92 Kan. 851 | Kan. | 1914
The opinion of the court was delivered by
The question involved in this proceeding is: Does the failure to keep and produce certain records of a commercial business, as required by the terms of a fire insurance policy, bar recovery in case of loss ? W. A. Hammond, the appellant, brought this action to recover against-The Niagara Fire Insurance Company, the appellee, on a policy of insurance issued by that company upon a stock of merchandise and store fixtures owned by him and located at Towanda, Kan. On July 17, 1911, the appellee, by its agent-, G. W. Moore, issued to appellant the policy of insurance upon his stock of merchandise to the amount of $3300 and upon the fixtures to the amount of $200, and a few days thereafter the appellant paid therefor the premium of $45.50. The policy was standard in form, and in it was a provision which required, among other things, that the insured would keep a set of books which would present a record of the business transacted and keep the books and inventories in a fireproof safe at night or at some place not exposed to fire and to produce them in case of loss, and it also provided that a failure to keep and produce the books and inventories would avoid the policy. About three o’clock in the morning of May 9, 1912, a fire occurred and the books of account, which it appears appellant had been keeping upon the top of a trunk in his sleeping room over the storeroom, and the last inventory, which he kept
The contention is that under the terms of the policy the failure to produce the books and inventories does not of itself avoid the policy nor forfeit the right to
“The assured will keep a set of books, which shall clearly and plainly present a complete record of the business transacted, including all purchases, sales and shipments of said stock, both for cash and credit, from the date of the inventory or inventories provided for in the first section of this clause, and during the continuance of this policy.”
In the third condition it was provided that:
“The assured will keep such books and last inventory and also the last preceding inventory, securely locked in a fireproof safe at night, and at all times when the building mentioned in this policy, or the portion thereof containing the stock described therein, is not actually open for business; or failing in this, the assured will keep such books and inventories at night, and at all such times in some place not exposed to a fire which would ignite or destroy the aforesaid building; and in case of loss, the assured specifically warrants, agrees and covenants to produce such books and inventories for the inspection of said company. In the event of failure on the part of assured to keep and produce such books and inventories for the inspection of said company, this entire policy shall become null and void and such failure shall constitute a perpetual bar to any recovery thereon.”
Appellant did keep a set of books which he says was a complete record of all his business and he did take an inventory as required by the terms of' the policy,
Some comment is made on the action of the agent in including this clause in the policy without the knowledge of the insured. It is not contended that there was
“It is not an unreasonable precaution; it is one with which the insured might very easily have complied. In any event, the parties making the contract agreed that it should be performed by the insured, and since it is a part of the contract it can not be ignored or arbitrarily set aside. It is generally held that neglect on the part of the insured substantially to comply with a clause in an insurance policy to keep the books used in conducting the insured’s business in an iron safe, or in some place where they will not be destroyed in case the place in which the insured stock is kept is consumed by fire, will avoid the policy.” (p. 387.)
It is said that the agent visited the store building and looked over its contents, and hence had an opportunity to see that there was no iron safe in the building. The agent testified that he did not observe whether or not there was a safe in the building, but that he had no discretion as to the iron-safe clause, as this is a part of the policies in all of the companies represented by him, and that he had no authority to write any other kind of a policy. Even if he had been informed that there was no safe in the store at the time, it would not, in the absence of fraud, relieve the insured from compliance with a plain requirement of the contract. In such a case it would have been his duty to have procured one or else have used the care specified in the alternative provision of the clause. This question was involved in Insurance Co. v. Knerr, supra, and there it was said that:
*856 “Conceding that the agent issuing the policy was familiar with the insured store building and stock, and knew that the insured did not keep an iron safe, and that he issued the policy knowing the existence of these conditions, that could not be construed into a waiver of the obligation of the insured to keep the books at night, and when the store was not open for business, in some
We think the trial court correctly interpreted the contract of insurance, and that the insured failed to keep and produce the books as he had agreed to do, and, further, that compliance with this requirement was essential to a recovery under the policy.
We find nothing in the testimony that would have warranted the court in reforming the contract by striking out the clause in question.
The judgment of the district court will be affirmed.