Mitchell v. Mississippi Home Insurance

Woods, J., delivered the opinion of the court. This is an action on an insurance policy issued by the appel-lee to appellant. The declaration is in the usual form. The insurance company filed the plea of the general issue and three special pleas. The first special plea sets up the defense of what is now commonly known as the iron safe clause; the second special plea sets up, by way of defense, that whisky was retailed on the premises in which appellant kept her store and conducted her other business, and where the property insured was kept; and the third special plea defends on the ground that an addition to the buildings- on the premises where the property insured was kept had been made, which increased the risk. The appellant demurred to the first and second special pleas, and took issue on the third. The demurrer to the second special plea was properly sustained, and was improperly overruled as to the first special plea. The first ground of demurrer to this first special plea was that it interposed no defense to the whole action, and this ground of demurrer appears to have been well taken. The requirement of the iron safe clause is that the last inventory, and the books of account of sales and purchases, shall be kept in such safe, or in some secure place other than on the premises where the insured property was kept, and that a failure to produce the inventory and books after loss shall avoid the policy; but all this has reference only to such articles of merchandise as constitute the stock in trade. The store fixtures and furniture, and the restaurant furniture, including the cooking stove, were never designed to be em [57] braced in the inventory of stock on hand, or to be entered and carried on the books of account showing purchases and sales of goods by the insured. As to these, the policy was not avoided by appellant’s failure to observe the iron safe clause. The contract .was divisible, and it may be true that appellant could be defeated of a recovery for the sum for which the stock of goods was insured, and yet might have been entitled to recover for the furniture and fixtures of the store and restaurant. The case is not to be confounded with those in which any iecovery for any part of the sum insured has been denied because of misrepresentations or frauds of the insured. Insurance Co. v. Bank, 71 Miss., 608. The refusal of the court to permit appellant to file her first replication to the first special plea was error. Thib replication set up, in substance, that, when the contract for insurance was made, the defendant knew plaintiff had no safe, and did not intend to keep a safe, and that defendant knew that plaintiff intended to keep her books in the store and at her dwelling-house, just as they were kept when the contract for insurance was made, and this was substantial matter in avoidance of the defense made by the plea. To ask us to hold that an insurance company shall ostensibly contract for keeping an inventory and books of account in an iron safe, or at some secure place apart from the premises on which the property insured is kept, and, yet, with full knowledge that the insured had, and intended to have, no safe, and with full knowledge that such inventory and books of account had been kept, and were to be continued to be kept, at the store, to receive the insured’s premiums as for a valid policy, the company intending to deny its validity if loss should occur, is to ask us to sanction trickery and fraud. The insurer cannot be permitted to collect premiums with the full knowledge of the existence of facts which might avoid the policy, and with full knowledge of the insured’s purpose to continue, in disregard of a provision working a forfeiture, to conduct the business as theretofore in such disregard. We can [58] not legalize by our sanction such perfidy. See Rivara v. Insurance Co., 62 Miss., 720. It is said by counsel for appellant that the court below was moved to exclude all the evidence of appellants, in part, because the appellant was shown to have kept gasoline in the store where her business was carried on. The pleadings nowhere present such issue. On this point, the issue made by the pleadings was, that the risk had been increased by the unauthorized addition to the building in which the business was conducted. On this issue, as to the addition, the evidence did not clearly show that the' risk had been increased by the addition. The evidence showed only that the addition brought the building in which the business was conducted a few feet nearer to the negro houses referred to by the witnesses; but whether these negro houses were ten feet or a thousand yards distant, does not appear, and whether the risk was increased by the addition, was left uncertain. The exclusion of appellant’s evidence was erroneous. Reversed and remanded.