CHAPTER SEVENTH.

Payment of the Loss.

RULE 1. Time when loss becomes payable and right to commence action as imposed by contract.

2. Period of time prescribed operates as condition pre

cedent.

3. When time commences to run.

4. Time as affected by form of statement or proofs.
5. Time not extended by requirements of the company,
but may affect right to sue.

6. Effect of waiver of proofs.

7. Denial of liability as waiver.

8. Demand of payment not necessary.
9. When interest added.

10. Effect on interest of independent promise to pay.

11. Effect of trustee process upon interest.

12. Claim and suit under Lloyds policy.
13. Several claims under same policy.

14. Penalty on refusing payment.

RULE 1.

Time when Loss Becomes Payable and Right to Commence Action as Imposed by Contract.

The loss does not become payable until sixty days after the notice, ascertainment, estimate, and satisfactory proof of the loss have been received by the insurance company, including an award by appraisers when appraisal has been required; no suit or action on the policy for the recovery of any claim shall be sus

tainable in any court of law or equity until after full compliance by the insured with all its requirements.

This rule is imposed by above terms in the standard form of policy prescribed in:

By the standard form of policy prescribed in Wisconsin, the loss is payable "sixty days after the notice and proof of loss required have been received by the company." It does not contain above provision.

By the standard form of policy prescribed in:

the loss is payable "within sixty days after the insured shall have submitted" the statement required. It does not contain above provision.

In South Dakota the form provides: "The company within sixty days after the assured shall have submitted the statement as hereinbefore provided, shall either pay the amount for which it shall be liable which amount if not agreed upon or determined by the provisions of this policy shall be ascertained by award of appraisers.'

In the States where no standard form is prescribed and other than those above named, the New York standard form is in general use.

In Iowa a statute prescribes a period of forty days. See statute, chapter twelfth; Finster v. Merchants' Ins. Co., 97 Iowa, 9, 65 N. W. Rep. 1004; Harrison v. Hartford Ins. Co., 59 Fed. Rep. 732, 23 Ins. L. J. 161; Blood v. Hawkeye Ins. Co., 103 Iowa, 728, 69 N. W. Rep. 1141; Woodruff v. Des Moines Ins. Co., 90 Iowa, 735, 57 N. W. Rep. 592; Worley v. State Ins. Co., 91 Iowa, 150, 59 N. W. Rep. 16, 23 Ins. L. J. 580. It is not operative in a suit upon a policy in another State. State Ins. Co. v. Du Bois, 7 Colo. App. 214, 44 Pac. Rep. 756.

*See note to "Duty to Save and Preserve Property," Rule 1, page 2.

RULE 2.

Period of Time Prescribed Operates as Condition Precedent.

The period of sixty days prescribed by Rule 1 must elapse before the assured can demand payment of the loss; the clause in the policy operates as a condition precedent.

Dwelling-House Ins. Co. v. Shaver, 52 Ill. App. 326; Clemens v. American Ins. Co., 70 App. Div. 435, 75 N. Y. Supp. 484; First Nat. Bank v. Dakota Ins. Co., 6 S. D. 424, 61 N. W. Rep. 439; German Ins. Co. v. Hall, 1 Kans. App. 43, 41 Pac. Rep. 69; Fire Assoc. v. Colgin, Tex. Civ. App. ,33 S. W. Rep. 1004; Doyle v. Phoenix Ins. Co., 44 Cal. 264; Kensington Nat. Bank v. Yerkes, 86 Pa. St. 227; Spare v. Home Ins. Co., 19 Fed. Rep. 14; Columbian Ins. Co. v. Lawrence, 10 Pet. (U. S.) 507; Shawmut Sugar Co. v. Hampden Ins. Co., 12 Gray (Mass.), 535; Davis v. Davis, 49 Me. 282; German-American Ins. Co. v. Hocking, 115 Pa. St. 398; Cascade Ins. Co. v. Journal Publishing Co., 1 Wash. 452, 25 Pac. Rep. 331.

RULE 3.

When Time Commences to Run.

The sixty days' period prescribed before loss becomes due and payable means that when an appraisal has been required the time commences to run from the receipt by the company of the award in connection with the proofs; but where no appraisal has been required, the sixty days run from the receipt of the proofs of loss, together with any ascertainment or estimate which may have been arrived at by the assured and the company. If no such ascertainment or estimate, and no appraisal has been required or made, the time runs from receipt of proofs;1 but where paper furnished as proofs is materially defective and objected to, and it is necessary to complete or amend, and

amended and complete proofs are furnished accordingly, the time runs from time latter are received;2 but if there is no objection to proofs first furnished, or they are waived, and an attempt is afterward made to render a fuller statement, it does not invalidate the first or operate to extend the time.3

1. Lawrence v. Niagara Ins. Co., 2 App. Div. 267, 37 N. Y. Supp. 811, affd. on opinion below, 154 N. Y. 752; Schmitt v. Boston Ins. Co., 82 App. Div. 234, 81 N. Y. Supp. 767; McAllister v. Niagara Ins. Co., 156 N. Y. 80, 84, 50 N. E. Rep. 502; Lancashire Ins. Co. v. Barnard, 111 Fed. Rep. 702, 49 C. C. A. 559. And see Clover v. Greenwich Ins. Co., 101 N. Y. 277; Ætna Ins. Co. v. McLead, 57 Kans. 95; State Ins. Co. v. Maackens, 38 N. J. L. 564; Schrepfer v. Rockford Ins. Co., 77 Minn. 291, 79 N. W. Rep. 1005. And see Williams v. German Ins. Co., 90 App. Div. 413, 86 N. Y. Supp. 98.

2. German-American Ins. Co. v. Hocking, 115 Pa. St. 398; Kelly v. Sun Fire Office, 141 Pa. St. 10. And see Mayor v. Hamilton Ins. Co., 10 Bosw. 537, affd., 39 N. Y. 45; Kimball v. Hamilton Ins. Co., 8 Bosw. 405.

3. Insurance Co. of N. A. v. McDowell, 50 Ill. 120; Insurance Co. of N. A. v. Forwood Cotton Co., 13 Ky. L. R. 261; Eggleston v. Council Bluffs Ins. Co., 65 Iowa, 308. See Rule 4. If insured first refuses to have an appraisal and then subsequently offers to have it, the time may run from the date of his offer. Schrepfer v. Rockford Ins. Co., 77 Minn. 291, 79 N. W. Rep. 1005.

RULE 4.

Time as Affected by Form of Statement or Proofs.

If the statement or proofs furnished substantially comply with the condition in the policy, the time begins to run then, although the statement may be objected to and further proof subsequently furnished.

McNally v. Phoenix Ins. Co., 137 N. Y. 389, 399, 33 N. E. Rep. 475. And see Manchester Ins. Co. v. Ellis, 85 Ill. App. 634; Ehlers v. Aurora Ins. Co., 19 Pa. Co. Ct. 165; Hamilton v. Phoenix Ins. Co., 61 Fed. Rep. 379, 9 C. C. A. 530, 23 Ins. L. J. 561. See also Putze v. Saginaw Valley Ins. Co., 132 Mich. 670, 94 N. W. Rep. 191, revg. on rehearing previous opinion, 86 N. W. Rep. 814.

RULE 5.

Time not Extended by Requirements of the Company, but May Affect Right to Sue.

The time for payment is not extended by the company making requirements of the assured under those clauses or conditions which become operative only in event of being required;1 but failure or neglect to comply with such requirements may affect the right to bring or maintain an action upon the policy.2

1. McAllister v. Niagara Ins. Co., 156 N. Y. 80, 50 N. E. Rep. 502; McNally v. Phoenix Ins. Co., 137 N. Y. 389, 33 N. E. Rep. 475. And see Clover v. Greenwich Ins. Co., 101 N. Y. 277; Etna Ins. Co. v. McLead, 57 Kans. 95, 45 Pac. Rep. 73. 2. See Rule 1.

RULE 6.

Effect of Waiver of Proofs.

If proofs of loss are waived by the insurance company the prescribed period commenced to run from the time of such waiver; and this may be so, notwithstanding the assured afterward furnishes same.

Eggleston v. Council Bluffs Ins. Co., 65 Iowa, 308. And see Phoenix Ins. Co. v. Center, 10 Tex. Civ. App. 535.

RULE 7.

Denial of Liability as Waiver.

If the insurance company denies liability the clause in the policy prescribing the sixty days' period before loss becomes due and payable is inoperative; the loss, if any, becomes immediately due and payable, and action may be commenced without waiting the expiration of the sixty days;1 and this result is not affected by the clause in the policy giving the company an