McAllaster v. Niagara Fire Insurance

This is an action upon a policy of fire insurance. Upon the trial a verdict was directed by the court in favor of the plaintiff, and the defendant has appealed from the judgment, and from the order denying a motion for a new trial on the minutes of the court. There seems to be no substantial dispute respecting the material facts of the case. On the 15th day of December, 1892, the defendant issued a policy of fire insurance in the standard form, by which it insured the house of the plaintiff at Congers, Rockland county, for $2,000. On the 27th day of August, 1893, the house was totally destroyed by fire, and notice thereof was immediately given to the company. On the 25th day of October, 1893, and in due time, the plaintiff served upon the company the proof of loss in regular form, as required by the policy. The company made no denial of its liability, and disputed only the amount of damage sustained. It was unable to agree with the plaintiff on that point, and thereupon demanded the arbitration provided for in the policy. The arbitrators, failing to agree, submitted their differences to the umpire, who,, with one of the arbitrators, made

“We are to-day informed that you are taking steps to rebuild the McAllister house at Congers, Rockland county, New York. As we have already notified you, your right to rebuild is now gone; anything you do in that direction is at your own peril. We shall not accept the house, and shall sue you for the insurance money as soon as we can legally do so.”

The company proceeded, however, with the work, and built the house. On the 19th day of May the sixty days expired within which an action could be commenced upon a policy, and on the 22d day of that month this suit v?as commenced. The company proceeded with the house, and on the 3d day of July, 1894, tendered the keys to the plaintiff, who refused to accept the same, and they were left upon his desk. He thereupon forthwith returned them to the company. The only question in the case is whether the defendant exercised its option to rebuild in time. The contention of the plaintiff is-that the company should have exercised such option within thirty days after the receipt of the proof of loss required by lines sixty-seven to eighty of the policy, whereas the defendant contends, that the company had until thirty days after the service of the award of the arbitrators. The policy reserves to the insurance ¿ornpany the option either to pay the loss or replace the property. If the company elects to pay the amount for which it is liable, that sum is payable sixty days after the reception of “due-notice, ascertainment, estimate, and satisfactory proof of loss.” If, on the other hand, the company elects to replace the property, it must, give notice of its intention to do so within thirty days after the receipt of the proof required by the policy, the language being, “the proof herein required.” What is meant by this phrase, and to-what does it pertain? In lines ninety-three, ninety-four, and ninety-five of the policy, it is provided that “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, including an award by appraisers, when appraisal has been required.” This provision, read in connection with line three, above quoted, shows that it relates to payment, solely. The only provision for indemnity by rebuilding is in the fifth line of the policy, arid that provision makes a notice of intention so to do within thirty days of the receipt of the proof of loss a condition precedent to the exercise ot the.right. While but little aid can be obtained in this case from adjudicated decisions, yet. such judicial expression as we have is in favor of our construction. Clover v. Greenwich Insurance Co., 101 N. Y. 277 ; McNally v. Phoe