Court Opinion

ID: 9309499
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:37:48.524635+00
Date Added: 2024-06-11T17:14:04.523560
License: Public Domain

PARKER, J.,
dissenting.
I find myself unable to bring my mind into agreement with the decision of a majority of this court in this ease. I do not believe that the rule which has been laid down here by them will be conducive to the attainment of the ends of justice. Neither do I think that it is in harmony with the expressions of our Supreme Court upon the subject, unless, perhaps with some of the language of Judge Davis in the opinion in Travelers’ Ins. Co. v. Myers, 62 Ohio St. 529 [57 N. E. Rep. 458; 49 L. R. A. 760], referred to by Judge Hull; and I am of the opinion that more weight is given by my colleagues to certain expressions of Judge Davis and to certain facts in that case, and less weight to others, than should be given to them.
If it were possible for this general agent, by his conduct, to waive the formal proofs of loss, then we are agreed that there was testimony tending to show such a waiver. Unless the whole matter is concluded by this provision of the policy, as to the proofs of loss, so that no consideration may be given to such evidence the case should have gone to the jury.
In looking into the facts of the case we find that the evidence of waiver was not very strong; but there was some oral evidence — enough my associates have, very properly, met the question squarely; they have not undertaken to avoid it by laying any stress upon the fact that a strong ease of waiver was not made out; for they ap* *562predate, as we all must, that if this rule is to be laid down and followed, it must be applied where there is strong oral evidence of waiver as well as where such evidence of waiver is slight.
I cannot see how the courts can avoid following it if it is established as a rule of law, even where the conduct of the agent, which ordinarily would amount to an estoppel in pais, is so pronounced as that to not apply the doctrine of estoppel would operate as a gross fraud upon the insured. For instance, a general agent may come upon the ground — ■ even the president of the company, according to the claims of counsel for the insurance company here — see the ashes of the fire and be satisfied that a fire has occurred; investigate the evidences of the loss and be satisfied that the loss claimed has occurred, and that the loss is great enough so that the company is liable, if at all, for the whole amount of insurance; he may be satisfied that the loss is entirely honest so far as the insured is concerned; that there is no valid reason on moral or legal grounds for resisting payment of the loss under the policy; he may say so to the insured; he may say to him, “It is not worth while to make out proofs of loss in this case, it is perfectly clear that you are entitled to your money;” he might lull the insured into security by such conduct and declarations and keep it up until the very last hour of the sixty days, and then turn his back upon him and snap his fingers at him and say, “we will not pay you because you have not made formal proofs of loss.” Now that, as I view it, might result from establishing this rule; it could be used in that unfair way by an insurance company; and I think it is not out of place to say that the experience of business men is such as to justify the suspicion, at least, that there are some insurance companies doing business in the country that would be glad to take unfair advantage of such a rule; and therefore I say that I do not believe that the adoption of such a rule would be conducive to the attainment of the ends of justice.
I agree with my associates that under the authorities, even in Ohio, a denial of liability on other grounds than that of lack of proofs of loss, by the general agent of an insurance company, amounts to a waiver of proofs of loss. I understand that that is distinctly held in the case of Enterprise Ins. Co. v. Parisot, 35 Ohio St. 35 [35 Am. Rep. 589], and though we have found by experience that it is not safe to place much reliance upon unreported cases, or upon the deductions of counsel, or of publishers of unofficial reports thereof, as to what has been decided by the courts, yet it seems from the report of the case, Ohio Farmers’ Ins. Co. v. Danison, 1 O. S. C. D. 653 (38 Bull. 163), a case not reported by authority of the Supreme Court, but reported by *563the Bulletin upon its own responsibility, that the same thing was held there, and held, as I understand it, because of the denial of liability on some other ground, before proofs of loss were due; the company through its general agent, having said to the insured, in effect, “it would be idle and useless for you to make up a proof of loss in this case, we will not pay the policy in any event. ’ ’ But, if that is still the law, what becomes of the provision in the policy that the proofs of loss cannot be waived except by agreement indorsed upon the policy? Such denial of liability of itself amounts to a waiver by conduct of proofs of loss. If there is to be any exception to or qualification of this provision of the policy, why not an exception in a case such as I have instanced, where the insured is given to understand up to the very last moment that the right to recover will not be questioned and then is disappointed when it is too late to correct the matter?
The case of Travelers’ Ins. Co. v. Myers, supra, is, it seems to me, very different from this, and does not amount to a precedent to be followed here; and for my part, in the establishment of such a rule as that applied by my associates, I am unwilling to go one step in advance of what the Supreme Court has distinctly held.
The case last referred to was one of insurance by an employer against liability and loss on account of injuries which might be sustained by employes. It appears that an accident happened to an employe and that no notice of the fact was conveyed to the company for some nine months after the accident occurred, whereas the policy required that “Immediate written notice shall be given this company of any accident and of all alleged injuries, together with copies of all statements made by employes, and all other information in possession or knowledge of the insured in any way relating to such accident or liability therefor.” And Judge Davis points ont why it is material in a case of that kind that the insurance company should have this information at the earliest possible moment, so that it may investigate the matter before it has faded from the minds of the witnesses, before the aspect of the whole matter is changed, while the insured is still suffering from his injury or accident, so that it may ascertain the extent of his injury, and especially so that it may ascertain whether or not there is a liability. Myers & Co. undertook to excuse themselves from furnishing this information on the ground that the local soliciting agent had advised them against doing it; had advised them to keep silent; had said to them that if they stirred the matter up the injured man might conceive that he had a cause of action and bring a suit against them, and that he might not do so if they kept still and allowed the matter to blow over.
*564In the course of his opinion Judge Davis emphasizes the fact that the agent was merely the soliciting agent, and the fact that what he is saying is applicable to that particular form of insurance. It seems to me that he carefully seeks to avoid having such a conclusion drawn from his utterances as is drawn therefrom by my associates. He endeavors to confine what he says to the particular kind of insurance under consideration there. What he, or the court, may have said if this had been done by a general agent, we can only surmise. What the court may have said if some general officer of the company had been upon the ground, had seen the accident, investigated all the facts, become satisfied that there was a liability and had said so — had said: “You need not furnish the information, we are already fully informed,” we can only surmise. .
It can hardly be inferred that under circumstances like those the court would have said that the company might still insist upon the formal evidence required under the written terms of the policy. But, that was not a fire insurance case to begin with. Much of what the learned judge says with reference to the materiality of these proofs, to put the insurance company in a fair position to protect itself, it seems to me has no application to fire insurance generally, and has no applb cation to a ease where a fire insurance company has become fully satisfied as to the facts and has so declared, without the formal proofs being presented.
It appears to me that the conclusions of my associates are in opposition to a rule that has been well established by the courts and recognized by the leading text writers: i. e., that a provision like the one here relied upon shall not be applied to stipulations touching acts to be performed after loss. This rule, and the doctrine of estoppel in pais as applied to this subject, are found in the books running at times in parallel lines and at times converging, and I shall read some authorities applicable to both phases of the subject.
I will read first a few paragraphs from Bishop on Contracts. Taking up in this small book the whole subject of contracts, of course Mr. Bishop was obliged to treat these principles with great brevity, but, under the head of Waiver, at page 308, Secs. 790 and 791, he has this to say, in part ;
“Waiver, equally with its counterpart, election, pervades nearly or absolutely every department of the law and judicial practice, civil and criminal. # * #
“The doctrine rests on one, or another, or on all in combination, of *565the following three principles, as the special facts and nature of the particular ease indicates; namely the principle of contract by mutual consent of the wills, the principle of contract created by law, and the principle of estoppel.”
Then going to See. 796:
“The principle on which, in various circumstances, a performance in time or manner differing from the stipulations which are waived, is accorded the same effect as a literal performance, is evidently that of estoppel. A party who, standing by, has concurred in and accepted what the other did in fulfillment, is not in a position to deny that the contract has been fulfilled. To illustrate,—
“'A policy of insurance specifies the time and manner of notifying the insurer of a loss, and proving it. But if, after the loss, the proper officer of the insurance company, instead of standing upon his right to have such notification and proof, goes upon the ground and agrees with the insured as to the valuation, the transaction constitutes a waiver, by the company, of the steps set down in the policy. And so does anything else of a similar sort. If, where the insurer has thus waived the steps, leaving the insured to believe them not required, the former could insist on being released from payment because they were not taken, he would have misled the latter to his great detriment, — exactly what the doctrine of equitable estoppel was introduced into the law to prevent.”
Now independently of any other consideration, and looking upon this simply as a question of estoppel, a ease where the law says, “You shall be held to have waived, and shall not be heard to deny that you have waived, because of your conduct in the premises,” it seems to me that it would be against public policy, and that therefore it would not be competent or permissible, for an insurance company to provide in its policies that it will not be bound by the equitable rules of estoppel; to say “We will not be affected by anything our general officers or general agents may do that might operate upon us as an estoppel in pais.” In my judgment stronger reasons may be adduced for holding such a provision void because opposed to public policy than those supporting the doctrine that a provision in a contract of a common carrier that it shall not be liable for lossess occurring through its own negligence, are invalid. While the company may stipulate that it will not be bound by any agreement unless it is reduced to writing, such stipulation should be qualified to the extent required to give full effect to the equitable doctrine of estoppel in pais. Without opportunity to search the books extensively for authority in support of this doctrine, enough has been found to show that it is not without support.
*566In 1 Joyce, Insurance Sec. 579, we read:
“It is held that a condition in the policy which conflicts directly with a settled rule of law will not be allowed to bind the assured, although he accept the policy, unless it appears that his attention was specially called thereto.”
The reference to authority for this statement appears to be Norman Pitney v. Insurance Co. 61 Barb. (N. Y.) 335, and from the opinion in that ease we extract the following:
“The defendant further resisted the plaintiff’s right to recover, upon the ground that the preliminary proofs of- loss were not as complete as the policy required. In the conditions of insurance it was provided that no act or omission of the company, or any of its officers or agents, should be deemed a waiver of a full and strict compliance with the requirements made concerning such proofs, except it be by a waiver in express terms, in writing, signed by the president or secretary of the company. This provision is directly in. conflict with the settled rules of law established for the government of this class of cases. And while there is no doubt but that a party may renounce the benefit of settled legal rules existing in his favor, yet before he should be held to have done so, something clearly evincing that to have been his purpose should be required to be affirmatively or positively shown. The acceptance of a policy of insurance containing a clause declaring that no act or omission of the insurers, their officers or agents, shall be deemed a waiver of compliance with requirements as to preliminary proofs of loss, unless it be by a waiver, in express terms, in writing, signed, etc., to which there is no evidence that the attention of the insured was ever in any manner directed, should never be permitted to produce such a result. The policy of the law stands directly in the way of allowing persons to be entrapped into the implied surrender of their well established legal rights by the success of any such ingenious device. If it should be allowed to prevail, the insurer would be secured a privilege which could be so used as to defeat all its undertakings, and legally .protect a career of fraud never yet sanctioned by either law or good morals.
“But in this case the insured, in the preliminary proofs furnished, expressly offered to supply ‘any other information that might be required,’ on call. Notwithstanding the'provision that the waiver of defects in the proofs must be in writing, it was still in the power of the company to waive that requirement. And by not responding to this offer while the defects could have been corrected and supplied, it should be held to have made that waiver. For, good faith, as well as every consideration of fair dealing, required it to specify the defects in the proofs *567when they were accompanied with this offer, if the company did not intend to waive any further act in that respect, on the part of the insured. (O’Niel v. Buffalo Fire Ins. Co. 3 N. Y. 122. Post v. Aetna Ins. Co. 43 Barb. 352.) The objections to these proofs came too late, and were properly overruled at the trial.”
I read from May, Insurance (3 ed.) Sec. 473d, published in 1891:
“A clause to the effect that no act of the company, except an express written declaration, shall waive the requirements in regard to proofs, will not prevent the company from estopping itself, by act in pais. So far as the clause is intended to have such effect it -is void, for a man cannot contract not to make an agreement that the law allows him to make with the covenantee. A provision in the policy that no condition shall be waived or annulled except by indorsement upon it, will not prevent the waiver of proofs of loss if the insurer without objecting to their absence joins in proceedings for adjustment. In spite of such a condition the agent may have authority to orally waive proof of loss, and the question should go to the jury. Such a provision is held not to refer to stipulations to be performed after loss, such as' giving notice and proof. ’ ’
I also read a part of Sec. 311 — under the head “Waiver; stipulation against, limitation of agent’s authority.”
“A clause in a policy of insurance that ‘nothing but a distinct specific agreement, clearly expressed and indorsed on the policy, shall operate as a waiver of any printed-or written condition, warranty, or restriction thereon,’ refers to those conditions and provisions of the policy which enter into and form a part of the contract of insurance, and are essential to make it a binding contract between the parties, and which are properly designated as conditions, and not to those stipulations which are to be performed after a loss has occurred, such as giving notice and furnishing preliminary proof of the loss.”
Now Judge Davis' says, in the course of his opinion before mentioned, that there is a line of decisions to this effect. A great many decisions to this effect are cited under the sections that I have read from May on Insurance. Others are cited by counsel for plaintiff in error. I cannot attempt to refer to or read from them without extending this opinion to too great length, but it seems to me that they lay down and establish a general rule, and that the few decisions cited from Vermont, Michigan and New York, that seem to adopt a different rule, are singular and out of line with the current of authorities; and while Judge Davis has expressed some satisfaction with these decisions, I do not understand that he attempted to adopt them on behalf of our Su*568preme Court to the full extent that they go. I understand that a fait way of considering what he said and the use he has made of them is to say that, insofar as they are necessary to sustain his opinion in this case, he adopts them; and so far as they are necessary to sustain the opinion of the court in that ease, we need not combat them, for that was a case of a mere soliciting agent, and of a different form of insurance and a different state of facts.
In the case of Ohio Farmers’ Ins. Co. v. Wilson, 70 Ohio St. 354, 362 [71 N. E. Rep. 715], Judge Davis lays down a rule for interpreting decisions that may well be applied to his opinion in Travelers’ Ins. Co. v. Myers, supra, when he says, in substance, that it is the syllabus alone for which the concurring judges are responsible, and that the syllabus must be interpreted in the light of the particular facts and circumstances of the case.
There is one authority containing language that seems to. me to be very appropriate here. It is the case of McNally v. Insurance Co. 137 N. Y. 389 [33 N. E. Rep. 475]. I will read from page 398:
“In determining the liability of the defendant it is entitled to the benefit of its contract fairly construed and can stand upon all of its stipulations. But when its liability has become fixed by the capital fact of a loss, within the range of the responsibility assumed in the contract, courts are reluctant to deprive the insured of the benefit of that liability by any narrow or technical construction of the conditions and stipulations which prescribe the formal requisites by means of which this accrued right is to be made available for his indemnification. If in this case, a right of action accrued to the plaintiff, by reason of the destruction of the property by fire on June 7, 1885, a liberal and reasonable construction of the stipulations of the contract which prescribe the formal acts on the part of the insured necessary to the recovery of the loss, is sanctioned and required by the rules of law.”
And there are a large number of eases here cited. Obviously there is a great difference between the provisions in the contract which have reference to risks assumed by the insurer, which are put in for the protection of the insurer so that the risk may not be increased without its knowledge, so that it may know and be advised all along as to the extent of its undertaking, so that there may not be binding oral stipulations upon that subject between the agents and the insured, and such provisions as apply to measures to be taken after the liability is fixed, after the fire has occurred. To the performance of these conditions subsequent, these things that are to be done in the way of furnishing the evidence of loss, it seems to me that the authorities require that very *569different rules shall be applied from those applicable to conditions of the other class, and that the courts have almost universally applied to these conditions subsequent rules that are calculated to preserve to the insured the right that has ripened into a just claim to pecuniary indemnification and that they may continue to do so without doing any injustice to the insurer whose liability has become fixed by the occurrence of the loss.