Hartford Fire Ins. Co. v. Adams

• Decision Date: 21 May 1913
• Citation: 158 S.W. 231
• Parties: HARTFORD FIRE INS. CO. v. ADAMS.
• Court: Texas Court of Appeals

158 S.W. 231

HARTFORD FIRE INS. CO. v. ADAMS.

Court of Civil Appeals of Texas. Texarkana.

May 21, 1913.

Rehearing Denied June 5, 1913.

Appeal from Smith County Court; Jesse F. Odom, Judge.

Action by James R. Adams against the Hartford Fire Insurance Company. Judgment for plaintiff, and defendant brings error. Reversed and rendered.

This is a suit on a fire insurance policy covering a stock of merchandise. There was a loss payable clause to defendant in error, and after the fire the insured assigned the policy to him. The policy, among other things, provided: "The following covenant is hereby made a part of this policy and a warranty upon the part of the assured: Section 1. The assured will take a complete itemized inventory of stock on hand at least once in each calendar year, and within twelve months of the last preceding inventory if such has been taken. Unless such an inventory has been taken within twelve calendar months prior to the date of this policy, and together with a set of books showing a complete record of business transacted since the taking of such inventory, is on hand at the date of this policy, one shall be taken within thirty days after the date of this policy, or in each and either case this entire policy shall be null and void." Plaintiff in error pleaded that the policy was null and void because the assured failed to take an inventory of his stock of goods within 30 days after the policy; none having been taken before the issuance thereof.

The facts are undisputed. On January 11, 1911, Lloyd Cone opened up a hardware business in Edgewood. On January 19, 1911, the policy sued on was issued to him by plaintiff in error's agent and insured his stock of goods for one year. On June 20, 1911, the insured contracted an undivided half of the stock of merchandise to C. E. Swartztrauber, and on July 1, 1911, an inventory was taken to effectuate the sale. It is an admitted fact that the inventory taken on July 1, 1911, was the first and only inventory ever taken of the stock. A fire destroyed a part of the merchandise on November 23, 1911. The insured testified: "I kept my original invoices showing each item of the goods purchased from the time I opened business to the fire and offer them in lieu of an inventory. They represent the goods I bought." There is no proof that the articles of merchandise represented by the invoices were or were not ever in the store.

Wm. Thompson and Jno. S. Patterson, both of Dallas, for plaintiff in error. Price & Beaird, of Tyler, for defendant in error.

LEVY, J. (after stating the facts as above).

By its first assignment the plaintiff in error makes the contention that the failure on the part of the insured to take an inventory of the stock of merchandise within 30 days after the date of the policy worked a forfeiture of the policy, and a verdict should have been directed in favor of plaintiff in error. It was an admitted fact in the trial that an inventory of the stock of merchandise was not taken by the insured within 30 days after the date of the policy, and that none was ever taken before the date of the policy, and the loss occurred several months after the date of the policy. The provision of the policy under consideration has been generally declared by the courts as a valid and enforceable term of contract and to be performed to entitle the insured to recover for a loss. See Insurance Co. v. Mercantile Co., 126 S. W. 616; Id. (Sup.) 135 S. W. 1165. So it must be said that the parties entered into a valid and enforceable contract embraced in the policy wherein it was expressly agreed that "this entire policy shall be null and void" unless (1) "the assured will take a complete itemized inventory of stock on hand," and do so (2) "within thirty days after the date of this policy." There can be no question about what was intended by the parties. The policy...