Philadelphia Underwriters' Agency v. Driggers

• Decision Date: 08 March 1922
• Docket Number: (No. 2996.)
• Citation: Philadelphia Underwriters' Agency v. Driggers, 238 S.W. 633, 111 Tex. 392 (Tex. 1922)
• Parties: PHILADELPHIA UNDERWRITERS' AGENCY OF FIRE INS. ASS'N OF PHILADELPHIA et al. v. DRIGGERS et al.
• Court: Texas Supreme Court

Page 633

238 S.W. 633

PHILADELPHIA UNDERWRITERS' AGENCY OF FIRE INS. ASS'N OF PHILADELPHIA et al. v. DRIGGERS et al.

(No. 2996.)

Supreme Court of Texas.

March 8, 1922.

Certified Question from Court of Civil Appeals of Second Supreme Judicial District.

Action by W. F. Driggers and others against the Philadelphia Underwriters' Agency of the Fire Insurance Association of Philadelphia and another. Judgment for the plaintiffs, and defendants appealed to the Court of Civil Appeals, which certified to the Supreme Court questions as to the validity of clauses in the policies relied on by the defendants. Clauses held valid.

Crane & Crane, of Dallas, for appellants.

Smoot & Smoot, of Wichita Falls, for appellees.

CURETON, C. J.

This cause is here on certified questions from the Court of Civil Appeals of the Seventh District. The certificate, with the questions submitted, is as follows:

"Appellees, W. F. Driggers and T. J. Taylor, sued the appellants, Philadelphia Underwriters' Agency of the Fire Insurance Association of Philadelphia and North British & Mercantile Insurance Company of London & Edinburgh, on two policies of fire insurance, issued by the said insurance companies, respectively, one for the sum of $500 on merchandise and $200 on furniture and fixtures, and the other for the sum of $500 on merchandise and $100 on furniture and fixtures, by which said policies of insurance the appellees were insured against loss by fire of a stock of merchandise and the furniture and fixtures used in connection with the establishment.

"Appellants, in their answers, alleged that each of said policies contained the following provision:

"`Record Warranty Clause. The covenant is hereby made a part of this policy and a warranty upon the part of the assured:

"`Section 1. The assured will take a complete itemized inventory of stock on hand at least once in each calendar year, and within twelve months of the last preceding inventory, if such has been taken. Unless such an inventory has been taken within twelve calendar months prior to the date of this policy, and together with a set of books showing a complete record of business transacted since the taking of such inventory, is on hand at the date of this policy, one shall be taken within thirty days after the date of this policy, or in each and either case this entire policy shall be null and void.

"`Sec. 2. The assured will make and prepare, in the regular course of business, from and after the date of this policy, 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 on credit, or this entire policy shall be null and void. The term "complete record of business transacted," as used above, is meant to include in said set of books a complete record of all the property which shall go into the premises and be added to the stock, and of all property taken from the stock, whether by the assured or by others, even though not technically purchases or technically sales. If the business of the assured under this policy be that of manufacturing, this complete record of business transacted must, in addition, show all the raw material received and all products manufactured therefrom, including the cost of manufacture, and must show waste in process of manufacture, and must show all the raw material and manufactured property which is taken from the building described.

"`Sec. 3. The assured will keep and preserve all inventories of stock taken during the current year, and also all those taken during the preceding calendar year, which are on hand when this policy is issued, and will keep and preserve all books which are then on hand, showing a record of business transacted during the current calendar year and the preceding calendar year. The assured will also keep and preserve all inventories taken after the issuance of this policy, and all books made and prepared after the issuance hereof, showing a record of business transacted. The books and inventories, and each of same, as called for above, shall be by the assured kept securely locked in a fireproof safe at night, and at all times when the building mentioned in the policy is not actually open for business, or, failing this, the assured shall keep such books and inventories, and each of them, in some secure place not exposed to a fire which would destroy said building, and, in event of a loss or damage insured against to the personal property mentioned herein, said books and inventories, and each of the same, must be by the assured delivered to this company for examinations, or this entire policy shall be null and void, and no suit or action shall be maintained hereon for any such loss.

"`It is understood and agreed that this clause and the requirements thereof is one of the inducing causes to the acceptance of the risk herein assumed and the issuance of this policy, and that the terms and requirements hereof are material to the risk, and to this insurance, and to any loss or damage happening to the property described in this policy. It is further agreed that the receipt of such books and inventories, or the...