McArdle v. German Alliance Insurance

The plaintiff is more than an appointee of White. He had an insurable interest in the property as the landlord. By the terms of the policy the loss was payable to him as his interest might appear, and the trial court has found as a conclusion of law that the plaintiff was entitled to have and receive from the company in the first instance the entire sum of $2,000, and there is no contention now in this court that the plaintiff would not be entitled to maintain this action if he had commenced it within twelve months next after the fire: The contractual limitation is a part of the standard form of insurance policies issued in this State pursuant to statute, and unless the defendant has waived the limitation, or it is estopped from asserting the same, it is a complete defense to the action.' An insurance company may waive the limitation or estop itself from asserting it. (13 Am. & Eng. Ency. of Law [2d ed.], 390; Gibson Electric Co. v. Liverpool & London & Globe Ins. Co., 159 N. Y. 418.)

The only question for our consideration is whether the defendant in this case is estopped from insisting that the action was not brought within the time prescribed by the contract. It is said that but slight evidence is required to sustain a waiver or an estoppel as against such a provision. (Arthur v. Homestead Fire Ins. Co., 78 N. Y. 462.)

The insurance company never at any time denied its liability under the terms of the policy, and it never refused to pay the same for any reason whatever. After the fire it promptly issued its draft for the full amount of the policy, in recognition of its liability to pay the same. Such draft was payable to both White and the plaintiff, but the company having failed to obtain a receipt signed by both of the payees named in the draft, at once, without plaintiff’s knowledge or consent, canceled the draft so issued by it and *599issued another draft for the same amount, payable to White, which it delivered to him in payment of the loss. On the delivery of the draft to White, the company received from him a bond, with a surety, in which bond the claim of the plaintiff was recognized, and by the conditions of which the obligees therein agreed to indemnify the company against any claim on the part of the plaintiff for the amount of the fund so transferred to White. The plaintiff does not claim that there was an express waiver of the limitation; and while mere silence and inaction are insufficient on which to base an implied waiver, or on which to found an estoppel, any conduct on the part of a company which is fairly calculated to induce a beneficiary to delay bringing an action on a policy and causes him to believe that the limitation will not be insisted upon is sufficient to estop a company from asserting a limitation as a defense to an action on the policy. The statements to the plaintiff were not only to the effect that the amount of the policy would not be paid to White without the plaintiff’s assent, but the plaintiff may have understood and believed from what was said to him that the $2,000 would be held as a fund for the payment of the loss under the policy, pending the adjustment of the dispute between White and himself. The statements made to the plaintiff left the matter open for future negotiations, and the payment to White was a violation of the- statements to and agreements with the plaintiff. No question is made in this court in regard to the authority of the agent Austin. The testimony before us is undisputed, and on such undisputed testimony the complaint as against the defendant company should not have been dismissed.

The appellant insists that the judgment should be reversed and that this court should direct the judgment to be entered in favor of the plaintiff against the insurance company. On a new trial the insurance company may produce other evidence materially affecting the findings of fact relating to the merits of the controversy.

The judgment should be reversed and a new trial granted, with costs to the appellant to abide the event.

All concurred, except Parker, P. J., and Houghton, J., dissenting.

Judgment reversed and new trial granted, with costs to appellant to abide event.