We are of the opinion that the stipulated facts will not support a determination that the insured failed to comply with this condition of the policy. Rockmiss v. New Jersey Manufacturers' Ass'n Fire Ins. Co., 112 N.J.L. 136, 169 A. 663. Any failure of cooperation ascribable to the false statements was cured when the correct information was given the plaintiff at the time it was called upon to defend the damage suits. Ibid.
The summary judgment precluded recovery for a $27,000 loss because of the alleged misrepresentation regarding the $1,200 elevator. The Court quoted Rockmiss v New Jersey M'f'rs Ass'n Fire Ins Co, 112 N.J.L. 136, 139-140; 169 A 663 (1934): "`It is a firmly established rule of construction that policies of insurance will be liberally construed to uphold the contract, and conditions contained in them which create forfeitures will be construed most strongly against the insurer and will never be extended beyond the strict words of the policy.
They did not constitute a failure of cooperation. Rockmiss v. New Jersey Mfrs. Asso. Fire Ins. Co., 112 N.J.L. 136, 169 A. 663. FOSTER, Justice.
It alleged neither. While I agree with the majority that the case of National Union Fire Ins. Co. v. Carmical, 99 Ga. App. 98 ( 107 S.E.2d 700) is different factually from the case before us, it is my opinion that some of the rulings therein contained, in discussing the law applicable to co-operation clauses generally, are appropriate, applicable, and controlling here. I quote from that case as follows, in discussing and quoting from the case of Rockmiss v. N. J. Mfrs. Ass'n. F. Ins. Co., 112 N. J. L. 136, 140 ( 169 A 663): "It was held that the fact that the insured gave conflicting statements to the insurer, the first of which exculpated the insured from blame, and the second tended to place liability upon him, was not a `failure to co-operate.' `The insured is not accused of collusion with respondent in an effort to impose a fraudulent claim upon the insurer. It is not claimed that his second statement is tainted with falsity.
"Even where the misstatement is persisted in until shortly before the trial of the action against the insured, no breach has been found, where the insurer failed to show that the delay in telling the truth had prejudiced it. United States. — For federal cases applying state law, see state headings infra. Illinois. — Norwich Union Indem. Co. v. Haas (1950, CA7th Ill) 179 F.2d 827; Michigan. — Bernadich v. Bernadich (1938) 287 Mich. 137, 283 NW 5; Missouri. — Cowell v. Employers' Indem. Corp. (1930) 326 Mo 1103, 34 S.W.2d 705; New Jersey. — Rockmiss v. New Jersey Mfrs. Asso. Fire Ins. Co. (1934) 112 NJL 136, 169 A 663; Rhode Island. — Marley v. Bankers' Indem. Ins. Co. (1933) 53 R.I. 289, 166 A. 350."
Hence, a deliberate falsehood to the insurance company by the insured, on a subject material to the assured's liability to a claimant as to the company's defense of such a claim, would constitute a breach of the cooperation clause. Despite early New Jersey authority to the contrary, see Rockmiss v. New Jersey Mfrs.' Ass'n Fire Ins. Co., 112 N.J.L. 136 ( E. A. 1934) and Petersen v. Preferred Accident Ins. Co., 114 N.J.L. 180 ( E. A. 1935), the present state of the law is to the effect that a breach of a cooperation clause relieves the insurer from policy liability regardless of whether actual prejudice to the insurer has ensued therefrom. Kindervater v. Motorists Casualty Ins. Co., supra; Whittle v. Associated Indemnity Corp., 130 N.J.L. 576 ( E. A. 1943); Bankers Indemnity Ins. Co. v. A.E.A. Co., 32 N.J. Super. 471 ( App. Div. 1954); 8 Appleman, op. cit., § 4773, p. 158.
The discrepancy in the statements made by insured himself was clearly not sufficient to establish lack of cooperation so conclusively as to justify direction of verdict for the company. Rockmiss v. New Jersey Mf'rs Fire Ins. Co., 112 N.J.L. 136, 169, A. 663; Conroy v. Commercial Casualty Ins. Co., 292 Pa. 219, 140 A. 905. It is well settled that, to relieve the insurer of liability on the ground of lack of cooperation, discrepancies in statements by the insured must be made in bad faith and must be material in nature and prejudicial in effect.
Corp. v. Rinnert, 170 F.2d 440 (5th Cir.); Pacific Indemnity Co. v. McDonald, 107 F.2d 446 (9th Cir.); State Automobile Ins. Co. v. York, supra; Rowoldt v. Cook County Farmers Mut. Ins. Co., 26 N.E.2d 903 (App. Ct. Ill.); Rockmiss v. New Jersey Manufacturers' Ass'n F. Ins. Co., 169 A. 663 (N.J.). See also, for an interesting opinion, Kurz v. Collins, 95 N.W.2d 365 (Wis.).
Forfeitures of insurance policies are not favored in the law and such policies will be liberally construed to uphold the contract. Hampton v. Hartford Fire Insurance Co., 65 N.J.L. 265; Rockmiss v. New Jersey Manufacturers, c., Co., 112 Id. 136. The insurer having in most cases drawn the particular policy, all doubt as to the construction of terms in an insurance policy is to be construed most strongly against the insurer and in favor of the insured.
These conditions are not, as urged, conditions subsequent. They do not fall into the class which is involved in such typical cases as, Center Garage Co. v. Columbia Insurance Co., 96 N.J.L. 456, 459; 115 Atl. Rep. 401; Kleinman v. Globe Rutgers Fire Insurance Co., 111 N.J.L. 374, 378, et seq.;168 Atl. Rep. 648; Rockmiss v. New Jersey Manufacturers,c., Insurance Co., 112 N.J.L. 136; 169 Atl. Rep. 663, and Bosshardt v. Commercial Casualty Insurance Co., 124 N.J.L. 54, 55; 11 Atl. Rep. (2 d) 49. In the case at bar the stated conditions by the very terms of the policy (Condition 10) are made conditions precedent.