The President and Directors of The Insurance Company of North America vs. Swineford.
1. JURISDICTION: What appearance waives service.
2- Opening Default. Action on insurance policy; refusal to open default in answering, sustained.
1. Where, after an order adjudging a defendant to have made default in answering, he asks for a stay of proceedings (which is granted) to enable him to move that he he relieved from his default and allowed to answer, this is such an appearance as waives any defect in the service of process.
2. In an action upon a' fire insurance policy, commenced five months after the loss, where several of the defendant company’s agents had investigated the loss before the action was brought, and ascertained all the facts relied on as a defense, it was not error to deny a motion by the company, made three months after the commencement of the suit, to be relieved from its default and allowed to answer.
3. The fact that the rules of the company required the pleadings in such actions against it to be sent to the home office for examination and advice, would not excuse the default. Such companies must conform their practice to the law regulating the time to plead.
ERROR to the Circuit Court fox Fond du Lac County.
The action below (commenced January 4, 1870), was by Salina Swineford against the above named company, to recover $1,000, upon a policy of insurance against loss by fire. The policy ran to one Hartman, who was the owner of the property, and insured him to the amount of $1,000 on the house, and $200' on the furniture, etc. By an indorsement made by the com-pany’s agent, the policy was assigned and the loss made payable to the plaintiff, who held a mortgage on the property for a debt of $1,500 and interest. The complaint avers, inter aliar that the loss which is the subject of the action occurred on the-28th of April, 1869, and that on or about the 29th of the same-month, “ the assured gave due notice and proofs of the fire and loss aforesaid, which were received at the office of the defendant in accordance with the terms of said policy and as required *258by tbe conditions thereof, and duly demanded payment,” etc. Tbe policy is annexed to and made part of tbe complaint. One of its provisions is, that tbe amount of any loss, shall be paid “ sixty days after due notice and proofs of the same made by tbe assured and received at this office in accordance with tbe terms of this policy, hereinafter mentioned,” etc. Another clause reads: “ All persons having a claim under this policy shall give immediate notice thereof and render a particular account thereof, with an affidavit stating the time and circumstances, of the fire,” etc., etc. The complaint further alleges that no part of the mortgage debt to plaintiff has been paid, though the whole thereof is past due. The defendant company failed to answer.
When the cause was called for trial, the plaintiff made proof that defendant had complied with the laws of this state in regard to foreign insurance companies, and was authorized to issue the policy sued upon. She also made proof of her interest as mortgagee. She then put the policy in evidence. One Handt was then called, and testified as follows: “ The policy was issued by the defendant. The building insured in it was totally destroyed by fire on the 28th of April, 1869. I am the agent of the defendant at Eond du Lac. I had notice of the fire; written notice was served upon me, and proofs were made by plaintiff and left with me more than sixty days before the commencement of this action, and I sent them to the defendant.” He further testified to demand made by the plaintiff, and non-payment thereof. No other evidence was introduced.
Judgment was entered for the plaintiff on the 12th of April, 1870. On the 14th of the same month, Grerrit T. Thorn, Esq., “ appeared specially in open court as counsel for defendant,” and asked a stay of proceedings to enable defendant to move the court to take off the default and allow defendant to come in and answer. The court ordered all proceedings to be stayed for the term. On the 13th of May, being the last day of the term, -defendant’s counsel, upon his own affidavit, obtained a further •stay for twenty days. On the 3d of June, defendant served on *259plaintiff’s attorney an order to sbow canse wby tbe judgment should not be vacated and defendant permitted to answer; a proposed answer; an affidavit of merits; and affidavits excusing tbe default. Tbe defenses set up in tbe proposed answer were, 1. That tbe policy was void because procured for a greater amount tba-n tbe real value of tbe property, by fraudulent misrepresentations of Hartman as to such value. By tbe terms of tbe policy it was to be void if tbe assured should “make any false representations as to tbe character, situation, or occupancy of tbe property, or conceal any fact'material to tbe risk,” or if be should “ make any attempt to defraud tbe company by false swearing or otherwise.” 2. That tbe building was burned by tbe wilful act or procurement of Hartman, for tbe purpose of defrauding tbe company. It is also alleged that tbe real estate covered by tbe mortgage was worth $1,800 to $2,000, and was ample security for tbe mortgage debt; that no proceedings bad been bad to foreclose the mortgage; and that plaintiff took tbe assignment of tbe policy knowing it to be void. Tbe affidavits to excuse tbe default stated, in substance, that defendant is a corporation created by tbe laws of Pennsylvania; that tbe general office and general agent thereof for the western department was at Erie, Pa.; that one Case was tbe general state agent- for Illinois, Iowa, "Wisconsin and Minnesota, with office and headquarters at Chicago, and “under tbe charge of tbe general western agency; ” that said Case was also tbe “ general adjusting agent of losses in tbe states aforesaid; ” that “ when legal proceedings or papers are served on local agents of tbe defendant, tbe practice is to forward them to tbe general western agency at Erie,” and horn there they are returned to Case at Chicago; with suggestions and instructions ; that tbe summons and complaint in this action were served on Mr. Handt, defendant’s agent at Fond du Lac in this state; that they did not come to Case’s bands until tbe time for answering bad expired; that as soon as tbe matter came to Case’s attention, be commenced to make examination to ascertain facts preparatory to a defense; *260tbat during tbe latter part of January and the month of February, Case was east on important business; that on his return from the east he received a severe bodily injury by a fall, by which he was laid up for a long time; that as soon as he became able to travel, he came to Fond du Lac to look after the cause and employ counsel to put in an answer for defendant; that on arriving there on the 13th of April, he found that judgment had been taken by default; that he employed Mr. Thom as counsel to examine the matter for defendant; that Mr. Thorn was engaged at the time in the trial of a cause, and before he could obtain time to prepare an answer and the other papers necessary to accompany a motion to open the default, Mr. Case received a dispatch from St. Louis, Mo., which required him to go immediately to that city to look after important business then pending in a United States court ; that Case could not dispose of this business and return to Fond du Lac until the 2d of June, the day when said affidavits were made ; that there was no person who had a knowledge of all the facts of the case but Case, and he alone could1 furnish them to counsel; and that it “was the intention” of Case, and he believed it “ was the intention of the general ageut aforesaid, to prepare an answer in the action and make a defense on the merits; ” but that he was “ unacquainted with the practice of the courts in this state, and did not know what was .necessary to be done until he took counsel as aforesaid, and that he was unavoidably occupied in the management of business and had moved in the matter as fast as he could, under the circumstances.”
In opposition to the motion, plaintiff also filed her own affidavit, that of James Swineford, her husband, and that of Mr. Handt. The affidavit of Mr. Handt was to the effect that, as agent for defendant at Fond du Lao, he issued the policy sued upon; that he believed the property was not over-insured; that as soon as the summons and complaint herein were served on him, he sent them to Messrs. Case & Haywood, defendant’s agents at Chicago, and received an immediate reply acknowl*261edging tbeir receipt; tbat after tbe loss, Mr. Haywood, of said firm of Case & Haywood, came to Fond du Lac and investigated tbe loss personally; tbat Mr. Case did not come to tbat city until after tbis suit was commenced; that such information as was possessed by Case was derived from affiant and said Haywood, who were both familiar with tbe facts, and from one Jennings, wbo came to Fond du Lac as special agent of defendant to investigate tbe loss; tbat after tbe loss bad been investigated by defendant’s agents, and before suit commenced, affiant, supposing from bis knowledge of tbe facts, and from communication with tbe agents of defendant, tbat tbe loss was to be paid, wrote to Mr. Downing, tbe general agent, enquiring why payment was not made, and Downing replied tbat tbe matter would be settled to tbe satisfaction of tbe insured; and tbat when Mr. Case first came to Fond du Lac, after tbe entry of tbe judgment, be bad an interview with Mr. Swineford, at wbicb affiant was present, and affiant supposed tbat tbe business of Case was to pay tbe loss, and tbat be intended to pay it.
Tbe affidavits of Mr. Swineford and tbe plaintiff tended to show tbat tbe loan to Hartman, secured by the mortgage aforesaid, was made only upon condition tbat tbe property should be insured; tbat tbe assignment of tbe policy to plaintiff was procured in good faith, without knowledge of any facts wbicb would avoid tbe policy, and because tbe mortgage without tbe policy was regarded as inadequate security; that tbe land alone was worth in fact less than tbe amount of tbe mortgage debt; tbat after proofs of tbe loss had been fully made, defendant made frivolous excuses for delay; tbat tbe commencement of tbe action was delayed for a considerable time from a conviction tbat tbe loss would be fully paid; and tbat tbis belief was caused by tbe assurances of tbe local agent, and also by a letter sent to such agent by Mr. Downing, tbe general agent. This letter is attached to one of tbe affidavits; and in it, under date “Erie, Pa., October 19, 1869,” Mr. Downing writes: “Yours of tbe 16th at band. Tbe matter of tbe Hartman loss' is still in tbe *262bands of Messrs. Case & Haywood, wbo, we suppose, are as anxious as we are to bave it cleared off. As tbe fire was evidently tbe work of an incendiary, tbe company certainly ought to take, and are entitled to take, a reasonable time to try and discover where tbe fault lies. * * * We presume tbe Hartman claim will soon be fixed up, if not to our satisfaction, at least to tbe satisfaction of tbe assured and bis friends.”
Tbe plaintiff also filed an affidavit of one Rider, showing that be bad been employed by defendant’s general agent to estimate tbe cost of replacing tbe building destroyed, and bad estimated it at between $1400 and $1500. As rebutting evidence defendant offered, but tbe court refused, tbe sworn estimate of said Rider, from which it appears that be estimated tbe cost of replacing said building at $1478.23; but that be estimated tbe actual value of tbe building destroyed at only $928.16, deducting one-third from tbe former amount for depreciation by reason of age. Defendant also offered in evidence, but tbe court refused, an extract from a letter written by Mr. Downing to Mr. Handt, under date “Erie, Pa., April 21, 1870,” in which tbe writer states that be is surprised to learn that judgment has been entered in this action; that be did not understand that a bearing of tbe case would be bad so soon,- or that tbe company was liable to bave judgment entered by default; that instructions bad been given to Mr. Case to do what seemed to be necessary on tbe part of tbe defense, but unfortunately be (Case) bad met with an accident which disabled him for some time, and so this matter was allowed to go by default; that tbe writer bad instructed Mr. Case to make application for a new trial, etc., etc.; and that if Mr. Ca e bad not sent any instructions, Mr. Handt was to employ an attorney to make application for an opening of tbe judgment, etc.
Tbe court denied tbe motion to vacate tbe judgment and permit defendant to answer; and defendant took out its writ of error.
Gerrit T. Thorn, for plaintiff in error,
contended that tbe *263proof of service of summons was defective in that it failed to show, as required by the statute, that Handt, on whom the service was made, was “ the authorized agent ” of the defendant, “resident or doing business in the county” where the action was brought. Fririlc v. Sly, 4 Wis., 810; Pollard v. Wegener, 13 id., 569; Upper Miss. Transp. Go. v. Whittaker, 16 id., 220; Farmer’s L. & T. Go. v. Warring, 20 id., 290. 2. No sufficient proof was made that the conditions of the policy in regard to notice and proof of loss were ever complied with. Had defendant appeared and moved for a nonsuit upon the evidence, it would have been granted. Gornell v. Mil. Mat. Fire Ins. Go., 18 Wis., 387; Blalcely v. Ins. Go., 20 id., 205. 3. Eor the reasons already stated, and also because the defendant sufficiently excused the default, the court erred in refusing to vacate the judgment, and permit an answer. Johnson v. Fldred, 13 Wis., 482; Butler v. Mitchell, 15 id., 355.
J. M. Gillet, for defendant in error,
to the point that any defect in the service of summons was waived by defendant’s appearance and successive motions, cited Upper Miss. Transp. Go. v. Whittaker, 16 Wis., 220; Tollman v. McCarty, 11 id., 401; Stonach v. Glessner, 4 id., 275; and cases cited in Simmons’ Digest under “Appearance.” 2. As to the objection that the judgment was not sustained by the proofs, he argued, (1.) That the complaint being verified, and no answer filed, no proof was necessary, but plaintiff was entitled to judgment on motion. Trumbull v. Peck, 17 Wis., 265; Bunker v. Band, 19 id., 254. (2.) That the proofs offered were sufficient. (3.) That the default was not excused; nor did the proposed answer even disclose any defense as against the assignee of the policy. To this latter proposition he cited Tillou v. Ins. Go., 1 Seld., 405, approving 2 Corns., 210; 9 Wend., 404; 1 Corns., 293.
DixoN, C. J.
The record shows that counsel for the plaintiffs in error, defendants below, appeared in open court and asked for a stay of proceedings to enable the defendants to *264move tbe court to take off tbe default and allow tbe defendants to come in and answer, wbicb stay was ordered by tbe court, and subsequently a further stay on like application. This was an appearance in tbe action, and a waiver on tbe part of tbe defendants of all previous defects in tbe service of process; Upper Mississippi Transportation Co. v. Whitaker, 16 Wis., 223; Keeler v. Keeler, 24 Wis., 522.
Tbe objection tbat no proof was made, upon tbe inquest or assessment, of tbe giving of notice and proofs of tbe fire and loss to tbe company, as required by tbe policy and averred in tbe complaint, is hypercritical and unfounded. There was such proof, quite sufficient upon tbe entry of judgment by default, where tbe failure to answer is an admission of tbe facts alleged in tbe complaint.
Tbe facts shown by tbe affidavits in excuse of tbe default and failure to answer, and as a reason for setting aside tbe judgment and letting tbe defendants in to a trial on tbe merits, are, in our judgment, insufficient. They show a case of inexcusable neglect and delay, and are in some respects inconsistent with good faith and fair dealing on tbe part of tbe defendants or theb agents. The loss occurred more than eight months before tbe action was commenced, and it was over three months after service of process when judgment by default was taken. In tbe meantime, both before and after the commencement of tbe action, negotiations were pending for a voluntary settlement and payment of the loss. The liability of tbe company was not seriously denied, and promises of payment were made as well on tbe part of the general agent of tbe company as of one or more of its special agents. The plaintiff was induced to believe tbat her claim bad been or would be allowed by tbe company, and payment made without objection. It furthermore appears tbat before tbe suit was commenced, and, tbe inference is, a considerable time before, tbe agents of the company — the local one at Eond du Lac, one of tbe general agents for tbe northwestern states at Chicago, and a special agent *265deputed for tbat purpose — bad fully investigated tbe facts touching tbe loss. It does not appear tbat any new fact or material cbcumstance bas been discovered since those agents made tbeir investigation. Tbe facts are sucb as they ascertained, and as were known by tbem before tbe action was commenced. Witb eight months intervening, and three agents engaged in tbe investigation, tbe defendants should have been prepared at tbe end of tbat time either to pay or put in tbeir answer. There was no good reason for tbeir not having answered. Tbe sickness, disability or business engagements of one of tbe agents at Chicago, was no excuse. His partner was not' sick or disabled, and be bad been upon tbe ground and knew tbe facts. Tbe agent who was sick bad not. Tbe answer might have been prepared under the direction of either of tbe three agents who bad investigated, and have been verified by any one of tbem. Tbe failure to answer was, therefore, tbe result of mere inexcusable negligence on tbe part of tbe company or its agents, unless tbe practice of tbe company of requiring tbe pleadings in actions against it to be sent to tbe home office for examination and advice, made it otherwise. But sucb practice did not necessarily interfere witb or prevent an answer in time ; and if it bad, tbe question would be, whether tbe law should conform to tbe practice of tbe company, or tbe practice of tbe company to tbe law. We think tbe law would prevail in sucb a case, and tbat tbe company must so regulate its business as to conform to tbe law, unless some reasonable excuse is shown.
On tbe whole, we are of opinion tbat no case was made out to justify tbe setting aside of tbe judgment, and tbat tbe order of tbe court below was right.
By ike Court. — Order affirmed.