125 Va. 191 | Va. | 1919
Lead Opinion
after making the foregoing statement, delivered the following opinion of the court.
The record in the case is voluminous. The petition and briefs are also exceptionally so. The latter, however, involve a number of questions which we do not find it necessary to deal with. The only questions which need to be considered for the decision of the case, in our view of it, will be disposed of in their order as stated below.
We will first consider the questions raised by the assignments of error touching the inventory in evidence, which is relied on by the assured as sufficient to comply with the
The defendant insurance company raises the following questions as to the inventory which was taken as of February 1, 1913:
We are of opinion that the preponderance of the evidence clearly shows that they did not.
Such evidence shows that while the inventory was taken as on February 1, 1913, the January, 1913, purchases of goods were not included in the inventory, because such purchases were for the spring trade of 1913, and in accordance with the custom and usual course of trade and keeping of accounts of such merchants as the assured, were not considered á part of the business done during the fiscal year ending February 1, 1913, but of the succeeding year. Such purchases were entered on the books of the company as of their date of purchase, it is true, to-wit, in January, 1913, but were extended thereon as purchases for the ensuing fiscal year, and were as such added to said inventory amount of $69,855.79 and were not included in that total.
2. Since the inventory did not include the said January purchases, was it such a’“complete itemized inventory of stock on hand” as. was required by the “iron safe clause” of the policy of insurance, quoad such goods?
Technically and literally speaking, this question would have to be answered in the negative. But the purpose of the “iron safe clause” in insurance contracts is to preserve evidence of the actual existence of the property insured, or from which such actual existence may be verified; and as a matter of fact, the invoices of all of the January purchases
We think, therefore, that under such circumstances, the books and invoices aforesaid must be taken to be a substantial compliance with the “iron safe clause” requirement of an inventory, so far as such January purchases are concerned. Substantial compliance with such clause is all that the law requires. Hartford Fire Ins. Co. v. Farris, 116 Va. 880, 83 S. E. 377.
3. Was the inventory sufficiently itemized as to the goods in fact covered thereby to comply with said “iron safe clause”?
(a) As to |3,102.10 of the goods included in the inventory, the position of the insurance company is that they were lumped so that they cannot be fairly regarded as itemized. But, as appears from the statement preceding this opinion, claim was waived by the assured as to those items; so that it is unnecessary for. us to decide the question as to whether they were sufficiently itemized to comply with the “iron safe clause” aforesaid.
There is no provision in the policy of insurance requiring such description in the inventory. The policy requires only a “complete itemized inventory of stock on hand” at the time of the inventory, and any description, which is sufficiently detailed to evidence that it is an actual inventory by items of goods found thereby to actually exist at the time, complies with such contract requirements. The actual existence of the goods at the time of the inventory, as found by an actual inventory, taken in the usual course of business, for the bona fide purpose of ascertaining actually existing goods and'their values at the time, as contradis-tinguished from a mere estimate or opinion on the subject, is the essence of such contract provision.
In such cases, however, the goods were of the same value per yard, and they were found by the inventory to actually exist in the quantity stated in the inventory. This was all the particularity of statement needed in the inventory, unless it were necessary that the inventory should state the items with sufficient particularity for them to be traced into preceding inventories or into the invoices or other records thereof. As we have seen above, such particularity of description was not requisite. And an inspection of the inventory, as shown in the record, discloses that the items of
The above are the principal objections to the sufficiency of the inventory of February 1,1913. There are some other such objections, but they raise no novel questions, and of these it is deemed sufficient to say that they have all been considered, and they are, in our opinion, clearly without merit.
It is also urged, however, by the insurance company, in argument before us, that said inventory of February 1, 1913, should not be considered by us as evidencing a compliance with the requirements of the iron safe clause with respect to an inventory, because—
(e) It is discredited by being in a mutilated book.
(f) It is not proved by the bookkeeper who made the entries in it or by the employees who made the slips or tablets from which the entries in the inventory book were made; and
(g) The slips or tablets aforesaid constituted the original inventory, and they alone were admissible in evidence.
The branch house at Elizabeth City was a separate business entirely. Whatever goods were shipped from that concern to the Petersburg concern were, in the current
The iron safe clause concerned only the inventory of the Petersburg business, the goods in that business being the goods which were insured, including “shipments” to it as well as “purchases,” as shown by the iron safe clause itself. To construe it to extend to requiring the preservation of an inventory of another business merely because such inventory would furnish additional evidence of verification of the correctness of the books of the assured embracing the business whose goods were insured, or the contrary, would be to go outside of the provisions of such clause, and, hence, to make a contract for the parties which was not in fact made by them.
The subject under consideration is purely a question of contract. We see therefrom that the contract does not require any other inventory to be taken than that of the stock of the assured at Petersburg.
The question under consideration must, therefore, be answered in the negative.
We come now to the question over which what is perhaps the chief controversy in the case exists, and that is this:
4. Did the books of the assured comply with the iron safe clause of the policy in suit?
That is to say, in the instant case, we have before us simply a question of construction of the contract of insurance. What books and with what completeness and accuracy does the policy in suit stipulate shall be kept by the assured?
As in the case of the Elizabeth City inventory question above considered and disposed of, so here, the policy sets at
In view, then, of the fact that the insurance c<mtract required only that the set of books which should be kept by the assured should clearly and plainly present a complete record of the business transacted by the assured at its Pe-tersburg place of business aforesaid, including all purchases, sales and shipments, both for cash and credit, from the date of the 1913 inventory to the time of the fire, and including the January, 1913, purchases, we have no difficulty in holding that the evidence in the record is amply sufficient to have sustained a verdict which found, in effect, that such a set of books was kept by the assured and that the loss by the assured was at least the amount claimed, as set forth in the statement preceding this opinion.
The books were not intended or expected to record the profits made nor the discounts which might have been, but were not received; but they did record all the data needed for the ascertainment of such matters.
The only ground on which the insurance company is left to stand, other than its difference with the assured as to the books which should have been kept and the kind of verification of them required of the assured, aforesaid, which we .have considered and disposed of above, is that there were some discrepancies between the amounts of the goods on hand at the time of the fire as first claimed by the assured, which was $113,214.57, as that total was taken from the books by M. E. Lavenstein, a member of the firm of the assured, and the amount of $103,866.56 as taken from the books as such value by an expert accountant named Weiss, first employed by the assured to aid in making out the proof of loss, and the amount of $95,834.20, aforesaid, ás taken from the books by Wood, as aforesaid, which wide variances evidenced that the books did not measure up to the requirements of the iron-safe clause aforesaid, as is claimed by the insurance company.
In so far as the period from the date of the 1913 inventory to the fire is concerned (as to which alone, except as to the January, 1915, purchases, the assured was under contract obligation to keep books, as aforesaid) the only material discrepancies between the Lavenstein, Weiss and Wood statements, aforesaid, which could have affected the completeness and accuracy of the books of the assured of its Petersburg business, were the following matters:
(b) The $4,299.91 credits of shipments from Petersburg to branch stores just preceding the fire, in November, 1913, being made on the books after the fire, in the usual course of business of posting the books — as to which also the facts are set forth in the statement preceding this opinion.
Lavenstein and Weiss made their statements before these omissions in the books were discovered. They were omissions which might occur in any, even exceptionally well-kept, books. The evidence clearly establishes that they were not omissions designedly made, and that they were, moreover, not unreasonable in their character, considering the volume of the business and the circumstances under which these credits on the books were not sooner made.
Further: These credits were in fact all entered on the books before suit, and after allowing them the books showed the total of sound value of $95,834.20, aforesaid (and indeed $1,454.93 additional, as set forth in the above statement of facts), of goods on hand at the time of the fire, as claimed by the assured in the suit.
We are of opinion that the iron safe clause in question does not require that the books of the assured should be free of such character of errors.
Of the other discrepancies between the statements of Lav-enstein, Weiss and Wood, we deem it sufficient to say that there is ample testimony for the assured in the record to satisfactorily explain them, down to a difference of a little over a hundred dollars,, without in any way affecting the completeness and accuracy of the books so far as required to be kept by the iron safe clause, as aforesaid. This result in itself is also, to us, convincing evidence of the suf-
A great many authorities are cited for the assured on the subject of what character of books, as to completeness and accuracy, the authorities hold to be requisite to comply with the iron-safe clause aforesaid, and many authorities are cited on the same subject for the insurance company. Among the latter are the Virginia cases of Scottish Union Ins. Co. v. Va. Shirt Co., 113 Va. 353, 74 S. E. 228; Phoenix Ins. Co. v. Sherman, 110 Va. 435, 66 S. E. 81; North British Ins. Co. v. Edmundson, 104 Va. 486, 52 S. E. 350; Homestead Fire Ins. Co. v. Ison, 110 Va. 18, 65 S. E. 463; and Hartford Fire Ins. Co. v. Farris, 116 Va. 880, 83 S. E. 377. But there is no real difference on this subject between the positions in argument of counsel on both sides of the case. They, in effect, concur in the view that the authorities hold that a literal compliance with the requirements of the iron safe clause is not essential and that a reasonable and substantial compliance is all that is required. This is a correct summary of the holding of the authorities on the subject, and we are, therefore, relieved of any need of discussing them.
Applying such holding to the facts of the case before us, we are of opinion that the books in question fulfill the requirements of the iron safé clause of the policy in suit.
There still remains, however, a question for our determination which in part concerns the books aforesaid, although they are sufficient to comply with the iron safe contract clause. Such question remains, notwithstanding that conclusion, because the assured undertook to prove the percentage of profits made in its business in 1912. for the purpose mentioned above, by relying on such books, as verified by ■documentary evidence and as aided by parol testimony, as proof of such business and profits during that period. That question is this:
Aside from the position of the insurance company, aforesaid, on the chief question of fundamental differences, above considered and passed upon, the claim of the insurance company is that the books were insufficiently verified as to certain shipments or alleged shipments of goods to the Peters-burg business from other branch stores of the assured in 1912, and as to a certain shipment from a Norfolk branch store of the assured to the Elizabeth City branch store also in 1912.
It is deemed sufficient to say of these matters that since there was no contract requirement that the assured should keep books covering these transactions for 1912 (a period "which antedated the inventory of 1913), so far as the transactions in question entered into the Petersburg business of 1912 and affected the ascertainment of the percentage of profits of that business in that year, they were matters as to which the facts were open to be established by any competent evidence. The weight and effect of such evidence' would have been for the jury but for the demurrer thereto, and there was ample evidence before the jury to have warranted them in holding that the percentage of profits included in said elaim of the assured was conservative and fair in amount as ascertained from the actual business transacted by the assured at Petersburg in 1912, as shown by the books and the other evidences for the assured in the record.
6. Did the assured encumber the stock of goods insured with a chattel mortgage?
This question must be answered in the negative.
“* * * having deposited as collateral security for the payment of this and any other liability of.to the holder hereof now due or to become due, or that may hereafter be contracted, the following property, with authority to use, transfer or hypothecate said collaterals; * * *.
“Lien on all stock, fixtures and accounts, etc., in our stores, 31-33 Sycamore street, city. (8367) the market value of which is now $., with the further right to call for additional security in case there should be a decline in the market value thereof; * *
The designation 31-33 Sycamore street, city, correctly describes the place of business of the assured in Petersburg, aforesaid. But—
The said note and the provisions thereof are plainly insufficient to create a chattel mortgage. 4 Elliott on Contracts, sec. 3031; 5 Idem, sec. 4750. Nor does it create a lien. And the undisputed fact, as shown by the record, is, that the assured never created or attempted to create, any lien on said stock of goods covered by the insurance policy in suit.
And, no lien having been created, or intended to be created, the doctrine of equitable lien or mortgage cannot apply, as was correctly held by the learned judge of the trial court. So that there was neither a legal nor an equitable encumbrance created by the assured on the subject of the insurance after the policy in suit was issued; far less an encumbrance by chattel mortgage.
This question must be answered in the negative for the reasons indicated in the consideration of the question, next above.
And even if the writing in question had created a mortgage, that would not have deprived the assured of the “unconditional and sole ownership of the property conveyed.” See Manhattan Ins. Co. v. Weill, 28 Gratt. (69 Va.) 389, 26 Am. Rep. 364; Morotock Ins. Co. v. Rodefer, 92 Va. 747, 24 S. E. 393, 53 Am. St. Rep. 846; Union Assur. Society v. Nalls, 101 Va. 613, 616, 44 S. E. 896, 99 Am. St. Rep. 923; 2 Cooley on Ins. 1378, 1379, 1383.
The next question we have to pass on is this:
The question must be answered in the negative.
The rule of law on this subject is well settled and is to the effect that such false swearing to forfeit an insurance policy must consist in an oath to statements knowingly and willfully false or recklessly made. Va. Fire & Marine Ins. v. Hogue, 105 Va. 369, 54 S. E. 8; North British Ins. Co. v. Nidiffer, 112 Va. 591-596, 72 S. E. 130, Ann. Cas. 1916 A, 464.
The proof of loss was based on statements made out by Weiss, the expert accountant first employed by the assured. There were mistakes therein, but, as shown by the evidence, as above indicated, they were honest mistakes, not misstatements of fact designedly made. They were honestly believed by the assured to be correct at the time the proof of loss was sent to the insurance company.
The sole question remaining for our consideration is raised by the cross assignment of error of the insurance company mentioned in the statement preceding this opinion, and that, in substance, is this:
This assignment of error affects only the question of fact as to whether the quantity of goods in the store at the time of the fire and destroyed or damaged thereby was such that they aggregated as much as $80,000 in value, the full amount of all the insurance thereon, so as to entitle the plaintiff to recover the full amount of $2,500 covered by the insurance policy in suit.
We have carefully examined all the evidence in the case on this subject and we deem it sufficient to say in this connection that it was such that the jury could have properly reached no other conclusion than that the preponderance of all the evidence in the case clearly established that there was such a quantity of goods in store at the time of the fire which were destroyed or damaged thereby that they aggregated the value of at least $80,000; and hence if the action of the trial court under consideration was in error, it was harmless error.
We so hold without at this time passing on the interesting question of whether under our present practice the de
But for the reasons aforesaid we are of opinion to reverse the judgment under review, and we will enter such judgment as, in our opinion, the trial court should have entered; namely, we will overrule the demurrer to the evidence and enter judgment for the assured, the plaintiff! in the trial court, in accordance with the verdict of the jury aforesaid, with interest and costs.
Reversed.
Dissenting Opinion
dissenting:
I prepared an elaborate dissenting opinion in this case, but have determined not to deliver it, as the dissent is on questions of fact, and hence the opinion could be of little, if any, value in the determination of future causes. I regret that I have been unable to deduce the same facts from the evidence as my brethren. I have deemed it necessary to say this much in explanation of my dissent, as we do not, in the main, differ on the questions of law involved.