Under the record in this case, it is evident that the insured did not perform the provisions of the insurance contract requiring him to furnish information and evidence to the insurance company when it was preparing to defend the suit for damages. Rather than so doing, the insured absolutely refused to give information about the accident involved. There is an indication in the record that the insured desired the plaintiff, in the damage suit, to recover at the insurance company's expense.
The district court, when passing upon this phase of the case, made the following finding: *Page 630
"I am inclined to condemn, rather than otherwise, the conduct of this plaintiff (the insured) in his treatment of the original action for damages. I have no hesitancy in holding that the provision of the policy requiring co-operation is valid and enforcible under ordinary circumstances."
In Coleman v. New Amsterdam Casualty Co., 247 N.Y. 271,160 N.E. 367, 72 A.L.R. 1443, it was held that there can be no recovery under a policy of the kind in the case at bar, when co-operation or assistance in obtaining evidence is made a condition for the insurance company's liability under the policy, unless the insured substantially complies with the contract. This, I believe, is a sound and wholesome rule of law. Obviously, the contract did not provide that said conditions precedent were immaterial, unless the insurance company proved prejudice because of the breach. Just the reverse is true under the policy; that is to say, the insured cannot recover unless he substantially performs the condition precedent which requires him to assist in revealing facts to, and furnishing evidence for, the insurance company. Prejudice, under the circumstances, stealthily enters through a breach of contract of this kind, although it might be difficult to prove it after the trial. Such prejudice permeates the entire record and handicaps the insurance company at every juncture.
On the other hand, the majority hold that, regardless of the insured's conduct, the insurance company is liable unless it proves prejudice. I do not believe that this holding of the majority is in accord with the decisions in the courts generally. Of course, the insurance company cannot ask or expect that the insured will give false testimony in behalf of the defense. But in the case at bar there is no evidence or indication that the insurance company asked the insured to give such testimony.
Furthermore, the insurance company defended the damage suit only after serving notice on the insured that it would insist onnot being bound by the policy under the circumstances. Upon those conditions the insured permitted the company to defend. Consequently, I think there was no waiver of the breach of the policy, as held by the district court.
*Page 631ALBERT, J., joins in dissent.