Hammond v. The Niagara Fire Insurance Company

• Decision Date: 07 July 1914
• Docket Number: 18,933
• Citation: 92 Kan. 851,142 P. 936
• Parties: W. A. HAMMOND, Appellant, v. THE NIAGARA FIRE INSURANCE COMPANY, Appellee
• Court: Kansas Supreme Court

142 P. 936

92 Kan. 851

W. A. HAMMOND, Appellant, v. THE NIAGARA FIRE INSURANCE COMPANY, Appellee

No. 18,933

Supreme Court of Kansas

July 7, 1914

Decided July, 1914.

Appeal from Sedgwick district court, division No. 1; THOMAS C WILSON, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. INSURANCE--Provisions of Policy that Books and Records Are to Be Kept in Fireproof Safe, or Out of Danger from Fire, Are Valid. In a contract insuring a stock of merchandise it was provided that the insured should take inventories of his stock at certain times and keep a set of books showing a record of the business transacted by him, and, further, that he should keep such books and the last inventory taken securely locked in a fireproof safe at night or, failing in this, keep them in a place not exposed to a fire which would ignite or destroy the store building, and in case of loss he would produce such books and inventory for the inspection of the insurer, with the further condition that the failure to keep and produce them would avoid the policy. Held, that the word "keep" as used in the policy has two meanings: in the first provision it means to make entries in books of the business transacted; and in the second, where it provides that the insured shall keep the books and inventory in a fireproof safe or in some place not exposed to fire, it means that he shall care for and preserve them; and the failure of the insured to both preserve and produce them in compliance with this provision operates to defeat a recovery of the insurance under the policy.

2. SAME--Knowledge of Agent--No Waiver of Provision in Policy. The fact that the agent of the insurer examined the stock when the policy was written and might have discovered that the insured did not keep a fireproof safe, or even his knowledge that the insured had no safe at that time, can not be construed into a waiver of the obligation of the insured to keep the books and inventory in the manner and place provided for in the contract of insurance.

R. L. Holmes, Charles G. Yankey, and W. E. Holmes, all of Wichita, for the appellant.

M. A. Fyke, E. L. Snyder, both of Kansas City, Mo., J. D. Houston, and C. H. Brooks, both of Wichita, for the appellee.

OPINION

JOHNSTON, C. J.

The question involved in this proceeding is: Does the failure to keep and produce certain records of a commercial business, as required by the terms of a fire insurance policy, bar recovery in case of loss? W. A. Hammond, the appellant, brought this action to recover against The Niagara Fire Insurance Company, the appellee, on a policy of insurance issued by that company upon a stock of merchandise and store fixtures owned by him and located at Towanda, Kan. On July 17, 1911, the appellee, by its agent, G. W. Moore, issued to appellant the policy of insurance upon his stock of merchandise to the amount of $ 3300 and upon the fixtures to the amount of $ 200, and a few days thereafter the appellant paid therefor the premium of $ 45.50. The policy was standard in form, and in it was a provision which required, among other things, that the insured would keep a set of books which would present a record of the business transacted and keep the books and inventories in a fireproof safe at night or at some place not exposed to fire and to produce them in case of loss, and it also provided that a failure to keep and produce the books and inventories would avoid the policy. About three o'clock in the morning of May 9, 1912, a fire occurred and the books of account, which it appears appellant had been keeping upon the top of a trunk in his sleeping room over the storeroom, and the last inventory, which he kept in the trunk, were destroyed. Appellee's agent was notified of the fire and an adjuster came and interviewed appellant, but he refused to recommend payment of the loss on account of appellant's inability to produce the books of account and the last inventory. He, however, suggested that appellant make proofs of loss to the appellee and also inform it as to the books and inventory. This appellant did about May 17, 1912. The loss was not paid, and on July 25, 1912, appellant brought this action asking for a reformation of the policy of insurance striking out that portion requiring the books and inventory to be kept in a fireproof safe, and also for judgment for the amount of the policy. In the proofs of loss made by appellant the value of the merchandise and fixtures was placed at $ 4800, and on the trial evidence was introduced tending to show that the last inventory, taken in January, 1912, showed the value of the stock to be about $ 4200 and the fixtures about $ 300. Evidence was also introduced tending to show that appellant did not know that the fireproof safe clause was in the policy. A demurrer of appellee to appellant's evidence on the ground that it failed to show a cause of action was overruled, but after the introduction of additional testimony by appellant to the effect that the safe clause in the policy was put in by the agent without mentioning the fact to appellant the court modified its ruling and sustained the demurrer as to the merchandise but overruled it as to the fixtures. The court directed the jury to return a verdict in favor of appellant for $ 224 for the loss of the fixtures, and overruling appellant's motion for a new trial. Judgment was rendered accordingly. He appeals, and here insists that the ruling of the trial court on the demurrer to the evidence as to the keeping and production of the books and inventory is error.

The contention is that under the terms of the policy...