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McCann v. ÆTNA Ins. Co.
The bill must be dismissed with costs, and it is so ordered.
J. D. McCANN et al. y. ÆTNA INSURANCE COMPANY.1
Held, that in an action against an insurance company ta compel it to issue a policy
upon an alleged contract of insurance, there must be conclusive proof that such contract was actually made. Held, that due notice of loss, and statements supported by affidavits, are conditions precedent to recovery. APPEAL from district court of Otoe County. Shambaugh $ Richardson, for plaintiffs. S. H. Calhoun, for defendants. GANTT, Assoc. J. The plaintiffs claim that on the 11th day of October, 1865, they made a verbal application to the agent of defendants for an insurance on the one half of the steamboat Sunset, and that the defendant by its agent, James Sweet, accepted such application and agreed to take the risk. The defendant denies the alleged contract of insurance on the steamboat, and makes several other defences. Considerable testimony was taken in the case, but the substance of all the testimony in spect to the alleged contract is that of McCann, one of the plaintiffs, that on the day above stated he went to the office of James Sweet, the agent, and by verbal agreement with him as the agent, he effected an insurance on the one half of the steamboat in the Ætna Insurance Company, and that this conversation was the only one in which he made a direct application for such insurance. Also that of James Sweet, the agent, that no such contract of insurance was made ; that he told Mr. McCann he could not issue such policy, but that he could take his application and send it to the office of the general agent, and that McCann quickly left his office, without leaving a written application. And that of S. H. Calhoun, stating that he was in the office of Sweet at the time the conversation occurred between McCann and Sweet, and that Sweet formally told McCann he would write to the company, and see if they would take the risk ; that he expressly said he could not issue a policy on the hull of the boat, but it must be done by the home office, and that McCann left the office within five minutes after he entered it. It seems that Calhoun was the only person present at the time of the conversation between McCann and Sweet, and therefore all the testimony in regard to the conversation and
1 Opinion filed January 15th, 1874. To appear in Vol. 3, Nebraska Reports.
McCann V. ÆTNA INs. Co.
(No. 5. the alleged contract of insurance is that of these three persons. We think the testimony is not sufficient to maintain the allegations of the petition. That of McCann stands without any support whatever, while that of Sweet is corroborated by that of Calhoun. And the most favorable construction which can possibly be put upon all this testimony for the plaintiff still leaves the matter in very great doubt. In Suydam v. The Columbus Ins. Co. 18 Ohio, 459, the rule is laid down that in an action against an insurance company to compel it to issue a policy upon an alleged contract of insurance, such action cannot be sustained unless there is conclusive proof that such contract was actually made. If the matter is left in doubt upon the whole evidence, the suit must be dismissed. Neville et al. v. The Merchants' and Manufacturing Ins. Co. 19 Ohio, 452; 2 Parsons on Con. 351. But suppose the evidence were sufficient to establish a parol contract of insurance between the parties, have the plaintiffs placed themselves in a position to secure a right of action and to maintain their suit to recover damages for the loss sustained by the sinking of the boat? The assured, sustaining loss, is required forthwith to give notice to the company or its agent, and as soon as possible thereafter to make and deliver in a particular account of such loss, signed and sworn to by him, together with a statement of the whole value of the subject insured, his interest therein, and when and how the loss originated so far as he knows or believes. All these requirements are conditions precedent to be performed on the part of the assured, and until such statements and proofs are produced, the loss shall not be deemed payable. It is said that the " assured cannot be presumed ignorant of the usages of the office to which he applies for insurance," and the law will not permit him on the ground of ignorance to claim exemption from producing the notice, statements, or preliminary proof, so indispensable to his demand of payment; at least all such proofs as may be in his knowledge or possession touching the nature and extent of the loss. And it seems to be the well settled doctrine in this country that the notice and statements supported by oath are conditions precedent, and must be performed before the assured is entitled to receive payment or to sue for the loss, unless the company, by some act on its part, waives the performance of said condition. Angell on Ins. sec. 226 ; Columbia Ins. Co. v. Lawrence, 2 Peters, 53; Same v. Same, 10 Peters, 513; Haff v. Marine Ins. Co. 4 John. 135.
In the case at bar, it appears from the proofs that the plaintiffs did not comply with these conditions precedent, except that a copy of protest was either left with or shown to the agent. If in law the plaintiff could, on the ground of ignorance, claim exemption from producing the preliminary proofs, yet in this case they could not be permitted to plead ignorance, for the proofs show that they were fully notified to produce such statements.
J. B. Bennett, general agent of the company, testifies that McCann called at his office, in Cincinnati, Ohio, and in their conversation he " distinctly requested him to submit the proofs of his loss, to reduce his statements of facts to writing and verify them by oath, to produce a protest, and submit any facts bearing directly or indirectly on his claim.” McCann in his testimony fully corroborates this testimony of Bennett;
says Bennett informed him “ that no statement of the facts or proofs had been received by him, and that he could not settle the matter; that
PERRY v. Smoot.
there were many questions arising from the peculiar facts of the case,” &c. ; that he “ returned to Nebraska City, called on Mr. Sweet, and asked him if he was prepared to pay the loss. He said he was not, and I brought the suit against the defendants.” The statements, &c., were demanded of McCann, and he refused to furnish them, and therefore the loss alleged to have been sustained by the sinking of the boat was not payable; and without the production of these proofs, certainly, the agent night well say he was not prepared to pay the loss.
The failure of the plaintiffs to produce those preliminary proofs we think are sufficiently pleaded in the answer. It is true the defendants plead other defences in their answer, but that does not relieve the plaintiffs from the performance of the conditions precedent. “Good faith and fair dealing is of the essence of the contract of insurance,” but the evidence shows that the plaintiffs have not so acted in the premises. They failed to produce the preliminary proofs, and when requested so to do, they refused and brought their suit; and as the alleged loss is not payable until these conditions precedent are performed, they cannot maintain their action.
Judgment affirmed. MAXWELL, J., concurs.
SUPREME COURT OF APPEALS OF VIRGINIA.
[MARCH TERM, 1873.]
DUTY TO INVEST.
PERRY V. SMOOT et als.
S. made his will in 1858, and died in July, 1867. He gave to his daughters S. and
C. each ten thousand dollars, to be realized out of his estate by sale or otherwise, as early as practicable after his decease ; and directed his executors to invest the said legacies in the bonds of the State of Virginia, in the names of S. and C. The residue of his estate he gave to his two sons, who were his partners in business, and who he appointed executors. When S. died his daughter C. was over twentyone years of age, and capable of understanding her rights. The executors did not invest the $10,000 left to her, but retained it in their hands with her knowledge, and as they aver, by express agreement with her, and paid her the interest regularly upon it. Held, in the condition of the country from 1867 to 1870, the executors were well justified in not investing the money in state bonds.
CHARLES C. Smoot, a citizen of Alexandria, died in July, 1867, leaving a will which was executed in 1858. For years before the date of his will and until his death he was engaged in a mercantile business with his two sons, Charles C. Smoot, Jr., and John B. Smoot, as partners. By his will he gave two houses and lots in the city of Alexandria to his daughter Mary Ann, the wife of John Perry, and he gave to his two unmarried daughters, Susannah Adelaide, and Catherine Florence Smoot, each the sum of ten thousand dollars, to be realized out of his estate by sale or otherwise, as early as practicable after his decease; and he directs his ex
PERRY v. Smoot.
ecutors to invest the said legacies in the stock or bonds of the State of Virginia, and in the names of his said daughters Susannah Adelaide and Catharine Florence severally, which said legacies he gave to his said two daughters for their sole and separate use and property, free and exempt from the debts, liabilities, and control of any husband either of them may marry, with power of disposition either in their life-time or by last will. He gave all the rest of his estate, both real and personal, to his two sons Charles C. and John B. Smoot; and he appointed them his executors.
In 1869 Catharine Florence Smoot having married Wm. Perry, a suit was instituted by them, and afterwards in the name of Catharine Florence by her next friend, against Charles C. and John B. Smoot, as executors of Charles C. Smoot deceased ; and in the bill it was charged that the testator left an estate of not less than $150,000; that the investment of the $10,000 left the plaintiff might have been made within six months after his death ; but the executors had chosen to retain the money in their own hands, paying her simply six per cent. interest upon it; that in failing to make the investment they had been unfaithful to the trust reposed in them, and had greatly injured the plaintiff. The prayer of the bill was that the defendants may be required to purchase for the plaintiff as much state stock as might have been purchased with $10,000 at the time the investment ought to have been made, and for general relief.
The executors answered the bill. They say that the estate of their testator was worth about $60,000, instead of $150,000. That the devise to Mary Ann Perry and Susannah Adelaide who had married Thomas Perry, had long since been paid and satisfied. That the plaintiff at the death of their testator was twenty-three years of age, intelligent, and fully informed of her rights; that the respondents paid her the interest on the $10,000 from the death of their testator, and she received the same in accordance with an agreement between them to that effect. It is true that they had not invested the $10,000 as directed by the will; but this was because the plaintiff, after a full discussion of the subject, shortly after the testator's death determined to leave it in the hands of the respondents on legal interest, until she should require it to be otherwise disposed of or invested ; of which she agreed to give them reasonable notice. This notice came on the 1st of April, 1869, in the shape of a demand from her husband, about two months after his marriage with the plaintiff, for the payment of the money to himself; and his suit was brought in two days after that demand. They deny that the plaintiff has been injured by the non-investment of the said $10,000 in Virginia stock. In 1858, when the will was made, state stock was considered a safe and profitable investment; but in 1867, when the respondents commenced executing the will, they did not, in view of the great changes that had taken place since the will was made, and of the depreciated and unsettled condition of such stock, feel authorized to invest $10,000 in such unreliable and unprofitable property; and they were therefore gratified when the plaintiff, long prior to her marriage, agreed that the said money should remain in the hands of the respondents on legal interest. How it shall be invested they submit to the court.
In August, 1869, and before the defendants ħad filed their answer, the court made a decree in the cause, directing a commissioner to settle the account of the administration of the executors, and to ascertain and report
PERRY v. Smoot.
the amount of property of every kind that came into their hands, with the description thereof; the earliest practicable time after the death of the testator at which the sum of $10,000 directed by the will to be invested in Virginia state stocks, for the sole and separate use of the plaintiff, could have been realized out of the estate of the testator by sale or otherwise; the inarket value of Virginia state stock at that time; the lowest market value of said stocks at any time between the periods at which the said $10,000 could have been realized and the date of the decree; and what would have been the present value of $10,000 worth of registered stocks of the State of Virginia if the saine had been purchased as directed by the will of the testator, and what amount of interest would have been collectable on the same up to the date of the decree.
The commissioner reported that the estate of the testator consisted at his death of real estate $12,900, of bonds of the State of Virginia and other stocks $4,195,64, and of his interest in the partnership $15,000 = $62,195.64 ; that the $10,000 might have been realized and invested within six months from the death of the testator; that the market value of Virginia State stock at the end of six months from the testator's death, was thirty-seven cents; the lowest value up to the time of the decree was thirty-six cents ; and assuming the lowest value as the proper basis of the settlement, he ascertained the amount of principal which the $10,000 would have purchased at $27,777.77 ; or in United States currency $13,055.55; the interest paid by the State on that ainount at $791.67 ; and the interest placed to the credit of the bondholders at $1,583.33= $2,375. And rejecting the claim of the executors for a credit for the succession tax on the $10,000 of $100, he stated their account with the plaintiff, showing them indebted for interest $1,683.33, after crediting them with $975 of interest paid by them to her.
The executors excepted to the report for the failure to credit them with the succession tax, and for fixing the amount of principal due the plaintiff at $13,055.55 and interest at $1,683.
The cause came on to be heard on the 14th of February, 1870, when the court sustained the said exceptions to the commissioner's report; and it appearing from a statement filed that, after the application of such credits as the defendants are entitled to, there was in their hands the sum of $9,884.25, which should be invested in registered stock of the State of Virginia, it was decreed that they should make said investment in the name of the plaintiff for her sole and separate use, free from the debts and control of her husband, and that they should pay to her the balance of the interest then due to her, to wit, $524.92, and the costs of suit $57.42. And it appearing that the defendants had brought into court and delivered to the attorney of the plaintiff the state bonds, and paid him the money as directed by the decree, the same was made a final decree in the cause.
From this decree the plaintiffs applied to this court for an appeal, which was allowed.
Claughton, for the appellant.
STAPLES, J. The testator, Charles C. Smoot, died in the city of Alexandria on the 31st of July, 1867. By his will, bearing date February 16th, 1858, he devised to his daughter Mary A. Smoot certain real estate