Western Assur. Co. of Toronto v. McGlathery

• Decision Date: 16 April 1897
• Citation: 115 Ala. 213,22 So. 104
• Parties: WESTERN ASSUR. CO. OF TORONTO v. MCGLATHERY. [1]
• Court: Alabama Supreme Court

22 So. 104

115 Ala. 213

WESTERN ASSUR. CO. OF TORONTO v. MCGLATHERY. ^[1]

Supreme Court of Alabama

April 16, 1897

Appeal from city court of Birmingham; William W. Wilkerson, Judge.

This was an action brought by D. R. McGlathery against the Western Assurance Company of Toronto, and sought to recover for the loss of a stock of goods, by fire, which was covered by an insurance policy issued by the defendant. Judgment for plaintiff. Defendant appeals. Reversed.

The complaint was in the statutory form, and contained but one count. The defendant pleaded the general issue and the following special pleas: "(2) A breach of the warranties contained in the 'iron-safe clause,' which is as follows: 'Iron-Safe Clause. Warranty to keep books and inventories and to produce them in case of loss. The following covenant and warranty is hereby made a part of this policy: First. 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 12 calendar months prior to the date of this policy, one shall be taken in detail within thirty days of the issuance of this policy, or this policy shall be null and void from such date and, upon demand of the assured, the unearned premium from such date shall be returned. Second. 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 the continuance of this policy. Third. 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. In the event of a 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 constitute a perpetual bar to any recovery thereon."' In this plea the defendant alleged the following breaches of the foregoing covenants and conditions: "(1) That the plaintiff did not keep a set of books as therein provided (2) that the plaintiff did not keep said books securely locked in a fireproof safe, at night and at other times, as therein provided, nor did he keep said books in a place not exposed to a fire which would destroy the building where said business was carried on; (3) that the plaintiff failed to produce said books for the inspection of the defendant after said alleged lose. Wherefore said policy became and was null and void." The other pleas were as follows: (3) Breaches of warranty against incumbrances, alleging that the stock of goods, library, and surgical instruments were incumbered by a chattel mortgage. (4) Breach of warranty as to plaintiff being the sole and absolute owner of the property, alleging that there was a chattel mortgage on said property. (5) Breach of the same warranty, alleging that there was a chattel mortgage on said property given to one Francis Atkins. (6) Alleging that plaintiff had no insurable interest in the property. (7) A breach of the warranty that the plaintiff should have the unconditional ownership of the property insured. (8) Breach of the warranty against permitting the property to become incumbered by a chattel mortgage. (9) A breach of the condition of said policy providing that the policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning the insurance or the subject thereof, or if the interest of the insured in the property be not truly stated, or in case of any fraud or false swearing by the insured touching any matter relating to the insurance or the subject thereof, whether the same be before or after the loss,-and assigning the following breaches: First. That the plaintiff, through her agent, F. S. McGlathery, concealed or misrepresented the fact that D. R. McGlathery, the plaintiff, was the wife of F. S. McGlathery, and induced defendant to issue said policy to D. R. McGlathery under the impression and belief that it was issuing said policy to F. S. McGlathery, the husband; and avers that such concealment or misrepresentation was a material fact or circumstance concerning said insurance, and by reason thereof said policy became and was null and void. Second. That the interest of the insured is not stated truly in the policy, the plaintiff having failed and neglected to state to this defendant that she had any interest in the property covered by said policy, but, on the contrary, at and before said policy was issued, represented that it belonged to her husband, who falsely personated said D. R. McGlathery. Third. That the plaintiff, through her agent, falsely swore, before one Leo. K. Steiner, a notary public, on the examination prescribed under the terms of said policy, after said loss, that he, the said agent, was D. R. McGlathery, and that the property destroyed belonged to him, and subscribed the deposition or examination as such D. R. McGlathery. (10) Breach of the warranty contained in said iron-safe clause in reference to inventories; defendant alleging that the plaintiff took an inventory of the stock on hand on the 25th day of December, 1893, and prior thereto, on the 1st day of May, 1893, took another inventory, which was the last preceding inventory, and failed to produce said last preceding inventory for the inspection of the defendant. (11) Breaches of the condition of said policy that the plaintiff would submit to an examination under oath by any person named by defendant; and alleges that defendant named one J. A. Sullivan to take the examination of plaintiff under oath, and F. S. McGlathery, the husband of plaintiff, appeared before said Sullivan, as agent of the plaintiff, to make claim for the loss occasioned by said fire, and the said Sullivan demanded an examination under oath of the plaintiff, according to the terms of the policy, but the plaintiff failed and neglected to submit to such examination.

The plaintiff demurred to the tenth plea upon the following grounds: "(1) Because the plea fails to allege that there was any warranty in said policy of insurance that two inventories taken prior to the loss should be produced for the inspection and examination of the defendant. (2) Because said plea fails to aver that the defendant demanded the examination of said inventory made May 1, 1893. (3) Because said plea fails to allege that the production of said inventory taken May 1, 1893, was material to the risk or proof of loss. (4) Because said plea fails to allege that the production of said inventory taken May 1, 1893, was necessary to enable defendant to ascertain the amount of the loss. (5) Because said plea fails to deny that the inventory and books presented by the plaintiff to the defendant were in fact amply sufficient data to ascertain definitely the amount of loss, and the agreement to produce any prior inventory was immaterial, and could not be required of the plaintiff, and defendant could not be injured by the failure of plaintiff to produce the same or benefited by its production. (6) For further grounds of demurrer to said tenth plea, the plaintiff says the first division of said iron-safe clause in said policy, requiring that within 30 days after the insurance was issued the assured should take a complete inventory of stock unless one had been taken within 12 months, and the true intent and meaning of said clause is that plaintiff is required to make and keep an inventory within 30 days after the issuance of the policy, and also keep the last preceding inventory in an iron safe or where not exposed to a fire that would destroy the building, etc., does not require the keeping of any antecedent inventory." To the eleventh plea the plaintiff demurred upon the following grounds "(1) Said eleventh plea is demurrable in this: that at the time of the loss complained of in this case the relation of insured and insurer ceased as between plaintiff and defendant, and they became debtor and creditor, and any clause in said policy which made any act of the plaintiff to be done or suffered thereafter a cause of forfeiture is null and void. (2) Because said clause, requiring examination under oath after loss, and failure to comply therewith a cause of forfeiture, is void as against public policy. (3) Because said plea fails to allege that said J. A. Sullivan made demand of plaintiff for her appearance before him, and said policy does not provide that demand upon the agent of assured shall be sufficient under said clause to require her to appear and submit to examination. (4) Said plea No. 11 is no answer to the complaint, because it fails to allege that the appearance and examination of the plaintiff's agent and the books was not a compliance with the terms of said policy on the question of proof of loss. (5) Because said plea is no answer to the complaint, because on its face it shows a substantial compliance with the terms of said policy therein set out, and the examination of the agent of plaintiff was a waiver of the examination of plaintiff. (6) Because the intent and purpose of said clause in said policy is and was that the defendant might ascertain the amount of the loss sustained by plaintiff, and there is no denial of the loss by defendant. (7) Because the clause in said policy set out in said plea is repugnant to the terms of the policy, in which defendant agreed to keep plaintiff insured for the term of one...