I find myself so much out of harmony with the opinion of the majority members of the court that I feel impelled to not only dissent from it but also to as briefly as possible register my reasons therefor. The reason for such disagreement on my part grows out of a desire, and what I also conceive to be my duty, to strive to make the opinions of this court to, not only harmonize with the great body of the declared law upon any given subject, but also that they be supported by reason and logic, and that they should never be rested upon an unfounded ipse dixit of the judge writing the opinion or upon pure dictum of a prior opinion.
The doctrine of the majority opinion was first promulgated by this court in the case of Phœnix Insurance Co. of Brooklyn v. Angel, 38 S.W. 1067, 18 Ky. Law Rep. 1034, wherein it was said in the opinion that what is commonly termed the iron-safe clause in insurance policies was "without consideration." Not a case was cited in support of that statement, and I am confident that no amount of industry on the part of counsel in that case, or on the part of the writer of that opinion, would have discovered any authority to sustain it. In point of fact, as I shall later endeavor to show, every court of last resort in the Union, and every text-writer upon the subject, are of one accord that such promissory warranties in insurance policies are not only valid, but that they are also supported by the same consideration that passes between the parties for all other obligations and promises that they each assume and make under the terms of the insurance contract. I cite no cases in support of that statement in this dissenting opinion, because the wide search that I have made in this, and other recent cases coming before this court involving the same question, has convinced me that no court has ever held to the contrary. *Page 250 Moreover, the ipse dixit, to which I have referred, was unnecessary in that particular case, since it appeared that the provision with reference to the "iron-safe clause" was waived by the agent who issued the policy, because he knew at the time of delivering it that the insured had no iron safe, and which a respectable number of courts hold is sufficient to constitute a waiver on the part of the company, if the particular agent had authority to make it.
For some considerable time insurance policies provided for no substitute action in lieu of the required iron safes, but latterly there has been added to that clause, in policies containing them, these words, "or in some secure place not exposed to a fire which would destroy the building where such business is carried on," and which requirement, like the provision for the iron safe, is for the purpose of securing the preservation of the books containing the required inventories "at night and at all times when the store mentioned in the within policy is not actually open for business." In other words, the requirement in more modern policies is simply one to preserve the evidence of the value of the property insured and to prevent it from being destroyed by the same fire that destroyed the property. That promissory warranty may be complied with, either by providing an iron safe and keeping the evidence therein at night and when the store is not open for business, or by removing the evidence to another building that would not be exposed to a fire that destroyed the insured one, and the courts everywhere have exacted no more than a substantial compliance with such provisions. With the policy in the Angel case providing for no substitute method of preservation other than the keeping of an iron safe, and with knowledge on the part of the agent that the insured had none at the time the policy was issued and delivered, it might well have been said that the provision was waived, instead of tearing it out of the policy on the ground that it was "without consideration," and it was in effect so held in that opinion.
That opinion was followed by the cases of Sun Mutual Insurance Co. v. Crist, 39 S.W. 837, 19 Ky. Law Rep. 305, and Citizens' Insurance Co. v. Crist, 56 S.W. 658, 22 Ky. Law Rep. 47. In the first one the court does not refer to or mention the Angel case, but plants its decision upon the conclusion that the promissory warranty *Page 251
contained in the iron-safe clause was included in and governed by the provisions of section 639 of our present statutes, enacted in 1874, with reference to statements contained in anapplication for a policy of insurance, and which this and other courts now hold has no reference to promissory warranties contained in the policy itself, as will be seen from our two recent opinions of Niagara Fire Insurance Co. v. Mullins,
Following the latter Crist opinion, the case of Niagara Fire Insurance Co. v. Heflin, 60 S.W. 393, 22 Ky. Law Rep. 1212, was decided by this court. In that case the insured kept a complete set of books at his dwelling house within the times prescribed in the clause under consideration, but he had by oversight left a small cashbook in his store which was destroyed by the fire, but the rest of his books that furnished the information embodied in the purpose of the clause were preserved and produced on trial, and it was shown that all the cash taken in had been deposited in a bank and which corresponded to the entries in the cashbook that was destroyed. It was in effect held in that case that there had been a substantial compliance with the provisions of the policy, and for that reason the opinion said:
"It will, therefore, be unnecessary for us to determine whether these stipulations of the policy *Page 252 are warranties or mere representations under the terms of the statute."
It will be seen that the court declined to so hold, as it had also done in the Crist opinions, and likewise it declined to rest its opinion upon the invalidity, for any cause, of the stipulation with reference to the preservation of the evidence (iron-safe clause). The opinion did not even mention the preceding ones in the Angel and Crist cases.
The Heflin case was followed by the case of Germania Insurance Co. v. Ashby,
The next case from this court is Springfield Fire Marine Insurance Co. v. Shapoff,
The next and last case from this court dealing with the question is that of London Guarantee Accident Co. v. Massman,
"The company shall not be liable for loss . . . unless books are kept by the assured and the loss can be accurately determined therefrom by the company."
The action on the policy was defended upon the ground that the quoted clause had not been complied with. The safe of the insured was robbed, and it appeared in the evidence that the thief or thieves also took the books which he kept therein. However, the effect of the stealing of the books upon the right of plaintiff to recover was really not presented in that case, because the lower court sustained a demurrer to the paragraph of the answer alleging that no such books were kept or preserved as required by the policy, and that ruling was affirmed by this court.
I have thus devoted considerable time and space to a brief review of every case cited in the majority opinion in support of it, and I confidently submit that none of them really and actually approve of the doctrine of the Angel opinion except the Floyd and Massman cases. I have hereinbefore stated that every court of last resort in the Union, and all text-writers, oppose the doctrine of the majority opinion, and many of them sharply criticize that doctrine as it was first announced in the Angel opinion as being entirely out of harmony with the otherwise *Page 254
universal law upon the subject, and, likewise, as not supported by logic or reason. Some of the authorities and cases so holding are 26 C. J. 249; 14 Rawle C. L. 1139; Joyce on Insurance (2nd Ed.), secs. 2063 and 2063a; Ostrander on Insurance, sec. 299; Clements on Insurance, p. 264; Cooley's Brief on Insurance, pp. 1813-1915; Thompson v. State Assur. Co.,
It is sufficient to repeat that I have been unable to find any case or any authority sustaining the doctrine of the Angel opinion upon which, as I have pointed out, and upon the Massman opinion, is the majority opinion rested. Neither the majority opinion, nor the one in the Massman case, attempt to justify the holding in the Angel opinion upon any recognized sound principle. It is virtually conceded in both of them that the only ground upon which that opinion can be followed is upon the doctrine of stare decisis. I have already shown that up to the time of rendering the Massman opinion only one other from this court (Floyd opinion) indorsed in toto the doctrine of the Angel opinion, and I do not regard those two opinions as establishing the fixed rule of property upon which the doctrine of stare decisis is built. Besides, who would be adversely affected by overruling the Angel opinion and the one in the Massman case, except it be an insured who has sustained loss under his policy and which has not been paid at the time of the rendition of this opinion? I venture the statement that if a list of such cases could be taken in this commonwealth, it would show but few, if any, persons in that condition. After the handing down of this opinion, correcting *Page 255 the law and harmonizing it so as to be in unison with all the other declared law upon the subject, and in harmony with logic, reason and sound principles, every insured carrying a policy containing an iron-safe clause would comply therewith without purchasing an iron safe by simply removing his books and inventories to a safe place during night and other times when the building in which the property insured was located was not open for business. To so hold is against no public policy known to me; but, on the contrary, it would substantiate the right of parties to a contract, including an insurance one, if sui juris, to insert any legal stipulation in their contract that they see proper.
Likewise, experience and observation convince me that to uphold such a clause would be in furtherance of promoting honesty and uprightness rather than entailing of hardships. There is no other practical method by which the insurer may be protected against fraud in the alleged value of the property destroyed. Boxes and receptacles, in which many articles of merchandise stock are incased, might fill the shelves and create the appearance of a full stock, and at the same time be empty. The requirements of the policy condition are not difficult to comply with, and, everything considered, I think now is the time to correct the glaring error into which this court has fallen, and to cease traveling in that forbidden path.
Judges REES and LOGAN join me in this dissent.