Queen of Arkansas Insurance Co. v. forlines

• Citation: 126 S.W. 719,94 Ark. 227
• Parties: QUEEN OF ARKANSAS INSURANCE COMPANY v. FORLINES
• Decision Date: 14 March 1910
• Court: Supreme Court of Arkansas

126 S.W. 719

94 Ark. 227

QUEEN OF ARKANSAS INSURANCE COMPANY v. FORLINES

Supreme Court of Arkansas

March 14, 1910

Appeal from Miller Circuit Court; Jacob M. Carter, Judge; affirmed.

Judgment affirmed.

J. W. & M. House, for appellant.

1. There was no waiver of proof of loss. 72 Ark. 484. The mere mailing of the proof of loss is not sufficient unless it reaches the company within sixty days. Ostrander on Ins § 238, p. 541; 52 L.R.A. 956; 84 Ark. 224; 114 S.W. 210; 112 Id. 200; 82 Ark. 476; 72 Ark. 484; 56 Mo.App 343; 73 N.Y.S. 193; 86 N.Y.S. 24.

2. There was no compliance with the iron-safe clause. 85 Ark 579; 83 Ark. 126. Nor was there any waiver by the company. 114 Iowa 153; 62 Iowa 387; 72 Ark. 490.

3. The court erred in giving and refusing instructions. 85 Ark. 579.

Joel D. Conway and William H. Arnold, for appellee.

1. Forfeitures are not favored in law. A denial of liability is a waiver of proof of loss. 53 Ark. 494; 77 Ark. 27; 13 Am. & E. Enc. of Law, 330; 85 Ark. 169.

2. The company is estopped by the knowledge and acts of its agents who inspected the stock. 79 Ark. 266; 81 Ark. 508, 205; 71 Ark. 295; 79 Ark. 315; 79 Ark. 266; 52 Ark. 15; 71 Ark. 242; 63 Ark. 187; 62 Ark. 348; 82 Ark. 150-162; 88 Ark. 506; 61 Ark. 108; 79 Ark. 315. Parol evidence was admissible to show a waiver by the agent. 88 Ark. 550; 74 Ark. 72.

3. There was a substantial compliance with the iron-safe clause. Kirby's Dig., § 4375a; 83 Ark. 130; 85 Ark. 33; 86 Ark. 119.

OPINION

FRAUENTHAL, J.

This is an action instituted by J. H. Forlines, the plaintiff below, against the Queen of Arkansas Insurance Company, upon a fire insurance policy. The defendant executed its policy of insurance on October 14, 1908, by which it insured the plaintiff against loss by fire in the sum of $ 1,050, of which $ 600 was on his stock of goods, $ 250 on his fixtures and $ 200 on his household goods. The property was destroyed by fire on November 15, 1908.

A number of defenses were interposed against a recovery; and upon the trial in the lower court a verdict was returned in favor of the plaintiff. Upon this appeal only two of these defenses are specially urged for a reversal of the judgment.

1. It is contended by the defendant that the plaintiff violated the provisions of the policy contained in what is commonly known as the "iron-safe" clause thereof, and on that account is not entitled to recover. The policy provided: "The following covenant and warranty is hereby made a part of the 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 twelve calendar months prior to the date of this policy, one shall be taken in detail within thirty 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 the date of inventory, as provided for in first section of this clause, and during the continuance of this policy. (3) 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 the policy is not actually open for business, or, failing to do this, the assured will keep such books and inventories in a 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 the company, this policy shall become null and void, and such failure shall constitute a perpetual bar to any recovery thereon."

The plaintiff began business in Texarkana, Ark., on October 9, 1908, and purchased all his goods from merchants in that city.

The goods were delivered at the store of plaintiff on drays, and the selling merchants made out invoices in duplicate of the goods as they were placed upon the dray, one of which was retained and filed away in a loose-leaf ledger and the other was sent by the drayman to plaintiff. As the goods were unloaded, the plaintiff checked same, and hung the invoice thereof on a hook in his store, and entered in a book kept by him the amount of each dray load of goods, the date received and the name of the merchant from whom same was purchased. All of his purchases were thus entered upon this book, and aggregated $ 1,401.60. This book also contained all cash which he paid to his creditors, and in it he also entered all cash and credit sales. This book was kept by plaintiff in his pocket, and was presented to the adjuster and also on the trial of the case. The invoices of the goods which plaintiff placed on the hook in his store were destroyed by the fire. About one week after the fire the adjuster of defendant came to plaintiff to negotiate relative to the adjustment of the loss. There was a sharp conflict in the evidence between the plaintiff and the adjuster as to what occurred between them, but the evidence on the part of plaintiff tended to prove the following: The plaintiff told the adjuster that the invoices which he had received from the merchants from whom he purchased the goods, and which constituted the only itemized inventory that he had kept, had been destroyed by the fire; and he explained to the adjuster how he had kept same, and how he had entered same in said book. The adjuster thereupon directed the plaintiff to get duplicates of the invoices from the merchants who had sold him, and told him that they would answer the purpose of the inventory. The plaintiff then employed the entire day in securing duplicates of these invoices, and brought same to the adjuster, who, after having spent with plaintiff a considerable time in examining them and comparing them with the entries in said book, made no objection to them, but stated that some of the duplicate invoices were missing and to obtain them. Plaintiff thereupon at further trouble secured these missing duplicate invoices, and on the following day brought same to the adjuster.

The plaintiff testified that the adjuster then told him that he would not settle at all, and that the company did not owe him anything and would not pay him. The adjuster testified that he did not deny or admit liability; but we think there is sufficient evidence to sustain the finding that the adjuster did then deny that the defendant was liable on the policy. It is contended by the plaintiff that a forfeiture of the policy for a failure to comply with the provisions requiring an itemized inventory of the stock to be taken and to be kept in an iron safe or a place not exposed to the fire was waived by the adjuster of the company. The question relative to the waiver was submitted to the jury under proper and appropriate instructions, and the sole question upon this appeal relative thereto is whether or not the above evidence is sufficient to sustain the finding of the jury that there was such waiver. By the above provisions of the policy the plaintiff "covenanted" to make and keep in an iron safe or in a safe place an inventory of the stock, but the breach of that covenant did not itself, in the true interpretation of the contract, invalidate or nullify the policy. Such a breach only gave a right to the insurance company, if it saw fit, to declare that by reason thereof it would not be further bound thereby. It was a condition that was inserted for the benefit of the defendant, and it had the right to waive that condition, if it did not desire to insist upon a strict compliance with it. Such a requirement or condition of the policy may be waived, either expressly by the assurance that it would not be insisted on, or impliedly by any acts or conduct of the insurance company indicating that it would not insist upon the provisions as required by the conditions or stipulations of the policy, or which would be inconsistent with such requirements. Such waiver may be made by any authorized officer or agent of the company; and an agent of the company who is intrusted with the apparent power to adjust the loss has the authority to waive the provisions of the policy relative to the inventory and proof of loss. As to what acts will constitute a waiver of the forfeiture of the policy by reason of a breach of its conditions, this court in the case of Phoenix Insurance Co. v Flemming, 65 Ark. 54, 44 S.W. 464, quoted with approval the rule formulated by the Court of Appeals of New York as follows: "The rule is now established that if, in any negotiations or transactions with the assured after knowledge of the forfeiture, the...