Hartford Fire Ins. Co v. Farris

• Decision Date: 12 November 1914
• Citation: Hartford Fire Ins. Co v. Farris, 83 S.E. 377, 116 Va. 880 (1914)
• Parties: HARTFORD FIRE INS. CO. v. FARRIS.
• Court: Virginia Supreme Court

83 S.E. 377

116 Va. 880

HARTFORD FIRE INS. CO.

v.FARRIS.

Supreme Court of Appeals of Virginia.

Nov. 12, 1914.

1. Insurance (§ 335*)—Fire Policies—Construction.

Provisions in fire policies, requiring the taking of an inventory, the keeping of regular books, and their preservation in an iron safe, are promissory warranties which must be strictly performed to entitle the insured to recover.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. S52, 853; Dec. Dig. § 335.*]

2. Insurance (§ 335*)—Fire Policies—Construction.

Where a fire policy required the insured to take a complete inventory once a year, providing that, unless such inventory had been taken within 12 months prior to the date of the policy, one should be taken within 30 days or the policy should be void, the insured is bound to take an inventory within 30 days after the issuance of the policy, where no inventory had been previously taken, though his business had been started only 2 months before the policy was procured.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 852, 853; Dec. Dig. § 335.*]

3. Insurance (§ 335*) — Fire Policies — Construction—"Inventory."

Where a tire policy required the insured to keep an inventory and to take one within 30 days after the issuance of the policy, if none had been taken within the year previous, the production after the fire of invoices, which did not clearly show what goods had been purchased and were received by the insured, is not a substantial compliance with the provision, and will not be considered an "inventory, " even though the insured had only recently started his business, and all stock was newly purchased.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 852, 853; Dec. Dig. § 335.*

For other definitions, see Words and Phrases, First and Second Series, Inventory.]

4. Insurance (§ 335*) — Fire Policies — "Books."

Where a fire policy required the keeping of "books" showing all sales, purchases, and shipments in an iron safe, the furnishing of books made up after the fire is not a compliance; the purpose of the provision being to prevent fraud.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 852, 853; Dec. Dig. § 335.*

For other definitions, see Words and Phrases First and Second Series, Book.]

5. Insurance (§ 335*)—Fire Policies—Keeping of Books—Defenses.

The failure of the insured to take an inventory and keep books, as required by the policy, cannot be excused because defendant's agent, after the issuance of the policy, consented to additional concurrent insurance.

[Ed. Note.—For other cases, see Insurance, Cent. Dig. §§ 852, 853; Dec. Dig. § 335.*]

Error to Circuit Court, Tazewell County.

Action by Joseph Farris against the Hartford Fire Insurance Company. There was a judgment for plaintiff, and defendant brings error. Reversed.

Geo. W. St. Clair, of Tazewell, and Powell, Price & Shelton, of Bristol, for plaintiff in error.

Sexton & Roberts, of Bluefield, W. Va., and J. W. Hicks, of Graham, for defendant in error.

CARDWELL, J. The plaintiff in this action, Joseph Farris, an Assyrian, for several years a resident of the town of Graham, Va., opened up a stock of merchandise and began business as a merchant in that town on or about the 11th day of August, 1911; his stock consisting of dry goods and notions, ladies' and gentlemen's furnishings, underwear, jewelry, etc. On September 19, 1911, there was issued to Farris, by the Hartford Fire Insurance Company, a policy of insurance, covering his stock of merchandise, in the sum of $1,000, for a term of one year; the policy containing the usual provisions found in this class of fire insurance policies, including what is generally spoken of and known as the "iron-safe clause, " which, so far as material in this controversy, is as follows:

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

"(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 prior to the date of this policy one shall be taken in detail within thirty days of issuance of this policy, or this policy shall be null and void from such date, etc.

"(2) The assured will keep a set of books which shall clearly and plainly present a complete record of the business transacted, including all purchases, sales and shipments, both for cash and credit, from the date of inventory, as provided for in the first section of this clause, and during the continuance of this policy."

Farris continued his business as a merchant until January 20, 1912, when the building wherein his stock of goods was situate was destroyed by fire, and none of the goods of Farris therein were saved. The insured, Farris, it appears, was away at the time of the fire, but returned the next morning to

*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes Graham, and immediately notified the agent of the insurance company of his loss. After an investigation and attempt to adjust the insured's loss, the insurance company notified him that there was no liability upon the company under the policy he held, and offered to return the premium of $37 paid thereon when the policy was issued, which Farris refused to accept, whereupon this suit was instituted by Farris on the policy, and at the trial thereof the defendant insurance company stated its grounds of defense; among them being the following:

"(3) The plaintiff did not take, preserve or produce an inventory of the stock of goods, nor did he keep and preserve a set of books as provided for in the policy."

This is the only ground of defense that is necessary to be considered, as we view the case.

The defendant offered no evidence at the trial, but, after the plaintiff had introduced his evidence, demurred thereto, in which demurrer the plaintiff joined. Whereupon the jury assessed the plaintiff's damages at $1,000, the full amount of the policy, and the court overruled the demurrer to the evidence and entered its judgment in favor of the plaintiff for the amount of damages ascertained by the jury's verdict, to which judgment this writ of error was awarded the defendant.

Following the provisions in the policy sued on. quoted above, are further provisions which required the insured to produce the books, inventory, etc., stipulated for in his contract with the insurer, evidenced by his policy, but at the trial of this cause in the court below the plaintiff made no pretense that he had complied with the "iron-safe clause" of the policy, or made any effort to do so, or offered any excuse for not complying with it. On cross-examination as a witness in his own behalf he was asked:

"You spoke in your examination in chief of having kept books showing your cash and credit sales. You had an inventory, did you? A. No, sir; I had no inventory at all."

His counsel in the argument before this court, while not taking issue with the contention of counsel for the defendant as to what an inventory is or should be, urges the view that:

"Under the clauses of the policy, the plaintiff had one year's time from the date of the issue of the policy in which to take his inventory."

In other words, this contention is that, as one year's time from the date of issuance of the policy had not expired when the loss occurred, plaintiff was in no default in not having taken an inventory of his stock of goods, as required by the terms of his policy.

The requirement of the contract between the parties was that the insured— "shall take a complete inventory of stock on hand at least once in each calendar year, and unless such inventory has been taken within twelve calendar months prior to the date of this policy one shall be taken in detail within thirty days of issuance of this policy, or this policy shall be null and void from such date, " etc.

"In order to expedite the proof of loss and to verify the honesty of the claim of loss, provisions are customarily inserted in policies upon stocks in trade requiring the insured to take an inventory at frequent intervals, to keep regular books, and to preserve all papers in an iron or fire proof safe. These provisions are uniformly...