Georgia Home Insurance v. Allen

119 Ala. 436 | Ala. | 1898

HARALSON, J.

The defendant took issue on the first count in the complaint, and also on the second count, but filed a special plea to-the second.

The second count alleged — after setting out the insurance and loss, as averred in the first count, and that the defendant had notice thereof — “that soon after the fire the defendant, hv its agent, visited, investigated and ex-¿mined, .the scene of ’ the fire, and thoroughly informed itself of the loss and damage by the fire, and waived formal proof thereof by the plaintiff, and failed to make payment,” etc.

The special plea to this count sets np, that the assured “covenanted and agreed to keep a set of books, showing a record of business transacted, including all purchases and sales, both for cash and credit, together wdth the last inventory of said business; and further covenanted and agreed to keep such books and inventory securely locked in a fire-proof safe at night and at all times wdien the store mentioned in the written policy is not actually opened for business, or in sbme secure place not exposed to a fire which would destroy the house where said business is carried on, and in case of loss the assured covenants to produce such books and inventory, and in the event of a failure to produce the same, this policy shall be deemed null and void,” etc. Appropriate breaches of the covenants, as set up in this plea, were averred. The defendant also pleaded a third plea, to which the plaintiff replied, but as no question is raised as to the matters set up in said plea, and the replication thereto, in the assignments of error by or in the brief of counsel for appellant,' it is unnecessary to notice them.

The plaintiff replied to the second plea, in substance, that immediately after the fire, and before suit, the defendant sent to the scene of the fire and loss one Geo. G. Adams, wdth full power and authority to make examination, investigation and adjustment of the loss and damage under the policy; that said adjuster did then and there make such examination and investigation as to the fire and loss, and after being fully informed as to how and when, in every particular, the plaintiff had violated the terms and conditions of the policy, if he had violated them at all, recognized and treated the policy as valid and binding, and entered into negotiations and dealings wdth the plaintiff for the settlement and adjustment of the loss and damage, in consequence of which the plaintiff, of necessity, incurred much trouble, expense and lawyer’s fees in the premises, and that finally, before this suit was brought, the said adjuster declined and refused to go on wdth and make such settlement and adjustment, on the sole ground that the policy wras void, because the plaintiff had kept, used or allowed on the premises, or in the stock of goods in controversy, hazardous or combustible materials, prohibited by the. policy, by all of wliich defendant, by its agents, waived and abandoned all the defenses it had to this suit, based on the second plea.

The defendant demurred to'this replication,'and the demurrer was overruled. To this ruling, we advert hereafter.

The defendant thereupon filed a rejoinder to this replication on grounds, in substance that said adjuster, after he had entered on the examination and investigation of said' loss, for the first time discovered that there had been a breach of the warranties and conditions in said policy, and he then and there refused to proceed with said examination or adjustment, unless and until the said plaintiff consented and agreed that by proceed.ing with said examination and investigation the said Adams, the adjuster, and the said defendant, should not Toe held to have waived any right or defense which might be available to said defendant by reason of any such breach or breaches, and that plaintiff then and there agreed and consented, that the further exaihination or adjutsment of said loss by said Adams should not be ■ taken or held as a waiver of any right or defense the defendant might have against said policy, and said examination as continued by said Adams under and in consequence of said consent and' agreement, and noc otherwise.

The plaintiff demurred to this rejoinder, and the demurrer Avas overruled. Issue was then taken on said rejoinder.

From the foregoing it appears, that the real issues to be tried were, 1st, on the plea of the general issue, and 2d, on issue joined on defendant’s rejoinder to plaintiff’s replication to the second plea, on which plea defendant also joined issue. Inasmuch as the first count was proved without conflict of evidence, the issue is narroAved to the inquiry, if defendant waived the iron-safe clause, as set up in plaintiff’s réplication to the 2d plea.

1. The first assignment of error is, that the court erred in overruling defendant’s demurrer to plaintiff’s replication to the 2d plea. The first objection by demurrer Avas that it was not shown by' the replication that Geo. Adams had power or authority to waive a forfeiture of said policy by a breach of warranty and condition therein. This ground is in direct contradiction of the averments of the replication, that the defendant sent Geo. Adams to the scene of the fire, immediately after it occurred, with full power and authority to make examination, investigation and adjustment of the loss. And it may be added just here, that it was shown in proof, without conflict, that Adams was the authorized adjuster of the defendant company. A general agent, with the authority of this adjuster, may waive the performance of the conditions of the policy. — Liverpool & L. & G. Ins. Co. v. Tillis, 110 Ala. 201; C. C. Ins. Co. v. Caldwell, 95 Ala. 77; Queen Ins. Co. v. Young, 86 Ala. 424; 2 Biddle on Ins., §§1070, 1073; 2 Wood on F. Ins., §§408, 452; 1 Joyce on Ins., §§397, 437, 439.

The 2d and 5th grounds, ‘ clearly untenable, were, in substance, that the policy had become void and of no effect, by reason of the breach of its condition, and said adjuster could not by any act of his revive and restore or give effect to said policy. Though a policy usually stipulates that breach of its conditions on the part of the insured will render it “void,” this word is always employed in the sense of “voidable;” and any condition inserted in a policy for the benefit of the insurer may be Avaived by him. — 2 Biddle on Ins., §1084, and authorities in n. 2; see also, Sherman v. Niagara, F. Ins. Co., 46 N. Y. 326; Titus v. Glens F. Ins. Co., 81 N. Y. 410 (and the authorities cited in these tivo cases), where the question receives elaborate consideration.

The 3d ground is in direct contradiction of the averments of the replication, which shows that the adjuster entered on the examination and investigation as to the fire and loss, after being fully informed as to Iioav and when, in every particular, the plaintiff had violated the terms and conditions of the policy, if he had violated them at all.

The 4th ground is immaterial, and no answer to the replication. It is of no moment that the company Aims not informed of any alleged breach of the policy by plaintiff, before it sent its adjuster to investigate the loss. Any defense the company had to the policy, aauII be deemed to have been Avaived, if the adjuster, Avith the powers this one is alleged to have had, entered on an investigation and adjustment of the loss, and treated the policy as valid and subsisting, after full knowledge of any supposed violation of its terms by plaintiff, as is alleged he did.

2. The second error assigned is, in that the court overruled defendant’s objection to the question propounded to plaintiff, when being examined as a witness in his own behalf, namely, “Did he (Adams), or not, during the investigation and adjustment of the loss, or previous to that time, make, a demand upon you for the proofs of loss, until sóme time after he had looked into the matter?” The question called for proof not immaterial to the consideration of the other point in dispute, as to whether or not the alleged forfeiture was waived, as it is averred it was in the replication. It is there averred, as ire have seen, that the adjuster was fully informed as to whether plaintiff had- violated the conditions of the policy, before he. entered on the investigation of the loss; and plaintiff’s proofs tend to show, that he treated any violation of the iron-safe clause as waived,, until he ascertained that plaintiff had kept fire-crackers or such like combustibles in store, and then he refused, •for that reason alone, to proceed further with the adjustment. The question ivas not immaterial, for it bore on the particular waiver of forfeiture at issue.

3. The letters admitted in evidence, against defendant’s objection, the basis of the third assignment of error, certainly tended to show the authority of the adjuster to make a settlement, and to waive the performance of the conditions of the policy, which were disputed facts in the case.

4. The first charge requested by defendant was properly refused. It was calculated to mislead the jury, for whether the plaintiff complied with the iron-safe clause or not, was not the question for decision. The question was, admitting that he did not comply with that clause, whether his non-compliance had been waived or not. Nor ivas there error in refusing the third charge. The matter predicated occurring after the alleged waiver of conditions was proper for the determination of the jury under the evidence, which the charge would have withdrawn.

5. The second charge was properly refused. “Cases, lamps and scales,” were covered in terms by the policy under tbe head of “Mercantile.” The premium on these articles, whether kept in stock for sale, or merely for the use of the store, 'was paid by the insured, and the company cannot, after this, dispute its liability for them. The fact that plaintiff afterwards admitted they were not kept for sale, and should be stricken from his inventory of loss, only shows that he was mistaken as to the liability of the company. It would be a very strict and illiberal construction of the policy to hold that the company, on a technical construction of the language employed, was not liable. The intention of the parties that these articles were to be covered, is clear. We should indulge a liberal construction in favor of the assured, and not a very strict and technical one in favor of the insurer.

6. It is well settled that an iron-safe clause, such as the one contained in this policy, which the insured covenanted to keep, is a condition, the breach of which will avoid the policy, but that it is one that may be waived, like any other conditions. — 3 Joyce on Ins., §§2063, 2064. The author, after referring to the authorities on the subject concludes: “In a Federal case it is held a substantial compliance is sufficient under the ‘iron-safe clause,’ requiring a set of books and an inventory to be securely locked in a fire-proof safe at night, and at all times when, the store is not actually open for business, or in some secure place, and that, in case of loss, assured will produce said books and inventory; such a clause is a condition subsequent only, and a literal, exact fulfillment is unnecessary. This decision certainly seems more in accord with the actual intent of the parties, and with justice and reason of the law7, and with the tendency of the decisions, than a construction requiring an exact and literal compliance.” — 3 Joyce on Ins., §2063; Western Assurance Co. v. Redding, 15 U. S. C. C. A. 619, 68 Fed. Rep. 708.

It has come to be w7ell settled, also, that conditions and duties of the assured prescribed in a policy of insurance, should be liberally construed in favor of the assured, but strictly against the insurer. — Piedmont & A. L. I. Co. v. Young, 58 Ala. 476; Tubb v. L. &L. & G. Ins. Co., 106 Ala. 651, 659.

In seeming recognition of these principles, the defendant requested the fourth instruction to the jury. The plaintiff’s own evidence showed, without conflict, that he had not made even a substantial compliance with his covenants of the iron-safe clause of his policy. He testified that he made entries of sales upon a pocket memorandum book, and when he got time he would transfer these entries to the blotter, and from the blotter to the ledger; that he made these transfers of entries once a week probably, and sometimes oftener; that at the time, the four last days’ sales had not'been transferred to the ledger, and he had lost 'his pocket memorandum book, and the blotter had been left on his desk the night of the fire, which he sometimes did, and it had been 'destroyed by the fire; that the blotter was the only book in which he made entries of goods bought and sold on credit; that he made transfers from the blotter to the ledger, sometimes once a day, sometimes in three -days, and some times not till the end of the week. He also swore that t'he blotter showed the amount of the goods used out of the store by himself and family for a part of the time, but that for the months of September, October and November, 1894, he made no entries in the blotter or elsewhere of the goods or cash used out of t'he store by himself and family, and the adjuster AVas left to calculation merely as to these items omitted from the ledger. The object of the iron-safe clause is to enable the insurer, in case of a fire, to arriAre more accurately than he other-AA'ise would be able to do, at the exact amount of the loss. We are unable, therefore, according to plaintiff’s oavu undisputed shoAving, to say that he complied substantially, even, with the requirements of this covenant. This Avas sufficient to defeat a recovery by him, unless the jury Avas satisfied from the evidence, that the defendant, or its agent, with full knoAvledge of the forfeiture, Avaived it. This is all that the fifth instruction asked, and it should have been gWen.

The letters referred to in the sixth refused charge of defendant, Avere for the construction of the court. We have examined these letters carefully, and fail to find anything in any or all of them to show a waiver by defendant of a breach of the conditions and covenants of the policy by the plaintiff, and the charge was, therefore, a proper one, and should have been given.

Eeversed and remanded.