Roberts, Willis & Taylor Co. v. Sun Mut. Ins. Co.

• Decision Date: 11 March 1896
• Citation: 35 S.W. 955
• Parties: ROBERTS, WILLIS & TAYLOR CO. et al. v. SUN MUT. INS. CO.<SMALL><SUP>1</SUP></SMALL> SAME v. LANCASHIRE INS. CO.
• Court: Texas Court of Appeals

35 S.W. 955

ROBERTS, WILLIS & TAYLOR CO. et al. v. SUN MUT. INS. CO.¹

SAME v. LANCASHIRE INS. CO.

Court of Civil Appeals of Texas.

March 11, 1896.

Appeal from district court, Grayson county; Don A. Bliss, Judge.

Actions by the Roberts, Willis & Taylor Company and others against the Sun Mutual Insurance Company and against the Lancashire Insurance Company on policies of insurance. There was a judgment for defendants in both cases, and plaintiffs appeal. Reversed.

E. C. McLean, and J. T. Cunningham, for appellants. Morgan & Thompson, for appellees.

FLY, J.

In the above cases, which have been consolidated for the purposes of this appeal, appellants, as assignees of Burge & Allen, the parties insured, brought suits to recover on two insurance policies executed by the respective insurance companies,—one being for $1,500 on a stock of general merchandise; the other for $600 on the same personal property, and for $400 on the frame house in which the merchandise was contained. The policies were assigned to appellants after the loss. The case was tried with a jury, and the judge instructed the jury that: "The undisputed testimony in this cause showing that Burge & Allen, the insured, by whom the policy sued on in this case was assigned to plaintiffs, failed to observe the terms of what is called the `iron-safe clause' in said policy, and there being no evidence before you of a waiver by the defendant of the terms of said clause, you are instructed to find a verdict for the defendant." It appears that Burge & Allen had no iron safe, but, to comply with the requirements of the clause in their policies, would take their books home with them at night. The date of one of the policies was November 28, 1891, and that of the other April 29, 1892. A detailed inventory of the property was taken in March, 1892, and the following summary of it was entered in a ledger, to wit:

                March 1, 1892
                  Dry goods, boots, shoes, and clothing
                    .................................... $1,210 00
                  Groceries and hardware ...............    800 00
                  Drugs and medicines ..................    400 00
                  Jewelry ..............................    350 00
                  Books and stationery .................    100 00
                  Fixtures .............................    156 00
                                                         _________
                     Total ............................. $3,035 43
                

This was the last inventory taken by them. The detailed inventory was destroyed by fire; the summarized inventory was produced after the fire. Burge & Allen placed their original entries in scratch books, from which the credit sales of the day were on each night copied into a ledger, and the cash sales into a cash book. The account containing the totals of purchases and from whom bought was also kept in a book which was produced after the fire. One of the scratch books containing the original entries of the beginning of Burge & Allen for several months after March 1, 1892, and also a ledger designated as "D," to which the original entries of credit sales from January 1, 1892, to August 1, 1892, were transferred, were destroyed by the fire. On August 1, 1892, Burge & Allen began using a new ledger, called "E," and in this they placed the balances from ledger D, as well as the entries from the scratch books. Ledger E was produced after the fire. The entry of the balances from the old ledger and the production of the book containing the same after the fire was not a compliance with the demands of the iron-safe clause, and, that clause being a promissory warranty, the policy was forfeited unless the forfeiture was waived by the insurance companies.

The first and second assignments of error are presented together by appellants, the first insisting on a waiver of the iron-safe clause by the agent at the time the policy was issued; the second claiming a waiver by the adjuster after the loss had occurred. We will consider them in their order.

It is provided in the policy that the agent of the insurance companies should not have the authority to waive the requirements of the "iron-safe clause," and the waiver of the agent, Abernathy, if it was made, could have no effect in relieving Burge & Allen, the persons insured, from complying with the provisions of the clause. No authority was given to waive the requirements of the clause in question, and, more than that, the authority to waive was expressly withheld from the agent. That an agent can bind his principal only within the scope of his authority is an elementary proposition. Burge & Allen had full notice of the limited powers of the agent. Insurance Co. v. Wagner (Tex. Civ. App.) 30 S. W. 959; Insurance Co. v. Waters, Id. 576; Insurance Co. v. Kempner, 87 Tex. 229, 27 S. W. 122; First Nat. Bank v. Lancashire Ins. Co., 62 Tex. 466; Egan v. Insurance Co. (Or.) 42 Pac. 611; Fitzmaurice v. Insurance Co., 84 Tex. 61, 19 S. W. 301; Quinlan v. Insurance Co., 31 N. E. 31, 133 N. Y. 356. The policy permitted the books to be kept in some house other than the store, outside of a safe. After the destruction of the property, one Landeau was sent by the insurance companies to the scene of the fire, to investigate the loss. After he had ascertained from Burge & Allen that the itemized inventory, and a certain scratch book, and ledger D had been destroyed by the fire, he refused to proceed further in the investigation, whereupon Burge & Allen requested him to proceed, and Landeau then wrote the following instrument, which Burge & Allen signed, to wit: "Ector, Texas, Dec. 15th, 1892. We, the undersigned W. R. Allen and J. T. Burge, constituting the firm of Allen & Burge, of Ector, Fannin county, Texas, have requested C. H. Landeau, adjuster for the Lancashire Insurance Co. of England, and the Sun Mutual Ins. Co. of N. O., to make examination of our books, invoices, and other data, to determine, if possible, the probable loss and damage we may have sustained by reason of fire of Nov. 25th, 1892, destroying our property, and we hereby agree that such examination and investigation shall not act or be taken as any waiver, direct or implied, of any defense the companies may have or claim by reason of the breach of warranty as contained in the iron-safe clause, made a part of the policies, we having lost our detailed inventory, and only having a memorandum of the amount." At this time the policy had been transferred to appellants by Burge & Allen, but Landeau, immediately afterwards, it seems, informed appellants of what had occurred, and they ratified the acts of Burge & Allen. On this ground, if no other, there was no error in admitting the agreement in evidence. At the time the agreement was written by Landeau, he was the agent of the two insurance companies, by virtue of the provisions of article 2943a, Sayles' Civ. St. He had been fully informed that the scratch book and ledger D had been destroyed, and with those facts before him he wrote the agreement; and it is plainly implied that the only ground that was reserved by the company, on which they claimed a forfeiture, was a failure to produce the detailed inventory. He therefore in the agreement contracted against a waiver by his investigation in so far as the iron-safe clause was affected by the destruction of the detailed inventory. This was evidence of a waiver on his part of any forfeiture that might arise by reason of the destruction of the books. It...