Merchants' Union Ins. Co. v. Johnson

• Decision Date: 12 May 1924
• Docket Number: 24095
• Citation: 135 Miss. 311,99 So. 899
• Parties: MERCHANTS' UNION INS. CO. v. JOHNSON. [*]
• Court: Mississippi Supreme Court

99 So. 899

135 Miss. 311

MERCHANTS' UNION INS. CO. v. JOHNSON. ^[*]

No. 24095

Supreme Court of Mississippi

May 12, 1924

Division B

(Division B) January 1, 1920

1 INSURANCE. Record warranty in fire policy held to require assured to keep books enabling accountant to ascertain property on hand at time of fire.

A "record warranty," in a fire insurance policy covering cotton and cotton seed in a gin house, which provides that "the assured will keep a book, containing a complete and correct record of all cotton put in the gin house or cotton house, and all cotton taken from the gin house, or cotton house, and all cotton seed put in the gin house or seed house and all cotton seed taken from the gin house or seed house, and in case of loss or damage the assured will produce such book and record for examination by this company, otherwise this entire policy shall be null and void," requires the assured to keep such a book or books as will enable an accountant to ascertain from them with reasonable accuracy the amount of the property on hand at the time of the fire.

2 INSURANCE. Book containing stubs of gin tickets held not a compliance with record warranty in fire policy on cotton and cotton seed in gin house.

A book containing the stubs of gin tickets, on which stubs was entered a statement of the date of the receipt of cotton, the name of the owner, the gross weight of the seed cotton received, the tare, the net weight of the seed cotton, the weight and number of the bale, and the net weight of the seed, and the word "delivered" when the cotton was delivered to the owner, and the word "saved" when the seed was carried away by the owner, but which contained no entry whatever showing the amount of cotton or cotton seed sold or shipped by the assured, is not a compliance with this record warranty, and this deficiency as to the seed cannot be supplied by the production of railroad bills of lading of cars of seed shipped, and loose memoranda of weights of seed which purported to have been issued by the purchaser of such seed.

HON. S. F. DAVIS, Judge.

APPEAL from circuit court of Sunflower county, HON. S. F. DAVIS, Judge.

Action by J. N. Johnson against the Merchants' Union Insurance Company. Judgment for plaintiff, and defendant appeals. Reversed and judgment rendered.

Reversed.

A. A. Armistead, for appellant.

It is confidently contended for by the appellant in this case that the peremptory instruction asked, directing the jury to find a verdict for the appellant insurance company in the court below on account of the breach of the record warranty above referred to, should have been given.

The book that the record warranty requires to be kept which was to show a complete and correct record of the cotton and cotton seed that went in and out of the gin house, was manufactured after the fire. It had not been kept at all. The contract required the plaintiff to keep this book, which should contain a complete and correct record of all cotton and cotton seed that went into the gin and went out, but failed to do it.

"Leaving out of consideration the manufactured sheet introduced in evidence and the manufactured ledger introduced in evidence, because both were made up after the fire, and considering alone the stub tickets as the only kind of a record kept by the plaintiff in the court below, appellee here, the question arises, do these stubs constitute a compliance with the record warranty required by the contract and policy sued on.

It has been repeatedly held that loose memoranda is not a compliance with the provisions of the iron-safe clause "to keep a set of books." Mounger & Henry v. Delaware Ins. Co., 79 S.W. 7.

The courts have held that: "A warranty must be performed as written." Insurance Co. v. Myers, 55 Miss. 479 (at page 500 at bottom); Citizens National Life Ins. Co. v. Swords, 68 So. R. (Miss.) 920; Elliott on Insurance, sec. 102, 87; 16 Enc. of Law (2 Ed.), 919-920, under title "Insurance"; Goldman Insurance Co. v. Williams, 237 F. Rep. 171.

We therefore say that the warranty to keep a book, showing a complete record of this plaintiff's business in cotton and cotton seed, was clearly breached, for which there can be no recovery.

The trouble about the testimony introduced is that it seeks to let the liability of the appellant insurance company rest solely in the mouth of the plaintiff and his witnesses, whereas if the book required by the record warranty had been kept as contracted to be kept, there would have been no need of the testimony of any witness, as "the record itself must show the loss without the aid of oral testimony" as all the courts have held. Penix v. American Central Ins. Co., 106 Miss. 145; Ins. Co. of North America v. Williams, 237 F. 171; Goldman v. Ins. Co., 48 La. Ann. 225.

But looking alone to the stub tickets, they did not show a complete and correct record of all the cotton that went into the gin and all the cotton that went out of the gin, and all of the cotton seed that went into the gin and all of the cotton seed that went out. No accountant could take these stub tickets and from them tell how many bales of cotton had been burned, nor could he tell from these stub tickets how many bales of cotton were still in the gin, nor whether any had been shipped away.

This court will not attempt to make a contract for the parties, nor will it undertake to construe away the contract the parties themselves have made. All the courts hold that they will not make a contract for the parties; that the only function of the court is to construe the one made by the parties themselves. Ins. Co. v. Dorsey, 102 Miss. 84, at page 87; Imperial Ins. Co. v. Coos Co., 151 U.S. 462; Day v. Home Ins. Co., 58 So. 549 (Ala.) ; Hartford Fire Ins. Co. v. Adams, 158 S.W. 232.

Applying this doctrine to this case, we insist that the book contracted to be kept, which should show a complete and correct record of all cotton and cotton seed that went into the gin and all cotton and cotton seed that went out of the gin, which record itself unaided by oral testimony would show such information as that an accountant could with reasonable certainty determine the exact amount of cotton and cotton seed that went in and out of the gin, is the only evidence by which any liability could be established against this appellant insurance company, conceding that there was any amount of cotton and cotton seed destroyed by fire.

Therefore, we insist that these bills of lading, and these oil mill receipts proved nothing. They are not a compliance with the contract. There is no record here to show that this was all the seed that was shipped away. There is no record to show what cotton was shipped away. This court cannot tell; no accountant could tell; no record was kept. The liability of this appellant is undertaken to be fixed by the plaintiff and his witnesses in violation of the very contract he sues on, and we insist that under every rule of law, the appellant was entitled to the peremptory instruction requested in the lower court and refused.

Quinn & Cooper, for appellee.

Was there a breach of the record warranty? We agree that there must be a compliance with the record warranty clause; that the method of showing the quantity of the burned cotton and seed after a fire is a "complete and correct record," and submit that we have complied with this requirement.

No court in the land, so far as we are aware, has held the insured to literal compliance with this requirement. So long as it is complete and correct it is sufficient. This court is in line with authorities all over the country. Phoenix Insurance Company v. Bourgeois, 105 Miss. 698, 63 So. 212; Georgia Life Insurance Company v. Friedman, 105 Miss. 795, 63 So. 214.

Counsel for the insurance company cites with a great deal of reliance, Penix v. American Central Insurance Company, 106 Miss. 145, 63 So. 346, decided by Chief Justice SMITH. In that case the effort of keeping books by the appellant, who was a merchant, was held not sufficient to comply with the requirement of the iron-safe clause, because the original records which showed the cash sales from day to day was kept under the pillow of the bookkeeper, and a fire destroyed the store in which the bookkeeper slept, while the store was locked, and the bookkeeper gone. The court carries in its opinion a portion of the record which shows that no intelligent system of keeping the cash sales was attempted, and that the last records in the ledger of any cash taken in for merchandise was on August 9. The fire occurred on August 15, and there was absolutely no record of the amount of merchandise sold from August 9, to the date of the fire, that record having been out of the iron safe and under the pillow of the bookkeeper, and was destroyed by fire.

Counsel argued in the brief for the insurance company that the statements or invoices or weight sheets from the oil mill showing the weights of the cars of seed shipped from the gin would not be considered records of the gin, or as a compliance with the record warranty clause; but Judge COOK, in the case of Phenix Insurance Company v. Dorsey, 102 Miss. 81, 58 So. 778, used this language: "We think such circumstances might arise whereby an invoice could be treated as an inventory within the meaning of the policy."

We have attempted in the statement of facts to show that the records on which we rely in showing the correct quantity of cotton and seed consumed in the fire were complete and correct. There is absolutely no question but that the gin stub books show this information as to the cotton, and as to the seed placed in the seed house. The only leg counsel for appellant has to stand on is concerning the record of outgoing seed.

There were no railroad scales...