Continental Insurance v. Rosenberg

Fire Insurance Policy—Iron Safe Clause—Warranty—Other Insurance—Inventories and Books; what they must show; ■ where to be kept; when to be produced—Insurance Contracts; how to be Interpreted—Agencies—Evidence—■ Reasonable Time; when a Question for the Jury— Supreme Court Court—Affirmance Affirmance of Judgment below. 1. In an insurance policy the “iron safe clause” is a covenant which constitutes a warranty on the part of the insured, a breach of which would prevent his recovery. The plaintiff must show at least a substantial compliance with every material part of said clause, or fail in his suit. 2. Although the plaintiff had procured other insurance upon his stock of goods greater than that which was permitted by the policy sued on, that fact would not prevent him from recovering, provided the agent of the defendant company, who issued and delivered the policy, and collected the premium, had knowledge of such excessive insurance, and the company did not cancel the policy. The knowledge of the agent having such powers, and performing such duties, is held to be the knowledge of the company. 3. Certain inventories, admitted in evidence and which disclosed the kinds of goods in stock, with their values, although not so full and particular as might be expected or desired, held to substantially comply with the requirements of the policy, and to be inventories within the meaning of the “iron safe clause” and were sufficient to inform the company, with reasonable certainty, of the character, quantity and value of the goods in stock, and that is all that is required. 4. Although the inventory was not continued to be kept in such place as the policy named yet, if it was preserved and actually produced for the inspection of the company as required, it is sufficient, provided the entries thereon are correct and true. 5. While the “iron safe clause” provides that a set of books shall be kept which shall clearly - and plainly present a complete record of purchases of stock from date of inventory, it does not necessarily mean that such record must be in book form. Invoices of goods purchased, if they were goods purchased since the date of inventory, and are produced for the inspection of the company in a reasonable time, furnish a substantial compliance with this requirement of the policy. And it matters not if such invoices were not kept in the exact place or method mentioned in the policy, provided they were actually preserved and produced for the inspection of the company in a reasonable time. 6. Although the plaintiff in his proof of loss stated his total loss or damage to be about $4700, he is not thereby precluded from asserting such statement to be erroneous, and explaining the error if he can, and proving upon the trial a greater loss than the amount claimed in such proof of loss. 7. The principles of interpretation applicable to contracts of insurance are the same as those which obtain in the case of other contracts, subject, to the exception that insurance contracts should be construed most strongly against the insurer, for the reason that it is the insurer’s language that must be interpreted. In the interpretation of insurance contracts the law does not require a literal interpretation. 8. A covenant in the policy to keep a set of books showing a complete record of business transacted, including all purchases and sales both for cash and credit, should not be interpreted to mean such books as would be kept by an expert bookkeeper in a large business house. That provision is satisfied if the books kept were such as to fairly show to a man of ordinary intelligence all purchases and sales, both for cash and credit. 9. The object of the “iron safe clause” of the policy is to facilitate the ascertainment of the extent of the loss, and prevent misrepresentation and fraud on the part of the insurer. 10. A demand by the duly authorized agent of the company for all the books and papers of the insured is the demand of the company, and it is the duty of the insured to comply therewith in a reasonable time; and if such agent is informed by the insured that the books and papers produced were all the books and papers kept by him, the agent has a right to rely on such information. 11. Books which show the daily totals of cash sales, disclose with substantial certainty the extent to which the stock has been depleted; and such books, together with the last inventory, and books or invoices showing all purchases since, enable the insurer to ascertain the value of the stock lost by the fire and therefore substantially comply with the reequirments of the contract in that belhaf. 12. All books and papers that the insured was required by the “iron safe clause” to produce for the inspection of the company should be produced in a reasonable time, but the Court cannot say, as matter of law, that the production of such books or papers at the trial of the cause is not a production of the same in a reasonable time. That is a question to be determined by the jury under all the facts and circumstances of the case as disclosed by the evidence.

Writ of Error to the Superior Court for New Castle County. This was an action of debt brought by Solomon M. Rosenberg against the Continental Insurance Company, to recover the sum of $2,000, with interest, on a policy of fire insurance, covering a stock of merchandise of the plaintiff. The following is the charge of the Court below: