Tutton v. Liverpool & London & Globe Ins. Co., Ltd., 7 Div. 527.

• Decision Date: 09 February 1939
• Docket Number: 7 Div. 527.
• Citation: 237 Ala. 230,186 So. 551
• Court: Alabama Supreme Court
• Parties: TUTTON v LIVERPOOL & LONDON & GLOBE INS. CO., LIMITED.

186 So. 551

237 Ala. 230

TUTTON v LIVERPOOL & LONDON & GLOBE INS. CO., LIMITED.

7 Div. 527.

Supreme Court of Alabama

February 9, 1939

Appeal from Circuit Court, Calhoun County; R. B. Carr, Judge.

Action on a policy of fire insurance by Mrs. J. E. Tutton against the Liverpool & London & Globe Insurance Company, Limited. From a judgment of nonsuit, plaintiff appeals.

Reversed and remanded.

That a replication is insufficient because averment of an essential fact is a conclusion may be raised by demurrer.

Plea 2 sets up the "Warranty to keep books and to produce them in case of loss", made a part of the policy, and providing, first, that "assured shall take a complete itemized inventory of stock on hand at least once in each calender year, and unless such inventory has been taken within twelve calender months prior to the date of this policy, one shall be taken in detail within 30 days of the issuance of this policy, or this policy shall be null and void"; second, that "assured shall keep a set of books which clearly and plainly present a complete record of business transacted, including all purchases, sales and shipments, both for cash and credit," from the date of inventory and during continuance of policy; and, third, that assured shall 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 the policy is not open for business or, failing in this, assured will keep such books and inventories in some place not exposed to fire which would destroy aforesaid building. In event of failure to produce such books and inventories for inspection of the company, it is provided that the policy shall become null and void.

It is averred by this plea that assured had not taken a complete itemized inventory of stock on hand in the calendar year preceding the date of issue of the policy, and did not within 30 days after said date take a complete itemized inventory of the stock on hand.

Plea 3 is the same in substance as plea 2.

Plea 4 avers a breach of the policy provisions in failing to keep a set of books; and plea 5 avers a failure to keep books and inventories in fireproof safe, etc.

Plea 15 is as follows:

"In the policy sued upon it is expressly provided that:

"'This entire policy *** shall be void *** if the hazard be increased by any means within the control or knowledge of the assured ***.'

"Defendant avers that after issuance of the policy to the assured the hazard insured against was increased by means within the knowledge or control of the insured".

Plea 18 (in mitigation of the damages) avers that the policy provides: "This company shall not be liable for loss caused directly or indirectly *** or (unless fire ensues, and in that event, for the damage by fire only) by explosion of any kind ***"; and avers further that a large part of the loss was caused directly or indirectly by explosion.

Replications 6 and 7 are as follows:

"6. Plaintiff says that if it be true that an explosion was connected with the loss sued on, it was in connection with a fire. That the explosion was either caused by the fire which was already damaging the goods of the plaintiff, the loss of which is being sued for in this cause, or fire ensued and caused the loss sued for in this cause."

"7. Plaintiff says that the explosion mentioned in defendant's plea was followed by fire, and the damage sued on in this cause was caused by the fire." By replication 8 plaintiff says that her interest in the property remained the unconditional and sole ownership; that the person mentioned in plea was her son, placed in charge of the store and worked for her on salary; that he had no interest in the property otherwise.

Further replications are as follows:

Replication No. 9: "Plaintiff says that prior to the time the policy in this case was issued and at the time the loss occurred and during all the time intervening between the writing and issuing of said policy and the loss in this cause, one John B. Nisbet was the general agent for defendant, with authority from the defendant to solicit and receive applications for insurance, to collect premiums and to issue and countersign policies. That he was supplied with blank policies signed by the United States manager of the defendant to be binding on the defendant only when countersigned by said John B. Nisbet. That said agent was authorized to enter into the contract sued upon on behalf of the defendant and had authority to waive the conditions set out in defendant's said plea. That the policy of insurance sued on was issued to the plaintiff by defendant and was drawn up and became binding on the defendant upon its having been countersigned by the said John B. Nisbet. That before the issuing and delivering of said policy to the plaintiff by said agent, plaintiff notified said agent in his representative capacity that she had taken an inventory of the stock on hand shortly after Christmas of 1936, which statement was true, but that said inventory was probably not as completely itemized as was contemplated by the policy of insurance which said agent desired to issue to her, and that plaintiff did not intend to and was not going to take another inventory until the summer of 1937. And plaintiff further avers that after informing and notifying said agent of the facts as hereinabove set out, said John B. Nisbet, as agent of the defendant and with full knowledge of the facts as hereinabove alleged, issued to the plaintiff the policy sued on and as described in plaintiff's complaint.

"And plaintiff further avers that after the issuance of said policy and before loss thereunder occurred, the facts hereinbefore alleged were again made known to said agent by the plaintiff, and the defendant failed for a reasonable time thereafter to assert the forefeiture and did not assert the same until after said loss, that plaintiff, relying upon the policy so issued, continued to run and operate her business as she had been accustomed to, and as she told said agent she was going to with regard to said inventory, until the time the loss sued on occurred. And the plaintiff avers that by reason of the above matters and facts defendant waived and is estopped from setting up as a defense to this action, the condition relied upon as a defense in said plea."

Replication No. 10: "Plaintiff says that prior to and at the time the policy in this case was issued and at the time the loss occurred and during all the time intervening between the writing and issuing of said policy and the loss in this cause, one John B. Nisbet was the general agent for defendant, with authority from the defendant to solicit and receive applications for insurance, to collect premiums and to issue and countersign policies and he was supplied with blank policies signed by the United States manager of the defendant to be binding on the defendant only when countersigned by said John B. Nisbet.

"And plaintiff avers that she had had a prior contract of insurance with said John B. Nisbet, either with the defendant company or with some other company, and that before the issuing and delivering of the policy sued on plaintiff notified said agent in his representative capacity of the way in which she kept books and records of her business, including purchases, sales and shipments, both for cash and credit, and notified him that she intended to continue keeping her books in this manner as she had done in the old policy, if and when the policy sued on was issued. That she notified said agent at this time that if this method and these records did not meet the requirements of said policy under discussion, she would not take said policy. That all the details in connection with the above matters were known to said agent at the time policy was issued and delivered.

"And plaintiff further avers that after informing and notifying the said agent of the facts as hereinabove set out, said John B. Nisbet, as agent of the defendant and with full knowledge of the facts as hereinabove alleged, issued to the plaintiff the policy sued on and as described in plaintiff's complaint, and that the plaintiff, relying upon the policy so issued, continued to run and operate her business as she had been accustomed to and as she told said agent she was going to and under the conditions of which he had already been notified, as set out above, until the time the loss sued on occurred.

"Plaintiff further avers that after the issuance of said policy and before loss, she again notified said agent in his representative capacity of the matters hereinabove set out, and that the defendant failed for a reasonable time thereafter to assert the forfeiture set out in said plea, and did not assert the same until after loss. And plaintiff avers that by reason of the above matters and facts, defendant waived, and is estopped from setting up a defense to this action, the condition relied upon as a defense in said plea."

Replication No. 11: "Plaintiff says that prior to and at the time the policy in this case was issued and at the time the loss occurred and during all the time intervening between the writing and the issuing of said policy and the loss in this cause, one John B. Nisbet was the general agent for defendant, with authority from the defendant to solicit and receive applications for insurance, to collect premiums and to issue and countersign policies and he was supplied with blank policies signed by the United States manager of the defendant to be binding on the defendant only when countersigned by said John B. Nisbet.

"Plaintiff further says that prior to the time the policy sued on in this cause was issued, the said agent came into and inspected the store of the...