Court Opinion

ID: 9583347
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:37:54.633609+00
Date Added: 2024-06-11T13:38:58.396111
License: Public Domain

Rodman, J.
The court overruled defendant’s motions to nonsuit. It charged the jury the burden of proof was on defendant to show that notice had not been given in a reasonable time, and that defendant was prejudiced by such failure to give notice.
There is no allegation that defendant has in any manner waived the policy provisions, nor is there contention that there is any evidence tending to show earlier notice to defendant of the accident of 24 October 1954 than the letter from Crosby dated 10 June 1955, received 20 June 1955. Nor is it contended there is evidence tending to explain such delay or justify the delay as reasonable. It is asserted by plaintiff that defendant has not offered evidence of nor in fact suffered prejudice from the failure to give earlier notice. The rulings *78therefore present for determination these questions: Who had the burden of’ proof with respect to notice required, by the policy? Is the evidence sufficient to permit a finding that the policy provisions have been complied with? Plaintiff has the right, of course, to the benefit of any evidence offered by defendant which tends to support her allegations that the conditions of the policy were complied with.
The learned trial judge presumably based his rulings and charge on MacClure v. Casualty Co., 229 N.C. 305, 49 S.E. 2d 742. It must be conceded that the language there used, supports his honor’s rulings. There can be, we think, no question that the Court in that case reached the correct result, but it is, we think, apparent from the facts as there stated that the Court used language not necessary to support its conclusion.
There insured promptly gave notice of the accident and of the institution of the action by the injured party against the insured. Pursuant to this notice the insurer assumed the defense of that action but permitted a default judgment to be rendered against the insured. It based, its assertion of nonliability on these facts: the insured was the proprietor of a carnival; he traveled with the show throughout the South; because of such travel insurer experienced delay in locating the insured and in having him verify the answer which the insurer’s attorneys had prepared. Because of the difficulty in locating the insured, the attorneys, on 7 April, asked permission to withdraw as his counsel. That day the insured received letter written by counsel employed by the insurance company. He replied by telegraph the next morning, the earliest possible moment. Counsel then sought to impose conditions on which they would agree to continue to represent him. Counsel for plaintiff in the personal injury action had agreed that counsel for insured might file an answer, and that they would waive verification. A verified answer was received from insured on 16 April, but permission to counsel to withdraw was not granted until May. The injured then brought suit against the insurance company. It disclaimed liability on the assertion that the insured had failed to comply with a condition precedent, to wit: full co-operation in the defense of the litigation. The trial court held, as a matter of law that the defense was established and entered judgment in favor of the insurance company. Justice Seawell, speaking for the Court, said: “There is no question here as to the validity and importance of clauses in liability insurance policies similar to that with which we are dealing, to the materiality of which appellee’s counsel address many citations of authority. But the issue here concerns the manner in which the breach of the co-operation clause may *79be ascertained, and by which branch of the court it may be determined, — judge or jury.” Thereafter he said: “As we are dealing with a nonsuit of plaintiff’s action based on an affirmative defense set up by the defendant while the burden of proof with respect thereto rested .on him, it is well to say that we are advertent to the fact that the policy names compliance with all its terms a condition precedent to the maintenance of the suit. In passing it may be observed that defendant made no objection to the pleading in that respect, and voluntarily undertook to prove its affirmative defense in avoidance of liability.” (Emphasis added.)
It is apparent from the opinion that the Court was not called upon to determine who had the burden of proof. Whether rightly or wrongly, the insurance company had voluntarily assumed that burden. It would not on appeal be permitted to shift its position and assert that the burden was in fact on plaintiff. Bowling v. Bowling, 252 N.C. 527; Rhyne v. Mount Holly, 251 N.C. 521, 112 S.E. 2d 40; Bivins v. R. R., 247 N.C. 711, 102 S.E. 2d 128; Gorham v. Insurance Co., 214 N.C. 526, 200 S.E. 5; Webster v. Trust Co., 208 N.C. 759, 182 S.E. 333. The question for decision in the MacClure case was: Did the admitted facts establish as a matter of law a failure of the insured to co-operate? The trial court answered in the affirmative, and this Court properly held that the facts did not as a matter of law establish failure to co-operate, but the evidence required the submission of an issue to a jury. This was all the Court was called upon to decide.- That portion of the opinion dealing with the burden of proof, being unnecessary to a decision, was merely obiter dicta and should not influence the decision in this case unless it logically assists in answering the question we are now called upon to decide. Hayes v. Wilmington, 243 N.C. 525, 91 S.E. 2d 673; Washburn v. Washburn, 234 N.C. 370, 67 S.E. 2d 264; Suskin v. Hodges, 216 N.C. 333, 4 S.E. 2d 891.
To determine the application of the language of the MacClure case to this case we must recognize established rights and be guided by well-settled rules repeatedly declared for the protection of those rights.
Freedom of contract, unless contrary to public policy or prohibited by statute, is a fundamental right included in our constitutional guaranties. Constitution, Art I, sec. 17; Alford v. Insurance Co., 248 N.C. 224, 103 S.E. 2d 8; 12 Am. Jur. 641, 642.
The policy provision requiring notice of facts which may impose liability on the insured as a result of the operation of his motor vehicle does not violate public policy, and, except as to a limited kind of policy, G.S. 20-279.21, is not declared invalid by statute.
*80Since the contractual provision is, as related to the facts of this case, a valid one, the parties are entitled to have it enforced as written. We cannot ignore any part of the contract. Suits v. Insurance Co., 249 N.C. 383, 106 S.E. 2d 579; Peirson v. Insurance Co., 248 N.C. 215, 102 S.E. 2d, 800; Ray v. Hospital Care Assoc., 236 N.C. 562, 73 S.E. 2d 475; Federal Reserve Bank v. Manufacturing Co., 213 N.C. 489, 196 S.E. 848; Whitaker v. Insurance Co., 213 N.C. 376, 196 S.E. 328.
The policy makes the giving of notice a condition precedent to insurer’s liability. Prior and subsequent to the decision in the MacClure case this Court has consistently held that plaintiff has the burden of showing that he has complied with those conditions precedent to his right to maintain his action. Illustrative of this well-settled rule are cases under the wrongful death statute as originally enacted, Wilson v. Chastain, 230 N.C. 390, 53 S.E. 2d 290; Webb v. Eggleston, 228 N.C. 574, 46 S.E. 2d 700; Hatch v. R. R., 183 N.C. 617, 112 S.E. 529; filing of a claim as required by G.S. 153-64 to impose liability by contract on a municipal corporation, Nevins v. Lexington, 212 N.C. 616, 194 S.E. 293; filing of a bond by caveators as required by G.S. 31-33, In re Winborne, 231 N.C. 463, 57 S.E. 2d 795; contract to pay money on the happening of a specified event, Jones v. Realty Co. 226 N.C. 303, 37 S.E. 2d 906; notice of-loss under a fire insurance policy, Gardner v. Insurance Co., 230 N.C. 750, 55 S.E. 2d 694; Boyd v. Insurance Co., 245 N.C. 503, 96 S.E. 2d 703; Zibelin v. Insurance Co., 229 N.C. 567, 50 S.E. 2d 290; notice of accidental death or injury as required in accident policies, Gorham v. Insurance Co., supra; Fulton v. Insurance Co., 210 N.C. 394, 186 S.E. 486; Dewease v. Insurance Co., 208 N.C. 732, 182 S.E. 447; Rhyne v. Insurance Co., 196 N.C. 717, 147 S.E. 6; Woodfin v. Insurance Co., 51 N.C. 558; policy provision that the injured may not bring an action on the policy “unless and until execution against the assured is returned unsatisfied,” Small v. Morrison, 185 N.C. 577, 118 S.E. 12; Anderson & Co. v. Insurance Co., 212 N.C. 672, 194 S.E. 281.
The general rule requiring plaintiff to establish compliance with contractual conditions precedent has general recognition. Murray v. Cunard S. S. Co., 139 N.E. 226 (N.Y.); Prudential Ins. Co, v. Myers, 44 N.E. 55 (Ind.); Wachovia Bank & Trust Co. v. Independence Indemnity Co., 37 F. 2d 550; A. Perley Fitch Co. v. Continental Ins. Co., 49 A.L.R. 2d 156 (N.H.); Public National Ins. Co. v. Wheat, 112 S.E. 2d 194; Segal v. Aetna Casualty Co., 148 N.E. 2d 659; American Fidelity Co. v. Hotel Poultney, 102 A. 2d 322; Depot Cafe *81v. Century Indemnity Co., 72 N.E. 2d 533; Lauritano v. American Fidelity Fire Insurance Co., 147 N.Y.S. 2d. 748; Honran v. Preferred Acc. Ins. Co. of New York, 195 A. 253; Zingerle v. The Commonwealth Insurance Co. of N. Y., 321 P. 2d 636; Horacek v. Smith, 191 P. 2d 41.
The general rule imposing on plaintiff the burden to establish his compliance with conditions precedent to the maintenance of his action has been frequently applied in actions on liability policies by courts of sister states. The identical question which we are called upon to decide was presented to the Supreme Court of Nevada in State Farm Mut. Auto Ins. Co. v. Cassinelli, 216 P. 2d 606, 18 A.L.R. 2d 431. That Court, in a well-considered opinion by Badt, J. (later C.J.), held that the burden rested on the plaintiff to establish compliance with the notice provision, by the policy, made a condition precedent. The note appearing in the A.L.R. report is exhaustive. It is not necessary to lengthen this opinion by inclusion of the cases cited and analyzed in that note. Northwestern Mut. Ins. Co. v. Independence Mut. I. Co., 319 S.W. 2d 898, decided in January 1959, follows the reasoning and conclusion reached in the Cassinelli case, citing in support of its conclusion a number of recent cases. See also 5A Am. Jur. 150-151; 8 Appleman Ins. L. & P., pp 103 & 145; 45 C.J.S. 1274.
Plaintiff does not contend that she has any greater right against insurer than Crosby, the insured, would have. Any failure of Crosby to give notice defeating his right to indemnity would likewise' prevent plaintiff from asserting any rights under the policy. Alford v. Insurance Co., supra; Peeler v. Casualty Co., 197 N.C. 286, 148 S.E. 261; Fulwiler v. Traders & General Ins. Co., 285 P. 2d 140; Kentucky Farm Bureau Mut. Ins. Co. v. Miles, 267 S.W. 2d 928; Indemnity Ins. Co. of North America v. Smith, 78 A. 2d 461; McFarland v. Farm Bureau Mut. Automobile Ins. Co., 93 A. 2d 551; 5A Am. Jur. 188.
Notice without explanation for the delay, given eight months after the happening of the accident, resulting in injuries as serious as depicted by plaintiff’s judgment against Crosby, cannot be said to be given “as soon as practicable.” Since plaintiff has failed to establish compliance with the condition or to justify the delay, it follows that she has failed to establish her right to maintain the action.
We treat the action as one by plaintiff against The Travelers Indemnity Company in which it has entered an appearance. The policy of insurance on which plaintiff bases her action was issued by The *82Travelers Indemnity Company and The Travelers Fire Insurance Company. By the terms of the policy each company agreed to indemnify the insured upon the happening of specific contingencies. The agreement with respect to bodily injuries is, by the terms of the policy, the obligation of The Travelers Indemnity Company. The case was treated in the trial below as if process had issued for The Travelers Indemnity Company, and it was in fact the defendant before the court. No suggestion was made here to the contrary. Hence, notwithstanding the caption of the cause, we are of the opinion and hold that The Travelers Indemnity Company was properly before the court.
Reversed.