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Sterling Sav. & Loan Ass'n v. Reserve Ins. Co.

OCTOBER 18, 1965.

STERLING SAVINGS & LOAN ASSOCIATION, PLAINTIFF-APPELLANT,

v.

RESERVE INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the First Municipal District of the Circuit Court of Cook County; the Hon. DAVID LEFKOVITZ, Judge, presiding. Affirmed.

MR. JUSTICE KLUCZYNSKI DELIVERED THE OPINION OF THE COURT.

Plaintiff, Sterling Savings & Loan Association, brought suit as mortgagee on a fire insurance policy for loss to property which secured its loan. Defendant, Reserve Insurance Company, insurer, denied liability upon the ground that plaintiff was restricted by the mortgagee clause of the policy to file suit within one year of the fire loss and having filed its action beyond that period it came too late. Based upon the pleadings, the trial court dismissed the suit and plaintiff brought this appeal.

No facts concerned in this appeal are in dispute. The policy involved was the Standard Fire Policy with attached Standard mortgagee coverage as prescribed by the Illinois Director of Insurance since September 15, 1945. The following provisions are indicated to us as relevant to the determination of this cause:

GENERAL POLICY PROVISIONS

Requirements in case loss occurs: "The insured shall give immediate written notice to this Company of any loss . . . and within sixty days after the loss, unless such time is extended in writing by this Company, the insured shall render to this Company a proof of loss . . ."

Appraisal: "In case the insured and this Company shall fail to agree as to . . . the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser. . . ."

When Loss Payable: "The amount of loss . . . shall be payable sixty days after proof of loss . . . and ascertainment of the loss is made either by agreement between the insured and this Company . . . or by the filing with this Company of an [appraiser's] award. . . ."

Suit: "No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with and unless commenced within twelve months next after inception of the loss."

SPECIAL MORTGAGE PROVISIONS

". . . This insurance, as to the interest of the mortgagee only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property. . . ."

"If the insured fails to render proof of loss such mortgagee, upon notice, shall render proof of loss in the form herein specified within sixty (60) days thereafter and shall be subject to the provisions hereof relating to appraisal and time of payment and of bringing suit."

The fire for which damages were sought occurred on October 22, 1959 and during the effective period of the policy. The insured (mortgagor) filed no proof of loss as required. Defendant, the insurer, arguendo, admits giving plaintiff, the mortgagee, no notice of the insured's failure to file proof of loss. Plaintiff filed suit on June 20, 1962, some thirty-two months after the fire occurred.

The sole issue here involved is whether the mortgagee is required to bring suit within twelve months after inception of the loss, when it has not been put on notice that the insured failed to make proof of loss as required of him.

Plaintiff says that the issue is a matter of first impression in this state. We find no Illinois decision covering it nor was any cited. It is therefore appropriate to consider the decisions of those jurisdictions ...


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