Kennedy v. Dashner , 319 Mich. 491 ( 1947 )

I do not concur in the opinion of Mr. Justice BUSHNELL.

The policy expressly provides, as a condition precedent to liability, that the assured shall, as soon as practicable, give the insurer written notice of any accident thereunder. This Court has given recognition to such provision as a condition precedent to liability. Oakland Motor Co. v. American Fidelity Co.,190 Mich. 74. Assured failed to give the insurer notice of the accident in question until 70 days after its occurrence and the insurer's first knowledge of the accident came by means of a letter from plaintiff's attorney received 47 days after the accident. No showing is made in the record to explain, justify or excuse assured's delay despite the burden reposing on the assured or plaintiff in that respect. Rushing v. Commercial CasualtyInsurance Co., 251 N.Y. 302 (167 N.E. 450). It can only be concluded that the delay was inexcusable. In consequence, it must be held that assured did not give the insurer notice "as soon as practicable," as required by the policy.

The requirement of the policy that notice be given "as soon as practicable" and similar provisions in policies for immediate notice, et cetera, are commonly construed as calling for notice within a reasonable time. Vanderbilt v. Indemnity InsuranceCo. of North America, 265 A.D. 495 (39 N.Y. Supp. [2d] 808); Empire State Surety Co. v. Northwest Lumber Co., 121 C.C.A. 527 (203 Fed. 417); Bartel's Brewing Co. v. Employers'Indemnity Co., 251 Pa. 63 (95 A. 919). Even under such construction it seems to me that we are constrained to hold that the assured did not fulfill the condition precedent in the policy. Notice given by the assured 70 days after the accident or by plaintiff's attorney after 47 days was not notice within a reasonable time. See Phillips v. Stone, 297 Mass. 341 (8 N.E. [2d] 890); McCarthy v. Rendle, 230 Mass. 35 (119 N.E. 188, L.R.A. 1918 E, 111); Associated Indemnity Corporation v.Garrow Co., 39 F. Supp. 100, affirmed (C.C.A.),125 F.2d 462; and Foster v. Fidelity Casualty Company of New York,99 Wis. 447 (75 N.W. 69, 40 L.R.A. 833) in which cases the courts held that notices of accidents, as required by insurance policies, after unexplained delays varying from 20 days to a month were not given within a reasonable time.

I am not in accord with Mr. Justice BUSHNELL'S view that a showing of prejudice to the insurer's rights, resulting from assured's failure to give notice within a reasonable time, is essential to the insurer's defense. In the case of St. LouisArchitectural Iron Co. v. New Amsterdam Casualty Co., decided by the eighth circuit court of appeals, 40 Fed. 2d 344, and in which certiorari was denied, 282 U.S. 882 (51 Sup. Ct. 86, 75 L. Ed. 778), assured failed to give insurer notice of accident for four months. The court not only held that such notice was not given within a reasonable time, but said:

"We think that, where by the contract between the parties the giving of the specified notice is a condition precedent to liability, a showing by the casualty company of prejudice to its rights is not necessary to its defense."

While the question was not squarely before this Court, we have expressed adherence to the same view in the case of Exo v.Detroit Automobile Inter-Insurance Exchange, 259 Mich. 578, and defined insurer's rights as follows:

"It is true that it is entitled to all reasonable notice, and failure to give it would release defendant from liability.Oakland Motor Co. v. American Fidelity Co., 190 Mich. 74;Wisconsin Michigan Power Co. v. General Casualty SuretyCo., 252 Mich. 331 (76 A.L.R. 1)."

Plaintiff cites Grinnell Realty Co. v. General Casualty Surety Co., 253 Mich. 16; Realty Construction Co. v.Kennedy, 234 Mich. 490, and Rose v. Ramm, 254 Mich. 259, to the effect that a showing of prejudice in this connection is necessary to the insurer's defense. These are surety cases in which the obligee as well as the principal and surety are parties to the contract and the surety has a right to recover against the principal for any loss paid to the obligee. In the instant case the plaintiff stands in the shoes of the assured (Musser v.Ricks, 271 Mich. 174) and the insurer has no right to recover against the assured for losses paid by it on the assured's behalf. The risks involved in surety cases are of a character different from those assumed under an accident policy as to which prompt notice is so essential to the preparation of a defense.

As stated by Mr. Justice WIEST, speaking for the Court inJackson v. State Mutual Rodded Fire Insurance Co., 217 Mich. 301 :

"It is axiomatic that parties may make such a contract for insurance as they may see fit provided the same does not contravene any provision of law."

The condition precedent to liability incorporated into the policy contravenes no provision of law. It is stated in clear and unambiguous terms. No claim is made of fraud or misrepresentations with respect thereto. Under such circumstances it is not the province of the court to write a new or different contract of insurance between the parties for the purpose of limiting the condition precedent to liability, in a manner never intended nor agreed upon by the parties, solely to those instances in which the insurer's rights have been prejudiced by its nonperformance.

Breach of the condition precedent in the policy requiring assured to give notice of the accident as soon as practicable, or within a reasonable time, constitutes a complete bar to plaintiff's right to recovery without necessity for a showing of resultant prejudice to defendant by reason of the delay.

But it is clear that defendant's rights were prejudiced by assured's failure to give notice of the accident within a reasonable time. In that connection defendant stresses the case of Oakland Motor Co. v. American Fidelity Co., supra. The opinion of Mr. Justice BUSHNELL indicates that that case is distinguishable from the instant case in the respect that in that case prejudice to insurer's rights was shown by reason of the disappearance of a material witness during the period while assured delayed giving notice. But in the instant case assured's delay prevented the insurer from securing a statement promptly from a material witness, the plaintiff himself, before he retained an attorney and had time to think over the case, discuss the legal principles involved and justify his position. In that respect the insurer's rights were no less prejudiced than in the Oakland Motor CompanyCase, for, as was said in Malloy v. Head, 90 N.H. 58 (4 Atl. [2d] 875, 123 A.L.R. 941):

"It is common for a freshly injured man to say that the accident was not the fault of the assured, only to change his mind later with the full approval of the jury. Such situations continually arise, many of them with no taint of fraud. They are the daily problems of insurers. This is the well known situation concerning which the parties have contracted."

Finally, I am impressed that assured's failure to attend the trial in the principal suit, as required by the policy, could not have failed to prejudice insurer's rights. The fact that assured was not a witness to the accident is not conclusive of the matter. The situation presented by his absence from the trial of the case before a jury is well described in Glens FallsIndemnity Co. v. Keliher, 88 N.H. 253 (187 A. 473), in which the court said:

"With reference to the defendants' third contention, the trial court found as follows: `Counsel have asked for a finding that the failure of Mr. Keliher to cooperate did not adversely affect the result.' * * *

"In view of the court's finding that it is `more probable than otherwise that liability would have been established if Mr. Keliher had testified,' counsel for the defendants argue that his absence from the trial did not harm the defendant, and, therefore, that his refusal to cooperate was not material.

"There are both practical and theoretical answers to this argument. Every person familiar with the trial of cases by jury knows that the case of an individual defendant is seriously, if not hopelessly, prejudiced by his absence from the trial. Such absence, if not adequately explained, is a circumstance, `chiefly persuasive as distinguished from probative in its effect' (Login v. Waisman, 82 N.H. 500, 502 [136 A. 134, 136]), which normally affects the decision of the jury upon all questions submitted to them. Even if the liability of a defendant were admitted or conclusively established, it cannot be doubted that the mental attitude of the jury in assessing damages would be influenced by his unexplained absence from the courtroom. Due regard for the current demand for realism in the administration of the law does not permit the adoption of the defendants' argument that the plaintiff was not prejudiced by Keliher's absence from the trial of the case against him.

"The theoretical answer to the defendants' argument, which is equally complete, was well stated by Cardozo, J. in Coleman v.New Amsterdam Casualty Company, 247 N.Y. 271 (160 N.E. 367,369, 72 A.L.R. 1443), as follows: `The argument misconceives the effect of a refusal. Co-operation with the insurer is one of the conditions of the policy. When the condition was broken, the policy was at an end, if the insurer so elected. The case is not one of the breach of a mere covenant, where the consequences may vary with fluctuations of the damage. There has been a failure to fulfill a condition upon which obligation is dependent.'"

Judgment should be reversed without a new trial, with costs in both courts to garnishee defendant and appellant.