The opinion of the court was delivered by: Oxner, Justice.
December 10, 1958.
The question presented by this appeal is whether the insurer waived, or is estopped to assert, noncompliance by the insured with a policy provision requiring the filing of written proof of loss "within sixty days after the loss."
On January 6, 1956, appellant, American Mutual Fire Insurance Company, insured against loss or damage by fire or lighting, to the extent of $10,000.00, a building located near the town of Kingstree, Williamsburg County, owned by respondent and used as an undertaking establishment. The Company further insured the contents of said building to the extent of $3,000.00. Attached to the policy was a standard mortgagee clause, payable to the Exchange Bank of Kingstree, which held two mortgages on the property aggregating the principal amount of $10,000.00. On October 16, 1956, while the policy was in force, the building and most of the contents were destroyed by fire. It is admitted that the building was a total loss but there was a dispute as to the value of the personal property destroyed.
After the fire Fred Green failed to pay the mortgage debt and on January 22, 1957, the Insurance Company, as permitted by the policy, paid to the Exchange Bank of Kingstree the sum of $10,122.50, representing the principal and interest due on the two mortgages, and took an assignment of said mortgages from the Bank.
On February 14, 1957, this action was brought by the Fire Insurance Company to foreclose the two mortgages above mentioned. Joined as defendants along with Fred Green were certain parties who had or claimed liens on the property junior to that of the mortgages. In his answer Fred Green admitted the execution of the mortgages and by way of counterclaim sought judgment against the Insurance Company for $13,000.00, the amount he claimed to be due as a loss under the policy. By way of reply the Insurance Company admitted the issuance of the policy but denied liability upon the grounds, (1) that the building, in violation of a policy provision, had been "vacant or unoccupied beyond a period of sixty consecutive days" immediately prior to the loss, and (2) that the insured had failed to furnish written proof of loss within sixty days after the fire as required by the policy.
The case was tried at the March, 1958, term of Court for Williamsburg County. At the conclusion of the testimony, the Insurance Company made a motion for a directed verdict upon the grounds (1) that no proof of loss was filed within sixty days after the fire and (2) that the undisputed testimony showed that the building was vacant and unoccupied for a period of more than sixty days prior to the fire. In refusing the motion, the trial Judge held that by denying liability on a ground not related to proof of loss, the Company waived the provision of the policy requiring proof of loss to be filed within sixty days, and that the testimony was conflicting on the issue raised by the second ground. Accordingly, the Court submitted to the jury the question as to whether the building was vacant or unoccupied for a period of more than sixty days prior to the fire and instructed the jury that if this issue was answered favorably to the insured, they should further determine the value of the personal property lost in the fire. The jury found that the building had not been unoccupied or vacant for a period of more than sixty days prior to the fire, and fixed the value of the personal property destroyed at $3,000.00. The Insurance Company made a motion for judgment non obstante veredicto or, in the alternative, for a new trial, which was refused.
The record contains four exceptions. One has been abandoned. The other three raise substantially one question, namely: Has the Company waived the admitted failure of the insured to file proof of loss within sixty days after the fire?
Insured, Fred Green, is a Negro with apparently little business experience. Immediately after the fire, which occurred about midnight, he got in touch with Jack Edwards, of the Edwards Insurance Agency of Kingstree, through whom the policy was written. Edwards in turn promptly notified an adjustment firm at Sumter which on the day following the fire sent one of their adjusters, Edward S. Ervin, to Kingstree to investigate the loss. Green's testimony as to his conversation with Ervin on that visit is as follows:
"Q. * * * Did you have any conversation with Mr. Ervin?
"A. Yes, sir, after Mr. Ervin went through, looked around, I asked him could I go ahead and take care of some of the things around there, where I thought I could take care, because I know they would be destroyed, and his answer to me was no, don't you move nothing, don't worry with a thing around here until you hear from me. He said I will let you hear from me.
"Q. Did you ever hear from him?
On November 23, 1956, at the request of Ervin, Green signed a "non-waiver agreement." Nothing further occurred until December 28, 1956, when the claims manager of the Insurance Company came from Charleston to Kingstree and denied liability on the ground "that the property was unoccupied at the time of the fire." Thereafter on January 29, 1957, a sworn, written proof of loss was filed with the Company. This action was instituted a few weeks later.
Ervin, the adjuster, did not testify and there is no explanation of the failure of the Company to offer him as a witness. The testimony of Green as to his conversation with Ervin is uncontradicted.
The general rule is that an insurer, by denying liability under a property insurance policy on grounds not related to the proof of loss, waives the provision of the policy requiring proof of loss to be filed within a specified time after the loss. Annotation, 49 A.L.R.2d 161. Among our decisions applying this rule are: Stickley v. Mobile Insurance Co., 37 S.C. 56, 16 S.E. 280, 283, Wilson v. Commercial Union Assurance Co., 51 S.C. 540, 29 S.E. 245; McBryde v. South Carolina Mutual Insurance Co., 55 S.C. 589, 33 S.E. 729; Madden & Co. v. Phoenix Insurance Co., 70 S.C. 295, 49 S.E. 855; Ward v. Pacific Fire Insurance Co., 115 S.C. 53, 104 S.E. 316. As shown in the foregoing annotation, the rule has been uniformly applied in cases where the denial of liability was made during the period prescribed by the policy for the presentation of proofs of loss. But there is a split of authority on the question whether a denial of liability made after the expiration of such period, on grounds not related to such proof, constitutes a waiver of compliance with the policy provision. This conflict of authority is largely the result of a difference of opinion between various jurisdictions as to whether waiver must be based on some element of estoppel. In most jurisdictions where a waiver may be created by acts or ...