Liverpool & London & Globe Ins. Co. v. Kearney, 180 U.S. 132 (1901)

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Liverpool and London and Globe Insurance Company v. Kearney

No. 85

Submitted November 7, 1900
Decided January 7, 1901
180 U.S. 132

ERROR TO THE CIRCUIT COURT OF

APPEALS FOR THE EIGHTH CIRCUIT

Syllabus

The plaintiff in error insured the defendants in error against loss by fire by two policies, one dated in June, 1894, the other in February, 1895, each of which contained the following provision:

The assured under this policy hereby covenants and agrees to keep a set of books showing a complete record of business transacted, including all purchases and sales, both for cash and credit, together with the last inventory of said business, and further covenants and agrees to keep such books and inventory securely locked in a fireproof safe at night, and at all times when the store mentioned in the within policy is not actually open for business, or in some secure place not exposed to a fire which would destroy the house where such business is carried on, and, in case of loss, the assured agrees and covenants to produce such books and inventory, and in the event of the failure to produce the same, this policy shall be deemed null and void, and no suit or action at law shall be maintained thereon for any such loss.

On the night of April 18, 1893, between the hours of one and three A.M., fire accidentally broke out in a livery stable in the Town of Ardmore, which was about three hundred yards distant from the plaintiffs’ place of business. Efforts to arrest the progress of the conflagration failed, and when it had approached so near to the plaintiffs’ place of business that the windows of their store were cracking from the heat and the building was about to take fire, one of the plaintiffs entered the building for the purpose of removing the books of the firm to a safer place, thinking that it would be better to remove them than to take the chances of their being destroyed by fire. He opened an iron safe in the store in which they had been deposited for the night, which was called a fireproof safe, and took them therefrom and to his residence some distance away. The books consisted of a ledger, a cash book, a day book or blotter, and a small paper-covered book containing an inventory that the firm had taken of their stock on or about January 1, 1895. In the hurry and confusion incident to the removal of the books, the inventory was either left in the safe and was destroyed or was otherwise lost, and could not be produced after the fire. The other books, however, were saved, and were exhibited to the insurer after the fire and were subsequently produced as exhibits on the trial. There was neither plea nor proof that the loss of the inventory was due to fraud or bad faith on the part of the plaintiffs or either of them. An action for the amount of the loss was brought by the insured against the insurance company, on the trial of which the jury gave a verdict in the plaintiffs’ favor, on which judgment was entered, which judgment was sustained by the circuit court of appeals. Held:

(1) That it was not intended by the parties that the policy should become void unless the fireproof safe was one that was absolutely sufficient against every fire that might occur, but that it was sufficient if the safe was such as was commonly used, and such as, in the judgment of prudent men in the locality of the property insured, was sufficient.

(2) That if the plaintiffs had the right, under the terms of the policy, as undoubtedly they had, to remove their books and inventory from the safe to some secure place not exposed to a fire which might destroy the building in which they carried on business, it was never contemplated that they should lose the benefit of the policies if, in so removing their books and inventory, the same were lost or destroyed, they using such care on the occasion as a prudent man, acting in good faith would exercise.

The case is stated in the opinion of the Court.