Albert v. Home Fire & Marine Ins. Co. of Cal.

• Decision Date: 05 March 1957
• Citation: 81 N.W.2d 549,275 Wis. 280
• Parties: Mark H. ALBERT et al., d/b/a Northwestern Products Co., Appellants, v. HOME FIRE AND MARINE INS. CO. OF CALIFORNIA, a foreign corporation, et al., Respondents.
• Court: Wisconsin Supreme Court

Page 549

81 N.W.2d 549

275 Wis. 280

Mark H. ALBERT et al., d/b/a Northwestern Products Co., Appellants, v. HOME FIRE AND MARINE INS. CO. OF CALIFORNIA, a foreign

corporation, et al., Respondents.

Supreme Court of Wisconsin.

March 5, 1957.

Mark H. Albert and Theodore Albert, partners, doing business as Northwestern Products Company, commenced action November 29, 1954 against Home Fire and Marine Insurance Company of California, The Phoenix Insurance Company and American Equitable Assurance Company of New York. Plaintiffs sought to recover a total of $125,000 for loss by fire. Plaintiffs appeal from judgment in their favor for a total of $68,039.85 plus interest and costs.

On October 28, 1953 each respondent issued a fire insurance policy to appellants. They were standard policies with an endorsement entitled 'Multiple Location Reporting Form A Monthly Average with Premium Adjustment.' This form of endorsement was approved by the commissioner of insurance May 1, 1953 for use in Wisconsin. Each endorsement provided that the limit of liability for all contributing insurance was $125,000. The Home policy was for 25% of the total contributing insurance; the Phoenix 50%, and the American Equitable 25%. The provisional premium for the three policies was $785.26. Each endorsement contained, among others, the following clauses:

'1. Provisional Amount Clause--The amount of insurance provided for hereunder is provisional and is the amount on which the deposit premium is based, it being the intent of this insurance to insure hereunder the total actual cash value of the property described herein, subject to the limits of liability and provisions for other insurance herein provided. Any loss in excess of the limits stated in this policy shall be borne by the Insured or by such other insurance to the extent of such excess, notwithstanding the requirement that premium is to be adjusted on the basis of full values reported.'

'11. Value Reporting Clause--It is a condition of this policy that the insured shall report in writing to this Company not later than thirty (30) days after the last day of each calendar month, the exact location of all property covered hereunder, the total actual cash value of such property at each location and all specific insurance in force at each of such locations on the last day of each calendar month. At the time of any loss, if the Insured has failed to file with this Company reports of values as above required, this policy, subject otherwise to all its terms and conditions, shall cover only at the locations and for not more than the amounts included in the last report of values less the amount of specific insurance reported, if any, filed prior to the loss, and further, if such delinquent report is the first report of values herein required to be filed, this policy shall cover only at the respective locations specifically named herein and for not exceeding 75% of the applicable limit of liability of this Company specified in the Limit of Liability Clause.'

'12. Full Reporting Clause--Liability under this policy shall not in any case exceed that proportion of any loss hereunder, (meaning the loss at the location involved after deducting the liability of specific insurance, if any) which the last reported value filed prior to the loss, less the amount of specific insurance reported, if any, at the location where any loss occurs bears to the actual cash value less the amount of specific insurance, if any, at that location on the date for which report is made. Liability for loss hereunder, occurring at any location acquired since filing the last report, (except as provided by the Value Reporting Clause) shall be apportioned in a like manner except that the proportion used shall be the relation that values reported at all locations less the amount of reported specific insurance, if any, bear to the actual cash values less the amount of specific insurance, if any, at all locations on the date for which report is made.'

'13. Premium Adjustment Clause--The premium named in this policy is provisional only. The actual premium consideration for the liability assumed hereunder shall be determined, at the expiration of this policy, by application of the following formula:

"A' After deducting the amount of specific insurance, if any (not exceeding, however, the amount of value reported), at each location, an average of the total remaining values reported at each location shall be made, and if the premium on such average values at the rate applying at each location herein provided on in the case of locations acquired (see Limit of Liability Clause), the rate used shall be the rate that is applicable to each such location at the time the location was first reported, exceeds the provisional premium, the Insured shall pay to the Insurer the additional premium for such excess; and, if such premium is less than the provisional premium, the Insurer shall refund to the Insured any excess paid.

"B' It is a further condition of this policy, anything to the contrary notwithstanding, that the final adjusted premium as provided in this Clause shall in no event be less than One Hundred Dollars ($100.00) per annum.'

'14. Verification of Values--This Company or its duly appointed representative, shall be permitted at all reasonable times during the term of this policy, or within a year after its expiration, to inspect the property covered hereunder and to examine the Insured's books, records and such policies as relate to any property covered hereunder. This inspection or examination shall not waive or in any manner affect any of the terms or conditions of this policy.'

On December 24, 1953 appellants' insured merchandise was damaged by fire in the amount of $139,481.97.

On December 11, 1953 appellants had made reports under the policies on forms provided by the respondent showing 'total actual cash value' of the insured goods as of October 30, 1953 at $63,000. This figure was not in fact the value of the goods as of October 30, but was the value as of September 30. The actual value as of October 30 was $129,150.26. On December 27, 1953 appellants filed reports showing the value of merchandise on hand as of November 30 at $175,000, but it was stipulated at the trial that this was in error and the actual cash value on that date was $150,136.73.

One of the respondents subsequently cancelled the insurance but the other two maintained it in force for a full year. The final premium determined in each case was based upon the average of all values reported while the particular policy was in force. The difference between the provisional premium the the final premium was refunded to appellants.

Appellants made two offers of proof by question and answer. Objections were sustained. Richard Kaufman testified that he had solicited the insurance business of appellants in 1953 and had signed the policies as agent for respondents. Early in December he telephoned Mark Albert about submitting the monthly reports of value. He explained that it was necessary for appellants to furnish the companies with 'their last fiscal inventory.' He was referred to Theodore Albert, and explained that Theodore had a monthly reporting form of insurance; that it was necessary for him to furnish a complete inventory every month. Theodore said he did not know much about the report and Kaufman acknowledged that this form of policy was new to him; that he wanted appellants to send 'their last fiscal inventory;' that he understood he was asking them 'to use the figure of the inventory at the end of their fiscal period;' Theodore did not tell him when that fiscal period ended.

Theodore Albert testified concerning the same conversation and to the same effect. The figure of $63,000 which he used was the value as of September 30 which was the close of appellants' fiscal year. A large increase of stock on hand during the month of October is normal in appellants' business. He knew when he wrote out the report forms that $63,000 was not a correct figure for October 30.

The report forms filled out by Theodore Albert were entitled 'Monthly Report of Values.' He wrote the date in a space so that it read: 'Report of Value as of Oct. 30, 1953.' The amount $63,000 was written in a space beneath the words 'Total actual cash value.' He signed the form immediately below the following: 'The undersigned has read the explanatory Guide for Reporting Values printed on the back of this form, and pursuant to the terms and conditions of the above numbered policy the foregoing constitute our report of values as of close of business on the date set forth above.' The guide is printed both on the back of the report form and on...