1. (a), To be effective as a demand for payment of a loss under an insurance policy it must be made at a time when the insured was legally in position to demand immediate payment.
(b) Where proof of loss is not furnished within the time required by the policy provisions, a refusal to pay after expiration of that time will not operate as a waiver of proof of loss.
2. (a) Where demand is made upon an agent or adjuster upon whom the insured is entitled to make it and the agent or adjuster merely informs the insured that the demand must be referred to the company for consideration and action, this does not amount to a refusal to pay upon which a waiver or estoppel can be leased.
(b) The policy requirement of written notice of loss to be given by the insured to the company is not met by a sending to the company of copies of investigation reports on the loss by an adjuster for another company having coverage.
(c) A company is not bound by notices or proofs of loss which its insured may deliver to an adjuster for another company having coverage on the same event, unless it appears that the insured delivered them to the adjuster in his capacity as agent and that it was done in reliance upon an apparent authority conferred upon him to receive them.
(d) The collection by the insurer of information concerning a loss on which it may have coverage, or an investigation of the circumstances does not work a waiver of policy require as to the giving of notice and the furnishing of proofs
(e) Although an insurer may have information indicating that the insured has suffered a loss under the policy, there is no duty on the insurer to notify the insured to give notice of the loss or to call upon him to furnish proofs of loss as required by the policy.
3. The insured is not excused from the giving of notice and the furnishing of proofs of loss as required by the policy provisions merely because he may have lost or misplaced his policy.
4. (a) Where the policy does not provide for a forfeiture upon failure to furnish proofs of loss within the sixty days required by its terms, yet unless the proofs are furnished at least sixty days before expiration of the twelve months during which a suit to recover for the loss may be filed, the insured is not in position to maintain the action.
(b) Absent a waiver, the furnishing of proofs of loss as required in the policy is a condition precedent to the accrual of liability for the loss and to the institution of the action to recover therefor.
(c) Where notice of the loss and proofs of loss are not given and furnished within the time required by policy provisions a refusal to pay subsequent to the expiration of the time--even an absolute refusal to pay--will not estop the company from setting up as a defense the failure of the insured to meet the policy requirements.
Star Photo Finishing Company had four locations where it carried a stock of merchandise insured against loss due to certain hazards under a Buffalo Insurance Company policy issued to Star through Lanier Haynie Insurance Agency for a term beginning September 28, 1962, and ending September 28, 1965, at high noon. It provided coverage up to 50 percent of the stated limits as a part of the "total contributing insurance." There was a similar policy issued by General Fire & Casualty Company for like amounts and upon identical terms providing coverage for the same period, issued through the same agency.
Each policy provided for an extension of coverage to newly acquired personal property, "up to 10 percent of the limits of liability specified for Coverage B-Personal Property, but not exceeding $10,000, to cover business personal property acquired by the insured at any other location used by him for mercantile or warehouse purposes, within the territorial limits of this policy. This extension of coverage shall cease 30 days from the date of such acquisition, or on the date values of such acquisition are reported to the company, whichever first occurs. Additional premium for acquired locations shall be due and payable for values so reported computed from the date of such acquisition. This extension does not apply to property in transit."
Star leased a fifth location and began placing merchandise (photo flash bulbs) in it. Lanier learned of this and telephoned Star asking for the values of merchandise in the new location, but Star did not report them, informing Lanier that it had decided to place the insurance with another agency and company. However, on the morning of September 28, 1963, at about 8 a.m., the roof of the new location fell in, due to faulty design and construction a peril insured against.
Star filed proof of loss with General Fire & Casualty Company for the portion of the loss covered under its policy, but there was never any written notice from Star to Buffalo of the loss and no proof of loss was ever filed with it, although the policy provided that: "The insured shall give immediate written notice to this company of any loss, . . . furnish a complete inventory of the destroyed, damaged and undamaged property, showing in detail quantities, costs, actual cash value and amount of the loss claimed; and within 60 days after the loss, unless such time is extended in writing by this company, the insured shall render to this company a proof of loss, signed and sworn to by the insured, stating the knowledge and belief of the insured as to the following: the time and origin of the loss, the interest of the insured and of all others in the property, the actual cash value on each item thereof and the loss there to, all encumbrances thereon, and all other contracts of insurance, whether valid or not, covering any of said property, any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this policy." (Emphasis supplied.)
There was further provision that: "The amount of loss for which this company may be liable shall be payable sixty days after proof of loss, as herein provided, is received by the company and ascertainment of the loss is made either by agreement or between the insured and this company expressed in writing, or by the filing with this company of an award as herein provided.
"No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 12 months next after inception of the loss." (Emphasis supplied.)
Plaintiff filed suit September 25, 1964, three days before expiration of the 12 months following the occasion of the loss, alleging that the policy had been lost and that it could not, therefore, attach a copy, but that demand for payment of the loss had been made on the company and that the company had refused to pay. By amendment it was alleged that Buffalo had intentionally concealed itself from the plaintiff and that the demand for payment of the loss was made about 11 months after it occurred and that the refusal was in bad faith. The testimony of plaintiff's attorney who made the demand was that it was made September 22, 1964--only three days before suit was filed, when he was informed by Buffalo's agent that his demand would have to be submitted to the company for its consideration.
Buffalo admitted that it learned of the loss some time between October 13, 1963, and December 16, 1963, when it received information from Mr. Charles Hurst, an adjuster who was handling the claim for General Fire, relative to a letter which Mr. Walter Calhoun, attorney for Star, had written to General Fire, and that it received from the adjuster a copy of an investigation report made to General Fire relative to the loss on November 13, 1963, but denied that it ever received proofs of loss or copies thereof which may have been made to General Fire by Star, and asserted that at the time it learned of the loss in this manner and received a copy of the adjuster's investigation report Buffalo had received no communication of any kind relative to the loss from Star and had received from it no notice of any claim which Star intended to make on account of the loss.
Motions for summary judgment were denied and the case was tried before a jury, which returned a verdict for the plaintiff.
Defendant, Buffalo, appeals from a denial of its motion for new trial and for judgment n.o.v., and plaintiff cross appeals from a pre-trial order limiting the liability under the policy to $5,000 and from the sustaining of a motion for directed verdict against the plaintiff on the issue of bad faith penalties and attorneys' fees.
1. All of the issues in both the appeal and the cross appeal can be disposed of by a ruling on the matter of whether the suit was maintainable, plaintiff not having given written notice of the loss 1
and not having filed any proof of loss at any time prior thereto.
1. (a) Although plaintiff seeks to rely upon an oral demand 2
made by its counsel upon a representative of the insurance company some three days prior to the filing of suit, and six days prior to the expiration of the 12-month policy limitation for the bringing of suit, and upon the company's alleged refusal to pay the amount of the demand, this can not avail. "The statutory demand for payment of the proceeds of an insurance policy must be made at a time when a demand for immediate payment is in order. It is not in order if the insurer, under the terms of the insurance policy, has additional time left in which to investigate or adjust the loss and therefore has no legal duty to pay at the time the demand is made." Napp v. American Cas. Co., 110 Ga. App. 673 (2) (139 SE2d 425)
. Accord: Life Cas. Co. of Ga. v. Burke, 219 Ga. 214 (2) (132 SE2d 737)
; Philadelphia Fire &c. Ins. Co. v. Burroughs, 176 Ga. 260 (2) (168 SE 36)
. "Whether or not it was a good demand depends on whether [if otherwise
App. 439, 445 (151 SE2d 780
). No such inventory was furnished here. See Stiles v. American Home Ins. Co., 146 Ga. 92
(1a) (90 SE 718
). Notice required under contract provisions or under statutory provisions is generally effective when given in the form, at the time and in the manner required. Cf. Rogers v. Hoskins, 14 Ga. 166
; Pritchard v. Johnson & Calhoun, 60 Ga. 288
; Ga. R. & Bkg. Co. v. Haas, 127 Ga. 187 (1)
(56 SE 313
, 119 ASR 327, 9 AC 627); Felton Beauty Supply Co. v. Levy, 198 Ga. 383
(31 SE2d 651
, 155 ALR 647); Roberts v. Ga. Southern Supply Co., 92 Ga. App. 303
, 308 (88 SE2d 554
); Woodall v. Pharr, 119 Ga. App. 692 (168 SE2d 645)
; Schaefer v. Mayor &c. of Athens, 120 Ga. App. 301 (6) (170 SE2d 339)
sufficient] it was made at a time when immediate payment could be exacted, and this depends on whether or not the defendant had lost the benefit of its 60 days contracted for under the policy after reception of proof of loss forms, which in turn depend on whether the filing (not merely the time of filing) of such forms was waived." Napp v. American Cas. Co., supra, p. 675.
(b) While it is true that when, as here, the policy contains no provision making the policy void upon failure of the insured to furnish proof of loss within 60 days after the loss, yet if the proof is not furnished within the 60 days as called for, a refusal of the insurer to pay after expiration of that time will not operate as a waiver of the proofs. Newark Fire Ins. Co. v. Reese, 32 Ga. App. 42 (123 SE 41)
; Prudential Ins. Co. v. Sailors, 69 Ga. App. 628 (8) (26 SE2d 557)
; Reserve Ins. Co. v. Campbell, 107 Ga. App. 311 (130 SE2d 236)
; South Carolina Ins. Co. v. Hunnicutt, 107 Ga. App. 366 (1) (130 SE2d 239)
. Further, failure to furnish proofs of loss before expiration of twelve months from the date of the loss will prevent the maintenance of a suit on the policy. Harp v. Fireman's Fund Ins. Co., 130 Ga. 726
(61 SE 704
, 14 AC 299); Southern Fire Ins. Co. v. Knight, 111 Ga. 622
(36 SE 821
, 52 LRA 70, 78 ASR 216). It is admitted that no proof of loss was ever filed with Buffalo.
2. (a) Although Star alleges that it demanded payment of the loss, and that the demand was refused, its attorney, who made the demand, testified that when he made the demand the agent informed him that the demand would have to be referred to the company for its consideration and action, whereupon he told the agent that he could not await the delay which that would entail inasmuch as he had only five or six days in which to institute suit under the provision of the policy requiring that suit be brought within twelve months after the date of the loss, and that he proceeded with the filing of suit to avoid the bar. Thus, there was a failure to prove that there had been any denial of the demand by the company. There was an admission in Buffalo's answer that there had been a demand and denial, but by amendment that was stricken and it was alleged instead that no demand for payment was made on Buffalo until the suit was filed, and thus there had been no refusal to pay the loss, and further that it does refuse to pay the loss because no proof of loss was ever made and because the loss was not one covered by the policy. Its attorney testified that this had been the purport of the answer as originally filed, and that the amendment was a clarification. The amendment is consistent with plaintiff's proof.
(b) Was there "notice in writing" of the loss within the requirement of the policy, or the contemplation of Code Ann. 56-2427? We think not. The policy provides that "The insured shall give immediate written notice to this company of any loss. . ." Certainly it cannot be said that this requirement is met when the company gets information in some other manner and from some other source. Suppose there had been a news story of the loss in a newspaper to which the company was a subscriber and which those in charge of its office read. While it night be said to have been "in writing" it could not be said to have been given by the insured or to have been directed to the company. Moreover, even the giving of notice does not dispense with the necessity of making proof of loss (Styles v. American Home Ins. Co., 146 Ga. 92 (1a) (90 SE 718)), unless the company fails to supply forms as required by Code Ann. 56-2427, nor does the fact that the insurer has knowledge of the loss relieve the insured of making proof of loss under terms of the policy. Code Ann. 56-2428 (3); Nalley v. Hanover Fire Ins. Co., 56 Ga. App. 555, 567 (193 SE 619).
(c) But Star contends that there is sufficient circumstantial evidence concerning the communications between Mr. Hurst, the adjuster for General Fire, and Buffalo to authorize the jury to find that he was acting as Buffalo's agent in sending the copies of investigative reports, etc., to it and thus, that when proofs of loss for General Fire were delivered to him this sufficiently complied with the policy provision requiring notice of the loss to Buffalo, placing a duty on it under Code Ann. 56-2427 to send to Star forms for making proof of loss, in default of which the proofs were waived.
The trouble with this contention is that when Star prepared and filed with Hurst proofs of loss directed to General Fire it was not and did not purport to be dealing with him as Buffalo's agent. Indeed, Mr. Starnes testified that Star did not learn of the Buffalo policy, and consequently of its claim against Buffalo, until Mr. Calhoun went to the office of the southern regional adjuster for Buffalo on September 22, 1964, and was shown a copy of the policy. It was not, therefore, relying upon any agency relationship between Hurst and Buffalo when the proofs for General Fire were delivered to him months before. There were no negotiations between them relative to Star's claim against Buffalo; indeed the matter was never discussed or mentioned.
"The rule that a principal is bound to the extent of the authority which he has apparently conferred upon his agent has no reference to a situation in which a person affected by the acts of the agent does not deal with the agent in reliance upon the authority which the principal has apparently conferred upon him." Piedmont Operating Co. v. Cumming, 40 Ga. App. 397 (1) (149 SE 814)
. "To create an estoppel by conduct of the principal it must be shown that the complaining party dealt with the supposed agent in reliance upon the authority which the principal apparently conferred upon him, and changed his position as a result of such reliance." National Homes, Inc. v. City Plumbing &c. Co., 108 Ga. App. 519 (133 SE2d 416)
. Accord: Patterson v. Southern R. Co., 41 Ga. App. 94 (1) (151 SE 818)
; Equitable Credit Corp. v. Johnson, 86 Ga. App. 844
, 847 (72 SE2d 816
). There is simply no proof in the record that Star ever dealt with Hurst as Buffalo's agent, or in reliance upon any apparent authority to him from Buffalo; its only dealings with him were relative to a claim against General Fire. It must appear that the person to whom notice of the loss was given was an agent authorized to receive notice or proof of loss in behalf of the company (Bailey v. First Nat. Fire Ins. Co., 18 Ga. App. 213 (89 SE 80)
), or one having apparent authority upon which there was reliance, and that does not appear.
(d) Star contends that a waiver should result from the fact that Buffalo received information from General Fire relative to the occurrence of the loss and copies of reports made to General Fire from time to time by its claims investigator and attorney and, having that information in hand, nevertheless failed to call on Star for proofs of loss or attempt to make settlement of the loss with it. The collection of information or the making of an investigation relative to a loss that may be covered under a policy issued by a company does not work a waiver of the policy requirements and compliance therewith by the insured. Code Ann. 56-2428 (3); Smith v. Western Assur. Co. of Canada, 18 Ga. App. 461 (89 SE2d 533)
; Nalley v. Hanover Fire Ins. Co., 56 Ga. App. 555
, 567, supra. Cf. Allen v. City of Macon, 118 Ga. App. 88 (162 SE2d 783)
; Schaefer v. Mayor &c. of Athens, 120 Ga. App. 301 (6)
(e) There is no merit in the contention that Buffalo should have called on Star to make claim against it. Star had been requested by Buffalo's agent to furnish information relative to the property so that it might be added to the policy for coverage, and Star had refused to give the information, saying that it had decided to place the insurance elsewhere. Buffalo might well have concluded that no claim would ever be made against it. Further, insurance is a matter of contract (North British & Mercantile Ins. Co. v. Tye, 1 Ga. App. 380 (58 SE 110)
), and under the unambiguous provisions of this policy it is the duty of the insured to present its claim to the company and make the required proof thereof. Until that is done neither the contract nor the law (save in situations covered by Code Ann. 56-2427) imposes a duty on the company to do anything. Indeed, the contract, unless contrary to statutory provision or public policy, is the law that governs. St. Paul Fire &c. Ins. Co. v. C. I. T. Corp., 55 Ga. App. 101
, 103 (189 SE 390
); Ga. Power Co. v. City of Decatur, 168 Ga. 705 (2) (149 SE 32)
; West View Corp. v. Alston, 208 Ga. 122
, 127 (65 SE2d 406
). The insured is in a better position than the company to know when he has suffered a loss and it is for him to determine whether and when he will make a claim under the policy. General American Life Ins. Co. v. Butts, 193 Ga. 350 (1) (18 SE2d 542)
; Sovereign Camp of the W.O.W. v. Cooper, 194 Ga. 208 (1) (21 SE2d 410)
; Metropolitan Life Ins. Co. v. Smith, 48 Ga. App. 245 (1) (172 SE 654)
3. Nor does the fact that plaintiff had lost or misplaced the policy excuse it from complying with its terms in this respect. Milwaukee Ins. Co. v. Powell, 108 Ga. App. 12 (132 SE2d 95)
. Cf. Prudential Ins. Co. v. Sailors, 69 Ga. App. 628
, 632, supra.
4. (a) "It was the misfortune of the insured that he so long delayed that, at the time he was aroused to action, he did not have time sufficient to submit his proofs of loss at least sixty days before the expiration of the twelve months within which he could bring his action in the event the company declined to pay the loss." Graham v. Niagara Fire Ins. Co., 106 Ga. 840, 842 (32 SE 579). And see Ritch v. Masons' Fraternal Acc. Assn. of America, 99 Ga. 112 (25 SE 191); United Benevolent Soc. v. Freeman, 111 Ga. 355 (36 SE 764); Southern Fire Ins. Co. v. Knight, 111 Ga. 622 (1) (36 SE 821, 52 LRA 70, 78 ASR 216).
(b) Absent a waiver, the furnishing of the proof of loss as required by the policy is a condition precedent to the accrual of liability on the part of the company and to the institution of suit by the insured. National Life Ins. Co. v. Jordan, 21 Ga. App. 647 (94 SE 862)
; Jones v. Pacific Fire Ins. Co., 31 Ga. App. 128 (119 SE 922)
; Penn Mut. Life Ins. Co. v. Milton, 33 Ga. App. 634 (2) (127 SE 798)
; Mutual Benefit Health &c. Assn. v. Hulme, 57 Ga. App. 876 (1) (197 SE 85)
; Milwaukee Ins. Co. v. Powell, 108 Ga. App. 12
, 16 (132 SE2d 95
(c) The refusal of Buffalo to pay the amount claimed for the loss does not estop it from defending on this ground. "[I]t is the well-settled rule in this State that, where notice of loss or injury, or proofs thereof, have not been given or furnished in accordance with provisions of the policy requiring the same as conditions precedent to liability, the company's subsequent absolute refusal to pay because of the non-compliance with such provisions, or for some other reason, will not estop the company from setting up as a defense the failure of the insured to make such reports [citations]." Barkley v. American Nat. Ins. Co., 36 Ga. App. 447 (2) (136 SE 803); Great Eastern Cas. Co. v. Reed, 17 Ga. App. 613 (2, 3) (87 SE 904); Volunteer State Life Ins. Co. v. McGinnis, 29 Ga. App. 370 (115 SE 287); Globe & Rutgers Fire Ins. Co. v. Atlantic & Gulf Shipping Co., 51 Ga. App. 904 (1) (181 SE 310); Prudential Ins. Co. v. Sailors, 69 Ga. App. 628 (9), supra; Fidelity & Cas. Co. v. Young Shoe Parlor, 150 Ga. 402, 404 (104 SE 429). Nor does it amount to a waiver of the requirement for the furnishing of proofs of loss. Phenix Ins. Co. v. Searles, 100 Ga. 97 (4) (27 SE 779); Newark Fire Ins. Co. v. Reese, 32 Ga. App. 42 (123 SE 41).
We find nothing in this record to authorize a finding of any waiver by Buffalo of the policy provisions, or of anything that would work an estoppel against it to plead and rely upon them as a defense. It is conceded that no proof of loss was ever furnished to the company. In this situation the suit was not maintainable and no verdict against the company could stand, for a condition precedent to a fixing of liability has not been met. Guarantee &c. Life Ins. Co. v. Norris, 219 Ga. 573
, 575 (134 SE2d 774
); Styles v. American Home Ins. Co., 146 Ga. 92
, supra; Bank of Ball Ground v. National Surety Co., 23 Ga. App. 187 (97 SE 892)
"The conditions set out in the policy contract are an essential part of the consideration for the insurer assuming the risk and the insured becomes bound by those conditions by his acceptance of the policy contract. It is no defense for the insured to merely say that he did not read the policy and, therefore, is not subject to the conditions." Mitchell, Georgia Law on Insurance, 243, 47-103.
It was error to deny the defendant's motion for judgment notwithstanding the verdict.
This disposes of, or renders moot, all other issues raised on the appeal or the cross appeal.
Judgment reversed on the main appeal, with direction that a judgment for the defendant be entered notwithstanding the verdict. Cross appeal dismissed. Bell, C. J., and Deen, J., concur.