharged by reason of the fact that, owing to the act of God, the case was of so sudden and fatal a character that it was impossible to have given the requisite notice Within seven days after the accident. That this is an extreme case .must be admitted. It was distinguished in Trippe v. Provident Fund Soc. (3 Misc. Rep. 445).

Other cases cited post also support in their reasoning and conclusions the foregoing rule of law.

Contention is made by plaintiffs counsel that he is entitled to the benefit of any provisions or exceptions contained in .the Statute of Limitations, and that the running of the statute is suspended until letters testamentary are issued, and the executor is thereby empowered to bring suit. Let us assume, for the purpose of argument, that the proofs were furnished in time, and that the executor was in a position to maintain an action, and that he may invoke in his behalf the exceptions and provisions (except as to limit of time) contained in the. statute.

Now, we are unable to perceive any express provision of the Code which would relieve the plaintiff in such a case as this. Where the cause, of action accnies during the lifetime of a party, and he dies before the expiration of the time limited for the commencement of the action, his personal representative may institute an action after the expiration of such time, and within one year after his death. (Code Civ. Rroc. § 402.)

f course this section has no application- and does not aid the plaintiff.

The failure of an appointment of executors does not save the running of the ¡statute. (Dunham v. Sage, 7 Lans. 419.)

Section 3:96 provides for cases of disability. By section 392 it is provided that, for the purpose of computing the timo within which an action must be brought by an executor, etc., to recover personal property, taken after the death of a testator, eto., and before the issuing of letters testmnentary, etc., or for damages for converting or injuring such property within the same period, the letters are *347deemed to have been issued within six years after the death of the testator or intestate.

In Throop’s note it is stated that this section is new; that “ As an action cannot be maintained until there is a person in being, capable of suing, it has been frequently held that, in the cases contemplated in this section, the Statute of Limitations commences to run only from the grant of letters; ” citing Bucklin v. Ford (5 Barb. 393), where ah action, brought fourteen years after the transaction, was sustained. “ Other cases are known to have occurred where actions have been maintained upon the same principle, although commenced forty or fifty years after the transaction and under circumstances of great hardship,” etc.

At first blush it would seem that as to all other cases where the cause of action accrued after the death of the party, there would be no suspension of the statute until grant of letters testamentary or. of administration. When the statute makes an exceptional provision for a special class of actions, it would seem to be a fair inference that all other actions were left to be governed by the general rules of limitation. However that may be, a different, interpretation and effect have been given to this section,, and it has been held on the authority of decisions prior to the Code that, in respect to cases not within section 392, the statute is suspended until the appointment of an administrator, although twenty-two years had elapsed since the death of plaintiff’s intestate. (Cohen v. Hymes; 64 Hun, 54.)

The doctrine is that the statute does not begin to run against an action which accrued in favor of the estate of a deceased person after his death until there is some person in existence capable of suing, or at least some person to whom the right of action may accrue ; that “ until a representative of the deceased is appointed the cause.of action does not accrue or in fact exist.” (Bucklin Ford, 5 Barb. 393 ; Everitt v. Everitt, 41 id. 385, 393 ; Dunning v. Ocean Nat. Bank, 6 Lans. 297; S. C., .61 N. Y. 497, 503; Dunham v. Sage, 7 Lans. 419, 421; Sandford v. Sandford, 62 N. Y. 553, 555.)

To apply this doctrine to a conventional limitation prescribed in a policy of insurance, the company might be called upon to pay many years after the fire occurred. And to give the plaintiff here, *348or the devisee and.owner of the property, the benefit of ..this rule of law, would contravene the express language of-the contract and annul the rule prescribed by the agreement of ‘the parties. Since the'contract itself fails to provide for a:.particular contingency or event, the' provisions of the statute cannot he engrafted upon-it as one of its terms.

It has been repeatedly adjudicated that where a limitation of time is fixed by agreement of the parties the terms in which, the agreement is expressed cannot be enlarged or extended, qualified or controlled by the provisions of the Statute of Limitations. (Wilkinson v. First Nat. Fire Ins. Co., 72 N. Y. 499, 503, 504; Quinn Royal Ins. Co., 81 Hun, 207; Riddlesbarger v. Hartford Ins. Co., 7 Wall. 388; Wheeler v. Connecticut Mut. Life Ins. Co., 82 N. Y. 543; Brown v. Roger Wms. Ins. Co., 7 R. I. 301; Wilson Ætna Ins Co., 27 Vt 99; McElroy v. Continental Ins. Co., 48 Kans. 200. The court cited Wilkinson v. First Nat. Fire Ins. Co., 72 N. Y. 499; Arthur, v. Insurance. Co.,78 id. 462; Wilson v. Ætna Ins. Co.,27 Vt. 99; Brown v. Roger Wms. Ins. Co., 7 R. I. 301; Arthur v. Homestead Fire Ins. Co., 78. N. Y. 462; [Harrison v. Hartford Fire Ins. Co., 67 Fed. Rep. 298, which latter case the court followed Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386; O'Laughlin v. Union C. L. Ins. Co., 11 Fed. Rep. 280; that the contract clause is to be. subsitituted,not only for the general Statute of Limitations, but as well for the exceptions thereto ”]; State Ins. Co. v. Stoffels, 48 Kans. 205; Hocking Howard Ins. 130 Penn. St. 170)

In the latter case the court went beyond the mere words of the policy, and cited with approval Wilson v. Ætna Ins. Co. (27 Vt. 99); Riddlesbatger v. Hartford Ins. Co, (7 Wall. 386); Wilkinson v. First Nat. Fire Ins. Co. (72 N. Y. 499); Arthur v. Homestead Fire Ins. Co. (78 id. 462), to the effect that the statutory provisions are not applicable to conventional limitations: (Suggs v. Travelers' Ins. Co., 1 Law. Rep. Ann. 847; 71 Tex. 579.)

The case of O'Laughlin v. Union C. L.Ins. Co. (11 Fed. Rep. 280) is similar to the last above case, and was followed in the decision that case.

The authorities are all against the contention made by plaintiff’s counsel, and furtlrer discussion is useless.

*349Defendant’s exceptions sustained and complaint dismissed, with costs.

Opinions by Follett and Green, JJ., in which Hardin, P. J., concurred. Dissenting opinions by Ward, J., and by Adams, J.