The opinion of the court was delivered by: FORMAN
This suit was commenced October 26, 1944, in the New Jersey Supreme Court and has been removed to this court. The complaint alleges ownership of a dwelling and saloon known as 'Captain Kidd's Inn', that defendant issued to plaintiff two policies of insurance on June 1, 1941, and September 11, 1941, respectively, against loss or damage by fire in the amount of $ 2,500 each, that the dwelling and saloon were destroyed by fire on May 31, 1942, and demand for judgment in the sum of $ 2,500 is made on each policy. The defendant answered, moved for judgment on the pleadings and for summary judgment. The case was tried before this court without a jury, and upon the conclusion of proofs defendant moved for a directed verdict, attacking plaintiff's representations to the insurer with regard to title to the premises, and claiming that this action is untimely, since it was not commenced within twelve months after the damage by fire as required in the terms of the policies.
Plaintiff denies defects in his title which would preclude recovery on the policies, and claims defendant waived the requirement of the policies concerning seasonability of claims.
The premises were insured by several policies of insurance which for convenience will be referred to as the Rhode Island Group and the Westchester Group, the latter constituting the policies involved in this particular suit. The Rhode Island Group policies were for an aggregate amount of insurance in the sum of $ 8,500 and were issued in the name of plaintiff only. The Westchester Group policies were issued in the names of plaintiff and his wife, and as heretofore stated, were in the total sum of $ 5,000. Title to the premises until after the fire was in the name of plaintiff and his wife.
The policies in both groups contained a standard mortgagee clause making the loss, if any, payable to Bond and Mortgage Guaranty Co.
Pursuant to the provisions of the policies proofs of loss were filed July 28, 1942. The Rhode Island Group denied liability, and on October 6, 1942, suit was commenced in the New Jersey Supreme Court on the policies within that group. The Westchester Group did not deny liability, and on the contrary examined the plaintiff and his wife under oath under the terms of the policies of insurance. On November 4, 1942, Mr. Kushinsky forwarded the transcript of this testimony to Mr. Foster and stated: 'Kindly advise me whether it is your intention to pay the loss or to deny liability, as it is our desire to institute suit so that all the suits can be tried at the same time if possible.'
On November 5, 1942, Mr. Foster replied: 'I would like very much to see if we cannot dispose of any claim which Mr. and Mrs. Holmes may have against the Westchester Fire Insurance Company' and toward the end that he would be 'in a position to deal with the claim a little more effectively', he requested a mortgage statement and a proper sum for depreciation. He stated: 'I feel sure if you do this there is a very good likelihood of our being able to dispose of the Westchester's interest'.
Further letters were exchanged but the two attorneys were unable to agree on the extent of the loss. Mr. Kushinsky indicated it would be best to litigate, to which Mr. Foster replied on November 17, 1942: ' * * * it may be possible for us to (to have) the loss determined in accordance with the policy provisions. * * * I have written to the company asking for its authority to permit me to suggest to you * * * that the matter be submitted to an appraisal'.
On the 18th of November Mr. Kushinsky replied: 'With regard to the question of appraising the loss in accordance with the terms of the policy, if it is your company's desire that it be done, kindly advise me and I will arrange to select an appraiser so that this matter can be disposed of soon.' And on the 20th of November Mr. Foster wrote: 'I have not yet heard from the Westchester but as soon as I have had word I will get in touch with you about the possibility of determining the amount of the loss by appraisal to eliminate delay and cost of suit.'
On December 2, 1942, Mr. Foster wrote as follows: 'I would appreciate it very much if you will let me know as soon as you have come to your conclusion whether you intend to file a bill in chancery for, as pointed out to you, the nature of your bill may have a very marked bearing upon the position of the Westchester, and more particularly since I desire to pay the mortgagee's claim and I will have to determine whether this is to be paid with a denial of liability to the assured or whether the payment to the mortgagee will be for the benefit of the assureds.' (Italics supplied.)
The insured property was conveyed to plaintiff and Harriet G. Holmes, his wife, by B.&M. Corporation by its deed dated May 1, 1935. The insurance policies of the Rhode Island Group had been issued to plaintiff alone upon his representation that he had the fee simple. The insurance policies of the defendant were issued to plaintiff and his wife upon the representation that they were the owners in fee simple. The aggregate amount of insurance written by the Rhode Island Group was in the sum of $ 8,500 as against $ 5,000 written by the defendant. In the light of the prospective defenses that could be anticipated from the insurance companies on the basis of misrepresentation of ownership it is obvious why counsel planned to institute a suit in the Court of Chancery of New Jersey to have the deed of the B.&M. Corporation reformed so as to give the fee simple to the plaintiff solely and make his position consistent with his claims against the insurers who carried $ 8,500 (the larger portion) of the risk. That Mr. Foster was apprised of Mr. Kushinsky's intention to institute such a chancery action is evident from the last quoted letter of December 2, 1942. In fact, the action was commenced on December 21, 1942. The Rhode Island Group sought to intervene in this suit, but was unsuccessful. It was practically an ex parte action and on August 17, 1943, a decree was entered in the Court of Chancery of New Jersey in the suit of Joseph A. Holmes against Harriet G. Holmes and B.&M. Corporation, Docket 149/263, in which it was ordered that the deed should be reformed so as to substitute for the grantees named in it the plaintiff as the sole, 'true and correct owner'.
Plaintiff recovered in his suit against the Rhode Island Group and commenced this action afterwards.
Plaintiff constructs a waiver out of negotiations for settlement and demands made by defendant which he claims prevented the prosecution of his claim until after the twelve month period had expired. He claims defendant did not deny liability under the Westchester Group Policies, suggested arbitration to which he was willing but that defendant never suggested a date and that defendant led him to believe it would pay in the event of recovery against the Rhode Island Group. As to title he claims his representations were correct when made.
Plaintiff relies upon the case of Martin v, State Ins. Co., 44 N.J.L. 485, 43 Am.Rep. 397, wherein suit was brought on a policy of fire insurance which provided that suit should be brought within six months after the loss occurred. The fire happened September 23, 1870, and suit was commenced April 7, 1871. Plaintiff's attorney testified that negotiations for settlement continued up to about the time suit was brought. The court was of the opinion they continued even after the period of limitation and that it was lawful for the jury to infer that defendant intended not to rely on the limitation, and that plaintiff's delay was owing to the fact that such intention was manifest, and, hence, that the condition was waived. Another reason for finding a waiver was found in defendant's request that the assured submit to an examination pursuant to the provisions of the policy. No time was specified for the examination, but on the second request defendant stated he would be ready at the plaintiff's earliest convenience. The court found that this request was not withdrawn prior to April 7, 1871, when plaintiff tendered himself for examination which was refused. There was no contention that plaintiff's earliest ...