Levine v. Lancashire Insurance Co.

• Citation: 66 Minn. 138
• Decision Date: 06 November 1896
• Docket Number: Nos. 9676 - (5).,s. 9676 - (5).
• Parties: JACOB LEVINE and Another v. LANCASHIRE INSURANCE COMPANY.<SMALL><SUP>1</SUP></SMALL>
• Court: Supreme Court of Minnesota (US)

Page 138

66 Minn. 138

JACOB LEVINE and Another v. LANCASHIRE INSURANCE COMPANY.¹

Nos. 9676 - (5).

Supreme Court of Minnesota.

November 6, 1896.

Appeal by defendant from a judgment of the district court for St. Louis county, in favor of plaintiffs, entered in pursuance of the findings and order of Ensign, J. Affirmed.

Kueffner, Fauntleroy & Rice, Allen & Baldwin, and J. N. Searles, for appellant.

Draper, Davis & Hollister and H. J. Grannis, for respondents.

MITCHELL, J.

This was an action on a fire insurance policy for $2,000 upon a stock of merchandise of the alleged value of over $56,000, upon which there was concurrent insurance for $46,500; the total alleged loss being $37,858.44, of which defendant's proportional share would be $1,561.16, of which $725.25 had been paid, and judgment for the balance of $835.91 was demanded.

The policy contained the usual provisions that upon the occurrence of a loss the plaintiffs should give the defendant immediate notice, and within 60 days after the fire furnish proofs of loss; that the amount of the loss should be ascertained or estimated by the parties themselves, or, if they differed, then by appraisers, one to be selected by each party, the two so chosen to select an umpire; that, if the two appraisers should disagree, their differences should be submitted to the umpire, and the award of any two should determine the amount of the loss; that the parties should pay the appraisers selected by them respectively; that the defendant should not be deemed to have waived any provision of the policy, or any forfeiture thereof, by any act or proceeding on its part relating to such appraisal; that the amount of the loss or damage having been thus ascertained should not become payable until 60 days after notice, ascertainment, estimate, and satisfactory proof of loss, including an award of appraisers when an appraisal had been required; that no suit or action on the policy for the recovery of any claim should be sustainable until after full compliance with all the foregoing requirements; that the policy should be void in case of any fraud or false swearing by the insured touching any matter relating to the insurance, whether before or after loss.

The complaint alleges that upon the occurrence of the loss the plaintiffs performed all the conditions of the policy, including the rendering of proofs of loss; that, a disagreement having arisen between the parties as to the amount of the loss, they, pursuant to the conditions of the policy, selected two appraisers, who in turn selected an umpire; that the appraiser selected by the defendant and the umpire made an award determining plaintiffs' loss to be $17,602.13, and no more, which award was accepted by the defendant, but rejected by the plaintiffs on the ground of fraud, misconduct, and partiality on part of the appraisers. The complaint then sets out the facts constituting the alleged fraud, misconduct, and partiality on part of the appraisers which it is claimed rendered their award void. It also alleges that the defendant waived the furnishing by plaintiffs of any other or further proof of loss than those already furnished.

Aside from a general denial of all the allegations of the complaint, except as admitted, qualified, or explained, the answer consists of three defenses, viz.: First, a denial of the allegations of fraud, misconduct, and partiality on part of the arbitrators, and an insistence that their award was valid, and that defendant has fully performed and satisfied it by the payment of the $725.25; second, that this sum was paid by the defendant and accepted by the plaintiffs as full payment and satisfaction of all claims or demands under the policy; third, that the plaintiffs were guilty of fraud and false swearing as to the amount and value of their stock and the amount of their loss, which, under the conditions of the policy, rendered it void.

The reply put in issue the new matter contained in the answer, and especially that the plaintiffs had accepted the $725.25 in full satisfaction of all claims under the policy, and alleged that they only accepted it on account as part payment.

Upon the trial the two main issues were as to — first, the alleged fraud, misconduct, and partiality of the appraisers; and, second, the actual amount of plaintiffs' loss. Upon the second issue the controversy was not so much in respect to the amount of damage to goods saved as in respect to the amount and value of goods totally destroyed; the defendant claiming that the value of the latter was trifling, while the plaintiffs claimed that it amounted to between $16,000 and $17,000.

The court found as facts, substantially in accordance with the allegations of the complaint, that the amount of plaintiffs' loss was $37,858.44, viz. goods totally destroyed $15,741.72, and damage to goods saved $22,116.72; that the arbitrators were guilty of the acts of fraud, misconduct, and partiality alleged; that the $725.25 was paid by the defendant and accepted by the plaintiffs as part payment, and not in full satisfaction, of their claim under the policy; that within the prescribed time the plaintiffs furnished proofs of loss, and, in response to defendant's request, further or supplementary proofs, which were accepted and retained by defendant without further objection. No express finding was made, and none seems to have been asked for, upon the issue as to plaintiffs' fraud and false swearing regarding the amount of their loss. As the burden of proof on this issue was on the defendant, the findings are equivalent to a finding in favor of the plaintiffs. Indeed, no serious attempt seems to have been made on the trial by defendant to maintain this issue by proof.

As conclusions of law the court held that the award was void, and should be vacated, and constituted no bar to this action, and that the plaintiffs were entitled to judgment for $835.30. Upon these findings judgment was entered in favor of the plaintiffs for that sum, but not in terms adjudging the award void.

Defendant's assignments of error are 70 in number. They have been so unnecessarily multiplied, and so many of them are so palpably without merit, that we cannot be expected to consider each separately. All we feel called upon to do is to make special mention only of the most important ones, and to dispose of the remainder by merely saying that they are without merit.

1. The first 47 relate to various rulings of the court upon the trial as to the admission or exclusion of evidence. Most of these that are worthy of notice have reference to the admission of plaintiffs' books of account, consisting of their journal, ledger, and invoice book, which may all be considered together. While this class of evidence had some bearing on the question of the misconduct and partiality of the appraisers, as tending to show that they arbitrarily and willfully refused to examine and consider important and material evidence, yet the main purpose of it was to prove the amount of plaintiffs' actual loss.

They introduced — first, an inventory of stock on hand, taken in the regular course of business on January 1, 1893; second, their journal and ledger, also kept in the regular course of business, and especially the merchandise account, purporting to contain an account of the amount and value of all merchandise bought or sold between the date of the inventory and the date of the fire, which occurred December 13, 1893. In connection with and as corroborative of these books, the plaintiffs also introduced the original invoices of goods bought between January 1 and December 13, 1893, which the evidence tended to show were carefully compared with the goods upon their arrival and then, in the regular course of business, entered in the invoice book. Inasmuch as the goods were charged to merchandise at their cost price and credited at their selling price, this documentary evidence was supplemented by testimony as to the average profit over cost at which the goods were sold.

If plaintiffs' books were correctly kept, this evidence would show the amount and value of the merchandise on hand at the date of the fire, and a comparison of this with the amount and value of the goods saved would show the amount of plaintiffs' loss. If the proper foundation was laid, there can be no doubt of the competency of this kind of evidence. Indeed, in case of a total or partial loss of a large and miscellaneous stock of merchandise it is of necessity the only kind of evidence that can be produced. Books of account, or "shop books," as they are often called, are usually introduced in evidence only to prove services performed or articles delivered to the person named in the entries in the course of dealings between the parties creating the relation of debtor and creditor. But the competency of such evidence in cases like the present, and for the purpose for which these books were introduced, is fully recognized by the authorities. Insurance Co. v. Weide, 9 Wall. 677; Id., 14 Wall. 375. This rule is founded on considerations of necessity, for ordinarily there is no other or better evidence in existence.

It is claimed, however, that these books were not verified so as to lay the proper foundation for their introduction in evidence. After a careful examination of the record, we are satisfied that the preliminary proof substantially fulfilled all the requirements of G. S. 1894, § 5738, and hence that they were properly admitted, if the provisions of that statute apply to books of this kind. Counsel's contention is that this section only applies where the books are offered to prove moneys paid, goods delivered, or services performed to or for the party charged therewith; that as these books were not of that kind, or offered for that purpose, they should have been proved according to the common law, which required the supplementary oaths of all the different clerks or bookkeepers who made the entries, except where it was...