Eaton v. Globe & Rutgers Fire Ins. Co.

• Decision Date: 05 June 1917
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: EATON v. GLOBE & RUTGERS FIRE INS. CO.

227 Mass. 354

116 N.E. 536

EATON

v.GLOBE & RUTGERS FIRE INS. CO.

Supreme Judicial Court of Massachusetts, Worcester.

June 5, 1917.

Report from Superior Court, Worcester County; Frederic H. Chase, Judge.

Actions by Perley R. Eaton against the Globe & Rutgers Fire Insurance Company, German-American Insurance Company, Hartford Fire Insurance Company, AEtna Insurance Company, North River Insurance Company, and Providence & Washington Insurance Company. There were verdicts for plaintiff in all cases, which were reported to the Supreme Judicial Court. Judgment ordered for plaintiff on the verdict.Clarence E. Tupper and Geo. H. Richardson, both of Worcester, for plaintiff and Trustee.

Brown & Came, of Boston, for defendants.

BRALEY, J.

By the terms of the report, if no error of law appears, judgment for the plaintiff shall be entered on the verdicts, and all material questions raised by the defendants except the rulings on the admission and exclusion of evidence, are covered by their exceptions to the refusal of their first request common to all the cases, that upon the evidence the plaintiff could not recover, as the subsequent requests are merely specifications of the grounds upon which the first request was asked.

The issuance of the policies, the occurrence of the fires, and consequent loss to the plaintiff to some extent although denied in the answers, were abundantly proven if not expressly admitted at the trial. But in avoidance of liability while the defendants relied in the actions to recover for loss or damage under the first fire on the defenses, that immediate notice in writing of the occurrence of the fire was not given or proofs of loss duly furnished, they also averred in the answer to all the actions, that the policies had been forfeited because of the failure of the plaintiff to make an inventory, and pleaded the award in bar of any right of recovery for either fire.

The policies with one exception, although issued in North Carolina, are stated by counsel for the parties to be in the standard form prescribed by the laws of the state of New York; yet as no evidence of the law of either state has been introduced the policies are to be treated for the purposes of our decision as contracts of insurance at common law.

The policies were for the term of one year from August 2, 1912, with the exception of the policy issued by the Globe & Rutgers Fire Insurance Company which ran from September 27, 1912. By each policy the plaintiff was insured against loss or damage by fire on:

‘All telegraph poles cut and peeled and all other timber products not more hazardous or while located on the lot or drawn out alongside the Logging Railroad or while on or in cars at the assured's risk or unloaded alongside thereof for reloading at any point on said Logging Railroad leading from Holley Ridge Station of the Atlantic Coast Line Railroad lot of 526 acres known as the Carrier Tract in Pender county, North Carolina. This insurance is intended to cover said property which is owned or held in trust or sold but not delivered or removed from the time cut until the time loaded on cars and forwarding orders given and received taken from the railroad relieves the assured of any further liability,’

and were made payable in case of loss or damage to ‘Charles E. Baker of Fitchburg, Mass., trustee * * * for collateral for any or all present or future obligations.’ The following clause, in so far as material, denominated as the ‘iron-safe clause,’ was attached by a rider to the fact of the policies:

‘The following covenants and warranties are hereby made a part of this policy:

1st. The assured will take a complete itemized inventory of stock on hand at least once in each calendar year unless an inventory has been taken within twelve calendar months prior to the date of this policy or shall be taken in detail within thirty days of the issuance of this policy or this policy shall be null and void from such date and upon demand of the assured the issuance of premiums from such date shall be returned.

‘2d. The assured will keep a set of books which shall clearly and plainly present a complete record of business transactions including all purchases, sales and shipments both for cash and credit from the date of inventory as provided for in the first covenant of this clause and during the continuance of this policy. * * * In the event of failure to produce such set of books and inventory for the inspection of this company this policy shall become null and void and such failure shall constitute a perpetual bar from any recovery thereon.’

The first fire occurred October 30, 1912, and the second fire on or about May 5, 1913.

It is the defendants' contention that the policies were forfeited because the evidence conclusively shows as matter of law, that the plaintiff had failed to comply with the first clause of the promissory warranty requiring an inventory.

The object of this clause is to facilitate the ascertainment of the extent of the loss. Georgia Home Ins. Co. v. Allen, 119 Ala. 436, 24 South. 399.

It is plain that it is inapplicable to standing timber which had not been converted. Southern Fire Ins. Co. v. Knight, 111 Ga. 622, 36 S. E. 821,52 L. R. A. 70, 78 Am. St. Rep. 216;Sowers v. Mut. Fire Ins. Co., 113 Iowa, 551, 85 N. W. 763. The cutting of the trees however had been ‘practically completed’ before the policies issued and if the poles and logs obtained are considered as articles which may be bought and sold in trade, the jury could find that as the trees were felled, peeled and cut into logs where they lay, each pole was measured, marked and tally slips made, or the number of poles and logs with their dimensions were entered in memorandum books with the number cut by each workman, and that the contents of the tallies and the memoranda were daily reported to the plaintiff's manager who kept in the tally books a weekly record of the operations. Burgess v. New England Marine Ins. Co., 10 Allen, 221;Van Patten v. Leonard, 55 Iowa, 520, 8 N. W. 334;Torrey v. Shawano County, 79 Wis. 152, 48 N. W. 246.

A time book which was properly admitted in evidence also showed not only the number of men employed by the day or hour with an account of their work and payment of wages, but the total number of logs and poles.

It is manifest upon this evidence, independently of any concession of the defendants, the jury could find, that proper books of account as required by this clause had been kept, and they further could find on the plaintiff's testimony, that in the back part of the time book there was an accurate summary or inventory of the poles taken in March, 1912, after the cutting had been completed which had been prepared from the tallies and the books. The question was one of fact. Burnett v. Am. Central Ins. Co., 68 Mo. App. 343;Morris v. Imperial Ins. Co., 106 Ga. 461.¹Jones v. Southern Ins. Co. (C. C.) 38 Fed. 19;Liverpool & London & Globe Ins. Co. v. Kearney, 180 U. S. 132, 21 Sup. Ct. 326, 45 L. Ed. 460.

The jury also were to decide whether the enumeration in the tally books which they could find were made in good faith specifically naming each pole and log with its dimensions, was a compliance with this clause. Georgia Home Ins. Co. v. Allen, 119 Ala. 436, 24 South. 399;Jones v. Southern Ins. Co. (C. C.) 38 Fed. 19. It also would seem to be obvious, or the jury could say, that in view of the necessary character of the business described in the policies, no formal separate schedule headed ‘inventory’ could have contained anything more definite under the requirements of this clause as contemplated by the parties when the policies were issued, than the schedule in the tally books. Paltrovitch v. Phoenix Ins. Co., 143 N. Y. 73, 77,37 N. E. 639,25 L. R. A. 198;Smith v. Commonwealth Ins. Co., 49 Wis. 322, 5 N. W. 804. The affirmative answers of the jury, that the plaintiff made a complete itemized inventory of stock within 12 calendar months prior to the date of the policies, and kept a set of books as described in the policies, were well warranted for the reasons stated. But before he could recover the plaintiff was required to prove that immediate notice in writing of the fire was given, and proof of loss furnished in compliance with the provision, that within ‘sixty days after the fire unless such time is extended in writing by this company shall render a statement to this company signed and sworn to by said insured stating the knowledge and belief of the insured as to the time and knowledge of the fire, the interest of the insured and of all others in the property, the cash value of each item thereof and the amount of loss thereon. * * *’ The sufficiency of the notice and proof of loss arising under the second fire are conceded and the question whether these conditions were complied with relates only to the loss under the first fire.

When the locality of the fire, which was a large forest fire and continued to burn for more than ten days over a tract difficult to traverse and explore, is considered with the circumstances, that the plaintiff, on the day after the fire started, left for his home here where his books and papers were kept, and on November 4th notified the insurance broker who had obtained the policies for him, and within four days after the broker had drafted a form of notice, sent the notice to the agent in North Carolina who had issued, countersigned, and received the premiums on all the policies except the policy of the Globe & Rutgers Insurance Company, with a letter stating that a loss had occurred, it could not have been ruled as matter of law that unreasonable delay was shown, if a period of some twelve days elapsed from the beginning of the fire before notices could be properly prepared and given to the defendants. Smith v. Scottish Union & National Ins. Co., 200 Mass. 50, 53, 54, 55, 85 N. E. 841;Greenough v. Phoenix Ins. Co., 206 Mass. 247, 249, 92 N. E. 447,138 Am. St. Rep. 383;Solomon v....