6 Div. 977.
March 19, 1925. Rehearing Denied April 16, 1925.
Appeal from Circuit Court, Winston County; Ernest Lacy, Judge.
Chester Tubb, of Haleyville, and W. F. Finch, of Jasper, for appellant.
Where an adjuster with authority to bind the company ascertains the facts and thereafter treats the policy as in force and effect, such action is a waiver of any defense to an action on the policy. Georgia Home Co. v. Allen, 119 Ala. 436, 24 So. 399; Id., 128 Ala. 451, 30 So. 537; Cassimus v. Scottish Union, 135 Ala. 256, 33 So. 163; Southern States Co. v. Kronenberg, 199 Ala. 164, 74 So. 63; New Brunswick Co. v Nichols, 210 Ala. 63, 97 So. 82. Where there is any evidence tending to establish liability, it is error to give the affirmative charge for defendant. Ray v. Fidelity-Phœnix, 187 Ala. 91, 65 So. 536; Fidelity-Phœnix Fire Ins. Co. v. Ray, 196 Ala. 425, 72 So. 98; Penna. Fire Co. v. Draper, 187 Ala. 103, 65 So. 923; Southern States Co. v. Kronenberg, supra. Where an agent, with knowledge of some condition which would avoid liability, issues a policy of insurance, such actions constitutes a waiver of the right to insist upon forfeiture upon such grounds. Authorities first cited.
Coleman, Coleman, Spain Stewart, of Birmingham, and Curtis, Pennington Pou, of Jasper, for appellee.
Plaintiff's books of account did not comply with the Iron Safe Clause of the policy. Fidelity-Phœnix Co. v. Williams, 200 Ala. 679, 77 So. 156; Ins. Co. v. Williams, 200 Ala. 681, 77 So. 159; Fire Association v. Williams, 200 Ala. 688, 77 So. 166; Home Ins. Co. v. Williams, 237 F. 171, 150 C. C. A. 317; Chamberlain v. Shawnee Co., 177 Ala. 516, 58 So. 267; Georgia Home Co. v. Allen, 119 Ala. 444, 24 So. 399; Monger v. Delaware Ins. Co., 97 Tex. 362, 79 S.W. 7; Jones v. Ætna Ins. Co., 201 Ill. App. 142. The filing of sworn statement of loss is a condition precedent to recovery. Fire Ins. Co. v. Felrath, 77 Ala. 194, 54 Am. Rep. 58; Central City Co. v. Oates, 86 Ala. 558, 6 So. 83, 11 Am. St. Rep. 67. An adjuster may investigate without waiting forfeiture. Day v. Home Ins. Co., 177 Ala. 610, 58 So. 549, 40 L.R.A. (N.S.) 652.
As observed by counsel, the pleadings in this cause are multitudinous, but the real issues to be tried were few and simple.
The undisputed evidence showed that plaintiff violated two provisions of the "iron safe clause" in his insurance policy, in that he kept no books and no complete records of his business transactions, and in that such records or memoranda as he kept were not kept in a fireproof safe, or at some other place not exposed to a fire that would destroy the store building. Plaintiff seems to have adopted, in a very imperfect way, what is known as the McKaskey register system of bookkeeping, which has been recently condemned as an insufficient compliance with this clause, by other courts as well as our own. Hanover Fire Ins. Co. v. Wood, 209 Ala. 380, 96 So. 250; Jones v. Ætna Ins. Co., 201 Ill. App. 142; Hughes v. Ætna Ins. Co. 148 Tenn. 293, 255 S.W. 363.
The evidence further showed without controversy that plaintiff wholly failed to render any sworn statement to the defendant insurance company of the knowledge and belief of the insured as to the time and origin of the fire, the interest of the insured or of others in the property, and of the several other matters required to be thus reported.
Plaintiff sought to avoid the effect of these breaches by showing that defendant sent an authorized adjuster to the scene of the fire about 10 days after its occurrence, who, by his conduct and declarations, with knowledge of the breaches, treated the policy as valid, and thereby waived the breaches — the more particular insistence being that this adjuster, after a full examination and understanding of the case estimated plaintiff's loss, and offered to pay him a stated sum in settlement.
This contention of plaintiff's presented the only real issue in the trial of the case — the questions being (1) whether the adjuster in fact said or did anything, with the knowledge of the several invalidating breaches, which could amount to a waiver of them; and (2) if so, was the implied waiver avoided in any event by the written nonwaiver agreement made by plaintiff with the adjuster on the occasion of the first conversation between them relative to the loss?
The only evidence on these issues is found in the testimony of the plaintiff himself. It will be noted that, as soon as the adjuster was informed of the breaches of the iron safe clause, he told plaintiff that he could not go any further with the adjustment; and, in the same conversation, a few minutes later, in order to avoid the implication of a waiver from his acts and declarations while pursuing his investigation of the case, he entered into the nonwaiver agreement with plaintiff.
That agreement was of the broadest character, and it was clearly sufficient, in accordance with its expressed intention to "permit an investigation of the claim and the determination of the amount of the loss or damage, * * * without prejudice to any rights or defenses which said [defendant] * * * might have." And during the period, and within the scope, of its intended operation, it must be held as effective for that purpose. Ins. Co. v. Williams, 200 Ala. 681, 77 So. 159. Merely equivocal conduct will never permit an implication of waiver or surrender of rights in the face of an explicit contemporaneous denial of any intention so to do. And, indeed, without any nonwaiver agreement, the adjuster might have made any examination he deemed appropriate of the circumstances of the fire, the conduct of the insured, and the amount of the loss, without waiving breaches, even though they were known to him. Day v. Home Ins. Co., 177 Ala. 611, 58 So. 552, 40 L.R.A. (N.S.) 652.
We deem it hardly necessary to remark that the evidence — plaintiff's own testimony — shows conclusively that there was no fraud or duress of any sort practiced on plaintiff in procuring his signature to the nonwaiver agreement, and he must be bound by it according to its legal effect. The case of Penn. Fire Ins. Co. v. Draper, 187 Ala. 103, 114, 65 So. 923, cited by counsel for appellant, involved a much narrower nonwaiver agreement, and also much broader acts indicative of waiver, as pointed out by Thomas, J., in Insurance Co. v. Williams, supra. It is not apt for authority here. However, the authorities are unanimous in holding that a nonwaiver agreement —
"does not prevent a waiver by subsequent independent acts or statements of insurer through its adjuster or other agent having authority to act in the premises." 26 Corp. Jur. 406, § 519, and cases cited under note 58.
The evidence does not show any offer or promise by the adjuster to pay the loss, after the execution of the nonwaiver agreement; for, in view of plaintiff's narrative of his interview with him on his second visit, the adjuster did no more than to state his estimate as to the amount of the loss, and to impliedly invite an offer from plaintiff on that basis.
We think it is conclusively apparent that none of the inquiries or statements made by the adjuster during the first interview with plaintiff, relative to the fire, or the conduct of plaintiff, or for the ascertainment of the amount of the loss, can support the implication of a waiver of any of the breaches of the "iron safe clause."
The final inquiry, therefore, is, Was there any independent promise made by the adjuster, during that first continuous conversation of 30 minutes, to pay the policy loss, which amounted to a recognition of the validity of the policy, and therefore to a waiver of the known breaches? And, if so, was such implied waiver revoked or avoided by the nonwaiver agreement entered into by the parties at the conclusion of that interview?
There is perhaps some confusion in the language of our cases with respect to what conduct on the part of an insurance adjuster, who has full knowledge thereof, will or may operate as a waiver of breaches of the policy, though all of them seem to agree that treating the policy as valid, or as being still in force, will have that effect. Queen Ins. Co. v. Young, 86 Ala. 424, 430, 5 So. 116, 11 Am. St. Rep. 51; Homer Ins. Co. v. Allen, 119 Ala. 436, 24 So. 399; Id., 128 Ala. 451, 30 So. 537.
But manifestly there can be no implication of waiver unless the acts or declarations of the adjuster are inconsistent with a denial of the validity of the policy. Plaintiff relies on the statements, imputed by him to the adjuster, that "the company would treat him right, and would pay him what was due"; and further, that "the company would pay him the amount due on the policy."
If it be conceded, for present purposes only, that these statements, standing alone, imported an unconditional promise to pay to plaintiff the amount of his loss, whatever that future adjustment might show it to be, and so constituted an implied recognition of the policy as valid, notwithstanding plaintiff's known breaches of the iron safe clause, yet we think they must be considered, along with the nonwaiver agreement, as part of a single conversation and transaction, and, so considered, the implication, otherwise permissible, is clearly rebutted. As said in Queen Ins. Co. v. Young, 86 Ala. 424, 432, 5 So. 116, 119 (11 Am. St. Rep. 51):
"It may be that if the company, with knowledge of the forfeiture, had authorized an agent to adjust the loss, a liability and a promise to pay would ordinarily be implied; but the implication may be rebutted, either by the terms of the policy, or by an agreement reserving the question of liability."
Moreover, it has been soundly held that there may be a waiver of a waiver by a subsequent agreement of the parties, as in this case. 26 Corp. Jur. 393, § 505, citing Ins. Co. of Nor. Amer. v. Caruthers (Miss.) 16 So. 911. This is not to impugn the rule that a waiver once made cannot be withdrawn by the waiving party. But a joint agreement is a different matter.
Upon the foregoing considerations, our conclusion is that there was no effectual waiver or breaches by the defendant's adjuster Cotter, nor by the defendant in any way; and it results that the general affirmative charge was properly given for the defendant.
Appellant's brief invites a review of all the numerous rulings of the trial court on the pleadings. Such a labor would be useless, however, since under the principle of error without injury we would inevitably reach the result already announced.
One specific insistence is that the general affirmative charge was erroneously given for defendant, for the reason that plaintiff's replications 11 and 12, setting up a waiver of breaches by defendant, were supported by the evidence, and, on the other hand, none of defendant's several rejoinders, setting up the nonwaiver agreement, were fully or conclusively proved. This contention cannot be sustained. The allegation in each of plaintiff's replications, that the adjuster "treated the policy as valid and binding," was denied by the general issue pleaded to them by defendant, and the evidence, as we have pointed out, does not support that allegation. Moreover, defendant's rejoinders 10 and 11 were substantially proved, without dispute, by the testimony of plaintiff.
The real issues seem to have been correctly decided on their merits, and we find no prejudicial error to warrant a reversal of the judgment.
ANDERSON, C. J., and THOMAS and BOULDIN, JJ., concur.