Gilbert v. Globe & Rutgers Fire Ins. Co.
Supreme Court of Oregon
171 P. 1161, rehearing denied 178 P. 358 (Or. 1918)

Facts:

Gilbert had an insurance policy with Globe, and the policy required that all suits must be commenced within one year of the fire. However, Gilbert sued a few years after the deadline.

  • Gilbert argued that the reason why he didn’t sue within the 12 months was because the adjuster kept promising that they would pay. Thus, Globe was estopped from arguing the time limit.

History:

Trial jury ruled in favor Gilbert.

Issue:

Was the suit brought within a reasonable time?

Holding:

No. Case reversed.

Reasoning:

Assuming Globe was estopped to plead the time limitation, the estoppel was removed when P was notified that the D denied liability and would contest his claim.

  • At that point he had a reasonable time in which to bring the action, but he delayed years.

Estoppel—The non-occurrence of a condition is excused if

(1) the party whose duty is subject to the condition made a false representation of material fact;

(2) the representation was known to be false by the party making it, or the party was negligent in not knowing its falsity,

(3) it was believed to be true by the person to whom it was made, (4) the party making the representation intended that it be acted on, or the person acting on it was justified in assuming this intent, and

(5) the party asserting estoppel acted on the representation in a way that will result in substantial prejudice unless the claim of estoppel succeeds.

Note: When a condition precedent to a contract duty is taking action within a certain amount of time, estoppel tolls the time (which is a downside, as evidenced in the case above) and waiver eliminates the condition forever, like in impracticability.