{ "id": 8658286, "name": "M. L. COGGINS, v. \u00c6TNA INSURANCE COMPANY", "name_abbreviation": "Coggins, v. \u00c6tna Insurance", "decision_date": "1907-02-19", "docket_number": "", "first_page": "7", "last_page": "15", "citations": [ { "type": "official", "cite": "144 N.C. 7" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "88 N. C., 141", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8682781 ], "opinion_index": 0, "case_paths": [ "/nc/88/0141-01" ] }, { "cite": "96 N. C., 480", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8650632 ], "opinion_index": 0, "case_paths": [ "/nc/96/0480-01" ] }, { "cite": "19 L. R. A., 211", "category": "reporters:federal", "reporter": "L.R.A.", "opinion_index": 0 }, { "cite": "81 S. C., 65", "category": "reporters:state", "reporter": "S.C.", "opinion_index": 0 }, { "cite": "19 Tex. Civ. App., 344", "category": "reporters:state", "reporter": "Tex. Civ. App.", "opinion_index": 0 }, { "cite": "180 U. S., 132", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3617854 ], "opinion_index": 0, "case_paths": [ "/us/180/0132-01" ] }, { "cite": "94 Fed., 314", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 6751463 ], "opinion_index": 0, "case_paths": [ "/f/94/0314-01" ] }, { "cite": "68 Fed., 708", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 6729613 ], "opinion_index": 0, "case_paths": [ "/f/68/0708-01" ] }, { "cite": "139 N. C., 390", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8652715 ], "opinion_index": 0, "case_paths": [ "/nc/139/0390-01" ] }, { "cite": "98 Fed., 314", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 6721479 ], "opinion_index": 0, "case_paths": [ "/f/98/0314-01" ] }, { "cite": "78 Fed., 278", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 6723670 ], "opinion_index": 0, "case_paths": [ "/f/78/0278-01" ] }, { "cite": "113 Iowa, 551", "category": "reporters:state", "reporter": "Iowa", "case_ids": [ 2123860 ], "opinion_index": 0, "case_paths": [ "/iowa/113/0551-01" ] }, { "cite": "111 Ga., 122", "category": "reporters:state", "reporter": "Ga.", "case_ids": [ 596338 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ga/111/0122-01" ] } ], "analysis": { "cardinality": 724, "char_count": 15086, "ocr_confidence": 0.447, "pagerank": { "raw": 3.430386827323932e-07, "percentile": 0.8791165044757435 }, "sha256": "0a407c13c50d89fdd9e14bde266d95a52363b10c300d963b4e4fd74e44634a86", "simhash": "1:856de17b3bbcd07e", "word_count": 2614 }, "last_updated": "2023-07-14T19:27:07.773177+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "M. L. COGGINS, v. \u00c6TNA INSURANCE COMPANY." ], "opinions": [ { "text": "Hoke, J.\nDefendant resists recovery in this case by reason of alleged breach of certain stipulations of the policy comprehended under the general term, \u201cthe iron-safe clause.\u201d These stipulations, as contained in the present policy, are as follows:\n\u201c1. The assured will take a complete itemized inventory of \u25a0stock on hand at least once in each calendar year, and unless such inventory has been taken within twelve calendar months prior to the date of this policy, one shall be taken in detail within thirty days of issuance of this policy, or this policy shall be null and void from such date, and upon demand, of the assured the unearned premium from such date shall be returned.\n\u201c2. The assured will keep a set of books which shall clearly and plainly present a complete record of business transacted, including all purchases, sales and shipments, both for cash and credit, from date of inventory as provided for in first section of this clause, and during the continuance of this policy.\n\u201c3. The assured will keep such books and inventory, and also the last preceding inventory, if such has been taken, securely locked in a' fire-proof safe at night, and at all times when the building mentioned in this policy is not actually open for business; or, failing in this, the assured will keep such books and inventories in some place not exposed to a fire which would destroy the aforesaid building.\n\u201cIn the event of failure to produce such set of books and inventories for the inspection of this company, this policy shall become null and void, and such failure shall constitute a perpetual bar to any recovery thereon.\u201d\nAnd the breach assigned is for violation of the first and second items of the clause, to-wit, that the insured made no inventory and kept no books as required by these provisions of the contract.\nThis \u201ciron-safe clause,\u201d frequently attached to policies of insurance, has been very generally upheld by the courts as a reasonable contract limitation on the risk which should be properly borne by tbe company. Knight v. Insurance Co., 111 Ga., 122; Sowers v. Insurance Co., 113 Iowa, 551; Lozano v. Insurance Co., 78 Fed., 278; Insurance Co. v. Kearney, 98 Fed., 314.\nThese decisions and tbe reasons given to support them are, we think, well considered, and the clause, therefore, when properly made a part of the contract of insurance, will'be adjudged with us a valid and binding stipulation.\nIn the two cases before this Court where the question has been raised, Bray v. Insurance Co., 139 N. C., 390, and Parker v. Insurance Co., 143 N. C., and in which recovery by the plaintiff was sustained, the fire occurred within thirty days from the date of the policy, and by the express terms of the contract, the provision known as the iron-safe clause, while incorporated in the policy, had not become effective.\nIn construing this clause, the better considered authorities seem to be to the effect that it should receive a reasonable interpretation, and that only a substantial compliance should be required. Brown v. Insurance Co., 89 Texas, 591; Insurance Co. v. Kemendo, 94 Texas, 367; Insurance Co. v. Redding, 68 Fed., 708; Insurance Co. v. Kearney, 94 Fed., 314; s. c., 180 U. S., 132. There are decisions, however, which hold that a literal compliance should be exacted. But whatever may be the correct rule, there has been no compliance in the present case. '\n,The plaintiff, giving evidence in his own behalf (and his was the only oral testimony produced at the trial), testified as follows: \u201cThe defendant\u2019s agent asked me in regard to an inventory, and I said to him I did not have an inventory; that I only took an assay of the goods about once a year. He then asked me if I had any inventory of my stock here at home, and I told him no.\u201d (Record, p. 17). And again, on pages 21 and 22, plaintiff testified further as follows: \u201cTes, I had another store. The two stores were two miles \u2014 may be a little further \u2014 apart. I have been running the other store about six or seven years. Tbe first stock in tbe new store was made partly out of tbe old store; tbe goods were in boxes and were just carried to tbe other store. I bad moved these goods there in May, 1904. -They bad been in my other store and bad not been there but' just a little bit. They consisted of dry goods, clothing, hardware, tin hardware, groceries and shoes. I never separated those bills. There were also some drugs \u2014 just a general line. No, I never kept any books of the Erastus store. Just a memorandum. I have the sale-books. I have the memorandum of the books kept. I just tore the leaves out of the book and have them here in my vest pocket. Here are the credit accounts.\u201d\nPlaintiff\u2019s counsel endeavored to supply the data which would furnish an approximate estimate of the amount of goods by offering as exhibits certain invoices of goods which plaintiff had sent from the principal store to the store at Erastus, and of some which he had purchased for the latter store after the enterprise was under way. A part of these invoices were burned in the store, but other and much the greater part had, it seems, been copied on to two or three leaves of the ledger of the home store. But these invoices and the entries made from them do not all amount to an inventory of the goods. They are simply a general statement of the aggregate value of goods sent by plaintiff from.one store to the other, and frequently the kind of goods is altogether omitted. Thus, the amount of bills of goods taken from Eernhurst store to Erastus store:\nNo. 1. Shoes...$ 377.45\nNo. 2. Dry goods. 259.86\nNo. 3. Mixed bills. 83.29\nNo. 4. Mixed bills. 68.89\netc., showing five others, termed mixed bills. Then three \u201cbills for suits\u201d; then bill for shoes, aggregating $1,342.34.\nIn Roberts v. Insurance Co., 19 Tex. Civ. App., 344, an inventory is defined to be \u201cA detailed and itemized enumeration of the articles composing the stock with the value of each.\u201d And other' decisions \"and law books generally give substantially a similar definition. Insurance Co. v. Knight, supra; Insurance Co. v. Calhoun, 28 Texas Civ. App., 338; Insurance Co., v. Kemendo, 94 Texas, 367; Black\u2019s Law Dict., 643.\nIn Kemendo\u2019s case, supra, Brown, J., delivering the opinion, stated the object and purpose of inventory as follows: \u201cThe object of having an inventory made was not to ascertain the gross value of the property insured, but to ascertain the different articles that went to make up the stock in order that the insurance company might test the correctness of the claim in two respects: (1) whether the articles of which the stock was composed all belonged to the class of goods covered by the policies; (2) whether the valuations attached to the diffei*ent items, and which went to make up the total sum expressed, was reasonable.\u201d Speaking further on this subject \u2014 and the comment is appropriate to the facts before us - \u2014 the Judge said: \u201cIf the assured had furnished everything from which the information contracted for could be with reasonable certainty ascertained, then the question of substantial compliance would be before'the Court; but where there is no compliance whatever, there can be no question of substantial compliance.\u201d And so it is here.\nThere has never been any inventory taken of the goods comprising the stock of this Erastus store, the one covered by the policy. There is not now and has never been any data from which such an inventory could be reasonably approximated.\nThe plaintiff, himself, testifying to this question, very correctly and properly said: \u201cNo, I do not know how much hardware, groceries and shoes I had. I never separated these bills. There was also some drugs \u2014 just a general line.\u201d The Court was right, therefore, in holding that on the evidence of plaintiff, there had been a breach of the first stipulation in the iron-safe clause.\nPlaintiff then takes the position that while this ruling would prevent a recovery for the loss of the goods, he should still be allowed to recover for the loss of the storehouse, inasmuch as the policy placed a definite and distinct portion of the insurance on the building. But we cannot so interpret the contract. True, the amount of the insurance is apportioned, a definite sum being specified for the building and another for the goods. It is also true that the stipulations of the iron-safe clause are more especially addressed to the insurance of the goods; but the premium on the policy is entire; the concluding stipulation is to the effect that if the insured fails to produce the set of books and inventories as required by the contract, the policy shall become null and void and the \u201cfailure shall constitute a perpetual bar to any recovery thereon.\u201d And furthermore, the goods are insured \u201cwhile they are contained in the storehouse, and not elsewhere\u201d ; thus making the risk on the goods and on the building substantially identical.\nAccording to the evidence the goods were placed in a small frame structure 25 by 25 feet, not worth over $300, where the destruction of the one would almost of a certainty involve the destruction of the other; and the physical hazard of the risk and the moral hazard, as affected by these stipulations in question, were one and the same. In such case, we are clearly of the opinion that the contract is not divisible, and that a breach of the stipulation will go to the entire measure of the obligation.\nWe are aware that there is much conflict among the decisions on policies of this character, where separate amounts are named on different items\u2019or kinds of property, and the premium is one and entire. Many of the decisions are to the effect that whenever the premium is entire and undivided, the obligation is likewise indivisible, and that a breach of a stipulation when it so provides will bar any and all recovery in case of loss.\nThis was so held in the well-considered case of Knight v. Insurance Co., 111 Ga., supra, and in which many authorities are cited. There are cases to the contrary, as in Miller v. Insurance Co., 14 Oklahoma, 81 S. C., 65; L. R. A., 173, cited by plaintiff\u2019s counsel, in which a recovery for the building was sustained, notwithstanding there had been a breach of the iron-safe clause established; the clause being expressed in the exact language of the one contained in this policy; and quite a number of cases are cited as supporting authority.\nWithout going into any extended 'review of these different decisions, we are of opinion that the great weight of authority, as well as the better reason, establishes the positions that when, to the fact that the premium is entire, there is added the fact of identity of risk, the obligation is single, and on breach of the stipulation all recovery is barred.\nThis question of identity of risk being held the determinative factor in policies of this kind, where the amounts are separate and the premiums entire, is very well treated in a note to Wright v. Insurance Co., 19 L. R. A., 211, the case being taken from 12 Montana, 474, where a number of decisions on this subject'are considered and reviewed.\nThere are cases in our own court where this identity of risk has been made a controlling feature in the decision. Cuthbertson v. Insurance Co., 96 N. C., 480; Biggs v. Insurance Co., 88 N. C., 141. In this last case, Ruffin, J., for the Court said: \u201cBut it is not necessary that we should further advert to them or attempt to reconcile them, for according to no one of them is there a doubt but that in a case like ours, in which the property insured consists of a single storehouse and the goods kept therein, a breach as to part will work a forfeiture as to the whole. In such case it is impossible to introduce any new element of carelessness by lessening the interest of the owner in one species of the property, so as to increase the risk thereof, without at the same time adding to the hazard of the other. Every risk that can attend the one must attend the other, and consequently the same rule must apply to both.\u201d\nWe hold that on the entire evidence no recovery could be had, and the action was properly dismissed.\nAffirmed.", "type": "majority", "author": "Hoke, J." } ], "attorneys": [ "Walter JE. Moore, Shepherd & Shepherd and Coleman C. Cowan for plaintiff.", "Merriclc & Barnard and King, Spalding & Little for defendant." ], "corrections": "", "head_matter": "M. L. COGGINS, v. \u00c6TNA INSURANCE COMPANY.\n(Filed 19 February, 1907).\n1. Fire Insurance Policies \u2014 -Validity of \u201cIron-safe Clause.\u201d \u2014 The limitation of liability of a fire insurance company contained in the \u201ciron-safe clause\u201d is reasonable and valid'.\n2. Producing a General Statement of Values Not a Compliance. \u2014 It is not a compliance by the insured with his contract to produce a complete itemized inventory of stock on hand for him to produce a general statement of aggregate values; and such alone being no compliance, the question of substantial compliance does not arise.\n3. What Inventory Must Show. \u2014 An inventory must show \u201ca detailed and itemized enumeration of the articles composing the stock, and value of each,\u201d so that it may appear that the articles are embraced by the contract of insurance, and that the price of each, and the sum total, are reasonable.\n4. Premium Entire, Separate Risks Identified, \u2014 When the amount of ' insurance under the policy is specifically apportioned to the building and the goods therein contained in fixed amounts as to each, and the premium is entire and the risks substantially identical, the obligation of the insurer is single,' and the insured cannot recover as to either when he fails to produce the books and inventory required by his contract of insurance.\nCivil actioN to recover on a policy of insurance, tried before McNeill, and a jury, at May Term, 1906, of JacesoN Superior Court.\nThere was evidence tending to show that plaintiff, having conducted for several years a general mercantile business at Eernhurst, Jackson County, N. C., in May, 1904, established a subsidiary business at Erastus, N. 0., two miles distant from the other store, and conducted same till the loss hereafter referred to. This second enterprise was carried on in a small storehouse, 18 by 25 feet, and a side room, 7 by 25 feet, mailing the entire floor space 25 by 25, the house being valued by estimate at $300.\nIn January, 1905, the plaintiff procured a policy of insurance in defendant company on the structure at Erastus, N. O., and the merchandise therein contained, consisting principally of groceries, boots and shoes and clothing; the amount of insurance on the store being fixed in the policy at $200 and that on the goods at $1,500.\nOn the night of 17 April, 1905, the storehouse at Erastus and all the goods therein contained was destroyed by fire, and defendant company, having failed and refused to pay the insurance, the plaintiff (claiming that his loss, by reason of destruction of store was $300 and that the goods destroyed at the time amounted to $2,100) instituted, the present action to recover the amount due on the policy.\nAt the close of plaintiff\u2019s testimony, on motion of defendant, the action was dismissed as on judgment of nonsuit, and plaintiff excepted and appealed.\nWalter JE. Moore, Shepherd & Shepherd and Coleman C. Cowan for plaintiff.\nMerriclc & Barnard and King, Spalding & Little for defendant." }, "file_name": "0007-01", "first_page_order": 47, "last_page_order": 55 }