Sun Mutual Insurance v. Searles

Whitfield, J., delivered the opinion of the court. We do not think the warehouse book is shown by this record to be a part of the set of books required by the policy to be kept in the iron safe. The proofs of loss were clearly waived. We reaffirm the principles on the doctrine of waiver announced in Phœnix Insurance Co. v. Bowdre, 67 Miss., 620; Matthews v. N. O. Insurance Association, 65 Miss., 301; Liverpool, etc., Insurance Co. v. Sheffey, 71 Miss., 922; Rivara v. Queen Insurance Co., 62 Miss., 727, and Home Insurance Co. v. Gibson, 72 Miss., 58. In the last named case, the case of Cleaver v. Insurance Co., 65 Mich., 530 (32 N. W., 660), is traced to its final determination and the true ground upon which it rests distinctly pointed out and the case shown to be in perfect accord with Insurance Co. v. Earle, 33 Mich., 143, from which the rule in Matthews’ case, supra, is taken. The C. J. Searles Co. took out, on June 1, 1893, a privilege tax license under § 3390 of annotated code of 1892, authorizing it to carry a stock never exceeding thirty-five hundred dollars. On the fourteenth day of November, 1893, this policy was taken out. The appellant, by its seventh and eighth pleas, defended upon the alleged ground that the C. J. Searles Co. carried a larger stock than thirty-five hundred dollars during the year covered by the license, from June 1, 1893, to June 1, 1891, and in the period from June 1, 1893, till the date when the contract of insurance was made, November 11, 1893; that the business was hence illegal, and that this contract of insurance was “a contract made in reference to the business ” thus [70] carried on in disregard of § 3390 of chapter 108 of code of 1892, and was therefore void. On this issue the court gave for the plaintiff instruction numbered four, in these words: “If the jury believe from the evidence that the C. J. Searles Company, on the first day of June, 1893, was doing business with a stock not in excess of thirty - five hundred dollars actual cash value, then they will find for the plaintiffs upon the issues raised by the seventh and eighth pleas, and the plaintiff’s replications thereto.” If this charge stood alone, we would be led to believe that the learned judge below had misconceived the holding of this court in Sneed v. British American Assurance Co., 72 Miss., 51. But the court charged the jury for the defendant several times, in different forms, in charges numbered two, four and six, that (see the sixth) ‘ ‘ if they believed from the evidence that, on the first day of June, 1893, or at any time thereafter up to and including the fourteenth day of November, 1893, the C. J. Searles Company’s stock exceeded $3,500, they would find for the defendant. ’ ’ These instructions, which correctly announce the law, show that the learned judge below very accurately understood the Sneed case. There are only two views, then, in which the fourth instruction for the plaintiff could have been regarded as proper by the court below. The first is, that ‘ ‘ the seventh and eighth pleas, and the replications thereto, ’ ’ limited the defenses on this point to the allegation that the plaintiff had a stock exceeding $3,500 on June 1, 1893, on that very day, and did not present the issue whether, though the stock did not exceed $3,500 on June 1, 1893, it might not have exceeded that sum in value between June 1, 1893, and November 14, 1893. But this view is too technical. The other view is, that, while the contract of insurance would be void, if the assured, though it did not have a stock in excess of $3,500 on June 1, 1893, yet did have a stock in excess of that sum between June 1, 1893, and November 14, [71] 1893, yet there was no testimony at all to go to the jury on that issue. And this view is most earnestly insisted upon by counsel for appellee. But in this view, after a most careful examination of the record, we cannot concur; and the charge would be, in that view, one upon the weight of evidence. These pleas are, of course, affirmative pleas, and the burden of proof under them on appellant. But it is undisputed that the appellees paid for this business, on March 13, 1893, $9,330.51; that, on April 1, 1894, the inventory then taken showed the value of the stock to be $8,282.12, and that the proofs of loss showed the value of the stock destroyed by the fire on June 15, 1894, to be $8,956.77. There is testimony — quite obscure — as to some bagging; whether two lots or one is not clear — apparently two lots. As to one lot, at least — the $4,194.34 lot — there seems to have been enough to leave it certainly very questionable on this record whether that lot of bagging was not to be taken as part of the stock of the C. J. Searles Co. With this testimony in the record, we think the jury should have been left to draw their own conclusion as to whether the C. J. Searles Co. did carry a stock in excess of $3,500 between June 1, 1893, and November 14, 1893, when this contract of insurance was made. The fourth instruction for plaintiff, in either of the two views indicated, was therefore erroneous. Counsel for appellees misconceive the Sneed case. That case held merely that where a merchant has paid the proper privilege tax, and his stock has been kept within the limit covered by that privilege tax license up to the time he makes a contract of insurance, his business was a legally licensed business for the whole time from the taking out of the privilege tax license up to and including the time of the making of the contract of insurance, and that such contract of insurance is one, therefore, made in the course of a legally conducted business, and, being so valid, is not made invalid by an increase of stock over the legal limit subsequently to the making of the contract .of [72] insurance. But where a merchant has paid the proper privilege tax, but, between that date and the date of making the contract of insurance, his stock exceeds the limit covered by the license, his business becomes, eo instanti, one conducted in violation of chapter 108 of annotated code of 1892, is illegal, not protected by the license, and the contract of insurance is, in such case, a contract ‘ ‘ made in reference to the business ’ ’ thus illegally “ carried on, ” and is void. To hold otherwise would open the door to limitless frauds. In all other respects the learned judge below charged the law correctly. The instructions refused to the defendant were properly refused, and all the modifications of defendant’s instructions were strictly accurate. For the error indicated, we feel constrained to Miller, Smith & Hirsh and Henry <& Scudder, for appellees, filed a petition for reargument, together with a brief discussing the law and the evidence. It was urged that sufficient value had not been given to the presumptions of law arising in favor of appellees; that a peremptory instruction is always upon the weight of the evidence, and the evidence in the case at bar was such as to entitle appellees to a peremptory instruction; that the contradictory instructions given to appellant, being unsupported by the facts, in nowise affected appellee’s right to a recovery under their fourth instruction; that the value of the stock of merchandise at the time the two inventories were taken, and when the fire occurred, does not prove, or tend to prove, what the value was between June 1, 1893, the date of the license, and November lé, 1893, the date of the policy; that the value on June 1, 1893, being within the limits of the license, that state of things should be treated as continuing until some change is affirmatively shown, and that the two inventories and proof of loss have no significance, in the absence of evidence connecting them with each other so as to cover the period extending from the issuance of the license to that of the policy; that the jury evidently accepted Searles’ statement that there was only $2,690.77 of stock on hand June 1, 1893, and, in the absence of all evidence to the contrary, were justified in inferring that there had been no subsequent increase of stock prior to the issuance of the policy, if they so found, and might also very properly have concluded, on the facts shown, that the bagging in the elevator that would have swollen the stock beyond the limits of the license did not belong to the company, but to the First National Bank; that the statute imposes the tax icon each store,” and, inasmuch as the policy relates only to the goods in the warehouse, which is held to be a store, there is nothing in the evidence to show that the goods in the warehouse alone exceeded the limits of the license, and the appellees were entitled to recover, though the elevator may have been used as another store, and no license procured to authorize the business there carried on (Harness v. Williams, 64 Miss., 600); that the seventh and eighth pleas of appellant do not say at what time during the year, covered by the license, the stock exceeded its limits, and, according to well-settled rules thereof, should be taken as alleging the insufficiency of the license as of the date of its issuance, and that so taken, appellees’ fourth instruction was unobjectionable. [72] Reverse the judgment a/nd rema/nd the cause for a neio trial. [73] JReargument denied.'