Carolina Ins. Co. v. Christopher

• Decision Date: 21 January 1935
• Docket Number: No. 4342.,4342.
• Citation: 80 S.W.2d 774
• Parties: CAROLINA INS. CO. v. CHRISTOPHER.
• Court: Texas Court of Appeals

80 S.W.2d 774

CAROLINA INS. CO. v. CHRISTOPHER.

No. 4342.

Court of Civil Appeals of Texas. Amarillo.

January 21, 1935.

Rehearing Denied March 11, 1935.

Appeal from District Court, Lynn County; Gordon B. McGuire, Judge.

Suit by J. C. Christopher against the Carolina Insurance Company. From a judgment for plaintiff, defendant appeals.

Affirmed.

Thompson, Knight, Baker & Harris, of Dallas, for appellant.

Nelson & Smith, of Tahoka, for appellee.

HALL, Chief Justice.

Based upon a fire insurance policy issued for $3,500 covering the appellee's stock of automobile tires, tubes, batteries, etc., and an additional sum of $500 covering the furniture and fixtures contained in his filling station at Tahoka, the appellee Christopher sued the insurer, Carolina Insurance Company, alleging that the policy was effective for one year beginning at noon on the 14th day of November, 1933, and that the property insured was totally destroyed by fire on December 7, 1933. He alleged that all the conditions precedent in the policy had been complied with, and prayed for judgment in the sum of $4,000, with interest from January 20, 1934.

The appellant answered by a general denial, and alleged a breach of the record warranty clause contained in the policy, denied that the appellee was the sole and unconditional owner of the property, further alleged that the sworn examination of plaintiff had after the fire did not amount to a waiver, that if any premium had been paid after the fire it was paid to some one in ignorance of the facts and had been tendered to plaintiff since, and further set up as a defense a breach of the three-fourths value clause contained in the policy.

By supplemental petition the appellee alleged that he made a complete inventory of his stock on September 15, 1933; that he had not been in business a year preceding the fire; and that the thirty days for taking an inventory and keeping books had not expired at the time of the fire. That he had complied with the terms of the policy relative to the making of inventory and keeping of books. That W. S. Cathey, the defendant's agent, at all times knew the character of books which he kept and made no objection to them, which constituted a waiver of the provision of the policy relative to the taking of an inventory and keeping of books. That he did keep a set of books as required by section 2 of the record warranty clause. That the defendant's agent visited the filling station both before and after the policy was issued and knew the kind and character of books that were kept and agreed to them, making no objection thereto, as result of which defendant waived its right to deny liability under said clause. That Mack Span, an agent of the defendant, inspected plaintiff's books after the policy was written, and made no objection thereto, by reason of which fact the defendant waived the record warranty clause. That the books which he kept were burned in a manner beyond his control. That they were kept in a place and manner satisfactory to the defendant's agents, whereby the defendant had waived the breach, if any, of the policy in that particular. That defendant knew plaintiff had no iron safe and that if the building burned the books would also burn. That after the fire defendant's agent told plaintiff he was sure all of his books burned and told plaintiff to get duplicate inventories and make up the best record he could of the property destroyed, and go and see the adjuster. That plaintiff went to Lubbock, incurring the expense and loss of time, believing that the loss under the policy would be paid. That defendant's agent, after the policy was issued, although told to do so several times, never collected the premium on the policy and after the loss the agent, with knowledge of the loss of the books and the inventories, accepted the premium and as a result defendant thereby waived any breach of the policy. That after the loss on December 7, 1933, and after the agent knew that the plaintiff's records had been destroyed by the fire, said agent consented to an assignment of a portion of the policy, thereby admitting that the policy was in force, and on December 26, nineteen days after the fire, defendant required plaintiff to submit to a sworn examination, all of which constituted a waiver of defendant's right to deny liability under the policy.

By a supplemental answer after a general denial, the defendant pleaded that provision of the policy that no waiver could be claimed unless it was in writing and attached to the policy, in so far as a condition in question might be raised by indorsement. In that connection defendant pleaded that the record warranty clause was not one which might be waived in writing or otherwise.

The court submitted the case to the jury upon seventeen issues, in response to which the jury found as follows:

(1) That W. S. Cathey, defendant's agent, inspected the contents of the building occupied by plaintiff before the policy was issued in order to determine whether the policy would be issued.

(2) That by reason of this inspection Cathey knew that plaintiff did not have an iron safe in which to keep his books as required by the terms of the policy.

(3) That Span, as agent of the defendant, inspected the building after the policy was written to determine whether the property was a satisfactory risk.

(4) That by reason of this inspection Span did not know that the plaintiff did not have an iron safe in which to keep his books as required by the policy.

(5) On the day after the fire plaintiff notified Cathey that the fire had occurred.

(6) Following the fire, plaintiff told Cathey that all of the books pertaining to his business had been destroyed by the fire.

(7) That after Cathey was advised by plaintiff of the result of the fire he accepted from plaintiff the premium for the one year's insurance provided in the policy.

(8) That plaintiff paid the premium to Cathey in good faith, believing the latter was authorized and empowered to accept it.

(9) That Cathey thereafter conveyed to the company such information in his report as to the fire.

(10) That after Cathey had given such information as to the fire and of the loss of plaintiff's books and records, the company caused the plaintiff to submit to an examination under oath relative to the fire and insurance.

(11) That Cathey remitted the premium paid for the policy to the defendant company.

(12) That after Cathey had knowledge of the fire and of the destruction of plaintiff's books and records thereby, he instructed plaintiff to get duplicate invoices and inventories as far as possible and make the record as best he could of the property which had been destroyed.

(13) Plaintiff believed that Cathey had authority from the defendant to so advise him.

(14) Plaintiff in good faith relied and acted upon Cathey's advice and did get duplicate invoices and inventories as far as possible, and made a record as best he could of the property destroyed.

(15) That plaintiff was the sole owner of the stock of merchandise that was destroyed.

(16) That the value of the stock of merchandise was $3,000.

(17) That the value of the furniture and fixtures was $600.

Based upon the verdict, the court rendered a judgment in favor of plaintiff for $2,700, with 6 per cent. interest from January 20, 1934. From such judgment, this appeal is prosecuted.

The principal defense seems to be a breach of the provisions of what is called the iron safe and record warranty clause. This clause provides for the keeping of a complete record of the business transacted, setting out in detail of what that record shall consist, and further provides:

"The books and inventories, and each of the same, as called for above, shall be by the Assured kept securely locked in a fire-proof 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 event of a loss or damage insured against 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 examinations; or this entire Policy shall be null and void, and no suit or action shall be maintained hereon 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 loss or damage happening to the property described in this Policy."

While appellee insists that he kept a set of books and records in compliance with the requirements of this clause, it is conceded that he had no iron safe, and that his books and other records were not kept in a safe, but were laying on the counter in the building which was destroyed by the fire. He contends that the provisions of the iron safe clause have been waived by reason of the following facts:

(1) That the agent Cathey knew at the time he inspected the premises prior to writing the policy of insurance, that the appellee had no iron safe and that Cathey gave no consideration to the provision in the policy requiring an iron safe to be kept as a prerequisite to writing the policy.

(2) That Cathey knew of the breach of the iron safe clause after the fire and knew that the records, books, etc., had been burned. Nevertheless, he caused the appellee trouble and expense in securing and compiling information relative to such loss that might be presented to the company for the purpose of determining the amount of the loss, thereby leading appellee to believe that the policy would be paid.

(3) That Cathey accepted the premium after knowledge on his part of the breach and consequent loss, and, after so...