No. 37938 | Miss. | Apr 23, 1951
Appellants, H. V. Stewart and Roy Boone, were the insured under a fire insurance policy issued by appellee, American Home Fire Insurance Company, covering their dry cleaning and pressing shop in Poplarville, Mississippi, known as Modern Cleaners. The policy was issued on January 6, 1948, and on the night of December 24th of that year the shop was totally destroyed, by fire at a time when it was closed. The policy was a standard fire insurance contract and covered under one item, furniture, fixtures, equipment, and supplies, and under another item, “clothing cleaned, being cleaned, and not delivered while contained in above described building.” Appellee paid appellants’ claim for the first item on March 1, 1949, but denied liability for the latter, on the grounds that appellants had failed to comply with a provision in the policy to keep records of the clothing in their possession, and that appellants had executed a release or accord and satisfaction.
The policy contained a standard iron-safe clause which applied “only to merchandise on storage or for sale.” This clause does not apply to the losses
"Record Warranty Clause Customer’s Goods, Laundry and Dry Cleaning Plants
"It is warranted by the insured that they will keep such records as will show at all times such goods and articles as they are liable for and held by them in trust at the time of the loss, if any, and will keep such records securely locked in a fireproof safe at night and at all times — when the building mentioned in this policy is not actually opened for business — and failing in this the insured will keep such books and records in some place not exposed to fire which would destroy the above said building. In event of failure to produce such books and records for the inspection for the Company — this policy shall become Null and Void.”
At the trial in the Circuit Court of Pearl River County, both of the appellants testified, and the trial court then sustained appellee’s motion to exclude appellants’ evidence and direct a verdict for appellee, from which this appeal.is taken. Accordingly, for purposes of this appeal, we must accept as true the believable evidence of appellants and reasonable inferences from it.
With reference to the sufficiency of the records, appellants had the following bookkeeping system: They
We think that the trial court erred in excluding the offered testimony of the owners of the clothing for the purpose of establishing its value. It is true that in the construction of the merchandise iron-safe clause the courts have held that the books must themselves furnish with reasonable certainty, the information required by the policy, both the amount and value, unaided by oral testimony except to explain the method of keeping the books. Note, 39 A. L. R. 1443, 1457 (1925); Note, 62 A. L. R. 630 (1929); Note, 125 A. L. R. 350, 358 (1940). The present record warranty clause must be interpreted in the light of its own peculiar terms and of the facts. It does not require the keeping of records by a dry cleaner to show the value of clothing in his possession. The insured agreed to keep “such records as will show at all times such goods and articles as they are liable for . . .” This provision, which is considerably different from the merchandise iron-safe clause, refers to the identity and amount of the clothing as distinguished from its value. This is in accord with the nature of the insured transaction. As a practical matter, it would be most difficult for the books of a dry cleaner to show the value of the clothes which he is processing. It could be done only by an estimate of either the owner or the bailee when the clothes are brought in. The inaccuracy and inconvenience of such a method is apparent. The danger of fraud is not present in a bailment relationship in the degree it is where the insured is the owner of the clothing. The motivation for misrepresentation is reduced to a minimum. Moreover, the standard merchandise iron-safe clause applies to an entirely different type of situation, merchandise on storage or for sale, from the record warranty clause for a dry cleaning shop,
Merchants ’ Union Insurance Company v. Johnson, 1924, 135 Miss. 311" court="Miss." date_filed="1924-05-12" href="https://app.midpage.ai/document/merchants-union-ins-v-johnson-7994915?utm_source=webapp" opinion_id="7994915">135 Miss. 311, 99 So. 899, does not preclude the use of such testimony. The terminology of the record warranty clause in that case, which was in a policy insuring a cotton gin, was entirely different from the present one and more detailed in its requirements. The records there offered were a ledger made after the fire, the stubs of gin tickets containing no entry of the amount of cotton or cotton-seed sold or shipped, and hills of lading and weighers’ tickets covering cars of seed shipped, which were loose memoranda not complying with that particular clause.
Here the testimony is clear as to the method of keeping the general ledger. It was a question for the jury from all of the evidence to determine whether or not the ledger book was a substantial compliance with the terms of the policy. Commercial Union Fire Insurance Co. v. Kelly, 1926, 144 Miss. 833" court="Miss." date_filed="1927-01-03" href="https://app.midpage.ai/document/commercial-union-fire-ins-v-kelly-3513340?utm_source=webapp" opinion_id="3513340">144 Miss. 833, 110 So. 681; 46 C. J. S., Insurance, Section 1369, pages 601-602; 29 Am. Jur., Insurance, Section 1534, page 1154; Notes, Sufficiency of Bookkeeping to Satisfy Condition of Insurance Policy, 39 A. L. R. 1443, 62 A. L. R. 630; 125 A. L. R. 350; Note, 51 L. R. A. 698 (1901). A substantial compliance with the terms of a policy requiring the keeping of a set of books is all that is necessary in order to warrant
Analogous to the present case is Mord v. New York Indemnity Company, 1926, 216 A.D. 252" court="N.Y. App. Div." date_filed="1926-03-19" href="https://app.midpage.ai/document/mord-v-new-york-indemnity-co-5289834?utm_source=webapp" opinion_id="5289834">216 App. Div. 252, 214 N. Y. S. 693, 695, affirmed in 1927, 244 N.Y. 589" court="NY" date_filed="1927-02-23" href="https://app.midpage.ai/document/mord-v-new-york-indemnity-company-3615389?utm_source=webapp" opinion_id="3615389">244 N. Y. 589, 155 N. E. 908. There the insured was in the business of dressing furs belonging to others. Some of these furs were stolen from the insured’s truck. The insurance company defended on the ground that the books and accounts of insured did not comply with the requirement of the policy, that insured keep records showing the amount of furs in his possession. On the trial, Mord, the insured, offered in evidence testimony of the owners of the furs for the purpose of showing their value, and also offered books of the owners for the same purpose. The records of Mord reflected the amount and identity. The Court held that the insured was entitled to prove the value of the furs by the offered evidence. It further said:
“While I am inclined to think that this evidence was competent, despite defendant’s objection that it had no right to use the customers’ books, and that it had ‘no relation with the customers,’ there can be no doubt that defendant appellant is here, asserting that it is not obliged to resort to any books other than those kept by the assured; that the precise amount of the loss must be disclosed on their books. I think the argument and the cases cited by appellant’s counsel have no application to the situation disclosed here. As matter of fact, the*534 books of the Fur Dressers’ Company contained all the necessary information, except the value of the goods sent to them for treatment; an important item, to be sure, hut one as to which from the very nature of the business the assured could make no entries in their hooks. They had no independent knowledge of the value of these goods at the time of their receipt. Their books gave the name and address of the owner, a description of the particular pieces of fur sent to the assured for treatment, with the day and date of receipt and redelivery.
“Where the assured is the owner of merchandise covered by an insurance policy, and seeks to recover, it is only reasonable that his books and accounts should show reasonable compliance with the requirement of the policy, and contain evidence'of the value of the property. In the case of the assured in the case at bar, any statement on the books concerning the value of the skins consigned to it for treatment would necessarily be hearsay. ’ ’
This case was followed in Licht v. New York Indemnity Company, 1928, 250 N.Y. 211" court="NY" date_filed="1928-12-31" href="https://app.midpage.ai/document/licht-v-new-york-indemnity-co-3617475?utm_source=webapp" opinion_id="3617475">250 N. Y. 211, 164 N. E. 910. In both the Mord and the present case the insureds were bailees of clothing for the purposes of cleaning and processing it. In both cases the records reflected the amount of clothing but not its value.
There was also ample evidence to go to the jury on whether appellee waived the record warranty clause, and on whether it was estopped to claim under it. Appellants’ testimony was to the effect that general agent Smith and Miazza, a claims adjuster for appellee, advised them on different occasions that if they could not locate the books and the owners would turn in their claims, appellee would pay them, and that appellants then obtained written claims for the clothing from the owners. This testimony constituted an adequate basis for submitting to the jury the issues of waiver of and estoppel to assert the record warranty clause. Fidelity-Phenix Fire Insurance Co. v. Redmond, 1927, 144 Miss. 749" court="Miss." date_filed="1926-03-15" href="https://app.midpage.ai/document/fidelity-phenix-fire-ins-v-redmond-3520773?utm_source=webapp" opinion_id="3520773">144 Miss. 749, 111 So. 366; 45 C. J. S., Insurance, Section 738; 29
Appellee pleaded a release by appellants of appellee from all further liability under the policy. On February 23, 1949, Miazza, claims adjuster for appellee, wrote appellant Stewart, enclosing proofs of loss “for the loss of equipment and supplies ’ ’. He further advised Stewart that appellee denied liability for the clothing because the records were destroyed. The proof of loss for equipment and supplies was prepared by appellants, and appellee sent them a check dated March 1, 1949 for $1200.00 constituting “full satisfaction of all claims and demands for loss and damage” occurring under the policy on December 24th. Appellants endorsed the check. They testified that Smith brought to them the proof of loss form and told them that it was only for the machinery and supplies and not for the clothing, that the company would make a settlement for the clothing later on, and that they relied on his representation. They said that upon receiving the check, they went to Smith and endorsed it in his presence; that before they signed it, Smith told them to go ahead, that it covered only machinery and supplies and that a settlement at a later
Reversed and remanded.
PER CURIAM.
The above opinion is adopted- as the opinion of the Court, and for the reasons therein indicated, the cause is reversed and remanded.