GERMAN, J.
In this case the facts are not in dispute. Suit was brought by the defendant in error, F. C. Flewellen, to recover upon three insurance policies, one issued September 17,1917, for $2,000, one September 25, 1917, for $2,000, and the other March 23, 1918, for $2,400. Plaintiffs in error sought to avoid the policies for breach of the warranty clauses, which were the usual provisions in lire insurance policies: (a) With reference to the taking of a complete itemized inventory; (b) with reference to the making and keeping of a set of books, presenting a record of the business transacted, including purchases, sales, and shipments; and (c) with reference to preserving the inventories and books and producing the same after the fire. A judgment was in favor of defendant in error for the amount of each of the policies. , ,
The Court of Civil Appeals affirmed the judgment of the trial court (221 S. W. 630), but declined to pass on the issue as to whether Vernon’s Sayles’ Ann. Civ. St. 1914. art. 4874a, is applicable to the facts of this case, as that question was then pending before the Supreme Court for- decision. Since the opinion in this case was rendered the Supreme Court has settled this question in the case of McPherson v. Camden Fire Insurance Co. (Tex. Com. App.) 222 S. W. 211, and we therefore hold that said article has no application to the warranties relied upon in this case.
In response to special issues the jury found that the defendant in error on September 17, 1917, October 17, 1917, and June IS, 1918, made a complete itemized inventory of the stock on hand; that the books, inventories, records, and other papers kept by the defendant in error were in substantial coinpli-ancé with the record warranty clause of the policies, and were sufficient to enable the jury to ascertain the amount and the value of the goods on hand at the time of the fire. They further found that the stock of goods covered by the policies were destroyed by fire July 26, 1918, and the value of such stock at that date was $9,939.56.
Plaintiffs in error assail the findings of the jury by their contention that the undisputed evidence shows, as a matter of law, a breach of the record warranty clause in the three particulars above set out. We do not think this proposition is supported by the authorities, and have concluded that the findings of the jury are supported by the evidence.
[1] The authorities are in accord that the warranties in insurance policies, such as are under inquiry here, must be substantially complied with, but in determining what is required a fair and reasonable construction is.to be adopted, so as to effectuate the contract of indemnity rather than defeat it. What is a substantial compliance with these requirements must be determined largely by the facts of each particular case, and this has resulted in numerous decisions, differing in. results, but not neccessarily in conflict with each other. Briefly, the facts are these:
Defendant in error was a partner with one Bassel in the firm of Bassel-Flewellen Produce Company, which began a new business during August, 1917. As soon as the stock [835]*835was received an inventory was taken, but it was not preserved. Some time in October the defendant in error bought the interest of Bassel and continued the business. At that time another complete inventory was taken, which the jury found was of date October 17, 1917. On June 18, 1918, another inventory was taken, and this was offered in evidence, having been submitted to the adjuster after the fire. This inventory shows the number of bushels, tons, sacks, and pounds of the different articles on hand, with the value of each bushel, ton, sack, and pound, and the total value of each item. The stock was practically all feed-stuff, and consisted of about 12 different items. With reference to the inventory taken October 17, 1917, the defendant in error testified that it was taken in the same way as the one of June 18, 1918, and “showed everything in stock to a nickel.” This inventory was left by defendant in error at his bank, and it was his belief that it was at the bank from the time it was made to the date of the fire. After the fire a search was made for it at the bank, but it could not be found.
With the exception of a few items all of the stock of defendant in error was bought in carload lots. All invoices of these purchases were preserved and kept in a bound invoice book, which was submitted to ihe adjuster and produced upon the trial of the ease. A few items to supply the demand of customers were bought in Temple, and these were paid for by check, a record being made on the stubs of the items purchased, the date when purchased, the name of the party from whom bought, and the price paid. These stubs were bound in a check book, which was submitted to the adjuster and used upon the trial.
Part of the sales were in carload lots. An invoice of such sales was made in duplicate, one copy being kept by the defendant in error, and these invoices, with copy of the bills of lading attached to same, were pasted in the bound invoice book. These invoices gave a detailed statement of these purchases and their cost.
The method of bookkeeping adopted by defendant in error with reference to sales other than in carload lots was as follows: When a sale was made it was noted upon a desk pad or daily sales ticket showing the articles sold, the date, and the price received. The tickets containing this memoranda were then torn off and put on a spindle. Nearly all sales were for cash and each cash sale was recorded on the cash register at the time made. A few large sales were to contractors who paid on their pay days. When sales were made to thorn their names were placed on the sales tickets, with statement of the purchases and prices, and when same were .paid they were recorded on the cash register. At the close of each day’s business the cash sales indicated by the register were checked with the sales tickets, and the various items were totaled on an adding machine. The daily sales tickets, the cash register slips, and the adding machine slips were pinned together at the close of each day’s business and placed in the safe. All of these invoices, tickets, and slips were submitted to the ad-' juster after the fire, and produced on the trial.
The evidence is that the invoices, bills of lading, and bank book stubs showed the items of stock and the value of same that had gone into the business from the beginning ; and in this manner defendant in error showed every item of stock and the value of same going into the business after the inventory of June 18, 1918. In the manner above indicated defendant in error showed the items sold from the stock and the amount received for same, and also all shipments from the beginning of the business and also from the time of the last inventory to the date of the fire. In our opinion the records and data produced by the defendant in error furnished means by which the jury could determine with accuracy the value of the stock on hand at the date of the loss, which they found to exceed the amount of the insurance. All goods were sold for cash, at a profit, and this increased the loss.
Ap we construe the contentions of plaintiffs in error they do not seriously question the correctness of the finding of the jury as to the amount of loss, but they do contend that the method of keeping the books and records which furnished the means by which the jury reached their conclusion was not such as the law requires to satisfy the warranty clauses of the policies.
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GERMAN, J.
In this case the facts are not in dispute. Suit was brought by the defendant in error, F. C. Flewellen, to recover upon three insurance policies, one issued September 17,1917, for $2,000, one September 25, 1917, for $2,000, and the other March 23, 1918, for $2,400. Plaintiffs in error sought to avoid the policies for breach of the warranty clauses, which were the usual provisions in lire insurance policies: (a) With reference to the taking of a complete itemized inventory; (b) with reference to the making and keeping of a set of books, presenting a record of the business transacted, including purchases, sales, and shipments; and (c) with reference to preserving the inventories and books and producing the same after the fire. A judgment was in favor of defendant in error for the amount of each of the policies. , ,
The Court of Civil Appeals affirmed the judgment of the trial court (221 S. W. 630), but declined to pass on the issue as to whether Vernon’s Sayles’ Ann. Civ. St. 1914. art. 4874a, is applicable to the facts of this case, as that question was then pending before the Supreme Court for- decision. Since the opinion in this case was rendered the Supreme Court has settled this question in the case of McPherson v. Camden Fire Insurance Co. (Tex. Com. App.) 222 S. W. 211, and we therefore hold that said article has no application to the warranties relied upon in this case.
In response to special issues the jury found that the defendant in error on September 17, 1917, October 17, 1917, and June IS, 1918, made a complete itemized inventory of the stock on hand; that the books, inventories, records, and other papers kept by the defendant in error were in substantial coinpli-ancé with the record warranty clause of the policies, and were sufficient to enable the jury to ascertain the amount and the value of the goods on hand at the time of the fire. They further found that the stock of goods covered by the policies were destroyed by fire July 26, 1918, and the value of such stock at that date was $9,939.56.
Plaintiffs in error assail the findings of the jury by their contention that the undisputed evidence shows, as a matter of law, a breach of the record warranty clause in the three particulars above set out. We do not think this proposition is supported by the authorities, and have concluded that the findings of the jury are supported by the evidence.
[1] The authorities are in accord that the warranties in insurance policies, such as are under inquiry here, must be substantially complied with, but in determining what is required a fair and reasonable construction is.to be adopted, so as to effectuate the contract of indemnity rather than defeat it. What is a substantial compliance with these requirements must be determined largely by the facts of each particular case, and this has resulted in numerous decisions, differing in. results, but not neccessarily in conflict with each other. Briefly, the facts are these:
Defendant in error was a partner with one Bassel in the firm of Bassel-Flewellen Produce Company, which began a new business during August, 1917. As soon as the stock [835]*835was received an inventory was taken, but it was not preserved. Some time in October the defendant in error bought the interest of Bassel and continued the business. At that time another complete inventory was taken, which the jury found was of date October 17, 1917. On June 18, 1918, another inventory was taken, and this was offered in evidence, having been submitted to the adjuster after the fire. This inventory shows the number of bushels, tons, sacks, and pounds of the different articles on hand, with the value of each bushel, ton, sack, and pound, and the total value of each item. The stock was practically all feed-stuff, and consisted of about 12 different items. With reference to the inventory taken October 17, 1917, the defendant in error testified that it was taken in the same way as the one of June 18, 1918, and “showed everything in stock to a nickel.” This inventory was left by defendant in error at his bank, and it was his belief that it was at the bank from the time it was made to the date of the fire. After the fire a search was made for it at the bank, but it could not be found.
With the exception of a few items all of the stock of defendant in error was bought in carload lots. All invoices of these purchases were preserved and kept in a bound invoice book, which was submitted to ihe adjuster and produced upon the trial of the ease. A few items to supply the demand of customers were bought in Temple, and these were paid for by check, a record being made on the stubs of the items purchased, the date when purchased, the name of the party from whom bought, and the price paid. These stubs were bound in a check book, which was submitted to the adjuster and used upon the trial.
Part of the sales were in carload lots. An invoice of such sales was made in duplicate, one copy being kept by the defendant in error, and these invoices, with copy of the bills of lading attached to same, were pasted in the bound invoice book. These invoices gave a detailed statement of these purchases and their cost.
The method of bookkeeping adopted by defendant in error with reference to sales other than in carload lots was as follows: When a sale was made it was noted upon a desk pad or daily sales ticket showing the articles sold, the date, and the price received. The tickets containing this memoranda were then torn off and put on a spindle. Nearly all sales were for cash and each cash sale was recorded on the cash register at the time made. A few large sales were to contractors who paid on their pay days. When sales were made to thorn their names were placed on the sales tickets, with statement of the purchases and prices, and when same were .paid they were recorded on the cash register. At the close of each day’s business the cash sales indicated by the register were checked with the sales tickets, and the various items were totaled on an adding machine. The daily sales tickets, the cash register slips, and the adding machine slips were pinned together at the close of each day’s business and placed in the safe. All of these invoices, tickets, and slips were submitted to the ad-' juster after the fire, and produced on the trial.
The evidence is that the invoices, bills of lading, and bank book stubs showed the items of stock and the value of same that had gone into the business from the beginning ; and in this manner defendant in error showed every item of stock and the value of same going into the business after the inventory of June 18, 1918. In the manner above indicated defendant in error showed the items sold from the stock and the amount received for same, and also all shipments from the beginning of the business and also from the time of the last inventory to the date of the fire. In our opinion the records and data produced by the defendant in error furnished means by which the jury could determine with accuracy the value of the stock on hand at the date of the loss, which they found to exceed the amount of the insurance. All goods were sold for cash, at a profit, and this increased the loss.
Ap we construe the contentions of plaintiffs in error they do not seriously question the correctness of the finding of the jury as to the amount of loss, but they do contend that the method of keeping the books and records which furnished the means by which the jury reached their conclusion was not such as the law requires to satisfy the warranty clauses of the policies. In view of the evidence and the findings of the jury we have reached the following conclusions:
[2] First. The warranty with reference to taking inventories was complied with. The first two policies were issued September 17, 1917, and September 25, 1917, and the jury found that a complete itemized inventory was made October 17, 1917. In addition the invoices and bank book stubs furnished proof of the value of all items going into the stock from the beginning. This was in effect a strict compliance with the requirement that an inventory should be taken within SO days after the date of the policy.
[3] We have no hesitancy in saying that the inventories of June 18, 1918, and October 17, 1917, which defendant in error says were similar as to the manner in which they were made, were a substantial compliance with the requirement for a complete and itemized inventory. This conclusion is not in conflict with the case of Hartford Fire Insurance Co. v. Walker (Tex. Com. App.) 210 S. W. 682, but we think is supported by statements contained in that opinion. In that case the purported inventory merely contained a statement of the number of sacks of oats, bran, etc., with no value, or grade [836]*836given at all. In tlie present case the inventory not only shows the number of sacks, bushels, pounds, etc., but the value per sack, bushel, and pound, and the total value of each item. For a like reason this conclusion is not in conflict with the decision in Camden Fire Insurance Co. v. Yarbrough (Tex. Com. App.) 215 S. W. 842.
[4] Second. We do not think the policies can be avoided by failure to produce the inventory of October 17, 1917. It appears that the failure to produce this inventory was not by reason of any fault, negligence, or design on the part of defendant in error. This conclusion is directly supported by the case of Assurance Co. v. Kemendo, 94 Tex. 373, 61 S. W. 1102. See, also, the case of Westchester Fire Insurance Co. v. Biggs (Tex. Civ. App.) 216 S. W. 274.
Third. We next come to consider whether or not, as a matter of law, the defendant in 'error failed to substantially comply with the terms of the policies requiring the keeping of a set of books. The Court of Civil Appeals treated this as the most important question for consideration, and the Supreme Cqurt granted the writ of error on the theory that the opinion was possibly in conflict with the decision in Monger & Henry v. Delaware Insurance Co., 97 Tex. 362, 79 S. W. 7, which relates to this phase of the case.
A careful consideration of many authorities leads us to the conclusion that the books and records of defendant in error and the method of keeping same were a substantial compliance with the warranty clause in this regard. Brown v. Palatine Insurance Co., 89 Tex. 590, 35 S. W. 1060; Liverpool & London & Globe Insurance Co. v. Jones (Tex. Civ. App.) 197 S. W. 738; American Cent. Insurance Co. v. Hardin (Tex. Civ. App.) 151 S. W. 1154; Phoenix Insurance Co. v. Padgitt (Tex. Civ. App.) 42 S. W. 802; Scottish Union & National Insurance Co. v. Andrews, 40 Tex. Civ. App. 184, 89 S. W. 419; First National Bank v. Cleland, 36 Tex. Civ. App. 478, 82 S. W. 337; Westchester Fire Insurance Co. v. McMinn (Tex. Civ. App.) 198 S. W. 638; Royal Insurance Co. v. Okasaki (Tex. Civ. App.) 177 S. W. 200; Hanover Fire Insurance Co. v. Eisman, 45 Okl. 639, 146 Pac. 214, Ann. Cas. 1918D, 288.
[5, 6] The purpose of all these warranties, and particularly the one requiring the keeping of books, is accomplished when it is shown that the insured has kept such a record of his business as will enable a man of ordinary intelligence to ascertain from the same with reasonable certainty the amount and the value of the goods destroyed. The obligation imposed upon the insured is to furnish the insurance company, in case of loss, with such—
“book account of his invoices, purchases, and sales as will show the amount of goods on hand at the time of the fire, and thus furnish data from which to make a reasonably correct estimate of the loss or damage.”
These stipulations require no particular system of bookkeeping and no particular kind of books. It must be presumed that the parties contracted with a knowledge of the various modern methods of keeping books and records, which the courts have recognized as being far different from the methods of a few years ago. Givens v. Pierson, 167 Ky. 574, 181 S. W. 327, Ann. Cas. 1917C, 956.
[7] In granting the writ of error, herein the Supreme Court stated that they were inclined to think the decision of the Court of Civil Appeals was in conflict with Monger & Henry v. Delaware Insurance Co., 97 Tex. 362, 79 S. W. 7. We think the two cases can clearly be distinguished on the facts. In the case above mentioned there was no book entry of cash sales or business transacted from the 24th of March to the 21st day of September, except the record kept on the cash register as shown by the slips taken therefrom. Upon this state of facts the Supreme Court said:
“The ‘detailed cash strips’ made by the plaintiffs’ cash register was in no sense a compliance with the requirements of the policy to keep a set of books, etc. The evidence showed conclusively that these strips constituted the only record kept by the plaintiffs of the cash sales made for about six months. We think that a set of books means something more than a loose memoranda like the strips which the plaintiffs kept, and, while it is difficult to say what will constitute a substantial compliance with such requirement to keep books, we have no hesitation in holding that the eask stx-ips kept by the plaintiffs was not such compliance in any sense whatever.”
[8] In the present case it is shown that the defendant in error not only kept the cash register slips showing cash sales, but also kept daily sales tickets on which were entered the date of sale, the item or items sold, and the amount received for same. In addition the entries on the daily sales tickets were registered on an adding machine and totaled. Then this record was checked with the cash register tickets. The daily sales tickets, the cash register slips, and the adding machine slips were pinned together and kept in a safe. By this method defendant in error was able to show a complete and correct record of all sales, other than in carload lots, from the beginning of business, and the date of the last inventory, to the date of the fire. It appears that the jury had no difficulty in arriving at the exact value of the stock destroyed by fire. While the record kept was not of a permanent character, yet it appears to have been a reasonably accurate record, and as the same was on hand and presented to the adjuster after the fire, the character of the record as to permanency becomes immaterial.
Forfeitures are never favored, and the in[837]*837surance company, in cases of this kind, cannot avoid its contract of indemnity except upon a clear and unequivocal showing of a breach of a material warranty.
We therefore recommend that the judgment of the Court of Civil Appeals he affirmed.
OURETON, C. J. Judgment of the Court of Civil Appeals affirmed.