Arkansas Mutual Fire Insurance Co. v. Stuckey

• Decision Date: 16 December 1907
• Citation: 106 S.W. 203,85 Ark. 33
• Parties: ARKANSAS MUTUAL FIRE INSURANCE COMPANY v. STUCKEY
• Court: Arkansas Supreme Court

106 S.W. 203

85 Ark. 33

ARKANSAS MUTUAL FIRE INSURANCE COMPANY v. STUCKEY

Supreme Court of Arkansas

December 16, 1907

Appeal from Pulaski Circuit Court; Edward W. Winfield, Judge affirmed.

Judgment affirmed.

J. W. & M. House, for appellant.

1. The method of bookkeeping resorted to by the insured, as shown in the evidence, was not a compliance with the requirements of the policy. The object of this clause of the policy is to ascertain the quantity and value of the property destroyed yet under the system adopted that was impossible. 53 Ark 357; 65 Ark. 249; 48 S.E. 918.

2. It is shown that the invoices were not kept in the safe, hence neither the iron safe clause nor the terms of the policy were complied with. 61 S.W. 963; 67 S.W. 153; 80 S.W. 283.

3. It was error to tell the jury that the expression "also the last preceding inventory," contained in the policy, must be taken to mean the one of December, 1904, whereas that expression evidently meant that, if an inventory had been taken prior to the one of December 5, 1904, it should be kept.

4. The promises of the insured in his application to keep certain books, inventories, invoices, etc., were by the terms of the application and policy made warranties, and compliance therewith is indispensable to recovery. 102 S.W. 195; 61 Ark. 207; 62 Ark. 43; 65 Ark. 240; 31 S.W. 321; 33 S.W. 554; 78 Am. St. Rep. 216. There can be no substantial compliance, where there is no compliance at all. There is no pretense, even, in this case that there was a complete set of books kept showing the details of the business. 61 S.W. 962; 77 S.W. 424.

5. The court erred in giving judgment for an attorney's fee and for penalty on the amount found to be due by the verdict of the jury. 102 S.W. 226.

M. M. Stuckey and J. W. Phillips, for appellee.

Concede that the judgment for attorney fee and penalty was erroneous, and offer to remit. Substantial compliance with the terms of the iron safe clause is all that the law requires, and substantial compliance is established by the evidence. 51 L. R. A. 699; Kirby's Digest, § 4375a; 37 W.Va. 272; 115 Ala. 213; 82 Ark. 476; 58 Ark. 565.

OPINION

MCCULLOCH, J.

This is an action to recover upon a fire insurance policy issued by appellant upon a stock of merchandise. The plaintiff recovered judgment below, and the defendant appealed.

Violation of the following clauses of the policy, which by its terms are made warranties, is pleaded in defense:

"1. The assured shall take a complete itemized inventory of stock on hand at least once in each calendar year; and, unless such inventory has been taken of the property covered by this policy within twelve calendar months prior to the date thereof, this policy shall be null and void from such date, and upon demand of the assured the unearned premium from such date Shall be returned.

"2. The assured shall keep a set of books which shall clearly and plainly present a complete record of business transacted in reference to the property herein mentioned, including all purchases, sales and shipments, both for cash and credit, from the date of the inventory provided for in the preceding section, and during the life of this policy, or this policy shall be null and void.

"3. The assured shall keep such books and inventory and also the last preceding inventory, if such has been taken, and also all books kept in his business since the date of such last preceding inventory, securely locked in a fire-proof safe at night, and at all times when the building mentioned in this policy is not actually open for business, or shall keep such books and inventories in some secure place not exposed to a fire, which would destroy the aforesaid building, and after a fire shall produce all such books and inventories and deliver the same to this company for examination, or this policy shall be null and void, and no suit or action shall be maintained thereon for any such loss; it being agreed that the receipt of such books and inventories and the examination of the same shall not be an admission of any liability under this policy, nor a waiver of any defense to the same."

These several provisions constitute what is termed the "iron safe clause" of the policy.

Violation of another clause of the policy is also pleaded, being as follows:

"The insured, as often as required, shall exhibit to any person designated by this company all that remains of any property herein described, and submit to an examination under oath by any person named by this company, and subscribe the same; and, as often as required, shall produce for examination all books of accounts, bills, invoices and other vouchers, or certified copies thereof, if originals be lost, at such reasonable place as may be designated by this company or its representatives, and shall permit extracts and copies thereof to be made."

The evidence shows affirmatively and indisputably that the first clause enumerated

above was strictly complied with by the assured. The policy was issued on February 10, 1905, and the fire occurred within the calendar year during which the policy was issued.

The assured also kept a set of books, which were preserved in an iron safe and produced after the fire; but it is claimed that these books were not kept in compliance with the requirements of the policy, in that the sales, cash and credit, were not itemized. The daily sales were entered in gross on the books at the end of each day's business. In all other respects the books came up to the requirements of the policy. Was this sufficient?

One of the members of the firm insured under the policy testified as to the amount of the loss, and produced the books before the jury. He testified in detail concerning the amount of the loss, the amount and value of goods according to the last preceding inventory, the amount of purchases and sales since then, the average profits on sales, and finally the amount of stock on hand at the time of the fire. His testimony was not disputed.

A consideration of the requirements of the policy must be with reference to the statute providing that in actions upon fire insurance policies upon personal property "proof of a substantial compliance with the terms, conditions and warranties of such policy, upon the part of the assured * *...