Prudential Fire Ins. Co v. Alley

• Decision Date: 14 September 1905
• Citation: 104 Va. 356,51 S.E. 812
• Parties: PRUDENTIAL FIRE INS. CO. v. ALLEY.
• Court: Virginia Supreme Court

104 Va. 356

51 S.E. 812

PRUDENTIAL FIRE INS. CO.

v.ALLEY.

Supreme Court of Appeals of Virginia.

Sept. 14, 1905.

1. Insurance —Stipulations in Policy — Warranties.

A stipulation in a policy insuring a stock of merchandise, requiring the assured to make periodical inventories, to keep books, and to keep the inventories and books in a fireproof safe at night, or the policy shall be void, is a warranty, and a compliance therewith is a condition precedent to a recovery for a loss; Va. Code 1904, p. 1766, § 3344a, providing that no answer to interrogatories made by an applicant for a policy shall bar a recovery thereon by reason of any warranty in the application, unless the answer was willfully false, not applying to the stipulation.

[Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insurance, § 853.]

2. Same — Stock of Goods — Keeping of Books—Compliance.

A stipulation in a policy insuring a stock of merchandise, requiring the assured to keep books showing a record of the business transacted, including purchases, sales, and shipments for cash and credit, is complied with by the assured keeping books so that, with the as sistance of those who kept them, the amount

of the purchases and sales could be ascertained and cash transactions distinguished from credit transactions.

[Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insurance, § 853.]

3. Same—Inventories of Goods Insured— Compliance.

A policy insuring a stock of merchandise required the assured to take periodical inventories, and, unless an inventory had been taken within a year prior to the date of the policy, one should be taken within 30 days of the issuance of the policy. The assured took an inventory of his stock June 10th. Subsequently he shipped the goods to another town and commenced business there, and the policy was issued June 25th, insuring the goods and the building in which they were placed. The inventory embraced articles not shipped to the new place of business, but these were accounted for as if sold for cash. Held, that the inventory sufficiently complied with the policy.

4. Same—Books of Account—Sufficiency.

A policy insuring a stock of merchandise required the assured to keep books presenting a record of the business transacted, including purchases, sales, and shipments, both for cash and credit. The book of purchases kept by the assured did not give an itemized statement of goods purchased, but showed the amount of each bill of goods purchased, when, and from whom. The book of sales did not give an itemized statement of goods sold, but gave, with exceptions explained, the amount of each day's sales. No goods were authorized to be sold on credit, and such goods as were sold without being paid for were treated as cash sales on the book and accounted for as cash by the clerk making the sale. Held, that the books sufficiently complied with the policy.

5. Same—Increase of Risk—Question for Jury.

Whether the erection of a building near the storehouse of assured was an additional risk was for the jury, and was not a question to determine which expert knowledge was proper.

[Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insurance, § 1741.]

6. Same—Action on Policy—Evidence—Admissibility.

Where, in an action on a policy insuring a stock of merchandise, the insurer alleged that the assured was guilty of fraud in procuring the policy and of false swearing after a loss, it was not error to permit witnesses to testify as to the value of the goods destroyed, based on what they saw in the storehouse.

[Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insurance, § 1695.]

7. Same—Agents—Declarations.

In an action on a fire policy it was shown that an insurance agency was an agent of the insurer and was authorized to issue policies. A third person was furnished with blank applications by the agency and solicited insurance for it, and represented to the assured that he was working for the agency and induced him to take out the policy afterwards issued by the agency. He was authorized to deliver policies and collect premiums issued on applications procured by him and accepted by the agency. It did not appear that he procured insurance for other agencies. Held, that he was an agent of the insurer, rendering declarations made by him admissible in evidence.

[Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insurance, §§ 118, 119.]

8. Evidence—Varying Insurance Policy by Parol.

A policy described the building insured as "one-story frame * * * building and addi-tion." When the policy was issued no addition existed. The assured informed the soliciting agent that he wished to extend the building, and the agent fixed the value on the building, including the addition which was to be erected. Held, that parol evidence of the value of the building after the addition had been completed was admissible in an action on the policy for a loss occurring after the completion of the addition.

9. Insurance—Proof of Loss—Sufficiency.

Where a stock of merchandise insured was totally destroyed, proof of loss, though failing to give the cash value of each item insured and the amount of the loss thereon, as required by the policy, was sufficient.

Appeal from Circuit Court, Wise County.

Action by J. J. Alley against the Prudential Fire Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Henry & Graham and Geo. W. St. Clair, for appellant.

Irvine & Slemp and W. S. Cox, for appellee.

BUCHANAN, J. This action was instituted to recover the amount alleged to be due upon a fire insurance policy issued by the Prudential Fire Insurance Company, covering such losses as might be sustained by the insured, J. J. Alley, in consequence of the destruction by fire of his storehouse and a stock of goods in the town of Appalachia.

Immediately prior to the time the policy sued on was issued, the insured was doing business as a merchant in Gate City, in Scott county, but was about to remove his stock of goods into a storehouse in Appalachia, in Wise county. Before moving the stock of goods from Gate City to Appalachia, the insured took an inventory of his stock, completing the inventory on the 10th of June, 1903. He then shipped the goods to Appalachia, except a few articles, and commenced business there on June 18th. On the 25th day of that month the policy sued on was issued. On the 29th of the same month a permit was issued, authorizing the insured to make an addition to the building insured. Business was conducted there until the morning of January 1, 1904, when the storehouse and its contents were destroyed by fire.

The policy contained what is known as the "iron-safe clause, " which is as follows:

"Warranty to Keep Books and Inventories, and to Produce Them in Case of Loss.

"Iron Safe Clause.

"The following covenant and warranty is hereby made a part of this policy:

"(1) 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 12 calendar months prior to the date of this policy, one shall be taken in detail within 30 days of 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.

"(2) The assured will keep a set of books which shall clearly and plainly present a complete record of the business transacted, including all purchases, sales, and shipments, both for cash and credit, from date of inventory as provided for in the first section of this clause, and during the continuance of this policy.

"(3) The assured will keep such books and inventory, 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 fire which would destroy the aforesaid building.

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

One of the defenses relied on by the insurance company was that the terms and conditions contained in that clause had not been kept and performed by the insured. To sustain his contention that he had complied with the iron-safe clause the insured introduced in evidence, over the insurance company's objection, the inventory taken at Gate City, referred to above, two books, one to show the purchases and the other the sales made by the insured while doing business at Appalachia, and certain witnesses to explain the manner of keeping the books. The objection made to the inventory introduced was that it was taken before the goods went into the building at Appalachia, that no complete inventory of the stock of goods insured was ever taken, and that the inventory introduced in evidence includes many articles not covered by the policy. The book of purchases was objected to because it does not give the items or articles claimed to have been purchased, nor show that they were such articles as were covered by the policy. The objection made to the book of sales was that it furnishes no data from which the insurance company could tell what had been sold, at what profit, or for what price, but merely purports to give the cash taken in each day. It is further objected that the books introduced do not "clearly and plainly present a complete record of the business transacted, including all purchases, sales, and shipments for cash and credit from the date of the inventory, " as provided by the policy. The insurance company insists that the iron-safe clause was a warranty, and that, being a warranty, literal compliance with its terms was a condition precedent to the right of the insured to recover.

In the case of Virginia F. & N. Ins. Co. v. Morgan, 90 Va. 290, 18...