Lewis v. National Fire Ins. Underwriters

• Decision Date: 16 June 1924
• Docket Number: 24047
• Court: Mississippi Supreme Court
• Parties: LEWIS v. NATIONAL FIRE INS. UNDERWRITERS et al. [*]

101 So. 296

136 Miss. 576

LEWIS v. NATIONAL FIRE INS. UNDERWRITERS et al. ^[*]

No. 24047

Supreme Court of Mississippi

June 16, 1924

Division B

Suggestion of Error Overruled Sept. 15, 1924.

APPEAL from circuit court of Monroe county, HON. C. P. LONG, Judge.

Suit by J. A. Lewis against the National Fire Insurance Underwriters and others. Judgment for defendants, and plaintiff appeals. Reversed and judgment rendered.

Judgment reversed.

Leftwich & Tubb, for appellant.

I. IT WAS ERROR IN THE COURT BELOW TO DIRECT A VERDICT FOR THE DEFENDANTS AS TO THE STOCK OF MERCHANDISE. Big Creek Drug Company v. Stuyvesant Ins. Co., 115 Miss. 333 and 561; Miss. Home Insurance Co. v. Stevens, 93 Miss. 439; Insurance Co. v. Farnsworth Lumber Co., 72 Miss 555; Mitchell v. Miss. Home Insurance Co., 72 Miss. 53; Home Insurance Co. of N.Y. v. Gibson, 72 Miss. 58; Rivari v. Queen Insurance Co., 62 Miss. 720. On the general subject of waiver by the company, see Natchez Insurance Co. v. Stanton, 2 Smedes & Marshall, 234; Rivari v. Queen Insurance Co., 62 Miss. 720; American Fire Insurance Co. v. Bank, 73 Miss. 469; Phoenix Ins. Co. v. Bowdre, 67 Miss. 620; Insurance Company v. Sheffy, 71 Miss. 915.

The defendant insurance companies contended that the plaintiff was not entitled to recover because he had not made an inventory of his stock of merchandise within a year, nor within thirty days after the issuance of the policy. The court below in ruling on appellees' motion to exclude the evidence and for a directed verdict took too narrow a view of the making of the inventory and keeping of the books as contemplated by the iron safe clause in these policies. Phoenix Insurance Company v. Camille Bourgeois, 105 Miss. 698. In the instant case there would be no trouble for the jury to determine precisely or with sufficient accuracy, the goods on hand at the time of the fire by adding to the amount of goods bought from Gentry the purchases made thereafter and taking therefrom the cash and credit sales which we have already shown is easily to be determined from the statement heretofore made. Georgia Life Insurance Company v. Friedman, 105 Miss. 779. We do not understand the rule of construction to be so strict and rigid that in this sort of case where the merchant once had in his possession a list of the articles with their value and afterwards accidently lost it, or misplaced it, or if it had become destroyed otherwise than by the result of the fire which consumed the plaintiff's goods, that he could not be heard to give evidence of the contents of the paper after having proved its loss. Home Insurance Company v. Delta Bank, 71 Miss. 608.

II. THE COURT SHOULD HAVE DIRECTED A VERDICT FOR THE PLAINTIFF FOR THREE-FOURTHS OF THE ENTIRE VALUE OF THE FIXTURES INCLUDING THE CASH REGISTER AND THE FILING CABINET BOUGHT AFTER THE POLICY WAS ISSUED. The court, it will be observed, directed the jury to find a verdict for the plaintiff for three-fourths of the value of the fixtures contained in the store at the time the policy was written. The construction of the court below would forbid the storekeeper from renewing his fixtures, or adding or changing the make of his adding machine, or buying a new adding machine, or as in this case buying a cash register, as recognized necessity. The risk as to the fixtures is a shifting risk as well as to the merchandise. The cash register bought by Lewis is named in the terms of the policy; see 26 C. J. 93, par. 92; Boyd v. Miss. Home Ins. Co., 75 Miss. 47.

The court will construe this policy liberally in favor of the assured and as against the insurer, and will construe the contract so as to include the property in question if the language is susceptible of two meanings, one of which would include and the other exclude it.

A. A. Armistead, for appellees.

I. The effort to prove the amount of the stock by invoices has been decided by this court in Insurance Company v. The Bank, 71 Miss. 614, and Bruce York v. Home Insurance Company of New York, 86 So. 714, which latter case was affirmed by the supreme court of Mississippi without an opinion.

The taking of the inventories required by the policy is indispensable to a recovery thereunder, and without the annual inventory or the thirty-day inventory required by the contract, no recovery can be had for any loss, no matter what amount of goods was on hand at the time of the fire. Insurance Company v. Dorsey, 102 Miss. 84 at 87. The supreme court passed on this same question again in another unreported case, that of J. Nosser and Bro. v. Glens Falls Insurance Co., 76 So. 771. The writer of this brief was the attorney for the insurance company in the Nosser Bros. case. The facts were that Nosser Bros. had not taken an inventory within a year before the date of the policy, nor thirty days thereafter, and suit to recover on the inventory taken just before the fire was entered. The lower court directed a verdict for the defendant insurance company and it was affirmed on appeal. This case became a controlling precedent and binding on the court. See Robertson v. Miss. Valley Co., 120 Miss. 159. This appellant then had no "itemized inventory" which the policy required, and which, the courts have held, is compulsory, without which no recovery can be had. 2 Cooley's Briefs on Insurance, p. 821; 1 Clements on Fire Insurance, p. 271.

Counsel insists that the rule of construction is not so strict and rigid that a merchant, who once had in his possession a list of the articles with their values, and happened to have accidentally lost it or misplaced it, or if it had become destroyed otherwise than by the result of fire which consumed plaintiff's goods, could not be heard to give evidence of the contents of the paper after having proved his loss. We take pleasure in calling Counsel's attention to Liverpool & London & Globe Ins. Co. v. Kearney, 180 U.S. 132-138. Here the books were lost while the assured was attempting to remove them from the burning building out of his safe, and the court held in that state of facts that he was undertaking to preserve the books, but if the inventory or the books are lost by negligence, fault, or design of the assured he is not relieved from the contract obligation to produce these books and inventories and prove his loss alone by them.

As to the books, the contract does not require him to keep any particular kind of books except there must be a "set of books," which shall clearly and plainly present a complete record of 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. The supreme court of Mississippi in Penix v. American Central Ins. Co., 106 Miss. 145, named kind of books he must keep, such as an accountant could take and determine his loss from the books alone unaided by the testimony of the plaintiff except as to the manner of keeping them. See, too, Insurance Co. v. Dorsey, 102 Miss. 84-87; Goldman v. Ins. Co., 48 La. Ann. 225; Home Ins. Co. v. Williams, 237 F. 171; Ins. Co. of North America v. Williams, 77 So. beginning on page 159; Monger & Henry v. Delaware Ins. Co., 79 S.W. 7.

II. WAS THE COURT CORRECT IN LIMITING RECOVERY TO THREE-FOURTHS OF THE VALUE OF THE FURNITURE AND FIXTURES? This three-quarter value clause in the contract sued on provided that the insurance company should not be liable for an amount greater than three-fourths of the actual cash value of each item of property insured under this policy. Mr. Lewis himself, testified on page 88 of the record that eighty-five dollars was to be deducted from the two hundred and forty dollars at which he valued his fixtures. On this testimony the court directed a verdict for the plaintiff in the court below for three-fourths of the two hundred and forty dollars less the credit of eighty-five dollars. This was done on the testimony of the witness himself and surely neither he, nor his attorneys can now complain of that result.

Argued orally by C. L. Tubb, for appellant.

OPINION

COOK, J.

The appellant, J. A. Lewis, instituted this suit in the circuit court of Monroe county against the National Fire Insurance Underwriters, the National Hardware Dealers' Mutual Fire Insurance Company, and the Hardware Dealers' Mutual Fire Association, on two policies of insurance covering a stock of merchandise and fixtures which had been destroyed by fire. At the conclusion of the plaintiff's evidence a motion to exclude this evidence and grant a peremptory instruction for the defendant as to the stock of merchandise and to grant a peremptory instruction for the plaintiff for three-fourths value of the fixtures, was sustained, and from the judgment entered in pursuance of this instruction, this appeal was prosecuted.

To the declaration, which is in the usual form, the defendants filed a plea of the general issue, and gave notice thereunder that evidence would be offered to show a breach of what is known as the "iron safe clause" contained in the policy contract, and also filed a special plea averring that a writ of garnishment had been served on the defendants by Morris & Co., of Chicago, Ill., as a creditor of the plaintiff, and that any sum adjudged by the court to be due by them to the plaintiff should be ordered to be first applied to the discharge of this garnishment.

The iron safe clause contained in the two policies sued on is as follows:

"First. 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...