Arkansas Mutual Fire Insurance v. Woolverton

McCurroch, J. This is an action on a fire insurance policy dated October 31, 1904, in the sum of $1,500, issued to the plaintiff on his stock of merchandise, store furniture and fixtures alleged to be of the value of $5,710.50, and which was destroyed by fire. The defendant pleaded as a defense an alleged violation by plaintiff of the iron-safe clause of the policy whereby he agreed to keep his boobs and inventory, as well as the last inventory taken preceding the issuance of the policy, in a firé-proof safe, and produce the same after the fire, and deliver them to the company for examination. The alleged breach of the conditions of the policy consisted of a failure to preserve the last preT ceding inventory taken on February 1, 1904. An inventory was duly taken in June, 1905, which was but a short time before the fire, and it was produced at the trial of -the cause, but the inventory taken February 1, 1904, was not produced, and the plaintiff was permitted to testify, over defendant’s objection, concerning the amount of stock shown by said inventory, and to read a summary of the inventory which had been entered on his ledger. He testified that the itemized inventory was taken down by himself and clerks on slips or sheets of paper in a tablet, and a general summary thereof was copied on the ledger; that these slips or sheets of paper were kept in the safe until after the fire, when they were taken out and delivered to the adjuster of the company except two* or three sheets which had been misplaced when the adjuster got there; that the adjuster examined the inventory, and made no objection to the 'loss of the two or three sheets, but on the contrary said that, if the company was liable at all, it was liable for the full amount of the policy; that afterwards the inventory was lost. •It is contended that the whole of the inventory must have been preserved in order to comply with the policy, that it must be produced at the trial, and that oral testimony of its contents or of the summary thereof on the ledger was not admissible. The evidence establishes, we think, compliance with the terms of the policy with respect to the taking and preservation of the inventory. It was properly itemized, and was preserved until ,after the fire and exhibited to the adjuster except two or three sheets which, it appears, did not materially affect the amount ,of the inventory. Our statute -provides that substantial compliance upon the part of the assured with the terms, conditions and warranties of fire insurance policies on personal property shall be deemed to be sufficient. Act March 29, 1899; Kirby’s Digest, § 4375a. The taking of the inventory and preservation of all of it except an immaterial part was certainly a substantial compliance with the requirements of the policy in that respect. The summary entered upon the ledger was not of itself a sufficient compliance with the terms of the policy, and counsel for appellee do not claim it to be such; but, in the absence of the inventory itself, and where it has been shown to have been lost after the fire and exhibition to the company’s adjuster, the summary could be used by a witness to refresh his memory in testifying concerning the amount of took shown by the inventory. Phoenix Ins. Co. v. Public Parks Amusement Co., 63 Ark. 187; Greenwich Ins. Co. v. State, 74 Ark. 72. The policy .does not require the preservation of the inventory until the trial. It only requires preservation until after the fire, so that the inventory can 'be exhibited to and examined by the company’s representative. There is no evidence of fraud, negligence or wilfulness on the part of the plaintiff in misplacing or suppressing the inventory. Proof of such conduct on his part might call into operation other principles which would prevent the assured from showing compliance with the terms of the policy by exhibition of the original inventory at the trial, but we have no such question before us. _ The proof is ample — in fact, undisputed — that the plaintiff acted in perfect good faith and fully complied with the policy. There is not the slightest evidence of any misconduct on his part in suppressing the inventory or any other evidence of the amount of his loss. The policy provides that “the assured shall keep a set of books which shall clearly and plainly present a complete record of business transacted in reference to the property herein mentioned, including all purchases, sales and shipments, both for cash and credit, from the date of the inventory provided for in the preceding section, and during the life of the policy, or this policy shall be null and void.” Plaintiff testified that his cash sales were entered daily in bulk at the end of each day’s business, and that the entry did-not'show each item, of merchandise sold for cash. His testimony and that of other witnesses established the fact that this was the customary method of bookkeeping in vogue among the merchants in that locality. This was sufficient to show substantial compliance with the clause of the policy quoted above. Sun Ins. Co. v. Jones, 54 Ark. 376; Western Assurance Co. v. Althcimer, 58 Ark. 565; People’s Fire Ins. Co. v. Gorham, 79 Ark. 160. The proof does not establish any forfeiture of the policy with reference to the statement of the. plaintiff in his application for insurance concerning threat or fear of incendiarism. The question was asked in the application, in the following form: “Has any threat of incendiarism been made, or have you any rea1 son to fear -incendiarism ?” To which the plaintiff answered in the negative. Fie admitted, while on the witness stand, that he had, several years previous to this time, suspected incendiarism in the destruction of other of his property, but said that the suspected .parties were dead when this application for insurance was made. This did not establish a breach of the conditions of the policy. .According to the testimony, all fear of incendiarism had passed away with the death of certain suspected parties. We find nothing in the record upon which a defense against liability of the defendant for the amount of the policy can be sustained. The verdict and judgment were therefore correct to that extent. The jury, under instructions -of the court, assessed against the defendant, in addition to the amount, of the policy, twelve per cent, of the amount of the policy as damage and the sum of two .hundred and fifty dollars as attorney’s fees. This was done pursuant to section 1 ,of the act of March 29, 1905, which reads as follows : “Section 1. In all cases where' loss occurs, and the fire’, life, health, -or accident' insurance company liable therefor shall fail to .pay the same within the time specified in the policy, after demand made therefor, such company shall be liable to pay the holder of such policy, in addition to the amount of such loss, 12 per cent, damages upon the amount of such loss, together with all reasonable attorney’s fees for the prosecution and collection of said loss; said attorney’s fees to be taxed by the court where the same is heard on original action, by appeal or otherwise, and to be taxed up as' a part of the costs therein and collected as other costs are or may be by law collected.” It will be noted that the statute just quoted was enacted after the issuance of the policy involved in this .case, and the question is therefore presented whether the statute operated retrospectively so as to warrant the assessment of damages and attorneys’ fees on a policy written before its passage. We are clearly of the opinion that the statute can be given no such effect. The .statute, if it be valid, materially affects -the contract of insurance, and can not be construed to affect or impair a contract already in existence when the statute was enacted. The Supreme Court of the United States has sustained the validity of a similar statute in Texas on the ground that it imposes a condition upon which insurance corporations could do business in the, State. Fidelity Mut. Life Ins. Assoc. v. Mettler, 185 U. S. 325. If the validity of our statute be sustainable upon that ground, it can not apply to contracts of insurance in existence when it was enacted, for it was intended to impose only a condition upon which future business could be done. Policies already written were not subject to those conditions. . The court erred in allowing the recovery of damages and attorneys’ fees. These amounts will be stricken from the judgment, and, after being modified to that extent, the jiudgment will be affirmed. It is so ordered.