Western Assur. Co. v. Kemendo

• Decision Date: 07 February 1901
• Citation: 60 S.W. 661
• Parties: WESTERN ASSUR. CO. v. KEMENDO.
• Court: Texas Supreme Court

60 S.W. 661

WESTERN ASSUR. CO. v. KEMENDO.

Supreme Court of Texas.

February 7, 1901.

Error to court of civil appeals of Third supreme judicial district.

Action by V. Kemendo against the Western Assurance Company. From a judgment of the court of civil appeals (57 S. W. 293) reversing a judgment for defendant, defendant brings error. Opinion of court of civil appeals reversed, and of district court affirmed.

Finley, Harris, Etheridge & Knight and Alexander & Thompson, for plaintiff in error. Clark & Bolinger, for defendant in error.

BROWN, J.

On the 24th day of February, 1898, the Western Assurance Company issued and delivered to defendant in error two policies of insurance, one for the sum of $3,000, and the other for $2,000, by which it insured him against loss by fire for one year on a stock of "staple and fancy groceries, produce, wood and willow ware, cigars, tobacco, confectioneries, and candies," subject to the iron-safe clause, which was attached to the policy, and is in this language: "(1) 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 twelve calendar months prior to the date of the policy, one shall be taken in detail within thirty days of the issuance of the policy or this policy shall be null and void from such date. (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 the date of inventory, as provided for in the first section of this clause, and also from date of last inventory, if such has been taken, and during the continuance of this policy. (3) 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 secure place, not exposed to fire, which would destroy such building; and, unless such books and inventories are produced and delivered to this company for examination after loss or damage by fire to the personal property insured hereunder, this policy shall be null and void, and no suit or action shall be maintained thereon. It is further agreed that the receipt of such books and inventories, and the examination of the same, shall not be an admission of any liability under the policy, nor a waiver of any defense to the same."

Kemendo paid the premiums when the policies were delivered. An itemized inventory of his stock had been made in January, 1898, and a set of books were kept according to the terms of the iron-safe clause. On the night of August 22, 1898, the stock of groceries, etc., was destroyed by fire, excepting $865 worth of the stock. The value of the goods destroyed was $15,962.66. We copy the following from the conclusions of fact found by the court of civil appeals: "All of the kept books were not actually in the safe on the night of the fire, but whether those left out were necessary to get a complete understanding of the stock purchased and sold is not conclusively shown. It seems that the data furnished by the books and invoices in evidence disclosed the amount of the stock purchased and sold, so that the goods destroyed by the fire could be ascertained therefrom with reasonable certainty. * * * There was testimony tending to show that the stock of Kemendo underwent rapid changes, the sales each month and the purchases of new supplies producing that result, so that the inventory taken in January, 1898, would not represent the stock on hand at the time of the fire in quantity or in kind." Some of the books, and the inventory taken in January, 1898, were not in the iron safe at the time of the fire, and were destroyed by the fire which destroyed the stock of goods. When the adjuster of the plaintiff in error came to make a settlement, he demanded the inventory which had been previously taken, and, it not being produced, he refused to go into the adjustment. Suit was brought to recover the amount of the two policies, and upon the trial below the judge instructed the jury to find a verdict for the defendant, which was done, and judgment entered accordingly. The court of civil appeals reversed the judgment of the district court, and remanded the cause. This writ of error was granted because the ruling of the court of civil appeals is in conflict with the ruling of the court of civil appeals of the Fifth district in the case of Roberts, Willis & Taylor Co. v. Sun Mut. Ins. Co., 48 S. W. 559, and in conflict with the ruling of this court in that case in refusing an application for writ of error therein.

There is no controversy as to the validity of the iron-safe clause which was attached to, and made a part of, the policy, nor is there any question made that the assured failed to produce the itemized inventory required by that clause of the policy. The property having been destroyed by fire, and the assured failing to produce the inventory provided for by the terms of the policy, the insurance company declined to adjust the claim, on the ground that the contract was forfeited; but it is claimed by the assured that the requirements of the contract were substantially complied with. In the case of Brown v. Insurance Co., 89 Tex. 594, 35 S. W. 1060, this court, upon careful consideration, held that insurance contracts are governed by the same rules as contracts between individuals, and that only substantial compliance with the requirements of the iron-safe clause was necessary to entitle the assured to the benefits of the policy; and upon a further consideration of the question, we are satisfied that our conclusion reached in that case correctly expresses the law.

The terms of this policy are in no sense ambiguous or uncertain, but distinctly and clearly provide for the taking, preserving, and producing of an itemized inventory of the stock insured within the time specified in the contract, and that in case such inventory has not been taken, or, not having been preserved...