Bros v. Hartford Fire Ins. Co
| Decision Date | 12 June 1919 |
| Citation | 99 S.E. 579 |
| Parties | LAVENSTEIN BROS. v. HARTFORD FIRE INS. CO. |
| Court | Virginia Supreme Court |
[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Inventory.]
[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Unconditional and Sole Ownership.]
Error to Hustings Court of Petersburg.
Action by Lavenstein Bros, against the Hartford Fire Insurance Company. Judgment of dismissal, and plaintiffs bring error, and defendant assigns cross-error. Reversed.
This action was instituted by the plaintiffs in error (hereinafter referred to as the assured) for the recovery of the sum of $2,500, the amount of fire Insurance provided for in a policy of insurance issued to the plaintiffs by the defendant in error (hereinafter referred to as the insurance company).
The policy was issued on September 19, 1913, for a period of one year on the "stock of general merchandise, consisting chiefly of millinery, dry goods, notions, fancy goods, hats, caps, boots, shoes, and all other articles of merchandise not more hazardous, while contained in" a certain store designated in the policy, occupied by the assured in Peterburg, Va.
The fire occurred on November 26, 1913. At the time of the fire the assured had other fire insurance on said stock of goods, the whole, including the policy in suit, aggregating $S0, 000, all of which insurance was permitted by such policy.
The policy is in standard form of the usual fire insurance policy and contains the usual iron safe clause, which embraces () the following provisions of warranty:
By its pleadings in the case the assured claimed that they had complied with said iron safe clause by their inventory taken of the stock of goods in said store, as of February 1, 1913 (which, however, did not include the purchases made in January, 1913), and by the books which it kept as a record of its business transacted at such place of business from February 1, 1913, to the date of the fire, and also of said January, 1913, purchases.
By such pleadings the assured claimed that the total sound value of its—
Stock of goods on hand at said place of business covered by the insurance policy in suit, which were burned or injured in the said fire was.........................................$95,834 20
Less the amount of salvage of goods not destroyed by the fire, as mutually agreed on............................................................10, 000 00
And less aggregate of items of goods on said inventory not itemized thereon, except as "lot" of this or that character of goods, for which the assured claimed no compensation...................................3, 102 10
Leaving net balance total loss claimed.........................................................$82,732 10
By its pleadings the insurance company took the following positions of defense to the action, which are material upon the assignment of error, namely:
(1) Not that no inventory was taken, or that no books were kept as required by the iron safe clause; but that (a) no "complete inventory" of the stock on hand "was taken or furnished the insurance company, as required by the iron safe clause, and that (b) the assured "did not keep a set of books which clearly and plainly present a complete record of the business transacted by them, including all purchases, sales, and shipments, both for cash and credit, " as required by the iron safe clause.
(2) That the inventory made by the assured in 1913, preserved and furnished the insurance company, was not the original inventory so made.
(3) That subsequent to the issuance of the policy in suit, to wit, on October 14, 1913, the assured incumbered the stock of goods insured by such policy by executing a chattel mortgage thereon to the National Bank of Petersburg; and
(4) That in the "proof of loss" furnished by the assured to the insurance company there was false swearing as to the amount of the goods on hand at the time of the fire.
There was a trial by jury.
The original inventory aforesaid of February 1, 1913, and the books aforesaid were introduced in evidence by the assured without objection on the part of the insurance company.
The inventory is contained in a book. It begins several pages from the first page asthe book was originally, but the inventory as there entered is complete, and the nonuse and absence of the first part of the book is satisfactorily explained by the testimony in the record.
The testimony for the assured explains how the inventory was taken by a number of employes of the assured, by transferring memoranda of the character of goods, quantity, and price or value, first entered on slips of paper, or "tablets." as the work of taking the inventory progressed, from which slips or "tablets" the entries were transferred to and made on the inventory as entered in the inventory book, in the progress of the work, in accordance with the usual manner of taking such an inventory, not only by the assured in preceding years, but by others in the same line of business. The testimony also shows who the employes were who took the inventory, and who the employe was who made the entries on the inventory book. The employe who made the entries on the inventory book, and in whose handwriting it is, was not examined as a witness to prove the book, nor were all of the employes examined as witnesses who aided in taking the said inventory.
The inventory just mentioned, as taken, gave, as a rule, the cost prices of the goods; but, where goods were old or shopworn, a deduction from cost prices was made to cover depreciation, and the inventory value was entered at what was considered the true cost value of the goods, if they had been bought in that condition; in no case, however, was any value added for enhancement of value due to increase in market price subsequent to the purchase of the goods.
The books of the assured, as kept, showed the cost price of the January, 1913, purchases, and of the purchases subsequent to the annual inventory (the annual inventory last taken next preceding the fire in question being taken as of February 1, 1913, as aforesaid).
For a long while prior to the fire, and prior to the issuance of the policy in suit, certainly as far back as 1911, the assured was engaged in the mercantile business at a number of other places than Petersburg, namely, at Elizabeth City, N. C., Charlottesville, Va., and elsewhere, which businesses are referred to in the record as "branches" or branch stores; but they were entirely separate and distinct businesses from that of the assured at Petersburg, as to which separate books were kept and separate inventories taken from time to time. However, during 1912 and 1913, prior to the fire (which periods only are material to be referred to in this connection), shipments of goods from one to another of these branch stores were made from time to time, and the regular course of such business was to treat these shipments as sales and purchases of the respective branches to and from each other, and the branch making such shipments would invoice the goods as sales at original cost prices, or at cost value, to the branch to which they were shipped, and the latter branch would enter such shipments on its books as purchases at such invoice prices.
All of such shipments, from the date of the 1913 inventory to the fire, to and from the Petersburg business, were entered on the books of the assured kept of that business, and all of the invoice of the character aforesaid covering such shipments during such period were preserved by the assured, furnished to the insurance company, are in evidence, and verify the books in every particular relating to these transactions. The same is true of the entries on the books of the January, 1913, purchases of the Petersburg business and of the original invoices of such purchases.
It should be noted, however, that no inventory of the Elizabeth City business was preserved or furnished the insurance company, and none such is in evidence. The same is true of the invoices of the original purchases of goods by the Elizabeth City concern, so far as appears from the record before us; and the latter is true, both as to inventories and invoices of original purchases of goods, by the other branch businesses of the assured.
As of September 1, 1913, the assured sold out a portion of the stock of goods of its business in Elizabeth City to one S. R. Siff Company, Incorporated, but did not include in such sale certain items of that stock of goods, which items were thereupon invoiced by the Elizabeth City concern for shipment to the Petersburg concern in accordance with the custom of business aforesaid to ship from time to time goods from one branch to another.
These goods were all included in one invoice and aggregated the invoice value of $25,912.84. The...
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Bros v. Hartford Fire Ins. Co.*
...to say this much in explanation of my dissent, as we do not, in the main, differ on the questions of law involved. *.Correcting opinion in 99 S. E. 579. ...
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