(JnrtipU ICam i^rlynnl SItbtary Cornell University Library KF1164.E46 An outline of the IS±Siffilil m Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924019259971 AN OUTLINE OF THE LAW OF INSURANCE SECOND EDITION WITH ILLUSTRATIVE CASES CHARLES B. ELLIOTT, PH. D., LL. D. Judge of the District Court of Minnesota, and Head of the Department of Corporation and International Law in the College of Law of the University of Minnesota St. Paul, Minn. WEST PUBLISHING CO. 1896 Copyright, 189s, BY CHARLES B. ELLIOTT. Copyright, 1896, BY CHARLES B. ELLIOTT. TABLE OF CONTENTS. PART I. DEFINITIONS. 1. Insurance Defined. 2. Terms in Common Use. 3. Reinsurance. PART n. THE CONTRACT OF INSURANCE. A. Of the Parties to the Contract. § 4. Who may be Parties. (a) The Insured. , (b) The Insurer. (c) Temporary Disability. B. The Form of the Contract. 5. Statutory Requirements. 6. Oral Contracts. 7. The Statute of Frauds. 8. Kinds of Policies. (a) Valued and Open. (b) Wager and Interest (c) Time and Voyage. LAW INS. (iii) iV TABLE OF CONTENTS. c. Cousummation of the Contract. § 9. When Contract Consummated. (a) In General. (b) Negotiations by Correspondencew (c) Delivery of the Policy. (d) Countersigning the Policy. (e) Specific Performance of Agreement to Insure. D. The Nature of the Contract. § 10. In Genei-al. 11. The Principle of Indemnity. (a) Indemnity against Negligence. (b) The Doctrine of Subrogation. (c) Life Insurance not a Contract of Indemnity. iz. A Conditional Contract. 13. A Personal Contract. 14. An Aleatory Contract. PART m. THE SUBJECT-MATTER OF INSURANCE, AND THE RISKS WHICH MAY BE INSURED AGAINST. § 15. General Rule. (a) Limitations. (b) Interest in an Illegal Business. 16. The Description of the Property Subject to Risk. TABLE OF CONTENTS. PAET IV. INSURABLE INTEREST. ^ 17. Definition of Insurable Interest. 18. Insurable Interest in Property. (a) General Statement. (b) Illustrations. (c) Time of Interest. (d) Continuity of Interest. 19. Insurable Interest in Lives. (a) At Common Law. (b) Iwodern Rule. (c) Interest of Beneficiary Designated by Insured, (d) Interest of Assignee. (e) Continuity of Interest. (f) Value of Creditor's Interest. (g) Interest Founded on Relationship, (b) Illustrations. PART V. THE CONSIDERATION OR PREMIUM. ^ 20. Generally. 21. Special Provision in Policy. 22. Manner of Payment. 23. Acceptance of Note for Premium. 24. Excuses for Nonpayment. 25. Waiver. 25a. Reinstatement. PART VI. WARRANTIES. ■f 26. Warranty Defined. 27. Must be in Policy. 28. Kinds of Warranties. (a) Express. (b) Implied. (c) Aflirmative. (d) Promissory. VI TABLE 01" CONTENTS. 29. Effect Of Breach of Warranty. 30. Construction. 30a. Burden of Proof. PART VII. REPRESENTATIONS. { 31. Representation Defined. 32. Affirmative and Promissory. 33. Oral Representations. 34. Oral Promissory Representations. 35. Representations of Belief or Expectation. 36. Continuing Conditions. 37. Materiality. 38. Answers to Questions Material. 39. Policy Covering Various Items. 40. Construction, 41. Statutes. PART VIII. CONCEALMENT. § 42. Concealment Defined. 43. Time of Concealment. 44. What must be Communicated. 45. What Need not be Communicated. 46. Concealment by Agent. PART IX. INSURANCE AGENT. 47. General Statements. 48. General Agents. 49. Secret Limitations on Authority. 50. Limitations Contained in Policy. 51. Stipulations in Policy as to Agency. 52. Waiver by Agent. 53. Notice to Agent. 54. Erior or Fraud of Agent oi: Insurer. TABLE OF CONTENTS. Vll. PART X. SPECIAL PROVISIONS CONTAINED IN THE POLICY. Stipulations of the First Class. § 55. Stipulations Relating to the Interest of the Insured. (a) As to the Title. (b) Alienation or Change of Interest. (c) Other Insurance. (d) As to Incumbrance. i 56. Stipulations Relating to the Care and Condition of the Prop- erty during the Term of the Insurance. (a) Vacancy. (b) The Use and Manner of Occupation. (c) Alteration. (d; Keeping and Use of Certain Articles. 0. § 57. Stipulations Contained in Life Policies Relating to the Condi- tion and Conduct of the Insured, (a) Health. (b) Occupation. (c) Habits. (d) Age. (e) Other Application. (f ) Married or Single. (g) Family Physician, (h) Suicide. (i) Military or Naval Service, (j) Residence and Travel. (l£) Death in Violation of Law. Vm TABLE QV CONTKNTS. D. i 58. Stipulations Relating to Risks and Articles Excepted from the Protection of the Policy. StiDulatious of the Second Class. A. § 59. Provisions Relating to Tilings to be Done after the Loss. (a) Notice of Loss. (b) Proof of Loss. (c) Production of Books and Papers. (d) Certificate of Notary. (e) Examination of Insured. B § 60. Provisions Relating to the Remedy on the Contract (a) Arbitration. (b) Limitation as to Time and Place of Bringing Suit. (c) Insurer's Right to Replace the Property. PART XI. WAIVER AND ESTOPPEL. § 61. Definitions. 62. Knowledge. 63. Limitations in Policy. 64. Effect of Knowledge by Insurer's Agent of Falsity of State- ments in Application. 65. Collusion between Applicant and Agent of Insurer. 66. By Conduct. (a) Of Proofs by Denial of Liability. (b) By Refusal on Specific Grounds. (c) Refusal to Furnish Blanks. TABLE OF CONTENTS. IX / PART xn. ASSIGNMENT, RIGHTS OF BENEFICIARY. G7. Fire Insurance. (a) Not Assignable. (b) Effect of Assignment with Consent (c) Assignment after Loss. 68. Life and Marine Policies. (a) Assignable. (b) Interest of Assignee. (c) Vested Interest of Beneficiary. (d) Reservation of Right. t AN OUTLINE LAW OF INSURANCE. SECOND EDITION. PART I. DEFINITIONS. 1. Insurance Defined. 2. Terms in Common Use. 3. Reinsurance. § 1. INSURANCE DEFINED. Insurance is a contract "whereby, for a stipulated consideration, one party undertakes to indemnify the other against loss or damage on a certain sub- ject-matter by certain contemplated perils. Insurance is a contract whereby one, for a consideration, undertakes to compensate another, if he shall suffer loss. "This," says May (section 1), "is substantially the definition given by Roccus, and is recommended alike by its brevity and its comprehensiveness, — qualities upon which subse- quent writers have scarcely been able to improve." In Lucena v. Craufurd, 2 Bos. & P. N. E. 300, 6 Kev. Re- ports, 685, insurance is defined as "a contract by which the one party, in consideration of a price paid to him adequate to the risk, becomes security to the other that he shall not LAW ms.— 1 § 1 DEFINITIONS. (Part 1 suffer loss, prejudice, or damage by the happening ol the perils specified to certain things, which may be exposed to them." , ,1 J ,_, „, _ Cooke (section 1) defines insurance as "a contract to make compensation (or pay) on the happening of any injury to life or property." In Com. T. Wetherbee, 105 Mass. 149, 160, the contract of life insurance is defined as "an agreement by which one party, for a consideration (which is usually paid in money, either in one sum or at different times during the continuance of the risk), promises to make a certain payment of money upon the destruction or injury of something in which the other party has an interest." Biddle (volume 1, § 1) says that the general term insur- ance "is applied to two species of contract, — insurance in respect of property, and insurance in respect of life, — which are not analogous in their elements, and which proceed up- on different principles." Insurance in respect of property he defines as "an agree- ment by the insurer, for a consideration, to Indemnify the insured against loss, damage, or prejudice to certain property that may be during a pertain period sustained, by reason of specified perils to which the property may be ex- posed." Insurance in respect of life, "which is substantially the purchase by the insured from the insurer of a reversionary interest for a present sum of money, may be defined to be an agreement by the insurer to pay to the insured or his nominee a specified sum of money, either at the death of the designated life, or at the end of a certain period, provided the death does not occur before, in consideration of the pres- ent payment of a fixed amount, or of an annuity till the death occurs or the period of insurance is ended." Bunyon (page 1) defines life insurance as "a contract in which one party agrees to pay a given sum upon the happen- ing of a particular event, contingent upon the duration of human life, in consideration of the immediate payment of a smaller sum or certain periodical payments by another." (2) Part 1) TERMS IN COMMON USE. §§ 1-2 Insurance other than life includes the common forms of fire and marine insurance. Fire insurance is a contract to indemnify the insured for loss or damage occasioned by fire during the specified pe- riod. Wood's Flajadera, §§ 1, 2, 5. "Marine insurance," says Phillips (volume 1, § 1), "is a contract whereby, for a consideration stipulated to be paid by one interested in a ship, freight, or cargo subject to marine risks, another undertakes to indemnify him against some or all of these risks, during a certain period or voy- age." Duer (volume 1, p. 1) says simply that it is "a contract of indemnity against the perils of the sea." Arnould (volume 1, p. 16) says: "Marine insurance is a contract whereby one party, for a stipulated sum, under- takes to indemnify the other against loss arising from cer- tain perils or sea risks, to which his ship, merchandise, or other interest may be exposed during a certain voyage or a certain period of time." For other definitions, see: Eensenhouse v. Seeley, 72 Mich. 603, 40 N. W. 765. Supreme Commandery v. Ainsworth, 71 Ala. 436. State V. Farmers' Ben. Ass'n, 18 Neb. 276, 25 N. W. 81. Bolton V. Bolton, 73 Me. 299. Paterson v. Powell, 9 Bing. 320. Wilson v. Jones, L. B. 2 Exch. 150. 1^ ^"Dalby v. India & L. L. Assur. Co., 15 C. B. 365. Elliott's Appeal, 50 Pa. St. 75. Park, c. 22. 1 Couteau, Traite des Assurance sur la Vie, § 31, p. 28. 1 Cauvet, Assurances Maritime, p. 1. § 2. TEBJIS IN COMMON USE. The party undertaking to indemnify the assured is called the "insurer" or "underwriter." (3) §§ 2-3 DEFINITIONS. (Part 1 The party to be indemnified is called the "insured" or "as- sured." There is no difference between the words. Connecticut Mut Life Ins. Co. v. Luchs, 108 U. S. 498, 2 Sup. Ct. 949. The agreed consideration is called the "premium." The written instrument evidencing the contract is called the "policy." The events and causes insured against are known as "risks" or "perils." The interest of the insured in the life or property is the subject-matter of the contract of insurance. The property in which the interest exists is often called the subject- matter. § 3. REINSURANCE. A contract of reinsurance is one by which an insurer pro- cures a third person to insure him against loss or liability by reason of the original insurance. The original insurer has no interest in the contract of reinsurance. Commercial Mut. Ins. Co. v. Detroit Fire & Marine Ins. Co., 38 Ohio St. 15. Phcenix Ins. Co. v. Erie & W. Transp. Co., 117 U. S. 323, 6 Sup. Ct. 750, 1176. Gantt v. Insurance Co., 68 Mo. 533. Goodrich's Appeal, 109 Pa. St. 523, 2 Atl. 209. "The original contract," says Emerigon, "subsists pre- cisely as it was made, without renewal or alteration. The reinsurance is absolutely foreign to the first insured, with whom the reinsurer contracts no sort of obligation. The risks which the insurer has assumed constitute between him and the reinsurer the subject-matter of the contract of reinsurance, which is a new contract totally distinct from the first." Emerigon, Traite des Assurance, c. 8, § 14: "A contract of reinsurance is where the insurer, in order to lessen his own liability on the contract of (4) Part 1) REINSURANCE. § 3 insurance, reinsures or transfers the insurance he has agreed to carry, in whole -! risk. Insurance Oo. of North America v. G^^-land, 108 HI. 220. Dennison v. Phoenix Ins. Co., 52 Iowa, 457, 3 N. W. 500. McClure v. Watertown Fire Ins. Co., 90 Pa. St 277. Galveston Ins. Co. v. Long, 51 Tex. 89. Continental Ins. Co. v. Kyle, 124 Ind. 132, 24 N. E. 727. The words "vacant and unoccupied" must be construed with reference to the ordinary use and adaptability of the building. Limburg v. Insurance Co., 90 Iowa, 709, 57 N. W. 626. Such a provision is waived if the property was vacant when the policy was issued. Eochester Loan & Banking Co. v. Liberty Ins. Co. (Neb.) 62 N. W. 877. (102) Part 10) AS TO CAKE AND CONDITION OF PKOPERTY. § 56 Anderson v. Manchester Fire Ins. Co., 59 Minn. 182, 63 N. W. 241. A policy on a house and bam, conditioned to be void if the premises become vacant, is void only on the vacancy of both. German Ins. Co. v. Davis, 40 Neb. 700, 59 N. W. 698. A vacancy of three days, incident to a change of tenants, will not avoid policy. Worley v. State Ins. Co. (Iowa) 59 N. W. 16. Liverpool, etc., Ins. Co. v. BuckstafE, 38 Neb. 146, 56 N. W. 695. Constructiou of clause "if the insured building become vacant and unoccupied." Moriarty v. Home Ins. Co., 53 Minn. 549, 55 N. W. 740. Moody V. Insurance Co., 52 Ohio St. 12, 38 N. E. 1011. A policy not containing such a provision is not affected by the vacancy of the building. Somerset Co. Mut Fire Ins. Co. v. Usaw, 112 Pa. St. 80, 4 Atl. 355. Becker v. Farmers' Mut. Fire Ins. Co., 48 Mich. 610, 12 N. W. 874. Lockwood V. Middlesex Mut. Assur. Co., 47 Conn. 553. (b) THE USE AND MANNER Or OCCUPATION (IN- CREASE or BISK). A provision that the premises shall not be occupiea so as to increase the risk without the consent of the company is valid, and in the event of its breach the policy becomes void, without regard to the cause or origin of the fire. Mack V. Rochester German Ins. Co., 106 N. Y. 560, 13 N. E. 343. In the absence of such a provision, a use and occupation increasing the risk bars recovery only when it was the cause of the loss. Pirn V. Keld, 6 Man. & G. 1. (103) § 56 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 Loehner v. Home Mut. Ins. Co., 19 Mo. 628. Breuner v. Insurance Co., 51 Cal. 101. What change increases the risk is a question for the jury, unless the policy cpntains a list of hazards which are pro- hibited. Liverpool & London Ins. Co. v. Gunther, 116 XJ. S. 113, 6 Sup. Ct. 306. , , Smith V. Insurance Co. (Mich.) 65 N. W. 236. In Kyte v. Commercial Union Assur. Co., 149 Mass. 116, 21 N. E. 361, the court said : "An increase of risk which is substantial, and which is continued for a considerable period of time, is a direct and certain injury to the insurer, and changes the basis upon which the contract of insurance rests, and since there is a provision that in case of an in- crease of risk which is not assented to or known by the assured, and not disclosed, and the assent of the insurer obtained, the policy should be void, we do not feel at liberty to qualify the meaning of these words by holding that the policy is only sus- pended durins the continuance of such risk." The following have been held not to constitute such change in the use or occupation as to avoid the policy: The making of repairs on a dwelling house; shutting down a factory temporarily; running the engine and certain shaft- ing at night, when the policy recites, "Eun by day only;" changing from a dwelling to a boarding house; changing occupants; ceasing to occupy the premises; lighting tem- porarily with gasoline; mortgaging the insured property. Brighton Manuf g Co. v. Beading Fire Ins. Co., 33 Fed. 232. Mutual Fire Ins. Co. v. Coatesville Shoe Factory, 80 Pa. St. 407. (104) Part 10) AS TO CARE AND CONDITION OP PROPERTY. § 56 (o) ALTERATION. A common provision of the policy is one intended to guard against an increase of risk by alteration. It may take place in the building, or in the mode of use or occupa- tion, or in its situation with reference to other buildings, or in any other circumstances tending to change the character of the risk. But it is not every alteration that is material; and whether, in any particular case, an alteration will avoid the policy, depends, as a general rule, upon its materi- ality, and this is determined by the question whether it in- creases the risk, which is a question of fact to be deter- mined by a jury. Curry v. Commonwealth Ins. Co., 10 Pick. 535. Limburg v. Insurance Co., 90 Iowa, 709, 57 N. W. 626. The question of materiality does not depend upon whether the loss is or is not caused by the alteration. It is competent for the parties to agree that a certain change or alteration shall work a forfeiture, although the risk is not thereby increased. Imperial Fire Ins. Co. v. Coos Co., 151 U. S. 452, 14 Sup. Ct 379. Frost's Detroit Lumber, etc., Works v. Millers', etc., Ins. Co., 37 Minn. 300, 34 N. W. 35. Mack V. Rochester Ins. Co., 106 N. Y. 560, 13 N. E. 343. Unless stipulated to the contrary, the insured may use, protect, and enjoy his property as such property is custom- arily used, enjoyed, and protected. He may make such or- dinary changes and repairs as are customary. Jolly's Adm'rs v. Baltimore Equitable Soc, 1 Har. & G. (Md.) 296. Any change in the situation of the property insured with reference to other property within the limits of fair and (105) § 56 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 Honest dealing is permissible, although the change cause the destruction of the property. Joyce V. Maine Ins. Co., 45 Me. 168. "Contiguous building," Olson v. St. Paul F. & M. Ins. Co., 35 Minn. 432, 29 N. W. 125. If the policy provides against an alteration and increase of risk, an alteration not incidental to the use of the prop- erty will avoid the policy if it increase the risk during the alteration. Lyman v. State Mut Fire Ins. Co., 14 Allen, 329. The insured is responsible for the alteration made by hia tenant without his knowledge. Grosvenor v. Atlantic Ins. Co., 17 N. Y. 391. Fire Ass'n of Philadelphia v, Williamson, 26 Pa. St. 196. (d) THE KEEPING OE USE OP CERTAIN ARTICLES. The keeping or use of prohibited articles renders the con- tract invalid. But a policy is sometimes issued upon a building which is used, and to be used, for a purpose desig- nated in the policy, such as for a restaurant, a general store, or for "mercantile purposes." Such policies generally contain printed provisions absolutely prohibiting the use of certain enumerated articles. The difficulty arises when such prohibit- ed articles are necessarily or commonly used in the business to be conducted in the insured building. Thus, in Maril v. Insurance Co., 95 Ga- 604, 23 S. E. 463, the policy was writ- ten ujwn "watches, jewelry," etc., and "watchmaker's ma- terial, all while contained in the three-story brick building," etc. The policy, on its face, provided that it should be void "if the risk be increased by any means within the control of the insured, • • • or if * * * benzine, gasoline, etc., etc., are kept or used on the premises without written consent." Th« plaintiff offered to prove that both kerosene and ben- (106) Part 10) AS TO CARE AND CONDITION OJF PROPERTY. § 56 zine, in reasonable quantities, were used in his business as watchmaker's material, and that their use as such was nec- essary, customary, and usual in the conduct of such busi- ness; that he was engaged in the conduct of this business at the time this business was effected, and that the de- fendant knew such to be the fact. He was not permitted to show these facts, and the trial court directed a verdict for the insurance company, on the ground that the polipy was invalidated by the keeping of a small quantity of gasoline and benzine on the premises without the consent of the insurer. The supreme court, in reversing the trial court, said: "If the articles were employed by the insured in the conduct of the particular business, and the use of such article is a necessary incident to the conduct of such a business, the parties will be presumed to have contract- ed with reference thereto; and at the time the insurance policy was issued the insurer will be presumed to have had in contemplation the use of such substances by the assured when he assumed the risk, and, under such circumstances, will be presumed to have waived the condition under which the use of such substances would render the policy void." In Faust v. Insurance Co. (Wis.) 64 N. W. 883, it was held that the keeping of a small quantity of benzine, neces sary for use in a furniture repair shop, did not invalidate a policy describing the building as a "furniture store and repair shop," although the printed portion of the policy provided that it should be void if benzine was kept on the premises without written permission. See, also: Mears v. Insurance Co., 92 Pa. St. 17. Viele V. Insurance Co., 26 Iowa, 9. Phoenix Ins. Co. v. Taylor, 5 Minn. 492 (Gil. 393). Hall V. Insurance Co., 58 N. Y. 292. As to when gasoline is "kept, used, or allowed" on the premises, see Smith v. Insurance Co. (Mich.) 65 N. W. 236. (107) § 56 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 In Garretson v. Insurance Ca (Iowa) 60 N. W. 540, the policy described the building as used for "mercantile pur- poses," and expressly prohibited the keeping of gasoline. It was held that the policy did not authorize the use of the building as a "restaurant" in which the use of gasoline would be necessary, and that the plaintiff could not recover. (108) Part 10) AS TO CONDITION AND CONDUCT OF INSUKED. § 57 § 57. Stipulations Contained in Life Policies Relating to the Condi- tion and Conduct of the Insured. (a) Health. (b) Occupation. (c) Habits. (d) Age. (e) Other Application. (f) Married or Single. (g) Family Physician, (h) Suicide. (i) Military or Naval Service. 0) Residence and Travel, (k) Death in Violation of Law. § 57. STIPTTLATIONS CONTAINED IN LIFE POLICIES EELATING TO THE CONDITION AND CONDUCT OP THE INSURED. (a) HEALTH. A warranty that the insured is in "good health" means that he is free from any conscious derangement of organic functions. Groucher t. North Western, etc., Ass'n, 20 Fed. 596. Morrison v. Wisconsin, etc., Ins. Co., 59 Wis. 162, 18 N. W. 13. Eoss T. Bradshaw (1760) 1 W. Bl. 312. Such words are to be gfven their common meaning. Whether the party was in "good health" is a question of fact for the jury. Swick V. Home Ins. Co., 2 Dill. 160, Fed. Cas. No. 13, 692. Grattan v. Metropolitan Life Ins. Co., 92 N. Y. 274. Connecticut Mut Life Ins. Co. v. Union Trust Co., 112 U. S. 250, 5 Sup. Ct. 119. Moulor v. American Life Ins. Co., Ill U. S. 335, 4 Sup. Ct 466. ao9) § 57 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 Continental Life Ins. Co. v. Yung, 113 Ind. 159, 15 N. E..220. "Disorder tending to shorten life." See Watson v. Main waring, 4 Taunt. 763; World Mut. Life Ins. Ca v. Schultz, 73 111. 586. (b) OCCUPATIOIT. The occupation if called for, must be correctly stated. Dwight V. Germania Life Ins. Co., 103 N. Y. 341, 8 N. E. 654. United Brethren M. A. Soc v. White, 100 Pa. St 12. A change of occupation, when forbidden by the policy, defeats the insurance. Stone's Adm'rs v. United State.a Casualty Co., 34 N. J. Law, 371. Summers t. United States Ins. Co., 13 La. Ann. 504. (c) TEMPERATE HABITS. Provision that the policy shall be void if the insured shall become intemperate, or be guilty of the excessive use of in- toxicating liquors, or shall die from the habitual use of in- toxicating liquors, or shall die by reason of intemperance in the use of intoxicating liquors, or death shall be caused by the use of intoxicating drinks or opium, will have the stipulated effect Miller v. Mutual Ben. Life Ins. Co., 31 Iowa, 216. Northwestern Mut. Life Ins. Co. v. Hazelett, 105 Ind. 212, 4 N. E. 582. Odd Fellows Mut Life Ins. Co. v. Rohkopp, 94 Pa. St 59. Davey v. Aetna Life Ins. Co., 38 Fed. 650. Bloom V. Franklin Life Ins. Co., 97 Ind. 478. (110) Part 10) AS TO CONDITION AND CONDUCT OF INSURED. § 57 The burden of proof is on the company to show a violation of sach stipulation. Boisblanc v. Louisiana Equitable Life Ins. Co., 34 La. Ann. 1167. A warranty of correct and temperate habits by an ap- plicant for life insurance refers to the habits of the assured, and not to occasional practices. Union Mut Life Ins. Co. v. Eeif, 36 Ohio St. 596. Knickerbocker Life Ins. Co. v. Foley, 105 U. S. 350. (d) AGE. The misrepresentation of the age of an applicant will de- feat the insurance. Attorney General v. Bay, 9 Ch. App. 397. Hartford Life & Annuity Ins. Co. v. Gray, 91111. 159. Linz V. Massachusetts Ins. Co., 8 Mo. App. 363. i (e) OTHER APPLICATION. A false answer stating that the applicant has never been rejected as an applicant for insurance avoids the policy. Edington v. Aetna Life Ins. Co., 100 N. Y. 536, 3 N. E. 315. (f) MARRIED OR SINGLE. A warranty that the insured is single when he is married avoids the policy. Jeffries v. Economical Mut. Life Ins. Co., 22 Wall. 47. United Brethren M. A. Soc. v. White, 100 Pa. St. 12. (g) FAMILY PHYSICIAN. An untrue statement that the applicant has had no medi- cal attendance avoids the policy. Metropolitan Life Ins. Co. v. McTague, 49 N. J. Law, 587, 9 Atl. 766. (Ill) § 67 SPECIAL PROVISIONS CONTAINED IN POLITY. (Part 10 A "family physician" means the physician who usually at- tends and is consulted by the members of the family in the capacity of physician. Price V. Phoenix Mut Life Ins. Co., 17 Minn. 497 (Gil. 473). (h) SUICIDE. In the absence of any provision in the policy, suicide will not avoid the policy. Eichards, § 184. Fitch V. American Popular Life Ins. Co., 59 N. Y. 557. Kerr v. Minnesota Mut. Ben. Ass'n, 39 Minn. 174, 39 N. W. 312. Contra, Hartman v. Keystone Ins. Co., 21 Pa. St. 466. Death resulting from poison taken by accident or mistake is not within the contemplation of a provision that the policy shall be void if the insured "die by his own hand." Penfold V. Universal Life Ins. Co., 85 N. Y. 317. Northwestern Mut Life Ins. Co. v. Hazelett, 105 Ind. 212, 4 N. E. 582. This is true although the accident was due to intox- ication. Equitable Life Assur. Soc. v. Paterson, 41 Ga. 338. A policy containing a clause that it shall be avoided if the insured "die by his own hand" is not avoided by self-destruc- tion while insane. Eastabrook v. Union Mut. Life Ins. Co., 54 Me. 224. Schaffer v. National Life Ins. Co., 25 Minn. 534. Sehultze v. Insurance Co., 40 Ohio St. 217. Contra, if the act be knowingly and intentionally com- mitted. Dean v. American Mut. Life Ins. Co., 4 Allen, 96. Van Zandt v. Mutual Benefit Life Ins. Co., 55 N. Y. 169. American Life Ins. Co. v. Isett, 74 Pa. St. 176. Borradaile v. Hunter, 5 Man. & G. 639. Clift V. Schwabe, 3 Man., G. & S. 437. (112) Part 10) AS TO CONDITION AND CONDUCT OF INSURED. § 57 In New York Mut. Life Ins. Co. v. Terry, 15 Wall. 580, Mr. Justice Hunt stated the rule as follows: "If the death is caused by the voluntary act of the assured, he knowing and intending that his death shall be the re- sult oT Ms act, but wnen nis reasoning taculties are so lar impaired that he is not able to understand the moral char- acter, the general nature, consequences, and effect of the act he is about to commit, or when he is impelled thereto by an insane impulse, which he has not the power to resist, such death is not with the contemplation of the parties to the contract, and the insurer is liable." In Massachusetts a policy to be void if the insured shall "die by suicide" is vitiated by such act, although the insured was insane, if it be the result of his will and intention. Cooper V. Mutual Life Ins. Co., 102 Mass. 227. Gay V. Union Mut Life Ins. Co., 9 Blatchf. 142, Fed. Cas. No. 5,282. Schultz T. Insurance Co., 40 Ohio St. 217. Blackstone v. Insurance Co., 74 Mich. 592, 42 X. W. 156. Contra, Connecticut Mut. Life Ins. Co. v. Groom, 86 Pa. St. 92. There is no presumption of law that self-destruction arises from insanity. The burden of proving that the insured committed suicide is upon the insurance company alleging it as a defense. Connecticut Mut. Life Ins. Co. v. Akens, 14 Sup. Ct. 155. Mutual Life Ins. Co. v. Hayward (Tex. Civ. App.) 27 S. W. 36. Mallory v. Insurance Co., 47 N. Y. 52. Cronkhite v. Travelers' Ins. Co., 75 Wis. 116, 43 N. W. 731. Terry v. Life Ins. Co., 1 Dill. 403, Fed. Cas. No. 13,839. Knickerbocker Life Ins. Co. v. Peters, 42 Md. 414. Hale V. Life Ind. & Inv. Co. (Minn. Dist Ct) 2 Minn. Law J. 316. LAW INS. 8 (113) § 57 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 'A provision that the policy shall be void if the insured commits suicide, "whether sane or insane," is valid. Pierce v. Travelers' Life Ins. Co., 34 Wis. 389. Bigelow V. Berkshire Life Ins. Co., 93 U. S. 284 But the company is still liable if the death was accidental, Phillips V. Louisiana Equitable Life Ins. Co., 26 La. Ann. 404. For a general discussion, see 21 Cent. Law J. 378. (i) MILITARY OB NAVAL SERVICE. If the insured enters the military or naval service without the consent of the company, and contrary to the provisions of the policy, the policy is avoided. Welts V. Connecticut Mut. Life Ins. Co., 46 Barb. 412, 48 N. y. 34. Ayer v. New England Mut. Life Ins. Co., 109 Mass. 430. (j) RESIDENCE AND TRAVEL. Provisions limiting residence and travel within certain limits are valid. Rainsford v. Eoyal Ins. Co., 33 N. Y. Super. Ct. 453. A pro\ision that the assured shall not "pass beyond the settled limits of the United States" means beyond the terri- torial limits of the nation. easier v. Connecticut Mut Life Ins. Co., 22 N. Y. 427. How waived. Home Life Ins. Co. v. Pierce, 75 111. 420. Bevin v. Connecticut Mut. Life Ins. Co., 23 Conn. 244. Where the permission is granted to go without the fixed limits by a fixed course, such course cannot be departed from without violating the stipulation, even though the course taken be both shorter and safer. Hathaway v. Trenton Ins. Co., 11 Cush. 448. (114) Pari 10) AS TO CONDITION AND CONDUCT OF INSURED. § 57 (k) DEATH IN VIOLATION OF LAW. To render this provision binding, the insured must die while engaged in the perpetration of the unlawful act, or as the direct result thereof. Death from some other cause, although following indirectly therefrom, will not come with- in its meaning. Cluff V. Mutual Ben. Life Ins. Co., 13 Allen, 308. Bradley v. Mutual Ben. Life Ins. Co., 45 N. Y. 422. Bloom T. Franklin Ins. Co., 97 lud. 478. In Duran v. Insurance Co., G3 Vt. 437, 22 Atl. 530, it was held that there could not be a recovery on a policy which was to become invalid if the insured was injured while en- gaged in the "violation of law," when it appeared that the insured was injured by slipping on the frozen ground while returning from a htmting expedition on Sunday. (115) § 58 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 D. § 58. STIPULATIONS RELATING TO RISKS AND AR- TICLES EXCEPTED TROM THE PROTEC- TION OF THE POLICY. Policies ordinarily provide that the insurer shall not be liable for damages caused by mobs, riots, war, explosion, and other such agencies. Certain articles, such as benzine, gunpowder, fireworks, and the like, are also considered of such a dangerous nature that they are not insurable. For construction of clauses relating to such excepted matters, see: Insurance Co. v. Boon, 95 U. S. 117. City Fire Ins. Co. of New York v. Corlies, 21 Wend. (N. Y.) 370. Security Ins. Co. v. Mette, 27 111. App. 324. Eenshaw t. Insurance Co., 33 Mo. App. 394. (Fall of building). Ermentrout v. Insurance Co., 60 Minn. 418, 62 N. W. 543. (116) Part 10) THINGS TO BE DONE AFTER THE LOSS. § 59 Stipulations of the Second Class. A. { 59. Provisions Relating to Things to be Done after the Loss. (a) Notice of Loss. (b) Proof of Loss. (c) Production of Bool£s and Papers. (d) Certificate of Notary. (e) Examination of Insured. § 59. PROVISIONS RELATING TO THINGS TO BE DONE AFTER THE LOSS. (a) NOTICE OP LOSS. Insurance contracts generally provide that notice of loss be given to the insurer forthwith, or within a certain num- ber of days. Where the notice is to be given forthwith, the insured must act with reasonable diligence. Ordinarily it is a question for the jury to determine whether reasonable diligence has been exercised. Griffey v. Insurance Co., 100 N. Y. 417, 3 N. E. 309. Carpenter v. Insurance Co., 135 N. Y. 298, 31 N. E. 1015. Trask v. Insurance Co., 29 Pa. St. 198. In the absence of statute, the time fixed by the policy will govern, unless so short as to be unreasonable. As said in Ermentraut v. Insurance Co. (Minn.) 65 N. W. 635: "It is a settled law that, where the policy requires notice of loss to be given to the insurer within a specified time, such no- tice is a condition precedent to the right of action on the policy." (b) PROOF OP LOSS. Proof of loss must be made as required by the policy, as a condition precedent to an action on the policy, or it must § 59 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 be shown that the insurer has waived the requirement, or is estopped to require compliance therewith. Bruce v. Insurance Co., 24 Or. 486, 34 Pac. 16. McCuUough V. Insurance Co., 113 Mo. 606, 21 S. W. 207. Johnson v. Insurance Co., 112 Mass. 49. Central City Ins. Co. v. Gates, 86 Ala. 558, 6 South. 83. See Kahnweiler v. Insurance Co., 57 Fed. 562. Hall V. Insurance Co., 90 Mich. 403, 51 N. W. 524. Jacobs V. Insurance Co., 86 Iowa, 145, 53 N. W. 101. (c) PRODUCTION OF BOOKS AND PAPERS. The insured must comply with the requirements of the policy with reference to the production of his books and pa- pers in order that they may be inspected by the insurer; but where, owing to the destruction of books, bills of sale, and invoices, and other papers, the assured is unable to fur- nish a specific statement of the property destroyed, the law will hold the terms of the policy requiring proofs of loss as sufflciently complied with by furnishing such as it is within the power of the assured to make. The law does not re- quire the assured to do an impossible thing. People's Fire Ins. Co. v. Pulver, 127 HI. 246, 20 N. E. 18. Miller v. Insurance Co., 70 Iowa, 704, 29 N. W. 411. (d) CERTIPICATE OF MAGISTRATE. The provision that the insured shall, if required, furnish a certificate of the nearest notary or magistrate to the eflEect that he believes that the insured has, without fraud, sus- tained loss on the property covered by the policy, is a valid condition; and, if not complied with, there can be no re- covery on the policy. Lane v. Insurance Co., 50 Minn. 227, 52 N. W. 649. Eoumage v. Insurance Co., 13 N. J. Law, 110. (118) Part 10) THINGS TO BE DONE AFTER THE LOSS. § 59 Paltrovitdi v. Insurance Co., 68 Hun, 304, 23 N. Y. Supp. 38. Agricultural Ins. Co. v. Bemiller, 70 Md. 400, 17 Atl. 380. McNally v. Insurance Co., 137 N. Y. 389, 33 N. E. 475. Such a requirement is prohibited by Minn. Gen. Ins. Law 1895. (e) EXAMINATION OF INSURED. Where a policy contains a provision to the effect that in the event of loss the insured shall submit to an examination under oath with reference to the loss, there can be no re- covery on the policy until this requirement is complied with or waived. Harris v. Insurance Co., 35 Conn. 310. (119) § 60 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 B. § 60. Provisions Relating to the Remedy on the Contract (a) Arbitration. (b) Limitation as to Time and Place of bringing Suit. (c) Insurer's Right to replace the Property. § 60. PROVISIONS RELATING TO THE REMEDY ON THE CONTRACT. (a) ARBITRATION. A provision for the arbitration of special matters, such as the amount of the damage, is valid. But a provision for the arbitration of the general question of the liability of the insurer is invalid, as an attempt to oust the courts of juris- diction. 2 May, Ins. § 492. 2 Beach, Ins. c. 36. The general rules regulating arbitration of matters grow- ing out of insurance contracts are well stated in the recent case of Chapman v. Insurance Co., 89 Wis. 572, 62 N. W. 422. After quoting the provision of the policy, the court said: "This provision furnishes a speedy, convenient, and inex- pensive mode of ascertaining the loss or damage of the assured, if he is entitled to recover, and does not appear to be obnoxious to the objection that it is void, as ousting the courts of their rightful jurisdiction. Under it the right of recovery is left open, and the appraisal serves only to liqui- date and determine the amount of the loss or damage. The validity of such stipulation appears to be beyond doubt. We think that the question is perfectly well settled, and that it has been so considered ever since the case of Scott v. Avery, 5 H. L. Cas. 811, and that When parties to a contract agree that money shall be paid when something else happens, and that something else is that a third person named in it, or persons to be named as therein provided, shall determine the amount, then the cause of action does not arise until the amount has been so ascertained or determined, unless some- (120) Part 10) REMEDY ON THE CONTRACT. § 60 thing has occurred which may operate as a waiver of such precedent condition, or to dispense with its performance, or that, with fair and reasonable efforts, performance of it cannot be obtained. The rule is stated by Jessel, M. K., in Dawson t. Fitzgerald, 1 Exch. Div. 257, 260, in the brief, to be this: 'There are two cases where such a plea as the present is successful: First, where the action can only be brought for the sum named by the arbitrator; secondly, where it is agreed that no action shall be brought until there has been an arbitration, or that the arbitration shall be a condition precedent to the right of action. In all other cases where there is, first, a covenant to pay, and, sec- ondly, a covenant to refer, the covenants are distinct and collateral, and the plaintiff may sue on the first, leaving the defendant to bring an action for not referring,' etc. Here the covenant to pay is, by necessary implication, conditioned upon the appraisal, if properly claimed, and the plaintiff is in no position to claim anything until an appraisal has been made, waived, or in some manner legally dispensed with. Elliott V. Assurance Co., L. B. 2 Exch. 240. The questions to be considered are: 'Whether an arbitration or award is necessary before a complete cause of action arises, or is made a condition precedent to an action, or whether the agreement to refer disputes is a collateral and independent one.' Collins v. Locke, 4 App. Cas. 689; Edwards v. So- ciety, 1 Q. B. Div. 592, 598. We think that the stipulation in question is a valid and reasonable one, and not open to the objection urged against it, that it ousts the jurisdiction of the court, and it leaves the general question of liability, if any exists, to be judicially determined. The case of Hamilton v. Insurance Co., 136 U. S. 242, 254, 10 Sup. Ct. 945, seems decisive. President, etc., of Delaware & H. Canal Co. V. Pennsylvania Coal Co., 50 N. Y. 250; Eeed v. Insur- ance Co., 138 Mass. 572, 576; Hudson v. McCartney, 33 Wis. 331. In such cases a party may not, of his own mere op- tion or volition, revoke the arbitration or submission clause, any more than any other provision of the contract. A con- trary view, however, obtains in Pennsylvania, in cases where (121) § 60 SPECIAL PROVISIONS CONTAINED IN POLICY. (Part 10 the person or persons who are to make the appraisal or award are not named in the contract, but are to be chosen thereafter by the parties. Mentz v. Insurance Co., 79 Pa. St. 478; ComiQercial Union Assur. Co. of London t. Hock- ing, 115 Pa. St. 414, 8 Atl. 589. But we are unable to see any substantial grounds for the distinction. Upon the other hand, the case of Hamilton v. Insurance Co., 137 U. S. 370, 11 Sup. Ct. 133, is one where the provision that an ap- praisal should be made was not either expressly or by neces- sary implication a condition precedent to the obligation to pay, but where the stipulation for an appraisal was held to be independent and collateral, and the assured entitled to sue without an appraisal; and the principal cases on this point are here collected. The cases relied on by the re- spondents' counsel fall within the category of Hamilton v. Insurance Co., and Reed v. Insurance Co., supra; Bowe v. AVilliams, 97 Mass. 165; Hood v. Hartshorn, 100 Mass. 121; Nute V. Insurance Co., 6 Gray (Mass.) 181; Stephenson v. Insurance Co., 54 Me. 70. The doctrine laid down in this state in Hudson v. McCartney has not been departed from, or materially qualified. In Phoenix Ins. Co. v. Badger, 53 Wis. 283, 10 N. W. 504, and Vangindertaelen v. Insurance Co., 82 Wis. 112, 51 N. W. 1122, where there were provisions, in substance, as in these cases, no arbitration was demand- ed. In Canfleld v. Insurance Co., 55 Wis. 419, 13 N. W. 252, the policy did not provide, either expressly or by neces- sary implication, that an award should be a condition to the right to sue; and the same is true of the contract in Oak- wood Retreat Ass'n v. Rathbome, 65 Wis. 177, 26 N. W. 742. We hold, therefore, that, where an appraisal has been properly demanded, an appraisal or award on the question of the amount of loss or damage is made by these policies, by necessary implication, a condition precedent to the right of the assured to sue, and he cannot maintain his action unless the condition is waived, or in some way dispensed with, and that he has in such case no right, at his mere option or voli- tion, to revoke the arbitration clause in the policy, or a sub- mission under it." (122) Part 10) REMEDY ON THE CONTRACT. § 60 (b) LIMITATIONS AS TO TIME AND PLACE OF BRINGING SUIT. The policy may contain a valid provision limiting the time within which a suit upon it may be maintained. Eipley v. Insurance Co., 30 N. T. 136. Woodbury Savings Bank & Building Ass'n v. Charter Oak Fire & Marine Ins. Co., 31 Conn. 518. Harris v. Insurance Co., 35 Conn. 310. But attempts to thus limit the place or court where the action shall be brought are ineffectual. Hall V. Insurance Co., 6 Gray (Mass.) 185. Minn. Gen. Ins. Law 1895, ^ 25. (e) INSUREB'S BIGHT TO BEPLACE THE PBOPEETY. In the absence of a stipulation to that effect in the policy, the insurer has no right to rebuild or replace the insured property. Wallace v. Insurance Co., 4 La. 289. The right, when reserved, must be exercised within the time stipulated, or within a reasonable time. Daul V. Insurance Co., 35 La. Ann. 98. HasMns t. Insurance Co., 5 Gray (Mass.) 432. (123) §§ 61-62 WAIVER AND ESTOPPEL. (Part 11 PART XI. WAIVER AND ESTOPPEL. I 61. Definitions. 62. Knowledge. 63. Limitations in Policy. 64. EfEect of Knowledge by Insurer's Agent of Falsity of State- ments in Application. 65. Collusion between Applicant and Agent of Insurer. 66. By Conduct. (a) Of Proofs by Denial of Liability. (b) By Refusal on Specific Grounds. (c) Refusal to Furnish Blanks. § 61. DEFINITIONS. Waiver is the voluntary relinquislmient of a known right. "When one party has, by his representations or conduct, induced the other party to a contract to give him. an advantage which it would be against equity and good conscience for him to assert, the courts will not permit him to avail himself of that advantage. Findeisen v. Metropole Fire Ins. Co., 57 Vt. 520. Union Mutual Ins. Co. v. Wilkinson, 13 Wall. 222. Bigelow, Estop. § 62. WAIVER B.EQUIBES KNOWLEDGE. Waiyer implies knowledge, and the insured, to claim a waiver, must be able to show "knowledge on the part of the Insurer of the act or omission on the part of the insured which he is claimed to have dispensed with or waived. The knowledge on a waiver need not be expressly shown, but may be implied, when the act of commission or omission is (124) Part 11) LIMITATIONS IN POLICY. §§ 62-63 of such a character as fairly to preclude the idea of igno- rance.'' 2 Biddle, § 1053. Miller v. Union Cent. Life Ins. Co., 110 111. 102. McMartin v. Continental Ins. Co., 41 Minn. 198, 42 N. W. 934. Stevens v. Queen Ins. Co., 81 Wis. 335, 51 N. W. 555. Globe Mut. Life Ins. Co. v. Wolflf, 95 U. S. 326. Mershon v. National Ins. Co., 34 Iowa, 87. Illustrations — Delivery of policy, without requiring prepayment of premium, Dilleber v. Life Ins. Co., 76 *N. Y. 567; Elkins v. Susquehanna M. F. Ins. Co., 113 Pa. St. 386, 6 Atl. 224. When it is known that the risk is prohibited by the by-laws, Merchants' & Manufacturers' Ins. Co. v. Curran, 45 Mo. 142. That the premises are vacant, Haight v. Continental Ins. Co., 92 N. Y. 51. Accepting premises after notice of the infirmity, Clapp V. Massachusetts Ben. Ass'n, 146 Mass. 519, 16 N. E. 433. § 63. LIMITATIONS IN POLICY. The various provisions which insurance companies have placed in their policies for the purpose of limiting or alto- gether taking away the power of agents to waive conditions in the policy may be classified as follows: 1. Those forbidding agents to waive except in a specified manner; as, for example, by writing indorsed on the policy. The courts are divided as to the validity of such provisions. Held valid in: Carlin v. West Assur. Co., 57 Md. 515. Smith V. Niagara Fire Ins. Co., 60 Vt. 682, 15 Atl. 353. Cronkhite v. Travelers' Ins. Co., 75 Wis. 116, 43 N. W. 731. Held invalid in: Shuggart v. Lycoming Fire Ins. Co., 55 Cal. 408. (125) § 63 WAIVER AND ESTOPPEL. (Part 11 Stevens v. (Jitizens' Ins. Co., G9 Iowa, 658, 29 N. W. 7G9. Michigan State Ins. Co. v. Lewis, 30 Mich. 41. 2. Those forbidding agents to waive except subject to the approval of certain officers of the company, and prescribing the manner in which such waiver may be made. McCormick v. Springfield F. & M. Ins. Co., 66 Gal. 361, 5 Pac. 617. Pitney v. Glen's Falls Ins. Co., 65 N. Y. 6. This provision is held valid in : Mclntyre v. Michigan State Ins. Co., 52 Mich. 188, 17 N. W. 781. Lantz V. Vermont Life Ins. Co., 139 Pa. St. 546, 21 Atl. 80. Hankins v. Kockford Ins. Co., 70 Wis. 1, 35 N. W. 34. .Van Allen v. Farmers' Joint-Stock Ins. Co., 64 N. Y. 469. 3. Those placing an absolute prohibition upon tfie power of agents to waive. Such a provision is binding, but the in- surer may be estopped from asserting it by a course of con- duct manifestly inconsistent with an intention to observe it. Franklin Ins. Co. v. Sefton, 53 Ind. 380. Jennings v. Metropolitan Life Ins. Co., 148 Mass. 61, 18 N. E. 601. A provision that "agents are not authorized to make, alter, or discharge contracts" has been held not to apply to a general agent. Marcus v. St. Louis Mut. Life Ins. Co., 68 N. Y. 625. In Ruthven v. American Fire Ins. Co. (Iowa) 60 N. W. 663, the court said: "The policy provides, in substance, that no officer, agent, or other representative of the company shall have power to waive any provision or condition of the policy, except such as by the terms of the policy may be the subject of agree- (126) Part 11) LIMITATIONS IN POLICY. § 63 ment indorsed thereon or added thereto. There is some con- flict in the authorities as to whether this land of an agree- ment or provision is valid or not. But we think the de- cided weight is in favor of the proposition that it is. Burlington Ins. Co. v. Gibbons, 43 Kan. 15, 22 Pac. 1010. Weidert v. Insurance Co., 19 Or. 261, 24 Pac. 242. Cleaver v. Insurance Co., 71 Mich. 414, 39 N. W. 571. Quinlan v. Insurance Co., 133 N. Y. 356, 31 N. E. 31. Smith V. Insurance Co., 60 Vt. 682, 15 Atl. 353. Walsh V. Insurance Co., 73 N. Y. 5. Hankins v. Insurance Co., 70 Wis. 1, 35 N. W. 34. Gould V. Insurance Co., 90 Mich. 302, 51 N. W. 455. Clevenger v. Insurance Co., 2 Dak. 114, 3 N. W. 313. Enos V. Insurance Co., 67 Cal. 621, 8 Pac. 379. Kyte V. Commercial Assur. Co., 144 Mass. 43, 10 N. E. 518. And many other cases cited in the authorities. "Whether this is the correct rule or not, it is the one adopt- ed by this court in the recent case of Kirkman v. Insurance Co. (Iowa) 57 N. W. 953, decided since this cause was tried in the lower court. The principle was also recognized in Zimmermann v. Insurance Co., 77 Iowa, 691, 42 K W. 462; Wood Mowing Mach. Co. v. Crow, 70 Iowa, 340, 30 N. W. 609. We do not mean to be understood as holding that the company could not itself, through its general agents, waive these provisions of the policy. What we do hold is that the provisions we have quoted are a limitation upon the power of its local, special, and adjusting agents, of which the plaintiffs had or are presumed to have had knowledge, and that any agreement or waiver which they attempted to make would not be binding upon the company, because not authorized." A provision that no waiver shall be binding except it be in writing, plainly expressed in the policy, and the like, has been held, like the other clauses, not to prevent a parol (127) §§ 63-64 WAIVER AND ESTOPPEL. (Part 11 waiver by the insurer, as the power to insert such a stipula- tion cannot be greater than the power to disregard it 2 Biddle, 1081. Gans V. St. Paul Fire & Marine Ins. Co., 43 Wis. 108. McFarland v. Kittanning Ins. Co., 134 Pa. St. 590, 19 Atl. 796. Anderson v. Manchester Fire Ins. Co. (Minn.) 63 N. ■ W. 241. A local agent, who is simply authorized to fix rates of insurance, and countersign and deliver policies, subject to the approval of the company, has no authority to waive a provision of the policy that, when a loss occurs, "the as- sured shall forthwith give notice of said loss to the com- pany," etc. Ermentrout v. Insurance Co., 60 Minn. 418, 62 N. W. 543. Bowlin V. Hekla Fire Ins. Co., 36 Minn. 433, 31 N. W. 859. Edwards v. Lycoming Co. Mut. Ins. Co., 75 Pa. St 378. 2 Biddle, § 988. § 64. EFFECT OF KNOWLEDGE BY INSURER'S AGENT OF FALSITY OF STATEMENT IN THE APPLICATION. / In a recent case it was said that it is settled beyond ques- tion that, if at the time the policy is issued the agent of the insurer knows that the application contains false state- ments, the insurer is estopped to assert such falsity in order to escape liability. ' Waterbury v. Insurance Co., 6 Dak. 468, 43 N. W. 697. The reason for this rule is stated in Michigan Shingle Co. V. State Inv. & Ins. Co., 94 Mich. 389, 53 N. W. 945. The insured warranted that "a continuous clear space of 150 feet shall hereafter be maintained" between the property in- (128) Part 11) agent's knowledge of falsity. § 64 sured and a building of a certain description. The agent of the insurer linew that the existing facts were otherwise, and that there was no intent to change the situation, and that it was not within the power of the applicant to do so. The court said: "The defendant insists that the clause, 'there shall be hereafter maintained 150 feet .clear space,' must be rendered literally, and without regard to the knowl- edge of the agent as to what the actual distance was; there- by asserting that it has the right to accept the money of the assured, issuing its policy therefor, and lead him to understand that he has a valid insurance until a loss occurs, and then to repudiate its liability. Such a rule as this would enable it to afflrm a contract entered into by it with fuU knowledge of all the facts, in so far as such contract might be of advantage to it, and to repudiate it the moment it ceased to be advantageous. This is inequitable, and con- trary to the well-established rule in reference to when and how the repudiation of a contract shaU be made. The knowledge of the agent is the knowledge of the company. If the insurer receives the premium with full knowledge of facts constituting a breach of one of the conditions of the policy, the right to insist that the policy is forfeited for that cause is gone.' Mershon v. Insurance Co., 34 Iowa, 87." To the same efiEect, see: Mutual Ben. Life Ins. Co. v. Daviess' Ex'r, 87 Ky. 541, 9 S. W. 812. Dunbar v. Insurance Co., 72 Wis. 492, 40 N. W. 386. Continental Ins. Co. v. Pearce, 39 Kan. 396, 18 Pac. 291. Pickel V. Insurance Co., 119 Ind. 291, 21 N. E. 898. Gotten V. Casualty Co., 41 Fed. 506. Eeynolds v. Insurance Co., 80 Iowa, 563, 46 N. W. 659. Manhattan Fire Ins. Co. v. Weill, 28 Grat. (Va.) 389. Germania Fire Ins. Co. v. Hick, 125 HI. 361, 17 N. E. 792. Anderson v. Assurance Co., 59 Minn. 182, 195, 60 N. W. 1095, and 63 N. W. 241. LAW INS. — 9 (129) §§ 64-66 WAIVER AND ESTOPPEL. (Part 11 But there are many cases which hold the insured strictly to the truth of his warranty, regardless of the knowledge of the agent of the insurer. Thus, in Clemans v. Society, 131 N. Y. 485, 30 N. E. 496, it was held that a false warranty by an applicant for life insurance avoided a contract of which it became a part, although he believed it to be true, and the agent knew it to be false. "It is not important that the party making the warranty really believed in its entire truth. If it be false, it avoids the contract. Nor does the mere knowledge of the agent of the company, at the time when it is made, that the warranty is false, pre- vent the defendant from setting up the breach as a defense to the action on the policy." And see: Kenyon v. Association, 122 ^\ Y. 247, 25 N. E. 299. Pottsville Mut. Fire Ins. Co. v. Promm, 100 Pa. St. 347. McC!oy V. Insurance Co., 133 Mass. 82. § 65. COLLUSION BETWEEN APPLICANT AND AGENT OF THE INSUBEE. No estoppel arises where there is a want of good faith on the part of the applicant, or collusion between the appli- cant and the agent of the insurer. Rocliford las. Co. v. Nelson, 75 HI. 548. § 66. ESTOPPEL BY CONDUCT AFTEB LOSS. The insurer may be estopped to deny liability, by its acts after the loss. ^a) GENEBAL DENIAL OP LIABILITY. Thus, a general denial of liability waives notice and proof of loss. 2 Biddle, § 1136. 2 May, § 464. Pennsylvania Fire Ins. Co. v. Dougherty, 102 Pa. St. 568. (130) V Part 11) ESTOPPEL BY CONDUCT AFTER LOSS. § 66 Boyd V. Cedar Rapids Ins. Co., 70 Iowa, 325, 30 N. W. 585. Protective Union v. Whitt, 36 Kan. 760, 14 Pac. 275. A provision in the policy relating to waiver may be waived. Haight V. Continental Ins. Co., 92 N. Y. 51. See Globe Mut. Life Ins. Co. v. Wolff, 95 U. S. 326. In Dwelling House Ins. Co. v. Brewster (Neb.) 61 N. W. 746, the court said: "One of the defenses relied on by the company wa% tjie fact that the insured had not furnished the proofs of the loss required by the terms of the policy of in- surance. Whether this was true or not was immaterial, as the company denied that it was bound to pay the loss, claiming that the policy was not in force at the time of the destruction of the property. This was a waiver of the re- quirements of the proofs of loss." (b) REFUSAL ON SPECIFIC GROUNDS. Where an insurance company puts its refusal to pay a loss on another ground, it is a waiver of objections to insufS- ciency in the proofs of loss required by the policy. Hand v. Insurance Co. (Minn.) 59 N. W. 538. Newman v. Insurance Co., 17 Minn. 123 (Gil. 98). Phoenix Ins. Co. v. Taylor, 5 Minn. 492 (Gil. 393). The authorities are collected in Omaha Fire Ins. Co. V. Dierks (Neb.; 1895) 61 N. W. 740. German Ins. & Sav. Inst. v. Kline (Neb.; 1895) 62 N. W. 857. (c) REFUSAL TO SEND BLANKS FOR PROOFS. A refusal to send to the insured the customary blanks has been held a waiver of proofs. Grattan v. Metropolitan Life Ins. Co., 80 N. Y. 281. Eifect of conduct subsequent to the loss. See : (131) § 66 WAIVER AND ESTOPPEL. (Part 11 AUemania Fire Ins. Co. v. Pitts Exposition Soc. (Pa. Sup.) 11 Atl. 572. Pennsylvania Fire Ins. Co. v. Dougherty, 102 Pa. St. 568. Fisher v. Crescent Ins. Co., 33 Fed. 544. Boyd T. Cedar Eapids Ins. Co., 70 Iowa, 325, 30 N. W. 585. Lebanon Mut. Ins. Co. v. Erb, 112 Pa. St. 149, 4 Atl. 8. Continental Ins. Co. v. Rogers, 119 HI. 474, 10 N. E. 242. Niagara Fire Ins. Co. v. Miller, 120 Pa. St. 504, 14 Atl. 385. The condition of a policy requiring proofs of loss within a specified time is waived where, after notice of the loss, the company's adjuster examines the circumstances of the flre, takes possession of the books of insured, and, with his help, makes an estimate of the amount of the loss. Home Fire Ins. Co. v. Hammang (Neb.) 62 N. W. 883. See Slater v. Insurance Co., 89 Iowa, 628, 57 N. W. 422. Faust V. Insurance Co., 91 Wis. 158, 64 N. W. 883. Trippe v. Society, 140 N. Y. 23, 35 N. E. 316. Paltrovitch v. Insurance Co., 143 N. Y. 73, 37 N. E. 639. (132) Part 12) ASSIGNMENT, EIGHl-S OF BENEIICIARY. § 67 PART xn. ASSIGNMENT, RIGHTS OF BENEFICIARY. § 67. Fire Insurance. (a) Not Assignable. (b) Effect of Assignment with Consent (c) Assignment after Loss. 68. Life and Marine Policies. (a) Assignable. (b) Intterest of Assignee. (c) Vested Interest of Beneficiary. (d) Reservation of Right. There is a difference at common law between life and fire and marine insurance contracts with respect to their assign- ability. This difference grows out of the common-law rule regarding the assignability of causes of action, and is also affected by the peculiar nature of marine insurance and life insurance. § 67. FIRE INSURANCE. (a) NOT ASSIGNABLE. Fire insurance contracts are not assignable without the consent of the insurer. Policies ordinarily contain a pro- vision for their assignment with the written consent of the company. As said in White t. Bobbins, 21 Minn. 370: 'Tolicies of insurance are not in their nature assignable, and unless made assignable at the pleasure of the insured, and by him assigned, or unless his assignment is assented to by the insurer, the effect of a sale by the insured of the property insured is to put an end to the contract of insurance. The vendor of the property cannot recover on the policy if the property is burnt, because he has sustained no loss. The (133) § 67 AShlGNMEST, RIGHTS OF BENEFICIAHY. (Part 12 purchaser cannot recover because he has no contract with the insurer." 1 Biddle, § 261. 2 May, c. 19. 2 Wood, c. 10, § 361. (b) EPrECT OF ASSIGNMENT WITH CONSENT OF INSUEEB. When the policy is assigned with the consent of the in- surer, a new contract arises as of that date, embracing the terms and stipxilations as they were in the original con- tract between the assignor and insured. Ellis V. Insurance Co., 32 Fed. 646 (Brewer, J.). 2 May, Ins. § 378A. 1 Biddle, Ins. § 321. This contract is unaffected by any causes of forfeiture which existed at the time of the assignment, unknown to the other party. This is the doctrine of most of the recent cases. Hall T. Insurance Co. (Mich.) 53 N. W. 727. Ellis V. Insurance Co., 32 Ted. 646. Continental Ins. Co. v. Munns, 120 Ind. 30, 22 N. E. 78. Syndicate Ins. Co. v. Bohn, 27 U. S. App. 564, 12 C. C. A. 531, 65 Fed. 165 (under what is known as the "Union Mortgage Clause"). The rule is strengthened when the insurer had knowledge of the existence of a cause of forfeiture at the time of the assignment. Steen y. Insurance Co., 89 N. Y. 319. Breckinridge v. Insurance Co., 87 Mo. 62. In EUis V. Insurance Co., 68 Iowa, 578, 27 N. W. 762, it was held that the insurer did not waive a cause of forfeiture existing at the time of the assignment, (134) Part 12) FIRE INSURANCE. § 67 but which was unknown to the insurer. But see Ellis T. Insurance Co., 64 Iowa, 507, 20 N. W. 782. In MeCluskey v. Insurance Co., 12(5 Mass. 30C, and in Eastman v. Insurance Co., 45 Me. 307, it was held that a policy which was void for want of insurable interest was invalid in the hands of one to whom it was assigned with the consent of the insurer, but upon no new consideration. And see Fogg v. Insurance Co., 10 Cush. 337; Phenix Ins. Co. v. Willis, 70 Tex. 12, 6 S. W. 825. After an 'assignment assented to by the insureri^the as- signor cannot affect the interests of the assignee by con- tracts with reference to the insurance. American Cent. Ins. Co. v. Sweetser, 116 Ind. 370, 19 N. E. 159. Hall V. Fire Ass'n, 64 N. H. 405, 13 Atl. 648. As by an accord and satisfaction, Hathaway y. In- surance Co., 134 N. Y. 408, 32 N. E. 40. Or an arbitration without notice to the assignee (mortgagee), Bergman v. Assurance Co., 92 Ky. 494, 18 S. W. 122. There is some conflict of authority on the question of the effect of a breach of condition by the assignor after the as- signment. It is apparent that there should be a distinc- tion made between the case of a transfer of the ownership of the property and an assignment of the policy to the new owner, and a mere assignment of the policy as collateral security for a debt. Some of the cases make no distinction, but hold that a new contract is created, which can in no way be affected by the subsequent acts of the assignor. Pollard V. Insurance Co., 42 Me. 221. Charlestown Ins. & F. Co. v. Neve, 2 McMul. 237. But the later and better-considered cases hold that, where the assignment is as collateral security only, the policy is (135) § 67 ASSIGNMENT, RIGHTS OF BENEFICIARY. (Part 12 avoided by breach of its conditions by the assignor subse- quent to the assignment. Buffalo Steam-Engine Works v. Sun Mut. Fire Ins. Co., 17 N. Y. 401. Illinois Mut. Fire Ins. Co. t. Fix, 53 111. 151, Pupke T. Insurance Co., 17 Wis. 378. Swenson v. Sun Fire Office, 68 Tex. 461, 5 S. W. 60. Home Mut. Fire Ins. Co. v. Hauslein, 60 111. 521. Eeed v. Insurance Co., 54 Vt. 413. Lycoming Fire Ins. Co. v. Storrs, 97 Pa. St. 354. In Agricultural Ins. Co. v. Hamilton (Md.) 33 Atl. 429, the policy was payable to the mortgagee as his interest might appear. The court said : "But here the validity of the policy was made to depend upon the insured continuing to occupy the premises; and, no matter to whom the loss may be made payable, it cannot be recovered by any one if by the terms explicitly set forth in the policy no right of action can accrue at all upon the violation of some specific con- dition, whose obsei"vance by the insured is made necessary to fix the insurer's liability." The uncertain nature of the security, which was thus at the mercy of the assignor, led to the adoption of a new form of assignment or mortgage clause, which expressly provides that no act of the assignor shall avoid the policy. The old form was an indorsement upon the policy, "Loss, if any, payable to , mortgagee, as his interest may appear." A new form, known as the "Union Mortgage Clause," pro- vides that "the interests of the above-named mortgagee or beneficiary, or its assigns, only, shall not be invalidated by any act or neglect of the mortgagor or owner of the prop- erty insured, &c." Of this clause, the court, in Syndicate Ins. Co. v. Bohn, 27 U. S. App. 564, 12 C. C. A. 531, and 65 Fed. 165, said: "Our conclusion is that the effect of the union mortgage clause, when attached to a policy of insurance running to the mort- gagor, is to make a new and separate contract between the mortgagee and the insurance company, and to effect a sep- (136) Part 12) LIFE AND MARINE POLICIEs'. §§ 67-68 arate insurance of the interest of the mortgagee, dependent for its validity solely" upon the course of action of the in- surance company and the mortgagee, and unaffected by any act or neglect of the mortgagor, of which the mortgagee is ignorant, whether such act or neglect was done or permitted prior or subsequent to the issue of the mortgage clause." See, also: Hartford Fire Ins. Co. v. Olcott, 97 HI. 441. Davis V. Insurance Co., 135 Mass. 251. Eddy V. Assurance Corp., 143 N. Y. 311, 38 N. E. 307. Phenix Ins. Co. v. Omaha Loan & Trust Co., 41 Neb. 834, 60 N. W. 133. (c) ASSIGNMENT AFTER LOSS. After loss the debt may be assigned without the consent of the insurer. It is then merely the assignment of a chose in action, and the assignee takes subject to all offsets and equities which existed against the assignor. Benefant v. Insurance Co., 76 Mich. 654, 43 N. W. 682. East Texas Fire Ins. Co. v. Coffee, 61 Tex. 287. Archer v. Insurance Co., 43 Mo. 434. 2 May, § 386. § 68. LIFE AND MARINE POLICIES. (a) ASSIGNABLE. Life and marine contracts are assignable without the con- sent of the insurer. Bliss, § 328. 1 Biddle, § 268. 1 Amould, p. 107. (b) INTEREST OF ASSIGNEE. As to the necessity for an insurable interest in the as- signee, see "Insurable Interest," tit. IV. § 18d. (137) § 68 ASSIGNMENT, RIGHTS OF BENEFICIARY. (Part 12 (o) VESTED INTEREST OP BENEFICIARY. When the insured is not also the beneficiary, there cannot be an assignment without the consent of the beneficiary. As said in Central Banli v. Hume, 128 U. S. 195, 9 Sup. Ct. 41: "It is the general rule that a policy and the money due under it belong, the moment it is issued, to the person or persons named in it as the beneficiary or beneficiaries, and that there is no power in the person procuring the insur- ance, by any act of his, by deed or by will, to transfer to any other person the interest of the person named^" Kicker v. Charter Oak Life Ins. Co., 27 Minn. 193, 6 N. W. 771. Allis V. Ware, 28 Minn. 166, 9 N. W. 666. Pingrey v. National Life Ins. Co., 144 Mass. 374, 11 N. E. 562. Holland v. Taylor, 111 Ind. 121, 12 N. E. 116. Splawn V. Chew,' 60 Tex. 532. Weisert v. Muehl, 81 Ky. 336. Fowler v. Butteriy, 78 N. Y. 68. Aetna Ins. Co. v. Mason, 14 K. I. 583. Hooker v. Sugg, 102 N. C. 115, 8 S. E. 919. Cooke, § 74. 2 May, § 399L. Eight of an insolvent debtor to insure his life for the benefit of his wife. See: Central Bank v. Hume, 128 U. S. 195, 9 Sup. Ct, 41, and article in 25 Am. Law. Rev. 185, Cooke, § 74. (d) RESERVATION OP RIGHT TO ASSIGN. The right to assign the policy or chahge the beneficiary without the consent of the beneficiary may be reserved by statute, by law, or by a provision in the policy. Weisert v. Muehl, 81 Ky. 336. Martin v. Stubbings, 126 111. 387, 18 N. E. 657. (138) Part 12) LIFE AND MAKING POLICIES. § 68 Milner v. Bowman, 119 Ind. 448, 21 N. E. 1094. Union Mut. Life Ass'n of Battle Creek v. Montgomery, 70 Mich. 587, 38 N. W. 588. Jory V. Supreme Council, 105 Cal. 20, 38 Tac. 524. Cooke, § 75. 2 May, § 399M. (139) APPENDIX. THE STANDARD POUCY. The Minnesota Law of 1895, contains the following provi- sions relative to the form and conditions of a fire policy: No fire insurance company shall issue fire insnrance policies on property In this state other than those of the standard form herein set forth except as follows, to wit: First — A company may print on or in its policies its name, location, and date of incorporation, the amount of its paid-up capital stock, the names of its officers and agents, the number and date of the policy, and, if it is issued through an agent, the words, "This pol- icy shall not be valid until countersigned by the duly authorized agent of the company at ." Second — ^A company may print or use in its policies printed forms of description and specification of the property insured. Third— A company Insuring against damage by lightning may print, in the clause enumerating the perils insured against, the ad- ditional words, "also any damage by lightning, whether fire ensues or not," and in the clause providing for an apportionment of loss in case of other insurance the words "whether by fire, lightning, or both." Fourth — ^A company incorporated or formed in this state may print in its policies any provisions which it is authorized or required by law to insert therein; and any company not incorporated or formed in this state may, with the approval of the insurance com- missioner, so print any provision required by its charter or deed of settlement, or by the laws of its own state or country, not contrary to the laws of this state, provided that the insurance commissioner shall require any provision which, in his opinion, modifies the con- tract of insurance in such a way as to affect the question of loss to be appended to the policy by a slip or rider, as hereinafter provided. Fifth— The blanks in said standard form may be filled in print or in writing. Sixth— A company may print upon policies issued in compliance with the preceding provisions of this section the words "Minnesota standard policy." LAW INS. (141) 142 APPENDIX. Seventh— A company may write upon the margin or across the face of the policy, or write, or print In type not smaller than long primer, upon separate slips or riders to be attached thereto, pro- visions adding to or modifying those contained in the standard form; provided, that no provision shall be attached to or included in said policy limiting the amount to be paid in case of total loss on buildings to less than the amount of insurance on the same, and all such slips, riders and provisions must be signed by the officers or agent of the company so using them. The said standard form of policy shall be plainly printed, and no portion thereof shall be in type smaller than long primer, and shall be as follows, to- wit: [Minnesota Standard Polky.'i No. . $ . (Corporate name of the company or association: its principal place or places of business.) 1 In consideration of dollars to be paid by the insured, 2 hereinafter named, the receipt whereof is hereby acknowl- 3 edged, does Insure and legal representatives 4 against loss or damage by fire, to the amount of dollars (Description of property insured.) 6 Bills of exchange, notes, accounts, evidences and securitief 6 of property of every kind, books, wearing apparel, plate, money. 7 jewels, medals, patterns, models, scientific cabinets and col- 8 lections, paintings, scuplture and curiosities are not included ir 9 said insured property, unless specially mentioned. 10 Said property is insured for the term of , beginning oi 11 the day of , in the year eighteen hundred and 12 at noon, and continuing until the day of , in tht 13 year eighteen hundred and , at noon, against all loss oi 14 damage by fire originating from any cause except invasion 15 foreign enemies, civil commotions, riots, or any military oi 16 usurped power whatever; the amount of said loss or dam 17 age to be estimated according to the actual value of the in 18 sured property at the time when such loss or damage happens 19 except in case of total loss on buildings, but not to include 20 loss or damage caused by explosion of any kind unless fire 21 ensues, and then to include that caused by fire only. 22 This policy shall be void if any material fact or circumstance 23 stated in writing has not been fairly represented by the in- 24 sured, or if the assured now has or shall hereafter make 25 any other insurance on the said property without the assent 26 of the company, or If without such assent the said property 27 shall be removed," except that, if such removal shall be 28 necessary for the preservation of the property from fire, this 29 policy shall be valid without such assent for five days there 30 after, or if, without such assent, the situation or circum- 31 stances affecting the risk, shall, by or with the knowl 32 edge, advice, agency or consent of the Insured, be so aJterec 33 as to cause an increase of such risks, or if, without such as- 34 sent, the property shall be sold or this policy assigned, or ij 35 the premises hereby Insured shall become vacant by the re 36 moval of the owner or occupant, and so remain vacant foi 37 more than thirty days without such assent, or If it be a man 38 ufacturlng establishment running in whole or in part extra APPENDIX. 143 39 time, except that such establishment may run in whole or in 40 part extra hours not later than nine o'clock p. m., or if such es- 41 tablishment shall cease operation for more than thirty days 42 without permission in writing endorsed hereon, or if the in- 43 sured shall make any attempt to defraud the company, either 44 before or after the loss, or If gunpowder or other articles sub- 45 ject to legal restriction shall be kept in quantities or manner 46 different from those allowed or prescribed by law, or if cam- 47 phene, benzine, naphtha or other chemical oils or burning 48 fluids shall be kept or issued by the insured on the premises 49 insured, except that what is known as refined petroleum, 50 kerosene or coal oil may be used for lighting, and in dwelling 51 houses kerosene oil stoves may be used for domestic pur- 52 poses, to be filled when cold, by daylight, and with oil of law- 53 ful fire test only. 54 If the insured propei-ty shall be exposed to loss or damage 55 by fire, the insured shall make all reasonable exertions to 56 save and pretect the same. 57 In case of any loss or damage under this policy, a statement 58 in writing, signed and sworn to by the insured, shall be forth- 59 with rendered to the company, setting forth the value of the 60 property insured, except in case of total loss on buildings the 61 value of said buildings need not be stated, the interest of the 62 Insured therein, all other insurance thereon in detail, the pur- 63 poses for which and the persons by whom the building Insured, 64 or containing the property insured, was used, and the time 65 at which and manner in which the fire originated so far as 66 known to the insured. The company may also examine the 67 books of account and vouchers of the insured, and make ex- 68 tracts from the same. 69 In case of any loss or damage the company, within sixty 70 days after the insured shall have submitted a statement as 71 provided in the preceding clause, shall either pay the amount 72 for which it shall be liable, which amount. If not agreed 73 upon, shall be ascertained by award of referees, as herein- 74 after provided, or replace the property with other of the 75 same kind and goodness, or it may, within fifteen days after 76 such statement is submitted, notify the insured of its intention 77 to rebuild or repair the premises or any portion thereof sepa- 78 rately insured by this policy, and shall thereupon enter upon 79 said premises and proceed to rebuild or repair the same with 80 reasonable expedition. 81 It is moreover understood that there can be no abandonment 82 of the property insured to the company, and that the com- 83 pany shall not in any case be liable for more than the sum 84 insured, with interest thereon from the time when the loss 85 shall become payable, as above provided. 86 If there shall be any other insurance on the property insured, 87 whether prior or subsequent, the insured shall recover on this 88 policy no greater premium of loss, except in case of total loss 89 on buildings, sustained than the sum hereby insured bears to the 90 whole amount iufsured thereon. And whenever the company 91 shall pay any loss, the insured shall assign to it to the extent 92 of the amount so paid all rights to recover satisfaction for the 93 loss or damage from any person, town or other corporation, 94 excepting other insurers; or the insured, if requested, shall 95 prosecute therefor at the charge and for the account of the 96 company. 97 If this policy shall be made payable to a mortgagee of the 98 insured real estate, no act or default of any person other than 99 such mortgagee or his agents, or those claiming under him, 100 shall affect such mortgagee's right to recover in case of loss 144 APPENDIX. 101 on such real estate; provided, that the mortgagee snaii, of 102 demand, pay according to the established scale of rates for any 103 increase of risks not paid for by the insured. And whenever 104 this company shall be liable to a mortgagee for any sum for 105 loss under this policy, for which no liability exists as to the 106 mortgagor, or owner, and this company shall elect by itself, 107 or with others, to pay the mortgagee the full amount secured 108 l3y such mortgage, then the mortgagee shall assign and ti-ans- 109 fer to the companies interested, upon such payment, the said 110 mortgage, together with the note and debts thereby secured. 111 This policy may be canceled at any time at the request of the 112 insured, who shall thereupon be entitled to a return of the 113 portion of the above premium remaining, after deducting the 114 customary monthly short rates for the time this policy shall 115 have been in force. The company also reserves the right, 116 after giving written notice to the insured, and to any mort- 117 gagee to whom this policy is made payable, and tendering to ,118 the insured a ratable proportion of the premium, to cancel 119 this policy as to all risks subsequent to the expiration of ten 120 days from such notice, and no mortgagee shall then have the 121 right to recover as to such risks. 122 In case of loss, except in case of total loss on buildings, under 123 this policy and a failure of the parties to agree as to the 124 amount of loss, it is mutually agreed that the amount of such 125 loss shall be referred to three disinterested men, the company 126 and the insured each choosing one out of three persons to be 127 named by the other, and the third being selected by the two 128 so chosen; the award in writing by a majority of the referees 129 shall be conclusive and final upon the parties as to the amount 130 of loss or damage, and such reference, unless waived by the 131 parties, shall be a condition precedent to any right of action 132 in law or equity to recover for such loss; but no person shall 133 be chosen or act as referee, against the objection of either 134 party, who has acted in a like capacity within four months. 135 No suit or action against this company for the recovery of 136 any claim by virtue of this policy shall be sustained in any 137 court of law or equity in this state unless commenced within 138 two years from the time the loss occurs. 139 In witness whereof, the said company has caused this 140 policy to be signed by the president and attested by its secre- 141 tary (or by such proper officers as may be designated), at 142 their office in . 143 Date, . When two or more companies (each having previously complied with the laws of this state) unite to issue a joint policy, there may be expressed In the heading of such policy the fact of the severalty of the contract; also the proportion of premium to be paid to each company, and the proportion of liability which each company agrees to assume. And in the printed conditions of such policy the nec- essary change may be made from the singular to the plural num- ber when reference is had to the companies Issuing such policy. The law also contains the following provisions and re- strictions: [1.] No fire or fire and marine insurance company shall make any conditions or stipulations in Its insurance contract concerning the APPENDIX. 145 coTirt of Jnrisdlctloii wherein any suit thereon may be brought, nor shall limit the time within which such suit may be commenced to less than one year after the cause of action accrues. [2.] Any provision, contract or stipulation contained in any con- tract or policy of Insurance issued or made by any fire insurance company, association, syndicate or corporation, insuring any prop- erty within this state, except risks equipped by ^tomatic sprink- lers, whereby it is provided or stipulated that the assured shall maintain insurance on any property covered by the policy to the extent of eighty per cent on the value thereof, or to any extent whatever, and any provision or stipulation In any contract or pol- icy of Insurance, that the insured shall be an insurer of the prop- erty insured to any extent, and any provision or stipulation in any such contract or policy to the effect that the insured shall bear any portion of the loss on the property insured, are hereby declared to be null and void, and the liability of the company, syndicate, as- sociation or corporation issuing the policy shall be the same as if no such agreement, stipulation or contract were contained in such policy. [3.] Nor shall any such insurance company insert any condition, stipulation or agreement in any policy of insurance requiring a cer- tificate from any notary public, justice of the peace, or other mag- istrate or person, as to anything whatever connected with such insurance or loss, and any such condition or stipulation shall be void. [4.] Any person, company or association hereafter insuring any building or structure against loss or damage by fire, lightning or other hazard by a renewal of a policy heretofore issued or other- wise, shall cause such building or structure to be examined by the insurer or his agent, and a full description thereof to be made, and the insurable value thereof to be fixed by the Insurer or his agent, the amount of which shall be stated in the policy of insurance. [5.] In the absence of any change increasing the risk, without the consent of the insurer, and in the absence of Intentional fraud on the part of the insured, in case of total loss the whole amount men- tioned in the policy or renewal upon which the insurer receives a premium shall be paid; and in case of a partial loss the full amount of the partial loss shall be paid, and in case there are two or more policies upon the property, each imllcy shall contribute to the pay- ment of the whole or the partial loss in proportion to the amount of insurance mentioned in each policy, but in no case shall the in- surer be required to pay more than the amount mentioned In the policy; [6.] Provided, that, in the rbsence of fraud, the burden of proof to show an increase of risk by any change in the ownership or con- LAW INS. — 10 146 APPENDIX. dition of the structure or building upon wblcli insurance is effected, either before or after loss arises, shall be upon the insurer, anything in the application or the policy of insurance to the contrary notwith- standing. TABLE OF CASES CITED. [The Refebences in the Right-Hand Coldmk Abe to the Sections.] A Abraham v. Insurance Co., 40 Fed. 717 47 Acer V. Merchants' Ins. Co., 57 Barb. 68 55 Adams v. Lindsell, 1 Barn. & Aid. 681 9 Aetna Fire Ins. Co. v. Tyler, 16 Wend. 385 55 Aetna Ins. Co. v. Grube, 6 Minn. 82, 84 (Gil. 32) 26, 27 V. Mason, 14 R. I. 583 68 Aetna Life Ins. Co. v. Deming, 123 Ind. 384, 24 N. B. 86 30 Aetna Uve-Stock, Fire & Tornado Ins. Co. v. Olmstead, 21 Mich. 251 54 Agricultural Ins. Co. v. Bemlller, 70 Md. 400, 17 Atl. 380 59 V. Hamilton (Md.) 33 Atl. 429 67 Alabama G. L. Ins. Co. v. Gamer, 77 Ala. 210 29 V. Mayes, 61 Ala. 163 7 Alexander v. Parker, 144 HI. 355, 33 N. B. 183 19 V. Sanders, 93 Ala. 345, 9 South. 521 18 Alkan v. New Hampshire Ins. Co., 53 Wis. 136, 10 N. W. 91 55 Allemania Fire Ins. Co. v. Pitts Exposition Soc. (Pa. Sup.) 11 Ati. 572 66 Allen V. Insurance Co., 85 N. Y. 473, 477 16 Allis V. Ware, 28 Minn. 166, 9 N. W. 666 68 Allison V. Phoenix Ins. Co., 3 Dill. 480, Fed. Cas. No. 252 55 Alsop V. Commercial Ins. Co., 1 Sumn. 451, 467, Fed. Cas. No. 262 8 Alston V. Mechanics' Mut. Ins. Co., 4 Hill (N. Y.) 329 34 American Cent Ins. Co. v. Sweetser, 116 Ind. 370, 19 N. B. 159 67 American Ins. Co. v. Gallatin, 48 Wis. 36, 3 N. W. 772 53 V. Mahone, 21 WaU. 152 51 American Life Ins. Co. v. Isett, 74 Pa. St. 176 57 V. Mahone, 56 Miss. 180 38 American Life & Health Ins. Co. v. Robertshaw, 26 Pa. St. 189.. 19 LAW INS. (147) 148 CASES CITED. [The references in the right-hand column are to the sectione.] Amick V. Butler, 111 Ind. 578, 12 N. B. 518 19 Ampleman v. Insurance Co., 35 Mo. App. 308 11 Anderson v. Assurance Co., 59 Minn. 182, 195, CO N. W. 1095, and 63 N. W. 241 64 V. Fitzgerald, 4 H. L. Cas. 483, 484 30, 38 V. Manchester Fire Assur. Co., 60 N. W. 1095, 59 Minn. 182, 195 50, 64 V. Manchester Fire Ins. Co., 63 N. W. 241, 59 Minn. 182, 195 5, 56, 63 Angell V. Hartford Fire Ins. Co., 59 N. Y. 171 6 Archer v. Insurance Co., 43 Mo. 434 67 Arff V. Insurance Co., 125 N. Y. 57, 25 N. E. 1073 48 Armour v. Transatlantic Fire Ins. Co., 90 N. Y. 450 37, 46 Ashbrook v. Insurance Co., 94 Mo. 72, 6 S. W. 4G2 20 Assevedo v. Cambridge (1710) 10 Mod. 77 19 Athenaeum Life Assur. Co., In re, 1 Johns. Eng. Ch. 633 3 Attorney General v. Guardian Mut. Life Ins. Co., 82 N. Y. 336.. 24 V. Ray, 9 Ch. App. 397 57 Ayer v. New England Mut. Life Ins. Co., 109 Mass. 430 57 Ay res v. Hartford Fire Ins. Co., 17 Iowa, 176 18, 55 B Badger v. American Popular Ins. Co., 103 Mass. 244 9 Bailie v. Insurance Co., 73 Mo. 371 6 Bankers' & Merchants' Mut. Ben. Ass'n v. Stapp, 77 Tex. 517, 14 S. W. 168 20 Barnes v. Insurance Co. (1892) 1 Q. B. 864 19 V. Onion Mut. Fire Ins. Co., 51 Me. 110 55 Barre v. CouncU Bluffs Ins. Co., 76 Iowa, 609, 41 N. W. 373 6 Bartlett v. Fireman's Fund Ins. Co., 77 Iowa, 155, 41 N. W. 601 7 V. Union Mut. Life Ins. Co., 46 Me. 500 30 Becker v. Farmers' Mut. Fire Ins. Co.. 48 Mich. 610, 12 N. W. 874 56 Benefant v. Insurance Co., 76 Mich. 654, 43 N. W. 682 67 Bennett v. Insurance Co., 70 Iowa, 600, 31 N. W. 948 53 Benton v. Martin, 52 N. Y. 570 9 Bergman v. Assurance Co., 92 Ky. 494, 18 S. W. 122 67 Beyin v. Connecticut Mut. Life Ins. Co., 23 Conn. 244 19, 57 Bigelow V. Berkshire Life Ins. Co., 93 U. S. 284 57 Blackburn v. Vigors (1887) L. R. 12 App. Cas. 531 46 Blackstone v. Insurance Co., 74 Mich. 592, 42 N. W. 156 57 CASES CITED. 14 J [The references tn tbe right-hand column are to the sections.] Blanchard v. Walte, 28 Me. 58 20 Bloom V. Franklin Life Ins. Co., 97 Ind. 478 57 Blooming Grove Mut Fire Ins. Co. v. McAnerney, 102 Pa. St. 335 29 Bloomington Mut Ben. Ass'n v. Blue, 120 111. 121, 11 N. E. 331 19 Blumer v. Phoenix Ins. Co., 45 Wis. 622 34-36 Bodine v. Insurance Co., 51 N. Y. 117 48 Boehm v. Combe, 2 Maule & S. 172 8 Boetcher v. Hawkeye Ins. Co., 47 Iowa, 253 51 Boggs V. American Ins. Co., 30 Mo. 63 33 Boisblanc v. Louisiana Equitable Life Ins. Co., 34 La. Ann. 1107 57 Bolton V. Bolton, 73 Me. 299 1 Borden v. Hingham Ins. Co., 18 Pick. (Mass.) 523 8 Borradaile t. Hunter, 5 Man. & G. 639 57 Bosworth V. Society, 75 Iowa, 582, 39 N. W. 903 20 Boussmaker, Ex parte, 13 Ves. 71 4 Bowlin V. Hekla Fire Ins. Co., 36 Minn. 433, 31 N. W. 859 63 Boyd V. Cedar Kapids Ins. Co., 70 Iowa, 325, 30 N. W. 585 66 Bradbum v. Railroad Co., L. R. 10 Exch. 2 19 Bradley v. Mutual Ben. Life Ins. Co., 45 N. Y. 422 57 Brandon v. Curling, 4 East, 410 4 Brandup v. St. Paul Fire & Marine Ins. Co., 27 Minn. 393, 7 N. W. 735 51, 53 Breckenridge v. Insurance Co., 87 Mo. 62 67 Breuner v. Insurance Co., 51 Cal. 101 56 Bridgewater Iron Co. v. Enterprise Ins. Co., 134 Mass. 433. ... 55 Brighton Manuf'g Co. v. Reading Fire Ins. Co., 33 Fed. 232 50 Britton v. Supreme Council, 46 N. J. Eq. 102, 18 Atl. 675 19 Bruce v. Insurance Co., 24 Or. 486, 34 Pac. 16 59 Bryan v. Traders' Ins. Co., 145 Mass. 389, 14 N. E. 454 53 Buck V. Chesapeake Ins. Co., 1 Pet. (U. S.) 151 18 Buffalo Steam-Englne Works v. Sun Mut. Ins. Co., 17 N. Y. 401. . 67 Burlington Ins. Co. v. Gibbons, 43 Kan. 15, 22 Pac. 1010 63 Burnand v. Rodocanachi, 7 App. Cas. 340 19 Burritt v. Saratoga Co. Mut Ins. Co., 5 Hill (N. Y.) 188 26 Bursinger v. Bank of Watertown, 67 Wis. 75, 30 N. W. 290 19 Burton v. Connecticut Mut. Life Ins. Co., 119 Ind. 207, 21 N. E. 746 19 C Cammack v. Lewis, 15 Wall. 643 19 Campbell v. American Fire Ins. Co., 73 Wis. 100, 40 N. W. 661.. 20 150 CASES CITED. [The references in the right-hand column are to the sections.] CampbeU v. New England Ins. Co., 98 Mass. 381 29, 31, 38, 44 Canfleld v. Insurance Co., 55 Wis. 419, 13 N. W. 252 60 Caplis V. American Fire Ins. Co., 60 Minn. 376, 62 N. W. 440. .37, 55 Cariln V. West Assur. Co., 57 Md. 515 63 Carpenter v. American Ins. Co., 1 Story, 57, Fed. Cas. No. 2,428. . 46 V. Centennial Mut. Life Ass'n, 68 Iowa, 453, 27 N. W. 456. . 24 V. Insurance Co., 135 N. Y. 298, 31 N. E. 1015 59 V. Insurance Co., 161 Pa. St. 9, 28 Atl. 943 19 V. Providence Wasliington Ins. Co., 16 Pet (TJ. S.) 495 18, 38 Carrigan v. Lycoming Fire Ins. Co., 53 Vt. 418 15 Carroll v. Charter Oak Ins. Co., 40 Barb. 292 48 Carson v. Jersey City Ins. Co., 43 N. J. Law, 300, 44 N. J. Law, 210 38 Carter v. Boehm, 3 Burrows, 1905 45 easier v. Connecticut Mut. Life Ins. Co., 22 N. Y. 427 57 Castellain v. Preston, 11 Q. B. Div. 380 11 Cazenove v. British Equitable Assur. Co., 29 Law J. C. P. 160; afiBrming s. c. 6 C. B. (N. S.) 437 38 Central Bank of Washington v. Hume, 128 U. S. 195. 9 Sup. Ct. 41 19, 68 Central City Insurance Co. v. Gates, 86 Ala. 558, 6 South. 83 59 Chaffee v. Cattaraugus Co. Mut. Ins. Co., 18 N. T. 376 44 Chambers v. Insurance Co., 67 N. W. 367 30 Chapman v. Insurance Co., 89 Wis. 572, 62 N. W. 422 60 Gharlestown Ins. & F. Co. v. Neve, 2 McMul. (S. C.) 237 67 Chisholm v. Insurance Co., 52 Mo. 213 19 Church of St. George v. Sun Fire Office Ins. Co., 54 Minn. 162, 167, 55 N. W. 909 55 City Fire Ins. Co. of New York v. Corlies, 21 Wend. (N. Y.) 370. 58 City of Davenport v. Peoria Marine & Fire Ins. Co., 17 Iowa, 276 6 Clapp V. Massachusetts Ben. Ass'n, 146 Mass. 519, 16 N. E. 433.. 62 Clark V. Allen, 11 K. I. 439 19 V. New England Ins. Co., 6 Cush. 342 55 V. Wilson, 103 Mass. 223 11 Cleaver v. Insurance Co., 71 Mich. 414, 39 N. W. 571 ,. . 63 Clemans v. Society, 131 N. Y. 485, 30 N. E. 496 64 Clevengeir v. Insurance Co., 2 Dak. 114, 3 N. W. 313 63 Clift V. Schwabe, 3 Man., G. & S. 437 57 Cluff V. Mutual Ben. Life Ins Co., 13 Allen, 308 57 Cockerill V. Cincinnati Ins. Co., 16 Ohio, 148 IS Cohn V. New York Mut. Life Ins. Co., 50 N. Y. 610 24 V. Virginia Ins. Co., 3 Hughes, 272, Fed. Cas. No. 2,970 18 CASES CITED. 151 [The references In the right-hand column are to the sections.] Colby V. Cedar Rapids Ins. Co., 66 Iowa, 577, 24 N. W. 34 55 Collins V. Insurance Co. of Philadelphia, 7 Phila. (Pa.) 201 9 V. Locke, 4 App. Cas. 689 60 Columbia Ins. Co. v. Cooper, 50 Pa. St. 331 18, 27, 51 Columbian Ins. Co. v. Lawrence, 2 Pet. (U. S.) 25 18, 55 Commeroial Ins. Co. v. HaUock, 27 N. J. Law, 645 9 V. Ives, 56 m. 402 51 Commercial Mut. Ins. Co. v. Detroit Fire & Marine Ins. Co., 38 Ohio St 15 3 Commercial Mut. Marine Ins. Co. v. Union Mut. Ins. Co., 19 How. (U. S.) 318 6, 7 Commercial Union Assurance Co. of London v. Hocking, 115 Pa. St 414, 8 Atl. 589 60 Commonwealth v. Wetherbee, 105 Mass. 149, 160 1 Commonwealth Ins. Co. v. Sennett, 37 Pa. St. 208 11 Commonwealth Mut. Fire Ins. Co. v. Huntzinger, 98 Pa. St. 41 . . 30 Connecticut Fire Ins. Co. v. Erie Ry. Co., 73 N. Y. 399 11 Connecticut Mut Ldfe Ins. Co. v. Akens, 14 Sup. Ct 155 57 V. Groom, 86 Pa. St 92 57 T. Luchs, 108 U. S. 498, 2 Sup. Ct 949 2, 38 v. Schaefer, 94 U. S. 457 11, 19 V. Union Trust Co., 112 U. S. 250, 5 Sup. Ct. 119 57 Continental Ins. Co. v. Kyle, 124 Ind. 132, 24 N. E. 727 56 V. Munns, 120 Ind. 30, 22 N. E. 78 67 V. Pearce, 39 Kan. 396, 18 Pac. 291 64 V. Rogers, 119 HI. 474. 10 N. E. 242 66 V. Ruckman, 127 lU. 364, 20 N. B. 77 «i Continental Life Ins. Co. v. Chamberlain, 132 U. S. 304, 10 Sup. Ct 87 54 V. Yung, 113 Ind. 159, 15 N. E. 220 57 Cooper V. Mutual Life Ins. Co., 102 Mass. 227 57 V. Schaeffer (Pa. Sup.) 11 Atl. 548 19 Corson, Appeal of, 113 Pa. St 438, 6 Atl. 213 11, 19 Goiy V. Patton, L. R. 7 Q. B. 304 43 Gotten V. Casualty Co., 41 Fed. 506 64 Coursin v. Pennsylvania Ins. Co., 46 Pa. St 323 18 Cousins V. Nantes, 3 Taunt. 513 11, 19 Cowan V. Iowa State Ins. Co., 40 Iowa, 551 18 Craufurd v. Hunter, 8 Term R. 13, 4 Rev. Reports, 576 11 Creed v. Sun Fire Office, 101 Ala. 522, 14 South. 323 18 Cronkhite v. Travelers' Ins. Co., 75 Wis. 116, 43 N. W. 731 57, 63 Cross v. National Fire Ins. Co., 132 N. Y. 133, 30 N. E. 390 18 Crotty v. Union Mut Life Ins. Co., 144 U. S. 621, 12 Sup. Ct 745 19 152 CASES CITED. [The references In tlie right-hand column are to the sections.] Orotise V. Insurance Co., 79 Mich. 249, 44 N. W. 496 53 Currier v. Continental Life Ins. Co., 57 Vt. 496 19 Curry v. Commonwealth Ins. Co., 10 Pick. 535 56 Cushman v. Northwestern Ins. Co., 34 Me. 487 8 Outhbertson v. Insurance Co., 96 N. C. 480, 2 S. B. 2.^8 38 D Dailey t. Association, 102 Mich. 289, 57 N. W. 184 20, 53 Dalby t. India & L. Life Assur. Co. (1854) 15 C. B. 365 1, 11, 19 Daniels v. Hudson River Ins. Co., 12 Cush. (Mass.) 416, 424. .80, 31 Daul V. Insurance Co., 35 La. Ann. 98 60 Davenport v. Peoria Mut. Fire Ins. Co., 17 Iowa, 276. 36 Davey v. Aetna Life Ins. Co., 38 Fed. 650 57 Davis V. Insurance Co., 135 Mass. 251 67 V. Quincy Ins. Co., 10 AUen, 113 55 Dawson v. Fitzgerald, 1 Exch. Div. 257, 260 60 Day V. Charter Oak Fire & Marine Ins. Co., 51 Me. 91 39 Dean v. American Mut. Life Ins. Co., 4 AUen, 96 57 V. Dicker (1746) 2 Strange, 1250 19 Deitz V. Insurance Co., 33 W. Va. 526, 11 S. E. 50 48 Delaware Ins. Co. v. Quaker City Ins. Co., 3 Grant's Cas. (Pa.) 71 3 De Longuemere v. New York Fire Ins. Co., 10 Johns. 119 45 Demlng v. Storage Co., 90 Tenn. 306, 17 S. VV. 89 11 Dennis v. Association, 120 N. Y. 496, 24 N. E. 843 20, 24 Dennison v. Phoenix Ins. Co., 52 Iowa, 457, 3 N. W. 500 56 Deunlstoun v. Lillie, 3 Bligh, 202 35 De Paba v. Ludlow (1721) 1 Comyn, 361 19 De Wolf V. New York Firemen's Ins. Co., 20 Johns. (N. Y.) 214. . 45 Dick V. Franklin Ins. Co., 81 Mo. 103 18 Dillard v. Manhattan Life Ins. Co., 44 Ga. 119 4 Dilleber v. Life Ins. Co., 76 N. Y. 567 62 Billing V. Draemel, 9 N. Y. Supp. 497 11 Dolliver v. St. Joseph, F. & M. Ins. Co., 9 Ins. Law J. 293 18 V. St. Joseph Ins. Co., 131 Mass. 39 33 Donnelly v. Cedar Rapids Ins. Co., 70 Iowa, 693, 28 N. W. 607. . 53 Downey v. Hoffer, 110 Pa. St. 109, 20 Atl. 655 19 Dunbar v. Insurance Co., 72 Wis. 492, 40 N. W. 386 64 Dupreau v. Insurance Co., 76 Mich. 615, 43 N. W. 585 55 Duran v. Insurance Co., 63 Vt. 437, 22 Atl. 530 57 Dwelling House Ins. Co. v. Brewster (Neb.) 61 N. W. 746 66 V. Hardie, 37 Kan. 674, 16 Pac. 92 , 20 D wight V. Germania Life Ins. Co., 103 N. Y. 341, 8 N. E. 654. . . 57 CASES CITSD. 153 [The references In the right-hand column are to the sections.] E Eastabrook v. Union Mut. Life Ins. Co., 54 Me. 224 57 Eastern Ry. Co. v. Relief Ins. Co., 98 Mass. 425 18 V. Relief Ins. Co., 105 Mass. 570 47, 52 Eastman v. Insurance Co., 45 Me. 307 67 East Texas Fire Ins. Co. v. Coffee, 61 Tex. ?S7 67 Eckel V. Renner, 41 Ohio St. 232 19 Eddy V. Assurance Corp., 143 N. T. 311, 38 N. E. 307 67 Edlngton v. Aetna Life Ins. Co., 77 N. Y. 564; 100 N. Y. 586, 3 N. E. 315 ^ 38. 57 Edwards v. Incoming Co. Mut. Ins. Co., 75 Pa. St. 378 63 V. Society, 1 Q. B. Div. 592, 598 60 Egan V. Fireman's Ins. Co., 27 Is,. Ann. 368 7 Ehrsam Mach. Co. v. Phenix Ins. Co., 43 Neb. 554, 61 N. W. 722 55 Elkins V. Susquehanna M. P. Ins. Co., 113 Pa. St. 386, 6 Atl. 224 62 Elliott V. Assurance Co., L. R. 2 Exch. 240 60 Elliott's Appeal, 50 Pa. St. 75 1 Ellis V. Albany City Fire Ins. Co., 50 N. Y. 402 6 V. Insurance Co., 32 Fed. 646 67 V. Insurance Co., 64 Iowa, 507, 20 N. W. 782 67 V. State Ins. Co., 68 Iowa, 578, 27 N. W. 762 67 Emery v. Insurance Co., 138 Mass. 398 6 V. Mutual, etc., Ins. Co., 51 Mich. 469, 16 N. W. 816 55 Enos V. Insurance Co., 67 Cal. 621, 8 Pac. 379 63 Equitable Life Assur. Soc. v. Paterson, 41 Ga. 338 19, 57 Equitable Life Ins. Co. v. Hazlewood, 75 Tex. 338, 12 S. W. 621 19 Ermentrout v. Insurance Co. (Minn.) 65 N. W. 635 59 V. Insurance Co., 60 Minn. 418, 62 N. W. 543 58, 63 Essex Sav. Bank v. Merlden Fire Ins. Co., 57 Conn. 335, 17 Atl. 930, and 18 Atl. 324 18 Everett v. Continental Ins. Co., 21 Minn. 76 30 F Fairchlld v. North Eastern Mut Life Ass'n, 51 Vt. 613 19 Faneuil Hall Ins. Co. v. Liverpool & London & Globe Ins. Co., 153 Mass. 63, 26 N. E. 244, and note 10 Lawy. Rep. Ann 3 Faunce v. State Mut. Life Assur. Co., 101 Mass. 279 9 Faust V. Insurance Co., 91 Wis. 158, 64 N. W. 883 56, 66 Fenn V. New Orleans Mut. Ins. Co., 53 Ga. 578 18 154 CASES CITED. [The references In the right-hand column are to the sections.] Ferguson v. Insurance Co., 32 Hun (N. Y.) 306 19 Fidelity & Casualty Co. v. Eiekhoff (Minn.) 65 N. W. 351 15 Findeisen v. Metropole Fire Ins. Co., 57 Vt. 520 61 Fire Ass'n of Philadelphia v. WiUiamson, 26 Pa. St. 196 56 First Baptist Church v. Brooklyn Fire Ins. Co., 28 N. Y. 153 6 First Nat. Bank v. American Cent. Ins. Co. (Minn.) 60 N. W. 345 55 V. Hartford Fire Ins. Co., 95 U. S. 673 30 Fish V. Cottenet, 44 N. Y. 538 6, 7 Fisher v. Crescent Ins. Co., 33 Fed. 544 29, 66 Fitch V. American Popular Life Ins. Co., 59 N. Y. 557 29, 30, 57 Fitzherbert v Mather, 1 Term R. 12 46 Fogg V. Insurance Co., 10 Cush. 337 67 Folsom V. Merchants' Marine Ins. Co., 38 Me. 414 18 Foote V. Hartford Ins. Co., 119 Mass. 259 55 Forward v. Insurance Co., 142 N. Y. 382, 37 N. B. 615 53 Foster v. Van Reed, 5 Hun (N. Y.) 321 18 Fowler v. Butterly, 78 N. Y. 68 68 V. Insurance Co., 116 N. Y. 389, 22 N. E. 576 20 V. New York Indemnity Ins. Co., 26 N. Y. 422 18 Fox V. Phoenix Fire Ins. Co., 52 Me. 333 18 Franklin Fire Ins. Co. v. Martin, 40 N. J. Law, 568 54 V. Taylor, 52 Miss. 441 9 Franklin Ins. Co. t. Sefton, 53 Ind. 380 63 Frost's Detroit Lumber & W. W. Works v. Millers' Mut. Ins. Co., 37 Minn. 300, 34 N. W. 35 56 Funke v. Minnesota Farmers' Ins. Ass'n, 29 Minn. 347, 13 N. W. 164 55 G Galveston Ins. Co. v. Long, 51 Tex. 89 56 Gans V. St. Paul Fire & Marine Ins. Co., 43 Wis. 108 51, 53, 63 Ganser v. Fireman's Fund Ins. Co., 34 Minn. 372, 25 N. W. 943; 38 Minn. 74, 35 N. W. 584 6 Gantt V. Insurance Co., 68 Mo. 533 3 Garretson v. Merchants' & Bankers' Ins. Co. (Iowa) 60 N. W. 540 56 Gay V. Union Mut. Life Ins. Co., 9 Blatchf. 142, Fed. Cas. No. 5,282 57 Gerhauser v. North British Ins. Co., 6 Nev. 15 33 Germania Fire Ins. Co. v. Hick, 125 111. 361, 17 N. E. 792 64 German Ins. Co. v. Davis, 40 Neb. 700, 59 N. W. 698 56 V. Gray, 43 Kan. 497, 23 Pac. 637 52 CASES CITED. 155 [The references In the rlght-haud column are to the sections.] German Ins. Co. v. Rounds, 35 Neb. 752, 53 N. W. 660 53 German Ins. & Sav. Inst. v. Kline (Neb.; 1895) 62 N. W. 857. . . 66 Gerrish v. Insurance Co., 55 N. H. 355 9 Gibb V. Fire Ins. Co. of Philadelphia (Minn.) 61 N. W. 137 55 Gibson v. Small, 4 H. L. Cas. 353 28 Gilbert v. Moose's Adm'rs, 104 Pa. St. 74 19 Girard Life Insurance, Annuity & Trust Co. v. Mutual Life Ins. Co., 97 Pa. St. 15 22 Gladstone v. King, 1 Maule & S. 35 46 Globe Mut. Life Ins. Oo. v. WolfC, 95 U. S. 32C 62, 66 Goddard v. Insurance Co., 67 Tex. 69, 1 S. W. 906 30 Godsall V. Boldero, 9 East, 72 11 Goode V. Insurance Co. (Va.) 23 S. E. 744 48, 53 Goodrich's Appeal, 109 Pa. St. 523, 2 Atl. 209 3 Goodwin v. Massachusetts Mut. Life Ins. Co., 73 N. Y. 480 19 Gordon v. Massachusetts Ins. Co., 2 Pick. 249 18 Goucher v. Northwestern, etc., Ass'n, 20 Fed. 596 57 Gould V. Insurance Co., 90 Mich. 302, 51 N. W. 455 63 Grace v. American Cent. Ins. Co., 109 U. S. 278, 3 Sup. Ct. 207. . 51 Grand Lodge A. O. U. W. t. Child, 70 Mich. 173, 38 N. W. 1 19 Grattan v. Metropolitan Life Ins. Co., 80 N. Y. 281 66 V. Metropolitan Life Ins. Co., 92 N. Y. 274 57 V. National Life Ins. Co., 15 Hun (N. Y.) 74 19 Green v. Insurance Co., 82 N. Y. 517 55 V. Liverpool & London & Globe Ins. Co. (Iowa) 60 N. W. 189 6 V. Merchants' Ins. Co., 10 Pick. 402 45 Grevemeyer v. Southern Mut. Fire Ins. Co., 62 Pa. St. 340 18 Griffey v. Insurance Co., 100 N. Y. 417, 3 N. E. 300 59 Gristock v. Insurance Co., 84 Mich. 161, 47 N. W. 549 53 Griswold v. Waddington, 16 Johns. 438 4 Grosvenor v. Atlantic Ins. Co., 17 N. Y. 391 56 Guardian Mut. Life Ins. Co. v. Hogan, 80 111. 35. '. 19 Guernsey v. American Ins. Co., 17 Minn. 104 (Gil. 83) 52 H Haden v. Farmers' & Mechanics' Fire Ass'n, 80 Va. 683 48 Haight V. Continental Ins. Co., 92 N. Y. 51 62, 66 Hale V. Investment Co. (Minn.) 68 N. W. 182, 185 19, 30 V. Life Ind. & Inv. Co. (Minn. Dist. Ct.) 2 Minn. Law J. 316 57 Hall V. Fire Ass'n, 64 N. H. 405, 13 Atl. 648 67 V. Insurance Co., 6 Gray (Mass.) 185 38, 60 156 CASES CITED. [The references In the right-hand column are to the sections.] HaU V. Insurance Co., 90 Mich. 403, 51 N. W. 524 59 V. Insurance Co., 93 Mich. 184, 53 N. W. 727 55, 67 V. Insurance Co., 58 N. Y. 292 56 V. Railroad Co., 13 Wall. 367 11 Hamblet v. City Ins. Co., 36 Fed. 118 46 Hamilton v. Insurance Co., 98 Mich. 535, 57 N. W. 735 53, 55 V. Insurance Co., 136 U. S. 242, 254, 10 Sup. Ct. 945 60 V. Insurance Co., 137 U. S. 370, 11 Sup. Ct. 133 60 V. Mendes, 2 Burrows, 1198 11 V. Mutual Life Ins. Co., 9 Blatchf. 234, Fed. Cas. No. 5,986 4 Hand v. Insurance Co. (Minn.) 59 N. W. 538. - 66 Hankins v. Rockford Ins. Co., 70 Wis. 1, 35 N. W. 34 63 Hardie v. St. Louis Mut. Life Ins. Co., 26 La. Ann. 242 9 Harnickell v. Insurance Co., Ill N. Y. 390, 18 N. B. 632 9 Harris v. Eagle Fire Ins. Co., 5 Johns. (N. Y.) 368 8 T. Insurance Co., 35 Conn. 310 5'), 60 V. York Mut. Ins. Co., 50 Pa. St. 341 18 Hart V. Railroad Corp., 13 Mete. (Mass.) 99 11 Hartford Fire Ins. Co. v. Davenport, 37 Mich. 609 33 V. Farrish, 73 HI. 166 9 V. Olcott, 97 111. 441 67 V. Smith, 3 Colo. 422 , , . 53 V. Walsh, 54 HI. 164 39 Hartford Life & Annuity Ins. Co. v. Gray, 91 lU. 159 57 V. Hayden's Adm'r, 90 Ky. 39, 13 S. W. 585 48 Hartman v. K^stone Ins. Co., 21 Pa. St. 466 57 Haskins v. Insurance Co., 5 Gray (Mass.) 432 60 Hathaway v. Insurance Co., 134 N. Y. 408, 32 N. E. 40 67 V. Trenton Ins. Co., 11 Gush. 448 57 Havens v. Home Ins. Co., Ill Ind. 90, 12 N. E. 137 39 Hebdon v. West, 3 Best & S. 579 19 Heiman v. Phoenix Mut. Life Ins. Co., 17 Minn. 153 (Gil. 127) . . 6, 9 Heinlein v. Insurance Co., 101 Mich. 250, 59 N. W. 615 19, 24 Herkimer v. Rice, 27 N. Y. 163 18 Herrman v. Insurance Co., 81 N. Y. 184, 188 16 Hill V. Cumberland Val. Mut. Protection Co., 59 Pa. St. 474 55 HiUyard v. Mutual Ben. Life Ins. Co., 35 N. J. Law, 415 4 Hinckley v. Germania Fire Ins. Co., 140 Mass. 38, 1 N. E. 737. . . 15 Hoadley v. Purifoy (Ala.) 18 South. 220 4 Hoffman v. John Hancock Mut. Life Ins. Co., 92 U. S. 161 22 Holbrook v. St. Paul Fire & Marine Ins. Co., 25 Minn. 229 18 HoUand v. Taylor, 111 Ind. 121, 12 N. E. 116 68 CASES CITED. 157 tThe references in the right-hand column are to the sections.] Home Fire Ins. Co. v. Hammang (Neb.) 62 N. W. 883 53, 55, 66 Home Life Ins. Co. v. Pierce, 75 HI. 426 57 Home Mut. Fire Ins. Co. v. Hauslein, 60 lU. 521 18, 55, 67 Homer v. Insurance Co., 67 N. Y. 478 20 Hood V. Hartshorn, 100 Mass. 121 60 Hooker v. Sngg, 102 N. C. 115, 8 S. E. 919 68 Hoop, The, 1 C. Rob. Adm. 196 4 Hooper v. Hudson River Ins. Co., 17 N. Y. 424 55 V. Robinson, 98 U. S. 528 18 Hoose V. Insurance Co., 84 Mich. 309, 47 N. W. 587 30 Hope Mut. Ins. Co. v. Brolaskey, 35 Pa. St. 282 55 Hopkins v. Hawkfeye Ins. Co., 57 Iowa, 203, 10 N. W. 005 21 Horn V. Amicable Mut. Life Ins. Co., 64 Barb. 81 40 Hosford V. Germania Fire Ins. Co., 127 TJ. S. 399, 8 Sup. Ct. 1190 36 V. Insurance Co., 127 U. S. 404, 8 Sup. Ct. 1202 55 Hough V. City Fire Ins. Co., 29 Conn. 10 51, 54, 55 Houghton v. Manufacturers' Mut. Ins. Co., 8 Mete. (Mass.) 114. 27 Hovey v. Home Ins. Co., 3 Ins. Law J. 815, Fed. Cas. No. 6,743 3 Hoyt V. Mutual Benefit Ins. Co., 98 Mass. 539 21 Hubbard v. Hartford Fire Ins. Co., 33 Iowa, 325 55 Hudson V. McCartney, 33 Wis. 331 60 Hughes V. Insurance Co., 40 Neb. 626, 59 N. W. 112 55 Hurd V. Doty, 86 Wis. 1, 56 N. W. 371 19 Idaho Forwarding Co. v. Fireman's Fund Ins. Co., 8 Utah, 41, 29 Pac. 826 9 Ide V. Phoenix Ins. Co., 2 Biss. 333, Fed. Cas. No. 7,001 6 Illinois Mut. Fire Ins. Co. v. Fix, 53 HI. 151 67 Imperial Fire Ins. Co. v, Coos Co., 151 U. S. 452, 14 Sup. Ct. 379 18, 56 Insurance Co. v. Boon, 95 U. S. 117 58 V. Colt, 20 Wall. (TJ. S.) 560 6, 9 V. Magee, Cooke & A. 182 19 Insurance Co. of North America v. Bachler (Neb.) 62 N. W. 911 55 V. Garland, 108 HL 220 56 V. Hibernia Ins. Co., 140 U. S. 565, 573, 11 Sup. Ct. 909 3 Irving V. Manning, 6 C. B. 391 11 158 CASES CITED. [The references In tbe right-band column are to the sections.] J Jackson v. Massachusetts Ins. Co., 23 Pick. 418 18 Jacobs V. Insurance Co., 86 Iowa, 145, 53 N. W. 101 59 J. B. Ehrsam Mach. Co. v. Phenix Ins. Co. (Neb.) 61 N. W. 722. . 55 Jeffries v. Economical Mut. Life Ins. Co., 22 Wall. (U. S.) 47.. 38, 44, 57 Jennings v. Metropolitan Life Ins. Co., 148 Mass. 61, 18 N. B. 601 63 Johnson y. Insurance Co., 112 Mass. 49 59 V. Northwestern Mut. Life Ins. Co., 56 Minn. 365, 57 N. W. 934, 59 N. W. 992 4 V. Union Ins. Co., 127 Mass. 557, note 15 JoUy's Adm'rs v. Baltimore Equitable Soc, 1 Har. & G. (Md.) 296 56 Jory V. Supreme Council, 105 Oal. 20, 38 Pac. 524 68 Joyce T. Maine Ins. Co., 45 Me. 168 66 K Kahnweiler v. Insurance Co., 57 Fed. 562 59 Kansas Protective Union v. Gardner, 41 Kan. 397, 21 Pac. 233.. 54 V. Whitt, 36 Kan. 760, 14 Pac. 275 23 Karelsen v. Sun Fire Office, 122 N. Y. 549, 25 N. E. 921 6 Kausal v. Minnesota Farmers' Mut. Fire Ins. Ass'n, 31 Minn. 17, 16 N. W. 430 51 Keeler v. Niagara Falls Ins. Co., 16 Wis. 523 37 Kelly T. Worcester Ins. Co., 97 Mass. 284 15 Kempton v. State Ins. Co., 62 Iowa, 83, 17 N. W. 194 55 Kennedy v. Insurance Co., 10 Barb. 285 55 Kentucky Mut. Ins. Co. v. Jenks, 5 Ind. 96 9 Kenyon v. Knights Templar Ass'n, 122 N. Y. 247, 25 N. E. 299..22, 64 Kerns v. New Jersey Mut. Life Ins. Co., 86, Pa. St. 171 23 Kerr v. Minnesota Mut. Ben. Ass'n, 39 Minn. 174, 39 N. W. 312. . 57 Kershaw v. Kelsey, 100 Mass. 561 4 Kimball v. Aetna Ins. Co., 9 Allen (Mass.) 540 34 Kingsley v. New England Ins. Co., 8 Gush. (Mass.) 393 27 Kinney v. Dodd, 41 111. App. 49 19 Kirkman v. Insurance Co. (Iowa) 57 N. W. 953 63 Kister v. Insurance Co., 128 Pa. St. 553, 18 Atl. 447 51 Kitchen v. Insurance Co., 57 Mich. 135, 23 N. W. 616 53 Kltts V. Massasoit Ins. Co., 56 Barb. 177 18 Klein v. New York Life Ins. Co., 104 U. S. 88 21, 24 Knickerbocker Life Ins. Co. v. Foley, 105 U. S. 350 57 CASES CITED. 159 [The reterences in the Tight-hand column are to the sections.] Knickerbocker Life Ins. Go. v. Norton, 96 U. S. 234 52 V. Pendleton, 112 U. S. 696, 5 Sup. Ct. 314 25 V. Peters, 42 Md. 414 57 Knight V. Eureka Fire Ins. Co., 26 Ohio St. 664 55 Knop V. National Fire Ins. Co. (Mich.) 59 N. W. 653 55 Knox V. Turner, Ii. R. 9 Bq. 163 19 Kratzenstein v. Assurance Co., 116 N. Y. 54, 59, 22 N. E. 221. . . 16 Krumm v. Jefferson Fire Ins. Co., 40 Ohio St. 225 48 Kyte V. Commercial Assur. Co., 144 Mass. 43, 10 N. B. 518 52, 63 V. Commercial Union Assur. Co., 149 Mass. 116, 21 N. B. 361 56 Lamberton v. Connecticut Fire Ins. Co., 39 Minn. 129, 39 N. W. 76 50 Lane v. Insurance Co., 50 Minn. 227, 52 N. W. 649 59 Langdon v. Union Mut. Life Ins. Co., 14 Fed. 272 19 Lantz V. Vermont Life Ins. Co., 139 Pa, St. 546, 21 Atl. 80. . .25, 63 Law V. London, etc., Co., 1 Kay & J. 223 11 Lawrence v. National Ins. Co., 127 Mass. 557 15 Lazarus v. Commonwealth Ins. Co., 19 Pick. 81, 2 Am. Lead. Cas. (5th Ed.) 806 18 Lebanon Mut. Ins. Co. v. Erb, 112 Pa. St 149, 4 Atl. 8 66 V. Kepler, 106 Pa. St 28 38 Leitch V. Atlantic Mut. Ins. Co., 66 N. Y. 100 28 Lemon t. Insurance Co., 38 Conn. 298 19 Leonard v. American Ins. Co., 97 Ind. 299 55 Lightbody v. North American Ins. Co., 23 Wend. 18 9, 49 Limburg v. Insurance Co., 90 Iowa, 700, 57 N. W. 626 56 Linz V. Massachusetts Ins. Co., 8 Mo. App. 363 57 Lipman v. Niagara Fire Ins. Co., 121 N. Y. 456, 24 N. B. 699 6 Liverpool & London Ins. Co. v. Gunther, 116 U. S. 113, 6 Sup. Ct 306 56 liverpool, etc., Ins. Co. v. Buckstaff, 38 Neb. 146, 56 N. W. 695. . 56 Lockwood V. Middlesex Mut Assur. Co., 47 Conn. 553 56 Lodge V. Capital Ins. Co. (Iowa) 58 N. W. 1089 55 Loehner v. Home Mut. Ins. Co., 19 Mo. 628 56 Longhurst v. Star Ins. Co., 19 Iowa, 364 18 Loomis V. Eagle Ins. Co., 6 Gray (Mass.) 396 18, 19 Lord V. Dall, 12 Mass. 115 19 Loy V. Home Ins. Co., 24 Minn. 315 55 160 CASES CITED. CTbe references In the right-hand column are to the sections.] Lucena v. Craufurd, 3 Bos. & P. 75, 2 Bos. & P. (N. R.) 269, 295, 300, 6 Rev. Rep. 623, 685 1, 11, 18, 19 Lycoming Fire Ins. Co. v. Storrs, 97 Pa. St. 354 67 V. Ward, 90 111. 545 22 Lyman v. State Mut. Fire Ins. Co., 14 Allen, 329 56 Lynch v. Dalzell, 4 Brown, Pari. Cas. 431 18 Lynn v. Burgoyne, 13 B. Mon. (Ky.) 400 9 Lyon V. Travelers' Ins. Co., 55 Mich. 141, 20 N. W. 829 25 M McAUister v. Neve England Ins. Co., 101 Mass. 558 23 McClure v. Watertowu Fire Ins. Co., 90 Pa. St. 277 29, 56 McCluskey v. Insurance Co., 126 Mass. 306 67 McCormlck v. Springfield F. & M. Ins. Co., 66 Cal. 361, 5 Pac. 617 63 McCoy V. Metropolitan Ins. Co., 133 Mass. 82 53, 54, 64 McCulloch V. Eagle Ins. Co., 1 Pick. (Mass.) 278 9 McCuUough V. Insurance Co., 113 Mo. 606, 21 S. W. 207 59 McDonald v. Lavy Union Fire & Life Ins. Co., L. R. 9 Q. B. 328 38 I'cFarland v. Kittanning Ins. Co., 134 Pa. St. 590, 19 Atl. 796. . 63 McFetridge v. American Fire Ins. Co. (Wis.) 62 N. W. 938. . 55 McGaw V. Ocean Ins. Co., 23 Pick. 405 18 McGurk V. Metropolitan Life Ins. Co., 56 Conn. 528, 16 Atl. 263 53 Mclntyre v. Michigan State Ins. Co., 52 Mich. 188, 17 N. W. 781 24, 63 Mack V. Rochester Ins. Co., 106 N. Y. 560, 13 N. E. 343 56 McKay v. Mutual Ins. Co., 103 Mass. 78 9 McKee v. Phoenix Ins. Co., 28 Mo. 383 19 McLaughlin v. Atlantic Mut. Ins. Co., 57 Me. 170 27 McLoon V. Insurance Co., 100 Mass. 478 30 McMartin v. Continental Ins. Co., 41 Minn. 198, 42 N. W. 934. . 62 McNally v. Insurance Co., 137 N. Y. 389, 33 N. B. 475 59 McQuitty V. Continental Life Ins. Co., 15 R. I. 573, 10 Atl. 635. . 4 Mactier v. Frith, 6 Wend. (N. Y.) 103 9 Malleable Iron Works v. Phoenix Ins. Co., 25 Conn. 465 51 Mallory v. Travellers' Ins. Co., 47 N. Y. 52 19, 57 Manhattan Fire Ins. Co. v. Weill, 28 Grat. (Va.) 389 64 Manhattan Ins. Co. v. Webster, 59 Pa. St. 227 18 Marcus v. St, Louis Mut. Life Ins. Co., 68 N. Y. 625 63 Maril v. Insurance Co., 95 Ga. 604, 23 S. E. 463 56 Martin v. Stubbings, 126 111. 387, 18 N. E. 657 19, 68 CASES CITED. 161 [The references In the right-hand column are to the sections.] Marvin v. Stone, 2 Cow. (N. Y.) 806 16 Masters v. Madison Co. Mut. Ins. Co., 11 Barb. 624, 3 Benn. Fire Ins. Cas. 398 51 Matthews v. Howard Ins. Co., 11 N. Y. 21 11 Mattoon Manuf g Co. v. Oshkosli Mut. Fire Ins. Co., 69 Wis. 564, 35 N. W. 12 21 May her v. Insurance Co., 87 Tex. 169, 27 S. W. 124 19 Mayor, etc., of New York v. Brooklyn Fire Ins. Co., 41 Barb. (N. Y.) 231 18 Meadows v. Hawkeye Ins. Co., 62 Iowa, 387, 17 N. W. 600 55 Hears v. Insurance Co., 92 Pa. St. 17 56 Meily v. Hershberger, 16 Wkly. Notes Cas. 186 19 Mentz V. Insurance Co., 79 Pa. St. 478 60 Merchants' Ins. Co. v. Algeo, 31 Pa. St. 446 28 Merchants' & Manufacturers' Ins. Co. v. Curran, 45 Mo. 142 .... 62 Merrill v. Agricultural Ins. Co., 73 N. Y. 452 39 Mershon v. National Ins. Co., 34 Iowa, 87 62, 64 Messelback v. Norman, 122 N. Y. 578, 26 N. E. 34 52 Metropolitan Life Ins. Co. v. McTa^ue, 49 N. J. Law, 587, 9 Atl. 766 57 Michigan Mut. Ben. Ass'n v. Rolfe, 76 Mich. 146, 42 N. W. 1094 19 Michigan Shingle Co. v. State Inv. & Ins. Co., 94 Mich. 389, 53 N. W. 945 53,64 Michigan State Ins. Co. v. Lewis, 30 Mich. 41 63 Miesell v. Globe Mut Life Ins. Co., 76 N. Y. 115 25 Miller v. Eagle Life & Health Ins. Co., 2 E. D. Smith (N. Y.) 208 19 V. Insurance Co., 70 Iowa, 704, 29 N. W. 411 59 V. Mutual Ben. Life Ins. Co., 31 Iowa, 216 38, 57 V. Union Cent. Life Ins. Co., 110 111. 102. 62 Milner v. Bowman, 119 Ind. 448, 21 N. B. 1094 68 Miner v. Phoenix Ins. Co., 27 Wis. 693 51, 52 V. Taggert, 3 Bin. (Pa.) 205 8 Missouri Valley Ins. Co. v. Dunklee, 16 Kan. 158 22 Mitchell V. Home Ins. Co., 32 Iowa, 421 18 V. Union Life Ins. Co., 45 Me. 104 19 Moody V. Insurance Co., 52 Ohio St. 12, 38 N. E. 1011 56 Moore v. Woolsey, 28 Eng. Law & Eq. 248, 4 Bl. & Bl. 243 19 Moriarty v. Home Ins. Co., 53 Minn. 549, 55 N. W. 740 56 Morrell v. Insurance Co., 10 Cush. 282 19 Morrison v. Tennessee Ins. Co., 18 Mo. 262 55 V. Wisconsin, etc., Ins. Co., 59 Wis. 162, 18 N. W. 13 57 Moulor V. American Life Ins. Co., Ill U. S. 335, 4 Sup. Ct. 466..38, 57 LAW INS. 11 162 CASES CITED. [The references In the right-hand column are to the sections.] Moulthrop V. Farmers' Mut. Fire Ins. Co., 52 Vt. 123 55 Mowry v. Home Life Ins. Co., 9 R. I. 346, 354 19 Murdock v. Chenango Co. Mut. Ins. Co., 2 N. Y. 210 34 Murphy v. Southern Life Ins. Co., 3 Baxt. (Tenn.) 440 48 Mussey v. Atlas Mut. Ins. Co., 14 N. Y. 79 55 Mutual Ben. Life Ins. Co. v. Daviess' Ex'r, 87 Ky. 541, 9 S. W. 812 64 V. Robison, 7 C. C. A. 444, 58 Fed. 723 26, 54 V. Wayne Co. Sav. Bank, 68 Mich. 116, 35 N. W. 853 4 Mutual Fire Ins. Co. v. Coatesville Shoe Factory, 80 Pa. St. 407. . 56 Mutual Ins. Co. v. AUen, 138 Mass. 24 19 Mutual Life Ins. Co. v. Hay ward (Tex. Civ. App.) 27 S. W. 36. . 57 Myers v. Keystone Mut. Life Ins. Co., 27 Pa. St. 268 9 N National Ben. Ass'n v. Jackson. 114 111. 533, 2 N. E. 414 22, 23 National Life Ins. Co. v. Mineh, 53 N. Y. 145 46 Newark Mach. Co. v. Kenton Ins. Co., 50 Ohio St. 549, 35 N. E. 1060 6,20 Newcomb v. Insurance Co., 22 Ohio St. 382 11 New England F. & M. Ins. Co. v. Robinson, 25 Ind. 536 9 V. Wetmore, 32 111. 221 18 New Hampshire Mut. Fire Ins. Co. v. Noyes, 32 N. H. 345 4 Newman v. Springfield Fire & Marine Ins. Co., 17 Minn. 123 (Gil. 98) 37, 52, 66 New York Bowery Pire Ins. Co. v. New York Fire Ins. Co., 17 Wend. (N. Y.) 359 3 New York Cent. Ins. Co. v. Watson, 23 Mich. 486 55 New York Life Ins. Co. v. Clayton, 7 Bush (Ky.) 179. 4 V. Fletcher, 117 U. S. 519, 6 Sup. Ct. 837 53 V. McGowan, 18 Kan. 300 23 V. Stathan, 93 U. S. 24 4, 20 New York Mut. Life Ins. Co. v. Terry, 15 Wall. 580 57 Niagara Fire Ins. Co. v. Brown, 123 111. 356, 15 N. B. 163 52 V. Be Graft, 12 Mich. 124 15 V. Miller, 120 Pa. St. 504, 14 Atl. 385 66 Nichols V. Fayette Ins. Co., 1 Allen, 63 38 Noble V. MitcheU, 100 Ala. 519, 14 South. 581 4 North British M. Ins. Co. v. Crutchfield, 108 Ind. 518, 9 N. El 458 53 CASES CITED. 163 [The references In tlie right-hand column are to the sections.] Northwestern Mut. Life Ins. Co. v. Hazelett, 105 Ind. 212, 4 N. E. 582 57 Norton V. Phoenix Mut. Life Ins. Co., 36 Conn. 503 9 Norwich Fire Ins. Co. v. Boomer, 52 HI. 442 44 Norwood, Bx parte, 3 Biss. 504, Fed. Cas. No. 10,364 3 Noyes v. Phoenix Life Ins. Co., 1 Mo. App. 584 9 Nute V. Insurance Co., 6 Gray (Mass.) 181 CO O Oakwood Retreat Aes'n v. Rathborne, 65 Wis. 177, 26 N. W. 742 60 Odd Fellows Mut. Life Ins. Co. v. Rohkopp, 94 Pa. St. 59 57 Olmstead v. Keyes, 85 N. Y. 593 19 Olson V. St Paul F. & M. Ins. Co., 35 Minn. 432, 29 N. W. 125. . 56 Omaha Fire Ins. Co. v. Dierks (Neb.) 61 N. W. 740 18, 66 Oshkosh Gaslight Co. v. Germania Fire Ins. Co., 71 Wis. 454, 37 N. W. 819 53 P Palmer v. Welch, 132 HI. 141, 23 N. B. 412 19 Paltrovitch v. Insurance Co., 68 Hun, 304, 23 N. Y. Supp. 38. . . 59 V. Insurance Co., 143 N. Y. 73, 37 N. E. 639 66 Patch V. Phoenix Ins. Co., 44 Vt. 481 27 Paterson v. PoweU, 9 Bing. 320 1 Paul V. Virginia, 8 Wall. 181 4 Penfold V. Universal Life Ins. Co., 85 N. Y. 317 57 Pennsylvania Fire Ins. Co. v. Dougherty, 102 Pa. St. 568 6G V. Kittle, 39 Slich. 51 55 People V. Empire Mutual Life Ins. Co., 92 N. Y. 105 24 People's Fire Ins. Co. v. Pulver, 127 111. 346, 20 N. E. 18 59 People's Ins. Co. v. Spencer, 53 Pa. St. 353 15 Peoria Ins. Co. v. Walser, 22 Ind. 73 9 Perine v. Grand Lodge, 51 Minn. 224, 53 N. W. 367 37 Phelps V. Gebhard Fire Ins. Co., 9 Bosw. (N. Y.) 404 18 Phenix Ins. Co. v. Omaha Loan & Trust Co., 41 Neb. 834, 60 N. W. 133. 07 V. Pennsylvania Co., 134 Ind. 215, 33 N. E. 970 11 V. WUlis, 70 Tex. 12, 6 S. W. 825 67 Philips V. Knox Co. Mut. Ins. Co., 20 Ohio, 174 55 PhiUips V. Louisiana Equitable Life Ins. Co., 26 La. Ann. 404. . 57 164 CASES CITED. [The references in the right-hand column are to the sections.] Phoenix Ins. Co. v. Badger, 53 Wis. 283, 10 N. W. 504 60 V. Benton, 87 Ind. 132 29 y. Covey, 41 Neb. 724, 60 N. W. 12 53, 55 V. Erie & W. Transp. Co., 117 U. S. 323, 6 Sup. Ct. 750, 1176 3 V. McLoon, 100 Mass. 475 8 V. Ryland, 69 Md. 437, 16 Atl. 109 9 V. Spiers, 87 Ky. 286, 8 S. W. 453 7, 53, 57 V. Taylor, 5 Minn. 492 (GU. 393) 56, 66 V. Tomlinson, 125 Ind. 84, 25 N. E. 126 25 Phoenix Life Ins. Co. v. Raddin, 120 U. S. 183, 7 Sup. Ct. 500. . 38 Phoenix Mut. Life Ins. Co. v. Bailey, 13 Wall. 616 18, 19 Pickel V. Insurance Co., 119 Ind. 291, 21 N. E. 898 64 Piedmont & Arlington Life Ins. Co. v. Ewing, 92 U. S. 377 30 V. Ray, 50 Tex. 511 22 Pierce v. Travelers' Life Ins. Co., 34 Wis. 389 57 Pirn V. Reid, 6 Man. & G. 1 56 Pingrey v. National Life Ins. Co., 144 Mass. 374, 11 N. E. 562. . 68 Pinkham v. Morang, 40 Me. 587 55 Pitney v. Glen's Falls Ins. Co., 65 N. Y. 6 48, 55, 63 Pitt V. Berkshire Life Ins. Co., 100 Mass. 500 23 Plath V. Minnesota Farmers* Mut. Fire Ins. Co., 23 Minn. 479. 39 Pollard V. Somerset Mut. Fire Ins. Co., 42 Me. 221 67 Post V. Hampshire Ins. Co., 12 Mete. (Mass.) 555 8 Pottsville Mut. Fire Ins. Co. v. Fromm, 100 Pa. St. 347 64 Power v. Ocean Ins. Co., 19 La. 21, 28 18, 55 President, etc., of Delaware & H. Canal Co. v. Pennsylvania* Coal Co., 50 N. Y. 250 60 Price V. Phoenix Mut. Life Ins. Co., 17 Minn. 497 (Gil. 473) 29, 30, 37, 38, 57 V. Supreme Lodge, 68 Tex. 361, 4 S. W. 633 19 Protective Union v. Whitt, 36 Kan. 760, 14 Pac. 275 23, 66 Proudfoot V. Monteflore, L. R. 2 Q. B. 511 46 Pupke V. Resolute Fire Ins. Co., 17 Wis. 378 67 Q Quarles v. Clayton, 87 Tenn. 308, 10 S. W. 505 13 Quigley v. St. Paul Title-Insurance & Trust Co. (Minn.; 1895) 62 N. W. 287 53 Quinlan v. Insurance Co., 133 N. Y. 356, 31 N. B. 31 63 CASES CITED. 165 [Tbe reterences In the right-hand column are to the sections.] B Rainsford v. EoyaJ Ins. Co., 33 N. Y. Super. Ct. 453 57 Rankin v. Potter, L. R. 6 H. L. 119 19 Raub V. New York Co., 14 N. Y. St. Rep. 573 22 Rawls V. American Mut Life Ins. Co., 27 N. Y. 282 18, 19, 33, 44 Rayner v. Preston, 18 Ch. Div. 1 13 Redman v. Insurance Co., 49 Wis. 431, 4 N. W. 591 30 Reed v. Insurance Co., 138 Mass. 572, 576 60 V. Insurance Co., 17 R. I. 785, 24 Atl. 833 55 V. Insurance C«., 54 Vt 413 67 Relief Fire Ins. Co. v. Shaw, 94 U. S. 574 6 Renier v. Insurance Co., 74 Wis. 89, 42 N. W. 208 .53 Rensenhouse v. Seeley, 72 Mich. 603, 40 X. W. 765 1 Renshaw v. Insurance Co., 33 Mo. App. 394 58 Reserve Mut. Ins. Co. v. Kane, 81 Pa. St. 154 19 Reynolds v. Insurance Co., 80 Iowa, 563, 46 N. W. 659 64 Richelieu & O. Nav. Go. v. Boston Marine Ins. Co., 136 U. S. 408, 10 Sup. Ct. 934 11 Ricker v. Charter Oak Life Ins. Co., 27 Minn. 193, 6 N. W. 771. . 68 Rickerson v. Insurance Co., 149 N. Y. 307, 43 N. E. ^6 16 Rlggs V. Commercial Mut. Ins. Co., 51 N. Y. Super. Ct. 466 18 v. Commercial Mut Ins. Co., 125 X. Y. 12, 25 N. E. 1058 18 Ripley v. Aetna Ins. Co., 30 N. Y. 136 29, 60 Rittler v. Smith, 70 Md. 261, 16 AtL 890 19 Robertson v. Insurance Co., 88 N. Y. 541 20 Robinson y. Insurance Co., 76 Mich. 641, 43 N. W. 647 23 Rochester Loan & Banking Co. v. Liberty Ins. Co. (Neb.) 62 N. W. 877 56 Rockford Ins. Co. v. Nelson, 75 lU. 548 65 Rockwell V. Insurance Co., 4 Abb. Prac. 179 9 Roebuck v. Hammerton, Cowp. 737 19 Rohrbach v. Insurance Co., 62 N. Y. 47 18 RoUer v. Moore's Adm'r, 86 Ya. 512, 10 S. E. 241 19 Ross V. Bradshaw (1760) 1 W. Bl. 312 57 Ronmage v. Insurance Co., 13 N. J. Law, 110 59 Rowe V. Williams, 97 Mass. 165 60 Rowley v. Empire Ins. Co., 36 N. Y. 550 51 Ruggles v. American Cent Ins. Co., 114 N. Y. 421, 21 N. E. 1000 49 V. General Interest Ins. Co., 4 Mason, 74, Fed. Cas. No. 12,119 46 Ruthven v. American Fire Ins. Co. (Iowa) 60 N. W. 663 63 166 CASES CITED. [The references In the right-band column are to the sections.] s Sadlers Co. v. Badcock, 2 Atk. 554 13, 18 St. John V. American Mut. Life Ins. Co., 13 N. Y. 31 18, 19 St. Louis, etc., Ky. Co. v. Commercial Union Ins. Co., 139 U. S. 235, 11 Sup. Ot. 554 11 Salisbury v. Hekla Fire Ins. Co., 32 Minn. 458, 21 N. W. 552. . . 6 Sanborn v. Fireman's Ins. Co., 16 Gray (Mass.) 448 7 Sandford v. Trust Fire Ins. Co., 11 Paige (N. Y.) 547 9 Savage v. Corn Excli. Ins. Co., 36 N. Y. 655 18 Sawyer v. Dodge Co. Mut. Ins. Co., 37 Wis. 503 18 Schaffer v. National Life Ins. Co., 25 Minn. 534 57 School Dist. V. Aetna Ins. Co., 62 Me. 330 55 Schreiber v. Gernian-American Ins. Co., 43 Minn. 367, 45 N. W. 708 55 Schultze V. Insurance Co., 40 Ohio St. 217 57 Schuster v. Dutchess Co. Ins. Co., 102 N. Y. 260, 6 N. B. 406. . . 39 Schwartz v. Germania Life Ins. Co., 18 Minn. 448 (Gil. 404) 21 Scott V. Avery, 5 H. L. Cas. 811 60 V. Dickson, 108 Pa. St. 6 19 Seaman v. Enterprise Ins. Co., 18 Fed. 250 18 Seamans v. Knapp, Stout & Co., 89 Wis. 171, 61 N. W. 757 48 V. Northwestern Mut. Life Ins. Co., 3 Fed. 325 24 Security Ins. Co. v. Mette, 27 HI. App. 324 58 Seybert v. Pennsylvania Mut. Fire Ins. Co., 103 Pa. St. 282 55 Shannon v. Nugent, Hayes, 536 19 Shuggart v. Lycoming Fire Ins. Co., 55 Cal. 408 63 Sidney, The, 23 Fed. 88 18 Silverberg v. Phoenix Ins. Co., 67 Cal. 36, 7 Pac. 38 52 Simcoke v. Grand Lodge, 84 Iowa, 383, 51 N. W. 8 19 Singleton v. St. Louis Mut. Life Ins. Co., 66 Mo. 63 19 Slater v. Insurance Co., 89 Iowa, 628, 57 N. W. 422 66 Sloat V. Koyal Ins. Co., 49 Pa. St. 14 55 Smith y. Insurance Co., 60 Vt. 682, 15 Atl. 353 63 V. Insurance Co. (Mich.) 65 N. W. 236 56 V. National Life Ins. Co., 103 Pa. St. 177 24 V. Niagara Fire Ins. Co., 60 Vt 682, 15 Atl. 353 63 V. St. Paul Fire & Marine Ins. Co., 3 Dak. 80, 13 N. W. 355 25 V. Union Ins. Co., 120 Mass. 90 55 Somerset Co. Mut Fire Ins. Co. v. Usaw, 112 Pa. St 80, 4 Atl. 355 56 CASES CITED. 167 [The references In the right-hand column are to the sections.] Southern Life Ins. Co. v. Booker, f> lleisk. (Teun.) 60C 48 V. McCain, 96 U. S. 84 24, 47 Spare v. Home Hut. Ins. Co., 15 Fed. 707 IS SpauMlng v. Railway Co., 30 Wis. 117, 118 19 Splawn V. Chew, 60 Tex. 532 68 Sprague v. Holland Purchase Ins. Co., 69 N. Y. 128 51 Standard Life & Ace, Ins. Co. v. Martin, 133 Ind. 376, 33 N. E. 105 27 Stanhilber v. Insurance Co., 76 Wis. 285, 45 N. W. 221 55 State V. Farmers' Ben. Ass'n, 18 Neb. 276, 25 N. W. 81 1 State Ins. Co. v. Jordan, 29 Neb. 514, 45 N. W. 792 53 Steele v. Insurance Co., 93 Mich. 81, 53 N. W. 514 48 Steen v. Insurance Co., 89 N. Y. 319 67 Stensgaard v. Insurance Co., 50 Minn. 429, 52 N. W. 910 26 Stephenson v. Insurance Co., 54 Me. 70 60 Stevens v. Citizens' Ins. Co., 69 Iowa, 658, 29 N. W. 769 63 V. Queen Ins. Co., 81 Wis. 335, 51 N. W. 555 62 Stickley v. Insurance Co., 37 S. C. 56, 16 S. E. 280 6 Stone's Adm'rs v. United States Casualty Co., 34 N. J. Law, 371 57 Stout V. City Fire Ins. Co., 12 Iowa, 371 28 Stribley v. Imperial M. Ins. Co., 1 Q. B. Div. 507 46 Strong V. American Cent. Ins. Co., 4 Mo. App. 7 3 V. Manufacturers' Ins. Co., 10 Pick. 40 18 V. Phoenix Ins. Co., 62 Mo. 289 3 Sullivan v. Phenix Ins. Co., 34 Kan. 170, 8 Pac. 112 51 Summers v. United States Ins. Co., 13 La. Ann. 504 57 Supreme Commandery v. Ains worth, 71 Ala. 436 1 Supreme Council v. Perry, 140 Mass. 580, 5 N. E. 634 19 Sussex Mut. Ins. Co. v. Woodruff, 26 N. J. Law, 541 18 Sutherland v. Old Dominion Ins. Co., 31 Grat. 176 55 Sweetser v. Ass'n, 117 Ind. 97, 19 N. B. 722 25 Swensen v. Sun Fire Office, 68 Tex. 461, 5 S. W. 60 67 Swick V. Home Ins. Co., 2 Dill. 160, Fed Cas. No. 13,692 57 Syndicate Ins. Co. v. Bohn, 27 U. S. App. 564, 12 C. C. A. 531, and 65 Fed. 165 18, 55, 67 T Tayloe v. Merchants' Fire Ins. Co., 9 How. (U. S.) 390 9, 22 Terry v. Life Ins. Co., 1 Dill. 403, Fed. Cas. No. 13,839 57 Thayer v. Middles^ Ins. Co., 10 Pick. (Mass.) 326 9 Thomas v. Fame Ins. Co., 108 111. 91 29 168 CASES CITED. [The references In the right-hand column are to the sections.] Thompson v. Adams, 23 Q. B. Div. 361 6 V. Knickerbocker Life Ins. Co., 104 U. S. 252 24 V. Phenix Ins. Co., 136 U. S. 28T, 10 Sup. Ct. 1019 40 Tliomson v. Weems, 9 App. Cas. 671 38 Titus V. Glen's FaUs Ins. Co., 81 N. Y. 410 56 Towne v. Fitchburg Ins. Co., 7 Allen, 51 38 Trade Ins. Go. v. Barracliff , 45 N. J. Law, 543 23 Trask v. Insurance Co., 29 Pa. St. 198 59 Travelers' Ins. Co. v. California Ins. Co., 1 N. D. 151, 45 N. W. 703 3 Travis v. Continental Ins. Co., 32 Mo. App. 198 18 Trenton Mut. Life & Fire Ins. Co. v. Johnson, 24 N. J. Law, 576 18, 19 Trinity College v. Travelers' Ins. Co., 113 N. O. 244, 18 S. B. 175.. 19 Trippe v. Society, 140 N. Y. 23, 35 N. B. 316 66 Trustees of First Baptist Church v. Brooklyn Fire Ins. Co., 19 N. Y. 305 7 Turner v. Meridan Ins. Co., 16 Fed. 454 55 Tyrie v. Fletcher, Cowp. 666 12 U Ulrich V. Reinoehl, 143 Pa. St. 238, 22 Atl. 862 19 Union Ins. Go. v. American Fire Ins. Co., 107 Gal. 327, 40 Pac. 431 6 v. Glipp, 93 111. 96 55 v. Smith, 124 U. S. 405, 8 Sup. Ct. 534 11 Union Mut. Ins. Go. v. Wilkinson, 13 Wall. (U. S.) 222. .47, 51, 53, 61 Union Mut. Life Ass'n of Battle Creek v. Montgomery, 70 Mich. 587, 38 N. W. 588 68 Union Mut Life Ins. Co. v. Mowry, 96 U. S. 544 33, 34 V. Reif, 36 Ohio St. 596 5T United Brethren Mut. Aid Soc. v. McDonald, 122 Pa. St 324, 15 Atl. 439 19 V. White, 100 Pa. St. 12 57 Valton V. National Fund Life Assur. Co., 20 N. Y. 32 19, 44 V. National Loan Fund Assur. Co., 22 Barb. 9 18 Van Allen v. Farmers" Joint-Stock Ins. Co., 64 N. Y. 469 63 CASES CITED. 169 [The references In the right-band column are to the sections.] Vanglndertaelen v. Insurance Ck)., 82 Wis. 112, 51 N. W. 1122. . 60 Vanklrk v. Insurance Co., 79 Wis. 627, 48 N. W. 798 53 Van Zandt v. Mutual Benefit Life Ins. Co., 55 N. Y. 169 57 Vlele V. Insurance Co., 26 Iowa, 9 56 Vivar V. Knights of Pythias, 52 N. J. Law, 455, 20 Atl. 36 19 W Wainer v. Insurance Co., 153 Mass. 335, 26 N. B. 877 9 Walker v. Insurance Co., 56 Me. 371 6 V. Metropolitan Ins. Co., 56 Me. 371 7 Wallace v. Insurance Co., 4 La. 289 .^ 60 Walllngford v. Home Mut. Fire Ins. Co., 30 Mo. 46 9 Walsh V. Hartford Fire Ins. Co., 73 N. Y. 5 49, 63 V. Philadelphia Fire Ass'n, 127 Mass. 383 55 Warnock v. Davis, 104 V. S. 775, 779 11, 18, 19 Warren v Davenport Fire Ins. Co., 31 Iowa, 464 18 Washburn Mill Co. v. Fire Ass'n (Minn.) 61 N. W. 828 55 Washington Life Ins. Co. v. Harney, 10 Kan. 525 37 Washington MUls Manuf'g Co. v. Weymouth Ins. Co., 135 Mass. 503 42, 44 Waterbury v. Insurance Co., 6 Dak. 468, 43 N. W. 697 63 Watertown Fire Ins. Co. v. Grover & Baker S. M. Co., 41 Mich. 131, 1 N. W. 961 53 Watson V. Centennial Mut. Life Ass'n, 21 Fed. 698 19 V. Mainwarlng, 4 Taunt. 763 57 Weldert v. Insurance Co., 19 Or. 261, 24 Pac. 242 63 Welsert v. Muehl, 81 Ky. 336 68 Welts V. Connecticut Mut. Life Ins. Co., 46 Barb. 412, 48 N. Y. 34 57 Wheeler v. Connecticut Mut Life Ins. Co., 82 N. Y. 543 4, 20, 24 Whitaker v. Farmers' Union Ins. Co., 29 Barb. (N. Y.) 312 9 White V. Madison, 26 N. Y. 117 18 V. Robbins, 21 Minn. 370 67 V. Society, 163 Mass. 108, 39 N. E. 771 41 Whitmore v. Supreme Lodge, 100 Mo. 36, 13 S. W. 495 19 Wiebeler v. Milwaukee M. Mut Ins. Co., 30 Minn. 462, 464, 16 N. W. 363 6,7 Wilklns V. State Ins. Co., 43 Minn. 177, 45 N. W. 1 50 Williams v. Boger Williams Ins. Co., 107 Mass. 377 17 V. Smith, 2 Calnes (N. Y.) 13 8 170 CASES CITED. [The references In the right-hand column are to the sections.] Wilson V. Conway Ins. Co., 4 R. I. 141 38 V. HiU, 3 Mete. (Mass.) 66 11 V. Insurance Co., 4 R. I. 159 30 V. Jones, L. R. 2 Bxch. 150 1 Winans v. Allemanla Fire Ins. Co., 38 Wis. 342 51 Wing V. Harvey, 23 Law J. Ch. (N. S.) 511 52 Wood V. Firemen's Ins. Co., 126 Mass. 316 37 Woodbury Sav. Bank v. Charter Oak Ins. Co., 31 Conn. 517. . . 51 Woodbury Savings Bank & Building Ass'n v. Charter Oak Fire & Marine Ins. Co., 31 Conn. 518 60 Wooddy V. Insurance Co., 31 Grat. 362 9 Wood Mowing Mach. Co. v. Crow, 70 Iowa, 340, 30 N. W. 609. . 63 Wooliver v. Boylston Ins. Co. (Mich.) 62 N. W. 149 55 World Mut. Life Ins. C6. v. Sqhultz, 73 HI. 586 57 Worley v. State Ins. Co. (Iowa) 59 N. W. 16 56 Worthlngton v. Hearse, 12 Allen (Mass.) 382 18 Wright V. Supreme Commandery, 87 Ga. 426, 13 S. B. 564 20 Zimmermann v. Insurance Co., 77 Iowa. 691, 42 N. W. 462 63 Zinck V. Phoenix Ins. Co., 60 Iowa, 266, 14 N. W. 792 55 TEXT BOOKS CITED. May. The Law of Insurance. 2 vols. (3d Ed.) 1891. Biddle. The Law of Insurance. 2 vols. 1893. Beach. The Law of Insurance. 2 vols. 1895. Barber. The Principles of Insurance. 1882. Wood. The Law of Insurance. 2 vols. 1886. Bliss. The Law of Life Insurance. (2d Ed.) 1874. Cooke. The Law of Life Insurance. 1891. Amould. The Law of Marine Insurance. 2 vols. (6th Ed.) 1887. Duer. The Law of Marine Insurance. 2 vols. 1845. Phillips. The Law of Insurance. 2 vols. (5th Ed.) 1867. Bichards. The Law of Insurance. 1892. Angell. The Law of Insurance. (2d Ed.) 1855. Marshall. The Law of Insurance. 2 vols. 1805. Emerigon. Traite des Assurances. 2 vols. 1827. Coutean. Traite des Assurances sur la Vie. 2 vols. 1881. Cauvet. Traits des Assurances Maritime. 2 vols. 1S79. LAW INS. (171)* INDEX. [THE REFERENCES ARE TO PAGES.] A ACCEPTANCE, of offer to insure by mall, 16. ACTION, limitation as to time and place of bringing, 123. AFFIRMATTVB REPRESENTATIONS, 69. AFFIRMATIYE WARRANTIES, 62. AGE, misrepresentation of, 111. AGENT, countersigning policy by, 18. concealment or misrepresentation by, 79. insurance agents, in general, 83. general agents defined, 83. local agents, 83. limitations on authority contained In policy, 85. secret limitations on agent's authority, 85. stipulations in policy as to who are agents of Insurer, 86. statutory provisions as to agents, 89. waiver by agent, 89. notice to agent, 90. error or fraud of agent of insurer, 93. knowledge of falsity of statements in application, effect, 128. collusion between applicant and agent, effect, 130. ALEATORY CONTRACT, insnrance is an, 25. ALIENATION, see "Cbange of Interest." effect on insurable interest, 36. stipulations against, 36, 37, 96. LAW INS. (173) 174 INDEX. (References to pages.) ALIENATION— OontinTied, void sale, 97. of portion of interest, 97. effect of mortgage, 97. effect of foreclosure, 97. waiver of alienation, 9S. ALTERATION, increase of risk by, 105. materiality of, 105. use permitted, 106. alteration by tenant, 108. ARBITRATION, stipulation for, 120. ASSIGNMENT, of insurance contracts, 133. fire insurance policy, 133. not assignable, 133. effect of assignment with consent of insurer, 134. as collateral security, 135. after loss, 137. life and marine policies, 137. Interest of assignee, 137. reservation of right to assign, 138. vested interest of beneficiary, 138. ASSURED, defined, 4. ATTACHMENT, insurable interest in property attached, 32. B BENEFICIARY, reservation of right to change, 138. BINDING SLIP, as contract of insurance, 12. BOOKS AND PAPERS, stipulation for production of, 118. BURDEN OF PROOF, as to truth or falsity of warranties, 65. suicide, 118. INDEX. 175 (References to pages.) CERTIFICATE OF MAGISTRATE, 118. CESTUI QUE TRUST, insurable interest of, 33. CHANGE OF INTEREST, see "Alienation." broader than alienation, 97. includes transfer of equitable interest, 97. GHATTEI, MORTGAGE, stipulation against incumbrance by, 101. COLLATERAL SECURITY, assignment of fire policy as collateral security, 135. COLLUSION, between applicant and agent, 130. COMMON CARRIER, insurable interest, 33. CONCEALMENT, see "Representations." defined, 77. time of concealment, 77. what must be communicated, 78. what need not be communicated, 78. or misrepresentation by agent, 79. CONDITIONS, insurance a conditional contract, 24. representation as to continuing conditions, 71. CONSIDERATION, of contract of insurance, see "Premium." CONTRACT OF INSURANCE, parties to the contract, 6. who may be parties, 6. the insured, 6. temporary disability, 7. the Insurer, 7. form of the contract, 9. statutory requirements, 9. oral contracts, 10. 176 INDEX. (References to pages.) CONTRACT OF INSURANCE— Continued, binding slip, 12. the statute of frauds, 12. kinds of policies, 13. valued and open, 13. time and voyage, 14. wager and interest, 14. consummation of contract, 15. in general, 15. when contract consummated, 15. delivery of policy, 15, 17. negotiations by correspondence, 16. countersigning policy, 18. specific performance of agreement to insure, 19. nature of contract, 20. in general, 20. the principle of indemnity, 20. indemnity against negligence, 21. doctrine of subrogation, 22. life insurance not a contract of indemnity, 23. a conditional contract, 24. aleatory contract, 25. a personal contract, 25. subject-matter of insurance, and risks which may be Insured against, 26. general rule, 26. limitations, 26. interest In an illegal business, 27. description of property subject to risk, 28. CORPORATION, insurable interest of stockholders, 32. CORRESPONDENCE, contract of insurance by, 16. CREDITORS, insurable interest in property of debtor, 33. Insurable interest In property of deceased debtor, 34. insurable interest in life of debtor, 51. INDEX. 177 (References to pages.) D DEATH IN VIOLATION OF LAW, construction of piovision, 115. DECEDENTS' ESTATES, insurable Interest of creditor In, 34. DEFINITIONS, of insurance, 1 of life Insurance, 2. of fire insurance, 3. of marine insurance, 3. of Insurer, 3. of underwriter, 3. of assured, 4. of insured, 4. of policy, 4. of premium, 4. of reinsurance, 4. of risks or perUs, 4. of subject-matter of insurance, 4. of insurable interest, 30. of premium, 53. of warranty, 59. of representation, 68. of concealment, 77. of general agent, 83. of estoppel, 124. of waiver, 124. DELIVERY, of policy, 17. necessity, 15. conditional delivery, 18. obtained by misrepresentation or fraud, 18. DESCRIPTION, of property subject to risk, 28. DOMESTIC RELATIONS, insurable interest in life of child, parent, brother, etc., 50. LAW INS. — 12 178 INDEX. (References to pages.) E EQUITABLE TITLES, Insurable Interest in holder of, 33. ESTOPPEL, see "Waiver and Estoppel." defined, 124. EXAMINATION OF INSURED, 119. EXECUTORS AND ADMINISTRATORS, insurable interest in property of testator, 32. EXPLOSION, exemption from liability for damage by, 116. EXPRESS WARRANTIES, 62. F FIRE INSURANCE, defined, 3. stipulations as to care and condition of property during insur- ance, 102 et seq. keeping or use of prohibited articles, 106. assignment of policy, 133. not assignable, 133. effect of assignment with consent of insurer, 134. assignment of policy as collateral security, 135. assignment after loss, 137. FORFEITURE, for nonpayment of premium, 56, 57. FORM OF CONTRACT, see "Contract of Insiu:ance." FEALT), in procuring delivery of policy, 18. of agent of insurer, 93. FRAUDS, STATUTE OF, application to contract of insurance, 12. G GASOLINE, use of, 106. GENERAL AGENT, defined, 83. INDEX. 179 (References to pages.) H HABITS, provisions as to, In life policy, 110. HEALTH, stipulations as to healtli, 109. HUSBAND AND WIFE, insurable interest in wife's property, 33. insurable interest in each other's lives, 51. IMPLIED WARRANTIES, 62. INCREASE OF RISK, use and manner of occupation, 103. INCUMBRANCES, stipulations against, 101. INDEMNITY, the fundamental principle of insurance with respect to prop- erty, 20. life insurance not a contract of, 23. insurer's right to replace property, 123. INFANTS, see "Parties." right to mate contract of insurance, 6. INSURABLE INTEREST, defined, 30. interest in illegal business, 26. general statement, 31. in propei-ty, 31. different parties may have insurable interest in same sub- ject-matter, 31. illustrations of insurable interest in property, 32. time of interest, 35. in lives, 37. at common law, 37. modem rule, 42. interest of beneficiary designated bj- insurer, 43. 180 INDEX. (References to pages.) INSURABLE INTEREST— Continued, interest of assignee, 44. continuance of interest in life, 48. value of creditor's interest, 49. illustrations of insurable interest in lives, 50. interest founded on relationship, 50. INSURANCE, defined, 1. against negligence, 21. INSURANCE AGENTS, see "Agent." INSURED, defined, 4. INSURER, defined, 3. INTEREST, stipulations relating to interest of Insured, 95. of assignee of life and marine policies, 137. INTEREST POLICIES, defined, 14. INTOXICATING LIQUORS, insurance on, 27. stipulation as to use of, 110. KNOWLEDGE, waiver requires, 124. L LANDLORD AND TENANT, insurable interest of landlord in goods of tenant, 32. LAPSED POLICY, reinstatement, 58. LIFE INSURANCE, defined, 2. not a contract of indemnity, 23, insurable interest in lives, 37. at common law, 37. modern rule, 32. INI>EX. 181 (References to pages.) LIFE INSURANCE-Continued, of beneficiary designated by insured, 43. of assignee, 44. continuance of interest in life, 48. value of creditor's interest, 49. illustrations of insurable interest, 50. interest founded on relationship, 50. stipulations as to health, 109. relating to condition and conduct of insured, 109. as to occupation, 110. as to temperate habits, 110. as to medical attendants, family physician. 111. as to other applications. 111. as to whether applicant is married or single, 111. misrepresentation of age. 111. effect of suicide, 112. entering military or naval service, 114. death in violation of law, 115. policies are assignable, 137. interest of assignee, 137. reservation of right to assign, 138. vested interest of beneficiary, 138. LIMITATION, as to time and place of bringing action, 123. M MAIL, contract of insurance by, 16. MARINE INSURANCE, defined, 3. policies are assignable, 137. interest of assignee, 137. vested interest of beneficiary, 138. MARRIAGE, stipulation as to in life insurance policy, 111. MASTER AND SERVANT, insurable interest, 51. MATERIALITY, see "Warranty" and "Representations." 1S2 INDEX. (References to pages.) MECHANIC'S LIEN, Insurable interest in holder of, 33. MILITARY SERVICE, effect of entering on life insurance, 114. MISREPRESENTATION, to procure delivery of policy, 18. MISTAKE, of agent of insurer, 93. MOBS, exemption from liability for damage by, 116. MORTGAGES, insurable interests in mortgaged property, 32 stipulations against incumbrances, 101. N NAVAL SERVICE, effect of entering on life insurance, 114. NEGLIGENCE, indemnity against, 21. NOTICE, to agent, 90. of loss, 117. NOTICE OP LOSS, waiver by denial of liability, 130. O OCCUPATION, statement of, 110. change of, 110. OPEN POLICY, defined, 13. ORAL CONTRACTS, of insurance, 10. ORAL REPRESENTATIONS, 69. OTHER INSURANCE, stipulations against, 98. INDEX. 183 (References to pages.) P PARENT AND CHILD, insurable interest in life of child, 50. insurable interest in life of parent, 50. PAROL CONTRACTS, of insurance, 10. PARTIES, to contract of insurance, 6. who may be parties, 6. the insured, 6. temporary disability, 7. the insurer, 7. life insurance by infant, 6. PARTNERSHIP, insurable interest in partnership property, 33. insurable interest in life of co-partner, 51. PAYMENT, of premium, 53, 54. manner of payment, 55. acceptance of note, 56. excuses for nonpayment, 56. waiver, 58. PHYSICIAN, meaning of "family physician," 112. POLICY, defined, 4. kinds of policies, 13. valued or open, 13. wager and interest, 14. time and voyage, 14. delivery of, 17. necessity of delivery, 15. countersigning by agent. 18. reinstatement of lapsed policy, 58. PREMIUM, defined, 4, 53. in general, 53. special provisions in policy, 54. manner of payment, 55. 184 INDEX. (References to pages.) PREMIUM— Continued, acceptance of note for premium, 56. excuses for nonpayment, 56. reinstatement of lapsed policy, 58. waiver of payment at time agreed upon, 58. PRODUCTION OF BOOKS AND PAPERS, stipulation as to, 118. PROMISSORY REPRESENTATIONS, 69. PROMISSORY WARRANTIES, 62. PROOF OF LOSS, a condition precedent to action, 117. waiver by denial of liability, 130. waiver by refusal to send blanks for, 131. waiver of insufficiency by refusal on specific grounds, 131. K RAILWAY COMPANIES, insurable interest in property along line, 33. REINSTATEMENT, of lapsed policy, 58. REINSURANCE, defined and explained, 4. RELEASE, of wrongdoer by insured, effect on Insurance, subrogation, 22. REMEDIES, provisions relating to, 120. arbitration, 120. insurer's right to replace property, 123. limitation as to time and place of bringing suit, 123. REPRESENTATIONS, defined, 68. affirmative and promissory, 69. oral representation, 69. written and oral promissory representations, 70. continuing conditions, 71. representation of belief or expectation, 71. materiality of representation, 72. materiality a question for jury, 72. answers to questions material, 72. INDEX. 185 (References to pages.) REPRESENTATIONS— Continued, construction of material representations, 75. policy covering various items, 75. statutory provisions, 76. RESIDENCE AND TRAVEL, limitations as to, 114. RIOTS, exemption from liability for damage by, IIG. RISKS, what may be insured against, 26. RUNNING WITH LAND, insurance does not run with land, 25. SHERIFFS, insurable interest in property attached. 32. SPECIFIC PERFORMANCE, of agreement to insure, 19. STANDARD POLICY, Minnesota standard fire policy, 142 et seq. STATUTE OF FRAUDS, application to contracts of insurance, 12. STATUTES, statutory requirements as to form of contract, 9. statutory provisions as to representations, 76. SUBJECT-MATTER, see "Contract of Insurance." of insurance, 4. SUBROGATION, doctrine applied to insurance, 22. release of wrongdoer by insured, effect, 22. effect of payment by wrongdoer, 23. SUICIDE, effect of, 112. 186 INDEX, (References to pages.) T TIME POLICIES, defined, 14. TITLE, stipulations as to, 95. TRUSTEE, insurable interest of, 33. insurable interest in life of, 51. u UNDERWRITER, defined, 3. USE AND OCCUPATION, provision as to, 103. increase of risk when no provision, 103. V VACANCY, / stipulations against vacancy, 102. construction, 102. effect of when no provision in policy, 103. VALUED POLICY, defined, 13. VESTED INTEREST, of beneficiary in life policy, 138. VOYAGE POLICIES, defined, 14. TV WAGER POLICIES, defined, 14. WAIVER AND ESTOPPEL, waiver defined, 124. waiver of payment of premium at time agreed upon, 58. waiver of provisions in policy by agent, 89. waiver of alienation, 98. waiver requires knowledge, 124. limitations in policy on power of agent, 125. INDEX. 187 (References to pages.) WAIVER AND ESTOPPEL— Continued, effect of knowledge by agent of falsity of statement in applica- tion, 128. collusion between applicant and agent, 130. estoppel by conduct after loss, 130. general denial of liability, 130. refusal on specific grounds, 131. refusal to send blanks for proofs, 131. WAR, exemption from liability for damage by, 116. WARRANTIES, defined, 59. kinds of warranties, 61. must be in policy, 61. affirmative warranties, 62. express warranties, 62. implied warranties, 62. promissory warrantless, 62. effect of breach of warranty, 63. construction of, 64. burden of proof, 65. WEST FUBl.lsaiHa CO.. PBUfTBBS Aifll STEBBOTYFSBS. BT. FAUL, MXHN. ILLUSTRATIVE CASES ON THE LAW OF INSURANCE ARRANGED WITH REFERENCE TO ELLIOTT'S OUTLINES OF THE LAW OF INSURANCE (2d EDO SELECTED BY CHARLES B. ELLIOTT, PH. D.. LL. D. Judge of the District Court of Minnesota, and Head of the Department of Corporation and International Law in the College of Law of the University of Minnesota ST. PAUL WEST PUBLISHING CO. 1896 COPYKIGHT, 1896, BT WEST PUBLISHING COMPANY. TABLE OF CONTENTS. Parti. THE CONTRACT OF INSURANCE. The Parties to the Contract. Page New Hampshire Mut. Fire Ins. Co. Noyes 3 Johnson v. Northwestern Mut. Life Ins. Co. 5 B. The Form of the Contract, (a) Oral or Written. Green t. Uvrnwol & London & Globe Ins. C!o 9 Newark Mach. Co. v. K«iton Ins. Co 12 Salisbury t. Hekla Fire Ins. Co. of Madi- son, Wis 16 Wiebeler t. Milwaukee Mechanics' Mut. Ins. Co 17 Cb) Open or Valued. Insurance Co. t. Butler 18 Fuller V. Boston Mut Fire Ins. Co 19 C. Consummation of the Contract. Fannce t. State Mut. Life Assur. Co 22 Dailey t. Preferred Masonic Mut. Ace. Ass'n of America 23 D. The Nature of the Contract. Quarles v. Clayton 26 Rayner v. Preston 29 Castellain v. Preston 34 Connecticut Fire Ijds. Co. t. EMe Ry. Co. . . 43 Dalby v. India & London Life Assur. Co. . . 45 Connecticut Mut. Life Ins. Co. v. Schaefer 48 Part n. THE STTBJECT MATTER OF INSUR- ANCE. Niagara Fire Ins. Co. v. De Graff 51 Hinckley y. Germania Fire Ins. Oo 53 Fidelity & Casualty Co. of New York v. EickhofC 56 Part m. insurabij: interest. A. Insurable Interest in Property. Rohrbach v. Germania Fire Ins. Co 59 Riggs y. Commercial Mut. Ins. Co 65 Hooper y. Robinson 67 B. Insurable Interest in Lives. Paga Warnock y. Dayis 71 Whitmore v. Supreme Lodge, Knights and Ladies of Honor 75 Olmsted y. Keyes 78 Martin y. Stubbings, two cases 82 Appeal of Corson 86 Rittler y. Sradth 89 Cooper y. ShaefEer 92 Lord y. DaU 93 Singleton v. St. Louis Mut. Ins. Co 95 Part rV. THE PREMIUM. Hoffman v. John Hancock Mut. Life Ins. Co 97 McAllister v. New England Mut. Life Ins. Co 99- Thompson y. Insurance Co 100 - Klein v. Insurance Go 103 ■ Carpenter v. Centennial Life Ass'n 105- Lantz y. Vermont Life Ins. Co 107 Part V. WARRANTIES. Phoenix Life Ins. Co. y. Raddin 113 White y. Proyident Say. Life Assur. Soc. of New York 118 Chambers y. Northwestern Mut. life Ins. Co 121 Part VI. REPRESENTATIONS. Armour y. Transatlantic Fire Ins. Co 123 Daniels y. Hudson River Fire Ins. Oo 125 Kimball y. Aetna Ins. Co 129 MUler y. Mutual Ben. Life Ins. Co 133 Part vn. CONCEALMENT. Norwich Fire Ins. Co. y. Boomer 139 Blackburn y. Vigors 141 Proudfoot V. Montefiore 152 Part Vm. INSURANCE AGENTS. Continental Ins. Co. y. Ruckman 155 Eagle B'ire Co. of New York y. Globe Loan & Trust Co 159 Wilkins y. P'^ate Ins. Co. of Des Moines. . . 163 Kausal y. Minnesota Farmers' Mut. Fire y. Ins, Ass'n. 1^ ELL. BEL. CAS. LAW INS. (ill) IV TABLE OF CONTENTS. Page Home Fire Ins. Co. v. Hammang 166 Ruthven v. American Fire Ins. Co 170 Part IX. STIPUI.ATIONS CONTAINED IN THB POLICY. Stipulations of the Fiest Class. A. StipnlatioiLS Relating to the Interest of tile Insured. Knop V. National Fire Ins. Co. of Hartford 174 J. B. Ehrsam Mach. Co. v. Phenix Ins. Co. 175 Green v. Homestead Fire Ins. Co 176 Loy V. Home Ins. Co 177 Gibb V. Philadelphia Fire Ins. Co 179 Funke v. Minnesota Farmers' Mut. Fire Ins. Ass'n 180 Reed t. Equitable Fire & Marine Ins. Co. . 182 B. Stipulations Relating to the Care and Condition o£ the Property during the Term of the Insurance. Continental Ins. Co. v. Kyle 184 Daniels v. Equitable Fire Ins. Co 188 Imperial Fire Ins. Co. v. Coos County 190 Faust T. American Fire Ins. Co 195 First Congregational Church of Rockland v. Holyoke Mut. Fire Ins. Co 198 C. Stipulations Contained in Iiife Policies Relating to the Condition and Comduct of the Insured. Moulor T. American Life Ins. Co 201 Schultz y. Insurance Co 206 Bigelow y. Berkshire I4fe Ins. Go 209 Stipulations Excepting the Insurer from Iiiability TTnder Certain Cir- cumstances. Page Insurance Co. y. Boon 211 Huck V. Globe Ins. Co 217 Stipulations of the Second Class. A. Stipulations Relating to Things to be Done after the I!»« i.iw IHB. (1)* THE CONTRACT OP INSURANCE. NEW HAMPSHIRE MUT. FIRE INS. CO. V. NOTES. (32 N. H. 345.) Supreme Court of New Hampshire. Merri- mack. December Term, 1855. Assumpsit on the premium note of the de- fendant. The plea was infancy, to which the plaintiff replied— First, that the defendant, after he became of age, ratified and confirmed his promise; and, secondly, that the note de- clared on was given for necessaries. Issue was joined upon both. H. A. Bellows, for plaintiff. Mr. Tappan, for defendant. FOWLER, J. The pleadings and agreed statement of facts present two distinct ques- tions for consideration: First, was there, in the circumstances stated, such a ratification by the defendant, after he became of age, of his premium note, or the contract of insur- ance, as amounted to a new promise to pay it; and, secondly, is a contract for a policy of insurance a contract for necessaries, such as wiU bind the infant absolutely? The subject of the ratification of his con- tract by an infant after arriving at maturity, bas heretofore been pretty fully considered in this state, in the cases of Hale v. Gerrish, 8 N. H. 374, and Aldrich v. Grimes, 10 N. H. 197, cited by the defendant's counsel. It seems to be the doctrine of these, and the tendency of most of the later, decisions, that the contract of an infant, where it might be for his benefit, is not absolutely void, but voidable at the election of the infant, and that it may be ratified and made valid by the acts of the infant after attaining full age. As to what acts will amount to a ratification of the contract in this class of cases, Upham, J., in delivering the opinion of the court in Hale V. Gerrish, 8 N. H. 376, says: "This ratification must either be a direct promise, as by saying, 'I ratify and confirm,' or, 'I agree to pay the debt,' or by positive acts of the infant, after he has been of age a rea- sonable time, in favor of his contract, which are of a character to constitute as perfect evidence of a ratification as an express and unequivocal promise." This seems the true rule on this subject, clearly and unequivocally expressed, and by it the first question in this case is decisively settled in the negative. There is nothing in the agreed statement of facts as to the con- duct of the defendant, after he became of age, in relation to his insurance by the plaintiff, which approximates to what is necessary to bring this case within the rule. There is no claim of any express promise, and the alleged acts of ratification are entirely of a negative •character. There is no positive act in favor of the contract, much less any of that express and decided character which would constitute perfect evidence of a ratification, such as would be equal to an express and unequivocal promise. The defendant has done nothing In relation to his contract. He seems to have remained entirely passive until called upon in this suit, when he availed himself of the plea of infancy in avoidance of his assumed lia- bility. This is as far as possible removed from that positive action in favor of his con- tract, indispensable to mal^e it valid and bind- ing. But the plaintiff contends that the defend- ant was boimd, on coming of age, to give no- tice of his disaffirmance of the contract in a reasonable time; otherwise he is to be consid- ered as having affirmed it. If there be any such general rule as that for which the coun- sel contends, it can be applicable only in those cases where the infant, after coming of age, is in possession, by virtue of the contract of his minority, of something of value to him, the retaining of which might justly be con- strued as an election to appropriate the fruits of that contract to his own personal and pe- cuniary advantage. Such is not the condition of things under consideration. Long before arriving at maturity, the defendant trans- ferred and sold the property insured, so that, by its own terms, the policy became absolute- ly null and void, of no possible value to him, or validity against the plaintiff. He did not attempt in any way to avail himself of it, as he might have done by assigning it to the pur- chaser of his goods. We are, therefore, clearly of opinion that there is nothing in the acts of the defendant aiter he became of age which can properly be regarded as such an affirmance of the contract of insurance as to make it legally binding up- on him. The remaining question we have carefully considered. For, as has been well suggested by the plaintiff's counsel, although an infant might not be liable to pay for the goods con- stituting his stock in trade, yet, having the goods, and being so engaged in trade, it would manifestly be for his interest, and would seem almost necessary for the security of his prop- erty, that it should be insured against loss or damage by fire. But it is evident from the most cursory examination, that the contract, being advantageous or disadvantageous to the infant or his estate, furnishes no reliable t&t on the point as to whether or not the subject- matter of such contract is properly included within the term "necessaries." Very many things can be mentioned the acquisition of which must undoubtedly have been beneficial to the infant or his estate, contracts for which have been repeatedly and uniformly holden voidable, at the election of the infant. In Phelps V. Worcester, 11 N. H. 51, it was holden that the services and expenses of counsel in carrying on a suit to protect the infant's title to his estate could not be re- garded as necessaries, and that the infant's liability for them might be avoided, even un- der an express promise to pay for them. Up- ham, J., in pronouncing the opinion of the THE CONTBACT 01" INSURANCE court, remarked: "The inquiry has heen made, if there had been no guardian, and the infant were without aid, whether he might not employ others to protect his rights to his property, and be legally holden, notwithstand- ing the interposition of his minority. We thinl£ clearly not. Though such services may promote the sound interests of the ward [in- fant], they are not such assistance as comes within the term "necessaries." Lord Coke considers the necessaries of the infant to in- clude victuals, clothing, medical aid, and good teaching or instruction, whereby he may profit himself afterwards. Co. Litt. 172a. Such aid concerns the person, and not the es- tate, and we know of no authority which goes beyond this." Now, if the services and expenses of coun- sel in protecting the property of an infant are not necessaries, on what principle can it be contended that the insvu-ance of that prop- erty against loss by fire can be? The object is the same in both cases— the protection and security of the infant's property; and- in- stances can readily be conceived where the services of learned and experienced counsel might be quite as valuable and Important as any contract of insurance. The test of bene- ficiality, then, cannot be relied on as deter- mining whether or not a thing is to be reckon- ed among necessaries. But it seems to us the suggestion in the case last cited, that necessaries concern the person and not the estate, furnishes the true test on this subject. Although there may be isolated cases where a contrary doctrine has obtained, we apprehend the true rule to be, that those things, and those only, are proper- ly to be deemed necessaries, which pertain to the becoming and suitable maintenance, sup- port, clothing, health, education and appear- ance of the Infant, according to his condition and rank in life, the employment or pursuit in which he is engaged, and the circumstances under which he may be placed as to profes- sion or position. Co. Litt. 172a; Whittingham V. Hill, Cro. Jac. 494; Ive v. Chester, Cro. Jac. 560. If this be so, then matters which pertain only to the preservation, protection, or security of the infant's property are excluded from the list of necessaries, however beneficial. What- ever relates to his property is the legitimate business of a guardian, and, if transacted by the infant, may be avoided at his election. Such are our convictions of the proper limit of the validity of the contracts of infants. Any other limitation would, it seems to us, lead to an almost interminable variety of de-' cisions on this subject, and tend to destroy those safeguards which the wisdom of the law has established to protect the inexper- ience and credulity of youth against the wiles and machinations of designing men. We are satisfied that the principle of the adjudged cases does not require, nor would sound pol- icy justify our holding, that a contract made by a minor for the protection or preservation of his property by insurance against fire is a contract for "necessaries," within the legal acceptation of that term, however judicious or beneficial such contract might ordinarily be regarded. Had we arrived at a different conclusion on the last point, the question might have arisen, whether this action could be maintained on the present declaration, the only count in the writ, so far as appears, being upon the note, which is avoided by the plea of infancy, the same not having been ratified by the defend- ant after he became of age. The result to which we have come, however, renders it un- necessary to enter upon this inquiry. According to the provisions of the agreed case, there must be judgment for the defend- ant. THE PARTIES TO THE CONTRACT. JOHNSON V. NORTHWESTERN MTJT. LIFE INS. CO.i (59 N. W. 992, 56 Minn. 365.) Supreme Court of Minnesota. July 10, 1894. Appeal by the defendant, the North.westem Mutual Life Insurance Company, from an or- der of the district court of Hennepin county, Seagrave Smith, J., made August 16, 1893, overruling Its demurrer to the complaint. On October 25, 1888, the defendant insured the life of the plaintiff, Martin C. Johnson, then of Stoughton, Wis., in the sum of $1,000. By its policy it agreed to pay him that sum 20 years thereafter, or, in case of his death mean- time, to pay it to his representatives or as- signs 60 days after due proof of his decease. After 10 years he was to share in the surplus profits of the company arising from the pol- icy. After three or more annual premiums were paid, he was entitled to a paid-up, non- participating policy for as many twentieth parts of the $1,000 as he had paid annual premiums. He paid $23.29 on that date, and agreed to pay a like sum every sli months thereafter. He was then but 17 years of age. He paid seven of these semiannual install- ments; in all, $186.32. On December 19, 1892, immediately after he became of age, he served written notice on the insurance com- pany that he elected to avoid the policy, and offered to return it, and demanded a return of the money he bad paid. It was not repaid, and he soon after brought this action to re- cover it. His complaint stated these facts, and a copy of the policy was attached. De- fendant demurred on the ground that the com- plainant did not state facts suflScient to con- stitute a cause of action. The demurrer was overruled, and defendant appeals. ■ Lusk, Bunn & Hadley, for appellant. P. P. Lane and W. H. Briggs, for respondent, MITCHELL, J. This case was argued and decided at the last term of this coiu't 57 N. W. 934. A reargument was granted for the reasons that although the amount was small the legal principles involved were very im- portant; the time permitted for argument un- der our rules was brief; the case was do cided near the end of the term, without, per- haps, the degree of consideration that its im- portance demanded; and, on further reflec- tion, we are not satisfied that our decision was correct. The former opinion laid down the following propositions, to which we still adhere: (1) That the contract of insurance was of benefit to the infant himself, and was not a contract for the benefit of third parties. (2) The con- tract, so far as appears on its face, was the tisual and ordinary one for life insurance, on the customary terms, and was a fair and rea- sonable one, and free from any fraud, imfair- 1 Opinion of Buck, J., and dissenting opinion of GiifiUan, C. J., omitted. ness, or undue Influence on part of the de- fendant, unless the contrary is to be pre- sumed from the fact that it was made with the infant. It is not correct, however, to say that the plaintiff has received no benefit from the contract, or that the defendant has parted with nothing of value under it True, the plaintiff has received no money, and the de- fendant has paid none to the plaintiff; but the life of the former was Insured for four years, and if he died during that time the de- fendant would have had to pay the amount of the policy to his estate. The defendant carried the risk all that time, and this is the essence of the contract of insurance. Nei- ther does it follow that the risk has cost the defendant nothing in money because plaintiff himself was not one of those insured who died. The case is therefore one of a void- able or rescindable contract of an infant, partly performed on both sides, the benefits of which the infant has enjoyed, but which he cannot return, and where there is no charge of fraud, unfairness, or undue in- fluence on the part of the other party, unless", as already suggested, it is to be presumed from the fact that the contract was made with an infant The question is, can the plaintiff recover back what he has paid, as- suming that the contract was in all respects fair and reasonable? The opinion heretofore filed held that he can. Without taking time to cite or discuss any of our former decisions, it is sufficient to say that none of them com- mit this court to such a doctrine. That such a rule goes further than is necessary tor the protection of the infant, and would often work gross injustice to those dealing with him, is, to our minds, clear. Suppose a minor engaged in agriculture should hire a man to work on his farm, and pay him reasonable wages for his services. According to this mle the minor might recover back what he paid, although retaining and enjoying the fruits of the other man's labor. Or, again, suppose a man engaged in mercantile busi- ness, with a capital of $5,000, should, from time to time, buy and pay for $100,000 worth of goods, in the aggregate, which he had sold, and got his pay. According to this doctrine, he could recover back the $100,000 which he had paid to the various parties from whom he had bought the goods. Not only would such a rule work great injustice to others, but it would be positively injurious to the infant himself. The policy of the law is to shield or protect the infant, and not to debar him from the privilege of contracting. But, if the rule suggested is to obtain, there is no foot- ing on which an adult can deal with him, ex- cept for necessaries. Nobody could or would do any business with him. He could not get his life insured. He could not insm-e his property against fire. He could not hire servants to till his farm. He could not im- prove or keep up his land or buildings. In short, however advantageous other contracts might be to him, or however much capital he THE CONTRACT OF LN"SUKANCE. might have, he could do absolutely nothing, except to buy necessaries, because nobody would dare to contract with him for any- thing else. It cannot be that this is the law. Certainly, it ought not to be. The following propositions are well settled, everywhere, as to the resclndable contracts of an infant, and in that category we include all contracts except for necessaries: First. That, in so far as a contract is executory on part of an infant, he may always interpose his infancy as a defense to an action for its enforcement. He can always use his infancy as a shield. Second. If the contract has been wholly or partly performed on his part, but Is whoUy executory on part of the other party, the minor therefore having received no benefits from it, he may recover back what he has paid or parted with. Third. Where the contract has been wholly or partly performed on both sides, the infant may al- ways rescind, and recover back what he has paid, upon restoring what he has received. Fourth. A minor, on arriving at fuU age, may avoid a conveyance of his real estate without being required to place the grantee in statu quo, although a different rule has sometimes been adopted by courts of equity when the former infant has applied to them for aid in avoiding his deeds. Whether this distinction between conveyances of real prop- erty and personal contracts is founded on a technical rule, or upon considerations of poli- cy growing out of the difference between real and personal property, it is not necessary here to consider. Fifth. Where the contract has been whoUy or partly performed on both Bides, the infant, if he sues to recover back what he has paid, must always restore what he has received, in so far as he still retains it in specie. Sixth. The courts wiU always grant an Infant relief where the other party has been guilty of fraud or undue influence. As to what would constitute a sufficient ground for relief imder this head, and what relief the courts would grant in such cases, we will refer to hereafter. But suppose that the contract is free from aU elements of fraud, unfairness, or over- reaclimg, and the infant has enjoyed the benefits of It, but has spent or disposed of what he has received, or the benefits received are, as in this case, of such a nature that they cannot be restored. Can he recover back what he has paid? It is well settled in England that he cannot. This was held in the leading case of Holmes v. Blogg, 8 Taunt 508, approved as late as 1890 in Val- entini v. Canali, 24 Q. B. Div. 166. Some obiter remarks of the chief justice in Holmes V. Blogg, to the effect that an infant could never recover back money voluntarily paid, were too broad, and have often been disap- proved,— a fact which has sometimes led to the erroneous impression that the case itself has been overruled. Corke v. Overton, 10 Bing. 252 (decided by the same court), held that the infant might recover back what he had voluntarily paid, but on the ground that the contract in that case remained wholly ex- ecutory on part of the other party, and hence the infant had never enjoyed its benefits. In Chitty on Contracts (volume 1, p. 222), the law is stated in accordance with the decision in Holmes v. Blogg. Leake,— a most accu- rate writer, — in his work on Contracts (page 553), sums up the law to the same effect. In this country. Chancellor Kent (2 Kent, Comm. 240), and Reeves in his work on Do- mestic Relations (chapters 2 and 3, tit. "Par- ent and Child"), state the law in exact ac- cordance with what we may term the "Eng- hsh rule." Parsons, in his work on Contracts (volume 1, p. 322), undoubtedly states the law too broadly, in omitting the qualification, "and enjoys the benefit of it." At least a re- spectable minority of the American decisions are in full accord with what we have termed the "English rule." See, among others, Riley V. Mallory, 33 Conn. 206; Adams v. Beall, 67 Md. 53, 8 Atl. 664; Breed v. Judd, 1 Gray, 455. But many— perhaps a majority— of the American decisions, apparently thinking that the English rule does not sufficiently protect the infant, have modified it; and some of them seem to have wholly repudiated it, and to hold that although the contract was in all respects fair and reasonable, and the infant had enjoyed the benefits of it, yet if the in- fant had spent or parted with what he had received, or if the benefits of it were of such a nature that they could not be restored, still he might recover back what he had paid. The problem with the courts seems to have been, on the one hand, to protect the Infant from the improvidence incident to his youth and Inexperience, and on the other hand, to compel him to conform to the principles of common honesty. The result is that the American authorities— at least the later ones — ^have fallen into such a condition of conflict and confusion that it is difficult to draw from them any definite or uniform rule. The dis- satisfaction with what we have termed the "English rule" seems to be generally based upon the idea that the courts would not grant an infant relief, on the ground of fraud or undue Influence, except where they would grant it to an adult on the same grounds, and then only on the same conditions. Many of the cases, we admit, would seem to sup- port this idea. If such were the law, it is obvious that there would be many cases where it would furnish no adequate protec- tion to the infant. Cases may be readily imagined where an Infant may have paid for an article several times more than it was worth, or where the contract was of an im- provident character, calculated to result in the squandering of his estate, and that fact was known to the other party; and yet If he was an adult the court would grant him no relief, but leave him to stand the conse- quences of his own foolish bargain. But to measure the right of an infant in such cases by the same rule that would be applied in THE PABTIES TO THE COiJ TRACT. the case of an adult would be to fail to give due weight to the disparity between the adult and the infant, or to apply the proper stand- ard of fair dealing due from the former to the latter. Even as between adults, when a transaction is assailed on the ground of fraud, undue influence, etc., their disparity in intelligence and experience, or In any other respect which gives one an ascendency over the other, or tends to prevent the latter from exercising an intelligent and unbiased judg- ment, is always a most vital consideration with the courts. Where a contract is im- provident and unfair, courts of equity have frequently inferred fraud from the mere dis- parity of the parties. If this is true as to adults, the rule ought certainly to be applied with still greater liberality in favor of in- fants, whom the law deems so incompetent to care for themselves that it holds them incapable of binding themselves by contract, except for necessaries. In view of this dis- parity of the parties, ttus recognized by law, every one who assumes to contract with an infant should be held to the utmost good faith and fair dealing. We further thinl£ that this disparity is such as to raise a presumption against the fairness of the contract, and to cast upon the other party the burden of prov- ing that it was a fair and reasonable one, and free from any fraud, undue Influence, or overreaching. A similar principle applies to all the relations, where, from disparity of years, intellect, or knowledge, one of the par- ties to the contract has an ascendency which prevents the other from exercising an un- biased judgment, — as, for example, parent and child, husband and wife, guardian and ward. It is true that the mere fact that a person is dealing with an infant creates no "fiduciary relation" between them, in the proper sense of the term, such as exists be- tween guardian and ward; but we think that he who deals with an infant should be held to substantially the same standard of fair dealing, and be charged with the burden of proving that the contract was in all respects fair and reasonable, and not tainted with any fraud, undue influence, or overreaching on his part. Of course, in this as in aU other cases, the degree of disparity between the parties, in age and mental capacity, would be an important consideration. Moreover, if the contract was not in ail respects fair and reasonable, the extent to which the infant should recover would depend on the nature and extent of the element of unfairness which characterized the transaction. If the party dealing with the infant was guilty of actual fraud or bad faith, we think the infant should beallowed torecovertackallhehadpaid, with- out making restitution, except, of course, to the extent to which he still retained in specie what he had received. Such a case would be a con- tract essentially improvident, calculated to facilitate the squandering the infant's estate, and which the other party knew or ought to have known to be such, for to make such a contract at all with an infant would be fraud. But if the contract was free from any fraud or bad faith, and otherwise reasonable, ex- cept that the price paid by the infant was in excess of the value of what he received, his recovery should be limited to the difference between what he paid and what he received. Such cases as Medbury v. Watrous, 7 Hill, 110; Sparman v. Keim, 83 N. Y. 245; and Heath v. Stevens, 48 N. H. 251,— really pro- ceed upon this principle, although they may not distinctly announce it. The objections to this rule are, in our opinion, largely imag- inary, for we are confident that in practice it can and will be applied by courts and juries so as to work out substantial justice. Our conclusion is that where the personal contract of an infant, beneficial to himself, has been wholly or partly executed on both sides, but the infant has disposed of what he has received, or the benefits recovered by him are such that they cannot be restored, he cannot recover back what he has paid, if the contract was a fair and reasonable one, and free from any fraud or bad faith on part of the other party, but that the burden is on the other party to prove that such was the character of the contract; that, if the con- tract involved the element of actual fraud or bad faith, the infant may recover all he paid or parted with, but if the contract Involved no such elements, and was otherwise reason- able and fair, except that what the infant paid was in excess of the value of what he received, his recovery should be limited to such excess. It seems to us that this will sufficiently protect the infant, and at the same time do justice to the other party. Of course, in speaking of contracts beneficial to the infant, we refer to those that are deemed such in contemplation of law. Applying these rules to the case in hand, we add that life insurance in a solvent com- pany, at the ordinary and usual rates, for an amount reasonably commensurate with the infant's estate, or his financial ability to car- ry it, is a provident, fair, and reasonable con- tract, and one which it is entirely proper for an insurance company to make with him, as- suming that it practices no fraud or other unlawful means to secure it; and if such should appear to be the character of this con- tract the plaintiff could not recover the pre- miums which he has paid in, so far as they were intended to cover the current annual risk assumed by the company under its pol- icy. But it appears from the face of the pol- icy that these premiums covered something more than this. The policy provides that after payment of three or more annual pre- miums the insured will be entitled to a paid- up, nonparticipating policy for as many twentieths of the original sum insured ($1,- 000) as there have been annual premiums so paid. The complaint alleges the payment of four annual premiums. Hence, the plaintifC was entitled, upon surrender of the original policy, to a paid-up, nonparticipating policy THE CONTRACT OF INSUBANCE. for $200; and it therefore seems to us that, having elected to rescind, he was entitled to recover back, in any event, the present cash "surrender" value of such a policy. For this reason, as well as that the burden was on the defendant to prove the fair and honest character of the contract, the demurrer to the complaint was properly overruled. The result arrived at In the former opinion was therefore correct, and is adhered to, although on somewhat different grounds. Order af- firmed. THE FORM OF THE CONTRACT. GREEN T. LIVERPOOL & LONDON & GLOBE INS. CO. (60 N. W. 189, 91 Iowa, 615.) Supreme Court of Iowa. Oct. 5, 1894. Appeal from superior court of Cedar Rai)- Ids; Johu T. Stoneman, Judge. Action at law on a contract for insurance. The cause was tried without a jury, and the coui-t found the following facts and conclu- sions: "(1) That on the 7th day of Novem- ber, 1891, the parties orally negotiated a contract of insurance, by the terms of which, in consideration of thirty dollars, then paid by the plaintiff to the defendant, the defend- ant promised and agreed to insure the plain- tiff against damage or loss by fire to an amount not exceeding $2,500, plaintiff's household furniture, useful and ornamental, beds, bedding, linen, family wearing apparel, printed books and music, sUyer plate and plated ware, pictures, paintings, engravings, and mirrors and their firames, piano-forte or organ, stool and cover, sewing machine, fuel and family stoves, watches and jewelry in use, and all other family goods not otherwise named, including pamphlets, magazines, ser- mons, and othe- writings, at not exceeding actual value, for the term of three years from November 7, 1891, at noon, to the 7th day of November, 1894, at noon, and plain- tiff paid to defraidant the sum of thirty dol- lars, which the defendant received in full as consideration and compensation for said in- surance, which defendant still retains. (2) That at the time of negotiating said contract the plaintiff was a minister of the gospel, and rector of Grace Church, in Cedar Rap- ids, Iowa, and resided at No. 133 A avenue, in said city, said residence being a few feet distant from said Grace Church. (3) That the property described, being Schedule A of plaintiff's petition, was, as to each article, covered by said contract of insurance with defendant, and each article was at the date of loss of the value set out in said schedulb, aggregating in value ?727. (4) That said property so described was by the plaintiff, in the ordinary, usual, and necessary use of the same at the time it was destroyed by fire, kept by plaintiff in said chapel of Grace Church for its ordinary, necessary, and con- venient use as rector of said church. (5) That on January 24, 1892, while said prop- erty was so kept in said chapel of said church, said chapel took fire, and from said fire in said chapel aU of said property was thereby destroyed, of the value of $727. (6) That afterwards, February 15, 1S92, plain- tiff served on defendant an affidavit show- ing said loss, of which Schedule A. of the pe- tition is a copy, and demanded of defendant payment of said loss, which defendant re- fused to make, and still refuses. (7) That at the time of said va-bal negotiations for in- surance it was understood between the plain- tiff and the defendant that a written policy of insurance was to be made out by defend- ant and delivered to the plaintiff, and the same was so executed by the agent of de- fendant on the 7th day of November, 1891, and mailed at Cedar Rapids to the plaintiff the same night, which is Exhibit B of plain- tiff's petition, which the plaintiff received before loss, and has since retained, without objection, up to date of loss, and still holds said policy. (8) Prior to the execution of policy (said Exhibit B) the plaintiff held a policy issued by said defendant, which is Exhibit No. 1 of the evidence. (9) That dur- ing all the times mentioned in plaintiff's pe- tition the defendant was an insurance cor- poration for pecuniary profit, organized un- der the laws of Great Britain as a stocK insurance company, and doing business as such within the state of Iowa, under license issued by the auditor of Iowa, said permit being Exhibit No. 5 of the evidence, doing business in the state of Iowa as a cash stock insiuance company, and not as a mutual in- surance company. (10) From the foregoing facts I find as a conclusion of law that said written policy (Exhibit B of plaintiff's peti- tion) was issued in violation of the law of the state of Iowa, and is therefore void, fca- the reason that said policy does not set forth whether the defendant is a mutual or stock company, as required by law. That plain- tiff is entitled to recover on the oral agi-ee- ment Plaintiff is entitled to judgment in the sum of $727, with interest on said amount at the rate of six per cent per annum from February 15, 1892, and costs. John T. Stoneman, Judge." From the judgment the defendant appealed. Reversed. Mills & Keeler, for appellant ChSis. A. Clark, for appellee. GRANGER, C. J. As to the facts of the case there is no substantial dispute. In Jan- uary, 1889, the defendant eompany issued to the plaintiff a policy on the property speci- fied in the first finding of fact by the court with slight exceptions, among which is the item of "printed books." The aggregate amount of the policy was $2,000, and it was specific in this: that $500 of the amount was on a "library of books, pamphlets, magazines, sermons, and other writings," and the re- maining $1,500 on other items. November 7, 1891, the plaintiff applied to the agent of the company at Cedar Kapids, Iowa, for some additional insurance, saying he had been buy- ing a number of new books, among other things, which he wanted insured, and he asked to have the amount of his insurance in- creased $500. At the suggestion of the agent it was agreed that the former policy should be canceled, and a new one issued for the full amount of the insurance wanted, namely, $2,500, and in "blanket form," instead of being specific. In pursuance of this agree- ment the new policy issued, in form as agreed upon, and was sent to and retained uy plaintiff till the loss in question occurred. 10 THE CONTBACT OP INSURANCE These facts, with perhaps others, appear from the record, and are proper to be con- sidered with those found by the court in pass- ing upon the assi^ments of eri'or argued. It will be remembered that this action is upon the oral contract for insurance, and not upon the policy. The property for which recovery was sought was burned in Grace Chapel. Both of the policies referred to lim- ited the liability of the company to loss for the property described "while contained in the two-story brick and frame dwelling house, with a shingle roof, situated on No. 133 A avenue, Cedar Rapids, Iowa." Be- cause of this limitation there could be no recovery on the policy, for the building de- scribed was not Grace Chapel, but separate, and some feet from it To justify a recovery on the oral contract for insurance it is aver- red in the petition that the policy is void for th^«^ason that it "does not set forth whether jcfie company is a mutual or stock company, as required by law.V It is true that neither of the policies conformed to the provisions of Code, § 1703, to show whether the company issuing the policy was a mutual or stock com- pany, and much attention is given in argu- ment to the propositions whether or not the section is applicable to foreign insurance companies, and, if it is, whether the omis- sion renders the policy void so as to justify an action on the oral agreement We do not find it necessary to determine either of these questions, for, if it be conceded that the action on the oral contract may be maintained, the undisputed facts are against plaintifC's right of recovery. The contract, whatever may be its terms, was made on the 7th day of November, 1891, and that is the date of the last policy. The policy, though void as such, as an instrument of wi-iting contains the terms and conditions upon which the insurance was obtained. When plaintifC went to the agent for addi- tional insurance it was to be additional to what he then held, and it is a fact not to be questioned that the first policy then con- tained the understanding of the parties as to the terms of insurance. It had been delivered to plaintiff, ajid accepted and retained by him as embodying the contract or understanding. On the 7th day of November, 1891, he simply asked for additionsl insin-ance, and it was agreed that another policy should issue, and the changes to be made were clearly under- stood. Both parties then knew the condi- tions of the policy as to the location of prop- erty insmred, and no change in that respect was in any way suggested or considered. It was then clearly understood that a policy, with the terms as changed, was to issue, and it did issue, and was accepted. Had the policy shown on its face that it was a "cash stock company," it would have constituted the contract of the parties. And why? Be- cause it contained the terms agreed upon by the parties. The terms expressed in the pol- icy are just as clearly those agreed upon by the parties as if the instrument had shown that It was a stock company. There is no pretense in the record of any other under- standing than as expressed in the policy. There Is no finding by the suiJerior court that the oral contract was in any way differ- ent from the policy, and, if the oral agree- ment contained the same limitation as to the location of the property, the liability for loss would have been the same as if the policy had been valid. The case of Barre v. In- surance Co., 76 Iowa, 609, 41 N. W. 373, is quite in point. In that case thgre was a breach of a contract to Issue a policy. A loss occurred, and an action was brought on the agreement to Issue one. It Is there held that the parties were bound by the terms the policy would have contained had it issued. Under plaintifC's contention in this case, that the policy is void, it is as if none had issued; and there is not a word of testimony In this record, outside of the policy itself, except of an agreement to Issue a policy of insurance. The right of action upon the oral promise Is because of a faDure to issue a valid policy. The terms of the oral agreement are the same as if the policy had been valid. The minds of the parties met on the terms and condi- tions as expressed in the policy. The Barre Case goes even further, and says: "The law will presume that the minds of the contract- ing parties met upon a contract containing the terms and conditions of the policy usually Issued by defendant covering the risks." See Smith V. Insurance Co., 64 Iowa, 716, 21 N. W. 145. In this case the parties actually put In writing the terms and conditions of their agreement The writing, when unquestioned, as in this case, as to its containing the terms as agreed upon. Is conclusive upon the ques- tion. Appellee urges that the restriction as to the place Is a mere matter of description, and that the company Is liable, notwithstanding. If the property is destroyed at another place "in its ordinary, necessary, and convenient use," and the case of Longueville v. Assur- ance Co., 51 Iowa, 553, 2 N. W. 394, with other like cases, are cited In support of the rule. In the Longueville Case certain wear- ing apparel and household goods were in- sured, "all contained in a two-story frame dwelling." Some of the wearing apparel was worn away, and burned while In such use, and the words, "contained in • * • a frame dwelling," were held to be words of description, and that the parties used them as indicating the place of deposit when not in use. This policy is different, and limits the liability of the company for loss on the property "while contained In the two-story brick and frame dwelling house," etc. This contract is widely different from those In the cases cited. The evidence shows that the property was kept sometimes In the chapel and sometimes in the house, and parts of 11 THE FORM OF THE CONTRACT. 11 used in both places; and if we assume tha% the parties, when making the contract, knevr of this, we have additional reason for limit- ing the liability to losses while in the house. It is sufficient to say tnat the liability is thus limited, and the courts have no right to ex- tend it We think, imder the undisputed facts of the case, there should have been a judgment for defendant, and that entered for the plaintiff is reversed. 12 THE CONTRACT OF INSURANCE. NEWARK MAOH. CO. v. KENTON INS. CO. (35 N. B. 1060, 50 Ohio St. 549.) Supreme Court of Ohio. Oct. 31, 1893. Error to circuit court, LicMng county. Action on a policy of insurance by the Newark Machine Company against the Ken- ton Insurance Company of Kentucky. A verdict and judgment for plaintiff having been reversed, It brings error. Reversed. The action below was brought by the Newark Machine Company against the Ken- ton Insurance Company of Kentucky to re- cover the amount of a policy of fire insur- ance. The issue tried was whether the con- tract of insurance had been consummated by the parties. The plaintiff prevailed in the court of common pleas, but the judgment there obtained was reversed by the circuit court, and error Is prosecuted here to the judgment of that court. A further statement of the facts that are pertinent to the ques- tions Involved is contained in the opinion. Kibler & Kibler, for plaintlfC in error. R. D. Marshall, for defendant In error. WILLIAMS, J. The facts of the case, as shown by the record, and about which there is no controversy, are substantially as fol- lows: On the 30th day of June, 1884, the plaintiff, a corporation, owned and was oper- ating a large manufacturing plant in the city of Newark, and had been the owner and operator of It for several years. The defendant, a fire insurance company, then had an established agency in Newark, in the charge of H. D. Murphy, who was also the agent of a number of other fire insmrance com- panies, among them the Norwich Union Com- pany. He was a regularly commissioned agent of these companies, and was provided by them with blank applications, and policies diily signed by the proper officers, to be filled up and countersigned by him as agent, and delivered in the course of the business of his agency; and also with registers in which to keep a record of the business, and blanks for making reports of the same to the re- spective companies. He had, during the ex- istence of his agency, issued a large num- ber of policies of different companies rep- resented by him to the plaintiff, insuring its buildings, machinery, and stock against loss or damage by fire, one of which was a policy on the stock for $5,000 in the Norwich Union, Issued a short time prior to June 30, 1884. There was an understanding between the managing officer of the plaintiff and Murphy that the latter should keep the insurance of the plaintiff up to a certain amount, either by renewals or new policies in good com- panies represented by him; and Ms course of dealing with the plaintiff under that under- standing was to charge up the amount of the premiums to the plaintiff when policies were issued or renewed, and have periodical settlements, usually once a month, when the premiums would be paid. The Norwich Union, not desiring to carry so large an in- surance on the plaintiff's stock, a few days prior to the 30th of June, 1884, directed Mur- phy to reduce its risk to $2,500. He there- upon, on the 30th day of June, 1884, filled up for that amount one of the blank policies which that company had furnished him, duly signed by its proper officers, and counter- signed it as agent, and at the same time fiUed up, for the same amount, one of the blank forms of policy vrith which the defend- ant company had supplied him, duly signed by its officers, and countersigned the same as its agent, ready for delivery. He made the customary entries of the issuing of the policies in the registers of the respective companies, and in that of the Norwich Union an entry also of the cancellation of the $5,000 policy. In place of which the two policies he had so filled up were intended to be substituted. On the 2d day of July, 1884, he forwarded to the defendant, at Its home office. In Covingrton, Ky., what is called a "daily report," in which he gave the number of the policy he had written for the plaintiff, its date, amount, and diu^tion, the rate and amount of the premium, a description of the property insured, and other particulars of the risk. This report was received at the home office July 3, 1884. The premium on the $5,000 policy had been fully paid by the plaintiff, and when the entry of its cancel- lation was made the policy had run but a short time. The unearned or return pre- mium was carried to the credit of the plain- tiff on the books of the agent, and the amount of the premiums due on the two new policies was charged to the plaintiff by the agent in accordance with his previous cus- tom. At the next regular settlement be- tween the plaintiff and the agent, which was made July 7, 1884, there was due him from the plaintiff, on account of premiums on various policies, the sum of $438.55, which amount included the balance due on the policy of the defendant. The amount due on the accounf was then paid by the plain- tiff. When the policy of the defendant was written, and the cancellation entered of the Norwich Union policy, the latter was In the possession of F. S. Wright, cashier of the First National Bank of Newark, as collat- eral. Wright was also vice president of the plaintiff, and looked after Its insurance. On the 30th day of June, 1884, after writing and executing the two new policies, and entering the cancellation of the one for which they were intended to be substituted, the ag^nt called at the bank to see Mr. Wright, take up the policy so held by him, and deliver the new oiies in its place. Wright was absent, and the agent failed to see him. He caUed several times within the next day or two with like results, and did not see Wright until the evening of July 3, 1884, after the b-'uk had closed. The agent then informed Wright that at the request of the Norwich Union Company he had canceled its policy for $5,000 which Wright then held, and is- sued to the plaintiff in its place two other THE FORM OF THE CONTRACT. 13 policies for ?2,500 each, which he proposed to deliver, and take up the canceled policy. Wright replied that was all right; all he wanted was to have it so that the amount was the same; and he (the agent) could call at the bank any time when it was open, and make the exchange, and if he (Wright) was not in, the person in charge would make the exchange for him. There appears to have been no reason why the exchange was not made at the time of the interview on the evening of July 3d, except that the bank was then closed. No claim was thereafter made by the plaintiff to the canceled policy; nor was there any question, at the trial, of Wright's authority to act for the plaintiff, or of that of the agent, Murphy, to act for the defendant The property was totally de- stroyed by fire on the 5th day of July, 1880. At that time the new policies had not been actually delivered, or the old one taken up. Immediately after the fire, the defendant was notified of it by telegram from the agent, who received from the defendant the follow- ing response: "Youfs received. Have tele- graphed you for list of companies on stock with us. The list sent to Cincinnati made no mention of Kenton, and we were willing to be ignored. Gteorge C. Coker, Secretary." It was admitted on the trial that proof of the loss was duly made and filed with the de- fendant; that Wright then had no interest tn the claim; and, if the plaintiff was entitled to recover, the amoimt of the recovery should be $2,500, with interest from Septem- ber 30, 1884. It does not appear that the names of the companies in which the new policies had been written were mentioned in the inter- view between Wright and the defendant's agent, nor the rate or amount of the pre- mium, nor the duration or conditions of the policies; and it is claimed by the defendant that there was, theref(»'e, no mutual assent of the parties to either of those terms, and so no completed contract of insurance be- tween them. It is undoubtedly true that those are essential elements of a contract of insurance, and, if there was not a meeting of the minds of the parties upon them, the contract was not consummated, and no risk attached. But it is equally true that the agreement need not be expressed in words; it may be implied from the circumstances, and conduct of the parties. If the case of Cockerill v. Insiurance Co., 16 Ohio, 148, in which it was held that a policy of insurance, to be valid, must be in writing, was not vir- tually overruled by the case of Insurance Co. V. KeUy, 24 Ohio St 345, as it was said to have been by Okey, J., in the case of In- surance Co. V. Wall, 31 Ohio St 633, it has been so qualified by these subsequent cases as to limit the rule it announced to policies in their strict technical sense, and leave un- affected by it parol contracts of insurance. It is now well settled that a policy is only evidence of the contract, and the latter may be shown by parol, when the policy has not been written, or is withheld, unless such con- tract is forbidden by statute or a provision of the company's charter which is brought to the notice of the other contracting party, (Ostr. Ins. §§ 13, 14; Richards, Ins. § 140; Insurance Co. v. Shaw, 94 U. S. 574; In- surance Co. V. Kelly, supra; Palm v. Insur- ance Co., 20 Ohio, 529, 537;) and, as in other cases of parol contracts, the terms of the agreement, and the assent of the parties to them, may be shown by their acts and the attending circumstances, as well as the words they have employed. There was, in this case, no express agreement in regard to the property to be insured by the new pol- icies. The property was not mentioned in the intCTview between the defendant's agent and Wright But, as it was agreed the new policies were to be exchanged for the can- celed policy, it must have been as clearly understood as if it had been expressly stated that they were to cover the property includ- ed in the canceled policy. So, in regard to the rate and amount of the premium, and form and conditions of the policy. It is not claimed that the conditions of the defend- ant's policies, or its rate of insurance, are different from those of like companies; and it is generally known that the form and con- ditions of fire policies in use by good com- panies do not differ substantially, and the rates of insurance are established and imi- form on the same classes of property. And, where nothing is said, in the negotiation for insurance, about special rates or conditions, it may be presumed that those which were usual and customary were intended. In Richards on Insurance (2d Ed., § 42) it is laid down as a general rule that, "whether the contract of insurance is closed by parol or by a preliminary binding receipt, the legal presumption is that the usual pol- icy is to follow." And in the preceding section the same author says that it is not necessary that all the particulars of a contract should be made the subject of express stipulation, "for it may well be un- derstood, in the absence of express declara- tion to the contrary, that the usual form of policy is acceptable to both parties." It was held by the supreme coiu:t of Minnesota, in Salisbury v. Insurance Co., 32 Minn. 460, 21 N. W. 552, that "upon an oral contract of insurance, where nothing is said about con- ditions, if a policy is to be issued, the par- ties are presumed to intend that it shall contain the conditions usually inserted in policies of insurance In like cases." And in Eames v. Insurance Co., 94 U. S. 629, Mr. Justice Bradley says: "It is sufficient if one party proposes to be insured, and the other party agrees to Insure, and the subject, the period, the amoimt, and the rate of insurance is ascertained or understood, and the premi- um paid if demanded. It will be presumed that they contemplate such form of policy, containing such conditions and limitations, as are usual in such cases, or have been used before between the parties. This is the sense 14 THE CONTEACT OP INhUEANCE. and reason of the thing, and any con- trary requirement should be expressly noti- fied to the party to be affected by it" Upon the facts of the present case there can be but little doubt that the contract of insurance made by the defendant, through Its agent, with the plaintiff, was complete in all its terms. The plaintiff had previously arranged witii the agent to lieep Its insur- ance up to a certain amount in good com- panies, for which he was authorized to act This arrangement TirtuaUy left the selectioQ of the companies to the discretion of the agent; and, acting imder it, he had written the policy of the defendant and the new IKjlicy of the Norwich Union Company, each for $2,500, and duly countersigned both, ready for deliyery to the plaintiff, and entered the cancellation of the policy which Wright had in his possession before the interview of July 3d. The policy of the defendant was then complete, containing a description of the property, the amount, commencement and duration of the rislc, the rate and amount of the premium, and all the terms and condi- tions usual In such policies. This jrolicy, and the new policy of the Norwich Union, the agent proposed to Wright to exchange for the canceled policy, without condition or qualification. The proposition was Immedi- ately assented to and accepted without any qualification or condition whatever. The terms of the contract of insurance thus pro- posed by the defendant, through its agent, were definite and certain in every particular. They were those set forth in the policy. The acceptance was as laroad as the proposition, and was, therefore, an acceptance of all the terms and conditions of the policy as it was written. That the plaintiff chose to accept the proposition unqualifiedly without further inquiry or examination affords the defend- ant no groimd for claiming the contract was, on that account, incomplete. The only rea- son the exchange was not then made was. that the canceled policy was locked up la the bank. The parties evidenfly regarded the ex- change as complete, and thereafter the agent was a mH-e custodian of the policy in ques- tion for the plaintiff, and the actual handing of it over was not essential to the risk. Ef- fect will be given to the intention of the parties, and what their conduct shows they considered a delivery must control in determining whether it was made. Bid. Ins. § 149; Dibble v. Assurance Co., 70 Mich. 1, 37 N. W. 704; Bodine v. Insurance Co., 51 N. Y. 117; 11 Amer. & Eng. Enc. Law, p. 285. It is quite evident the agent con- sidered the policy of the defendant in fuU force. He reported it as such to the com- pany; and that the latter so treated it, even after the fire, is shown by its tele- gram to the agent, inquiring what compa- nies were "on stock with us." The policy was on the stock of the plaintiff in its manu- factory. The manual siurender by Wright of the policy in his possession was not, we think, necessary to effect its cancellation. His assent to the cancellation made by the agent was sufficient It then ceased to be of any force, and was so treated by the par- ties. The only other ground upon which it is claimed the defendant is not liable is that the premium was not paid until after the loss occurred. Murphy was the duly-com- missioned agent of the defendant, authorized to make contracts of insurance, coUect pre- miums, and issue and renew policies; and to that end was famished by the defendant with printed forms of policies, signed in blank by the president and secretary of the comi)any, to enable him, without conference with them, to countersign and issue the ped- icles in behalf of the company. It Is well settied that such an agent Is the general agent of the company, and may, in his deal- ings with those he insures, waive payment in cash ot the prwnlums, and, indeed, any of the conditions of the i)olicy, except wh«i a restriction upon his authtwity is in some way brought to the knowledge of the Insured. In a recent and valuable work on Insurance it is said that a fire policy "does not ordina- rily make the payment of the premium a condition precedent to the validity of the con- tract, and a general ageat may, of course, extend credit to the insured or not, as he chooses. The general custom, whCTe credit is given, is for the agent to do so on his own responsibility. But, in case the agent should make default in accounting to the company, the policy will neverthdess be valid. And though the policy provide that it shall not take effect until the premium Is paid ia cash, the general agent has power to waive the premium, and will be held to have waived it if he delivers the policy without enfor- cing payment" Richards, Ins. (2d Ed.) § 95. And In section 93 of the same work that au- thor says: "An agent of a life company, who Is intrusted with the business of closing the contract by delivering the policy. Is held to have an Implied authority to determine how the premium then due shall be paid, whether by cash, or, as is sometimes done, by giving credit; in which case the agent becomes the creditor of the insured, and Uie debtor of insurer. In that event, though the agent subsequentiy defaulted, and the money never reached the comJ)any, the policy would still be binding. By the weight of authority the agent is held to have this discretionary power, although the policy in terms denies it But this is based ui)on his possession of the document for purposes of delivery, and his instructions to deliver it; and conse- quentiy his power does not extend to subse- quent premiums or premium notes." Bodine V. Insurance Co., 51 N. Y. 117. The authori- ties on this subject are extensively collected In that very convenient, and almost indis- pensable, work, the American & English En- cyclopedia of Law, (volume 11, p. 333.) The waiver of the payment of the premium In THE FORM OF THE CONTRACT. 15 cash is an act within the exercise of the agent's general authority to issue poliries and collect the premiums, and such waiyer may be either express or implied; and when, as in the case before us, it has been the custom of the agent, under an arrangement with the Insured by which the latter's insur- ance should be kept up to a certain amoimt by renewals or new policies, to charge the in- sured with the premiums as policies were Issued or renewed, and have periodical set- tlements, when the premiums would be paid, a credit for a premium so charged to the next period of settlement may be fairly im- plied. We see no reason, upon the facts of this case, why the plalntlfif should not recover, as it did in the court of common pleas. The judgment of tbe circuit court is therefore reversed, and that of the common pleas affirmed. 16 THE CONTRACT OF INSURANCE. SALISBURY et al. v. HBKLA FIRE INS. CO. OF MADISON, WIS. (21 N. W. 552, 32 Minn. 458.) Supreme Court of Minnesota. Nov. 29, 1884. Appeal from an order of the district court, Heunepin county, denying motion for a new trial. Atwater & Hill, for appellant. J. S. Root, for respondents. GILFILIiAN, C. J. Defendant, by its agent at Minneapolis, made orally a contract with plaintiffs, acting by their agent, insuring plaintiffs' building used as a manufactory in the sum of $150, and the stock and machin- ery therein in the sum of $350, against loss by fire, for a premium at the rate of 6 per cent, on the amount of Insurance for one year, the risk to commence at once,to-wit, February 17, 1883; a written policy to be made and deliv- ered as soon as could be done. The premium was not then paid, and nothing was said as to when it should be. On the night of February 18th, the manufactory then run- ning, the property insured was destroyed by fire. On the morning of the 19th, after the fire, defendant's agent delivered to plaintiffs' agent a policy of insurance. February 23d, plaintiffs paid the premium. In the oral agreement nothing was said about any con- ditions or restrictions of insurance. In the policy delivered there was a condition that it should be void if the manufactory should run at night or overtime, or cease to be operated, without the consent of defendant indorsed on the policy. The controversy is as to whether that condi- tion attached to the contract of insurance un- der which the loss occurred. Was that con- dition a part of the contract existing at the time of the fireV Unless it was, it has no in- fluence on the rights of the parties. Whether it was or not must be determined by what was said between them or agents when the Insurance was effected. The written policy made out by the defendant after the fire, of course, cannot be conclusive. Indeed, having been made after the Uability accrued, It would be no evidence of the contract at all, were it not for Its delivery^ to and retention by plain- tiffs. Such delivery and retention may be taken as an admission by plaintiffs that it set forth the terms of the contract as agreed on, which might be rebutted by proof of what the contract actually was. And in view of the fact indicated by the evidence, that the plain- tiffs did not read It, it would not be very strong evidence as an admission. It stands on an entirely different footing from a policy delivered and accepted before Hihe loss. For in that case, if there be no fraud or mistake, the policy is the contract, (from the time of its delivery, at any rate,) no matter what may have been the negotiations which led to it, and proof of such negotiations is not admissi- ble to contradict its terms. This policy did not exist and was not the contract at the time of the fire, when defend- ant's liability accrued. The only contract then in force was oral, and the rights of the parties must be measured by it. Upon an oral contract of insurance, where nothing is said about conditions, if a policy Is to be is- sued the parties are presumed to intend that it shall contain the conditions usually inserted in policies of insurance in like cases, or as have been before used by the parties. That a particular condition is usual must be shown by the party who insists upon it, who has the affirmative. There was no evidence that such a condition as this is usual. Order affirmed. THE FORM OF THE CONTRACT. 17 WIEBBLER T. MILWAUKEE MECHAN- ICS' MUT. INS. CO. (16 N. W. 363, 30 Minn. 464.) Supreme Court of Minnesota. June 14, 1883. Appeal from a judgment of the district court, Scott county. O'Brien & Wilson, for appellant. R. A. Irwin, for respondent. GILFILLAJJ, C. J. Action on a contract to insure. From the admissions in the pleadings and on the trial, and from the evidence, the referee was justified in find- ing, as he did find, that plaintiff held de- fendant's policy (about to expire) insuring his dwelling for three years for the sum of ^250, and that before it expired the agent of defendant, on its behalf, agreed orally with plaintiff to renew it, increasing the amount on the dwelling to $400, and extend- ing it so as to cover the furniture In the ELIi.SSlL.CAS.IiAW INS. — 2 amount of $250, and the barn to the amount of $100. Nothing being said to the contrary, the presumption would be that the renewal was to be for the same length of time and the same rate of premium as in the original policy, and the referee found the fact ac- cordingly. This makes a good contract to insure for the term of three years. Defend- ant claims that the contract was within the statute of frauds and void. There is in- cluded in the statute "every agreement that by its terms is not to be performed within one year from the making thereof." This, of course, does not include an agreement that may, in accordance with its terms, be fully performed and ended within the year; as where the thing to be done depends on a contingency that may happen within the time. This is the case with a contract to insure where the insurance is to commence within the year. Judgment affirmed. 18 THE CONTEACT OF INSUBANCE. INSURANCE CO. v. BUTLER. (38 Ohio St. 128.) Supreme Court of Ohio. Jan. Term, 1882. Error to district court, Holmes county. Critchfield & Graham, for plaintiff In error. Stilwell & Hoogland, for defendant in error. McILVAINE, J. Whether the policy of in- surance in this suit is valued or open, is the sole question in this case. A policy of insurance is essentially a con- tract for indemnity in case of loss. Wager policies are contrary to public policy. The insured must have an interest in the subject of the insurance, — an interest in its preserva- tion. In case of loss, his contract rightfully entitles him to compensation, — ^nothing more. The reason upon which this principle rests, is the prevention of fraud and crime, by remov- ing all induc.?ment and temptation to commit them, which would naturally arise from the great disparity between the consideration paid and the indemnity received by the insured. This disparity, however, does not amount to inadequacy, or even a suspicion of fraud, be- cause of the supposed remoteness of the con- tingency of loss; nevertheless its existence re- quires the utmost good faith on the part of the insured. While these considerations do not, in the least, exempt the insurer from lia- bility on his contract, they do show that, in the absence of a contract to the contrary, the amount of recovery on a policy of insurance should be limited to the actual loss sustained by the insured on account of the risk against which the policy was taken. In other words, a policy of insurance must be regarded as an open one, unless it appears to have been the intentioi. of the parties to the policy, upon a fair and reasonable construction of its terms, to value the loss, and thereby fix, by con- tract, the amount of recovery. Mr. Wood, in his treatise on Fire Insur- ance (section 41), says: "Valued policies are those in which both the property insured and the loss are valued, and which bind the in- surer to pay the whole sum insured, in case of total loss. They may be said to be poli- cies in which the insurer himself, at the time of making the policy, assesses the damages in case of total loss, unless fraud, inducing an overvaluation on the part of the assured, is established." And further along in the same section he says: "If there is anything in the policy that clearly indicates an intention on the part of the insurer to value the risk and the loss, in whatever words expressed, the policy is valued, otherwise it is open." Again: "No particular form of expression is neces- sary; the intention of the parties, gathered from the whole instrument, must determine the roatter." Fuller v. Insurance Co., 18 Pick. 523. It has been decided that a policy of a com- pany whose charter limited its liability to a certain proportion of the actual value of the property insured, which refers to the value of the property as stated in the application of the insured, is a valued policy. Phillips v. In- surance Co., 10 Cush. 351. Other cases go so far as to hold, generally, that a policy which refers to the valuation of the property as it appears in the application, which is made a part of the policy, is a valued one. Nichols V. Insurance Co., 1 Allen, 63; Phoenix Ins. Co. V. McLoon, 100 Mass. 475. Without expressing an opinion as to the soundness of such construction when nothing further appears in the policy, we are satisfied that the policy before us, which contains the ftirther stipulation, that "said Farmers' Insur- ance Company hereby agrees to make good unto the said assured, his heirs, executors, administrators, or assigns, all such loss or damage, not exceeding in amoimt the several sums insured, as shall happen by fire or light- ning to any of the aforesaid property, from the 28th day of March, 1873, at 12 o'clock at noon, to the 28th day of March, 1878, at 12 o'clock at noon, and to be paid ninety days after due notice and proofs of the same shall have been made by the assured and received at this oflice, with the terms and provisions of this policy," shows that it was not intend- ed by the insurer to make the sum assured the measure or value of the damages, al- though the loss might be total. Proofs of loss or damage here required as a condition pre- cedent to the payment, refer to cases of total as well as partial losses. The amount of li- ability on the policy was thus left open to inquiry, limited, however, by the amount of insurance named in the policy. The court of common pleas, therefore, erred in rejecting testimony offered by the defend- ant below as to the amount of actual loss. And the district court erred in affirming the judgment of the common pleas. Judgments reversed and cause remanded. THE PORM OF THE CONTRACT. 19 FULLER V. BOSTON MUTUAL FIRE INS. CO. (4 Mete. 206.) Supreme Judicial Court of Massachusetts. Suffolk and Nantucket. March Term, 1842. This was an action of assumpsit, in which the plaintiff declared on the two policies of insurance and the award hereinafter men- tioned. The case was submitted to the court on the following facts agreed by the parties: The defendants are a corporation estab- lished by St. 1838, c. 192, and are subject to the provisions of Rev. St c. 37, §§ 24-39, with authority to "insure, for a term not ex- ceeding seven years, upon any building with- in this state, any amount not exceeding three fourths of the value thereof." On the 8th of December, 1838, Peter C. Jones was the owner of a paper mill and the water wheels attached thereto, situate in Watertown, and on that Say the defendants executed to said Jones (who was then one of their directors) the policy which is the sub- ject of this action; whereby, in considera- tion of his paying a premium of $35, and of his premium note for the same sum, and of his binding himself to pay, in addition, such farther sum or sums as might be assessed on him by the defendants, pursuant to their hy-laws, but not exceeding $140, they insured said Jones $2,000 upon said paper mill and water wheels, for one year. The policy stat- ed that said $2,000 was "not more than three fourths of the value of said building and ■wheels, as appears by the proposal of said Jones, lodged with the secretary of this com- pany;" and said Jones, in his proposal for insurance, did state the estiir ated value of said mill and wheels, exclusive of the land, to be $3,000. The policy was made on said estimate; a committee of said insurance company having previously visited and ex- amined the mill and wheels, in company with said Jones. Upon the face of the policy, and executed at the same time, was the following assign- ment to the plaintiff: "In case of loss, pay to Alexander Fuller, mortgagee. Peter C. Jones. Approved: Lemuel Blake, Presi- dent." The plaintiff, at the time of said as- signment, and at the time of the loss, was interested in said insured property, to the amount of $2,500, as mortgagee. The by-laws of said insurance company were printed on the sheet that contained the policy. By the seventh article of these by- laws, "the president shall examine alone, or jointly with the monthly or any other di- rector, all the buildings or other property In the city of Boston, which may be pro- posed to be insured, and fix the sum to be taken thereon, and the rates of insurance." On the 2d of May, 1839, a loss of the In- sured property occurred by fire, of which the defendants had due notice In writing; and on the 11th of said May, the question of damages upon this policy (and also upon an- other policy of $3,300, upon the machinery, stock, &c. in said mill) was submitted, by said Jones and the defendants, to referees, by a written agreement, by which the award of the referees was to be made in writing, and to be final and binding on both parties. The referees gave notice to the parties, and on the 13th of said May, examined the prem- ises, and returned their award in writing, as follows: "To the President of the Boston Mutual Fire Insurance Co.: Sir: The un- dersigned, having viewed the premises at Watertown, owned by Peter C. Jones, lately destroyed by fire, and insured at your oflBce, for the sum of $2,000 on the building and wa- ter wheels, and $3,300 on the machinery, &c. find that the fire was very destructive to the property, amounting to about a total loss of the whole insured; and from the experience we have had in building and operating paper machinery, and the cost and actual value of such buildings to the owner, we think that the building could not have been worth less than $2,8(X) to Mr. Jones, to operate the ma- chinery in. Therefore we make an award, that Mr. Jones is entitled to the whole amount insured." A copy of this award was delivered to said Jones, by the defendants, at his request, immediately upon its being re- turned by the referees. As the defendants refused to abide by the award, the plaintiff commenced the present action, on the 9th of July, 1839. The parties afterwards made a settlement of the policy upon the machinery and stock. The judge who presided at the trial, at March term, 1841, ruled that the award afore- said was obligatory on the defendants, and that the estimate of the value of the insured property, in the proposal and policy, was conclusive, and must be taken to be the true value. Whereupon the case was taken from the jury, under an agreement, that if the whole court should determine that the award is binding on the defendants, in this action, or that the valuation in the policy is con- clusive, then the plaintiff should have judg- ment; otherwise, that the action should stand for trial. Goodrich & Barrett, for plaintiff. C. P. Curtis, for defendants. SHAW, C. J. Assumpsit on a policy of insurance against fire, in which the plaintiff relies upon the original cause of action, and also on an award. The plaintiff sues, in ef- fect, as assignee; but as the assignment was made with the consent of the defendants, and as a part of the original contract, and as it is found that the plaintiff was interested, as mortgagee, to the amount of the whole sum Insured, we see no reason why he can- not maintain the action in his own name; and his right so to do ha.s not been con- tested on that ground. Several questions have been argued; one 20 THE COJfTRACT OF INSURANCE. of them, and a principal one, is wliether the valuation of the property, as stated in the policy, under the clrcumstanceSi is to be deemed conclusive evidence of the actual value, for the purpose if adjusting the loss. It is not contended that there was any de- signed or fraudulent over-valuation, or any collusive valuation, or any wilful misrepre- sentation of the value. The case arises upon a policy made by a mutual insurance com- pany, that had no authority to insure over three fourths of the value of the buildings. In regard to all property lying out of the city of Boston, the mode taken to ascertain the value was this: the assured made a statement in writing — ^in answer to certain standing questions, in compliance with the by-laws of the company — of the situation, cir- cumstances, and value of the buildings pro- posed to be insured, which was filed and re- mained with the company. By the 7th arti- cle of the by-laws, it would be the duty of the president to visit and examine the build- ings, alone or jointly with a director, and fix the sum to be taken thereon, and the rates of insurance. As this company was estab- lished at Boston, it was to be expected that the greater proportion of risks would be taken in Boston; and the by-laws were adapted to meet that expected state of things; but they made no special provision for examining buildings out of the city. But this indicates the general policy of the com- pany; and in point of fact, it appears, in the present case, that a like examination was made by a committee of the directors, and for the like purpose. In determining what amount shall be in- sured, the company necessarily determine the value of the building, or rather they fix a valuation, over which it shall not be rated, for the purpose of insurance. Being limited to insure not exceeding three fourths of the value, in determining the sum to be insured, they by necessary consequence fix a valua- tion at such a sum, ■ that the sum insured shall not exceed three fourths of it. The re- sult is, that as the valuation is thus proposed on the one side, and after the proposition is considered and modified, it is acceded to on the other, and the amount insured, and the rate of premium, assessment and liability, established on the same basis, it is, in the highest sense, a valuation by mutual agree- ment. Then the question is, whether a valuation thus deliberately and carefully made by mu- tual agreement, as a part of the original ne- gotiation—when each party is independent of the other, and at liberty to contract or not, as they are or are not respectively satis- fied with the terms— shall, in the absence of all fraud, collusion and misrepresentation, be taken as the best evidence of the actual value of the premises insured. See Borden V. Insurance Co., 18 Pick. 523. The same reason, which applies to other cases of contract, applies to this; and the general rule is, that parties capable of con- tracting, and who enter into a contract, with- out fraud or imi>osition, are bound by law to abide by it. One of the principal objections is, that the defendants are a corporation, and that a cor- poration can only act within the scope of the authority conferred upon them; and that by their act of incorporation, this company can only Insure three fourths of the value of the property; and if they can show that a contract, in Its terms proposes to bind them to a responsibility for a greater amount, they may show it in defence, and reduce the amount to that, for which alone they can make themselves liable. This, as I un- derstand it, is the strength of the argument But admitting its full force, we think It does not shake the position, that a valuation, fairly and deliberately made, is binding on them. The defendants were Incorporated for the express and indeed for the sole pur- pose of insuring each other against loss by fire. Like all other trading or negotiating corporations, being invested with power to make a particular class of contracts, they are Invested with all the incidental powers necessary to carry Into effect the objects and purposes for which the corporation was cre- ated. In giving them power to insure a cer- tain proportion of the value of buildings, the legislature necessarily clothed them with the power, at some time and in some mode, to determine such value, or to enter into suitable and proper arrangements for fixing it. Whether this shall be done by their own ofilcers, or by referees mutually agreed on; whether before or after the contract entered into; is a question of expediency, not of power. If they had not power, in some mode, to fix the value, they never could make an adjustment which might not be overreach- ed by a suit, in which the question of value must be submitted to a jury. Such valua- tion by the appraisement of indifferent men, or such adjustment after a loss, would al- ways be open to the same objection as this valuation; which Is, that though the officers of the corporation have assented to the val- uation, yet if it is an over-valuation, or if, in other words, it can be shown, to Ihe satisfac- tion of a jury, to be an over-valuation, it is; void as against the corporation. But we think the true answer is this: that a valua- tion deliberately and honestly fixed by agree- ment, a valuation by which the premium and assessments to be paid by the assured are fixed, as well as the amount to be paid by the company in case of loss, is the best evi- dence of the actual value. Suppose a claim on a policy for a loss, and that the company might perhaps have successfully defended, on the ground that the loss was one for which they were not liable— as by fire caused by civil war, or insurrection— and the parties should agree to an adjustment by compro- mise or arbitration: Such adjustment would, we think, be binding; and yet its binding THE FORM OP THE CONTRACT. 21 force would be derived wholly from the agreement. It being once admitted that they are a body having the faculty to contract, we think It follows, that they have power, by their regular agents and ofiScers, to make all such subsidiary and incidental contracts and agreements, both in making the principal contract, and afterwards in adjusting and executing it, as are necessary to accomplish the main purpose and object of their incor- poration. Being of opinion, that the valua- tion, under the circumstances, was conclu- sive, it becomes unnecessary to consider the other branch of the case, or the effect of the award. The fact, that the present plaintiff was no party to the submission, would seem to be a formidable objection to his recover-' ing upon it; but for the reason stated, we give no opinion on that point, and only make this remark, to show that we place no re- liance on that award, in rendering judgment for the plaintiff. 22 THE CONTRACT OF INSURANCE. FAUNCE V. STATE MUT. LIFE ASSUR. CO. (101 Mass. 279.) Supreme Judicial Court of Massachusetts. Suftolk. March, 1869. H. G. Hutchins. for plaintiff. B. F. Thomas, for defendants. HOAR, J. This case is very simple. It is an action on a policy of life insurance. The plaintiff has no such policy. She un- dertook to show that the defendants agreed to issue such a policy, and that the terms on which it was to be issued were fully com- plied with; that the policy was written and executed, and thereby became a valid con- tract; and therefore, though the paper was not delivered, and remained in the hands of the defendants or their agents, that it is her property, and will support her action. To meet this case, the defendants proved by parol that it was agreed between the parties that the policy should issue, not in addition to, but as a substitute for, a policy previously made, which was to be surren- dered; that the earlier policy was not sur- rendered, but has been enforced and paid. This is a perfect defence to the action. The plaintiff contends that the application and policy together constitute the contract; and that it is not competent to show by parol any variance from the terms of the con- tract contained in the writing. But this doctrine has no application to the ease. The writing remained under the control of the defendants. There was no delivery of It, as a complete and perfected agreement. And if It were true that, without delivery, a complete execution of all the terms agreed on to constitute the contract would be suf- ficient to make it binding, it Is first to be determined whether all these terms were complied with. This may be shown by pa- rol testimony, because the evidence Is not to vary the contract, but to prove whether any contract was made. No written con- tract passed from one party to the other; and the point in controversy is, whether the parties agreed that a certain paper, without more, should be the contract This must, of course, be proved by parol. The defendants voted to issue the policy; but they did so upon the agreement that the former policy was to be surrendered. This condition was not embraced in their vote, but It was un- derstood and agreed to by both parties, and the policy retained until the condition should be performed. No vote or assent of the de- fendants to the contract was communicated to the other party, except with this condi- tion. The plaintiff has not a delivered instru- ment, the evidence of a complete agreement, not to be qualified or varied In its legal ef- fect by parol testimony; and it does not ap- pear that the parties have ever agreed that the written paper should become a contract, except upon a condition which has not been performed. Exceptions overruled. CONSUMMATION OF THE CONTRACT. 23 DAILEY V. PREFERRED MASONIC MUT. ACC. ASS'N OF AMERICA. (57 N. W. 1S4, 102 Mich. 289.) Supreme Court o^ Michigan. Jan. 5, 1S94. Error to circuit court, Wayne county; Henry N. Brevoort, Judge. Action by Asa C. Dailey against the Pre- ferred Masonic Mutual Accident Association of America on an accident policy. Judg- ment for plaintiff. Defendant brings error. Reversed. Frank T. Liodge, (Edwin F. Conely, of coimsel,) for appellant. Wm. E. Baubie, (Russel & Campbell, of counsel,) for appel- lee. LONG, J. This action is brought upon a benefit and indemnity certificate of $5,000, issued by the defendant upon the life of Arthur H. Dailey, a conductor on the Michi- gan Central Railroad, and a brother of the plaintiff, who was named as beneficiary therein. The maximum indemnity in case of injury was ?25 per weeli. The cause was tried before a jury, resulting in a ver- dict and judgment for plaintiff for the amount of the policy and interest. The record shows that the deceased made an ap- plication for the insiu-ance in writing on January 16, 1891. It was filled out by Mr. JIcBride, a solicitor for the defendant, up- on a blank form provided and furnished for that purpose. In answer to the question contained in the application: "Have you other accident insurance covering weekly in- demnity? If so, give names of companies, and amount of weekly indemnity in each," — McBride filled in the answer, "No." And in answer to the question: "Does the week- ly Indemnity you now carry, and the amotmt you now apply for, exceed your weekly sal- ary, wages, or income? If so, how much? Answer fully,"— McBride filled in the an- swer, "No." The testimony tends to show that, at the time of signing the application, Dailey explained to McBride that he had other insurance, which, with that proposed to bfe taken in the defendant company, would make the weekly indemnity exceed his wages. McBride induced him to agree to drop this other insurance when It expired, upon the 1st of March following, and as- sured him that the statements in the applica- tion would make no difference as to the validity of the insurance he would give him; that he agreed also to give Dailey credit for the premium until February 1st. Mr. McBride testified that Mr. Miller, the sec- retary of the company, was advised of the fact that DaUey had other insurance, and that he did not desire to pay until the end of the month. January 19th, Mr. Miller, as secretary, indorsed an acceptance upon the application. January 24th a policy was filled out, and properly executed by the presi- dent and secretary, imder the seal of the company, and mailed to DaUey. The same date, about two or three hours after the pol- icy was mailed to him, Dailey was run over by his train, and injm-ed, so that he died the following day. He never saw the policy, which was delivered at his residence in the regular course of mail. The premium re- quired by the company was afterwards ten- dered and refused. Mr. McBride testified on the trial that he informed Miller, the secretary, of all the facts, and that Miller agreed to charge him with the premium, and issue the policy at once. McBride says: "I had told Miller that Dailey was going to let his other insurance run out, and he has px-omised to let me write him up as soon as his other insurance runs out." Miller said: "You get it as soon as you can. We want it, and he may not see you when it runs out, and get another year's insurance in some other company." Mr. Miller does not deny that he was informed of the other in- surance, and of Dailey's wish not to pay the premium at once. He says, however, that he did not agree to issue the policy and give credit for the premium. He did fill out the policy, however, and dated it back to the date of the application, Janu- ary 16th, but claims that he instructed his cashier not to deliver it until March 1st, when the premium would be collected. 1. The defense claims that the policy was not operative at the time of Dailey's death, for the reason that it had not been deliver- ed; that it was sent to applicant's house by mistake; that the advance premium had not been paid; and that it was agreed that it should not be operative untU March 1, 1891. The court instructed the jury substan- tially that if the policy was filled out by the secretary with intent to have it take imme- diate effect, he knowing of the other in- surance and of the agreement to give credit for the premium, and that it was mailed to the deceased with intent to have it take im- mediate effect, the plaintiff could recover; but, on the other hand, if the secretary in- dorsed It to take effect on the 1st of March, when the other pohcy expired, and the sec- retary did not agree to extend credit for the premium, and the policy was mailed to the deceased by mistake of the cashier, and against the instructions of the secretary, the plaintiff would not be entitled to recover. The court further charged the jury "if they believed the statements as to the other in- surance contained in the apphcation were made imder the direction of McBride, after he had been fully informed of the facts, and the answers were written in by McBride, after being so informed, the defendant would be bound by the acts of McBride, as he was the agent of the company." We think there was testimony in the case to sustain those instructions. McBride says he knew of the other insurance, and the amount of it, and when it would expire. He testifies that he advised the secretary of it, and in fact so- licited the insurance under the advice of 24 THE CONTRACT OF INSURANCE. the secretary. If so, then, notwithstanding the answers in the application were not truthfully made, the company could not avoid the policy. The knowledge of McBride and the secretary was the knowledge of the compdny, and the company must be held to have waived the right to insist upon the other insurance as a forfeiture. Under such circumstances dt is not in a position to as- sert that the answers are untrue. Pudrit- sky V. Lodge, 76 Mich. 428, 43 N. W. 373. The court was not in error in the charge as to the extension of time to pay the premium, and the delivery of the policy, to take imme- diate effect. If the secretary, knowing all the facts, filled out the policy with intent to have it take immediate effect, and caused it to be mailed to the deceased as of force and effect at that time, the company cannot now be heard to say that there was no delivery, though it did not reach its destination until after the death of the insured. If these facts were true, the beneficiary could have enforced a delivery of the policy if delivery had been refused. The contract was com- plete when the application was accepted and credit given for the premium. May, Ins. § 46. It is contended that the court was in error in directing the jury that Mr. McBride was the agent of the company, and that the company would be bound by his acts in writing in the answers to the questions in the application. We think the court was not in error in this part of the charge. Mr. McBride was given authority to take the application, and It appears that he was sent by the secretary for the very purpose of obtaining the application, the secretary knowing at that time that Dailey had other insurance. 2. Another question in the case relates to a certain condition in the policy. The poli- cy redtes: "The conditions under which this certificate is issued, and to which the insur- ed, by his acceptance hereof, agrees, are as follows: Standing or walking on the road- bed or bridge of any raUway, or attempting to enter or leave moving conveyances using steam, electricity, water, or compressed air as a motive power, are hazards not covered by this insurance, and no sum will be paid for injuries or death in consequence of such exposure, or while the insured is thus ex- posed." The application upon which this policy was issued is set out in the record, and is entitled "Application for Membership in the Preferred Masonic Mutual Association of America," and states: "I hereby apply for membership in the above association, membership to be based upon the following statement of facts, which I hereby warrant to be true, and agree to accept certificate of meml>ership subject to all its conditions and provisions." The blank form of application is numbered with questions and answers, from 1 to 20, inclusive. No. 4 is as follows, in question and answer: Question: "Place of business." Answer: "M. 0. Ry. Co., De- troit" No. 6: "Occupation." Answer: "Pas- senger conductor M. C. Ry." No. 7: "What are the duties required of you in these occu- pations? Answer fully." Answer: "Run- ning passenger train." No. 8: "Name and line of business of firm of which you are a member, or by whom j'ou are employed." Answer: "M. C. Ry. Co." No. 15: "Have you in contemplation any special journey or hazardous undertaking, not stated in this application for indemnity?" Answer. "No." No. 16: "Are you aware that the benefits from this association will not ex- tend to nor cover hernia, orchitis, nor to any bodily injury happening directly or in- directly in consequence of disease, nor to death or disability caused wholly or in part by bodily infirmities or disease, or by the taking of poison in any form or manner, or by any surgical operation or medical or me- chanical treatment, nor to any caus^ except when the accidental injury shall be caused by external and accidental violence, and that these shall be the proximate and sole cause of disability or death?" Answer: "Yes." No. 17: "Are your habits of life correct and temperate, and do you understand that the certificate of insurance will not cover any injury which may happen to you while under the influence of intoxicating drinks, or in consequence of having been under the in- fluence thereof?" Answer: "Yes." No. 18: "Are you aware that any misstatement or concealment of facts by you, or the omission or neglect to pay within thirty days from the date of notice the quarter annual fee, or any of the assessments made by the associatian up- on you, wiU work a forfeiture of aU the claims you or your heirs or legal representatives may have to any benefits arising from your connection with this association?" Answer: "Yes." "Applications for certificates are not binding until accepted by the secretary. No other person is authorized to bind the asso- ciation. [Signed] A. H. Dailey. Accepted Jan. 19, 1891, 12 o'clock noon. A. O. M. Secretary. 3-1-91." Aside from the ques- tions of other insurance, which have been before discussed, the foregoing contains sub- stantially aU there is in the application which Dailey signed. It is contended that no recovery can be had under this policy, for the reason that the proofs show conclusively that Mr. Dailey came to his death while attempting to alight from his train when it was in motion, and that the direct cause of his injury and death, resulting therefrom, was in attempting to alight from his train while in motion. The declaration avers that, "at the time said in- juries were incurred by said Arthur H. Dailey as aforesaid, he, the said Arthur H. Dailey, was not attempting to enter or leave a moving conveyance, as defined by said policy." It is contended by plaintiff (1) that there was some evidence from which the jury might find that the deceased did not meet his death from attempting to leave the CONSTJMMATIOJf OF THE CONTRACT. 25 train -while In motion; (2) that, under the application, the insured was entitled to have a policy issued to him which did not con- tain these restrictions; (3) that, under the application, It is fairly to be inferred that an accident such as caused the death of Dailey was within the express risli against which it was assumed to insure; (4) that the restriction in the policy cuts out the probable accidental violence which, in the minds of both parties, Mr. Dailey, a railway passen- ger conductor, was Insuring himself against; that the restriction would practically render the Insurance nugatory and valueless; and that It must therefore be held inoperative so far as this insurance is concerned. There can be no doubt about the correctness of plsuntiff's position when we take into ac- count the answers given to the questions in the application, and, had the action been brought upon the contract made by the ac- ceptance of the application, no doubt could arise as to the plalntifC's right of recovery; but the declaration avers that the deceased •did not come to his death by the attempt to leave the moving train. Failing to es- tablish that fact, and it being shown by de- fendant that the proximate cause of the in- jury and death was the attempt to leave the train while in motion, it Is now asserted that that was one of the very risks Insured against, and plaintiff should be permitted to recover for that reason. We think there was no evidence from which the jury would have been warranted In finding that Dailey came to his death by any other means than In an attempt to leave the train while In motion. We are also satisfied from the ap- plication and the information which that gave to the defendant company that acci- dents of this kind are of the risks intended to be insured against The sole business of the deceased was in running passenger trains, and this was plainly stated in the application. It Is common knowledge that conductors of passenger trains on all rail- roads must, in the very nature of their busi- ness, not only enter, but leave, their trains "before they come to a full stop. It is com- mon knowledge that conductors of passenger trains have full charge of their trains. They give the signal to start, and, after the train starts, they get on board. At stations when the train pulls up, and before it stops, the conductor alights upon the platform. This may be a dangerous practice, but it Is among the risks which the passenger conductor as- sumes when he enters upon such employ- ment; and so general is this knowledge that the defendant company, wnen it took and ap- proved the application, must have had knowledge of it. In view of this, the above restriction in the policy cannot be insisted upon by the defendant company, and. If the declaration had been based upon the con- tract actually made, the questions here raised by plaintiff might be of avail. As before stated, the contract was complete when the application was accepted and cred- it given by the secretary for the premium. The Insurance which the parties agreed up- on is substantially set out in the applica- tion, and the insured had no reason to be- lieve from it that there was to be any such restriction as to entering or leaving moving trains as contained m this policy. He was entitled to have a jwlicy Issued to him in conformity to the application, and If the suit had been planted on the contract of insur- ance such as the minds of the parties met upon, and the other facts were as found by the jury, there could be no doubt about the right of recovery. If it was the intent of the parties that the policy should issue at once when the application was accepted, and the application was accepted to take effect as of January 19th, so as to give the insured the same legal remedy which he would have had had the policy been de- livered on that day, and that was the in- tent of the parties, the law will give effect to such intention. Davenport v. Insurance Co., 17 Iowa, 276; Perldns v. Insurance Co., 4 Cow. 646; Tayloe v. Insurance Co., 9 How. 390. But as the declaration counts on the policy as the contract between the parties, and negatives the restrictive clause, and this not being proved, the action cannot, in its present form, be maintained, and the judg- ment of the court below must be reversed. New trial granted, with costs. The other justices concurred. 26 THE CONTKACT OF INSUEANCE. QUARLES V. CLAYTON. (10 S. W. 505, 87 Tenn. 308.) Supreme Court of Tennessee. February 12, 1889. Appeal from chancery court, Rutherford county; W. S. Beardon, Chancellor. Agreed case between Nancy M. Quarles and J. A. Clayton, administrator of her de- ceased husband's estate, to determine the rights of the parties to the proceeds of a pol- icy of fire insurance issued to the deceased. Decree for the administrator, and Mrs. Quarles appeals. J. B. Richardson, for appellant. Palmer & Palmer, for appellee. liURTON, J. The deceased husband of ap- pellant took out a policy of fire Insurance upon his dwelling; loss payable to the as- sured, his executors or administrators. Be- fore the expiration of the policy by time, but after the death of the assured, the house was accidentally burned. The insurance company, by consent of the claimants, paid the loss into the hands of the defendant, un- der an agreement that the fund should be held subject to the legal rights of complain- ant, if any she had, to be thereafter deter- mined by the courts. An agreed case was made up, and submitted to the chancery court, and from the decree of the chancellor Mrs. Quarles has appealed. Appellant is the widow of the assured, and claims a life-estate in the fund, upon the fol- lowing state of facts: Before her marriage to the assured, a marriage contract was en- tered into, and duly executed, and registered in the county of their residence, by which, among other things not material to be here mentioned, it was agreed "that all the prop- erty and estate, both real and personal, now owned or hereafter acquired by said John W. Quarles, shall continue to be his, and shall remain wholly unaffected by said contem- plated marriage with said Mrs. Nancy M. Kirk, in favor of whom no marital or other rights on his said property and estate shall attach or inure by reason of said contem- plated marriage relation, further, or other- wise, than is expressed and provided in this instrument; and he hereby reserves the right and privilege of making such suitable provi- sion for her out of his estate as he may at any time desire, either by deed of gift, last will and testament, or otherwise. If he die without making any such provision for her, then she shall out of his real estate, if she survive him, have a comfortable home, to consist of, say, about one hundred and forty acres of his lands, in which will be included hi.s dwelling and outhouses; the same to be surveyed and laid off to her by proper metes and bounds, and in such manner as will be most useful and convenient to her, and with least injury to his estate. This home, so laid off to her, to be and remain to her own proper use, supiwrt, and benefit for and during the term of her natural life; and, after her- death, to take such directions as he may give to it by his last will and testament,, or other proper mode of disposing of real estate; and if he die without any will, and without disposing of the remainder interest in said 'home,' as above provided for and de- scribed, then the same shall descend to his- proper heirs and distributees according to the laws of the state of Tennessee." After the marriage, the dwelling-house above described^ which was then and after the residence of Mr. Quarles and his wife, was insured under- a contract, as before stated, that the loss should be paid to the assured, the husband of appellant, his executors or administrators. Mr. Quarles died intestate, and without hav- ing, by deed or otherwise, made any provi- sion for his widow other than that contained, in the marriage contract. The widow con- tinued to occupy the dwelling as her resi- dence until it was desti*oyed by fire. The portion of the farm of the decedent which was to be assigned to her under the mar- riage agreement had not, at the time of the- fire, been laid off by metes and bounds; but it was subsequently done to the satisfaction of all concerned. This estate was so laid, off, as required by the contract, as to in- clude the outhouses of the assured, and like- wise the site of the burned mansion-house. TJie insurance policy was not taken out upon any agreement or contract, express or im- plied, with appellant, that she was to have any interest whatever therein. Under this state of facts, has appellant any equitable or legal Interest in the proceeds of this fire policy? That the precise boundaries- of the 140 acres to be laid off to her had not been ascertained by survey at the time of the fire can cut no figure, because it was to be laid off, m all events, so as to include the mansion-house and the outhouses. It seems equally clear that she cannot hold the estate of her husband responsible for the value of the house, because, at his death, her contin- gent right to the house for her life ripened, and became a vested Interest -for her life; and at the moment her husband died intes- tate, and vyithout having made any other pro- vision for her, the house was standing, and her right to the use and possession at once accrued. Her interest became at once an in- surable interest; a:nd the destruction of the house by any means after her husband's death was not an injury for which his estate or his heirs would be responsible. Whatever right she has to any interest in this fmid must arise from the contract of insurance. The person insured against loss in the policy is- sued upon the premises of Mr. Quarles was the owner himself. By aU the authorities, a contract of fire insurance is a personal con- tract, and assures the interest alone of the assured in the property, in the absence of some agreement or trust to the contraiy. The policy taken out by Mr. Quarles con- THE NATURE OF THE CONTRACT. 27 tained the usual provision proliibiting any as- signment of tlie policy without the consent of the insurer. It also contained the further! stipulation that the policy should become! void "in case any change shall talce place in' title or possession, except by succession by reason of the death of the assm-ed." These provisions have been upheld by the courts as reasonable conditions, limiting and restrict- ing the liability of the insured. That they are reasonable Is obvious, when we consider that the contract is one for the personal in- demnity of the assured against a loss affects ing his interest in the property covered by the policy. The insurer contracts with refer- ence to the character of the assured for in- tegrity and prudence. He might be very willing to agree to make good the loss of one, by the destruction of property owned by him, while he would be altogether unwilling to insure the same property if owned by an- other. Again, the contract undertakes to make good any loss which the assured may sustain; and from this it follows that, if the assured has parted with his interest be- fore the loss, he cannot ask to be indemni- fied, because he has sustained no loss. The provision agatnst the change of title is there- fore in precise harmony with the personal character of the contract. In some fire in- surance conti-acts the stipulation against change of title extends so far as to make the policy void should such change of title be brought about by the death of the assured. The title, in such case, is no longer in the assured, but has by law passed to his heirs, or by will to his devisees; and a change of title so occurring has been held to defeat an action for a loss occurring after the death of the assured. Sherwood v. Insurance Co., 73 N. Y. 447; Hine v. Woolworth, 93 N. Y. 75. The contract is not, therefore, one which at- taches to or follows the property, being one for the personal indemnity of the assured; and, where the insurer does not assent to the assignment of the policy to a grantee of the property, neither the assured nor his as- signee of the property can recover upon the policy. Hobbs v. Insurance Co., 1 Sneed, 444. But this policy was not avoided by the death of the assured. It expressly provides that a change of title shall defeat the policy, except when it occurs "by succession by rea- son of the death of the assured." The legal effect of this exception is to continue and ex- tend the policy notwithstanding the change of title by death of the assured. In whose favor is this continuance? It has been ably argued that the effect of this continuance is in favor of those who by "succession"' take the property covered by the risk, and that, though it may be payable to the executor or administrator of the assured, yet he will, in case the risk was upon real estate, take and hold in trust for those who by "succession" have taken the property, and who are there- fore the persons damnified by the loss. This word "succession," in the connection in wMch It appears, is a word of technical meaning, and refers to those who by descent or will take the property of a decedent. It is a word which clearly excludes those who take by deed, grant, gift, or any form of purchase or contract. This meaning is made most ot)- vious when we consider that the contract provided against any change of title except by "succession;" and, to more directly affix a limited and technical meaning, the explana- tory words are added, "by reason of the death of the assured." There is much plausibility in the argument that, inasmuch as the policy is continued not- withstanding a change of title has occurred, in case the risk is upon real estate, the ex- tension is, by intendment of the contract, to operate as an indemnity to those who by "succession" have become the owners of the property, in such a case, neither the admin- istrator nor the distributee would have any interest to be insured, wWle the heir or dev- isee upon whom the title has been cast would be the legal and equitable owner, and the person to suffer by the loss. The root principle of insurance, that the loss is pay- able only to the extent that the assured has an insurable interest, would seem to pre- clude the administrator in such a case from any recovery, or make him a trustee for the heir of what he should recover when the loss occurred after the property had passed by "succession" to the heir This seems to be the holding of the courts, when the ques- tion has arisen, although the text-book writ- ers seem not to have seized upon the distinc- tion. Wyman v. Wyman, 26 N. Y. 253; Cul- bertson v. Cox, 29 Minn. 809, 13 N. W. 177. But does the appellant take any interest in the insured property by succession? If she had taken as devisee or under the home- stead law, she would be within the principle just discussed, and would be within the ex- press holding of the two cases last cited. Unfortunately for her, appellant takes what- ever interest she has in the property imder the fire policy by virtue of her marriage con- tract. She is not entitled to homestead or dower, for she expressly agreed to take, in lieu of all right which the law would have given her, the provision which she cove- nanted for by marriage contract. This inter- est was a contingent one. It depended upon two events: First, that she should survive her husband; and, second, that he should not by deed or will make any other provision for her. Both of these events occurred; and, instantly upon the death of her husband, she became seised of an estate for her life in the insured premises. She therefore took this mansion-house as the grantee of her hus- band, and did not take it by "succession." But it is insisted that, however she ac- quired the estate, she has an equitable inter- est in a life-estate in this fund, because it represents the premises which she had a right to occupy and enjoy during her life. This presents a strong case in morals, but 28 THE CONTRACT OF INSURANCE. ier legal rights are not so clear. The rule is well settled that no equity attaches upon the proceeds of a fire policy in favor of third persons who, in the character of grantee, mortgagee, or creditor, may have sustained loss, in the absence of some trust or con- tract to that efCect. May, Ins. § 456; 3 Kent, Comm. (10th Ed.) 499. This rule applies as well to vendors and lienors of every class as to mortgagees who may have had their se- ■curity Impaired by a loss by fire. This court, in a well-considered case, held that the hold- er of a mechanic's lien upon a building had no equitable lien in a fire policy, effected by the owner, and assigned to a mortgagee. Oalyon v. Ketchen, 85 Tenn. 55, 1 S. W. 508. An equity will attach when the vendee or mortgagor was, by covenant or otherwise, iDound to insure the property, for the better security of the creditor or vendor. In such a case the latter would have, to the extent of their interest in the property destroyed, an equitable lien upon the money due on a policy taken by the mortgagor or vendee or other debtor who had given a security upon the insured property; and this would be so, «ven though the policy stand in the name of the debtor, vendee, or mortgagor. But, in the absence of some such agreement, the mortgagor or vendee or grantor, having an insurable interest, might insure such interest for his own benefit; and no lien would at- tach thereto in favor of his creditor, secured by lien or mortgage or otherwise upon the insured property. Carter v. Rockett, 8 Paige, 436; Wheeler v. Insurance Co., 101 U. S. 439; Nordyke v. Geiy, 112 Ind. 535, 13 N. B. 683; Sheld. Subr. §§ 233, 235. The agreed state of facts upon which this case is sub- mitted fails to show any covenant, contract, agreement, or understanding that Mr. Quarles should insure this property for the bene- fit of appellant. The interest of appellant, after the death of her husband, was an in- surable one; so was the remainder interest of the heirs. The decedent having left no debts, and the distributees being the same persons who take the real estate as heirs, no controversy arises as between the adminis- trator and the remainder-men. That the insurance company had the option to rebuild is urged as a reason why the in- surer's election to pay, instead of rebuilding, ought not to operate to the disadvantage of complainant. This option is one common to all contracts of fire insurance; and the ar- gument, if good in this case, would operate to overturn the well-settled rule that no equity attaches to the proceeds of a fire pol- icy in favor of third persons who have suf- fered loss, in the absence of some agreement to that effect. If this option to pay or re- build should be regarded as sufficient to found an equity upon in favor of third per- sons disappointed by the election of the in- surer, the law of insurance would have to be rewritten. There is no privity between ap- pellant and the insurer, and no action of his can be ground to give her an interest which she would not otherwise have. The decree of the chancellor will be af- firmed. THE NATURE OP THE CONTRACT. 29 RAYNER v. PRESTONI (18 Ch. Div. 1.) ^ Chancery Division. April 8, 1881. Roxburgti, Q. 0., and Ingle Joyce, for ap- pellants. Chitty, Q. C, and Mr. Bardswell, for appellees. COTTON, L. J. This Is an appeal \from a judgment of the master of the rolls dismiss- ing action. The plaintlfCs purchased from the defendants a messuage and workshops. Bet-ween the date of the contract and the time fbced for completion the buildings pur- chased were injured by fire. The vendors had before the contract insured the buildings against fire, but there was not in the contract any mention of this fact, or of the policy. The plaintiffs brought an action to establish their right to a sum received by the vendors from the insurance office, or to have it ap- plied in or toward reinstating the buildings injured. The master of the rolls decided against their claim, and from this decision the plaintiffs appealed. It was contended by the appellants that they were entitled to the moneys (1) on gen- eral principles, irrespective of any special circumstances alleged to exist in the case; (2) under provisions of the Act U Greo. III. c. 78, either alone, or with the aid of the special circumstances of this case. In the first point it was urged that, al- though the contract did not mention the policy, it gave the plaintiffs, as purchasers, a right to all contracts to the benefit of which the vendors were entitled, and of which the execution would be beneficial to or improve the thing purchased. This was inconsistent with one of the conditions on the back of the policy, which stipulated that assigns of the property (with certain exceptions, not including a purchaser) should not be entitled to the benefit of the insurance. But, inde- pendently of that objection, I am of opinion that the contention of the appellants cannot prevail. The contract passes all things be- longing to the vendors appurtenant to or necessarily connected with the use and enjoy- ment of the property mentioned in the con- tract, but not, m my opinion, collateral con- tracts; and such, in my opinion, at least in- ' dependently of the Act 14 Geo. III. c. 78. the policy of insurance is. It is not a contract limiting or affecting the interest of the ven- dors in the property sold, or affecting their right to enforce the contract for sale, for it is conceded that, if there were no insurance and the buildings sold were burnt, the con- tract for sale would be enforced. It is not even a contract in the event of a fire to re- pair the buildings, but a contract in that event to pay the vendors a sum of money, which, if received by them, they may apply in any way they think fit It is a contract, not to repair the damage to the buildings, but to pay a sum not exceeding the sum In- sured, or the money value of the injury. In my opinion, the contract of insurance is not of such a nature as to pass, without apt words, under a contract for sale of the thing insured. But the appellants' case was put in an- other way. It was said that the vendor is, between the time of the contract being made and being completed by conveyance, a trustee of the property for the purchaser, and that as, but for the fact of the legal ownership of the building insured being vested in him, he could not have recovered on the policy, he must be considered a trustee of the money recovered. In my opinion, this cannot be maintained. An unpaid vendor is a trustee in a qualified sense only, and is so only be- cause he has made a contract which a court of equity will give effect to by transferring the property sold to the purchaser, and so far as he is a trustee he is so only in respect of the property contracted to be sold. Of this the policy is not a paTt. A vendor is in no way a trustee for the purchaser of rents accruing before the time fixed for comple- tion, and here the fire occurred and the right to recover the money accrued before the day fixed for completion. The argument that the money is received in respect of property which is trust property is, in my opinion, fallacious. The money is received by virtue or in respect of the contract of insurance, and though the fact that the insured had parted with all interest in the property in- sured would be- an answer to the claim, on the principle that the contract is one of in- demnity only, this is very different from the proposition that the money is received by reason of his legal interest in the property. It remains to be considered whether the statute of 14 Geo. III. c. 78, can give the plaintiffs any right to the money. In my opinion, the statute does not of itself so con- nect the money with the land sold as to en- title the plaintiffs successfully to contend that, under the contract, they were entitled to the money. I give no opinion whether the plaintiffs, as purchasers who are liable to the vendor for the full amount of the purchase money, even though the buildings are burnt, are persons who can (possibly to the preju- dice of the office) insist that the money is to be applied in rebuilding. Even if they were so entitled, the act only gives a right to in- sist on the money being so applied, and their claim to hare this done is the foundation of and essential to the existence of their right. But it was urged that the vendors misled the plaintiffs, and thus prevented them from in- sisting on their rights under the statute. In my opinion, this has not been established by the plaintiffs. The evidence of the plain- tiff, E. Rayner, the younger, who is not sup- ported by the other plaintiff, though present when the conversation relied on took place, is contradicted by the defendants' solicitor, the person whose statements are said to have- misled the plaintiffs, and the alleged mis- representation is at the utmost a statement •30 THE CONTRACT OF INSURANCE. of the law, which in my opinion, if made, was erroneous, but which the plaintiffs have ■contended to be correct. The plaintiffs were not entitled, as against the defendants, to rely on a statement of opinion made by the solicitor of the defendants as to the legal right of the parties, and, in my opinion, the plaintiffs cannot establish their claim by the special circumstances on which they rely. The appellants, however, contended that there was authority In their favour, and it therefore becomes necessary to consider shortly the cases relied upon. The most im- portant, and that which apparently is most In their favour, is Garden v. Ingram, 23 Law J. Ch. 478, a decision of Lord St Leonards. He, affirming a decree of Vice-Chancellor Knight Bruce, declared that the purchaser from the mortgagee of a lessee was entitled to the benefit of a policy of insurance effect- ■ed in pursuance of a covenant contained in the lease in the joint names of the lessor and lessee, and ordered the defendant, the lessee, to concur with the landlord In giving a re- ceipt for the money. But there the lease •contained a provision that any money re- covered on the policy should be laid out in re- instating the buildings injured by fire; and this, in my opinion, was the ground on which the decision was based, and this is the view of the case expressed by Vice-Chancellor Kindersley in Lees v. Whiteley, L. R. 2 Bq. 148, 149. The appellants also relied on the case of Durrant v. Friend, 5 De Gex & S. S43, where Vice-Chancellor Parker, though te refused to give a legatee of specific chat- tels, which perished at the same time with the testator, the benefit of an insurance ef- fected on the chattels by the testator, used ■expressions which shew that he thought the legatee would have been entitled to the poli- cy if the chattels were shewn to have existed after the testator's death. But this was dic- tum only, not decision. In Garden v. In- gram, Lord St. Leonards refers to a case not quoted in argument, and of which he •does not give the name, in which it had been decided that a remainderman was entitled to a policy effected by a tenant for life. No such case was quoted to us, and the only case of the sort which I have been able to find, is Norris v. Harrison, 2 Madd. 268, in which Lord St. Leonards was counsel, and of which he probably had an imperfect recollection. In that case it is true a remainderman did receive the balance of a fund received by a previous tenant for life on account of a policy effected by such tenant for life, but he did so because the executor and residuary legatee of the tenant for life had by his will treated the fund as appropriated for the benefit of the remainderman. In my opinion, therefore, there is no deci- sion in favour of the appellants. Against them there is the direct decision of Vice- Chancellor Kindersley in Poole v. Adams, 12 Wkly. Rep. 683. It is urged by the appel- lants that the vice-chancellor arrived at this aecision from an erroneous view of Lord F.ldon's judgment in Paine v. Meller, 6 Ves. 349. In my opinion, though the decision of lyord Eldon is not expressly in point, yet the part of his judgment quoted by the mas- ter of the rolls does to some extent support the view of the vice-chancellor in the case referred to. In my opinion the judgment of the master of the rolls was correct. BRETT, L. 3. For a reason which will presently appear, viz., the different opinion of Lord Justice JAMES, I give with some fear the result of the, I must say, very clear opin- ion which I have in this case. This action is brought by the plaintiffs against the defendants to recover money which is in the hands of the defendants; and, there- fore, if the action had been brought at com- mon law, it would have been an action for money had and received. That action was al- ways treated at common law as being founded upon equity, and therefore It seems to me that the decision in this case, whatever it ought to be, would be the same whether it should be considered to be a decision at com- mon law or in equity. It seems to me that the question raised be- tween the plaintiffs and the defendants calls upon us to consider, first of all, the natvire of a policy of fire Insuiance; and, secondly, what was the relation with regard to the policy and to the property between the plaintiffs and the defendants in this case. Now, in my judg- ment, the subject-matter of the contract of insurance is money, and money only. The subject-matter of the insurance is a different thing from the subject-matter of the contract of insurance. The subject-matter of insur- ance may be a house or other premises in a fire policy, or may be a ship or goods in a marine policy. These are the subject-matters of insurance, but the subject-matter of the contract is money, and money only. The only result of the poUcy, if an accident which is within the Insurance happens, is a payment of money. It is true that under certain cir- cumstances In a fire policy there may be an option to spend the money in rebuilding the premises, but that does not alter the fact that the only liability of the insurance company is to pay money. The contract, therefore, is a contract with regard to the payment of money, and it is a contract made between two per^ sons, and two persons only, as a contract. In this case there was a contract of insur- ance made between the defendants and the insurance company. That contract was made by the defendants, not on behalf of any un- disclosed principal, not on behalf of any one interested other than themselves. The con- tract was made by the defendants solely and entirely on their own behalf, and at a time when they had no relation of any kind with the plaintiffs. It was a personal contract be- tween the defendants and the insurance of- fice, to which they were the sole parties. It is true that under certain circumstances a THE NATURE OF THE CONTRACT. 31 policy of insurance may, In equity, be as- signed, so as to give another person a rigtit to sue upon it; but in tliis case the policy of insurance, as a contract, never was assigned by the defendants to the plaintiffs. It would have been assigned by the defendants to the plaintiffs if it had been includfed In the con- tract of purchase, but it was not. Any valua- tion of the policy, any consideration of in- crease of the price of the premises in conse- quence of there being a policy, was wholly omitted. There was nothing given by the plaintiffs to the defendants for the contract. The contract, therefore, neither expressly nor impliedly, was assigned to the plaintiffs; and, so far as regards the contract of insurance, there never was any relation of any kind be- tween the plaintiffs and the defendants. But there did exist a jelation between the plaintiSs and the defendants, not with re- gard to the subject-matter of the contract, but with regard to the subject-matter of the insur- ance. There was a contmct of purchase and sale between the plaintiffs and the defend- .ants in respect of the premises insured. Il becomes necessary to consider accurately, as it seems to me, and to state in accurate terms, what Is the relation between the two people who have contracted together with regard to premises in a contract of sale and purcliase. With the greatest deference, it seems wrong to say tliat the one is a trustee for the other. The contract is one which a court of equity will enforce by means of a decree for specific performance. But, it the vendor were a trus- tee of the property for the vendee, it woiild seem to me to follow that all the product, all the value of the property received by the ven- dor from the time of the making of the con- tract, ought, under all circumstances, to be- long to the vendee. TVhat is the relation be- tween them, and what Is the result of the ■contract? Whether there shall ever be a con- veyance depends on two conditions; first of All, whether the title is made out, and, sec- ondly, whether the money is ready; and, un- less those two things coincide at the time when the contract ought to be completed, then the contract never will be completed, and the property never will be conveyed. But suppose at the time when the contract should be completed, the title should be made out and the money is ready, then the conveyance takes place. Now it has been suggested that when that takes place, or when a court of equity ■decrees specific performance of the contract, .and the conveyance is made in pursuance of that decree, then by relaticxi back the vendor has been trustee for the vendee from the time of the making of the contract. But, again, with deference, it appears to me that if that were so, then the vendor would in all cases be trustee for the vendee of all the rents which have accrued due and which have been received by the vendor between the time of the making of the contract and the time of completion; but it seems to me 'that that is not the law. Therefore, I ven- ture to say that I doubt whether it is a true description of the relation between the parties to say that from the time of the mak- ing of the contract, or at any time, one is ever trustee for the other. They are only parties to a contract of sale and purcliase, of which a court of equity wiU under certain cir- cumstances decree a specific performance. But even If the vendor was a trustee for the ven- dee, it does not seem to me at all to follow that anything under the contract of insurance would pass. As I have said, the contract of insurance is a mere personal contract for the payment of money. It is not a contract which runs with the land. If it were, there ought to be a decree that upon the completion of the purchase the policy be handed over. But that is not the law. The contract of insurance does not run with the land; it is a mere per- sonal contract, and unless it is assigned no suit or action can be maintained upon it ex- cept between the original parties to it. My Brother COTTON has mentioned the cases in equity. As I have said, it seems to me that the case is the same in equity as at common law. At common law, with regard to marine policies, it has been always held that where there is a policy, and where the subject-matter of the insurance is sold dtu-ing the running of the policy, no interest under the policy passes unless it is made part of the contract of pur- chase and sale, so that it would be consid- ered in a court of equity as assigned. The leading case on the subject is the case of Powles v. Innes, 11 Mees. & W. 10, in which it is stated that "a person who assigns away his interest in a ship or goods after effecting a policy of insurance upon them, and before the loss, cannot sue upon the policy except as a trustee for the assignee in a case where the policy is handed over to him upon the as- signment, or there is an agreement that it shall be kept alive for his benefit" Lord Ab- inger and Lord Wensleydale both said that the mere fact of making the contract of pur- chase and sale does not pass any interest in the policy; that there must be a bargain with regard to the policy in order to pass the interest That is more clearly expressed by Mr. Justice Quain in tlie case of North of England Pure Oil Cake Co. v. Archangel Mar- itime Ins. Co., L. R. 10 Q. B. 249, where he lays down as settied law that "on the sale of a thing insured no interest in the policy passes to the vendee unless at the time of the sale the policy be assigned either ex- pressly or impliedly." That seems to me to have been the law always in courts of law, and it seems to me that Vice-Chancellor Kin- dersley, in the case which has been referred to, lays it down that that was the well-set- tied and recognized law in courts of equity just as much as in covu-ts of common law. I therefore, with deference, think that the plaintiffs here cannot recover from the de- fendants, on the ground that there was no re- lation of any kind or sort between the plain- tiffs and the defendants with regard to the 32 THE CONTRACT OF INSURANCE. policy, and therefore none with regard to any money received under the policy. , JAMES, Ii. J. I am unable to concur in af- firming the judgment of the master of the rolls. According to my view of the case the plaintiff's contention is founded not only on what I may call the natural equity which commends itself to the general sense of the lay world not instructed in legal principles, but also on artificial equity as it is under- stood and administered in our system of juris- prudence. I am of opinion that the relation between the parties was truly and strictly that of itrustee and cestui que trust. I agree that it is not accurate to call the relation between the vendor and purchaser of an estate under a contract while the contract is in fieri the relation of trustee and cestui que trust. But that is because it is uncertain whether the contract will or will not be performed, and the character in which the parties stand to one another remains in suspense as long as the contract is in fieri. But when the con- tract is performed by actual conveyance, or performed in everything but the mere formal act of sealing the engrossed deeds, then that completion relates back to the contract, and it is thereby ascertained that the relation was throughout that of trustee and cestui que trust. That is to say, it is ascertained that while the legal estate was in the vendor, the beneficial or equitable interest was wholly in the purchaser. And that, in my opinion, is the correct definition of a trust estate. Wherever that state of things occurs, wheth- er by act of the parties or by act or opera- tion of law, whether it is ascertained from the first or after a period of suspense and uncertainty, then there is a complete and per- fect trust, the legal owner is and has been a trustee, and the beneficial owner is and has been a cestui que trust. This being the relation between the par- ties, I hold it to be an universal rule of equity that any right which is vested in a trustee—any benefit which accrues to a trustee, from whatever source or under what- ever circumstances, by reason of his legal ownership of the property — that right and that benefit he takes as trustee for the bene- ficial owner. If the policy of insurance in this case were a collateral contract, such as the policy which a creditor effects on the life of his debtor, the case would be wholly dif- ferent. But the policy of fire insurance is not, in my opinion, a collateral contract; it is not a wagering contract, a contract that if a fire happens then a certain sum of money shall be paid to the insurer; it is in terms and in effect a contract that, if the property is injured, then the insurance company will make good the actual damage sustained by the property. That damage, and that dam- age only, gives the right and is the measure of the right, and it seems to me impossible to say that it is not by reason of the legal ownership, and in respect solely of the in- jiu-y done to that legal ownership, that the right to recover from the insurance company accrued to the insured. If the fire in this case had happened through the wrongful or negli- gent act of a third person while the contract was in fieri, the legal right to sue for the damage would be in the vendor, but on the completion of the contract the purchaser would be entitled to use the name of the vendor as his trustee to sue for the damage so sustained, or, if the damages had actually been recovered in the Interval, to recover the damages from the vendor. And it appears to me that there is no distinction in prin- ciple between this right and the right to use the vendor's name in an action on the con- tract of indemnity against loss by fire which the policy of insurance is. It is not, in my view of the case, at all material to consider what would be the case if after actual con- veyance and during the currency of the pol- icy, a fire had occurred. The vendor in that case would have no right as between him and the insurance office, and the purchaser would have no right of action, because one of the conditions of the policy excludes it. and, in- dependently of that condition, the policy would or might probably be held not to run with the land, in the hands of the subse- quent owner, and in that case there would not be that which is the foundation of the right,— legal ownership and right in one per- son, and equitable ownership in another. No doubt it is a mere accident that there was such a policy and there was such a right. The vendor could not have complained if there had been no insurance. But that has occurred in a great variety of cases in which equitable rights have arisen. Where there is a creditor, a debtor, and a surety, and the surety finds out that by something to which he was not privy and of which he had never heard, somebody else had become surety, or the creditor had obtained security, the surety has a right to obtain contribution from such surety, or to obtain such security, as the case may be, and the creditor releasing such surety or parting with such security would probably find himself in considerable peril. In the same city in which this controversy has arisen there occurred some years ago a great destruction of property by reason of an explosion of gunpowder caused by a fire. Houses were damaged, not by fire, but by the explosion caused by a fire in another neighboring place. The insurance offices thought that it was for their interest to be very liberal, and treat the damage from the explosion as a damage by fire, within the policies, and to pay accordingly. This was a mere act of liberality. They thought it was for their permanent benefit commercially to be liberal, and they were liberal accord- ingly. See Taunton v. Insurance Co., 2 Hen. & M. 135. I cannot myself doubt that THE NATURE OP THE CONTRACT. 33 If a tnistee. or a vendor who had become a trustee by the completion of his contract, had received this bounty, he would have re- ceived It by reason of his trusteeship, and would have had to give it up to his cestui que trust or purcbaser. In my view of the case it is perhaps unnec- essary to refer to the act of parliament as to fire insurance. But that act seems to me to shew that a policy of insurance on a house was considered by the legislature, as I be- lieve it to be considered by the universal consensus of mankind, to be a policy for the benefit of all persons interested in the prop- erty, and it appears to me that a purchaser having an equitable interest under a contract of sale is a person having an interest in the house, within the meaning of the act. I be- lieve that there is no case to be found in which the liability of the insurance office has been limited to the value of the interest of the insured in the house destroyed. If a tenant for life having instired his house has the house destroyed or damaged by fire, I have never heard it suggested that the in- surance oflice could cut down his claim by shewing that he was of extreme old age, or suffering from a mortal disease. In the case of Collingridge v. Assurance Corp., 3 Q. B. Div. 173. the vendor recovered the whole amount of the loss, although it was absolute- ly certain, having regard to the solvency of his purchaser, that he would really never suffer any loss at all, personally or other- wise, as trustee for such pmrchaser. Of authority on the subject, there is, no doubt, the express decision of Vice-Chancel- lor Kindersley against the plaintiff, but against that there are to be set off the very distinct opinions of Lord St. Leonards and Vlce-ChanceUor Parker, men of great knowl- KLL.SKL.CAS.LA.W DJS. — 3 edge of equity, and of great accuracy even in their dicta. But I prefer to rest my judgment on the fact that the relation between the vendor and the purchaser became, and was in law, as from the date of the contract and up to the completion of it, the relation of trustee and cestui que trust, and that the trustee re- ceived the insurance money by reason of, and as the actual amount of, the damage done to the trust property. The plaintiff puts his case also on the ground of the rep- resentations made to him by the defendant's solicitor and agent. What took place appears to me to be this: The solicitor said to the purchaser, I don't know who is entitled, but the vendor is the only person who has a legal claim, and I will make the claim accordingly, whichever Is entitled, and the purchaser left the matter in his hands. Now the purchaser could at that time have applied to the office to compel the money to be laid out in re- storing the building. And I am of opinion that when the money was under these cir- cumstances obtained from the office, it reach- ed the vendor's hands according to the then rights of the parties as between them and the insurance office; that is to say, as money which ought to be laid out in reinstating the premises, or, in other words, as money which the purchaser alone had any real or substan- tial interest in. BRETT, li. J. I should like to add to what I have said that I feel very great doubt whether, as between the defendants, and the Insurance company, the defendants can keep the money. COTTON, L. J. I quite concur in that doubt 34 THE CONTBACT OF INSURANCE. CASTELLAIN v. PRESTON. (11 Q. B. Div. 380.) Court of Appeal. March 12, 1883. Cliaxles Russell, Q. C, and A. Aspinall Tobin, for plaintiff. Gully, Q. C, and W. R. Kennedy, for defendants. Solicitors for plaintiff: Gregory, Rowcliffes & Co., for Laces, Bird, Newton & Richard- son, Liverpool. Solicitors for defendants: Torr & Co., for Anthony & Imlach, Liver- pool. BRETT, L. J. In this case the action is brought by the plaintiff, as representing an insurance company, against the defendants, in respect of money which has been paid by that company to the defendants on account of the loss by fire of a building. The defend- ants were the owners of property consisting partly, at all events, of a house, and the de- fendants had made a contract of sale of that property with third persons, which contract, upon the giving of a certain notice as to the time of payment, would oblige those third persons, if they fulfilled the contract, to pay the agreed price for the sale of that property, a part of which was a house, and, according to the peculiarity of such a sale and purchase of land or real property, the vendees would have to pay the purchase-money, whether the house was, before the date of payment, burnt down or not. After the contract was made with the third pprsons, and before the day of payment, the house was burnt down. The vendors, the defendants, having insured the house in the ordinary form with the plaintiff company, it is not suggested that upon the house being burnt down the defendants had not an insurable interest. They had an in- surable interest, as it seems to me, first, be- cause they were at all events the legal own- ers of the property; and, secondly, because the vendees or third persons might not carry out the contract, and if for any reason they should never carry out the contract, then the vendors, if the house was burnt down, would suffer the loss. Upon the happening of the fire, the defendants made a claim on the in- surance company represented by the plaintiff, and were paid a certain sum which repre- sented the damage done to the house. After that, the contract of sale between the defend- ants and the third persons, the vendees of the property, was carried out, and the full amount of the purchase-money was paid by the third persons to the defendants notwith- standing the fire. Under those circumstances the plaintiff representing the insurance com- pany brings this action; I do not say that he brings it to recover back the money which has been paid by the insurance company (for that expression of opinion would rather inter- fere with the form of the action), but he brings the action in respect of that money. The question is whether this action is main- tainable. The case was tried before Chltty, J., and he, in a very careful and elaborate judgment (8 Q. B. Dlv. 613, at page 615), has come to the conclusion that the Insurance company cannot recover against the defend- ants in respect of the money paid by them. It seems to me that the foundation of his judgment is this, that he considers that the doctrine of subrogation of the insurer into the position of the assured is confined within lim- its, which prevent it from extending to the present case. I must now consider whether I can agree with him. In order to give my opinion upon this case, I feel obliged to revert to the very foundation of every rule which has been promulgated and acted on by the courts with regard to in- surance law. The very foundation, in my opinion, of every rule which has been applied to insurance law. Is this, namely, that the contract of insurance contained in a marine or fire policy is a contract of indemnity, and of indemnity only, and that this contract means that the assured, in case of a loss against which the policy has been made, shaU be fully indemnified, but shall never be more than fully indemnified. That is the funda- mental principle of insurance, and iC ever a proposition is brought forward which is at variance with it, that is to say, which either will prevent the assured from obtaining a full indemnity, or which will give to the assured more than a full indemnity, that proposition must certainly be wrong. In the course of this discussion many propo- sitions and rules well known in insurance law have been glanced at. For instance, to speak of marine insurance, the doctrine of a constructive total loss originated solely to carry out the fundamental rule which I have mentioned. It was a doctrine introduced for the benefit of the assured; for, as a matter of business, a constructive total loss is equiva- lent to an actual total loss; and if a con- structive total loss could not be treated as an actual total loss, the assured would not recover a full indemnity. But grafted upon the doctrine of constructive total loss came the doctrine of abandonment, which Is a doc- trine in favour of the insurer or imderwriter, in order that the assured may not recover more than a full indemnity. The doctrine of constructive total loss and the doctrine of no- tice of abandonment engrafted upon it were invented or promulgated for the pm-pose of making a policy of marine Insurance a con- tract of indemnity in the fullest sense of the term. I may point out that the doctrine of notice of abandonment is most difficult to jus- tify upon principle; it was introduced, rather as a matter of justice in favour of the under- writers, so as to prevent the assured from ob- taining by fraud more than a full indemnity. That doctrine is to a certain extent technical, that is to say, although the assured has in reality suffered a constructive total loss, and although he is upon general principles en- titled to recover, nevertheless he must fall unless he has given a notice of abandonment 1 suppose that the doctrine of notice of aban- THE NATURE OF THE CONTRACT. 35 ■donment was originally introduced by mer- chants and underwriters, and afterwards adopted as part of the law as to marine insur- ance; but at first sight it seems a mere en- croachment of the judges. I have mentioned the doctrine of notice of abandonment for the purpose of coming to the doctrine of subrogation. That doctrine •does not arise upon any of the terms of the contract of insurance; it is only another prop- osition which has been adopted for the pur- pose of carrying out the fundamental rule which I have mentioned, and it is a doctrine in favour of the underwriters or insurers in order to prevent the assured from recovering more than a full indemnity; it has been adopted solely for that reason. It is not, to my mind, a doctrine applied to insurance law on the ground that underwriters are sureties. I'nderwriteis are not always sureties. They have rights which sometimes are similar to the rights of sureties, but that again is in or- der to prevent the assured from recovering trom them more than a full indemnity. But it being admitted that the doctrine of subro- ^tion is to be applied merely for the pur- pose of preventing the assured from obtain- ing more than a full indemnity, the question is, whether that doctrine, as applied in insur- ance law, can be in any way limited. Is it to ■be limited to this, that the underwriter is subrogated into the place of the assured so far as to enable the underwriter to enforce a contract, or to enforce a right of action? Why is it to be limited to that, if when it is limited to that, it wiU, in certain cases, ena- ble the assured to recover more than a fuU indemnity? The moment it can be shewn that such a limitation of the doctrine would have that effect, then, as I said before, in my opinion, it is contrary to the foundation •of the law as to insurance, and must be wrong. And, with the greatest deference to my Brother Chitty, it seems to me tliat that is the fault of his judgment. He has by his Judgment limited this doctrine of subrogation to placing the insurer in the position of the assured only for the purpose of enforcing a right of action, to which the assured may be entitled. In order to apply the doctrine of subrogation, it seems to me that the full and absolute meaning of the word must be used, that is to say, the insurer must be placed in the position of the assured. Now it seems to me that in order to carry out the fundamental rule of insurance law, this doctrine of subro- gation must be carried to the extent which I am now about to endeavour to express, name- ly, that as between the underwriter and the assured the underwriter is entitled to the ad- vantage of eveiy right of the assured, wheth- ■er such right consists in contract, fulfilled or unfulfilled, or in remedy for tort capable of "being insisted on or already insisted on, or in any other right, whether by way of condition •or otherwise, legal or equitable, which can be, or has been exercised or has accrued, and whether such right could or could not be en- forced by the insurer in the name of the as- sured by the exercise or acquiring of which right or condition the loss against which the assured is insured, can be, or has been di- minished. That seems to me to put this doc- trine of subrogation in the largest possible form, and if in that form, large as it is, it is short of fulfilling that which is the funda- mental condition, I must have omitted to state something which ought to have been stated. But it will be observed that I use the words "of every right of the assured." I think that the rule does require that limit. In Bumand v. Rodocanachi, 7 App. Gas. 333, the foundation of the judgment to my mind was, that what was paid by the United States government could not be considered as sal- vage, but must be deemed to have been only a gift. It was only a gift to which the assur- ed had no right at any time until it was placed in their hands. I am aware that with regard to the case of reprisals, or that which a person whose vessel had been captured got from the English government by way of reprisal, the sum received has been stated to be, and perhaps in one sense was, a gift of his own government to himself, but it was al- ways deemed to be capable of being brought within the range of the law as to insurance, because the English government invariably made the "gift," so invariably, that as a mat- ter of business it had come to be considered as a matter of right. This enlargement, or this explanation, of what I consider to be the real meaning of the doctrine of subrogation, shews that in my opinion it goes much fur- ther than a mere transfer of those rights which may at any time give a cause of action either in contract or in tort, because if upon the happening of the loss there is contract between the assured and a third person, and if that contract is immediately fulfilled by the third person, then there is no right of action of any kind into which the insurer can be subrogated. The right of action is gone; the contract is fulfilled. In like manner if upon the happening of a tort the tort is immediate- ly made good by the tort feasor, then the right of action is gone; there is no right of ac- tion existing into which the insurer can be subrogated. It will be said that there did for a moment exist a right of action in favour of the assured, into which the insurer could have been subrogated. But he cannot be subro- gated into a right of action until he has paid the sum insured and made good the loss.' Therefore innumerable cases would be taken out of the doctrine, if it were to be cofi- fined to existing rights of action. And I go further and hold that if a right of action in the assured has been satisfied, and the loss has been thereby diminished, then, although there never was nor could be any right of ac- tion into which the insurer could be subro- gated, it would be contrary to the doctrine of subrogation to say that the loss is not to be diminished as between the assured and the in- surer by reason of the satisfaction of that 36 THE CONTRACT OF INSURAJTCE. right. I fall to see at present if the present defendants would have had a right of action at any time against the purchasers, upon which they could enforce a contract of sale of their property whether the building was standing or not, why the Insurance company should not have been subrogated into that right of action. But I am not prepared to say that they could be, more particularly as I understand my learned brother, who knows much more of the law as to specific perform- ance than I do, is at all events not satisfied that they could. I pass by the question with- out solving it, because there was a right in the defendants to have the contract of sale fulfilled by the purchasers notwithstanding the loss, and it was fulfilled. The assured have had the advantage Dherefore of that right, and by that right, not by a gift which the purchasers could have declined to make, the assured have recovered, notwithstanding the loss, from the purchasers, the very sum of money which they were to obtain whether this building was burnt or not. In that sense I cannot conceive that a right, by virtue of which the assured has his loss diminished, is not a right which, as has been said, affects the loss. This right which was at one time merely in contract, but which was afterwards fulfilled, either when it was in contract only, or after it was fulfilled, does not affect the loss; that is to say, it affects the loss by ena- bling the assured, the vendors, to get the same money which they would have got if the loss had not happened. While I am applying the doctrine of sub- rogation which I have endeavoured to enun- ciate, I think it due to Chitty, J., to point out what passages in his judgment require some modification. 8 Q. B. Div., at page 617. I find him reading this passage: "I know of no foundation for the right of underwriters, except the well known principle of law, that where one person has agreed to indemnify another, he will, on making good the Indem- nity, be entitled to succeed to all the ways and means by which the person indemnified might have protected himself against' or re- imbursed himself for the loss." That is a quotation from Lord Caims in Simpson v. Thomson. 3 App. Cas. 279, at page 284. The learned judge then goes on, "What is the principle of subrogation? On payment the insurers are entitled to enforce all the reme- dies, whether in contract or in tort, which 'the insured has against third parties, where- by the insured, can compel such third parties to make good the loss Insured against" That Is, as it seems to me, to- confine this doctrine of subrogation to the principle that the. insurers are entitled to enforce all rem- edies, whether in contract or in tort. I should venture to add this— "And if the assured en- forces or receives the advantage of such remedies, the insurers are entitled to receive from the assured the advantage of such ifinedies." Then when we come to this illustration, "Where the landlord insures. and he has a covenant by the tenant to repair, the insurance office, on payment in, like manner, succeeds to the right of the landlord against his tenant." I would add this— "And if the tenant does repair, the in-, surer has the right to receive from the as- sured a benefit equivalent to the benefit which the assured has received from such tepair." Then, dealing with the case of Burnand v. Rodocanachi, 7 App. Cas. 333, the learned judge cites the opinion of Bram- weU, L. J., 8 Q. B. Div. at page 618. He says that Bramwell, L. J., in his judgment held that it was not salvage, but "that in the cir- cumstances the sum received by the shipown- er was but a pure gift, and there was no right on the part of the insurers to recover any part of it over against him." I, for my- self, venture to add this as the reason, "Be- cause there was no right in the assured to demand the compensation from the Ameri- can government." There was no right to de- mand it, it was bestowed and received as a pure gift. DarreU v. Tibbitts, 5 Q. B. Div. 560, seems to me to be entirely in favour of the plaintiff in this case. I shall not retract from the very terms which I used in that ease. It seems to me that in DarreU v. Tib- bitts, 5 Q. B. Div. 560, the insurers were not subrogated to a right of action or to a remedy. They were not subrogated to a. right to enforce the remedy, but what they were subrogated into was the right to re- ceive the advantage of the remedy which had been applied, whether it had been en- forced or voluntarily administered by the person who was bound to administer it. That seems to me to be the doctrine. Then with regard to the passage (5 Q. B. Div. at page 563), "the doctrine is well established, that where something is insured against loss, either in a marine or a fire policy, after the assured has been paid by tha insurers for the loss, the insurers are put into the place of the assured with regard to every right given to him by the law respecting the subject- matter insured." I wish to explain 'that that was a distinct clause, and it was so intended by me when I stated it. I then mentioned contracts: "And with regard to every con- tract which touches the subject-matter in- sured, and which contract is affected by the loss or the safety of the subject-matter in- sured by reason of the peril insured against." I fail to conceive any contract which gives a right over the thing insured, which is not af- fected by the loss or safety of it, and if It is. necessary to bring the present case within those terms, it seems to me that the contract of purchase and sale was affected by that loss. I will not go further with the judg- ment of Chitty, J., except to say this, that at the end my learned brother has put it thus, that "the only principle applicable is that of subrogation as understood in the full sense of that term." 8 Q. B. Div., at page 625. There I agree with him, only my view of the" f ull sense is larger than that which he adopt- THE NATURE OF THE CONTRACT. 37 ed. "And that where the right claimed is under a contract between the Insured and third parties, it must be confined to the case of a conti-act relating to the subject- matter of the insurance, which entitled the insurers to have the damages made good." I think it would be better expressed in this way— "which entitles the assured to be put by such third parties into as good a position as if the damage insured against had not happened." If it is put in that sense, it seems to me to be consistent with the propo- sition which I laid down at the beginning of what I have said, and to cover this case. I will repeat it, "which entitles the assured to be put by such third parties into as good a position as if the damage insured against had not happened." The contract in the present case, as it seems to me, does enable the assured to be put by the third party into as good a position as if the fire had not hap- pened, and that result aris-?s from this con- tract alone. Therefore, According to the true principles of insurance law, and in order to carry out the fundamental doctrine, namely, that the assured can recover a full indemnity, but shall never recover more, except, per- haps, in the case of the suing and labouring clause under certain circumstances, it is necessary that the plaintiff in this case should succeed. The case of Darrell v. Tib- bitts, 5 Q. B. Div. 560, has cut away every technicality which would prevent a sound de- cision. The doctrine of subrogation must be carried out to the full extent, and carried out in this case by enabling the plaintiff to recover. COTTON, L. J. In this case the appeUant's company insured a house belonging to the de- fendants, and before there was any loss by fire the defendants sold the house to certain purchasers. Afterwards there was a fire, and an agreed sum was paid by the insurance of- fice to the defendants in respect of the loss. The appellant apparently seeks to recover the sum which the office paid to the defendants, and if the plaintiff's claim could be shaped only in this form, I think my opinion would be against him. The plalntifC's claim may be treated in substance in another way, name- ly, the company seek to obtain the benefit either wholly or partly of the amount paid by them out of the purchase-money which the defendants have received since the fire from the purchasers. In my opinion, the plaintiff is right in that contention. I think that the question turns on the consideration of what a policy of insurance against fire is, and on that the right of the plaintiff depends. The policy is realljr a contract to Indemnify the person insured for the loss which he has sus- tained in consequence of the peril insured against, which has happened, and from that it follows, of course, that as it is only a con- tract of indemnity, it is only to pay that loss which the assured may have sustained by rea- son of the fire which has occurred. In order to ascertain what that loss is, everything must be taken into account which is received by and comes to the hand of the assured, and which diminishes that loss. It is only the amount of the loss, when it is consid- ered as a contract of indemnity, which is to be paid after taking into account and estimat- ing those benefits or sums of money which the assured may have received in diminution of the loss. If the proposition is stated in that manner, it is clear that the office would be entitled to the benefit of anything received by the assured before the time when the policy is paid, and it is established by the case of Darrell v. Tibbitts, 5 Q. B. Div. 560, that the insurance company is entitled to that benefit, whether or not before they pay the money they insist upon a calculation being made of what can be recovered in diminution of the loss by the assured; if they do not insist up- on that calculation being made, and if it aft- erwards turns out that in consequence of something which ought to have been taken into account in estimating the loss, a sum of money, or even a benefit, not being a sum of money, is received, then the office, notwith- standing the payment made, is entitled to say that the assured is to hold that for its benefit, and although it was not taken into account in ascertaining the sum which was paid, yet when it has been received it must be brought into account, and if it is not a sum of money, but a bene&t that has been received, its value must be estimated in money. Now Lord Blackburn, in the case of Bur- nand v. Rodocanachi, 7 App. Cas. 333, at page 339, states the principle in these words: "The general rule of law (and it is obvious justice) is that where there is a contract of indemnity (it matters not whether it is a marine policy, or a poUcy against fire on land, or any other contract of indemnity), and a loss happens, anything which reduces or diminishes that loss reduces or diminishes the amount which the indemnifier is bound to pay; and if the indemnifier has already paid it, then, if any- thing which diminishes the loss comes into the hands of the person to whom he has paid it, it becomes an equity that the person who has already paid the full indemnity is en- titled to be recouped by having that amount back." In DarreU v. Tibbitts, 5 Q. B. Div. 560, to which I have already referred, the question which we had to consider was wheth- er the insurance office was entitled to the ben- efit produced in consequence of a covenant to repair if the building should be damaged by an explosion of gas. In my opinion it was not intended in any way to Umit the right of the insurer, as an insurer, to cases where the cj&tract in respect of which benefit had been received related to the same loss or damage as that against which the contract of indem- nity was created by the policy. That was what was before this court in that case, and undoubtedly expressions do occur as to a contract relating to the loss or affecting the loss, but the principle was not limited to con- 38 THE CONTRACT OF INSURANCE. tracts. The principle whlcli 1 liave enun- ciated goes further, and if there is a money or any other benetit received which ought to be taken into account in diminishing the loss, or in ascertaining what the real loss is against which the contract of indemnity Is given, the indemnifler ought to be allowed to take ad- vantage of it in order to calculate what the real loss is, even although the benefit is not a contract or right of suit which arises and has its birth from the accident insured against. Of course the difficulty is to con- sider what ought to be taken into account in estimating that loss against which the insurer has agreed to indemnify, and we have been pressed in argument with many difficulties. One which possibly was put to us most strongly, was that the contract of sale has nothing to do with destruction by fire, and if any part of the purchase-money is to be taken into account, why is a gift not to be taken into account V That may be said to diminish the loss as well as a contract of sale. The answer is that when a gift is made afterwards in order to diminish the loss, it is bestowed in such terms as to shew an intention to benefit the assured, and to give the insurer the benefit of that would be to divert the gift from its intended object to a different person. That really was what was decided in Bumand V. Rodocanachi, 7 App. Cas. 333. There the money bestowed, not as a matter of right but as a gift, was intended to benefit the assured beyond the amount which they had got in consequence of any insm^nce. There is an- other groimd which may possibly exclude gifts. It may be that the right of the in- surer to have a sum brought into account in diminution of the loss, against which he has given a contract of indemnity, is confined to that which is a right or other incident belong- ing to the person insured, as an incident of the property at the time when the loss takes place. This definition would not include a sum subsequently bestowed on the assured by way of gift, for it can in no way be said to have been appertaining to him as owner of the property at the time when the loss took place. But, m the present case, what we have to consider is whether the contract of sale is not. an Incident of the property belong- ing to the owners at the time of the loss in such a way, that it ought to be brought Into account in estimating the loss, against which the insurer has undertaken to Indemnify. What was the position of the parties V The defendants' house was Insured, and there was a loss fi'om fire, the damage caused by the fire being estimated by the parties at £330. Ultimately, the property having been already agreed to be sold at a fixed price, the assured received the whole' amount of that price. Now they did that in respect of a contract relating to the subject insured, the house, and, to my mind. If they received the whole amount of the price which they previously had fixed as the value of the house, that must of necessity be brought into accoimt when it was received, for the purpose of ascertaining what was the ultimate loss against which they had concluded a contract of Indemnity with the Insurance office. Here the purchas- ers have paid the money in full, and as the property was valued between the vendors and the purchasers at £3100, the vendors got that sum In respect of that which had been burn- ed, but which had not been burned at the time when the contract was entered into. They had fixed that to be the value, and then any money which they get frcm the purchas- ers, and which together with £330, the sum paid by the office, exceeds the value of the property as fixed by them under the contract to seU, must diminish, and in fact entirely ex- tinguishes the loss occasioned to the vendors of the property by the tire. Therefore, though It cannot, to my mind, be said that the in- surers are entitled, because the purchase is completed, to get back the money which they have paid, yet they are entitled to take Into account the money subsequently received un- der a contract for the sale of the property ex- isting at the time of the loss, in order to see what the ultimate loss was against which they gave their contract of indemnity. On the principle of Darrell v. Tibbitts, 5 Q. B. Div. 560, when the benefit afterwards accrued by the completion of the purchase, the Insurance company were entitled to demand that the money paid by them should be brought into account. Therefore the conclusion at which I have arrived is, that if the purchase-money has been paid in full, the Insurance office wlil get back that which they have paid, on the ground that the subsequent payment of the price which had been before agreed upon, and the contract for payment of which was exist- ing at the time, must be brought Into account by the assured, because it diminishes the loss against which the insurance office merely un- dertook to indemnify them. In my opinion, therefore, the dedslon below was erroneous. I think Chltty, J., based it upon this, that in this case there was no right of subrogation, no contract which the office could have Insist- ed upon enforcing for their benefit. I think it Immaterial to decide that question, because the vendors have exercised their right to msist upon the completion of the purchase. BOWEN, L. J. I am of the same opinion. The answer to the question raised before us appears to me to follow as a deduction from the two propositions, first, that a fire insur- ance is a contract of Indemnity; and secondly, that when there is a contract of Indemnity no more can be recovered by the assured than the amount of his loss. First of all, is a fire Insurance a contract of indemnity? It appears to me It is quite as much a contract of indemnity as a marine iQSurance is. The differences between the two are caused by the diversity of the sub- ject-matters. On a marine policy a ship may be Insured which is at a distance and move- able, or goods may be insured on board of THE NATURE OF THE CONTRACT. 39 vessels which are at a distance, and on a Are policy a house Is insured which is fixed to the land; but both are contracts of Indem- nity. Only those can recover who have an Insurable interest, and they can recover only to the extent to which that Insurable interest is damaged by the loss. In the course of the argument it has been sought to establish a distinction between a fire policy and a ma- rine policy. It has been urged that a Gie policy is not quite a contract of indemnity, and that the assured can get something more than what he has lost. It seems to me that there is no justification in authority, and I can see no foundation in reason, for any sug- gestion of that kind. What is it that is in- sured in a fire policy? Not the bricks and the materials used in building the house, but the interest of the assured in the subject-mat- ter cf insurance, not the legal interest only, but the beneficial interest; and I do not Iinow any reason why there should be a different definition of what is an 4nsurable interest in fire policies from that which is well known as the established definition in marine poli- cies, allowance being made for the differences of the subject-matter. It seems to me that it is an ocular illusion to suppose that under any circumstances more may be obtained by tlie assured than the amount of the loss. I think this illusion can be detected if it is rec- ollected what are the ordinary business rules according to which insurances are made. It is well known in marine and in fire insurance that a person who has a limited interest may insure nevertheless on the total value of the subject-matter of the insurance, and he may recover the whole value, subject to these two provisions; first of all, the form of his pol- icy must be such as to enable him to recover the total value, because the assured may so limit himself by the way in which he insures as not really to insure the whole value of the subject-matter; and secondly, he must intend to insure the whole value at the time. When the insurance is effected he cannot recover the entire value unless he has intended to insure the entire value. A person with a limited in- terest may insure either for himself and to cover his own interest only, or he may insure so as to cover not merely his own limited in- terest, but the interest of all others who are interested in the property. It Is a question of fact what is his intention when he obtains the policy. But he can only hold for so much as he has intended to insure. Let us take a few of the cases which are most commonly known in commerce of persons who insure. There are persons who have a limited interest, and yet who insure for more than a limited in- terest, who insure for the total value of the subject-matter. There is the case, which is I suppose the most corumon, of carriers and wharfingers and commercial agents, who have an interest in the adventure. It is well known what their rights are. Then, to take a case which perhaps illustrates more exactly the argument, let Ub turn to the case of a mortgagee. If he has the legal ownership, he is entitled to insure for the whole value, but even supposing he is not entitled to the legal ownership he is entitled to insure prima fa- cie for all. If he Intends to cover only his mortgage and is only insuring his own inter- est, he can only in the event of a loss hold the amount to which he has been damnified. If he has intended to cover other persons beside himself, he can hold the surplus for those whom he has intended to cover. But one thing he cannot do, that is, having intended only to cover himself and being a person whose interest is only limited, he cannot hold anything beyond the amount of the loss caus- ed to his own particular interest. Suppose for a moment the case of a ship and a mort- gagee who has lent £500 on the ship. The ship is worth £10,000. If he insures for £10,- 000, meaning only to cover his own interest, and not the interest of anybody besides, can it for a moment be supposed that the mort- gagee who insures under those circumstances can hold the £10,000? That would be an over insurance, and to treat it in any other way would be to make a marine policy not a con- tract of indemnity, but a wager, a speculation for gain. Suppose, again, there are several mortgagees for small sums, can they all re- cover and hold (having ex hypothesi insured their separate interests only) the entire value of the ship? It seems to me they cannot. They can recover only what they have lost. That being, as I apprehend, the law about mortgages of ships, is there any real distinc- tion between that and the mortgagee of a house? I can see none. It seems to me that the same principle appUes, and here as in many other problems of insurance law, the problem wiU be solved by going back and resting upon the doctrine of indemnity. Let us take another instance which has been much pressed upon us in the course of the argument, the case of a tenant for years or a tenant from year to year. We have been asked to hold that a tenant from year to year can always recover the full value of the house from the insurance company, al- though he has intended to insure only his limited interest in it. There is some justi- fication for that in the language of James, L. J., in Rayner v. Preston, 18 Ch. Div. 1, at page 15. He says this: "In my view of the case it is perhaps unnecessary to refer to the act of parliament as to fire insurance. But that act seems to me to shew that a policy of insurance on a house was consid- ered by the legislature as I believe it to be considered by the universal consensus of mankind, to be a policy for the benefit of all persons interested in the property, and it ap- pears to me that a purchaser having an equi- table interest under a contract of sale is a per- son having an interest in the house within the meaning of the act. I believe that there is no case to be found in which the liability of the insurance office has been limited to the value of the interest of the insured in the 40 THE CONTEACT OF IKSUBANCE. house destroyed. If a tenant for life hav- ing insured his house has the house de- stroyed or damaged by fire, I have never heard it suggested that the insurance office could cut down his claim by shewing that he was of extreme old age or suffering from a mortal disease." Now, with the greatest possible respect and reverence for all that is left to us of the judgments of a great judge like James, L. J., I confess I do not follow that. I have no doubt the insurance offices seldom take the trouble to look to the exact interest of the tenant who insures, or per- haps of the landlord who insures, and for the best of all reasons, because it is general- ly intended that the insurance shall be made, not merely to cover the limited interest of the tenant, but also to cover the interest of all concerned. In most cases the covenants as to repair throw liability on one side or the other, and in a large class of leases the lia- bility to repair is by the provisions of the lease thrown upon the tenant. Therefore, in these cases no question ever can arise be- tween the insurance office and the tenant from year to year, or the tenant for years, as to the amount which the insurance office ought to pay. But if a tenant for a year, or a tenant for six months, or a tenant from week to week, insures, meaning only to cover his interest, does anybody really sup- pose that he could get the whole value of the house? It is true that in most cases the claim of the tenant from year to year, or for years, cannot be answered by handing over to him what may be the marketable value of his property; and the reason is that he insures more than the marketable value of his property, and he loses more than the marketable value of his property; he loses the house in which he is living and the bene- ficial enjoyment of the house as well as its pecuniary value. That I think is all that was meant by the vice-chancellor in Simp- son V. Scottish Union Ins. Co., 1 Hen. & M. 618, at page 628. I will pass on to the case of a life tenant. I will take the case of a life tenant who is a very old man, and whose house is burnt down, but who has intended only to insure his own interest. I am far from saying that he could not under any conceivable circum- stances be entitled to have the house rein- stated. A man cannot be compensated sim- ply by paying him for the marketable value of his interest. But it does not follow from that that he gets or can keep more than he has lost. I very much doubt whether, if a life tenant, having intended to insure only his life interest, dies within a week after the loss by fire, the court would award his exec- utors the whole value of the house. In all these difficult problems I go back with confi- dence to the broad principle of indemnity. Apply that and an answer to the difficulty will always be found. The present case arises between vendors and vendees. That does not fall within the category of the cases which I have been discussing, where a per- son with a limited interest intends only to cover his own interest. But can it be any exception to the infallible rule that a man can only be indemnified to the extent of his loss? What is really the interest of the vendors, the assured? Their insurable in- terest is this — they had insured against fire, and they had then contracted with the pur- chasers for the sale of the house, and, after the contract, but before the completion, the fire occurred. Their interest therefore is that at law they are the legal owners, but their beneficial interest is that of vendors with a lien for the unpaid purchase-money; they would get ultimately all the purchase- money provided the matter did not go off owing to defective title. Such persons in the first instance can obviously recover from the insurance company the entire amount of the purchase-money. That was decided in the case of CoUingridge v. Corporation, 3 Q. B. Div. 173; but can they keep the whole, having lost only half? Surely it would be monstrous to say that they could keep the whole, having lost only half. Suppose for a moment that only £50 remained to be paid of the purchase-money, and that a house had been burnt down to the value of £10,000, would it be in accordance with any principle of indemnity that persons who were only interested, and could only be interested to the extent of £50, could recover £10,000? They would be getting a windfall by the fire, their contract of insurance would not be a contract against loss, it would be a specula- tion for gain. Then what is the principle which must be applied? It is a corollary of the great law of indemnity, and is to the following effect: That a person who wishes to recover for and is paid by the insurers as for a total loss, cannot take with both hands. If he has a means of diminishing the loss, the result of the use of those means belongs to the underwriters. If he does diminish the loss, he must account for the diminution to the underwriters. In Simpson v. Thom- son, 3 App. Cas. 279, at page 284, it is said by Lord Cairns, L. C: "I know of no foundation for the right of underwriters, ex- cept the well known principle of law, that where one person has agreed to indemnify another, he will, on making good the indem- nity, be entitled to succeed to all the ways and means by which the person indemnified might have protected himself against or re- imbursed himself for the loss." Is there any real distinction here between fire policies and marine policies? It seems to me that the learned judge below, and the American authorities on which he relies, have fallen into the mistake of supposing that the distinction which obtains as to cer- tain incidents of marine policies and fire poli- cies, is derived from a difference of principle, and not from the diversity of the subject- matter. In any case the principle of in- demnity is the same, and there is no depar- THE NATURE OF THE CONTRACT. 41 ture from It. I will make plain what I mean by reading the language of Chitty, J. He says (S Q. B. Dlv. 618) : "An obvious dis- tinction exists between the case of marine insurance and of Insurance of buildings an- nexed to the soil. In the case of marine in- surance, where tliore is a constructive total loss, the thing is considered as abandoned to the underwriters, and as vesting the prop- «rty directly in them. But this doctrine of abandonment cannot be applied to the insur- ance of buildings annexed to the soil; al- though the buildings annexed are destroyed, there cannot be a cession of the right to the soil itself." It seems to me, if I may venture to say it of so expe-ienced a judge, that there is an ambiguity in the way in which he is dealing with the doctrine of construct- ive total loss. The doctrine of abandonment is itself based upon the principle of indem- nity. It is well known, historically, that that is so, and in reason it must be so. It is only since marine policira have ceased to be wager policies throughout the world, and be- come contracts of indemnity, that the doc- trine of abandonment has become universal, and so far from its constituting a difference of principle between marine insurance law and fire insurance law, it is the same prin- ciple of indemnity, only worked out different- ly, because what happens at sea is the loss of a ship, and what happens on land is the loss of a house. It is true that the doctrine of abandonment is inapplicable. But if the l)uildings annexed to the soil are destroyed, it is not a question of constructive total loss, it is a question of actual total loss. The same ambiguity, I think, is to be found in the language of the American case which Chit- ty, J., cites at page 624. The learned judge in that case says, "it may be a question whether he" (the chancellor) "has not relied too much on the cases of marine insurance in which the doctrine of constructive total loss, abandonment, and salvage are fully acknowl- edged, but which have slight application to insurance against loss by fire." Slight ap- plication it is true, but not because the doc- trine of indemnity is not to be carried out to Its extreme in case of loss by fire, but be- cause the subject-matter in the one case is the vessel lost at sea, and in the other the house burned, which is annexed to the soil. •Chitty, J., goes on to discuss the case on the basis of what he calls the principle of subro- gation. I will add very little to what BRETT, L. J., has said about that It seems to me that a good deal of confusion would be caused, if one were to suppose that insurers are in the position of sureties. A surety Is a person who answers for the default of an- other, and an insurer is a person who guar- antees against loss by an event. The default or nondefault of another, as between that other and the person who is insured, may diminish or increase the loss; but what the insurer is guaranteeing is not the default of that person, he is guaranteeing that no loss shall happen by the event And subrogation is itself only the particular application of the principle of indemnity to a special sub- ject-matter, and there I think is where the learned judge has gone wrong. He has tak- en the term "subrogation," and has applied it as if it were a hard and fast line, in- stead of seeing that it is part of the law of indemnity. If there are means of diminish- ing the loss, the insurer may pursue them, whether he is asking for contracts to be car- ried out in the name of the assured, or whether he is suing for tort. It is said that the law only gives the underwriters the right to stand in the assured's shoes as to rights which arise out of, or in consequence of, the loss. I venture to think there is ab- solutely no authority for that proposition. The true test is, can the right to be insisted on be deemed to be one the enforcement of which will diminish the loss? In this case the right, whatever it be, has been actually enforced, and all that we have to consider is whether the fruit of that right after it is enforced does not belong to the insurers. It is insisted that only those payments are to be taken into consideration which have been made in respect of the loss. I ask why, and where is the authority? If the payment diminishes the loss, to my mind it falls with- in the application of the law of indemnity. On this point I should like to pause one in- stant to consider the definition which BRETT, L. J., has given. It does seem to me, that taking his language in the widest sense, it substantially expresses what I should wish to express with only one small appendage that I desire to make. I wish to prevent the danger of his definition being supposed to be exhaustive by saying that if anything else occurs outside it the general law of indemnity must be looked at. With regard to gifts, all that is to be con- sidered is, has there been a loss, and what is the loss, and has that loss been in sub- stance reduced by anything that has hap- pened? Now I admit that in the vast major- ity of cases, it is difficult to conceive a volun- tary gift which does reduce the loss. I do not think that the question of gift was the root of the decision in Burnand v. Rodocan- achi, 7 App. Cas. 333, although it seems to me that it was a very essential matter in consid- ering the case. I think the root of the deci- sion in Burnand v. Rodocanachl, 7 App. Cas. 333, was the payment which had been made did not reduce the loss, not having been in- tended to do so. The truth was that the English government and the American gov- ernment agreed that the sums which were to be paid were to be paid, not in respect of the loss, but in respect of something else, and therefore the payment could not be a reduc- tion of the loss. Suppose that a man who has insured his house has it damaged by fire, and suppose that his brother offers to give him a sum of money to assist him. The ef- fect on the position of the underwriters will 42 THE CONTRACT OF INSURANCE. depend on the real character of the transac- tion. Did the brother mean to give the mon- ey for the benefit of the insm'ers as well as for the benefit of the assured? If he did, the Insurers, it seems to me, are entitled to the benefit, but if he did not, but only gave it for the benefit of the assured, and not for the benefit of the underwriters, then the gift was not given to reduce the loss, and it falls within Burnand v. Rodocanachi, 7 App. Gas. 333. If it was given to reduce the loss, and for the benefit of the insurers as well as the assured, the case would fall on the other side of the line, and be within Randal v. Cockran, 1 Ves. Sr. 98, to which allusion has been made. In the present case the ven- dors have been paid the whole of their pur- chase-money. Even if they had not been paid, but had still the purchase-money out- standing, they would have had some beneficial interest in the nature of their vendors' lien. An unpaid vendor's lien is worth something, I suppose. I do not say that it is necessary to decide the point, and I only mention it to make more clear my view of this case, not as laying down the law for future occasions. But if an unpaid vendor's lien is worth something, on what principle could a vendor keep the unpaid vendor's lien and be paid for it by the insurers? In such a case he would be taking with both hands. Now why should not underwriters be entitled at all events to insist on the vendor's lien? As to specific performance I say nothing. I am not familiar, as COTTON, L. J., is, with that bi-anch of the law, and there may be some special reasons why the insurers should not be able to insist upon specific performance; but why should not they insist upon the un- paid vendor's lien? The vendor, if he did not exercise it for their benefit, would be trying to make the contract between himself and the insurers more than a contract of in- demnity. Chitty, J., seems to think that in this instance it is necessary to recollect that the contract of sale was not a contract, ei- ther directly or indirectly, for the preserva- tion of the buildings insured; that the con- tract of insurance was a collateral contract wholly distinct from, and unaffected by, the contract of sale. What does it matter? The beneficial interest of the vendors in the house depends on the contract being fulfill- ed or not, and the fulfillment of the contract lessens the loss, its nonfulfillment affects it. Chitty, J., Indeed, says further that "the at- tempt now made is to convert the insurance against loss by fire into an insurance of the solvency of the purchaser." 8 Q. B. Div. 621. That may be answered in the same way. It is not that the solvency of the pur- chaser is guaranteed, but that the vendors are guaranteed against the loss which is di- minished or increased according as the pur- chaser turns out to be solvent or not. The solvency of the purchaser affects the loss, — that is the only way in which it touches the insurance, — it is not because the insurance is directly an insurance of his solvency, fi- nally (and this is the last observation that I wish to make upon the judgment of Chitty, X), he puts the case of a landlord insuring, and the tenant under no obligation to repair. He takes a case, "where under an informal agreement evidently drawn by the parties themselves, the large rent of £700 was re- served, and the tenant, notwithstanding the fire, was bound to pay the rent," He says, "Assume that the building in such a case was ruinous, and would last the length of the term only. Could the insurers recover a proportionate part of each payment of rent as it was made, or could they wait until the end of the term, and then say in effect, 'You have been paid for the whole value of the building, and therefore we can recover against you?' " That seems to me at first sight to look as if it were a very difficult point, but I think this difficulty diminishes, if it does not vanish, as soon as it is con- sidered what are the conditions of the hy- pothesis. Is the learned judge supposing that the landlord, who is a person with a limited interest, did intend to insure all oth- er interests besides his own? The landlord can do so if he so intended; the question is, has he done so? If the landlord intended to insure all other interests besides his own, the difficulty dissipates itself into thin air. If he did not, it would be a very odd case, and perhaps one might ride safely at anchor by saying that one would wait till it arose. But I am not desirous of being over cau- tious, because I am satisfied to rest on the broad principle of indemnity, and I say, "Apply the broad principle of indemnity, and you have the answer." The vendor cannot recover for greater loss th.an he suffers, and if he has only a limited interest in the sub- ject-matter, and only intends to insure that interest, I know of no means in law or equi- ty by which he is entitled to obtain anything else out of the insurance office except what is measured by the measure of his loss. As to the form of action, I need add nothing to what has fallen already from the other mem- bers of the court. I am so much in accord with their views that I should not have add- ed a judgment as long as mine has been if It were not for the very great importance, to my mind, of keeping clear in these insurance cases what is really the basis and founda- tion of all insurance law. Judgment reversed. THE NATURE OF THE CONTRACT. 48. CONNECTICUT FIRE INS. CO. v. ERIE RY. CO. (73 N. Y. 399.) Court of Appeals of New York. April 23, 1878. Action by an Insurance company against a railway company to recover the amount paid by plaintiff to a third person under a policy of insurance, on the ground that the loss was caused by defendant's negligence. A verdict for plaintiff was set aside, and the complaint dismissed. Plaintiff appealed. Re- versed. M. H. Hirschberg, for appellant Lewis E. Carr, for respondent. CHURCH, C. J. It must be assumed from the verdict of the jury that the buildings were burned through the negligence of the defendant's agents and servants, and it is too well settled to render the citation of au- thorities necessary, that as between the plain- tiff,, the insurer, and the defendant, the latter was ultimately liable for the loss. A fire pol- icy is a contract of indemnity, and if a loss is occasioned by the wrongful act of another the insurer Is subrogated to the rights and remedies of the assured, and may s^aintain an action against the wrong-doer. If the as- sured receives the damages from the wrong- doer before payment by the insurer, the amount so received will be applied pro tanto In discharge of the policy. Hart v. Railroad Corp., 13 Mete. (Mass.) 99. If the wrong-doer pays the assured after payment by the in- surer, with knowledge of the facts, it is re- garded as a fraud upon the insurer, and he will not be protected from liability to the latter. Clark v. Wilson, 103 Mass. 223; In- surance Co. V. Hutchinson, 21 N. J. Eq. 107; Graff V. Kip, 1 Edw. Ch. 619. The question is presented In this case in a somewhat novel aspect, and unlike that of any other case to which our attention has been called. The plaintiff paid the policy after the release by the assured to the defend- ant, and by consenting to the judgment the payment must be regarded as voluntary on its part. If the plaintiff might have inter- posed the payment by the defendant to the assured, and the release as a defense to an fiction by the latter upon the policy, then the plaintiff cannot maintain this action. This question and the liability of the defendant depend upon the construction to be put upon the release, or rather if that construction be in favor of the plaintiff it will be unneces- sary to notice any other point. The release is as follows: "Loss and Damage. "Erie Railway Company, to John Martin, Salisbury Mills, Dr. "For settlement in full of all claims, de- mands and causes of action against the Erie Railway Company for loss and damage by fire, claimed to have been caused by sparks or coals from engine, burning hotel building,, barn, shed and contents, fences, trees, etc, at Salisbury station, on or about May 13, 1873, $2,100. "This settlement is not Intended to dis- charge the Connecticut Fire Insurance Com- pany from any claim which said Martin has against them for insurance, but as a full set- tlement with, and discharge of, the Erie Rail- way Company only. "Received, September 10, 1873, of the Erie- Railway Company, through the hands of R. Ij. Brundage, claim agent, two thousand one hundred dollars, m full of the above amount. "?2,100. John Martin." It 's proper to refer to the surrounding cir- cumstances. The buildings burned were worth about $3,400. Of the consideration paid for the release $300 was paid for a parcel of lajid conveyed to the defendant, leaving $1,- 800 paid for the damage to the buildings. The clause that the settlement was not in- tended to discharge the plaintiff from any claim of the assured against It for insurance was in the nature of a proviso or exception from the general purview of the release. It must be construed so as to carry out the In- tent of the parties, and that Intent must be determined from the language viewed in the Ught of surrounding circumstances. It is. evident that the assured did not receive the fuU amount of the damages incurred. This circumstance sheds some light upon the mean- ing of the release. The clause was intended for some purpose, and It seems to me obvious that It was designed to prevent the plaintiff from interposing the release as a defense to an action on the policy, and it is inferable that the amount of the policy was deducted from the amount of the loss in the settlement with the defendant The substance of the transaction was that the assured, having a claim against the plaintiff for $1,500, settled with and released the defendant from liabil- ity for the balance, retaining the claim against the plaintiff. The form of the clause is not very specific, but looking at the sub- stance it was a proviso that the release should not operate to prevent a recovery upon the policy against the plaintiff. With such a pro- viso, other portions of the release would have to yield to enable the proviso to have effect, and as to the plaintiff it would be the same as though no release had been given. It fol- lows that the plaintiff could not have Inter- posed the release as a defense in an action by the assured upon the policy, and if not,, the logical sequence is that the right of sub- rogation inures against the defendant. It is Insisted that as the assured has settled and released all his claim for damages, the plaintiff could acquire no right or remedy through him by equitable subrogation, or from him by assignment This proposition implies an assumption of the controverted fact whether the assured did release all claim. 44 THE CONTRACT OF INSURANCE. The answer to it is that the assured released only such damages as he could without in- terfering with his claim against the plaintiff, and the legal consequences must be regarded as a part of the exception, viz., the right of the plaintiff to a remedy over. This was as much reserved as the right to enforce the pol- icy. That right could not be reserved with- out reserving the remedy. The power to en- force the policy having been expressly re- served, ;he parties could not take away the right of the plaintiff to the remedy which that reservation vested in him by law. Hav- ing made their agreement so as to prevent the plaintiff from interposing this defense, they cannot object to the consequences which legally flow from it The exception neces- sarily embraces the right of subrogation. It is not needful to consider whether the effect would have been different If the assured had received the full amount of the loss. No in- justice is done the defendant by the result indicated. It was liable for the whole" loss, and the payment to the plaintiff of the amount of the policy will, with that already paid, not exceed that amount. It did not profess to pay the assured but a part of that amount, nor did the assured intend to receive but a part, and the legal construction of the contract accords with the principles of right and justice. The action is properly brought in the name of the plaintiff. No other person has any right or interest in the claim. Code, § 111; Cummings v. Morris, 25 N. T. 627. The judgment must be reversed and judg- ment ordered on verdict All couciu", except MILLER, J., absent Judgment accordingly. THE NATURE OP THE CONTRACT. 45 DALBY V. INDIA & LONDON LIFE- ASSUR. CO. (15 C. B. 365.) Elxchequer Chamber. Dec. 2, 1854. Mr. Bramwell (H. Tlndal Atkinson and F. J. Smith with him), for plaintiff. Channell, Serjt. CPartridge & Coxon with him), contra. PARKE, B. If we shotUd, upon consid- eration, think that the interest must be a continuing interest, as my Brother Channell contends, we will hear the matter further discussed upon the question whether the facts disclosed upon this bill of exceptions shew such continuing interest. Cur. adv. vult. PARKE, B., now delivered the judgment of the court: This case comes before us on a bill of ex- ceptions to the ruling of my Brother Cress- well at nisi prius. We learn, that, on the trial, he reserved the important point which arose in it for the consideration of the court of common pleas; and that, where it came on for discussion, it was thought right to put it on the record in the shape of a bill of ex- ceptions, that it may be cai-ried, if it should be thought proper, to the highest tribunal; and we have now, after a very able argu- ment on both sides, to disxrase of it in this court of error. It is an action on what is usually termed a policy of life-assurance, brought by the plaintiff as a trustee for the Anchor Assur- ance Company, on a policy for £1000 on the lif^ of his late royal highness, the Duke of Cambridge. The Anchor Life-Assurance Company had insured the duke's life in four separate poli- cies,— two for flOOO, and two for £500 each, granted by that company to one Wright. In consequence of a resolution of their direct- ors, they determined to limit their insm'ances to £2000 on one life; and, this insurance ex- ceeding it, they effected a policy with the defendants for £1000 by way of counter-in- surance. At the time this policy was subscribed by the defendants, the Anchor Company had un- questionably an insurable interest to the full amount Afterwards, an arrangement was made between the office and Wright for the former to grant an annuity to Wright and his wife, in consideration of a sum of money, and of the delivery up of the four policies to be cancelled, which was done; but one of the directors kept the present policy on foot by the payment of the premiums tiH the duke's deatli. It may be conceded, for the purpose of the present argument, that these transactions be- tween Wright and the office totally put an end to that interest which the Anchor Com- pany had when the policy was effected, and In respect of which It was effected: and that, at the time of the duke's death, and up to the commencement of the suit the plaintiff had no interest whatever. This raises the very important question, whether, under these circumstances, the as- surance was void, and nothing could be re- covered thereon. If the court had thought some interest at the time of the duke's death was necessary to make the policy valid, the facts attending the keeping up of the policy would have under- gone further discussion. There is the usual averment in the declara- tion, that, at the time of the making of the policy, and thence until the death of the duke, the Anchor Assurance Company was interested in the life of the duke, and a plea, that they were not interested modo et forma, — which traverse makes it unnecessary to prove more than the interest at the time of malting the policy, if that interest was suffi- cient to make it valid in point of law. Lush V. Russell, 5 Exch. 203. We are all of opin- ion that it was sufficient; and, but for the case of Godsall v. Boldero, 9 East, 72, should have felt no doubt upon the question. The contract commonly called life-assur- ance, when properly considered, is a mere contract to pay a certain sum of money on the death of a person, in consideration of the due payment of a certain annuity for his life, — the amount of the annuity being calculated, in the first instance, according to the prob- able duration of the life: and, when once fixed, it is constant and invariable. The stipulated amount of annuity is to be uni- formly paid on one side, and the sum to be paid in the event of death is always (except when bonuses have been given by prosperous offices) the same, on the other. This species of insurance in no way resembles a contract of indemnity. Policies of assurance against fire and against marine risks, are both properly con- tracts of indemnity, — the insurer engEiging to make good, within certain limited amounts, the losses sustained by the assured in their buildings, ships, and effects. Policies on maritime risks w^re afterwards used improp- erly, and made mere wagers on the happen- ing of those perils. This practice was limited by the ]9 Geo. II. c. 37, and put an end to in all except a few cases. But, at common law, before this statute with respect to mari- time risks, and the 14 Geo. III. c. 48, as to insurance on lives, it is perfectly clear that all contracts for wager-policies, and wagers which were not contrary to the policy of the law, were legal contracts; and so it is stated by the court, in Cousins v. Nantes, 3 Taunt 315, to have been solemnly determined in the case of Lucena v. Crawford, 2 Bos. & P. 324, 2 N. B. 269, without even a difference of opinion among all the judges. To the like effect was the decision of the court of en'or In Ireland, before aU the judges except three, in Insurance Co. v. Magee, Cooke & A. 182, that the Insurance was legal at common law. 46 THE COJTTBACT OF IXSURAKCE. The contract, therefore. In this case, to pay SL fised sum of £1000 on the death of the late Duke of Cambridge, would have been un- questionably legal at common law, if the plaintiff had had an interest therein or not: -and the sole question is, whether this policy was rendered illegal and void by the provi- sions of the statute 14 Geo. III. c. 48. This -depends upon its true construction. The statute recites, that the making In- .s\irances on lives and other events wherein the assured shall have no interest, hath intro- duced a mischievous kind of gaming: and, for the remedy thereof, it enacts "that no insurance shall be made by any one on the life or lives of any person or persons, or on .any other events whatsoever, wherein the person or persons for whose use and benefit, or on whose account, such policy shall be made, shall have no interest, or by way of gaming or wagering; and that every assur- ance made contrary to the true intent and meaning hereof shaU be null and void to all intents and purposes whatsoever." As the Anchor Assurance Company had un- questionably an interest in the continuance of the life of the Duke of Cambridge,— and that to the amount of flOOO, because they had hound themselves to pay a sum of £1000 to Mr. Wright on that event,— the policy effected lay them with the defendants was certainly legal and valid, and the plaintiff, without the slightest doubt, could have recovered the full amovmt, if there were no other provisions in the act. This contract is good at common law, and certainly not avoided by the 1st section of the 14 Geo. III. c. 48. This section, it is to be ■observed, does not provide for any particular -amount of interest. According to it. If there was any interest, however small, the policy would not be avoided. The question arises on the third clause. It is as follows: "And be it further enacted, that, in aU cases where the Insured hath interest in such life or lives, event or events, no greater sum shall be recovered or received from the insurer or insurers, than the amount or value of the interest of the assured in such life or lives, or other event or events." Now, what is the meaning of this provision? On the part of the plaintiff, it is said, it means only, that, in all cases in which the party insuring has an interest when be effects the policy, his right to recover and receive Js to be limited to that amount; otherwise, under colour of a small interest, a wagering policy might be made to a large amount, — as it might if the first clause stood alone. The light to recover, therefore, is limited to the amount of the interest at the time of effecting the policy. Upon that value, the as- sured must have the amount of premium cal- culated: if he states it truly, no difflculty can occur: he pays in the annuity for life the fair value of the sum payable at death. If he misrepresents, by over-rating the value of the interest, it is his own faulty in paying more in the way of annuity than he ought; and he can recover only the true value of the interest in respect of which he effected the policy: but that value he can recover. Thus, the liability of the assurer becomes constant and uniform, to pay an unvarying sum on the death of the cestui que vie, in consideration of an unvarying and uniform premium paid by the assured. The bargain is fixed as to the amount on both sides. This construction is effected by reading the word "hath" as referring to the time of ef- fecting the policy. By the 1st section, the assured is prohibited from effecting an in- surance on a life or on an event wherein he "shall have" no interest,— that is, at the time of assuring; and then the 3rd section requires that he shall cover only the interest that he "hath." If he has an interest when the policy is made, he is not wagering or gaming, and the prohibition of the statute does not apply to his case. Had the 3rd /section provided that no more than the amount or value of the interest should be insured, a question might have been raised, whether, if the insurance had been for a larger amount, the whole would not have been void: but the prohibition to recover or receive more than that amount, obviates any difficulty on that head. On the other hand, the defendants contend that the meaning of this clause is, that the assured shall recover no more than the value of the interest which he has at the time of the recovery, or receive more than its value at the time of the receipt. The words must be altered materially, to limit the sum to be recovered to the value at the time of the death, or (if payable at a ti^e after death) when the cause of action ac- crues. But there is the most serious objection to any of these constructions. It is, that the written contract, which, for the reasons given before, is not a wagering contract, but a valid one, permitted by the statute, and very clear in its language, is by this mode of construction completely altered in its terms and effect. It is no longer a contract to pay a certain sum as the value of a then-existing interest, in the event of death, in considera- tion of a fixed annuity calculated with refer- ence to that sum: but a contract to pay,— contrary to its express words, — a varying sum, according to the alteration of the value of that interest at the time of the death, or the accrual of the cause of action, or the time of the verdict, or execution: and yet the price, or the premium to be" paid, is fixed, cal- culated on the original fixed value, and is unvarying: so that the assured is obliged to pay a certain premium every year, calculated on the value of his interest at the time of the policy. In order to have a right to recover an uncertain sum, viz. that which happens to be the value of the interest at the time of the death, or afterwards, or at the time of the verdict. He has not, therefore, a sum THE NATURE OF THE CONTRACT. 47 certain, which he stipulated for and bought with a certain annuity; but It may be a much less sum. or even none at all. This seems to us so contrary to justice and fair dealing and common honesty, that this construction cannot, we think, be put upon this section. We should, therefore, have no hesitation, if thte question were res Integra, In putting the much more reasonable construc- tion on the statute, that. If there is an interest at the time of the policy, it is not a wagering policy, and that the true value of that inter- est may be recovered, in exact conformity with the words of the contract Itself. The only effect of the statute, is, to make the assured value his interest at its true amount when he makes the contract. But it Is said that the case of Godsall v. Boldero, 9 East, 72, has concluded this ques- tion. Upon considering this case, it is certain that Lord EUenborough decided it upon the assumption that a life-policy was in its nature a contract of indemnity, as jwlicies on marine risks, and against fire, undoubtedly are; and that the action was. In point of law, founded on the supposed damnification, occasioned by the death of the debtor, existing at the time of the action brought: and his lordship relied upon the decision of Lord Mansfield in Hamilton v. Mendes, 2 Burrows, 1270, that the plaintiff's demand was for an Indemnity only. Lord Mansfield was speaking of a pol- icy against marine risks, which is in its terms a contract of indemnity only. But that is not of the nature of what Is termed an assurance for life: It really Is what it is on the face of it.— a contract to pay a certain sum in the event of death. It is valid at common law; and, if it is made by a person having an interest In the duration of the life, it Is not prohibited by the statute 14 Geo. III. c. 4S. But, though we are quite satisfied that the case of Godsall v. Boldero was founded on a mistaken analogy, and wrong, we should hesitate to overrule It, though sitting in a court of error, if it had be«i constantly ap- proved and followed, and not questioned, though many opportunities had been offered to question It. It was stated that It had not been disputed in practice, and had been cited by several eminent judges as established law. The judgment itself was not, and could not be, questioned in a coiurt of error: for, one of the Issues, nil debet, was found for the defendant Since that case, we know practically, and that circumstance Is mentioned by some of the judges, in the cases hereinafter referred to, that the insurance-offices, generally speak- ing, have not availed themselves of the decl- ■slon, as they found it very injurious to their Interest to do so. They have, therefore, gen- erally speaking, paid the amount of their life- insurances, so that the number of cases in which it could be questioned is probably very small indeed. And it may truly be said, that instead of the decision in Godsall V. Boldero being uniformly acquiesced in, and acted upon, it has been uniformly dis- regarded. Then, as to the cases. There is no case at law, except that of Barber v. Morris, 1 Man. & R. 62, in which the case of Godsall v. Bol- dero was accidentally noticed as proving it to be necessary that the Interest should con- tinue till the death of the cestui que vie. It was proved in that case to be the practice of the particular office in which that assurance was made, to pay the sums assured, without inquiry as to the existence of an insurable interest: and on that account it was held that the policy, though in that case the in- terest had ceased, was a valuable policy, and the plaintiff could not recover, on the ground that the defendant, the vendor of it, was guilty of fraudulent concealment, in not dis- closing that the interest had ceased. This was the point of the case: and, though there was a dictum of Lord Tenterden, that the payment of the sum insured could not be enforced, it was not at all necessary to the decision of the case. The other cases cited on the argument in this case, were cases in equity, where the propriety of the decision of Godsall v. Bol- dero did not come in question. The questions arose as to the right of the creditor and debtor, inter se, where the offi- ces have i>aid the value of a policy, in Humphrey v. Arabln, 2 Uoyd & G. 318; Henson v. Blackwell. 4 Hare, 434, cor. Sir J. Wigram, V. C; Phillips v. Eastwood, 1 Lloyd & G. t. Sugd. 281, — where the point de- cided was, that a life-policy, as a security for a debt, passed under a will bequeathing debts: the lord chancellor stating that the offices found it not for their benefit to act on the rigid rule of Godsall v. Boldero. In these cases, the different judges concerned in them do not dispute,— some, indeed, ap- pear to approve of.^the case of Godsall v. Boldero: but it was not material in any to controvert It; and the question to be de- cided were quite Independent of the authority of that case. We do not think we ought to feel ourselves bound, sitting in a court of error, by the authority of this case, which itself could not be questioned by writ of error; and as so few. If any, subsequent cases have arisen in which the soundness of the principle there relied upon could be made the subject of judicial inquiry; and as, in practice, it may be said that It has been constantly disregard- ed. Judgment reversed, and venire de novo. 48 THE CONTEACT OF INSURANCE. CONNECTICUT MUT. LIFE INS. CO. t. SCHAEPBR. (94 U. S. 457.) Supreme Court of the United States. Oct., 1876. Error to the circuit court of the United States for the Southern district of Ohio. The facts are set forth in the opinion. Edgar M. Johnson, for plaintiff in error. J. D. Brannan, for defendant In error. Mr. Justice BRADLEY delivered the opin- ion of the court. This was an action on a policy of life as- surance issued July 25, 1868, on the joint lives of George F. and Pranzisca Schaefer, then husband and wife, payable to the sur- vivor on the death of either. In January, 1870, they were divorced, and alimony was decreed and paid to the wife. There was never any Issue of the marriage. They both subsequently married again, after which, in February, 1871, George F. Schaefer died. This action was brought by Franzlsca, the survivor. On the trial of the cause, several excep- tions were taken by the defendant to the rulings and charge of the court, and this writ of error Is brought to reverse the judg- ment for alleged error in said rulings and charge. The first exception was for overruling cer- tain testimony offered by the defendant. The plaintiff, having offered herself as a wit- ness, on her cross-examination admitted that she had employed one Harris as her attor- ney to file her petition for divorce; and be- ing questioned whether she had not stated to him, to be embodied in the petition, that Schaefer had been an habitual drunkard for a period of more than three years prior to the date of filing the petition, denied that she had so stated to him. (Had such been the fact, it would have falsified the statement made in the application for insurance.) The defendant called Harris, and asked him whether the plaintiff had not so stated to him on that occasion. The question was ob- jected to and overruled, as calling for confi- dential communications between attorney and client. The defendant alleges that here- in the court erred, because, by the law of Ohio, such communications are not privi- leged. An examination of the Ohio statutes renders it doubtful whether the law is as the defendant contends. But if it were, the court did right to exclude the testimony. The laws of the state are only to be regard- ed as rules of decision In the courts of the United States where the constitution, treat- ies, or statutes of the United States have not otherwise provided. When the latter speak, they are controlling; that is to say, on all subjects on which It Is competent for them to speak. There can be no doubt that It Is competent for congress to declare the rules of evidence which shall prevail in the courts of the United States, not affecting rights of property; and where congress has declareci the rule, the state law is silent. Now, the competency of parties as witnesses in the federal courts depends on the act of con- gress in that behalf, passed in 1864, amend- ed in 1865, and codified in Rev. St. § 858. It is not derived from the statute of Ohio, and is not subject to the conditions and qualifi- cations imposed thereby. The only condi- tions and qualifications which congress deemed necessary are expressed In the act of congress; and the admission In evidence of previous communications to counsel is not one of them. And it is to be hoped that it win not soon be made such. The protection of confidential communications made to pro- fessional advisers Is dictated by a wise and liberal policy. If a person cannot consult his legal adviser without being liable to have the interview made public the next day by an examination enforced by the courts, the law would be little short of despotic. It would be a prohibition upon professional ad- vice and assistance. The other exceptions were to the charge of the court, and relate to two points: First, to the forbearance note given for a portion 6f the last renewal premium; and, second- ly, to the alleged failure of interest of the plaintiff in the policy, caused by the divorce of the Insured parties. First, as to the forbearance note. Only one half of the annual premium was re- quired to be paid in cash; the Insured, if they chose, could have a credit for the other half. This credit was given upon the as- sured's signing an acknowledgment in the following form: "I hereby acknowledge a credit or forbearance of dollars of the premium on my policy No. , which amount shall be a lien on said policy at six per cent per annum until paid or adjusted by return of surplus premium." It was not a note promising to pay money, but a form of acknowledgment by which the assured consented to a deduction from the policy for non-payment of a portion of the premium. As long as George F. Schaefer took any in- terest in the policy, he signed this acknowl- edgment for himself and wife, "George F. and Franz. Schaefer;" or for himself alone. One premium became due after the divorce, and Franzlsca Schaefer herself attended to the payment of it,— paying the cash portion, and authorizing her son by a former mar- riage to sign the forbearance note, as it Is called. He did so in the name of both par- ties insured, thus: "Geo. P. & P. Schaefer." The company accepted it. On what valid ground they can now object to the trans- action, it Is difficult to see. A joint act was to be done. Only one of the parties could physically do it. Either had a right to da it. This act was, to pay or settle the annual premium. The plaintiff, as one of the joint parties, performed what was necessary to be done. George P. Schaefer could not com- plain; for it was done In his interest, keep- THE NATURE OF THE CONTRACT. 49 ing the policy alive for his benefit as well as Franzisca's. The company could not com- plain; for they accepted both the money and the acknowledgment in the form in which they were given. There is no pre- tence that any deception was practised upon them. This point is really frivolous. The other point, relating to the alleged ces- sation of insurable interest by reason of the divorce of the parties, is entitled to more serious consideration, although we have very little difficulty in disposing of it. It will be proper, in the first place, to as- certain what is an insurable interest. It is generally agreed that mere wager policies— that is, policies in which the insured party has no interest whatever in the matter in- sured, but only an interest in its loss or de- struction—are void, as against public policy. This was the law of England prior to the Revolution of 1688. But after that period, a course of decisions grew up sustaining wager policies. The legislature finally in- terposed, and prohibited such insurance: First, with regard to marine risks, by stat- ute of 19 Geo. II. c. 37; and next, with re- gard to lives, by the statute of 14 Geo. III. c. 48. In this country, statutes to the same effect have been passed in some of the states; but where they have not been, in most cases either the EngUsh statutes have been considered as operative, or the older common law has been followed. But pre- cisely what interest is necessary, in order to take a policy out of the category of mere wager, has been the subject of much discus- sion. In marine and fire insurance the dif- ficulty is not so great, because there insur- ance is considered as strictly an indemnity. But in life insurance the loss can seldom be measured by pecuniary values. Still, an interest of some sort In the insured life must exist. A man cannot take out insurance on the life of a total stranger, nor on that of one who is not so connected with him as to make the continuance of the life a matter of some real interest to him. It is well settled that a man has an insur- able interest in his own life, and in that of his wife and children; a woman In the life of her husband; and the creditor in the life of his debtor. Indeed, It may be said gen- erally that any reasonable expectation of pe- cuniary benefit or advantage from the con- tinued life of another creates an insurable interest in such life. And there Is no doubt that a man may effect an Insurance on his own life for the benefit of a relative or friend; or two or more persons, on their joint lives, for the benefit of the survivor or survivors. The old tontines were based sub- stantially on this principle, and their validity has never been called In question. The essential thing Is, that the policy shall be obtained in good faith, and not for the purpose of speculating upon the hazard of a life in which the Insured has no Interest EI,I..SBL.CAS.LAW IKS. ^4 On this point, the remarks of Chief Justice Shaw, in a case which arose in Connecticut (in which state the present policy origi- nated), seem to us characterized by great good sense. He says: "In discussing the question in this commonwealth [Massachu- setts], we are to consider it solely as a ques- tion of common law, unaffected by the statute of 14 Geo. III., passed about the time of the commencement of the Revolution, and never adopted in this state. All, therefore, which It seems necessary to show, in order to take the case out of the objection of being a wager policy, Is, that the insured has some interest in the cestui que vie; that his tem- poral affairs, his just hopes and well-ground- ed expectations of support, of patronage, and advantage in Ufe, will be impaired; so that the real purpose is not a wager, but to se- cure such advantages, supposed to depend on the life of another; such, we suppose, would be sufficient to prevent It from being regarded as a mere wager. Whatever may be the nature of such interest, and whatever the amount insured, it can work no Injury to the insurers, because the premium Is pro- portioned to the amount; and whether the Insurance be a large or small amount, the premium is computed to be a precise equiv- alent for the risk taken. We cannot doubt," he continues, "that a parent has an interest In the life of a child, and, vice versa, a child in the life of a parent; not merely on the ground of a provision of law that parents and grandparents are bovmd to support their lineal kindred when they may stand in need of relief, but upon considerations of strong morals, and the force of natural affection be- tween near kindred, operating often more efficaciously than those of positive law." Loomis V. Insurance Co., 6 Gray, 399. We concur in these views, and deem it unnec- essary to cite further authorities, all those of Importance being collected and arranged in the recent treatises on the subject. See May, Ins. §§ 102-111; Bliss, Ins. §§ 20-31. The policy in question might, in our opin- ion, be sustained as a joint insurance, with- out reference to any other interest, or to the question whether the cessation of Interest avoids a policy good at its inception. We do not hesitate to say, however, that a policy taken out in good faith, and valid at its Inception, Is not avoided by the cessation of the insurable interest, unless such be the necessary effect of the provisions of the pol- icy itself. Of course, a colorable or merely temporary interest would present circum- stances from which want of good faith and an Intent to evade the rule might be inferred. And in cases where the insurance Is effected merely by way of indemnity, as where a creditor insures the life of his debtor, for the purpose of securing his debt, the amount of insurable Interest is the amount of the debt But supposing a fair and proper insurable Interest, of whatever kind, to exist at the 50 THE CONTRACT OF INSURANCE. time of taking ont the policy, and that it be taken out in good faith, the object and pur- pose of the rule which condemns wager poli- cies is sufficiently attained; and there Is then no good reason why the contract should not be carried out according to its terms. This is more manifest where the considera- tion is liquidated by a single premium paid in advance, than where it is distributed in annual payments during the insured life. But, in any case, it would be very difficult, after the policy had continued for any con- siderable time, for the courts, without the aid of legislation, to attempt an adjustment of equities arising from a cessation of inter- est in the insured life. A right to receive the equitable value of the policy would prob- ably come as near to a proper adjustment as any that could be devised. But if the parties themselves do not provide for the con- tingency, the courts cannot do it for them. In England, by the operation of the stat- ute of 14 Geo. III., as construed by the courts, the law has assumed a very definite form. In a lucid judgment delivered by Baron Parke in the exchequer chamber, in the case of Dalby v. Insurance Co. (decided 1854) 15 C. B. 365, it was held that the true meaning of the statute is, that there must be an interest at the time the insurance is ef- fected, but that it need not continue until death; the words of the statute being, "that no insurance shall be made on a life or lives wherein the assured shall have no interest, or by way of gaming or wagering," and "that in all cases where the insured hath interest in such life, &c., no greater sum shall be recovered than the amount or value of the interest." The word "hath" was construed as necessarily referring to the time of ef- fecting the insurance, and not to the time of the death; that being the only construction which would subserve the object of the stat- ute to discourage wagering, render the con- tract uniform and certain, and preserve a. fixed relation between the premiums and the amount insured, as required by the princi- ples of life assurance. This case overruled the previous case of Goodsall v. Boldero, 9 East, 72, decided by Lord EUenborough, in which, proceeding upon the idea that life insurance is a mere contract of indemnity, it was held that the interest must continue until death, and even until the bringing of the action. Baron Parke, in commenting upon this case, very justly says: "Upon considering this case, it is certain that Lord EUenborough decided it upon the assumption ttiat a life policy was in its nature a mere contract of indemnity, as policies on marine risks, and against fire, undoubtedly are; and that the action was, in point of law, found- ed on the supposed damnification, occasioned by the death of the debtor, existing at the time of the action brought; and his lordship relied upon the decision of Lord Mansfield in Hamilton v. Mendes, 2 Burrows, 1270, that the plaintifiC's demand was for an indemnity only. Lord Mansfield was speaking of a pol- icy against marine risks, which is, in its terms, a contract for Indemnity only. But that is not the nature of what is termed an assurance for life: it really is what it is on the face of it, — a contract to pay a certain sum in the event of death. It is valid at common law; and, if it is made by a person having an interest in the duration of the life, it is not prohibited by the statute." As thus interpreted, we might almost regard the Eng- lish statute as declaratory of the original common law, and as indicating the proper rule to be observed in this country where that law furnishes the only rule of decision. Be this, however, as it may, in our judg- ment a life policy, originally valid, does not cease to be so by the cessation of the as- sured party's interest in the life insured. Judgment affirmed. THE SUBJECT MATTER OF mSUBANCE. 51 NIAGARA FIRE INS. CO. ▼. DE GRAFF, (12 Mich. 124.) Supreme Court of Michigan. Oct Term, 1863. Error to circuit court, Lenawee county. O. A. Stacy and O. L Walker, for plaintiff in error. A. L. MUlerd, H. D. Condict, and T. M. Cooley, for defendant in error. CAMPBELtL, J. Plaintiffs in enor insured De Graff upon his stock of goods, described in his application as a "stock of dry goods, groceries, etc.," dividing the risk into specific sums on dry goods, groc«ies, hardware, and other things specifically mentioned. There was evidence tending to show that he had in Ms store a few bottles of spirituous liquors, and a barrel of alcohol. Alcohol was among the articles mentioned in the second class of hazards in the second subdivisic« of extra hazards. Grocers* stocks generally were in the first subdivision of the same class. Bot- tled spirituous liquors were not classed as extra hazardous, but were included in the first class of ordinary hazards in the second ^vision of hazardous. There was evidence tending to show that the insurance agent who drew up the application was informed of the presence of the liquors and alcohol, which was, however, denied by the agent. The property being destroyed, a suit was ■brought on the policy, and judgment was re- covered. Error is brought on the rulings up(»i the triaL The points taken refer most- ly to a clause in the policy which declared that if the store should be used "for storing •or keeping therein any articles, goods, or merchandise, den(Hninated hazardous, or ex- tra hazardous, m specially hazardous, in the second class of the classes of hazards an- nexed to this policy, except as herein special- ly provided tor, or hereafter agreed to by this corporation, in writing upon this policy, from thenceforth, so long as the same shall l)e so used, this policy shall be of no force or ^Eect" There was a further clause annul- ling the policy whenever guni>owder or any other article subject to legal restriction should be kept in greater quantities or in a different manner than prescribed by law. The court below refused to charge, as re- quested, tliat since the passage of the pro- hibitory liquor law^, alcohol and spirituous liquors are not included in the term "gro- ceries." as used in referring to goods kept for sale; and charged tliat the question, whether they were so included, was one of fact tor the jury. To this exception is tak- •en. It was claimed on behalf of the plaintiffs in error, that if these liquors can be al- lowed to be induded in a policy, the policy will be, to all intents and purposes, insuring an illegal trafllc; and several cases were cited involving marine pcrficies on unlawful voyages, and lottery insurances, which have been held void on that ground. These cases are not at all parallel, because they rest upcm the fact, that in each instance, it is made a necessary condition of the policy that the illegal act shall be done. The ship being in- sured for a certain voyage, that voyage is the only one upon which the insurance would apply, and the underwriter becomes thus di- rectly a party to an Ulegal act So insuring a lottery ticket requires the lottery to be drawn In order to attach the insurance to the risk. If this policy were in express terms a i>olicy insuring the party selling liquors against loss by fine or forfeiture, it would be quite analogous. But this insurance attaches only to property, and the risks insured against are not the consequences of illegal acts, but of accident Our statute does not in any way destroy or affect the right of property in spirituous liquors, or prevent title being transmitted, but renders sales un- profitable by preventing tlie vendor from availing himsdf of the ordinary advantages of a sale, and also affixes certain penalties. Hibbard v. People, 4 Mich. 125; Bagg v. Jerome, 7 Mich. 145. If the owner sees fit to retain his property without selling it, or to transmit it into another state or country, he can do so. By insuring his property, the Insurance company Iiave no concern with the use he may make of it, and as it is sus- ceptible of lawful uses, no one can be held to contract concerning it in an illegal man- ner, unless the contract itself Is for a direct- ly illegal purpose. Collateral contracts, in which no illegal design enters, are not af- fected by an illegal transaction with which they may be remotely connected. In the case of Insurance Co. v. PoUeys, 13 Pet 157, an insurance upon a ship known by the in- surance company to be liable to forfeiture under the registry laws of the United States was held valid, and a recovery was permit- ted for a loss while sailing under papers known to be illegal. The ease of Armstrong V. Toler, 11 Wheat 25S, is still stronger. It is difficult to perceive how public policy can be violated by an insm-ance of any kind of property recognized by law to exist The question then arises, whether the court rightly left it to the jury to say, as a matter of fact, whether the term "groceries" includ- ed spirituous liquors and alcohol. That it may include them in the absence of such a statute is not denied; the recognized defini- tions embracing them clearly, so that it may be doubted whether it might not, in that case, require evidence of usage to exclude that meaning if such articles existed in an insured stock of groceries. See Insurance Co. V. Langdon, 6 Wend. 623. There was evidence before the jury in the case before us, that these things did In fact form a p.art of tie stock, and evidence tending to show a knowledge of that fact by the agent The statute does not prohibit the sale of all kinds of liquors, but, as to some, expressly recognizes the right in every one. Whatever may be the presumption, under our present 52 THE SUBJECT MATTER OP IHSUUANCE. statute, as to the extent of the term "gro- ceries," — a question not raised in the case, and upon which, therefore, it would be im- proper to pass,— we tbmk. the instruction aslied was altogether too broad, in claiming that alconol and other liquors could not pos- sibly be included. The question was prop- erly left to the jury. If the jury found— as their verdict shows they must have done— that the term "gro- ceries" Included the liquors in question, then the other instructions complained of, which held that by insuring such a stock the liquors were embraced although extra hazardous, were clearly correct. By the use of a term Including them they are "specially provided for in writing on the policy." Insuring a class of goods Includes what is usually con- tained in it, whether extra hazardous or not. See Bryant v. Insurance Co., 17 N. Y. 200; Harper v. Insurance Oo., Id. 194; Harper v. Insurance Co., 22 N. Y. 441; Delonguemare V. Insurance Co., 2 Hall, 589. In these in- structions the juiy were directed to include the articles, only if satisfied that they were commonly kept and sold as part of a grocer's stock. This qualification was suflSciently broad to prevent any improper inferences. The clause of the policy vitiating it if gun- powder and other articles subject to legal restriction should be kept in greater quanti- ties or in a different manner than is provided by law, was not pressed very strongly on the argument, and evidently refers only to arti- cles of an intrinsically dangerous nature, as liable to cause injury accidentally or by care- lessness. It has no reference to any risks except such as render the property more likely to be destroyed. There are no statu- tory provisions concerning liquors analogous to the laws restricting the use of powder. Our attention has been called to the fact, that the other charges given on the one side and refused on the other, are inconsistent with those complained of. So far as this is the case, however, they favored the plain- tiffs In error,— those excepted to being the only ones which could damnify them. Had the verdict been for them, the discrepancies would have been more important in deter- mining the rights of the other party. The question whether the jury did not find against evidence, or perversely, could only be presented in the circuit court. The judgment should be affirmed, with costs. MANNING, J., concurred. CHRISTIAN- CY, J., also concurred In the result MAR- TIN, C. J., was absent. THE SUBJECT MATTER OF INSURANCE. 53 HINOKUEY V. GERMANIA FIRE INS. CO. (1 N. E. 737, 140 Mass. 38.) Supreme Judicial Court of Massachusetts. Barnstable. June 18, 1885. This was an action of contract upon a policy of insurance against fire upon a pool table and other saloon fixtures. At the trial in the superior court a verdict was ordered for the defendant, and the case reported for the con- sideration of the supreme court J. M. & T. C. Day, for plaintiff. M. & C. A. Williams, for defendant. ALLEN, J. The report does not state the grounds upon which the ruUng rested, that the plaintiff was not entitled to recover. The defendants, in their brief, rely on various ob- jections, which we have considered. In the first place, the defendants suggest that there is certainly great doubt whether the license under which t£e plaintiff was do- ing business on the day when the policy was dated and delivered was of any validity, since this license ran to both brothers, Edwin and Herbert, though Herbert had ceased to have any interest in the place before the license was dated and issued. No authority is cited or reason assigned for so strict a construction, and we are of opinion that a license duly granted to two persons, under Pub. St. c. 102, § 111, to keep a biUiard or pool table, or a bowling aUey, for hire, is available to each of them. This is not like a case where two per- sons seek to avail themselves of a license granted to only one of them. It is then urged that, after the license had expired, the plaintiff kept the Insured proper- ty, in violation of law, from May 1, 1883, till the last week in June, 1883. The policy was dated March 15, 1883, and the license then existing expired May 1, 1883. The fire oc- curred on August 6, 1883, and It was conced- ed that there was no illegal use of the prop- erty after the last week of the preceding June, at which time the plaintiff ascertained that his license would not be renewed. The de- fendants rest their objection on two grounds: First, that the illegality and criminality of the plaintiff's act in respect to the injured prop- erty vitiates the policy by operation of law, independently of any express provisions con- tained in the policy; and, secondly, that imder a provision of the policy the right to recover was taken away. The authorities cited in support of the first proposition do not support it. In Kelly v. Insurance Co., 97 Mass. 288, the policy was on Intoxicating liquors, which at the time of the insurance, and thereafter to the time of the loss, were intended for sale in violation of law. The policy never attached. There was never a moment when the liquors were not iUegally kept; and all that the case decides is that jroods so kept at the time when the policy issued, or at the time of the loss, cannot be the subject of a valid insurance. In Johnson v. Insurance Co., 127 Mass. 555, the facts were similar. The policy was on biUiard tables, balls, cues, etc., kept without a li- cense at the time the policy was issued, as well as at the time of the loss. The ground of the decision in both of the above cases is stat- ed to be "that the object of the assured in ob- taining the policy was to make their illegal business safe and profitable: and that, the di- rect and immediate purpose of the contract of insurance being to protect and encourage an unlawful traffic, the contract was iUegal and void, and the policy never attached." The same facts existed in Lawrence v. Insurance Co., Id. 557. In Cunard v. Hyde, 2 El. & El. 1, the cargo which was the subject of insurance was partly loaded on deck, in violation of law, and while in that condition was totally lost. In the present case, the plaintiff had a li- cense at the time when the policy issued, and the policy, therefore, was valid when obtain- ed. If it be assumed without discussion that the policy would cease to be operative during the time when the property was kept in use without a license, the question remains wheth- er such temporary illegal use of the property has the effect to avoid the policy altogether, or merely to suspend it during the continuance of such illegal use. There is nothing in the case to show that it was proved, as a matter of fact, that the plaintiff, at the time of tak- ing out the policy, intended to make it cover any illegal use of the property. He may have expected to get his license renewed; or, fall- ing in that, he may have intended to close the place where the property was used, as, accord- ing to his own testimony, in point of fact he did. Under this state of facts, we are of opin- ion that the temporary use of the property without a license, if uncontemplated at the time of taking out the policy, would not of itself, and as a matter of law, render the poli- cy void during the whole of the rest of the time which it was to run. If there were any special or peculiar reasons why such absolute invalidity should be declared, they should be made to appear. In the absence of such rea- sons, such temporary and uncontemplated il- legal use of the property should not be visited with so severe a penalty as the absolute avoid- ance of the policy. It does not appear that the defendants were or would be in any way injuriously affected thereby after such illegal use had ceased. They have the benefit of the temporary suspension of the risk, without any rebate of the premium. There is no hardship to the defendants in requiring them to show an actual injury, or else to avail themselves of the clause in the policy giving them a right to cancel it upon notice, and a return of a rata- ble proportion of the premium. There is no rule of law preventing the revival of a policy of insurance after a temporary suspension. "The doctrine that the risk may be suspend- ed, and again revive, without an express pro- vision for the purpose, seems to be within the strictest judicial principles." 1 Phil. Ins. § 975. Accordingly, temporary unseaworthi- ness, if the ship has became seaworthy again, 54 THE SUBJECT MATTER OP INSUBANCE. will not defeat the policy. Id. § 730. So as to other stipulations; as, e. g., that of neutral character and conduct. Id. § 975. And in Worthington v. Bearse, 12 Allen, 382, it was held, on great consideration by this court, that if the assured in a marine policy temporarily parts with his interest in the property insur- ed, and afterwards buys it In again, the policy will revive. If there are no express provisions making it void, and there is no increase of risk. As between the insurer and the assur- ed, there is no reason why the former should be allowed to avail himself of a temporary il- legal use like that which existed in the pres- ent case, unless it can also be shown that the subsequent risk was thereby Increased, or the position of the insurer otherwise injuriously affected. And, as a matter of general policy, it does not seem reasonable to impose upon the assured so severe a consequence as the forfeiture of his policy, in addition to the pen- alty of $100, which the legislature have con- sidered adequate as the maximum punishment for his ofCense against the public. Pub. St. c. 102, § 111. It Is further contended by the defendants that, however it might be under the general rule of law, the policy contained a provision making it void. In the standard form of poli- cy established by the legislature, which was used in the present case, the matters avoiding a policy are enumerated. Omitting matters not here material, the provision is: "This pol- icy shall be void • * * if the insured shall make any attempt to defraud the company ei- ther before or after the loss; or if gun-powder or other articles subject to legal restrictions shall bekept in quantities or manner different from those allowed or prescribed by law; or if camphene, benzine, naphtha, or other chemi- cal oil, or bUi'ning fluids shall be kept or used by the insured on the premises insured, ex- cept that what is known as refined petroleum, kerosene, or coal oil may be used for light- ing." In this commonwealth, imder the stat- utes for the regulation of trade, and provid- ing for licenses and municipal regulation of police, there are a great many articles which, in a certain sense, may be said to be "subject to legal restriction." Dogs, fish, nails, com- mercial fertilizers, hacks, and horses, in cities, may be referred to as examples. It may well be questioned whether, under the maxim nos- citur a sociis, the clause in the policy above quoted ought not to be limited in its applica- tion to other articles of a character similar to gunpowder, the keeping of which may have a natural tendency to Increase the risk. It would be rather a strained construction of this clause to- hold that a policy should be void because an unlicensed dog was kept upon the premises; and yet such a dog, being subject to legal restriction, would be kept in a man- ner different from that allowed by law. It would not be sensible to give to these words the broadest construction of which they are susceptible. But, Irrespective of this consideration, it is not the necessary meaning of the word "void," as used in policies of insurance, that it shall under all circumstances imply an absolute and permanent avoidance of a policy which had once begun to run; but the meaning of the word is sufliciently satisfied by reading it as void or inoperative for the time being. In Phil. Ins. § 975, it is said: "After it (i. e., the policy) has begun, so that the premium is be- come due, it surely is but equitable that a temporary non-compliance should have etfect only during its continuance. To carry it fur- ther is to infiict a penalty on the assured, and decree a gratuity to the insurer, who is thus permitted to retain the whole premium when he has merited but part of it. A forfeiture certainly ought not to be extended beyond the grounds on which it is incurred. * * * And there does not appear to be any good reason why, in the absence of all fraud and all prej- udice to the underwriter, the same doctrine should not be applicable to express conditions in the nature of warranties or conditions, un- less by the circumstances, or the express pro- visions of the policy, such application is ex- cluded." In accordance with this doctrine, a provision in a policy that it should be void, and be surrendered to the directors of the company to be canceled, in case of alienation of the property by sale or otherwise, was held to be inoperative for the time being; and the assured, upon acquiring title after a sale of the property by him, was held entitled to re- cover. Lane v. Insurance Co., 12 Me. 44. So where a policy provided that "in case of any transfer or termination of the interest of the assured, either by sale or otherwise, without such consent (i. e., of the company), this policy shall from thenceforth be void and of no ef- fect," it was held that after such sale the pol- icy revived upon the assured acquiring again the title, and holding it at the time of the fire. Power V. Insurance Co., 19 La. 28. The same rule of construction has been ap- plied to provisions against other insurance. Obermeyer v. Insurance Co., 43 Mo. 573; New England Fire & Marine Ins. Co. v. Schettler, 38 lU. 166; MitcheU v. Insurance Co., 51 Pa. St. 402. The court In Illinois has gone so far as to apply it also to a provision against an increase of risk, which ceased before the loss. Schmidt V. Insurance Co., 41 111. 295; Insur- ance Co. of North America v. McDowell, 50 111. 120, 129. Without at present going be- yond what is called for by the circumstances of the present case, we are of opinion that, assuming the temporary use of the property insured, without a license, to come within the prohibition of the policy in tlie clause above quoted as to gunpowder or other articles sub- ject to legal restriction, yet that clause is not to receive such a construction as to prevent the policy from reviving after such temporary use has ceased. The only remaining objection urged by the defendant is that the statements of loss ren- dered to them by the plaintiff were insuffi- cient, in failing to state that the plaintiff had THE SUBJECT MATTER OF INSURANCE. 55 no legal title to the injured property, and that the Spurrs had an interest in it. But there is no finding as a matter of fact that the plain- tiff was not the owner of the property, and upon the report of the case we cannot say, as a matter of law, that it appears that he was not such owner. Bailey v. Hervey, 135 Mass. 172; McCarty v. Henderson, 138 Mass. 310. Moreorer, no attempt to defraud the defend- ants being proved or charged, the provision of the policy that a statement shall be rendered setting forth the interest of the insured there- in was sufficiently complied with. There was no provision calling for an exact statement of his title or interest in detail, and a general statement of ownership was sufficient Powle V. Insurance Co., 123 Mass. 191. New trial granted. 56 THE SUBJECT MATTER OF IXSURAKCE. FIDELITY & CASUALTY CO. OF NEW YORK V. EICKHOFF. (65 N. W. 351.) Supreme Court of Minnesota. Dec. 13, 1895. Appeal from district court, Polk county; Frank lyes. Judge. Action by the Fidelity & Casualty Company of New York against William Eickhoff. From an order sustaining a demurrer to the com- plaint, plaintiff appeals. Reversed. Van Fossen, Frost & Brown, for appellant. Halvor Steenerson, for respondent. MITCHELL, J. The plaintiff, a foreign corporation, is what is termed a "guaranty Insurance company," engaged in the business of guarantying to employers the fidelity of their employes. This action was brought to recover money alleged to have been paid to the Red River Elevator Company, defend- ant's employer, upon a bond by which the plaintiff obligated itself to make good, and re- imburse to the elevator company, such pe- cuniary loss as it might sustain by reason of the rnfldelity of the defendant as its receiving agent in one of its grain elevators. The ap- peal is from an order sustaining a demurrer to the complaint on the ground that it did not state facts constituting a cause of action. The material conditions of the bond, which Is set out in the complaint, are as follows: "The aforesaid company [the plaintiff] shall, • * • subject to the conditions and pro- visions herein contained, • * • make good, and reimburse to the said employer, such pecuniary loss as may be sustained by the employer by reason of fraud or dishonesty of any of the employes [of which defendant was one] named upon said schedule, as here- inafter provided, in connection with his duties as receiving agent or buyer: • • • Pro- vided, that the company shall be liable only for the acts of fraud or dishonesty on the part of the persons mentioned in the schedule, who act as receiving agents, for shortages in their grain accounts, as follows, viz.: There shall be deducted from the total amount of grain and dockage received by the receiving agent at said elevator or elevators screenings and dirt from such grain as has been cleaned at said elevator or elevators, together with the amounts of shipments based upon weights of grain and dockage at terminals; and if ' the result shows a deficit, and the shortage is not caused by the various exceptions agreed to, this proof of loss will be accepted as binding on the part of the company. In case where screenings and dirt are burned at an elevator, they shall be weighed before being burned, and the weight reported daily to the employer: provided, that the company shall not be liable for the grading of grain, loss by heating, drying, or leakage of cars, or other damage, shortages caused by defective weigh- ing apparatus or appliances, or for shortages in any elevator or elevators caused by the failure of any of the parties mentioned in said schedule to take dockage enough to make good their weights for grain checks is- sued, as the employer hereby assumes the risks of its superintendents, traveling men, and officers in giving instructions to its re- ceiving agents as to the amount necessary to take to make good the amount of dockage at terminal points, and the action of receiving agents in taking dockage, the loss by clean- ing grain, and the ordinary shrinkage arising from dust in handling of said grain in ele- vators. And it is further agreed that the company shall not be liable for errors or care- lessness in weighing of grain, nor for thefts of grain by persons other than those covered by this bond, nor for robbery or thefts of money from the persons so covered, where proofs of such errors, carelessness, thefts, or robbery are conclusive, as negligence is not covered by this bond." The complaint alleges that defendant, in consideration of plaintiff's becoming a guaran- tor for him by executing this bond, agreed to indemnify it against any losses, damages, or expenses it might sustain or become liable for in consequence of executing the bond; also, that this bond was in the form requested by the defendant; also, that defendant further agreed "to admit the voucher or other proper evidence of such payment by plaintiff as con- clusive evidence against himself as to the fact and extent of his liability to the plain- tiff." It is further alleged that defendant, within the scope of his employment as receiv- ing agent of plaintiff, issued tickets for, re- ceived, and took in, at one of the elevator company's elevators, a certain number of bushels of wheat and dockage, but, of the same, only delivered to the elevator company a certain less number of bushels at the ter- mination of his emplojTnent; leaving nearly 1,000 bushels which he never delivered, al- though requested to do so. The complaint then states specifically the manner in which this shortage was ascertained and made to appear, which was the exact manner provided for in the bond. It then negatives specifical- ly that this shortage was caused by any of the exceptions named m the bond. It is then alleged that the elevator company presented its claim for this shortage to the plaintiff; that the latter was compelled to pay the same, and now holds the elevator's voucher for the same, but that defendant refuses to indemnify the plaintiff for the money thus paid out In his behalf. Counsel for plaintiff asks us to pass upon numerous questions touching the construction of this bond; but as It Is a novel contract, and Its provisions prolix, somewhat obscure, and sometimes ap- parently contradictory, we deem it unwise, upon a demurrer, to decide much except what is necessary to determine whether a canse of action is stated. Hence we shall confine our- selves mainly to the specific objections made by defendant's counsel to the sufficiency of ' the complaint. 1. The first objection urged against the THE SUBJECT MATTER OF INSURANCE. 57 be insured, and provided that In case she survived her husband, the amount of the in- surance should be payable to her, to and for her own use, free from the claims of the representatives of her husband or of any of his creditors; but that such exemptioik should not apply where the amount of pre- miums annually paid should exceed $300. Section 2 provided that in case of the deaths of the wife before the decease of her hus- band, the amount of the insurance might be made payable after her death to her childreni for their use, and to their guardian, if un- der age. It may be assumed that this policy was taken out under that act; and yet it will not aid these appellants. Section 1 secures the amount of insurance to the wife only, in case she survives her husband. Here she did not survive her hus- band. There is nothing therefore in that section to take away his common-law right in the amount insured as survivor. Section 2. confers no right upon the children of Hul- dah, because the amount of the insurance was not by the terms of the policy, made payable to them after her death. The stat- ute does not make it payable to them after her death, but simply provides that It may be made payable to them. The subsequent amendments of this chapter make it more certain that this is the proper construction of section 2. The first amendment of the act of 1840 was by chapter 187 of the Laws, of 1858, but that amendment did not touch section 2, and therefore has no bearing upon the questions now under consideration. Sec- tion 2 was amended in 1862 by chapter 77, and was made to read as follows: "The amount of the insurance may be made pay- able in case of the death of the wife before the decease of her husband to his or to her children for their use as shall be provided in the policy of insurance, or to their guardian if under age." Under the section as thus amended, it is clear that the amount of the Insurance cannot be claimed by the children of either the wife or the husband unless It is provided in the policy that it shall be pay- able to them. In 1866, by chapter 656, sec- tion 2 was again. amended so as to read a» follows: "The amount of insurance may be made payable, in case of the death of the wife be- fore the period at which it became due to her husband or to his, her or their children for their use -as shall be provided In the pol- icy of insurance, and to their guardian, if un- der age." Here again It is provided that the policy must determine to whom of the per- sons named payment shall be made. In. 1873, by chapter 821, section 2 was again- amended, and the section, as amended, pro- vided that a married woman holding a pol- icy for her benefit or for the benefit of her- self and her children might surrender such, policy to the company Issuing the same in the same manner slb any other policy; antl INSURABLE INTEREST IN LIVES. 81 also provided that in case she had no issue she might dispose of such policy by wiU or by deed, which disposition should invest such person or persons, to whom the policy had so been bequeathed or granted and conveyed, with the same rights in respect thereto as such married woman would have had in case she survived the person on whose life such policy was issued, and such legatee or grantee should have the same right to dis- pose of such policy as therein conferred on such married woman. I can see nothing in all this legislation which gives countenance to the idea that by virtue of section 2, as enacted in 1840, the children of Huldah obtained any right in this policy, the Insurance not having been made payable to them in any event If it had been the intention of the law-makers that the amount should be absolutely pay- able to them, in case of the death of their mother before the decease of her husband, they would have so provided in plain terms, as was done in Massachusetts (Swan v. Snow, 11 Allen, 224), Instead of providing that it might be made payable to them. There was nothing decided in Eadie v. summon, 26 N. Y. 9, in conflict with any views herein expressed. AH that was de- cided there is that a policy of insurance to a married woman, made under the Laws of 1840, for her benefit and that of her children in case of her death, could not be transferred so as to divest the interest of the wife or of her children. In that case the insurance was upon the life of the husband for the sole use of his wife, and in case of her death be- fore him, for the use of her children. There was nothing in the statute of 1840 which ex- pressly prohibited the assignment of such a policy; but it was held that it would be a violation of the spirit of that act to hold that a wife could sell or traflSc with her policy as though it were realized personal property or an ordinary security for money. It is stated in the opinion of Judge Denio that that stat- ute looks to a provision for a state of widow- hood and for orphan children; and so it does. It provides that a married man may effect an insurance upon his life for the ben- efit of his widow, and also for the benefit of his children; but the provision need not be for both unless he chooses to make it so. When the learned judge said that "by the general rules of law a policy on the life of one sustaining only a domestic relationship to the insured would become inoperative by the deatlf of such insured in the lifetime of the cestui que vie," he certainly fell into error, as shown above; and it is clear that he did not feel certain of the proposition thus announced, because he followed it by this language: "Or if it should be considered as existing for any purpose after that event, it KLL. SKL. CAB. LAW INS. — 6 would be for the benefit of the personal rep- resentatives of the Insured." The latter al- ternative Is sufficiently correct. He says the personal representatives of the insured, not the children. The husband, in the event stated, would be entitled to administration, and would thus become the sole representa- tive of his wife, and as shown above, the administration would be solely for his bene- fit in the absence of debts of the wife; and under such circumstances he could release, assign or dicharge a policy without adminis- tration. In Barry v. Assurance Soc, 59 N. Y. 587, the insurance was again for the ben- efit of the wife, and in case of her death be- fore her husband, for the benefit of her children; and the decision in the case of Eadie v. Slimmon was simply re-affirmed. It is said however that because the wife could not assign this policy and because the husband could not control it during her life- time, in consequence of the statute of 1840, therefore the common-law right of survivor- ship to the husband was also destroyed. It i^ difficult to see how this conclusion follows. The statute went so far and limited the right of the husband during her life, but it went no further. When Huldah died the statute ceased to operate upon the policy, and then the common-law right of the husband be- came operative. I know of no principle, and there certainly is no authority holding that the husband must have the right to dispose of his wife's choses in action during her life in order to reduce them to possession or con- trol them after her death. Ransom v. Nich- ols, supra. So far as the statute interfered with his common-law right in reference to this policy it was gone. In all other respects his common-law rights remained. Lester took out this policy and paid the premiums thereon for about eleven years to make a provision for his first wife in case she survived him. He then continued the insurance after his second marriage, and paid the premiums for about seventeen years for the purpose of making a provision for his second wife in case she survived him. That there are no rules of law which require that that purpose shall fail, and that the money paid upon the policy shall be dis- tributed to the adult children of the first wife, to the exclusion of the second wife and her minor child, I think I have sufficiently shown. The judgment should therefore be affirmed, with costs. POLGER, C. J., and ANDREWS and FINCH, JJ., concur. DAXFORTH and MIL- LER, JJ., dissent RAPALLO, J., absent at argument Judgment affirmed. 82 INSURABLE INTEBEST. _ MARTIN T, STUBBINGS et aL MARTIN et aL v. STUBBINGS. (18 N. E. 657, 126 111. 387.) Supreme Court of Illinois. Nov. 15, 1888. Error to appellate court, First district. Bill of interpleader by the Knights Tem- plars' & Masons' Life Indemnity Company against Cornelia Martin and Wilson H. Stub- bings to determine to whom the amount due upon the certificate of membership in it of Neal K. Martin, deceased, belongs; and bill for specific performance by Stubbings against the Supreme Council of the Royal League and Mrs. Martin to require the Su- preme Council of the Royal League to levy an assessment to pay a certificate of member- ship issued by it to Neal K. Martin, and, when collected, to pay the amount, or a por- tion of it, to complainant. Prior to January 1, 1886, Martin and Stubbings were copart- ners, under articles which were to expire in 1888, unless dissolved on three months' no- tice; and it was found on examination of the books that on that day there were due from Martin to Stubbings $3,411.66, the amount drawn by Martin in excess of his share of the profits, in which alone he was interested. Stubbings thereupon announced his intention of terminating the partnership; but on April 16, 1886, new articles were entered into, and Martin and wife signed a judgment collat- eral note in favor of Stubbings for the amount of the overdraft, and also, for fur- ther security, assigned to Stubbings the ben- efit certificates. Martin having died, these suits were brought In the Interpleader suit, $3,281.87, the balance after payment of costs, were decreed to Stubbings. And in the oth- er suit, the Supreme Council of the Royal League, having collected $1,023.28, was di- rected to pay to Stubbings the balance re- maining due to him, amounting to $474.76, and the balance to Mrs. Martin. The de- crees were affirmed in the appellate court, and Mrs. Martin brings error. Starr & C. St. c. 110, par. 91, provides that in all cases where the sum in the controversy exceeds $1,000, exclusive of costs, "which shall be heard in any of the appellate courts upon errors assigned, if the judgment of the ap- pellate court be that the order, judgment, or decree of the court below be affirmed, or if final judgment or decree be rendered therein in the appellate court, or if the judgment, or- der, or decree of the appellate court be such that no further proceedings can be had in the court below, except to carry into ^ect the mandate of the appellate court," the cause may be removed to the supreme court. Chapter 37, par. 28, provides that "in aU cases determined in said appellate courts. In actions ex contractu, wherein the amount in- volved is less than one thousand dollars, ex- clusive of costs; and in all cases sounding in damages wherein the iudgment of the court below is less than one thousand dollars, ex- clusive of costs, and the judgment is affirmed or otherwise finally disposed of in the appel- late court, * * * no appeal shall lie or writ of error be prosecuted therefrom. * * • In all other cases appeals shall lie, and writs of error may be prosecuted, from the final judgments, orders, or decrees of the appellate courts to the supreme court: provided, also, that in any case a majority of the judges of the appellate court shall be of opinion that a case decided by them in- volving a less sum than one thousand dol- lars, exclusive of costs, also involves ques- tions of law of such importance * * * as that it should be passed upon by the supreme court, they may in such cases grant appeals and writs of error to the supreme court. * * *" Millard R. Powers and Robert S. lies, for plaintiff in error. Hoyne & Pollansbee, for defendant in error. BAILEY, J. The amount involved in the case of Stubbings v. The Supreme Council of the Royal League and Cornelia Martin is only $474.76. It is true the amount found due from the Supreme Council of the Royal League on the membership certificate of Neal k; Martin, deceased, was $1,023.28; but of that sum $548.52 was ordered to be paid and was in fact paid to Cornelia Martin, and only $474.76 was ordered to be paid to Stub- bings. The Supreme Council of the Royal League is not complaining, the writ of error having been sued out by Cornelia Martin alone. As between her and Stubbings, the only parties to the present controversy, only $474.76, or less than $1,000, is involved. There is no certificate by the judges of the appellate court that the case involves ques- tions of law of such Importance, either on account of princii>al or collateral interests, that it should be passed upon by this court It follows that in that case the writ of er- ror was improvidently issued, and it must therefore be dismissed. In the other case— the one involving the certificate of membership in the Knights Templars' & Masons' Life Indemnity Clish the insurable interest Garnier,- however, did not hold any such relation to Ellen Mc- Lean, either natural or assumed. He was simply her "friend and adviser." He was doubtless a valuable friend. He had ad- vanced money to bring her to Philadelphia. He fitted up, stocked, and from time to time replenished, the store at Tenth and Manilla. Having disposed of this for her benefit, he purchased the establishment on Fitzwater, and, selling this, he bought for her a third, on Fifth below Christian. She repaid Gar- nier, however, for his outlays in her behalf, from time to time, from the ordinary re- ceipts of the several stores, and from the pro- ceeds of the sales. The only relation existing between James Garnier and EUen McLean which could give Gamier an insurable interest in her life was that of debtor and creditor, and upon this ground alone the case must be con- sidered. It is not denied that at the date of the policy Mrs. McLean was indebted to Gaxnier, for money advanced and expend- ed in her behalf, in some amount between $500 and $750. It is said, however, that Gar- nier in his answer disclaims as a creditoij that he places his right to the proceeds of the policy on other grounds, and makes no claim whatever by reason of any indebted- ness. We do not so understand either the answer or the evidence given by the de- fendant in the case. The bill charges, in the first paragraph, in substance, that the policy was taken out and applied as a col- lateral security to the debt which Mrs. Mc- Lean then owed Gamier; and, in the sub- sequent paragraphs, that the debt having been fully paid in the life-time of the as- sured, the proceeds of the policy should pass into her estate. This fact is specifically de- nied. The defendant in his answer says it is "not true that the policy of insurance, re- ferred to in paragraph 1 of the complainant's bill, was applied for and Issued upon the life of Ellen McLean for any such reason or pur- pose as therein stated." It is undisputed, however, that at the is- suing of the policy the relation of debtor and creditor did exist, and to the extent stated. The defendant having denied that the pol- icy was taken as collateral security for that debt, a question of fact is thus raised to be determined by the evidence. Upon exam- ination of the proofs we find no evidence from which the fact might be fairly infer- red. The insurance was not effected at the instance of Mrs. McLean, but at the sugges- tion of her son Samuel McClatchy, in whose name a second policy in $1,000 was at the same time issued. The premiums were paid and the policy maintained by Garnier. In- deed, there is not the slightest proof in sup- port of the plaintiff's hypothesis, that the policy was held in trust for the debtor, and, in the absence of such proof, the presump- tion is that the rights of the parties appear upon the face of the policy. Cunningham v. Smith, 70 Pa. St 450. It has been said, however, on the author- ity of Godsall V. Boldero, 9 East 72, that an insurance upon the life of a debtor, in be- half of a creditor, is in legal effect but a guaranty of the debt; and, if the debt is paid, the insurance is at an end. But it is now settled that this case is not the law. It was directly drawn in question, and was expressly overruled, in Dalby v. Assurance Co. (decided in the exchequer chamber) 15 C. B. 365. The law seems to be well settled that it is wholly unnecessary to prove an insurable interest in the life of the assured at the maturity of the policy if it was valid at its inception; and, in the absence of ex- press stipulation to the contrary, the sum expressed on the face of the policy is the measure of recovery. Rawls v. Insurance Co., 27 N. Y. 282; Mowry v. Insurance Co., 9 R. I. 346; Hoyt v. Insurance Co., 3 Bosw. 440; Insurance Co. v. Bailey, 13 Wall. 616. The doctrine of all the cases to which our attention has been called, is that, if the pol- icy was originally valid, it does not cease to be so by cessation of interest in the subject of insurance unless such be the necessary effect of the provisions of the instrument it- self. Therefore, where a husband insured his life for the benefit of his wife, and was subsequently divorced, it was held that not- withstanding the, relation of husband and wife no longer existed, and her insurable interest had thus ceased, yet she could re- cover the full amount of the policy. Insur- ance Co. V. Schaefer, 94 U. S. 457. "Suppos- ing a fair and proper insurable interest of whatever kind," says the court in the case last cited, "to exist at the time of taking out the policy, and that it be taken out in good faith, the object and purpose of the rule which condemns wager policies is sufficient- 88 INSURABLE IKTEREST. ly attained; and there Is then no good reason ■why the contract should not be carried out according to its terms." To the same effect is McKee v. Insurance Co., 28 Mo. 383. All the cases to which we have referred, it is true, arose from suits brought upon the poli- cies of insurance; but the same principles apply where the company, admitting Its lia- bility, has paid the money into court to abide the result, and the controversy is between the remaining parties. In our own case of Scott v. Dickson, 16 Wkly. Notes Oas. 181, our Brother Paxson, upon a review of the cases, concludes that, where one has an insurable interest at the time an Insurance is effected upon the life of another for his benefit, the fact that his interest ceases to exist at or prior to the death of the Insured will not, as against the personal representatives of the insured, de- prive him of the right to receive the insur- ance money. Therefore it was held that a surety on an official bond has an insurable interest in the life of the obligor, and that his right to recover upon the policy was not affected by the fact that no breach of the condition of the bond had ever occurred. But a merely colorable, temporary, or dispro- portionate interest may present circumstan- ces from which want of good faith, and an intent to evade the rule, may be inferred. Therefore, although the relation of debtor and creditor may in general be said to es- tablish an insurable interest, the amount of the insurance placed upon the life of the debtor cannot be grossly disproportionate to the benefit which might be reasonably sup- posed to accrue from the continuance of the debtor's life, without leaving the transaction open to the imputation of being a specula- tion or wager upon the hazard of a life. Wainwright v. Bland, 1 Moody & R. 481; Miller v. Insurance Co., 2 B. D. Smith, 268. The case of Cammack y. Lewis, 15 Wall. 643, is exactly in point The policy was taken out by Cammack, the creditor, upon the life of Lewis, his debtor, in the sum of 53,000,— $2,000 for his own benefit, and $1,000 for the benefit of Lewis. Lewis, in fact, only owed Cammack $70, although he voluntarily and without consideration gave his obligation at the time for $3,000. "If the transaction," says Mr. Justice Miller, "as set up by Cammack be true, then, so far as he was concerned, it was a sheer wagering pol- icy, and probably a fraud on the insurance company. To procure a policy for $3,000 to cover a debt of $70 is of Itself a mere wager. The disproportion between the real interest of the creditor and the amount to be re- ceived by him deprives it of all pretense to be a bona fide effort to secure the debt, and the strength of this proposition is not di- minished by the fact that Cammack wa.s only to get $2,000 out of the $3,000; nor is it weakened by the fact that the policy was taken out in the name of Lewis, and as- signed by him to Cammack. This view of the subject receives confirmation from the note executed by Lewis to Cammack for the precise amount of the risk in the policy, which, if Cammaek's account be true, was without consideration, and could only have been intended for some purpose of decep- tion, — ^probably to impose on the insurance company." See, also. Insurance Co. v. Luchs, 108 U. S. 498, 2 Sup. Ct 949. In the case at bar the policy was $2,000. The amount of the indebtedness was, at the time, undetermined, and therefore uncertain. It has since been ascertained to have been between $500 and $750. Considering the character of their business relations, the un- settled condition of their affairs, the age of the subject of insurance, the probable amount of premiums which might accrue, the ac- cumulation from interest, we could not say the transaction carries with it any inherent evidence of bad faith. The essential thing is, as stated by the learned judge of the court below, that the policy should be ob- tained in good faith, and not for the pur- poses of speculation upon the hazard of a life in which the insured has no Interest. The case is materially different from Gil- bert V. Moose, 13 Wkly. Notes Cas. 489. The principles involved in that case are not drawn in question here. We find no error in the decree of the court below, and it is therefore affirmed. The de- cree is affirmed, and the appeal dismissed, at the costs of the appellant. INSURABLE INTEREST IN LIVES. 89 RITTLER V. SMITH. as Ati. 890, 70 Md. 261.) Court of Appeals of Maryland. Feb. 21, 1889. Appeal from circuit court of Baltimore city. Bill by Emeline Smith, administratrix of Victor Smith, against William H. Rittler. Decree for complainant, and defendant ap- Argued before MILLER, ROBINSON, IRV- ING, STONE, BRYAN, YBLLOTT, and Mc- SHERRY, JJ. J. Wilson Leakln and R. R. Battee, for ap- pellant. T. Alexander Seth, for appellee. MILI^ER, J. In June, 1886, Victor Smith was indebted to WiUiam H. Riltler in the sum of about $1,000, and. Smith being in- solvent, Rittler took out certificates of insur- -aace on Smith's life in four several mutual aid associations, aggregating on their face the sum of $6,500. T^ese certificates were All in favor of Rittler, and he paid all the premiums or assessments thereunder. Smith died in March, 1887, and Rittler collected from these insurances the sum of $2,124.82, which appears to have been all that could have been collected according to the terms •of the certificates and the financial condition of the associations. Deducting from this sum the debt and interest due Rittler, the premiums he had paid, and the costs and expenses of effecting the insurances, there re- mained a balance of $474.53 as of the 1st of June, 1SS7. On the 3d of October foUowing, letters of administration on Smith's estate were granted to an administratrix, who tl-.ereupon filed her bill, claiming this balance as belonging to the estate of the decedent In his answer Rittler denied this claim, and insisted that the money belonged to him. The case was heard on bill and answer, and the court below decreed in favor of the complainant. From this decree Rittler lias appealed. The question as thus presented is an inter- «sting one, is of first impression in this state, and has been very ably argued. On the part of the appellant It is contended that where a creditor; with his own money, and for his own account, effects and keeps up an insure ance on the life of his debtor, the whole of the proceeds belong to him unless it appears that he has gone into It foi- the mere pur- pose of speculation, which, in this case, is expressly negatived by the answer, the aver- ments of which must be taken as true, the ■case having been heard on bill and answer. On the other hand, counsel for the api)ellee <-ontend that where the creditor receives more than enough to reimburse him for his debt and outlay, with interest, he will, as to the balance, be regarded as a trustee for the per- sonal represeatative of the debtor; that the law says to the creditor in such a case : "You may protect yourself. You may, by insuring j-our debtor's life, secure your debt with all outlay and expenses. You may make your- self whole, but you shall not have a greater direct pecuniary Interest in his death than you may have in his life." There have been numerous decisions upon this subject, some of which are conflicting. On many points, however, bearing upon the question, there is a general concurrence of judicial opinion and authority. For instance, it is generally held by the courts in this coun- try that one who has no insurable interest in the life of another cannot Insure that life. Such insurances ape considered gambling contracts, and for that reason void at com- mon law, apart from any statute forbidding them. In England they were held valid at common law, but were prohibited as introdu- cing a "mischievous kind of gaming" by the first section of the statute (14 Geo. III. c. 48). The effect of this section, as construed by the English courts, is to make the law of England, by act of parliament, the same as it has t)een held to be by the courts in this country without such an act. In some cases they have been denounced as void, not simply because they tend to promote gambling, but because they are incentives to crime. The force of this latter suggestion has been, and may well be, doubted. It means that one not related or connected by consanguinity or marriage, who may have a direct pecuniary interest in the speedy death of another, will thereby be tempted to murder him, though he knows that hanging Is the penalty for such a crime. This doctrine, carried to its logical result, has a far reaching effect. It strikes down every legacy to a stranger which may become known to the legatee, as is frequently the case, before the death of the testator. It makes void every similar limitation in remainder after the death of a life-tenant. Every like conveyance of prop- erty, in consideration that the grantee shall support the grantor during nis life, falls un- der the same condemnation. Yet we know of no case in which a court has declared such testamentary disi>ositions or conveyan- ces to be void on this ground. Other in- stances, in which the same result would fol- low from the application of this doctrine, could be readily suggested, but we need not pursue the subject further. All the authori- ties also concur in holding that a creditor has an insurable interest in the life of his debtor. In England it was at one time held that though the creditor had an insurable interest at the time the policy was issued, yet, if his debt was paid in the life-time of his debtor, and his interest had therefore ceased, he could not recover, because the con- tract of life insurance, like insurances of property, was one of indemnity. But this doctrine has long since been repudiated, and the settled rule in England now is that a life insurance in no way resembles a contract of indemnity, but is an agreement to pay a certain sum of money upon the death of the person Insured, in consideraition of the due 90 INSUKABLE INTEKBST. payment of a certain fixed annual sum or premium during his life, and hence, if the contract be valid at the time it was entered into, notwithstanding the fact that the inter- est of the creditor has ceased during the life of his debtor, he may still recover on the policy, though the result may be that he will be twice paid for his debt, — once by his debt- or and again by recovery on the policy. Dal- by V. Assurance Co., 15 C. B. 365. The same construction of the contract has been ap- proved and adopted by this court Emerick V. Coakley, 35 Md. 193; Whiting v. Insurance Cx>., 15 Md. 326. In support of the view taken by the ap- pellee's counsel, cases have been cited in which It has been held that the assignee of a life policy, who has no insurable interest in the life, stands in the same position as if he had originally taken out the policy for his own benefit. In other words, the conten- tion is that the assured himself can make no valid, absolute assignment of his policy to one who has no Insurable interest in his life. But our own decisions are opposed to this. It is settled law in this state that a life in- surance policy is but a chose in action for the payment of money, and may be assigned as such .under our act of 1829, c. 51. Insur- ance Co. V. Flack, 3 Md. 341; Whltridge v. Barry, 42 Md. 150. It Is quite a common thing for the bond or promissory note of a private individual to be sold through a broker to a bona fide purchaser for less than its face value, and when the latter takes an as- signment of it without recourse, he becomes its absolute owner, and is not bound to re- fund to the vendor anything he may recover upon it over and above what he paid for it. So a life policy, being a similar chose in action, .may be disposed of and assigned in the same way, provided the assent of the insurer is obtained w^here it is so stipulated in the instrument. In such case, the as- signee must, of course, keep the policy alive by the due payment of premiums if he wishes to realize anything from it. Such an assignment is valid in this state if it be a bona fide business transaction, and not a mere device to cover a gaming contract. Such is also the English rule. Ashley v. Ashley, 3 Sim. 149. These considerations prevent us from adopting some of the rea- soning of the supreme court in Wamock v. Davis, 104 U. S. 775. It seems to us, with great deference, that from the facts in that case the association, Which was the assignee, could well be regarded as standing in the same position as if It had taken out the policy in its own name, and, having no in- surable interest in the life, it clearly became a wager policy. The assignment was made the day after the policy was issued, in pur- suance of an agreement to that effect made the day of Its issuance. The assignment was evidently a mere device to cover up a gam- ing transaction. In the preceding case of Cammack v. Lewis, 15 Wall. 643, the debt due the creditor was only $70, and the policy was for $3,000. It was taken out by the debtor, who was In bad health, at the sug- gestion of the creditor, and was assigned to him immediately after it was made out, he, at the same time, taking a note from his debtor for $3,000, confessedly without con- sideration. In view of these facts, the court well said: "It was a sheer wagering policy, and probably a fraud on the insurance com- pany. To procure a policy for $3,000 to cov- er a debt of $70 Is of itself a mere wager. The disproportion between the real Interest of the creditor and the amount to be re- ceived by him deprives it of all pretense to be a bona fide effort to secure the debt, and the strength of this proposition is not di- minished by the fact that Cammack was only to get $2,000 out of the $3,000, nor is It weak- ened by the fact that the policy was taken out in the name of Lewis, and assigned by him to Cammack." It was "under these cir- cumstances" that the court held that Cam- mack could hold the policy only as security for the debt due him when it was assigned, and such advances as he might afterwards make on account of it. If such, then, be the nature of a life Insurance contract, and if a bona fide assignee for value, though a stranger, may recover and hold the whole amount for his own use, why may not a cred- itor, who, in pursuance of a bona fide effort to secure payment of his debt, insures the life of his debtor, and takes the policy in his own name, or for his own benefit, be en- titled to hold aU he can recover? He is in fact the owner of the policy, takes the risk of the continued solvency of the insurance company, and is obliged to keep the policy alive by paying the annual premiums during the life of the debtor, and the latter is under no obligation to do anything, and in fact does nothing, in this respect If he pays the debt to his creditor, he has only discharged his duty, and what interest has he In the policy, or in what his creditor may recover upon it? In a recent English case it was held that a creditor who had insured the life of his debtor could retain all the sums he had received from the policies, without accounting for them to the representatives of the debtor, unless there was distinct evi- dence of a contract to the effect that the creditor had agreed to effect the policy, and that the debtor had agreed to pay the pre- miums, in which case only will the policy be held in trust for the debtor. Bruce v. Garden, L. R. 5 Ch. App. 32. Thjs is the latest English authority to which we have been referred, and was decided by Lord Chancellor Hatherley on appeal. In that case the amount received from the policies by the creditor was nearly twice as much as the debt due him by his debtor. We agreo- that there may be such a gross disproportion between the debt and the amount of the policy as to stamp the transaction as indicat- ing upon its face want of good faith, and as INSURABLE INTEREST IN LIVES. 91 a mere speculation or wager. The case of Cammack v. Lewis affords an instance of such gross disparity, but no general rule on this subject has as yet been laid down by the courts, and it is probably better to leave each case to depend on its own circumstan- ces. The disparity between the debt of $1,- 000 and $6,500, the aggregate of the sums named in the certificates, is certainly great, but upon examination it is more apparent than real. The answer, wliich we must take as true, shows bona fides on the part of the creditor. The policies were aU in mutual aid associations, where mortuary dues are paid by assessments and where, of course, the sum to be realized depends upon the ii umber and solvency of the members. One of the certificates for $2,000 contained a con- dition tliat only one-half should be paid if the assured should die within one year from its date, an event which actually occurred. Another expressly provided that he should receive an amount not exceeding $2,000, but according to the numbers liable to assessment on this certificate, and from that he received, according to its terms, only $250. Another of the associations was in financial difficul- ties, and he compromised his claim on a cer- tificate for $1,000 and received only $132.82. By taking out these certificates he became liable to be assessed as a member, and dur- ing the short time they were running (from June to the following March) he paid, in this- shape and in premiums, the sum of $351.75. In view of the character of these certificates, and of the associations by wbdch they werfr issued, we cannot say the disproportion be- tween the debt and the real amount and value of the insurances is so great in this- case as to warrant a sentence of condemna- tion against the transaction as t)eing a mere speculation or wager on the life of the debtor. Without attempting a review of all the- numerous decisions on this subject, we sim- ply refer, in support of our views, to the fol- lowing cases, in addition to those already cited (Insurance Co. v. Allen, 138 Mass. 24; Clark v.AUen,ll K. 1.439; Olmsted v. Keyes,. 85 N. T. 593; Amick v. Butler, 111 Ind. 578, 12 N. B. 518; Johnson v. Van Epps, ilO 111. 562; Corson's Appeal, 113 Pa. St. 438, 6 Atl. 213); and among the text writers, to Bliss, Ins. § 30, and Hine & N. Assignm. 81, 82. On the whole, we are of opinion the weight of reason as well as of authority sustains the appellant's claim. We shaU therefore re- verse the decree appealed from, and dismiss the appellee's bUL 92 INSUBABLE INTEREST. COOPER T. SHABPPER. (11 Atl. 548.) 'Supreme Court of Pennsylvania. Get. 3, 1887. Error to court of common pleas, Lebanon county; McPherson, Judge. Case by Allen Shaeffer, administrator of Baniel Weaver, deceased, against Jacob C. Cooper, to recover the excess of a policy of insurance on the life of said Daniel Weaver, assigned to defendant's assignor as security for a debt, on the ground that the transaction ■was a wager. The facts as they appeared on the trial are sufficiently stated in the opinion. Verdict for plaintiff, $1,100.04, and Judgment thereon; whereupon defendant took this writ. J. P. S. Gobin, for plaintiff in error. Bass- ler Boyer, for defendant in error. STERRETT, J. It is conceded that the policy of $3,000 on the life of Weaver was taken out and immediately assigned to Blouch for the purpose of securing a debt of $100, •due by the former to the latter. Subsequent- ly one-half interest in the policy was assigned by Blouch to plaintiff in error, but Weaver was not in any manner a party to that trans- action. On the death of Weaver the insur- ance company, recognizing its liability for the amount insured, paid $1,800 thereof to Cooper, and the residue to Blouch. In view of the undisputed facts, the learned judge of the common pleas held that the disproportion be- tween the Insurance $3,000, and the debt, 4fl00, was so great as to require him to say, as matter of law, that the transaction was a wager, and that the assignees of the policy lad no right to retain more of the Insurance money received by them than the amount of the debt, plus the premiums paid and intw- est thereon. In this he was clearly right The disproportion is so great as to make the Insurance a palpable wager, and no court should hesitate to declare it so as matter of law. It has heretofore been correctly said that the sum insured must not be dispropor- tionate to the interest the holder of the pol- icy has in the life of the insured, but we have never found it necessary to adopt any rule by which such disproportionate interest may be determined. Speaking for himself, our Brother Paxson, In Grant v. Kline (Pa. Sup.) 9 AtL 150, suggests that a policy taken out by a creditor on the life of his debtor ought to be limited to the amount of the debt with interest, and the amount of premimns with interest thereon, during the expec^Jancy of the lite insured, according to the Carlisle tables. This appears to be a just and prac- ticable rule. It is not easy to define with precision what will In all cases constitute an insurable In- terest, so as to take the contract out of the class of wagering policies; but, as is said in Corson's Appeal, 113 Pa. St 438, 445, 6 Atl. 213: "In aU cases there must be a reason- able ground, founded on the relations of the parties to each other, either pecuniary, or by blood or affinity, to expect some benefit or advantage from the continuance of the life of the assured. Otherwise the contract is a mere wager, by which the party taking the IMsllcy is directly Interested in the early death of the assured. Such policies have a ten- dency to create a desire for the event They are therefore, independently of any statute on the subject, condemned as against public policy." But, in such a case as the one be- fore us, where the disproportion is so great, there can be no doubt as to the character of the transaction. There is no merit in either of the specifications of error. Judgment af- firmed. INSURABLE INTEREST IN UVE5. 93 LORD 7. DALL. (12 Mass. 115.) Supreme Judicial Court of Massachusetts. Suffolk. March Term, 1815. Assumpsit on a policy of insurance, made for $5000, in favor of the plaintiff, upon the life of Jabez Lord, her brother, aged thirty- three years, bound on a voyage to South Amer- ica, or any other place he might proceed to from Boston, commencing the risk on the 16th of December, 1809, at noon, and to continue until the 16th of July, 1810, at noon; for a premium of seven per cent The defendant underwrote the sum of $500. At the trial of the cause upon the general Issue, at the last November term, before the chief justice, it was proved, that the said Jabez had died, on the coast of Africa, before the expiration of the time for which his life was insured, and not from any of the causes excepted from the risk. It was also proved that the said Jabez sail- ed from Boston, after the making of the pol- icy, to E^al, as supercargo of a vessel called the Mount Aetna, at which place she was con- verted into a Portuguese vessel, called the Vincidero, still belonging to the former own- ers, but sailing with Portuguese papers, and under Portuguese colors. Prom Fayal the ves- sel sailed to Madeira, £Uid from thence to the coast of Africa, for the purpose of procuring slaves, with intention to carry them to South America; the said Jabez acting as supercargo, and having purchased some of the slaves him- self. The objections made at the trial to the plain- tifC's recovery were, 1. That she had no insurable Interest in the life of the said Jabez. But, it being in evi- dence that she was a i)erson of no property at the time, depending altogether upon the said Jabez for hei- support and education, and he having for several years paid her board, pro- vided her with clothing, and paid for her edu- cation; all which he continued to do at the time the policy was effected; this objection was overruled, but reserved for the considera- tion of the whole court. 2. That there was a concealment of the in- tention of the said Jabez to go to the coast of Africa. This was left to the jury, with di- rections, if they were satisfied that there had been such concealment, to find for the defend- ant. 3. The third objection was, that the policy was void, it being to secure the. life of the said Jabez, while in the execution of an un- lawful enterprise. It was not made certain, whether the said Jabez originally designed to go to the coast of Africa, or whether that voyage was con- ceived after the vessel left Boston. The jury were instructed, that, if they believed that he had such intention originally, and knew that the vessel was so bound, there could be no doubt, from the evidence in the case, that such intention and knowledge were concealed. The question, therefore, which the judge states to- be reserved for the consideration of this objec- tion, was, whether the actual going upon a voyage for the purposes aforesaid, by the- party whose life is insured, avoids the policy. The said Jabez Lord gave his note for the premium; and there was no evidence that the plaintiff knew where the said Jabez was bound. If the court should be of opinion that the- plaintiff had not an insurable interest, or that the policy was void on account of the illegality of the voyage, the verdict returned for the plaintiff was to be set aside, and she was to become nonsuit; otherwise, judgment was to. be rendered on the verdict, Prescott & Hubbard, for plaintiff. Mr. Liv- ermore and W. Sullivan, for defendant. PARKER, C. J. It has been a question in the argument, whether a policy of assurance- upon a life is a contract, which can be en- forced by the laws of this state; the law of England, as it is suggested, applicable to such contracts, never having been adopted and prac- tised upon in this country. It is true, that no precedent has been pro- duced from our own records, of an action upon a policy of this nature. But whether this has happened from the infrequency of disputes which have arisen it being a subject of much less doubt and difficulty than marine insm-- ances, or from the infrequency of such con- tracts, it is not possible for us to decide. By the common principles of law, however, all contracts fairly made, upon a valuable con- sideration, which infringe no law, and are not repugnant to the general policy of the laws, or to good morals, are valid,* and may be en- forced, or damages recovered for the breach of them. It seems that these insurances are not fa- vored in any of the commercial nations of Eu- rope, except England; several of them having- expressly forbidden them, for what reasons, however, does not appear; unless the reason given in France is the prevailing one, namely, "that it is indecorous to set a price upon the- life of a man, and especially a freeman, which, as they say, is above all price." It is not a little singular, that such a reason should be advanced for prohibiting these policies in France, where freedom has never been known to exist, and that it never should have been thought of in England, which for several cen- turies has been the country of established and regulated liberty. This is a contract fairly made; the premium is a sufficient consideration; there is nothing- on the face of it, which leads to the violation of law; nor any thing objectionable on the score of policy pr morals. It must, then, be valid to support an action, until something is shown by the party refusing to perform it, in excuse of his non-performance. It is said, that, being a contract of assur- ance, the law on the subject of marine insur- ance is applicable to it; and, therefore, unless. ■94 INSUBABLE INTEKEST. the assured had an interest in the subject- matter insured, he is not entitled to litis action. This position we agree to; for, otherwise, it would be a mere wager-policy, which we think would be contrary to the general policy of our laws, and therefore void. Had, then, the plaintiff an interest in the life of her broth- «r, which was insured? The report states the facts, upon which that interest was supposed at the trial to exist. The plaintiff, a- young female without property, was, and had been for several years, supported and educated at the ex- pense of her brother, who stood towards her in loco parentis. Nothing could show a stronger affection of a brother towards his sister, than that he should be willing to £ive so large a sum to secure her against the contingency of his death, which would •otherwise have left her in absolute want One per cent, per month upon $5000, taken on the life of a man of thirty-three years of age, in good health at the time, was a suffi- cient inducement to the underwriter to take .at least common chances, and proved the strong disposition of the brother to secure his sister against the melancholy conse- quence to her of his death. In common un- •derstanding no one would hesitate to say, that in the life of such a brother the sister iad an interest; and few would limit that interest to the sum of $5000. But, it is said, the interest must be a pe- ■cuniary, legal interest, to make the contract valid; one that can be noticed and protected by the law; such as the interest which a creditor has In the life of his debtor, a child in that of his parent, &c. The former case, indeed, of the creditor would leave no room for doubt. But with respect to a child, for whose benefit a policy may be effected on the life of the parent, the interest, except the insurable one which may result from the legal obligation of the parent to save the <;hild from public charity, is as precarious as that of a sister in the life of an affection- .ate brother. For, if the brother may with- draw all support, so may the father, except SIS before stated. And yet a policy effected by a child upon the life of a father, who de- pended on some fund terminable by his •death to support the child, would never be tiuestioned; although much more should be secured than the legal interest which the child had in the protection of his father. Indeed we are well satisfied that the inter- est of the plaintiff in the life of her brother is of a nature to entitle her to insure it. Nor can it be easily discerned, why the un- derwriters should make this a question after a loss has taken place, when it does not ap- pear that any doubts existed when the con- tract was made; although the same subject was then in their contemplation. As to the other objection, that the life in- wared was employed, during the continu- ance of the contract, in an illegal traffic, we do not think it can prevail to the prejudice 4»f the plaintiff, who did not participate in the illegal employment, and. Indeed, does not appear to have known of it The underwriters insure the life of Jabez Lord, for the benefit of the plaintiff, for the term of seven months; and he is described in the policy as being about thirty-three years of age, "and bound on a voyage to South America or elsewhere, and any other place he may proceed to from Boston." This gave the utmost latitude to Jabez Lord, to go where he pleased at all times, and im- posed no restriction whatever upon him, as to the place where he should exercise his in- dustry and enterprise. Possibly, if he se- cretly intended, at the time the policy was subscribed, to visit some portion of the globe, where his life would be exposed to more than common hazard, and kept that In- tention concealed from the underwriters; had he been interested himself In the policy, or had his sister been privy to his Inten- tions, and aided him In concealing them, such conduct might have been considered in the light of a fraudulent concealment; and, If the fact were material, the contract might have been avoided. But the jury have found, that there was no such concealment; and the objection now rests entirely upon the supposed Illegality of the enterprise in which he was engaged. It Is a sufficient answer to this objection, that, whatever the law may be as to an in- surance upon an illicit voyage, between the parties to the contract, the present plaintiff, being Ignorant of any intended violation of the law, ought not to be affected by such illegality. Had the policy been effected for Jabez Lord himself, it might be questiona- ble, as the underwriters had excepted no particular employment In which he might be engaged, and no cause of death but sui- cide and forfeiture of life for crime, wheth- er his engagement in any traffic prohibited by law would have discharged their liability. If it would, it must be only because it might be thought just and legal to discour- age contracts, which might tend to uphold enterprises forbidden by the laws. It would be dtfiicult, however, to maintain, that the executors of a man, whose life was insured for the benefit of his children, should be deprived of their right to enforce the con- tract because he had pursued a course of smuggling or counterfeiting; neither of these acts being excepted in the policy, and the party having died within the time, from a cause which was clearly at the risk of the underwriters. A policy made for the pur- pose of enabling a man to commit crimes would undoubtedly be void. But one honest- ly made would seem not to be affected by tie moral conduct of the party who had procur- ed it. Perceiving nothing in this contract un- friendly to the morals or interests of the com- munity; and no knowledge of an Ulegal in- tention being imputed to the plaintiff; we see no reason for setting aside the verdict Judg- ment win therefore be entered upon It TKSURABLE INTEREST IN LIVES. 95 SINGLETON v. ST. LOUIS MUT. INS. 00. et al. (66 Mo. ea) Supreme Court of Missouri. Oct Term, 1S77. Appeal from circuit court, Audrain county; ■G. Porter, Judge. Henry Flanagan, for appellant McFar- lane, Jones & Carkener, and R. W. Jones, for respondent HENRY, J. Plaintiff sued defendants on a policy of insurance issued by the St Louis Mutual Life Insurance Company, on the life of John T. Anderson, procured by plalntifC, who paid the premiums, and was to recelTe the amount for which said life was insured by said company, on the death of said An- derson. Plaintiff was an uncle of Jno. T. Anderson, but it was neither alleged nor proved by plaintiff, that he had any pecuniary interest in his life, and the mere relation of uncle and nephew does not constitute an insurable interest, to enable either to Insure the life ■of the other. It is maintained with great ability by Messrs. McParlane and Jones, at- torneys for plaintiff, that a policy of Insur- ance, effected by one on the life of another in which he has no pecuniary interest, is Talid; and they rely upon Chisholm v. In- surance Co., 52 Mo. 213. in which this court O^'agner, J.) said: "In this state we have no statute on the subject covering this case, and as the policy Is not void by the common law, it can only be declared so on the ground that it is against public policy. There Is nothing to show that the contract was a mere wagering one, or that it is in any wise against or contrary to public policy." These remarks, of course, are to be restricted to the case then under consideration. The plaintiff there had Insured the life of Clark, between whom and herself there was a mar- riage engagement, and the court held that she had a pecuniary interest in the life of Clark, remarking that, "had he observed and kept the same (his contract of marriage), then, as his wife, she would have been en- titled to support Had he lived and violated the contract she would have had her action for damages." There are intimations in the opinion which support the views urged by respondent's attorney, but they are obiter dicta. The case of Insurance Co. v. John- son, 24 N. J. Law, 576, is approvingly cited by the court, but a different doctrine from that announced in that case has been held in Massachusetts, New York, Connecticut, Maine, Rhode Island, Indiana, by the circuit court of the United States, by Dillon, J., in Swick V. Insurance Co., 2 Dill. 161, Fed. Cas. No. 13,692, and in this state In McKee v. In- surance Co., 28 Mo. 383. And in Gambs v. Insurance Co., 50 Mo. 44, it was held indi- rectly that a person procuring an insurance on the life of another must, to make it valid. have a pecuniary interest in the life Insured. In the latter case. Bliss, J., said: "Gam- bling, or wager policies, are those where the persons for whose use they issue have no pecuniary interest in the life Insured. But the wife has a direct interest in the life of her husband." In the former case, Scott, J., said: "There Is nothing in the contract as stated in the petition, which shows It to be a wager- ing one, or in any wise contrary to public policy." He then proceeds to show, that the plain- tiff had a pecuniary interest in the life of the husband, which she Insured for her benefit. In Evers v. Association, 59 Mo. 430, Wagner, J., who delivered the opinion of the court did not seem entirely satisfied with Chis- holm V. Insurance Co. He said: "Our opin- ion on this subject was expressed in Chis- holm V. Insurance Co., 52 Mo. 213, to some extent, but It is not necessary to examine the question further In this case, as the plaintiff's own instructions assume that such an interest is necessary." As the observa- tions of our court on this subject, in the case referred to, are obiter dicta, the question may be considered an open one In this stata In his Commentaries (volume 3, p. 462) Chan- cellor Kent said: "But policies, without In- terest upon lives, are more pernicious and dangerous than any other class of wager policies, because temptation to tamper with life is more mischievous than incitement to mere pecuniary fraud." In Lord v. DaU, 12 Mass. 115, It was held "that, unless the as- sured had an Interest in the life insured, it would be a mere wager policy, which we think would be contrary to onr laws, and therefore void." In Stevens v. Warren, 101 Mass. 564, Lord v. Dall was cited and ap- proved, and Willis, J., speaking for the court, said: "The general rule recognized by the courts has been that no one can have an insurance upon the life of another, unless he has an Interest in the continuance of that life." To the same effect are ihe cases of Mitchell V. Insurance Co., 45 Me. 104; Lewis V. Insurance Co., 39 Conn. 101; Bevin v. In- surance Co., 23 Conn. 244; Mowry v. Insur- ance Co., 9 R. I. 346; Insurance Co. v. Hays, 41 Ind. 117; Ruse v. Insurance Co., 23 N. Y. 516; Freeman v. Insurance Co., 38 Barb. 247; Cammack v. Lewis, 15 Wall. 643; Swlck V. Insurance Co., 2 DilL 161, Fed. Cas. No. 13,692; May, Ins. p. 724, § 587. Neither the case of Shannon v. Nugent, Hayes, BJxch. 539. nor Ferguson v. Lomax, 2 Dru. & War. 120, cited in Chisholm v. In- surance Co., supra, sustains the doctrine contended for by respondent In the latter case the question was neither considered by the court nor presented in the brief of coun- sel, and in the former, Joy, C. B., speaking for the court, said: "It is not now necessary for us to decide whether a life insurance, made in Ireland, must be on interest." He stated, however, that the leaning of the court was, that interest was not necessary to 96 INSURABLE INTEKEST. give it validity. We feel constrained, there- fore, by the weight of authority to hold that the policy of insurance procured by one upon the life of another, for the benefit of the former, who has no pecuniary interest in the continuance of the life insured, is against public policy, and therefore void. This pol- icy, upon its face, does not state an interest, nor in the application is it stated that Sin- gleton had a pecuniary interest in the life of Anderson. The following question was pro- pounded to the applicant: "Has the benefi- ciary (if a creditor) an interest in the life to be assured to the full amount of this appli- cation?" To which he answered "No." He does not state that he is a creditor. It was neither averred, in the plaintifiFs petition, nor proved, that plaintiff had any pecuniary interest in the continuance of the life of John T. Anderson. The following instruction, asked by defendant, the court refused: "That to entitle plaintiff to recover In this action, he must show some insurable inter- est in the life of John T. Anderson, the in- sured, and that in the absence of any evi- dence, showing or tending to show such in- surable interest, the jury must find for de- fendant." Plaintiff's counsel contend that it devolved upon defendant to show that plaintiff had no such interest, and several cases from our own Reports are relied upon as authority for tills position. In the earlier of these cases aU that was determined was that when a contract was good at common law, without being reduced to writing, after the passage of the statute of frauds it was matter of de- fense to be pleaded that the contract was not in writing. The case here is of a con- tract void at common law, upon its face, and of course it devolves upon plaintiff to show such facts as render it valid and binding. In Freeman v. Insurance Co., supra, the court said: "It must be considered as well settled at present that at common law, as well as under the statute of betting and gaming, a policy of fire insurance is void, unless the party has at the time an insurable interest. It follows that a complaint in an action on the policy must contain an averment of such an interest, in order to state a cause of ac- tion." "The plaintiff must aver an insura- ble interest, or if he has not that, the grounds upon which he rests his right to sue." May, Ins. § 587. In Ruse v. Insurance Co., supra, in which the opinion was deliv- ered by that able jurist, Judge Selden, the court said: "And it is apparent from the authorities, that it had always been previ- ously held In suits upon policies, not con- taining the words, 'interest or no interest,' or other equivalent words, that the plaintlfT must aver and prove that he had an inter- est." This was said in reference to Depaba. V. Ludlow, Comyn, 361, which shows how the doctrine that wagering policies upon: ships are valid, originated. The defendant there had insured the plaintiff, "Interest or no interest," and it was hrfd that the im- port of that clause relieved plaintiff froon proving his interest That the plaintiff' must, in these cases, aver and prove an In- terest, was held In the supreme court of Illi- nois, in Insurance Go. v. Hogan, 80 111. 35, and that he must prove the same affirma- tively as a part of the case. The court below erred in refusing to give defendant's tenth instruction, and for that error the judgment must be reversed. The court did not err in excluding statements made by John T. Anderson, as to how he had been afflicted, and did properly admit statements made by him to witnesses, whether medical men or not, which were ex- pressions of his feelings at the time. 1 Greenl. Bv. § 101. Nor was it necessary tb- make such statements admissible that they should have been made In answer to inqui- ries as to his health, or observations of oth- ers as to his appearance, &c. But they must not have been made too long before the ap- plication to throw any light upon the condi- tion of his health when the application was made. We think evidence properly admissi- ble to show In what sense the term "spitting of blood," was used in the application. With- out any evidence of the meaning of that term, the court might properly have instruct- ed the jury that "spitting of blood," in con- sequence of a drawn tooth, or a cut on the gums, was not meant by that term, and yet, if Anderson had spit Mood from such trivial causes, literally his answer to the question would have been false. There was, there- fore, a propriety in the admission of evi- dence of the meaning of the term. There is something ambiguous in the term "spitting of blood." There is room for interpretation. Literally, the meaning Is spitting blood, whether from the teeth, gums or lungs, but it would be absurd to hold that It was used in that sense in the application. We have given two instances of spitting blood, which no court would hold as embraced within the term "spitting of blood," as used in that ap- plication. Hence, the necessity for an ex- planation; "spitting of blood" is, and was proved to be, a technical term. Other errors- are assigned, but it is unnecessary to con- sider them. We are all agreed that the judg- ment should be. and it is accordingly, re- versed, and the cause remanded. Reversed. THE PREMIUM. 97 HOFFMAN V. JOHN HANCOCK MUT. LIFE INS. CO. (92 U. S. 161.) Supreme Court of the United States. Oct., 1875. Appeal from the circuit court of the United States for the Northern district of Ohio. James A. Garfield, for appellant H. L. Terrell, for appellee. Mr. Justice SWAYNE delivered the opinion of the court. There is a direct conflict in the testimony of the two principal witnesses in this case, and the aiscrepancies axe irreconcilable. Accord- ing to our view, the case must turn upon the appplication of legal principles to facts about which there is no controversy. An elaborate examination of the testimony is, therefore, un- necessary. A brief statement will be suffi- cient for the purposes of this opinion. Justin E. Thayer was the general agent of the appellee at Clevelanjd, Ohio. He was au- thorized to appoint sub-agents; and on the 7th of April, 1S69, appointed A. C. Goodwin such agent. This arrangement continued un- til the 7th of June, 1869. It was then put an end to by the parties; and they agreed that thereafter Goodwin should act as an insurance broker, and that he should receive for such applications as he might bring to Thayer thirty per cent, of the first premium paid for the insurance. On the 7th of August, 1869. Goodwin gave to Frederick Hoffman a receipt, signed by Goodwin as agent, setting forth that he had received from HoSman 5922.57, "being the first annual premium on an insurance of $8,000 on the life of Frederick Hoffman, for which an application is this day made to the John Hancock Mutual Life Insurance Com- pany of Boston. The said insurance to date from Aug. 7, 1869, subject to the conditions and agreements of the policies of said com- pany, provided that the said application shall be accepted by the said company, and a pol- icy be by them granted thereon. The said policy, if issued, to be delivered by me, when received, to the holder of this receipt, which shall then be given up. It is expressly agreed and understood, that, if the above-mentioned application shall be declined by the said com- pany, it shall be deemed that no insurance has been created by this receipt; but the amount above receipted shall be returned to the holder of this receipt, which shall then be given up." The amount of the premium specified wa^ paid by Hoffman to Goodwin as follows: A horse valued at $400 00 A sixty-day note to Goodwin 100 00 A cancelled debt owing by Goodwin to , Hoffman 53 57 A premium note of 369 00 $922 57 Groodwln reported the application to Thayer, but said nothing of the receipt. Thayer for- warded the application, and in due time re- BLL.8Kr..CAS.IiAW INS.— 7 oeived the policy. Some time afterwards, Hoffman called for the policy. Thayer de- manded the premium. Hoffman refused to pay it, and produced Goodwin's receipt. Thay- er then, for the first time, learned the exist- ence of the receipt, and the particulars of the alleged payment of the premium. He refused to ratify the transaction. Ineffectual attempts were made to sell the horse. Finally Thayer, to save trouble to his company, agreed, that if Hoffman would take back the horse, and pay in his stead $250 to the company, the transaction should be closed, and the policy be delivered. This Hoffman refused to do, and sued the company in the court of common pleas of Cuyahoga county for what he had dehvered to Goodwin. A verdict was found for the defendant. He took a new trial under the statute of Ohio. Upon the re-trial, a verdict was rendered in his favor. The defendant moved for a new trial, which was granted. In this condition of things, Hoffman died. The suit abated by his death, and was not revived. Thereupon his widow, Henrietta Hoffman, filed this bill. It prayed that the company should be compelled to deliver the policy to her, and to pay the amount of the insurance-money specified. The policy was upon what is known as the "en- dowment plan." It provided that the amount insured should be paid to Hoffman at the end of ten years, or to his wife in the event of his death in the mean time. No part of what was paid by Hoffman to Goodwin ever came into the hands of Thayer or the company, or inured in any wise to the benefit of either. Goodwin testified that his share of the pre- mium was "two hundred and seventy-six dol- lars and some cents;" and, further, that Thayer assented to the transaction in advance, and, with full knowledge of the facts, ratified it subsequently. If it be admitted that the facts as to assent and ratification by Thayer are as stated by Goodwin, — a concession by no means warrant- ed, in our judgment, by the state of the evi- dence, — ^the question arises, what is the legal result? Agencies are special, general, and universal. Story, Ag. § 21. Within the sphere of the authority conferred, the act of the agent is as binding upon the principal as if it were done by the principal himseU. But it is an elementary principle, applicable alike to all kinds of agency, that whatever an agent does can be done only in the way usual in the line of business in which he is acting. There is an implication to this effect arising from the nature of his employment, and it is as effectual as if it had been expressed in the most formal terms. It is present whenever his authority is called into activity, and pre- scribes the manner as well as the limit of its exercise. Upton v. Suffolk Co. Mills, 11 Cush, 586; Jones v. AVarner, 11 Conn. 48; Story, Ag. § 60, and note; 3 Chit Com. 199; U. S. V. Babbit, 1 Black, 61; 1 Pars. Cont (4th Ed.) pp. 41, 42. 98 THE PREMIUM. Life Insurance is a cash business. Its dis- bursements are all in money, and its receipts must necessarily be in the same medium. This is the universal usage and rule of all such companies. Good-win had settled his own debt to Hoff- man of ?53.57, and had appropriated to him- self Hoffman's note of $100. If he had the right to take his percentage In such way as he might think proper, this did not justify his taking the horse at $400. Nor, if Thayer had expressly agreed to take the horse in payment of the premium pro tanto, could that have given validity to the transac- tion. If the agent had authority to take the horse in question, he could have taken other horses from Hoffman, and have taken them in all eases. This would have carried with it the right to establish a stable, employ hands, and do every thing else necessary to take care of the horses until they could be sold. The company might thus have found itself carry- ing on a business alien to its charter, and in which it had never thought of embarking. The exercise of such a power by the agent was liable to two objections, — it was ultra vires, and it was a fraud as respects the com- pany. Hoffman must have known that nei- ther Goodwin nor Thayer had any authority to enter into such an arrangement, and he was a party to the fraud. No valid contract as to the company could arise from such a transaction. This objection is fatal to the ap- pellant's case. It is insisted by the counsel for the appel- lee, that Hoffman, by bringing his action at law, repudiated and rescinded the contract, if there was one; and that the appellant is thereby estopped from maintaining this bill. Authorities are cited in support of this propo- sition. Herrington v. Hubbard, 2 III. 569; Dalton V. Bentley, 15 111. 420; Smith v. Smith, 19 lU. 349; Cooper v. Brown, 2 McLean, 495, Fed. Cas. No. 3,191; Williams v. Insurance Co., 4 Bigelow, Ins. Cas. 56. As the point already determined is conclu- sive of the case, it is unnecessary to consider this subject Decree affirmed. THE PREMIUM. 99 McAllister t. new England mut. life ins. co. aoi Mass. 558.) Supreme Judicial Court of Massachusetts. Suf- folk. March, 1869. H. G. Hutchlns, for plaintiff. D. Poster and ■G. W. Baldwin, for defendants. GRAY, J. The policy upon which this ac- tion is brought is expressed to be made in con- sideration of a premium already paid, and of a like sum to be paid annually during its con- tinuance; and "does not take efCect until the premium is paid." But it is agreed by the parties. In the case stated, that the defend- ants made and delivered the policy to the as- sured, and at the time of the delivery took for the first premium a certain sum In cash, -and two notes of the assured, one payable in six: months, and the other on demand after five years. Whatever were the powers of the ■directors, the corporation itself might cer- tainly take notes for part of the premium, instead of insisting on immediate payment of the whole. Uodsdon v. Insurance Co., 97 Mass. 144. The policy thus took effect as a binding contract, and the question is, whether It was terminated before the death of the as- sured. The defendants rely upon that provision of the policy, which declares that, "in case any premium due upon the policy shall not be paid at the day when payable, the policy shall thereupon become forfeited and void," except for a certain period, which had expired before the death of the assured In this case. But the court Is of opinion that this clause, which is inserted for the benefit of the insurers, and to be construed most strongly against them, and which merely provides that the policy "shall become forfeited and void," in case a premium "shall not be paid at the day when payable," can only apply to a policy which has once taken effect, and to nonpayment of s. premium payable after that time, and can- not be held to refer to that premium which the policy contemplates and requires to be paid before the contract of insurance has any binding force. This policy does not provide that it shall be avoided or forfeited upon the failure to pay any note or obligation given for a premium, and differs in that respect from the cases of Pitt V. Insurance Co., 100 Mass. 500, and Rob- erts V. Insurance Co., Disney, 355, cited for the defendants. The subsequent stipulation, by which the policy, and any sums that shall become due thereon from the company, are pledged and hypothecated to them to secure the payment of any premium on which credit may be given, and of any note or security therefor, expressly declares that "this pledge and hy- pothecation shall in no respect affect the pro- visions respecting the forfeiture of the policy," and cannot therefore enlarge those provisions. The difference also in the form of the two notes taken by the defendants for part of the premium— that for the smallest amount and payable in the shortest time omitting the pro- vision, which is carefully Inserted in the other, of "said policy being agreed to be sub- ject to forfeiture, and to become void in case of nonpayment of interest and principal of this note in compliance with the terms there- of" — accords with the construction that non- payment of the first note was not Intended to have the effect of* avoiding the policy. The refusal of the assured to pay that note after it had become due, accompanied by the statement that "he would not have anything more to do with the company, and abandoned the whole thing," does not appear to have been assented to by the company; for the company continued to hold the notes, and the assured to hold the policy. The defendants, having admitted the death of the assured and due notice and proof there- of, and having failed to show that the policy was forfeited, canceled, or in any way avoid- ed or determined before his death, are liable to his administratrix in this action. Judgment for the plaintiff. 100 THE PREMIUM. THOMPSON V. INSTJEANCB CO. (104 U. S. 252.) Supreme Court of the United States. Oct, 1881. Error to the circuit court of the United States for the Southern district of Alabama. This was an action on a policy of insurance for $5,000, issued by the Knickerbocker Life Insurance Company, the defendant In error, on the life of John Y. Thompson, for the ben- efit of his wife, Ruth B. Thompson, the plain- tiff in error. The policy bore date Jan. 24, 1870, and was to continue during his life, in consideration of an annual premium of $410.- 20, payable on or before the twenty-fourth day of January in every year. He died Nov. 3, 1874. The complaint was in the usual form, setting forth the contract contained in the policy, his death, and the performance of the conditions of the policy by him and the plaintiff. The company pleaded the general Issue, and two special pleas, which set up in substance tlie same defence. The second plea, after setting forth the provisions of the policy for the payment of the annual premium, pro- ceeds as follows: "Under said policy an annual credit or loan of a portion of said premium was provided for, and said policy also contained a condi- tion or proviso that the omission to pay the said annual premium on or before twelve o'clock noon on the day or days above desig- nated for the payment thereof, or that the failure to pay at maturity any note, obliga- tion, or indebtedness (other than the annual credit or loan) for premium or Interest due under said policy or contract, shall then and thereafter cause said policy to be void with- out notice to any party or parties interested therein. "The defendant further says that the said annual premium was not paid on or before the twenty-fourth day of January, A. D. 1874, and thereupon the defendant did give time for the payment of said premium upon the condition named in the note hereinafter men- tioned, and for the payment of said premium did take certain promissory notes of said Thompson, one of which was as follows: "$109. New York, Jan'y 24th, 1874. "Nine months after date, without grace, I promise to pay to the Knickerbocker Life In- surance Company one hundred and nine dol- lars, at Mobile, Alabama, value received, in premium on policy No. 2334, which policy Is to be void in case this note is not paid at maturity, according to contract in said policy. "No. 2334 was an error. No. 2331 being in- tended." It then avers that the note was not paid when it became due, Oct 24, 1874, and that by reason thereof the policy became void and of no effect before the death of the assured. To these pleas four replications were filed, numbered 2, 3, 4, and 5, as follows: "2d. That the said policy of insurance was renewed by said defendant on the twenty- fourth day of January, 1874, and continued in force until Jan. 24, 1875. That the pay- ment of said note at maturity was not a con- dition precedent as alleged. That the said Thompson had the money in hand, was ready and willing and intended to pay said note, but that before the maturity thereof he was taken violently ill, and before and at the time the same fell due was in bed, prostrated by a fatal disease, and in this condition re- mained until he died on the third day of No- vember, 1874; that during all this time he was mentally and physically incapable of at- tending to his business, or knowing of and performing his obligations, and was non compos mentis; that the existence of said note was not known to the plaintiff. "3d.' That it was, and had been for many years before, and on the day said note fell due, the uniform usage and custom of said defendant in such cases to give notice of the day of payment to its policy-holders; such is. and was the uniform usage and custom with all insurance companies, and the said de- fendant had in all cases adopted and acted on said usage, and in all its dealings with said Thompson had adhered to said usage, and gave notice of the day when such pay- ments fell due; yet said defendant in this case failed to give any notice of the day of payment of said note, notwithstanding they knew said Thompson was in the city of Mo- bile, and was sick. Plaintiff avers that said Thompson was ready and willing to pay, had said notice been served as in previous cases, but acting on said usage he was deceived by want of said notice, and that the plaintiff had no notice of the existence of said note, or when the same fell due, wherefore and whereby said note was not paid. "4th. That on the twenty-fourth day of Jan- uary, 1874, said policy was renewed and en- tered in full force for one year, to wit, until Jan. 24, 1875. Tliat said note was for the balance of the premium of that year, which defendant agreed should be deferred and paid as set out on said note; that by said agreement said policy was not to become void on the non-payment of the note alone at maturity as alleged in said plea, but was to become void at the Instance and election of said defendant, and plaintiff avers that said defendant did not elect to cancel said policy or take any steps to avoid it or give any notice of such intention during the life of said John Y. Thompson, or since, and still holds said note against said estate of said Thompson. "5th. And for further replication to the first and second special pleas by said defend- ant pleaded, plaintiff says that it was the general usage and custom adopted by said defendants, and practised by them before and after the making of said note, not to demand punctual payment of such premium notes on the days they fell due, but to give days of grace thereon, to wit, for thirty days there- after, and the said defendants had repeated- THE PREMIUM. 101 ly so done with said Thompson and others, and they led said Thompson to believe and rely on such leniency in this case, and there- by said Thompson was deceived, and said note not paid, and he did rely on them for such notice." • Demurrers to these replications were sus- tained by the court. The case was then tried upon the plea of the general issue. On the rejection of evidence at the trial, the same questions presented by the replications were raised. Exceptions were taken in due form and preserved on the record. There was a judgment for the defendant. The plaintiff thereupon sued out this writ of error. J. Hubley Ashton and Thomas N. Mc- Cartney, for plaintiff in error. Fletcher P. Cuppy and Thomas H. Hemdon, contra. Mr. Justice BRADLEY, after stating the facts, delivered the opinion of the court. The questions presented for review in this case arise on the rulings of the court below on the demuiTers of the defendant. It appears from the special pleas that the policy contained the usual condition that it should become void If the annual premiums should not be paid on the day when they sev- erally became due, or if any notes given in payment of premiums should not be p&id at maturity. The replications do not pretend that the note given for premium, which became due jn the twenty-fourth day of October, 1S74, was ever paid, or that payment thereof was ever tendered, either during the life of Thompson or after his death; but it is con- tended that such payment was not necessary in order to avoid the forfeiture claimed by the defendant. First, it is contended that the mere taking of notes in payment of the premium was, in itself, a waiver of the conditional forfeiture; and for this reference is made to the case of Insurance Co. v. French. 30 Ohio St. 2W. But, in that case, no provision was made in the policy for a forfeiture in case of the non- payment of a note given for the premium, and an unconditional receipt for the premium had been given when the note was taken; and this fact was specially adverted to by the court. We think that the decision in that case was entirely correct. But in this case the polic.v does contain an express condition to be void if any note given in payment of premium should not be paid at maturity. We are of opinion, therefore, that whilst the pri- mary condition of forfeiture for non-payment of the annual premium was waived by the acceptance of the notes, yet, that the second- ary condition thereupon came into operation, by which the policy was to be void if the notes were not paid at matm-ity. Beside this general answer the plaintiff set up, in her replications, various excuses for not paying the note in question, which are re- lied on for avoiding the forfeiture of the pol- icy. In the second replication the excuse set up is, that before the note fell due Thompson be- came sick and mentally and physically incapa- ble of attending to business until his death on the third day of November, 1874, and that the plaintiff was ignorant of the outstanding note. We have lately held, in the case of Klein v. Insurance Co., supra, that sickness or incapacity is no ground for avoiding the for- feiture of a life policy, or for granting relief in equity against forfeiture. The rule may, in many cases, be a hard one; but it strictly follows from the position that the time of pay- ment of premiums is material in this contract, as was decided in the case of Insurance Co. V. Statham, 93 U. S. 24. Prompt payment and regular interest constitute the life and soul of the life insurance business; and the sentiment long prevailed that it could riot be carried on without the ability to impose strin- gent conditions for delinquency. More liberal views have obtained on this subject in recent years, and a wiser policy now often provides express modes of avoiding the odious result of forfeiture. The law, however, has not been changed, and If a forfeiture is provided for in case of non-payment at the day, the courts cannot grant relief against it. The in- surer may waive it, or may by his conduct lose his right to enforce it; but that is all. The third replication sets up a usage, on the part of the insurance company, of giving no- tice of the day of payment, and the reliance of the assured upon having such notice. This is no excuse for non-payment The assured knew, or was bound to know, when his pre- miums became due. Insurance Co. v. Eggle- ston. 96 U. S. 572, is cited in support of this replication. But, in that case, the customary notice relied on was a notice designating the agent to whom payment was to be made, without which the assured could not make it, though he had the money ready. As soon as he ascertained the proper agent he tendered payment in due form. It is obvious that the present case is very different from that. The reason why Ihe insurance company gives no- tice to its members of the time of payment of premiums is to aid their memory and to stim- ulate them to prompt payment. The compa- ny is under no obligation to give such notice, and assumes no responsibility by giving it The duty of the assured to pay at the day is the same, whether notice be given or not. Banks often give notice to their customers of the approaching maturity of their promis- .sory notes or bills of exchange; but they are not obliged to give such notice, and their neg- lect to do it would furnish no excuse for non- payment at the day. The fourth replication sets up a parol agree- ment of defendant made on receiving the promissory note, that the policy should not become void on the non-payment of the note alone at maturity, but was to become void at the instance and election of the defendant. 102 THE PREMIUM. which election had never been made. As this supposed agreement Is In direct contradiction to the express terms of the policy and the note itself, it cannot affect them, but is itself void. We did hold, m Eggleston's Case, it Is true, that any agreement, declaration, or course of action on the part of an insurance company, which leads a party insured honestly to be- lieve that by conforming thereto a forfeiture of his policy will not be incurred, followed by due conformity on his part, will estop the company from Insisting upon the forfeiture. An insurance company may waive a forfei- ture or may agree not to enforce a forfeiture; but a parol agreement, made at the time of Issuing a policy, contradicting the terms of the policy itself, like any other parol agreement in- consistent with a written instrument made contemporary therewith, is void, and cannot be set up to contradict the writing. So, in this case, a parol agreement supposed to be made at the time of giving and accepting the premium note cannot be set up to contradict the express terms of the note itself, and of the policy under which It was taken. The last replication sets up and declares that it was the usage and custom of the de- fendants, practised by them before and after the making of said note, not to demand punc- tual payment thereof at the day, but to give days of grace, to wit, for thirty days there- after; and they had repeatedly so done with Thompson and others, which led Thompson to rely on such leniency in this case. This was a mere matter of voluntary Indulgence on the part of the company, or, as the plaintiff her- self calls it, an act of "leniency." It cannot be justly construed as a permanent waiver of the clause of forfeiture, or as implying any agreement to waive it, or to continue the same indulgence for the time to come. As long as the assured continued in good health, it is not surprising, and should not be drawn to the company's prejudice, that they were willing to accept the premium after maturity, and waive the forfeiture which they might have insisted upon. This was for the mutual benefit of themselves and the assured, at the time; and in each Instance in whieh it happen- ed it had respect only to that particular in- stance, without involving any waiver of the terms of the contract in reference to their future conduct. The assured had no right, without some agreement to that effect, to rest on such voluntary indulgence shown on one occasion, or on a number of occasions, as a ground for claiming It on all occasions. If it were otherwise, an insurance conJpany could never waive a forfeiture on occasion of a par- ticular lapse without endangering its right to enforce it on occasion of a subsequent lapse. Such a consequence would be injurious to- them and injurious to the public. But a fatal objection to the entire case set up by the plaintiff is, that payment of the premium note in question has never been made or tendered at any time. There might possibly be more plausiljility in the plea of former indulgence and days of grace allowed. If payment had been tendered within the lim- ited period of such indulgence. But this has never been done. The plaintiff has, therefore, failed to make a case for obviating and su- perseding the forfeiture of the policy, even if the circumstances relied on had been suffi- ciently favorable to lay the ground for it. A valid excuse for not paying promptly on the particular day Is a different thing from an ex- cuse for not paying at all. Courts do not favor forfeitures, but they cannot avoid enforcing them when the party by whose default they are incurred cannot show some good and stable ground in the con- duct of the other party, on which to base a. reasonable excuse for the default. We think that no such ground has been shown in the present case, and that it does not come up to the line of any of the previous cases referred to, in which the excuse has been allowed. We do not accept the position that the pay- ment of the annual premium is a condition precedent to the continuance of the policy. That is untrue. It is a condition, subsequent only, the non-performance of which may incur a forfeiture of the policy, or may not, accord- ing to the circumstances. It is always open for the insured to show a waiver of the con- dition, or a course of conduct on the part of the Insurer which gave him just and reasona- ble ground to infer that a forfeiture would not be exacted. But it must be a just and reasonable ground, one on which the assured has a right to rely. Judgment affirmed. THE PREMIUM. 103 EX,EIN V. INSURANCE CO. (104 U. S. 88.) Supreme Court of the United States. Oct., 1881. Appeal f^jm the circuit court of the Unit- ed States for the Northern district of Illinois. The facts are stated in the opinion of the court. Hiram Barber, Jr., for the appellant. Fran- cis H. Kales, contra. Mr, Justice WOODS delivered the opinion of the court. On Sept. 1, 1866, a policy of Insurance was issued by the New York Life Insurance Com- pany upon the life of Frederick W. Klein, in the sum of $5,000, payable to his wife, Caro- line Klein, within sixty days after nls death and due notice and proof thereof. The policy is in the usual form. The con- sideration for its issue was the payment to the company by Carolille Klein or an annual premium of ?173, in semi-annual instalments of $86.50 each, on the first day of September and the first day of March of every year dur- ing the life of Frederick W. Klein. The policy contains the following provision: "And it is also understood and agreed by the within assured to be the true intent and meaning hereof that ... in case the said Caroline Klein shaU not pay the said pre- miums on or before the several days herein mentioned for the payment thereof, with any interest that may be due thereon, then and in every such case the said company shall not be liable for the payment of the sum assured or any part thereof, and this policy shall cease and determine." The premiums were punctually psiid until March, ISTl, when default was made in the payment of the semi-annual instalment which matured on the first day of that month, and it remained unpaid until the death of Fred- erick W. Klein, which occurred March IS, 1871. The agent of the company, after proof of the death of Klein, offered to pay Caroline Klein the surrender value of the policy. She de- clined to accept any sum less than the amount of the insurance, and on the com- pany then insisting upon the absolute forfei- ture of the policy, according to its terms, she filed this bill. She therein alleges as the ground of relief that the policy was taken out by Frederick W. Klein without her knowledge; that she had received no information of its terms or conditions until after his death; that about February 1 he was taken down by the illness of which he died; that for about twenty days prior to March 1, and thence up to the time of his death, he was, in consequence of his sick- ness, deranged in mind and incapable of at- tending to any matter of business whatever, and for that reason, and that alone, failed to pay the premium when it was due, and that she failed to pay It because sne was ig- norant of the existence of the policy and of its terms. The prayer of the bill is as follows: "That the said New York Life Insurance Company may be prevented from insisting upon and taking advantage of the alleged forfeiture of said policy of insurance, and that your ora- trlx may be relieved from said alleged de- fault upon her part, and the accidental de- fault of the said Frederick W. Klein in the non-payment of said s^ml-annual premium maturing March 1, 1871, and that the said New Y'ork Life Insurance Company may* be decreed to pay to your oratrix the said sum of $5,000," &c. The answer of the company denies Its lia- bility upon the policy of Insurance, and in- sists that the contract ceased and determin- ed by reason of the non-payment or the pre- mium due March 1, 1871, and denies the equi- ty of the bill. The bill was dismissed upon final hearing. The cause was then brought to this court for review, by the appeal of the complainant. Conceding, for the sake of argument, that the case made by the bill is sustained by the evidence, the question is presented whether, upon the facts, the appellant was entitled to the relief prayed for. In Insurance Co. v. Statham, 93 U. S. 24, It was held by this court, Mr. Justice Bradley delivering Its opinion, that a life Insurance policy "is not a contract of insurance for a single year, with the privilege of renewal from year to year by paying the annual pre- mium, but that It is an entire contract for assurance for life, subject to discontinuance and forfeiture for non-payment of any of the stipulated premiums." But, In the same case, the court further said: "In policies of life Insurance time Is material and of the essence of tne contract, and non-payment at the day involves abso- lute forfeiture, if such be the terms of the contract." While conceding this to be the rule which would apply if an action at law were brought upon the policy, the appellant Insists that she is entitled to be relieved In equity against a forfeiture, by reason of the excuses for non- payment of the premium set ont in the bill, and this contention raises the sole question in this case. We cannot accede to the view of the ap- pellant. Where a penalty or a forfeiture Is Inserted in a contract merely to secure the perfonnance or enjoyment of a collateral ob- ject, the latter Is considered as the principal intent of the instrument, and the penalty Is deemed only as accessory. Sloman v. Walter, 1 Brown, Ch. 418; Sanders v. Pope, 12 Ves. 282; Davis v. West, Id. 475; Skinner v. Day- ton, 2 Johns. Ch. 526. But in every such case the test by which to ascertain whether relief can or cannot be had in equity, is to consider whether com- pensation can or cannot be maae. In Rose v. Rose, Amb. 331, 332, Lord Hard- 304 THE PREMIUM. wieke laid down the rule thus: "Equity will relieve against all penalties whatsoever; against non-payment of money at a day cer- tain; against forfeitures of copyholds: but they are all cases where the court can do it with safety to the other party; for if the court cannot put him in as good condition as if the agreement had been perrormed, the court will not relieve." A life insurance policy usually stipulates, first, for the payment of premiums; second, for their payment on a day certain; and, third, for the forfeiture of the policy in de- fault of punctual payment Such are the pro- visions of the policy which is the basis of this suit Each of these provisions stands on precise- Ij' the same footing. If the payment of the premiums, and their payment on the day they fall due, are of the essence of the con- tract, so is the stipulation for the release of the company from liability in default of punctual payment. No compensation can be made a life insurance company for the gen- eral want of punctuality on the part of Its patrons. It was said in Insurance Co. v. Statham, supra, that "promptness of payment Is essen- tial in the business of life insurance. All the calculations of the insurance company are based on the hypothesis of prompt payments. They not only calculate on the receipt of pre- miums when due, but upon compounding in- terest upon them. It is on this basis that they are enabled to offer Insurance at the favorable rates they do. Forfeiture for non- payment is a necessary means of protecting themselves from embarrassment. Delin- qu€'ncy cannot be tolerated or redeemed ex- cept at the option of the company." If the assured can neglect payment at ma- turity and yet suffer no loss or rorfeiture, premiums will not be punctually paid. The companies must have some efficient means of enforcing punctuality. Hence their con- tracts usually provide for the forfeiture of the policy upon default of prompt payment of the premiums. If they are not allowed to enforce this forfeiture they are deprived of the means which they have reserved by their contract of compelling the parties insured to meet their engagements. The provision, therefore, for the release of the company from liability on a failure of the insured to pay the premiums when due is of the very essence and substance of the contract of life insurance. To hold the company to its prom- ise to pay the insurance, notwithstanding the default of the assured in making punctual payment of the premiums, is to destroy the very substance of the contract. This a court of equity cannot do. Wheeler v. Insurance Co., 82 N. Y. 543. See, also, the opinion of Judge Gholson, in Robert v. Insurance Co., 1 Disn. (Ohio) 355. It might as well undertake to release the assured from the payment of premiums alto- gether as to relieve him from forfeiture of his policy in default of punctual payment. The company is as much entitled to the bene- fit of one stipulation as the other, because both are necessary to enable it to keep its own obligations. In a contract of life insurance the insurer and assured both take risks. The insurance company is bound to pay the entire insur- ance money, even though the party whose life is insured dies the day after the execu- tion of the policy, and after the payment of but a single premium. The assured assumes the risk of paying premiums during the life on which the insur- ance is taken, even though their aggregate amount should exceed the Insurance money. He also takes the risk of the forfeiture of his policy if the premiums are not paid on the day they fall due. The insurance company has the same claim to be relieved in equity from loss resulting from risks assumed by it as the assured has from loss consequent on the risks assumed by him. Neither has any such right. The biU is, therefore, based on a miscon- ception of the powers of a court or equity in such cases. There is another answer to the case made by the bill. The engagement of the insur- ance company was with Caroline Klein, and not with Frederick W. Klein. It entered into no contract with the latter. It agreed to pay Caroline Klein the insurance, provided she paid with punctuality the premiums. She was never incapacitated from making pay- ment. The aUeged fact that she had no knowledge of the existence and terms of the policy does not reUeve her default If the fact be true, her ignorance resulted from the neglect of her husband, who, in respect to this contract of insurance, was ner agent, in not Informing her about the insurance upon his life and the terms of the policy. The bill is, therefore, an effort by her to obtain relief in equity against the appellee from the con- sequences of the carelessness or neglect of her own agent. We are of opinion that the decree of the circuit court is right, and should be affirmed. THE PREMIUM. 105 CARPENTER v. CENTENNIAL LIFE ASS'N. (27 N. W. 456, 68 Iowa, 453.) Supreme Court of Iowa. April 6, 1886. Appeal from circuit court, Des Moines •county. This is an action in chancery on a policy of insurance upon the life of Henry L. Car- penter. Plaintiff is his widow, and prays that defendant may be required to make as- sessments upon holders of its policies to pay the amount insured upon the life of her de- ceased husband, as provided for in the poli- cy. The defendant, as a defense to the ac- tion, alleges that when the assured died he had made default in the payment of an as- sessment which, under a condition of the policy, rendered it void. The cause was tried upon an agreed statement of facts, and a decree was entered dismissing plaintifTs pe- tition. She now appeals to this court. Stow, Hammond & Day, for appellant. Newman & Blake, for appellee. BECK, J. 1. The agreed statement of facts upon which the case was tried is in the following language: "(1) The plaintiff was the wife of Henry L. Carpenter at the date of his death. (2) On the twenty-second ■day of May, 1883, the defendant association issued the policy declared upon, insuring the life of Henry L. Carpenter. (3) The insured, in his life-time, had not been liable to pay any assessments or dues, except the $5 dues -which feU due December 1, 1883. (4) The plaintiff had no knowledge of the conditions of said insurance, or that the dues became ■delinquent December 1, 1883, until after the tourial of the insured, December 9, 1883. (5) In the fall of 1883 the said Henry L. Carpen- ter was taken sick, and on the twelfth day of November, 1883, he went to bed with ty- phoid fever, and after the seventeenth or ♦"ighteenth of November, 1883, he had no con- scious understanding of anything whatever, because of his delirious condition. (6) The life insured expired on the eighth day of De- cember, 1883. (7) During the last illness of the said insured his business, mail, and cor- respondence were kept from him by direc- tion of his physician, but plaintiff at once forwarded the dues after she discovered, on December 9, 1883, that they were delinquent; ■and the defendant refused to receive the same, claiming that the policy had lapsed for non-payment of said annual dues on or before December 1, 1883. (8) The policy was in custody of the assured continually from its date to the time of his death, and the date when said annual dues are payable is therein fixed and definitely named. (9) The notice sent by the defendant, reminding him that, by the conditions of his policy, his an- nual dues of five dollars were due and pay- able December 1, 1883, was duly mailed to the assured on the fifteenth of November, 1883, properly addressed, directed, and for- warded, and reached said assured in due course of mail, about November 17, 1883, but for the reasons heretoforth set forth he never saw it or knew of its receipt. (10) Proof of loss was duly made December 22, 1883, and demand that an assessment be made as provided in the policy sued on, and the company declined and refused to make the same for the sole reason that said pol- icy was void and had lapsed by the failure to pay the annual dues of five dollars on or before December 1, 1883. (11) No person other than the plaintiff is interested in the subject-matter of this action." 2. Counsel for plaintiff insists that the ob- ligation of the assured to pay the assessment was a condition subsequent, the non-perform- ance of which was excused by the uncon- sciousness and delirium of the assured, which is to be regarded as the act of God. It is urged by counsel that as it became impos- sible for the assured to pay his insurance by reason of the visitation of Grod, the policy did not become forfeit 3. It is a familiar rule that when the per- formance of a contract Be**omes impossible by the act of God, the obligor is excused, and his rights under the contract are not for- feited. We presume that the rule contem- plates cases of absolute impossibility to per- form contracts; as in the case of the de- struction of property which the obligor un- dertook to deliver, as the closing of a river with ice upon which the obligor undertook to sail a vessel to be delivered at a port sit- uated on the river. In such cases the obli- gors could not have performed the conditions of the contract, nor could they have been performed for the obligors by others. Nei- ther could the obligors, by the exercise of foresight and care, have provided against the effects of the act of God, which de- stroyed the subject of the contract or the sole means of its performance. But there was no such impossibility of performing the contract in this case. It is true it was im- possible for the assured at the time required therein to perform it; but be could have pro- vided for its performance beforehand, and those of his family about him could have per- formed it for him. The fact that the plain- tiff did not know of the existence of the pol- icy before her husband's death does not change the case. Prudence and care on the part of assured would have prompted him to prepare for the payment of the assessment upon the day it became due, and to inform his wife of his contract, and his obligation to perform it at the time therein prescribed. We reach the conclusion that the facts of the case do not constitute grounds for ex- cusing the non-performance of the contract of the assured, and do not present a case of impossibility of performance caused by the act of God. Our conclusions are supported by the following cases: Klein v. Insurance Co., 104 U. S. 88; Thompson v. Insurance 106 THE PKEMIUM. Co., Id. 252; Wheeler v. Insurance Co., 82 N. Y. 543. Other cases tending in the same direction could be cited. 4. Counsel for plaintiff cite many cases wherein it is held that the non-performance of contracts may be excused by the act of God, rendering performance impossible, but these facts distinguish them from the case at bar. They cite other cases, wherein it is held that performance is excused by reason of the act of the government rendering per- formance impossible, and probably others which hold that performance will be excused when it becomes unlawful; but it is obvi- ous that these decisions are not applicable to- the case before us, and do not serve to eluci- date the principles upon which it should be decided. It is our opinion that the judgment of the circuit court ought to be affirmed. THE PREMIUM. 107 LAXTZ V. VERMONT LIFE INS. CO. ii;i Ati. 80, 139 Pa. St. 546.) Supreme Court of Pennsylvania. Jan. 26, 1891. Appeal from court of common pleas, Philadelphia county. Rudolph M. Schick, for appellant. Adel- bert E. Stock well, tor appellee. PAXSON,C. J. This wa.«i an action on a policy issued by the defendant company, insuring the lite of Simeon B. Lantz, tor the benefit of his wife, Evalina B. Lantz, the plaintiff below. The policy stipulated that the premiums should be paid quar- terly, on the 19th days of February, ilay, August, and November in each year; that if the said premiums should not be paid on the days named, and in the life-time of the assured, the policy should cease and determine; that the acceptance of a premi- um after maturity should not be deemed or construed as a ■svaiver, or as any evi- dence of an agreement to waive the pay- ment of any future premiums at the time the same shall, by the terms of the policy, become payable; and that no person ex- cept the president and secretary, acting together, are authorized to make, alter, or discharge contracts or waive forfeit- ures. Upon the trial below it was among the admitted facts of the case that the premiums falling due in May, August, and November, 1SS7, were not paid at maturi- ty, but were paid after maturity, and ac- cepted by the company; that the premium due on February 19, 1888, was not paid at maturity; that on March 2,1888, a brother of tlie insured, who was also a policy- holder, called on the general agent of the company in Philadelphia, and informed the latter that Simeon B. Lantz would be down on March 6th to pay his premi- um, and was told that he, the agent, did not make out his monthly report until the 10th of the month, and that it the premi- um was paid by the 9th it would be all right. Bo far there is no dispute. But Mr. Lantz, the witness, testified that there was no condition annexed to the promise to receive the money, while Mr. Kyer, the agent, testified that he said he would re- ceive the money, provided the insured was in his usual health at the time; that he would have to be satisfied upon this point either by a health certificate, or by seeing the insured personally, and that in the mean time the latter was carrying the risk himself. This question of fact was sub- mitted to the jury, and they have found there was no condition apnexed to the promise. We must, therefore, treat the case upon this basis. It may simplify the discuF.sion somewhat to note the follow- ing admission of the learned counsel tor the company, to be found on page 32, of his paper-book : " It was admitted on the trial that the insured had paid three prior premiums after maturity, which had been received by the defendant ; and also that the manager was in the habit of, and prac- tically had authority to, receive premiums and deliver renewal receipts after matu- rity, provided that the insured was at the time of the payment in good health. This was as far as the testimony went. There was no evidence which, even the plaintiff pretends, goes to show that the agent had authority, or has ever acted beyond this, or that the company had ever known of or ratified such agreement; and it was further admitted, that, if Simeon B. Lantz,. the insured in this case, had on March ath been alive and in good health, and had ten- dered payment of the premium, it would have been received." Simeon B. Lantz, the Insured, was in good health on March 2d, but was taken ill on the next daj-, and died tm March 6th. The above admission disposes of any question as to the author- ity of the general agent to receive overdue premiums. But we must stop where the admission ends, unless a further or greater authority is to be found in the evidence. In order to establish an authority to re- ceive an overdue premium after the death of the insured, one of two things must be shown, viz.: (a) An express authority to do so, conferred upon him by the com- pany; or (6) such a course of dealing on the part of the company, by ratifying or recognizing such acts of the agent, as would justify persons dealiug with said company in assuming that he possessed such authority. There is not a word in the testimony to sustain either of these propositions. All that it shows was the- receipt of overdue premiums on three oc- casions. But the insured was in full life and health at the time. The case of the- plaintiff.if sustained at all, must restupon the promise of the agent to receive the- premium up to the 9th day of Ma rch. This promise, as before observed, the jury ha ve found to be an unconditional one. Thi& I understand to mean that the money would be received as late as the 9th of March, without regard to the health of the insured, or even his death prior to that- time. It remains to consider the legal effect of such promise. The first question which logically sug- gests itself is, what was the legal effect upon the status of the policy by the de-^ fault or failure to pay the premium due on the 19th of February? Did it continue to bind the compan" and protect the in- sured thereafter? And, it so, how long did it remain in force? Was it tor a week, a month, or a year? I know of no in- stance in which a policy was held to be In force after such a default, unless in pur- suance of a contract made between the company and the insured contemporane- ous with the insurance, or during the lite- of the policy. In Helme v. Insurance Co., 61 Pa. St. 107, the plaintiff offered to prove that it is the custom among insurance companies to receive premiums if tendered at any time within 30 days of the time they fall due, provided the insured is in usual health, and that this is the custom among companies issuing policies stipu- lating that non-payments of premiums at the day shall be a forfeiture. This offer was rejected by the court below, and the rejection was held to be error. Chief Jus- tice Thompson saying: "It might have been a difficult thing to prove such a cus- tom, but that was not a good ground on which to refuse the offer." The grounds of this decision are obvious. While a cus- tom which has grown into a law may not be heard, as a general rule, to affect the 108 THE PREMIUM. terms of a statute nor a contract to the ■extent of enlarging or abridging the force of it, yet it may interpret either. Rapp v. Palmer, 3 Watts, 178. The chief justice gives a number of examples of the appli- ■cation of this principle; among others, the familiar instance of the days of grace on commercial paper. By the custom of merchants, so universal as to have grown into law, such paper is not due until three ■days after it purports to be due; or, rather, the remedy is suspended during that period. It was not alleged that any «uch custom existed in this case. There was not even an offer to show It, much less proof to support it. Did the tact that the company upon three prior occasions accepted the premium from the insured after maturity, the insured being in good health at the time, continue the polic,y in iorce after the default on the 19th of Feb- ruary? I know of no authority for such ■a proposition, and none has been called to our attention. It was at most a mere personal indulgence, a matter of grace on the part of the company, and all that can he claimed for it is' that it may have led the insured to believe that, it he again neg- lected to pay on the day, the money would '6 accepted if paid shortly there- after, provided no change had occurred in his condition of health. The law upon this subject is so clearly stated by Mr. Justice Bradley in Thompson v. Insur- ance Co., 104 D. S. 252, that I need make no apology for quoting it at length : "The last replication sets up and declares that it was the usage and custom of the de- fendants, practiced by them before and after the making of said note, not to de- mand punctual paj-ment thereof at the ■day, but to give days of grace, to-wit, for thirty days thereafter; and they had re- peatedly so done with Thompson and others, which led Thompson to rely on such leniency in this case. This was a mere matter of voluntary indulgence on the part of the company, or, as the plain- tiff himself calls it, an act of leniency. It •cannot be justly construed as a permanent waiver of the clause of forfeiture, or as impl.ying any agreement to waive it, or to continue the same indulgence for the time to come. As lon^ as the assured contin- ued in good health, it is not surprising, and should not be drawn to the com- pany's prejudice, that they were willing to accept the premium after maturity, and waive the forfeiture which they might have insisted upon. This was for the mutual benefit of themselves and the as- sured, at the time; and in each instance in which it happened it had respect only to that particular instance, without in- volving any waiver of the terms of the contract iu reference to their future con- duct. The assured had no right, without some agreement to that effect, to rest on eueh voluntary indulgence shown on one occasion, or on a number of occasions, an a ground for claiming it on all occasions. If it w ere otherwise an insurance company could never waive a forfeiture on an occa' sion of a particular lapse without endan- gering its right to enforce it on occasion of a subsequent lapse. Such a conse- ■quence would be injurious to them and to the public. " The consequence of a default in the payment of the premium is defined in the policy itself. It declares that, if not paid on the days named, and in the life- time of the insured, the policy should "cease and determine." By this I under- stand that it is suspended, it ceases to bind the company and to protect the as- sured, and this without any act or decla- ration on the part of the former. It does not require a formal forfeiture. This term is often used, and, I think, inaccurately, in such cases; nor is the policy void in the general sense of that terra. It is voidable at the election of the company, and that election can be exercised without notice to the assured, tor the reason that the policy itself is notice that his rights cease with the non-payment of the premium. As to him it is a dead policy. It is true it may be restored to life by the subsequent payment of the premium, and its accept- ance by the company. This, however, is a new contract by which the company agrees in consideration of the premium to continue in force a policy which had previously expired ; in other words, It is a new^ assurance, though uuder the former policy. Want v. Blunt, 12 East, 183. I do not understand it to be contended that, had the assured died between the 19th of February and the 2d of March, there could have been a recovery on this polic.v. It seems almost a work of supererogation to cite authorities for so plain a proposition, and I will refer to but few, out of an abundance. In Insurance Co. v. Rosen- berger, 84 Pa. St. 373, which was a case of fire insurance, our Brother Sterrett, after saying that the default suspended the protection of the policy, continued : "Upon the payment of the assessment the policy would have been revived in its full vigor ; but it was never paid, or even tendered, until sfter the fire, and as delin- quent policy-holders they had no right to maintain the action without showing that the default was either waived or ex- cused by the company. There is no evi- dence of waiver, nor do we think there is any evidence to excuse the default. There was considerable testimony showing that great indulgence was extended to delin- quent members, and that the company was accustomed to receive assessments long after thoy were due; but this is en- tirely consistent with the fact that, while thedefault continued, the protection of the policy was suspended. " In Insurance Co. V. Bought, 97 Pa. St. 415, it was said by Mr. Justice Merccr: "It is well settled, if a member of a mutual insurance com- pany is in default in the payment of an assessment upon his policy, after due no- tice according to the by-laws and rules of the company, the protecting power of the policy is suspended until the assessment is paid. No recovery can be bad for a loss sus- tained during the continuance of such de- fault;" citing Hummel's Appeal, 78 Pa. St. 320; Insurance Co. v. Buckley, 83 Pa. St. 293; Insurance Co. v. Rosenbcrger, 84 Pa. St. 373; Insurance Co. v. Cochran, 88 Pa. St. 230. It is true these were cases of fire insurance companies, but the principle is equally applicable to a case of life insur- ance. This we think sufficient to show THE PREMIUM. 109- that no recovery could have been had upon this policy had the assured died be- tween the date of the maturity of the pre- mium and the promise of the agent to ac- cept the premium on the 9th of March. Regarding that as a promise to accept the premium even in the case of the previous deatli of the assured, we are led to in- quire, in the Jirst place, what authority had the agent to make such a promise? The condition of the policy is explicit that the premium must be paid "in the life-time of the insured. " Had the agent the au- thority to waive this condition"' The policy not only declared that no person except the presiden t and secretary, acting tosrether, are authorized to make, alter, or discharge contracts, or waive forfeitures, but a Doticetothe same effect was printed on the hack of each renewal receipt given to Mr. Lantz. It was not alleged that the president and secretary, acting to- gether or singly, had ever waived this con- dition in the policy, or that they, or either of them, had given authority to the agent to waive it in this or any other instance. No course of dealing wa.s shown on the part of the company by which the grant of such authority to the agent could be im- plied. There was not even an attempt to prove that the company or it.s agent had ever received an overdue premium after the death of the assured. There is nothing within the four corners of this record to show that the agent had authority, ex- press or implied, to waive this condition? What right had the assured to suppose, with this condition in the very front of his policy, that the agent would receive his overdue premium after his death? We are not without authority upon this point. The leading case is Want v. Blunf, 12 East, 183. The following statement of the facts is condensed from the opinion of Lord Ellenborough. The policy pro- vided for the payment of quarterly pre- miums on March 25th, June 24th, Septem- ber 29th, and 20th of December during the life of the said W. W. Want, or within such time after those days, respectively, as is or shall be allowed for that purpose by the rules of the said society. It was pro- vided by tne rules of the society that if any member neglected to pay the quarter- ly premiums for 15 days after the same be- come due, the policy will be void. This provision was attached to the policy. The quarterly payments were all paid at maturity until the one that came due on December 20th, which was not paid, and Want died on December 25th ; and on De- cember 27th, 2 days after his death, but within the 15 days, his executors tendered the payment of the premium, which was ri'fuKed. The court sustained the refusal. Lord Ei.LENBOROUGH saying, inter alia: "This is a contract of assurance, and must be construed according to the meaning of the parties as expressed in the deed or policy. » • • The risk insured against is his death, and the premium is a quarter- ly payment, to be made by him to the so- ciety daring his life. The duration of the insurance is so long as he shall continue to make those quarterly payments; but the insurance is not to be void if he pay the quarterly premium within such time after the quarter day as is allowed by the rules of the society. » • • The cove- nant on the defendant to pay the wife's- annuity after Want's death is: 'If Warft shall pay, or cause to be paid, the quar- terly premium on every quarter day dur- ing the life of Want, or within such timfr after as shall be allowed by the rules of the society for that purpose;' in constru- ing which sentence, the expression, ' during the life of Want,' must be understood as. applying to and carried on to the latter part of the sentence, and is the same as if the words 'during the life' had been re- peated nfter the words ' within such time- after,' 7. e., or ' within such time after, dur- ing the life.' * • » For these reasons, we are of opinion that the death of W. W. Want, which liappened ou the 25th of De- cember, was during a period of time not covered by the policy, and that on the true construction of the policy and rules of the society, the insurance could not be- continued beyond the expiration of the- quarter, which ended on the 20th of De- cember, by a tender of the premium by his- executors after his death, though within fifteen days after the quarter day, so as- to include within the policy the period of Ills death. " In Simpson v. Insurance Co., 2" C. B. (N. S.) 257, the words of the policy were: "Provided he, the said insured, on or before * • * payor cause to be paid to tlie defendant the annnal premium;"' and on this point the court said : "The policy was to continue, provided he, the- insured, paid the premium within the twenty-one days; and this, we think, did not give the executors the right to pay it after his death." To the same point is. Pritchard v. Society, 3 C. B. (N. S.) 622; Insurance Co. v. Eu.se, 8 Ga. 534. The- rule laid down in Want v. Blunt, supra, appears to have been followed in all sub- sequent cases where the same point arose. If there has been any departure it has not been called to our attention. If, however, we are wrong in this, if we regard tlie con- dition in the policy that the premium must be paid in the lite-time of the insured, as of no effect, or, if effective, that it has been waived, there is another reason why the company was not bound to receive- the premium after the death of the as- sured. I have endeavored to show that, by the failure to pay the premium, the pol- icy lapsed, or was suspended, on the IStii- of February. With the policy in this con- dition, the plaintiff proved, as already stated, an unconditional promise on the part of the agent of the company to ac- cept the premium up to the 9th of March. In the ordinary case of the payment of an overdue premium, as all the authorities show, the policy does not bind betwocn- the default and" the payment. The plain- tiff claims that this case does not come within the rule; that the promise enlarged, the time of payment, precisely as if March 9th had been the period stipulated in the- policy; and that from the time the prom- ise was made until the time it was to be fulfilled the policy was in full force. But if, as I have at least endeavored to show, the policy did not bind between the de- fault and the promise, what occurred on the 2d day of March to change the situa- 110 THE PREMIUM. tion of the parties and restore this rleaa policy to life? Was it the payment of the premium? The premium was not paid. Was it a promise to pay it? There was no such promise. There was nothing but the bare promise of the agent to accept the premium if paid by the 9th of March. Had it been paid by the assured, prior to that date, and accepted by the company, the policy undoubtedly would have been restored to life. This would result, not toy virtue of the promise of the agent, but from the acceptance of the premium as a consideration for the renewal. It would have been a new assurance under the old policy. Tbo mere promise of the agent, made after the default had occurred, to re- ceive the premium up to March 9th, was a nudum pactum. It was not a contract because there were no contracting parties. The assured gave nothing, promised noth- ing. A lapsed policy can only be restored to life, BO far as the assured is concerned, by the actual payment and acceptance of the premium, or a contract based upon a sufficient consideration. What considera- tion did the company receive for carrying this risk from the 19th of February until the 9th of March? Had the insured lived until the latter date, and then refused or neglected to pay his premium, he would have had the benefit of an insurance on his life during said period without paying a dollar of consideration. For, as before ■stated, he did not give anything, nor -did he i)romise anything. It was optional with him to pay. The company could not have enforced it against him had he de- clined. There is no provision in the policy which covers such a case. If the insured does not pay, the policy drops, and the contract relation ceases. Marvin v. Insurance Co., 85 N. T. 282, is so exactly like the case in hand upon the facts that a reference to it will not be out -of place. In that case one Milton B. Mar- vin had a policy of $3,000 on his life, pay- able to his wife In case of his death. The premium due on the 13th of April was un- paid. On the 27th of April, Hinkle, the agent of the company, told the assured that if he paid thepremium thenext morn- ing, the 28th, he, the agent, would receive the same. Hinkle went to the house of the assured the next day, and there found bim lying sick upon his bed, and, on being •offered the overdue premium by the as- sured, declined to receive it at that time, because the assured was then sick, but told him to keep the money, and when he j?ot well, he, Hinkle, would receive it, and keep the policy alive. The assured never did recover from his sickness, the premium was not paid, and the company notified the assured that It would hold itself ab- solved from the contract by reason there- i of. The assured died in the following Sep- tember. Under this state of facts it was held there could be no recovery upon the policy, the court below saying: "We think the plaintiff was properly nonsuit- ed. As we understand the law as laid down by the court of last resort in such cases, in order to a valid extension of the time for the payment of a premium upon a life-policy after the time of payment has gone by, there must be some valid consid- eration for the extension or waiver of the condition of payment, or there must be something said by or on behalf of the in- surance company, while the party bound to make the payment has still time and opportunity for so doing, by which the insured is induced to believe the condition is waived, or that strict compliance will not be insisted on. This introduces an element of estoppel in the case. In such a case it would be unjust to alio w the insur- ance company to repudiate the agree- ment, and to insist that, because of the non-payment of the premium punctually, which omission had been induced or coun- tenanced by its own act, it should be ab- solved from the performance of its part of the contract. " This case was aflBrmed in the court of errors and appeals in an opin- ion by FmcH, J., principally upon the ground that, even if Hinkle was the general agent of the company, he had no aiithor- ity to waive the condition as to payment, the clause in the policy containing a con- dition similar in this respect to that in the policy in this case. For this reason the court did not deem it necessary to express an opinion upon the ground upon which the court below rested the case, viz., the want of consideration for the promise, but said expressly: "It must not be inferred that we deem the ground of the decision below incorrect. " This case is valuable for the further reason that it shows very clearly the ground of the distinction between a promise to extend the time of payment made before the time of such payment and one made after the default. In the former instance the assured may have relied upon the promise, and allowed the time to slip by, whereas, without such promise, he might have procured the money and paid the premium. Hence the cases hold that the company, having misled the assured to his harm, are estopped from alleging a de- fault because of non-payment on the day. But where a promise is made after the de- fault the assured has not been misled or injured in any manner. He has allowed his policy to lapse by his own neglect. It can only be restored by the consent of the company, and he has no reason to suppose that if he dies before the matter is perfected by the payment and accept- ance of the premium the company will pay as in the case of a live policy. In nearly every case cited to show the authority of an agent to bind the com- pany, by a promise made after a default to pay the premium, the decision of the court was rested upon the ground of es- toppel, a principle which I do not think has any application to the case in band. In Dean v. Insurance Co., 62 N. Y. 642, the agreement to extend the time was not only made before the premium became due, but the company had actually received the notes of the assured for the payment of three-fourths of the premium. This not only introduced the element of estoppel, but the notes received constituted a valid consideration for the waiver of punctual payment. In Homer v. Insurance Co., 67 N. Y.478. the agreement extending the time of payment was also made before the pre- mium fell due. and thus the policy-holder was prevented from paying the premium THE PREMIUM. Ill •on tlie day it became due by the terms of the policy. In Tennant v. Insurance Co., 31 Fed. Rep. 322, the credit was extended while the policy was in full force. In Church y. Insurance Co.. 66 N. Y. 222, the dealings were between the assured and the .home office, and no question was involved as to the authority of the agent. The court held there was evidence to go to the jury that a credit was intended, Inasmuch as it showed a prior dealing with the assured for many years, and that he was In the habit of getting pol- icies without paying for them at the time. In Insurance Co. v. Norton, 96 U. S. 234, there is an expression by Mr. justice Brad- ley which indicates that he did not see any difference between a promise to ex- tend the time of the payment of the pre- mium, made before the default, and aprom- ise made after such default. In this ease, however, there was not only a promise made to pay, but this was followed up by an actual tender of the premium, and a refusal by the company of such tender. This presents an enti^ly different state of facts from the case I am discussing, and Mr. Justice Bradley's remarks must be taken in connection with the par- ticular facts to which he was referring. In Insurance Co. v. Eggleson, 96 U. S. 572, the question was whether the assured was excused for not paying his premium at maturity. This clearly appears from the concluding portion of the opinion of Mr. Justice Bradley. It is as follows: " The insured, residing in the state of Mis- sissippi, had always dealt with agents of the company, located either in his own titate, or within some accessible distance. He bad originally taken his policy from, and had paid his first premium to, such agent, and the company had always, un- til the last premium became due, given him notice what agent to pay to. This was necessary, because there was no per- manent agent in his vicinity. The judge rightly held that, under these circum- stances, he had reasonable cause to rely on having such notice. The company it- self did not expect him to pay at the home office. It had sent a receipt to an agent located within thirty miles of his resi- dence; but he had no knowledge of the fact, at least such was the finding of the jury from the evidence." Insurance Co. V. Doster, 106 U. S. 30, 1 Sup. Ct. Rep. IS, is somewhat similar as to its facts. The assured was entitled to a dividend on the business of the company, which was set apart to the insured in part discharge of his premium. The company failed to notify him of the amount, and it was the cause of the delay in the payment. In Insurance Co. v. Block. 109 Pa. St. 535, 1 Atl. Rep. 523, the premium had been paid, and the question was whether it had been paid to the proper person. In Insurance Co. V. Hoover, 113 Pa. St. 591. 8 Atl. Rep. 163, which was the case of a payment of the premium on a fire policy after ma- turity, there was a coui-se of dealing by which the agent gave the assured a credit in his accounts, and became him- self the debtor of the company therefor. This clearly appears from the following extract from the opinion of Mr. Justice Sterristt: "On the trial, evidence was received tending to show that Fredrick, through whom the insurance was placed, was the recognized agent of the company for the purpose of securing risks, receiving and remitting premiums, etc. ; that in his dealings with the company he was made its personal debtor for premiums on all policies issued through him, and that he periodically accounted to it therefor, whether the money was received by him from the persons to whom the policies were issued or not ; that he made the per- sons or firms to whom he delivered pol- icies his personal debtors, and dealt with them in that relation, charging them with the premiums on his books, sending them bills in his own name, and making himself responsible to the company for the same; and that the bills for premiums were generally rendered some time dur- ing the month after the insurance was ef- fected. " I have not, of course, reviewed all the authorities cited; I have consid- ered the most important. To review them all would protract this opinion to such a length that no one would probably read it. No Pennsylvania case was cited which is in serious conflict with the views above expressed, nor have I been able to find one after a careful examiuation of the digests. It is possible I may, in the press of business, have overlooked some such case. We have little leisure to search for cases that are not cited. But I regard the overwhelming weight of au- thority, both in this state and elsewhere, to be in accord with the principles above stated ; moreover, I believe theiu to be sustained by the sounder reason. Under the circumstances, we think it was error for the learned judge below to charge the jury as follows: "Therefore I think the question arises, and it is for you to say, in this case, whether this general superin- tendent, residing here in Philadelphia, with his principal in Vermont, and in a constant habit of doing this very thing, because we find a number of receipts where hedid receive the money subsequent to the time fixed, and it is testified to in this case that he certainly agreed to do it, and had done it in the case of Mr. Lantz, his brother, so that, if the rule was to be enforced as it is written, he would have no right to do this thing which he had been in the habit of doing, and that therefore it is a question for you to say whether he had any authority; whether the com- pany, having permitted him to do this thing constantly, had not authorized him — the secretary and president had not au- thorized him — to perform the acts that he was doing. " See first assignment. The "thing" which the agent had done and which the company had ratified was the acceptance in three instances of overdue premiums from the assured, he being in full life at the time. Authority beyond this could not be inferred from any act of the company or its agent. It was not denied— indeed, it was expressly admitted — that, had the assured tendered the premium during his life-time, it would have been accepted, and the policy rein- stated. No inference can be pn)perly drawn from this, however, that the cam ■ 112 THE PEEMIUM. pany would receive the premium after the death of the assured. The learned judge failed to note the difference between the renewal of a lapsed policy by the act- ual payment and acceptance of the pre- mium andamere attemptto renew it with- out any consideration moving from the assured to the company. The one is a completed transaction, and therefore- binding; the other is uncompleted, and does not even amount to a contract. The same error runs through the charge. The assignments are all sustained. We- think there should have been a binding instruction in favor of the defendant. Judgment reversed. WARRANTIES. 113 PHOENIX MUT. LIFE INS. CO. T. RADDIN. (7 Sup. Ct. 500, 120 U. S. 183.) Supreme Court of the United States. Jan. 31, 1887. In error to the circuit court of the United States for the district of Massachusetts. Action on life insurance policy Plaintiff had judgment below. M. F. Dicliinson, Jr., for plaintiff in error. R. M. Morse, Jr., and Wm. M. Richardson, for defendant in error. GRAY, J. This was an action brought by Sewell Raddin, and prosecuted by his admin- istrator, upon a policy of life insurance dated April 25, 1872, the material parts of which were as follows: "This policy of assurance witnesseth that the Phoenix Mutual Life In- surance Company of Hartford, Conn., in con- sideration of the representations made to them in the application for this policy, and of the sum of one hundred and fifty-two dol- lars and ten cents to them duly paid by Sewell Raddin, father, and of the semi-an- nual payment of a like amount on or before the twenty-fifth day of April and October in every year during the continuance of this policy, do assure the life of Charles E. Rad- din, of Lynn, in the county of Essex, state of Massachusetts, in the amount of ten thousand dollars, for the term of his natural life. This policy is issued and accepted by the assured upon the following express conditions, and agreements," namely, among others, that "if any of the declarations or statements made in the application for this policy, upon the faith of which this policy is issued, shall be found in any respect untrue, this policy shall be null and void." The application was signed by Sewell Raddin, both for his son and for himself, and contained 29 printed "questions to be answered by' the person whose life is proposed to be insured, and which form the basis of the contract," three of which, with the written answers to them, and the concluding paragraph of the applica- tion, were as follows: "(10) Is the pan y addicted to the habitual nse of spirit- No. none llqnors or opiam? "(28) Has any application been made to this or any oth- er company for osearance on the life of the party? If so, flO.OOO, Equitable Life with what result? AVhat Assurance Society, amounts are now assured on the life of the party, and in what companies? 11 already assured in this company, state the No. of policy. "(29) Is the party and the applicant aware that any un- true or fraudulent answers to the above queries, or any sup- pression of fact« in regard to the health, habits, or circum- Yes. stances of the party to be as- sured, will vitiate the policy, and forfeit all payments thereon? "It is hereby declared that the above are fair and true answers to the'f Tegoin^ questions, and it is acknowl- edged and Of^fieA by the undersized that this applica- tion shall form the basis of the contract for insurance, BIJi.8EL.CAS.LAW INS. — 8 which contract shall be completed only by delivery of poliry . and that any untrue, or fraudulent answers, any suppression of facts, or should the applicant become as to habits, so far different from condition nowrepresented to be in as to malce the risk more than ordinarily haz-' ardous, or negclect to pay the premium on or before the day it becomes due, shall and will render the policy null and void, and forfeit all payments made thereon.". It was admitted at the trial that all pre- miums were paid as they fell due; tbat Charles E. Raddin died July 18, 1881; and that at the date of this policy he had an en- dowment policy in the Equitable Life In- surance Society for $10,000, which was after- wards paid to him. One of the defenses relied on at the trial was that the answer to question 28 in the application was untrue, and that there was a fraudulent suppression of facts material to the insurance, because the plaintiff, by his answer to that question, "$10,000, Equitable Life Assurance Society," intended to have the defendant understand that the only ap- plication which had been made to any other company for assurance upon the life of his son was one made to the Equitable Life As- surance Society, upon which that society had issued a policy of $10,000, whereas in fact the plaintiff, within three weeks before the ap- plication for the policy in suit, had made ap- plications to that society, and to the New York Life Insurance Company, for addition- al insurance upon the son's life, each of which had been declined. The defendant of- fered to prove that the two other applications were made and declined as alleged, and that the facts as to the making and the rejection of both those applications were knowii to the plaintiff, and intentionally concealed by him, at the time of his application to the defend- ant; and upon these offers of proof asked the court to rule — First, that the answer to ques- tion 28 was untrue, and therefore no recov- ery could be had on this policy; second, that there was a suppression of facts by the plain- tiff, and therefore he could not recover; and, third, "that the answer to question 28 must be construed to be an answer to all the clauses of that question, and as such was misleading, and amounted to a concealment of facts which the defendant was entitled to know, and the plaintiff was bound to com- municate." But the court excluded all the evidence so offered, declined to give any of the rulings asked for, and ruled "that, if the answer to one of the interrogatories of ques- tion 28 was true, there would be no breach of the warranty; that the failure to answer the other interrogatories of question 28 was no breach of the contract; and that, if the company took the defective application, it would be a waiver on their part of the an- swers to the other interrogatories of that question." The jury having returned a ver- dict for the plaintiff in the full amount of the policy, the defendant's exceptions to the re- fusal to rule as requested, and to the rulings aforesaid, present the principal question in the case. The rules of law which govern the decision WARRANTIES. of this question are well settled, and the only difficulty is in applying those rules to ..ae facts before us. Answers to questions pro- pounded by the insurers In an application for insurance, unless they are clearly shown by the form of the contract to have been in- tended by both parties to be warranties, to be strictly and literally complied with, are to be construed as representations, as to which substantial truth in everything mater- ial to the risk js all that is required of the applicant. Moulor v. Insurance Co., Ill U. S. 335, 4 Sup. Ct 466; Campbell v. Insurance Co., 98 Mass. 381; Thomson v. Weems, 9 App. Cas. 671.' The misrepresentation or concealment by the assured of any material fact entitles the insurers to avoid the policy. But the parties may by their contract make material a fact that would otherwise be immaterial, or make immaterial a fact that would otherwise be material. Whether there is other insurance on the same subject, and whether such in- surance has been applied for and refused, are material facts, at least when statements regarding them are required by the insin:ers as part of the basis of the contract. Carpen- ter V. Providence Washington Ins. Co., 16 Pet. 495; .lefifries v. Life Ins. Co., 22 WaJl. 47; Anderson v. Fitzgerald, 4 H. L. Cas. 484; Macdonald v. Insurance Co., L. R. 9 Q. B. 328; Edington v. Insurance Co., 77 N. Y. 564; Id., 100 N. T. 536, 3 N. B. 315. Where an answer of the applicant to a direct question of the insurers purports to be a complete answer to the question, any sub- stantial misstatement or omission in the an- swer avoids a policy Issued on the faith of the application. Cazenove v. Assurance Co., 29 Law J. C. P. (N. S.) 160, affirming s. c, 6 C. B. (N. S.) 437. But where upon the face of the application, a question appears to be not answered at all, or to be imperiectly an- swered, and the insurers issue a policy with- out further inquiry, they waive the want or imperfection in the answer, and render the omission to answer more fully immaterial. Insurance Co. v. Luchs, 108 U. S. 498, 2 Sup. Ct. 949; Hall v. People's Ins. Co., 6 Gray, 185; Lorillard Ins. Co. v. McCuUoch, 21 Ohio St. 176; Insurance Co. v. Mahone, 56 Miss. 180; Carson v. Insurance Co., 43 N. J. Law, 300, 44 N. J. Law, 210; Lebanon Ins. Co. v. Kepler, 106 Pa. St. 28. The distinction between an answer appar- ently complete, but in fact incomplete, and therefore untrue, and an answer manifestly incomplete, and as such accepted by the in- surers, may be illustrated by two cases of fire insurance, which are governed by the same rules in this respect as cases of life in- surance. If one applying for insurance upon a building against fire is asked whether the property is incumbered, and for what amount, and in his answer discloses one mortgage, when in fact there are two, the policy issued thereon is avoided. Towne v. Insurance Co., 7 Allen, 51. But if to the same question he merely answers that the property is incum- bered without stating the amount of incum- brances, the issue of the policy without fur- ther inquiry is a waiver of the omission to state the amount. Nichols v. Insurance Co., 1 Allen, 63. In the contract before us the answers in the application are nowhere called warran- ties, or made part of the contract. In the policy those answers and the concluding para- graph of the application are referred to only as "the declarations or statements upon the faith of which this policy is issued;" and in the concluding paragraph of the application the answers are declared to be "fair and true answers to the foregoing questions," and to "form the basis of the contract for insur- ance." They must therefore be considered, not as warranties which are part of the con- tract, but as representations collateral to the contract, and on which it Is based. The twenty-eighth printed question in the application consists of four successive inter- rogatories, as follows: "Has any application been made to this or any other company for assurance on the life of the party? If so, with what result? What amounts are now assured on the life of the party, and in what companies? If already assured in this com- pany, state the No. of policy." The only an- swer written opposite this question Is "$10,- 000, Equitable Life Assurance Society." The question being printed in very small type, the answer is written in a single line mid- way of the opposite space, evidently in order to ppevent the ends of the letters from ex- tending above or below that space; and its position with regard to that space, and to the several interrogatories combined m the ques- tion, does not appear to us to have any bear- ing upon the construction and effect of the answer. But the four interrogatories group- ed together in one question, and all relating to the subject of other insurance, would nat- urally be understood as all tending to one object, — the ascertaining of the amount of such insurance. The answer in its form !S responsive, not to the first and second inter- rogatories, but to the third interrogatory on- ly, and fully and truly answers that Inter- rogatory by stating the existing amount of prior insui-ance, and in what company, and thus renders the fourth interrogatory irrele- vant. If the insurers, after being thus truly and fully Informed of the amount and the place of prior insurance, considered It ma- terial to know whether any unsuccessful ap- plications had been made for additional In- surance, they should either have repeated the first two interrogatories, or have put further questions. The legal effect of issuing a poli- cy upon the answer as it stood was to waive their right of requiring further answers as to the particulars mentioned in the twenty- eighth question, to determine that it was im- material, for the purposes of their contract, whether any unsuccessful applications had been made, and to estop them to set up the WARRANTIES. 115 omission to disclose such applications as a ground for avoiding the policy. The insur- ers, having thus conclusively elected to treat that omission as immaterial, could not after- wards make it material by proving that it was intentional. The case of Assurance Co. v. Mansel, 11 Ch. Div. 363, on which the insurers relied at the argument, did not arise on a question in- cluding several interrogatories as to whether another application had been made, and with what result, and the amount of existing in- surance, and in what company. But the ap- plication or prox>osal contained two separate questions,— the first whether a proposal had been made at any other office, and, if so, where; the second whether it was accepted at the ordinary premium, or at an increased premium, or declined; and contained no third question or interrogatory as to the amount of existing insurance, and in what company. The single answer to both questions was, "Insured now in two offices for £16,000, at ordinary rates. Policies effected last year." There being no specific interrogatory as to the amount of existing insurance, that an- fcwer could apply only to the question wheth- er a proposal had been made, or to the ques- tion whether It had been accepted, and at what rates, or declined; and as applied to either of those questions it was in fact, but not upon its face, incomplete, and therefore untrua As applied to the first question, it disclosed only some, and not all, of the pro- posals which had in fact been made; and, as applied to the second question, it disclosed only the proposals which had been accepted, and not those which had been declined, though the question distinctly embraced ■both. That case is thus clearly distinguish- ed in its facts from the case at bar. So much of the remarks of Sir George Jessel, il. R., in delivering judgment, as implies that an insurance company is not bound to look with the greatest attention at the answers of an applicant to the great number of ques- tions framed by the company or its agents, and that the intentional omission of the in- sured to answer a question put to him is a concealment which vrill avoid a policy issued without further inquiry, can hardly be recon- ciled with the uniform current of American decisions. For these reasons, our conclusion upon this branch of the case is that there was no error of which the company had a Tight to complain, either in the refusals to rule, or in the rulings made. Another defense relied on at the trial was that after the issue of the policy Charles E. Itaddin became, as to habits of using spirit- uous liquors, so far different from the condi- tion he was represented to be in at the time of the application as to make the risk more than ordinarily hazardous, and thus to ren- der the policy nuU and void. The bUl of ex- ceptions, after showing that in support of this defense the defendant introduced evi- dence, which it is now unnecessary to state, because the exception to its admission was abandoned at the argument, contains this statement: "In rebuttal of the foregoing de- fense of change of habits on the part of the assured after the issuing of the policy, the plaintiff not only denied the fact, but of- fered evidence tending to show that the de- fendant was informed of such change in habits prior to its receipt of the last premi- um, and that it gave no notice to Sewell Raddin of its intention to cancel the policy. Evidence to the contrary was introduced by the defendant, and the questions of change of habits, knowledge thereof by the company, notice to Sewell Raddin, receipt of premium after knowledge, and waiver, were all sub- mitted to the jury." The whole charge to the jury is made part of the bill of exceptions, in accordance with a practice which this court for more than half a century has emphatically condemned, and has by repeated decisions, ap well as by express rule, constantly endeavored to suppress. As long ago as 1822, Mr. Justice Stoiy, speaking for the whole court, said: "The charge is spread in extenso upon the record, a practice which is unnecessary and inconvenient, and may give rise to minute criticisms and observations upon points in- cidentally introduced, for purposes of argu- ment or illustration, and by no means es- sential to the merits of the case." Evans v. Baton, 7 Wheat 356, 426, 427. Opinions to the same effect have been delivered in many later cases. Carver v. Jackson, 4 Pet. 1, 80, 81; Ex parte Crane, 5 Pet 190; Gonard v. Insurance Co., 6 Pet. 262, 280; Magniac v. Thompson, 7 Pet 348, 390; Gregg v. Sayre, 8 Pet 244, 251; Stimpson v. RaUroad Co., 3 How. 553; Zeller v. Edsert, 4 How. 289, 297; U. S. V. Rindskopf, 105 TJ. S. 418. And in 1832 this court adopted a rule which, with slight verbal changes, has ever since remain- ed in force, by which it was ordered, not only that the judges of the circuit and district courts should not allow any bUl of exceptions containing the charge of the court at large to the jury in trials at common law, upon any ground of exception lo the whole of such charge, but also "that the party except- ing be required to state distinctly the several matters of law In such charge to which he excepts; and that such matters of law, and Ihose only, be inserted in the bill of excep- tions, and allowed by tlie court." Rule 38 of 1832, 6 Pet 4, and 1 How. 34; Rule 4 of 1858 and 1884, 21 How. 6, 108 U. S. 574, and 3 Sup. Ct 5. The disregard of this rule has caused the principal embarrassment in dealing with the question now under consideration. •The substance of the instructions to the jury on this part of the case was as follows: The judge directed the jury that if they should find that the assured was addicted to the habitual use of spirituous liquors at the date of the policy, or his habits afterwards changed in this respect so as to make the 116 WAKKANT1E8. risk more than ordinarily hazardous, they would consider whether there had been a waiver on the part of the insurance com- pany. The judge then told the jury that the plaintiff not only claimed that any misrepre- sentation as to the habits of the assured, or failure to inform the company of a change in those habits, had been waived by the company by accepting payment of a premium on or about April 25, 1881, after It had knowl- edge of the habits of the assured, or of the change in those habits, but further claimed that mere silence of the company, after knowledge of such change in habits, was a waiver of the violation of the provision of the policy; and the judge did charge the jury upon both the supposed grounds of waiver, instructing them that if the defend- ant had knowledge of the change in the habits of the assured before receiving the premium of April 25, 1881, the acceptance of that premium would be a waiver, which would estop the company to set up that the policy was forfeited for a breach of that pro- vision; and further instructing them that If the company, having knowledge of the change in the habits of the assured, did not give notice to the plaintiff of that change, and he was prejudiced in any way by the failure of the company to give such a notice, and by reason of this silence of the company did any act, or omitted to do any act, which prejudiced him, there was a like waiver and estoppel on the part of the company. The bill of exceptions, after setting out the charge of the court, proceeds as follows: "To so much of the foregoing instructions as related to notice and waiver the defendant excepted, and asked the court to instruct the jury (1) that no notice of the cancellation of the policy or termination of the risk was necessary, if the jury find the fact to be that the habits of the assured had so far changed from the condition represented to be in as to make the risk more than ordinarily hazard- ous; (2) that even if any notice were nec- essary at all, under any circumstances, until the company had completed its investiga- tions, if the company acted in good faith and with reasonable dispatch, they were not bound to give the notice; also that the receipt of the last premium, April 25, 1881, pending such investigations, would not amount to a waiver, especially if a much larger sum was tendered back when full knowledge was had by the company. The court refused these requests, and the defendant excepted there- to." But the bill of exceptions does not state what the investigations and the tender were which are mentioned in the second request for instructions, or at what time or for what purpose either was made; nor does it show that any evidence had been introduced of prejudice to the plaintiff in consequence of the defendant's silence, or any other evidence upon the question of waiver, except that al- ready mentioned, namely, that "the plaintiff offered evidence tending to show that me defendant was informed of such change in habits prior to its receipt of the last premium, and that it gave no notice to Sewell Raddin of its Intention to cancel the policy," and that "evidence to the contrary was intro- duced by the defendant." It does not, there- fore, appear that the instructions requested, or the instructions given, except so far as they related to the effect of accepting pay- ment of the last premium with previous knowledge of the habits of the assured, had any application to the case on trial. Ex- cept as just mentioned, the bill of excep- tions is in the same condition as that of which Mr. Justice Miller, delivering a former judgment of this court, said: "There is in no part of this bill of exceptions any state- ment of the evidence. There is no state- ment that any evidence was offei-ed, or that any was objected to. With the exception of the reference to it in the charge of the court, there is nothing to show what was proved, or what any of the evidence tended to prove. The prayers for instruction, therefore, may have been hypothetical, and whoUy unwar- ranted by any testimony before the jury."' Worthington v. Mason, 101 U. S. 149, 151. It follows that the only question upon the; instructions of the court to the jury which is open to the defendant on this bill of ex- ceptions is whether, if insurers accept pay- ment of a premium after they know that there has been a breach of a condition of the policy, their acceptance of the premium is a waiver of the right to avoid the policy for that breach. Upon principle and authority, there can be no doubt that It Is. To hold otherwise would be to maintain that the con- tract of insurance requires good faith of the assured only, and not of the insurers, and to permit insurers, knowing all the facts, to continue to receive new ben^ts from the contract while they decline to bear its bur- dens. Insurance C5o. v. Wolff, 93 TJ. S. 326; Wing V. Harvey, 5 De Gex, M. & G. 265; Frost V. Insurance Co., 5 Denio, 154; Bevin V. Insurance Co., 23 Conn. 244; Insurance Co. V. Slockbower, 26 Pa. St. 199; Viele v. Insurance Co., 26 Iowa, 9; Hodsdon v. Insur- ance Co., 97 Mass. 144. The only objection remaining to be con- sidered is that of variance between the dec- laration and the evidence, which is thus stated in the bill of exceptions: "After the plaintiff had rested, the defendant asked the court to rule that there was a variance be- tween the declaration and the proof, inas- much as the declaration stated the consider- ation of the contract to be the payment of the sum of ?152.10, and of an annual pre- mium of $304.20, while the policy showed the consideration to be the representations made In the application as well as payment of the aforesaid sums of money, and that an amendment to the declaration was neces- sary; but this the court declined to rule, to which the defendant excepted." WARRANTIES. 117 But the "consideration," In the legal sense of the word, of a contract, is the quid pro quo; that which the party to whom a prom- ise is made does or agrees to do in ex- change for the promise. In a contract of insurance, the promise of the insurer is to pay a certain amount of money upon certain conditions; and the consideration on the part of the assured is his payment of the whole premium at the inception of the con- tract, or his payment of part then, and his agreement to pay the rest at certain periods while it continues in force. In the present case, at least, the application is collateral to the contract, and contains no promise or agreement of the assured. The statements in the application are only representations upon which the promise of the insurer is based, and conditions limiting the obligation which he assumes. If they are false, there is a misrepresentation, or a breach of condi- tion, which prevents the obligation of the insurer from ever attaching, or brings it to an end; but there is no breach of any con- tract or promise on the part of the assured, for he has made none. In short, the state- ments in this application limit the liability of the insurer, but they create no liability on the part of the assured. The expression at the beginning of the policy, that the insur- ance is made "in consideration of the repre- sentations made in the application for this policy," and of certain sums paid and to be paid for premiums, does not make those rep- resentations part of the consideration, in the technical sense, or render it necessary or proper to plead them as such. Judgment afltaned. 1J8 WAHRANTIES. WHITE T. PROVIDENT SAV. LIFE ASSUR. SOC. OF NEW YORK: (39 N. E. 771, 163 Mass. 108.) Supreme Judicial Court of Massachusetts. Essex. Feb. 28, 1895. Exceptions from superior court, Essex county; Edgar J. Sherman, Judge. Action by Bridget L. White against the Provident Savings Life Assurance Society of New York on a policy of insurance. There was a verdict for defendant, and plaintiff ex- cepts. Verdict set aside, and a new trial or- dered. J. F. Quinn and H. P. Moulton, for plain- tiff. William H. Moody and Joseph H. Pearl, for defendant. BARKER, J. The most important ques- tion raised by the report Is as to the effect of St. 1887, c. 214, § 21, now, by the Massa- chusetts insurance act of 1894, re-enacted as St. 1894, c. 522, § 21. The question is, in substance, whether the provisions of that section include in the word "misrepresenta- tion" statements which in Insurance law are classed as "warranties," because expressly said to be warranties by the language of the parties, or whether the section deals only with statements which are representations, and not with technical warranties. The rul- ing of the trial court went upon the theory that the section did not affect statements which were said in the policy and the ap- plication to be warranties, but only misrep- resentations as to matters which were the subject of representations as distinguished from warranties. The section, as it stood in St. 1887, c. 214, § 21, was In these words: "No oral or written misrepresentation made In the negotiation of a contract or policy of insurance by the assured or in his behalf, shall be deemed material or defeat or avoid the policy, or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter mis- represented Increased the risk of loss;" and the language of St. 1894, c. 522, § 21, is the same. This language is broader than that of Pub. St c. 119, i 181, which applied only to misrepresentations made in obtaining or se- curing policies of fire insurance and of life insurance, and which was in these words: "No oral or written misrepresentation made in obtaining or securing a policy of fire or life insurance shall be deemed material, or defeat or avoid the policy, or prevent its at- taching unless such misrepresentation is made with actual intent to deceive or unless the matter misrepresented increases the risk of loss." The broader language of the sec- tion, as it is found in the general insurance act of 1887, was clearly designed to extend the rule, which up to that time dealt only with misrepresentations affecting policies of fire insurance and of life insurance, and to apply it to misrepresentations made in the negotiation of any contract or policy of in- surance of whatever kind. Pub. St c. 119, § 181, is merely a re-enactment identical in language with St. 1878, c. 157, § 1, which as to life insurance was a wholly new pro- vision. There was, however, a previously enacted statute containing the form of flre insurance policies, providing that the con- ditions of the insurance should be stated in the body of the policy, and that neither the application of the insured nor the by-laws of the company should be considered as a war- ranty or a part of the contract, except so far as incorporated in full into the policy, and appearing on Its face before the signa- tvires of the officers of the company. This was St 1864, c. 196, which took the place of and repealed St 18C1, c. 152, which seems to have been the earliest statute dealing with the form of fire insurance policies, and which provided that in all insurance against loss by flre the conditions of the insurance should be stated in the body of the policy, and that neither the application nor the by- laws, as such, should be considered as a warranty or part of the contract. The pro- visions of Pub. St c. 119, § 181, were sub- stantially re-enacted in the general insur- ance act of 1887 and in that of 1894. See St 1887, c. 214, § 59; St 1894. c. 522, § 59. Besides the statutes already noted, there are also the several enactments, beginning in the year 1873, establishing a standard form for policies of fire insurance. These are St 1873, c. 331, with the amendatory act (St 1880, c. 175; St 1881, c. 166), repeal- ing the two acts last cited, and prescribing a new standard form of policy; and Pub. St c. 119, § 189; St 1887, c. 214, § 60; and St 1894, c. 522, § 60,— the last three being substantially re-enactments, continuing in force the provisions of St 1881, a 166. In the standard form of policy given in St 1873, c. 331, is this clause: "This policy shaU be void if any material fact or circumstance stated in writing has not been fairly repre- sented by the assured;" and the same clause is in the standard form given in St. 1881, c. 166, and in Pub. St c 119, § 139; in St 1887, c. 214, § 60; and in St 1894, c 522, $ 60. The provisions of St 1887, c. 214, § 21, are thus seen to be part of a system of legislation, beginning in the year 1861, and then ap- plied only to fire Insurance, in which the legislature has dealt with the subject of statements on the part of the assured af- fecting contracts of insurance, and which, before the question now raised for decision arose, had been made to apply to all state- ments made in the negotiation of contracts and policies of insurance of whatever kind. St 1878, c. 157, does not appear to have been enacted In consequence of any recom- mendation by the insurance department nor has any construction been given to that statute or to Pub. St c 119, § 181; St 1887, c. 214, §21; or St 1894, c 522, § 21— by that department, or by this court, except so far WARRANTIES. 119 as St. 1887, c. 214. § 21, has been dealt with in the case of Ring v. Assurance Co., 145 Mass. 426, 14 N. E. 525, and in that of Durkee V. Insurance Co., 159 Mass. 514, 34 N. E. 1133. The case last cited has no bearing up- on the present question, nor is that ques- tion governed by the decision of Ring v. Assurance Co. The statutes above referred to show a general intention on the part of the legislature to mal;e, in lieu of the rules i which spring from the doctrines held in the law of insurance as to technical warranties and representations, a statute rule by which to determine the effect upon the contract of all statements on the part of the assured, and also the effect of by-laws and similar matters which it might otherwise be con- tended would avoid or modify the contract The distinction in insurance law between "warranties" and "representations" is said by Baron Parke in Anderson v. Fitzgerald, 4 H. ti. Gas. 484, 496, to have been laid down by Lord Mansfield. In Pawson v. Watson, Cowp. 785, decided in the year 1778, Lord Mansfield said: "There is no distinction bet- ter known to those who are at all conversant in the law of insurance than that which ex- ists between a warranty or condition, which makes a part of a written policy, and a rep- resentation of the state of the case. Where it is a part of the written policy, it must be performed. • » * Nothing tantamount will do or answer the purpose. It must be strictly performed, as being part of the agreement * • * So that there cannot be a clearer distinction than that which exists between a warranty, which makes part of the written policy, and a collateral repre- sentation, which, if false in a point of mate- riality, makes the policy void; but if not material, it can hardly ever be fraudulent" And in De Hahn t. Hartley, 1 Term R. 343, decided In 1786, he said: "There is a mate- rial distinction between a 'warranty' and a "representation." A representation may be equitably and substantially answered; but a warranty must be strictly complied with. * * • , A warranty in a' policy of insurance is a condition or a contingency, and unless that be performed there is no contract It is perfectly immaterial for what purpose a warranty is introduced, but, being inserted, the contract does not exist nnless it be lit- erally complied with." And, in the same case, Ashhurst J., says: "The very mean- ing of a 'warranty' is to preclude all ques- tions whether it has been substantially com- plied with; it must be literally so." These doctrines of the law of insurance have long been recognized in our decisions, and their effect was fully pointed out by this court be- fore the enactment of St 1878, c. 157. See Houghton V. Insurance Co., 8 Mete. (Mass.) 114, 120; Campbell v. Insurance Co., 98 ; Mass. 381, 389, 401. i It is easy to see how an insurer by multi- plying immaterial statements to be mdde by the insured, and giving to them, by the wording of the policy, the technical charac- ter of warranties, can, in the absence of any statute provision upon the subject, place the assured in a position in which it wUl be difla- cult if not impossible, for him, although he has acted in good faith, to recover upon his contract, because of some inaccurate state- ment on his part. If he is held to have war- ranted the truth of a statement its exact and literal truth is a necessary condition of his right to recover, however Immaterial the statement may be, and however honest may have been his conduct. In the opinion of a majority of the court, it was the intention of the legislature by St 1878, c. 157, to change this rule to some extent, and to enact in place of it one which should hold the con- tract valid unless the misstatement, if made in the negotiation of the contract, was made with an actual intent to deceive, or unless the misstatement was of a matter which ac- tually increased the risk of loss; and this with reference to statements which may be said by the parties to be warranties as well as those which were only representations. Such was already the law as to statements not technical warranties. As to mere repre- sentations, the statute may well be held to be only declaratory, but as to warranties it made a new rule. In the opinion of a ma- jority of the court, it speaks in terms neither of wurranties nor of representations, tech- nically so called, but deals with aU misrep- resentations made in negotiating the con- tract or policy, luisstatements of fact, whether the statement is said to be by the parties a warranty or a representation, are equally misrepresentations, and are placed in each case upon the same footing by the statute which applies to them if the state- ments are called "warranties" by the parties no less than if they are mere "representa- tions." And the same construction must in the opinion of a majority of the court, be given to Pub. St c. 119, § 181, and to St 1887, c. 214, § 21, which was in force when the policy sued on was written. It is not necessary at present to consider whether the statute would have any effect if an immaterial statement declared by the ap- plication to be a warranty, instead of, as in the present case, being referred to in the policy, and thus brought into it by such ref- erence only, were independently written out at length in the policy itself, and thus there declared to be a warranty upon the exact truth of which the policy was conditioned and founded. The statements upon the falsity of which the defendant relies in this case are not incorporated into the policy ex- cept by reference to the application. The declaration of the applicant warranting the answers to be true was in his application made in the negotiation of his policy, and was within the operation of the statute. In the opinion of a majority of the court it was not taken out oi ine operation of the statute by the reference to the application 120 WARRANTIES. In the policy, that it was "in consideration of the stipulations and agreements in the ap- plication herefor, and npon the next page of this policy, all of which are a part of this contract." In the trial of the present case a different view of the effect of the statute was held by the presiding judge, who ruled that, because the statements of the assured were warranties, the provisions of St. 1887, c. 214, § 21, did not apply. The plaintiff's exception to this ruling was well taken, and because the ruling was wrong the verdict for the defendant must be set aside, and a new trial ordered. We all agree that the ruling was correct; that the assured was at- tended by a physician, within the meaning of the question, "When and by what physi- cian were you last attended, and for what complaint?" If he went to the office of a physician, told him that he had coughed and spit blood, desired him to make a physii^ examination, to which he submitted, receiv- ing a prescription, and paying for the serv- ices of the physician, and subsequently call- ing again at the physician's office, and con- sulting him professionally, and paying him a fee, the circumstances recited show that the assured was under the care and treat- ment of the physician for a complaint, and was as really attended by the physician as if the latter had seen the assured at his home. Verdict set aside, and a new trial ordered. WARRANTIES. 121 CHAMBERS v. NORTHWESTERN MUT. LIFE INS. CO. (67 N. W. 367.) Supreme Court of Minnesota. May 25, 1896. Appeal from district court, Washington county; W. C. Wtlliston, Judge. Action by George W. Chambers, adminis- trator, against the Nortiiwestem Mutual Life Insurance Company. There was a judgment for plaintiff, and from an order denying a new trial defendant appeals. Affirmed. Edmund S. Durment, for appellant. Clapp & McCartney, for respondent. MITCHELL, J. This was an action on a policy of insurance on the life of plaintifTs intestate. The complaint alleged the issuing of the policy, the death of the insured, the fur- nishing of proofs of loss, and the refusal of the defendant to pay; also, generally, that the insured and the plaintifC had each ful- filled all the conditions ef the policy. The policy, which was attached to the complaint, provided that the insured's application was made a part of the policy; also, that "if any fraudulent representation or statement shall be made in the application, ♦ • * then and in every such case the policy shall be null and void." The application, which was introduced in evidence, contained numerous questions to the apx)licant and his answers thereto. All of these related to then existing or past facts. It also contained an agreement, signed by the applicant, that all the state- ments and answers written on the amplica- tion, including those made to the medical examiner, are warranted to be true, and to be full and fair answers to the questions, without evasion or concealment, and are of- fered to the company as a consideration for the contract of insurance. Defendant, in its answer, admitted the issuing of the policy, the death of the insured, the fnmishtng of proofs of death, and a refusal on its part to pay, but, except as thus admitted, denied all the allegations of the complaint It then alleged that the answers to the following questions in the application were false and untrue: "Have you ever had disease of the heart? Ans. No. Do you use malt or spirit- uous beverages? Ans. No. Have you al- ways been temperate? Ans. Yes. Is there anything, or has there ever been anything, in your physical condition, family or personal history, or habits, tending to shorten your life, which is not distinctly set forth above? Ans. No." And that by reason of said false and fraudulent representations, and each of them, said policy or contract of insurance is nuU and void. The assignments of error are very numerous, but most of them can be dis- posed of very briefly. 1. After a careful examination of the en- tire record, we are satisfied that there was no abuse of discretion on part of the trial court in refusing defendant's application for a con- tinuance, for a postponement of the trial, for leave to amend its answer, or for a new trial on the ground of accident and surprise. To fully state our reasons for this conclusion would require an extended review of the facts as disclosed by the record, which time and space will not permit, and which would be of no particular value as a precedent 2. The next question is, was the burden on the plaintiff to allege and prove the truth of the answers to the questions contained in the application, or was it upon the defendant to allege and prove their falsity? Defend- ant's contention Is that because, if any of these answers were false, the policy would be void ab initio, therefore they were con- ditions precedent, and hence, according to a familiar rule, the burden was on the plain- tifC to allege and prove that they were true. The law is so well settled otherwise that it would hardly seem to require discussion. For the purposes of this case it is immaterial whether these answers are to be deemed warranties or mere representations, for the rule of pleading and proof would be the same in either case. Hence we shall assume, most favorably to the defendant that the answers are warranties. A condition precedent as knovra in the law, is one whicli is to be per- formed before the agreement of the parties becomes operative. A condition precedent calls for the performance of some act or the happening of some event after the contract Is entered into, and upon the performance or happening of which its obligation is made to depend. In the case of a mere warranty, the contract takes effect and becomes operative immediately. It is true that, where a policy of insurance so provides, if there is a breach of a warranty, the policy is void ab initio. But this does not change the warranty into a condition precedent as understood in the law. It lacks the essential element of a con- dition precedent, in that it contains no stip- ulation that an event shall happen or an act shall be performed in the future, before the policy shall become effectual. It is more in the nature of a defeasance, where the insured contracts that, if the representations made by him are not true, the policy shall be de- feated and avoided. But even if these war- ranties are to be deemed conditions preced- ent it has become settled in insurance law, for practical reasons, that the burden is on the insurer to plead and prove the breach of the warranties. Not only so, but he must, in his pleading, single out the answers whose truth he proposes to contest, and show the facts on which his contention is founded. Otherwise, the Insured would enter the trial ignorant as to which of his numerous an- swers would be assailed as false. The num- ber of questions in these applications is usual- ly very great, relating to the habits and health of ancestors, the personal habits and condition of the applicant, etc., the truth of many of which it would be impossible to prove affirmatively after the death of the in- sured. To require such proof on part of the 122 WARUANTFES. beneficiary would defeat more than half of the life policies ever issued. On the other hand, it is no hardship to require of the in- surer, if he believes that any of these an- swers were false, that he specifically allege which ones he claims to be false, and produce evidence of the truth of his claim. It would be superfluous to cite authorities on this sub- ject; but, to the point that these warranties are not conditions precedent, in the legal sense of the term, we refer to Redman v. Insurance Co., 49 Wis. 431, 4 N. W. 591; and, for a forcible statement of the practical reasons for the rule, to Insurance Co. v. Ewing, 92 U. S. 377. The dictum in Price v. Insurance Co., 17 Minn. 497 (Gil. 473), that warranties are conditions precedent, the truth of which must be pleaded and proved by the assured, was, we thinli, inadvertent, and cannot be adhered to. We therefore hold that it was no part of plaintiff's case to ei- ther allege or prove the truth of the answers in the application, that the burden of alleging and proving their falsity was on the defend- ant, that it was bound to specify in its de- fense the particular answers which it claim- ed were false, and that on the trial it was properly limited in its proof to those an- swers which it had specifically alleged to be false. 3. Upon the trial the only substantial evi- dence produced by defendant tending to prove the falsity of any of the answers in the application related to those in response to the questions whether the applicant used malt or spirituous beverages and whether he had always been temperate. The only as- signments of error not disposed of by what has been already said are those relating to the rulings of the court in the admission of evidence, and to its instructions to the jury upon the issue of the truth or falsity of the answers to these questions. The testimony of Dr. Clark, referred to in the tenth assign- ment of error, does not seem to have been relevant to any issue in the case; but it was harmless, and its admission, if error, was without prejudice. The testimony of Durant, referred to in the eleventh, twelfth, and thir- teenth assignments of error, as to the busi- ness habits, pursuits, and associations of the insured, at and prior to the date of the appli- cation, had a legitimate and direct bearing upon the question whether he was temperate or intemperate. The defendant had very fully cross-examined the witness Welch as to all facts within his knowledge as to the habits of the deceased, and there was no error in excluding the questions, referred to In the fifteenth and sixteenth assignments of error, as to whether the deceased looked as if he had been full or drtaklng, and T\liether the witness believed that he was sobering up, oa a certain occasion previously testified ta The question (referred to in the sixteenth as- signment of error) put to the plaintiff, when called in rebuttal, was properly excluded, as not being proper cross-examination. The court instructed the jury that the ques- tion, "Do you use malt or spirituous bev- erages?" was to be construed as referring to- a customary and habitual use, and not to a single or occasional act of use; also, that the word "temperate" was to be taken in its or^ dinary sense, and not as meaning total abr stinence, — and refused defendant's requests to instruct the jury that if the deceased, at the time he made the application for the in- surance, used malt or spirituous beverages, even though only occasionally, and in small quantities, or if he used such beverages at all, or if, prior to the date of the application, he- had drank such beverages to excess even once, then plaintiff could not recover. But the court did instruct the jury that if, prior to the issuing of the policy, the deceased had been in the habit, periodically and frequent- ly, of using spirituous and malt liquors to ex- cess, or to such an extent as tended to short- en his life, then his answer to the last ques- tion was false; also, that before the plaintiff could recover, it must appear from the evi- dence that the deceased was always temper- ate before making the application for the in- surance; also, that if any one of the an- swers alleged to be untrue were in fact un- true, the plaintiff could not recover, although all the others were true. The charge of the court was sufficiently favorable to the de- fendairt. In fact, as respects the burden of proof, it was too favorable. The questions, "Do you use malt or spirituous beverages?" and "Have you always been temperate?" referred to the applicant's habits, and not to exceptional and occasional acts; and the word "temperate" suggests moderation, re- fraining from excessive or injurious use, and not total abstinence. May, Ins. § 299; Beach,. Ins. § 436, and cases cited. Whether the ap- plicant had always been temperate, and whether he used malt or spirituous beverages, within these definitions of the , terms, were, under the evidence, questions for the jury. Order affirmed. REPRESENTATIONS. 123 ARMOUR V. TRANSATLANTIC FIRE INS. CO. (90 N. Y. 450.) Court of Appeals of New York. Dec, 1882. Action on a policy of fire insurance. The facts are stated in the opinion. Judgment for defendant. D. M. Porter, for appellant. Lewis Sanders, for respondent. RAPALLO, J. The court at the trial dis- missed the complaint in this action on the de- fendant's evidence, and refused the plaintiffs' request to submit the questions of fact in the case to the jury. The only questions for our consideration are whether the facts alleged on the part of the defendant were, or either of them was, sufficient to defeat the plaintiffs' claim to recover, and so clearly proved by con- clusive or uncontroverted evidence as to justi- fy the court in withdrawing the case from the consideration of the jury. The action was upon a policy of insurance issued by the de- fendant upon a warehouse of the plaintiffs in the city of Chicago, which was partially de- stroyed by fire upon the 25th of January, 1879. The warehouse consisted of three sections, and the amount of insurance on one of the sec- tions covered by the plaintiffs' policy was $3,000. The loss on that section was about $14,000, and the total Insurance thereon about $17,000. The amount insured on all three sections was $38,000, exclusive of defendant's policy at the time of the loss. The pro rata share of loss claimed from the defendant was $2,440. The defendant set up three defenses: First. That the policy was issued upon a misrepre- sentation of the plaintiffs, through their agent, that the rate of insurance in Chicago on the premises Insured was, at the date of their ap- plication for said insurance, seventy-five cents for every $100 insured for the term of one year; whereas in fact the rate of insurance upon the property in Chicago at the time of plaintiff's application was $1.25 for every $100 insured. Second. That, at the time of the ap- plication for said insurance, the plaintiffs, by their agent, represented that the property sought to be insured was already insured in the amount of $200,000 in various other com- panies, of which a list was furnished; that the defendant relied upon the truth of said representation in making the policy and ac- cepting the risk, but that in fact none of the property mentioned in said policy was insured in the amount of $200,000,' or to exceed the sum of $50,000. Third. That, according to the terms of the policy, the defendant was en- titled to terminate it on giving notice to the plaintiffs, and that It did so elect to terminate it before the alleged loss by fire. The plaintiffs, after making the prima facie proof necessary to maintain the action on their part, rested their case, and the defendant in- troduced evidence in support of the defenses set up by it. We have carefully examined the evidence, and think there may be some ques- tion as to whether the allegation of misrepre- sentation as to the rate of insurance should not have been submitted to the jury; but the defense of misrepresentation as to the amount of insurance on the property was, we think, so fully established that a verdict in favor of the plaintiffs could not have been sustained. The insurance was effected by the plaintiffs; through Mr. Cameron of Chicago, who, with the knowledge of the plaintiffs, employed a broker in New York named Dickinson, to ob- tain the insurance in that city. The whole warehouse was divided into three separate sections— A, B and 0. Mr. Cameron was au- 'thorized by the plaintiffs to procure $80,0uO upon the entire building, viz., $20,000 on sec- tion A, and $30,000 each on sections B and 0. The plaintiffs at that time had over $200,000 of insurance upon the stock of merchandise In the warehouse, but had no insurance upon the building. Mr. Cameron by letter instructed Mr. Dickinson in New York as to the situa- tion of the building, and informed him that he probably should request him by telegraph to effect the insurance in question, in New York, on the building; that $200,000 had al- ready been placed on the three sections at three-quarters per cent. Mr. Cameron, in his testimony taken on commission, says that in employing that language he referred to the in- surance on the stock in the warehouse, and did not intend to refer to the insurance on the building. But nevertheless the letter which conveyed Mr. Cameron's instructions states distinctly that $200,000 had already been placed in Chicago, on the three sections of the warehouse, and Mr. Dickinson states that he imderstood that the $200,000 of insurance was upon the warehouse. Mr. Hoenig, the general manager of the de- fendant, testifies that when Dickinson ap- plied to the defendant for the policy in ques- tion, he stated to him that he already had $200,000 of insurance on the building in Chi- cago, and that in Issuing the policy he acted upon the statement of Mr. Dickinson that the board rate of Insurance in Chicago was sev- enty-five cents on $100, and that there had al- ready been procured insurance on the build- ing to the amount of $200,000. Mr. Dickin- son does not contradict this statement, but testifies that he exhibited to Mr. Hoenig the list of companies which he had received from Chicago, stating that they were on the risk,, and that he understood that that risk was on the building, and he was not informed that it was on the stock until after the fire. There is consequently no conflict of evidence on that point between these two witnesses. By the terms of the policy of the defendant other insurance was permitted without no- tice, and it was provided that losses should be apportioned on the whole sum insured, and It was further provided that any omission to make known every fact material to the risk, or any overvaluation, or any misrepresenta- 12-1 EEPEESENTATIONS. tion whatever, either In a ■written application or otherwise, should avoid the policy. The representation in this case was not fraudulent, and arose from a mistake or misappropriation of the plaintifCs' agent, but, nevertheless, it was a very material representation, and was untrue, the insurance on the entire building being, as appears by the testimony of one of the plaintiffs, only $30,000 at the time of the application to the defendant, and the insur- ance on the section which was injured only $17,000. Had the insurance been $200,000, the proportion of loss chargeable to the de- fendant would have been comparatively tri- fling. The risk was greatly enhanced by the comparatively small amount of insurance ac- tually existing. On the other branches of the defense, the testimony indicates that the defendant issued the policy to Mr. Dickinson with the express understanding that if the board rate in Chi- cago was more than three-quarters per cent., the policy should not take effect and should "be returned, and that long before the fire, having ascertained that the rate was $1.25, they recalled the policy and demanded its sur- render. There is however some slight con- flict of evidence in relation to these points, "but it is unnecessary to consider them, as we find that the misrepresentation as to the amount of other insurance is so clearly estab- lished that a recovery by the plaintiffs could not have been sustained. It is not necessary, In all cases, in order to sustain a defense of misrepresentation in applying for the policy, to show that the misrepresentation was inten- tionally fraudulent. A misrepresentation is defined by Phillips to be where a party to the contract of insurance, either purposely or through negligence, mistake, or inadvertence, or oversight, misrepresents a fact which he is tound to represent truly (Phil. Ins. § 537), and he lays down the doctrine that it is an im- plied condition of the contract of insurance that it is free from misrepresentation or con- cealment, whether fraudulent or through mis- take. If the misrepresentation induces the in- surer to enter into a contract which he would otherwise have declined, or to take a less pre- mium than he would have demanded had he known the representation to be untrue, the ef- fect as to him is the same if it was made through mistake or inadvertence, as if it had teen made with a fraudulent Intent, and it avoids the contract. An immaterial misrep- resentation, unless in reply to a specific in- quiry, or made with a fraudulent intent, and influencing the other party, will not impair the contract. But if the risk is greater than it would have been if the representation had "been true, the preponderance of authority is to the efCect that it avoids the policy, even though the misrepresentation was honestly made. Phil. Ins. §§ 537-542; Wall v. Insurance Co., 14 Barb. 383. A material misrepresentation by the agent for effecting the insurance will defeat it, though not known to the assured, and though made without any fraudulent intent on the part of the agent, to the same extent as though made by the assured himself. Car- penter V. Insurance Co., 1 Story, 57, Fed. Cas. No. 2,428. In this case (Which was a case of fire insurance), Story, J., says: "A false representation of a material fact is, according to well-settled principles, sufficient to avoid a policy of insurance underwritten on the faith thereof, whether the false representation be by mistake or design." The rules as to misrepresentations and con- cealments, or omissions to state facts mate- rial to the risk, are more strict in cases of marine than of fire insurance. But the dis- tinctions are founded on the differences in the character of the property, and the greater facility the insurers possess, of obtaining in- formation as to its condition and surrounding circumstances in cases of insurance on build- ings, etc., than on vessels, which are often in- sured when absent or afloat, aad the distinc- tions are applied, ordinarily, in cases where the Insurer sets up the omission of the insured to state material facts. In those cases there is a difference between the rules applicable to marine insurances and those applicable to fire Insurance. But where the defense is a material aflBrmative misrepresentation as to a matter which is presumably within the knowledge of the party applying for the Insurance, and as to which the insmer has not the same means of knowledge, there is no ground for any dis- tinction between cases of fire aad marine in- surance. See Phil. Ins. § 635 et seq. Where any doubt exists as to the material- ity of the misrepresentation, it is a question of fact for the jury. But in this case It so clearly appears that the amount of risk incur- red by the defendant was so much greater than it would have been had the representa- tion as to other insurance been true, that a verdict that the representation was Immate- rial could not have been sustained. Aside from these considerations however in the pres- ent case the parties stipulated in a policy that any misrepresentation whatever, either in a written application or otherwise, should avoid the policy, and the parties, by this agreement, put every material representation on the same footing as a warranty. Burritt v. Insurance Co., 5 Hill, 188. That that is the effect of such an agreement was reaffirmed in this court in Gates v. Insurance Co., 2 N. Y. 49-53. The judgment should be affirmed. All concur. Judgment affirmed. REPRESENTATIONS. 125 DANIELS et al. v. HUDSON RIVER FIRE INS. CO. (12 Cush. 416.) Supreme Judicial Court of Massachusetts. Norfolk. Nov. Term, 1853. R. Cioate and J. J. Clarke, for plaintiff. P. C. Bacon and D. Foster, for defendants. SHAW, C. J. This is an action of contract, to recover on a policy of insurance, made by the defendant company, for a loss by fire. The insurance was upon the plaintiffs' fac- tory building in Medway, and the machinery and stock. The defendant company have their office and principal place of business at Waterford, N. Y. The policy, for one year, purports to be dated there, and signed by the president and secretary; but the ne- gotiation was had by an agent of the com- pany in Massachusetts, and by the terms of the policy, it was not to be valid unless coun- tersigned by their agent at Worcester, and it was so countersigned and delivered by him. There can be no doubt that this is a contract made in Massachusetts, and to be governed and construed by the laws of this state; for though it was dated in New York and signed by the president and secretary there, yet it took effect, as a contract, from the counter- signature and delivery of the policy in Mas- sachusetts. It is to be interpreted accord- ing to the laws, and with reference to the usages and the practice of this state, in the same manner with any other Massachusetts policy of insurance against fire. It came to trial before one of the justices of this court; several exceptions were taken by the defendants to the directions and de- cisions of the judge. These are now brought before the whole court by bill of exceptions. 1. The defendants, relying upon a viola- tion of the statements in the application, contended that these statements were war- ranties or conditions, and if they were not strictly and literally true at the time of the application, that the policy was void; and that if they were then true, and the plaintiffs afterwards ceased to comply with them, the policy thereupon became void, whether the same were or were not material to the risk. But the presiding judge instructed the jury, that the statements of the application were not warranties, requiring an exact and lit- eral compliance, but that they were repre- sentations; and as such, must have been substantially true and correct as to things done, or existing, at the time the policy was issued, and that so far as they related to the future^to things to be done, and rules and precautions to be observed— they were stipu- lations, to be fairly and substantially com- plied with. The, court are of opinion, that looking at the policy and the application, this instruc- tion was correct. There is undoubtedly some difficulty in determining by any simple and certain test what propositions in a contract of insurance constitute warranties, and what representations. One general rule is, that a warranty must be embraced in the policy itself. If by any words of reference, the stipulation in another instrument, such as the proposal or application, can be construed a warranty, it must be such as make it in legal effect a part of the policy. In a re- cent case, it was said that "the proposal or declaration for insurance, when forming a part of the policy, has been held to amount to a condition or warranty, which must be strictly true or complied with, and upon the truth of which, whether a misstatement be intentional or not, the whole instrument de- pends." Vose V. Insurance Co., 6 Cush. 47. But no rule is laid down in that case, for de- termining how or in what mode such state- ments contained in the application, or in an- swer to interrogatories, shall be embraced or incorporated into the policy, so as to form part thereof. The difference is most essential, as indi- cated in the definition of a warranty in the ease last cited, and as stated by the counsel for the defendants in the prayer for instruc- tion. If any statement of fact, however un- important it may have been regarded by both parties to the contract, is a warranty, and it happens to be untrue, it avoids the policy; if it be construed a representation, and is untrue, it does not avoid the contract if not wilful, or if not material. To illus- trate this; the application, in answer to an interrogatory, is this: "Ashes are taken up and removed in iron hods;" whereas it should turn out in evidence, that ashes were taken up and removed in copper hods; per- haps a set recently obtained, and unknown to the owner. If this was a warranty, the policy is gone; but if a representation, it would not, we presume, affect the policy, be- cause not wilful or designed to deceive; but more especially, because it would be utterly immaterial, and would not have influenced the mind of either party in making the con- tract or in fixing its terms. Hence it is, we suppose, that the leaning of all courts is, to hold such a stipulation to be a representa- tion, rather than a warranty, in all cases, where there is any room for construction; ba- cause such construction will, in general, best carry into effect the real intent and purpose which the parties have in view, in making their contract. In the present case, the only clause in the policy having any bearing upon this ques- tion, is this: "And this policy is made and accepted in reference to the terms and con- ditions hereto annexed, which are to be used and resorted to, in order to explain the rights and obligations of the parties hereto, in all cases not herein othervyise specially provided for." Here is no reference whatever to the application or the answers accompanying it; the only reference is to the conditions an- 126 BEPBESENTATJ ONS. nexed to the policy. In looking at these con- ditions, second clause of article 1, the pro- vision is, that "if any person, insuring any building or goods in this office, shall make any misrepresentation or concealment, or, &c., — mentioning several other cases, all of ■which would tend to increase the risk, — such insurance shall be void and of no effect." The terms "misrepresentation" and "con- cealment" have a known and definite mean- ing in the law of insurance; and it is that meaning and sense in which we are to pre- sume the parties intended to use them in their contract of insurance, unless there is something to indicate a different intent. "Misrepresentation" is the statement of something as fact, which is untrue in fact, and which the assured states, knowing it to be not true, with an intent to deceive the underwriter, or which he states positively as true, without knowing it to be true, and which has a tendency to mislead, such fact in either ease being material to the risk. "Concealment" is the designed and intention- al withholding of any fact material to the risk, which the assured, in honesty and good faith, ought to communicate to the un- derwriter; mere silence on the part of the assured, especially as to some matter of fact which he does not consider it important for the underwriter to know, is not to be con- sidered as such concealment. "Aliud est celare, aliud tacere." And every such fact, untruly asserted or wrongfully suppressed, must be regarded as material, the knowledge or ignorance of which would naturally influ- ence the judgment of the underwriter in making the contract at all, or in estimating the degree and character of the risk, or in fixing the rate of the premium. If the fact so untruly stated or purposely suppressed is not of this character, it is not a "misrep- resentation" or "concealment" within this clause of the conditions annexed to the policy. But further; the clause in this policy has none of the characteristics of a warranty, because it is not, in its own terms, or by reference to the terms and conditions an- nexed, an absolute stipulation for the truth of any existing fact, or for the adoption of any precise course of conduct for the future, making the truth of such fact, or a compli- ance with such stipulation, a condition pre- cedent to the validity of the contract, or the right of the assured to recover on it. The policy is made in reference to the terms and conditions annexed; but these are referred to, not as conditions precedent, but "to be used and resorted to, in order to explain the rights and obligations of the parties hereto, in cases not herein otherwise specially pro- vided for." They are not to control or alter any express provision in the contract, or be- come parts of the policy; but they are state- ments in a collateral document, which both parties agree to, as an authoritative exposi- tion of what they both understand as to the facts, on the assumption and truth of which they contract, and the relations in which they stand to each other. The court are of opinion, therefore, that the statements in this application were not warranties, and could have no greater effect than that of representations, and that the judge was right in giving such instruction to the jury. 2. Another exception was taken to the di- rection of the judge in regard to the force- pump, which is, that the judge erroneously ruled that the burden of proof was on the defendants, to prove its materiality to the risk, and also, whether it had been complied with or not. This was correct. Whether the answer was responsive to the question or not, it could have only the character of a representation; and, therefore, if the defend- ants rely either upon the falsity of the rep- resentation, or the failure to comply with an executory stipulation, it is upon them to prove it; and it is a question of fact for the jury, in either aspect. 3. With respect to the representation and stipulation that a water-cask should be kept in each room, the presiding judge instructed the jury, that if the plaintiffs established a rule that such water-casks should be kept full, and employed servants to execute such rule, and if, through their negligence at any time, they were not full, such negligence of servants would not avoid the policy. We understand it to be a well-settled prin- ciple in the law of fire Insurance, and, in- deed, the strong tendency of modern judicial decisions in cases of marine insurance is in the same direction, that the negligence of subordinates, many of whom must often be employed, without much knowledge of them by employers, is one of the perils insured against. In Chandler v. Insurance Co., 3 Gush. 328, the rule is laid down thus: "The general rule unquestionably is, in case of insurance against fire, that the carelessness and negligence of the agents and servants • of the assured constitutes no defence." The question there was, whether gross negligence on the part of the assured himself, gross carelessness, equivalent in legal estimation to a wilful intent to bum the building, would be a good defence. It seems difficult to see how an incorporated company, who must act by agents and servants, could otherwise comply with their representations. If, in- deed, such servants and agents are habitu- ally or frequently careless in performing their duties, it may become negligence . on the part of the employers, whose duty it is to have a reasonable vigilance over them, and employ faithful servants. 4. The next exception turns on the repre- sentation that a water-cask was kept in each room, and the admission of evidence tending to show in what sense the parties understood the word "room." This is a REPRESENTATIONS. 127 point which seemed most doubtful, and which has had the particular attention of the court. The question arises upon tne representa- tion made in answer to the twenty-fourth interrogatory. It may be remarked, in pass- ing, that there Is some discrepancy between the question and answer. Whether design- ed or not, does not appear. The question is, "Are there casks in each loft constantly sup- plied with water?" The answer is, "There is in each room, casks of forty-two gallons each kept constantly full." If the plaintifEs intended to conform their answer to the question proposed, then it is manifest, that in their view the word "loft" in the ques- tion, and "room" in the answer, would mean the same thing, and the effect of the an- swer would be, that a cask was kept in each loft. This would raise another ques- tion, whether the term 'loft" would include the basemei^t story, or only the chambers over the basement the "rooms aloft"? Or, did it mean each story? These consideiti- tions are, perhaps, not material, except that they have some tendency to show that the word "room" was used without any very precise or definite meaning. The evidence offered for the purpose of falsifying this representation was, that there was in the basement story a partition, setting off a part for a particular purpose, in which no water- cask was kept,— that in the next story above there was a small apartment partitioned off, in which there was no water-cask; and in the two stories above, the water-casks stood in the entry ways by the doors of the main rooms, and not in the main rooms. If the plaintiffs, in answering the interrogatory as put, intended to say that there is a cask of water kept for each loft, or each story, the jury might well find that the representation was true; if they intended to use the word "room" in a narrower sense, so as to mean more than one apartment, in each loft or story, then it becomes necessary to inquire what was the extent of the word "room" as used in this answer. The word is certainly a familiar one In the English language, and as ordinarily used and construed, as all words must be, by the subject-matter and the context, is not likely to be misunder- stood, yet it is not without some considera- ble varieties of meaning. Apply it to a dwelling-house, and suppose one, in offering a house to be sold or let, should represent that there is a fireplace in every room. Sup- pose there is a cellar, or an attic, with or without windows, are they rooms? Or sup- pose a large apartment into which the front door opens, used for the double purpose of an entry, and for a sitting-room in warm weatlier, and furnished for that purpose; is it a room within the representation that there is a fireplace in it? Or suppose above stairs, one or more small apartments, capable of being used as a closet or clothes-press, or for a bedroom; would the representation be falsified by showing that either of these di- visions of the house had no fireplace in it? The language might be somewhat ambigu- ous, and require aid to ascertain its meaning. The interpretation of written contracts, in- deed, of all written documents, is a question of law for the court; and it is of great im- portance that the meaning of written evi- dence should not be altered or varied by pa- rol evidence. But this presupposes that the words are used in their ordinary and normal sense, according to the established rules of the language; but if they are foreign words, or words used in a peculiar, unusual, or technical sense, evidence may be proper to show their meaning, and then it is the prov- ince of the court to declare and apply the law, according to the true meaning of the language as thus ascertained. The rule is laid down, in the case of Eaton v. Smith, 20 Pick. 156, thus: "When a new and unusual word is used in a contract, or when a word is used in a technical or peculiar sense, as applicable to any trade or branch of busi- ness, or to any particular class of people, it is proper to receive evidence of usage, to explain and illustrate it, and that evidence is to be considered by the jury; and the province of the court will be, to instruct the jury what wiU be the legal effect of the con- tract or instrument, as they shall find the meaning of the word modified or explained by the usage." This principle seems to be intelligible enough, but the difficulty in applying it as a practical rule is this: The words severally and as first read seem plain, but like other matters of latent ambiguity, it is when they come to be applied to the subject-matter, that the ambiguity becomes apparent Then it Is, that evidence of usage, or other evi- dence aliunde, becomes competent and ad- missible, to show the sense in which the words were used in the particular written paper. It must depend, therefore, much up- on the circumstances of each case, and the posture of the evidence already admitted in the trial, whether such evidence aliunde ought to be admitted. In the present case, we are of opinion that there was sufficient uncertainty and ambiguity in the representa- tion in question, to warrant the introduction of evidence of usage, and it was a queslon of fact for the jury to decide, whether, ac- cording to the true meaning of the language used, the representation was substantially true, when made, and substantially com- plied with afterwards. One other ground was taken by the defend- ants in this branch of the case, thus: The defendants contended not only that the meaning of the word "room" in the applica- tion was a question of law for the court to decide, and also whether there was such a general use of language; but also, that if there were such use of language, it was in- 128 REPRESENTATIONS. sufficient, unless it was known and general among insurers, as well as manufacturers. Such a direction, we tJiink, would not have been conformable to the rules of law. The general rule on that subject is, that if any person, or any company, foreign or domes- tic, shall engage in any branch or depart'- ment of business, they must be presumed to be acquainted with the rules and usages of such buslnesh, to be conversant with the language employed in it, whether strictly technical or not. When, therefore, the de- fendant company undertook to insure a man- ufactory in Massachusetts, with the machin- ery and stock therein, they must be pre- sumed to be acquainted with the structure and arrangement of such building, and the distribution of the apartments within it, with a view to its adaptation to the business to be therein carried on, and with the use of the language employed by the owners, super- intendents, and persons employed therein. If, therefore, the language of this represen- tation was understood in a particular man- ner by manufacturers, according to which, understanding the representation was true, the legal presumption is that it was so un- derstood by the insurers, in their contract. 5. Exception was taken to the admission of the witness Adams as an expert; but na sufficient ground has been shown that his. admission was erroneous; nor does it ap- pear to us that the questions permitted to be- put to him, and the answers he gave to. them, for the limited purpose to which they were confined by the instructions given thereon to the jury, are open to exception. Exceptions ovemiled. KEPHESENTATIOSrS. 129 KIMBALL v. AETNA INS. CO. SAME V. SPRINGFIELD FIRE & MARINE INS. CO. (9 AUen, 540.) Supreme Judicial Court of Massachusetts, Essex. Jan. Term, 1865. Two actions on policies of insurance. The defense was the breach of an oral promise made to procure the insurance, that the prem- ises should be occupied. The judge ruled that such breach constituted no defense. The de- fendants alleged exceptions. E. Avery and S. B. Ives, Jr., for plaintiff. J. W. Peny and W. C. Endicott, for defendants. GRAY, J. The ruling of the judge who pre- sided at the trial was in accordance with the opinion which had been repeatedly expressed by this court in previous cases. Higginson v. Dall, 13 Mass. 99, 100; Whitney v. Haven, Id. 172; Rice v. Insurance Co., 4 Pick. 442, 443; Bryant v. Insurance Co., "22 Pick. 200. That opinion has been ingeniously and elaborately criticised and controverted by learned writers to whose conmentaries the defendants have referred; but a careful re-examination has satisfied us that it is founded upon elementary principles of the law of insurance, and sup- ported by the adjudged cases m EIngland and in the United States. The contract of Insurance is a contract to indemnify the owner of certain property against certain risks. This contract is found- ed upon the representations previously made by the assured to the insurer. The condition and circumstances of the property are within the knowledge of the owner more than of the insurer, and must be trtUy represented by the former to the latter, in order that he may es- timate the risk before entering into the con- tract. In making this representation, the ut- most good faith is required. If an existing tact material to the risk is misrepresented by the owner to the underwriter, the minds of the parties never meet, they agree on no sub- ject-matter to which the contract can attach, the contract founded on such misrepresenta- tion never takes effect, the underwriter may treat it as a nullity, and the other party, un- less chargeable with fraud, may recover back the premium. If representations, whether oral or written, concerning facts existing when the policy is signed, are false, it never has any existence as-a contract, unless it con- tains in itself terms which expressly, or by necessary implication, waive or sui)ersede the previous representations. If the representa- tions are positive, and not of mere opinion or belief, it matters .not whether they are made at or before the time of the execution of the policy, nor whether they are expressed in the present or the future tense, if they relate to what the state of facts is or will be when the policy is executed and the risk of the under- writer begins. If the facts are then mate- rially different from the representations, the whole foundation of the contract fails, the risk does not attach, the policy never becomes £IjI>8EUCAS.I>AW ihs. — 9 a contract between the parties. Representa- tions of facts existing at the time of the ex- ecution of the policy need not be inserted In it; for they are not necessary parts of it, but, as is sometimes said, collateral to it. They are its foundation; and it the foundation does not exist, the superstructure does not arise. Falsehood in such representations is not shown to vary or add to the contract, or to terminate a contract which has once been made; but to show that no contract has ever existed. The word "representations" has not always been confined in use to representations of facts existing at the time of making the pol- icy; but has been sometimes extended to statements made by the assured concerning what is to happen during the term of the in- surance; in other words, not to the present, but to the future; not to facts which any hu- man being knows or can know, but to matters of expectation or belief, or of promise and conti-act. Such statements (when not ex- pressed in the form of a distinct and explicit warranty which must be strictiy complied with) are sometimes called "promissory repre- sentations," to distinguish them from those relating to facts, or "affirmative representa- tions." And these words express the distinc- tion; the one is an affirmation of a fact ex- isting when the contract begins; the other is a promise, to be performed after the contract has come into existence. Falsehood in the af- firmation prevents the contract from ever hav- ing any life; breach of the promise could only bring it to a premature end. A promissory representation may be Inserted in the poUey itself; or it may be in the form of a written application for insurance, referred to in the policy in such a manner as to maiie it in law a part thereof; and in either case the whole instrument must be construed together. But this written instrument is the expression, and the only evidence, of the duties, obligations and promises to be performed by each party while the Insurance continues. To make the continuance or termination of a written con- tract, which has once taken effect, dependent on the performance or breach of an earlier oral agreement, would be to violate a funda- mental rule of evidence. A representation that a fact now exists may be either oral or written; for if it does not exist, there is noth- ing to which the contract can apply. But an oral representation as to a future fact, honest- ly made, can have no effect; for if it is a. mere statement of an expectation, subsequent disappointment will not prove that it was un- true; and IC it is a promise that a certain state of facts shall exist or continue during the term of the policy, it ought to be embodied in the written contract. The distinction between representation of facts existing when the policy was signed, which, if untrue, would prevent its taking ef- fect as a contract, and representation of what should exist in the future, which would not avoid the policy, if merely false and not fraud- ulent, was pointed out by Lord Mansfield. In 130 REPEESEXTATIONS. the leading ease of Carter v. Boehm, which was of .an insurance of a fort In the East In- dies against loss by capture, by a foreign enemy, he laid down the general principles as to concealment or misrepresentation of exist- ing facts, saying, "Insurance is a contract upon speculation. The special facts, upon which the contingent chance is to be comput- ed, lie most commonly in the knowledge of the insured only; the underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance in his linowledge, to mislead the underwriter into a belief that the circumstance does not exist, and to induce him to estimate the risk as if it did not exist. The keeping back such circumstance is a fraud, and therefore the policy is void. Although the suppression should happen through mistake, without any fraudulent intention; yet still the underwriter is deceived, and the policy is void, because the risk run is really different from the risk un- derstood and intended to be run at the time of the agreement." 3 Burrows, 1909. This last proposition is reported in slightly differ- ent language by Sir WUllam Blackstone, thus; "If a concealment happens, without any fraudulent intention, by mistake of the prin- cipal or his agent, still the policy is void, be- cause the risk which is run is not that which the underwriter intended." 1 W. Bl. 594. Lord Mansfield in the same opinion repeated the statement that concealment, whether de- signed, and so fraudulent, or undesigned and materially changing the risk, would have the same effect, saying, "The question therefore must always be, whether there was, under all the circumstances, at the time the policy was underwritten, a fair representation; or a con- cealment, fraudulent, if designed; or, though not designed, varying materially the object of the policy, and changing the risk understood to be run." 3 Burrows, 1911. In Pawson v. Watson, Gowp. 785, it was represented to Ewer, an underwriter on the Julius Caesar, that "she mounts twelve guns and twenty men;" but to Watson and others only that she was "a ship of force." There were neither men nor gims on board at the time of the in- surance; and at the time of her capture she had less than twelve carriage guns, and less than twenty able men, but so many swivels and boys as to be stronger than if she had had that number. The actions against all the un- derwriters were tried together, and the only Question reserved for the whole court was, "whether the written instructions which were shown to the first underwriter are to be con- sidered as a warranty inserted in the policy, which must be strictly complied with, or as a representation which could only avoid the pol- icy, if fraudulent;" and the court held them to be a representation only. Cowp. 786; 1 Doug. 11, note. But Lord Mansfield, in his report of the trial, said that he was of opin- ion "that it would be of very dangerous con- sequence to add a conversation that passed at the time, as part of the written agreement;" 'T)ut, secondly, if these instructions were to be considered in the light of a fraudulent mis- representation, they must be both material and fraudulent." Cowp. 78G. And in deliver- ing the opinion of the court, he said of the representation by the assured to Ewer, "There is no fraud in It, because it is a representa- tion only of what in the then state of the ship they thought would be the truth; and in real truth the ship sailed with a larger force;" and that Ewer had "determined whether It should be In the policjr or not, by not inserting it himself." Cowp. 789, 790. So in Bize v. Fletcher, 1 Doug. 285, 289; Park, Ins. (7th Bd.) 314, 315, Lord Mansfield held that a represen- tation, not made part of the policy, that the ship should go to China, could not, unless fraudulent, be introduced to limit the policy, which in terms extended to all ports and places beyond the Cape of Good Hope; and a verdict was found for the plaintiff, and ac- quiesced in. The opinion of Lord Mansfield, that actual fraud was necessary to be proved- in order to avoid a policy for a mistake In as- serting "what would be the truth" in the future. Is brought out stiU more clearly in a later case of misrepresentation of an exist- ing fact, as to which it was held that if the assured made representations to the under- writer witBout knowing the truth, he took the risk upon himself, although there was no evi- dence of actual fraud; and Lord Mansfield pointed out the distinction that in the case of The Julius Csesax the ship was only fitting out and had no guns or men on board when the insurance was made. MacdowaU v. Eraser, 1 Doug. 261. In Driscol v. Passmore, 1 Bos. & P. 200, In the common bench, no decision was made upon this question. There a vessel being about to sail from Lisbon to Madeira, thence to SafR, and thence back to Lisbon, insur- ance on the freight from Saffi to Lisbon was applied for, without success, because of the distant period at which the risk was to be- gin; but was subsequently made, on a repre- sentation of the Intended round voyage, and that the ship had arrived at Madeira, and was about to proceed on her voyage immedi- ately. The ship, on her arrival at Madeira, was obliged, by the refusal of the crew to go on to Saffi, to put back to Lisbon, and was thence ordered by the charterer to Saffi, and lost on her way back from Saffi to Lisbon. The only point decided was, that tne voyage Insured, being from Saffi to Lisbon only, was substantially performed. None of the judges suggested that subsequent non-compliance with an oral representation would defeat the policy. On the contrary. Eyre, C. J., said, "That representation was reaUy true at the time that it was made, and the underwriter was to form his own conclusion or the time when the Timandra would arnve at Saffi. If the insurance was made on a representa- tion which was true at the time, it will be difficult to state a case where subsequent events, not happening through misconduct, and not totally disappointing the voyage, will discharge the underwriter. He formed his REPHESENTATIOJJS. 131 judgment of the case, knowing tliat all was ■executory, and that an alteration might arise of a kind that might increase his risk, upon the representation made to him to under- write." And in "Weston v. Emes, 1 Taunt 115, in the same court, the insurers offered to show that before the execution or a poUcy on goods for a certain voyage "in ship or ships," it was orally agreed that a particular ship should not be included. But the whole court "determined that the evidence could not be admitted, without abandoning in the •case of policies the rule of evidence which prevails in all other cases; and that it would "be of the worst effect if a broker cotild be permitted to alter a policy by parol accounts of what passed when it was effected. The ■court also observed that Lord Mansfield says of misrepresentations that they must be of a matter collateral to the contract; but that this was part of the contract." In Edwards v. Footner, 1 Camp. 530, a week before the policy on the vessel was ■signed it was represented to the unaerwriter that she was to sail with two armed ships, and to carry ten guns and twenty-five men. The reporter, after stating this, simply says, ^There was no evidence of any conversation upon the subject having passed between the parties, either when the policy was signed, or in the intervening period. In fact, the Fanny sailed by herself, and carried only eight guns and seventeen men." The report ■does not show whether the ship had or had not sailed when the policy was signed. The only point raised or denied was whether the •court could look to the previous conversation, or must be confined to what tooK place at the time of subscribing the policy; and upon that Lord Ellenborough raled that the pre- vious conversation "must be referred to the policy, and treated as a representanon which required to be substantially com|>lied with on the part of the assured." But be gave no intimation that oral representations, made in good faith, of what should take place during the term of the insurance could De admitted to control the policy. And such a position ■could hardly be reconciled with tne contem- poraneous case of Bowden v. Vaughan, 10 East, 415, in which the owner or a cargo, ap- plying for insurance, having represented that the ship would sail in a few days, the same eminent judge submitted to the jury, as the turning point In the case, the question wheth- er the representation was made In good faith, advising them indeed to take into considera- tion that the owner of the goods had no con- trol of the vessel, but not making that de- cisive of the case; and the jury having found that it was made in good faith, tne court of king's bench gave judgment on the verdict for the plaintiff. Lord Ellenborough's successor, Lord Tent- erden. reaffirmed the distinction between oral representations as to the present, and as to the future condition of the subject insured. An applicant for insurance on a ship repre- sented to the underwriter, at the time of his | signing the policy, that she was to carry only so much salt as would put her in ballast trim. The ship was in fact deeply laden with salt, but whether shipped before or after the representation did not appear. Lord Tenter- den instructed the jury to find for the de- fendant if they thought that a material mis- representation was made as to the quantity then on board, but for the plaintiff if they thought that the representation was respect- ing the cargo expected to be shipped. The jury found that the misrepresentation was not material, on evidence which was thought sulficient by the full court, who on that ground refused a new trial, without passing upon this point Flinn v. Headlam, 9 Barn. & C. 693. Upon the trial, within a month after the decision of this case, of an action upon another policy on the same ship, the evidence was similar, and the defence relied on was the misrepresentation that the salt would not exceed the amount necessary tor ballast But Lord Tenterden instructed the jury that the defendant would not be entitled to a ver- dict unless he satisfied them that there was a fraudulent misrepresentation of the cargo which the ship was to carry; that "the mere fact of a misrepresentation, without fraud, will not be enough to prevent the plaintiff's recovering; for the contract between the par- ties is the policy, which is in writing, and cannot be varied by parol." Flinn v. Tobin, Moody & M. 367. The case perhaps most often cited, as show- ing that an oral promissory representation may be set up to defeat a written policy, is Dennistoun v. Lillie, 3 Bligh, 202, But an examination of the facts of the case shows that the representation to the underwriters was in no sense promissory, or relating to anything after the execution of the policy. The representation was contained in a let- ter received and shown to the imderwriters in June, which staLted that the ship would sail from Nassau on the 1st of May; she had sailed on the 23d of April, and been lost on the 11th of May; so that the representation, as made to the underwriters, was an untrue statement of a past fact It was so distinct- ly pleaded, as appears by the report of the same case in 1 Shaw, App. Cas. 23. Lord Eldon so treated it after the argument, stat- ing the question to be "whether it is a repre- sentation of an expectation, or a statement as of a past fact, which is material to the risk." 3 Bligh, 209. In announcing his final opinion, he omitted the word "past," before "fact," and said, "There is a difference be- tween the representation of an expectation and the representation of a fact. The for- mer is immaterial," but the latter avoids the policy if the fact misrepresented be material to the risk." 3 Bligh, 210. Yet the report clearly shows that the chancellor was merely reaffirming his original opinion; and used "fact" as past, opposed to "expectation" which was future; and did not intend to speak of anything in the future, which no human being could control, as a fact 132 KEPH ESEN T AT 1 ON S. Alsop V. Colt, 12 Mass. 40, falls within the same class. The vessel which was repre- sented to sail with convoy had in fact sailed without convoy, and been captured when the representation was made. Mr. Justice Jack- son, delivering the opinion of the court, said, "The underwriter could not suppose, when signing such a policy, that the vessel had sailed two days before the letter was written, and that the frigates which were to protect her were still in port." So In Von Tungeln V. Dubois, 2 Camp. 151; Feise v. Parkinson, 4 Taunt. 640; and Vandenheuvel v. Church, 2 Johns. Cas. 173, note,— the misrepresenta- tions were as to the documents or national character of the ship at the time of the in- surance. In several of the cases cited by Mr. Duer, there was no oral representation whatever. The decision in Steel v. Lacy, 3 Taunt. 290, 298, went upon the ground that, in the ab- sence of all warranty or representation, a ship was bound to carry the documents nec- essary to establish her national character. Id Vandenheuvel v. Insurance Co., 2 Johns. Cas. 127,' the ship was warranted American on the face of the policy. In Murray v. Alsop, 3 Johns. Cas. 47, the representation on which the policy issued was in writing, resembling the applications for insurance against fire recently in use in this commonwealth. The law seems to be settled in New York in accordance with that of England and /of Massachusetts. In Vandervoort v. Smith; 2 Calnes, 155, it was held that a policy on a vessel "from New York to two ports on the coast of Brazil" could not be controlled by a previous statement of the assured to the un- derwriter that the ports were only four or five hours' sail apart, although the premium on such a risk would have been less. Tne case decided in the same year, of Suckley v. Delafield, Id. 222, in which a representation (whether oral or written does not appear) was held to have been substantially com- plied with, contains no intimation of an op- posite rule. In a subsequent case, singularly like those now before us, upon a policy of In- surance on a house against loss by fire, the defendants proved that before obtaining the policy the plaintiff used a fireplace in the basement, and. on the defendants refusing for that reason to insure, promised to aban- don the use of the fireplace and use a stove instead, but did not keep this promise. The supreme court, without much consideration, citing no cases except Edward v. Pootner and Bize V. Fletcher, and without any notice of the difficulty of controlling the performance of a written contract by a previous oral state- ment, held that the action could not be main- tained. Alston V. Insurance Co., 1 Hill, 510. But this judgment was unanimously reversed by the court of errors, in accordance with a very able opinion of Chancellor Walworth. 4 Hill, 329. See, also, Undelock v. Insurance Co., 2 N. Y. 221; AUegre v. Insurance Co., 2 Gill & J. 136. We do not find that Mr. Duer's views have been approved in any court in New York, except In a single instance by one judge of the superior court of the city of New York, while Mr. Duer was a member of that court. Bilbrough v. Insurance Co., 5 Duer, 593. In the cases now before us, there was no representation that the house was already oc- cupied, and no representation or agreement that it should be occupied the instant the policies took effect. The plaintiff's statement was that "the house would be occupied; that he had a man In view who was going to oc- cupy it." There is nothing to show that this statement was not made in the most perfect good faith. Giving it the strongest possible interpretation against the plaintiff, it was a promise that the house should be occupied within a reasonable time, and the policies at- tached as soon as they were made, and con- tinued In force until such reasonable time had elapsed. The policies, having once taken effect, cannot be terminated or avoided, in the absence of fraud, by the subsequent breach of an oral agreement made before they were executed. The cases come exactly within the rule laid down by Chief Justice Shaw, and confirmed by the opinion of the whole court, in Bryant v. Insurance Co. "The evidence offered was not admissible for any other pur- pose than to prove a fraudulent intent on the part of the insured to mislead the defendants, and to indace them to take the risk, or to take it at a lower premium than they other- wise would have done; as a representation,, not of a fact, but of an intention, it did not avoid the policy, unless made with a fraudu- lent intent; as it related solely to the em- ployment of the vessel within the time for which she was Insured, it was not of an In- dependent or collateral fact affecting the risk, but was embraced in the terms of the con- tract, and must be considered as absorbed ia the contract afterwards formally executed, or as by mutual consent withdrawn and waived by the execution of the policy." 22 Pick. 201. This subject illustrates the wisdom of the- common law in taking for its guides judicial opinions, given after ai^ument, under the responsibility of determining the rights of parties in actual controversies, rather than the theories of scholars and commentators,, however learned or acute. It may be added that the legislature of the- commonwealth seem to have assumed the law upon this question to be settled In favor of excluding such evidence as was here of- fered. Before the policies in suit were made,. It was provided by St. 1861, c. 152, that in fire insurance, "the conditions of the insur- ance shall be stated in the body of the policy,, and neither the application of the insured nor the by-laws of the company, as such, shall be considered as a warranty or part of the contract." The legislature can hardly have contemplated that while separate writ- ings should pass for nothing, oral promises- might control the policy. Exceptions overruled. KEPEESENTATIONS. 133 MILLER T. MUTUAL BEN. LIFE INS. CO. (31 Iowa, 216.) Supreme Court of Iowa. June Term, 1871. Appeal from circuit court, Delaware coun- ty. Adams & Robinson, for appellant. De "Witt O. Cram and C. J. Rogers, for appellee. DAY, C. J. I. The defendant requested the liberate fraud upon the in- sured." The correctness of this instruction, as an abstract proposition, is conceded. It is said, however, that it assumes that the jury would be justified in finding, from the evidence, that the company had full knowl- edge that the risk was greater than an ordi- nary one. We have before seen that the company is affected by the knowledge of its agents ac- quired when actively engaged in procuring the application for tiie policy. The defend- ant, however, insists that there is nothing in the record which shows that either Case or Thornton had knowledge that Miller's habits had been intemperate. We think that the testimony of Rogers, as set forth In the statement of this ease, tends to establish this fact, and that the question of their knowledge was properly submitted to the jury. vn. It is claimed that the court erred in instructing the jury as follows: "If you find that Miller's death was produced by oth- er causes, then you should find for the plain- tiff on this branch of the case. The policy must be construed strictly against the de- fendant, and if you find that Miller's death was only contributed to by the intemperate use of liquor, then you must find for the plaintiff on this branch of the case. In or- der to avoid the policy, the defendant must satisfy you, by a preponderance of evidence, that the sole or paramount cause of Miller's death was caused by the intemperate use of intoxicating liquors." The defendant claims that, "if intemperance shortens life, it is a cause of death, within the meaning of the policy," and that the policy is thereby avoid- ed. It rarely, if ever, happens, that the in- temperate use of intoxicating drinks is in- dulged in for a considerable period without, to some extent, shortening life. The conse- quences of the construction contended for by the defendant would, therefore, be, that an Insurance company which had assured the life of one known to be intemperate, and which had charged a higher rate of insurance in consequence of such fact, could exonerate itself from liability upon the policy by show- ing that the life of the assured had been shortened by intemperance. A sound prin- ciple does not lead to consequences so un- just and unreasonable. A proximate cause of an effect is that which immediately pre- cedes and produces it, as distinguished from the remote, mediate or predisposing cause. When several causes contribute to death as a result, it may be extremely difficult to de- termine which was the remote and which the immediate cause, yet this difliculty does not change the fact that the -death is to be at- tributed to the proximate and not the mediate cause. Nor is the difficulty in questions of this kind any greater than that which arises in questions of negligence, contributory neg- ligence, and many others which are constant- ly the subjects of judicial investigation. That the policy is to be construed strictly against the company, see Catlin v. Insurance Co., 1 Sumn. 434, Fed. Cas. No, 2,522;' Wil- son V, Insurance Co,, 4 R. I. 142. The instruction given, we think, correctly reflected the law, VIU. The deposition of the plaintiff was 138 EEPUESEXTATIOJTS. introduced as follows: "Ten days before my husband died, and when Dr. Staples was first called, he stated that my husband had a severe attack of congestion of the lungs; on the day following he repeated this same lan- guage, and stated that I need not be alarmed if my husband was delirious, as congestion of the brain usually accompanied congestion of the lungs; and continued to remark that my husband had done work enough to kill any ordinary man, or, perhaps, two men, and that he had no doubt Injured himself by leaning against the desk." The attention of Dr. Staples w.as directed, upon the cross-examination, to this conversa- tion, and he stated that he thought he did not make the statements above detailed. The deposition was introduced for the purpose of impeachment. It is claimed that the statements were mere matters of opinion, and that, with respect to them, the witness cannot be impeached. The witness, as an expert, testified to mat- ters of opinion, and may be impeached by showing that, upon a former occasion, he had expressed a different opinion. Patchin v. Insurance Co., 23 N. Y. 268; Sanderson v. Nashua, 44 N. H. 492. IX. Some objections were made upon the trial to the introduction of testimony, which may be briefly considered: The evidence tending to show that Case and Thornton had knowledge that Miller's previous habits had been intemperate was proper, for the reasons already considered. The evidence showing that the certificates of Kogers and Sprague were incomplete when delivered to the agents was competent for the same reasons. The receipt for premium signed by Thornton as "general agent," con- stituted a link in the chain of testimony tend- ing to show the extent of Thornton's au- thority, and, although, alone, it would not establish the extent of his agency, yet, as- bearing upon that question, it was properly admitted, and even if erroneously admitted, it was, under the views herein expressed, error without prejudice. X. The errors considered embrace substan- tially all those insisted upon in the argument. As the cause must be reversed for the error already noticed, it is not necessary to con- sider whether the verdict is sustained by suf- ficient testimony. For the error of the court in submitting to the jury the materiality of the misstatements- alleged to exist in the answer of MUler, the judgment Is reversed. CONCEALMENT. 13S> NORWICH FIRE INS. CO v. BOOMER. (52 111. 442.) Supreme Court of Illinois. Sept. Term, 1869. Appeal from superior court of Chicago; William A. Porter, Judge. O. B. Sansum, for appellants. Waite & Clarke, for appellee. WALKER, J. This was an action of as- sumpsit, brought by appellee, in the superior court of Chicago, against appellants, on a pol- icy of insurance. The policy was issued and bears date on the third of April, 1867, and covers a frame packing and slaughter house, with the alley or pens attached, known as Boyington, Cash & Wilder's Slaughter and Packing House, in Chicago; also the engine and boiler, machinery and pipes, hoisting ma- chine and belts, and lard rendering tanks, water tanks and cooling vats, all contained in the building, for one year from that date, Jind insuring appellee against all immediate loss by fire, not exceeding $4,000. The policy contained several conditions, among which are, first, that the company shall not be liable if the applicant has made any erroneous representations materially af- fecting the risk; nor for loss if there was any prior or subsequent insurance without the written consent of the company; nor for loss of property owned by any other party, unless such interest is stated in the policy; second, the policy to become vitiated if the insured premises should become vacated by the re- moval of the owner or occupant for more than twenty days; third, the assured not to re- cover of the company any greater portion of the loss or damage than the amount insured bears to the whole sum Insured on the prop- erty. Within the year the property was part- ly destroyed by fire, and this action was brought to recover for the loss. After the fire, appellee took possession of the portion not destroyed, and sold it, and after deduct- ing expenses, it yielded the sum of $1,070. A trial was had, resulting in a verdict in favor of appellee, for $2,757.56, upon which judg- ment was rendered by the court. It appears that appellee, at the time the ap- plication was made, by the broker, only held a chattel mortgage on the property Insured, and it Is urged by appellants that, by faiUng to dis- close the nature of his Interest, the policy be- came void; that he was bound to disclose this as a material fact, and its suppression vitiated the policy. That he was bound to disclose all facts material to the risk, is no doubt true; but, in what respect it could be material that the company should know whether the inter- est was that of mortgagor or mortgagee, we are at a loss to perceive. It was, no doubt, ma- terial that he should have had an insurable in- terest, but it has, so far as we can find, never been held that the interest of a mortgagee was not of that character. AU that he was bound to disclose, unless interrogated, was, that he had an insurable interest, and this he did, and in that the representations of his application are true. He was not asked by the company to state the nature of his title, nor did the terms of the policy require that he should. If the company had deemed it material, they would have propounded the necessary ques- tion to learn the fact, and inserted a clause that the policy should be void if the nature of his interest had not been fairly disclosed. Had the question been asked, and appellee had given a false statement in answer, then, it may be, a different question would have been presented. That the company did not regard it material is clearly shown by the policy itself. We find, in limiting their hability, they say they will not be liable "for loss for property own- ed by any other party, unless the interest of such party be stated in this policy." From this condition it is apparent they deemed it unnecessary appellee should disclose his own interest. It, by implication, says he need not, and no other inference can be drawn from the language. It, however, discloses the fact that the company did regard it material, where one person insures the property of another, that the assured should state the nature of the in- terest of the owner in the property. Neither reason, authority, nor the contract of assur- ance, so far as we can see, required appellee, unless interrogated, to state the nature of his interest in the property insured. It is again urged that, inasmuch as the mortgagors paid the debt to appellee before the recovery in the court below, and the mort- gagee has sustained no loss, he is not entitled to recover. Had appellants paid this loss be- fore the mortgagors paid the debt to appellee, then the question of their right to subroga- tion would have been presented for considera- tion;' but, inasmuch as appellants had not done so, the questions presented are of a dif- ferent character. Had appellee applied for the policy, paid the premium, and effected the in- surance, and on the occurrence of this fire appellants had paid the loss, they would no doubt have been entitled to subrogation, by an assignment of the mortgage. In such a case, the insurance would be considered as a further security of the debt, and on the famil- iar principle that a surety who pays the debt may resort to the principal debtor for pay- ment; in such a case the insurer might, no doubt, resort to the mortgagor for payment. But in this case the mortgagors paid the premium, and obtained the policy, in pur- suance to an agreement with the mortgagee before it was effected. The mortgagors pro- cured it as a part of the security they agreed to give appellee for the debt they owed him. It was, then, in equity, their poUcy, and not appellee's, although in his name. Had the mortgagors paid the premium, and obtained the policy in their names, the question could not have arisen. Then why, when they, in pursuance of their agreement, pay the pre- mium should they not be regarded as the bene- ficial assured, when they shall have paid the ]40 CONCEALMENT. •debt and released the property? In such a case they seem to have strong equitable, as •well as legal, claims to pay for the loss, and should be permitted to use the name of the mortgagee to recover. Had they taken this policy in their own names, with the loss pay- able to appellee, according to his interest, and they had subsequently paid the debt, no one, we presume, would question their right to sue in the name of the mortgagee, arid recover for their own use. We understand it to be the settled law that, when the mortgagor or pledgor insures the property, and a loss occurs, he may recover "because he has an insurable interest in the property, and reason and justice require that ■when he pays the premium, although he in- sures in the name of the incumbrancer, and "he afterwards pays the debt, he shojild be permitted to recover for loss to the property. And this rule is supported by the authorities. King V. Insurance Co., 7 Cush. 1; Insurance ■Co. V. "Woodbury, 45 Me. 447; Kemochan v. In- surance Co., 17 N. Y. 428. The first of these osing the insurance is kept in ignorance of a material fact which ought to have been made known to the underwriter, and through such ignorance fails to disclose it." Now I will again examine the difCerent parts of this proposition. The duty relied upon— namely, that of communication by an agent or servant — cannot be a duty imposed in a particular ease by a specific order of the ■owner to his servant or agent, for, if so, the alleged infirmity in the policy will depend upon whether such order has or has not been given; it must therefore be a duty, if any, held to arise in contemplation of law necessa- rily by reason of the relation between owner and agent. And, as I have before stated, the alleged duty is useless for the purpose for which it is suggested unless the duty is a duty to give immediate information. I know of no such implied duty. I know of no agent or servant of a shipowner, still less of an owner of cargo, whose implied duty it is, by any implication which a court is justified in making, to communicate Immedi- ate Information of every or any accident hap- pening to the ship or cargo in the course of a voyage. The proposition is again, I ven- ture to say, obviously inaccurate In coupling concealment and misrepresentation as if the doctrines of insurance law were identical as to both. If the owner makes a misrepresen- tation, the policy no doubt cannot be en- forced, however much the owner may have been misled into making the representation. But with regard to concealment, in the sense of mere nondisclosure, the law is not the same as in the case of misrepresentation. The proposition then states "that the insurer is entitled to assume, as the basis of the con- tract between him and the assured, that the latter will communicate to him every ma- terial fact of which the assured has knowl- edge." This is undoubtedly correct, it be- ing the necessary consequence of the doc- trine of uberrima fides. But the proposition proceeds: "That the insurer Is entitled to assume that the assured will communicate to him every material fact of which the as- sured ought in the ordinary course of busi- ness to have knowledge." This branch as- sumes that the assured has not the knowl- edge; the doctrine of uberrima fides, there- fore, does not reach it; why the insurer has a right to assume that the assured will com- municate to him what the assured by the hypothesis does not know is a proposition which passes my comprehension. The prop- osition then lays down "that the insurer has a right to assume that the assured will take the necessary measures, by the employment of competent and honest agents, to obtain all due information." But the proposition, by using the phrase "the necessary meas- ures," assumes that, although the assured has taken every reasonable or even possible measure to employ competent and honest agents, he may have failed to succeed, and therefore have failed to take "the necessary measures." And it fails to touch the case of there being by accident or momentary neg- ligence of the agent a failure, although the agent is in every sense a competent and hon- est agent." It seems to me that this whole proposi- tion is a finely written deduction from the case of Gladstone v. King, 1 Maule & S. 35, but that as a business or legal proposition it will not bear close examination. It is further suggested in this case of Proudfoot V. Montefiore, 36 Law J. Q. B. 225, L. K. 2 Q. B. 511, that the proposition laid down in It rests on a ground of public policy. But in the first place it seems dif- ficult to see how public policy can be affect- ed by any circumstances relating to the power between the parties of enforcing or repudiating a contract of insurance any more than of any other contract. And sec- ondly, it seems dlflacult to reconcile the in- terference of the doctrine of public policy, in the case of a contract of insurance on ship or goods lost, or not lost, one step beyond affirming that the parties who are allowed by law to enter into this hazardous and well- nigh gambling speculation of whether a loss has or has not already happened must be equally informed or equally ignorant. I am, for all these reasons, of opinion that in this case the plaintiff was entitled to re- cover, and that the appeal should be dis- missed. LINDLEY, L. J., after stating the facts. The plaintiffs' counsel conceded that if the plaintiffs had themselves known of these facts and had concealed them from the de- fendant, he would not be liable on the pol- icy. The plaintiffs' counsel further conced- ed that if the policy in question had been effected through Rose, Murison & Co., and they had concealed from the defendant the information given by Murray to Murison, the defendant would not be liable to the plaintiffs on the policy. But the plaintiffs' counsel contended that as the plaintiffs themselves acted in good faith and In igno- rance of the facts disclosed to Murison, and did not effect the policy sued on through him or his firm, but through other agents who knew no more than the plaintiffs them- selves knew, the plaintiffs are entitled to recover on the policy. This was the view adopted by the learned judge who tried the action. The defendant, on the other hand, contends that the knowledge acquired by Murison, whilst he was endeavouring to ef- fect an insurance for the plaintiffs, must in point of law be imputed to them; and that, as between the plaintiffs on the one side and the defendant on the other, the plaintiffs rather than the defendant must suffer from the omission on the part of Murison to com- municate what he knew to the plaintiffs. In support of this contention certain authorities were referred to, which it is necessary to ex- amine. The first is FItzherbert v. Mather, 1 Term 148 CONCEALMENT. R. 12. That was an action on a marine policy on a cargo of oats (lost or not lost) belonging to the plaintiff. The policy was effected through a person of the name of Fisher. The oats were bought by Bun- dock, acting for the plaintiff, from a person named Thomas, who shipped them, and who by Bundocls's orders sent a bill of lading and Invoice to Fisher. Thomas also wrote to Fisher, stating that the oats had been shipped, and that the vessel on board which they were had sailed. After this letter was written, but before it could have left the town where it was posted, Thomas learned that the vessel was lost. But he said noth- ing about it, and sent no further letter, and Fisher knew nothing of the loss. He acted bona fide, and effected the insurance after he had received Thomas's letter above allud- ed to. It is not stated that this letter was shewn to the defendant, although there is some reason for supposing that It was. But even if it was not, still the information on which Fisher acted was obtained from Thomas, who was directed by Bundock, and it would seem also by the plaintiff, to com- municate with Fisher, and ThonM^ wrote to Fisher expressly that he might insure if he liked. Moreover, the plaintiff himself in- structed Fisher to insure as soon as the bills were sent him. The court construed this as meaning as soon as they came from Thomas. The court appears to have come to the conclusion that the plaintiff referred Fisher to Thomas for information, and thereby, in effect, through Thomas, supplied Fisher with defective information. The court held that the policy was effected by misrepresentation; that Thomas had been guilty, if not of fraud, at least of great neg- ligence; that the concealment by him from Fisher, and therefore from the underwriter, of the loss of the oats vitiated the policy, although both the plaintiff and Fisher acted in perfect good faith. It is to be observed that Mr. Justice Ashurst decided this case on the ground that Thomas's knowledge was to be treated as the knowledge of the plaintiff; but the rest of the court seem to have treated the case as one of direct mis- representation, though an innocent one so far as the plaintiff and Fisher were con- cerned. The next case is Gladstone v. King, 1 Maule & S. 35. This was an action on a policy on a ship lost or not lost The plain- tiffs were her owners, and they claimed to recover damages for an injury sustained by the ship, by getting on a rock, before the policy was effected. The captain of the ship had written to the plaintiffs after the accident, and before the policy was effected, but he had not alluded to the accident, and the plaintiffs knew nothing of it until after the ship arrived home. The court, never- theless, decided that the plaintiffs could not recover. The court held that it was the duty of the captain to inform the plaintiffs of the fact that the ship had been on a rock and sustained injury, and that his omission in this respect, by means of which the own- ers were prevented from disclosing the ac- ■ cident to the underwriters, operated as an exception of the particular risk out of the policy. Lord EUenborough, in this case, ap- pears to have been influenced by the consid- eration of the danger there would be to un- derwriters if captains were permitted to wink at accidents without hazard to the owners, and so always enable them to throw past losses on insurers. This case certainly went beyond Fitzherbert v. Mather, 1 Term R. 12, for the captain had nothing to do with the insurance, and he was not referred to by the plaintiffs for information. What, how- ever, he knew, was treated as impliedly known to the plaintiffs, although he did not tell them what he knew. The next case is Proudfoot v. Montefiore, 36 Law J. Q B. 225, L. R. 2 Q. B. 511. It was an action on an agreement to insure some madder belonging to the plaintiff. Rees was the plaintiffs agent at Smyrna to buy and ship madder for him, and Rees had bought and shipped for the plaintiff a cargo of madder on board a vessel which was lost soon after she sailed. Rees knew of the loss, and might have informed the plaintiff of it by telegram, but he purposely refrained from doing so in order that the plaintiff might be able to insure in ignorance of what had occurred. The plaintiff did In fact in- sure the cargo before he knew of the loss, and the slip was signed by the defendant in ignorance of what had happened. The court decided against the plaintiff, although he personally had acted in good faith and had concealed nothing within his personal •knowledge. The grounds of the decision are given on page 521 of the Law Reports, and page 236 of the Law Journal Reports: "Notwithstanding the dissent of so eminent a jurist as Mr. Justice Story, we are of opin- ion that the cases of Fitzherbert v. Mather, 1 Term R. 12, and Gladstone v. King, 1 Maule & S. 35, were well decided, and that if an agent, whose duty it Is in the ordinary course of business to communicate informa- tion to his principal as to the state of a ship and cargo, omits to discharge such duty, and the owner, in the absence of informa- tion as to any facts material to be com- municated to the underwriter, effects an in- surance, such insurance will be void on the ground of concealment or misrepresentation. The insurer is entitled to assume, as the ba- sis of the contract between him and the assured, that the latter will communicate to him every material fact of which the assured has, or, in the ordinary course of business, ought to have, knowledge, and that the lat- ter will take the necessary measures, by the employment of competent and honest agents, to obtain through the ordinary channels of intelligence In use In the mercantile world all due information as to the subject-matter of the insurance. This condition is not com- plied with where, by the fraud or negll- CONCEALMENT. 149 gence of the agent, the party proposing the insurance Is kept in ignorance of a material fact which ought to have been made linown to the underwriter, and, through such igno- rance, fails to disclose It." The last authority which it is necessary to refer to is Strlbley v. Imperial Marine Ins. Co., 45 Law J. Q. B. 396, 1 Q. B. Div. 507. It was an action by the owners of a ship for a total loss, and one point raised was whether the fact that the captain had not informed the plaintiff, and that he, therefore, had not informed the defendant, of the fact that the vessel had encountered a storm and lost an anchor before the policy was effected vitiated the policy. It was held that it did not I understand this decision as in substance similar to Gladstone v. King, 1 Maule & S. 35. The principle on which Fitzherbert v. Math- er, 1 Term E. 12, and Gladstone v. King, 1 Maule & S. 35, are based has been much dis- cussed, and stated by the court in Proudfoot V. Monteflore, 36 Law J. Q. B. 22o. L. R. 2 Q. B. 511. Mr. Justice Story, in Ruggles v. General Interest Ins. Co., 4 Mason, 74, Fed. Cas. No. 12,119, declined to follow it. His view, however. Is opposed to that of the su- preme court of the United States (12 Wheat. 408), and to that of Phillips and Duer (sec- tion 549), and has not been adopted in this country. It appears to me to be established, by the cases to which I have referred, that in order to prevent fraud and willful igno- rance on the part of persons effecting insur- ance, no policy can be enforced by an as- sured who has been deliberately kept in ignorance of material facts by some one whose moral, If not legal, duty it was to inform him of them, and who has been kept In such ignorance purposely in order that he might be able to effect the insurance with- out disclosing those facts. The person who allows the assured to effect a policy under such circumstances as I am now supposing does not act fairly to the underwriters; and although such person may owe them no legal <3uty, the assured cannot in fairness hold the underwriters to the contract into which they have in fact entered under these cir- cumstances. The assured may himself be perfectly innocent when he effects the insur- ance, but as soon as he is informed of the facts it ceases to be right on his part to take advantage of the concealment without which that insurance would not have been effected. In other words, the assured cannot take ad- vantage of the ignorance in which he has been improperly kept by one who ought to have told him the truth. If It was the legal duty of the i)€rson who has so kept him in ignorance to inform him of the facts C'U- cealed, it is, I think, clearly settled that he cannot avail himself of his own personal ignorance of them. But if there is no such legal duty to him. the same consequence ap- pears to me to follow If there was a moral duty to tell him the truth. He may exclude all legal duty to be informed of what has oc- curred by giving instructions dispensing with information, and such instructions may be given for reasons which exclude all Influence of fraudulent Intent on his part But in such a case it appears to me that he cannot en- force a contract of Insurance obtained by such unfair means as those supposed. In my opinion Duer (volume 2, § 647) and Phillips (volume 1, § 537) are both right in contend- ing that fraud on the part of the assured is not essential to discharge the underwriters on the ground of misrepresentation or conceal- ment. It is a condition of the contract that there is no misrepresentation or concealment either by the assured or by any one who ought as a mattter of business and fair deal- ing to have stated or disclosed the facts to him or to the underwriter for him. If this view of the law be correct, it fol- lows that the plaintiffs canhot recover in this action. The omission of Mimson to tell the plaintiffs what he knew, and the remarkable course his firm took of discontinuing negotia- tions themselves and of puttting the plain- tiffs in direct communication with Rose, Thompson, Young & Co., are only to be ex- plained upon the theory that the plaintiffs were purposely kept in ignorance in order that they might insure on more favourable terms than they otherwise might have done. It appears to me to have been clearly Muri- son's duty to the plaintiffs to give them the information he had, so that they might, by disclosing what they knew and increasing their offer, cover the increased risk. Murl- son was not a stranger under no obligations to the plaintiffs. He was employed by them to effect an insurance, and whilst so employed he acquired important knowledge respecting the ship. I cannot doubt that it was his duty to disclose this to the plaintiffs, and not to let them go on to insure in ignorance of what it was of the utmost importance they should know. The plaintiffs cannot, in my opinion, obtain any advantage from this breach of duty to themselves. As between themselves and the defendant the plaintiffs are the per- sons to suffer from the mistaken view their own agents took of their own duty. Their conduct vitiates this policy, although it was not effected through them nor until after their agency had ceased, for had it not been for their breach of duty the policy could never have been effected for the premium which the plaintiffs paid. I have not based my judgment on the maxim that the knowledge of an agent is the knowl- edge of his principal, for, like the master of the rolls, I distrust such general expressions, which are quite as likely to mislead as not But, for the reasons I have stated, the de- cision of Mr. Justice Day was, in my opin- ion, erroneous, and judgment ought to be entered for the defendant, with costs here and below. LOPES, L. J. I have arrived at the same conclusion as Lord Justice LINDLBY, but 150 CONCEALMENT. the case Is so important tbat I wish to give a separate judgment stating my reasons. It is unnecessary to restate the facts of this case. They have been already fully stated, and are undisputed. I- propose shortly to state the conclusion at which I have arrived after much consideration, and my reasons for that conclusion. It is clear law that if the policy sued on In this action had been effected through the agents to whom the material communication was made, and who suppressed it, the as- sured, though ignorant of the communication, could not have recovered from the under- writers, because there had been a conceal- ment of a material fact by the agent of the assured. The knowledge of the agent in such circumstances would be the knowledge of the principal— a phrase which I understand to mean, that the principal Is to be as respon- sible for any knowledge of a material fact acquired by his agent employed to obtain the insurance as if he had acquired it himself. In what does the present case differ from the one above stated, where the law is clear? It differs only In this, that here the policy was effected, not through the agent who had ac- quired and concealed the information in or- der that his principal might effect an insur- ance upon favourable terms, but through an- other agent subsequently employed, who, as well as his principal, was innocent of any previous concealment. The plaintiffs' contention is that it is only the concealment of material facts by the agent who effects the policy that vitiates it, not the concealment by any other agent. And the learned judge in the court below so held. The question raised seems to be whether, If an agent employed to effect an insurance purposely omits to communicate material facts which came to his knowledge during his employment (facts which it was his duty to communicate to his principal), it is a concealment which wiU avoid an insur- ance effected by an innocent principal through another agent ignorant of any such concealment. Authority and principle compel me to an- swer that question in the affirmative. I will first deal with the authorities. The earliest case is Fitzherbert v. Mather, 1 Term R. 12. In that case it seems to have been held that when the conduct of the assured was wholly free from blame or suspicion, his policy was avoided by the concealment and virtual misrepresentation of an agent who had no authority to procure or direct the Insurance. He was the consignor and shipper of the goods Insured. The judges thought the letter was a misrepresentation. The court clearly thought that it was the duty of the agent to have given information of the loss. The concealment of the agent was the ground of the decision. The Insured was held to be affected by the concealment of an agent other than an agent employed to obtain an insurance. The next is Gladstone y. King, 1 Maule & S. 35. The insurance was on a ship on a specified voyage; it was made after the risk had commenced, but by its terms (lost or not lost) it related to their commencement, and covered all prior losses. When the pol- icy was effected no such loss was known to the owners to have occurred, but a partial loss had in fact occurred, wfiich the master had neglected to communicate, although the information might have been given in time to have governed the terms of the insurance. He had in fact, written to his owners after the loss had happened, and they were in possessidn of his letter when they effected the policy; but it contained no mention of the loss; nor does it appear from the report that this letter was shewn to the underwrit- ers, or that any representation was made to them founded upon its contents. In re- spect to them the case was simply that of the concealment of a loss which was un- known to the assured, but which their agent was bound to communicate, and might have communicated — and It was so treated by aU the judges. It was for the recovery of the partial loss that the action was brought, and it was the opinion of the court that the con- cealment of the master, although, not being fraudulent, it did not operate to avoid the policy, yet exonerated the underwriters from the payment of the loss. Lord EUenborough remarked that, unless this rule was adopted, the master would be instructed to remain silent in all similar cases, and then the un- derwriter would incur the certainty of be- ing rendered liable for all antecedent av- erage losses that he could not prove to have been known to the assured. These decisions establish that the knowl- edge of an agent not authorised to Insure may be Imputed to his principal, so that his silence shall have the effect of a conceal- ment avoiding the policy and exonerating the underwriters from the loss. They seem to me a fortiori cases to the present. The mas- ter had nothing to do with the insurance. His knowledge was, however, imputed to the plaintiffs, although he did not communicate to them what he knew. Proudfoot V. Monteflore, 36 Law J. Q. B. 225, L. R. 2 Q. B. 511, Is a comparatively re- cent case. The plaintiff, in Manchester, em- ployed an agent at Smyrna, who purchased and shipped for him there a cargo of madder of which he advised him on the 12th of Jan- uary and forwarded the shipping documents on the 19th. The ship sailed on the 23rd of that month, and went ashore the same day, whereby there was a total loss of the cargo. Next day the agent had intelligence of the loss, and might have telegraphed the casu- alty to his principal immediately, but re- frained on purpose that his principal might insure the cargo. On the 26th, which was the earliest post-day for England, he an- nounced the loss to his principal by letter. Meanwhile, before the arrival of that letter, but after the loss had been posted in Lloyd's Lists, the principal effected an insurance on CONCEALMENT. 151 the cargo. It was held that the policy was void, on the ground of "concealment of ma- terial facts known to the agent, and there- fore known to the principal. All the cases, both English and American, were reviewed, and the judgment of the court, consisting of Chief Justice Cockburn, Mr. Justice Black- burn, and Mr. Justice Shee, was delivered by Chief Justice Cockburn; and unless that judgment is overruled it is clear that an as- sured cannot recover on a policy, when he has been designedly kept in ignorance of ma- terial facts by somebody whose duty it was to communicate them. The chief justice, in his judgment, says, "There is no fraud or undue concealment by the plaintiff (the assured) of a material fact within his personal knowledge." On the oth- er hand, it is clear that the fact of the loss of the vessel might have been communicated to him by the telegraph, but was purposely kept back by the agent for the fraudulent purpose of enabling the plaintiff to insure. We think it clear, looking to the position of Rees as agent to purchase and ship the car- go for the plaintiff, that it was his duty to communicate to his principal the disaster which had happened to the cargo, and, look- ing now to the general use of the electric tel- egraph, to communicate with his employers by the speedier means of communication. Further, as the chief justice says, "If an agent, whose duty it is, in the ordinary course of business, to communicate informa- tion to his principal as to the state of a ship and cargo, omits to discharge such duty, and the owner, in the absence of information as to any fact material to be communicated to the underwriter, effects an insurance, such insurance will be void on the ground of con- cealment and misrepresentation." Then come these very important words: "The in- surer is entitled to assume, as the basis of the contract between him and the assured, that the latter will communicate to him ev- ery material fact of which the assured has, or, in the ordinary course of business, ought to have knowledge, and that the latter will take the necessary measures, by the em- ployment of competent and honest agents, to obtain, through the ordinary channels of Intelligence in use in the mercantile world, all due Information as to the subject-matter of the Insurance. This condition is not com- plied with where, by the fraud or negligence of the agent, the iwrty proposing the insur- ance is kept in ignorance of a material fact which ought to have been made known to the underwriter, and through such ignorance fails to disclose it" The case we are now considering is a much stronger case than Proudfoot v. Montefiore, 3G Law J. Q. B. 225, L. R. 2 Q. B. 511, for here the agent who designedly withheld ma- terial information was at the time employ- ed by the assured to effect an Insurance. The case of Strlbley v. Imperial Marine Ins. Co., 45 Law J. Q. B. 396, 1 Q. B. Div. 507, does not appear to me to carry the matter beyond the cases already cited. The authorities, therefore, support the con- clusion at which I have arrived. I fail, however, to see why in principle there should be any distinction between the case where the insurance is effected by the agent who obtained the information, and where it is effected by another agent em- ployed about the insurance. In both cases the assured, by a suppression of what ought to have been communicated to him, obtains an insurance which he would not otherwise have got. The underwriters are as much misled in the one case as the other. In both cases there is misconduct on the part of the agent of the assured; In both cases the underwriters are free from blame. It seems to me unjust and against public pol- icy that a person, through whose agent's fault the mischief has happened, should prof- it, to the detriment of those who are in no way in fault. On the ground of the implied contract be- tween the parties, I am of opinion, too, the defendant is entitled to succeed. The con- cealment by an agent who is bound to give the intelligence violates the undertaking on which the contract is founded in the same way as a similar concealment by a prin- cipal. The underwriter has a right to be- lieve, when he accepts the risk, that he is placed in possession of all the Information which the assured himself has, or which it was the duty of any agent of his to com- municate. The underwriter does not intend to insure risks concealed by some agent em- ployed to obtain an insurance, who ought to have communicated them to his principal, any more than he does risks concealed by the agent actually effecting the Insurance, or concealed by the principal himself. It is admitted that freedom from misrep- resentation or concealment is a condition precedent to the right of the assured to in- sist on the performance of the contract, so that on a failure of the performance of the condition the assured cannot enforce the con- tract I entirely agree; but it is insisted now that if the misrepresentation or concealment is by an agent It does not vitiate the policy where the principal is innocent, unless the agent be the agent employed to effect the in- surance. I cannot accede to that I think there must be a freedom from misrepresenta- tion or concealment not only so far as the agent by or through whom the policy is ef- fected is concerned, but in respect of any agent employed by the assured to obtain the policy whose duty it was to communicate material facts to his principal. Any more limited construction, to my mind, would be against public policy, against principle, contrary to authority, and would tend to encourage fraud and collusion In transactions where uberrima fides is essen- tial. The appeal in my opinion must be allowed. Appeal allowed. 152 CONCEALMENT. PEOUDPOOT V. MONTEFIORE. (L. K. 2 Q. B. 511.) Court of Queen's Bench. June 15, 1867. Jones, Q. C. (Temple, Q. C, with him), for plaintiff. Mr. Cohen, for defendant. Slater & Dommett, attorneys for plaintiff. Pearce, Phillips & Pearce, attorneys for de- fendant. COCKBURN, C. J. This was an action against the defendant, as chairman of the Alliance Marine Insurance Company, for the recovery of damages from the company in respect of the company not having delivered to the plaintiff a policy of insurance on cer- tain goods shipped on board a vessel called the Anne Duncan, pursuant to an agreement alleged by the plaintiff to have been entered into between him and the company, and in respect of the company not having paid the simi of money which the plaintiff alleges would have become due on such policy if the same had been so delivered. The agreement was for insurance on a car- go of madder, lost or not lost, shipped at Smyrna, on a voyage from Smyrna to Liver- pool, on board the ship Anne Duncan, for and on account of the plaintiff, and consigned to him by one T. B. Rees, of Smyrna. The plaintiff, a merchant at Manchester and Liverpool, dealt largely in madders in the Smyrna market, and Rees, being resident at Smyrna, was employed by him at a sal- ai-y of £800 a year to make purchases of madder on his account, and to ship and con- sign the cargoes to him. The cargo in ques- tion was purchased and shipped by Rees in the course of his employment as such agent. The ship, with the cargo on board, sailed from Smyrna on the 21st of January, 1861, but again brought up in the Gulf of Smyrna on the same day. She set sail again on the 23rd, but was stranded in the course of that day, and became a wreck. The cargo be- came a total loss. Intelligence of the strand- ing of the ship was communicated to Rees on the morning of the 24th. On the 26th, which was the first post day, he communi- cated by letter to the plaintiff the loss of the vessel; and the fact that though the cargo had been got out, yet as the vessel had had 12 feet of water in the hold, the greater part of the cargo would be seriously damaged. Having communicated this information, the letter proceeds thus: "I hope to goodness you are fully insured. On the 12th instant I forwarded you invoice and weights of the shipment by her, which gave you plenty of time to effect insurance. Lloyd's agents have telegraphed the disaster, which will reach London before my letter of the 19th in- stant, inclosing bill of lading, i I did not dare telegi-aph to you, for when once you had 1 The telegram was received, and the loss pub- lished in Lloyd's List of the 29th of January; but neither the plaintiff nor the company's agent was aware of it. the intelligence in hand you were prevented from insuring." On the 31st of January the plaintiff, after receipt of the letters from Rees of the 12th and 19th of January, but prior to the receipt of that of the 26th, gave instructions to effect the policy, and the slip was signed on the same day by the com- pany's agent at Manchester. There was, therefore, no fraud or undue concealment by the plaintiff of a material fact within his personal knowledge. On the other hand, it Is clear that the fact of the loss of the vessel and damage to the car- go might have been communicated to him by Rees by means of the telegraph, but was pur- posely kept back by the agent for the fraud- ulent purpose of enabling the plaintiff to in- sure. We think it clear, looking to the posi- tion of Rees as agent to purchase and ship the cargo for the plaintiff, that it was his duty to communicate to his principal the dis- aster which had happened to the cargo; and, looking to the now general use of the electric telegraph, in matters of mercantile interest, between agents and their employers, we think it was the duty of the agent to com- municate with his employers by this speedier means of communication. From the letter of the agent it appears that, but for the fraud- ulent motive for his silence, he would, in the ordinary course of his duty, have conveyed the intelligence of the loss to his employer, and would have availed himself of the tele- graph for that purpose. Upon the above facts, the question arises whether the plaintiff, the assured, is so far affected by the knowledge of his agent of the loss of the vessel and damage to the cargo as that the fraud thus committed on the under- writer, through the Intentional concealment of the agent, though innocently committed so far as the plaintiff is concerned, will afford a defence to the underwriter on a claim to en- force the policy. Two cases decided in this court, one in the time of Lord Mansfield, the other in that of Lord EUenborough, established the aflSrma- tive of this proposition. In the case of Fitz- herbert v. Mather, 1 Term R. 12, 16, where an agent of the assured was employed to ship a cargo of oats, and to communicate the shipment to another agent who was em- plojed to effect an assurance, an omission on the part of the former, who had written to announce the sailing of the ship, on the ship having afterwards got on shore, to communi- cate that fact, which he might have done by the same post, was held fatal to the insur- ance. Ashurst, J., observes: "On general principles of policy, the act of the agent ought to bind the principal; because it must be taken for granted that the principal knows whatever the agent knows. And there Is no hardship on the plaintiff; for if the fact had been known the policy could not have been effected." BuUer, J., says: "Though the plaintiff be innocent, yet if he built his in- formation on that of his agent, and his agent CONCEALMENT. 153 be guilty of a misrepresentation, the princi- pal must suffer. It is the common question «very day at Guildhall, when one of two in- nocent persons must suffer by the fraud or negligence of a third, which of the two gave credit. Here it appears that the plaintiff trusted Thomas (the agent), and he must therefore take the consequences." In the case of Gladstone v. King, 1 Maule & S. 35, 3S, which was an action on a policy on a ship "lost or not lost," the master had omitted to communicate, when writing to his owners, the fact of the ship having been driv- en on a rock, a fact as to which, on arriving at the port of discharge, he made a protest, detailing the accident and stating that the ship's bottom must have been chafed; and the owners, in ignorance of the accident, had ef- fected an insurance. On these facts it was held that the captain was bound to communi- oate the fact, and, for want of such com- munication, the antecedent damage was an implied exception from the insurance, and the plaintiffs could not recover the loss aris- ing from the repairs rendered necessary by the accident. "If," says Lord EUenborough, "the captain might be permitted to wink at these circumstances without hazard to the own- ei-s, the latter would in all such cases in- struct their captain to remain silent; by which means the underwriter at the time of subscribing the policy would incur a certainty of being liable for an antecedent average loss. To prevent such a consequence, and consider- ing that what is known to the agent is im- pliedly known to the principal, and that the captain knew, and might have actually com- municated to the plaintiffs, the cause of dam- age, so as to have apprised them of it before the time of effecting the policy, I think that no mischief will ensue from holding in this case that the antecedent damage was an im- plied exception out of the policy. If the prin- ciple be new, it is consistent with justice and convenience; and there being no fraud im- puted to the captain in the concealment will not alter the case." An eminent authority, the late Mr. Justice Story, has, however, declined to be bound by these decisions. In a case (Ruggles v. In- surance Co., 4 Mason, 74, Fed. Cas. No. 12,- 119) tried before him on a policy of insur- ance effected after a total loss, where the master had omitted to give intelligence of the loss to his owner, with the fraudulent design of enabling him to make an insurance, and the insurance had been effected by the owner in ignorance of the loss, that learned judge held that, as the owner at the time of pro- curing the insurance had no knowledge of the loss, but acted with an entire good faith, he was not precluded from recovering, and that the policy was not rendered void by the omis- sion of the master to communicate intelligence of the loss, although such omission was wil- ful and fraudulent The case being taken to a court of error (12 Wheat 408), the latter up- held the decision; not indeed, on the grounds taken by Mr. Justice Story, but on the very unsatisfactory, and, as we think, untenable ground, that by the total loss of the vessel the master had wholly ceased to be the agent of the owner, and had become the agent of the underwriters. From the language of the judgment, it may be inferred that if the com-t had considered that the relation of the master to his owners had not been interrupted by the loss of the vessel, they would not have up- held the decision appealed from. The ruling of Mr. Justice Story has been discussed by Mr. Duer, in his admirable work on Insur- ance (volume 2, p. 418), and we think the reasoning of the learned writer fully estab- lishes his conclusion as to the ruling having been erroneous. Notwithstanding th'e dissent of so eminent a jurist as Mr. Justice Story, we are of the opinion that the cases of Fitzher- bert V. Mather, 1 Term R. 12, and Gladstone V. King, 1 Maule & S. 35, were well decided; and that if an agent, whose duty it is, in the ordinary course of business, to communicate information to his principal as to the state of a ship and cargo, omits to discharge such duty, and the owner, in the abser.ce of in- formation as to any fact material to be com- municated to the underwriter, effects an in- surance, such insurance will be void, on the ground of concealment or misrepresentation. The insm-er is entitled to assume, as the basis of the contract between him and the assured, that the latter will communicate to him eveiy material fact of which the assured has, or, in the ordinary course of business, ought to have knowledge; and that the latter will take the necessary measures, by the employment of competent ana honest agents, to obtain, through the ordinary channels of intelligence in use in the mercantile world, all due infor- mation as to the subject-matter of the insur- ance. This condition is not complied with where, by the fraud or negligence of the agent the party proposing the insurance is kept In ignorance of d. material fact, which ought to have been made known to the under- writer, and through such ignorance falls to disclose it. It has been said, indeed, that a party desir- ing to insure is entitled, on paying a corre- sponding premium, to insure on the terms of receiving compensation in the event of the subject-matter of the insurance being lost at the time of the insurance, and that he ought not to be deprived of the advantage, which he has paid to secijre, by the misconduct of his agent But to this there are two answers: First, that, as we have already pointed out, the implied condition on which the under- writer undertakes to insure — not only that ev- ery material fact which is, but also that ev- ery fact which ought to be, in the knowledge of the assured, shall be made known to him — is not fulfilled; secondly, as was said by the court in Fitzherbert v. Mather, 1 Term R. 12, 16, where a loss must fall on one of two in- nocent parties through the fraud or negligence of a third, it ought to be borne by the party 154 CONCEALMENT. by whom the person guilty of the fraud or negligence has been trusted or employed. By thus holding, we shall prevent the ten- dency to fraudulent concealment on the part of masters of vessels and agents at a distance, in matters on which they ought to communi- cate information to their principals, as also any tendency on the part of prinlcpals to en- courage their servants and agents so to act. For these reasons our judgment must be for the defendant. Judgment for the defendant. INSUKANCE AGENTS. 1§5 CONTINENTAL INS. CO. v. RUCKMAN. (20 N. E. 77, 127 111. 364.) Supreme Court of Illinois. Jan. 26, 1889. Appeal from appellate court, Fourth dis- trict. Baker, McNulty & Baker, for appellant Wise & Davis, for appellee. BAIIiEY, J. This was a bill in chancery, brought by Stephen Ruckman against the Continental Insurance Company of the city of New Yorii, praying for the reformation of a policy of insurance, and for a decree for the amount of the complainant's loss and damage by fire to the property insured. The policy in question bore date March 24, 1SS4, and insured the complainant, for the term of three years, against loss or damage by fire, in the sum of $400, on his one-story, frame, shingle-roof dwelling-house, and $600 on his log bam, situate in St. Charles county. Mo. The following facts, shown by the com- plainant's evidence, are in no way contra- dieted: The policy was obtained by the complain- ant from the defendant through the agency of one MUne, an employe of Whipple & Smiley, the defendant's local agents at Alton, lU. On the day next prior to the date of the policy MUne came to the complainant at his place in St. Charles county. Mo., and solicit- ed said insurance. The complainant express- ed a willingness to take out a policy on said buildings, but told Milne that he expected to have them rented, and that sometimes they might be vacant 5, 10, or 15 days, and asked him if that would make any difference vyith the insurance. Milne assured him that. If they did not remain vacant to exceed 30 days, the insurance would not be afCected, and agreed that the policy should so provide; but that, if the vacancy should continue for a longer period, it would be necessary for the complainant to notify the company, and get a permit for a further period of 30 days. On these terms the complainant agreed to take the policy. The next day he went to the office of Whipple & SmUey for the policy, and found Milne there alone, no other per- son being in the office. Milne thereupon took a blank policy, filled it up, and delivered It to the complainant, and received from him the premium. The complainant is an illiter- ate man, not being able to read or write, and that fact was known to Milne at the time he filled up and delivered the policy. On re- ceiving it, the complainant asked Milne whether the clause in relation to the vacancy of the buildings was in it, and was told by him that it was, and the complainant had no knowledge that the contrary was the fact until after the destruction of the buildings by fire. In point of fact, the condition agreed up- on was not in the policy, but among its condi- tions was one providing that, if the buildings insured became unoccupied without the con- sent of the company indorsed thereon, the policy should be void. A tenant who went Into possession March 1, 1885, continued to occupy the premises, using the house for a dwelling, and the bam for keeping therein his domestic animals, his hay, and other per- sonal property, until October 21, 1886, at which date he moved out of the house, leav- ing It unoccupied, and moved into another house about a quarter of a mile distant there- from. On the 1st day of November, 1886, the house and barn were both destroyed by fire, the house at that time remaining unoc- cupied; the former tenant, however, still re- taining the key to the bam, which he kept locked, and having therein a load of hay, a hay frame, 12 bushels of potatoes, and some lumber. Proofs of loss were furnished by the complainant to the insurance company, showing that the house was unoccupied at the date of the loss, and the defendant there- upon refused to pay the loss; basing its refusal upon the alleged breach of the condi- tion of the policy relating to the occupancy of the buildings. The cause was heard on pleadings and proofs, and a decree rendered reforming the policy by inserting therein a provision that the buildings insured might remain vacant and unoccupied 30 days, but no longer, with- out notice to the defendant; and also de- creeing that the defendant pay the complain- ant, within 10 days, the sum of $1,049.50, with legal interest thereon from the date of the decree, together with costs of suit, and that, in default of such payment, execution issue therefor. From this decree the de- fendant appealed to the appellate court, where said decree was affirmed, and by a fur- ther appeal the defendant has brought the record to this court. It is urged, as a ground for the reversal of the decree, that the complainant failed to perform the condition of the policy in rela- tion to preliminary proofs of loss. It is not disputed that proofs were served, consisting of a statement in relation to the circum- stances of the loss made by the complainant under oath, and a certificate by a justice of the peace residing in the vicinity of the build- ings destroyed. It may be that these proofs failed in some particulars to answer all the requirements of the policy, but whether they did or not is wholly immaterial, since the defendant, on receiving the proofs, instead of pointing out the deficiencies therein, and requiring a further statement and certificate, refused to pay the loss; placing its refusal wholly upon the ground that the condition prohibiting a vacancy of the buildings, with- out notice and consent, had been broken. Where proofs of loss are served, and re- tained by the insurance company without ob- jection, and the company refuses to pay the loss, placing its refusal upon some ground other than defects in the proofs, any further performance of the condition in relation to ir,6 INSUUANCE AGENTS. proofs Is waived, and the company is es- topped, when sued on its policy for the loss, to make any formal objections to the proofs. Insurance Co. v. Dunmore, 75 111. 14; In- surance Co. V. Cary, 83 HI. 453; Insurance Co. V. Ward, 90 111. 550; Insurance Co. v. Tucker, 92 111. 64; Grange Mill Co. v. West- em Assur. Co., 118 111. 396, 9 N. E. 274; Scammon v. Insurance Co., 20 111. App. 500. The ground, however, for a reversal of the decree, upon which reliance is chiefly pla- ced by the defendant, is that Milne was not the defendant's agent, and had no authority to stipulate on its behalf for a clause in the policy permitting the buildings insured to become and remain vacant and unoccupied for 30 days without invalidating the insur- ance. The contention is that Milne was merely an agent or employ^ of Whipple & Smiley, and that the maxim, "delegatus non potest delegare," applies. Whipple & Smiley, though representing their principal in a particular locality, or within a limited territory, and therefore call- ed "local agents," were in fact general agents of the defendant in the matter of issuing policies. They were not only appointed agents, but supplied with blank policies, properly signed by the company, which they were authorized to fill up, countersign, and deliver to the assured. The rule is well es- tablished that this constituted them the gen- eral agents of the insurers in the matter of soliciting and accepting risks, agreeing upon and settling the terms of insurance, and car- rj'lng the same into effect by issuing the poli- cies. Pitney v. Insurance Co., 65 N. Y. 6; Insurance Co. v. Kinnier's Adm'x, 28 Grat 88; Viele v. Insurance Co., 26 Iowa, 9; Car- roll V. Insurance Co., 40 Barb. 292; Insur- ance Co. V. Maguire, 51 111. 342; May, Ins. «126. Whipple & Smiley, possessing, as they did, the powers of general agents in the matter of making contracts of insurance and issuing policies, will be presumed to have possessed competent authority to stipulate for the In- sertion in the Insuraice contract with the complainant of the clause in question relating to the occupancy of the buildings to be in- sured. Such stipulation was clearly within the apparent purview of their agency, and, unless there were limitations upon their au- thority, of which the complainant had notice at the time the contract was made, the de- fendant cannot now set up want of authority in them. But it Is said that the complainant was notified by the terms of the policy which he received that no agent of the insurance company had authority to enter into a con- tract of insurance upon any other terms or conditions than those embodied in the blank policies furnished by the defendant to Whip- ple & Smiley. Those blanks, it is true, con- tained the following condition: "It is further understood and made a part of this con- tract that the agent of this company has no authority to waive, modify, or strike from this policy any of its printed conditions." That this clause cannot have the effect here contended for is apparent from either of two considerations. At the time the contract of Insurance was agreed upon, which was the day next prior to the delivery of the policy, the complain- ant, so far as the evidence shows, had no no- tice that any such clause was contained in the company's blanks. And it is doubtful whether even the delivery of the policy to him was notice of its contents, whan that fact is taken in connection with his inability to read it, and Milne's assurance that it was drafted in accordance with the contract. The other reason is that the clause above quoted, when the printed conditions of the policy are subjected to the strict rule of in- terpretation which properly applies to them, neither is, nor purports to be, a limitation upon the power of the company's agents in agreeing upon and settling the terms of the contract of insurance. It is a limitation up- on the powers of agents to waive, modify, or strike from the policy any of its printed con- ditions. A waiver is the voluntary yielding up by a party of some existing right, but, until the contract is consummated, the com- pany has no rights which are susceptible of waiver, nor can any condition be properly said to be modified or stricken from a policy until there is a policy; that is, until after the terms of the contract have been agreed upon, and the policy issued. Clearly, the clause in question was intended as a limita- tion upon the powers of agents to waive or modify the terms of a policy after it has been issued, and not upon their power to agree upon and settle the terms of the policy prior to its issue. Whipple & Smiley being general agents, could they employ Milne to perform the duties of their agency, and make his acts binding on the defendant? The facts are that Whip- ple was a gentleman advanced in years, who gave but little attention to the duties of the agency. Smiley was an employg in the Al- ton National Bank, and during banking hours his duties usually required his attendance at the bank. Under these ciicomstances, Milne was employed by the firm to assist them in their insurance business. He did the gen- eral office work; kept the books of the firm; conducted their correspondence; received the premiums paid at the office, and to some ex- tent collected those which were paid else- where; filled up policies, all except counter- signing; and the evidence tends to show that, whenever he could, he acted as solicitor for the firm ;n procuring insurance, and that when he had negotiated a policy with any particular person, and expected him to call for it, he would so inform the firm, and a blank policy, duly countersigned, would be left with him, to be by him filled up and de- livered. The employment of Milne by the firm, and the general nature of his duties, seems to have been known to the defendant, INSURANCE AGENTS. 157 as the defendant's state agent is shown to have frequently visited the oflSce of the firm while Milne was in its employ. As to whether, under these circumstan- ces, general agents can delegate their au- thority, so as to bind their principal by the acts of their sub-agent, the authorities are not altogether agreed. The position taken by defendant's counsel which is entitled to most consideration is that agents to whom are committed duties which require the ex- ercise of judgment and discretion cannot delegate their authority, for the reason that such agency is from its nature personal; the principal having contracted for the personal skill and judgment of the agents selected. In support of this view, we are cited to a very able discussion in MeClure v. Insurance Co., 4 Mo. App. 148, where it is held that a general agent, with power to issue policies of insui-ance. the signing and delivery of which involve passing upon the character of risks, and consequently (Mull for the exercise of discretion and judgment, cannot delegate his powers as such agent to another. Without expressing any dissent from the doctrine of that decision, and others which take a similar view, we are of the opinion that the present case falls within a quite dif- ferent rule In that case the question was whether any valid policy had been issued by the defendant to the plaintiff. The acts there challenged as having been performed by virtue of a delegated authority embraced the passing upon the character and desira- bility of the risk, and its acceptance on be- half of the insurer, — acts clearly involving the exercise of discretion and judgment In the present case no question is raised as to the validity of the policy as issued. No fault is found with the character of the risk, nor is the validity of Milne's acts, by which it was accepted and the policy exe- cuted, in any way challenged. The defend- ant received the premium, and keeps it, and proceeds upon the assumption that the pol- icy was properly issued, and correctly em- braces the terms of a valid contract of in- surance with the complainant. The defense is based solely upon an alleged breach of one of the conditions of the policy, and the question raised, involving a consideration of Milne's authority to bind the defendant, re- lates merely to the clause as to the occupan- cy of the buildings which he agreed to in- sert In the policy. We have to determine, then, whether Whipple & Smiley could properly delegate their authority to Milne to that extent only, no other question as to the delegation of their authority being in issue. We are un- able to see that this was a matter specially calling for the exercise of discretion or judg- ment. The complainant's buildings, so far as the question of non-occupancy was con- cerned, differed in no material respect from all other buildings similarly situated. The case comes now nearly within the principle of Bodlne v. Insurance Co., 51 N. T. 117. There the original policy provided that no insurance, original or continued, should be binding until the actual payment of the pre- mium. The defense was based upon the non-payment of the premium upon a renewal receipt, and the plaintiff's claim was that the clerk of the insurance agent who deliv- ered to him the receipt waived the prepay- ment of the premium. The only question was as to the authority of the clerk to make such waiver. He was the son of the insur- ance agent, and had for several years been assisting his father in his insurance busi- ness, among other things, by procuring poli- cies and renewal receipts from the company, and delivering them to the insured. In va- rious cases, including the one in question, he had, with the presumed consent and au- thority of his father, waived the prepayment of premiums. Such delegation of authority was held to be proper, upon the principle that the act of the clerk was the act of the agent, binding on the company just as ef- fectually as if it were done by the agent in person. The doctrine of the foregoing case was cited with approval by this court in In- surance Co. V. Pahrenkrug, 68 111. 463. See, also, Lingenfelter v. Insurance Co., 19 Mo. App. 252. In the present case the act of Milne, by which he agreed to insert in the policy the clause in question, relating to the non-occu- pancy of the buildings, may be regarded as the act of Whipple & Smiley, and therefore binding on the company, the same as though they had made the agreement themselves. The fact that they knew nothing of the agreement, and gave no actnal assent to it, is immaterial, so long as it was within the apparent purview of their powers as agents, and also within the apparent purview of Milne's employment as their clerk and as- sistant. But there is another, and we think a con- clusive, reason why the agreement of Milne must be held to be binding on the defendant. The defendant is an insurance company or- ganized under the laws of the state of New York, and doing business by its agents in this state under and by virtue of our statute in relation to such companies. The twenty- third section of the statute, in relation to fire insurance companies, after fixing and defin- ing the terms and conditions upon which in- surance companies organized under the laws of other states may take risks or transact insurance business by their agent or agents in this state, provides as follows: "The term 'agent' or 'agents,' used in this section, shall include an acknowledged agent, sur- veyor, broker, or any other person or per- sons who shall, in any manner, aid in trans- acting the insurance business of any insur- ance company not incorporated by the laws of this state." 1 Starr & C. St p. 1322. The general assembly, having power to impose upon foreign insurance companies coming 158 IKSUBANCE AGENTS. into this state to do business such reasonable terms and conditions as it saw fit, had an undoubted right to make such companies re- sponsible, not only for the acts of those who are in fact their agents, but of those who as- sume to act as their agents, and in fact aid them in the transaction of their insurance business. That such was the intention of the statute seems too plain to admit of doubt. We placed this construction upon said statute in People v. Insurance Exch. (decided in November last) 18 N. B. 774. Similar statutes have been upheld in other states, and have there received the same construction we are disposed to place upon our own. A statute of Wisconsin provided that whoever solicited insurance on behalf of an insurance company, or made any con- tract of insurance, or in any manner aided or assisted in making such contract, or transacted any business for the company, should be held to be an agent of such com- pany, to all intents and purposes. In Schom- er V. Insurance Co., 50 Wis. 575, 7 N. W. 544, the court, in construing said statute, say: "The obvious intention of the legis- lature is to make an insurance company re- sponsible for the acts of the person who assumes really to represent and act for it in these particulars, and to change the rule of law that the insured must at his peril know whether the person with whom he is dealing has the power he assumes to exercise, or is acting within the scope of his authority." Said statute was upheld, and the same con- struction adhered to, in Knox v. Insurance <:!o., 50 Wis. 671, 7 N. W. 776; Alkan v. In- surance Co., 53 Wis. 136, 10 N. W. 91, and Body V. Insurance Co., 63 Wis. 157, 23 N. W. 132. A statute of Iowa provided that any per- son who should solicit insurance, or procure applications therefor, should be held to be the soliciting agent of the Insurance com- pany. In Bennett v. Insurance Co., 70 Iowa, ■600, 31 N. W. 948, it appeared that an agent of the company, who had authority to solicit insurance and issue policies, sent his clerk to solicit a risk, and take an application, and the clerk knew that there was other in- surance on the property, but the agent, who was ignorant of such other insurance, issued a policy, and collected the premium; and it was held that the company was bound by the knowledge of the agent's clerk, who, for the purposes of that policy, must, by virtue of the provisions of the statute, be regarded as the company's soliciting agent. An attempt is made to distinguish our stat- ute from those considered and construed in the cases above cited, because of the use of the word "acknowledged" in the phrase, "ac- knowledged agent, surveyor, broker, or any other person or persons who shall In any manner aid in transacting the insurance business of any insurance company," etc. The contention is that the word "acknowl- edged" qualifies the entire clause, and that the statute, therefore, applies to no person who is not acknowledged by the insurance company as having authority to act for it in Its insurance business. It is sufficient to say that the construction contended for is so forced and unnatural as not to possess even the virtue of plausibility. It would render the statute impotent and unmeaning, by lim- iting its operation to those who would be agents of insurance companies without it. The manifest intention was to make such companies responsible for the acts not only of its acknowledged agents, etc., but also of all other persons who in any manner aid in the transaction of their insurance business. Nor do we see anything inequitable or op- pressive in such provision. Doubtless the mere assumption of authority to act for an insurance company will not of itself charge the company with responsibility for the acts of the assumed agent. The company must in some way avail itself of such acts, so that the person performing them may be said to aid the company in its insurance business. But after a company has availed itself of the acts of an assumed agent, and thus adopted them as Its own, there is nothing oppressive in assuming, as against such com- pany, the existence of the relation of prin- cipal and agent, and charging the company with responsibility for such acts. We are of the opinion that the circuit court properly decreed a reformation of the policy, and, the property insured having been de- stroyed by fire, it was also proper for the court to enter a decree in favor of the com- plainant for the amount of his loss. We find no error in the record, and the judgment of the appellate court will there- fore be affirmed. INSURANCE AGENTS. 159 EAGLE FIRE CO. OF NEW YORK v. GLOBE LOAN & TRUST CO. (62 N. W. 895, 44 Neb. 3S0.) Supreme Court of Nebraska. April 3, 1895. Error to district court, Douglas county; Doane, Judge. Action on a policy of insurance by Henry Cr. Hubbard against the Eagle Fire Com- pany of New York, wherein the Globe Loan & Trust Company was made a party. From the judgment rendered, defendant brings er- ror. Affirmed. Frank T. Ransom and Howard B. Smith, for plaintiff in error. J. Fawcett, for de- fendant in error. RA6AN, C. This is a suit brought to the district court of Douglas county against the Eagle Fire Company (hereinafter called the "insurance company") upon an ordinary pol- icy of fire insurance issued by the insurance company to one Ida W. Brown, insuring ■certain property of hers against loss or dam- age by fire from noon of the 13th day of March, 1890, to noon of the 13th day of March, 1895. The suit was brought by Henry G. Hubbard, Mrs. Brown's assignee. Pending the action, Hubbard died, and the suit was revived in the name of his exec- utors. The connection of the Globe Loan & Trust Company with the case need not be stated. Hubbard's executors had a verdict and judgment, and the insurance company has prosecuted to this court a petition in error. In our examination of the case we shall not confine ourselves to a consideration of the errors assigned in the order of their assignment, but consider them under the fol- lowing heads. 1. That the verdict is not sustained by suf- ficient evidence. The policy sued upon contained this pro- vision: 'This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has, or shall hereafter make or pro- cure, any other contract of insurance, wheth- er valid or not, on property covered in whole or in part by this policy." As a defense to the action the insurance company pleaded that after the issuance of the policy in suit, and without its consent indorsed in writ- ing on the policy, Mrs. Brown procured ad- ditional insurance on the insured property. Hubbard's executors, by their reply to this defense, admitted that Mrs. Brown procured additional insurance on the insured proper- ty without the consent of the insurance com- pany having been first indorsed In writing on the policy in suit, but pleaded in avoid- ance of the defense that the company had waived Mrs. Brown's violation of the policy in that respect, in this: That prior to the loss the company had notice of the procur- ing of such additional insurance, and failed to exercise its right to cancel the policy by reason of such additional Insurance, and thereby elected to carry the risk notwith- standing such additional insurance; that aft- er the loss occurred the Insurance company, with full knowledge of the existence of the additional Insurance, in pursuance of an agreement with Mrs. Brown, submitted the amount of the loss or damage sustained by Mrs. Brown by reason of the destruction of the insured property by fire to arbitration, the insured and the insurer paying the ex- penses of such arbitration; that the loss oc- curred on the 9th day of November, 1890, and on "the 24th of November, 1890, after ar- bitration of the amount of the loss, the com- pany elected to and did cancel its policy,^ such cancellation taking efCect only from and after the day of the date of the loss,— and repaid to the insured the unearned premium for carrying the risk from the day after the date of the loss until the expiration of the policy by its terms. The evidence is un- disputed that the company canceled the pol- icy on the 24th of November, 1890, and repaid to Mrs. Brown the unearned premium, and took from her a receipt of that date, in words and figures as follows: "Received of the Eagle Fire Company twenty-nine dol- lars, return premium on policy number 474, in consideration of which said policy is can- celed. Said cancellation dates from Novem- ber 9th, 1890, subject, however, to claim for loss up to and including November 9th, 1890." The evidence is also undisputed that after the loss had occurred the insurance company, with knowledge of the fact that Mrs. Brown had procured additional insur- ance upon the property subsequent to the date of the policy in suit, submitted the amount of the loss or damage to the insured property to arbitration. The evidence as to the knowledge or notice which the insurance company had of the additional insurance prior to the loss is contained in the following testimony given by Brown, the husband of the insured: "Q. After * * * this insur- ance had been taken out that is being sued on here, did you visit Ringwalt Bros., agents for the Eagle Company, for the purpose of taking out further insurance? A. I did; yes, sir. Q. Who did you find in the office? A. Mr. Ringwalt,— the same that is sitting right near the desk in the court room. Q. At the present time? A. Yes, sir. Q. What trans- pired between you and Mr. Ringwalt? A. I told Mr. Ringwalt that I was going to take out some more insurance. I asked him to give me a list of the insurance, as Mr. Dev- ries had changed the amount of the policies. I was not sure about the amount. He said, 'All right'; and he went and got some large book from a bookcase, and he put it down with a lead pencil. Q. Who put it down? A. Mr. Ringwalt put down the amount of the insurance and the name of the company, and handed that to me. Q. Look at the pa'- per I hand you now, and state whether that is the memorandum Mr. Ringwalt made and handed you at the time you are si)eaking of ? A. That is the memorandum. Q. When did you first speak to Mr. Ringwalt after 160 INSURANCE AGENT& that, about additional insurance, and when did he first learn about it, to your knowl- edge,— about the additional insurance? A. After the time I got this paper from him? Q. Tes. A. Why, on the morning of the 10th— I think it was— of November. That was the day after the fire, on Monday morn- ing. Q. Where did you see him? A. Out there at the house. Q. What was said there about additional insurance? A. He wanted to know if I had that insurance written I was speaking about, and I told him 'Yes.' He said, have I notified those companies. He wanted to know if they had been out there; and I said, 'No; not so far.' Q. Was anything said about the amount of addi- tional insurance? A. Yes; I told him the amount. Q. Was anything further said about it? A. No, sir; Mr. King wait seemed to be in a hurry. He didn't stop there more than ten minutes, probably, all together." What is the effect of this evidence? We think that the evidence of Brown amounts to this: (1) That about the 5th Of November, prior to the destruction of the property by fire, Mr. Brown, husband and agent of the insured, went to the agents of the insurance company, asked them for certain informa- tion, and told them that he intended to place additional insurance upon the insured prop- erty; but we do not think that this evi- dence shows, nor that the jury would have been justified in inferring from it, that the insurance company or its agents knew, at any time before the loss made the subject of this suit, that Mrs. Brown had procured addi- tional insurance upon the Insured property. (2) That the conduct of the insurance compa- ny, after the loss, in submitting the amount of the loss or damage sustained by Mrs. Brown by reason of the destruction of the insured property by fire to arbitration, was evidence which tended to show that the in- surance company at that time, having knowl- edge of the existence of the additional in- surance, had elected to waive a cancellation of the policy on account of such additional insurance. It is true that the contract be- tween the insured and the insurer, under which this arbitration took place, provided that the arbitration should not be construed as a waiver of any of the rights or defenses of either party, nor as either an admission or denial of liability on the part of the in- surance company. But this only meant that the arbitration should not be conclusive evi- dence of a waiver on the part of the insur- ance company of any legal defense it might have to a suit upon the policy. The arbitra- tion, then, while not conclusive evidence, was, we think, competent evidence for the jury to consider in determining whether or not the insurance company waived the viola- tion of the policy by Mrs. Brown In taking out additional insurance. (3) That the act of the insurance company in canceling the policy on the 24th of November, 1890, and repaying to Mrs. Brown the unearned pre- mium to which the instirance company would have been entitled for carrying the risk: from the 10th of November, 1890, until nooa of the 13th of March, 1895,— both dates in- clusive, — was evidence which tended very strongly to show that the insurance company at that time recognized the policy as being- in force up to and including the day that the loss sued for occurred. Whether the insur- ance company waived the provision in the policy which made it voidable, at the elec- tion of the insurance company, in case the insured should procure additional insurance without the consent of the company thereto having been first indorsed on the policy, was a question of fact for the jury. And this question of fact was to be found one way or the other by the jury from the facts and circumstances In evidence in the case which went to show the intention of the insurance company in the premises. If the insurance company did not intend to waive, and had not waived, its right to cancel the policy by reason of Mrs. Brown's procuring additional insurance, it is very difficult to understand its conduct in going to the exjjense of having the amount of the loss or damage sustained by Mrs. Brown determined by arbitration; and it is still more difficult to understand why the insurance company paid her the un- earned premium from the 10th day of No- vember, 1890, to the expiration of the policy by its terms. Mrs. Brown having violated the policy by procuring additional insurance thereon without the knowledge or consent of the insurer, it was entitled, on discovering such violation, to cancel the policy by rea- son thereof,— such cancellation to take ef- fect from and after the date of Its violatioB. But the insurance company did not do this. By its own act it canceled the policy on the 24th of November,— the cancellation to take effect on and after the 10th day of Novem- ber, the day after the date of the loss. The evidence, then, on which this verdict rests. Is not very satisfactory. It is slight But we are constrained to say we think it is suf- ficient 2. That the judgment is contrary to the law of the case. The argument under this contention is that the notice given by the insured to the in- surance company's agents of his intention to procure additional insurance on the in- sured property was not notice to the com- pany; in other words, that notice to an agent is not notice to his principal. In view of what we have already said as to the effect of the evidence of Brown, we might dispense with any further consideration of this evi- dence, and would do so, but for the fact that counsel seems to misapprehend the de- cision of this court in Insurance Co. v. Hel- duk, 30 Neb. 288, 46 N. W. 481. In that case the defense was the same as it is here,— additional Insurance without the knowledge or consent of the insurer,— and the reply that the insurance company had waived the viola- tion of the policy in that respect, in this: that the local agent of the Insurance com- ISrsUUANCE AGEXTS. 161 pany orally consented to such additional in- surance. The policy provided that "no con- sent or agreement by any local agent should affect any condition of the policy until such consent or agreement is indorsed thereon." And the court held— the present chief justice (Norral) writing the opinion— that the oral consent of the local agent to taking out the additional insurance was not binding on the company. But that case does not hold, nor does any other case In this court hold, that a notice given to a duly-authorized and act- ing agent of a principal about a matter with- in the scope of such agent's authority is not notice to the principal. In the ease at bar it is not claimed that the agent of the in- surance company consented that the insured might procure additional Insurance upon the property. The claim made is— though, as we have seen, the evidence does not sustain it— that the insured notified the agent that he had taken out additional insurance upon the insured property, and that such notice to the agent was notice to the principal. Without a doubt, the conclusion contended for would be correct if the evidence estab- lished the fact that the insured did give the insurance comx>any's agent notice that addi- tional insurance had been procured upon the property. It would seem unnecessary to cite an authority in support of this rule. Insur- ance comi>anies, for the most part, are cor- porations. They act, and can only act, through agents. Some of the insurance com- panies doing business in this state hold charters from the parliament of Great Brit- ain. Their domicile is in England. It will not do to say that a notice, to be effective and binding ui)on such a company, must be served by the insured on the company at its home oflSce, In London or Liverpool. Again, it is to be remembered that the violation of this provision by the assured. In procuring additional insurance on the property without the knowledge or consent of the first insurer, did not render the iMjUcy issued by it void, but voidable, at the election of such first in- surer; that this provision was inserted in the Insurance contract for the benefit of, and might be waived by, the insurer. Hughes T. Insurance Co., 40 Neb. 626, 59 N. W. 112. The evidence in this record shows that Ringwalt Bros, were the agents of this in- surance company at the time the policy In suit was issued, and that they continued to be the agents of this company, so far as this record shows, until the present time, and that they had authority not only to Issue, but to cancel, policies, when, In their judgment. It was for the interest of their principals to do so. In Insurance C!o. v. Covey, 41 Neb. 724, 60 N. W. 12, this court said: "Where an Insurance agent, with au- thority to receive premiums and issue pol- icies, exercises such authority with knowl- edge of the existence of concurrent Insurance on the premises, the company is estopped, aft- er a loss, to Insist that the policy is void be- cause consent to such concurrent insurance EI.L.SEL.CAS.I1AW INS. — 11 was not given in writing." In other vrords, the case last cited holds that the knowledge of the insurance company's agent of the ex- istence of insurance on the property on which he issued the policy was the knowl- edge of the insurance company. This rule Is supported by the overwhelming weight of authority. In Gans v. Insurance Co., 43 Wis. 108, it was held: "Knowledge on the part of the agent of an insurance company, author- ized to issue its policies, of facts which ren- der the contract voidable at the Insurer's option, is knowledge of the company." In Bennett v. Insui-ance Co., 31 N. W. 948, the supreme court of Iowa said, "Where the clerk of a duly-appointed agent of a fire insurance company solicits insurance on property which he knows to be insured al- ready in another company, and his employer, the agent, issues the policy upon the appliei- tion so obtained, the insurance company is bound by the knowledge of the clerk." In McEwen v. Insurance Co., 5 Hill, 101, it is said, "Notice given to an agent, relating to business which he is authorized to transact, and whUe actually engaged in transacting it, wiU, in general, invire as notice to the prin- cipal." See, also. Insurance Co. v. Gallatin (Wis.) 3 N. W. 772; Mattocks v. Insurance Co. aowa) 37 N. W. 174. 3. Another assignment of error here is that the court erred in admitting the evidence of the witness Brown, the husband and agent of the insured. We cannot review this assignment of error. Brown's testimony cov- ers several pages of the bill of exceptions, and the petition in error does not specifically point out any particular part of his evidence which it is alleged the court erred in permit- ting to go to the jury. Nor does it appear from the bill of exertions that any excep- tion was taken to the rulings of the court in permitting Brown to give, the testimony which we have quoted above. An assign- ment of error in this court that the district court erred In admitting the evidence of a certain witness will be overruled if any of the evidence given by the witness was com- petent. 4. Another error assigned is "that the com^ erred in giving Instructions numbered one, two, three, and four given by the court up- on Its own motion." The first of these in- structions is in the following language: "That the terms contained in the policy of insurance which has been introduced in evi- dence, providing for a forfeiture of the pol- icy under certain conditions, were inserted therein for the benefit of the defendant com- pany and such forfeiture may be waived by the company. If it chooses so to do." Cer- tainly the court did not err in giving this instruction, and, as the assignment is that the court erred in giving all of the instruc- tions named, it must be overruled. 5. Another assignment of error is that the court erred in modifying instructions num- bered 1 and 3 asked by the Insurance com- pany. The third of these instructions was 162 INSURANCE AGENTS. in the following language: "You are fur- ther instructed that it appears from the evi- dence that one Mr. Butler, whom the evi- dence shows to have been an independent adjuster, residing in St. Louis, Missouri, came here, and represented the defendant in the adjustment and appraisal; but there is no evidence as to what authority, if any, he pos- sessed, and the law will presume that his power extended coextensive with the busi- ness intrusted to him, namely, the ascer- taining the amount of the loss, but it will not be presumed that he had power to alter the contract beween the parties, or to waive any of its conditions, these not being within the apparent scope of his authority." And the modification complained of was the ad- dition by the court, at the end of the in- struction, of the following words: "But such want of authority in the adjuster, if there was such want of authority, would in no way affect the authority of other officers and agents of the company to waive the condi- tions of the policy." The court did not err in modifying this instruction. 6. The final assignment of error is that the court erred in refusing to give instructions 2, 4, and 5 asked by the insurance company. The fourth of these instructions is in the following language! "You are instructed that, so far as the evidence discloses in this case, the RingwaJt Bros, were the agents of the defendant company who issued the pol- icy and collected the premium. But when that was done, so far as the evidence shows in this case, their authority ceased and de- termined, and the defendant is not bound by any knowledge which came to them, affect- ing the validity of the polidy subsequent thereto, unless it be shown that the same was communicated to the company; and as to such knowledge or information as may have come to their knowledge, or to the knowl- edge of either of them, and as to which there is no evidence to show the same was com- municated to the company, the company is not bound, the burden being upon the plain- tiff to show that such information or com- munication was delivered to the company." The court did not err in refusing to give this instruction, and, since the assignment is that he erred in refusing to give all the instruc- tions named, the assignment must be over- ruled. By this instruction the insurance company requested the court to tell the jury that after Ring wait Bros., the insurance com- pany's agents, had issued the policy in suit, their authority as agents of the insurance company ce.ased. This would have been wrong. The evidence in the record shows that they were not only agents of the com- pany at the time they issued the policy in suit, but that they were agents of the com- pany at the time the loss occurred, at the time the arbitration of the loss took place, at the time the policy in suit was canceled, and at the time of the trial of this action, and that they had authority, not only to issue policies, but to cancel them. The agent of the insurance company said on the witness stand, in this case, that, had he known of the existence of the additional insurance prior to the occurrence of the loss, he would have canceled the policy of Mrs. Brown. But this instruction was bad for another reason. By it the insurance company re- quested the court to charge the jury, as a matter of law, that the insurance company was not bound by any knowledge affecting the validity of the policy which came to the insurance company's agents, unless such knowledge was communicated to the insur- ance company. We have already seen this is not the law. There is no error In the record, and the judgment of the district court is affirmed. INSURANCE AGENTS. 163 WILKINS V. STATE INS. CO. OF DES MOINES. (45 N. W. 1, 43 Minn. 177.) Supreme Court of Minnesota. April 24, 1890. Appeal from district court, Rice county ; BncKHAM, Judge. ilf. H. Keeley, for appellant. A. D. Keyes, !or respondent. MITCHELL, J. Thedefpndant.anlowa corporation, but doing business in this state, had an agent at Faribault, whose general duties were to solicit insurance, fill up the blanks in printed policies al- ready signed by the general officers of the company, and left in his possession, coun- tersign, and deliver the same, and collect and remit the premiums. Itis undisputed in the evidence that this agent, having so- licited the plaintiff for insurance on his stock, and the plalntff being unable then to pay the premium, assumed to waive immediate payment, and to give plaintiff a temporary credit for the premium, and delivered to him the policy on which this action is brought. The agent subsequent- ly called on the plaintiff at least twice for the premium, hut the latter failed to pay; and some two and a half months after the policy was issued the property was burned, the premium being still unpaid. The question is whether the company was bound by the act of the agent in waiv- ing immediate payment of the premium, and giving plaintiff credit. The policy contains a provision that " no insurance shall be considered as binding until actual payment of the premium. " The same rules apply to insurance companies as to any other case of agency. They are bound by all the acts of their agents within the scope of the real or apparent authority with which they have clothed them, and no further ; and it would seem well settled by the great weighfof authority that, at least in the case of stock companies, a per- son dealing with an agent possessing the powers exercised by this agent has a right to assume, in the absence of notice to the contrary, that he has authority, pending negotiations for a contract of insurance, to waive a provision like the onequoted, and to give a short credit for the premium. But it is the undoubted right of the com- pany, as in the case of any principal, to impose a limitation upon the authority of its agents. And it is as elementary as it is reasonable that if an agent exceeds his actual authority, and the person dealing with himhas noticeof fchatfact.the princi- pal is not bound; and it is upon this prop- osition that defendant chiefly relies. There are two provisions in the policy to which he refers in support of his conten- tion. The first is that "no officer, agent, or representative of the company, shall be held to have waived any of the terms or conditions of this policy unless such waiver shall be Indorsed thereon. " Fol- lowing Lamberton v. Insurance Co., 39 Minn. 129, 39 N. W. Eep. 76, which is abun- dantly supported by the authorities. This contains no limitation upon the authori- ty of any class of agents, prohibiting them from waiving any of the terms or conditions of the policy. It applies alike to all representatives of the company, — ex- ecutive or general officers as well as oth- ers ; and, so far as it assumes to be a lim- itation at all, it is upon the company it- self, to the effect that it can only waive the conditions of the policy in a certain way, or, rather, it assumes to provide what shall be the exclusive evidence of such waiver. This provision, therefore, will not support defendant's contention, but the other or second one does. It is as follows: "This policy is made and accept- ed upon the above express terms, and no part of this contract can be waived except in writing signed by the secretary of the company." The words "policy "and "con- tract" are evidently here used as synon- ymous, and the latter clause clearly means that none of the terms of the policy can be waived by any one except the secre- tary. Conceding that this would not pre- vent the company itself, through its board of directors, or other body representing it in its corporate capacity, from waiving any of the terms or conditions of the pol- icy, yet it Is a plain declaration thatno rep- resentative of the company but the secre- tary can do so, and hence that no local agent can do it. This, being in the policy itself, was notice to plaintiff that this agent at Faribault had no authority to waive the condition that no insurance would be binding until payment of the premium. It is no answer to say that he did not read the policy, and hence did not know what it contained. He was bound toknowthis; and, by acceptirigtiie policy, he is estopped from setting up powers in the agent in opposition to the express lim- itations contained in it. For this reason, we think the court erred in charging the jur3' that, if the policy was delivered by the agent to the plaintiff with the inten- tion of giving him a temporary credit for the premium, this would be a delivery that • would bind thecompany sothatthe policy would be operative, and in force. Order reversed. 164 INSURANCE AGENTS. KAUSAIi et al. v. MINNESOTA FARMERS' MUT. FIRE INS. ASS'N. (16 N. W. 430, 31 Minn. 17.) Supreme Court of Minnesota. July 11, 18S3. Appeal from district court, Hennepin coun- tv- Wilson & Lawrence, for appellants. Levi, Cray & Hart, for respondent MITCHELL, J. 1. On principle, as well as from considerations of public policy, agents of insurance companies authorized to procure applications for insurance, and to forward them to the companies for acceptance, must be deemed the agents of the insurers and not of the insured in all that they do in preparing the applications, or in any representations they may make to the insured as to the char- acter or effect of the statements therein con- tained. This rule is rendered necessary by the manner in which business is now usually done by the insurers. They supply these agents with printed blanks, stimulate them' by the promise of liberal commissions, and then send them abroad in the community to solicit insurance. The companies employ them for that purpose, and the public regard them as the agents of the companies in the matter of preparing and filling up these ap- plications,— a fact which the companies per- fectly understand. The parties who are in- duced by these agents to make applications for insurance rarely know anything about the general officers of the company, or its consti- tution and by-laws, but look to the agent as its full and complete representative in all that is said or done in regard to the applica- tion. And in view of the apparent authority with which the companies clothe these so- licitors, they have a perfect right to consider them such. Hence, where an agent to pro- cure and forward applications for insurance, either by his direction or direct act, makes out an application incorrectly, notwithstand- ing all the facts are correctly stated to him by the applicant, the error is chargeable to the insurer and not to the insured. Insurance Co. V. Mahone, 21 Wall. 152; Insurance Co. V. Wilkinson, 13 Wall. 222; Malleable Iron Works V. Phoenix Ins. Co., 25 Conn. 465; Hough V. Insurance Co., 29 Conn. 10; Wood- bury Sav. Bank & Bldg. Ass'n v. Charter Oak Fire & Marine Ins. Co., 31 Conn. 517; Miner v. Insurance Co., 27 Wis. 693; Winans V. Insurance Co., 38 Wis. 342; Rowley v. Insurance Co., 36 N. Y. 550; Brandup v. In- surance Co., 27 Minn. 393, 7 N. W. 735; 2 Am. Lead. Cas. (5th Ed.) 917 et seq.; Wood, Ins. c. 12; May, Ins. § 120. 2. After the courts had generally estab- lished this doctrine, many of the insurance corapahies, in order to obviate it, adopted the ingenious device of inserting a provision in the policy that the application, by whomso- ever made, whether by the agent of the com- pany or any other person, shall be deemed the act of the insured and not of the insurer. But, as has been well remarked by another court, "there is no magic in mere words to change the real into the unreal. A device of words cannot be imposed upon a court in place of an actuality of fact." If corpora- tions are astute in contriving such provisions, courts will take care that they shall not be used as instruments of fraud or injustice. It would be a stretch of legal principles to hold that a person dealing with an agent, ap- parently clothed with authority to act for his principal in the matter in hand, could be af- fected by notice, given after the negotiations were completed, that the party with whom he had dealt should be deemed transformed from the agent of one party into the agent of the other. To be efficacious, such notice should be given before the negotiations are completed. The application precedes the pol- icy, and the insured cannot be presumed to know that any such provision will be inserted in the latter. To hold that by a stipulation, unknown to the insured at the time he made the application, and when he relied upon the fact that the agent was acting for the com- pany, he could be held responsible for the mistakes of such agent, would be to impose burdens upon the insured which he never anticipated. Hence we think that If the agent was the agent of the company In the matter of making out and receiving the appli- cation, he cannot be converted into the agent of the insured by merely calling him such in the policy subsequentiy issued. Neither can any mere form of words wipe out the fact that the insured truthfully informed the insurer, through its agent, of all matters per- taining to the application at the time it was made. We are aware that in so holding we are placing ourselves in conflict with the views of some eminent courts. But the con- clusion we have reached is not without au- thority to sustain it, and is, as we believe, sound in principle, and in accordance with public policy. Wood, Ins. § 139; May, Ins. § 140; Insurance Co. v. Ives, 56 111. 402; Cans V. Insurance Co., 43 Wis. 108; Insur- ance Co. V. Cooper, 50 Pa. St. 331. 3. It Is contended by respondent that there is a distinction in this regard between "stock" and "mutual" insurance companies; that the difference in the character of the companies makes a difference in the relative duties of the applicant and the company, and the au- thority of the agents employed; that in the case of a mutual company the application is in effect not merely for insurance, but for admission to membership,— the applicant him- self becoming a member of the company upon the issue of the policy. By some courts a distinction in this respect is made between the two classes of companies. This distinc- tion is usually based upon the ground that the stipulations held binding upon the in- sured are contained in the charter or by-laws of the company, and that a person applying for membership is conclusively bound by the terms of such charter and by-laws. Such is INSURANCE AGENTS. 165 not this case, for the stipulations claimed to bind the insured are only in the policy. But, so far ae concerns the questions now under consideration, we fail to see any distinction between the two kinds of companies, and we feel confident that the average applicant for insurance is rarely aware of any. It is ti-ue that in the case of a mutual company the insured becomes in theory a member of the company upon the issue of the policy. But in applying and contracting for insurance the applicant and the company are as much two distinct persons as in the case of a stock company, and we see no reason for holding the agent who takes the application any less the agent of the Insurer in the one case than in the other. The membership does not be- gin until the policy is issued. As to all pre- vious negotiations the agent acts only for the company. Insurance Co. v. Cooper, supra; May, Ins. § 139 et seq. 4. Verbal testimony is competent to show that the application was filled up by the agent of the company, and that the facts were fully and correctly stated to him, but that he, without the knowledge of the insured, mis- stated them in the application. This was not In violation of the rule that verbal testimony is not admissible to vary a written contract. It proceeds upon the ground that the contents of the paper were not his statement, though signed by him, and that the insured company, by the acts of their agent in the matter, are estopped to set up that it is the representation of the insured. Insurance Co. v. Wilkinson, supra; May, Ins. §^ 143, and cases cited, note 3. 5. It appears that the property covered by the policy was the several property of Wil- liam Kausel, whereas the policy is a joint one to him and his wife, as if upon the joint property of the two. On this groimd it is claimed that there can be no recovery, be- cause a joint policy to two does not cover the several property of either. Had plaintiffs taken out this policy without disclosing the real nature of their interest in the property, there might be something in this suggestion. But according to the offers of plaintiffs, which must here be taken as the facts, the wife was the owner of an undivided three-fourths, and in the actual possession of the whole of the land upon which the house and other personal property covered by the policy was situate. The husband erected the house with his own monay, under a license from and an agreement with his wife that he might do so, and should have the right to remove It at pleasure. At the time the application for i insurance was made, defendant's agent, au- thorized to take such applications, was per- sonally present on the premises, and was first fully informed by the plaintiffs of all these facts, and then himself wrote out the application, and told William Kausel that it was correct; that William Kausel then signed it, and also signed his wife's name thereto, upon the statement and representa- tion of the agent that such was the proper mode of maldng the application. In short, it appears that the agent, after being informed that it was the individual property of the husband, although situated on the land of the wife, directed the making of a joint ap- plication, and upon such application the defendant Issued a joint policy. Insuring the two against loss by the destruction of the property by fire, and that the plaintiffs, rely- ing upon the representations of the agent that this was, under the circumstances, the proper course, made the application m this form, and accepted the joint policy. On this state of facts, if the policy does not cover the loss it is the fault of the defendant and not of the plaintiffs. It seems clear that plaintiffs are not without remedy. We are not prepared to say that WiUiam Kausel alone might not have maintained an action, at least upon asking to have the policy re- formed; but we see no good reason why, un- der the facts of this case, the two plaintiffs to whom the policy was issued cannot maintain a joint action. The policy is not a wagering policy, because, between the two plaintiffs, title to the whole of the property was in the beneficiaries to whom the policy ran, and it can make no difference to the defendant in what way their interests are apportioned, or whether it all belongs to one. It brings in no new party to the contract; and by Issuing the policy to the two, the defendant admits that both are proper persons to insure. It was entirely competent for all parties to treat this as joint property for the purposes of in- surance, and that the loss, if any, should be payable to the two plaintiffs. This is, in effect, just what they have done, and what defendant not only assented to, but advised and directed. If the husband, who owned the property, assented to this, and If the de- fendant, with full knowledge of all the facts, agreed to it, we fail to see what principle, either of law or justice, is violated by enfor- cing the contract just as the parties have made it. Peck v. Insurance Co., 22 Conn. 575; Castner v. Insurance Co., 4G Mich. 15, 8 N. W. 554. Order reversed. 166 INSUBAXCE AGENTS. HOME FIRE INS. CO. v. HAMMANG et al. (62 N. W. 883, 44 Neb. 566.) Supreme Court of Nebraska. April 4, 1895. Error to district court, Washington county; Scott, Judge. Action on policy of insurance by Ham- mang Bros. & Co. against the Home Fire In- surance Company of Omaha. Plaintiffs had judgment, and defendant brings error. Af- firmed. J. Fawcett, for plaintiff in, error. W. C. Walton, W. S. Cook, and D. Z. Mummert, for defendants in error. RAGAN, C. Hammang Bros. & Co. brought this suit to the district court of Washington county against the Home Fire Insurance Company of Omaha, Neb., hereinafter called the "Insurance Company," to recover the value of certain merchandise -which they al- leged they owned, which had been insured against loss or damage by fire by the insur- ance company, and which merchandise had been destroyed by fire. Hammang Bros. & Co. had a verdict and judgment, and the in- surance company brings the same here for re- view. •■ There is no contention here but that the policy sued upon was Issued, that the pre- mium was paid, and that the property was destroyed by fire; nor is there any claim made that the actual loss sustained by Ham- mang Bros. & Co. was not greater than the amount of the insurance; nor Is it claimed that the fire resulted from any fraud or neg- lect on the part of the insured. To reverse the judgment of the district court counsel for the insurance company have argued four points here, which we notice as follows: 1. One of the defenses the insurance com- pany interposed to this action in the district court was that the insured did not furnish to the insurance company proofs of loss, as required by the insurance contract The poli- cy provided that, when a fire has occurred damaging the property hereby insured, the assured shall give immediate notice, and ren- der a particular account of such loss, signed and sworn to by them. If there is other, in- surance, shall give a detailed account of same with copies of the written portions of all policies. Shall also give the actual cash value of the property; their interest therein; the interest of all other parties therein, if any, giving their names; the amount of the loss or damage; for what purpose and by whom the building insured or containing the prop- erty insured, and the several parts thereof, were used; when and how the fire originated; and an itemized estimate of value of the prop- erty destroyed. The fire occurred on the 31st day of October, 1890. On the 25th day of November, 1890, the assured made a state- ment in writing, swore to the same before a justice of the peace, and transmitted It to the insurance company. This written state- ment or proof of loss set out that a fire had occurred on the 31st of October, 1890, de- stroying and injuring the property covered by the policy in suit; that the date of such policy was the 14th of lime, 1890; that the policy had been issued to Hammang Bros. & Co.; that the amoimt of the insurance was $1,500; that the property damaged and de- stroyed consisted of hardware, stoves, tin- ware, and other articles usually kept in a hardware store; that the loss was payable to Hammang Bros. & Co.; that the Omaha Fire Insurance Company of Omaha, Neb., had also a policy of $1,000 on the destroyed propei-ty; that the goods saved were well pro- tected; that an Inventory was being made of the goods saved; that the books of the firm of Hammang Bros. & Co. had been saved; that the fire which destroyed the insured property was communicated to the building in which it was situate from a fire in a livery bam across an alley west of the store of Hammang Bros. & Co.; that an inventory of the stock of Hammang Bros. & Co. had been taken on January 1, 1890; that the condition of the insured property saved was fairly good; and that there had been no change in the risk or its external exposure since the policy was issued. It will be seen that this proof of loss fur- nished by Hammang Bros. & Co. to the in- surance company is not a strict compliance with the requirements of the policy, but we think it is a substantial compliance with that provision of the insurance contract Technic- al accuracy in making out a proof of loss Is not essential. The proof of loss is sufficient if it shows upon its face that the Insured made an honest effort to comply with the requirement of the insurance contract In- surance Co. V. Iiipi)old, 3 Neb. 391; Insur- ance Co. V. Etherton, 25 Neb. 505, 41 N. W. 406; Insurance Co. v. Gustin, 40 Neb. 828, 59 N. W. 375. The insm-ed property was situate in the town of Arlington, and the in- surance company was domiciled in the city of Omaha. Immediately after the receipt by the insurance company of the proof of loss hereinbefore mentioned the Insurance com- pany sent to Arlington Its adjuster. This adjuster remained there several days, inquir- ing Into the circumstances of the fire and the amount of the loss. He took possession of the books and Invoices of the insured, and estimated the value of the property saved from the fire, the amount of stock on hand at the time the fire occurred, and the amount of the loss or damage which the insured had sustained by reason of the fire, and offered to pay the insured $900 in settlement of their loss. The Insurance company, when it re- ceived the paper called a proof of loss, here- inbefore refei'red to, retained possession of the same; made no complaints to the Insured that the proofs furnished were insufficient or defective; nor did it request the insured to furnish any other or different proof of loss at any time or place. The insurance com- pany, then, by its conduct, waived the in- sufficiency of the proofs of loss furnished it Dy the insured, and in fact waived any proof of loss whatever. For the purpose of settling. If such a question can ever be settled, that the clause in an insurance contract requiring INSURANCE AGENTS. 167 tie Insured, in case of the destruction of the Insured property, to furnish the insurer proofs of loss, is inserted in the insurance contract for the benefit of the insurer, and the furnishing of such proofs of loss may be waived by such conduct of the insurer, hav- ing knowledge of the loss, as established an intention on his part to waive the furnishing of such proofs of loss, we collate some of tho authorities in point: Insurance Co. v. Schreck, 27 Neb. 527, 43 N. W. 340; Insurance Co. v. Meyer, 30 Neb. 135, 46 N. W. 292; Insurance Co. V. Gotthelf, 35 Neb. 351, 53 N. W. 137,— where it was held that "provisions of an in- surance policy covering a stock of goods, for notice of loss within a specified time and in a particular manner, will be held to have been waived by the insurer where, with the knowl- edge of the loss of part of said stock by fire, it, by its adjusting agent, demands and ob- tains possession of the remainder of the goods and books of the insured, and is engaged several days, with the help of the latter, in ascertaining the amount of the loss." Insur- ance Co. V. Barwick, 36 Neb. 223, 54 N. W. 519; Insurance Co. v. Richardson, 40 Neb. 1, 58 N. W. 597, — ^where it was held: "In case the preliminary proof of loss submitted to the comx)aiiy is unsatisfactory, it should re- turn the same to the insured within a reason- able time, stating in what respect it is con- sidered defective; and if it fails to do so, but rejects such proof on the ground that it was not furnished in proper time, it cannot after- wards avail itself of the insufficiency of such preliminary proof." Phenii Ins. Co. v. Had Bila Hora Lodge, 41 Neb. 21, 59 N. W. 752; Harriman v. Insurance Co. (Wis.) 5 N. W. 12; Cannon v. Insurance Co. (Wis.) 11 N. W. 11; Zielke v. Corporation (Wis.) 25 N. W. 436; Bromberg v. Association (Minn.) 47 N. W. 975; Insurance Co. v. Holthouse (Mich.) 5 X. W. 642; Green v. Insurance Co. (Iowa) 50 N. W. 55S; Assurance Co. v Hocking (Pa. Sup.) 8 Atl. 589. In this last case the court held that "an insurance company which receives proofs of loss when offered, refers them to an adjuster, and retains them, without objec- tion or complaint, for five months, will be held to waive a compliance with the con- ditions of the policy, even though the proofs were not made within the time nor in the form required by the policy." But, as we shall see hereafter, the insurance company refused to pay this loss, and defended this action on the ground that the policy in suit was not in force at the time the loss occurred. This, then, constituted another waiver on the part of the insurance company of the fur- nishing to it of proofs of loss by the insured. ^'The absolute denial by the insurer of all liability on the ground that the policy was not in foree at the time of the loss is a waiver of the preliminary proofs of loss required by the policy." Insurance Co. v. Bachelder, 32 Neb. 490, 49 X. W. 217; Insurance Co. v. Richardson, 40 Neb. 1, 58 N. W. 597; In- surance Co. V. Dierks (Neb.) 61 N. W. 745; Insurance Co. v. Brewster (Neb.) 61 N. W. 746. 2. Another defense Interposed in the court below, and argued here, is this: The policy, as already seen, provided that, in case a loss of the insured property should occur, the in- sured should furnish the insurance company proofs of loss; and "shall also produce a certificate, under the hand and seal of a magistrate, notary public, or commissioner of deeds, nearest to place of fire, * * * stating that he has examined the circum- stances attending the loss, knows the char- acter and condition of the assured, and firm- ly believes that the assured has without fraud sustained loss on the property insured to the amount which he shall so certify." The insured furnished no such certificate as the one required by this provision, and the argument is that, therefore, the insured could not recover. Of this defense we have this to say: (1) that it was really included in the defense of the failure of the insured to furnish the insurance company proofs of loss. All that has been said above in reference to that defense applies to this defense and ar- gument. (2) We very seriously doubt if any such provision in a contract can be enforced. Here the argument of the insurance com-" pany in effect is that: "We insured your property, and agreed with you that in case it should be lost and damaged we would pay the amount of such loss or damage. You have paid us a premium for carrying this risk, and the property has been destroyed without fault on your part; but you have not furnished us the certificate of an officer whose office is next to the place where the fire occurred, certifying that he has exam- ined the circumstances attending the loss, knows your character and financial condition, and that he believes you have sustained loss without fault on your part, and until you furnish such certificate you cannot maintain a suit in the courts of the state on this con- tract" The right of a citizen to maintain an action in the courts of this state is fixed by the constitution and the laws thereof, and we do not think that right can be made to depend upon the whim of a justice of the peace or a notary public. Suppose that this justice of the peace should be the enemy of the insured, or for any other reason should refuse to furnish the insured a cer- tificate of good moral character, and should refuse to examine into the circumstances at-" tending the loss and the financial condition of the insured. How is the insured to com- pel the making of this certificate? We are aware that the supreme court of the state of Minnesota in Lane v. Insurance Co. (Minn.) 52 N. W. 649, sustained a provision like the one under consideration, and held that the furnishing of the certificate was a condition precedent to the right of the insured to re- cover, and that his inability to furnish the certificate because of the refusal of the magistrate to give it afforded no excuse for the insured's failure. But it is to be remem- bered that in that state the legislature pre- scribes the terms and conditions of all fire Insurance policies, and such was the policy 168 IXSUKANCE AGENTS. considered in the case last cited. Further- more, the constitution of this state provides that "all courts shall be open, and every per- son, for any injury done him in his lands, goods, person or reputation, shall have a remedy by due course of law, and justice administered without denial or delay." Sec- tion 13, Bin of Rights. It may be that the legislature has the authority to provide that before an insured can maintain an action in the courts to recover for a loss on an insur- ance policy he must procure the certificate of a magistrate next to where the loss oc- curred that he has examined into the condi- tions of the loss, and believes that It oc- curred without the fault of the insured, that the insured is of good moral character, and that he is acquainted with his financial con- dition. But we shall hesitate a great while before we uphold any such provision as this, in the absence of express legislation requir- ing it We are also aware that provisions similar to this have been considered and up- held in other courts; and It is said that the rule announced in the Minnesota case is sus- tained by a line of authorities reaching back to an early date in the English courts. How- ever this may be, and however venerable such a rule may be, however much it may be sanctioned by authority and covered with the dust and cobwebs of ages, we decline to be bound by it 3. The policy provided it should be void "if there is now or shall hereafter be, obtained any other insurance, whether valid or not, on the said property, or any part thereof," unless the consent of the company to such other insurance was indorsed on the policy. Another defense of the insurance company in the district court was that at the time of the issuance of the policy in suit the in- sured had a policy of $1,000 upon the in- sured property, issued by the Omaha Fire Insurance Company, and that the existence of such latter policy, or, the consent of the insurance company thereto, was not Indorsed in writing on the policy in suit Hammang Bros. & Co. in reply admitted the facts stated as a defense, and pleaded in avoid- ance thereof, or as an estoppel against the insurance company, that the insurance com- pany wrote the policy in suit with actual knowledge of the existence of the policy held by them in the Omaha Fire Insurance Com- pany. The evidence shows that prior to the 14th of June, 1890, one Badger, a banker in Arlington, was the agent of the insurance company. That a man named Cook, in said town of Arlington, was the agent of the Oma- ha Fire Insurance Company. That for the year Immediately preceding June 14, 1890, the Omaha Fire Insurance Company had a risk upon the property of the insured for $1,000. That about the 13th of June, 1890, Mr. Badger went to Hammang Bros. & Co., and said to them that their policy in the in- surance company would expire by the 14th of June, and asked them to permit him to write them a policy for $2,000 on their stock of merchandise. The Insured responded that they were carrying $2,000 of insurance then, $1,000 in the Omaha Fire Insurance Com- pany, and $1,000 in Badger's company,— the insurance company. Mr. Badger replied that he knew that, but that the insured, consider- ing the amount of stock they carried, should carry more than $2,000, and asked them If they would not allow him to write a policy in his company to take the place of the one it carried, as that would expire by the 14th of June, for $1,500, thus making the total amount of insurance of the insured on their stock $2,500. The insured demurred to this somewhat, on the ground that the rate was too high, but finally they authorized Badger to write on the 14th of June, 1890, the policy In suit for $1,500 in the insurance company, to take the place of the one the insurance company was carrying for $1,000, and which would expire by the 14th of June. They also Instructed Mr. Badger to make a memoran- dum in writing on the $1,500 policy, which he was about to issue, to the efCect that they had $1,000 of insurance at that time in the Omaha Fire Insurance Company on the same stock of merchandise. Mr. Badger promised to do this, and says in his testimony that the only reason he did not do it was because he forgot it On the 14th day of June, Bad- ger wrote the policy in suit, and on that date, or very shortly after that wrote a letter to the insurance company, his principal, stating to it that he had written a policy for Ham- mang Bros. & Co. on the 14th of June, 1890, for a year for $1,500, to take the place of their policy of $1,090, which expired on that date; and in this letter he informed the in- surance company, his principal, that the Omaha Fire Insurance Company had a pol- icy of $1,000 on the same property. The pol- icy in suit after it was written by Mr. Badger, was placed by him in a vault in his bank, where it appears that Hammang Bros. & Co. kept their private papers, and they, nor either of them, ever saw the policy until after the fire occurred out of which this suit arose. Badger collected from Ham- mang Bros. & Co. the premium for the pol- icy in suit, and duly remitted it to the insur- ance company. It appears, also, from the evidence, that Badger, before he wrote the policy in suit, and before talking with Ham- mang Bros. & Co. of writing it knew, through Mr. Cook, the agent of the Omaha Fire In- surance Company, that that company had a policy of $1,000 on the same property insured by the policy here. The argument of coun- sel for the Insurance company here is not that Hammang Bros. & Co. concealed from the insui-ance company the existence of the policy in the Omaha Fire Insurance Com- pany, not that Badger made any inquiries as to any other insurance outstanding on the property, and that Hammang Bros. & Co. answered falsely such inquiries or kept si- lent; but the entire defense and the argu- ment here are rested upon the proposition that, because no memorandum in writing of the existence of the policy in the Omaha Fire Insurance Company was indorsed on the pol- INSTJBANCE AGENTS. 169 icy in suit, the latter never was in force. If Hammang Bros. & Co. had themselves vio- lated the provision of the policy in reference to additional insurance on the property, such violation would not, of itself, have rendered the policy in suit; absolutely void, but only voidable, at the election of the insurer. Such a provision is inserted in insurance policies for the benefit of the Insurer, and is a pro- vision which it may waive. Hughes v. In- surance Co., 40 Neb. 626, 59 N. W. 112. But the evidence quoted above shows that the insured have not violated any provision of the policy with reference to other insurance than that in suit. The insured did not write the policy in suit. It was not their business to write it They fully and fairly disclosed to the agent of the insurance company— what he already knew— the existence of the policy In the Omaha Fire Insurance Com- pany, and requested this agent to make a memorandum in writing rn the policy in suit of the existence of « the other policy. The insurance company's agent intended to do this; and it must be said, in justice to Mr. Badger, that his failure to make this memorandum seems to have been the result of f orgetf ulness. Here, then, was actual knowledge of the additional insurance complained of In the possession of the insurance company's agent when he solicited and wrote the insurance policy in suit This knowledge of the agent was the knowledge of the company. Knowl- edge on the part of the agent of an insurance company, authorized to issue its policies, of facts which render the contract voidable at the insurer's option, is knowledge of the company. Gans v. Insurance Co., 43 Wis. 108; Bennett v. Insurance Co. (Iowa) 31 N. W. 948. This precise question was before this court in^nsurance Co. v. Covey, 41 Neb. 724, 60 N. W. 12. Ryan, C, writing the opin- ion of the court, said that "where an insur- ance agent with an,thority to receive pre- miums and issue policies, exercises such au- thority with knowledge of the existence of concurrent insurance on the premises, the company is estopped, after a loss, to insist that the policy is void, because consent to such concurrent insurance was not given in writing." This case is decisive of the ques- tion under consideration. We are satisfied with the rule as there announced, and ad- here to it That it states the rule correctly we have no doubt and that it is sustained by the authorities, see, among others, the fol- lowing cases: Insurance Co. v. Jordan, 29 Neb. 514, 45 X. W. 792; Billings v. Insurance Co., 34 Neb. 502, 52 N. W. 397; Insurance Co. V. Penrod, 35 Neb. 273, 53 N. W. 74; Insur- ance Co. V. Rounds, 35 Neb. 752, 53 N. W. 660; McEwen v. Insurance Co., 5 Hill, 101; Insurance Co. v. GaUatin (Wis.) 3 N. W. 772; Oshkosh Gaslight Co. v. Germania Fire Ins. Co. (Wis.) 37 N. W. 819; Reiner v. Insurance Co. (Wis.) 42 N. W. 208: Yankirk V. Insurance Co. (Wis.) 48 N. W. 798; Kitch- en V. Insurance Co. (Mich.) 23 N. W. 616. In this last case the court said: "An insurance company is bound by the acts or conduct of an agent who has power to solicit Insurance, make examination and survey of the prem- ises, take applications and forward them to the home or branch office, deliver policies, and collect premiums; and when a party in- sured notifies such agent of his intention to take additional insurance, and when he has obtained such insurance requests him to in- form his company of that fact, the company cannot, after a loss, hold the policy issued by it void because its written consent to the taking of such additional insurance was not indorsed on the policy, as provided therein."' Grouse v. Insurance Co. (Mich.) 44 N. W. 496; Gristock v. Insurance Co. (Mich.) 47 N. W. 549; Cleaver v. Insurance Co. (Mich.) 39 N. W. 571; Temmink v. Insurance Co. (Mich.) 40 N. W. 469; Copeland v. Insurance Co. (Mich.) 43 N. W. 991; Tubbs v. Insurance Co. (Mich.) 48 N. W. 296; Brandup v. Insur- ance Co. (Minn.) 7 N. W. 735; Kansel v. Association (Minn.) 16 N. W. 430; Eggles- ton V. Insurance Co. (Iowa) 21 N. W. 652; Donnelly v. Insurance Co. (Iowa) 28 N. W. 607; Miller v. Insurance Co. (Iowa) 29 N> W. 411; Bennett v. Insurance Co. (Iowa) 31 N. W. 948; Mattocks v. Insurance Co. (Iowa) 37 N. W. 174; Brown v. Insurance Co. (Iowa) 38 N. W. 135; Barnes v. Insurance Ca (Iowa) 39 N. W. 122; Reynolds v. Insui^ ance Co. (Iowa) 46 N. W. 659; Hamilton v. Insurance Co. (Mo.) 7 S. W. 261; Brumfield V. Insurance Co. (Ky.) 7 S. W. 893. 4. But it is argued that the evidence of Mr. Badger, the insurance company's agent, and the evidence of the members composing the firm of Hammang Bros. & Co. showing that at the time and before the issuance of the policy in suit Badger knew of the existence of the policy in the Omaha Fire Insurance Company, and agreed to and did write the policy sued on here, and agreed to make a memorandum In writing thereon of the existence of such Omaha Fire Insurance Company's policy, was incompetent, and that the court erred in admitting It It is said that the effect of this evidence was to vary and contradict the terms of a written con- tract, to wit, the policy, between the parties. We think this evidence tended to prove that the plea of estoppel set up by the insured to the defense of other insurance on the property made by the Insurance company was compe- tent and material; and we do not think the efCect of the evidence was such as counsel contend. 5. The final assignment of error is that the court erred In not sustaining the application of the insurance company for a new tiial on the ■ ground of accident and surprise. We cannot consider this assignment, for the rea- son that the affidavits used in the district court in support of this ground of the motion for a new trial are not preserved in the bill of exceptions. The judgment of the district court was rignt It is accordingly in all things affirmed. Affirmed. NORVAL, O. J. I concur in the result. 170 INSURANCE AGENTS. RITTHVEN et al. t. AMERICAN FIRE INS. CO. (60 N. W. 663.) Supreme Court of Iowa. Oct. 22, 1894. Appeal from district court, Palo Alto coun- ty; George H. Carr, Judge. Action at law upon a policy of fire insur- ance. Trial to a jury, yerdict and judgment for plaintiffs, and defendant appeals. Re- versed. R. W. Barger and McCarty & Linderman, for appellant. B. E. Kelly and Soper, Allen & Morling, for appellees. DEEMER, J. On the 30tli day of April, 1891, the defendant issued to plaintiffs its policy of assurance, insuring them against loss or damage by fire for the period of one year upon an ice house situated in Palo Alto county. On the 15th day of October, and during the life of the policy, the building was totally destroyed by fire. The compa- ny having failed and neglected to pay the loss, this action was brought to recover the amount of the policy. Upon the trial of the case in the court below it was conceded that the property was destroyed by fire, and was ■worth more than the amount called for by the policy. It was also admitted by the plaintiffs that they did not give the prelimi- nary notice and proof of loss required by the policy and by McClain's Code, § 1734, but they averred that th'' defendant, through its •officers and agents, had waived the same. At the conclusion of the testimony for plain- tiffs, defendant moved for a verdict, on the ground that no such waiver had been proved. The com^ overruled this motion, and this rul- ing is assigned as error. IngersoU, Howell & Co., of Des Moines, were the local agents of the defendant, who issued the policy in suit. They had the power "to receive pro- posals for insurance against loss or damage "by fire, to name rates, receive premiums, and to countersign, issue, renew, and consent to the transfer of policies of insurance, signed Ijy the president and secretary of the com- pany, subject to the regulations of the com- pany and the instructions of its officers." The evidence also shows that they some- times received notices and proofs of loss, and forwarded them to the defendant company. Shortly after the fire, and on the same day, one P. H. Giddings, through whom the pol- icy of insurance was procured, at the re- quest of one of the plaintiffs, sent to Inger- soU, Howell & Co. the following telegram: -"IngersoU, HoweU & Co.: Ice House No. 3 & 4 burned to-day. WiU write. F. A. Gid- dings." On the next day he wrote as fol- lows: "IngersoU, Howell & Co., Des Moines, la.— Gents: The ice house Nos. 1, 2, 3, & 4 burned to the ground yesterday. We have one thousand dollars insurance on No. 3 & 4 in American Fire of Philadelphia, policy No. 3,505. When can you have the adjuster come and look It over? Respectfully yours, P. H. Giddings." In a few days thereafter, Giddings received a reply to these commu- nications from IngersoU, HoweU & Co., which stated, in effect, that they had re- ceived the letter and telegram, and would have the adjuster come la a few days. On receipt of the letter and telegram from Gid- dings, IngersoU, Howell & Co. "mailed the usual notice of loss to the company." On the 19th day of October a man by the name of Wemiemont, who was the adjusting agent of the Dubuque Fire & Marine Insurance Company, which was also interested in the loss, appeared upon the scene, and made es- timates of the material and workmanship on the building, figured the dimensions of and located the buildings. The authorities and powers of this agf^nt will be referred to hereafter. Nothing further being heard from the company, Giddings, at the request of plaintiffs, again wrote or telegraphed In- gersoU, Howell & Co. regarding the loss, and on December 11th received the following tel- egram: "American interest left with the Du- buque Fire & Marine. Fill proofs, and send Americans to C. E. Bliven, Manager, 218 La Salle Street, Chicago, Ills." And a few days thereafter received the foUowlng letter: "Des Moines, la., Dec. 11, '91. P. H. Gid- dings, Esq., Ruthven, la.— Dear Sir: Your telegram received yesterday, and we have this morning telegraphed you as follows. [Then follows a copy of the telegram above set forth.] We will say that immediately on the report of the loss last October we gave the necessai-y notice to the companies' man- agers at once. A few days after that, the special agent of the American Fire & Ma- rine were both in Des Moines, and, it seeming unnecessary for both to go to Ruthven, the American special turned over the loss to the Dubuque Fire & Marine special, for him to settle both. We understand the American special, Mr. C. N. Miller, notified Ruthven Bros, to this effect, and also inclosed proofs of loss for them to fiU out. Since that time we have paid no attention to the matter, and do not know what action has been taken by the Dubuque Fire & Marine people. We did not answer your telegram yesterday, antici- pating the arrival in the city of the Amer- ican special We now suggest (if you have not already done so) that the assured make out proofs of loss, and send them by regis- tered mail or express, to make sure that they reach the proper parties of both companies. Send proofs to C. E. Bliven, Manager, 218 La Salle Street, Chicago, Ills. As we under- stand, the state laws give 60 days in which to file such proofs. We do not understand, from aU our conversation with the American spe- cial, that they intended to take advantage of you in any way, but it is weU in aU cases to take the necessary steps in matters of that kind. Do not the assured consider that the loss was due to the neglect of the Des Moines Ice Company in originating the fire, and do INSURANCE AGENTS. 171 -they expect to make any claims in court against these people for the loss sustained? In that case, it strikes us, it might be well to confer with the insurance companies interested on your loss, and join with them in making any such claim, provided you "have the proofs to substantiate it We trust .you will have no trouble in getting matters settled as they should be, and do not antici- pate that you will, so far as the American Is concerned. We trust this is satisfactory, and "to hear from you again soon. Yours, truly, Ingersoll, Howell & Go." C. N. Miller is a special agent and adjuster of the defendant -company, living at Des Moines. Whether he is a general adjuster, or acts as such in spe- cial cases, does not clearly appear. Immedl- Jitely upon receipt of the notice of loss from Giddings, Ingersoll, Howell & Co. notified Miller of the loss, and a short time thereafter Miller and Werniemont came into the office -of Ingersoll, Howell & Co., and it was there arranged between thent that Werniemont -Should go and investigate the plaintiffs' loss, and report to the defendant company. Wer- niemont went pursuant to their arrange- ment, and made the Investigation before -Stated. Some time in January, 1892, and aft- er the 00 days had expired for making proofs of loss. Miller himself went to Ruth- ven, where plaintiffs lived, and there had a conversation with the plaintiffs, in which he stated in substance that he did not wish to go to the site of the property; that he had seen Wernlemcmt before he came up, and had a talk with him after he went back, and that he was satisfied tliat it was aU straight and right, and ought to be paid, but that plaintiffs ought to commence an action against the ice company for their negligence in destroying the property, and if they (plaintiffs) fought them they would take care •of us (plaintiffs); that Werniemont had come to investigate the liability of the ice com- pany when he was first there. Miller did not agree to pay the loss at any time, how- ever, and did not agree to do anything until plaintiffs had tried to recover from the ice company. The foregoing facts are established by plaintiffs' testimony, and are relied upon to prove a waiver of the provisions of the pol- icy requiring notice and a statement of the loss within 60 days from the date of the fire, and of the statute requiring practically the same thing. The defendant Introduced no testimony, and the question in the case is, ■do these facts establish a waiver? The pol- icy required this statement of loss to be filed within 60 days after the fire, unless such tiine was extended In writing by the compa- ny, and provided that the statement should be signed and sworn to by the insured, and should state the time and origin of the fire, according to his best belief, the interest of the assured in the premises, etc The stat- ute (McClain's Code, | 1734) requires the as- .sured to give notice in writing, accompanied by an affidavit stating how loss occurred, and the extent of the loss, within 60 days from the time the loss occurred. These mat- ters were conditions precedent to a right of recovery on the policy, and, unless waived, a failure to comply with them is fatal. The policy also provided: "This company shall not be held to have waived any provision or condition of this policy, or any forfeiture thereof, by any requirement, act, or proceed- ing on its part relating to the appraisal or to any examination herein provided for; and the loss shall not become payable until six- ty days after the notice. * * * This poli- cy is made and accepted subject to the fore- going stipulations and conditions, together with such other provisions, agreements, or conditions as may be indorsed hereon or added hereto; and no officer, agent or other representative of this company shall have power to waive any provision or condition of i this policy, except such as by the terms of ■ this policy may be the subject of agreement I indorsed hereon or added hereto, and to such i provisions and conditions, no officer, agent, ' or representative shall have such power, or : be deemed or held to have waived such pro- visions or conditions, unless such waiver. If any, shall be written upon or attached here- l to; nor shall any privilege or permission af- fecting the insurance under this policy exist or be claimed by the insured unless so writ- ten or attached." The plaintiffs contend that the notice which they sent to Ingersoll, How- ell & Co. of the loss was sufficient, or if not sufficient, that the defendant company raised no objections thereto, and that they were led to believe that they were sufficient They further urged that by sending Werniemont to examine into the loss after the receipt of the notice the company waived any further proofs, and accepted the notice as being suf- ficient It is these claims that we now pro- ceed to examine In the light of the facts and adjudicated cases. Ingersoll, HoweU & Co. were, as w« have already stated, local agents of the defendant company. They had nothing to do with the adjustment of losses. The mere fact that an agent is shown to have authority to Issue policies and countersign the same does not warrant an Inference that he has authority to adjust and settle losses, or waive the per- formance of the conditions in the policy; and the fact that he assumes to do so does not even tend to establish his authority. 2 Wood, Ins. 915; Bush v. Insurance Co., 63 N. Y. 531; Bowlin v. Insurance Co. (Minn.) 31 N. W. 859; Smith v. Insurance Co. C^'t) 15 Ati. 353; Kyte v. Assurance Co. (Mass.) 10 N. E. 518; Knudson v. Insurance Co. (Wis.) 43 N. W. 954; Lohnes v. Insurance Co., 127 Mass. 439. As the policy does not name the person to whom the notice may be sent, but merely provides for notice to the company within sixty days, it may be true that notice can be given to the agent who Issued the policy. And where, as In this case, it is for- 172 I>rf5URAKCE AGEXTS. ther shown tnat the agent mailed a notice of loss to the company, it is more than probable that the notice was given to a proper per- son, and was sufficient as a notice to bind the company. Insurance Co. v. Taylor, 73 Pa. St 342; Argall v. Insurance Co., 84 N. C. 355; Loeb v. Insurance Co. (Mo. Sup.) 12 S. W. 374; Insurance Co. v. Helfenstein, 40 Pa. St. 289; Pennypaclier v. Insurance Co. (Iowa) 45 N. W. 408. This notice, however, was not accompanied by proofs of loss, and, as we have already seen, the local agents had no authority to waive them. The an- swer of defendant's local agents to the plaintiffs that an adjuster would be sent at once was not binding on the company, for they had no authority in matters con- nected with the adjustment of the loss. Von Genechtin v. Insurance Co., 75 Iowa, 544, 39 N. W. 881. Could it be said that IngersoU, Howell & Co. had authority to waive proofs of loss, yet it is apparent ffom their letters and telegi-ams to Giddings, who was representing the assured, that they did not waive them. They both telegraphed and wrote plaintiffs within the 60 days to file proofs of loss, and directed them where to send them. It is not shown that these agents had authority to notify or to send an ad- juster to examine into the loss, and the plaintiffs had no right to rely upon any statement from them that they would. 2. After notifying the local agents of de- fendant company of their loss, an adjusting agent of the Dubuque Insurance Company appears, and makes some figures regarding the loss, with the help of plaintiffs' clerks; and it is claimed that this is a waiver of the requirements of the statute and the terms of the policy. There is no proof that he was sent there by any general agent of the defendant company. The most that can be claimed from the testimony is that he went at the request of Miller, the special agent and adjuster for the defendant company in this state. Just what Miller's powers were does not fully appear. This much, however, is shown: that he was a special agent, had a general oversight over the local agents in this state, and was either a general adjuster or acted specially in regard to such losses as he was directed to by the company. He was not, so far as shown, empowered to delegate his authority. Whatever may have been his powers, we are dear that as to the matter of adjusting losses he had no right to delegate his authority. The business of adjusting losses, carrying with it the in- herent power of waiving conditions in the policy and dispensing with proofs of loss, as well as determining the rights and liabilities of coinsurers, is one reqr'iring special skill and peculiar fitness, and it is a matter of common business knowledge that agents are selected for this work because of their special skill and fitness. It is elementary that when an agent is so selected he cannot delegate his powers. Waldman v. Insiuunce Co. (Ala.) 8 South. 666; 1 Am. & Eng. Enc. Law, 368. The defendant company, so far as shown, did not direct, and had no notice of, the appointment of this subagent, and they did nothing which ought to estop then* from denying his authority. As it is at- tempted to show a waiver by the company of the conditions of the polity by the fact that they investigated the loss, it is incumbent upon the plaintiffs to show that they were misled by some act of the defendant indi- cating that it had dispensed with the proof of loss. The defendant itself did no act which would indicate such a waiver, and it is certainly permitted to show that what was done was without its knowledge, consent, or authority. "Werniemont was manifestly not clothed with authority, either real or appar- ent, to waive proofs of loss. Barre v. Insur- ance Co., 76 Iowa, 609, 41 N. W. 373; Hollis V. Insurance Co., 65 Iowa, 454, 21 N. W. 774. Again, if this adjuster had authority to visit the premises, and make report of the loss, he did or said nothing to indicate that form- al proofs were not required. It is provided in the policy "that the company shall not be held to have waived any provision or condi- tion thereof, or any forfeiture thereof, by any requirement, act, or proceeding on its part relating to the appraisal or to any examina- tion provided for in the policy." Plaintiffs then had no right to rely upon this examina- tion as a waiver of the proofs of loss, even if authorized. Without such a provision in the policy, it has been held that investigation by an adjuster who does not say anything to the assured is not a waiver. Busch v. In- surance Co., 6 Phila. 252; Insurance Co. v. Shimp, 16 111. App. 248. Whatever the true rule may be in this respect, it is clear from what has been said that Werniemont had no authority to waive proofs of loss. 3. Lastly, it is insisted that Miller, the spe- cial agent and adjuster of the company, who interviewed the plaintiffs after the expiration of the 60 days within which to make proofs of loss, waived the performance of the con- dition, and agreed to pay the policy. There is no evidence of any express promise to pay. The most that can be said of his testimony is that he said the loss was all right, and ought to be paid, and that he had received a state- ment from Werniemont regarding the loss. In the first place it is not shown, except by the alleged declarations of Miller, that he had any authority to visit the plaintiffs. The company made no representations to them that he would be sent. He was a special agent, having charge of the agencies within his state, and perhaps was the adjuster of the company for this state; these facts be- ing the case within the rule annoimced in the BaiTe and Hollis Cases, supra. But, if this be not true, the authority of Miller, as well as of Ingersoll, Howell & Co. and Wernie- mont, was limited by the express terms of the policy, of which plaintiffs will be pre- sumed to have had notice. The policy pro- INSURANCE AGENTS. 173 Tides, In substance, that no officer, agent, or •other representative of the company shall have power to waive any provision or con- vn. No one was living in the house when it burned down. It wag unoccupied by any one. " Henry McClentack testified : , "I and Mr. Crabb rented the house that was burned down of Mr. Kyle the plaintiff. At the time we rented it his aunt, Marga- ret Kyle, was living in it. On the 26th day of March, 1886, she moved out, and took all of her things out. After she moved out we made some repairs on the house, and when we finished repairing we left a few planes in said house, on orabout the 30th day of March, 1886. We hauled some hay, ami put it in the stable loft. At the time the house burned down it was unoccupied by any one. The planes were all the property that was in it. We in- tended to move in the next day after the fire occurred. " We have examined the authorities to which counsel for the appellee in their brief call our attention, and other author- itips which we have been able to find in the same line, but think they do not sup- port the ruling of the court to which we have called attention. As strong a case as we have been able to find in support of the contention of the appellees is the case of Eddy v. Insurance Co., 70 Iowa, 472, 30 N. W. Rep. 808. The syllabus to that case is as follows : "A tenant moved out of the insured dwelling on Tuesday, and on Wednesday morning the owner, who lived near, took possession of the house, and with his servant began cleaning it; • * * and they were continuously en- gaged during the working hours of each day in cleaning and moving goods into the house until Friday evening, intending that the family should be fully domiciled there on Saturday, but on Friday night the house was burned. Held, that the house was not vacant." The facts as stated by the learned judg^e who delivered the opinion of the court are as follows: "The house had been temporarily occupied by a tenant, who removed therefrom on Tuesday. The fire occurred on the follow- ing PYiday night. The plaintiff was resid- ing in another house on another part of the farm, and on the next morning after the tenant moved out of the house which was burned the plaintiff took possession of it, and his employes cleaned the house, and prepared to move in. They were con- stantly engaged every day in cleaning the house and in moving in household goods until P^day evening. By that time there were carpets and bedding and bedsteads, cans of fruit, chairs, pictures, mirrors, and a stove, and clothing, a table and dishes, in the house, and the family were expecting to be there to remain on Satur- dnv. The farm stock was there, and the plalutiff cr hisemployes were in and about the house every day from six o'clock in the morning until seven or eight o'clock in the evening. The preparation for occupying the house was continuous during all the working hours of each day. " The court could very well hold, as it did, from these facts, that the building was not vacant when burned. But we hereafter cite a later case from the same court, where the facts were not as favorable to the insur- ance company as the case before us, in which it was held that the policy could not be enforced. In most of the cases to which counsel call our attention (if the buildings insured were dwellings) were where there was a permanent occupancy, and a temporary absence of the tenant at the time of the fire; and, if mills or manu- factori,es, where there was but a tempo- rary suspension of business'at the time of the fire. In construing a condition in an insurance policy against vacanc.v or non- occupancy, the courts will look to the sub- ject-matter of the contract. Whitney v. Insurance Co., 72 N. Y. 117; American, etc., Ins. Co. v. Brighton, etc., Manuf'g Co., 125 111. 131, 17 N. E. Rep. 771; Insur- ance Co. V. Kinnier, 28 Grat. 88; Sonne- born V. Insurance Co., 44 N. J. Law, 220. The occupancy of a dwelling, of a mill, of a barn, is each essentially different in its scope and character, and the construction must have reference thereto. Sonneborn V. Insurance Co., supra; Kimball v. Insur- ance Co., 70 Iowa, 513, 30 N. W. Rep. 862. The hous" covered by the policy here under consideration was a dwelling. It became entirely vacant on the 26th day of March, 1886, and remained so until its de- struction by fire, on the 3l8t day of March. The prospective tenants made some re- pairs on the building after Mrs. Kyle va- cated it, but the^ nature and character thereof does not^ipear, nor the length of time they were edgS^d thereat. It ap- pears that the repkirs were completed about the 30th day of March, and on that day the prospective occupants moved some hay to the loft of the stable on the prem- ises, and then, or before, buried some po- tatoes on the premises ; but all of the wit- nesses state that the building was unoccu- pied when burned, and had not been oc- cupied after Mrs. Kyle moved out, and that the only thing left in it at any time after her removal was a couple of carpen- ter's planes, left there by Crabb and Mc- Clentack during the time they were mak- ing the repairs, and thereafter. The contract in all of its parts was one that the parties were competent to make, and which. they had a perfect ri^t to en- ter into, and hence they are bound by all of its terms and conditions. From the time the building became vacant until its destruction, the risk which the appellant had assumed was increased because of the vacancy ; and it was an increase of risk which the appellant had guarded against by its contract. It would be folly to con- tend that the building woul(f have been consumed notwithstanding the vacancy. Most certainly the care and vigilance that would have accompanied the occupation of the property forita protection and pres- ervation was lessened because of the va- cancy . In the light of all of the authorities, the facts which the record discloses estab- 186 STIPULATIONS CONTAINED IN THE POLICY. Jish beyond question that the property was " vacant or unoccupied " from the 26th of March, 1886, until it was consumed by fire, on the Slst of that month. In Insurance Co. t. Meyers, 63 Ind. 238, the condition in the policy and the cir- cumstances of the case and in the present case do not materially differ. The follow- ing is the condition in the policy in that «ase: "It is hereby agreed and declared to be the true intent and meaning of the parties hereto that in ease the above-men- tioned building shall at any time after the maliing, and during the continuance, of this insurance, become unoccupied, * • • unless otherwise specially provided for, •or hereafter agreed by the company in writing, and added or indorsed on this policy, then and from thenceforth, so long ■as the same shall be so unocdupied, * * * these presents shall cease and be of no force or effect. " We copy the fol- lowing from the opinion : "It appeared by the evidence that the house was occupied by tenants when it was insured ; that the tenants failed to pay rent when due, and the landlord took steps to remove them. Meyers, the owner, testified: 'No one lived in the house at the time of the fire. The tenants left on Friday or Satur- day. The building was burned the next Tuesday. The building was used as a ten- ant-house. It was a double tenement, usually occupied by two families. I put the tenants out because they would not pay rent. I had engaged it to S. C. Carney as soon as I could get them out and have the building repaired. A little plastering and whitewashing was all that was need- ed. Carney was living in my house across the street, and -was to gointo itfor a year as soon as I could get the tenants out, and get Fi"ed Meyers to fix the house. The tenant was to move in as soon as it was repaired.' In the case at bar the touse was unoccupied at the time it was burned. It had been unoccupied for about four days,— some of the witnesses make the time longer; and no definite time when it was to be occupied was fixed. It was to be occupied as soon as it should be re- paired by Fred Meyers. * * * As a matter of fact, as we have said, the house was unoccupied when it was burned. By itsterms thecompany • • * wasnotlia- ■ble on the policy sued upon. The policy was a contract. What reason appears for giving it an operation, by construction, different from that which its terms re- quire? It seems to us that the literal meaning expresses just that the parties intended. Here, a tenant-house is insured ■for a year. A change of tenants, during the time, is not prohibited, and might naturally be expected. Short intervals in which the property would be vacant might naturally occur. The contract provided that, when they did occur, the policy should not operate during their existence. " In Cook V. insurance Co., 70 Mo. 610, the condition in 'the policy was : " If the prem- ises become unoccupied without the as- «entof the company indorsed hereon, then, and in every such case, the policy shall be void." The following is the learned judge's statement of the facts: "About two weeks before the fire the plaintiff went to Kansas City, Mo., to reside, and lived thereuntil after the fire. She shipped a car-load of her furniture to the latter place, and left about ¥300 worth in the bouse, and instructed one Barnard to sell' it, except a bed-room set, and also to rent the house. Joseph Southwick was left in possession, with instructions to remain in possession and sleep in the house until he could rent it. Delaney was to rent the house. Southwick went to Kansas City three or four days before, and was there when the fire occurred. He left no one in the house, but told Delaney, with whom lie left the keys, (except the key of the bed- room he had slept in,) to take charge of the house, and rent it if he could before he returned." And, following this recital of the facts, the learned judge goes on to say : " On these facts the question arises, was the house unoccupied when it was burned? If it was, she was not entitled to recover. ' Occupation of a dwelling-house is living in it.' Paine v. Insurance Co., 5 Thomp. & C. 619. 'A fair and reasonable construc- tion of the language "vac-ant and unoccu- pied"i8 that it should be without an occu- pant,— without any person living in it.' Insurance Co. v. Padfield, 78 111. ISO. Speaking of a dwelling-house and barn, Colt, J., in Ashworth v. Insurance Co., 112 Mass. 422, observed : 'Occupancy, as ap- plied to such buildings, implies an actual use of the house as a dwelling-place, and such use of the barn as is ordinarily inci- dent to a barn belonging to an occupied house, or at least something more than a use of it for storage. The insurer has a right, by the terms of the policy, to the care and supervision which is involved in such an occupancy.' * * * In Wood, Ins. 164, the above observations of Colt, J., are quoted and approved. In Paine v. Insurance Co., 5 Thomp. & C. 619, it was said that 'occupation of a dwelling-house is living in it, not mere supervision over it; and, while a person need not live in it every moment, there must not be a cesse;*- tiou of occupancy for any considerable portion of time.'" After citing other au- thorities, the court says: "Applying the doctrines of the above-cited cases to this, it is clear that, within the meaning of the clause under consideration, the premises insured were unoccupied from the time plaintiff went to Kansas City until the fire occurred. " Insurance Co. v. Wells, 42 Ohio St. 519, sup- ports the contention of the appellant. The tenant moved out with no intention of returning, leaving behind a barrel of corn and a coal-oil can. During the night following the removal the building was destroyed by fire. The court said: "The condition that the policy should be void if the building therein mentioned be 'va- cated or unoccupied' was absolute. The parties to the contract were competent to make such stipulation." The court concludes by holding that the property was vacant, and the policy void, and says that the duration of the vacancy was wholly immaterial. In the case of Sleeper v. Insurance Co., 56 N. H. 401, the condition in the policy was : " If the premises hereby insured be- come vacated by the removal of the owner or occupant without immediate notice to the company, and consent indorsed here- AS TO THE CARE AND CONDITION OF PROPERTY. 187 on, » * • this policy shall be void." In the opinion by Smith, J., It is said: " It is apparent the insurers intended to guard against the increased risli which in- evitably affects buildings where no one is living or carrying on any business. An unoccupied building in vites shelter to wan- derers and evil disposed persons. No one interested is present to watch or care for the property, or seasonably to extinguish the flames in case of fire; and for various reasons that might be enumerated an un- occupied building is more exposed to de- struction, to say nothing of the induce- ment a dishonest owner would have to turn it, if unprofitable, into money, when insured, by becoming a party to ite de- struction by fire. If, then, the motive is to have some one present occupying and -dwelling in the buildings, and interested to preserve the roof that shelters his fam- ily or holds his household goods, that ob- ject would plainly be defeated by holding that he and his family may depart with all their possessions, save, perhaps, a few articles not needed foe present use, and still the premises be considered occupied. • • * Icannotsaythatlhaveany doubt that these buildings were vacant at the time they wereburned, in the sense in which that term was used in the policy. " All of the reasoning of the court has much force when ajiplied to the facts of the case we bave brfore us. In the same case, Ladd, jr., said : "I thinli, when the occupant of a dwelling-house moves out with his family, tailing J)art of his furniture and all the veearing apparel of the family, and makes his place of abode in another town, al- though he may have an intention of re- turning in eight or ten months, such dwel- ling-house, while thus deserted, must be regarded as unoccupied, that is, vacated, according to the natural and ordinarily received import of those terms. It is the very situation against the hazards of ■which the defendants undertook to guard themselves, by an expi-ess stipulation and •condition inserted in the contract, upon which this action is founded. " In the case of Moore v. Insurance Co., 64 N. H. 140, 6 Atl. Bep. 27, 10 Amer. St. Bep. 3S4, it is held that the words " vacant and unoccupied, " "when used in a policy of in- surance, in connection with the idea that the insurer was stipulating against an in- cpease in the risk from the absence of per- sons from the premises insured, must be re- garded as interchangeable and equivalent in meaning; that when no one lives in the house it is both vacant and unoccupied, "though it may contain articles of furniture which the last occupant failed to remove. In the learned note to the foregoing case ilO Amer. St. Rep. supra) it is said : " There is strong authority in support of the rule that a fair and reasonable construction of the term 'vacant and unoccupied ' is that the house should be without an occupant; that is. without any person living in it;" citing Insurance Co. v. Zaenger, 63 in. 464; Insurance Co. v. Padfield, 78 111. 167; Insurance Co. v. Tucker, 92 111. 64; Fitzgerald v. Insurance Co., 64 Wis. 463, 25 N. W. Bep. 785; Alston v. Insurance Co., 80 N. C. 326; Cook v. Insurance Co., supra. And it is stated : "The same construction is given to the term 'vacant or unoccu- pied,'" Herrman v. Insurance Co.,85 N. Y. 163 ; Stupetski V, Insurance Co., 43 Mich. '>73 ; Insurance Co. v. Kiernan, 83 Ky. 4()S; Sonneborn v. Insurance Co., 44 N. J. Law, 220. As will be remembered, the words " va- cant or unoccupied " are employed In the policy under consideration. In view of these authori"ties, we repeat, at least in substance, what we have once before said, that we cannot well imagine how it can be said that the building covered by the policy upon which the present action rests can be said not to have been vacant when the fire occurred. It "was certainly "with- out an occupant, in any sense of the term. In Sexton v. Insurance Co., 69 lovia, 99, 28 N. W. Bep. 462, it "vi as held thai the use of a buildinglor the purposeof storing tools, jars, etc., was not a compliance withihe condition against the vacancy of the build- ing. In Feshe v. Insurance Co., 74 Iowa, 676, 39 N. W. Rep. 87, the insured property was a dwelling-house occupied by a ten- ant, and the policy provided thatit should become void if the building became " whol- ly or partially vacant or unoccupied." The tenant moved out, and five days after- wards the property was burned. The owner, who lived but a half mile distant, spen t a part of each intervening day in examining and cleaning the house, but did not stay there at night ; an d her tather.who worked near, left a lew tools in the house at night. It was held that the house was " vacan t and unoccupied " within the mean- ing of thepolicy , and that no recovery could be had thereon. In Bennett v. Insurance Co., 50 Conn. 420, thepolicy provided that it should be void "if the dwelling-house here- by insured shall cease to be occupied as such." At the time of the insurance the house was occupied by a tenant, who moved out about 6 o'clock on a certain evening, and the house was burned about 2 dVIiicIv the next morning. It was held that the policy was void, and was not saved by the fact that the fire had actual- ly commenced, and was smouldering, un- observed, when the tenant moved out. The first of the last two cited cases is in some of its fact* much like the case we have under consideration, but the facts of this case support more strongly the contention of the insurer than UiU the facts in those cases. For a further con- sideration of the questions discussed, we refer to the exhaustive note to Moore v. Insurance Co., supra. At this point it may be well to say that we do not wish to be understood as holding that a tem- porary absence of the occupants of an in- sured dwelling, the furniture and other contents remaining undisturbed during such temporary absence, would render a policy of insurance thereon inoperative be- cause of a condition against vacancy. The point Is made by counsel lor the ap- pellee that counsel for the appellant do not discuss in their brief the i-ullng of the court upon the motion for a new trial, and therefore waive it. In this contention counsel are mistaken as to the fact upon which it rests. The judgment is reversed, with costs, with direction to the court be- low to overrule the demurrer to the com- plaint, and proceed in accordance with this opinion. 188 STIPULATIONS CONTAINED IN^THE POLICY. DANIELS V. EQUITABLE FIRE INS. CO. (48 Conn. 105.) Supreme Court of Errors of Connecticut. May Term, 1880. C. E. Perkins, for the motion. G. G. SiU and J. H. Tallman (with whom was G. Case), opposed. CARPENTER, J. This is an action on a fire insurance policy. The cause was tried to the jury, and the plaintiff had a verdict. The defendants move for a new trial for a mis- direction and for a verdict against evidence. On one point in the case we think the verdict was clearly against the weight of evidelice, and we will confine our attention mainly to that. The property insured is described in the policy as follows: "Furniture, fixtures and tools, used by the assured in his business as renovator of furniture, clothing and carpets, and on the improvements to the building put in by him." Then follows this claus^: "The assured has permission to use naphtha in his business, but fire or lights are not permitted in the building, except a small stove in the office." At that time there was no other stove in the building. The policy issued July 7th, 1877, for one year. About the first of Janu- ary following a large stove was placed in a room used for a drying room, aiid~ was* there- after used in connection with hot water pipes for warming the naphtha in tanks in the base- ment. The fire occurred in April, and was caused by an explosion of gas. The court charged the Jury as follows: "The defendants claim that the plaintiff put in a stove and other apparatus, after the policy was issued, without the consent of the company, and that this materially in- creased the risk. Now if this was done, and materially increased the risk, it vitiated the policy. You are to decide whether putting in that additional stove and apparatus and using it increased the risk. The question is wheth- er there would be more likelihood of danger from two stoves, with the pipes for heating naphtha, than from one stove." It was con- ceded that the additional stove was used in the manner and for the purpose stated, and that the use of naphtha caused an accimiula- tion of highly inflammable gas in the room where the stove was. The defendants chose to insure property in a building in which there should be but one small stove, and that definitely located in. as safe a place probably as there was in the building. By strong im- plication the use of any other stove was pro- hibited. We must presume that the defend- ants would have refus.ed to insure with lib- erty to use two stoves in the manner they were used at the time of the fire. It wiU not do to say that they insured business carried on with naphtha, and that therfefore the in- sured had a right to use the ordiVary means for carrying on that business. The conditions and manner of use were clearly defined and^ limited, to which he agreed, and he had no- right to use means which involved a viola- tion of his agreement. Nor was it necessary;: for obviously the naphtha could have been heated by means of steam or hot water pipes from a fire at a safe distance. But the plaintiff says that it is not ex- pressed in the policy that the 'use of another stove shall make it void, and therefore that such use is not of itself a defense. It may be true that such- use, irrespective of the in- crease of risk, will not have that effect; but the policy in another part expressly provides- that if the risk is increased it shall be void; so that the real question was whether the ad- ditional stove increased the risk. The court correctly instructed the jury that if it did the- plaintiff could not recover. The jury there- fore must have totmd that the risk was not increased. There was no evidence to justify such a finding. The testimony the other way was clear and conclusive. In addition to the obvious danger from the use of such materials, two witnesses, familiar with the business of insurance, testified unqualifiedly that the use of the additional stove materially increased the risk and rendered the property uninsur- able; and there was no conflicting evidence. It seems very clear that the jury must have disregarded the evidence. The case is not met by the suggestion that there was evidence tending to show that the fire caught from the office stove. The diffi- culty reaches back of that The defendants not only did not insure against the risk of two stoves, but virtually refused to inside at all if the premises were subjected to that ad- ditional risk. They had a right to refuse In- surance in a case in which the question would be an open one, whether a loss was occa- sioned by a risk insured against, or one that was not insured against. The difficulty of proving the origin of a fire, to say nothing of the inclination of juries to find against cor- porations, is a sufficient reason for the exer- cise of the right; and when a party has clear- ly exercised the right, as the defendants have In the present case, the court ought not to de- prive him of the benefit of it by a strained interpretation of the policy. Nor is the plaintiff's claim a tenable one th^t the policy continued in force during the term for which it issued, notwithstanding the increased risk, by virtue of the eleventh con- dition in the policy. That condition provides for a renewal of the policy at the expiration of the term, and then adds, "But in case there shall have been any change in the risk, either within itself or by neighboring buildings, not made known to the company by the assured at the time of renewal, this policy and renewal shall be void." It is obvious that this is not inconsistent with the first condition, which provides that the increased risk shall avoid the policy; nor was it intended to modify that condition; but was intended to extend it to the renewal in AS TO THE CAKE AliD CONDIT.ON OF PROl'ERTY. 189 ■case one should happen to issue in ignorance ■of the inci-eased risk. Feeling constrained as we do to grant a new trial for the reason given above, it is unnec- essary to consider the other questions raised by the motion. A new trial is granted. In this opinion the other jndges concurred. 190 STIPULATIOXS CONTAINED IN THE POLICY. IMPERIAL, FIRE INS. CO. v. COOS COUNTY. (14 Sup. Ct. 379, 151 TJ. S. 452.) Supreme Court of the United States. Jan. 29, 1894. No. 204. In error to the circuit court of the United States for the district of New Hampshire. Reversed. Harry Bingham, for plaintiff. S. R. Bond and Fletcher Ladd, for defendant Mr. Justice JACKSON delivered the opin- ion of the court This was an action of assumpsit upon a $5,000 policy of insurance issued by the plaintiff in error November 21, 1882, insiuring the comthouse of the defendant in error, at Lancaster, in the county of Coos, N. H., against loss by fire, for a period of five years from the date of the policy. The premises insured were a two-story building, having on the first floor the offices of register of deeds and probate, clerk of comrt, and county commissioners. The court room was on the second floor. At the date of the policy there were two brick vaults, — one, 8 by 13 feet, for the use of the probate office; and the other, 16 by 13 feet, for the use of the offices of the register of deeds and clerk of court, — there being a partition in the center, separating the part used by the reg- ister from that used by the clerk. The fire which destroyed the insured prem- ises occmred about 2 o'clock in the morning of November 4, 1886. The policy in suit contains the following: "Payment in case of loss is upon the fol- lowing terms and conditions." Among the terms and conditions are the following: "This policy shall be void and of no effect if, without notice to this company and per- mission therefor in writing indorsed hereon, * * * the premises shall be used or oc- cupied so as to increase the risk, * • * or the risk be increased • • * by any means within the knowledge or control of the assured, * * * or if mechanics are employed in building, altering, or repairing premises named herein, except in dwelling houses, where not exceeding five days in one year are allowed for repairs." In August, 1886, the plaintiff, without the written consent of the defendant, and with- out its knowledge, employed wood carpen- ters and brick masons, and reconstructed and enlarged the vaults, making that of the office of the register of probate 12 by 13 feet instead of 8 by 13 feet, as it was at the date of the policy, and making those of the offices of the register of deeds and clerk of court 22 by 13 instead of 16 by 13 feet, as at the date of the policy. The foundations were also reconstructed and enlarged to cor- respond with the enlargement of the vaults. The reconstruction and enlargement of the- vaults necessitated the cutting of the floors and ceilings of the respective offices in which they were, so as to extend the vaults. The time during which these mechanics- were employed in the reconstruction and en- largement of the foundations and vaults was about five or six weeks. Some painting was also done incident to the above changes, but the extent did not distinctly appear. In addition to the foregoing, the plaintiff below also changed the method of heating the offices of the register of probate and clerk of court, placing a hot-water coil In the furnace in the basement, from which ran pipes through the floors, and were at- tached to radiators in those offices. This work was commenced November 2, and com- pleted about midnight November 3, 1886. No permission to make this change in the method of heating was either obtained or requested, and the defendant had no knowl- edge of its being done. In the evening of November 3d a fire was built in the furnace, to test the heating apparatus, and heat the- radiators, so they might be bronzed, and the fire was left burning at about midnight, when the mechanics and some of the coun- ty officers left the building. From the time work began upon the vaults —early in August — until the fire, the papers and records of the offices of the clerk of court and registers of probate and deeds were in the com-t room, or in the respective- offices, unprotected by any safes or vaults. The expense of the labor and raw material of the foregoing alterations was about $3,- 000. The defendant contended that the fore- going alterations, rebuilding, and repairs- were extraordinary, and not ordinary, re- pairs, such as were necessary in the use of the premises insured, and such as might have been contemplated by the parties when the contract was made; and the following request for a ruling was made to the pre- siding judge, viz.: "The defendants request the court to rule ; that the building, altering, and repairing of I the premises to the extent of tearing down j several partitions, cutting away a portion of the floors in several rooms, tearing down the vault and enlarging and rebuilding It^ and by chansing the method of heating a portion of its b.uilding by putting in piping and radiators for hot water or steam, all at the expense of several thousand dollars, for the labor of mechanics, for raw materials, was a building, altering, or repairing of the premises which increased the risk,, and the policy thereby became void." The coiurt declined to rule as requested,, and the defendant excepted. Upon the conclusion of the testimony, which proved the foregoing facts, the defendant made the following motion that a verdict be- directed, viz.: "The defendants move that a verdict be- directed for them on the ground that there AS TO THE CARE AXD CONDITION OF PROPERTY. 191 is no evidence competent to be submitted to the jury that the buUding, altering, and repairing shown by the evidence was not such building, altering, and repairing as avoided the policy." The motion was denied by the court, and the defendant excepted. The defendant requested the coiu-t to in- struct the jury— "That if the work done by the mechanics, as disclosed by the evidence, increased the hazard while such work was being done, then the plaintiff is not entitled to recover." The court refused to give this instruction, and the defendant excepted. The court, in the course of its charge to the jury, instructed them as follows: "The identical question before you is whether, at the time the fire took place, what the county of Coos had done in the way of alterations and repairs increased the risk at that time, (that is, at the time of the fire; that is, on the night of November 4;) that the county of Coos had done in the way of repairs, changing the vaults, putting in additional heating apparatus, — did those things inci-ease the risk at that particular time? Not whether mechanics, two days previously, or three days previously, or a week previously, had worked in that build- ing. What was the condition of the build- ing on the night of the fire? Had what the county of Coos did in making those repairs Increased the risk, or had it not? Were the repairs ordinary or necessary, and accom- panied by no increase of risk, or were they of such an extraordinary and material char- acter upon that particular night — ^that is, the condition in which the building was upon that particular night— that the risk was in- creased, and therefore the assured, the coun- ty, violated this condition in the policy, and consequently the defendant company should not be held liable." To this instruction the defendant except- ed. There was a verdict and judgment for the plaintiff bdow for the sum of $5,505, and the present writ of error is prosecuted to re- verse that judgment In the view we take of the case, it will be necessary to notice only the exceptions based upon the refusal of the court to in- struct the jiu:y, as requested by the defend- ant, "that if the work done by the mechanics, as disclosed by the evidence, increased the hazard while such work was being done, then the plaintiff is not entitled to recovery;" and the exception to the instruction given, to the effect that the question was whether the work and repairs done upon the building increased the risk at the time of the fire. It is contended on behalf of the plaintiff in error that these exceptions present the fol- lowing legal propositions: (1) The court should have instructed the jury that if the work done by the mechanics increased the hazard while the work was in progress, then the assured would not be en- titled to recover, because, when the hazard was increased, and the risk changed, by the acts of the assured, and without the knowl- edge or consent of the insurer, in that event the contract came to an end by virtue of its- own expressed, imambiguous terms. (2) The assured, the county of Coos, hav- ing made extensive repairs upon the insured premises, and having neither notified the- plaintiff in error, the insurer thereof, nor obtained its consent in writing therefor, the- conditions of the policy were violated,! and, by its terms, the contract terminated. ' (3) It was error to instruct the jury that it was immaterial what had occurred to in- crease the hazard during the repairs, unless such increased hazard existed at the time of the fire. On behalf of the defendant in error it is- claimed that under a proper construction of the policy the question on which the case- turns is, did the repairs and alterations made by the defendant in error upon its court- house, and completed when the fire occmred, result in an increase of risk at that time,, or were they in any way the cause of the fire? The proposition is that, unless such repairs and alterations had the effect of either causing the fire, or of increasing the risk, at the time it occmred, then there was- no breach of the condition contained in the contract that "this policy shall be void and of no effect if, without notice to the com- pany, and permission therefor indorsed here- on, • • « mechanics are employed in building, altering, or repairing the premises named herein." Contracts of insurance are contracts of in- demnity upon the terms and conditions specl- ' fied In the policy or policies embodying the- agreement of the parties. For a compara- tively small consideration the insurer under- takes to guaranty the insured against loss: or damage, upon the terms and conditions agreed upon, and upon no other, and, when called upon to pay m case «f loss, the in- surer, therefore, may justly insist upon the j fulfillment of these terms. If the insured I cannot bring himself within the conditions I of the policy, he is not entitled to recover for j the loss. The terms of the policy constitute the measure of the Insurer's liability, and, in order to recover, the assured must show him- sdf within those terms; and, if it appears that the contract has been terminated by the viola- tion on the part of the assured of Its condi- tions, then there can be no right of recov- ery. The compliance of the assured with the terms of the contract is a condition preced- ent to the right of recovery. If the assured has -violated or failed to perform the condi- tions of the contract, and such violation or want of performance has not been waived by the Insurer, then the assured cannot re- cover. It is ImmatMial to consider the rea- sons for the conditions or provisions on which the contract is made to terminate, or any other provision of the policy which has been accepted and agreed upon. It Is enough that the parties have made certain terms condl- 192 STIPULATIONS CONTAINED IN THE POLICY. tions on which their contract shall continue or terminate. The courts may not make a conti-act for the parties. Their function and duty consist simply in enforcing and carrying out the one actoaJly made. It is settled, as laid down by this court In Thompson v. Insurance Co., 136 TJ. S. 287, 10 Sup. Ct. 1019, that, when an insurance contract is so drawn as to be ambiguous, or to require interpretation, or to be fairly susceptible of two different constructions, so that reasonably intelligent men, on read- ing the contract, would honestly differ as to the meaning thereof, that construction will be adopted which is most favorable to the insured. But the rule is equaUy well settled that contracts of insurance, like other contracts, are to be coiistrued according to the sense and meaning of the terms which the parties have used, and, if they are clear and unam- biguous, their terms are to be taken and un- derstood in their plain, ordinary, and popu- lar sense. It is entirely competent for the parties to stipulate, as they did in this case, "that this policy should be void and of no effect, if, without notice to the company, and permis- sion therefor indorsed hereon, • * * the premises shall be used or occupied so as to increase the risk, or cease to be used or oc- cupied for the purposes stated herein; * * * or the risk be increased by any means with- in the knowledge or control of the assured; * * * or, if mechanics are employed in building, altering, or repairing premises nam- ed herein, except in dwelling houses, where not exceeding five days in one year are al- lowed for repairs." These provisions are not unreasonable. The insurer may have been willing to carry the risk at the rate charged and paid, so long as the premises continued in the condition in which they were at the date of the contract; but the company may have been unwilling to continue the contract under other and different conditions, and so it had a right to make the above stiptdations and conditions on which the policy or the contract should terminate. These terms and conditions of the policy present no ambiguity whatever. The several conditions are separate and dis- tinct, and whoEy independent of each other. The first three of the above conditions de- pend upon an actual increase of risk by some act or conduct on the part of the insured, but the last condition is disconnected entire- ly from the former, whether the risk be in- creased or not. This last condition may properly be construed as if it stood alone, and a material alteration and repair of the building beyond what was incidental to the ordinary repairing necessary for its preserva- tion, without the consent of the insurer, would be a violation of the condition of the policy, even though the risk might not have been, in fact, increased thereby. The condi- tion that the policy should be void and of no effect if "mechanics are employed in build- ing, altering, or repairing the premises named herein," without notice to or permission of the insurance company, being a separate and valid stipulation of the parties, its violatioa by the assiured terminated the contract of the insurer, and it could not be thereafter made liable on the contract, without having waived that condition, merely because, in the opin- ion of the court and the jury, the alterations and repairs of the building did not, in fact, increase the risk. The specific thing described in the last condition as avoiding the policy. If done without consent, was one which the insurer had a right, in its own judgment, to make a material element of the contract; and, being assented to by the assured, it did not rest in the opinion of other parties, court or jury, to say that it was immaterial, im- lessi it actually increased the risk. If the last stipulation had been so framed as to require the element of an Increased risk to be incorporated into the condition that if "mechanics are employed in building, alter- ing, or repairing the premises named here- in," without notice to the company, and its permission in writing indorsed on the policy, then there would have been presented a ques- tion of fact for the jury whether such altera- tions and repairs constituted an Increase of the risk. But this condition being wholly in- dependent of any increase of risk, its viola- tion without the consent of the insurer, or waiver of the breach, annulled the policy. This being the proper construction, as we think, of the terms and conditions of the pol- icy, and it being shown that the insured, in August, 1886, without the knowledge or writ- ten consent of the insurer, employed carpen- ters and brick masons, and reconstructed and enlarged the vaults and offices of the court- house, reconstructing the foundations corre- sponding to the enlargement of the vaults, which necessitated the cutting of the floors and ceiUngs of the different offices, and that this work occupied five or six weeks, and in connection therewith necessitated painting, and a new method of heating the offices of the register of probate and the clerk of the com-t, (this change in the method of heating being completed about midnight of Novem- ber 3, 1886, and the fire which destroyed the building occurring some two hours there- after,) clearly entitled the plaintiff in error to the instruction requested, that "if the work done by the mechanics, as disclosed by the evidence, increased the hazard while such work was being done, then the plaintiff is not entitled to recover." This instruction, which the court declined to give, presented the question of fact whether there had been any violation of the condition that the prem- ises should not be so used or occupied as to increase the risk, or that the risk should not be increased by any means within the knowl- edge or control of the assured. The court not only refused this instruction, but in its charge to the jury so construed the condition that if "mechanics are employed In building, altering, or repairing the premises AS TO THE CARE AND CONDITION OF PROPERTV. 193 named herein," without the consent of the In- surer, as to make it mean that such altera- tions and repairs must be shown to have in- creased the risli in point of fact, and that such increase of risk must hare existed at the time of the fire. If the mechanics were employed in altering and repairing the building in a manner be- yond what was required for its ordinary re- pair and preservation, and in such a material way as constituted a breach of the condition of the contract, it is difficidt to understand upon what principle the charge of the court can be sustained. The condition wliich was violated did not, in any way, depend upon the fact that it increased the risk, but by the express terms of the contract was made to avoid the policy if the condition was not ob- served. The instruction of the court gave no validity ch' effect to the condition and its breach, but made it d^end upon the question whether the acta done in violation of it in fact increased the risk, and whetho: such in- creased risk was operative* at the date of the fire. The court below proceeded upon the theortion of the policy, so far as they would otherwise prohibit the necessary use of benzine in the repair shop, must be held to be controlled by the written portion of the policy, which expressly insures the building in part as a repair shop; this upon the pre- sumption, that must exist, that the parties intended that the repair shop as it was, and as it must necessarily continue to be if it continued at all, must be carried on with all usual and necessary incidents, and that as such it was protected by the contract of in- surance; also by force of the well-estab- lished rule, that the written special descrip- tion of the particular subject-mafter, wher- ever inconsistent with the printed clauses of the policy, must control. Insurance Co. t. McLaughlin, 53 Pa. St. 485; Cushman t Insurance Co., 34 Me. 487; Archer v. Insur- ani:^ Co., 43 Mo. 434. The construction we thus give the policy renders the contract just and reasonable, and carries out the obvious intention of the parties to it Any other con- struction would lead to the absurd result that the prohibitory clause of the policy would absolutely prevent the carrying on of the business expressly permitted in the writ- ten portion. No such absurdity can be held to have been contemplated by lie parties, un- less the terms of the contract are such as not to permit of any other reasonable construc- tion. As said in Carlin v. Assurance Co.. supra: "Where the contrary is not expressly made to appear, it is not to be presumed that, when an Insurance is effected vrith ref- erence to an established and current business, whose protection is really the object of the insurance, such a narrow and stringent con- struction of the provisions of the policy was intended as will necessarily cause its serious embarrassment or suspension." The only other question which requires con- sideration is whether there has been a fail- ure to comply with the condition requiring proofs of loss, so as to defeat a recovery on the policy. The circumstances of the defend- ant's adjuster's visit to plaintifE soon after the fire; his receiving and taking away a list of the property destroyed, furnished by plain- tiff, and the retention of the same by the company or its agent; and the denial of lia- bility for the loss on account of the pres- ence of benzine on the premises, — are suffi- cient to constitute a waiver of the provisions of the policy requiring proofs of loss. Van- kirk V. Insurance Co., 79 Wis. 627, 48 N. W. 798; Zielke v. Assurance Corp., 64 Wis. 442, 25 N. W. 436; McBride v. Insurance Co., 30 Wis. 562; Parker v. Insurance Co., 34 Wis. 363; King v. Insurance Co., 58 Wis. 508, 17 N. W. 297; Earriman v. Insurance Co., 49 Wis. 71, 5 N. W. 12; Insurance Co. v. Bach- elder, 32 Neb. 490, 49 N. W. 217; Carson v. Insurance Co., 62 Iowa, 433, 17 N. W. 650; Boyd V. Insurance Ca, 70 Iowa 325, 30 N. W. 585; O'Brien v. Insurance Co., 52 Mich. 131, 17 N. W. 726. In McBride v. Insurance Co., supra, the court held that when the agent of the insurance company, after examining up- AS TO THE CARE AND CONDITION OF PROPERTY. 197 on tile spot tiie circumstances attending the loss, told plaintiff he could not recommend the company to pay the loss tof certain rea- sons, it was a denial of all liability on the part of the company, and a waiver of Its right to demand the usual proofs of loss. That substantially fits this case. The ad- juster visited the premises, and when he dis- covered the presence of benzine, acw>rding to his testimony, he did very little further, and told the assured the policy was to all intents and purposes void; that he could do nothing for him; and that he, the assured. would have to present his claim to the com- pany as provided by the policy. That, coupled with the refusal of the company to hold any conmiunlcation thereafter with the assured, constituted a denial of liability by the com- pany on the ground of a violation of the clause prohibiting the use of benzine cm the premises, and effectually waived proofs of loss. It follows from the foregoing that the judgment of the circuit court must be re- versed, and a new trial granted. The judg- ment of the circuit court is reversed, and the cause remanded for a new trial. 198 STIPULATIONS CONTAINED IN THE POLICY. FIRST CONGREGATIONAL CHURCH OP ROCKLAND v. HOLYOKE MUT. FIRE INS. CO. SAME V. SPRINGFIELD FIRE & MARINE INS. CO. SAME t. SUN FIRE OFFICE CO. SAME v. QUINCT MUT. FIRE INS. CO. SAME v. FITCH- BURG MUT. FIRE INS. CO. SAME v. NORTH BRITISH & MERCANTILE INS. CO. (33 N. B. 572, 158 Mass. 475.) Supreme Judicial Court of Massachusetts. Suffolk. March 17, 1893. Report from buperior court, Suffolk county; John Hupkinij, Juds:e. Actions by the First Consregational Church of Rockland against the Holyoke Mutual Fire InHuranee Company, antl five other companies, on fire insurance policies. There was a general verdict for plaintlH directed by the court on special verdicts returned by the jury, and the cases were reported. Verdicts set aside. Gaston & Whitney, for plaintiff. Allen, Long & Hemeu way, for defendants Hol- yoke Mut. Fire Ins. Co. and other com- panies. KNOWLTON, J. The policies of insur- ance sued on in these six cases are all alike in containing provisions which are relied on in defense, and which areas follows: "This policy shall be void if, * * * without the assent in writing or in print of the company, • • • the situation or circumstances affecting the risk shall, by or with the knowledge, advice, agency, or consent of the insured, be so altered as to cause an increase of such risk; * • * or If campliene, benzine, naphtha, or other chemical oils or burning fluid.s shall be kept or used by the insured on the prem- ises insured, except that what is known as refined petroleum, kerosene, or coal oil may be used for lighting," etc. The prop- erty insured was a church edifice built of wood, not dapboarded, but sheathed hor- izontally with grouved and tongued shPHthing, closely matched together, and painted and sanded on the outside. The paint had peeled and curled, and at the timeof the tiro the plaintiff was repainting the building. Three trustees had"thecon trolandcareof all the real estate belonging to thechurch, " and were anthorized to pro- vide for its insurance and repairs. They arranged with one Gilson, a painter, to paint the outside of the building by the day at the rate of f3 pep day for himself, and $2.75 per day for his men, the trustees furnishing the paint stock, and he furnish- ing his own brushes, ladders, and other tools of trade. It was also arranged that he was to burn off the old pnint with a torch or some such implement, prepara- tory to repainting. He procured for the purpose a naphtha torch so made as to hold a quart or more of naphtha, with a handle at one side of the receptacle, and a tube extending out on the opposite side, through which a tiame could be emitted, produced by the gns from the naphtha and compressed air. It could be made to send this flameout in a straight lineabout two feet, and when in use it made a noise "similar to a steam engine." The flaiiie could be regulated by a thumb screw so bs to extend not more than six or eight inches beyond the end of the tube, and Ihe torch was used by holding it in the left hand, and passing it along, so that the flame from the tube would blister or burn the paint, which could then easily be scraped off. The evidence tended to show that the trustees knew that Gilson was to burn off the paint, and left it to him to deter- mine exactly in what way he would do it. Oneor more of them saw the torch which was used beforehebegan touseit, and ihey repeatedly saw him usingit before thefire. When the work had been going on about four weeks, the torch, according to the testimony, having been used daily during all the working days, the building caught tire on the edge of aboard where there was a crack and where the torch had just been used, and was entirely consumed. This was on the I6th day of July, 1890, and there was evidence that the weather was hot, anri the boards very dry. There was also evidence that, as a protection against fire, a pail of water was kept on hand while the work was going on. The evidence tended strongly to show that the danger of a conflagration was greatly increased by the use of the naphtha torch on the dry, inflammable, soft pine boards, with their shrunken joints. If the risk was increased by the use of the torch, it seems, on the undisputed facts, that it was by the agency and with the knowl- edge and consent of the insured, for the officers represented the plaintiff in the management of the property, and saw the torch in use, and they authorized the u.se of it before the work was begun. Bank V. Cushman, 121 Mass. 490. Gilson was their agent, acting in the exercise of his discretion and with full authority In pro- curing and using the naphtha, and on the uncontradicted evidence the use of naphtha by him was a use of it by the insured, within the meaning of the provision quot- ed from the policies. Was a change of this kind increasing the risk, with the knowl- edge, agency, and consent of the insured, an alteration uf "the situation or circum- stances affecting the risk," within the meaning of those words in the policies? These words imply something of duration, and a casual change of a temporary char- acter would not ordinarily render the pol- icy void under this provision. But this change had existed continuously during the working hours of every day for nearly a month, and the work was not nearly done when it was interrupted by the fire. We ore of opinion that the change of the condition was sufficiently long continued to be deemed a change in "the situation or circumstances affecting the risk." In the case of Lyman v. Insurance Co., 4 Allen, 329, it was held that an alteration of a building which increased the risk for three weeks was enough to render the policy void under a similar clause. AVe find no evidence that naphtha was kept on the premises. The word "kept," as used in the policy, implies a use of the premises as a place of deposit for the pro- hibited articles for a considerable period of time. See Williams v. Insurance Co., 3] Me. 219; O'Niel v. Insurance Co., 3 N. Y. 122; Williams v. Insurance Co., 54 N. Y. AS TO THE CARE AXD CONDITIOJiT OF PBOPERTr. 199 569; Mears v. Insurance Co., 92 Pa. St. 15; Putnam ?. ItiBurance Co., 18 Blatchf.368, 4 Fed. Rep. 753. For nearly four weeks naphtha was used within a few inches of the outer wall of the buildjng to produce the flame which was brought in contact with the bnilding. It would be a narrow and nnreasonableconstruction of the poli- cies, in reference to the purposes for which the words were inserted, to say that the use of naplitba was not "on the prem- ises,'' because while in liquid form it was a few inches outside of the wall, when it was made to produce an effect directly on the premises by burnins; it in the form of gas, and directing it against the building. On the undisputed facts, as stated in the bill of exceptions, the only ground on which the plaintiff conld fairly ask to pre- sent a question to the jury is that the use of the naphtha and the change in condi- tions affecting the risk occurred through making ordinary repairs in a reasonable and proper way, and that in the provi- siouR quoted from the policies there Is an implied exception of what is done in mak- ing ordinary repairs. It is generally held that such provisions are not intended to prevent the making of necessary repairs, and the use of such means as are reasona- bly required for that pnrpose. 0"Niel v. Insurance Co., 3 N. Y. 122; Dobson v. Sothehy, Moody & AI. 90; Franklin F. Ins. Co. V. Chicago Ice Co., 36 Md. 102; Billings V. Insurance Co., 20 Conn. 139; Mears v. Insurance Co., 92 Ha. St. 15; Williams v. Insurance Co., 31 Me. 219; Putnam v. In- surance Co., 18 Blatchf. 368, 4 Fed. Rep. 753. Both parties to a contract for insur- ance must be presumed to ezpsct that the property will be preserved and kept in a proper condition by making repairs upon it. Policies on buildings are often issued for a term of five years or more. The making of ordinary repairs in a reasona- ble way may sometimes increase the risk, more or less, while the work is going on, or involve the use of an article whose nse iu a business carried on in the bnilding is prohibited by the policy. In the absence of an express stipulation to that effect, a contract of iusarancn should not be held to forbid the making of ordinary repairs in a reasonably safe way, and provisions like these we are considering should not be deemed to apply to an increase of risk, or to a nse of an article necessary for the preservation of the property. We are therefore of opinion that if the use of naphtha' at the time, and in the manner in which it was used, was reasonable and proper, in the repair of the building, hav- ing reference to Uie danger of fire as well as to other considerations, it would not render the policies vtiid. But the questions submitted to the jury on the answers to which verdicts were or- dered for the plaintiff did not suflSciently present the matters of fact in issue. The only qne»tion bearing on the most vital part <»f the issue was as follows: ""Was the method used the method ordinarily pursued to remove paint on the outside of a building, preparatory to scraping it off to repaint it?" The verdict-* rendered on an affirmative answer to this question assumed that the removal of the paint from this building was reasonably neces- sary to the repair of the building. It also assumed that this building, in reference to the danger from moving the flaming torch all over its external surface, was like ordi- nary buildings. Many buildings are built of brick, and painted on the outer walls. Many others are clapboarded in such a way as to make a very close, tight cover- ing. If this is the method ordinarily pur- sued when paint is to be removed from the outside of a biiildiug, it does not fol- low that it is ordinarily pursued when the building is covered with soft pine sheathing, tongued and grooved, and put on horizontally, and when, at the time of doing the work, the weather is very hot and dry, and the boards shrunken so that in some places there are cracks. Gilson testified that, although he had beeu a house painter in Rockland 25 years, he had never burned off paint from the out- side of a building before. The architect who was consulted by the plaintiff in re- gard to repairs advised removing the old paint by the application of a paint re- mover, which was a preparation to be applied by a brush or a sponse. The use of naphtha and the increase of risk by an alteration of the circumstances affecting it were permitted under the implied excep- tion only when reasonably required for the making of repairs. If it was unreason- able to use naphtha under thecircumstan- ces, at the time and in the manner dis- closed by the evidence, the use was not within the exception, and the policies were avoided. The question for the jury was whether the defendants, if familiar with the condition of the building and the methods usually adopted in making re- pairs, should have contemplated- when they issued the policies that the plaintiff corporation would burn off the paint at such a time and in such a way as it did. Was such a use of naphtha a reasonably safe and proper way of making repairs on this building, under the circumstances? The questions submitted to the jury were not equivalent to these. As bearing on the question whether the use of a naphtha torch would increose the risk, the defendants might show, if they could, by an expert, in regard to the rates of premium for fire insurance, that the rates on a building whose paint was to be removed from the outside by the use of such a torch would be higher than if there was to be no such use. The relative rates usual for insurance under different circum- stances are treated as facts which a jury may consider in determining the degree of the risk. Luce v. Insurance Co., 105 Mass. 297-301; Webber v. Railroad, 2 Mete. (Mass.) 147; Cornish v. Insurance Co., 74 N. Y. 2195; Hartman v. Insurance Co., 21 Pa. St. 466; Insurance Co. v. Rowland, 66 Md. 237, 7 Atl. Rep. 257. The other question to the witness Page, which called for his opinion as an expert as to the actual effect of the use of naphtha in reference to danger from fire, was incompetent. Lyman v. Insurance Co.. 14 Allen. 329. The testimon.v of experts in regard to the proper and usual way of removing paint was rightly admitted. It was with- 200 STIPULATIONS CONTAINED IN THE POLICY. in the discretion of the eonrt to exclude the question " whether the slieathing of the church was burned by the use of the torch." It might have caught fire in such a way as would have no tendency to show that the use of the torch was an un- reasonable and improper method of mak- ing repairs. On the other band, the cir- cumstances may have been such af< to make it a proper fact for the considera- tion of the jury. It is largely within the discretion of the court to determine bow Far to go into the trial of collateral isaues. Verdicts set aside. AS TO THE CONDITION AJifD CONDUCT OF INSURED. 201 MOULOR T. AMERICAN LIFE INS. CO. (4 Sup. Ct 466, 111 U. S. 335.) Supreme Court of the United States. April 14, 1884. In Error to the Circuit Court of the United States for the Eastern District of Pennsyl- vania, James Parsons, for plaintiff in error. Hen- ry Hazlehurst and Isaac Hazlehurst, for de- fendant in error. HARLAN, J. This is an action upon a pol- icy of insurance issued by the American Laf e Insurance Company of Philadelphia. By its terms the amount insured— 510,000— is paya- ble to Emilie Moulor, the plaintiff in error, hpr executors, administrators, and assigns, within 60 days after due notice and satis- factory proof of interest and of the death of her husband, the insured, certain indebt- edness to the company being first deducted. Upon the first trial there was a verdict for the plaintiff, which was set aside and a new trial awarded. At the next trial the jury were peremptorily instructed to nnd for the company, and judgment was accormngiy en- tered in its behalf. Upon writ of error to this court that judgment was reversed upon the ground that, as to certain issues arising out of the evidence, the case should have been submitted to the jury. Moulor v. In- surance Co., 101 U. S. 708. At the last trial there was a verdict and judgment for the defendant Upon that trial the plaintiff of- fered to show, by the testimony or witnesses, that at a previous trial, in 1875, the company went to the jury upon the single issue of an alleged breach of warranty, and did not se^ a verdict upon the ground that the insurea had committed suicide. The offer was de- nied, and the action of the court thereon is a.<;signed for error. The avowed object of the proof was to establish a waiver by the company of any defense founded upon that clause of the policy which declares that it shall be void in case the insured "die by his own hand." Undoubtedly, it was compe- tent for the company to waive that or any other defense arising out of the conditions of the policy; but clearly, its willingness, at one trial, to risk its case before t"he Jury, upon a sinsrle one of several issues made, did not preclude it, at a subsequent trial, from insist- ing upon other defenses, involving the merits which had not been withdrawn of record or abandoned in pursuance of an agreement with the plaintiff. After the evidence was closed, tne plain- tiff submitted to the court a series of instruc- tions. 23 in number, and asked that the jury be charged as therein indicated. As to in- structions 11, 12, and 19, no ruling was made, nor was an exception taken for the failure »f the court to pass upon them. The twenty- third, relating to the before-mentioned waiv- er of defense, upon the ground of self-de- struction, was rightly refused, because the evidence showed no such waiver. As to the remaining instructians, the court said, gen- erally, that the propositions announced in them could not be aifii-med, because they were either unsound or irrelevant. A gen- eral exception was taken to the "answers" of the court to the application to charge the jury as indicated in plaintiff's points. That exception, however, was too vague and in- definite. Some of the instructions submitted might well have been given, while others were abstract, or did not embody a correct exposition of the law of the case. Those in- structions, although separately numbered, seem to have been presented as one request, and the exception was general as to the ac- tion of the court in respect of them aU. If it was Intended to save an exception as to distinct propositions embodied in the instruc- tions, the attention of the court should have been directed to the si)ecific points concern- ing which it was supposed error had been committed. As some of the plaintiffs in- structions were properly overruled, we ought not, under the general exception taken, to reverse the judgment merely because, in the series presented as one request, there were some which ought to have been given. Rail- road Co. V. Horst, 93 U. S. 295; Rogers v. The Marshal, 1 Wall. 644; Harvey v. Tyler, 2 WaU. 338; Johnson v. Jones, 1 Black, 209; Beaver v. Taylor, 93 U. S. 46; Beckvrith v. Bean, 98 U. S. 284. But there were certain parts of the charge to which exceptions were taken in due form. The rulings, the correctness of which is ques- tioned by the assignments of error, will be presently stated. It is necessary that we should first ascertain the precise nature of the case disclosed by the evidence. The seventh question in the appUcation for insurance required the insured to answer yes or no, as to whether he had ever been afflict- ed with any of the following diseases: In- sanity, gout, rheumatism, palsy, scrofula, convulsions, dropsy, small-pox, yellow-fever, fistula, rupture, asthma, spitting of blood, consumption, and diseases of the lungs, throat, heart, and urinary organs. As to each the answer of the insured was, no. The tenth question was: "Has the party's father, mother, brothers, or sisters been af- flicted with consumption or any other serious family disease, such as scrofula, insanity, etc. ?' The answer was, "No, not since child- hood." The fourteenth question was: "Is there any circumstance which renders an insur- ance on his life more than usually hazardous, such as place of residence, occupation, phys- ical condition, family history, hereditary pre- dispositions, constitutional infirmity, or other known cause, or any other circumstance or information with which the company ought to be made acquainted?" The answer was, no. To the sixteenth question, "Has the appli- cant reviewed the answers to the foregoing 202 STIPULATrOXS CONTAINED IN THE POLICY. questions, and is it clearly understood and agreed that any untrue or fraudulent an- swers, or any suppression of facts in regard to health, habits, or circumstances, or neg- lect to pay the premium on or before the time it becomes due, will, according to the ■terms of the policy, vitiate the same and for- feit all payments made thereon?" the an- swer was, yes. At the close of the series of questions, 19 In number, propounded to and answered by the applicant, are the following paragraphs: "It is hereby declared and warranted that •the above are fair and true answers to the foregoing questions; and it is acknowledged .and agreed by the undersigned that this Ap- plication shall form a part of the contract of Insurance, and that If there be, in any of the answers herein made, any untrue or evasive statements, or any misrepresentation or con- cealment of facts, then any policy granted upon this application shall be null and void, ■and all payments made thereon shall be for- feited to the company. '•And it is further agreed that if at any time hereafter the company shall discover that any of said answers or statements are un- true or evasive, or that there has been any concealment of facts, then, and m every such •case, the company may refuse to receive fur- ther premiums on any policy so granted upon this application, and said policy shall be null and void, and payments forfeited as afore- said." The policy recites that the agreement of the company to pay the sum specified is "In consideration of the representations made to them in the application," and of the payment of the premium at the time specified; fur- ther, "it is hereby declared and agreed that if the representations and answers made to this company, on the application for this pol- icy, upon the full faith of which it is issued, shall be found to be untrue in any respect, or that there has been any concealment of facts, then and in every such case the policy shall be null and void." The main defense was that the insured liad been afflicted with scrofula, asthma, and consumption prior to the making of his ap- plication, and that, in view of his statement that he had never been so afllieted, the pol- icy was, by its terms, null and void. There was, undoubtedly, evidence tending to show that the insured had been afilicted with those diseases, or some of them, prior to his ap- plication; but there was also evidence tend- ing to show not only that he was then in sound health, but that, at the time of his application, he did not know or beUeve that he had ever been afilicted with any of them in a sensible, appreciable form.. Referring to the seventh question in the application, the court— after observing that the answer thereto was untrue, and the pol- icy avoided, if the insured had been, at any time, afflicted with either of the diseases last referred to — instructed the jury: "It is of no consequence, in such case, whether he knew it to be untrue or not; he bound him- self for its correctness, and agreed that the validity of his policy should depend upon its being so." Again: "That he, the insured, did not know he was then afilicted, is of no im- portance whatever, except as it may bear upon the question, was he afflicted V If he was, his answer (for the truth of which he bound himself) was untrue, and his knowl- edge, or absence of knowledge, on the sub- ject, is of no consequence." Further: "You [the juiy] must determine whether the in- sured was at any time afilicted with either of the diseases named. If he was, his an- swer, in this respect, was untrue, and, not- withstanding he may have ignorantly and honestly made it, the policy is void, and no recovery can be had upon It" To so much of the charge as we have quoted the plaintift excepted. Assuming — as in view of the finding of the jury we must assume — ^that the Insured was, at the date of his application, or had been prior' thereto, afflicted with the disease of scrofula, asthma, or consumption, the question arises whether the beneficiary may not recover, un- less it appears that he had knowledge, or some reason to believe, when he applied for insurance, that he was or had been afflicted with either of those diseases. The circuit court plainly proceeded upon the ground that his knowledge or belief as to having been afflicted with the diseases specified, or of some one of them, was not an essential ele- ment in the contract; in other words, if the assured ever had, in fact, any one of the diseases mentioned in his answer to the sev- enth question, there could be no recovery, al- though the jury should find from the evidence that he acted in perfect good faith, and had no reason to suspect, much less to believe or know, that he had ever been so afflicted. If, upon a reasonable interpretation, such was the contract, the duty of the court is to en- force it according to its terms; for the law does not forbid parties to a contract for life insurance to stipulate that its validity shall depend upon conditions or contingencies such as the court below decided were embodied in the policy in suit. The contracts involved in Jeffries v. Insurance Co., 22 Wall. 47, and Aetna Life Ins. Co. v. France, etc., 91 U. S. .510, were held to be of that kind. But, un- less clearly demanded by the established rules governing the construction of written agreements, such an interpretation ought to be avoided. In the absence of explicit, une- quivocal stipulations requiring such an inter- pretation, it should not be inferred that a person took a life policy with the distinct un- derstanding that it should be void, and all pre- miums paid thereon forfeited, if at any time in the past, however remote, he was, whether conscious of the fact or not, afflicted with some one of the diseases mentioned in the question to which he was required to make a categorical answer. If those who organize AS TO THE CONDITION AND CONDUCT OF INSURED. 203 and control life insurance companies wish to exact from the applicant, as a condition precedent to a valid contract, a Ejuaranty Asainst the existence of diseases, of the pres- enc-e of which in his system he has and can have no knowledge, and which even skillful physicians are often unable, after the most careful examination, to detect, the terms of the contract to that effect must he so clear -as to exclude any other conclusion. In National Bank v. Insurance Go. 95 U. S. CIS. — which was a case of fire insurance, involving, among others, the question wheth- er the statements as to the value of the property insured were warranties, — it was said: "When a policy of insurance contains contradictory provisions, or has been so framed as to leave room for construction, rendering it doubtful whether the parties in- tended the exact truth of the applicant's statements to be a condition precedent to any binding contract, the court should lean against that construction which imposes up- on the assured the obligation of a warranty. The company cannot justly complain of such a rule. Its attorneys, officers, or agents pre- pared the policy for the purpose, we shall assume, both of protecting the company against fraud, and of securing the just rights of the assured under a valid contract of in- surance. It is its language which the court is invited to interpret, and it is both rea- sonable and just that its own words should be construed most strongly against itself." See, also, Grace v. Insurance Co., 109 U. S. 282, 3 Sup. Ct. 207. These rules of interpretation, equally ap- plicable In cases of life Insurance, forbid the conclusion that the answers to the ques- tions in the application constituted warran- ties, to be literally and exactly fulfilled, as distinguished from representations which must be substantially performed in all mat- ters material to the risk; that is, in mat- ters which are of the essence of the contract We have seen that the application contains a stipulation that it shall form a part of the contract of insurance; also, that the policy purports to have been issued upon the faith of the representations and answers in that application. Both instruments, therefore, may be examined to ascertain whether the contract furnishes a uniform, fixed rule of Interpretation, and what was the intention of the parties. Taken together, it cannot be said that they have been so framed as to leave no room for construction. The mind does not rest firmly in the conviction that the parties stipulated for the literal truth of every statement made by the insured. There is, to say the least, ground for serious doubt as to whether the company Intended to re- quire, and the Insured intended to promise, ;iu exact, literal fulfillment of all the dec- larations embodied in the application. It is true that the word "warranted" is in the ap- plication; and, although a contract might be so framed as to impose upon the insured the obligations of a strict warranty, without introducing into it that particular word, yet it is a fact, not without some significance, that that word was not carried forward into the policy, the terms of which control, when there is a conflict between its provisions and those of the application. The policy upon its face characterizes the statements of the in- sured as representations. Thus, we have one part of the contract apparently stipulat- ing for a warranty, while another part de- scribes the statements of the assured as rep- resentations. The doubt, as to the Intention of the parties, must, according to the settled doctrines of the law of insurance, recognized in all the adjudged cases, be resolved against the party whose language it becomes neces- sary to interpret. The construction must, therefore, prevail which protects the insured against the obligations arising from a strict warranty. But it is contended that if the answers of the assured are to be deemed representations only, the policy was, nevertheless, forfeited, if those representations were untrue in re- spect of any matters material to the risk. The argument is that if the insured was, at the time of his application, or had been at any former period of his life, seriously or in an appreciable sense, afflicted with scrofula, asthma, or consumption, his answer, without qualification, that he had never been so af- flicted, being untrue, avoided the policy, without reference to any knowledge or be- lief he had upon the subject The soundness of this proposition could not be disputed If, as assumed, the knowledge or good faith of the insured, as to the existence of such dis- eases, was, under the terms of the contract in suit, of no consequence whatever in de- termining the liability of the company. But is that assumption authorized by a proper in- terpretation of the two instruments consti- tuting the contract? We think not Looking into the application, upon the faith of which the policy was issued and accepted, we find much justifying the conclusion that the company did not require the insured to do more, when applying for insurance, than observe the utmost good faith, and deal fairly and honestly with it, in respect of all material facts about which inquiry is made, and as to which he has or should be presum- ed to have knowledge or information. The applicant was required to answer yes or no as to whether he had been afflicted with cer- tain diseases. In respect of some of those diseases, particularly consumption, and dis- eases of the lungs, heart, and other internal organs, common experience informs us that an individual may have them in active form, without, at the time, being conscious of the fact, and beyond the power of any one, how- ever learned or skillful, to discover. Did the company expect when requiring categorical answers as to the existence of diseases of that character, that the applicant should an- swer with absolute certainty about matters 204 STIPULATIONS CONTAINED IN THE POLICY. of which certainty could not possibly be predicated? Did it intend to put upon him the responsibility of knowing that which, perhaps, no one, however thoroughly trained in the study of human diseases, could possi- bly ascertain? We shall be aided in the solution of these Inquiries by an examina- tion of other questions propounded to the applicant In that way we may ascertain what was in the minds of the parties. Beyond doubt the phrase "other known cause," in the fourteenth question, serves the double purpose of interpreting and qualify- ing all that precedes it in the same clause or sentence. For instance, the applicant was not required to state all the circumstances within his recollection of his family history, but those only which rendered the proposed insurance more than usually hazardous, and of which he had personal knowledge or of which he had information fairly justifying a belief of their existence. If he omitted to state circumstances in his "family history" of which he had no knowledge, nor any in- formation deserving attention, that omission would not avoid the policy, although it sub- sequently appeared that those circumstances, if known to the company, would have shown that the proposed insurance was more than usually hazardous. Apart from other ques- tions or clauses in the application, the tenth question would Indicate that an incorrect or untrue answer as to whether the applicant's "father, mother, brothers, or sisters had been affected with consumption, or any other se- rious family disease, such as scrofula, insani- ty, etc.," would absolve the company from all liability. Yet, in the fourteenth question, the insured, being asked as to his family history and as to "hereditary predisposi- tions," — ^an inquiry substantially covering some of the specific matters referred to in the tenth question, — was, as we have seen, only required to state such circumstances as were known to him, or of which he had in- formation, and which rendered an insurance upon his life more than usually hazardous. So, in reference to that part of the four- teenth question relating to the then physical condition of the applicant. Suppose at the time of his application he had a disease of the lungs or heart, but was entirely unaware that he was so affected. In such a case he would have met all the requirements of that particular question, and acted in the utmost good faith, by answering no, thereby imply- ing that he was aware of no circumstance in his then physical condition which rendered an insurance upon his life more than usually hazardous. And yet, according to the con- tention of the company, if he had, at any former period of his life, been afflicted with a disease of the heart or lungs, his positive answer to the seventh question, that he had not been to afflicted, was fatal to the con- tract; this, although the applicant had no knowledge or information of the existence at any time of such a disease in his systems So, also, in reference to the inquiry in the- fourteenth question as to any "constitutional infirmity" of the insured. If, in answering that question, he was required to disclose only such constitutional infirmities as were then known to him, or which he had reason to believe then existed, It would be unreason- able to infer that he was expected, in an- swer to a prior question, in the same policy, to guaranty absolutely, and as a condition precedent to any binding contract, that he had never, at any time, been afflicted with diseases of which, perhaps, he never had and could not have any knowledge whatever. The entire argument in behalf of the com- pany proceeds upon a too-literal interpreta- tion of those clauses in the policy and appli- cation which declare the contract null and void if the answers of the insured to the questions propounded to him were, in any respect, untrue. What was meant by "true" and "untrue" answers? In one sense, that only is true which is conformable to the actual state of things. In that sense, a state- ment is untrue which does not express things exactly as they are. But in another and broader sense the word "true" is often used as a synonym of honest, sincere, not fraud- ulent. Looking at all the clauses of the ap- plication, in connection with the policy, it is reasonably clear— certainly the contrary can- not be confidently asserted — ^that what the company required of the applicant, as a con- dition precedent to any binding contract,' was, that he would observe the utmost good faith towards it, and make full, direct, and honest answers to aU questions, without eva- sion or fraud, and without suppression, mis- representation, or concealment of facts with which the company ought to be made ac- quainted; and that by so doing, and only by so doing, would he be deemed to have made "fair and true answers." If it be said that an individual could not be afflicted with the diseases specified in the application, without being cognizant of the fact, the answer is that the jury would, in that case, have no serious difficulty in find- ing that he had failed to communicate to the company what he knew or should have known was material to the risk, and that, consequently, for the want of "fair and true answers," the policy was, by its terms, null and void. But, whether a disease is of such a character that its existence must have been known to the individual afflicted with it, and therefore whether an answer denying its ex- istence was or not a fair and true answer, is a matter which should have been submitted to the jury. It was an erroneous construc- tion of the contract to hold, as the court be- low did, that the company was relieved from liability if it appeared that the insured was, in fact, afflicted with the diseases, or any of them, mentioned in the charge of the court. The jury should have been instructed, so far AS TO THE CONDITIOK AND CONDUCT OF INSUHED. 205 as the matters here under examination are concerned, that the plaintiff was not pre- cluded from recovering on the policy, unless it appeared from all the circumstances, in- cluding the nature of the diseases with which the insured was alleged to have been afflict- ed, that he knew, or had reason to believe. at the time of his application, that he was or had been so afflicted. It results from what has been said that the judgment must be reversed, with directions to set aside the verdict, and for further pro- ceedings consistent with this opinion. It is so ordered. 206 STIPULATIOXS CONTAINED IN THE POLICY. SCHULTZ V. INSURANCE CO. (40 Ohio St. 217.) Supreme Court Commission of Ohio. Jan. Term, 1883. Error to district court, Hamilton county. A. G. CoUins and C. H. Blacliburn, for plaintiff in error. McGuffey, Morrill & Strunk, for defendant in error. MARTIN, J. The action below was upon a policj of life insurance issued by the de- fendant to the plaintiff on the life of her husband. The policy contained a proviso that it should be null and void if the insured "shall under any circumstances die by his own hand." The petition was in the usual form. The answer denied the death of the Insured, and averred that if he was dead, he died of his own hand. Reply was a general denial. Trial to a jury, resulting in verdict and judgment for defendant. District court on error gave judgment of affirmance. On the trial, amongst other things, the death was proved, and plaintiff rested. Defend- ant Introduced testimony tending to show that the insured had family troubles, was tired of life, and contemplated, prepared for and committed suicide by falsing poison. In rebuttal the plaintiff interrogated a wit- ness as to the mental condition of the in- sured shortly before his death, with a view to show his insanity at the time of commit- ting the act of suicide. Objection was made, but not to the form of the question. The court refused to allow the question to be answered, ruling the proposed testimony inadmissible. Exception was taken, and the ruling was also assigned as a ground for a new trial, which was refused. It is also one of the assignments of error here; and the only one we consider It important to no- tice. Was testimony tending to show the insanity of the insured at the time of his death material to the Issue? The majority of this court think it was material, and that the court below erred in excluding it. We have arrived at this conclusion from a con- struction of the proviso, and hold that in- sanity of the suicide might affect Its opera- tion. The policy is a contract between the parties to this suit. Its object was to pro- vide indemnity against the premature death of the insured. The plaintiff, before she brought her action, had duly performed all the conditions of the contract to be kept by her. Her claim upon the company could to no extent be impaired by any act of crime of the insured committed after the execution of the contract, unless It was so stipulated therein. Such stipulations ^re against the general intendment of the contract, and can operate only by way of forfeiture. And therefore, whilst it is entirely competent for the parties to provide such conditions of for- feiture, yet to be valid they must be reason- \ ably precise and particular, and not against public policy. The condition of forfeiture in. this policy is that if the insured "shall un- der any circumstances die by his own hand." The learned counsel for the company in their argument advance two propositions: The first is that the expression "die by his own hand," without any qualifying terms, means intentional self-destruction, whether the party is sane or insane. The second Is that if the expression is re- stricted to mean criminal suicide, then the- effect of adding the qualifying phrase "un- der any circumstances," is to enlarge the meaning so as to include every case of in- tentional suicide, whether criminal or not, or committed by a person sane or insane. If his first position be tenable no effect what- ever can be given to the qualifying phrase^ unless it be to extend the proviso to ev- ery case of unintentional self-destruction. Strictly taken, the proviso is susceptible of a reading that makes the qualifying words, meaningless. But such a construction is presumably not within the contemplation of the parties, and is never admissible unless, required by the context or the nature of the subject. Nor is the other reading admissi- ble which would work a forfeiture in cases of accidental death, occasioned by the direct act of the party— a condition which if plain- ly stated in the policy, would, to say the least, be of very questionable validity. The phrase occurs in the printed part of the policy, and was inserted by the company, no- doubt, for a lawful and commendable pur- pose. The perplexing state of uncertainty and conflict in the judicial holdings in this coun- try as to the meaning of the condition In the common form, and the difficulty of mak- ing proof to the satisfaction of juries in cases of shameless frauds by suicides, pre- sent strong inducements to companies to seek protection in definite stipulations. The object of this company in inserting the phrase under consideration, was doubt- less to secure such protection; and it was probably supposed that its effect would be merely to extend the proviso to cases of in- tentional self-destruction, whether the party was sane or insane. But whatever the pur- pose may have been, to have effect it must be expressed in suitable language and be lawful. The question is, did both parties so understand the phrase, or rather is the lan- guage such that they must be held to have so understood it? And in determining this- question we are entitled to the aid of, and are probably bound on principle to apply, the rule of strict construction as against the company. In National Bank v. Insurance Co., 95 U. S. 673, this rule is indicated in the third proposition of the syllabus as follows: "The policy, having been prepared by the company, should be construed most strongly AS TO THE CONDITION' AND CONDUCT OP INSURED. 207 against them." Here the stipulation was not only prepared by the company, but is one of forfeiture. However, it is sufBcient to say that there is nothing in the phrase that carries an idea of any precise qualification, such as is now claimed by the defendant, or such as would be acceptable to either party or the court. Language more nearly expressive of the ob- ject could have been employed. Well-con- sidered analogous cases lend support to the view we have expressed. In Bigelow v. Insurance Co., 93 U. S. 2S4, the question was as to the construction and validity of a proviso to the effect that it should be void if the insured died by suicide, sane or in- sane. Justice Davis in pronouncing the opinion says, "Nothing can be clearer than that the words "sane or insane' were introduced for the purpose of excepting from the operation of the policy any intended self-destruction, whether the insured was of sound mind or in a state of insanity. Thfese words have a precise, definite and well-understood mean- ing. No one could be misled by them; nor could an expansion of this language more clearly express the intention of the parties." In Pierce v. Insurance Co., 31 Wis. 389, the same question arose on a similar proviso. The words were, "die by suicide, felonious or otherwise, sane or insane." The quali- fication was upheld, and in the very able opinion of the court great stress is laid on the fact that the qualification was restricted and particular, and that it was so precise and guarded as to clearly and expressly ex- clude a limitation to self-murder. In Jacobs v. Insurance Co., 5 Bigelow, Ins. Cas. 42, the condition was that the policy should be void if the insured shall "die by his own hand or act, voluntary or other- wise." It was held that the words "or oth- erwise" were of uncertain meaning and void. In the opinion of the court it is said, "If the act is by his own hand, it is only necessary that it should be voluntary or otherwise in order to avoid the insurance. There is nothing in the ordinary or popular acceptation of the term which would limit its sense only to mean insanity. It is admit- ted that such was not the understanding of the company, and that this construction would defeat the intention of both parties; and probably no court in America would un- dertake to enforce a provision so dangerous and uncertain." A majority of the court are of opinion that the phrase "under any circumstances" must be disregarded as too general and uncertain to serve any pvuT)ose in the construction of the proviso under consideration. We must consider the condition of for- feiture as if it were simply "if he die by his own hand." Do these words, as assumed, mean crim- inal self-destruction? The terms "die by his own hand," "suicide," "self-murder," and the like, are synonymous. In England they involve the element of criminality, and the- principle that an insane man is not responsi- ble for the act is applied in all cases, except only in the construction given to such act when committed by the insured under a pol- icy containing a condition of forfeiture- therefor. The exception is as well estab- lished as the rule, and goes to the extent of holding that the act is within the proviso if the insured had mind enough to intend the act and knew it would kill him, although he was unable to appreciate that it was wrong, or had not the power to resist an impulse to- commit it In other words, it excludes any consideration of sanity. In this country the conflict between the- authorities is utterly irreconcilable. The de- cided preponderance, however, favors the- general rule and rejects the English doc- trine. It is unnecessary to refer to the authori- ties in detail. The state of the discussion i* well known to the bar; and the argument was long since exhausted. A majority of the court reject the English doctrine, and adopt the view generally prevailing in this country, which is consistent with legal an- alogies. We adopt, as the law of this case, the rules laid down by the supreme court of the United States in Insurance Co. v. Terry, 15 Wall. 584, as follows: "If the assured, being in possession of his ordinary reasoning faculties, from anger, pride, jealousy or a desire to escape from the iUs of life, intentionally takes his own life, the proviso attaches and there can be no recovery. "If the death is caused by the voluntary act of the assured, he knowing and intend- ing that his death shall be the result of his act, -but when his reasoning faculties are so far impaired that he is not able to under- stand the moral character, the general na- ture, consequences and effect of the act he- is about to commit, or when he is impelled thereto by an insane impulse which he has- not the power to resist, such death is not within the contemplation of the parties to^ the contract, and the insurer is liable." The condition of forfeiture in that case was, "if the assured shall die by his own hand," — the same as we have found the con- dition in this case to be. The onus of showing the requisite capacity of the insured, as well as the act of self-de- struction, to bring the case within the pro- viso, rests upon the company — ^the party who sets it up as a defense. Insurance Co. v. Peters, 42 JId. 414; Insurance Co. v. Gridley, 100 U. S. 614; Phillips v. Insurance Co., 26 La. Ann. 404. In maintaining this issue the defendant wiU have the benefit of the presumption of sanity which obtains in a case of suicide, as- in that of any other enormous crime, until it is overcome by competent testimony. It follows from what has been said, that 208 STIPULATIONS CONTAINED IN THE POLICr. the testimony proposed in rebuttal was com- petent, and its exclusion by the trial court was error. Judgment reversed and cause remanded. ORANGBR, C. J., and DICKMAN, J. (dis- senting). Originally the expressions "die by his own hand" and "self-murder" were not always used as synonymous terms. The latter always included the element of crime, and therefore indicated that the decedent was sane when he did the act The former sometimes included the crime: at other times it did not. The courts have in many cases ■construed them as technical terms, having precisely the same meaning. If their use must therefore be limited by the decisions of courts, our language is destitute of a word that describes the act of a man who kills him- self, knowing that his act would cause his death, but does not indicate that the deed was criminal. Strictly, the phrase "died by his own hand,"' aptly described just such a death. In our judgment, notwithstanding the decisions referred to, parties may of right use the phrase in this sense; and whenever their contracts indicate that they so intend- ed, effect should be given to that intent It seems to us that the words "shall under any circumstances die by his own hand" do indi- cate that the phrase was not used in the technical sense. They evince a purpose to widen that which judicial construction had made narrow. As that narrowing consisted in always so construing the phrase as to in- clude the idea that the decedent was criminal and therefore sane, it is evident that the widening intended consists in excluding that idea. Hence by a reasonable construction effect can be given to the new words "under any circumstances." If we are right in thus thinking, it is the duty of the court to so con- strue in this case. We think the record shows that at the mo- ment when counsel for the plaintiff offered to prove "insanity," the evidence had pre- sented a case in which mere "insanity" was immaterial. It was evident that counsel did. not expect to show that Schultz did not know that he was taking arsenic and that it would cause his death. Hence we think the court did not err in refusing to admit the evidence offered, and that the refusal to charge the jury as the plaintiff desired was right. AS TO THE CONDITION AND CONDUCT OF INSURED. 209 BIGELOW T. BERKSHIRE LIFE INS. CO. (93 U. S. 2S4.1 Supreme Court of the United States. Oct., 1876. Error to the circuit court of the United States for the Northern district of Illinois. This is an action on two policies issued by the defendant on the life of Henry W. Bige- low. Eacli contained a condition in avoid- ance, if the insured should die by suicide, sane or iusane; and in such case the com- pany agreed to pay to the party in interest the surrender value of the policy at the time of the death of Bigelow. The defendant pleaded that Bigelow died from the effects of a plstoI-wound Inflicted upon his person by his own hand, and that he Intended by this means to destroy his life. To this the plain- tiffs replied, that Bigelow, at the time when he inflicted the pistol-wound upon his person by his own hand, was of unsound mind, and wholly unconscious of the act A demurrer to this replication was sustained by the court below, and the plaintiffs bring the case here for review. Thomas Hoyne, for plaintiff in error. H. G. Miller, for defendant in error. Sir. Justice DAVIS delivered the opinion of the court. There has been a great diversity of judi- cial opinion as to whether self-destruction by a man, in a fit of insanity, is within the con- dition of a life policy, where the words of ex- emption are that the insured "shall commit suicide," or "shall die by his own hand." But since the decision in Insurance Co. v. Terry, 15 WaU. 580, the question is no longer an open one in this court. In that case the words avoiding the policy were, "shall die by his o^vn hand;" and we held that they re- ferred to an act of criminal self-destruction, and did not apply to an insane person who took his own life. But the insurers in this case have gone further, and sought to avoid altogether this class of risks. K they have succeeded in doing so, it is our duty to give effect to the contract; as neither the policy of the law nor sound morals forbid them to make it. If they are at liberty to stipulate against hazardous occupations, unhealthy cli- mates, or death by the hands of the law, or in consequence of injuries received when in- toxicated, surely it is competent for them to stipulate against Intentional self-destruction, whether it be the voluntary act of an ac- countable moral agent or not It is not per- ceived why they cannot limit their liability, if the .Tssured is in proper language told of the extent of the limitation, and it is not against public policy. The words of this stipulation, "shall die by suicide (sane or in- sane)," must receive a reasonable construc- tion. If they be taken in a strictly literal sense, their meaning might admit of discus- sion; but it is obvious that they were not so used. "Shall die by his own hand, sane or EI.1-SEI..CAS.LAW ESB. — 14 Insane," is, doubtless, a more accurate mode of expression; but It does not more clearly declare the intention of the parties. Besides, the authorities uniformly treat the terms "suicide" and "dying by one's own hand," in policies of life insurance, as synonymous, and the popular understanding accords with this Interpretation. Chief Justice Itodall, in Bor- radaile v. Hunter, 5 Man. & G. 668, says, "The expression, 'dying by his own hand,' is, in fact no more than the translation into English of the word of Latin origin, 'sui- cide.' " Life insurance companies indis- criminately use either phrase, as conveying the same idea. If the words, "shall commit suicide," standing alone in a policy, import self-murder, so do the words, "shall die by his own hand." Either mode of expression, when accompanied by qualifying words, must receive the same construction. This be- ing so, there is no diflBculty in defining the sense in which the language of this condition should be received. Felonious suicide was not alone in the contemplation of the parties. If it had been, there was no necessity of adding anything to the general words, which had been construed by many courts of high authority as not denoting self-destruction by an insane man. Such a man could not com- mit felony; but conscious of the physical nature, although not of the criminality, of the act be could take his own life, with a set- tled purpose to do so. As the line between sanity and insanity Is often shadowy and difficult to define, this company thought prop- er to take the subject from the domain of controversy, and by express stipulation pre- clude all liability by reason of the death of the insured by his own act whether he was at the time a responsible moral agent or not Nothing can be clearer than that the words, ''sane or insane." were introduced for the pmpose of excepting from the operation of the policy any intended self-destruction, whether the insured was of sovmd mind or in a state of insanity. These words have a precise, definite, well-understood meaning. No one could be misled by them; nor could an expansion of this language more clearly express the intention of the parties. In the popular, as weU as the legal, sense, suicide means, as we hove seen, the death of a party by his own voltmtary act; and this condi- tion, based, as it is, on the construction of this language, informed the holder of the policy, that if he purposely destroyed his own life, the company would be relieved from liability. It is imnecessary to discuss the various phases of insanity, in order to de- termine whether a state of circumstances might not possibly arise which would defeat the condition. It wUl be time to decide that question when such a case is presented. For the purposes of this suit it is enough to say, that the policy was rendered void. If the in- sured was conscious of the physical nature of his act, and intended by it to cause his death, although, at the time, he was inca- 210 STIPULATIONS CONTAINED IN THE POLICY. pable of judging between right and wrong, and of understanding the moral consequences of what he was doing. Insurance companies have only recently in- serted in the provisos to their policies words of limitation corresponding to those used in this case. There has been, therefore, bnt little occasion for courts to pass upon them. But the direct question presented here was before the supreme court of Wisconsin in 1874, In Pierce v. Insurance Co., 34 Wis. 389, and received the same solution we have giv- en it. More words were there used than are contained in this proviso; but the effect is the same as if they had been omitted. To say that the company will not be liable if the insured shall die by "suicide, felonious or otherwise," is the same as declaring its non- liabilty, if he shall die by "suicide, sane or insane." They are equivalent phrases. Nei- ther the reasoning nor the opinion of that court is at all affected by the introduction of words which are not common to both policies. It remains to be seen whether the court below erred in sustaining the demurrer. The replication concedes, in effect, all that is al- leged in the plea; but avers that the insured at the time "was of unsound mind, and wholly unconscious of the act" These words are identical with those in the replication to the plea in Breasted v. Trust Co., 4 Hill, 73; and Judge Nelson treated them as an aver- ment that the assured was insane when he destroyed his life. They can be construed in no other way. If the insured had perished by the accidental discharge of the pistol, the replication would have traversed the plea. Instead of this, it confesses that he intention- ally took his own life; and it attempts to avoid the bar by setting up a state of in- sanity. The phrase, "whoUy unconscious of the act," refers to the real nature and char- acter of the act as a crime, and not to the mere act itself. Blgelow knew that he was taking his own life, and showed sufficient in- telligence to employ a loaded pistol to ac- complish his purpose; but he was uncon- scious of the great crime he was committing. His darkened mind did not enable him to see or appreciate the moral character of his act, but still left him capacity enough to under- stand its physical nature and consequences. In the view we take of the case, enough has been said to show that the court did not err in holding that the replication was bad. Judgment affirmed. EXCEPTIONS PROM LIABILITY. 211 INSURANCE CO. v. BOON. (95 U. S. 117.) Supreme Court of the United States. Oct, 1S77. Error to the circuit court of the United States for the district of Connecticut This was an action commenced in Septem- ber, 1868, to recover $6,000, the amount of a policy of insurance, bearing date Sept 2, 1864, issued to the plaintiffs below by the Aetna Fire Insurance Company of Hartford, Conn., for one year, upon certain goods, wares, and merchandise then in their store at Glasgow, Mo., which were destroyed by fire Oct 15, 1864. By written stipulation, a jury was waived, and the issues of fact tried by the court. On AprU 28, 1874, the court filed a written opinion declaring their finding of facts upon the evidence, with their conclusions of law thereon, and rendered judgment accordingly for the plaintiffs. No other findings of fact were had, nor was a bill o£ exceptions tend- ered at that time. On the 13th of July fol- lowing, the defendant applied to the circuit judge in vacation for a rule on the plaintiffs to show cause why the findings of fact and the conclusions of law thereon should not be stated by the court, and a biU of exceptions signed and filed nunc pro tunc. Leave for that purpose having been granted, execution of the judgment was stayed. August 22, the parties stipulated in writing that the rule should be heard before the district judge at chambers. Upon the hearing, he, on the twenty-fourth day of that month, granted the rule. At the September term of the court the findings of fact and conclusions of law thereon were duly entered nunc pro tunc as of the April term, and the bill of exceptions was signed by both judges. The findings, so far as they involve any question argued by counsel here, are as follows: "That the policy, which was duly executed by the defendant and delivered to the plain- tiffs, contained the following express provi- sions, annexed to the agreement of insurance and in the body of the policy, namely: "Provided always, and it Is hereby declared, that the company shall not be liable to make good any loss or damage by fire which may happen or take place by means of any inva- sion, insurrection, riot or civil commotion, or of any military or usurped power, or any loss by theft at or after a fire." That the facts and circumstances showing the cause of the fire are as follows, namely: At and before the time of the fire in question, the city of Glasgow, within which the said store of the plaintiffs was situated, was oc- cupied as a military post of" the United States, by the military forces and a portion of the army of the United States engaged in the civil war then, and for more than three years theretofore, prevailing between the govern- ment and the citizens of several Southern states who were in rebellion and seeldng to establish an independent government, under the name of the Confederate States of Amer- ica. As such military post, the said city of Glasgow was made the place of deposit of military stores for the use of the army of the United States, which stores were in a build- ing called the city hall of the said city of Glasgow, situated on the same street, on the same side of the street, and about one hun- dred and fifty feet distant from the plaintiffs' said store, three buildings, nevertheless, being located in the intervening space, not, however, in actual contact with either. Colonel Ches- ter Harding, an oflicer of the United States government, and in command of the military forces of the United States, held the posses- sion of the said city, and had lawful charge and control of the military stores aforesaid. On the fifteenth day of October, 1864, an armed force of the rebels, under military or- ganization, surrounded and attacked the city at an early hour In the morning, and threw shot and shell into the town, penetrating some buildings, and one thereof penetratuig the said store of the plaintiffs, but without setting fire thereto or causing any fire therein, and some of said shell killing soldiers and citizens. The city was defended by Colonel Harding and the military forces under his command, and battle between the loyal troops and the rebel forces continued for many hours. The citizens fled to places of security, and no civil government prevailed in the city. The rebel forces were superior in numbers, and, after a battle of several hours, drove the forces of the government from their position, com- pelled their surrender, and entered and oc- cupied the city. During the battle, and when the government troops had been driven from their exterior lines of defence, it became apparent to Colonel Harding that the city could not be success- fully defended, and he thereupon, in order to prevent the said military stores from falling into the possession of the said rebel forces, ordered Major Moore, one of the oflicers un- der his command, to destroy them. In obedience to this order to destroy the said stores, and having no other means of do- ing so. Major Moore set fire to the said city hall, and thereby the said building, with its contents, was consumed. Without other in- terference, agency, or instrumentality, the fire spread along the line of the street aforesaid to the building next adjacent to the city hall, and from building to building through two other intermediate buildings to the store of the plaintiffs, and destroyed the same, together with its contents, including the goods insured by the defendant's policy aforesaid. During this time, and until after the fire had con- sumed such goods, the battle continued, and no surrender had taken place, nor had the forces of the rebels, nor any part thereof, ob- tained the possession of or entered the city. It was conceded that the order of Colonel Harding was, la the exigency, a lawful and 212 STIPULATIONS CONTAINED IN THE POLICY. discreet use of the military autliority vested in bim. The court declared, as conclusions of law upon the facts found, that the 'defendant was not exempted by virtue of the said proviso from liability to the plaintiffs under said policy, and that the plaintiffs were entitled to judgment for $6,000, the value of the property destroyed, with interest thereon from July 1, 1865, and costs of suit. On the 7th of October, 1874, the defendant sued out this writ of error. G. W. Parsons and R. D. Hubbard, for plaintiff in error. Francis Fellowes, for de- fendants in error. Mr. Justice STRONG delivered the opinion of the court. Preliminary to any consideration of the as- signments of error is the question whether the bill of exceptions and the special finding of facts can be considered as a part of the record. The issues formed by the pleadings were tried by the court, without the interven- tion of a jury, in September, 1873, and judg- ment for the plaintiffs was ordered at April term, 1874. It does not appear that any ex- ceptions were talsen to the rulings of the court during the progress of the trial, and that which is now claimed to be a bill of excep- tions has no reference to any such rulings. It relates only to the judgment given on the findings of the issues of fact. The act of con- gress which authorizes trials by the court (13 Stat. 500; sections 649, 700, Rev. St.) has en- acted that the finding of the court upon the facts, which may be either general or special, shall have the same effect as the verdict of a jury; and that, when the finding is special, the review by the supreme court upon a writ of error may extend to the determination of the sufiiciency of the facts found to support the judgment. No bill of exceptions is re- quired, or is necessary, to bring upon the rec- ord the findings, whether general or special. They belong to the record as fully as do the verdicts of a jury. If the finding be special, it tates the place of a special verdict; and, when judgment is entered upon it, no bill of exceptions is needed to bring the sufficiency of the finding up for review. But there must be a finding of facts, either general or special, in order to authorize a judgment; and that finding must appear on the record. In this case, there was no formal finding of facts when the judgment was ordered. It is to be inferred, it is true, from the judgment and from the entry of the clerk, that the issue made by the pleadings was found for the plaintiffs, but how, whether generally or spe- cially, does not appear. There was, there- fore, a defect in the record, which it was quite competent for the court to supply by amendment; and such an amendment was made. After the close of the April term, and In the vacation nest following, the judge of the court, on application of the defend- ants, granted an order upon the plaintiffs to show cause why the defendants should not have leave inter alia to' make and serve a case or bill of exceptions, containing the evi- dence given at the trial, special findings of fact and law, and such exceptions thereto as the defendants might desire to make, and why such case or bill of exceptions when made and settled should not be filed, nunc pro tunc, as of the term when the judgment was enter- ed. Upon this rule both parties were heard; and the result was an order that "a finding of facts in the cause, with the conclusions of the court thereupon, conformably to the opinion of the court theretofore filed," be prepared, to be approved by the court at the next following term (September); that the defendants have leave to prepare a bill of exceptions to be al- lowed and signed at said term, and that "said special finding of facts" and bill of excep- tions should be made, allowed, and entered of record, nunc pro tunc, as of the April term, 1874, of the court. Such a special finding was accordingly prepared, and at the September term signed by both the judges of the circuit court, the order made in vacation was made the order of the court, and the separate find- ings of fact and conclusions of law, together with the bill of exceptions, also signed, were ordered to be filed, nunc pro tunc, as of April term, 1874, and made part of the record of the cause. Had the court power to make such an order respecting a special finding, and, if it had, does the order have the effect of mak- ing the special finding a part of the record? It is not necessary to inquire whether the court, at a term subsequent to the judgment, could lawfully allow and sign a bill of excep- tions not noted at the trial. It may be ad- mitted that a court has no such power; but, as already remarked, no bill of exceptions was needed to bring any thing upon the record. If the special finding of facts was properU there, or was rightfully supplied, the judg- ment of the court is subject to review inde- pendently of any bill of exceptions, the only office of which is to bring upon the record rulings that without it would not appear. It remains, therefore, to consider whether the court could at the September term, by an or- der, correct the record by incorporating into it, nunc pro tunc, a special finding of the facts upon which the judgment had been ren- dered. It is familiar doctrine that courts al- ways have jurisdiction over their records to make them conform to what was actually done at the time; and, whatever may have been the rule announced in some of the old cases, the modern doctrine is that some orders and amendments may be made at a- subse- quent term, and directed to be entered and become of record as of a former term. In Rhoads v. Com., 35 Pa. St. 276, Gibson, C. J., said: "The old notion that the record re- mains in the breast of the court only till the end of the term has yielded to necessity, con- EXCEPTIONS FROM LIABILITY. 213 Tenience, and common sense. <3ountless in- stances of amendment after the term, but os- tensibly made during it, are to be foimd in our own boolvs and those of our neighbors." Even judgments may be corrected in accordance with the truth. It has been held by this court that, at a subsequent term, when a judgment liad before been arrested, an amend- ment may be made to apply the verdict to a good count, if another be bad, and the min- utes of the judge show that the evidence sus- tained the good one. Matheson's Adm'r v. Grant's Adm'r, 2 How. 282. And this has been repeatedly held elsewhere. Generally, it may be admitted that judgments cannot be amended after the term at which they were rendered, except as to defects or matters of form; but every court of record has power to amend its records, so as to make them con- form to and exhibit the truth. Ordinarily, there must be something to amend by; but that may be the judge's minutes or notes, not themselves records, or any, thing that satis- factorily shows what the truth was. Withip these rules, we think, was the order made at September term, that the special finding of facts and conclusions of law be signed by the judges and allowed, conformably to the opin- ion of the court theretofore filed, and that it, together with the order, should be filed nunc pro tunc as of April term, and made part of the record. It was but an amendment or cor- rection of form, the form of the finding, not of its substance, and there was enough to amend by. The opinion, which was tiled concurrent- ly with the entry of the judgment, contained substantially, almost literally, the same state- ment of facts, and relied upon it as the founda- tion of the judgment given. True, that opin- ion is no part of the record, any more than are a judge's minutes; but It was a guide to the amendment made, and it seems altogether probable it was intended to be itself a special finding of the facts. The order of September, 1874, recites that the court had at April term filed, announced, and declared their findings of facts, with their conclusions of law there- upon, which findings and conclusions were embodied in the opinion of the court announ- ced and filed in the cause. And all that was wanting to make it a sufficient special find- ing was that it was not entitled "Finding of Facts." The amendment or correction, there- fore, contradicts nothing in the record as made at April term, and it is in strict ac- cordance with the truth. We conclude, then, that the order of September term was within the discretion of the court, and that by it the special finding returned became a part of the record of the cause, and that the judgment fotmded upon it is subject to review In this court without any bill of exceptions. In so holding, we do not depart from any thing we have ever decided respecting the power of a court to make up a case, after the expiration of a term, for bills of exceptions not claimed at the triaL This is not a case of that kind. It is the case of a correction of the record, not merely an allowance of excep- tions never taken, and necessary to have been taken, to bring an interlocutory ruling upon it. We hold now, as we have always holden, that when bills of exceptions are necessary to bring any matter upon record so that it can be re- viewed in error, it must appear by the rec- ord that the exception was taken at the trial. A judge cannot afterwards allow one not taken in time. Could he allow it, the record would be made to speak falsely. Coming, then, to the merits of the case, the main question is, whether the fire which de- stroyed the plaintiffs' property "happened or took place by means of any invasion, insurrec- tion, riot, or civil commotion, or of any mili- tary or usurped power." If it did, the loss was excepted from the risk taken by the in- surers. The policy contains this express stipulation: "Provided always, and it is hereby declared, that the company shall not be liable to make good any loss or damage by fire which may happen or take place by means of any inva- sion, insurrection, riot, or civil commotion, or of any military or usurped power, or any loss by theft at or after a fire." The general pur- pose of this proviso is clear enough, but there is controversy respecting the extent of the exemption made by it. It has been very strenuously argued that the words "military or usurped power" must be construed as meaning military and usurped power; that they do not refer to military power of the government, lawfully exercised, but to usurped military power, either that exerted by an in- vading foreign enemy, or by an internal arm- ed force in rebellion, sufficient to supplant the laws of the land and displace the constituted authorities. There is, it must be admitted, considerable authority, and no less reason, in support of this interpretation. In our view of the present case, however, we are not called upon to affirm positively that such is the true meaning of the words in the connection in which they were used in the policy now under review; for, if it be conceded that it is, we are still of opinion that the fire which de- stroyed the premises of the plaintiffs below "happened," "took place," or occurred by means of a risk excepted in the policy. In other words, it was caused by invasion, and the usurped military power of a rebellion against the government of the United States, as the contracting parties understood the terms "invasion" and "military or usurped power." Policies of • insurance, lik'e other contracts, must receive a reasonable interpretation con- sonant with the apparent object and plain in- tent of the parties. This is entirely consist- ent with the mle that ambiguities should be construed most strongly against the under- writers, and most favorably to the assured. Insurance Co. v. Stein, 5 Bush, 652. It was well said recently by the New York court of 214 STIPULATIONS CONTAINED IN THE POLICY. appeals, that, In construing contracts, words must have the sense in which the parties un- derstood them. And, to understand them as the parties understood them, the nature of the contract, the objects to be attained, and all the circumstances must be considered. Cushman v. Insurance Co., 70 N. Y. 76. Apply, now, these principles to the pres- ent case. The policy was issued in 18B4, while the country was convulsed by a civil war. The property insured was in a state bordering upon sections, the people of which were in insurrection against the general gov- ernment, and confederated as a usurping pow- er. The state had been the theatre of civil commotion and of armed invasion during the struggle between the confederated states and the federal government, a struggle not then ended. It was quite possible that new in- vasions might be made and new destruction of property might be caused by the military or usurped power then in rebellion. It is evi- dent that the insurers were willing to assume only ordinary rislss, and that, to guard against more extended liability, the excepting clause was introduced into the policy. The provision must have been intended to be a protection to the company against extraordinary risks, at- tendant upon the condition of things then ex- isting. Invasion involved, of necessity, re- sistance by the constituted authorities of the government, and the employment of its mili- tary force. Destruction of property by fire was quite as likely to be caused by resistance to the usurping military power as by the di- rect action of that power Itself. This must have been foreseen and considered when the insurance was efCected. It is diflScult, there- fore, to believe that the parties intended to confine the stipulated exemption within the limits to which the assured would now con- fine it. That the destruction of the plaintiffs' property by fire was a consequence of the at- tack of the organized rebel military forces up- on the forces of the United States holding possession of Glasgow, the special finding of facts clearly shows. Glasgow was a military post, and a place of deposit for the military stores of the United States, which were in the city hall. The city was guarded and defend- ed by a military force under the command of Colonel Harding. At an early hour of the morning of the fif- teenth day of October, 1864, an armed force of the rebels, under military organization, sur- rounded and attacked the city and thrfew shot and sheU into it, penetrating some buildings, and one thereof penetrating the store of the plaintiffs, but without setting fire thereto or causing any fire therein, and some of the shell killing soldiers and citizens. The city was defended by Colonel Harding and the military forces under his command, and a bat- tle between the loyal troops and the rebel forces continued for many hours. The citizens fled to places of seciulty, and no civil govern- ment prevailed in the city. The rebel forces were superior in number, and drove the forces of the government from their position, com- pelled their surrender, and entered and oc- cupied the city. During the battle, and when the govern- ment troops had been driven from their ex- terior lines of defence, it became apparent to Colonel Harding that the city could not be successfully defended, and he thereupon, in order to prevent the said military stores from falling into the possession of the rebel forces, ordered Major Moore, one of the of- ficers imder his command, to destroy them. In obedience to this order to destroy the said stores, and having no other means of doing so, Major Moore set fire to the city hall, and thereby the said building, with its contents, was consumed. Without other interference, agency, or instrumentality, the fire spread along the line of the street aforesaid to the building next adjacent to the city haU, and from building to building through two other intermediate buildings to the store of the plaintiffs, and destroyed the same, together with its contents, including the goods insured by the defendant's policy aforesaid. During this time, and until after the fire had consum- ed such goods, the battle continued; and no surrender had taken place, nor had the forces of the rebels, nor any part thereof, obtained the possession of or entered the city. In view of this state of facts found by the court, the inquiry is, whether the rebel in- vasion or the usurping military force or power was the predominating and operative cause of the fire. The question is not what cause was nearest in time or place to the catastrophe. That is not the meaning of the maxim "Causa proxima, non remota spectatur." The proximate cause is the efficient cause, the one that necessarily sets the other causes in operation. The causes that are merely in- cidental or instruments of a superior or con- trolling agency are not the proximate causes and the responsible ones, though they may be nearer in time to the result. It is only when the causes are independent of each other that the nearest is, of course, to be charged with the disaster. A careful consideration of the au- thorities wiU vindicate this rule. Mr. Phillips, in his work on Insurance (section 1097), in speaking of a nisi prius case of a vessel burnt by the master and crew to prevent its falling into the hands of the enemy (Gordon v. Rim- mington, 1 Camp. 123), says, the "maxim 'Causa proxima spectatur* affords no help in these cases, but is, in fact, fallacious; for if two causes conspire, and one must be chosen, the more scientific inquiry seems to be, wheth- er one is not the efficient cause, and the other merely instrumental or merely incidental, and not which is nearer in place or time to the consummation of the catastrophe." And again, in section 1132: "In case of the concurrence of different causes, to one of which it is neces- sary to attribute the loss, it Is to be attributed to the efiScient predominating peril, whether it EXCEPTIONS FROM LIABILITY. 215 is or Is not in activity at the consummation of ttie disaster." In Brady v. Insurance C!o., 11 Micli. 425, Martin, C. J., in delivering the opinion of the court, said: "That which Is the actual cause of the loss, whether operat- ing directly or by putting intervening agen- cies, the operation of which could not be reasonably avoided, in motion, by which the loss is produced, is the cause to which such loss should be attributed." In St, John v. In- surance Co., 11 N. Y. 519, the insurance was against fire, but the policy exempted the in- surers from any loss occasioned by the ex- plosion of a steam-boiler. A fire occurred, caused by an explosion, which destroyed the insured property. The court, regarding the explosion, and not the fire, as the predominat- ing cause of the loss, held the insurers not lia- ble. Decisions are numerous to the same ef- fect. Policies of insurance do not protect an assured against his voluntary destruction of the thing insured. Yet in Gordon v. Rimming- ton, supra, it was held tha^ when the captain of a ship insured against fire burned her to prevent her falling into the hands of the enemy, it was a loss by fire within the meaning of the policy. It was because the fire was caused by the public enemy. The act of the captain was the nearest cause in time, but the dan- ger of capture by the public enemy was re- garded as the dominating cause. Vide, also, Emerig. Ins. tom. 1, p. 434. And we find the same principle followed in common practice. Often, in case of a fire, much of the destruc- tion is caused by water applied in efforts to extinguish the fiames. Yet it is not doubted all that destruction is caused by the fire, and insurers against fire are held liable for it. In Lund V. Inhabitants of Tyngsboro, 11 Cush. 563, where it appeared that a traveller had been injured by leaping from his carriage, ex- ercising ordinary care and prudence, in conse- quence of a near approach to a defect in a highway, the town was held liable, though the carriage did not come to the defect. The defect was regarded as the actual, the dom- inating, cause. And in this court similar doc- trine has been asserted. Insurance Co. v. Tweed, 7 Wall. 44, the principle of which case, we thinl£, should rule the present. There it was, in effect, ruled that the efficient cause, the one that set others in motion, is the cause to which the loss is to be attributed, though the other causes may follow it and operate more Immediately in producing the disaster. In Butler v. WUdman, 3 Barn. & Aid. 398, may be found a case where the captain of a Spanish ship, in order to prevent a quantity of Spanish dollars from falling into the hands of an enemy by whom he was about to be at- taclced, threw them into the sea. The suit was upon a policy insuring the dollars, and Judgment was given for the plaintiff. Bayley, J., said, "It was the duty of the master to pre- vent any thing which could strengthen the hands of the enemy from falling into their pos- session. Now, as money would strengthen the enemy, it was the duty of the master to throw it overboard; and the sacrifice of the money was, therefore, ex justa causa. It seems to me, therefore, this is a loss by jettison. But it Is not a loss by jettison: it is a loss by enemies. It clearly falls within the principle stated by Emerigon, in the case of the de- struction of a ship by fire; and I think the enemy was the proximate cause of the loss." Holroyd, J., said, it seemed to him it was a loss by enemies, for the meditated attacls; was the direct cause of the loss. A similar doc- trine was asserted in Barton v. Insurance Co., 42 Mo. 156, and in Marcy v. Insurance Co., 19 La. Ann. 388. It la a doctrine resting upon reason, and in accord with the common under- standing of men. Applying it to the facts found in the present case, the conclusion is inevitable, that the fire which caused the de- struction of the plaintiffs' property happened or took place, not merely in consequence of, but by means of, the rebel invasion and mili- tary or usurped power. The fire occurred while the attack was in progress, and when it was about being successful. The attack, as a cause, never ceased to operate until the loss was complete. It was the causa causans which set in operation every agency that con- tributed to the destruction. It created the military necessity for the destruction of the military stores in the city hall, and made it the duty of the commanding officer of the fed- eral forces to destroy them. His act, there- fore, in setting fire to the city hall, was di- rectly in the line of the force set in motion by the usurping power, and what that power must have anticipated as a consequence of its action. It cannot be said that was not an- ticipated which militar-y necessity recognized. And the insurers and the assured must have looked for such action by the federal forces as a probable and reasonable consequence of an overpowering attack upon the city by an in- vading rebellious force. Having excepted from the risk undertaken responsibility for such an attack, they excepted with it respon- sibility for the consequences reasonably to be anticipated from it The court below regarded the action of the United States military authorities as a suffi- cient cause intervening between the rebel at- tack and the destruction of the plaintiffs' property, and therefore held it to be the re- sponsible proximate cause. With this we can- not concur. The proximate cause, as we have seen, is the dominant cause, not the one which is in- cidental to that cause, its mere instrument, though the latter may be nearest in place and time to the loss. In Railway Co. v. Kellogg, 94 V. S. 469, we said, in considering what is the proximate and what the remote cause of an injury, "The inquiry must always be whether there was any Intermediate cause disconnected from the primary fault, and self- operating, which produced the injury." In the present case, the burning of the city hall 216 STIPULATIONS CONTAINED IN THE POLICY. and the spread of the fire afterwards was not a new and Independent cause of loss. On the contrary, it was an incident, a necessary in- cident and consequence, of the hostile rebel attack on the town,— a military necessity caus- ed by the attack. It was one of a continuous chain of events brought into being by the usurped military power, — events so linked to- gether as to form one continuous whole. The case is, therefore, clearly within the doctrine asserted by Emerigon, and held in Butler v. Wildman, and in the other cases we have cit- ed. Hence it must be concluded that the fire which destroyed the plaintlffe' property took place by means of an invasion or military or usurped power, and that It was excepted from the risk, undertaken by the insurers. Judgment reversed and record remitted, with instructions to enter judgment for the defendant below. EXCEPTIONS FKOM LIABILITY. 217 HTCK et al. t. GLOBE INS. CO. WALKER T. QUEEN INS. CO. STOWB et al. v. GIRARD FIRE & MARINE INS. CO et al. a27 Mass. 306.) Supreme Judicial Court of Massachusetts. Hampden. Sept. 3, 1879. M. P. Knowlton, for plaintiffs in first and second cases. G. Wells, for plaintiffs in third case. M. Wilcox and J. P. Bucl^land, for defendants. GRAY, C. J. The manifest intent and pur- pose of the clause inserted in each of these policies, by which it is provided that, "if a building shall fall except as the result of a fire, aU insurance by this corporation on it or Its contents shall immediately cease and determine," is that the insurance, whether upon a building or upon its contents, shaU continue only while the building remains standing as a building, and shall cease when the building has fallen and become a ruin. When substantially aU the floors and the roof of a building used as a storehouse fall, leav- ing nothing standing but the outer walls and perhaps a staircase or an elevator, the build- ing must be deemed to have fallen. When several buildings or the goods therein are in- sured by the same policy, the fall of one building terminates the policy, at least on that building or its contents. The report shows that the eastern and west- em halves of the block were substantially dis- tinct buildings, separated from each other by a bricli partition wall extending from the front to the rear of the bloct and from cellar to roof (though with doors of communication in each story), and each of the two parts or buildings capable of standing or falling by itself; that in each of these two parts or buildings, midway between the partition wall and the end wall, there was a beam or girder in each floor, extending from the front to the rear, supported by four brick piers in the cel- lar and by wooden posts in each story, and upon which the joists of the floors rested; that by the giving way of the piers in the cel- lar of the easterly part or building, with- out the agency of fire, the beam or girder rest- ing thereon fell down near the ground, bring- ing with it the floors and partitions and roof above, with the goods and merchandise in each story, in a mixed and confused mass^ excepting only very small portions of some of the floors and of the roof, and a single case of goods; and that only the outer walls of this building (of which the brick partition wall separating it from the adjoining building was one), and an elevator five feet square in one comer, were uninjured by the faU; that it was after the fall that the fire broke out that caused the injury, for which recovery i& sought In these actions, to the goods which had fallen, and to the elevator and to the surroimding walls, with the doors and win- dows therein, which remained standing; and that the west half of the building remained in all its parts undisturbed and uninjured. Of the building forming the eastern half of the block, the roof and the whole Interior, with all the floors and divisions thereof, had fallen, and nothing remained standing but the outer walls and the elevator, constituting a mere shell or ruin, and not a standing build- ing In any proper sense. It follows that nei- ther the goods precipitated by the fall inta a confused mass, nor the walls of the ruined building, nor the elevator therein, were any longer at the risk of the insurers, and that in each of these cases a jury would not have b'een warranted In finding a verdict for the plaintiffs. The decisions cited for the plaintiffs are not inconsistent with this conclusion. In Fireman's Fund Ins. Co. v. Congregation Ro- deph Sholom, 80 111. 558, the building, though shaken by a storm so as to lean over, re- mained entire, and no part of It had fallen. In Breuner v. Insurance Co.. 51 Cal. 101. goods exceeding in value the amount of the- insurance were destroyed by fire in that part of the building which had not fallen, and the decision against the insurers was by a bare majority of the court The result is, that In each case there must, according to the terms of the report, be judg- ment for the defendant .218 STIPULATIONS CONTAINED IN THE POLICY. BRMENTRAUT et al. t. GIRARD FIRE & MARINE INS. CO. (65 N. W. 635.) ■Supreme Conrt of Minnesota. Dec. 24, 1895. Appeal from district court, Hennepin coun- ty; Henry 0. Belden, Judge. Action by Charles H. Ermentraut and Charles H. Maxcy against the Girard Fire .& Marine Insurance Company of Philadel- phia. From an order dismissing the action, plaintiffs appeal. Affirmed. Merrick & Merrick, for appellants. Kuefl- ■ner & Fauntleroy and P. P. Lane, for re- spondent MITCHELL, J. This action was brought on a policy issued by the defendant to the plaintiff Ermentraut, insuring him, to the amount of $1,000, for one year "against all direct loss or damage by fire," on his "brick. Iron-roof, grain warehouse building, and bins therein, including foundations and aU per- manent fixtures," etc. The only other pro- visions of the policy involved on this appeal are as follows: "If a building or any part thereof fall, except as the result of fire, aU insurance by this policy on such building or its contents shall immediately cease." "If fire occur, the insured shall give immedi- ate notice of any loss thereby in writing to this company." "The sum for which this company is liable, pursuant to this policy, shall be payable 60 days after due notice, ascertainment, estimate, and satisfactory proof of the loss have been received by this company, in accordance with the terms of this policy." When the plaintiffs rested, the defendant moved to dismiss the action, for the reason that plaintiffs had failed to es- tablish their cause of action, in that— First, It did not appear that the loss or damage was the direct result of fire; second, that it did appesLT that the plaintiffs had not given immediate notice of the loss in writing to the company. The judge granted the mo- tion, although placing his decision exclusive- ly on the last ground. Of course, if the ac- tion should have been dismissed on either ground, the ruling of the court must be af- firmed. 1. The insured building was adjacent to another used as a feed mill, the wall be- tween them being a partition wall. There IS no claim that any part of the insured building was actually ignited or consumed by fire. The fire was confined to the adja- cent feed mill, which fell, carrying down with it the partition wall, and a part of the elevator insured, and the question to which both the examination and cross-examination of plaintiffs' witnesses seem to have been ■directed was whether the fall caused the fire or the fire caused the fall. While the evidence offered by plaintiff was not of the most convincing or satisfactory character, yet we think it was such that the jury might have found either way on the question. We think that, as the evidence stood when olain- tiff rested, it would have justified the jury in finding that the feed mill had caught fire before it fell, and that the fall was caused by the partial consumption of the feed mill, and the weakening of the partition wall by the fire. If such were the facts, then we think the falling of the insured building was a "direct loss or damage by fire," within the meaning of the policy. The provision that, if the building fell, "except as the result of fire," the insurance thereon shall cease, was introduced into the policy by the Insurer for its own benefit, and, un- der a familiar rule, must be construed, in case of ambiguity, most strongly against it We think it has reference only to cases where the building might fall from some other cause than fire,— as, for example, de- fective construction, the withdrawal of nec- essary support, storm, fiood, or other like cause,— and fire thereafter ensued. But it was not intended to exclude cases where fire was the immediate or proximate cause of the falL To render the fire the immediate or proximate cause of the loss or damage, it is not necessary that any part of the in- sured property actually ignited or was con- sumed by fire. This is so well settled that the citation of authorities in support of the proposition is unnecessary. The question is, was fire the efficient and proximate cause of the loss or damage? Thus, in one case, where a house protected by a policy of in- surance against damage by fire was injured ■ by the falling of part of the wall of an ad- jacent house, in consequence of fire in the latter house, It was held that the fire was the proximate cause of the loss, and that the insurers were liable, although the house insured had never been on fire. Johnston v. Insurance Co., 7 Shaw & D. Scot Ct Sess. 52. The word "direct" in the policy, means merely "immediate," or "proximate," as dis- tinguished from "remote." Counsel for de- fendant cites, in support of a contrary view, some language used by way of Illustration in California Ins. Co. v. Union Compress Co., 133 U. S. 387-^15, 10 Sup. Ct. 365, in which the court names "destmction through the falling of burning waJls" as an instance of remoteness of agency. The question was not before the court, for in that case the insured property was physically burned by the direct action of fire. If the court meant what counsel claims, we cannot avoid the conclusion that the illustration was, to say the least of it, an unfortunate one. 2. Seeley & Co., who issued the policy, were the local agents of the defendant, with au- thority "to receive proposals for insurance within the county of Hennepin, and to receive premiums thereon, and to give receipts and issue policies therefor." It also appeared that these agents had authority to accept applica- tions for insiu-ance, fix the premium or rate of insurance, and ffil up, countersign, and is- sue policies thereon, which they received from the company, signed by its president and sec- AS TO THINGS TO BE DONE AFTEK LOSS. 219 retary. So far as appeared from the evidence, this was the extent of their actual authority, and there was no evidence tending to show lliat their apparent authority was other or greater than their actual authority. The only evidence of the giving of notice of loss, except the sending of proofs of loss to the general managers of the defendant at Chicago on or after October 9th (received by them on or about October 23d), was to the effect that, within a day or two after the loss, one of the plaintiffs verbally notified Seeley & Co. that "the fire had destroyed the building." Al- though probably not material, it does not ap- pear that he requested Seeley & Ca to give or forward the notice to the company, or that they promised to do so, or made any reply to the plaintiff. As the loss occurred on the 12th •of August, it is clear, under the authorities, that as a matter of law, the time for giving notice of loss had expired before the proofs of loss were sent to Chicago. It is also settled law that, where the policy requires notice of loss to be given to the insurer within a specified time, such notice is a condition precedent to the right of action on the policy. Hence, for their right of recovery on the policy, the plain- tiffs have to rely on the verbal notice given to Seeley & Co. If SeWey & Co. were the proper parties to whom to give this notice, — in other words. If it was within the scope of their authority to receive notice of loss, — we would not feel any doubt but that if, when they received verbal notice, they made no ob- jection to its form, they would be deemed to have waived the omission to give it in writ- ing. But it is self-evident that if they had no authority to receive such notice, then they •could waive nothing in the matter. Upon this state of facts, it was not within the scope of the authority of Seeley & Co. to receive or waive notice of loss, and hence notice to them was not notice to the company. Even if there •could be any doubt of the correctness of this proposition as a new question, it has been too long and too well settled in this state to be now considered open. Bowlin v. Insurance Co., 36 Minn. •433, 31 N. W. 859; Shapiro v. Insurance Co., 51 Minn. 239, 53 X. W. 463; Id. (Jlinn.) 63 N. W. 614. But we think the rule is correct upon both principle and au- thority. It is in iiccordsnce with the general principles of the law of agency. It is ele- mentary that a principal is only liable for -acts done by his agent within the scope of the authority, actual or apparent, with which the principal has clothed him; that it rests en- tirely with the principal to determine the ex- tent of the authority which he will give to his agent; also, that every person dealing with an assumed agent is bound, at his peril, to ascertain the nature and extent of the agent's authority. In insurance cases courts fre- •quently inaccurately classify agents as "lo- cal" and "general." But the extent of the territory which is to be the field of his agency is no test of the extent of an agent's authority -within tliat field. His field of operations may include the whole United States, and yet his powers be special and limited. On the other hand, his field of operations may be confined to a single county or city, and yet his authori- ty within that field be unlimited. In the pres- ent case there is no question of apparent, as distinguished from actual, authority. The question is simply one of actual authority, ex- pressed or implied. Authority to act in the matter of a loss under the policy, after it has occurred, is not expressly given. All the au- thority expressed relates to the maldng of the contract of insurance. It is a fundamental principle in the law of agency that a delega- tion of power, unless its extent be otherwise expressly limited, carries with it, as a neces- sary incident, the power to do all those things which are reasonably necessary to carry into effect the main power expressly conferred. But it is equally fundamental that the power impUed shall not be greater than that fairly and legitimately warranted by the facts; in other words, an implied agency is not to be extended by construction beyond the obvious purpose for which the agency was created. We do not think that mere authority to make a contract of insurance carries with it im- plied authority to act in the matter of a loss under the policy after it has occurred. If the implied authority extends to accepting no- tice of the loss, it would logically follow that it also extends to proof of loss, and even to the adjustment of the loss,— a length to which no court has ever gone. The rule which we have adopted is also in accordance with the general current of the authorities. Lohnes v. Insurance Co., 127 Mass. 439; Smith v. In- surance Co., 60 Vt 682, 15 Atl. 353; Bush v. Insurance Co., 63 N. Y. 531. Occasional state- ments in some of the text-books seem to an- nounce a different rule, but they are not borne out by the authorities cited in their support. For example, in Wood, Ins. § 419, it is stated that, "where an agent is intrusted with policies signed in blank, and is authori2ed to issue them upon the appUcation of parties seeking insur- ance, he is thereby clothed with apparent au- thority to bind the party in reference to any condition of the contract, whether precedent or subsequent, and may waive notice of proofs of loss, and may bind the company by his ad- missions in respect thereto," Upon an exam- ination of the large number of authorities cit- ed in support of the text, it will be found that not one of them tends to support the author's proposition as to proofs of loss, unless it be the nisi prius decision in Ide v. Insurance Co., 2 Biss. 333, Fed. Cas. No. 7,001, in which the question is not discussed, no authorities cited, and the statement of facts so meager that it cannot be ascertained what the evidence was as to the actual or apparent authority of the agent. Most, if not all, of the other cases may be classified as follows: First Cases holding that, where an agent is authorized to make the contract of insurance and issue the policy, the company Is bound by his acts, rep- resentations, or omissions preceding or accom- 220 STIPULATIONS CONTAINED IN THE POLICY. panying the issuing of tlie policy. Consid- ered as the statement of a general rule, this is the docti'ine of all courts. Second. Cases hold- ing that authority to make the original con- tract of insurance carries with it implied au- thority to modify or waive any of its condi- tions while the contract is still current, as by consenting to other insurance, change of risk, etc. This court has adopted this general rule, although some courts do not go that far. Third. Cases where the agent had, with the knowledge of the company, been in the habit of receiving notices of loss, proofs of loss, and of adjusting losses, and it had thereby clothed him with apparent authority to do these things. F'ourth. Cases where the authority of the agent to do the particular acts was admit- ted, or not disputed, and the only question was as to the effect of his acts, as, for example, whether they constituted a waiver. 3. When the general managers received the proofs of loss in October, they wrote to plain- tiffs, stating that they were in receipt of pa- pers purporting to be proofs of loss, but add- ing: "This is to notify you that we deny any liability under said policy on the part of this company." They did not, however, return the proofs of loss. If the question was one of the sufficiency of the proofs of loss, we have no doubt the conduct of the general managers would have amounted to a waiver of any defect in them, either of form or sub- stance. But this did not amount to any waiver of the prior failure of the plaintiffs to give notice of loss as required by the terms of the policy. It will be observed that by reason of this prior failure the policy was already dead when the proofs of loss were received; also, that in this letter the general managers did not place their denial of lia- bility on any particular ground, but denied all liability generally. What would have been the effect, under the circumstances, of placing their denial of liability upon some specific ground other than the failure to give notice of loss we need not inquire. But there was nothing in the language or conduct of the general managers that could be con- strued as a waiver of plaintiffs' prior failure to give notice of the loss, by reason of which the policy was already dead. If the policy had been still alive, and the plaintiffs stiU had time within which to give the notice, or to supply defects in one already given, a differ- ent question would be presented, and many of the numerous cases cited by plaintiffs' counsel wotild have been in point. Our con- clusion is that the court was right in dis- missing the action, on the ground that plain- tiffs had failed to give notice of loss as re- quired by the policy. Order affirmed. CANTX, J. I concur in the first division of the foregoing opinion, but not in the sec- ond. I am of the opinion that an insurance agent who has authority "to receive propos- als for insurance," "receive premiums there- on," "fix the pramlums or rate of Insurance," and "fill up, countersign, and issue policies of insurance," should be presumed to hav& authority to receive notice of loss, at least when no higher local authority appears to exist. Especially is this true of the highest local representative of an insurance company in so large and populous a county as Henne- pin. It is a matter of common knowledge that every insurance company depends largely (though perhaps not exclusively) on such agents to furnish it information concerning such losses. Every company doing a consid- erable amount of business in any locality, es- pecially in a commercial center of any size,, must have and always does have the assist- ance of its local agent in ascertaining the- facts concerning the loss, just as much as they have his assistance in obtaining busi- ness or determining the character of risks. It is true that an adjuster is often and quite- usually sent to examine into the facts and adjust the loss, but it is almost the invari- able custom for the local agent to furnish the company all the facts within his knowl- edge, and all the facts which he can ascer- tain, immediately after he learns of the loss, and usually long before the adjuster comes upon the ground. Of course most of this in- formation from the agent to the company is secret and confidential, but it is none the less within the scope of the agent's duties to furnish it. These are things that every- body knows, and what everybody knows the courts should not refuse to know. These are duties which such agents usually perform. It should be presumed that such duties are within the scope of their authority, and if so it should be presumed that they have authority to receive information of such a loss from the insured and transmit it to the company, and that when such information is. so received It is their duty so to transmit it. As far as concerns the authority of such agents generally, there is no clear or well- defined line drawn between matters arising in connection with or accompanying the making of the policy and other matters, ex- cept as that line is being drawn by some of the courts. The line which the companies themselves have always drawn is the line- between the right to receive and retain pre- miums and the right to refuse to pay losses. They always admit that their agents have authority to receive such premiums, and al- ways deny that these agents have any au- thority to waive any forfeiture whatever, whether arising before or after loss, whether arising in connection with the issuing of the policy or in connection with the giving notice of loss. I am of the opinion that notice to the local agent was sufficient notice of loss, and that the retention by the company of the proof of loss subsequently sent it, tended to prove waiver of prior conditions, as well as per- formance of the condition requiring such proof of loss. AS TO THINGS TO BE DONE AFTEK LOSS. 221 CENTRAL CITY INS. CO. v. GATES. (6 South. S3, 86 Ala. 558.) Supreme Court of Alabama. May 2, 1889. Appeal from circuit court, Montgomery county; John P. Hubbard, Judge. This was an action bronglit by W. J. Oates against the Central City Insurance Company, and was founded on a polioy of insurance issued by defendant to plaintiff on a stocli of goods owned by him. Defendant pleaded the general issue, and by special pleas set up the defense that defendant had not fulfilled the conditions stipulated in tiie policy; had not forwarded to the company sworn proof of loss ; and had not given the company a certificate of loss by a magistrate. Plaintiff filed his replication, and setting up waiver of such proof and certificate by the company, after having been given notice of the loss, on the ground that the company had made no objection to the notice as forwarded to them, and had not complained to plaintiff of not having received such proof and certifl- 'Cate, but that in the dealings of plaintiff with the agents of the company, and with the company itself, no objection was made as to plaintiff's failure to give such proof and cer- tificiite. Defendant demurred to this repli- -cation of plaintiff, on the ground that the facts, as set out, constituted no waiver of the conditions of said policy. The court ■overruled this demurrer, and defendant duly excepted. Among many charges requested by defendant was the following: "That if the jury believe the evidence they must find for the defendant. " The court refused to give this charge, and defendant, excepted. There was verdict and judgment for plaintiff, and defendant appeals. Pettiis & PetVus and Troy, Tompkins & London, for appellant. Jones & Fcdkner, for appeUee. SOMERVILLE, J. The policy of insurance sued on, among other conditions, requires three important steps to be taken by the as- sured in the event of a loss by fire: (1) He must "forthwith give notice of said loss to th^'company inthecity of Selnia;" (2) "and, as soon after as possible, [he must] render a particular account of such loss, signed and sworn to by him," (the assured,) stating the origin of the fire, what other insurance he has, if any, his interest in the property, its value, and by whom and for what purpose it was occupied; (3) "he must produce the certificate of the neareat disinterested magis- trate that such officer has examined the cir- cumstances of the loss, and believes that it originated without fraud, and amounted to a specified sum." These three requirements, •omitting for the present all mention of oth- ers, viz.: (1) notice of loss; (2) sworn proof •of loss; (3) certificate of loss by a magistrate, -T-have uniformly been held by the courts to be conditions precedent in policies of insur- ance like the present one, and satisfactory evidence of compliance with them, in proper time, has been held to be an essential prereq- uisite to the right of recovery by the assured, unless such compliance is waived by the in- surer. Wellcome v. Insurance Co., 2 Gray, 480; May, Ins. §§ 460, 466; Insurance Co. v. Felrath, 77 Ala. 194. "Forthwith" in all such policies means without unnecessary delay, or with reasona- ble diligence, under the circumstances of the particular case. Insurance Co. v. Kyle, 11 Mo, 278. It has been held in one case that delay of 11 days, and in another of 18 days, in giving notice of loss, is not a compliance with such a requirement, in the absence of excusatory facts explaining the delay. Trask v. Insur- ance Co., 29 Pa. St. 198; Edwards v. Insur- ance Co., 75 Pa. St. 380. Where the fire oc- curred on the 15th, and the plaintiffs, hear- ing of it on the 18th, gave notice by mail on the 23d, this was held to be a sufficient com- pliance with a condition requiring notice to be given "forthwith." Insurance Co. v. Insurance Co., 20 Barb. 468. And notice given on the morning after the fire was held sufficient in Hovey v. Insurance Co., 2 Duer, 554. The settled rule in all cases, however, is to construe such requirements liberally in favor of the assured, and strictly against the insurer. Insurance Co. v. Young, 58 Ala. 476; Insurance Co. v. Johnston, 80 Ala. 467, 2 South. Rep. 125. It has been held, by this and other courts, that where preliminary proofs of loss are pre- sented to the insurer in due time, and they are defective in any particular, these defects may be waived m either of two modes: (1) By a failure of the insurer to object to them on any ground within a reasonable time after receipt, — in other words, by undue length of silence after presentation ; or (2) by putting their refusal to pay on any other specified ground than such defect of proof. The rea- son is that fair-dealing entitles the assured to be apprised of such defect, so that he may have an opportunity to remedy it before it is too late. Insurance Co. v. Felrath, 77 Ala. 194; Insurance Co. v. Crandall, 33 Ala. 9; Insurance Co. v. McDowell, 50 111. 120; In- surance Co. v. Kvle, supra; Insurance Co. v. Allen, 80 Ala. 571, 1 South. Rep. 202. So, there are cases decided by this and oth- er courts which hold, and properly so, we think, that an entire failure to make any formal proof of loss may sometimes be ex- cused on the principle of waiver or estoppel in pais. In Martin v. Insurance Co., 20 Pick. 389, no evidence was offered of any pre- liminary proofs before bringing the action, but only of an abandonment not accepted, and a demand of payment of the loss. The insurer refused to pay the loss solely on ac- count of the unseaworthiness of the vessel, and in aU their communications with the plaintiff made no objection to the want of proof. The court held that the refusal to pay on the ground specified was a fact from which the jury were authorized to infer a waiver of the proof of loss. On like principle, a waiver 223 STIPULATIONS CONTAINED IN THE POLICY. of preliminary proofs has been inferred from a distinct refusal of the company to pay be- cause the assured had taken other insurance without notice, and "had in other ways acted unfairly. " Insurance Co. v. Neve, 2 McMul. 237. And again, on the ground that no val- id contract of .insurance liad ever been en- tered into because incomplete at the time of the loss, no objection being made to the want of such proofs. Tayloe v. Insurance Co., 9 How. 390; Insurance Co. v. Adler, 71 Ala. 518. So, where the insurance company sub- jected tlie assured to a personal examination under oath, which statement he subscribed as required by the terms of the policy, and no demand was made for formal proofs, it was held that, upon this state of facts, the jury were authorized to find a waiver of such proofs. Badger v. Insurance Co., 49 Wis. 400. The payment by the insurer of a part of the sum agreed to be paid by the policy in case of loss has also been held a waiver of the usual preliminary proofs. Westlake v. In- surance Co., 14 Barb. 206. So, the offer to pay a specified sum, accompanied by a denial of liability for some of the articles as not cov- ered by the policy, without demand of such proofs. Insurance Co. v. Allen, 80 Ala. 571, 1 South. Rep. 202. We can find no case, however, where the mere silence of the insurer has been construed as a waiver of the presentation of preliminary proofs by the insured, where no such proofs, defective or otherwise, have been presented. The policy itself is the most solemn notifica- tion possible of the imperative prerequisite of furnishing such proofs. It is there stipu- lated that they must be furnished as soon as possible after the fire, and this stipulation is a standing notice of the requirement. It stands to reason that this notice need not be reiterated by the insurer, nor any special at- tention of the assured called to it, unless the particular circumstances of tlie case render it necessary to fair and honest dealing be- tween the parties. And the authorities ac- cordingly hold that the mere silence of the underwriter or insurer, or his failure to spec- ify the non-production of such preliminary proofs, as an objection to the payment of the loss, is not sufficient evidence to justify a jury in inferring a waiver of their produc- tion. Insurance Co. v. Lawrence, 2 Pet. 25; O'Keilly V. Insurance Co., 60 N. Y. 169; Keenan v. Insurance Co., 12 Iowa, 126. A like principle was applied in Insurance Co. V. Kyle, 11 Mo. 278, where there was a fail- ure on the part of the insurer to object to a notice of loss when it was received too late. It was suggested by the court that it was not the duty of the company to make any formal objection to the want of notice, and whether they were silent, or made objections on this ground, could not alter the rights of the par- ties. "Such a doctrine would be in fact," it was said, "implying a new contract between the parties from the mere inaction or silence of one party. " See, also, Patrick v. Insur- ance Co., 43 N. H. 621. As we have said, the contract exacts (1) a notice of loss forthwith, and (2) proofs of loss as soon thereafter as possible. It is manifest that mere notice of loss is not proof of such loss, and cannot ordinarily subserve snch purpose; although proof of loss, if made "forthwith," may answer, not only as proof ,. but as notice. Wood, Ins. § 428; May, Ins. g 460. It has been accordingly held, in rec- ognition of this distinction, that there might be a waiver of the notice of loss, without a waiver of the proof of loss required to be fur- nished. Desilver v. Insurance Co., 38 Pa. St. 130. In this case there was notice of loss, but the company received no preliminary proofs. The policy required that such proofs should be rendered to the company, meaning from the context, in the city of Selma, where the notice also was required to be given. The deposit in the post-offlce of a written state- ment of loss, made out and sworn to, and ad- dressed to the company at Selma, but never received by them, was not a delivery of such proof to them, and could not operate to ful- fill the requirement of the contract that such proofs of loss should be rendered to the com- pany at Selma. Hodgkins v. Insurance Co., 34 Barb. 213. Waiver is necessarily a matter of mutual intention between the contracting parties in the nature of a new contract between them. In the absence of evidence that the company had ever received any proofs of loss, or knew their contents and defects, if any, it cannot be contended that such defects were waived. There can be no waiver of anything as to the existence of which one is totally ignorant. Bennecke v. Insurance Co., 105 U. S. 355. In Dawes v. Insurance Co., 7 Cow. 462, it was held that the president of an insurance company, as such, possessed no power t* waive full preliminarv proofs. In Insurance Co. V. Young, 86 Ala. 424, 5 South. Rep. 116, it was decided that a local soliciting agent has no authority, after loss, to waive the breach of any condition in a fire insur- ance policy. And Patrick v. Insurance Co., 43 N. H. 621, is authority for the proposition that a condition in a policy of insurance, re- quiring notice of loss to be given within 30- days, is not waived by a vote of the directors of the company to indefinitely postpone the consideration of the loss, which was tanta- mount to a refusal to pay anything on ac- count of it, the notice not having been given in due time. The jury were probably justi- fied in coming to the conclusion that the no- tice of loss, under all the circumstances of the case, was given in a reasonable time, and in proper mode. But there were no proofs of loss furnished, and no conduct on the com- pany's part from which the jury were au- thorized to infer a waiver of such proof. Under a proper application of the forego- ing principles, it is our opinion that the de- fendant's demurrer to the plaintifiE's replica- tion should have been sustained, and that the defendant was entitled to have the general afiirmative charge given as requested. Reversed and remanded. AS TO THINGS TO BE DONE AFTER LOSS. 223> PEOPLE'S FIRE INS. CO. v. PULVEK. (20 N. E. 18, 127 ni. 246.) Supreme Conrt of lUinois, Jan. 25, 1889. Appeal from appellate court, First district Moses & Newman, for appellant Kraus, Mayer & Stein, for appellee. PER CURIAM. This was an action of as- sumpsit on one of the three fire insurance policies, mentioned in the case of Birming- ham Insurance Co. t. Pulver, in which an opinion has heretofore been filed. 18 N. E. Rep. 804. The judgment in the superior court was for appellee for $1,112.13, from which an appeal was prosecuted to the ap- pellate court, where it and the Birmingham Case were by agreement submitted together, and both judgments affirmed. Both cases were again appealed to this court, but sub- mitted separately. It is first insisted that the judgment in this case is erroneous because the evidence fails to show that preliminary proofs of loss were made by the assured, as required by the terms of the policy; and that the trial court erred in refusing to instruct the jury to find for defendant for want of such proofs. It is not claimed that there is an entire want of such evidence, but the contenuon is that the proofs of loss furnished, and which were admitted in evidence, is not a compliance with the condition in the policy as to such proofs, in that the assured "tailed to fur- nish an inventory of the goods claimed to be totally destroyed, showing the quantity, qual- ity, and cost of each article claimed to be destroyed." The proofs of loss in question were made February 17, 1SS5, seven days after the fire. In it the actual cash value of the property destroyed is stated to be $3,929.45, as shown by an annexed schedule marked "Exhibit B," "giving a full and ac- curate description of each kind of property, and the value of the same, with the damage or loss on each separately." Eixhibit B is a list of many articles, giving numbers and value in the following form: 8 Imported dolmans, $17.50 $140 00 10 Russian circulars, $8.00 80 00 * ***** 1 lot handkerchiefs 5 00 —The whole footing $3,929.45. Then follows a list of a few small articles under the head- ing. "Present Worth of Damaged Stock." Conceding that the inventory furnished was not a strict compliance with the require- ments of the policy, it was an attempt to do so in apparent good faith, and we think, un- der the proof made as to the ability of the assured to furnish a more accurate one, should be held sufficient. The evidence shows that the preliminary proofs of loss were delivered to the company about the date of its execution. No objection was made to it until March 30th. Of the three objec- tions then made two are abandoned. She was also notified in this letter to produce her books, inventory, and other vouchers and ex- hibits * * • for examination, and that then the company would require her to sub- mit to an examination under oath, etc. TO' the objection now urged the assured replied on April 4th: "I beg leave to inclose a cer- tified copy of the bUl of sale to me of the in- sured property, the original having been de- stroyed in the fire. The inventory was also destroyed, and I have already furnished you with a copy of it, attached to and a part of the proofs of loss. As you are aware, the- fire occurred within a week after I opened the business, and I had no books of account at all except a sales-book, also destroyed, and no bills or invoices except the above bill of sale." This letter was not answered until the 14th of the same month, when she was- again informed that the proofs were insutfi- cient for the reasons stated in the letter of March 30th, and that the certified copy of the bill of sale in no way met the request of the company. In the same letter, however, she is again notified to appear for further ex- amination. If from the destruction of books,, bill of sale, invoices, and other papers the assured was unable to furnish a more spe- cific statement than that which she did fur- nLsh, the law would hold the terms of the policy sufficiently complied with. It would not require her to do an impossible thing. 1 Wood, Ins. 709. That there is evidence in this record tending to show that she did avail herself of all the means within her control to comply with the terms of the pol- icy and the demands of the company can- not be denied. Nor can it be seriously con- tended that the conduct of the company did not amount to a waiver of defects in the proofs of loss. The delay in pointing out objections alone must be so held, under the authority of Insurance Go. v. Staaden, 26 lU. 365. At least it will be conceded that there is evidence in the record tending to prove such waiver. The court below therefore properly refused to take the case from the jury, both because the evidence tended to- show compliance with the requirements of the policy in furnishing proofs of loss, andi because it tended to prove a waiver of any defects therein. In this case appellant asked 20 Instruc- tions, many of them quite lengthy, and near- ly all literal copies of those asked in the Birmingham Case. As in that case all were refused, and a series prepared and given by the judge. It is contended that it was error to refuse the instructions asked, and that those given by the court did not present the law of the case fairly to the jury. By the fifteenth instruction asked by appellant it» defense was stated in two propositions: First that the plaintiff was not the actual owner of the destroyed property at the time of the insurance and fire; second, that the- plaintiff committed fraud upon the company by making a fraudulent proof of loss in over- stating the amount and value of the prop- 224 STIPULATIONS CONTAINED IN THE POLICY. erty destroyed, and that she swore falsely, in her examination taken under the provi- sions of the policy, with the Intent to defraud the company. In the Instructions given by the court, in addition to these defenses, it is stated that the defendant claimed that the fire was collusive, and that the assured made fraudulent statements as to the origin of the fire; and it is insisted that by stating to the jury that such claim was made by the defendant its case was prejudiced. From the pleas remaining in the record (especially the tenth) and the scope of the evidence we may well suppose such defenses were in- sisted upon in the argument before the jury; a,t least, we have no means of determining that thiey were not. Even if the instruc- tions given did state the defense broader than the issues and evidence made it, it would not work a reversal of the judgment, unless we could see that injury to appellant had resulted, of which there is no evidence before us. The instructions given on the is- sues and evidence presented the law of the case with reasonable accuracy, and there- fore, whether all the points sought to be covered by appellant's instructions were met or not is immaterial. Having examined the refused instructions with care, and compar- ed them with those given, we are clearly of the opinion that there was no error in giving and refusing instructions. The other grounds of reversal insisted upon, of suflBcient impor- tance to be noticed, are disposed of in the Birmingham Case referred to, and need not be further noticed in this. AflSrmed. AS TO THINGS TO BE DONE AFTER LOSS. 225 LANE V. ST. PAUL FIRE & MARINE INS. CO. (52 N. W. 649, 50 Minn. 227.) Supreme C!ourt of Minnesota. June 22, 1892. Appeal from district court, Hennepin county; Poxn, Judge. Action by Freeman P. Lane against tlie St. Paul Fire & Marine luHuranee Com- pany on a policy of insurance. From a judgment for plaintiff, defendant appeals. Keversed. Kueffner & Fauntleroy, for appellant. Preetn»a P. Laae, in pro. per. MITCHELL, J. The policy sued on con- tained a provision that the insured "shall, if required, furnish a certificateof the mag- istrate or notary public (not interested in the claim as a creditor or otherwise, nor related to the insured) living nearest the place of fire, stating that he has ex- amined the circumstances, and believes the insured has honestly sustained loss to the amount that such magistrate or no- tary public shall certify." It also provid- ed that "no suit or action on this policy for the recovery of any claim shall be sus- tainable in any court of law or equity un- til after full compliance by the insured with all the foregoing requirements. " The complaint alleged that the insured had fully complied with all the terms and pro- visions of the policy in such case made and provided. Defendant, in its answer, de- nied that the insured had complied with the terms and provisions of the policy, and alleged that after the fire it duly re- que.sted and demanded of the insured to furnish the certificate required by the pol- icy, but that he had failed and refused to do so. The answer also set up the further defenses that the loss was caused by the fraudulent and incendiary act of the in- sured himself; also that he had made and served on the company false and fraudu- lent proofs of loss. To the first defense the plaintiff replied, admitting that the certificate referred to had been demanded, and that it had not been furnished, but by way of excuse for not furnishing it alleged, in substance, that he had made every reasonable eSort to procure it, but was unable to do so for the reason that the magistrates and notaries living near- est the place of fire, because of an unjust, unreasonable, unwarranted, and ground- less prejudice ou their part and on part of the inhabitants of that vicinity, refused to make or furnish any such certificate, and that because of such unreasonable and un- founded prejudice it had been and was im- possible to secure any such certificate. To this reply the defendant demurred, and from an order overruling the demurrer the defendant appeals. We shall pass over the fact that the re- ply was clearly a departure from the com- plaint, and consider the case upon the merits. Provisions similar to this are as old as fire insurance policies themselves, and the doctrine has been established by a uniform current of authorities in Eng- land and this country, beginning with Oldman v. Bewicke, 2 H. Bl. 577, and Routledge v. Burrell, 1 H. Bl. S4, that the production of such certificate, unless BIiIi.SEIi.CA8.LAW IKS. — 15 the insurance company itself has pre- vented the obtaining it, or waived its want, is a condition precedent to the right of the insured to recover; that the as- sured, by accepting the policy, assents to the condition ; that it is one whir-h the company has a right to impose, and for which it is not bound to accept any substitute; thattheiuability of the insured to furnish it because of the refusal of the magistrate or notary, for any cause what- ever, to give it, will not relieve him from the performance of the condition; that the case comes within the rule by which one who engages for the act of a stranger must procure tlie act to be done, and the refusal of the stranger without the inter- ference of the other party is no excuse. The inability of the insured to procure the certificate because of such refusal does not render thecondition impossible in thelegal sense, so as to excuse the party from per- forming his contract. The cases on the subject will be found cited in any text-book on fire insurance, but among a few of the leading ones are Woi-sley v. Wood,H Term R. 710; Insurance Co. v. Lawrence, 2 Pet. 25, 10 Pet. 507; Roumage v. Insurance Co., 13 N. .T. Law, 110; Leadbetter v. Insur- ance Co., 13 Me. 265; Johnson v. lusurance Co., 112 Mass. 49. We are not aware of a single authority to the contrary, except a suggestion, in Insurance Co. v. Miers, 5 Sneed, 339, that such a condition is direct- ory onlv, and a dictum, in Insurance Co. V. Block, 109 Pa. St. 535, 1 Atl. Rep. 523, repeated in Davis Shoe Co. v. Kittan- ning Ins. Co., 138 Pa. St. 73. 20 Atl. Rep. 838, that such conditions are void for the reason that an insurance company has no right to require a public oflBcer to act in the adjustment of losses. But this was expressly overruled by the same court in Kelly V. Sun Fire Office, 141 Pa. St. 10, 21 Atl. Rep. 447. While the doctrine that such stipulations are valid and constitute a condition precedent to the insured's right to recover is unquestionably sound in principle, yet, as they often operate harshly in practice, they have, in some states, been expressly or impliedly prohib- ited by statutes regulating the form of policies. See Shannon v. Insurance Co., 2 Ont. App. 81; Insurance Co. v. Johnson, 46 Ind. 315. But there is no room in this state for holding such conditions void or unreasonable, for they have been incorpo- rated into the Minnesota standard policy by the insurance commissioner, under the authority vested in him by Gen. Laws 1889, c. 217, by the provisions o! which all fire insurance policies are required to con- form to the form prepared by him, and any other or different form is prohibited. A second reason assigned by the trial court for overruling the demurrer was that the nature of the other defenses set up in the answer shows that the furnish- ing of the certificate would not have tend- ed in any degree to influence the defend- ant's conduct; that it was evident from the nature of these defenses that it would Btill have resisted payment of the loss, and therefore the defendant must be held to have waived compliance with this condi- tion ; and in support of his position the learned judge cites those cases in which we have held that a demand for property. 226 STIPULATIONS CONTAINED IN THE POLICY. before suit, was waived by (defendant's setting up title in himself, or some otber de- fense on tlie merits wtiicli showed that a demand wonld have been unavailin;;. The cases are not at all in point. In the first place, it cannot be assumed that the cer- tificate, if furnished, would not have influ- enced the conduct of the defendant. The fact that the nearest magistrate or notary refused to certify that in his opinion the loss was au honest one might have been the very cause that induced the defendant to set np the defenses that the fire was incendiary, and that the proofs of loss were false. But chiefly, the famishing of this certificate was by the contract of the parties a condition precedent to plaintiff's right to sue, and consequently the failure to furnish it a defense to this action. A party has a right to set up as many de- fenses (if not incuuaistent) as he has, and the setting up one defense cannot be con- strued as a waiver of another. It was also urged on the argument that the retention, without objection by the defendant, of the " proofs of loss " furnished by plaintiff, amounted to a waiver of the certificate. But these proofs were in per- formance of a condition in the policy en- tirely distinct from and independent of that requiring the certificate, and the ac- ceptance of the "proofs of loss" as com- pliance with the one condition cannot be construed as amounting to a waiver of compliance with the other. Order reversed. STIPULATIONS RELATING TO THE REMEDY. 227 CHAPMAN v. ROCKFORD INS, CO. et al. (62 N. W. 422, 89 Wis. 572.) Supreme Court of Wisconsin. March 5, 1895. Appeal from circuit co\irt. Pond du Lac ■couuty; N. S. Gilson, Judge. Several actions by Henry G. Chapman against the Roctford Insurance Company, the Traders' Insiirance Company, the Hartford Fire Insurance Company, the Amo-ican Fire Insurance Company, the Merchants' Insur- ance Company, the Fireman's Insurance Asso- ciation of Philadelphia, and the Liverpbol, London & Globe Insurance Company, to re- cover under fire insurance policies, are con- solidated. From a judgment for plaintiff in each action, the defoidant in each action -appeals. Affirmed. This action was brought to recover for loss sustained by the plaintiff under the standard insurance poUcy of Wisconsin, issued by the defendant on the plaintiff's stock of goods, which were wholly destroyed by fire at Oak- field, Wis,, July 6, 1893, and claimed to be of the value of $13,465.12. The plaintiff held policies with six other companies, upon the same goods, for various amounts, namely, Traders' Insurance Company, Hartford Fire Insurance Company, American Fire Insurance Company, Merchants' Insurance Company, Fireman's Insurance Association of Philadel- phia, Liverpool, London to Globe Insurance Company, such insurance amounting in all to $10,000. Actions were brought on each of the policies, October 8, 1893. It appeared that the plaintiff gave due notice of his loss, and proofs thereof were made and submit- ted to the respective companies, July 24, 1893, to which no objections have been made. By the terms of each of the policies it was provided that, "in the event of dis- agreement as to the amount of the loss, the same shall • * • be ascertained by two competent and disinterested appraisers, the Insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire. The appraisers together shall then estimate and appraise the loss, stating separately sound value and damage; and, failing to agree, «hall submit their differences to the umpire, and the award in writing of any two shall determine the amount of the loss; • • • and the loss shaU not become payable until sixty days after the notice, ascertainment, estimate, and satisfactory proofs of the loss herein required have been received by this company, including an award by appraisers, when appraisal has been required." It was charged in the complaint that the companies conspired together to obtain an unjust and unwarranted rebate of the plaintiff's loss, and on the Sth of August, 1893, demanded the right of appraisement of the goods destroyed, under the arbitration clauses in the policies, the validity of which the plaintiff denied; that on that day a written submission was executed for that purpose, each party select- ing an appraiser, the insurer selecting a resi- dent of Chicago, unacquainted with the value of the goods and the market and trade in the vicinage of the fire, namely, at Oakfield, Fond du Lac county, Wis.; that an effort was made by the appraiser selected by the plain- tiff to select an umpire, but the appraiser selected on the part of the companies refused to select an umpire, and to enter upon an appraisement, until he could ascertain the wishes of the companies, and on the next day left Fond du Lac, and returned to Chicago, and had never since returned to the vicinage of the fire or to the state, and that all attempts thereafter to obtain the selection of an umpire had proved fruitless, by the refusal of the said appraiser for the companies to agree upon a proper and competent umpire, and would thereafter fall, unless the plaintiff would consent to an unjust rebate and com- promise; that said appraiser appointed by the companies was wholly subservient to their wishes and interests, and had been se- lected to carry out the conspiracy of the companies by so refusing to appoint an um- pire; that, having failed to get an umpire appointed, the plaintiff gave notice to the companies of revocation of the submission of August 8th, and that by reason of the prem- ises the companies had waived the benefit of said arbitration clause and submission. The defendant companies, respectively, each an- swered, in the actions against it, in sub- stance setting up, by way of plea in abate- ment, the said arbitrati(»i clause, and the submission under it to arbitrate, of August Sth, to wit, the selection of George Ferris and G. W. Weber as appraisers, and that they had taken and subscribed the proper oath, and that they were not able to agree upon the amount of loss or damage, and that no um- pire had been chosen; that the amount of loss due the plaintiff had never been ascer- tained, proposed, or awarded or returned under the respective policies; that said arbi- tration proceedings were valid, in full force, and undetermined when each of the actions was brought, and that, therefore, they were each premature; that said stipulation and sub- mission had not been waived, and nothing was due the plaintiff under the terms of the respective policies. The actions were all tried before the court at the same time, and submitted on the same evidence. The court found in each case, in substance, among other things: (1) That the demand for an appraise- ment was not made In good faith, because of any real and substantial difference between the respective companies and the plaintiff, but to prolong and postpone the adjustment and payment of plaintiff's loss, and to coerce him to make rebate from his claim, which could not oth«-wise be obtained. (2) That the defendants, respectively, through their ap- praiser, and with their approval, wantonly and unreasonably suspended the plaintiff's claim, and refused and neglected to appraise the loss, or make any attempt to do so, but hung the same up indefinitely, to prolong 228 STIPULATIONS CONTAINED IN THE POLICY. and postpone the adjustment and payment of the plaintiff's loss and damages until he should be coerced into allowing an unjust rebate. (3) That no action was taken by the companies, respectively, within 60 days after receiving proofs of the plaintiff's loss, nor prior to the commencement of the actions, tending towards an appraisement and adjust- ment of plaintiff's loss, by arbitration or otherwise, or showing any purpose or intent to do so; that the plaintiff for that reason, October 3, 1893, revoked the agreement to arbi- trate, signed August 8, 1893, and gave notice thereof to the respective companies before bringing the actions. (4) That the cash value of the plaintiff's property covered by the policies at the time of the fire was $13,465.12. Judgment was given against each of the de- fendants for the amount of its policy, with interest from the date of the action, and each of them appealed from the judgment against it, and the appeals were heard to- gether upon the same record. Barbers & Beglinger, for appellants. Duffy & McCrory and E. S. Bragg, for respondent. PINNEY, J. (after stating the facts). 1. These appeals involve questions of consid- erable importance in respect to the constmc- tion and effect to be given to the appraisal clause in the standard policies now in use in this state. The policies in question pro- vide that loss or damage shall be ascer- tained or estimated by the assured and the company, or, in case of difference between them, then by appraisers as therein pro- vided, and that "the loss shall not become due and payable until sixty days * • * after an award by appraisers, when ap- praisal has been required." This provision furnishes a speedy, CMivenient, and inex- pensive mode of ascertaining the loss or damages of the assured, if he is entitled to recover, and does not appear to be ob- noxious to the objection that it is void as ousting the courts of their rightful juris- diction. Under it the right of recovery is left open, and the appraisal serves only to liquidate and determine the amount of the loss or damage. The validity of such stip- ulations appears to be beyond doubt. We think that the question is perfectly well settled, and that it has been so considered ever since the case of Scott v. Avery, 5 H. Ii. Gas. 811; and that when parties to a contract agi-ee that money shall be paid when something else happens, and that something else is that a third person named in it, or persons to be named as therein provided, shall determine the amount, then the cause of action does not arise until the amount has been so ascertained or deter- mined, unless something has occurred which may operate as a waiver of such precedent condition, or to dispense with its performance, or that with fair and reason- able effort performance of It cannot be ob- tained. The rule Is stated by Jessel, M. R., in Dawson v. Fitzgerald, 1 Exch. Div. 257, 260, in brief, to be this: "There are two cases where such a plea as the present is successful: First, where the action can only be brought for the sum named by the arbitrator; secondly, where it is agreed that no action shall be brought until there has been an arbitration, or that the arbi- tration shall be a condition precedent to the right of action. In all other cases where there is — First, a covenant to pay; and, secondly, a covenant to refer, — the covenants are distinct and collateral, and the plaintiff may sue on the first, leaving the defendant to bring an action for not re- ferring," etc. Here the covenant to pay is, by necessary implication, conditioned upon the appraisal, if properly claimed, and the plaintiff is in no position to daim anything until an appraisal has been made, waived, or in some manner legally dispensed with. El- liott V. Assurance Co., L. R. 2 Exch. 240. The questions to be considered are "whether an arbitration or award is necessary before a complete cause of action arises, or is made a condition precedent to an action, or wheth- er the agreement to refer disputes is a col- lateral and independent one." Collins v. Locke, 4 App. Cas. 689; Edwards v. Insur- ance Soc., 1 Q. B. Div. 592, 598. We think that the stipulation in question is a valid and reasonable one, and not open to the ob- jection urged against it that it ousts the ju- risdiction of the courts, as it leaves the gen- eral question of liability, if any exists, to be judicially determined. The case of Hamil- ton V. Insurance Co., 136 U. S. 242, 254, la Sup. Ct 945, seems decisive. Delaware & H. Canal Co. v. Pennsylvania Coal Co., 50 N. Y. 250; Reed v. Insurance Co., 138 Mass. 5T2,. 576; Hudson v. McCartney, 33 Wis. 331. In such cases a party may not of his own mere option or volition revoke the arbitration or submission clause, any more than any other provision of the contract. A contrary view, however, obtains in Pennsylvania, in cases- where the person or persons who are to make the appraisal or award are not named in the contract, but are to be chosen thereafter by the parties. Mentz v. Insurance Co., 79 Pa. St. 478; Assurance Co. v. Hocking, 115 Pa. St 414, 8 Atl. 589. But we are unable to see- any substantial ground for the distinction. Upon the other hand, the case of Hamilton V. Insurance Co., 137 U. S. 370, 11 Sup. Ct 133, is one where the provision that an ap- praisal should be made was not either ex- pressly or by necessary implication a condi- tion precedent to the obligation to pay, but where the stipulation for an appraisal was held to be independent and collateral, and the assured entitled to sue without an ap- praisal; and the principal cases on this point are here collected. The cases relied on by the respondent's counsel fall within the cate. gory of Hamilton v. Insurance Co. and Reed v. Insui-anee Co., supra; Rowe v. Williams, STIPULA.TIOKS RELATING TO THE REMEDY. 229 97 Mass. 165; Hood t. Hartshorn, 100 Mas& 121; Nute v. Insurance Co., 6 Gray, 181; Ste- phenson V. Insurance Ca, 54 Me. 70. The doctrine laid down in this state in Hudson T. McCartney has not been departed from or materially qualified. In Insurance Co. v. Badger, 53 Wis. 283, 10 N. W. 504, and Van- gindertaelen v. Insurance Ca, 82 Wis. 112, 51 N. W. 1122, where there were provisions, in substance, as in these cases, no arbiti-ation was demanded. In Canfield v. Insurance Co., 55 Wis. 419, 13 N. W. 252, the policy did not proTide, either expressly or by nec- essary implication, that an award should be ■a condition to the right to sue; and the same is true of the contract in Retreat Ass'n v. Rathbome, 65 Wis. 177, 26 N. W. 742. We hold, therefore, that, where an appraisal has been properly demanded, an appraisal or 4iward on the question of the amount of loss or damage is made by these policies, by nec- essary implication, a condition precedent to the right of the assured to sue, and he can- not maintain his action unless the condition is waived or in some way dispensed with; &nd that he has in such case no right, at his mere option or volition, to revcdte the arbitra- tion clause in the policy or a submission un- ■der it 2. About two weeks after the fire, July 20th, a Mr. Berne, adjuster for the Traders' Insurance Company, and then representing some of the other companies, called on the plaintiff, and examined his books and papers, and made inquiries in regard to the loss, and he soon afterwards came to represent the other companies. The plaintiff had piuv chased the stock, that of a variety store in a country village, about six months before, of one Russell, and had paid a considerable, indeed the greater, part of the price in Iowa lands. He had been allowed quite a consid- erable discount on the goods, because some were shelfwom, and a further discount of about 51,100 was insisted on and obtained by the plaintifC. Berne, the adjuster, Insist- ed on a considerable discount on the goods because they had been paid for by the plain- tiff in land; and under this claim the differ- ence on insured value, at the outside, amounted to about $700, and upon a fair computation did not seem to be more than $400. Berne testified that "the difference was as to the value of the stock of goods paid for by real-estate trade,— that was the point"; that they had not been bought for cash. The plaintiff claimed the full face of the policies, and he testified that Berne told him, on this occasion, that "the only way he could get anything out of me was to at- tack the original invoices; that he traded land for it, and did not pay cash, and he was not going to allow cash price for it" Berne denies the particular form of expres- sion, "make anything out of you," but ad- mits that he might have said the only way he could get along with him was to attack the inventory of RusselL Berne then noti- fied the plaintiff he should demand an ap- praisal. August 8th the parties met at Fond du Lac, by appointment, Berne bringing with him from Chicago one Weber, of that city, whom he named as appraiser on behalf of the companies, the plaintiff naming one Ferris, who acted as appraiser when he pur- chased of Russell, and the submission was signed. The evidence is clear that no at- tempt was ever made by the appraisers to agree on an award; that they at once failed to agree in the choice of an umpire. Ferris proposed the names of six business men, conceded to be competent and of good char- acter, residing in Fond du I.ac county. Web- er did not name any one, except three par- ties living in Chicago. He said he wanted to go to Chicago, though he stated that, if Ferris desired, he would stay and get through with the matter; and that about that time a boy came to the door, and called out: "Mr. Berne says, if you are going to take that train, you will have to start now"; and he took the list of names, and never re- turned again to meet Ferris in relation to the business. Weber testified that he thought the parties named by Ferris "too much befriended" to the plaintiff, but "did not find in looking them up that which indi- cated friendship"; that he made up his mind "that they were not the men we wanted"; that he did not find out anything against their integrity; that he "objected to these six men all on general principles"; "I rejected all of them"; that he "did not offer to name any one in Fond du Lac, nor any country merchant; • ♦ * I stayed by Chicago." Alter Berne and Weber left Fond du Lac, correspondence occurred between Ferris and Weber, and between the plaintiff and Berne. Ferris declined to accept either of the three Chicago parties named by Weber, August 15th, and on the 25th Weber asked him to submit other names, which he did, and on the 28th Weber refused to accept any of them, and suggested that Ferris visit him in Chicago, and "we can possibly agree on the proper party." This Ferris declined to do, and, on the 5th of September, Weber refused to consent to any one Ferris had named, say- ing, "I do not think, there is any occasion to name specific reasons for objection," and asking Ferris to submit other names. On the 16th he sent the names of three other parties in Fond du Lac county, and on the 30th Weber promised he should hear from him in a few days. Finally, on the 5th of October, he proposed one Kroeger, of Mil- waukee, but in the meantime notice of revo- cation had been served. On the 2d of Sep- tember the plaintiff wrote Berne that if he wished to proceed with the arbitration he must come to Oakfleld (the place of loss) or Fond du Lac. On the 8th of September, Berne wrote the plaintiff that the appraisers had, in his opinion, "spent quite sufficient time over it to enable them to select some 230 STIPULATIONS CONTAINED IN THE POLICY. good man, but neither you nor I can Inter- fere, as the matter is left to them," but pro- posed to select other appraisers; to which the plaintiff responded that Weber's "rea- sons for not agreeing on an umpire are sim- ply frivolous"; that in his opinion he would "reject any proposed by Mr. Ferris"; that he was "willing to do anything reasonable to get this matter settled, but to continue it in the way it has been I object" This was one month before the actions were brought, and nothing further appears to have been done by Berne, except to inform the plaintifC that he declined "to enter into any discussion of the reasons either of your or our appraisers in declining the parties proposed by each," and that he had "neither the right nor the inclination to interfere in any way with them." On the 16th the plaintiff wrote Berne asking that he and Weber come to Fond du Lac, and agree upon some qualified business man acquainted with the business and that part of the state; but on the 2d he wrote the plaintiff that a representative of Walker & Co. had called to learn about his claim, and that he had explained the situation, and "again urged Mr. Weber, in so far as I could, to try and meet Mr. Ferris with some one on whom they could agree"; and finally suggesting that he intrust his matters to Walker & Co., "and we might agree in that way, and settle everything." Both Berne and Weber were examined at considerable length at the trial, as well as the plaintiff. The uncontradicted evidence was that the goods were wort:h $13,465.12, and there was no claim of any defense to the actions, ex- cept the one insisted on by the plea in abate- ment. An examination of the evidence leaves no doubt as to the correctness of the finding of the circuit court It shows that unfair and perverse practices were resorted to, to compel the plaintiff to abate what appears to have been a just and valid claim for an honest loss. The circuit court haying heard the evidence, and observed the manner of testifying of the plaintiff, Berne, the adjust- er, and Weber, could not easily be misled as to the purposes and the complicity found be- tween the two latter. We cannot say that the finding was not in accordance with the evidence. It seems evident that there was no fair bona fide difference between the par- ties as to the amount of the loss. It was of no importance what the plaintiff paid for the goods, or whether in money or property, or whether they had been given to him. In either event he would be entitled to the benefit of his bargain or gift The only question was as to the fair cash value of the goods destroyed. By signing the submis- sion, probably the plaintiff waived the right to object that there was no bona fide dis- agreement, but the facts remain in their bearing upon what ensued in the way of at- tempting to get an adjustment of his loss. We think he used all fair and reasonable efforts to that end, and that he did not suc- ceed was solely the fault of Weber and the adjtister, Berne. The whole transaction ia quite transparent. Weber was "standing by Chicago," and by Berne as wdl, and objecting, "on general principles," to any one proposed as an umpire by Ferris, arbitrarily and with- out any attempt to assign reasonable ground or explanation. There does not seem to be any fair criticism made or attempted against the conduct of Ferris. The plaintiff was en- titled to have his goods appraised at their value in the market where they were de- stroyed, and not at Chicago rates on broken or bankrupt stocks. The policy of our law is in favor of the adjustment of such losses where they occur, and it is unreasonable and unfair to expect that the assured wiU follow up his claim into another state, or ac- cept the arbitrament of appraisers selected from Chicago, nearly 200 miles distant; or, if froiii Chicago, why not from Cincinnati, New Tork, or Boston? We do not say that such parties are incompetent but, in view of the effect of the submission, we do hold that the parties are bound to exercise to- wards each other the utmost good faith, and proceed with all reasonable diligence to pro- cure an adjustment according to the letter and spirit of the contract. It is not permis- sible for the Insurers, under the provisions of the standard policy, to arbitrarily or ca- priciously demand an appraisal, simply to suspend a claim for a loss, and select an ap- praiser who will perversely refuse to CMicur in the appointment of an umpire unless he re- sides in Chicago, or is the kind of man the in- surers want Such a course, if tolerated, places the assured very largely at the mercy of the insurers. Any attempt on the part of either party to misuse or pervert the provisions of the standard policy for an appraisal, so as to unreasonably delay an adjustment, or to secure an unjust abatement of an honest loss, is a breach of good faith, and should be treated as a waiver of the condition, and dispensing with the necessity of an ap- praisal, or warranting a resort to an action without one, if the party thus prejudiced has used aU fair and reasonable means and diligence on his part to secure it To hold otherwise would be to permit the party in fault to profit by his own wrong. The re- sult reached in this case is in accordance with a recent case quite in point, — McCul- lough V. Insurance Co. (Mo. Sup.) 21 S. W. 207, 209. In Uhrig v. Insurance Co., iOl N. Y. 362, 4 N. E. 745, it was laid down that "under the arbitration clause, it was the duty of each party to act in good faith to ac- complish the appraisement in the way pro- vided in the policy. If either party acted in bad faith, so as to defeat the real object of the clause, it absolved the other party from compliance therewith; and if either refuse to go on with the arbitration, or to procure the appointment of an umpire, so that there could be an agreement upon an appraisal, the other party is absolved; that a claimant STIPULATIONS EELATING TO THE BEMEDr. 231 cannot be tied up forever •without his fault, and against his will, by an Ineffectual arbi- tration." Bishop V. Insurance Co., 130 N. Y. 488, 29 N. E. 844, is, in substance, to the same effect And the arbitration having failed. In consequence of the perverse con- duct and want of good faith of the Insurance companies, represented by their adjuster and the appraiser, Weber, the plaintiff was not bound to enter into a new one, or name another appraiser, even if the companies were willing to name a new one on their part Uhrig v. Insurance Co., supra. And this is in harmony with what was said in Daven- port V. Insurance Co., 10 Daly, 538, 539. The judgments appealed from were rightly given for the plaintiff. The judgments ap- pealed from are affirmed. 232 STIPULATIONS CONTAINED IN THE POLICY. WALLACE et al. v. INSURANCE CO. (4 La. 289.) Supreme Court of Louisiana. Aug. 1832. Appeal from First district conrt. Mr. Pierce, for appellant. Mr. Slidell, for appellees. PORTER, J. This is an action on a policy of insurance against fire. The case presents three questions: 1. Whether the policy was a valued one? 2. Whether if it was open, the verdict and judgment be supported by evidence? 3. Whether the defendants had not a right to discharge themselves from the payment of money by rebuilding the houses which were biu-ned? In arguing the question whether the con- tract on which this litigation has arisen, was what is denominated a valued iwlicy, coun- sel have gone into the consideration of the legality of such an agreement in a fire in- surance. The books are very meagre of in- formation on this subject, and if it were necessary to decide this case on that ground, we should most probably find that authority would not stand in the way of either conclu- sion, which reason might suggest. Parke states, "that the insurer from the nature of the thing is obliged in a great measure to rely on the integrity and honesty of the in- sured, as to the representation of the value and quantity of the property. Therefore, the utmost good faith Is essentially requisite to render the contract effectual." And Mar- shall observes, "There is reason to believe in- surances against fire are often made to a large amount upon property of a very small value with a fraudulent view." These re- marks, perhaps, authorize the conclusion that in the opinion of these writers, there may be a valued policy in an insurance like that now under consideration. Phillips states in the most unqualified manner, there may, and that the rules with respect to valuation are the same as those in relation to a ship and cargo. In this assertion he is supported by the case of Harris v. Ptre Co., 5 Johns. 368, cited in argument. Bell, in his Commenta- ries, says the loss by fire is scarcely ever a total loss, and the valuation in the policy is rather the fixing of a maximum beyond which the underwriters are not to be liable, than the conclusive ascertainment ot the value. In France, where these contracts have of late years become very common, val- ued policies are rejected on reasons of public policy. Parke, Ins. 603; 2 Marsh. Ins. 788; PhU. Ins. 320; 5 Ivh. 371; 1 Bell, Comm. 627. Traite de 1' Assurances contre I'lncen- die, par Boudousquie, Nos. 9, 132, 248, and 255. Be the law, however, cm this question as it may, we do not think there was in this case a valued policy. The contract states the company have insured eight thousand five hundred dollars, on one brick house and two wooden ones. The words "valued at" are not inserted, but the former is put down at six thousand seven hundred dollars, the latter at one thousand eight hundred dollars. Then follows this clause, "and the said company do hereby promise, &c. to make good to the said insured, &c. all such loss or damage not exceeding the sum hereby insured. The said loss or damage to be estimated according to the true and actual value of the said proper- ty at the time the same shall happen." The rules which govern the interpretation of other contracts, regulate those of insur- ance, and it is a cardinal rule of construction to give if possible every part of the agree- ment effect. It is indeed true, as observed from the bar, that the written parts of a pol- icy control those which are printed, but this principle can only receive a proper applica- tion in cases where it is not possible to satis- factorily reconcile them. No such diflJculty presents itself here. The sums placed oppo- site the houses respectively, may be easily accounted for as indicating an amount be- yond which the company would not be re- sponsible. The absence of the term "valued at," which is invariably used in maritime policies, where the intention of the parties is to make the estimation conclusive, strength- ens this construction. We are clear there is no such repugnance between the written and printed clauses, as authorizes us to reject one of them. See Seton v. Insurance Co., 2 Wash. C. C. 175, Fed. Cas. No. 12,675. II. We think the evidence supports the judgment below, and that a correct conclu- sion was drawn by the jury in relation to the value of the property destroyed by fire. Connected with this part of the case is the bill of exceptions to the judge's refusal to permit the jury to take into consideration the amount stated in the policy as insured on each house. Whether this estimation might not properly have formed an element in the calculation the jury was required, to make, need not be decided. For if we were of opin- ion it should have been admitted we would remand the cause, and we tmderstand the appellee prefers an affirmance of the judg- ment III. On the last- point, which is as to the right of the defendants to rebuild, there is no doubt. No usage is found to sanction such a pretension. There is no law which authorizes it. The contract makes no men- tion of it. On the contrary it stipulates the loss shall be compensated in money. It is true rebuilding might in some cases be an in- demnity for the loss. It would perhaps have been so in this instance, but then it was not the indemnity the assured paid for, and we are at a loss to conceive, how on policies where such a right is not expressly con- ferred, it could be supposed one of the par- ties had a right to change the agreement and substitute one mode of performance for an- other. \ It is, therefore, ordered, adjudged, and de- creed, that the judgment of the district court be affirmed with costs. STIPULATIONS EELATING TO THE REMEDY. 233 HART V. CITIZENS' INS. CO. (56 N. W. 332, 86 Wis. 77.) Supreme Court of Wisconsin. Sept. 26, 189a Appeal from eircoit court, Douglas county; R. D. Marshall, Judge. Action by John H. Hart against the Cit- izens' Insurance Company of Pittsburgh on a policy of fire insurance. From a judgment in defendant's faror, plaintiff appeals. Af- firmed. Reed, Grace, Rock & Reed, for appellant J. B. Douglas, for respondent. WINSLOW, J. The action is upon a pol- icy of insurance issued by defendant, No- Tember 11, 1890, upon plarntifTs dwelling house. There is no dispute as to the facts. The house was burned March 5, 1891. Proofs of loss were served May 1, 1891, being within the time required by the pol- icy. The defendant refused payment May 9, 1891, and plaintiff commenced this ac- tion May 3, 1892, nearly 14 months after the fire. The policy contained provisions re- quiring immediate notice of loss, proofs within 60 days after the fire, examination of the assured imder oath, if desired, and ap- praisal in case of disagreement as to amount of loss; also the following: "This company shall not be held to have waived any provision or condition of this policy or any forfeiture thereof by any require- ment, act, or proceeding on its part relating to the appraisal or to any examination here- in provided for; and the loss shall not be- come payable until sixty days after the no- tice, ascertainment, estimate, and satisfac- tory proof of the loss herein required have been recaved by this company, including an award by appraisers when appraisal has been required. No suit or action on this policy for the recovery of any claim shall be sustained in any court of law or equity until after full compliance by the in- sured with all the foregoing requirements, nor unless commenced within twelve months next after the fire." It was held by the circuit court that the action was barred because not commenced within 12 months next after the date of the fire, and plaintiff appeals. It is well settied that a clause in a con- tract limiting the time within which an ac- tion may be commenced thereon to a time shorter than that allowed by the statute of limitations is vaUd. The question here is whether the expression "twelve months aft- er the fire" means what it says, or some- thing else It is to be noticed that the par- ties here have not used the expression "aft- er the loss occurs." Had this been the lan- guage used, it might reasonably be claimed, upon authority, that the "loss occurs," not at the date of the fire, but when the loss is ascertained and established, and the right to bring an action exists. The decisions in favor of this doctrine are numerous. Steen v. Insurance Co., 89 N. T. 315; Spare V. Insurance Co., 17 Fed. Rep. 568; Chanu- ler V. Insurance Co., 21 Minn. 85; Ellis v. Insurance Co., 64 Iowa, 507, 20 N. W. Rep. 782; MUler v. Insurance Co., 70 Iowa, 704, 29 N. W. Rep. 411; Insurance Co. v. Fair- bank, 32 Neb. 750, 49 N. ,W. Rep. 711; Bar- ber V. Insurance Co., 16 W. Va. 658. There are, however, many decisions to the contrary: Chambers v. Insurance Co., 51 Conn. 17; Johnson v. Insurance Co., 91 m. 92; FuUam v. Insurance Co., 7 Gray, 61; Glass V. Walker, 66 Mo. 32; Bradley v. In- surance Co., 28 Mo. App. 7; Insurance Co. V. Wells, (Va.) 3 S. E. Rep. 349; Peoria Sugar Refining Co. v. Canada Ins. Co., 12 Ont. App. 418; Blair v. Insurance Co., 19 N. S. 372; Travelers' Ins. Co. v. California Ins. Co., (N. Dak.) 45 N. W. Eep. 703; Schroeder v. Insurance Co., 2 PhUa. 286. Other cases, bearing more or less direcUy on the question, might be cited upon either side of the proposition. It seems apparent that it can hardly be said that the great weight of authority is on either side. It is a case where there are two directly oppos- ing lines of authorities, both very respecta- ble in ntmibers and weight It was claimed by appellant that this court had substan- tially approved of the affirmative view of the proposition in KiUlps v. Insurance Co., 28 Wis. 472, and Black v. Insurance Co., 31 Wis. 74. Examination of these cases shows that this court expressly declined to pass upon this question. The principle laid down in them is simply that if the in- surance company, by its acts, induces the insured to sxispend his proceedings, and de- lay action on the policy, the time elapsing during such delay so caused shoiild not be reckoned as a part of the time limited for the bringing of the action. It is an appli- cation of the famiUar principle of estoppel. Doubtiess the tendency of so many courts to construe the term "loss," as meaning the time when liability was fixed, induced many insurance companies to substitute the word "fire," as in the policy before us. It would seem as if the phrase "twelve months next after the fire" was susceptible of but one meaning; yet the courts have disagreed up- on this question also. In the following cases it has been held that the word "fire" is to be construed as meaning, not the date of the fire, but the time when liability is fixed, and an action accrues to the insured: Frlezen v. Insurance Co., 30 Fed. Rep. 352; Hong SUng v. Insurance Co., (Utah,) 30 Pac. Rep. 307; Case v. Insurance Co., (Cal.) 23 Pac. Rep. 534. On the other hand, the fol- lowing cases hold that the limitation begins to run from the date of the fire: Steel v. Insurance Co., 47 Fed. Rep. 863; Meesman V. Insurance Co., (Wash.) 27 Paa Rep. 77; McBlroy v. Insurance Co., (Kan.) 29 Pac, Rep. 478; Insurance Co. v. Stoffels, Id. 479; King V. Insurance Co., 47 Hnn, 1. It is no- ticeable that aU of the three cases above cited which hold that "fire" means the time 234 STIPULATIONS CONTAINED IN THE POLICY. when liability Is fixed rely for authority upon the cases which construe the word "loss" as having such meaning. No atten- tion seems to have been given to the fact that the word "fire" has been substituted for the word "loss." It is also noticeable that in the case of Case v. Insurance Co., supra, the facts were that the insured was compelled to submit to examination by the company, and to produce books, bills, and Invoices, and that he compUed with these requirements as rapidly as he was able, but was unable to fuUy comply therewith until more than 13 months after the fire, or a month after the expiration of the time lim- ited for bringing suit Here, certainly, was a dear case of estoppeL The company, by its own acts, had postponed the time when a cause of action accrued untU after the limitation had run, and should clearly be denied the right to rely upon the limita- tion. See, to this effect, Thompson v. In- surance Co., 136 tr. S. 287, 10 Sup. Ct Rep. 1019. The cases of Frieeen v. Insurance Co. and Hong Shng v. Insurance Co., supra, are, however, direct authorities to the effect that '^twelve months after the fire" means twelve months after the liability is fixed. The argument in support of this view is briefly that aU clauses of the policy must be construed together; that there are clauses which necessitate the making of proofs, the submission of the assured to examination if required, the production of books and pa- pers, and the submission of the question of the amount of loss to appraisers, aU of which things will consume time; and, furthermore, the loss not being payable un- til 60 days after the amount is fixed, it may happen that more than 12 months may elapse after the date of the fire before the company can be sued; and thus the plain- tiff's action may be cut off entirely if a literal meaning is to be givai to the words. The deduction is that the parties cannot have meant what they said in the clause under consideration, but must have meant something else, which they did not say. We cannot assent to this line of reasoning. It does violence to plain words. It smacks too strongly of making a contract which the parties did not make. It construes where there is no room for construction. Plain, unambiguous words, which can have but one meaning, are not subject to con- struction. "Twelve months next aftCT the fire" has one certain meaning, and but one. It can have no other. It may well be that the insurer may by his acts waive the lim- itation, or estop himself from Insisting on it, as held in the cases of KiUips v. Insur- ance Co., Black V. Insurance Co., and Thompson v. Insurance Co., supra; Imt the Invocation of this principle does no vio- lence to the conti-act of the parties. There is no element of estoppd present here, however. The defendant company have done nothing which has induced the insured to suspend proceedings or delay Ills action. They notified him at once on the receipt of his proofs that they denied Uability. They did not require him to do anything. He had nearly 10 months In wliich to bring his suit By failing to do so he must be held to be barred by his con- tract The provision of section 1975 of the Revised Statutes to the effect no insur- ance policy shaU contain a provision that no action or suit shall be brought thereon is not apphcable, because the clause under consideration is plainlyj not such a provision. Judgment affirmed. ■WAIVER AND ESTOPPEL. 2D5 OMAHA FIRE INS. CO. v. DIERKS et al.i (61 N. W. 740, 43 Neb. 473.) Supreme Court of Nebraska. Jan. 15, 1895. Error to district court, Holt county; Crltes, Judge. Action by Dlerks & White against the Omaha Fire Insurance Company. From a judgment for plalntlfEs, defendant brings error. Affirm- ed. J. Fawcett, for plaintiff in error. M. F. Harrington, for defendants in error. RA.GAN, C. Dlerks & White brought this suit to the disti-ict court of Holt county against the Omaha Fire Insurance Company to recover the value of certain live stock vrhlch they alleged they owned, which had been Insured against loss or damage by fire by the Insurance company, and which live stock had been destroyed by fire. Dlerks & White had a ver- dict and judgment, and the Insurance com- pany brings the case here for review. 1. The first error assigned is: "Irregularity In the proceedings of the court, and abuse of discretion, by which the defendant was pre- vented from having a fair trial." This as- signment is too indefinite for consideration, and, indeed, is not referred to in the briefs of counsel for the insurance company. 2. The second error is assigned in the follow- ing language: "Irregularity in the proceed- ings of the jury." This assignment is also too indefinite for review. 3. The third assignment is: "Accident and surprise, which ordinary prudence could not have guarded against, in the evidence of the witness Dierks in testifying to a verbal re- lease of a part of the property from the mort- gage." This is one of the causes for a new trial permitted by the third subdivision of section 314 of the Code of Civil Procedure; but section 317 of the same Code provides that such a ground for a new trial must be sus- tained by affidavits showing the truth of the ground alleged. This means that the affidavits showing the truth of the facts alleged for a new trial on the grounds of accident or sur- prise must be filsd in, and brought to the attention of, the court below. The record con- tains no affidavit filed by the insurance com- pany in the district court in support of a new trial on the grounds of accident or surprise. Affidavits which tend to show that the insur- ance company was taken by surprise in the trial of the case below have been filed in this court, but we cannot consider them. This, as an appellate court, is authorized by law to review the action of the district courts; but in doing so this court can pass upon no question which was not presented to and passed upon by the district court, nor will this court, for the purpose of determining whether the dis- trict court came to a correct condusion, ex- amine any evidence which was not presented to that court 1 Portion of opinion omitted. 4. The fourth assignment of error is: "Ex- cessive damages, appearing to have been given xmder the influence of passion or prejudice." And the fifth assignment is: "Error in the assessment of the amount of recovery, it be- ing in excess of the amount the plaintiffs were entitled to under the evidence." Neither of these assignments are referred to in the briefs of counsel for the Insurance company, and are therefore considered waived. 5. The eighth assignment is: "Errors of law occurring at the trial, and excepted to at the time by the defendant" This assignment ia too indefinite and uncertain for review. 6. The ninth assignment is: "The court erred in each of the instructions given upon its own motion, and in each of the instructiona given at the request of the plaintiffs, to which exception was taken at the time." The charge of the district court contains 12 paragraphs or Instructions, and the exception noted to these instructions by counsel for the insm-ance com- pany is in the following language: "Comes now the defendant, and excepts to the instruc- tions numbered from one to seven, inclusive, given to jury by the court on the trial of said cause." In McReady v. Rogers, 1 Neb. 124,. the exception taken to the charge of the court was in the following language: "To aU of which charge, and each and every part there- of, the defendant, by his counsel, then and there excepted." Croimse, J., speaking for the court, of this exception said: "This firing at the flock will not do. It Is a well-estab- lished point of practice that when the charge of the court involves more than one single proposition, a general exception to it wiU be unavailing; and, if any portion of It be cor- rect, the whole wiU stand. Each specific por- tion of It which is claimed to be erroneous, must be distinctly pointed out, and specifical- ly excepted to." The rule as announced in that case has, so far as we know, never been consciously deviated from by this court but has been time and again reaffirmed. Here the assignment of error is that the court erred in giving each— every one— of the instructions given by it on its own motion, but no attempt was made to except to more than seven of them; and, since the assignment is in effect that the court erred in giving aU the instruc- tions which it did give, and aU the instruc- tions were not excepted to, the assignment of error cannot be considered for that reason. 7. The tenth assignment is: "The court erred in giving each of the instructions givea at the request of the plaintiff below." If the district court gave any Instructions at the re- quest of Dierks & White, they do not appear In the record. The only Instructions in the record are those given by the court upon its. own motion. 8. The sixth, seventh, and eleventh assign- ments of error are that the verdict is not sus- tained by the evidence, that the verdict is- contrary to law, and that the court erred in overruling the motion of the Insurance com- pany for a new trial. The verdict of the jiury Is not contrary to the law, and the court did 236 WAIVER AND ESTOPPEL. not err in overrnling the motion for a new trial, if the verdict is sustained by sufficient evidence. Dierks & White pleaded in. their petition that about the 5th of February, 1891, as provided by the policy, they gave notice of the loss in writing to the insurance company, and gave notice of said loss to one Wallace, the agent of the defendant nearest to where the loss occurred. This allegation of the pe- tition was expressly denied by the Insurance ■company. The insurance company, as an af- ^rmatlve defense to the action, pleaded that the insurance policy provided that, if the in- sured property should be sold or incumbered without the consent of the insurance company indorsed on the policy, the policy should there- upon become void; and that before the fire, Dierks & White, without the knowledge or consent of the insurance company, executed a ■chattel mortgage upon the properly; and that "said mortgage was a valid and subsisting lien upon said property so insured, and upon the property claimed to have been destroyed by said Are, at the time of the fire, on Febru- ary 2, 1891." The reply of Dierks & White to this defense of the insurance company was as follows: "Denies the plaintiff mortgaged the property destroyed by fire, * • * and says that the policy sued upon covered personal proi)erty only, and no particular property was insured by the policy sued on; • * * and ■denies that there was a valid or subsisting lien upon said property, or any portion there- of, at the time the same was destroyed by fire." The issues of fact as made by the pleadings were: (a) The value of the proper- ty destroyed; (b) whether Dierks & White gave notice of the fire to the insurance com- pany; (c) whether Dierks & White mortgaged the insured property, without the consent of the insurance company, prior to the fire; (d) whether the mortgage was a lien upon the in- sured property at the time it was destroyed by fire. The evidence sustains the value placed on the property by the jury, and the ■evidence in the record shows beyond dispute that the insured property, or a part of it, which was destroyed by fire, was, previous to its destruction. Incumbered by a chattel mortgage; and the evidence in the record is sufficient to support the finding of the jury that such insured proi)erty at the time of its destruction by fire had been released froA the lien created by the mortgage. In Insurance Co. V. Schreck, 27 Neb. 527, 43 N. W. 340, it was held that, where personal property was incumbered by a chattel mortgage after such property had been insured, and contrary to the provisions of the insurance policy, the in- sured could nevertheless recover for tljs value of the property destroyed if at the time of the property's destruction it was free from the incumbrance. We adhere to and reaf- firm the doctrine of that case. The eminent counsel for the insurance company does not controvert, as we understand him, the cor- rectness of the decision in Insurance Co. v. Schreck, supra, but his contention is that it was incompetent for Dierks & White, under the issues made by the pleadings, to prove that the mortgage made upon the insured property had been released. Counsel says that Dierks & White, instead of denying the execution of the mortgage, and denying that the mortgage was a lien upon the insured property at the time of its destruction, should have pleaded by way of confession and avoid- ance that the mortgage was executed as al- leged by the insurance company, but that prior to the destruction of the property by fire the mortgage had been released. Assuming, for the purposes of this case, the correctness of the argument of counsel, the answer to It is that he has not assigned in his petition In error here that the coxnt erred in admitting the evidence offered by Dierks & White to show that the destroyed property was unin- cumbered at the time of its destruction. If such evidence was incompetent imder the pleadings, counsel for the Insurance company should have objected to its introduction on that ground, and then specifically assigned the ruling of the district court In admitting such evidence in bis petition in error. ******* Judgment of district court affirmed. ASSIGNMENT. 237- ILLINOIS MUT. FIRE INS. CO. v. FIX. (53 111. 151.) Supreme Court of Illinois. Jan. Term, 1870. Appeal from circuit court, Madison coun- ty; Joseph Gillespie, Judge. Billings & Wise, for appellants. Davis & Gillespie, for appellee. LAWRENCE, J. The appellee, Fix, being indebted to Mayer, for whose use this suit Is brought, executed to him his notes, se- cured by mortgage on a brewery, and at the same time assigned to him a policy of insur- ance, issued by the appellants, upon the building and fixtures. This assignment was made with the consent of the company en- dorsed upon the policy. The present suit was brought in the name of Fix for the use of Mayer, and resulted in a verdict and judg- ment for the plaintiff, from which the com- pany appealed. ' On the trial, the company offered to prove that the building was set on fire by the plain- tiff, Fix. The evidence was objected to by plaintiff's counsel, and the objection was sus- tained. This ruling presents the main ques- tion in the case, to wit, whether, where a policy of Insurance has been assigned by the assured to one holding a mortgage on the premises, with the consent of the company endorsed upon the policy, its validity can be destroyed by acts done by the assignor in violation of its conditions. This question has received much discussion in the courts of New York, and the decisions first made have been deliberately overruled. It was first held, in Insurance Co. v. Rob- ert, 9 Wend. 404, that no act of the assured, after the assignment of the policy with the consent of the company, can impair the rights of his assignee. This case was approv- ed and followed in Tillon v. Insurance Co., 5 N. Y. 406, the court holding that the as- signment of a policy, with the assent of the insurer, creates new and mutual relations and rights between the assignee and the in- surer, which can not be impaired by a third person, over whom the assignee has no con- trol. The question again came up in Gros- venor v. Insurance Co., 17 N. Y. 392, and in Buffalo Steam Engine Works v. Sun Mut Ins. Co., Id. 401. In the first case, the policy was not assigned by the mortgagor to the mortgagee, but, by its original terms, the loss, in case of fire, was made payable to the mortgagee. The majority of the court held the case was not distinguishable from an assignment of the policy, and, overrul- ing the cases already cited, held the policy was avoided by certain acts done by the mortgagor in violation of its terms. One of the eight judges composing the court, dis- sented altogether, and two others concurred only on the ground that the case was not Uke one in which the policy had been assign- ed. In the other case, decided at the same term, and which was one of assignment, the majority of the court held the policy avoid- ed by the acts of the assignor, the three judges dissenting. In these two cases, the question involved received a much fuller discussion than was. given to It when the former decisions were rendered. In reply to the argument of the- court in 9 Wend, that the assignor could not be permitted to execute a release to the insur- ance company which would impair the rights: of the assignee, and that he should not be permitted to do indirectly what he could not do directly, the court very justly say, this ar- gument fails to distinguish between acts done for the purpose of discharging a lia- bility, and acts which, by the terms of the- contract, were necessary to be done or omit- ted, in order to continue the liability in force. The principle, however, laid down in the case in 4 Selden, that the assignment of a. policy, with the assent of the company, cre- ates new relations and rights between the- assignee and the company, is not wholly re- pudiated as never applicable, for it is ad- mitted that, in cases where there has been an absolute sale of the insured property, the assured retaining no Interest in it, and there- has been an assignment of the policy to the purchaser, with the consent of the company, such purchaser may be considered as be- coming a party to the contract, taking up- on himself the performance of its conditions, while the assignor, ceasing to be a substan- tial party, and having no Interest in the sub- ject-matter, could do no act affecting the- rights of the assignee. The court Insist, however, that this principle can not be ap- plied to an assignment to a mortgagee, be- cause, in such cases, the mortgagor retalns^ his interest in the property and in the policy, and whenever the mortgage debt is paid, the- benefit of the policy reverts to him, or In case the policy exceeds the amount of the mortgage, the surplus, in the event of a loss, would be payable to the mortgagor. The court further say, that the rule of the former cases would make insurance com- panies liable for risks which they never as- sumed, and against which their policies are Intended to guard them, for, under this rule, a mortgagor, remaining in possession, might convert a building, insured as a dwelling house, to a use vastly more hazardous, as by making it a place for manufacturing fire works, and still the company be required to- pay, although one of the material terms of its contract was that its liability should cease in the event of such a change in the uses of the property. The supreme court of Pennsylvania, in In- surance Co. V. Roberts, 31 Pa. St. 438, adopts; the rule of these cases, in a well considered opinion. The supreme court of the United States In Carpenter v. Insurance Co., 16 Pet 495,. lays down a similar principle. 238 ASSIGNMENT. This rule is also followed in People v. Kesolute Ins. C!o., 17 Wis. 378. On the other hand, the earlier New York cases were followed in PoUard v. Insurance Co., 42 Me. 226. In this state the question is an open one. Counsel for appellee cite Insurance Co. v. Wet- more, 32 111. 242, and Insurance Co. v. Marks, 45 111. 482, as adopting the rule of the earlier New York cases. But in the first of these cases, the poUcy was issued directly to the mortgagees, and assigned by them with the note and mortgage, and the question, in regard to which the case in 5 N. Y. was cited, was a^ to the right of the assignee to bring suit in the name of the assignors. In the case in 45 111. the assured had sold the stock of goods insured, and the policy had been assigned to the purchaser with the consent of the com- pany. The court, in its opinion, cites the earUer New York cases only, but even under the rule laid down in the last case, in 17 N. Y., the assignee was entitled to recover, the transaction being a sale and not a mortgage. This court has shown. In various cases, a disposition to hold Insurance companies to a full measure of responsibility, but we are of opinion that the eases in 17 N. Y. stand upon the better reason. The consent of insurance companies to an assignment of the policy by a mortgagor to a mortgagee, should not he construed as im- posing upon them, as a consequence of such mere naked assent, a liability which they never would intentionally assume, and against which they take all iKJSSible pains to guard themselves, and must guard themselves in or- der to preserve their solvency. The principle contended for by coimsel for appellee, and laid down in the earlier New York cases, Is, that no act of the assignor, done without the con- sent of the assignee, can invalidate the policy, so far as relates to the assignee. If this be true without limitation, then, as said by the New York court of appeals, a risk taken by a company at the lowest rates, because in the least hazardous class, might be changed, by the mortgagor remaining in possession, and without the concurrence of the mortgagee, to the class of extra-hazardous, and the Uability of the company would remain the same. A detached dwelling house might be converted into a powder magazine, or to some other use which would prevent any sound insurance company from taking the risk on any terms, and still, under the rule claimed by appellee, the company would remain responsible. The mortgagor might go further, and not only con- vert his building to extra-hazardous uses, but absolutely set it on fire, with a view of de- frauding the company, as the appellants of- fered to prove was done in the present case. We can not adopt a rule which would lead to such results. In analogy to the case of absolute sales by the assured, we should be much inclined to hold to the rule announced in 5 N. Y., if it were possible to separate the interest of the mortgagor and mortgagee. But it is not, for the mortgagor Is not only Interested In the payment of the mortgage, but, where he pays the premium, the fruits of the policy absolutely belong to him, subject to the lien of the mortgagee. Where there is an absolute sale, there is no difficulty in de- termining the meas»u"e of the assignee's rights and the company's liabilities, for he stands in the position of receiving a new poUcy as owner, and becomes responsible for any extra- hazardous uses to which the building may be applied, a responsibility he can not evade on the ground that the building is not under his control. But where there is no sale, but the policy Is merely assigned as security, we are obliged to hold, either that the company is bound absolutely to the assignee, no matter how far the conditions of its contract may have been violated, which would be a very unreasonable ruling, or that there is such Iden- tity of Interest In regard to both the property and the policy, that there can be no recovery, even for the use of the assignee. If the as- signor faUs to comply with the conditions. The utmost that can be claimed for an as- signee In such cases is, that he should stand In the same position as if he had taken out a new and independent policy to protect his own Interest as mortgagee. But admitting such claim, we have no rule to guide us. It Is impossible for us to say what conditions the company would deem It necessary to insert In such a policy for Its own protection. It Is very certain it would stipulate that the haz- ard to the building should not be Increased, and thus would compel the mortgagee to take upon himself the responsibility of the mort- gagor's acts, from which he could not escape by saying that his rights should not be prej- udiced by the acts of a third person. It would necessarily result, from the nature of the in- terest insured, that Its owner might be damni- fied by the acts of the mortgagor in posses- sion, although beyond his control. Whether a company would also stipulate, in such a policy, that neither the mortgagor nor the mortgagee should obtain further Insurance, without Its consent, we do not know, though It is evident such a stipulation would be a wise precaution. The history of the Robert Case, In 9 Wend., singularly illustrates the Injustice of attempt- ing to base a judgment against an insurance company. In favor of the mortgagor, upon the equities of his assignee. In that case, the judgment was rendered in favor of Robert, the mortgagor, for the use of Bolton, his as- signee, on the ground that, though Robert had violated the policy, this could not prejudice Bolton. After the rendition of the judgment, and before Its payment, Robert paid off the mortgage, and threatened the insiu'ance com- pany with an execution. The company moved the court for a perxmtual stay, which was granted, the court holding, consistently with its former ruling, that Robert had no equi- table rights under the policy. 9 Wend. 404 and 474. From this order an appeal was ASSIGNMENT. 239 taken to the court for the correction of er- rors, and that court held, as the original judg- ment was unreversed, it was conclusive upon the rights of the parties, and, as the mortgage had been paid, the benefit of the judgment re- verted to Robert, the mortgagor. He thus re- ceived the full benefit of the policy, although he had forfeited all rights under it, and a judgment had been rendered in his favor only in consequence of the equities of his assignee. 17 Wend. 631. It is, in our opinion, very clear, -if we at- tempt to dispose of cases of this character on the theory that the assignment is to be treated as a new policy, issued directly to the mort- gagee, for his exclusive benefit, and to adjust the rights of these parties in accordance with what we may suppose such a policy would contain, we shall be wandering In a labyrinth where there would be but one thing certain, and that is, that great Injustice would be done these companies. We should practically be enforcing liabilities against them which they never intended to incur, and giving to the mortgagor the benefit of a policy in which he has forfeited all his rights. We deem it safer and more just to say, that where a policy is assigned as collateral to a mortgage, though with the consent of the company, the assignee takes it subject co the conditions expressed upon its face, or neces- sarily inhering in it, and that no recovery can be had merely in consequence of the equities of the assignee, if the assignor has l*st the right to recover by violating the terms of the contract The evidence, oflEered to show that the plain- tiff set the building on fire, should have been admitted, and the instruction asked for de- fendants, in regard to the effect of a second insurance, should have been given. Judgment reversed. 240 ASSIGNMENT. HAIxL V. NIAGARA FIRE INS. CO. (53 N. W. 727, 93 Mich. 184.) Supreme Court of Michigan. Oct. 4, 1892. Error to circuit court, Wayne county; George .S. IIormek, Jud^e. Action by Harry C. Hall against the Ni- agara Fire Insurance Company on a poli- cy of insurance. The court directed a ver- dict for defendant. Plaintiff brings error. Reversed. Keena & Liffhtner, for appellant. Hau- cbett, Stark & Uunebett, for appellee. McGRATH, C. J. This is an action upon a policy of insurance dated October 13, 18S8, and running for three years, issued to J. C. Hough "on his two-story frame dwelling, • • * against all such imme- diate loss or damage sustained by the as- sured as may occur by fire to the property above specified, but not exceeding the in- terest of the assured in the property." By the terms of the policy, the asHured by its acceptance "warrants that any appli- cation, survey, plan, statement, or de- scription, connected with procuring this insurance, or contained in or referred to in this policy, is true, and shall be a part of this policy; that the assured has noF overvalued the property herein described, nor omitted to state to this company any information material to the risk." The policy also provided that "this policy wliall become void, unless consent in writ- ing is Indorsed by the company hereon, in eai'h of the following instances, viz. : If the insured is not the sole and uncondi- tional owner of the property; or if any ' building intended to be insured stand on ground not owned in fee simple by the assured; or it the interest of the assured in the property, whether as owner, trus- tee, consignee, factor, agent, mortgagee, lessee, or otherwise, is not truly stated in this policy ; or if any change take place in the title, interest, location, or posses- sion of the property, (except in case of succession by reason of the death of the assured,) whether by sale, transfer, or conveyance, in the whole or in part, or by legal process or judicial decree; or the title or possession be now or hereafter be- come involved in litigation ; or if this pol- icy be assigned or tran.siferred before a loss." No written application for the policy was requested or made. Thelnsur- ance was solicited by the company's agent, "who saw the building permit In the paper, and came to the office, [Hough's,] and wanted to write a policy on the house." No statement as to the condition of the title or as to the nature of Hough's ownership was asked for or given. Hough, in November, 18S7, had bought 10 acres of land for »18,000, a large portion of which had been paid, and had subdivided the land; the house in question being, at the time the insurance was effected, in process of construction on oneof the lots known a8"Lot7." He held the whole under a contract of purchase. October 13, 1888, the policy was issued. May 14, 1889, Hough contracted, in writ- ing, to sell to one Stevens this lot 7 for f 3,500, which was to be paid as follows: f 25,on July 1, 1889, and the further sum ol $3.5 in monthly payments thereafter, until the entire sura, with interest, should be paid. Stevens contracted to pay all taxes and assessments upon the property, and to pay the expenses of keeping the buildings insured against loss or damage by Are. Hough agreed, on performance of all of the covenants upon Stevens' part, to ex&cute a good and sufficient deed to Stevens. It was further agreed that "the said party ol the second part shall have possession of said premises on and after the date hereof, while he shall uot be in de- fault oif his part in carrying out the terms hereof; and if said party of the second part shall fail to perform his agreements on this contract, or any part of the same, the said party of the first part sjiall, im- mediately after such failure, have a right to declare the same void, and may retain whatever may have been paid hereon, and all improvements that may have been made on said premises, to the extent of his just interest therein, and treat the party of the second part as his tenant holding over without permission." Ste- vens went into possession at once, and occupied the premises at the date of the fire, although he only made three monthly payments. On July 1, 1890, he was given notice to quit the premists, and that the contract had been declared void. In March, 1889, Hongh assigned all his inter- est in the original contract held by him to plaintiff. At the time of that assignment. Hough assigned the policy to Hall, and Hough and Hall went together to the office of defendant's agent. Hall told the agent that Hough had "assigned his interest in the property " to him, (Hall,) and that he " wanted the policy to read payable to hiw in case it should burn," and thereupon the consent of the compa- ny was indorsed upon the policy. Upon these facts the court directed a verdict for defendant, and plaintiff appeals. The record presents two questions: (a) Was this contract valid at its incep- tion? (ft) Conceding that the policy was vitiated by the Stevens contract as to Hough, what was the effect of the compa- ny's consent to the assignment to plaintiff? It must be conceded that Hough, at the inception of the policy, bad an insurable interest in the property. It is well settled in this state, at least, that an applicant for insurance is not required to show the exact condition of his title, unless request- ed so to do, (Castner v. Insurance Co., 46 Mifth. 15, 8 N. W. Rep. 554; Guest v. Insur- ance Co., 66 Mich. 98, 33 N. W. Rep. 31;> th,at the failure to mention incumbrances, if not inquired about, the application be- ing oral, and no deceit being practiced, >» immaterial, (O'Brien v. Insurance Co., 52 Mich. 131, 17 N. W. Rep. 726; Tiefenthal v. Insurance Co., 53 Mich. 306, 19 N. W. Rep. 9;) and that an equitable ownership will support a recital of ownership, (In- surance Co. V. Fogelman, 35 Mich. 481; Guest v. InsuranceCo., supra.) Seel May, Ins. 28r-287, and 7 Amer. & Eng. Enc. Law, 1020. In the present case, neither Hough Bor Hall were asked to state the nature of their interest in the property or the condi- tion of the title; neither made any misrep- resentntion or was guilty of any fraud ASSIGNMENT. 241 or concealment; and hloap;ti, at the in- ception ol the policy, and plaintiff, at the time ot the consent ol the company to the asriiprnment to bim, had snch an interest in the property insured as would support the recitation in the policy that It cov- ered "his two-story frame dwelling." Hough's contract with Stevens was not executed until after the jjolicy had been Issued, and when Hull took Stevens was in default, but, in any event, Hall had at that time an equitable interest. The pro- visions of the policy in the present case, respecting the sole and unconditional ownership of the property, the truthful- ness of the statement as to the interest of the assured in the property, and as to any change in the title, interest, location, or possession of the property by sale or trans- fer, are precisely the same as were passed upon in Hoose v. Insurance Co., 84 Mich. 309, 47 N. W. Rep. .587, and the court there held that ail the provisions of the contract must be taken together; that, if the insur- er desired to know the interest it was in- suring, it should have defined that inter- est in the policy ; thaf it was the inten- tion of the parties to make a binding eon- tract ot insurance when accepted by the insured ; that the claim as to sole aud un- conditional ownership could only be held to relate to changes arising after the ex- ecution and acceptance of the policy, aud did not apply to an existing state or con- dition of the property at the time that the policy was issned. That case, therefore, disposes of the first question. The other question is the more serious one, and one upon whirh the authorities are by no means uniform. In Insurance Co. V. Munna, 120 Ind. 30, 22 N. E. Rep. 78, the insured had mortgaged the property, and afterwards sold it to Muuns, and as- signed the policy, to which assignment the company, without knowledge or notice ot the mortgage, consented. The court held that a contract of insurance is a purely personal engagement, and does not run with the property insured, citing Nordyke & Marmon Co. v. Gery, 112 Ind. 535, 13 N. E. Kep. 683, and Cummings v. In- surance Co.. 55 N. H.457. "That the policy expires with the transfer of the estate, so far as it relates to the original holder, but the assignment and assent of the com- pany constitute an independent contract with the assignee, the same, in effect, as it the policy had been reissued to him upon terms' and conditions therein ex- pressed. • • * The contract of insur- ance, thus consummated, arises directly be- tween the purchaser and the Insurance company, to all intents and purposes the same as if e new policy had been issued embracing the terms of the old. In such a case, no defense predicated on supposed violations of the conditions of the policy by tlie assignor will be available against the assignee. Until the latter himself does some act or permits a condition of things to exist in violation of the terms of the policy, be is not in default." That, being a new and independent contract, both parties are subject to the same rules which govern the making of the original contract. A large number of authorities are cited in support of the conclusions reached. In Steen v. Insurance Co., 89 N. ELIi.SEL.CAS.l.AW INS. — 16 Y. 315, the court hold that the consent to the assignment created a new contract between the company and the assignee, unaffected by the forfeiture, it. In any event, it could have been insisted upon. In Shear- man V. Insurance Co., 46 N. Y. 526, the property was conveyed to plaintiff March 14th. The policy was renewed in the name of the grantor, March 2Ist, and was assigned to plaintiff, April 15th, and on the same day the company consented to the assignment. The company insisted that at the time ot its consent it had no knowledge of any fact except that at that time it was notified that the property had been conveyed to plaintiff, but the time of the transfer had not been given, nor the fact that the policy was issued after the transfer. The court held that "the renewal revived the original policy, and continued it with uU the virtue which it would have had for any purpose, if it had not expired; that the consent to the assignment was equivalent to an agreement to be liable to the assignee upoii the policy as a subsisting operative contract, for which agreement the reten- tion of the premium received on renewal was a good consideration." In Hooper V. Insurance Co., 17 N. Y. 424, the insur- ance was upon a stock of goods which had been sold on execution, and the pur- chaser obtained the consent of the com- pany to an assignment to him, and the court held that the policy became a new contract of insurance between the un- derwriters and the assignee. "An assign- ment, therefore, being of no avail, except in case of an interest in the assignee in the subject insured, the request made to the defendant to consent to an assign- ment to plaintiff was of itself notice to them that he had acquired or was about to acquire an interest in the insuretl prop- erty. If, therefore, it was important to the defendants to know what the nature of the interest was which the plaintiff had acquired, they should have asked for information in respect to it. If they were content to give theirconsent without such inquiry, it was their own fault. " In Ellis V. Insurance Co., 64 Iowa, 507, 20 N. W. Rep. 782, it was held that, although "as- sured may have made statements in his application which by the terras of the policy would defeat a recovery thereon by him, yet, where the insured property is sold and the policy assigned to an- other, and the company assents to such assignment, a new contract arises, which is not affected by the fraud of the party originally insured." In Ellis v. Insurance Co., 68 Iowa, 578, 27 N. W. Rep. 762, a ma- jority of the court held that the provision in the policy that, if the title ot the prop- erty is incumbered, the policy should be ■ void, was imported into the new con- tract, and that the existence ot the mort- gage invalidated that contract. The court divided upon the construction ot this provision, a minority of the court holding that it was not against prior or existing incumbrances, but against those which should fall on the property subse- quent to the execution and delivery of the new contract. Upon this question the dissenting opinion is in accord with the case of Hoose v. Insurance Co., supra. 242 ASSFGNMENT. In EUiH V. Insurance Co., 32 Fed. Rep. 646, there is a very able discussion of tbe ques- tion hy Brewer, J., who says: "That where an assignment goes with an abso- late sale of the propertj' there is the crea- tion of a new contract. If it is a new contract for one purpose, it is a new con- tract for all purposes. The assignment is express3d to be subject to the terms and conditions of the policy. It is equivalent to saying that the assignee takes the con- tract as of present writing, containing the same terms and stipulations, binding him to the same duties, and subjecting him to the same liabilities that were im- posed by the contract in the first instance upon the assignor. In no other way can it fairly be said that a new contract was made. Tested by chat rale, the assignee, as the assignor, had agreed, in the first instance, that he would place no incum- brance upon the property, and that, if he did, the policy should fail. There is no pretense that he has violated that stipula- tion thus construed. It may well be doubted whether the use of the technical terms 'assignment,' 'assignor,' and 'as- signee' are apt to describe the actual transaction. When the insured sells the property, that moment the policy falls. He has no insurable interest. The policy ceases to have legal force as a policy. Can it be said he is assigning that which is nothliig, and that the insurance com- pany contemplates and assents to the transfer of that which has no legal exist- ence? This is a practical question, ami we must look at these matters in a prac- tical light. When the purchaser buys the property, naturally the thought in his mind is insurance. It being his, and the old policy being dead, he looks for insur- ance. He finds a policy which had been in force, dead because of his purchase and ceshation of the insurable Interest in th^ assignor, yet which the insurance com- pany is willing to have transferred to him. Would it not be an injustice to him if, after the insurance company had con- sented to that transfer, it could turn back to acts done by the person from whom be obtained the policy, and claim that those acts vitiated the whole thing, and rendered it not liable to the assignee? But it is said there is really no considera- tion for this contract on the part of the company; the assignment of this policy is an assertion, practically, hy the as- signor of a right to an unearned premium, and the claim of such unearned premium, presented to the assignee, is assented to by the company when it consents to the assignment. It matters not that there may have been no actual right to such un- earned premium, for the recognition and compromise of a claim is consideration. Further than that there would be the in- jury to the assignee as well as the benefit to the insurer to be considered. Again, it is said that there can be no waiver with- out knowledge; that the insurance com- pany was ignorant of the fact of this incumbrance; and therefore it should not beheld to have waived its rights. There may be estoppel without knowledge. This consent to the assignment, dealing with things in a practical way, must be construed as a statement by the insur- ance company that it recognized that pol- icy as a valid instrument. Surely it would be unjust to think that the Insur- ance company put itself into the position of assenting to the transfer of a policy, which had no validity, going through the form of consenting to that which had no legal existence, and was worthless. These considerations, although we con- cede that the question is one of not perfect transparency, leads us to the conclusion that this assignment must be taken, in the language of the text-books and the authorities, to create a new contract be- tween theassignee and the insurance com- pany, — a new contract embracing, as of present writing, the same terms and stip- ulations as were embraced in the contract originally written between the assignor and insured." 2 May, Ins. 378; Wood, Ins. 110,366; Fland. Ins. 4S4; Cummings V. Insurance Co., 55 N. H. 457; Wilson v. Hill, 3 Mete. (Mass.) 66; Pratt v. Insur- ance Co., 64 Barb. 589. An insurance policy is a personal con- tract of indemnity. It is nonassignable, except with the assent of the insurer; nevertheless the assignment of policies of insurance is an incident of nearly every transfer of personal property or improved real estate. Unexpired policies, before loss, have, as a rule, in the hands of the person to whom issued or his assignee, a certain face value, which is the unearned premium or indemnity to the assignee for the unexpired term. They are either transferred as a part of the consideration for the purchase money, or the value of the unearned premium is agreed to be paid in consideration of the assignment. The assignee acquires the right to the un- earned premium, or the right to the in- demnity for the unexpired term for value. The right to the unearned premium may be subject to the conditions of the con- tract, for he takes that right subject to the consent of the company. But suppose that the unearned premium is paid over to the assignee of the policy, or credited upon the premium for a new policy, coull it be contended that the company would have the right to recover back the sum so paid or credited from the assignee? The company, . in such case, recognizes the validity of the policy, and the assignee ia simply reimbursed for what he has paid to the assignor. The ordinary railroad mileage ticket is not transferable, and at- tached is a condition that its use by any other person will operate as a forfeiture. Suppose that A. holds such a ticket, which he desires to transfer to B., and they go together to the office of the railroad com- pany, and A. transfers the ticket to B., and the company indorses its consent, B. paying the value represented by the un- used strip for the transfer. Could the rail- road company he afterwards heard to say, as against B., that A. had, before the transfer, forfeited the contract, even though it had no knowledge of the breach, and therefore the contract was void as to B.? Certainly not. By consent, a new contract between the company and B. is created. The company has agreed with ii. that the unused coupons are good in his hands. The company caniint be said to have waived that which they had no mm ASSIGNMENT. 243 knowledge of, but they have waived the right as against B. to insist upon A. 'a In- firmities, whatever they may have heen. The contract which, prior to the transfer, was personal with A., has ceased, and has become personal with B. B. does not agree that A. has not violated its provi- sion, but only that he will not. Insurance contracts are peculiar, and hence rules ap- plicable to other contracts are applicable to them only so far as the provisions are analogous. When a party to a nonassignable instru- ment, representing upon its face an un- earned value, consents to its transfer with- out reservation, and the assignee in good faith pays value for such transfer, the par- ty consenting cannot be heard to set up mental reservations or prior breaches which were unknown to either party. The rule applicable to the transfer of an assignable contract has no application to such contracts. The consent to the as- signment imported validity. Theriffhtto withhold or grant it is lor the benefit of the insurer. It has its burdens as well as its advantages. 'I'he application for con- sent Is, in effect, one for a contract of in- demnity to the assignee. It affords an op- portunity to the company to examine the risk, or to inquire as to the title or inter- est to be insured, or as to wliether there had been any other change in risk or title. Had it done so, and refused its ccjnsent, plaintiff would have been in a position to retain or recover the consideration paid, and to seek indemnity elsewhere. It is too late now, after the loss, to set up the changed conditions. It may be said, too, that at the time of the application for the consent of the company to the assignment, plaintiff informed the company that Hough had assigned his interest in the property to him. That was sufficient, of itself, to put the company upon inquiry. Defendant insists, further, that, inas- much as plaintiff had commenced proceed- ings against Stevens before a circuit court commissioner, to recover possession of the premises, the policy was invalidated there- by. The policy contained a provision that, "if the title or possession be now or hereafter Involved in litigation," the poli- cy should become void. Stevens was clearly in del'ault, having occupied the premises for 12 months, and paid but $75, whereas he had agreed to pay $25 per month. Plaintiff had declared the con- tract under which Stevens occupied void, as he had the right to do under the con- tract. From that moment Stevens be- came and was a tenant holding over with- out permission. The proceeding to re- cover possession was predicated upon these provisions of the contract. It can- not be contended that the provision of the policy referred to contemplated that, in the event that proceedings were insti- tuted to oust a tenant, the policy should become void. This provision, taken in connection with the other provisions ot the policy, clearly relates to a litigation over the title or possession of the insured. The judgment must be reversed, and a new trial had, with costs of this court to the plain tiff. The other j nstices concurred. 244 BENEFICIARIES. KICKER et al. v. CHARTER OAK LIFE INS. CO. et al. (6 N. W. 771, 27 Minn. 19a) Supreme Court of Minnesota. Sept 24, 1880. Appeal from order of district court, Hen- nepin county. Woods & Babcock, for plaintiffs. "Wilson & Lawrence, for defendants. Lochren, Mc- Nair & Gilfillan, for interrenor and appel- lant. CORNELIi, J. The original policy was Is- sued upon the application of Samuel Stanch- fleld, the person whose life was insured, and all the provisions stipulated for were paid by him before the death of Elizabeth A. Stanch- fleld, who was his wife. By its terms the amount of the insurance was made payable upon the death of the insured to Elizabeth A. Stanchfield, his said wife, and in case of her death before his decease the same was to be paid to his children, or to their guard- ian, if minors, for their use and benefit. The said Elizabeth died intestate in July, ,1874, leaving surviving her said husband, the plain- tiffs herein, and one Joel B. Stanchfield, who were the issue of their marriage. After this- Samuel Stanchfield married the intervenor herein, by whom he had one child, Carl S. Stanchfield, both of whom are now liviiag. On the thirteenth day of February, 1878, Samuel Stanchfield died. After the decease ©f his former wife and his marriage with the intervenor, Louisa Stanclifield, the Insured surrendered the original poUcy, which was cancelled, and a new one was Issued In. Its place and as a substitute therefor, bearing the same date, and containing the same terms and conditions, save that it was therein provided that it should enure "to the sole and separate use and benefit" of said inter- venor, Louisa Stanchfield, his second wife. The legal effect of this surrender and change, and the competency of Samuel Stanchfield to make It without the consent of his Chil- dren, are the important questions presented for adjudication In this case. Upon the aliegations and admissions In the pleadings it must be presumed that the orig- inal policy was made, and its stipulations were to be performed, In the state of Connec- ticut, where the defendant company was cre- ated, organized, and did its business, and hence Its legal effect, and the rights and obligations of the parties under It, depend upon the laws of that state; but as no evi- dence appears to have been given as to what those laws were, they are to be taken as identical with the common law of this state. Independent of any statute upon the subject. Upon this theory the case has been argued, and It will be considered and determined ac- cordingly. The general rule upon the subject, as stat- ed by Mr. Bliss, Is this: "That a policy of life insurance, and the money to become due under it, belong, the moment It is issued, to the person or persons named In it as bene- ficiary or beneficiaries, and that there Is no power in the person procuring the insurance, by any act of his, by deed or by will, to transfer to any other person or persons so named. The person designated in the policy Is the proper person to receipt for and to sue for the money. The principle is that the rights under the policy become vested imme- diately upon its being issued, so that no per- son other than those designated In It can as- sign or surrender it, and that In such assign- ment or surrender all the persons must con- cur, or the Interest of those no^ concurring Is not affected." Bliss, Ins. (2d Ed.) Ii 317, 337. This is held to be the rule In Succession of Kegler, 23 Lon. 550. Upon the facts rn the case at bar, how- ever, the court Is not called upon to consider the rule as applied to a case where a portion of the premiums which constitute the con- sideration for the Insurance still remains un- paid, and where the policy is liable to for- feiture In case of non-payment. Here the en- tire amount of the premiums stipulated for In the policy had been paid before the ^eath of the wife, Elizabeth A. Stanchfield, and the subsequent attempted surrender of the policy by her husband, whose life was insured. The case, therefore, stands in the same position It would if the whole consideration for the pol- icy had been paid by the party procuring it at the time of its execution and delivery by the company, and the question is, having made such payment and taken out a policy for the benefit of his said wife and his chil- dren, payable in express terms to her, or. In the event of her prior decease, to his children, it was competent for him to surrender the same and take another policy In consideration of such surrender, and In lien of the original, for the benefit of another party. This ques- tion, it seems to the court, must be answered In the negative. The transaction on the part of Mr. Stanch- field was In the nature of an Irrevocable and executed voluntary settlement upon his wife and children of the sum secured to be paid by the policy at his death, conditioned that the same should be to her for her benefit should she survive him; but. If not, then the same should be paid to his children, or, if minors, to their guardian, for their sole use and ben- efit. Nothing remained to be done on his part to make the intended gift of the policy to the beneficiaries therein named complete and effectual as against himself and all mere volunteers claiming under him. In pay- ing for the insurance and procuring the pol- icy to be Issued, payable, in express terms, upon his death, to his said wife, Elizabeth, if then living, and If not, to his children, for their sole use and benefit, without any con- dition or stipulation reserving a right to change or alter any of the terms of the agree- ment, he did all that could well be done, un- der the circumstances, in the execution of an Intention to vest in his said appointees the en- BENEFICIARIES. 245 tire interest in the policy, and all rights there- under. Adams v. Brackett's Ex'r, 5 Mete. (Mass.) 280; Landnim t. Knowles, 22 N. J. Eq. 594. What he did was a "clear and distinct act," ■wholly divesting himself of all ownership or control over the money paid for the insur- ance, disclaiming any interest in the policy, or intention to take or hold it for himself or his legal representatives, at the same time putting it beyond his power so to do by the stipulation obligating the company to pay the sum insured, whenever it should become due, to such of the persons named in the policy as might then be entitled thereto by Its terms. Taking the delivery of the policy from the company, under these circumstances, can only be construed as an act of acceptance for the designated beneficiaries, and his subsequent holding of the same as that of a naked de- positary, without any interest, for those enti- tled thereto. Such conduct on the part of the husband and father was both natural and proper, and it raises no presumption against the theory of a completed transaction on his part, as evidenced by his other acts. As the insured had no legal or equitable interest in the policy at the time of its surrender and cancellation, the act was a nullity, and could not affect the rights of his children, to whom it then belonged, and who alone could release the company from the obligations it contain- ed. We concur in the opinion of the district court, that "his children" included the issue of both marriases. Order affirmed. 246 BENEFICIARIES. CENTRAL BANK OP WASHINGTON et al. V. BnjMB et aL HUME V. CENTRAL NAT. BANK et aL (9 Sup. Ct 41, 128 TJ. S. 195.) Supreme Court of the United States. Nov. 12, 1888. Appeals from the Supreme Court of the Dis- trict of Columbia. On the 23d of April, 1872, in consideration of an annual premium of $230.89, the Life In- surance Company of Virginia issued at Peters- burgh, in that commonwealth, a policy of in- surance on the life of Thomas L. Hume, of Washington, D. C, for the term of his natural life, in the sum of $10,000, for the sole use and benefit of his wife, Annie Graham Hume, and his children, payment to be made to them, their heirs, executors, or assigns, at Peters- burgh, Ya. The charter of the company pro- vided as follows: "Any policy of insurance issued by the Life Insurance Company of Vir- ginia on the life of any person, expressed to be for the benefit of any married woman, whether the same be effected originally by herself or her husband, or by any other per- son, or whether the premiums thereafter be paid by herself or her husband or any other person as aforesaid, shall inure for her sole and separate use and benefit, and that of her or husband's children, if any, as may be ex- pressed in said policy, and shall be held by her free from the control or claim of her bus- band or his creditors, or of the person effect ing the same and his creditors. " Section 7. The application for this policy was made on behalf of the wife and children by Thomas L. Hume, who signed the same for them. The premium of $230.89 was reduced by annual dividends of $34.71 to $196.18, which sum was regularly paid on the 23d of April, 1872, and each year thereafter, up to and including the 23d of April, 1881. On the 28th of March, 1880, the Hartford Life & Annuity Company of Hartford, Conn., issued five cer- tificates of insurance upon the life of Thomas L. Hume, of $1,000 each, payable at Hart- ford, to his wife, Annie G. Hume, if living, but otherwise to his legal representatives. Upon each of these certificates a premium of $10 was paid upon their issuance, amounting in all to $50; and thereafter certain other sums, amounting at the time of the death of Hume to $41.25. On the 17th of February, 1881, the Maryland Life Insurance Company of Baltimore issued, at Baltimore, a policy of insurance upon the life of Thomas L. Hume, in the sum of $10,000, for the term of his natural life, payable in the city of Baltimore to "the said insured, Annie G. Hume, for her sole use, her executors, administrators, or as- signs;" the said policy being issued, as it re- cites on its face, in consideration of the sum of $337.20 to them duly paid by said Annie G. Hume, and of an annual premium of the same amount to be paid each year during the continuance of the policy. The application for this policy was signed '"Annie G. Hume, by Thomas L. Hume," as is a recognized us- age in such applications, and in accordance with instructions to that effect printed upon the policy. The charter of the Maryland Life Insur- ance Company provides as follows: "Sec. 17. That it shall be lawful for any married wo- man, by herself, or in her name or in the name of any third person, vidth his consent, as her trustee, to be caused to be insured in said company, for her sole use, the life of her husband, for any definite period, or for the term of his natural life; and, in case of her surviving her husband, the sum or net amount of the insurance becoming due and payable by the terms of the insurance shall be pay- able to her to and for her own use, free from the claims of the representatives of her hus- band, or of any of his creditors. In case of the deati) of the wife before the decease of the husband, the amount of the insurance may be made payable, after the death of the husband, to her children, or, if under age, to their guardian, for their use. In the event of there being no children, she may have power to devise, and, if dying intestate, then to go [to] the next of kin." The directions printed on the margin of the policy called especial attention to the provisions of the charter upon this subject, an extract from which was printed on the fourth page of the application. The amount of premium paid on this policy was $242.26, a loan having been deducted from the full premium of $337.20. On the 13th of June, 1881, the Connecticut Mutual Life Insurance Company of Hart- ford, in consideration of an annual premium of $350.30, to be paid before the day of its date, issued a policy of insurance upon the life of Thomas L. Hume, ii^ the sum of $10,000, for the tei-m of his natural life, pay- able at Hartford to Annie G. Hume and her children by him, or their legal representa- tives. The application for this policy was signed "Annie G. Hume, _by Thomas L. Hume. " It was expressly provided, as part of the contract, that the policy was issued and delivered at Hartford, in the state of Connecticut, and was "to loe in all respects construed and determined in accordance with the laws of that state." The "statute of Connecticut, respecting policies of insurance issued for the benefit of married women," was printed upon the policy under that head- ing, and is as follows: "Any policy of life insurance expressed to be for the benefit of a married woman, or assigned to her or in trust for her, shall inure to her separate use, or, in case of her decease before payment, to the use of her children or of her husband's children, as may be provided in such policy: provided, that if the annual premium on such policy shall exceed three hundred dollars, the amount of such excess, with interest, shall inure to the benefit of the creditors of the person pay- ing the premiums ; but if she shall die before the person insured, leaving no children of herself or husband, the policy shall become the property of the person who has paid the premiums, unless otherwise provided in such policy;" and this extract from the statute BENEFICIARIES. 247 was printed upon the policy, and attention directed thereto. Prom the $350.30 premium the sum of $105 was deducted, to be charged against the policy in accordance with its terms, with interest, and $246.30 was there- fore the sum paid. The American Life In- surance & Trust Company of Philadelphia had also issued a policy in the sum of $5,000 on the life of Hume, payable to himself or his persoiKil representatives, and this was collected by his administrators. Thomas L. Hume died at Washington on the 23d of October, 1881, insolvent, his wid- ow, Annie G. Hume, and six minor children, surviving him. Xovember 2, 1881, the Cen- tral National Bank of Washington, as the holder of certain promissory notes of Thomas L. Hume, amounting to several thousand doUars, filed a bill in the supreme court of the District of Columbia against Mrs. Hume and the Maryland Life Insurance Company, the case being numbered 7,906, alleging that the policy issued by the latter was procured while Hume was insolvent; that Hume paid the premium of $242.26 without complain- ant's knowledge or consent, and for the pur- pose of hindering, delaying, and defrauding the complainant and his other creditors; and praying for a restraining order on the insur- ance company from jwying to, and Mrs. Hume from receiving, either for herself or children, the amount due pending the suit, and "that the amount of the said insurance policy may be decreed to be assets of said Thomas L. Hume applicable to the payment of debts owing by him at his death," ete. The temporary injunction was granted. On the 12th of November the insurance company filed its answer to the effect that Mrs. Hume obtained the insurance in her own name, and was entitled under the policy to the amount thereof, and setting up and relying upon the seventeenth section of its charter, ■quoted above. Mrs. Hume answered, No- vember 16tli, declaring that she applied for and procured the policy in question, and that it was not procured with fraudulent intent; that the estate of her father, A. H. Pickrell, who died in 1879, was the largest creditor of Hume's estate; that she is her father's re- siduary legatee; that the amount of the pol- icy was intended, not only to provide for her, but also to secure her against loss; that her mother had furnished Hume with about a thousand dollars annually, to be used for her best interest, and that of his wife and children; and that the premium paid on the policy in question, and those paid on other policies, was and were paid out of money be- longing to her father's estate, or out of the money of her mother, applied as directed and requested by the latter. Benjamin U. Key- sei; receiver, holding unpaid notes of Hume, was allowed, by order of court, November 16, 1881, to intervene as co-complainant in the cause. R. Eoss Perry and Reginald Een-- •dall were appointed, November 26, 1881, Hume's administrators. On January 23, 1882, the administrators filed three bills (and obtained injunctions) against Mrs. Hume and each of the other insurance companies, being cases numbered 8,011. 8,012, and 8,013, at- tacking each of the policies (except the Amer- ican) as a fraudulent transfer by an insolv- ent of assets belonging to his creditors. The answers of Mrs. Hume were substantially the same, mutatis mutandis, as above given, and so were the answers of the Connecticut Mutual and the Virginia Life; the former pleading the statute of Connecticut as part of its policy, and the latter the seventh section of its charter. The Hartford Life & Annuity Company did not answer, and the bill to which it was a party defendant was taken pro confesso. The administrators were, by order of court, January 2, 1883, admitted parties defendant to said first case numbered 7,906, and cases numbered 8,011, 8,012, and 8,013 were consolidated with that case. Jan- uary 4, 1883, the court entered a decretal or- der, dissolving the restraining order in orig- inal cause numbered 8,012, and directing the Virginia Insurance Company to pay the amount due upon its policy into court, and the clerk of the court to pay the same over to Mrs. Hume, for her own benefit and as guardian of her children, (which was done accordingly;) and continuing the injunctions in original causes 8,011, 8,013, and 7,906, but ordering the other insurance companies to pay the amounts due into the registry of the court. By order of court, January 30, 1883, the Farmers' & Mechanics' National Bank of Georgetown, which had proved up a large claim against Hume's estate, was allowed to intervene in original cause No. 7,906 as a co-complainant; and March 19, 1883, George W. Cochran, a creditor, was by like order allowed to intervene as co-complainant in the consolidated cases. Replications were filed and testimony taken on both sides. The evidence tends to show that Hume's financial condition, as early as 1874, was such that, if called upon to respond on the instant, he could not have met his liabilities, and that this condition grew gradually worse, until it culminated in irretrievable ruin, in the faU of 1881 ; but it also indicates that for several years, and up to October 21, 1881, two days before his death, he was a partner in a going concern apparently of capital and credit; that he had a considerable amount of real estiite, though most of it was heavily incumbered; that he was an active business man, not per- sonally extravagant; and that he was, for two years prior to October, in receipt of moneys from his wife's mother, who had an income from her separate property. He seems to have received from Mrs. Pickrell, or the es- tat-e of Pickrell, his wife's father, of which Mrs. Hume was the residuary legatee, over $6,000 in 1879, over $3,000 in 1880, and over $1 ,700 in 1881. Mre. Pickrell's fixed income was $1,000 ayearfrom rents of her own prop- erty, which, after the death of her husband in May, 1879, was regularly paid over to Mr. Hume. She testifies that she told Hume that "he could use all that I fshel had for his own 248 IJENEFICIARIES. and his family's beneiit, and that he could use it for anything lie thought best;" that she had out of it herself from $200 to $250 a year from the death of Pickrell, in May, 1879, to that of Hume, in October, 1881; and that before his death Mr. Hume informed his wife and herself that he had insured his life for Mrs. Hume's benefit, but did not state where the premium money came from. Blackford, agent for the Maryland company, testified, under objection, that Hume told him in Feb- ruary, 1881, that certain means had been placed in his hands, to be invested for his wife and children, and he had concluded to take $10,000 in Blackford's agency, and should, some months later, take $10,000 in the Connecticut Mutual. He accordingly took the $10,000 in the Maryland, and subse- quently, during the summer, informed Black- ford that he had obtained the insurance in the Connecticut Mutual. Evidence was also ad- duced that Mr. Hume was largely indebted toPickrell'e estate, by reason of indorsements of his paper by Pickrell, and the use by him in raising money of securities belonging to the latter, and that said estate is involved in litigation, and its ultimate value problemat- ical, Ihe causes were ordered to be heard in the first instance at a general term of the su- preme court of the District of Columbia; which court, after argument, on the 5th day of January, 1885, decreed that the adminis- trators should recover all sums paid by Thomas L. Hume as premiums on all said policies, including those on the Virginia pol- icy from 1874; and that, after deducting said premiums, the residue of the money paid into court (being that received from the Maryland and the Connecticut Mutual) be paid to Mrs. Hume individually, or as guardian for herself and children ; and that the Hartford Life & Annuity Company pay over to her the amount due on the certificates issued by it. From this decree the said Central National Bank, Benjamin U. Keyser, the Farmers' & Me- chanics' Ifational Bank of Georgetown, George W. Cochran, and the administrators, as well as Mrs. Hume, appealed to this court, and the cause came on to be heard here upon these cross-appeals. W. D. Daoidye, R. Ross Perry, and Regi- nald Fendall, for Central National Bank. J. 8. Edwards and Job Barnard, for George W. Cochran. Enoch Totten and/. S. Gor- don, for Annie G. Hume. Mr. Chief Justice FULLER, after stating the facts as above, delivered the opinion of the court. No appeal was prosecuted from the decree of January 4, 1883, directing the amount due upon the policy issued by the Life Insurance Company of Virginia to be paid over to Mrs. Hume for her own benefit and as guardian of her children, nor is any error now assigned to the action of the court in that regard. In- deed, it is conceded by counsel for the com- plainants that this contract was perfectly valid as against the world, but it is insisted that, assuming the proof to establish the insolvency of Hume in 1874 and thencefor- ward, the premiums paid in that and the subsequent years on this policy belonged in equity to the creditors, and that they were entitled to a decree therefor, as well as for the amount of the Maryland and Connecticut policies, and the premiums paid thereon. It is not denied that the contract of the Mary- land Insurance Company was directly be- tween that company and Mrs. Hume, and this is, in our judgment, true of that of the Connecticut Mutual, while the Hartford company's certificates were payable to her, if living. Mr. Hume having been insolvent at the time the insurance was effected, and having paid the premiums himself, it is argued that these policies were within the provisions of 13 Eliz. c. 5, and inure to the benefit of his creditors as equivalent to transfers of prop- erty with intent to hinder, delay, and de- fraud. The object of the statute of Eliza- beth was to prevent debtors from dealing with their property in any way to the preju- dice of their creditors; but dealing with that which creditors, irrespective of such dealing, could not have touched, is within neither the letter nor the spirit of the statute. In the view of the law, credit is extended in reli- ance upon the evidence of the ability of the debtor to pay, and in confidence that his pos- sessions will not be diminished to the preju- dice of those who trust him. This reliance is disappointed, and this confidence abused, if he divests himself of his property by giv- ing it away after he has obtained credit. And where a person has taken out policies of insurance upon his life for the benefit of his estate, it has been frequently held that, as against creditors, his assignment, when in- solvent, of such policies, to or for the benefit of wife and children, or either, constitutes a fraudulent transfer of assets witl^i,n the statute; and this, even though the^debtor may have had no deliberate intentipii'of de- priving his creditors of a fund to whiqh they were entitled, because his act has in point of fact withdraw^n such a fund from them, and dealt with it by way of bounty. Free- man V.Pope, L. E. 9 Eq. 206, L. R. 5 Ch. 538. The rule stands upon precisely the same ground as any other disposition of his prop- erty by the debtor. The defect of the dis- position is that it removes the property of the debtor out of the reach of his creditors. Cornish v. Clark, L. B, 14 Eq, 189. But the rule applies only to that which the debtor could have made available for payment of his debts. For instance, the exercise of a gen- eral power of appointment might be fraudu- lent and void under the statute, but not the exercise of a limited or exclusive power; be- cause, in the latter case, the debtor never had any interest in the property himself which could have been available to a creditor, or by which he could have obtained credit. May, Fraud. Conv. 83. It is true that creditors can obtain relief in respect to a fraudulent BENEFICIARIES. 249 conveyance where the grantor cannot, but that relief only restores the subjectioh of the debtor's property to the payment of his in- debtedness as it existed prior to the convey- ance. A person has an insurable interest in his own life for the benefit of his estate. The contract affords no compensation to him, but to his representatives. So the creditor has an insurable interest in the debtor's life, and can protect himself accordingly, if he so chooses. Marine and fire insurance is con- sidered as strictly an indemnity; but while this is not so as to life insurance, which is simply a contract, so far as the company is concerned, to pay a certain sum of money upon the occurrence of an event which is sure at some time to liappen, in considera- tion of the payment of the premiums as stip- ulated, nevertheless the contract is also a contract of indemnity. If the creditor in- sures the life of his debtor, he is thereby in- demnified against the loss of his debt by the death of the debtor before payment, yet if the creditor keeps up the premiums, and his debt is paid before the debtor's death, he may still recover upon the contract, which was valid when made, and which the insurance com- pany is bound to pay according to its terms; but if the debtor obtains the insurance on the insurable interest of the creditor, and pays the premiums himself, and the debt is extinguished before the insurance falls in, then the proceeds would go to the estate of the debtor. Knox v. Turner, L. R. 9 Eq. 155. The wife and children have an insur- able interest in the life of the liusband and father, and if insurance thereon be taken out by him, and he pays the premiums and sur- vives them, it might be reasonably claimed, in the absence of a statutory provision to the contrary, tliat the policy would inure to his estate. In Insurance Co. v. Palmer, 42 Conn. 60, the wife insured the life of the husband, the am )unt insured to be payable to her if she su'vived him; if not, to her children. The wife and one son died prior to the hus- band, the son leaving a son surviving. The court held that, under the provisions of the st-atute of that state, the policy being made payable to the wife and children, the children immediately took such a vested interest in the policy that the grandson was entitled to his father's share, the wife having died be- fore the husband; but tliat, in the absence of the statute, "it would have been a fund in the bands of his representatives for the ben- efit of the creditors, provided the premiums had been paid "by him." So in the case of Anderson's Estate, 85 Pa. St. 202, A. insured ills life in favor of his wife, who died intes- tate in his life-lime, leaving an only child. A. died intestate and insolvent, the child sur- viving, and the court held that the proceeds of the policy belonged to the wife's estate, and, under the intestate laws, was to be dis- tributed share and share alike between her child and her husband's estate, notwithstand- ing, under a prior statute, life insurance taken out for the wife vested in her free from the claims of the husband's creditoi-s. But if the wife had survived she would have taken the entire proceeds. We think it cannot be doubted that in the instance of contracts of insurance with a wife or children, or botli, upon their insurable in- terest in the life of the husband or father, the latter, while they are living, can exercise no power of disposition over the same witii- out their consent, nor has he any interest tlierein of wliich he can avail himself, nor upon his death have his pei-sonal representa- tives or his creditors any interest in the pro- ceeds of such contracts, which belong to the beneficiaries, to whom they are payable. It is indeed the general rule that a policy, and the money to become due under it, belong, the moment it is issued, to the person or per- sons named in it as the beneficiary or bene- ficiaries; and that there is no power in the person procuring the insurance, by any act of his, by deed or by will, to transfer to any other person the interest of the person named. Bliss, Ins. (2d Ed.) 517; Glanz v. Gloeck- ler, lOBradw. 486, per McAllisteb, J. ; Id., 104 111. 573; Wilburn v. Wilburn, 83 Ind. 55; Kicker v. Insurance Co., 27 Minn. 193, 6 N. W. Eep. 771; Insurance Co. v. Branti 47 Mo. 419; Gould v. Emerson, 99 Mass. 154; In- sui-ance Co. v. Weitz, Id. 157. This must ordinarily be so where the con- tract is directly with the beneficiary; in re- spect to policies running to the person in- sured, but payable to another having a direct pecuniary interest in the life insured; and where the proceeds are made to inure by pos- itive statutory provisions. Mrs. Hume was confessedly a contracting party to the Mary- land policy; and, as to the Connecticut con- tracts, the statute of the state where they were made and to be performed explicitly provided that a policy for the benefit of a married woman shall inure to her separate use or that of her children; but, if the an- nual premium exceed $300, tlie amount of such excess shall inure to the benefit of the creditors of the person paying the premiums. The rights and benefits given by the laws of Connecticut in this regard are as much part of these contracts as if incorporated therein, not only because they are to be taken as if entered into tliere, but because there was the place of performance, and the stipulation of the parties was made with reference to the laws of that place. And if this be so as be- tween Hume and the Connecticut companies, then he could not have at anytime disposed of these policies without the consent of the ben- eficiary ; nor is there anything to the contrary in the statutes or general public policy of the District of Columbia. It may very well be that a transfer by an insolvent of a Connec- ticut policy, payable to himself or his per- sonal representatlNes, would be held invalid in that district, even though valid under the laws of Connecticut, if the laws of the dis- trict were opposed to the latter, because the positive laws of the domicile and the forum 250 BENEFICIARIES. must prevail; but there is no such conflict of laws in this case, in respect to the power of disposition by a person procuring insurance payable to another. The obvious distinction between the trans- fer of a policy taken out by a person upon his insurable interest in his own life, and payable to himself or his legal representa- tives, and the obtaining of a policy by a per- son upon the insurable interest of his wife and children, and payable to them, has been repeatedly recognized by the courts. Thus in Elliott's Appeal, 50 Pa. St. 75, where the policies were issued in the name of the Iius- band, and payable to himself or his personal representatives, and w^hile he w;is insolvent were by him transferred to trustees for his wife's benefit, the supreme court of Pennsyl- vania, while holding such transfers void as against creditors, say; "We are to be under- stood in thus deciding this case that we do not mean to extend it to policies effected with- out fraud, directly and on their face for the benefit of the wife, and payable to her; such policies are not fraudulent as to creditors, and are not touched by this decision." In the use of the words "without fraud," the court evidently means actual fraud partici- pated in by all parties, and not fraud inferred from the mere fact of insolvency; and, at all events, in McCutcheon's Appeal, 99 Pa. St. 137, the court say, referring to Elliott's Ap- peal : " Tiie policies in that case were effected in the name of the husband, and by hira transfeiTed to a trustee for his wife at a time when he was totally insolvent. They were held to be valuable choses in action, the property of the assured, liable to the pay- ment of his debts, and hence their voluntary assignment operated in fraud of creditors, and was void as against them under the stat- ute of 13 Eliz. Here, however, the policy was effected in the name of the wife, and in pointof fact was given under an agreement for the surrender of a previous policy for the same amount, also issued in the wife's name. * * * The question of good faith or fraud only arises in the latter case; that is, when the title of the beneficiary arises by assign- ment. When it exists by force of an original issue in the name or for the benefit of the beneficiary, the title is good, nothwithstand- ing the claims of creditors. * * * There is no anomaly in tliis, nor any conflict with tlie letter or spirit of the statute of Elizabeth, because in such cases the policy would be at no time the property of the assured, and hence no question of fraud in its transfer could arise as to his creditors. It is only in the case of the assignment of a policy that once belonged to the assured that the ques- tion of fraud can arise under this act. " And see Bank v. Insurance Co., 24 Fed. Rep. 770; Pence v. Makepeace, 65 Ind. 347; Succession of Hearing, 26 La. Ann. 326; Stigler's Ex'r V. Stigler, 77 Va. 163; Thompson v. Cundiff, II Bush, 567. Conceding, then, in the case in hand, that Hume paid the premiums out of bis own money, when insolvent, yet, as Mrs. Hume and the children survived him, and the con- tracts covered their insurable interest, it is difficult to see upon what ground the credit- ors, or the administrators as representing them, can take away from these dependent ones that which was expressly secured to them in the event of the death of their nat- ural supporter. The interest insured was neither the debtor's nor his creditors'. The contracts were not payable to the debtor, or his representatives, or his creditors. No fraud on tlie part of the wife, or the children, or the insurance company is pretended. In no sense was there any gift or transfer of the debtor's property, unless the amounts paid as premiums are to be held to constitute such gift or transfer. This seems to have been the view of the court below, for the decree awarded to the complainants the premiums paid to the Virginia Company from 1874 to 1881, inclusive, and to the other companies from the date of tlie respective policies; amounting, with interest, to January 4, 1883, to the sum of $2,696.10, which sum was di- rected to be paid to Hume's administrators out of the money which had been paid into court by the Maryland and Connecticut Mut- ual Companies. But, even though Hume paid this money out of his own funds when insolvent, and if such payment were within tlie statute of Elizabeth, this would not give the creditors any interest in the proceeds of tlie policies, which belonged to the beneficia- ries for the reasons already stated. Were the creditors, then, entitled to re- cover the premiums? These premiums were paid by Hume to the insurance companies, and to recover from them would require proof that the latter participated in the al- leged fraudulent intent, which is not claimed. Cases might be imagined of the payment of large premiums, out of all reasonable propor- tion to tlie known or reputed financial condi- tion of the person paying, and under circum- stances of grave suspicion, which might jus- tify the inference of fraud on creditors in the withdrawal of such an amount from the debtor's resources; but no element of that sort exists here. The premiums form no part of the proceeds of the policies, and can- not be deducted therefrom on that ground. Mrs. Hume is not shown to have known of or suspected her husband's insolvency, and if the payments were made at her instance, or with her knowledge and assent, or if, with- out her knowledge, she afterwards ratified the act, and claimed tlie benefit, as she might rightfully do, (Thompson v. Ins. Co., 46 N. Y. 675,) and as she does, (and the same re- marks apply to the children,) then has she thereby received money which ex cequo et bono she ought to return to her husband's creditors; and can the decree against her be sustained on that ground? If in some cases payments of premiums might be treated as gilts inhibited by the statute of Elizabeth, can they be so treated here? It is assumed by complainants that the BENEPIOIABIES. 251 money paid was derived from Hume him- self, and it is therefore argued that to that «xtent his means for payment of debts were impaired. That the payments contributed in any appreciable way to Hume's insolv- •ency, is not contended. So far as premiums were paid in 1880 and 1881, (the payments prior to those years having been the annual «um of $196.18 on the Virginia policy,) we are satisfied from the evidence that Hume received from Mrs. Pickrell, his wife's motli- er, for the benefit of Mrs. Hume and her family, an amount of money largely in excess ■of these payments, after deducting what was returned to Mrs. Pickrell ; and that, in pay- ing the premiums upon procuring the pol- ii-ies in the Maryland and the Connecticut Mutual, Hume was appropriating to that purpose a part of the money which he con- sidered he thus held in trust; and we think that, as between Hume's creditors and Mrs. Hume, the money pl;iced in Hume's hands for liis wife's benelit is, under the evidence, ■equitably as much to Ije accounted for to her by Hume, and so by them, as is the money paid on her account to be accounted for by her to him or them. We do not, liowever, dwell particularly upon this, nor pause to discuss the bearing of tlie laws of the states of the insurance companies upon this matter of the payment of premiums by the debtor himself, so far as they may differ from the rule which may prevail in the District of Columbia, in the absence of specific statutory enactment upon that subject, because we prefer to place ■our decision upon broader grounds. In all purely voluntary conveyances it is the fraudulent intent of the donor which vitiates. If actually insolvent, hf is held to knowledge ■of his condition; and if the necessary conse- quence of his act is to hinder, delay, or de- fraud his creditors, within the statute, the presumption of the fraudulent intent is irre- bnttable and conclusive, and inquiry into his motives is inadmissible. But the circum- stances of each particular case slioiild be con- sidered, as in Partridge v. Gopp, 1 Eden, 1(53, Amb. 596, wliere the Lord Keeper, while holding that debts must be paid before gifts jire made, and debtors must be just before they are generous, admitted that "the fraud- ulent intent might be collected from the magnitude and value of the gift." Where fraud is to be imputed, or the imputation of fraud repelled, by an examination into the circumstances under which a gift is made to those towards whom the donor is under nat- ural obligation, the test is sad, in Kipp v. Hanna, 2 Bland, 33, to he the pecuniary abil- ity of the donor at that time to withdraw the amount of the donation from his estate with- out the least hazard to his creditors, or in any material degree lessening their then prospects of payment; and, in considering the suflBciency of the debtor's property for the payment of debts, the probable, immediate, unavoidable, and reasonable demands for the support of the family of the donor should be taken into the account and deducted, having in mind also the nature of his business and his necessary expenses. Emerson v. Beinis, 69 111. 541. This argument in the interest of creditors concedes that the debtor may riglitfuUy preserve his family from suffering and want. It seems to us that the same public policy which justifies this, and recog- nizes the support of wife and children as a positive obligation inlaw as well as morals, should be extended to protect them from des- titution after the debtor's death, by permit- ting him, not to accumulate a fund as a per- manent provision, but to devote a moderate portion of his earnings to keep on foot a se- curity for support already, or which could thereby be, lawfully obtained, at least to the extent of requiring that, under such circum- stances, the fraudulent intent of both parties to the transaction should be made out. And inasmuch as there is no evidence from which such intent on the part of Mrs. Hume or the insurance companies could be inferred, in our judgment none of these premiums can be recovered. The decree is affirmed, except so far as it directs the payment to the administrators of the premiums in question and interest, and, as to that, is reversed, and the cause re- manded lo the court below, with directions to proceed in conformity with this opinion. Ordered accordingly. WEST PUBL,13HiHa CO., PRIMTKBfl AHB BTKRKOTYPEES, ST. PACTli, MINK. Date Due Ubruy Bursal lC«t. No. 1137 KF 1164 ihS Author Vol. Elliott, Charles Burke Title An outline of the law of copy insurance . . . Date Borrower's Name isas