BOLLINGER v. NATIONAL FIRE INS CO OF HARTFORD CONN (1944)

Plaintiff, as trustee in bankruptcy, brought this action to recover on a policy of fire insurance issued to the bankrupt, Kwan Tow. The policy follows the standard form prescribed by the California statutes, Insurance Code, §§ 2070, 2071, St.1935, p. 596, and contains the following clause: ‘No suit or action on this policy for the recovery of any claim shall be sustained, until after full compliance by the insured with all of the foregoing requirements, nor unless begun within fifteen months next after commencement of the fire.’ The policy requires the insured to submit preliminary proof of loss to the company within sixty days after the fire and gives the company twenty days thereafter to approve or disapprove the amount of loss claimed. If that amount is ascertained either by agreement or arbitration, it is payable thirty days thereafter; if not ascertained within sixty days after the company receives the preliminary proof of loss, it is payable ninety days thereafter. Provision is made for arbitration in the event the insured and the company cannot agree upon the amount of loss, to be completed within ninety days after the preliminary proof of loss has been received. The policy also provides that the words ‘the time of loss or damage’ are equivalent to ‘the time of the commencement of the fire.’

The complaint incorporates the policy by reference and alleges that on September 27, 1939, property insured by this policy was partially destroyed by fire; that on November 18, 1939, plaintiff and the insured furnished the defendant insurer with proof of loss as required by the policy; and that on December 22, 1939, plaintiff and defendant's agent entered into an agreement fixing the amount of loss at $1,160.25. Defendant denied all liability, and on January 15, 1940, plaintiff brought suit in the Superior Court of San Joaquin County to recover on the policy. On defendant's motion the action was transferred to the Municipal Court of the City and County of San Francisco and brought to trial on January 8, 1941. After plaintiff presented his evidence, defendant moved for a nonsuit upon the ground that the action had been filed prematurely because it was commenced within thirty days after the loss was ascertained, and before it became payable under the policy. The motion was granted and judgment upon the nonsuit entered on February 21, 1941. On February 25, 1941, about eighteen months after the date of the fire, plaintiff filed the present action in the Superior Court of Contra Costa County.

The complaint also alleges that on January 8, 1941, the day of the trial of the first action, plaintiff learned for the first time that defendant was relying upon the defense that the action was premature and that had he known this earlier he would have dismissed that action and filed a new one within the time permitted by the policy; that this defense was not set up or disclosed in defendant's demurrer or answer in that action, and that while it was pending defendant requested and obtained numerous continuances and extensions of time. Plaintiff alleges that by this conduct and by its denial of all liability under the policy defendant waived the requirement that suit be commenced within fifteen months after the fire. Defendant demurred, claiming that the action was barred, since it was commenced more than fifteen months after the fire. The trial court sustained the demurrer without leave to amend and entered judgment for defendant. Plaintiff appeals, contending that under a proper construction of the policy his action was filed in time, that the facts pleaded in the complaint are sufficient to estop defendant from relying upon the limitation clause, and that he should be allowed to amend his complaint if it does not allege a cause of action.

Plaintiff contends that the fifteen months' limitation is inconsistent with the prohibition against any action before the loss becomes payable under the provisions of the policy, since a limitation period cannot run while the right to sue is suspended, and that the ambiguity must be construed against the defendant. Plaintiff argues that the words ‘after the commencement of the fire’ mean ‘after the loss becomes payable’ and that viewed in its entirety the provision gives the insured fifteen months after his cause of action accrues in which to file an action on the policy. Plaintiff relies principally upon Case v. Sun Insurance Co., 83 Cal. 473, 23 P. 534, 8 L.R.A. 48, which held that a similar clause limiting the period for suit to ‘twelve months next after the fire’ did not bar an action brought more than thirteen months thereafter. Under the facts in that case, however, ‘no right of action accrued until more than 3 months after it was barred by the 12-months limitation clause.’ Although parties to a contract may agree upon a limitation period less than that provided by statute, a reasonable time must be allowed for the bringing of an action. Tebbets v. Fidelity & Casualty Co., 155 Cal. 137, 99 P. 501; Fitzpatrick v. North American Accident Ins. Co., 18 Cal.App. 264, 123 P. 209; Harlow v. American Equitable Assur. Co., 87 Cal.App. 28, 261 P. 499; Beeson v. Schloss, 183 Cal. 618, 192 P. 292; Fageol T. & C. Co. v. Pacific Indemnity Co., 18 Cal.2d 748, 117 P.2d 669. While the court relied upon cases from other states that support plaintiff's contention, it distinguished Garido v. American Cent. Ins. Co. of St. Louis, 2 Cal. Unrep. 560, 8 P. 512, on the ground that the plaintiff there had ample time after his right of action accrued to commence the action within twelve months after the loss occurred. Any doubt as to what rule was applied in the Sun Insurance Company case is dispelled by the unequivocal holding in Tebbets v. Fidelity & Casualty Co., supra. The life-accident policy involved in the latter case provided that proof of death must be furnished within two months of its occurrence, and that action could not be brought until three months after filing such proofs or ‘brought at all unless begun within six months from time of death.’ [155 Cal. 137, 99 P. 502] The action was not brought until seven months from the date of death, and the trial court sustained the demurrer to the complaint on this ground. This court affirmed the judgment, stating: ‘The six months' period was not in itself unreasonable. It began to run from the date of the death, and was not affected by the provision that legal proceedings could not be brought before the expiration of three months from the date of filing proofs.’ See, also, Fitzpatrick v. North American Accident Insurance Co., supra; Bennett v. Modern Woodmen of America, 52 Cal.App. 581, 199 P. 343.

In the present case the policy allowed the plaintiff ample time within which to bring an action. It requires that a certain time elapse before the insured can bring an action, not exceeding approximately 150 days or five months from the date of the fire. The insured is given 60 days from the date of the fire to submit his preliminary proof of loss, and the loss becomes payable not later than 90 days after receipt by the company of this preliminary proof. There remains, therefore, a period of approximately ten months within which the insured may bring his action, unquestionably a reasonable length of time. Tebbets v. Fidelity & Casualty Co., supra; Beeson v. Schloss, supra; Rechtsteiner v. National Surety Co., 44 Cal. App. 774, 776, 187 P. 34; Fageol T. & C. Co. v. Pacific Indemnity Co., supra; see note 121 A.L.R. 758, 772–774.

The reference to fifteen months is qualified by the phrase, ‘next after the commencement of the fire’ and conveys no intention to give the insured fifteen months after the cause of action accrued within which to bring the action. The policy delimits a period in which suit cannot be brought, not to exceed approximately five months from the fire, the time allowed for preliminary rpoof of loss, agreement upon amount of loss, and the period allowed the company within which to pay it. There is also delimited the period in which suit must be brought, terminating fifteen months after the fire. The policy thus clearly provides for a period of fifteen months within which to perform all preliminary conditions and commence the action. The provision does not give the insured a specified time during all of which he may sue, but simply fixes a period beyond which he may not This interpretation has been adopted by the courts of many states. Daly v. Concordia Fire Ins. Co., 16 Colo.App. 349, 65 P. 416; Chichester v. New Hampshire Fire Ins. Co., 74 Conn. 510, 51 A. 545; State Ins. Co. of Des Moines v. Stoffels, 48 Kan. 205, 29 P. 479; Travelers' Ins. Co. v. California Ins. Co., 1 N.D. 151, 45 N.W. 703, 8 L.R.A. 769; Wever v. Pioneer F. Ins. Co., 49 Okl. 546, 153 P. 1146, L.R.A. 1918F, 507; Egan v. Oakland Home Ins. Co., 29 Or. 403, 42 P. 990, 54 Am.St.Rep. 798; State Ins. Co. v. Meesman, 2 Wash. 459, 27 P. 77, 26 Am.St.Rep. 870; Hart v. Citizens' Ins. Co., 86 Wis. 77, 56 N.W. 332, 21 L.R.A. 743, 39 Am.St.Rep. 877; King v. Watertown Fire Ins. Co., 47 Hun, N.Y., 1; Appel v. Cooper Ins. Co., 76 Ohio St. 52, 80 N.E. 955, 10 L.R.A.,N.S., 674, 10 Ann.Cas 821; Virginia Fire & Marine Ins. Co. v. Wells, 83 Va. 736, 3 S.E. 349; Western Coal & Dock Co. v. Traders' Ins. Co., 122 Ill.App. 138; Dahrooge v. Rochester-German Ins. Co., 177 Mich. 442, 143 N.W. 608, 48 L.R.A.,N.S., 906; Rottier v. German Ins. Co., 84 Minn. 116, 86 N.W. 888; Grigsby v. German Ins. Co., 40 Mo.App. 276; Gibraltar Fire & Marine Ins. Co. v. Lanier, 64 Ga.App. 269, 13 S.E.2d 27; Ignazio v. Fire Ass'n of Philadelphia, 98 N.J.L. 602, 121 A. 456; Carraway v. Merchants' Mut. Ins. Co., 26 La.Ann. 298; see Provident Fund Soc. v. Howell, 110 Ala. 508, 18 So. 311.

Plaintiff contends that under section 356 of the Ocde of Civil Procedure the period allowed for the commencement of the action must be extended by the time allowed for preliminary proof of loss and agreement upon amount of loss and for payment by the insurer. This section provides, ‘When the commencement of an action is stayed by injunction or statutory prohibition, the time of the continuance of the injunction or prohibition is not part of the time limited for the commencement of the action.’ The time limited for the commencement of the action must be ascertained before it can be determined whether this section applies. Plaintiff assumes that in the present case the time limited for the commencement of the action is fifteen months from the date of the fire. Under section 2071 of the Insurance Code, however, fifteen months from the date of the fire marks, not the period of limitation, but only the date on which the period of limitation expires. The period commences when the cause of action accrues, namely, upon compliance with the requirements of the policy regarding proof of loss and agreement upon amount of loss and expiration of the time allowed the insurer to make payment. The period between that date and the date fifteen months after the fire is the time limited by the specific provisions of the Insurance Code for the commencement of the action. Since the action was not stayed during that period, section 356 of the Code of Civil Procedure has no application.

Plaintiff contends that defendant is estopped from contending that the action is barred by its failure in the first action to claim in its demurrer or answer that the suit was filed prematurely or to disclose this defense before the expiration of the fifteen-month period, and by the delays it caused in obtaining repeated continuances and extensions of time. No estoppel arises, however, from the mere failure to assert the defense of premature filing before the trial of the action. Plaintiff does not allege that defendant affirmatively indicated that it would not rely upon the defense, and silence alone does not create an estoppel in the absence of a duty to speak. See 10 Cal.Jur. 631; 19 Am.Jur. 662–664; Paul v. Fidelity & Casualty Co., 186 Mass. 413, 71 N.E. 801, 104 Am.St.Rep. 594. Plaintiff and defendant were adversaries in an action at law and as such entitled to deal with each other at arm's length. Not only was defendant under no duty to warn plaintiff that his rights would be forfeited if he did not commence a proper action within the time limited by the policy (Fleishbein v. Western Auto. S. Agency, 19 Cal.App.2d 424, 428, 65 P.2d 928; Wilhelmi v. Des Moines Ins. Co., 103 Iowa 532, 72 N.W. 685, 686; Howard Ins. Co. v. Hocking, 130 Pa. 170, 18 A. 614; Travelers' Ins. Co. v. California Ins. Co., supra; see Arthur v. Homestead Fire Ins. Co., 78 N.Y. 462, 34 Am.Rep. 550), but as an adversary, defendant was not compelled to reveal its strategy of action to plaintiff by disclosing that it would raise the defense of prematureness at the trial. Plaintiff is charged with notice of the provisions of his policy (Madsen v. Maryland Casualty Co., 168 Cal. 204, 206, 207, 142 P. 51; Rice v. California-Western States Life Ins. Co., 21 Cal.App.2d 660, 670, 70 P.2d 516) and of the fact that his action was filed prematurely (see 10 Cal.Jur. 760, 761). He is also charged with notice that defendant might raise this defense at any time that the court allowed, and if the court erred in permitting defendant to delay the plea until the time of trial, plaintiff's remedy lay in an appeal in that action. State Ins. Co. of Des Moines v. Stoffels, supra. Bringing an action within the time provided in the policy does not prevent application of the limitation provision to a subsequent suit brought after the expiration of the period limited if the earlier action was dismissed or discontinued. Chichester v. New Hampshire Fire Ins. Co., supra; State Ins. Co. of Des Moines v. Stoffels, supra; Travelers' Ins. Co. v. California Ins. Co., supra; 5 Joyce, The Law of Insurance, 5th Ed., 5371, § 3204, and cases there cited.

Similarly, no estoppel arises from the fact that defendant obtained continuances and extensions of time in the earlier action, for there is no contention that they were improper. They followed the common practice, and are not a basis for an estoppel against asserting the running of the limitation period in a subsequent action. Arthur v. Homestead Fire Ins. Co., supra.

Plaintiff contends that defendant waived the limitation clause by denying liability under the policy upon grounds other than that it was barred. There was no occasion, however, for defendant to assert this defense earlier than in the present action. The limitation period had not run when defendant first denied liability under the policy or when plaintiff commenced his earlier action. A contract limitation is not waived by a denial of liability on other grounds unless the defense that the limitation period has expired is available at the time of the denial. Hansell-Elcock Co. v. Frankfort M. A. & P. G. Ins. Co., 177 Ill.App. 500, 504. Although the first action was still pending when the period expired, the defense was inapplicable to that action, and defendant's subsequent claim therein that it had been filed prematurely did not preclude reliance upon the running of the limitation period, for it was not a denial of liability under the policy but a defense to the particular action. See Travelers' Ins. Co. v. California Ins. Co., supra.

Plaintiff contends finally that he should be allowed to amend the complaint to set forth the reasons for the delay that occurred between the dates of the fire and the agreement as to loss, as well as the circumstances surrounding the requests for continuances of the first action. These reasons and circumstances are not disclosed nor were they presented to the trial court. The allegations of the complaint show that the agreement on the amount of loss was reached within the period fixed in the policy and without unusual delay. No offer was made in the court below to amend the complaint although ample opportunity was afforded to do so. Plaintiff relies on section 472c of the Code of Civil Procedure providing: ‘When any court makes an order sustaining a demurrer without leave to amend the question as to whether or not such court abused its discretion in making such an order is open on appeal even though no request to amend such pleading was made.’ The plaintiff has the burden of showing that the trial court abused its discretion (Wixon v. Devine, 91 Cal. 477, 483, 27 P. 777; Vilardo v. County of Sacramento, 54 Cal.App.2d 413, 417, 129 P.2d 165) in order to avail himself of this section. That burden is not sustained if, as in the present case, there is nothing in the record before the trial court to indicate that plaintiff could plead sufficient facts, or to indicate the changes sought to be made, and there is no showing on appeal that if the changes were made a cause of action would be stated. See Wennerholm v. Stanford University, 20 Cal.2d 713, 719, 128 P.2d 522, 141 A.L.R. 1358; Rose v. Ames, 53 Cal.App.2d 583, 589, 128 P.2d 65; Ehlen v. Burrows, 51 Cal.App.2d 141, 144, 124 P.2d 82.

Since plaintiff instituted this proceeding in his capacity as trustee in bankruptcy, the question has arisen whether the applicable statute of limitations is section 11, sub. e of the federal Bankruptcy Act of 1938, 11 U.S.C.A. § 29, sum. e, which provides: ‘A receiver or trustee may, within two years subsequent to the date of adjudication or within such further period of time as the Federal or State law may permit, institute proceedings in behalf of the estate upon any claim against which the period of limitation fixed by Federal or State law had not expired at the time of the filing of the petition in bankruptcy. * * *’

It is well settled that in enforcing a bankrupt's chose in action, the trustee ordinarily has no greater rights than the bankrupt and is subject to any defense that might have been raised against the latter. See 8 C.J.S., Bankruptcy, § 194, pp. 656, 657; Bankruptcy, § 194, n. 91, § 199; 4 Collier on Bankruptcy, 14th Ed., 1160. The policy suit limitation therefore governs unless the special limitation in the Bankruptcy Act applies.

Provisions similar to section 11, sub. e of the 1938 act, have been in the federal bankruptcy laws for more than a century. Section 8 of the Bankruptcy Act of 1841, 5 U.S.Stats. 446, provided: ‘* * * No suit at law or in equity shall, in any case, be maintainable by or against such assignee * * * in any court whatsoever unless the same be brought within two years after the declaration and decree in bankruptcy, or after the cause of suit shall first have accrued.’ In the first case construing this section, In re Conant, C. C. N. Y. Fed.Cas.No. 3086, the court declared: ‘It is obvious * * * that the limitation applies only to suits growing out of disputes in respect to property and rights of property of the bankrupt which came to the hands of the assignee, and to which adverse claims existed while in the hands of the bankrupt, and before the assignment. * * * The limitation has no reference to suits growing out of the dealings of the assignee with the estate after it comes into his hands. These are matters for which he may be made personally responsible, and no reason existed for changing the general period of limitation any more than in the case of any other trustee dealing with trust property * * *.’

The Bankruptcy Act of 1867, 14 Stat. 518, as later substantially incorporated into section 5057 of the United States Revised Statutes, provided: ‘No suit, either at law or in equity, shall be maintainable in any court between an assignee in bankruptcy and a person claiming an adverse interest, touching any property or rights of property transferable to or vested in such assignee, unless brought within two years from the time when the cause of action accrued for or against such assignee. And this provision shall not in any case revive a right of action barred at the time when an assignee is appointed.’ The United States Supreme Court, following the doctrine of In re Conant, supra, held that this section did not apply to causes of action arising after the estate came into the hands of the assignee. Dushane v. Beall, 161 U.S. 513, 515, 16 S.Ct. 637, 40 L.Ed. 791; Hammond v. Whittredge, 204 U.S. 538, 550, 27 S.Ct. 396, 51 L.Ed. 606; Yazoo, etc., R. Co. v. Brewer, 231 U.S. 245, 248, 34 S.Ct. 90, 58 L.Ed. 204; see, also, Bowen v. Delaware, etc., R. Co., 153 N.Y. 476, 47 N.E. 907, 60 Am.St.Rep. 667; 8 C.J.S., Bankruptcy, 346, p. 1133. These cases supersede the earlier cases upon which plaintiff relies: Bailey v. Glover, 21 Wall. (U.S.) 342, 22 L.Ed. 636; Norton v. De La Villebeuve, Fed.Cas. 10, 350, 1 Woods 163; Phelan v. O'Brien, C.C., 13 F. 656; Harvey v. Gage, C.C., 31 F. 275; Rock v. Dennett, 155 Mass. 500, 30 N.E. 171.

In 1898 the limitation provision was given the form in which it remained until the 1938 act. It then read: ‘Suits shall not be brought by or against a trustee of a bankrupt estate subsequent to two years after the estate has been closed.’ 11 U.S.C.A. § 29 sub. d. Like its predecessors this provision was held not to apply to causes of action existing before bankruptcy. Stanolind Oil & Gas Co. v. Logan, 5 Cir., 92 F.2d 28, 31, certiorari denied, 302 U.S. 763, 58 S.Ct. 409, 82 L.Ed. 592; Logan v. Stanolind Oil Co., 303 U.S. 636, 58 S.Ct. 522, 82 L.Ed. 1097; Tuffy v. Nichols, 2 Cir., 120 F.2d 906, 909, certiorari denied, 314 U.S. 660, 62 S.Ct. 113, 86 L.Ed. 528.

Plaintiff contends that the foregoing authorities are not controlling on the ground that they were concerned with subdivision d, which remains in the act, and that subdivision e is a new provision having an entirely different purpose. Before the enactment of the 1938 act, subdivision d provided not only for suits by but for suits against a trustee. In the 1938 act, subdivision d covers only suits against the trustee, whereas subdivision e covers suits by the trustee. No reason appears why the authorities cited, all of which applied to suits by trustees under former subdivision d or its predecessors, do not apply to suits by trustees under subdivision e. They can be held inapplicable to subdivision e only if its language is so different from that formerly used in subdivision d as to indicate an intention to avoid their application and to change the rule. As it formerly read with respect to suits by a trustee, subdivision d provided: ‘Suits shall not be brought by * * * a trustee of a bankrupt estate subsequent to two years after the estate has been closed.’ The fact that subdivision e provides affirmatively that the trustee may institute proceedings within two years, while subdivision d provided negatively that suits shall not be brought subsequent to two years, does not indicate an intention to extend the scope of subdivision e beyond that of former subdivision d, any more than the fact that subdivision e refers to ‘proceedings' instituted while subdivision d referred to ‘suits' brought. Nor is there any indication of such an intention in the fact that the phrase ‘after the estate has been closed’ in subdivision d has been supplanted in subdivision e by ‘subsequent to the date of adjudication.’ This change removes any uncertainty as to the time of the commencement of the two-year period, for the ‘date of adjudication’ is defined in section 1 of the act as the date of the entry of the decree in bankruptcy. 11 U.S.C.A. § 1. The phrase ‘or within such further period of time as the Federal or State law may permit’ appearing in subdivision e simply codifies the rule of the cases cited above, for in each of them the trustee was allowed to bring suit after the two-year period because that period was not applicable and the claim was not barred under the statute of limitations that was applicable. The words ‘upon any claim against which the period of limitation fixed by Federal or State law had not expired at the time of the filing of the petition in bankruptcy’ expressly set forth a rule that was also set forth in the 1867 act and that would exist independently of such language. See In re Dunavant, D.C., 96 F. 542; Sheldon v. Parker, 66 Neb. 610, 92 N.W. 923, 95 N.W. 1015.

Plaintiff contends that the cases cited are not controlling if the application of a different period of limitation from that in the Bankruptcy Act would bar the suit, for in all of these cases the trustee was allowed to bring suit. The applicability of a statute of limitations, however, depends, not on the fortuitous circumstance that it would or would not bar the action but on whether its framers have provided that the cause of action should be governed by it. As the federal cases had held, Congress did not intend the special limitation in the Bankruptcy Act to apply to a cause of action that accrues after the adjudication in bankruptcy, and it is immaterial whether the applicable statute of limitations bars or permits the action.

In view of the many decisions of the Supreme Court of the United States and other federal and state courts that the special limitation in the Bankruptcy Act does not apply to claims and causes of action arising after bankruptcy, and in the absence of any expression of intention to change the rule of these cases, the conclusion is inevitable that no change in the rule was intended. See 1 Collier on Bankruptcy, 14th Ed., 1187.

Plaintiff relies on Hansen v. California Bank, 17 Cal.App.2d 80, 61 P.2d 794; Isaacs v. Neece, 5 Cir., 75 F.2d 566; Sproul v. Gambone, D. C., 34 F.Supp. 441; Banister v. Solomon, 2 Cir., 126 F.2d 740; Devoy v. Superior Fire Ins. Co., 239 App.Div. 28, 265 N.Y.S. 432. The claim in each of these cases, however, arose before the date of adjudication in bankruptcy.

The fire in the present case occurred one week after the plaintiff was appointed but two days before he filed his bond and qualified as trustee. He invokes section 11, sub. e, on the ground that the claim existed before he was legally able to act. The fire, however, admittedly occurred after the ‘date of adjudication’ as provided in the act. There was moreover, no enforceable cause of action until compliance with the requirements of the policy regarding proof of loss, agreement upon amount of loss, and expiration of the time allowed the insurer to make payment. It was held in Tuffy v. Nichols, 2 Cir., 120 F.2d 906, 909, that the rule that the limitation in the Bankruptcy Act applies only to actions existing at the time of bankruptcy ‘is not avoided here merely because the origin of the adverse claim predated bankruptcy. * * * There was no cause of action to enforce until * * * after bankruptcy.’ A fortiori the rule is not avoided where the origin of the claim follows bankruptcy.

The judgment is affirmed.

I dissent. The insured in a fire insurance policy suffered a loss covered by his policy on September 27, 1939. Proof of loss was given on November 18, 1939. The insured and an agent of the insurer entered into an agreement fixing the amount of the loss on December 2i, 1939, but the insurer denied any liability under the policy, and action was commenced thereon on January 15, 1940. On February 21, 1941, a nonsuit was granted on the insurer's motion on the ground that the action was premature because it was commenced less than 30 days after the loss was ascertained. Thereafter on February 25, 1941, about 18 months after the fire, but within 15 months after his cause of action accrued, the insured commenced the instant action on the policy. The insured learned for the first time on January 8, 1941, after the lapse of the 15 months since the fire, that the insurer was relying upon the prematurity of the action. The insurer's demurrer in the lastmentioned action on the ground that said action was barred by the 15 months' limitation period specified in the policy was sustained. The insured claims that he relied upon the insurer's conduct in delaying the first action and not raising the issue of prematurity until after the 15 months had expired and that thereby the insurer waived that limitation period and was estopped to urge it in the instant action.

First, with regard to estoppel, the majority decision rests upon the ground that there is no estoppel because the insurer could raise the defense of prematurity in the first action at any time and the insured must have known that; that therefore it had no duty to speak or mention that defense until the motion for a nonsuit was made, and the insured could not rely upon its failure to raise the defense before that time. The foundation upon which that argument rests is clearly erroneous and contrary to the authorities. There was a clear legal duty on the part of the insurer to raise its defense of prematurity in its answer in the first action. The complaint in the instant action alleges that that defense was not pleaded in the first action by way of demurrer or answer. A defense of prematurity is a dilatory plea in abatement and is not favored in the law. Seches v. Bard, 215 Cal. 79, 8 P.2d 835; California Thorn Cordage, Inc. v. Diller, 121 Cal.App. 542, 9 P.2d 594; Verbeck v. Clymer, 202 Cal. 557, 261 P. 1017; 1 C.J.S., Abatement & Revival, § 85. If that defense is not specially and promptly pleaded it is waived. Seches v. Bard, supra; Verveck v. Clymer, supra; Realty & Rebuilding Co. v. Rea, 184 Cal. 565, 194 P. 1024; Bemmerly v. Woodward, 124 Cal. 568, 57 P. 561; see S. W. Towle Lumber Co. v. Anderson, 208 Cal. 371, 281 P. 500. It must be pleaded in the answer as was said in Bemmerly v. Woodward, supra, 124 Cal. page 574, 57 P. page 563:

‘It has been held, however, that this [a defense of prematurity] is a mere matter of abatement, which is waived unless pleaded. Formerly such pleas could only be interposed before a plea to the merit. Under our Code all defenses may be included in one answer, but, if a defense which is mere matter of abatement is not made by that time, it should be deemed waived.’ (Emphasis added.) Obviously, the insured had the right to and did rely upon that waiver by the insurer. The insurer did not raise the defense by answer as the law required presumably because it intended to mislead the insured, lull him into security, until the 15 months' period had expired, and then invoke the abatement on a motion for a nonsuit. Such conduct estops it from now relying upon the limitation period of 15 months. The reason underlying the requirement of pleading prematurity is stated in Bemmerly v. Woodward, supra, 124 Cal. page 575, 57 P. page 563, in discussing failure to present a claim in probate before an action thereon was commenced.

‘In this case, if the defense had been promptly made, plaintiff [claimants] could have dismissed their suit and brought another. But if, after three months [the time to present claims] had elapsed after the claim was rejected, the point could be successfully urged, plaintiff would have lost their right of action.’ (Emphasis added.) Therefore, a clear duty rested upon the insurer to promptly plead prematurity and thus enable the insured to dismiss and commence another action within the limitation period. Its failure to do so estops it from now relying upon the limitation period. The reason behind the requirement of promptness in a plea in abatement is also stated in 1 C.J.S., Abatement & Revival, § 193:

‘To guard plaintiff against surprise; to save the time of the court and avoid unnecessary court expenses; to save litigants from the expenses of needless litigation; and to guard against the bar of the statute of limitations, in the event of abatement on some technical ground.’ In Isaac v. Donegal & Conoy Mut. Fire Ins. Co., 308 Pa. 439, 162 A. 300 the court held that a defense of plea in abatement was waived by an insurer where the limitation in the policy had run on a new action. It recognized the injustice that would result and invoked the doctrine of estoppel. It is said at page 302 of 162a:

‘The insurer also contends that as the policy insured three persons whose interest in most of the property was joint and several, but as this is a joint action, it cannot be sustained because part of the property was owned in severalty. The amended pleadings which raised this question were not filed until after the first trial and after the time had expired for instituting suit under the policy, though defendants knew when the statement was filed that a small part of the property was owned in severalty; yet they waited, as stated above, until the limitation in the policy would have defeated a separate action for this insurance; the laches of the company prevents such claim from being now raised. As the parties elected to include all the property, owned jointly and severally, in one policy, as the suit is on that policy, since the company knew that a small part of the property was owned individually, we cannot say at this late date that the court below committed error in refusing to separate the action.’ (Emphasis added.) In the instant case the insurer by its tactics must similarly be said to have waived the 15 months' limitation.

But assuming there is no estoppel, I am convinced that the action was timely brought as the time during which plaintiff was precluded from commencing the action must be excluded from the 15 months' period provided in the policy pursuant to section 356 of the Code of Civil Procedure which provides:

‘When the commencement of an action is stayed by injunction or statutory prohibition, the time of the continuance of the injunction or prohibition is not part of the time limited for the commencement of the action.’ The Legislature has fixed four years, Code Civ.Proc. § 337, as being ordinarily the reasonable period within which an action founded upon an instrument in writing shall be brought, but the provisions of sections 2070 and 2071 of the Insurance Code have prescribed ‘fifteen months next after the commencement of the fire’ as the period within which an action for the recovery of a claim upon a fire insurance policy must be instituted. This special limitation is required to be set forth in every policy and, by reason of such statute, it is to be deemed included in every policy, regardless of whether it is actually written therein. It derives its effectiveness from the statute. The same statute also prescribes certain requirements as to notification, proof, ascertainment of loss, and lapse of time, which must be met before an action can be ‘sustained.’ It specifically provides that ‘No suit or action * * * for the recovery of any claim shall be sustained, until after full compliance by the insured with all of the foregoing requirements, nor unless begun within fifteen months next after the commencement of the fire.’ (Italics added.) This section, on its face, would seem to mean that an action on the policy could be commenced at any time ‘within fifteen months next after the commencement of the fire’ but that it could not be ‘sustained,’ as by a judgment for plaintiff, until the lapse of the required time before the commencement of the action.

The meaning of the word ‘sustained,’ and the effect of the clause in which it appears, might be open to argument if the defendant here had not already committed itself to its understanding of a definite meaning for that word and the clause, and enforced that meaning on the plaintiff. The meaning so attributed to the clause by defendant is not merely that an action assertedly prematurely brought can be abated during the incompetent period and until the specified requirements have been met, but is, rather, that such an action must be dismissed. In other words, the position of the defendant, as invoked in the preceding action, is that the provision in question amounts to a statutory prohibition staying the commencement of the action. Defendant cannot be permitted to invoke the benefits of a statutory prohibition against the commencement of an action on the policy without also bearing the burden of such statutory prohibition. Section 356 of the Code of Civil Procedure is a general law of the state, applicable under the circumstances shown. The majority opinion seeks to escape that section by arguing that: ‘The time limited for the commencement of the action must be ascertained before it can be determined whether this section applies. Plaintiff assumes that in the present case the time limited for the commencement of the action is fifteen months from the date of the fire. Under section 2071 of the Insurance Code, however, fifteen months from the date of the fire marks, not the period of limitation, but only the date on which the period of limitation expires. The period commences when the cause of action accrues, namely, upon compliance with the requirements of the policy regarding proof of loss and agreement upon amount of loss and expiration of the time allowed the insurer to make payment. The period between that date and the date fifteen months after the fire is the time limited by the specific provisions of the Insurance Code for the commencement of the action.’ The fallacy of that position is apparent on the face of the opinion. The time limited clearly means the fifteen months from the date of the fire. The opinion so states in the forepart in quoting from Tebbets v. Fidelity & Casualty Co., 155 Cal. 137, 139, 99 P. 501, 502, as follows: ‘The six months' period was not in itself unreasonable. It began to run from the date of the death, and was not affected by the provision that legal proceedings could not be brought before the expiration of three months from the date of filing proofs.’ (Emphasis added.)

The period which commences running at the date of death or the fire can be none other than the period limited for the commencement of the action. It is not the period after the preliminary steps have been taken. Hence the time during which suit cannot be prosecuted must be added to the fifteen months' period by virtue of the provisions of section 356 of the Code of Civil Procedure. In other words plaintiff was prohibited by statute, §§ 2070 and 2071, Insurance Code, for a period of approximately four months from commencing an action on the policy of insurance, and under the provisions of said section 356 ‘the time of the continuance of the * * * prohibition is not part of the time limited [15 months] for the commencement of the action.’ This language is too clear to justify any other interpretation, and I am forced to conclude that the present action was commenced in time and the judgment of the trial court should therefore be reversed.

TRAYNOR, Justice.

GIBSON, C. J., and CURTIS and EDMONDS, JJ., concur.