Security Mutual Insurance Co. v. Berry

• Decision Date: 03 December 1906
• Citation: 98 S.W. 693,81 Ark. 92
• Parties: SECURITY MUTUAL INSURANCE COMPANY v. BERRY
• Court: Arkansas Supreme Court

98 S.W. 693

81 Ark. 92

SECURITY MUTUAL INSURANCE COMPANY v. BERRY

Supreme Court of Arkansas

December 3, 1906

Appeal from Ashley Circuit Court; Zachariah T. Wood, Judge affirmed.

Judgment affirmed. Motion denied.

Mehaffy & Armistead, for appellant.

1. Appellee failed to comply with the terms of the iron-safe clause of the policies. The credit book was not kept in a fireproof safe, and was destroyed by the fire. This clause in the contract has been upheld as reasonable, and its provisions have been sustained as promissory warranties to be strictly performed to entitle the insured to recover for a loss. 19 Cyc. 761, note 1; 58 Ark. 565; 53 Ark. 353. A reasonable construction of the statute with reference to substantial compliance, Kirby's Digest, § 4375a will not excuse or justify noncompliance with the provisions of the contract.

2. The application is made part of the policy, and the answers to the questions therein are made warranties as to their truth. If the applicant makes an untruthful answer, or answers so incompletely as not to disclose all circumstances material to the risk, he can not recover. 57 Ark. 279; 123 Mich. 277; 39 Am. Rep. 584; 51 Barb. 647; 66 N.C. 70; 58 Ark. 528; 19 Cyc 706; 25 Conn. 51; 74 P. 312; 53 A. 1102, 125 F. 684.

Pugh & Wiley and T. M. Hooker, for appellee.

1. All the entries with reference to credit sales were transferred, or copied, from the day book to certain pages of the cash register set apart for that purpose, and the latter book was kept in the safe. If not a literal compliance with the iron safe clause, which appellee contends is the case, this was at any rate such substantial compliance as authorizes a recovery. Kirby's Digest, § 4375a; 79 Ark. 160; Id. 266. The clause relied on by appellant to defeat this claim, contains no warranty that the assured shall keep or produce the book of original entry. The transcript, when identified as being the book upon which the daily credit sales are entered, was the best means by which the credit sales could have been proved.

2. If the answer to the fourfold question, to which appellant objects, was not as "full, true and complete" as contended for by it, it was due to the form and arrangement of the question. Authorities cited in support of appellant's contention are either not in point or are favorable to appellee.

OPINION

HILL, C. J.

This was an action on a fire insurance policy. Appellant presents two matters which it alleges should bar recovery.

1. It is claimed that the "iron safe clause" was not complied with in that the book containing the credit sales was lost in the fire. It was shown, however, by appellee that said credit sales were a small part of the business, and they were entered on a day book (the one lost) and transferred or copied into another book which was preserved and presented for inspection.

Appellant refers to the doctrine that there must be a strict compliance with this clause in order for the insured to recover, and cites its statement and the authorities to sustain it in 19 Cyc. p. 761, and its application in Western Assurance Co. v. Altheimer, 58 Ark. 565, 25 S.W. 1067, and Pelican Ins. Co. v. Wilkerson, 53 Ark. 353, 13 S.W. 1103.

Undoubtedly this was the law in this State until the passage of the act of 1899 (Kirby's Digest, § 4375a) which renders substantial compliance with the terms, conditions and warranties in fire insurance policies on personal property sufficient.

Counsel, of course, admit the statute changes the force of the former decisions, but contend that "it excuses technical and non-essential details of performance, but it interprets itself as preserving the substance." It can not be presumed that the former decisions of this court and the current of authority held a policy void for noncompliance with "technical and nonessential details of performance." Necessarily, the act was intended to reach beyond such matters, and to establish the rule that a substantial, as contradistinguished from a strict, compliance answered the justice of the requirement. See People's Fire Ins. Co. v. Gorham, 79 Ark. 160, 95 S.W. 152; Security Mut. Ins. Co. v. Woodson, 79 Ark. 266, 95 S.W. 481.

The court submitted, under proper instructions, the question of substantial compliance to the jury, and the verdict has sufficient evidence to support it.

2. The application contained these questions thus answered:

"31. Loss. Have you ever suffered loss by fire--when and if then insured, in what company? Yes. Security Mutual Ins. Co. How did it originate?"

It was developed on the trial that a former stock of goods of appellee insured in appellant company had been destroyed by fire, and also that prior to coming to Arkansas appellee's residence in Delhi, La., had been destroyed by fire. Whether the residence was insured in appellant company or insured at all, was not shown. The answers to the fourfold interrogatory 31 were incomplete, but so far as they went were not false. The Supreme Court of the United States said in regard to a similar answer: ...