Scottish Union & National Insurance v. Keene

Roberts, J.,

delivered the opinion of the Court.

This suit was brought to recover on a policy of insurance against loss by fire. The policy was written by the appellant in favor of D. Langfeld & Co., who were engaged in the business of manufacturing ladies’ clothing. The property insured is described in the policy in these words :

“ $5,000 on merchandise, consisting principally of dry goods and ladies’ ready-made clothing, and on all materials used in their business as manufacturers of same, their own, or held in trust or consignment, or commission or sold, but not removed while contained in the brick building situate No. 32 S. Paca street, Baltimore, Md., communicating through fire-proof boiler house in basement with No. 34 S. Paca st., opening protected by fire-doors.”

In addition to this policy there were risks written by sixteen other companies on the same stock, the aggregate of the sixteen policies being forty thousand dollars. The usual conditions were annexed to and formed parts of the policy. A fire occurred on December the second, 1893, within the period of time covered by the policy sued on, and the entire stock and machinery of the assured as well as most of their *280 books were totally destroyed. Proof of loss was furnished, but was objected to as insufficient; and upon this and other grounds to be stated presently the insurer refused to pay the loss and thereafter this suit was brought. The refusal of the appellant to pay the amount of the loss insured against in the policy issued by it is founded on several grounds which may be briefly summarized as follows, viz., that the proof of loss was not sufficient in that it did not contain a statement in detail of the stock and materials on hand at the time of the fire, nor set forth the cash value of each item thereof and the extent to which each article was damaged ; that the assured had not furnished, as required by the policy, within sixty days after the loss, a copy of the descriptions and schedules in other policies written upon the same property; that the assured refused to subscribe an examination taken by a person designated and appointed by the insurer ; and that notwithstanding a difference arose between the assured and the insurer respecting the amount of the loss sustained by the former, the assured refused to enter into an appraisement as provided for in the policy, in such a contingency, although a demand was made for such appraisal by the underwriter.

During the progress of the trial six bills of exception were taken and they present the questions to be disposed of on this appeal. Under the rulings and instructions of the Superior Court the jury rendered a verdict in favor of the assured for the full amount claimed to be due by the terms of the policy and upon that verdict a judgment was duly entered. From that judgment the insurance company has prosecuted the pending appeal.

There was no dispute respecting the execution and delivery of the policy, the payment of the exacted premium and the subsequent loss and destruction of whatever property was on the premises when the fire occurred. Nor was there any denial that the loss, if a loss was sustained at all, was a total and complete one. The controverted question at the threshold was, whether there was sufficient evidence *281 to show that any of the materials described in the policy were in fact destroyed by the fire. The first, second and third exceptions and the appellants’ fourth and fifth prayers in the sixth exception involve this inquiry, and may be considered and discussed together, because upon the correctness of the rulings on the objections set forth in the first three exceptions depends the propriety of the Court’s action in rejecting the two prayers just designated by their numbers.

We have said that most of the appellee’s books were destroyed in the fire. The only ones saved were the sales’ book, or the day book, showing the amount of daily sales ; the purchase book, showing the amount of merchandise bought from January xst, 1893, up to the time of the fire; and the book of expenditures, showing the amount paid out in manufacturing between the same dates. Now, it is obvious, that to entitle the assured to recover it was incumbent on him to show to the satisfaction of the jury, first, that he had sustained a loss by fire; and, secondly, what the amount of that loss was — not with exact mathematical precision, but with a reasonable measure of certainty. Confessedly all that he had on the premises described in the policy was destroyed ; his most valuable and important books had been burned, and there is no pretence that from mere memoiy he could possibly have stated the quantity or description of a stock of goods, such as it is apparent, he carried. But his inability to do this, arising, as it clearly does, from the very misfortune against whose disasters the appellants wrote the insurance, can scarcely, in a Court of justice, be considered a valid and sufficient ground to defeat his claims for indemnity. Deprived by the casualty which the policy was designed to reimburse him for, of the best means to compute the precise amount of his loss, by no means precluded him from resorting to other, even if less satisfactory methods of laying that branch of his case before the jury. And to other methods he did resort. He showed most incontestibly that the amount of *282 stock which he had on hand the first day of January, 1893, was $22,131.46. He then showed by his book of purchases that from that date to the day of the fire he had bought $107,821.00 worth of materials, and by one of his other books saved from the fire, that the cost paid for manufacturing during the same period had been $35,311.04, making a grand total of $165,263.50. He likewise demonstrated from his day book, or book of sales, that his sales during the same period had been $169,215.25, and that the average or usual profit included in this gross amount of sales was forty per cent., or $48,347.00, which on being deducted from the gross amount of sales showed the cost value of the manufactured articles sold to be $120,868.25, and that sum being deducted from $165,263.50 — the aggregate of the inventory, the merchandise bought and the cost of manufacture — left the sum of $44,395.25 as the value of .the goods and materials in stock when the fire occurred. This process is the one objected to in the exceptions now being considered. Without pausing to consider the specific questions objected to, because such a course is wholly unnecessary, we deem it only necessary to say that there was no error in allowing the questions to be asked which elicited this result. Brit a single observation is all that is needed to illustrate‘ the correctness of this conclusion. Were this method of ascertaining the value of the goods destroyed excluded, there would be no possible way in the event of a total loss of the goods themselves and the books of the assured, to arrive at even an approximate estimate of the amount of the loss, for it is not to be assumed that in a large business establishment either the proprietor or his employees can carry in their minds a schedule of the stock in trade. And if the method of proof allowed by the Court below were excluded, then, in the case supposed (which is, in fact, the case at bar), no proof could be adduced at all; and it would follow that the more complete and disastrous the conflagration the less would be the liability of the insurer. A ruling leading to such a con *283 elusion is obviously illogical and untenable. We find, therefore, no error in the rulings set forth in the first, second and third exceptions and in the rejection of the appellants’ fourth and fifth prayers.

The question presented by the fourth exception arose in this way : The conditions annexed to the policy provide, amongst other things, that “ the insured, as often as required, shall submit to examinations under oath by any person named by this company, and subscribe the same, &c.” On March 5th, 1894, Mr. Thomas E. Bond, adjuster, required the appellee to submit to an examination under oath. No authority from the company to Mr. Bond to make the examination was shown the appellee, but he nevertheless did undergo an examination, which was taken down by a stenographer, and he states he produced what books he had. He further testifies that Mr. Bond never asked him to sign the examination, and that he did not sign it because as taken down it was full of errors. He likewise stated that he was -not asked to sign it. He was then asked whether Mr. Bond ever refused to let him, the appellee, correct the statement. The question was objected to, the Court sustained the objection, and hence the fourth exception. The question was irrelevant. It did not appear that Mr. Bond had been appointed by the company to make the examination, and the appellee was under no obligation to submit to or to sign an examination until he had been informed that some person had, in the language of the policy, been “named by ” the company to make it; and whether Mr. Bond refused to let the appellee correct errors in the stenographic report of the examination was under the circumstances wholly immaterial as respects the liability of the company. If the company desired the statement signed it should have demanded that the appellee sign it. The mere fact that Mr. Bond did not refuse to correct any errors in the copy was no evidence that the company either exacted or insisted on the signature. It literally proved nothing.

*284 The fifth exception also presents a question of the admissibility of evidence. Listner was the adjuster for the appellee ; he made out the proof of loss and was present at the examination alluded to in discussing the preceding exceptions. Mr. Bond testified that he had given a copy of the examination to Listner, and he was then asked, “What did you say to Mr. Listner at the time you gave him the copy of the deposition of Mr. Keene,” the appellee? An objection was made which the Court sustained and this ruling is the one complained of in the fifth exception. Clearly there was no error in this ruling. Nothing that Mr. Bond said to Mr. Listner could affect in any way the rights of the appellee. There is no pretence that Listner had any authority to bind the appellee. Listner was the appellee’s adjuster, and any declaration made by Bond to him’ about a totally different subject, viz., the written examination of the appellee, could not possibly bind the appellee. The proffered evidence was wholly irrelevant.

The remaining exception relates to the prayers. The appellant presented seven, all of which were rejected. The appellee offered four, the first, second and fourth of which were granted, the third not being in the record; and the learned Judge of the Superior Court gave an instruction of his own. The appellant filed special exceptions to the granting of the appellee’s first and fourth prayers. We find no errors in the granted prayers. The first prayer asks the Court to instruct the jury, that if they find from the evidence that the defendant made the policy of insurance offered in evidence, and delivered the same to the plaintiff; and further find that the property described in said policy was totally destroyed by fire, on or about the second day of December, 1893 ; and that the defendant had notice of the fire at the time thereof, and that the plaintiff furnished the proofs of loss referred to in the evidence, together with the certificate of the magistrate, and furnished, so far as it was possible for him so to do, an inventory of the property destroyed, stating the quantity and cost of each article and the amount *285 claimed thereon; and furnished so far as it was possible for him so to do, the cash value of each item and the amount of loss thereon; and also furnished the copy of all the descriptions and schedules in all the policies, then the plaintiff is entitled to recover. This prayer is clearly sound if supported by the evidence ; and we think the evidence alluded to in considering the first, second and third exceptions was quite sufficient to goto the jury, and if believed by them, to support the hypothesis of the instruction. ( 50 Md. 193 ). The second instruction is not open to criticism. There was evidence, if credited, to support the facts, hypothetically submitted, and if the jury found those facts, then obviously the failure of the appellee to sign the examination heretofore mentioned furnished no reason for the refusal of the appellant to pay the loss. The fourth prayer is not obnoxious to the special exception filed to it for the same reason we have given in disposing of the special exception to the first prayer. The legal principle it announces is sound, and is that generally applied in estimating damages in such cases as this and in apportioning them amongst contributing companies.

• The first, second and third prayers of the appellant were properly rejected. They relate to the proof of loss and its legal sufficiency. The proof of loss furnished in this case— a case of total loss — was under the circumstances all that could have been required. These prayers exacting a more detailed proof were consequently erroneous. The sixth prayer being the converse of the appellee’s second and the latter being right, the former must be wrong. The seventh prayer asserts that the appellee did not furnish a copy of all the descriptions and schedules in all policies as he was required to do under the terms of the policy sued on, and inasmuch as the evidence shows that such description and schedules were duly demanded by the defendant, the verdict of the jury must be for the defendant. But the evidence does not justify the assumption of facts contained in this prayer. The proof of loss distinctly gave the names of the other six *286 teen companies having policies on this property. It gave the numbers of these policies, the amounts covered by each and the dates of their respective expiration ; and it expressly stated that “ full copies of the written portions of all other policies and endorsements, transfers and assignments are hereto annexed, or will be furnished on demand.” The requirement was substantially complied with. The written portion of the policy sued on was set out and, as stated, the names of the other companies holding policies on the same property, a statement of the respective amounts and of the dates showing that they were concurrent with the policy in suit, constituted a substantial compliance with the condition relied on in the seventh prayer. (Jones v. Howard Ins. Co., 22 Northeastern Rep. 578; Keeney v. Ins. Co., 71 N. Y. 396 ). The Court’s instruction was clearly right under the case of Citizens’ Fire Ins. Co. v. Doll, 35 Md. 103 . Finding no errors the judgment will be affirmed with costs above and below.

(Decided March 31st, 1897).

Judgment affirmed with costs above and below.