Scottish Union & National Ins. Co. v. Warren Gee Lumber Co.

• Decision Date: 02 December 1918
• Docket Number: 19871
• Citation: 118 Miss. 740,80 So. 9
• Parties: SCOTTISH UNION & NATIONAL INSURANCE COMPANY v. WARREN GEE LUMBER COMPANY ET AL
• Court: Mississippi Supreme Court

80 So. 9

118 Miss. 740

SCOTTISH UNION & NATIONAL INSURANCE COMPANY v. WARREN GEE LUMBER COMPANY ET AL

No. 19871

Supreme Court of Mississippi

December 2, 1918

Division A

APPEAL from the circuit court of Forrest county, HON. PAUL B JOHNSON, Judge.

Suit by G. L. Hawkins, Trustee, and the Warren Gee Lumber Company against the Scottish Union & National Insurance Company. From a judgment for plaintiff, defendants appeal.

The facts are fully stated in the opinion of the court.

Affirmed and reversed and remanded.

McLaurin & Armistead, Baskin & Wilbourn, and E. J. Bowers, for appellant.

Watkins & Watkins, C. R. Connor, S. E. Travis, Sullivan & Sullivan, and H. S. Gray, for appellees.

OPINION

SYKES, J.

G. L. Hawkins, trustee, and the Warren Gee Lumber Company, filed suit in the circuit court of Forrest county against the defendant insurance company, based upon a fire insurance policy for one thousand dollars. The property insured and burned was a planning mill plant. The insurance policy is a divisible item policy, and by its terms provides:

"This policy being for proportionate amounts of each item, as shown by form hereto attached and understood to be the written portion of the policy."

These items as finally amended are as follows:

"(1) $ 2,000--On their one-story, frame, composition-roof building, including additions and foundations, platform attached within one hundred feet of buildings, situated on southwest side of G. & S. I. R. R., and partly on right of way, near the town of Mt. Olive, Miss.

"(2) $ 9,450--On machinery of every description, being item 2 of the form.

"(3) $ 400--On their one-story, frame, composition-roof boiler house, situated fifty feet southwest of planer building.

"(4) $ 2,300--On boiler, foundations, settings including stacks and pumps between boiler house and main buildings.

"(5) $ 3,100--On their one-story, frame, composition-roof dry-kiln building, including piping, hangers, all dry-kiln apparatus of all kinds and tools, situated north of main building.

"(6) $ 5,000--On their stock of lumber, rough and dressed, being item 6 of the form.

"(7) $ 300--On their one-story, frame, shingle-roof office building, situated on premises and entirely isolated from mill and dry-kiln buildings.

"(8) $ 200--On their office furniture and fixtures of every description including iron safe, all while contained in the above described building.

"$ 22,750 total concurrent insurance permitted."

The amount of insurance under each item is the same proportion of the amount of total insurance permitted under that item that one thousand dollars bears to twenty-two thousand seven hundred and fifty dollars, or one hundred two thousand two hundred and seventy-fifths of the total amount of insurance allowed under each item.

Attached to the policy is a loss payable clause, which reads as follows;

"Any loss that may be ascertained and proven to be due the assured under this policy shall be held payable to G. L. Hawkins, trustee, as interest may appear; balance to assured."

The Mt. Olive Lumber Company sold this plant to George D. Sisson. In the deed to Sisson a vendor's lien for the balance of the unpaid purchase money is reserved. This amount was eight thousand dollars evidenced by four promissory notes, each for two thousand dollars, dated April 8, 1904, and due one year from date, bearing six per cent. interest from date, and containing a provision for the payment of ten per cent. attorney fees if placed in the hands of attorneys for collection. Sisson, by deed, conveyed the plant to the Warren Gee Lumber Company on April 16, 1904, reserving in this deed a vendor's lien for unpaid purchase money. The fire which destroyed this property occurred on December 22, 1904. The unpaid purchase money at the time of the fire was evidenced by the notes above referred to payable to G. L. Hawkins, trustee. The Warren Gee Lumber Company had a number of other insurance policies with various companies covering this plant at the time of the fire. The declaration was filed on April 19, 1913. At the same time, in the same court, similar suits were filed against nine other insurance companies on policies similar in all material respects to this one, and all containing the same loss payable clause.

The declaration alleges that the total amount of insurance outstanding at the time of the fire was eighteen thousand seven hundred and fifty dollars, and that the interest of the trustee, Hawkins, including the principal and interest on his debt, together with attorney fees, amounts to forty-nine and four tenths per cent. of the total insurance; that Hawkins is entitled to recover this amount, and the Lumber Company the residue. The amount of recovery under this policy, claimed by Hawkins, trustee, less the interest due on same is four hundred and ninety-four dollars. There was a total loss claimed by the plaintiff on all of the items in the policy except items 7 and 8, under which two items there was no loss. Some time before the filing of these ten suits in the circuit court of Forrest county, plaintiffs filed suit in the chancery court of Jackson county against two insurance companies for the sum of four thousand dollars. This chancery suit was before this court upon a demurrer to the bill overruled in the lower court. The case is styled Niagara Insurance Co. v. Warren Gee Lumber Co., and is reported in 94 Miss. 159, 47 So. 551. The present suit has also been in this court once before, styled Hawkins et al. v. Scottish Union & National Insurance Co., 110 Miss. 23, 69 So. 710. The litigation between these parties about this insurance was first begun in April, 1905, when the insurance companies filed a bill in the chancery court of Forrest county against these defendants to cancel the policies. Reports of this original chancery suit are found in 103 Miss. 816, 60 So. 1010, and 104 Miss. 636, 61 So. 310. For a complete understanding of this suit it is necessary to examine the above reports, which contain further facts not herein repeated.

In this case numerous pleas, replications, rejoinders, and demurrers were filed, which we shall later discuss. After the introduction of testimony by both parties, the court peremptorily instructed the jury to return a verdict in favor of the plaintiffs, apportioning the amount of recovery by each as claimed in the declaration. Judgment was entered upon the verdict of the jury in accordance with this instruction, from which judgment this appeal was prosecuted.

The first assignment of error argued by counsel for appellant is that:

"The court erred in sustaining plaintiff's demurrer to defendant's rejoiner to plaintiff's replication to defendant's sixth special plea and to defendant's seventh special plea."

The sixth special plea set up the defense that the Warren Gee Lumber Company, at the time of the issuance of the policy of insurance, was conducting the business of a sawmill, and that the contract of insurance was made in and about and with reference to same, and that plaintiff had not at that time paid the privilege tax as required by law.

The seventh special plea set up, as a defense to the maintaining of this suit by the Warren Gee Lumber Company, with reference to the sixth item, which was the insurance on the lumber, that this plaintiff had failed to keep a set of books as required by the "iron safe clause" contained in this policy, and had failed to prove this loss from the books. This clause in the policy reads 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 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 such date shall be returned.

"(2) The assured will keep a set of books, which shall clearly and plainly present a complete record of 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 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 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 this company, this policy shall become null and void, and such failure shall continue a perpetual bar to any recovery thereon."

The replication of plaintiffs to the sixth and seventh pleas of the defendant stated in effect that, because the defendant and the other insurance companies had not set up in their bill in the original chancery suit, reported in 103 Miss 816, 60 So. 1010, and 104 Miss. 636, 61 So. 310, above set out, the facts alleged in these pleas, it was thereby estopped to plead them in this case. The rejoinder of defendant to this replication set up the fact that this original bill in chancery had been dismissed without prejudice. Plaintiff's demurrer to this rejoinder alleged in substance that the dismissal of the suit without prejudice made no difference. This demurrer was sustained. Replications to these two special pleas...