People's Fire Insurance Association of Arkansas v. Gorham

• Decision Date: 28 May 1906
• Citation: 95 S.W. 152,79 Ark. 160
• Parties: PEOPLE'S FIRE INSURANCE ASSOCIATION OF ARKANSAS v. GORHAM
• Court: Arkansas Supreme Court

95 S.W. 152

79 Ark. 160

PEOPLE'S FIRE INSURANCE ASSOCIATION OF ARKANSAS v. GORHAM

Supreme Court of Arkansas

May 28, 1906

Appeal from Hepstead Circuit Court; Joel D. Conway, Judge; affirmed.

Judgment affirmed.

Dan W Jones, for appellant.

1. Appellees warranted that the stock was "new stock" of the cash value of $ 1,600. The evidence shows it was an old bankrupt stock, worth not more than $ 400. Goods are to be estimated at their market value without reference to their cost, the fair cash value in the market. 2 May on Ins. § 424, and cases cited; 11 L. C. 170; 74 N.C. 89; 71 N.C. 121. Parties are bound by their contract and their warranties. 72 Ark. 484, 490; 2 May on Ins. § 374; 66 N.C. 70. Any wilfully false statement as to value avoids the policy., 75 Ark. 251.

2. Appellees violated the 'iron safe clause." 58 Ark 565, 575; 1 May on Ins. §§ 156-7; 61 Ark. 207; 62 Id. 43. Conceding that § 4375a Kirby's Digest makes only a substantial compliance necessary, yet no compliance at all is not a substantial compliance, and the court erred in the first and second instructions for appellees. The fourth should not have been given, as it ignores that provision of the "iron safe clause" which requires all the books, etc., to be kept in an iron safe, or some place secure from fire.

3. The premium was never paid. No presentment, demand or notice was necessary. The payment of the premium was necessary before suit. 2 May on Ins. § 345 F.

Jobe & Eakin, for appellees.

There is no error in the court's instructions. The jury were properly instructed, the evidence is amply sufficient to sustain the verdict. The court followed the law. Kirby's Digest, § 4375a. It left it to the jury to say whether or not there was a substantial compliance with the provisions of the policy or not. The jury have settled it. The premium was not due until after the destruction of the property. The jury deducted the premium, and appellant has received all it is entitled to.

OPINION

BATTLE, J.

Dully Gorham & Company owned a stock of merchandise, on which they held a policy of fire insurance, which was executed to them by "The People's Fire Insurance Association of Arkansas." During the life of the policy, on the 22d day of January, 1904, the stock was destroyed by fire, and this action was brought by the insured against the insurer to recover the promised indemnity of $ 1,200. The plaintiff, in a trial before a jury, recovered a verdict and judgment against the defendant for $ 1,166; and the defendant appealed.

Appellant's defenses against the action were, substantially, as follows:

Appellees, in their application for insurance, which was made a part of the policy sued on, warranted that the stock of merchandise insured was "new stock", and of the cash value of $ 1,600, whereas it was the remnant of an old stock, and was not at the time of the application worth more than $ 400.

It alleged that appellees executed to it for the premium they agreed to pay for the insurance of the stock of merchandise "their two several promissory notes, due and payable, respectively, thirty and sixty days after date, each for the sum of $ 16.50; that both of said notes were due and payable before the bringing of this action, and appellees had wholly failed, neglected and refused to pay either of them; by reason whereof said policy, by the express terms thereof, became void before the bringing of this action."

That appellees promised and agreed to keep all of their books and invoices in an iron safe at night, or in some place secure against fire, so that in case of fire they might be submitted to adjusters; but appellees did not keep their books and invoices in such manner, by reason whereof a part of the invoices were destroyed by the fire which consumed the merchandise, and the policy became void.

1. After a careful examination of the policy and the application made a part of it, we fail to find a representation or warranty that the merchandise insured was a "new stock". We find in the application the following question and answer, "When was it last taken?"...