Georgia Life Ins. v. Friedman

Reed, J., delivered the opinion of the court. The store of appellee in Cleveland, Miss., was burglarized on May 21, 1911. He brought suit on a policy issued by appellant to indemnify him for any loss from burglary. He claimed that the value of the goods taken amounted to seven hundred ninety-two dollars and twenty-two cents. The jury returned a verdict in his favor for three hundred and ninety-five dollars. [795] Appellant assigns as error the refusal by the court to give a peremptory charge to find in its favor on the ground that appellee had failed to comply with section .seven of the mercantile rider in the burglary insurance policy. This provision is that the company shall not be liable “if the accounts of assured are not so kept that the actual loss may be accurately determined therefrom. ’ ’ The requirement in section seven is similar to that in the iron safe clause in the fire insurance policies regarding the books which assured must keep. However, the iron safe clause states more explicitly and more in detail what the set of books shall contain. It is said in the case of Aetna Insurance Company v. Mount, 90 Miss. 642, 44 South. 162, 45 South. 835, 15 L. R. A. (N. S.) 471, that the purpose of the iron safe clause in policies is to prevent fraud, and is for the protection of the rights of insurance companies. This is so concerning the provision in the burglary policy now under consideration. The iron safe clause has been frequently discussed by the courts. This court has had it under consideration in .several cases. We gather from the various decisions that a substantial compliance with the provision is all that is required. Courts do not favor forfeiture of policies for purely .technical violations. Counsel for appellant, in their brief, ,say that section seven “simply means that the books of account kept by the insured must show in detail the stock of .goods he had on hand at the time of the burglary, .so that an inventory taken after the burglary will show ■the exact amount of goods stolen. ” We gather from their argument that they contend the books should show at the end of every day the exact number of all articles in the store — say, the number of hats, pairs of shoes, and so on. We cannot agree with this strict construction ■of .this section. We believe that the books are sufficiently ■kept if they will enable a man of average intelligence to. ascertain with reasonable certainty the loss sustained. [796] It would be well-nigh impossible to comply with the strict requirement of section seven as it is interpreted by counsel. Surely no particular system of bookkeeping should be-required; but such system as is commonly used among merchants in the same class, and which exhibits a fair showing’ of the business conducted, is sufficient. It would be difficult to find a set of books in any general merchandise store in towns like Cleveland, in this state, which are kept with such particularity and with such detail as to show every single article which has come into the store by purchase and gone out by sale. It is contrary to the custom of the country to enter upon books in such general merchandise stores each and every article sold for cash. We think that section seven should therefore have a reasonable interpretation and not a narrow one. The books are sufficient if they set forth a fair and intelligent record of the business conducted. It seems that this is the first time this court has been called on to consider section seven. Counsel for appellant state in their brief that they have only found two authorities from courts of last resort touching the construction of the provision.. These are in the cases of Pearlman v. Metropolitan Surety Company, 127 App. Div. 539, 111 N. Y. Supp. 882, and Rosenberg v. People’s Surety Company of New York, 140 App. Div. 436, 125 N. Y. Supp. 257. But these cases are unlike the case now before us. The facts are different. Therefore they will not help us in reaching a decision herein. In the Rosenberg Case the court in the opinion stated that “there is absolutely no evidence that the assured kept such books and accounts as are called for by the policy. On the contrary, all the evidence is that he did not. . . . The plaintiff undertook to make up his proof of loss by estimating from the marks upon certain empty paper wrappers and pasteboard boxes the extent and value of their contents, which, as he alleged, had been stolen." [797] In the Pearlman Case the condition of the policy which was claimed was forfeited read: “If the hooks and accounts of the assured and daily tally of money are not so kept that the actual loss may be accurately determined therefrom, nor unless said loss shall have been established by competent and conclusive evidence.” The court in the opinion said: “The plaintiffs did producé some books; but thé evidence respecting them, including that of one. of the plaintiffs, was to the effect that it was impossible to tell from the books as kept that the goods on hand on any particular day could be accurately determined. As the proof stood there was not sufficient evidence to justify a verdict in plaintiffs’ favor.” In the present case the proof shows that the appellee • was selling only for cash. Upon the trial he produced (1) original invoices, showing purchases; (2) the inventory taken a few months prior to the loss, showing all the goods then in the store; (3) the merchandise account book, showing the amounts of the goods purchased by him from the date of his inventory to the time of the burglary; and (4) cash book, showing cash sales from date of inventory to the burglary. Appellee, answering from his books, shows articles lost by the burglary totaling in value more than the verdict rendered by the jury. There was sufficient evidence in this case to justify the verdict in appellee’s favor. From the books, including the in-. ventory and invoices produced by appellee, he was enabled to establish a loss exceeding the amount of the verdict. The purpose of the provision, section seven of the mercantile rider in the policy, is to enable the insurance company to determine the actual loss sustained. In this case this purpose has been fulfilled. It cannot, therefore, be said that the books of appellee were insufficient. Affirmed.