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Matthews v. American Central Ins. Co.

Court of Appeals of the State of New York
Dec 7, 1897
154 N.Y. 449 (N.Y. 1897)


In Matthews v. American Central Insurance Co., 154 N.Y. 449, 456-57, 48 N.E. 751 (1897), the New York Court of Appeals explained that, because insurers generally prepare policies, "when the meaning is doubtful, it should be construed most favorably to the insured, who had nothing to do with the preparation thereof.

Summary of this case from Haber v. St. Paul Guardian Ins. Co.


Submitted October 22, 1897

Decided December 7, 1897

J.F. Parkhurst for appellant. I.N. Ames for respondent.

The policy in question provided that if a fire should occur "the insured" should "give immediate notice of any loss thereby in writing to" the company, and "within sixty days after the fire" should furnish proofs of loss "signed and sworn to by said insured." It further provided that the loss should not become payable until sixty days after the receipt by the company of the proofs of loss, and that "no suit or action on this policy, for the recovery of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless commenced within twelve months next after the fire." By a subsequent clause it was stipulated that whenever the word "insured" occurred in the policy it should "be held to include the legal representatives of the insured," and by a preceding clause that any change in interest, title or possession, "other than by death of the insured," should avoid the policy.

As the fire occurred after the death of Mrs. Silvernail, "the insured" at the date of the loss was either the person who, in the course of time, should be appointed by the surrogate to administer upon her estate, or the persons interested in her estate who expected to share therein. (13 Am. Eng. Ency. of Law, 221; 21 id. 18; Greenwood v. Holbrook, 111 N.Y. 465.) As "legal representatives" are equivalent to "executors and administrators," where the subject-matter or context do not control the meaning, we will first proceed upon the assumption that, on the death of the testatrix, the words "the insured," as used in the policy, referred to the legal representative to be appointed by the surrogate. That person could not, in the nature of things, be known until the appointment was actually made, as, in the case of testacy, the executor nominated might die or decline, and, in case of intestacy, none of the persons entitled to the right of administration might accept the trust. The policy, although of the standard form, was prepared by insurers, who are presumed to have had their own interests primarily in view, and hence, when the meaning is doubtful, it should be construed most favorably to the insured, who had nothing to do with the preparation thereof. ( Rickerson v. Hartford Fire Ins. Co., 149 N.Y. 307, 313; L. 1886, ch. 488; L. 1892, ch. 690, § 121.)

Moreover, when a literal construction would lead to manifest injustice to the insured and a liberal but still reasonable construction would prevent injustice by not requiring an impossibility, the latter should be adopted, because the parties are presumed, when the language used by them permits, to have intended a reasonable and not an unreasonable result. ( Trippe v. Provident Fund Society, 140 N.Y. 23, 26; McNally v. Phœnix Ins. Co., 137 N.Y. 389.) Hence, it cannot be held that the policy became of no value upon the death of Mrs. Silvernail, because, at that moment she had, and of necessity, could have, no legal representative to give immediate notice of a fire if one had occurred. So, when the fire actually occurred there was still no legal representative to give the notice specified, yet the liberal construction that always obtains with reference to the procedure after a loss, does not permit us to hold that the policy became void because, under the circumstances then existing, the notice was not given at once. ( Paltrovitch v. Phœnix Ins. Co., 143 N.Y. 73, 76.) As the policy provides for the effect of death, and includes, under the head of "the insured," the legal representative of the insured, the parties necessarily contemplated a period longer or shorter in duration, depending upon circumstances, when there could be no one authorized to act for the estate. Hence, the covenants that "the insured" should give written notice immediately after the fire, and that within sixty days "the insured" should sign, swear to and deliver proofs of loss, are to be considered in the light of what may reasonably be presumed to have been within the contemplation of the parties when they entered into those covenants, as to the possibility of literal performance in case of a fire after the death of the original "insured" and before any opportunity to have a legal representative appointed by the surrogate. The words "immediately after the fire," as used with reference to the preliminary notice, and "sixty days after the fire," as used with reference to the proofs of loss, are to be construed, not literally in all cases, but in the light of what was reasonable and possible in the case in hand. ( Bennett v. Lycoming C.M. Ins. Co., 67 N.Y. 274; Richards on Insurance, § 160.) The law does not require impossibilities. The disability to sue, caused by war, has been held to relieve a policyholder from the consequences of failing to bring suit within twelve months after a loss, as required by the policy, because compliance was impossible under the circumstances. ( Semmes v. Hartford Ins. Co., 13 Wall. 158.) The same cause was held for the same reason to legally excuse the non-payment of premiums upon a policy of life insurance as required by its terms. ( Cohen v. N.Y. Mut. Life Ins. Co., 50 N.Y. 610.) Still, as the covenants in question are essential to the safe conduct of the insurance business, in order to enable the insurer to promptly investigate the facts connected with a fire, to provide for paying or defending, or for rebuilding, if it so elected, it is incumbent upon those interested in the policy to make reasonable efforts to see that the covenants are kept and, within a reasonable time, to use such agencies as the law provides, in order that they may be kept, if possible. As was said by this court in Wheeler v. Conn. Mut. Life Ins. Co. ( 82 N.Y. 543, 550), with reference to the failure to pay premiums of life insurance owing to the insanity of the insured and the infancy of the assignees of the policy: "After Vose became insane he was not really the party in interest. He had assigned the policies to his children, and they were the parties interested therein and to be affected by a failure to perform the condition of the contract. Although Vose was their guardian, if incapacitated by his insanity a competent person could have been appointed in his place; and hence his insanity was not necessarily an insuperable obstacle to their performance of the condition of the policy, and they were not relieved thereby." Those who expect to share in the proceeds of the policy, when paid, cannot trifle with the subject nor delay action that would naturally result in compliance with the requirements of the contract. If the appointment of an executor or administrator cannot for any reason be secured with ordinary promptness, it would not be a reasonable construction of the policy to cast all the risk and inconvenience of the delay upon the insurer, provided those interested in the estate could procure the appointment of a temporary representative, who, by taking the necessary steps, could keep the covenants entered into by the insured.

It is provided by section 2670 of the Code of Civil Procedure that, on the application of a creditor, or a person interested in the estate, the surrogate may in his discretion issue to one or more suitable persons letters of temporary administration, where delay necessarily occurs in the granting of letters testamentary or of administration owing to a contest before the surrogate, arising on an application therefor or for probate of a will, or for any other cause. At least ten days' notice must be given to each party to the proceeding who has appeared, but the period may be shortened to not less than two days by the surrogate upon proof that the safety of the estate requires it. A temporary administrator, thus appointed, "has authority to take into his possession personal property; to secure and preserve it; and to collect choses in action; and, for either of those purposes, he may maintain any action or special proceeding." (§ 2672.) It is further provided that, "where a temporary administrator is appointed, in consequence of a contest respecting a will of real property, the order appointing him may confer upon him authority to take possession of real property, in the same or another county, which is affected by the will, and to receive the rents and profits thereof. The surrogate may, by an order, confer upon him authority to lease any or all of the real property, for a term not exceeding one year; or to do any other act with respect thereto, except to sell it, which is, in the surrogate's opinion, necessary for the execution of the will, or the preservation or benefit of the real property. For either of these purposes, he may maintain or defend any action or special proceeding." (§ 2675.) While other powers are conferred by statute, or may be conferred by the surrogate, under its authority, upon a temporary administrator, these are sufficient for the purpose of discussing the question now before us.

The will of Mrs. Silvernail embraced both real and personal property, including by specific mention the farm upon which the burned buildings stood, and indirectly the produce destroyed, through the power to sell the same in order to pay pecuniary legacies. The executor was given the right to sell the farm after five years, with power to lease the same in the meantime. The income, after deducting interest and taxes, was to be applied upon the incumbrances, and the proceeds of the sale, after payment of all the debts of the testatrix, were to be divided among her children.

A fire insurance policy, after a loss has occurred, is a chose in action, and a temporary administrator could collect the same and, if necessary, commence an action for that purpose. Whether the proceeds, when collected, would be real or personal property, or both, is unimportant in this case, as the power to collect is the vital fact. That power necessarily implies the further power to do whatever is requisite in order to perfect the chose in action so that collection can be enforced, for the power to do an act includes the power to do all that is reasonably necessary to do it effectively. ( Hall v. Lauderdale, 46 N.Y. 70, 73; Parker v. Supervisors, 106 N.Y. 392.) Independent, therefore, of the provisions of the statute empowering the surrogate to confer authority upon the temporary administrator in regard to real estate, when there is a contest respecting a will of realty, we think that the right to collect the policy carried with it the right to serve all such notices as the policy required, in order to make it collectible. Hence, it was within the power of the persons expecting to share in the property of the testatrix to do something toward keeping her covenants with the defendant. While it is true that their application, if made to the surrogate, was subject to his discretion, it cannot be presumed that he would have hesitated to appoint a temporary administrator if the facts, bearing upon the subject, were spread before him that appear in the record now before us. ( McGregor v. Buel, 24 N.Y. 166, 169.) Moreover, even if the application, although made in due time and form, had failed, it would have relieved the beneficiaries under the will from the accusation of negligence that is now brought against them, for they could say in answer thereto, "We have done all that we could." No excuse, sufficient or otherwise, for non-action was shown, such as absence, insanity, infancy, or want of knowledge that the fire had taken place. The subject of applying for a temporary administrator was under discussion among the heirs while the contest over the will was in progress. Not long after Mrs. Silvernail died, the plaintiff deposited the will with the surrogate, and informed him that he did not want to have anything to do with it, but after the lapse of several months, upon the request of certain creditors of the testatrix, he consented to act, and thereupon proceedings were begun to prove the will. Mrs. Silvernail left three children, each of whom was a devisee or legatee under the will, and all were of full age and competent to act, except one, who was an infant of thirteen when her mother died. Two of them, at least, lived within sight of the building in question at the time of the fire. So far as appears, therefore, there was no reason why a temporary administrator should not have been applied for and appointed. The contingency of death was foreseen and provided against by provisions in the policy which kept it alive notwithstanding that event. ( Dolan v. Rodgers, 149 N.Y. 489; Dexter v. Norton, 47 N.Y. 62.) The legal representative was by the contract substituted as "the insured," upon whom rested the burden of performing those covenants which Mrs. Silvernail had entered into. The insurance company was under no obligation to procure the appointment of an administrator, temporary or permanent, even if it had been in a position to, because its promise to pay was dependent on prior action by the insured, but those entitled to the proceeds of the policy when paid were bound to do so, if they could by reasonable effort, so that the agreement could be performed on the part of "the insured."

If the executor could have acted by virtue of the power conferred by the will, without probate or other action by the surrogate, his default is too apparent to require discussion.

Upon the assumption that the legal representatives of the insured, referred to in the policy, included the heirs at law, next of kin, legatees or devisees, as the case may be, the situation of the plaintiff is not improved, because, according to that theory, there was no time when competent persons, sustaining one or more of those relations to the decedent, with full knowledge of all the facts, could not have given the preliminary notice and furnished the proofs of loss. ( Wyman v. Wyman, 26 N.Y. 253; O'Brien v. Phœnix Ins. Co., 76 N.Y. 459; Greenwood v. Holbrook, 111 N.Y. 465.) The delay in serving notices and in bringing the action was in no respect owing to the defendant, which, so far as appears, did nothing to mislead any one, or to waive the defenses it now insists upon.

Some evidence was giving tending to show that a son of the testatrix, about ten days after the fire, signed and swore to a statement of the loss and delivered it to an aunt, but he could not tell what she did with it. She died before the trial and there was no satisfactory evidence to show that the statement sworn to by the son ever reached the defendant. One witness testified that he saw a lady, who, as he thought, was a "Silvernail," deliver a paper to a man who claimed to be an adjuster and that they talked about the loss. The nature or contents of the paper was not shown and it did not appear that the man was an adjuster for the defendant, except by the verification of the answer, which was not put in evidence. But even assuming that there was evidence to sustain a finding that both the preliminary and final notice of loss were given to the defendant as required by the policy, the fact remains that this action was not begun until long after the time limited for that purpose had elapsed, and yet no lawful reason is given for not procuring temporary administration in time to have sued within the stipulated period.

Therefore, whether the policy means by legal representative the appointee of the surrogate, or some person directly interested in the estate, or both, there was a failure to comply with its provisions, with no excuse for non-compliance. The "insured" was bound by contract to do certain acts, as conditions precedent to the right to recover, and was under a legal obligation, if there were obstacles in the way, of making a reasonable effort to remove them. ( Howland v. Edmonds, 24 N.Y. 307, 308; Porter v. Kingsbury, 71 N.Y. 588; Reining v. City of Buffalo, 102 N.Y. 308.) If, after due diligence, they had proved insurmountable for a time, the delay would have been excusable, and performance at the earliest practicable moment thereafter would have been sufficient, but to excuse non-performance it must appear that the act to be done could not, by any reasonable means, have been accomplished. Mere difficulty of performance is not enough. ( Wheeler v. Conn. Mut. L. Ins. Co., 82 N.Y. 543, 551.) In Sanford v. Sanford ( 62 N.Y. 553) it appeared that the defendant's intestate was adjudged an idiot in 1847, and that the committee then appointed died in 1854. The intestate died December 9, 1864, and during the ten years preceding his death he had boarded with the plaintiff and was clothed and cared for by her, and she paid his necessary funeral expenses, yet it was held that the Statute of Limitations applied to the whole claim accruing before the death of the intestate. Judge ALLEN said: "There was no legal impediment to an action against the intestate. Had there been a committee in office, the creditor could have petitioned the court either for a summary adjustment and payment of her claim, or for leave to sue. As there was no committee, although it seems the judgment of the court, determining that the debtor was non compos mentis, was in force, the plaintiff might have applied to the court for leave to sue, or, perhaps, have brought an action without such leave. One or the other of these courses was open to the plaintiff, and which would have been the proper practice it is not necessary to determine."

The failure to apply for a temporary administrator and to endeavor through him to give the notices required by the policy and essential to perfect the cause of action, and then to have suit brought therefor within the period stipulated, was absolute and without excuse, and hence the plaintiff, upon the facts now presented, was not entitled to recover. The motion for a nonsuit, which raised generally or specifically all of the defenses discussed, should have been granted because it affirmatively appeared that the conditions of the policy had not been complied with by "the insured."

The judgment of the Appellate Division not only sustained the exceptions taken by the defendant upon the trial, but also dismissed the complaint on the merits. This it had no power to do. The Code of Civil Procedure provides two methods of review by the Appellate Division, before the entry of judgment, when the trial was before a jury. The first is authorized by section 1000 which permits the presiding judge, in his discretion, to order that the exceptions taken during the trial be heard in the first instance by the Appellate Division and that judgment be suspended in the meantime. In such a case, as the section further provides, "the exceptions must be heard upon a motion for a new trial, which must be decided by the Appellate Division." The decision should either grant or deny the motion. If the exceptions were well taken, the motion should be granted and the case sent back for a new trial. If the exceptions were not well taken, the motion should be denied and judgment entered on the verdict, or the order of nonsuit as the case may be. ( Huda v. American Glucose Co., 151 N.Y. 549.) The only function of the Appellate Division is to grant or deny the motion and order judgment accordingly. It cannot go farther and dismiss the complaint on the merits, because the Code does not authorize it. The verdict or order is the authority for the entry of a final judgment, and if the exceptions are not sustained the judgment must be in favor of the party for whom the verdict was rendered, while, if the exceptions are sustained, there can be no final judgment, but simply the award of a new trial.

The second method of reviewing before judgment is when a verdict is taken subject to the opinion of the court as authorized by section 1185 of the Code. In such a case the motion is not for a new trial, but for judgment, and it may be made by either party before the Appellate Division under section 1234. The decision of a motion of that kind necessarily involves a direction for judgment.

As the case now before us arose under section 1000, the action of the learned Appellate Division in dismissing the complaint was inadvertent and without authority.

The judgment appealed from should, therefore, be so modified as to sustain the defendant's exceptions and order a new trial, and as so modified affirmed, with costs to abide event.

In this case the cause of action did not accrue until after the death of the testatrix. At that time there was no person who was authorized to enforce or comply with the provisions and requirements of the policy. Until a representative of the estate of the testatrix was appointed, who was authorized to commence an action and perform the conditions of the policy, neither the contractual limitation commenced to run nor was the previous non-performance of its condition a bar to the action. The fact that the appointment of a temporary administrator might have been applied for does not change the situation. Whether an administrator would be appointed rested wholly in the discretion of the surrogate, and no certainty that it would have been done existed at any time. The creditors and other persons interested in the estate were not required to make that experiment to protect their rights under the policy.

I think the judgment should be reversed.

VANN, J., reads for modification and affirmance; ANDREWS, Ch. J., GRAY, BARTLETT and HAIGHT, JJ., concur; MARTIN, J., reads memorandum for reversal, and O'BRIEN, J., concurs.

Judgment modified and affirmed.

Summaries of

Matthews v. American Central Ins. Co.

Court of Appeals of the State of New York
Dec 7, 1897
154 N.Y. 449 (N.Y. 1897)

In Matthews v. American Central Insurance Co., 154 N.Y. 449, 456-57, 48 N.E. 751 (1897), the New York Court of Appeals explained that, because insurers generally prepare policies, "when the meaning is doubtful, it should be construed most favorably to the insured, who had nothing to do with the preparation thereof.

Summary of this case from Haber v. St. Paul Guardian Ins. Co.
Case details for

Matthews v. American Central Ins. Co.

Case Details

Full title:WILLIAM MATTHEWS, as Executor of CAROLINE SILVERNAIL, Deceased, Appellant…

Court:Court of Appeals of the State of New York

Date published: Dec 7, 1897


154 N.Y. 449 (N.Y. 1897)
48 N.E. 751

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