Commonwealth Underwriters' Agency v. Lawrence G. Co.

• Decision Date: 22 June 1922
• Docket Number: (No. 8216.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 244 S.W. 200
• Parties: COMMONWEALTH UNDERWRITERS' AGENCY OF REPUBLIC INSURANCE CO. OF TEXAS v. LAWRENCE GROCERY CO. et al.
• Court: Texas Court of Appeals

Page 200

244 S.W. 200

COMMONWEALTH UNDERWRITERS' AGENCY OF REPUBLIC INSURANCE CO. OF TEXAS v. LAWRENCE GROCERY CO. et al.

(No. 8216.)^*

Court of Civil Appeals of Texas. Galveston.

June 22, 1922.

Rehearing Denied October 5, 1922.

Appeal from District Court, Brazos County; W. C. Davis, Judge.

Action by the Lawrence Grocery Company and others against the Commonwealth Underwriters' Agency of the Republic Insurance Company of Texas. From a judgment for plaintiffs, defendant appeals. Reversed and rendered.

Lamar Bethea, of Bryan, and Coke & Coke, of Dallas, for appellant.

Henderson & Ranson, of Bryan, for appellees.

GRAVES, J.

The appellee grocery company, assignee of Mrs. H. H. Grimes, sued appellant on three policies of fire insurance for one year, each issued by it to Mrs. Grimes on her stock of merchandise at Marquez, Leon county, Tex., one dated October 1, 1920, for $2,000, the other two for $1,000 each, dated, respectively, November 6 and 10, 1920. All three contained a clause limiting the amount of concurrent insurance permitted on the property, two of them fixing it at $4,000, and the other at $5,000, further provided that the policy should be void if the insured had or should procure other insurance on the property covered in whole or in part by it, unless consent therefor was indorsed on the policy, and also contained this "iron safe" or "record warranty" clause:

"The following covenant is hereby made a part of this policy and a warranty upon the part of the assured:

"Section 1. The assured will take a complete itemized inventory of stock on hand at least once each calendar year, and within 12 months of the last preceding inventory if such has been taken. Unless such an inventory has been taken within 12 calendar months prior to the date of this policy, and, together with a set of books showing a complete record of business transacted since the taking of such inventory, is on hand at the date of this policy, one shall be taken within 30 days after the date of this policy, or in each and either case this entire policy shall be null and void.

"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.

"The term `complete record of business transacted,' as used above, is meant to include in said set of books 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 others, even though not technically purchases or technically sales.

"If the business of the assured under this policy be that of manufacturing, this complete record of business transacted must, in addition, show all the raw material received and all products manufactured therefrom, including the cost of manufacture, and must show waste in process of manufacture, and must show all the raw material and manufactured property which is taken from the building described.

"Section 3. The assured will keep and preserve all inventories of stock taken during the current 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 a record of business transacted.

"The books and inventories, and each of the same, as called for above, 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 event of a loss or damage insured against to the personal property mentioned herein, said books and inventories, and each of 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 loss or damage 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 the same, shall not be an admission of any liability under this policy, nor a waiver of any provision or condition of this policy, or of any defense to the same."

In each of the policies there was also a stipulation to the effect that no agent of the company could waive any provision or condition thereof, except such as its terms permitted to be done by indorsement on or addition to it, and then only when such waiver was actually written upon or attached to the instrument.

The grocery company alleged the assignments to it, the destruction of the property by fire on December 29, 1920, while all the policies were in force, the making of proper proofs of loss, and asked judgment for the aggregate face amount of the three policies, $4,000, with interest and costs.

In answer, the insurance company set up, among others not deemed material here, these defenses: (1) That assured took out a policy of $1,200 in the Superior Fire Insurance Company on the 16th day of December, 1921, without the consent of the defendant, and contrary to the provisions of the policies, by reason of which they became void; (2) that the assured failed to comply with the record warranty clause in the policies hereinbefore copied, in that there was a failure to make and keep the books, records, inventories, etc., therein required.

By supplemental petition the grocery company additionally averred, along with some other matters, that all insurance on the stock of Mrs. Grimes was issued by the same agent, E. O. Boggs, who was agent of defendant, and that he had knowledge of all the insurance carried and of the total concurrent insurance thereon.

On a trial before the court without a jury, judgment for $4,000 asked went for the grocery company; hence this appeal by the insurance company.

Findings of fact and conclusions of law filed by the court below, after recitations to the effect that the polices sued on were duly issued to Mrs. Grimes by appellant through its agent, E. O. Boggs, the regular assignment thereof to the appellee grocery company, and, while they were all in force, the total destruction, on December 29, 1920, of the goods covered thereby by a fire of unknown origin, continued as follows:

"(4) That Mrs. H. H. Grimes, as provided in said policies, complied with the various warranties and conditions in said policies contained; that an inventory was taken on January 1, 1920, a record of the merchandise purchased during the year of 1920 was kept, and that record of the sales made during said year was kept; that another inventory was taken on November 30, 1920; that both of said inventories and all said books and records were produced in court on the trial of this cause; that from same the loss could be determined, and same shows a substantial compliance with the record warranty and iron safe clauses in said policies; and I find that same were complied with.

"(5) I find that the agent, E. O. Boggs, represented both the defendant and the Superior Insurance Company, and delivered all of the policies which the said Mrs. H. H. Grimes owned, and which covered the loss, and that he, the said Boggs, examined the inventory of November 30, 1920, and told the insured that there was not enough insurance on her stock of goods, and then wrote and delivered to the insured an additional $1,000 policy; that the said agent was cognizant of the condition of said stock as shown by said inventory, and that he wrote and delivered all the policies which the insured had.

"(6) I find the additional insurance and the amount of insurance allowed...