Mayor v. Hamilton Fire Insurance — 39 N.Y. 45

Majority

p. 45

The Mayor, etc., of New York, Respondent, v. The Hamilton Fire Insurance Company, Appellants.

Headnote

The limitation in a policy of insurance, that the action shall be commenced “within the term of six months after any loss or damage shall accrue,’ is to be construed in connection with the other conditions of the policy; and thus construed, means that the action shall be thus commenced within six months after the right to sue the company has accrued.

Thus, when the fire occurred on the 5th of October, and the proofs of loss were not adjusted by the parties until the 13th of the following February, it was held, that the limitation of six months did not commence to run, until the expiration of sixty days from the latter date.

This was an action to recover upon a policy of insurance. The most of the questions involved have been decided by this court, in the suits against the Excelsior and the Corn Exchange companies. The only distinguishing point arises upon certain conditions of the policy. They are as follows:

“ X. In case of any loss or damage to the property insured, it shall be optional with the company to replace the articles lost, or to rebuild or repair the buildings within a reasonable time, giving notice of their intention to do so, within thirty days after having received the preliminary proofs of loss required by the ninth article of these conditions; and it is hereby expressly agreed, that no suit or action of any kind, against said company, for the recovery of any claim upon, under or by virtue of this policy, shall be sustainable in any court of law, unless such suit or claim shall be commenced within the term of six months after any loss or damage shall accrue; and in case any such suit or action shall be commenced against said company, after the expiration of six 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 the claim thereby attempted to be enforced.

“ XI. Payment of losses shall be made in sixty days from the date of the adjustment of the preliminary proofs of loss by the parties.

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“XII. Persons sustaining loss or damage by fire shall forthwith give notice thereof in writing to the company, and shall as soon thereafter as possible deliver to the company as particular an account of their loss and damage as the nature of the case will admit, signed with their own hands, which account shall set forth the whole cash value, etc.,” proceeding at great length and in great detail.

The fire by which the loss occurred, took place on the 5th of October, ¿8$8. The action was commenced April 16, 1859. Preliminary proofs were served on the 30th of November, 1858. On the 3d of January, 1859, the defendants objected to the sufficiency of this proof. On the 12th of February, 1859, additional proofs were served. On the 18th of February further objections were made to the proofs.

The plaintiffs recovered in the court below, and the judgment upon such recovery was affirmed by the General Term. The defendants now appeal to this court.

James Emott, for the appellants.

T. H. Rodman, for the respondents.

The defense in this case is based upon a non-compliance with the contract of limitations created by the tenth condition of the policy. In Roach v. The N. Y. & Erie Ins. Co. ( 30 N. Y. 546 ), the condition in question was held to be valid. We are bound to hold in the same manner in the present case. In Ames v. N. Y. Union Ins. Co. ( 14 N. Y. 253 ), it was held that this condition might be waived by the acts and declarations of the parties, and that it had been waived by the parties in that case. The condition is extremely stringent. It is in derogation of the rights of the assured as given by the statute of limitations of the State. It is often not known or not considered by the assured, and should only be permitted to prevent a recovery, when its just and honest application would produce that result.

The cases above cited, also hold that this condition should be construed in connection with the other conditions of the

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policy, and so construed as to give the fullest possible effect to all.

The eleventh condition provides that “ payment of losses shall be made in sixty days from the date of the adjustment of the preliminary proofs of loss.”

The'counsel for the appellants insist that the word “ adjustment ” is inaccurately used in this connection, that it is only appropriate in the settlement of marine losses, and then not by means of the action of parties themselves. This is not impossible. In the preceding condition, when it is said that “ unless such suit or claim shall be commenced within the term of six months after any loss or damage shall accrue,” the words “ loss or damage ” are not used with legal precision. “ Within six months after the right of action shall have accrued ” was, no doubt, what the parties intended. That construction would cut off five years and six months of the right to sue as given by law, and to hold that it extended as much farther as the right to seiwe and object to preliminary proofs might require, with sixty days added to that, would require "of the sufferer very prompt action indeed, to enable him to receive any benefit from his policy.

But the condition gives the company sixty days from the date of the “adjustment of the preliminary proofs of loss by the parties ” before the loss is payable. To “ adjust,” in its fair meaning, is to settle or bring to a satisfactory state, so that parties are agreed in the result (Webster). And that this is a fair reading in the present case, is evident from the use of the words “ by the partiós ” at the close of the condition. The preliminary proofs are to be adjusted by the parties. The parties are to act'upon them by negotiation, by statements on the one side, demands for correction or addition on the other, by compliance with such requests, until the parties agree. If they do not agree, it can hardly be termed an adjustment by the parties, although the law may itself determine the sufficiency of such proofs. In the present case the parties had not adjusted the proofs so recently as the 12th of February, 1859, when additional proofs were served, and possibly not as late as the 18th of that month, when the

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defendants made a demand of still further proofs. I infer that the plaintiffs relied upon their last proofs as sufficient, and refused to furnish any other, as the case contains no evidence of any further action in that respect. If, however, we fix the time when the preliminary proofs were complete, as on the 12th of February, 1859, the defendants were under no obligation to pay, and no suit could successfully be commenced against them until sixty days from that date. This is the period, in my judgment, at which the claim or right to sue becomes perfected against the company. At the end of these sixty days, the period of six months commences to run. This I understand to be the necessary result of the reasoning of Judge Wright in Ames v. The Union Ins. Co. (supra, 264, 265). At this time, and not before, the plaintiffs could have commenced their action. The object was to compel an early litigation, within six months after the right to sue attached. The suit was commenced on the 16th of April, 1859, which, in my view of the case, was within four days of the time in which the plaintiffs would have been justified in instituting the proceeding. The preliminary proofs were first served on the 30th of November. No objection appears to have been made that they were not served in time. If the six months were counted from that date, a rule much too favorable to the defendants, the suit wc lid still have been commenced in time.

Judgment should be aff irmed, with costs.

Judgment affirmed.

Cases cited

Roach v. New York & Erie Insurance 30 N. Y. 546 N.Y. p. 46
Ames v. New-York Union Insurance 14 N. Y. 253 N.Y. p. 46