S. E. Hanna & Company v. Orient Insurance Company

• Decision Date: 07 November 1904
• Citation: S. E. Hanna & Company v. Orient Insurance Company, 82 S.W. 1115, 109 Mo.App. 152 (Kan. App. 1904)
• Parties: S. E. HANNA & COMPANY, Appellant, v. THE ORIENT INSURANCE COMPANY, Respondent
• Court: Kansas Court of Appeals

82 S.W. 1115

109 Mo.App. 152

S. E. HANNA & COMPANY, Appellant, v. THE ORIENT INSURANCE COMPANY, Respondent

Court of Appeals of Missouri, Kansas City

November 7, 1904

Appeal from Johnson Circuit Court.--Hon. Wm. L. Jarrott, Judge.

Judgment reversed. (with directions).

J. W Suddath for appellants.

(1) The agent who solicited this insurance countersigned and delivered the policy and collected the premium, had authority to make a waiver and under the facts in this case waived the "iron-safe clause" and keeping of books. Bush v. Ins. Co., 85 Mo.App. 155; Trust Co. v. Ins Co., 79 Mo.App. 362; Ross-Langford v. Ins. Co., 97 Mo.App. 87; Ormsby v. Ins. Co., 98 Mo.App. 371; Rickey v. Ins. Co., 79 Mo.App. 485; James v Ins. Co., 148 Mo. 1. (2) Under section 7979, Revised Statutes 1889, this was and is a valued policy, and the value of the stock was fixed by the taking of the policy. Gibson v. Ins. Co., 82 Mo.App. 515. (3) All warranties of any facts or condition in policies in any policy issued since 1897, which shall not materially affect the risk insured against shall be deemed as representations only. R. S. 1899, sec. 7974. (4) What is material to the risk insured against is always a question for the jury. Kern v. Ins. Co., 40 Mo. 20; Boggs & Leath v. Ins. Co., 30 Mo. 67; Schroeder v. Ins. Co., 46 Mo. 178; Schultz v. Ins. Co. , 57 Mo. 331, l. c. 337; Atherton v. Ins. Co., 39 A. 1006; Levie v. Ins. Co., 39 N.E. 792; Dolan v. Ins. Co., 88 Mo.App. 666; White v. Ins. Co., 93 Mo.App. 282. (5) A person with long experience in the insurance business is competent to give his opinion as to materiality to the risk, of the facts or condition complained of. Kern v. Ins. Co., 40 Mo. 20.

Fyke Bros., Snider & Richardson for respondent.

(1) The action of the court in granting a new trial was proper. The court erred in admitting evidence of so-called experts upon the question whether or not the iron-safe and book clause was material. If there was any question of fact as to the materiality of the condition, such question was for the jury, and not for the witnesses. (2) It was not proper subject-matter of expert testimony. Kirby v. Ins. Co., 9 Lea (Tenn.) 142; Ins. Co. v. Dwyer, 1 Posey (Tex.) 441; Thorpe v. Ins. Co., 70 Mo. 531; Ins. Co. v. Catheral, 7 Wenk 72; Joyce v. Ins. Co., 4 Maine 168; Dry Goods Co. v. Ins. Co., 74 S.W. 468; Desoto v. Ins. Co., 74 S.W. 1. For distinction between warranty and representation, see McDermott v. Ins. Co., 97 Mo.App. 647. (2) The court erred in giving plaintiffs' instruction 2 for the foregoing reasons, and because it ignores the three-quarter clause in the policy. Willis v. Company, 95 Mo.App. 211; Roberts v. Ins. Co., 94 Mo.App. 150.

OPINION

SMITH, P. J.

This is an action which was brought on a fire insurance policy insuring a stock of merchandise in the sum of $ 800. The answer admitted the issue of the policy, the payment of the premium, the fire and the loss. It denied all liability and especially pleaded a condition of the policy commonly known as the "iron-safe clause" to the effect that, "the assured under the policy hereby covenants and warrants to keep a set of books, showing a complete record of business transacted including all purchases and sales, both for credit and cash, together with the last inventory of stock insured; and further covenants and warrants to keep such books and inventory securely locked in a fire-proof safe at night and at all times when the store mentioned in the within policy is not actually open for business, or in some secure place not exposed to a fire which would destroy the house where such business is carried on; and in case of loss, the assured warrants and covenants to produce to this company or its agent or attorney, such books and inventory, and in event of failure to produce the same, this policy shall be deemed null and void, and no suit or action shall be maintained thereon for any such loss."

The answer further alleged that the plaintiffs wholly failed to comply with the requirements of said clause so pleaded, and that, in consequence thereof, they were not entitled to recover. It was also therein further alleged that the said condition was material.

The replication denied that the said condition was material to the risk insured against. It alleged that plaintiffs did keep a set of books showing a complete record of business transacted, including all purchases and sales for cash or credit, together with the last inventory of the stock insured, and that they kept said books in another building where one of the plaintiffs resided except when the store was actually open for business. It is further alleged that defendant's agent who issued the policy sued on had full knowledge of the kind and character of plaintiffs' books and where such books, as well as the inventory of the store, were kept and where the same were expected to be kept; that defendant's said agent knew that plaintiffs did not have an iron safe; that plaintiffs told him where they kept and expected to keep their said books and inventory and that he assented to their being so kept; and with this understanding the plaintiffs paid the premium to him and accepted the policy, by which acts the defendant, through its agent, waived all the rights to claim any benefit of said condition pleaded by the answer, etc.

There was a trial to a jury resulting in a verdict for plaintiffs. Afterwards, the court on motion of defendant made an order setting aside the verdict on the ground, as appears from the record, that it had erred in the admission of testimony offered by the plaintiffs and in giving instructions requested by them. The plaintiffs appealed from this order.

The instructions given for both plaintiffs and defendant submitted to the consideration of the jury the issue of waiver of the conditions of the ironsafe and book clause of the policy. There was an allround concession that there was sufficient evidence to carry the case to the jury on that issue. An examination of the record has convinced us that the evidence there preserved was ample to justify a submission of the issue. The effect of the finding of the jury on this issue in favor of the plaintiffs was to strike that condition from the policy. The policy as found by the jury is not different from that containing no such condition. The numerous adjudications cited in plaintiffs' brief fully sustain this conclusion.

No instruction save that to be presently noticed was requested by either party submitting to the jury any issue other than that of waiver of the iron-safe condition. It is true that plaintiffs introduced several witnesses who were experienced in the business of fire insurance. The plaintiffs in the examination of these witnesses read to them severally the iron-safe and book condition of the policy and were then permitted to inquire of them whether or not with that condition in the policy, if when the policy was issued there was $ 1,300 insurance on the stock of goods and the law fixed the value of such stock by reason of said policy at $ 1,300 and a fire occurred eighteen days after the date the policy was issued, there having intervened two Sundays, leaving sixteen business days, and the evidence showed the average daily sales amounted to $ 150 per month, it would be material to the risk. It seems to be the consensus of judicial opinion in this jurisdiction that the question of what is material to the risk is for the jury to determine, except in such clear cases as can be determined by the court as a matter of law. White v. Ins. Co., 93 Mo.App. 282; Dolan v. Ins. Co., 88 Mo.App. 666; Kern v. Ins. Co., 40 Mo. 19; Boggs & Leathe v. Ins. Co., 30 Mo. 63, 67; Schroeder v. Ins. Co., 46 Mo. 174, 178; Schultz v. Ins. Co., 57 Mo. 331, l. c. 337; Atherton v. Ins. Co., 39 A. 1006; Levie v. Ins. Co., 39 N.E. 792. And in view of the ruling in Kern v. Ins. Co., 40 Mo. 19, the hypothetical question already referred to was probably unexceptionable.

But if as the defendant contends, there was included within its hypotheses erroneous conclusions of law in that the law did not fix the value of the plaintiffs' stock of merchandise at any amount, yet, as no issue as to whether or not the iron-safe and book condition of the policy was material to the risk, was submitted to the jury by either party, but, on the...