Capital Fire Insurance Company v. Kaufman

• Decision Date: 12 July 1909
• Citation: 121 S.W. 289,91 Ark. 310
• Parties: CAPITAL FIRE INSURANCE COMPANY v. KAUFMAN
• Court: Arkansas Supreme Court

121 S.W. 289

91 Ark. 310

CAPITAL FIRE INSURANCE COMPANY v. KAUFMAN

Supreme Court of Arkansas

July 12, 1909

[Copyrighted Material Omitted]

Appeal from Pulaski Circuit Court, First Division; Robert J. Lea Judge; affirmed.

STATEMENT BY THE COURT.

Appellee sued appellant on a policy of fire insurance issued February 15, 1907, insuring for a lump sum of $ 52 a stock of merchandise and household goods. The insurance on the stock of goods was $ 1,000, and on the household effects $ 500. It was alleged that the fire and total loss of the property insured occurred during the life of the policy. The complaint asked judgment for the full amount of the policy, with 6 per cent. interest and penalty and attorney's fees.

The answer set up in defense the application, which was made a part of the contract, and the following stipulations in the policy, to-wit:

"Section 1. The assured will take a complete itemized inventory of stock on hand at least once in each calendar year; and unless such inventory has been taken within twelve calendar months prior to the date of this policy, and is on hand at the date of this policy, one shall be taken complete in detail within thirty days after the date of this policy, or this entire policy shall be null and void from such date.

"Section 2. The assured will make and prepare, in the regular course of business, from and after the date of this policy, a set of books, which shall clearly and plainly present a complete record of business transacted, including all purchases, sales and shipments, both for cash and on credit, or this entire policy shall be null and void. By the term 'complete record of business transacted,' as used above, is meant a complete record of all the property which shall go into the premises and be added to the stock, and of all property taken from the stock, whether by the assured or by others, even though not technically purchases or technically sales.

"Section 3. The assured will keep and preserve all inventories of stock taken during the current calendar year, and also all those taken during the preceding calendar year, which are on hand when this policy is issued, and will keep and preserve all books which are then on hand, showing a record of business transacted during the current calendar year and the preceding calendar year. The assured will also keep and preserve all inventories taken after the issuance of this policy, and all books made and prepared after the issuance hereof, showing record of business transacted. The books and inventories, and each of the same, shall be by the assured kept securely locked in a fireproof safe at night and at all times when the building mentioned in the policy is not actually open for business; or, failing in this, the assured shall keep such books and inventories, and each of them, in some secure place not exposed to a fire which would destroy said building; and, in the event of a loss by fire to the personal property mentioned herein, said books and inventories, and each of the same, must be by the assured delivered to this company for examination, or this entire policy shall be null and void, and no suit or action shall be maintained thereon for any such loss. It is understood and agreed that this clause and the requirements thereof is one of the inducing causes to the acceptance of the risk herein assumed and the issuance of this policy, and that the terms and requirements hereof are material to the risk, and to this insurance, and to any fire loss happening to the property described in this policy. It is further agreed that the receipt of such books and inventories, or the request for them, or either of them, and the examination of same, shall not be an admission of any liability under this policy, nor a waiver of any defense to the same."

It was alleged "that the plaintiff did not preserve the inventory referred to in his application, nor books and invoices referred to therein, in an iron safe at night and at all times when not open for business; and that the same were destroyed in violation not only of the terms and agreements in his said application, but in violation of the terms and agreements in the policy as quoted; whereby the conditions of said policy contract were violated, and the defendant was released from liability."

Appellee was a merchant at Wampoo. She and her husband, who was her business manager (and whom we shall hereafter in the statement designate as the appellee for convenience), lived over the store room. The fire occurred February 8, 1908 first in an adjoining building. It then destroyed the building occupied by appellee and its contents. The stock of goods at the time of the fire was valued at $ 7,000, and the household effects were valued at $ 1,100 or $ 1,200. Appellee's counsel further states the facts correctly as follows: "Every Saturday night appellee posted his books. The store house was cold and uncomfortable, and a stairway led from the store up to the living rooms of appellee. After the active business of the day was over, he turned out the loafers, locked his doors, left his lights burning in the store, and took his books up the short flight of stairs into his bedroom, where he had a good light and warm fire, and a comfortable place in which to work. He generally closed about 10 o'clock, but was in the habit of coming down to wait on customers until he finally put out his lights, and, in case of an urgent call for medicines or necessaries, would come down later. At the time of the fire he had not extinguished the lights in the store, and had not replaced his books and cash in the iron safe. This was the custom of appellee, and also the custom of the only other store at Wampoo. The owner of the other store closed about ten or eleven o'clock, according to the weather, on Saturday nights, and then left for his home, about a mile or a mile and a half away from his store. The population around Wampoo is pretty nearly all negroes. They get paid off on Saturday, and generally sit around appellee's store, talking, eating peanuts and chewing tobacco until appellee told them he wanted to close up. After appellee finished writing up his books, he would take his cash and his books downstairs into the store, and put them in the iron safe, lock up the safe and extinguish the lights for the night.

The policy of insurance was taken out February 15, 1907. Appellee took an inventory January, 1907, and August, 1907, between the 1st and 5th of the month. These inventories were copied into a large book, in which were kept the accounts of the store and other data of the business. This book was upstairs, and was burned. There were other books in the iron safe at the time, bringing the business down to 1906, and a credit book bringing the business down to the date of the fire. These books appellee had no occasion to have upstairs. There was also a credit ledger in the safe which was saved. Appellee had been at work on the books about an hour before the fire broke out. It was his habit to put the books in the iron safe at night, except on Saturday night, when he took them to his room to post them, leaving the light burning in the store until he finished posting his books. He testified that he intended carrying them down stairs and putting them in the big combination lock iron safe after he had finished work on them. He would then put out the lights in the store. The lights were still burning in the store at the time the fire broke out. The store was 40 feet by 22 feet, and the stairs ran straight up from the inside of the store in the rear of the bedroom.

Wampoo is six miles from the railroad. The postoffice is in appellee's store, and he is the postmaster. The invoices had been entered in the book that was destroyed by fire, and the invoices themselves were wrapped up and put away in pigeon-holes in the store. When the invoices came in, appellee put them in the safe until Saturday night, when he took them with his book up to his room to copy them. He did not copy the items in detail, but only entered on his book the footings or aggregate amount shown by each invoice.

The court, over the objection of appellant, gave the following instructions:

"1. The court instructs the jury that the insurance on the household effects and upon the stock of merchandise mentioned in the policy sued on are divisible, and that plaintiff is entitled to recover the amount of the policy on the household goods with six per cent. interest from the 29th day of April 1908, together with a penalty of twelve per cent. on said amount.

"2. The court instructs the jury that they have a right to take into consideration the custom or mode of doing business such as the opening and closing of the store, the time and manner of writing up the books, that was incident or prevailing at Wampoo, Arkansas, the place where the goods insured were located.

"3. The court instructs the jury that if they find from the testimony that plaintiff kept a set of books suitable for the business he was carrying on, and which are ordinarily kept for such business, and that he kept an iron safe such as is provided for in the policy sued on, and that he was in the habit of placing said set of books in such safe after closing up his business, but that on the night of the fire he did not close up his store for the night, but did retire to his room with his books for the purpose of posting the same, and did leave a light burning in the store with the intention of returning to the store with his books when he had finished working on the same for the purpose of placing the same in his safe for the night, but that while the said books were in his manual possession in his private room near the store the alarm of fire was suddenly given, and plaintiff was unable to replace...