Opinion
July Term, 1897.
W.I. Van Allen, for the plaintiff.
Myron H. Peck, Jr., for the defendant.
By the terms of the defendant's contract of insurance, as expressed in its policy, the furnishing of proofs of loss by the plaintiff was undoubtedly a condition precedent to the latter's right to recover, and his omission to furnish the same within the prescribed time would, generally speaking, work a forfeiture of the contract. ( Sergent v. The L. L. G. Ins. Co., 85 Hun, 31.) This requirement, however, is one which was inserted in the policy for the exclusive benefit of the defendant, and unquestionably it had the right to waive its performance. The single question, therefore, which this court is called upon to decide is, whether the evidence, upon the part of the plaintiff, establishes such a waiver.
It appears, and it is not disputed, that soon after the fire the defendant's adjuster announced to the plaintiff that the defendant would not pay the loss upon the grounds of non-liability, and this denial of liability was explicit and unqualified. If, therefore, this statement may be treated as emanating from the company itself, and not from one who represented it merely in the capacity of an agent, the denial of liability was equivalent to a declaration on the part of the defendant that it would not pay the plaintiff's loss, even if the proofs were furnished, and consequently it was tantamount to a waiver of the condition requiring such proofs to be furnished. (May on Ins. 573, 574; Lang v. Eagle Fire Co., 12 App. Div. 39, and cases there cited.)
In determining, therefore, how far the defendant is bound by the declaration of Dolson, it is important to bear in mind the circumstances under which he assumed to act for, and the apparent authority with which he had been clothed by, the company. It is undisputed that he was sent by the defendant to inquire into the plaintiff's loss, with full authority to adjust the same. What does this imply? The definition of the verb "adjust," is thus given in the Century Dictionary, viz., "to settle or bring to a satisfactory state, so that parties are agreed in the result; as to adjust accounts." And, if to adjust is to settle, an "adjuster" is, of course, a person who makes the adjustment or settlement.
The defendant informed its local agent at Mount Morris that the matter of the plaintiff's loss had been referred to their adjuster, Mr. R.H. Dolson. It would seem, therefore, that when this gentleman reached Mount Morris he was accredited to this plaintiff as fully authorized and empowered to adjust and settle his loss, and if so, it follows, by implication at least, that his authority was sufficient to enable him to take any and every step which he deemed necessary or proper to facilitate an adjustment. Had he stated to the plaintiff that he was satisfied with respect to his claim, and that, therefore, it would be unnecessary for him to furnish any proofs of loss, can it be doubted that the plaintiff would have had a right to rely upon such an assurance and would have been justified in omitting to take any further steps to establish his claim? And if this be so it would seem equally clear that when he declared that the company was not liable in any event, his declaration was binding upon the company, because in making it he was in fact the company, and the plaintiff had the right to so regard him and to act accordingly.
Since the adoption of the standard policy in this State many important questions have arisen, the decision of which has produced some apparent confusion and conflict in the law of insurance. There is, however, one rule which seems to be pretty well established, and that is, that where a contract of insurance contains a provision that it shall not be changed, except by an agreement indorsed upon the policy by a duly authorized agent or officer of the company, an agent who possesses the power of his principal, either actually or apparently, may, by his conduct, estop his principal from enforcing such a provision against a party who has acted in reliance upon such conduct. ( Messelback v. Norman, 122 N.Y. 578; Bishop v. Agricultural Ins. Co., 130 id. 488; Manchester v. The Guardian Assurance Co., 151 id. 88.)
We think that this case fairly falls within this rule, and that it may be said that the defendant is estopped from questioning the authority of its representative to waive a strict compliance with the requirements of the contract, for the reason that it sent him to the plaintiff clothed with apparent authority to take every necessary and proper step to adjust and settle his loss, and that when the adjuster declared that the defendant would not pay anything whatever until compelled so to do by a legal adjudication, the plaintiff had a right to rely upon that assurance as well as upon the apparent authority of the adjuster to give it, and he consequently had the right to bring his action forthwith, without first going through what, in the circumstances of the case, would have been the mere idle ceremony of furnishing proofs of loss.
We conclude, therefore, that the judgment of nonsuit in this case was improperly granted and that a new trial should be directed.
All concurred.
Motion granted and a new trial ordered, with costs to abide the event.