Bros v. Dutchess Ins. Co
| Decision Date | 17 April 1906 |
| Citation | 59 W. Va. 432,53 S.E. 943 |
| Court | West Virginia Supreme Court |
| Parties | RUFFNER BROS. v. DUTCHESS INS. CO. |
An inventory of a stock of merchandise, within the meaning of the term "inventory" used in what is known as the "iron-safe clause" of a fire insurance policy, is a list of all the articles of merchandise in the stock, sufficiently itemized to show the kinds and numbers or quantities thereof, together with their values at the time of making the same, as nearly as they can be ascertained.
[Ed. Note.—For cases in point, see vol. 28. Cent. Dig. Insurance, § 853.]
In the case of a store, opening with an entirely new stock of goods, at or about the date of the issuance of the policy, the invoices of the first lot of goods put into it, giving the quantities thereof by items, with the cost prices, if preserved and kept for production, upon the demand of the insurer, as and for an inventory, will constitute such a list, and the insured will have substantially complied with so much of the policy as requires the taking of an inventory.
[Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insurance, § 853.]
In determining what constitutes such an inventory, regard must be had to the purpose for which it is required, and, in seeking this, all parts of the "iron-safe clause" should be read and considered together.
4. Same—Cancellation of Policy—Waiveb oi? Breach.
Cancellation of a fire insurance policy, by an agent of the company, having no authority to waive conditions, except by indorsement on the policy or addition thereto, does not imply a waiver of a breach, previously made, of a promissory warranty therein contained, or estop the company from relying upon such breach as matter of defense to an action on the policy, though it be shown that the agents had knowledge of such breach.
5. Same—Increase of Hazard—Waiver.
Violation of a clause of an insurance policy, declaring that it shall become null and void, if the hazard be increased by any means within the control or knowledge of the insured, is not waived by a letter, written at about the date of the fire, which caused destruction of the property, by an agent of the company, having no authority to waive conditions, except by indorsement on the policy or addition thereto, notifying the insured that the policy is canceled, and specifying said violation as the reason for canceling it.
6. Appeal—Reversal—Entry of Judgment.
This court, on reversing a judgment for the plaintiff and setting aside a verdict for insufficiency of evidence and refusal of the trial court to exclude the evidence from the jury and direct a verdict for the defendant, will not remand the case for a new trial, but will render judgment for the defendant, when it does not appear that injustice will be done thereby. Poffenbarger, J., dissenting.
(Syllabus by the Court.)
Error from Circuit Court, Kanawha County.
Action by Ruffner Bros, against the Dutchess Insurance Company. Judgment for plaintiffs, and defendant brings error. Reversed, and judgment rendered for defendant.
Chilton, MacCorkle & Chilton and Murray Briggs, for plaintiff in error.
Mollahon, Mc-Clintic & Mathews, for defendants in error.
The Dutchess Insurance Company complains of a judgment for the sum of $649.12, rendered against it by the circuit court of Kanawha county, on the 27th day of March, 1905, in favor of Ruffner Bros., assignees of A. Haws and his son, H. H. Haws, who are doing business as the Haws Company. The policy of insurance, under which the loss sustained by the Haws Company occurred, had covered a frame store building, a stock of general merchandise kept therein, and the store and office furniture and fixtures. The stock of goods so in sured was entirely new at the time of the issuance of the policy. After the policy had been in force a short time, an addition to the building in which the store was kept was made for the accommodation of a steam gristmill, and the mill installed therein and operated to an extent not clearly indicated before the fire occurred. In the meantime, Haws had attempted to obtain insurance on the mill from the agents from whom he had secured the policy on the store. They had declined it, and he had vainly tried to obtain it from another agency. Some days before the fire occurred, a member of the firm of Lohmeyer & Goshorn, the agents, had informed him they would give him no insurance on the mill, but they would carry his store at a 6 per cent, rate, which was an increase of 4 per cent, over that of the policy he then had. The defenses relied upon by the defendant were two in number: First, noncompliance with that part of the iron-safe clause which required an inventory to be made within 30 days from the issuance of the policy, unless one had been taken within 12 calender months prior to the date of its issue; and, second, violation of that clause of the policy which declared it would become void if the hazard should be increased by any means within the control or knowledge of the insured, unless permitted or waived by an indorsement on the policy or attached thereto.
As constituting substantial compliance with the requirement of an inventory, the plaintiff relied upon his invoices or bills. He reasonably contended that, it being a new store, the first lot of goods having been placed in it but a few days before the issuance of the policy, these bills constituted a complete list, by items, with the values annexed, of all the goods that had been put into the store. At the date on which the first lot was taken into the store and put upon the shelves, the invoices therefor made up as complete and accurate a list of the goods as if they had been relisted into a book. All goods subsequently put in, for which bills were likewise received and kept, were additions to the stock. The purpose and object of an Invoice is not very clearly defined in insurance law. Most of the courts, in dealing with it, simply refer to the legal definition of the term "inventory." This falls far short of indicating what it is intended for, the function it performs between the parties. It seems to me perfectly plain that the requirement is intended to secure, in the interest of the insurance company, and possibly both parties, a basis, or starting point, upon which to found an esitmate of the value of the stock in case of a loss. It, of itself, Indicates nothing except the quantum and value of the stock at the time of the taking thereof. It does not indicate what they amounted to at any previous or subsequent date, nor the average stock. Having an inventory at agiven date, however, and the invoices for goods subsequently put in, the determination of the aggregate value of all the goods in the store at the date of the inventory, and those subsequently put in, is a mere matter of addition. All insurance policies on merchandise require the production of the invoices as well as the inventory. Another requirement which goes with the inventory and the bills, as an ally, in working out the estimate, is the book in which the account of sales is kept. After ascertaining, from the inventory and the bills for the goods subsequently put in, the aggregate as above stated, the quantities and values of the goods sold out of the store are deducted, and thus a fair and reasonable indication, as to the quantities and value of the goods at the date of the fire, is obtained. The three clauses of the iron-safe provision require the inventory and keeping of the books and their protection by means of the iron safe. In determining what they mean, what more reasonable view could be taken than that they must be all construed together? Some courts exclude the invoices and deny to them the force and effect of an inventory, upon the fanciful ground that they are no index to the value of the goods. What better evidence of the value of the goods could there possibly be than the bills showing what they had cost? They show the value as agreed upon between the owner of the store and a disinterested third party, while an inventory would show the value according to an estimate put upon them by an interested party, knowing that the inventory was made for the purpose of forming the basis of a claim against the insurance company. I am utterly unable to see any force in that contention. Of course, the invoices would not constitute an inventory in the case of a store which had been running for a considerable time. They would not afford any basis upon which to begin the estimate, but in the case of a new store starting simultaneously with the issuance of the policy, or practically so, the first bill constitutes as good a basis for the beginning of the estimate as an inventory could possibly afford. It has been suggested in one or two instances that, if the bills were pinned together and some indorsement made upon them, indicating an intention to treat them as an inventory, they might, on the theory of substantial compliance, be deemed to constitute an inventory. In other words, they constitute an inventory if they are indorsed "inventory, " otherwise they do not. This, to my mind, puts more merit into the name of the thing than it is entitled to. Itsacrifices substance to mere form and technicality. What is an inventory is to be determined in view of the peculiar circumstances of the case. What would substantially comply with the requirement in one case would not in another, in which the circumstances are wholly different. For these reasons, we are unwilling to follow Insurance Co. v. Knight (Ga.) 36 S. E. 821, 52 L. R. A. 70, 78 Am. St. Rep. 216, Fire Association v. Masterson, 25 Tex. Civ. App. 518, 61 S. W. 962, and the Mississippi case in which the proposition advanced by the attorneys for the plaintiff in error arose, and we hold that the evidence is sufficient to sustain the finding of the jury in favor of the plaintiff on the first issue.
The violation of the clause...
To continue reading
Request your trial