Scottish Union & National Insurance v. Stubbs

Simmons, Chief Justice. This was an action upon a policy of fire insurance on the plaintiff’s stock of merchandise, consisting principally of groceries and provisions, while contained in a one-story frame shingle-roof building occupied as a store, near Macon, Ga. The policy stated that the property was insured “subject to iron safe clause attached”; also that it was accepted subject to such conditions as might be endorsed thereon or added thereto; and upon its face was pasted a strip of paper, which bore the signature of the agents who [760] issued the policy, and upon which was printed the “iron safe clause.” This clause is in these words: “The following covenant and warranty is hereby made a part of this policy: (1) The assured shall make a complete itemized inventory of stock on hand at least once in each calendar year, and unless such inventory has been taken within twelve months prior to the date of this policy, one shall be taken in detail within thirty days of the issuance of this policy, or this policy shall be null and void from such date, and upon demand of assured the unearned premium from such date shall be refunded. (2) The assured shall keep a set of books, which 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. (3) The assured shall keep such books and inventory, also the last preceding inventory, if such has been taken, securely locked in a fire-proof safe at night, and at all times. when the building mentioned in this policy is not actually open for business, or failing in this, the assured will keep such books and inventories in some places not exposed to fire which would destroy the aforesaid business. In the event of failure to produce such set of books and inventories for the inspection of this company, this policy shall become null and void, and such failure shall constitute a perpetual bar to any recovery thereon.” The property insured was burned at night, after the store was closed. The plaintiff’s books of account were not placed in a safe, but were left in the store, on a desk, where they were destroyed by the fire. The insurance company refused payment of the policy, and in its answer to the action denied liability, upon the ground that the plaintiff had violated the clause above referred to. The plaintiff contended that the clause in question was not a part of the contract, but was attached to the policy without his consent and by the fraud of the defendant’s agents. On this point the evidence was conflicting. There was a verdict for the plaintiff for the full amount of the policy, and the defend [761] ant made a motion for a new trial, which, was overruled, and B excepted. • 1-3. As to the admissibility of the letters and inventory referred to in the motion for a new trial, nothing need be added to what is said in the head-notes. 4-6. The court, in charging upon the effect which should be given to the “iron safe clause” in case the jury should find that it constituted a part of the policy, submitted to them the question of its materiality, and authorized them to treat it as a merely incidental matter to be considered by them in connection with the subject of furnishing proofs’ of loss. This we think was error. The provisions of our code touching the materiality of representations and conditions in fire insurance policies (§2803 et seq.), and the decisions of this court in the cases of Southern Life Insurance Co. v. Wilkinson, 53 Ga. 549; Mobile Fire Department Insurance Co. v. Coleman & Collat, 58 Ga. 251, and Phenix Insurance Co. v. Fulton, 80 Ga. 224, relied upon by counsel for the defendant’ in error, relate to representations of fact, and not to conditions of the kind contained. in the clause now under consideration. This clause constitutes á promissory warranty. It binds the assured to do certain things for the protection of the insurer, and is important as providing a check against fraud on the part of the assured, and a mode by which the insurer may ascertain for itself the extent of the loss; and the compliance of the assured with this part of the contract is a condition upon which, by the express terms of the contract, the validity of the policy is made to depend. As to such warranties our code made no departure from the rules of law governing contracts of this class, as laid down by the authorities generally; and according to all the authorities, the materiality of such a warranty is not a matter of inquiry for a jury. 11 Am. & Eng. Enc. of Law, Insurance, 291; 1 May Ins. §156; and see Thomson v. Southern Mutual Insurance Co., 90 Ga. 78. In the following cases an “iron safe [762] clause” was held to be a warranty, and not a mere representation: Landman v. Hartford Ins. Co., La. Court of App. (1890), 19 Ins. L. J. 572; Kelly-Goodfellow Shoe Co. v. Liberty Ins. Co. (Tex. Civ. App.) S. W. Rep. 1034; Home Ins. Co. of New Orleans v. Cary (Tex. Civ. App.), 31 S. W. Rep. 321; Virginia Fire & Marine Ins. Co. v. Morgan (Va.), 18 S. E. Rep. 191. Judgment reversed.