Westchester Fire Ins. Co. v. Biggs

• Citation: 216 S.W. 274
• Decision Date: 11 November 1919
• Docket Number: (No. 490.)
• Parties: WESTCHESTER FIRE INS. CO. v. BIGGS.
• Court: Texas Court of Appeals

216 S.W. 274

WESTCHESTER FIRE INS. CO. v. BIGGS.

(No. 490.)

Court of Civil Appeals of Texas. Beaumont.

November 11, 1919.

Rehearing Denied December 3, 1919.

Error from District Court, Panola County; Daniel Walker, Judge.

Action by J. I. Biggs against the Westchester Fire Insurance Company. There was a judgment for plaintiff, and defendant brings error. Affirmed.

Thompson, Knight, Baker & Harris and Will C. Thompson, all of Dallas, for plaintiff in error.

W. G. Banks, of Shreveport, La., for defendant in error.

BROOKE, J.

By his original petition, the plaintiff alleged: That he was the owner of a stock of merchandise, consisting principally of some drugs and sundries, and of some furniture and fixtures and soda fountain, located in Beckville, Tex., and that on October 17, 1916, defendant issued him its policy of insurance in consideration of a $94.20 premium, insuring him against loss by fire to the amount of $1,000 on drugs, $100 on furniture, and $400 on fountain; that on November 1, 1916, in consideration of $68.20, it issued him an additional policy, insuring him against fire to an amount of $1,000 on stock. Both of these policies were for a year, and are attached to the petition as exhibits. That on May 6, 1917, the property was destroyed by fire, and was at that time of the value of $4,706.57, as shown by Exhibit C attached to the petition. That after the fire defendant received from plaintiff notice and proof of loss and demand for payment, which was refused. Ownership is sufficiently alleged.

By its amended answer the defendant alleged a general demurrer, special exceptions, general denial, and specially set up the record warranty clause contained in each of the policies sued on, and alleged a breach of each of the provisions of same, and further alleged the pendency of a garnishment suit, and prayed protection against it.

The case was submitted to the jury on special issues, to which they returned their answers, finding, in substance:

That the cash value of the merchandise in the store at the time of the fire was $3,640.02; that the cash value of the furniture, fountain, and fixtures was $1,082.65; that the plaintiff did, within 12 calendar months prior to November 1, 1916, take a complete itemized inventory of his stock in his store at Beckville; that the plaintiff did, between July 4, 1916, and the time of the fire, make, prepare, and keep in the regular course of his business a set of books, which clearly and plainly present a complete record of his business, including all purchases and all sales, whether made for cash or credit; that the plaintiff, Biggs, did, between October 17, 1916, and the time of the fire, make and prepare and keep in the regular course of his business a set of books, which clearly and plainly present a complete record of his business, including all purchases and all sales, whether made for cash or on credit; that the plaintiff did, between November 1, 1916, and the time of the fire, make and prepare and keep in the regular course of his business a set of books, which clearly and plainly present a complete record of his business, including all purchases and all sales, whether made for cash or credit; that the plaintiff did, between July 4, 1916, and January 1, 1917, make and prepare in the regular course of his business a record, showing all of the sales made by him during that period for cash.

Judgment was rendered in favor of the plaintiff and against the defendant for $2,500, with interest from April 30, 1918, provision being made to take care of the garnishment pleaded. Defendant duly made its motion for new trial, which was overruled by the court, and defendant excepted and gave notice of appeal to this court, duly applied for writ of error, and filed its writ of error bond, citation in error, after Mr. Biggs could not be found, being served on his attorney of record, on October 8, 1918.

We make the following additional statement of facts in this case:

The plaintiff below began business about the 4th of July, 1916. At that time he bought out the going business of his father and uncle. He was to pay them 75 per cent. of the invoice price of their stock, and to ascertain what that sum might be an inventory was taken on that date of a part of the stock. One of the questions involved here is whether that inventory constituted a complete itemized inventory. One of the policies sued on was issued October 17, 1916, and covers $1,000 on stock of merchandise, $100 on furniture and fixtures, and $400 on soda fountain. The other policy was issued November 1, 1916, and described stock. Each of these policies contained the usual record warranty clause. To show a compliance with this clause, the plaintiff produced upon the trial an inventory taken January 1, 1917, his bank book, a book called "cash book" in which appear purchases made during 1917, and a gray book (ledger), in which appear, so the assured testified, a record of purchases for 1916—though this is attacked as failing to show such purchases as is required by the terms of the policy—and also for 1917, a record of cash sales for 1917, and a record of sales for sales on credit for 1916 and 1917. The inventory for 1916 was burned in the fire which occurred May 6, 1917, while in the store and out of the safe, under circumstances hereafter set out.

The Westchester Fire Insurance Company comes to this court complaining of the errors committed by the trial court as evidenced by the following assignments of error.

The first assignment of error is as follows:

"The court erred in refusing and further erred in not giving in charge to the jury defendant's first requested charge, directing a verdict for it, for the reason, among others, that the undisputed evidence showed that the policies sued on, and each of them, was breached and avoided by the plaintiff in the following particulars:

"(a) Failure to take a complete itemized inventory within 12 months prior to the date of each policy or 30 days thereafter.

"(b) Failure to make and prepare within time required a set of books showing a complete record of business transacted, as required by each policy.

"(c) Failure to keep, preserve, and present as required inventory assured says was taken in July, 1917.

"(d) Failure to comply with first section of clause.

"(e) Failure to comply with second section of clause.

"(f) Failure to comply with third section of clause."

The first proposition under this assignment is:

"The undisputed evidence being that the inventory of July, 1916, failed to include some 15 per cent. of the stock, it was not, as a matter of law, any such complete inventory as constitutes any compliance with requirements of the policy as to the taking of inventory, so that peremptory instructions for the defendant in the court below should have been given, since the evidence was also undisputed that no such inventory was taken within 30 days after the issuance of either policy."

On the contrary, it is urged that, it being usual and customary for all merchants to drop from their annual inventories old and discarded stock, failure to include or consider such items in making inventory will not constitute breach of warranty clause in insurance policy requiring that complete inventory be taken.

We are of opinion that on this proposition the court was not in error, and it would, perhaps, be well in this connection to state some of the testimony on this point.

Defendant in error testified:

"The stock of goods that I bought from my father and uncle was the stock of goods that they had in the store for a long time; that is, some of it was; I mean that a small per cent. of it was old stock. I would say that about 15 per cent. of it was old stock, but we did not include that in taking stock, but just left the old stuff here, and that did not go on my inventory. I do not know just how much there was of it, but probably not over 15 per cent."

This testimony was not considered for any purpose except showing that the property had no value, and, if it had any value, it was not purchased by assured, as the only purchase was the goods shown in the inventory.

We do not believe that the cases cited by plaintiff in error have any application here. In the case of Dorroh-Kelly Mercantile Co. v. Orient Insurance Co., 104 Tex. 199, 135 S. W. 1165, the parties had only prepared a partial inventory of the valuable and salable merchandise on hand. This is a case where a complete inventory of all the valuable and salable merchandise was taken. If the old stock omitted in this case was not of sufficient value to be accounted for anything at the time of the sale of the stock in bulk, it would clearly come within the rule announced by plaintiff in error in its brief, that is, that "it is true that the omission of unimportant items of little value and consequence would not be sufficient to defeat the right of recovery."

The policies sued on each provided in part as follows:

"Record Warranty Clause.

"The following covenant is hereby made a part of this policy and a warranty upon the part of the assured:

"Section 1. The assured will take a complete itemized inventory of stock on hand at least once in each calendar year and within twelve months of the last preceding inventory, if such has been taken. Unless such an inventory has been taken within twelve calendar months prior to the date of this policy, and together with a set of books showing a complete record of business transacted since the taking of such inventory, is on hand at the date of this policy, one shall be taken within thirty days after the date of this policy, or in each and either case this entire policy shall be null and void.

"Sec. 2. The assured will make and prepare, in regular course of business, from and after the date of this policy, 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 on credit,...