Amelia Sullivan, Respondent, v. The Prudential Insurance Company of America, Appellant

Amelia Sullivan, Respondent, v. The Prudential Insurance Company of America, Appellant. Insurance — Limitation of Action upon Policy—Waiter An action upon a policy of life insurance, which provided that any suit or action thereon should be commenced within six months after the death of the insured, brought after the expiration of such time is barred, unless the provisions of the limitation clause have been waived, although in a previous action, which had been commenced in time, the service of the summons and complaint had been vacated and set aside as unauthorized; the facts that within three or four days after the death of the insured the plaintiff delivered to the defendant the proofs of death, together with the policy and an assignment thereof and that the latter has since retained' them,' do not establish a waiver. Sullivan v. Prudential Ins. Co., 63 App. Div. 280, reversed. (Argued October 23, 1902; decided November 18, 1902.) Appeal from a judgment of the Appellate Division, of the Supreme Court in the second judicial department, entered August 2, 1901, affirming a judgment in favor of plaintiff entered upon a verdict directed by the court. The action was brought by the assignee of a policy of insurance, issued by the defendant upon the life of Patrick J. McGuinness, who died on April 3d, 1895. The defense interposed by the answer, and which furnished the issue for trial, was that the action had not been commenced within six months after the decease of McGuinness, the insured. The clause of the policy, upon which this defense was rested, provides as follows: “Mo suit or action at law or in equity shall be maintainable with respect to the payment of this policy until after the filing in the principal office of the company of the above mentioned proof of death, nor unless such suit or action shall be commenced within six months next after the decease of the person insured under this policy; and it is expressly agreed that, should any such suit or action be commenced after the expiration of said six months, the lapse of time shall be deemed as conclusive evidence against the validity of such claim,.any statute of limitation to the contrary, notwithstanding.” Upon the trial it was established, without dispute, that within three or four days after the death of McGuinness, the insured, the plaintiff delivered to the defendant company the proofs of death, together with the original policy of insurance and the assignment of the same to the plaintiff, and that all of these documents had remained in the possession and control of the defendant since their delivery to it; that a previous action had been commenced by the plaintiff to recover upon the same policy of insurance, by the service of a summons and complaint, on October 3d, 1895, upon an agent of the defendant, which service had been, by an order of the court, vacated and set aside as unauthorized, void and of no effect; that thereafter, on December 26th, 1895, the plaintiff commenced the present action. Upon these facts the plaintiff’s counsel asked for the direction of a verdict and the defendant’s counsel moved to dismiss the complaint. upon the ground that the cause of action was outlawed before the commencement of the action by the limitation in the contract. The latter motion was denied by the court and a verdict was directed for the plaintiff; to which ruling and direction the defendant duly excepted. The judgment entered upon the verdict, as directed, was affirmed by the Appellate Division, in the second department, and the defendant has appealed to this court. William 0. Oampbell for appellant. The action was barred by the limitation in the contract six months after the date of McGuinness’ death, April 3, 1895. (Wilkinson v. F. Nat. Bank, 72 N. Y. 499; Dougherty v. Met. L. Ins. Co., 3 App. Div. 313; Arthur v. H. F. Ins. Co., 78 N. Y. 162.) There was no waiver by defendant of the period of limitation by contract. (Titus v. G. F. Ins. Co., 81 N. Y. 410 ; Dougherty v. Met. L. Ins. Co., 3 App. Div. 313; Arthur v. H. F. Ins. Co., 78 N. Y. 462; Sergent v, L. & L. & G. Ins. Co., 155 N. Y. 349.) Joseph T. Magee and Seward Baker for respondent. The . .appellant was estopped, by its conduct, from pleading the period of limitation in the policy, and had, in fact, waived the same. (Goodwin v. M. M. L. Ins. Co., 73 N. Y. 480 ; Prentice v. K. L. Ins. Co., 77 N. Y. 483 ; Sergent v. L. & L. & G. Ins. Co., 155 N. Y. 349 ; Dougherty v. Met. L. Ins. Co., 3 App. Div. 313; Mayor, etc., v. H. F. Ins. Co., 39 N. Y. 45.) There is evidence in this case to support the decision of the trial court, and the judgment should, therefore, not be disturbed. (Dillon v. Cockcroft, 90 N. Y. 649 ; Adams v. R. L. Co., 159 N. Y. 176; Smith v. Weston, 159 N. Y. 194.) [MAJORITY — Gray, J.] Gray, J. The only question for our consideration is whether the defendant was estopped by its conduct from insisting upon the limitation clause in the policy and had, thereby, waived the same. The plaintiff claims, and her claim in that respect has been sustained below, that the retention by the defendant of the policy, and of the documents connected therewith and with the proofs of death, justified her in the assumption and misled her into the belief that its provisions would be waived. The right of the parties, by their written contract, to prescribe a shorter limitation for its enforcement than that contained in the Code of Civil Procedure cannot be questioned. That right is clearly recognized in section 414; where it is provided that the general provisions of that chapter of the Code should not apply to “ a case, where a different limitation is specially prescribed by law, or a shorter limitation is prescribed by the written contract of the parties.” (Subdiv. 1.) It was not claimed, and it cannot well be, that the limitation in this contract was unreasonable. The cause of action arose upon the death of the insured and the obligation of the insurer was fixed, if it had not been avoided by some breach of the policy. The commencement of an action to enforce it, unless excused by law, or by the act of the insurer, was reasonably possible and proper within a period of six months thereafter. But, further, the plaintiff had recognized the force of the obligation upon her and her perfect ability to commence an action within the time prescribed, in. bringing her previous action within the contractual period. What then, therefore, is there in the facts which constitutes a waiver on the part of the defendant of the limitation clause ? Waiver by a party of any contractual right is a matter of intention. It is not pretended that an intention to waive is to be found elsewhere than in inferences, which are claimed to be deducible from the continued possession by the defendant of the various documents, and they are too shadowy to be entertained in the presence of so distinct a clause. It appears that, on September 16th,' 1895, the plaintiff had been notified by letter of the commencement of an action against the defendant by the administratrix of McGuinness, the insured, upon the policy of insurance and that, unless she came in and defended the action, the amount of the policy would be paid to the administratrix. She, then, commenced an action to recover upon the policy on October 3d, 1895, which was within the period of limitation prescribed. She, thus, showed that the possession of the policy and of the papers was not essential to the commencement of the action. Her action showed that she did not regard their retention by the defendant as indicating any waiver of the limitation clause. If, by deferring her action as long as she did, she placed herself in a position where its dismissal, for the nullity of the service of the summons, was ordered, that is her misfortune. The agreement of the parties was clear; its object was definite and compliance therewith was possible. In the case of. Arthur v. Homestead Fire Ins. Co. (78 N. Y. 462), which was an action upon a fire insurance policy, in which was contained a limitation clause "of one year, the plaintiff’s recovery against the defendant was reversed in this court, upon the ground that the action, having been commenced after the time prescribed therefor in the policy, was too late. In that case, a previous action, commenced within the contractual period, had been abandoned by the plaintiff, who,. thereafter, instituted the one which came to this court. The plaintiff there claimed that, because of certain conduct on the part of the defendant’s agents, affecting the maintenance of the previous suit, and of the acceptance by the defendant of the costs of the action, which had been abandoned, there had been a waiver by it of the condition of the contract. But the claim was not considered tenable in this court and it was held that these facts could not advantage the plaintiff, or confer any new right against the defendant. In Wilkinson v. First National Fire Insurance Company, (72 N. Y. 499), where there was a short limitation in the insurance policy in question, it was claimed that an injunction, restraining the insurance company from paying and the insured from receiving any money on account of the loss of the insured property, until the further order of the court, excused the bringing of an action by the assignee of the policy within the time specified in the policy. The claim was not allowed and the action was held to be barred by the lapse of time. It was observed, in the opinion by Judge Andrews, that u the provision fixing the time within which an action must he brought is distinct, definite and unqualified. The contract contains no saving of the right of action after the expiration of a year from the loss, for any cause whatever; and unless the bringing of the action within the time limited by the contract was waived by the defendant, or was excused and made impossible by the act of God or of the law, the remedy of the plaintiff has been lost.” The right to prescribe in a contract a shorter limitation to actions was upheld, as consistent with the policy upon which statutes of limitations are founded, and the right of the party to insist upon the benefit of that feature of the contract was recognized. In Joyce on Insurance, (section 3204), the author observes that “ the weight of authority seems to support the rule that if a suit is brought within the time provided in the policy, but is dismissed or discontinued for any reason, and a subsequent suit is brought after the expiration of the time limited, though perhaps immediately upon the dismissal or discontinuance of the first suit, the second action cannot be maintained.” In my opinion", the evidence did not disclose any conduct on the part of the defendant, which amounted to a waiver of the limitation clause of the policy, and the plaintiff was in no position, even, to assert that she had been misled by the defendant, in view of having, in fact, commenced one action within the time prescribed. For these reasons, L advise • a reversal of the judgment and the ordering of a new trial, with costs to abide the event. Parker, Oh. J., O’Brien and Bartlett, JJ., concur; Haight, Martin and Tans, JJ., dissent. Judgment reversed, etc.