Hartford Fire Ins. Co. v. Adams

LEVY, J. (after stating the facts as above). By its first assignment the plaintiff in error makes the contention that the failure on the part of the insured to take an inventory of the stock of merchandise within 30 days after the date of the policy worked a forfeiture of the policy, and a verdict should have been directed in favor of plaintiff in error. It was an admitted fact in the trial that an inventory of the stock of merchandise was not taken by the insured within 30 days after the date of the policy, and that none was ever taken before the date of the policy, and the loss occurred several months after the date of the policy. The provision of the policy under consideration has been generally declared by the courts as a valid and enforceable term of contract and to be performed to entitle the insured to recover for a loss. See Insurance Co. v. Mercantile Co., 126 S. W. 616; Id. (Sup.) 135 S. W. 1165. So it must be said that the parties entered into a valid and enforceable contract embraced in the policy wherein it was expressly agreed that “this entire policy shall be null and void” unless (1) “the assured will take a complete itemized inventory of stock on hand,” and do so (2) “within thirty days after the date of this policy.” There can be no question about what was intended by the parties. The policy was either valid or invalid after the 30 days, according to whether or not the assured took an inventory within the 30 days. If the courts must enforce all valid and reasonable terms of contract, as they must and properly should do, then there could be no justification for the court’s setting aside the terms of contract because the insured, subsequent to the 30 days, did what he was obligated to do within the 30 days in order to keep the policy in force. The policy being voided by its terms after the 30 days, the subsequent act' of taking an inventory in July would not operate to revive the policy without the consent of the insurance company. Defendant in error relies in this case on invoices of the goods by which they were purchased as being equivalent to an inventory of the stock and as constituting substantial compliance with the requirement of an inventory. The parties having stipulated, as they had the right to do, for a record of the class of an “inventory” which “the assured will take,” it is not believed that the courts would be justified in so changing the language of the parties as to compel the insurance company to accept a record of a different class or a substitute for that which it had contracted for. And there is a practical difference between submitting an inventory taken of stock in the store and offering an invoice of goods by which they were purchased. For invoices to have any verity as evidence of goods received into a stock of merchandise, it would become necessary to show outside the invoice that the goods were checked with the invoice at the time they were received into the store and were found to be correct in quantity and soundness, and that the merchandise represented by the invoice was actually received into the house and added to the stock before the close of the period for which the invoices are to be used as an inventory, for it is commonly known that invoices most frequently precede shipments and sometimes the goods are only on approval. It must be assumed that the parties contemplated there was a practical and substantial difference between an inventory and commercial invoices by stipulating, as they did, for an inventory to be taken by the assured. It has been decided that the furnishing of invoices by which goods were purchased was not a compliance with the requirement of taking of an inventory by the assured within 30 days after the- date of the policy. Fire Ass’n v. Masterson, 25 Tex. Civ. App. 518, 61 S. W. 962; Insurance Co. v. Knight, 111 Ga. 622, 36 S. E. 821, 52 L. R. A. 70, 78 Am. St. Rep. 216; Reynolds v. Insurance Co., 107 Md. 110, 68 Atl. 262, 15 L. R. A. (N. S.) 345. In the case of Insurance Co. v. Delta Bank, 71 Miss. 608, 15 South. 932, the insured was not required to produce invoices in lieu of an inventory under the requirement of a clause that ■ an inventory be takén, kept, and produced. If an insured is not required to produce invoices in lieu of an inventory under the requirement that an inventory be taken and kept then, conversely, the furnishing of invoices would not be a compliance with the requirement that an inventory be taken. The case of Assurance Co. v. Kemendo, 94 Tex. 367, 60 S. W. 661, would *233 not have full application to the question here, for in that case an inventory had been taken but destroyed by fire at the time the goods burned, and in the instant case there is default in any compliance at all. Defendant in error contends that offering the invoices operates as a substantial compliance with the requirement, and that this was sufficient. It is not believed that, where there has been no compliance or undertaking to comply with the requirements, the rule of substantial compliance could apply. It is correctly said by Justice Brown in the Re-mendó Case, supra: “But when there is no compliance whatever there can be no question of a substantial compliance with such requirement.” The case of Insurance Co. v. Kearney, 180 U. S. 132, 21 Sup. Ct. 326, 45 L. Ed. 460, has no application to an insured who has never undertaken to comply with the requirements, and therefore does not support the proposition here. Giving full legal effect to the admitted facts under consideration, the policy was voided at the time of the fire; and defendant in error, taking his rights subject to the conditions of the policy, cannot recover. The assignment is sustained. The judgment is reversed and here rendered for plaintiff in error, with costs of appeal and of the county court.