Court Opinion

ID: 7942042
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:16:00.341716+00
Date Added: 2024-06-11T16:33:45.917832
License: Public Domain

ON REHEARING.
Moore, J.
This case was heard, and an opinion filed, which is reported supra. Afterwards a rehearing was ordered. A reference to the opinion which was filed will make a long statement of facts unnecessary here. The question in doubt is what construction shall be given to the word “due,” as used in the statute. The claim of plaintiff is stated as follows:
“The policy became ‘due' as soon as completed proofs of loss were filed, but not ‘payable,' under the terms of the policy, until 60 days thereafter. In the statute the word ‘due' is used, and the word ‘payable' is not used. We contend that the word ‘ due' here is used as meaning * owing' and ‘ remaining unpaid;' that as soon as a sum is fixed it is ‘ due,' although it may not be ‘ payable' until later. There is a distinction between the word ‘ due' and the word ‘ payable.' ‘ Due' means ‘ owing' and ‘ remaining unpaid.' Fowler v. Hoffman, 31 Mich. 219; Smalley v. Ashland Brown-Stone Co., 114 Mich. 104 (72 N. W. 29).”
On the part of the defendant it is insisted that this position is erroneous, and that the claim was not due until it was payable.
The case is not free from difficulty. Not many cases have been adjudged which aid the court in arriving at a conclusion. After the opinion was filed in the case, our attention was called for the first time to two cases to which reference will be made later.
The defendant company is organized under Act No. 78, *678Pub. Acts 1883. The provision of the statute to be construed is found, in section 10 of said act (3 Comp. Laws, § 7336), and reads:
“Suit at law may be prosecuted and maintained by any member against such corporations for claims which may have accrued, if payments are withheld more than sixty days after such claims shall have become due.”
As early as 1849 the State of New York passed a law which had a provision essentially like the one contained in our statute. Laws N. Y. 1849, p. 448, chap. 308. This provision was construed by the supreme court of New York in 1853 in the case of Utica Ins. Co. v. American Mut. Ins. Co., 16 Barb. 171. In that case the statute under which the defendant company was organized provided, among other things, that “suits at law cannot be maintained by any stockholder or member of the corporation for losses until payment shall have been withheld more than two months after such loss shall have become due.” Section 16, Laws 1849, p. 448, chap. 308. It was claimed, as is claimed here, that the loss did not become due until 60 days after its amount had been determined, and that suit could not be brought until two months after the expiration of the 60 days. The court said:
“ That section provides that the corporation may sue its stockholders, and that ‘suits at law maybe prosecuted by any stockholder, against such corporation, for losses which may have accrued (if payment is withheld more than two months) in all risks after such losses shall have become due.’ The word ‘due’ has two meanings. The one indicates a debt ascertained and fixed, though payable in futuro; and the other, a debt where the money has become payable, so that a suit will lie on it presently. The first objection applies whenever a sum of money is due by a certain and express agreement, as by a bond for a determinate sum, a bill, a note, or a special bargain, or rent reserved on a lease; when the quantity is fixed and specified, and does not depend on any subsequent valuation to settle it. 2 Jacob, Law Dict. 198. This is in accordance with the old maxim, ‘Debitum in preesenti, solvendum in futuro.’’ The amount due in this case wag *679settled by a resolution of the company on the 13th day of January, 1852, and the money declared to be payable in 60 days thereafter. This suit was not commenced till after the expiration of the said 60 days. This was right. It was not the intention of the act to give a further credit of 60 days after the expiration of the two" months from the time when the proofs were received by the company, and the amount had been settled and allowed and fixed absolutely by the defendants. By that settlement, stated in the resolution of the 13th of January, 1852, the money became due by the true interpretation of the statute, payable in 60 days thereafter. Such, we think, is the true construction of this section.”
The same question was discussed in Allen v. Insurance Co., 19 Barb. 442, where the court used the following language :
‘ ‘ It was insisted upon the trial that the action had been commenced prematurely. The preliminary proofs were delivered on the 24th of July. The suit was brought on the 10th of November in the same year. By the terms of the policy, the loss was to be paid within 60 days after notice and proof thereof made by the assured in conformity to the conditions annexed to the policy. The loss became due immediately upon the happening of the fire, and would have been payable at once, but for this provision in the policy. By the 16th section of the general insurance act, under which the defendants were incorporated (Sess. Laws 1849, p. 448, chap. 308), suits at law may be prosecuted for losses if payment is withheld more than two months after such losses shall have become due. The defendants insist that the effect of this provision of the statute is to extend the credit to which they are entitled for the period of two months beyond that for which they had stipulated by the terms of their contract. But I do not so construe the statute. The loss became due when the property was destroyed, or, at any rate, when the requisite proofs were furnished. Without the statute, and had there been no stipulation in the contract to prevent it, a suit might have been commenced at once. But though due when the proofs were delivered, the statute had the effect to postpone the time of payment two months. It was then a debt, debitum in prcesenti, solvendum in futuro. The defendants, without reference to the provision of the statute, saw fit to stipulate in their contract for a similar *680credit. Had they agreed to pay in 10 ■ or 30 days after proof of loss, they might have been sued at the expiration of this period, notwithstanding the provision of the statute. The only effect of that provision is to fix the time within which the loss should be payable when the parties have omitted to do so by the terms of their contract.”
This construction of the statute of New York, given to it in two cases before our statute was adopted, should have great weight, and a majority of the court think it should obtain in this case. We are of the opinion it was not the intention of the legislature that the company should have 60 days after satisfactory proof of the loss had been received before the loss should be pajmble, and, in addition thereto, that 60 days must elapse after the. loss became payable by the terms of the policy before suit could be brought.
It is said by counsel that the case of Utica Ins. Co. v. American Mut. Ins. Co., supra, is practically overruled by the later case of Steen v. Insurance Co., 89 N. Y. 315 (43 Am. Rep. 297). We do not agree' with this conclusion. In that case the question involved was, not that the suit was brought prematurely, but that it was brought too late. It was claimed that the suit must be' brought within a year from the time of the fire, and-the court held that the period of limitation did not begin to run until the loss was payable, and made use of the following language:
“The contract limits the time for bringing an action under or by virtue of the policy to a ‘ term of 13 months next after the loss or damage shall occur,’ and declares that, ‘ in case any such suit or action shall be commenced * * * after the expiration of 13 months next after such loss or damage shall have occurred, the lapse of time shall be taken and deemed conclusive evidence against the validity of the claim thereby so attempted to be enforced, anyatatute of limitation to the contrary notwithstanding.’ The validity of such a stipulation is well settled (Wilkinson v. Insurance Co., 72 N. Y. 499 [28 Am. Rep. 166]; 2 May, Ins. § 478), and in this case the'question is one of construction. What was the intention or understanding *681of the parties as to the time when the limitation should begin to run ? The facts are undisputed, and the defendant’s contention is that the words I have quoted are to be taken literally, and that they import a contract that no action shall be commenced after the expiration of 12 months from the happening of the fire by which the property insured was damaged or destroyed. On the other hand, the plaintiff has so far succeeded upon the ground that they relate to the time when a claim or cause of action accrues on which a suit may be maintained; that no claim accrues or arises in favor of the insured upon the mere happening of the loss, nor until 60 days after the proof required by the insurers, or provided for in the policy, should have been received by them at their office in New York, and the loss satisfactorily ascertained and proved.
“These events are made conditions, and are certainly precedent to the maintenance of an action, and we are of the opinion that they cannot be disregarded in getting at the true understanding of the parties of the meaning of the clause in question. Indeed, they seem to be the governing words of the contract. They are the words of the underwriters, intended for their protection, and qualify the general obligation to make good any loss, not exceeding the sum insured, or the interest of the assured in the property, by requiring preliminary proof, and a lapse even then of a fixed period before any cause of action can accrue. Except for these provisions, a suit would have lain upon the instant of the happening of the fire, or within a reasonable time thereafter.
“Now, if we look at the clause relied upon, we find the insurers prescribing a time after which no claim shall be brought, and a declaration that it shall not be sustainable unless commenced within ‘the term of 12 months,’ and a greater lapse of time is made ‘ conclusive evidence against the validity of the claim then attempted to be enforced. ’ It is plain that a ‘term ’ or period is indicated after which the insurers shall not be liable, and the implied meaning of the same words must be that within that period they are or will be liable to an action. The law, in case of breach of contract, limits the time of bringing an action to six years. The contract substitutes 12 months. If we take the appellant’s construction, the term of 12 months is at once narrowed to 10 months, for 60 days, at least, must elapse after ‘a loss by fire’ before any suit could be brought, and the term is subjected to such additional *682abatement as may be made necessary by alleged inadequacy of proof, or controversies between the insurers and the policy-holder before such loss is ‘satisfactorily ascertained.’ The delay incident upon such provisions is illustrated by a variety of cases heretofore considered by the courts, and, among others, Ames v. Insurance Co., 14 N. Y. 253; Mayor, etc., of New York v. Insurance Co., 39 N. Y. 45 (100 Am. Dec. 400); Hay v. Insurance Co., 77 N. Y. 235 (33 Am. Rep. 607). These cases, in substance, hold that the time of limitation prescribed by such a contract does not commence running until the right to bring an action exists. Whether the delay is caused by extraneous circumstances, made effective by the insurer, as in the above cases, or by the provision of the policy giving time to the insurer before, the lapse of which payment cannot be enforced, is immaterial. The delay in either case is caused by the insurer, and until, by the terms of the policy, a cause of action accrues, the period of limitation against its enforcement should not, in the absence of plain and unequivocal words requiring such a construction, be deemed to commence.
‘ ‘ Here, we think, the intention of the defendant was to give the insured a full period of 12 months, within any part of which he might commence his action; and having, by postponement of the time of payment, secured itself from suit, it did not intend to embrace that period within the term after the expiration of which it could not be sued. In other words, the parties cannot be presumed to have suspended the remedy and provided for the running of the period of limitation during the same time.”
It will be seen this language is not inconsistent with the two cases cited, and it also disposes of the contention that to give the statute the construction we have given it will have the effect of depriving some other plaintiff of his remedy because he has not commenced his suit soon enough, though it was commenced within the time prescribed by the statute.
It is said that, as the defendant had 30 days after proofs of loss were received in which to elect whether it would repair, rebuild, or replace the property, or pay the money value thereof, until that time expired the plaintiff had no right to demand money damages, and, as this is a suit *683for money damages, it could not be brought until 60 days had expired after the 30 days for election had elapsed. "We do not think there is force in this contention. Under the cases which we have cited, the loss becomes ascertained when satisfactory proof-of loss is filed. It may be discharged by either electing within 30 days to repair, replace, or rebuild the property, or by paying the money value within 60 days.
We think the judgment should be affirmed.
Carpenter and Montgomery, JJ., concurred with Moore, J.