Noland v. Buffalo Ins. Co., 13904.

• Decision Date: 02 May 1950
• Docket Number: No. 13904.,13904.
• Citation: 181 F.2d 735
• Parties: NOLAND v. BUFFALO INS. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

181 F.2d 735 (1950)

NOLAND v. BUFFALO INS. CO.

No. 13904.

United States Court of Appeals Eighth Circuit.

May 2, 1950.

John J. Robison, Marysville, Mo. (Harold L. Miller, St. Louis, Mo., and Waldo P. Goff, St. Joseph, Mo., were with him on the brief), for appellant.

Hale Houts, Kansas City, Mo. (Clarence Strop, Strop & Strop, St. Joseph, Mo., Henry Depping, and Hogsett, Trippe, Depping, Houts & James, Kansas City, Mo., were with him on the brief), for appellee.

Before SANBORN, JOHNSEN, and RIDDICK, Circuit Judges.

SANBORN, Circuit Judge.

This litigation has its source in a fire of undetermined origin which on November 11, 1946, destroyed an unoccupied store building and its contents in Winthrop, Missouri, a small town across the Missouri River from Atchison, Kansas. The contents belonged to G. E. Noland, who, from 1937 to July 1, 1946, had conducted a retail package liquor business in the building, which he leased. The Buffalo Insurance Company, of New York, on March 4, 1946, issued to Noland a $6,500 policy of fire insurance upon the contents of the building, $500 of which insurance covered household and personal effects. The policy was in force at the time of the fire. By the terms of the policy, the insurance company was liable for the actual value of the property insured at the time of its loss, not exceeding the face of the policy.

After the fire, Noland furnished proofs of loss, stating the value of the insured property to be $18,395, and the total amount of fire insurance thereon to be $15,750. The insurance company denied liability. Noland brought an action in a State court of Missouri to recover the face of the policy, alleging the total destruction of the contents of the building by the fire, and asserting the value of the contents to be more than $18,000. The defendant removed the case to the Federal District Court on the grounds of diversity of citizenship and amount in controversy. In its answer the defendant admitted the occurrence of the fire, denied that the value of the insured property was as alleged in the complaint, and set up several additional defenses, including noncompliance by the insured with the record-keeping provisions of the policy, known as the "inventory and iron safe clause."¹

The issues were tried to the court without a jury. The court determined that the insured had not complied with the "inventory and iron safe clause" of the policy. The court also found that no records or other evidence sufficient to enable the court to determine the amount of the loss had been produced, and that the insured had failed to sustain the burden of establishing the value of the insured property which was destroyed. A judgment of dismissal was entered, from which the insured has appealed.

Noland, in effect, contends that the findings of the court are clearly erroneous, and that, under the evidence and the applicable law of Missouri, he was entitled to judgment. He asserts that the court was clearly mistaken as to the sufficiency of his record-keeping to meet the requirements of the policy, and that it is reasonable to assume that this mistake led to the judgment against him.

It appears that Noland and his wife lived in the store building and personally conducted the business of selling packaged liquor at retail until the latter part of September, 1945. Noland also carried a small stock of groceries, in order to qualify under Missouri law for a license to sell liquor. The grocery business was merely a side line. He also sold soft drinks and tobacco and cigarettes. He was an uneducated man, and his wife kept the books and paid the bills. In the latter part of September 1945, he and his wife took a vacation, leaving the store in charge of an ex-service man named Joe Ryan, who thereafter conducted the business for Noland until July 1, 1946. At that time Noland's license to sell liquor expired and was not renewed. After the insured and his wife returned from their vacation, in the fall of 1945, they did not live in the store, but moved to their farm near Amity, Missouri, about fifty miles from Winthrop. Thereafter they visited the store on Saturdays or Sundays, sometimes once a week and sometimes once every two weeks. Joe Ryan, while he conducted the business for Noland and until about fifteen days before the building burned, lived in the store.

Noland, in the fall of 1945, knew that his lease on the store would not be renewed. He had been notified to vacate the premises on or about May 1, 1946. On November 1, 1946, in an unlawful detainer action brought by the owner of the building against Noland in the Circuit Court of Buchanan County, Missouri, that court determined, by its decree, that Noland had unlawfully detained the premises since April 23, 1946, and ordered restitution of the building and that the owner recover of Noland $300, "double the sum found by the Court for rents and profits from the 23rd day of April, 1946, to the 23rd day of October, 1946, and until restitution be made." Restitution had not been made at the time the fire occurred.

Prior to the closing of the business, there were times when salable straight whiskey was difficult to obtain, and, in order to get it, Noland was forced to buy "tie-in" liquors such as wines, gin, rum, and cordials, which were not readily salable. On July 1, 1946, when his license expired, he had a large amount of these "tie-in" liquors. He testified that he had sometimes bought straight whiskey at over-ceiling prices, to avoid "tie-in" purchases, but not in 1946.

The evidence tending to support Noland's claim as to the value of the contents of the building and the amount of his loss was that of himself and his wife. Mrs. Noland testified that the merchandise and household goods that were in the store on July 1, 1946, were left there; that she and her husband had no other place in which to store them; that, while she and her husband were operating the business, she kept track of cash sales by listing them on a little tab every day, and at the end of the month, when she made up the monthly State sales tax report showing the amount of gross receipts for the month, the tabs were discarded, but that copies of the sales tax reports were kept; that she also had a little book (not produced) in which she recorded purchases of merchandise; that they had two iron safes in the store, one of which was sold after the business was closed in July, 1946, and the other taken to the farm; that thereafter records were kept in the safe at the farm. Mrs. Noland produced in evidence copies of the sales tax reports made to the State of Missouri for each of the months from January 1, 1946, to July 1, 1946. She testified that the reports correctly stated the total amount received from sales in each of those months. She also produced in evidence original invoices purporting to cover all purchases of liquor, beer and other merchandise from January 1, 1946, to July 1, 1946. She testified...