Fire Ass'n of Philadelphia v. Masterson

• Decision Date: 09 March 1901
• Citation: 61 S.W. 962
• Parties: FIRE ASS'N OF PHILADELPHIA v. MASTERSON et al.
• Court: Texas Court of Appeals

61 S.W. 962

FIRE ASS'N OF PHILADELPHIA v. MASTERSON et al.

Court of Civil Appeals of Texas.

March 9, 1901.

Appeal from Hill county court; J. B. Reynolds, Judge.

Action by W. R. Masterson and another against the Fire Association of Philadelphia. From a judgment in favor of plaintiffs, defendant appeals. Reversed.

The appellees, W. R. Masterson and L. E. Miller, as plaintiffs below, instituted this suit in the county court of Hill county, against the appellant (defendant below) on two policies of insurance,—one in the sum of $500, executed and delivered to L. E. Miller on the 16th day of December, 1899, and the other in the sum of $400, executed and delivered to L. E. Miller on the 9th day of January, 1900; each of said policies running for one year, and covering a stock of groceries kept in the name of L. E. Miller at the town of Whitney, Hill county, Tex., and each of said policies providing loss, if any, payable to W. R. Masterson as his interest may appear. It was alleged that the full face of said policies, in the sum of $900, accrued by virtue of the total destruction of the stock insured on the 4th day of June, 1900. Defendant answered with a denial and a special plea that each of said policies contained a covenant of warranty known as the "iron-safe clause." It was alleged by the defendant that the assured neglected, failed, and refused to comply with said iron-safe clause, and neglected and failed to take the inventory required by the first section thereof either within 12 calendar months preceding the issuance of the policies, or within 30 days thereafter, and in consequence thereof said policies became null and void. Defendant also pleaded a tender, and offered to return the premium paid on said policies. Defendant further pleaded that the assured neglected and failed to keep a set of books showing a complete record of business transacted, and failed and refused to produce the books, records, and inventories called for in the iron-safe clause. Defendant further pleaded that the fire described in plaintiffs' petition was caused or procured by the assured in the policy named. By supplemental petition, plaintiffs alleged that they had complied with the terms of the iron-safe clause, but that, if the court should hold that a strict compliance with same had not been made, the same was substantially complied with, in that the merchandise which was destroyed by fire was shipped by wagon from Hillsboro to Whitney, a distance of about 13 miles, by Masterson, and that Masterson kept in his safe at Hillsboro itemized lists of merchandise so shipped and delivered to said Miller, and that the contract by which said Masterson furnished said Miller said goods as aforesaid began in the latter part of December, 1899, within less than 12 months of the time of the fire. They further alleged that the retail business, as conducted in the sale of groceries and produce or perishable articles, necessitated a constant change in said stock, and that an inventory made 6 or 12 months before the fire would not furnish the safest and best means of ascertaining the amount of the loss, and would be of no practical use in determining the amount of goods on hand at the time of the fire. Plaintiffs further alleged that after the fire defendant's agent investigated the fire, and became advised of all the facts and circumstances attending the fire, and fully informed himself of all the acts and doings of the plaintiffs relating thereto, and failed to deny liability under said policies, and led plaintiffs to believe that liability would not be denied, and that it would be necessary to furnish proofs of loss, and, so believing, and in ignorance of defendant's intention to deny liability, plaintiffs incurred expenses in connection with the proofs of loss within 60 days, provided for in the policies; that after receiving them defendant for the first time denied liability, wherefore plaintiffs say that the defenses pleaded by defendant were waived. There was a trial with the aid of a jury, resulting in a verdict and judgment in favor of plaintiffs, from which judgment defendant has duly prosecuted an appeal to this court.

Alexander & Thompson, for appellant Wear, Morrow & Smithdeal, for appellees.

BOOKHOUT, J. (after stating the facts).

W. R. Masterson lived at Hillsboro, where he was engaged in the grocery business. L. E. Miller lived at Whitney, Hill county, Tex., where he was conducting a dry-goods business. In December, 1899, Masterson started a grocery business in Whitney, which business was placed in charge of Miller, with the agreement that Masterson should supply the groceries from his store at Hillsboro, and all the profits over and above invoice cost were to be equally divided between them. Miller had authority to buy produce, consisting of butter, eggs, chickens, etc., from the public generally, as a part of this business. Both the dry goods and groceries were kept in the same storehouse, the stocks being kept separate. Miller bought and sold country produce in connection with the grocery business. On December 16, 1899, Miller took out a policy of insurance in appellant company for $500 on the stock of groceries, and on January 9, 1900, took out a second policy for $400; it being stipulated in the face of each of said policies that the loss, if any, was payable to W. R. Masterson as his interest may appear. These policies contained a clause of warranty known as the "iron-safe clause," reading: "(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...