Sun Mut. Ins. Co. v. Searles

• Decision Date: 18 November 1895
• Court: Mississippi Supreme Court
• Parties: SUN MUTUAL INSURANCE COMPANY v. T. M. SEARLES ET AL

18 So. 544

73 Miss. 62

SUN MUTUAL INSURANCE COMPANY v. T. M. SEARLES ET AL

Supreme Court of Mississippi

November 18, 1895

FROM the circuit court of Warren county, HON. JOHN D. GILLAND Judge.

The C J. Searles Company, under assignment, from whom appellees claim, was a corporation doing a wholesale grocery and commission business in Vicksburg. It had a warehouse on Levee street, in which its stock of merchandise was kept, and had its office on Washington street, in the rear of Ruhman's store, where its books were kept and business transacted. At the time it commenced business, in March, 1893, it had a stock of merchandise of the value of $ 9,330.50, which was insured for $ 7,500. On June 1, 1893, it paid a privilege tax of $ 15, and procured the necessary license "on a store where the stock sometimes exceeds $ 2,000, but never $ 3,500." On November 14, 1893, the policy in suit, for $ 1,250, was procured from the appellant on the stock of merchandise. On April 1, 1894, an inventory was taken, that showed the value of the stock on hand to be $ 8,282.12. On June 1, 1894, the license expired, and, on the fifteenth of the same month, the warehouse, and all its contents were destroyed by fire.

In connection with the foregoing facts, the appellant offered to prove that, at the time of the fire, the company had no license, and did not take out any until after the fire; that it was not renewed until the day after the fire; that it was then renewed as before, by paying only $ 15, and that, within a few days after that time, a representative of the company had the $ 15 license canceled, and took out one for $ 30, the latter being the tax "on each store where the stock sometimes exceeds $ 7,000, but never $ 10,000," and had it dated back as of June 1, 1894. On appellee's objection, the court below refused to admit this evidence but the $ 30 license was subsequently introduced by the appellees. It was shown that the total amount of insurance on the property represented by all the policies held by the company was $ 7,500; that the one in suit contained the ordinary three-fourths value clause, and that, shortly after the fire, the appellee, T. M. Searles, rendered to appellant's adjuster a statement, which he afterwards withdrew and refused to give up, showing a loss of $ 10,170. As a witness, he testified that, between March, 1893, and June, 1894, the company, of which he was a member, bought a large lot of bagging ahead of time, and had it stored in the elevator, but that it never went into the warehouse, and had no connection with the stock, and was covered by separate policies that also had no connection with the stock, and that they sold this bagging on contract around the country; that the amount of bagging in the elevator on or about June 1, or the latter part of May, 1893, as shown by their invoices, was $ 4,194.34; that it was stored in the elevator for the First National Bank of Vicksburg, and was sold under contract, to be delivered the following August; that it was held in trust by the elevator company for the First National Bank, and that it never went into their warehouse, and was paid for by the First National Bank; that, taking this $ 4,194.34 item off of their gross purchases made from March 1, 1893, to June 1 1893, and deducting net cash sales, leaves $ 2,690.77, which would be the amount of goods they had on hand on June 1, 1893, if they made no profits, and that it was impossible to figure out their profits.

The company kept at their warehouse, and not at their office on Washington street, where the other books relating to the business were kept, a warehouse book, in which were entered the items or articles of merchandise actually on hand at any given time. This book was not kept in a fireproof safe, and was destroyed in the fire. It was claimed, on the part of the defendant, that this book was a part of the company's set of books and within the terms of what is termed the iron safe clause of the policy, while the plaintiff showed that it kept a complete set of books at its office, and that this particular book was only kept as a check on the young man who kept its warehouse. The language of the policy is as follows: "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, etc. 3. The assured will keep such books and 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," etc.

To relieve any insufficiency in the proof of loss, the appellees undertook to prove a waiver on the part of appellant, and showed that the books, papers, etc., of the company were turned over to the adjuster and special agent of appellant and the persons similarly representing the other companies, and that they figured the loss $ 3,734.78, putting the profits of the company, by guess, at five per cent., but that the loss would have been, according to their figures, $ 5,435.64 had the profits been estimated at ten per cent; that appellant's special agent and adjuster offered appellees a compromise, which was rejected, and that, on August 6, 1894, as such representative of appellant, he wrote to T. M. Searles denying all liability on the policy.

Appelant's seventh plea averred that the policy sued on was void, because the company carried on its mercantile business without having first paid a state privilege tax and obtained a license as required by law. The eighth plea of appellant set up that the policy was void, because the company exercised the privilege of carrying on the business of a merchant, having store in which the stock sometimes exceeds $ 3, 500, without paying the privilege tax and obtaining the license required by chapter 108 of the annotated code. Demurrers were filed to both pleas, and, the same having been overruled, issue was joined. The opinion sets out, in substance, the instructions criticized. Judgment for plaintiff. Defendant appeals.

Judgment reverse and cause remanded for new trial. Reargument denied.

Booth & Anderson, for appellant.

1. The facts show that when the privilege tax license was issued, it was insufficient for a stock of merchandise of the value of that of the C. J. Searles Company; and an insufficient license is, in its consequences, the same as none at all. Code 1892, § 3390; Pollard v. Phoenix Insurance Co., 63 Miss. 244. But, if mistaken in this contention it is submitted that the stock largely exceeded $ 3, 500 in value subsequent to the issuance of the license, and prior to that of the policy. The evidence shows that from the time the company began business until the fire, its stock, whenever the value was ascertained in any way, was largely in excess of the above amount. The case of Sneed v. British American Insurance Co., 72 Miss. 51, is without application to the present controversy.

2. On the facts shown, the warehouse book was a part of the set of books which should have been kept in a fireproof safe, as required by the iron safe clause. It showed what was on hand at the warehouse.

3. The proof of loss was insufficient, and the adjuster of appellant was by its express limitations without authority to waive the requirements of the policy in reference to proof of loss. Gould v. Dwelling House Insurance Co., 51 N.W. 455, s.c. 52 N.W. 754; Quinlan v. P. W. Insurance Co., 31 N.E. 31; Wash v. Insurance Co., 73 N.Y. 10; Marvin v. Insurance Co., 85 N.Y. 278; Porter v. Insurance Co., 35 N.E. 678.

Miller, Smith & Hirsh, for appellees.

1. The C. J. Searles Company kept at its office a complete set of books, which were turned over for inspection to appellant's adjuster. On the facts shown, the warehouse book kept at its warehouse was not a part of the set of books required to be kept in a fireproof safe.

2. The dealings that took place, after th fire, between appellant's adjuster and the appellee, T. M. Searles, resulting finally in the former's denial of all liability on the policy, constituted a waiver of proofs of loss. Phoenix Insurance Co. v. Bowdre, 67 Miss. 620; 2 May on Ins. (3d. ed.), §§ 473a, 469d; Kohn v. Traders' Insurance Co., 34 P. 1059; Lamberton v. Connecticut Fire Insurance Co., 39 N.W. 76; Farmers Insurance Co. v. Taylor, 73 Pa. 342; Bartlette v. Fireman's Fund Insurance Co., 77 Iowa 155; Brink v. Merchants' Insurance Co., 39 Vt. 442; Clement's Fire Insurance Digest, p. 515; Little v. Phoenix Insurance Co., 133 Mass. 380; Etna Insurance Co. v. Shyer, 85 Ind. 362; Perry v. Fanueil Hall Insurance Co., 11 Fed. Red., 482; McPike v. Western Insurance Co., 61 Miss. 37.

3. The seventh and eighth pleas of the appellant fail to aver that the company had an insufficient privilege license, either at the date of effecting the insurance, or when the fire occurred, and must be taken as relating to the date of the license; and the testimony of T. M. showed that the value of the goods on hand at that time was but $ 2,690.77. It has been held in this state, without qualification, that, unless it is shown that the privilege license was insufficient when the contract of insurance was made, the insured is entitled to a recovery. Sneed v. British American Ins. Co., 72 Miss. 51.

There was nothing in the evidence to show that the stock of the C J. Searles Co. was any larger on November 14, 1893, when the policy...