1. A condition in a policy of fire insurance that no action
against the insurers for the recovery of any claim upon the policy
shall be sustained unless commenced within twelve months after the
loss shall have occurred, and that the lapse of this period shall
be conclusive evidence against the validity of any claim asserted
if an action for its enforcement be subsequently commenced is not
against the policy of the statute of limitations, and is valid.
2. The action mentioned in the condition which must be commenced
within the twelve months is the one which is prosecuted to
judgment. The failure of a previous action from any cause cannot
alter the case, although such previous action was commenced within
the period prescribed.
This was an action against the Hartford Insurance Company
Page 74 U. S. 387
upon a policy of insurance in the sum of five thousand dollars,
issued by the said company, a corporation created under the laws of
Connecticut, to the plaintiff, upon a brick building, belonging to
him, situated in Kansas City, in the state of Missouri. The policy
bore date on the first of June, 1861, and was for one year. The
building was destroyed by fire in March, 1862, and in June
following the plaintiff brought an action for the loss sustained in
the Kansas City Court of Common Pleas, in the County of Jackson in
that state. To this action the defendant appeared and answered to
the merits, and the cause continued in that court until June, 1864,
when it was dismissed by the plaintiff. Within one year after this
dismissal, the present action was commenced in the Court of Common
Pleas in the County of St. Louis, from which it was transferred to
the Circuit Court of the United States for the District of
Missouri.
The policy contained the following condition:
"That no suit or action of any kind against said company for the
recovery of any claim upon, under, or by virtue of the said policy
shall be sustainable in any court of law or chancery, unless such
suit or action shall be commenced within the term of twelve months
next after the loss or damage shall occur, and in case any suit or
action shall be commenced against said company after the expiration
of twelve months next after such loss or damage shall have
occurred, the lapse of time shall be taken and deemed as conclusive
evidence against the validity of such claim thereby so attempted to
be enforced."
To the present action the defendant pleaded this condition. The
plaintiff replied the commencement of the first action in the
Kansas City Court of Common Pleas within the year stipulated in the
condition, and the commencement of the present action within one
year after the dismissal of that action. To the replication the
defendant demurred.
The statute of limitations of Missouri, after prescribing
various periods of limitation for different actions, provides that
if in any action commenced within the periods mentioned, the
plaintiff shall "suffer a nonsuit," he may commence a new action
within one year afterwards.
Page 74 U. S. 389
MR. JUSTICE FIELD, after stating the case, delivered the opinion
of the Court as follows:
By the demurrer to the replication two questions are presented
for our determination:
first, whether the condition
against the maintenance of any action to recover a claim upon the
policy, unless commenced within twelve months after the loss, is
valid, and
second whether, if valid, the condition was
complied with in the present case under the statute of limitations
of Missouri.
The objection to the condition is founded upon the notion that
the limitation it prescribes contravenes the policy of the
Page 74 U. S. 390
statute of limitations. This notion arises from a misconception
of the nature and object of statutes of this character. They do not
confer any right of action. They are enacted to restrict the period
within which the right, otherwise unlimited, might be asserted.
They are founded upon the general experience of mankind that claims
which are valid are not usually allowed to remain neglected. The
lapse of years without any attempt to enforce a demand creates,
therefore, a presumption against its original validity, or that it
has ceased to subsist. This presumption is made by these statutes a
positive bar; and they thus become statutes of repose, protecting
parties from the prosecution of stale claims, when, by loss of
evidence from death of some witnesses, and the imperfect
recollection of others, or the destruction of documents, it might
be impossible to establish the truth. The policy of these statutes
is to encourage promptitude in the prosecution of remedies. They
prescribe what is supposed to be a reasonable period for this
purpose, but there is nothing in their language or object which
inhibits parties from stipulating for a shorter period within which
to assert their respective claims. It is clearly for the interest
of insurance companies that the extent of losses sustained by them
should be speedily ascertained, and it is equally for the interest
of the assured that the loss should be speedily adjusted and paid.
The conditions in policies requiring notice of the loss to be
given, and proofs of the amount to be furnished the insurers within
certain prescribed periods, must be strictly complied with to
enable the assured to recover. And it is not perceived that the
condition under consideration stands upon any different footing.
The contract of insurance is a voluntary one, and the insurers have
a right to designate the terms upon which they will be responsible
for losses. And it is not an unreasonable term that in case of a
controversy upon a loss resort shall be had by the assured to the
proper tribunal, whilst the transaction is recent, and the proofs
respecting it are accessible.
A stipulation in a policy to refer all disputes to arbitration
stands upon a different footing. That is held invalid,
Page 74 U. S. 391
because it is an attempt to oust the courts of jurisdiction by
excluding the assured from all resort to them for his remedy. That
is a very different matter from prescribing a period within which
such resort shall be had. The condition in the policy in this case
does not interfere with the authority of the courts; it simply
exacts promptitude on the part of the assured in the prosecution of
his legal remedies, in case a loss is sustained respecting which a
controversy arises between the parties.
The statute of Missouri, which allows a party who "suffers a
nonsuit" in an action to bring a new action for the same cause
within one year afterwards, does not affect the rights of the
parties in this case. In the first place, the statute only applies
to cases of involuntary nonsuit, not to cases where the plaintiff
of his own motion dismisses the action. It was only intended to
cover cases of accidental miscarriage, as from defect in the
proofs, or in the parties or pleadings, and like particulars. In
the second place, the rights of the parties flow from the contract.
That relieves them from the general limitations of the statute,
and, as a consequence, from its exceptions also.
The action mentioned, which must be commenced within the twelve
months, is the one which is prosecuted to judgment. The failure of
a previous action from any cause cannot alter the case. The
contract declares that an action shall not be sustained, unless
such action, not some previous action, shall be commenced within
the period designated. It makes no provision for any exception in
the event of the failure of an action commenced, and the court
cannot insert one without changing the contract.
The questions presented in this case, though new to this Court,
are not new to the country. The validity of the limitation
stipulated in conditions similar to the one in the case at bar has
been elaborately considered in the highest courts of several of the
states, [
Footnote 1] and has
been sustained in all of
Page 74 U. S. 392
them, except in the Supreme Court of Indiana, [
Footnote 2] which followed an adverse
decision of Mr. Justice McLean in the circuit court for the
district of that state. [
Footnote
3] Its validity has also been sustained by Mr. Justice Nelson
in the circuit court for the District of Connecticut. [
Footnote 4]
We have no doubt of its validity. The commencement, therefore,
of the present action within the period designated was a condition
essential to the plaintiff's recovery, and this condition was not
affected by the fact that the action, which was dismissed, had been
commenced within that period.
Judgment affirmed.
[
Footnote 1]
Peoria Insurance Company v. Whitehill, 25 Ill. 466;
Williams v. Mutual Insurance Company, 20 Vt. 222;
Wilson v. AEtna Insurance Company, 27
id. 99;
N.W. Insurance Company v. Phoenix Oil Co., 31 Pa.St. 449;
Brown v. Savannah Insurance Company, 24 Ga. 101;
Portage Insurance Company v. West, 6 Ohio St. 602;
Amesbury v. Bowditch Insurance Company, 6 Gray 603;
Fullam v. New York Insurance Company, 7 Gray 61;
Carter v. Humboldt, 12 Ia. 287;
Stout v. City
Insurance Company, id., 371;
Ripley v. AEtna Insurance
Company, 29 Barbour 552;
Gooden v. Amoskeag Company,
20 N.H. 73;
Brown v. Roger Williams Company, 5 R.I. 394;
Brown v. Roger Williams Company, 7
id. 301;
Ames v. New York Insurance Company, 4 Kernan 253.
[
Footnote 2]
Eagle Insurance Company v. Lafayette Insurance Company,
9 Ind. 443.
[
Footnote 3]
French v. Lafayette Insurance Company, 5 McLean
461.
[
Footnote 4]
Cray v. Hartford Insurance Company, 1 Blatchford
280.
