Case Name: WALTER GRAHAM and Philip Rau, Doing Business under the Name of GRAHAM & RAU, Appellants, v. ALLIANCE HAIL ASSOCIATION OF NORTH DAKOTA, a Corporation, Respondent
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1921-03-29
Citations: 47 N.D. 425
Docket Number: 
Parties: WALTER GRAHAM and Philip Rau, Doing Business under the Name of GRAHAM & RAU, Appellants, v. ALLIANCE HAIL ASSOCIATION OF NORTH DAKOTA, a Corporation, Respondent.
Judges: Eobinson, Oh. J., concurs.
Reporter: North Dakota Reports
Volume: 47
Pages: 425–433

Head Matter:
WALTER GRAHAM and Philip Rau, Doing Business under the Name of GRAHAM & RAU, Appellants, v. ALLIANCE HAIL ASSOCIATION OF NORTH DAKOTA, a Corporation, Respondent.
(182 N. W. 463.)
Insurance — receiving notice of loss by mail held a waiver of notice by registered mail.
1. In an action on a liail insurance policy, where the insurance company, without objection, received by mail notices of loss and requests for adjustment, it is held that it waived the provision of the by-laws requiring such notice to be sent by registered mail.
Insurance — notices required by by-laws of bail insurance society held given under evidence.
2. The evidence is examined, and it is held that there is substantial evidence that the notices required by the by-laws were given.
Contract — jurisdiction of court held not ousted by conditions precedent in hail policy making adjustment by association final.
3. Where a policy issued by a mutual hail insurance association expressly declares certain provisions of the by-laws relating to adjustment to be conditions precedent, the by-laws, construed in accordance with the expressed intention, do not serve to oust the courts of jurisdiction.
Opinion filed March 29, 1921.
Appeal from District Court of Burleigh County, Nuessle, J.
Reversed and remanded.
Peter A. Winter, for appellants.
“In civil cases if hearsay is admitted without objection, the evidence is competent although any adherent weakness still attaches.” 16 Cyc. 1194.
Testimony elicited by respondent’s own attorney, and let in without objection, became good evidence upon which the jury could base their verdict. 4 O. J. 103; 80 Pac. 856; 131 Pac. 69; 94 Pac. 553; State ex reí. Race v. Cranney, 11 Pac. 50.
O. 8. Bucle, for respondent.
The courts have uniformly held that where the contract of insurance, either fire or hail, provides a manner for determining the actual loss, such a provision is binding on both of the parties and must be complied with. Montgomery v. Whitbeck, 12 N. D. 385; Peterson v. Independent Order of Forresters, 166 N. W. 951; Mutual Ins. Co. v. Atty. Gen.- 131 N. W. 1119.

Opinion:
Grace, J.
This action is one to recover loss, sustained by hail, to a certain crop of barley grown upon certain land described in the policy.
It was tried to the court and jury. The jury returned a verdict in plaintiff's favor in the sum of $400. The defendant moved for judgment, notwithstanding the verdict, and the court made an order gx*antixxg the motion. Judgment was ehtex*ed xxpon that order for a dismissal of the action and for the sum of $43.40 costs, in favor of defendant, and from the judgmexxt plaintiffs appeal.
The complaint, ixx substaxxce, charged that the loss upon given dates was in the amount of $400. The defendant, ixx its answer, admits its corporate existence, the issuixxg of the policy, the giving.of a premixxnx xxote in the suxn of $64.40, the proper description of the land, and the amount and kind of crops thereon insured. It adxxxits that it received written notice of the loss. It also pleads a general denial.
It further claims, in its answer*, that Malixx, one of its adjxxsters, upon notice of the claim of loss, oxx the 19th axxd 21st day of Augxxst, 1918, examixxed the sanxe, and claimed that no loss had been suffered by reason of hail oxx those dates, and that plaintiff did not accept the adjustment, axxd further alleges that the plaintiff did not immediately notify the secretary of the defendant's corporation by letter*, calling for a readjustmexxt, as provided in § 2 of article 14 of the by-laws of the defendant eompaxxy, which is claimed to be a part of the policy of insurance.
The defexxdant further alleges to have suffered damages, by way of expexxse, in' the sum of $20, claiming that the loss was less than 5 per cexxt, and in that event, by the terms of the by-laws, xxo loss is allowable.
The following facts are established by sxxbstaxxtial evidence: It is admitted that the xxotice of plaintiffs' loss, by reasoxx of the two hail storms, was by them sent to and received by the defexxdant. Upon receiving this notice, defexxdant sent one Malin, as its adjuster, to adjust the loss. He did not do so. He refused to allow plaintiffs anything for the loss, claiming that it was less than 5 per cent, and that, therefore, the company was not- liable.
That defendant refused to pay any loss. This appears from exhibit "6," which is entitled "Adjustment of Loss," which was signed by the adjuster, but to which the plaintiffs refused assent.
After the hail storms had destroyed the plaintiffs' crop, Nan called up the agent of defendant, Arnold Gerberding, and notified him of the loss. Gerberding's name appears on the application as the agent of defendant. He made a proof of loss, which plaintiff signed and which was sent by registered letter to the company and received by it.
On cross-examination, Hau testified that he sent a second notice; that he was not satisfied — meaning, with the alleged adjustment. He said that he notified the agent (Gerberding) — talked with him just the same as the first time. lie testified that he, the plaintiff, did not send the notice, but that, upon being asked if he knew whether the banker (Gerberding) sent in the notice, or not, he answered, "Tes," testifying further that the banker told him so.
There was no objection to this testimony, on the ground that it was hearsay, and, in these circumstances, it was proper for the jury to consider the same. Defendant was again notified of plaintiffs' dissatisfaction of and resistance to the adjustment, as attempted to be made by the defendant, by Mr. Winter, plaintiff's attorney.
We think the evidence is sufficient, in this regard, so that the jury could find therefrom that a second notice was sent by plaintiffs to defendant, notifying it of plaintiffs' dissatisfaction' in regard to the adjustment and of their refusal to accept the same.
As a matter of fact, there was no adjustment of any kind or character, but a simple refusal of the defendant to allow any loss whatever. The clause in the by-laws relied upon by defendant to evade liability provides: "An adjuster will be sent within a reasonable time after the loss is reported, and his decision shall be binding upon the insured, unless objected to by the looser, when, the looser shall immediately notify the secretary by registered letter, calling for a readjustment, and this readjustment shall be final, subject only to review and change by the board of directors. In case of readjustment the expense shall be borne equally by the insured and the association, insured's share of expense to be levied as part of his assessment."
That provision, as we view it, is absolutely void, in so far as it seeks and pretends to oust the courts of jurisdiction of any action which might be brought by the insured to recover for the loss sustained, if by inadvertence he failed to send the second notice in the time and manner required by the by-laws.
In addition to'this, the provision is absolutely unreasonable. It constitutes nothing but a trap into which the unwary may fall. The defendant haring received due notice of the loss, it Avas its duty to adjust and allow all the loss plaintiffs had sustained, not exceeding the amount of the policy. But it refused to allow any loss, and plaintiffs refused to receive any such alleged adjustment, Avhich Avas in fact no adjustment. Plaintiffs then had an absolute right, in laAV, to proceed in court to compel defendant to pay the amount of such loss. And any provision in the by-laAvs which denies him such right is, as above stated, Avholly inyalid. 1 Bailey, Jur. § 54; Muldrow v. Norris, 2 Cal. 74, 56 Am. Dec. 313, 13 C. J. 455, 456, and cases cited in notes 8 and 9.
Insurance companies, or other corporations, partnerships, or persons, cannot, in this manner, oust the court of its jurisdiction of this subject-matter, clearly Avithin its jurisdiction, nor thus prevent plaintiffs from their right of having due process of laAV.
There is not only sufficient evidence, substantial in character, to support the verdict, which plaintiffs received in regard to the amount of damage Avhich they sustained, to their barley crop, by reason of the t.Avo hail storms, but it is also of a very conclusiA^e character. Each of four Avitnesses gave positive testimony that plaintiffs' loss on the barley field was total.
It is needless to set forth such testimony. Sufficient to say, it is A'ery abundant and substantial. The insurance policy provided for $8 per acre, in the event of a total loss of the barley by hail. There were 50 acres of barley. The total amount of damages recovered by plaintiffs was $400.
Upon argument of the case before this court, attorney for the defendant and respondent advanced the point that this court had no jurisdiction, for the alleged reason that the appeal Avas not taken Avithin six months after the entry of the judgment. There is no merit in this contention.
It is true that the notice of entry of judgment seiwed by defendant upon plaintiffs was dated the 23d day of June, 1920, and that the notice of appeal recites an appeal from a judgment entered in this case on the 23d day of June, 1920, and that the undertaking describes the judgment entered at that date, but both the notice and the undertaking describe accurately the judgment' appealed from as one in the above-entitled action; and the undertaking describes it as a judgment of $41.40, which was the amount thereof, except for the fee for entry of judgment, which was $2, making a total of $43.40.
The judgment was not entered on the 23d day of June, 1920, but on the 1st day of July of that year, as appears from the judgment duly authenticated by the signature and seal of Charles Fisher, clerk of the district court of Burleigh county, and it is a part of the judgment roll. The most that can be said is that, in the notice of appeal and undertaking, a clerical error was made in inserting the wrong date of the entry of judgment. This was, no doubt, caused by the erroneous date of entry contained in the notice of entry served by defendant upon plaintiff.
The- notice of appeal and undertaking were dated the 21st day of October, 1920, and due and personal service thereof, and the specifications of error, were by defendant admitted on the 20th day of December, 1920, and they were filed with the clerk of court December 30, 1920. The appeal, therefore, was wholly perfected within the six months' period of time allowed for an appeal from a judgment. Hence, the appeal was properly hero, and this court had full jurisdiction to hear the same.
The jurisdiction of this court is not attacked otherwise than as above stated. It is clear, from what has been said, that the order of the trial court, vacating the judgment in favor of plaintiff, and ordering judgment in favor of defendant, and for a dismissal of the action, and for costs, was without any authority in law and wholly void. It is apparent that the judgment entered thereon in favor of defendant must be reversed.
The judgment appealed from is reversed, and the case is remanded to the trial court, and it is directed to enter an order reinstating the judgment in favor of plaintiff.
The appellants are entitled to their costs and disbursements on ap-; peal.
Eobinson, Oh. J., concurs.