Queen of Arkansas Insurance Company v. Malone

• Decision Date: 02 February 1914
• Citation: 163 S.W. 771,111 Ark. 229
• Parties: QUEEN OF ARKANSAS INSURANCE COMPANY v. MALONE
• Court: Arkansas Supreme Court

163 S.W. 771

111 Ark. 229

QUEEN OF ARKANSAS INSURANCE COMPANY v. MALONE

Supreme Court of Arkansas

February 2, 1914

Appeal from Monroe Circuit Court; Eugene Lankford, Judge; affirmed.

Judgment affirmed.

Manning Emerson & Morris, for appellant.

1. Laney was a mere soliciting agent. His declarations are not competent to prove agency. 80 Ark. 228; 93 Id. 600; 97 Id. 420. Special agents must act strictly within the limits of their powers. 81 Ark. 202.

2. The peremptory instruction should have been given. The books were not properly kept. 65 Ark. 336. A soliciting agent can not waive a forfeiture. 85 Ark. 337; 98 Id. 166; 38 S.E 541; 5 So. 116.

3. The iron safe clause must be complied with. 91 Ark. 310; 83 Id. 126.

John B Moore, for appellee.

1. Proof of loss was waived. 53 Ark. 500; 83 Id. 129; 93 Id. 49; 72 Id. 365.

2. While declarations of an agent are inadmissible to prove agency, if the agency be otherwise prima facie proved, they become admissible in corroboration. 31 Cyc. 1655. Circumstantial evidence of agency is sufficient. 93 Ark. 603.

3. One who holds one out as his agent is bound. 57 Ark. 203. Persons dealing with an agent within the apparent scope of his authority must have notice of his real authority. 57 Ark. 203; 49 Id. 320.

4. The iron safe clause was substantially complied with. But it was waived. 157 S.W. 1030; 155 Id. 1106.

5. The jury decided that Laney acted within the scope of his authority. 81 Ark. 162.

MCCULLOCH, C. J. HART, J., dissents.

OPINION

MCCULLOCH, C. J.

The plaintiff, Theodore Malone, was engaged in the mercantile business at Blackton, Monroe County, Arkansas, and obtained from defendant, Queen of Arkansas Insurance Company, a policy of fire insurance in the sum of $ 1,000 on his stock of goods. The policy was dated March 14, 1910, and was delivered to plaintiff two days later. The fire occurred on the night of May 31, 1910, and totally destroyed the property covered by the policy.

Plaintiff gave notes for the premium, one of which fell due June 2, 1910, and was forwarded for collection, reaching the place of plaintiff's residence and being presented to plaintiff for payment the morning after the fire.

Defendant was notified of the loss, and sent its adjuster to adjust the loss who, after investigation, denied liability and refused payment on the ground that the iron safe clause in the policy had not been complied with by plaintiff.

This action was instituted to recover the amount of the loss sustained under the policy. Plaintiff recovered judgment below for the sum of $ 750, and defendant appealed.

It is first insisted that there can be no recovery for the reason that proof of loss was not furnished in accordance with the requirement of the policy.

This requirement was waived by the act of the adjuster denying all liability and refusing payment.

The nonwaiver agreement entered into between the plaintiff and the adjuster does not avert the operation of the waiver of proof of loss. Arkansas Mut. Fire Ins. Co. v. Witham, 82 Ark. 226, 101 S.W. 721.

The nonwaiver agreement does not reach to that question, for denial of liability on other grounds is inconsistent with the further requirement to furnish proof of loss. Besides that, the nonwaiver agreement does not, according to its terms, reach to any waiver resulting from denial of liability. It only contains a stipulation against waiver by action of the adjuster "in investigating the cause of the fire or in investigating or ascertaining the amount of loss or damage to the property."

It is next contended that, according to the undisputed evidence, there was no compliance with the iron safe clause, in that the plaintiff did not keep a set of books constituting a record of his business, etc., and that for that reason the court should have given a peremptory instruction in defendant's favor.

Our conclusion is, that the evidence was sufficient to justify the submission to the jury of the question whether the books kept by plaintiff were in substantial compliance with the requirements of the policy.

A statute of this State provides that only substantial compliance with such a provision of a policy is essential. We have reviewed that statute in a great many cases and applied it to varying facts with reference to methods of keeping books. The uniform holding of the court on that subject has been that that clause of a policy is complied with if a set of books is kept and preserved until after the fire from which it can be ascertained with reasonable certainty the quantity and value of the insured property which has been lost or damaged.

Plaintiff was doing a very small business at the village of Blackton, and followed a very crude method of bookkeeping. He took the inventory required by the policy. The proof which he introduced tended to show that he took the inventory about April 1. There is a conflict in the testimony on this point, but there was enough to warrant a finding in plaintiff's favor on that issue. The defendant adduced testimony strongly tending to establish the fact that the inventory was not made until May 3, which was more than thirty days after the date of the policy and beyond the stipulated time for making it.

The principal contention of defendant with respect to breach of the terms of the iron safe clause of the policy relates to the alleged failure to keep an account of cash sales.

Plaintiff's evidence shows that he kept inventories of purchases and pasted them in a book; that he kept an account of credit sales to his customers and collections thereon, and that he deposited the cash received in the business in a bank and kept the bank account on his books. It does not appear, however, that the deposits were made daily so as to constitute a daily account of cash sales; but that was not necessary if the amounts were deposited and account thereof kept. Planters' Fire Ins. Co. v. Nichols, 103 Ark. 387, 147 S.W. 68. It is sufficient to show that the cash receipts were deposited in a bank and charged on the plaintiff's books, for the account on the books against the bank was sufficient to afford information concerning the cash receipts, and as the accounts against customers disclosed the amount of collections, a deduction of those accounts from the cash account would disclose the amount of the cash sales. This was, as before stated, sufficient to constitute substantial compliance with the terms of the policy. Queen of Ark. Ins. Co. v. Forlines, 94 Ark. 227, 126 S.W. 719. At least, the facts were sufficient to warrant a submission to the jury of the question of substantial compliance. The question was properly submitted in this case, and the verdict of the jury settles that issue in plaintiff's favor.

Error of the court is assigned in refusing to give several instructions requested by defendant submitting that question. But an examination of the instructions shows that they limited the consideration to literal compliance with the terms of this clause of the policy, and as those instructions entirely ignored the statute which makes substantial compliance sufficient, the court was correct in refusing to give the instructions. It is true that the instructions given on this subject were general ones; but as the defendant failed to request correct instructions on the subject, it is in no position to complain because the instructions given by the court were too general.

Error is assigned in giving the following instruction:

"3. Under the terms of plaintiff's contract with defendant, plaintiff was required to take an itemized inventory of his stock of goods within thirty days from the date of his contract with defendant and preserve same in an iron safe and produce same upon request of defendant in event loss occurred under the policy. Defendant has pleaded plaintiff's failure to make and preserve this inventory as a bar to plaintiff's right of recovery. The plaintiff, in order to recover, must show by a fair preponderance of the testimony that he did within thirty days from the date of the contract sued on, prepare a list of the articles composing his stock of goods, which, in your opinion, was a substantial requirement of this condition of said contract, and that same was preserved by plaintiff and was delivered or tendered to defendant company or its adjuster as its representative after the fire."

It is claimed that this instruction was erroneous because it singled out the issue of failure to make...