Fleisch v. Insurance Co. of North America

58 Mo. App. 596 | Mo. Ct. App. | 1894

Rombaueb, P. J.

This is an action upon a fire insurance policy by the assignee of the assured. The assured was one Abe Strouse, who did business under the name of Strouse & Company in Glasgow, Missouri; and the property insured was merchandise in a store. At the date of the fire this merchandise was covered by insurance to the amount of $20,500. Of this amount the defendant carried $3,000 on the policy now sued upon, such policy expiring May 1,1892. On February 19, 1892, the store burned down, and the property insured became a total loss.

The plaintiffs’ petition states the insurance and total loss, and also that the property destroyed was of the value of $24,000, with an insurance of $21,000 thereon. The petition also states the performance of all conditions precedent by the assured, and prays judgment for the amount of the policy with interest. The petition also states by way of anticipation that an arbitration is outstanding, but that suit is brought to avoid a bar by the one year limitation contained in the policy.

The defendant’s answer interposes a number of defenses, part of which are in abatement of the action and part in bar of a recovery. The defenses are burning by design, fraudulent neglect to extinguish the fire after its discovery, fraudulent “neglect to save goods after discovery of the fire,- false swearing in proof of loss, refusal of the assured to submit his books and papers to examination after the loss; refusal of the assured to submit to a personal examination under oath; the pendency of arbitration proceedings to determine the extent of the loss; the pendency of a garnishment proceeding against the defendant, instituted and pending in the state of Pennsylvania.

The affirmative defenses are denied by reply. The cause was tried by a jury who brought in a verdict for the plaintiff for $2,171, which, as a computation shows, is based upon a valuation of the entire loss at $14,000, although the sworn proof of loss by the assured claimed the loss to be $22,614.34.

The main complaints of the defendant on this appeal are the rejection of evidence offered on its behalf, and the refusal of instructions. Complaint is also made that the court rejected proof of the pendency of garnishment proceedings in Pennsylvania, where the defendant resides. As the judgment will have to be reversed for other reasons, and as the question of jurisdiction over the debt in such cases is now before the supreme court .on a certificate from the Kansas City court of appeals in Wyeth Hardware Co. v. Lange, 54 Mo. App. 147, we refrain from expressing our opinion as to the merits involved in that complaint. The supreme court will probably have settled the point before this case is retried.

The defendant’s answer sets out specifically a clause of the policy which provides that, when personal property is totally destroyed, the character and value thereof must be verified by proper books of account, bills, invoices and other vouchers to be furnished by assured, certified copies of such bills, invoices and vouchers to be furnished by assured when the originals can not be had; also, that the assured shall, if requested, either before or after making proofs as herein required, submit to an examination or examinations under oath or affirmation by an agent or attorney of the company touching all matters relating to the claim and the cause of fire, and subscribe to the same when reduced to writing; also, that refusal or failure to comply with any of the foregoing provisions shall be deemed and taken as an abandonment of the claim.

The reply stated that the plaintiff had complied with these terms of the policy.

Upon the trial the following facts appeared. The assured sent preliminary proofs of loss to the defendant on March 25, 1892. On April 1, 1892, the defendant’s adjuster wrote to the assured that he would be required to produce his books and papers and vouchers relating to the loss before him at Glasgow, Missouri, within a reasonable time and upon such a date as could be agreed upon between them; also that the assured would be required to submit to an examination under oath in. the manner required by the policy. This letter requested the assured to answer by return mail at what time he could meet the adjuster at Glasgow. Not receiving any reply to this letter, the adjuster wrote to the assured again under date of May 7 requiring him to meet him at Glasgow on May 17 for the purposes stated in the above letter. To this letter the assured replied under date of May 16, stating that he had just received the letter, and stating further that he was a resident of New York city, and that, as the policy was silent on the point where the books were to be produced, he was prepared to undergo the examination and produce the books and papers for inspection in New York city where he resided. To this letter the adjuster replied at once naming June 7 as the time, and Glasgow as the place of examination. In reply to the request that the examination take place in New York city the adjuster suggested that the assured might with the same show of reason demand that the examination take place in Jerusalem or on the plains of Asia, and continued as follows: “Your policy was obtained at Glasgow, Missouri, on property situated at that place. The fire, which you allege destroyed the property mentioned in the policy, occurred there. You were there at that time; your books of .account which we are entitled to have you produce are still there, and common sense as well as the decisions of numerous courts prevent the company from requiring you to produce this evidence, or to present yourself at any other place.” The adjuster might have added with equal propriety that the contract was a Missouri contract, and since the company -was bound to perform all its promises in that state, it necessarily followed that the assured was bound to perform conditions imposed upon him in that state, no other place being named in the contract. To this letter the assured replied declining to produce his books at Glasgow, or to submit to a personal examination there.

When this correspondence was offered in evidence, the plaintiffs objected to it on two grounds: First, that, in regard to a letter of May 27, the sixty days within which the loss was to be paid after furnishing proofs of loss had expired; and, second, in regard to all the correspondence, that the demands of the company were unreasonable. This objection was sustained, and the correspondence excluded.

This ruling of the court was erroneous. The condition providing for the inspection of books, furnishing of vouchers and personal examination of the assured, is upheld by all the authorities as a reasonable condition, even to the extent that- its violation works an absolute forfeiture. Mueller v. Ins. Co., 45 Mo. 84; Grigsby v. Ins. Co., 40 Mo. App. 276; O’Brien v. Ins. Co., 63 N. Y. 108; Claflin v. Ins. Co., 110 U. S. 81; Farmers’ Ins. Co. v. Mispelhorn, 50 Md. 180, 53 Md. 473. As was said in the case last cited, the object of such a condition in the policy is protection to the insurance company, as furnishing the mode and means whereby the ordinary proofs of loss may be scrutinized and their accuracy tested. The objection, that the demand was not timely, is not worthy of serious notice. The demand was rpade within a few days after the réceipt by the company of the preliminary proofs of loss, ánd the further delay in the correspondence was due to the fact that the assured paid no notice whatever to the first demand for more than one month after it was made wpon him. The objection, that the demand was unreasonable, is equally untenable. In the absence of any stipulation to the contrary in the policy, the place of location of a trading concern is the proper place for the examination of its books. The books and vouchers are presumed to be kept there, and, if destroyed by the fire, their certified duplicates can be sent as easily to that place as to any other. The market value of the goods destroyed is to be determined at the place of loss. That place is a. place certain, while the place of residence of the assured may be shifting', whereby an examination of the books, vouchers, and of the person of the assured at a place of residence other than his place of business may be wholly impracticable.

That the rejection of the evidence was prejudicial admits of no doubt. That the demand for the examination of the books was made in good faith is apparent. The evidence disclosed that, the day before the loss, the assured was anxious to close out the entire property by sale for $12,500, and that his indebtedness.exceeded $12,000. The jury found that the value of the property was not exceeding $14,000, although it was insured for $20,500. The assured had furnished sworn proofs claiming its value to have been $22,614.34. Under these circumstances it must be evident that the defendant had not only the legal right, but was on the plainest principles of fair dealing - entitled, to prove the 'extent of the loss by means conferred upon it by the terms of the policy, as well as to investigate fully whether the loss was the result of a mere fortuitous accident in behalf of an insolvent trader, or whether it was brought about by the fraud and connivance of the assured.

While we are inclined to hold that the outstanding arbitration would have furnished good ground for an application for a continuance of the cause, we are not prepared to say that it was pleadable either in bar or abatement of the suit. The arbitration merely determines the extent of the loss, leaving other questions open. It has been held recently in Clover v. Ins. Co., 111 N. Y. 277, and McNally v. Ins. Co., 50 N. Y. State Rep. 680, that, where the policy makes the loss payable within a certain number of days after the furnishing of proofs of loss, an institution of a suit after the expiration of that time is not premature, even though an arbitration be pending. Proofs oi loss in that connection would seem to imply the formal proofs in due form, and not tlieir subsequent investigation by the company.

On the other hand we must hold that the court erred in refusing the following instruction asked by the defendant:

“The court instructs the jury that, if you find from the evidence that Abe Strouse was present at the store when the fire first originated, and his attention was called to the fact that said store was on fire, and said fire could then have been extinguished by him by reasonable effort, and that he closed and locked the door and went away without giving any alarm, and made no attempt to extinguish the fire or save the goods until the fire had made such progress that no goods could be saved, then he was guilty of such culpable negligence as precludes a recovery in this case by plaintiff.”

The policy contains this clause: “The company will not be liable for any part of damage resulting from negligence in protecting property when exposed to loss or damage.” The court did instruct the jury fully and fairly upon the facts of the case, as far as they tended to show a fraudulent burning by design, but on the condition of the policy last hereinabove recited the court gave no instruction whatever. It was conceded by the evidence that the assured had visited the store. between four and five o’clock in the morning and very shortly before the fire broke out; that it was then quite dark; that he lit several matches to seethe combination on the safe; that he left the store after doing so, and that the fire broke out immediately afterwards. There was also evidence tending to show that the fire was noticed by a passerby who called the attention of the assured, who had just come out of the store, to the fact, and asked him whether it had better not be put out, to which the assured answered: “You can’t get in.”

Negligence of the assured is one of the risks insured against, but fraudulent negligence is not. Regardless of the clause in the policy, the assured could not recover, if he knew a fire had originated on the premises by his negligence which he could readily put out, if so inclined, but failed to use any effort to put it out. The instruction, therefore, states the law correctly. It is claimed by the respondent that the instruction is objectionable, because it is a comment upon the evidence. To group together aseries of facts, of which there is evidence, and tell the jury that such facts, if shown, will or. will not constitute fatal negligence, is not error.

For the reasons hereinabove stated, the judgment is reversed and the cause remanded.

Judge Bond concurs. Judge Biggs is absent.