Connecticut Fire Ins. Co. v. Boydston

• Decision Date: 04 April 1927
• Docket Number: (No. 325.)
• Parties: CONNECTICUT FIRE INS. CO. et al. v. BOYDSTON.
• Court: Arkansas Supreme Court

293 S.W. 730

CONNECTICUT FIRE INS. CO. et al. v. BOYDSTON.

(No. 325.)

Supreme Court of Arkansas.

April 4, 1927.

Rehearing Denied May 9, 1927.

Appeal from Circuit Court, Poinsett County; G. E. Keck, Judge.

Actions by W. H. Boydston against the Connecticut Fire Insurance Company and the National Union Fire Insurance Company. The suits were consolidated. Judgment for plaintiff, and defendants appeal. Affirmed.

W. H. Boydston instituted separate actions against the Connecticut Fire Insurance Company and the National Union Fire Insurance Company to recover the sum of $1,000 in each case upon a policy of insurance upon a stock of merchandise. The suits were consolidated and defended on the ground that the insured had forfeited his policies by noncompliance with the conditions thereof.

The policies were introduced in evidence. They are very lengthy, and need not be set out in full. Each policy is for $1,000 upon the stock of merchandise of W. H. Boydston at Tyronza in Poinsett county, Ark. The policies are practically alike in their terms. Each one contained what is called a "record warranty clause," requiring an inventory to be made at least once a year, and that a set of books be kept showing completely the business transacted since the date of the inventory, and also requiring the inventory and set of books to be securely kept in a fireproof safe at night when the store was not open for business. The policy also contains the following:

"The insured, as often as required, shall exhibit to any person designated by this company all that remains of any property herein described, and submit to examination under oath by any person named by this company, and subscribe to the same; and, as often as required, shall produce for examination all books of account, bills, invoices and other vouchers, or certified copies thereof if originals be lost, at such reasonable place as may be designated by this company or its representative, and shall permit extracts and copies thereof to be made."

The policy also contains a clause that the company shall not be deemed to have waived any conditions of the policy unless by written agreement, or unless there is an indorsement upon the policy of the terms of the waiver.

The storehouse containing the stock of merchandise insured during the life of the policy caught on fire by a fire communicated to it from adjoining buildings, and thereby burned the stock of merchandise. After the fire loss occurred, the adjuster of the companies came to the scene of the fire, and, on the 7th day of May, 1925, made with W. H. Boydston a nonwaiver agreement, which reads as follows:

"It is mutually agreed and understood by and between Boydston Bros., of the first part, and the named below insurance company of as below, and other companies signing this agreement, parties of the second part, that any action taken by any adjuster or representative of the said parties of the second part in investigating the cause of, or investigating or ascertaining the amount of loss and damage to the property of the party of the first part caused by fire alleged to have occurred on April 26, 1925, shall not waive or invalidate any of the conditions of the policies of the parties of the second part, held by the party of the first part, and shall not waive or invalidate any rights whatever of either of the parties to this agreement.

"The intent of this agreement is to preserve all the rights and defenses of all parties hereto, and to provide for an investigation of and the determination of the amount of the loss or damage only, for the interest of `whom it may concern,' without regard to the liabilities of the parties of the second part."

Subsequent to this time the adjuster required Boydston to appear before him for the purpose of being examined under oath. W. H. Boydston, at his own expense, made a trip from Tyronza in Poinsett county, where he lived, and where the loss occurred, to Jonesboro, Ark., and there, on the 30th day of June, 1925, submitted to an examination by a representative of the defendant.

At the time of the fire, the books and invoices of the plaintiff were not in a fireproof safe. He had been using them during the day, and, being very tired that night, went home, and forgot to put them in the safe. His inventory was at the home of his son, where it was being used in the preparation of his income tax report. Before the nonwaiver agreement was executed the adjuster of the companies had been informed of the facts with regard to the breaking of the record warranty clause. At the trial of the case the plaintiff introduced in evidence duplicate invoices, which he had obtained from the persons from whom he had purchased the goods, and, from the testimony of himself and other merchants who were familiar with his stock of goods and the prices of such goods, he proved the value thereof.

Other facts will be stated or referred to in the opinion.

The jury returned a verdict in each case for the sum of $1,000; and from the judgment rendered, each defendant has duly prosecuted an appeal to this court.

R. Lee Bartels, of Memphis, Tenn., and Mardis & Mardis, of Harrisburg, for appellants.

Hawthorne, Hawthorne & Wheatley, of Jonesboro, for appellee.

HART, C. J. (after stating the facts as above).

It is the contention of counsel for the plaintiff that the forfeiture of the policy occasioned by the failure of the plaintiff to comply with the record warranty clause was waived when, after the loss by fire occurred, the adjuster, with knowledge that the plaintiff had failed to comply with the conditions of the policy with regard to keeping his books and inventory locked in a fireproof safe when the store was not open for business, required the plaintiff to be put to the trouble and expense of going from Tyronza in Poinsett county, where the fire occurred, to Jonesboro in Craighead county for the purpose of being examined under oath with regard to the conditions of the policy. It is the settled law of this state that any condition inserted in a policy for the benefit of the insurer may be waived by it, and that an insurance agent authorized to waive a forfeiture in a policy may do so orally, though the policy provides that the waiver must be indorsed on the policy. German-American Ins. Co. v. Humphrey, 62 Ark. 348, 35 S. W. 428, 54 Am. St. Rep. 297; Phœnix Ins. Co. v. Public Parks Amusement Co., 63 Ark. 187, 37 S. W. 959; Queen of Arkansas Ins. Co. v. Forlines, 94 Ark. 227, 126 S. W. 719; and Queen of Arkansas Ins. Co. v. Malone, 111 Ark. 229, 163 S. W. 771.

It is also settled by these decisions that an adjuster with the authority of the adjuster in this case may waive the performance of the conditions of the policy. But it is contended by counsel for the defendants that, under the provisions of the nonwaiver agreement, there was no waiver of the...