Penix v. American Cent. Ins. Co.

• Citation: 106 Miss. 145,63 So. 346
• Decision Date: 24 November 1913
• Docket Number: 16,068
• Court: United States State Supreme Court of Mississippi
• Parties: J. H. PENIX, TRUSTEE, v. AMERICAN CENTRAL INS. CO

63 So. 346

106 Miss. 145

J. H. PENIX, TRUSTEE, v. AMERICAN CENTRAL INS. CO

No. 16,068

Supreme Court of Mississippi

November 24, 1913

APPEAL from the circuit court of Hinds county, HON. W. A. HENRY Judge.

Suit by J. H. Penix against the American Central Insurance Company. From a judgment for defendant plaintiff appeals.

Appellant was plaintiff in the court below, and appellee was defendant. Suit was brought to recover on an insurance policy covering a stock of goods destroyed by fire. The defense of the insurance company was that the insured had failed to comply with the iron-safe clause of the policy, which is as follows:

"Iron-Safe Clause.

"1st. 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 the issuance of this policy, or this policy shall be null and void from such date, and upon demand of the assured the unearned premium from such date shall be returned.

"2nd. The assured will keep 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 date of inventory as provided for in first section of this clause, and during the continuance of this policy.

"3rd. The assured will keep such books and inventories--and also the last preceding inventory, if such has been taken--securely locked in a fireproof safe at night, and at all times when the building mentioned in this policy is not actually open for business; or, failing in this, the assured will keep such books and inventories in some place not exposed to a fire which would destroy the aforesaid building.

"In the event of failure to produce such set of books and inventories for the inspection of this company, this policy shall become null and void, and such failure shall constitute a perpetual bar to any recovery thereon."

Affirmed.

Watkins & Watkins, for appellant.

It is contended that there was a violation of the iron-safe clause. Our reply to this contention upon the part of the appellee was, and is repeated here: First, that the appellant had thirty days within which to take an inventory of his stock of goods, and was not obligated to keep a set of books until the taking of this inventory. Cooley's Brief on Insurance page 1820; Gray and Franklin v. Insurance Co., 51 S.E. 922; Insurance Co. v. Ison, 65 S.E. 463; Haanan v. Ins. Co., 118 N.W. 65; Insurance Co v. Wright, 148 S.W. 824; Parker & Co. v. Ins. Co. (N. C.), 55 S.E. 717; Papal Ins. Co. v. Wright (Tex.), 148 S.W. 824; Home Ins. Co. v. Bank, 71 Miss. 609; Day v. Insurance Co. (Ala.), 58 So. 549; Ins. Co. v. Knight (Ga.), 52 L. R. A. 70; Insurance Co. v. Bank, 71 Miss. 608; Mercantile Co. v. Insurance Co. (La.), 37 So. 967; 38 So. 87; Insurance Co. v. Dorsey, 58 So. 778; Insurance Co. v. Masterson (Tex.), 61 S.W. 962; Roberts v. Insurance Co., 48 S.W. 559; Insurance Co. v. Bank, 71 Miss. 608.

If, however, everything that we have said in the preceding paragraphs to the effect that the invoice in question does not constitute an inventory, and, therefore, that Mr. Borah had thirty days in which to take an inventory of the stock, is wrong, then, we respectfully submit that there was a substantial compliance with the requirements of the iron-safe clause; and it is to be noted in this connection that only a substantial, and not a literal compliance is required. 2 Cooley's Briefs on Insurance Co., p. 1818; Insurance Co. v. Schwartz, 57 L. R. A. 752; Mr. Cooley, Brief on Torts, p. 1826; Ostrander, Fire Insurance (2 Ed.), p. 657; Jojes v. Southern Ins. Co. from the federal court of Arkansas, 38 F. 19; 1 Mayon, Insurance (3 Ed.), pages 511, 512; Majors v. Insurance Company, 86 S.W. 883; Insurance Co. v. Jones, 15 S.W. 1034; Capitol F. Ins. Co. v. Kaufman, 91 Ark. 310, 121 S.W. 289; Phoenix Ins. Co. v. Schwartz (Ga.), 57 L. R. A. 752; Assurance Co. v. Redding in the circuit court of appeals, 68 F. 708; Ins. Co. v. Woolveston (Ark.), 102 S.W. 226.

If we should be in error, however, in our position that the destruction of the little daybook, which was in the building at the time of the fire, was not a violation of the iron-safe clause; in other words, if this court should hold that the terms of the policy required that the same should be kept, then we respectfully submit to the court, even without the daybook, all of the invoices, together with the journal, present a substantial compliance with the iron-safe clause; that the record would only be short five days and that five days is such a short time in proportion to the time the store was open that, certainly, it ought to be left to the jury to say whether or not it was a substantial compliance with the iron-safe clause; and we wish to call the attention of the court to authorities in that connection. Assurance Co. v. Redding, above referred to, 68 F. 708; Cooley's Brief on Insurance, page 1822; Brown v. Insurance Co., supreme court of Texas, 35 S.W. 1060; Insurance Co. v. Andrews and Matthews, supreme court of Texas, 89 S.W. 419; Arnold v. Ins. Co., 67 S.E. 574; Ins. Co. v. Alley, 51 S.E. 812; Ins. Co. v. Kearney, 45 Lawyer's Edition, 460; Insurance, Co. v. Pearlstone, supreme court of Texas, 45 S.W. 832; Insurance Co. v. Sherman, 43 S.W. , supreme court of Texas, 19 Cyc. 855.

That there was no violation of the iron-safe clause, because Mr. Borah was not required to keep any books at all until the expiration of the time within which he was permitted to take an inventory; that is to say, thirty days. If mistaken in this, then all of his invoices plus the daybook which was destroyed by fire, which was in use at the store, afforded a clear record of his business.

If we are mistaken in saying that there was no breach of the iron-safe clause in permitting this small day-book to get destroyed by fire, then, we say, without the day-book, a substantial compliance with the iron-safe clause was had. At least, it was a question for the jury to determine whether or not the clause was substantially complied with.

As to whether or not the assured propounded a false claim at all, and as to whether or not, if a false claim was propounded, it was done knowingly, under the undisputed evidence in this case, was peculiarly a question of fact for the jury.

McLaurin, Armistead & Brien, for appellee.

The brief of appellant in this case, which we have just received and read, is a complete somersault from the position occupied in the lower court. The entire direct examination of their witness, Borah, the merchant to whom this policy was issued, shows that the plaintiff's counsel in the lower court undertook to show a compliance with the iron-safe clause in that provision which obligates the assured to take an inventory. The provisions of the iron-safe clause in that respect are 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 the issuance of this policy, or this policy shall be null and void from such date, and upon demand of the assured the unearned premium from such date shall be returned; second, the assured will keep 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 date of inventory as provided for in first section of this clause, and during the continuance of this policy; third, the assured will keep such books and inventories--and also the last preceding inventory, if such has been taken--securely locked in a fireproof safe at night, and at all times when the building mentioned in this policy is not actually open for business; or, failing in this, the assured will keep such books and inventories in some place not exposed to a fire which would destroy the aforesaid building.

"In event of failure to produce such set of books and inventories for the inspection of this company, this policy shall become null and void, and such failure shall constitute a perpetual bar to any recovery thereon."

From the first paragraph of this clause the court will see that it is made the duty of the assured to "take an 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 the policy, then one shall be taken in detail within thirty days of the issuance of this policy or this policy shall be null and void from such date, and upon demand of the assured, the unearned premium from such date shall be returned."

In the record is the itemized inventory of the goods taken out of the Silver City store and shipped to the Greenwood store, as sworn to by Borah and his clerk; when they arrived at the Greenwood store they were checked out in the Greenwood store by this itemized inventory (so-called by counsel for appellant) by Borah himself and by Lyell, though it is marked an "Invoice of goods shipped to Greenwood."

When counsel for appellant struck a snag in the books in this case showing that the iron-safe clause had been violated in reference to any correct record being kept by the assured, by which the company could discover from the books themselves exactly what amounts had been put into the store, and what had been sold out of the store from the date of the inventory as provided for in the first section of the iron-safe clause, counsel for appellant, seeing that they had utterly failed to comply with the iron-safe...