Phoenix Ins. Co. of Hartford v. Bourgeois

| Miss. | Oct 15, 1913

Reed, J.,

delivered the opinion of the court.

Appellee obtained a judgment for the full amonnt of a fire insurance policy issued to him by appellant. A defense presented in the case is that there was a violation by Mm of the iron safe clause in the insurance policy, in that he failed to keep such set of books as is required by the second paragraph in the clause. This paragraph is as follows: “The assured will keep a set of books, wMch shall clearly and plainly present a complete record of business transacted, including all purchases, sales, and shipments, both for cash and credit, from date of inventory as provided for in the first section of this clause, and during the continuance of this policy.”

Appellant contends that the trial court erred in refusing to grant a peremptory instruction requested by appellant, directing the jury to find for appellee, and assess his damages at the amount of the premium paid for the insurance when the policy was issued on July 1, 1911, with interest which amount had been tendered. It appears that in January, 1911, appellee purchased from Mr.’ Bangard, for the consideration of five hundred and fifty dollars, the stock of goods and the fixtures of the business conducted by him at Bay St. Louis, which inventoried eight hundred and sixty-five dollars. On September 28, 1911, the contents of appellee’s store, including the fixtures, were destroyed by fire. In the first statement of his loss, made by appellee with the assistance of his attorney, it was claimed that the value of the prop*-erty burned amounted t'o thirty-eight hundred dollars. Later appellee employed W. O. Fowler, a bookkeeper, to make for him a statement showing the actual loss .by fire. This statement shows that the property burned amounted in value to four thousand and seventy-two dollars and forty-nine cents.

Now, did appellee keep a set of books which clearly and plainly presented a complete record of the business he transacted, including all of his purchases, sales, and shipments, both for cash and credit, from date of inventory, as specified in the second paragraph of the iron safe clause in the policy of insurance issued to him by appellant company? Were the books kept by him such as amounted to a substantial compliance with the requirements of the contract? Can there be- ascertained from the books, with reasonable certainty, the actual- amount of loss by the fire?

In his testimony, Mr. Fowler, the accountant, admitted that he obtained information which it was necessary for hirn to have, to enable him to make his statement, from other sources than the books. In short, he went outside of the books to get facts and figures needed in making a complete statement. He testified' that he had to obtain invoices from merchants in order to show certain goods purchased by appellee, that he did not find entries on the books for every invoice thus secured, that there were no entries showing the purchases by appellee from thé Standard Oil Company, that these purchases were in small quantities and paid for in cash, that there were no entries on the books of the amounts paid by appellee for freight. This freight he estimated to be five per cent, on the total purchases, and then added the total sum to the purchases. He said that the books did not show what amount of cask had been received from cash sales, and what amount from collections on credit sales. Mr. Fowler estimated, from the entries of credits made on the several accounts against customers, the amounts of cash received from collections on credit sales, which were registered in the general cash received in the business. He admits, however, that he could not designate these amounts in the general record of cash received. His testimony further shows that the books contain no record of the amounts of groceries and other things taken out of the business for the support of appellee’s family, and to maintain a horse and delivery wagon during the eight and one-half months appellee was in business. He estimated this amounted to sixty-seven dollars and fifty cents per month, and the total of this he used in making up his statement. It appears that the family of appellant consisted of himself, his wife, and ten children.

. It will be seen that there is no record whatever in the books showing what was taken out of the business conducted by appellee to support his family of twelve people and to keep up a horse and delivery wagon. Certainly a substantial amount of the general merchandise, including groceries, dry goods, clothing, notions, and general articles composing appellee’s stock of goods, were necessary for the support of his large family.

• By agreement of counsel there accompanies the record the original pages of the book kept by appellee to show the cash he received from the time of his purchase to the daté of the fire. With the exception of a part of the first page, the entries on these pages are in pencil. A few of the entries were made with an indelible pencil. There is nothing on these pages to show what part of the cash was from cash sales and what part from collection of the credit sales. The pages are headed, “Merchandise,” except as to the two last pages, and that heading is, “To Mdse. Cash.” The first entry at the beginning of the first page shows, “To Cash.” Thereafter some of the columns of entries begin with, “To Cash,” and some with, ‘ ‘ To Mdse. ’ There are, apparently, erasures and alterations in the pencil entries.

Shortly after the fire, a young lady employed in a hank in Bay St. Louis was eng’aged to add on an adding machine the daily entries of cash as shown on appellee’s book. Her original tabulation of these entries, filed as an exhibit to her testimony at the trial of the case, by agreement of counsel, was sent up as a part of the record. Upon examination of the pages of the cash book, and comparing them with her tabulated statement, she stated that her work on the adding machine was correct ; that she found many changes made in the entries on the book of cash after she made the tabulation, and she testified to these alterations, entry by entry, and fully. For instance, she showed that the entry of ninety-six dollars and seventy-five cents, made on February 18th, had been changed to sixteen dollars and seventy-five cents, and the entry made on July 7th, of one hundred and thirty dollars had been reduced to thirty dollars. These changes were made in pencil entries. The total amount of the reductions by these alterations is fourteen hundred and sixty-four dollars and fifty-five cents. Mr. Fowler, the accountant, in making his statement, took the figures as they áre now on the book. Therefore there is a considerable difference in the amount of the cash received, as shown by the statement made on the adding machine, and that made by Mr. Fowler.

While not now holding that any one of the several errors and omissions in the books of appellee, or the changes therein after the fire, taken alone, is enough to render the books an insufficient compliance with the iron-safe clause, we do decide that,'taken together, they show a failure to keep such a set of books as will answer the requirements of the contract.

The insured’s books show substantially the total received in the store since his last inventory, and substantially the total that has gone out. Else how can the loss in the event of fire be fairly ascertained? We do not favor a literal or technical construction of the clause. We do think the books are insufficient if the actual value of the property destroyed cannot ■ be ascertained with reasonable certainty therefrom. Account books are for the purpose of keeping a record of one’s business; The record is necessary, so that it may be known what property is in hand. The books of appellee, as shown by the evidence, do not fulfill the requirements we have indicated. We do not see that his actual loss by the fire can be arrived at with any degree of certainty from appel-lee’s books. The peremptory instructions should have been given.

Reversed, and judgment here in favor of appellee for thirty-seven dollars and fifty cents, with six per cent, per annum from July 1, 1911; costs in this appeal taxed against appellee.

Reversed.