(9ortt?U Slam ^rlynol Slihtar^ Cornell University Library KF 1196.C62 1905 V.2 The law of fire insurance / 3 1924 019 307 994 The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924019307994 THE LAW OF FIRE INSURANCE GEORGE A. gLEMENT OF THE NEW VORK BAR EDITOR OF THE NEW YORK ANNOTATED CODE OF CIVIL PROCEDURE AND FIRE INSURANCE DIGEST IN TWO VOLUMES. VOL. I AS A VALID CONTRACT IN EVENT OF FIRE AND ADJUST- MENT OF CLAIMS THEREUNDER. VOL. II AS A VOID CONTRACT, AND IN BOTH VOLUMES THE CONDITIONS OF THE CONTRACT AS AFFECTED BY CONSTRUCTION, WAIVER, OR ESTOPPEL. INCLUDING MISCELLANEOUS PROVISIONS, AND AN ANALYSIS AND COMPARISON OF THE VARIOUS STANDARD FORMS, ALL REDUCED TO RULES, WITH THE RELE- VANT STATUTORY PROVISIONS OF ALL THE STATES. VOL. IL NEW YORK BAKER, VOORHIS & COMPANY 1905 Copyright, 1905, By GEORGE A. CLEMENT. J. B. LYON COMPANY PRINTERS AND BINDERS ALBANY, ti. Y. PREFACE-Vol. 2. This volume completes the treatment of the subject of fire insurance, taking as a basis the conditions of the standard forms or of the contract specifically declaring the agreement to be void, and adding a separate chapter covering the miscel- laneous provisions and other matters not elsewhere treated. The same plan is followed as in the first volume, and the two volumes together furnish a convenient, practical, and useful means of comparing and ascertaining the fundamental rules and principles now governing the special subject in all parts of the United Stated and the (^fference of opinion, if any, among the judges or courts. The rules under the special provision or condition which may be under consider- ation as affected by construction, waiver, or estoppel, read in connection with the rules under the chapter or title "Agents," together with the general rules under " Construction " and " Waiver or Estoppel " in the first volume, and the statutory provisions of the particular State, will demonstrate the practi- cal value of the entire work. There is a separate index to each vohmie, and a combined index to both volumes. These, together with the table of contents preceding each volume, will afford a ready means of reference to what may be desired. The first volume has been revised, altered, and reprinted, so that both volumes are now up to date. The cases and statutes have been inserted in both volumes as published or amended to about the 15th of August, 1905. Attention is called to the preface to the first volume as reprinted where the general plan and scope of the entire work is more fully explained. ISTew Yokk^ September, 1905. GEORGE A. CLEMENT. [iii] TABLE OF CONTENTS-Vol. 2. CHAPTER FIRST. PAGE. Concealment 1 EuLE 1. As imposed by contract 3 2. Effect of no written application and no inquiry — When chargeable with intentional conceal- ment 3 3. Oral application without inquiry — Waiver — Exception 4 4. When insured bound to make disclosure though no inquiry is made — Concealment not as- sumed 4 5. Effect of defective written application 5 6. No concealment when company has knowledge or is put upon inquiry 6 7. Effect of insured's knowledge of material fact. . 6 8. Must be material — Question of fact or law — Burden of proof 7 9. Test of materiality — Effect of inquiries 8 10. Evidence as to rate of premium 8 11. Concealment by insured's agent or broker; 9 13. Effect of concealment by owner acting as agent for mortgagee 9 13. Withholding information as to interest or title — Question of fact — Effect of warranty .... 9 14. When company put upon inquiry as to interest. . 11 15. No concealment as to value 11 16. Effect of a diagram as concealment 13 CHAPTER SECOND. Misrepresentation 13 EuLE 1. As imposed by contract 13 3. Eepresentation distinguished from warranty. ... 15 3. Eepresentations basis of insurance — Effect of falsity 15 [V] vi Table of Contents. PAGE. EuLE 4. Eepresentation relates to past or existing fact — If promissory, should be inserted in contract. . 16 5. When insured bound by written anplication 16 6. Effect of filling up an application by company's agent — Insured responsible for his own mis- statements 17 7. Misrepresentation not predicated on defective an- swers in application 18 8. Misrepresentation may be evidenced by written description furnished to fill up policy 18 9. When insured not bound by verbal representa- tions 18 10. Influence of misrepresentations not assumed ... 19 11. No misrepresentation when company knows facts. 19 12. Expression of opinion or belief 30 13. Whether statement an opinion or representation of fact, question for jury 20 14. Misrepresentation by insured's agent 20 15. Must be material — Question of fact — Burden of proof — Evidence 21 16. Eate of premium as evidence 23 17. Effect of company being put upon inquiry as to interest or title 23 18. When representation as to interest or title material 24 19. When no misrepresentation as to interest or title. 24 20. Eepresentation as to construction or situation of building — When question of law 25 21. When no misrepresentation as to building or other subject of insurance 26 22. Eepresentation as to other insurance 27 23. Eepresentation of incumbrance 27 24. Eepresentation as to value 28 25. Contract severable 29 CHAPTER THIRD. Warranty 30 EuLE 1. As imposed by contract 32 2. What construed as a warranty 33 Table op Contents. vii PAGE. EuLB 3. Express warranty and effect — Distinction be tween warranty and representation — Not affected by good or bad faith 35 4. Test of warranty by construction 36 5. As affected by construction — ^ Ambiguity 36 6. When construction of warranty affected by usage or custom — Question of fact 37 7. When insured entitled to return of premium. ... 38 8. Effect of new agreement to pay a loss 38 9. Burden of proof 39 10. Burden of proof — Sprinkler system 39 11. Contract severable 39 13. Eule 1 applies to paper independent of policy. . . 40 13. Application made part of contract, both must be proved 40 14. Conflict between written application made part of policy and printed condition 41 15. When statements in application are warranties — Construction 41 16. Incomplete or uncertain statements 42 17. Construction of questions in written application. 43 18. When insured bound by application 44 19. Written application and policy niust be con- strued together — Application may limit or qualify warranty 45 30. Effect of fraud — Insured responsible for his own misstatements in a written application — ■ Whether bound or not, question of fact — Pre- sumption 46 31. Agent of company in taking and iilling up writ- ten application responsible for misstatements — Evidence — Question for jury 47 22. Broker agent of insured in filling up written ap- plication 50 33. Effect of statute requiring written application to be incorporated in policy 51 24. Statutory requirements must be complied with. . 51 25. Defective copy, summary, or abstract, not ac- cepted as substitute 52 36. When warranty established, no question as to ma- teriality 53 37. Effect of statute requiring examination of prop- / erty before policy issues 54 viii Table of Contents. PAGE. EuLE 28. Knowledge of company when policy issues may be element of estoppel • • 5-t 39. Mere knowledge by company does not relieve in- sured — Must be elements of estoppel or fraud. 55 30. Admissibility of parol evidence 57 31. Knowledge of broker or agent of insured 57 33. Waiver as applicable to a promissory warranty. . 57 33. Waiver by agent after issue of policy 53 34. Eelating to situation, condition, or occupation of building — Construction — Ambiguity 59 35. Building as affected by description GO 36. Effect of warranty as to occupation — Breach by tenant 60 37. When breach as to occupation 01 38. Warranty as to distance of buildings 61 39. Distinction between affirmative and promissory warranties — Latter not created by implica- tion or construction — Promissory warranty must be complied with 62 40. Compliance with and construction of promis- sory warranty — Question of fact or law 64 41. When insured has reasonable time to comply with promissory warranty — Question of fact or law 64 43. Construction of promissory warranty, building in course of erection — Mill run only part of the year j . . . 65 43. Promissory warranty as affected bv impossibility of exact performance 65 44. Construction of " detached " — Effect of specific statement as to exposure 66 45. Application of warranty to new location 67 46. Construction of statement as to occupation as affected by condition when policy issues 67 47. Construction of warranty as to watchman 67 48. Limitation as to construction of warranty as to watchman — Effect of possession by sheriff .... 69 49. Ambiguous or doubtful statements as to watch- man 69 50. Warranty as to watchman not created nor ex- tended by construction 70 51. When insured has reasonable time to comply. ... 71 52. Warranty of no regular watchman 71 Table of Contents. ix PAGE. EuiiE 53. When compliance with warranty as to watch- man question of fact 71 54. Warranty as to clear space 72 55. Statements as to value 73 56. Incendiary fire — Other insurance 73 57. Warranty as to interest, title, lien, or incum- brance 74 53. Construction of various warranties as to interest or title 75 59. Construction of other various warranties 77 CHAPTER FOURTH. Other Insurance 79 EuLE 1. As imposed by contract 81 2. Condition as to other insurance reasonable and enforced '. 83 3. What constitutes double insurance 83 4. Joint and several interests , 84 5. EfEect of violation of condition — Estoppel — Voidable 85 6. Construction of the word " insured " 85 7. Insurance resulting from oneration of law with- out design — Evidence — Parol contracts — Unaccepted or rejected policy 86 8. Delivery of policy upon condition — As affected by cancellation 87 9. Effect of noncompliance with statute 87 10. Motive of insured immaterial 88 11. Other insurance effected at same time 88 12. Effect of binder or certificate of temporary in- surance 88 13. Effect of insufScient parol contract of insurance . 89 14. Insurance in excess of permitted amount 89 15. Effect of blank permission for other insurance. . 90 16. Interest of mortgagor and mortgagee 90 17. Insurance of vendee's interest 91 18. Other insurance must be by consent or authority of insured — Act of mortgagee 92 19. Cancellation and substitution without author- ity — Election — Waiver or estoppel 93 20. Substitution without authority ,. 94 X Table of Contents. PAGE. EuLE 21. Attempted ineffective cancellation and substitu- tion 94 23. Policy never delivered or accepted as substitute. 94 23. Insured bound by his own act in obtaining other insurance 95 34. Insured must be consistent in repudiation — Eatification of unauthorized act 95 25. Effect of permission for other concurrent insur- ance — Distinction between a requirement and permission — Eepresentation — Warranty ... 96 26. Construction of word " concurrent" 98 27. Meaning of word " concurrent " 98 28. Construction of permission for concurrent in- surance 99 29. Same subject — When permits other insurance. 30. Same subject — Amount left blank 1 31. Same subject — Amount left blank — Addi- tional insurance not permitted , . 100 32. Effect of difference in_ form 100 33. Effect of a coinsurance'clause as consent to other insurance 100 34. As between a first and second policy. . . .i 101 35. Distinction between void and voidable insur- ance 102 36. As affected by question of validity 103 37. Construction and object of insertion of the words " valid or not " 104 38. Effect of the words " valid or not " 105 39. Policy voidable only 106 40. Estoppel by issue and delivery of policy or re- newal with knowledge of facts 106 41. Issue and delivery of policy with knowledge does not operate as a waiver — Parol evidence .... 109 42. When knowledge of agent not that of the com- pany 109 43. Knowledge of company's soliciting agent — Authority — Question of fact 110 44. Effect of expression of intention to procure other insurance — Opinion of agent — Written con- sent Ill 45. Limitation upon agent's authority after, issue of policy — Authority must be shown 112 46. Estoppel after issue of the policy 114 47. Effect of alteration in form with knowledge of facts — Consent to assignment 116 Table of Contents. xi PAGE. Rule 48. Authority of agent — Presumption — Evidence. 116 49. Authority of clerk of company's agent — Evidence — Broker 117 50. Company not bound by broker's knowledge 117 51. Construction of written restriction 118 52. Agency in placing surplus line 118 53. Agency of company in obtaining policy from another company 119 54. When company estopped by silence and failure to cancel , 119 55. Same subject — Evidence 130 56. Effect of mere omission to cancel 131 57. Mutual mistake — Eeformation 131 58. Application of written permission for other in- surance 131 59. Effect of removal and merger of stock 133 60. Effect of renewal — Substitution 133 61. Contract severable 133 63. Evidence of other insurance 133 63. Burden of proof — Construction — Evidence — Question of fact or law 134 CHAPTER FIFTH. Relating to Interest or Title 135 TITLE I. Insurable Interest 135 EuLB 1. Must be alleged and proved — Exception — Pre- sumption 135 3. Eeason for necessity of allegation and proof of insurable interest — Not subject of waiver . . . 137 3. Test of insurable interest — Does not depend on title or possession — Equitable interest 137 4. May be representative as well as personal 138 5. Existence of an insurable interest no answer to violation or breach of conditions in policy. . . 139 6. Effect of adjudication in bankruptcy 139 7. Pleading and evidence 139 8. Who has an insurable interest 130 9. When no insurable interest 136 xii Table of Contents. TITLE II. FAOE. Statement of Interest 137 EuLE 1. As imposed by contract i 138 2. Good faith required — Effect of misstatement as to title 138 3. Construction of language in policy applicab% to interest — Pafol evidence 139 •4. Construction of word " insured " 140 5. Application of the word " property " 140 6. Effect of making loss payable to third party — Policy issued to two jointly 140 7. Effect of mortgages, judgments, or liens — No inquiries 141 8. True statement in application sufficient 14^^**^ 9. Company put upon inquiry by ambiguous answer in written application 142 10. Issue of policy without application or repre- sentation 143 11. When insured may state property to he " his " . . 143 12. Individual doing business in iirm or corporate name — Void court order — Property held by third party as security 144 13. Tenant or created by lease — Executory con- tract 145 14. Estoppel by issue of policy with knowledge of facts 145 15. Estoppel in conduct of company's soliciting agent 146 TITLE III. Interest other than Unconditional and Sole Ownership. 146 EuLE 1. As imposed by contract 148 2. Breach of condition forfeits insurance — Effect of written description — Evidence 143 3. Otherwise provided by written description 150 4. An insurable interest no answer to breach of the condition 150 5. Meaning of unconditional and sole ownership — Construction 151 6. When ownership sole and unconditional 152 7. Eequisites of unconditional and sole 153 Table of Contents. xiii PAGE. KuLE 8. Test of sole unconditional ownership 153 9. Several parties may together be sole and uncon- ditional owner 153 10. Clause applies to ownership when policy issues. . 153 •> 11. When no written application and no inquiry — Presumption 154 12. Insurance company may rely upon conditions in policy — Not necessary to make inquiry as to title 155 13. Effect of acceptance of policy by insured — Not affected by omission to make inquiry 156 14. When company put upon inquiry by ambiguous answer in written application 156 15. Distinction between interest and title — Equi- table interest — - Construction of interest 157 16. Ownership of property described in general words as a class or kind 160 17. Partnership interest 160 18. Admission of third party as a partner 161 19. Policy on "use and occupancy" — -Effect of pooling arrangement 162 20. Deed intended as a mortgage — A deed must be delivered — Effect of recording 162 21. Words added to deed after execution may present a question of fact as to spoliation 163 22. When insured sole and unconditional owner though title defective — Equitable interest. . . 163 23. Instrument creating interest as affected by fraud. 164 24. Mortgagee as insured 164 25. Effect of liens or incumbrances 164 26. Interest of vendee under an executory contract of sale 167 27. As tested by right to enforce specific performance — Assumption of loss 16.8 28. Effect of executory contract on ownership of vendor 1G9 29. Effect of option to purchase 169 30. Vendee of personal property under conditional contract of sale — Lessee of personal prop- erty 170 31. Waiver or estoppel — Parol evidence — Agents — Question of fact — Company not charge- able with knowledge of records 170 33. Knowledge of broker , 174 xiv Table of Contents. EuLE 33. Pleading — Evidence — Burden of Proof — Question of fact l'^4 34. Contract severable l'''^ 35. When insured sole and unconditional owner — Illustrative cases .".■■■■ ^'^^ 36. When the insured is not sole and unconditional owner — Illustrative cases 178 TITLE IV. Building on Ground not Owned in Fee Simple 180 EuLE 1. As imposed by contract 181 3. Violation of condition voids policy — Burden of proof 182 3. Effect of written description 182 4. Presumption as to estate in fee 183 5. Equitable interest or title 183 6. Several individual interests insured may together amount to fee simple — When policy void .... 183 7. As dependent upon delivery and record of a deed. 184 8. Effect of conveyance or deed not signed by wife. 184 9. Effect of oral application and no inquiries 185 10. Duty of insured — Company not bound to in- quire — May rely upon conditions of the pol- icy ; 185 11. Company put upon inquiry by ambiguous answer in written application ,. . 186 12. When breach of condition 186 13. Leasehold interest .• 186 14. Partner may be owner in fee simple 187 15. Condition operative independent of statute gov- erning a written application 187 16. Effect of mortgagee clause ■ — Omission of in- sured not an " act or neglect " 188 17. Assignment of lease may be valid as against in- surance company though not consented to by lessor 188 18. Possession under an executory contract of sale. . 189 19. Waiver or estoppel in issue and delivery of pol- icy with knowledge of facts — Knowledge — Presumption 189 20. Policy as a written contract not affected by mere knowledge of company's agent 191 Table of Contents. xv TITLE V. PAGE. Incumbrance by Chattel Mortgage 191 EuLE 1. As imposed by contract. . . .1 192 3. Policy void or voidable ■ — ■ No question of good faith, concealment, or increase of risk — Burden of proof 194 3. Instrument must be legally operative — De- livery 195 4. Does not depend upon form — Liens — Con- struction 195 5. Application of rule admitting parol evidence. . . 196 6. Chattel mortgage bv one partner to another. . . . 197 7. Stocks of merchandise and the like 197 8. Effect of description of property as held in trust or sold but not delivered 197 9. If policy voided subsequent release or discharge does not revive it 198 10. As afEected by payment or discharge 198 11. Existence of chattel mortgage renders policy void — Omission to make inquiry cannot strike out provision of policy 199 13. Duty of insured — Insurance company not bound to inquire — May be put upon inquiry. 199 13. Effect of issue of policy upon oral application vfithout inquiry 200 14. Waiver or estoppel in issue and delivery of pol- icy — When chargeable with knowledge — Newspapers ■ — Public records — Collusion and fraud 301 15. Substitution of one mortgage for another- — As affected by decrease or increase in amount — Change in form 303 16. Duty of insured to procure written consent — Oral promise of agent insufficient 304 17. Contract severable 204 TITLE VI. Foreclosure or Notice of Sale 305 EuLE 1. As imposed by contract ■• ■ 306 3. Violation of condition voids policy 307 xvi Table op Contents. PAGE. EuLE ' 3. Effect upon moral risk — What regarded as com- mencement of proceedings 208 4. Knowledge of insured — Commencement 308 5. Provision has reference to future — Condition subsequent 309 6. Mortgagee protected by mortgagee clause 309 7. Policy void as to both insured owner and mort- gagee to whom loss payable 310 8. Effect of making loss payable to mortgagee. . . . 310 9. Action bv mortgagee to whom loss is made pay- able . ." ; 311 10. To what foreclosure proceedings refer 311, 11. Effect of making loss payable to third party 312' 13. Proceedings mean judicial proceedings 312 13. Effect of advertising for sale under deed of trust 212 14. Meaning and application of the phrase "notice given of sale " 313 15. Waiver or estoppel when policy issues 213 16. No waiver after issue of policy. 214 17. When insured not bound by notice of limitation upon agent's authority 215 18. Omission to cancel as evidence of estoppel 315 19. Insured must be misled as element of estoppel. . 316 TITLE Vn. Change in Interest, Title, or Possession 316 EuLE 1. As imposed by contract 217 2. Provision material and reasonable — Enforced.. 321 3. Condition subsequent — Burden of proof 231' 4. Distinction between interest and title — Part- nership — When no distinction 222 5. Meaning of the word "interest" — Interest in land 222 6. Effect of written description 223 7. Notice of change not sufBcient — Duty of in- sured to procure written consent 323 8. Application of clause "except change of occu- pants without increase of hazard " — Question of fact 234 9. Meaning of " sale or transfer" 224 10. Change of title increasing interest 335 Table of Contents. xvii PAGE. EuLE 11. Effect of insured parting with all his interest — Application of the word " interest " 226 12. Effect of consent to change, in interest 226 13. Construction of word " sold " in Massachusetts standard form 227 14. Legal process to effect change in possession must be valid 229 15. No change in transfer of legal title to beneficial owner 229 16. Effect of consent to transfer — Cannot claim instrument void 230 17. Sale or mortgage of stocks of merchandise — Sale of same in bulk — Change in partner- ship 230 18. Sale or transfer by one partner to another part- ner — Parties insured may transfer as between themselves — Dissolution — Death — Taking in third party as partner 231 19. Effect of taking in partner with interest in profits only 233 30. Executory agreement between partnership in- sured and third parties to form corporation — Change from partnership to limited liability company , 233 21. Change by mortgage — Meaning of change — Title or possession — Interest 233 22. Chattel mortgage — Parol evidence — Chattel mortgage by one partner on firm property for individual benefit 235 23. Bill of sale must be delivered and accepted. . . . 236 24. Effect of executory contract of sale 237 25. Executory contract for sale and exchange of stock or goods 238 26. Change by deed — Delivery and acceptance — Eecord — Void deed . . . '. 238 27. Attornment of tenant to purchaser 241 28. Judicial sale — Redemption — Confirmation.... 241 29. Sale of real estate on execution — Eedemption . . 242 30. Partition — Sale — Confirmation 242 31. Sale under deed of trust — Confirmation 243 32. Lew by sheriff — Attachment — Possession by sheriff 243 33. Appointment of receiver — Eeceiver of partner- ship — Change of receiver 244 Vol. II.— ii xviii Table of Contents. PAGE. Edle 34. Void sale — Insured continuing in possession . . 245 35. Effect of adjudication in bankruptcy 345 36. Waiver or estoppel when policy issues. 346 37. Waiver or estoppel after issue of policy 347 38. Effect of consent to assignment of policy 348 39. Effect of making loss payable to third party. . . 349 40. Contract divisible 249 41. When eontraft not divisible 250 42. What is a change — Illustrative eases 350 43. What is not a change — Illustrative cases 253 TITLE VIII. Assignment of Policy 355 EuLE 1. As imposed by contract 356 3. Condition valid and reasonable — Violation voids the policy — Written consent may be on separate paper to be attached 358 3. Duty of assignee to procure written consent of the company — Estoppel 359 4. Effect of company's consent to assignment — Waiver 359 5. Assignment need not be in writing unless re- quired by statute 260 6. Assignment of policy not dependent upon form — Question of intention 361 7. Assignment not inferred 261 8. Loss made payable to assignee — Must be evi- dence of knowledge and intent — Effect of making loss payable to third party — Sale of property does not include policy 361 9. An assignment of the policy and sale or transfer of the propertv are distinct and independent — Both must be consented to 263 10. While both assignment of policy and transfer of property must be consented to, immaterial as to order in time 264 11. Effect of company's consent to assignment of policy 264 13. Assignee must have insurable interest 365 13. Assignee of policy takes it subject to conditions, 366 14. Assignment with consent of company to pur- chaser of property — Effect '. 266 Table oe Contents. xix PAGE. EuLE 15. Assignment may be made condftional 268 16. One of several insured may assign his interest. . 268 17. Effect of general assignment for benefit of cred- itors 269 18. Effect of adjudication in bankruptcy 26d 19. Eule as to statement of interest inapplicable to assignment of policy 269 20. Assignor of policy no power to impair validity of policy ' 270 21. Insured cannot acquire claim under void policy by assignment from mortgagee 270 22. Assignment as between partners 271 23. Assignment as security or collateral 271 24. Eight of assignment 272 25. Effect of assignment as security — Lien 273 26. When assigned as security subject to violation of conditions by assignor 273 27. Assignment by mortgagee 274 28. Assignment after loss 274 29. Effect of assignment after loss to a trustee 275 30. Assignment after loss induced by false repre- sentation 276 31. Assignment after fire includes right to reforma- tion , 276 CHAPTER SIXTH. Relating to Use or Occupation 377 TITLE I. Operation of Manufacturing Establishment 277 Eule 1. As imposed by contract 278 2. Violation of condition voids policy — Not re- vived by subsequent operation — Policy may be suspended by special provision 280 3. Provision as to limitation of night work sub- stantial 280 4. What is a manufacturing establishment 280 5. Establishment not in operation when policy issues 281 XX Table of Coi^^tents. PAGE. Rule 6. Insured's custom does not relieve him of neces- sity of procuring consent of the insurance com- pany 282 7. As affected hy usage or custom 282 8. Temporary cessation of operation is not ceasing to operate ^82 9. Partial cessation of operation 283 10. .Stoppage of «aachinery is not of itself a ceasing to operate 283 11. When "a mill is " shut down '' — Opinion evi- dence 283 12. No cessation if premises continue same as when policy issues 284 13. Effect of permitted repairs and alterations 284 14. Keeping a watchman no answer to violation of condition 285 15. Construction affected hy character and use of property — Presumption as to knowledge of company 285 16. Waiver or estoppel when policy issues — After its issue — Effect of written permission to run nights 286 17. When policy not divisible 286 TITLE II. Increase of Hazard 387 EuLB 1. As imposed by contract 288 2. Violation of condition voids policy though fire caused by independent means 290 3. Change does not mean increase — Burden of proof 290 4. Condition has reference to future — Continua- tion of existing use 291 5. Knowledge or control essential element — Acts of tenant 291 6. Increase of risk as affected by time — Tempo- rary or permanent 293 7. Violation of condition renders policy void or voidable — Not merely suspended — Contract not revived by acts of insured 294 8. Pleasure of insured cannot legally be substituted for obligations of contract 295 9. Increase of risk temporarily suspends policy. .. 296 Table of Contents. xxi PAGE. EULE 10. Balancing or comparison of risk not admissible. 297 11. Effect of making ordinary repairs — Unauthor- ized alterations — Question of fact 398 12. Materiality of written application — Violation of specific permission as to nse of prohibited article 299 13. Effect of consent to removal to new location. . . . 300 14. As affected by other clauses or conditions in the policy — Application of clause against in- crease of hazard 300 15. Presumption as to assumption of risk 300 16. Construction of builder's risk. . . .' 301 17. Construction limited by existing or contemplated uses or occupation 301 18. Construction of words " increase of risk " 302 19. As affecting construction of warranty 302 20. Question of increase of risk as affected by acts in violation of law 303 21. Interest of mortgagee — Effect of mortgagee clause 303 22. No application to liens or judgments — May be question of fact 304 23. As affected bv rate of premium — Evidence — Test . . . /. 304 24. Opinion evidence — Experts 305 25. When expert testimony admissible 306 26. When policy not divisible 307 27. Waiver or estoppel 307 28. Knowledge or notice to company's agent after issue of policy no waiver 309 29. Effect of demand and receipt of additional pre- mium — Insured has reasonable time to com- ply with special condition 309 30. Pleading — Burden of proof 310 31. Increase of hazard may be question of law 310 32. No inferences in favor of an insurance company. 311 33. When proper to set aside verdict 313 34. Question of increase of hazard is ordinarily one of fact , 314 35. What recognized as a fact which may increase hazard — Illustrative cases 315 36. What is not an increase of hazard — Illustrative cases 316 xxii Table of Contents. TITLE III PAGE. Alterations or Repairs by Mechanics 318 EuLE 1. As imposed by contract 318 2. If condition violated policy rendered void with- out regard to any question of increase of risk. 320 3. Test of time substituted for former test of rea- sonableness — Change commendable 320 4. Permission limited to property described — Ad- mission of parol evidence — Construction of addition 321 5. Effect of permission for repairs and alterations. . 331 6. Limitation of special permission for alterations and repairs 322 7. Permission annlieable to building in course of erection ,. . . 323 8. Effect of carpenter's risk only 323 ' 9. Eisk must not be increased further than neces- sary 323 10. As affected by construction 324 11. Eepairs not extended by construction 324 12. Construction of the word " mechanics " 324 13. Application of permission or condition to ten- ants 325 14. When policy contains no condition as to repairs — Question of fact — Effect of special per- mission 325 15. Suspension of policy when hazard increased. . . . 326 16. Eemoval of automatic sprinkler equipment 326 17. Assignee of policy not affected by subsequent acts of grantor ; 327 18. Effect of condition against alteration by specific means 327 19. Expert evidence . . ' 327 20. Waiver or estoppel when policy issues 328 21. Oral agreement by agent to grant a permit inef- fectual 328 TITLE IV. Illuminating Gas or Vapor and Prohibited Articles 329 EuLE 1. As imposed by contract 331 2. Construction — Violation voids policy without regard to increase of risk or cause of fire. . . . 333 Table of Contents. xxiii PAGE. HuLB 3. Ignorance no excuse 334 4. Construction of the word " premises " 334 5. Construction of the words "kept and used on premises " 335 6. Construction of word " allowed " 335 7. Construction of parenthetical words in Eule 1 applicable to kerosene 335 8. Construction of the words " for lights and by daylight " 336 9. Reduced oil residuum of petroleum — Increase of hazard — Question of fact 336 10. Every occupation is not trade or manufacture — Usage and custom 337 11. Judicial notice — Effect of use of general words. 337 13. Construction of special permission or privilege. . 338 13. Special permit limited in time by its terms 338 14. Ordinary repairs 339 15. Use of gasoline without permission 339 16. Keeping in barn does not prevent forfeiture for use in dwelling 340 17. Keeping of gasoline not excused by abandonment of specific purpose 340 18. Rate of premium conveys no notice 340 19. Custom in use of gasoline for exhibition pur- poses 341 20. Contract ends when condition violated — Not re- vived without consent of the insurance com- pany 341 31. Occasional or temporary neccessary use — Re- pairs — Household purposes — Cleaning ma- chinery 343 22. Limitation of preceding rule 343 23. Written description construed as agreenient pro- viding otherwise . . 343 24. Effect of written description — Evidence — Risk of particular business , 344 25. Limitation of rule as to assumption of risk of particular business ... 347 26. A sale incidental to a business does not permit manufacture 347 27. Drawing of kerosene 348 28. Keeping of gunpowder 348 29. Effect of permission to be occupied for hazardous or extrahazardous purposes 348 xxiv Table of Contents. PAGK. EuLE 30. Usage or custom — Ambiguity in description. . . 349 31. Opinion evidence — Experts 349 33. Keeping or use by tenant 349 33. Waiver or estoppel when policy issues — After issue 350 34. Waiver as to use of small quantity not extended. 351 35. Burden of proof 351 36. Article may not be prohibited yet violate condi- tion as to increase of hazard — Question of fact 352 TITLE V. Vacant or Unoccupied 356 EuLE 1. As imposed by contract 358 2. Condition reasonable and binding 360 3. Condition subsequent — Burden of proof 360 4. Construction not governed by rules of a board of fire underwriters — Nor by those of the com- pany 361 5. Effect of action by board of underwriters 361 6. Not dependent upon insured's knowledge or con- trol, or that breach willful 363 7. Distinction between " vacant or unoccupied " and " vacant and unoccupied " 363 8. Property may be vacant in part 363 9. Making repairs does not constitute occupancy. . . 364 10. Effect of written permission for vacancy 364 11. When description not construed a warranty 364 13. Permission for unoccupancy may extend to re- newals ■ — Construction of the words " during the summer " 365 13. Oral application and no inquiry do not prevent forfeiture 365 14. Effect of time limitation 365 15. Violation voids policy — Not revived by subse- quent occupation 367 16. Policy suspended during violation — Eevived by subsequent occupation 367 17. Limitation as to time — Authority of agent. . . . 368 18. Not necessary to claim risk increased — Effect of statute — Question of fact — Evidence — Ex- pert — Custom 368 Table of Contents. xxv PAGE. EuLE 19. Vacancy may be claimed to increase risk — Bur- den of proof 369 20. Divisibility of contract , 370 21. When policy not divisible 370 22. Construction of " occupied " and " unoccupied " — Governed by nature and character of build- ing and use — Knowledge of company's agent. 371 33. Construction as affected by description — Effect not limited to building 372 24. When nature or character of occupation changed. 372 25. Meaning of " vacant " or " unoccupied " as ap- plied to a dwelling 372 26. When house unoccupied — Occupancy of house and bam 376 27. Furniture remaining in dwelling does not consti- tute occupancy or living in it 376 28. House may not ije vacant and yet be unoccupied . 377 29. Occupation of a dwelling — Temporary absence — Governed by intention — Question of fact. 377 30. Temporary absence from dwelling B79 31. TTse of house for partial purpose of a dwelling. . 379 32. Cleaning of dwelling not occupation 379 33. Effect of sleeping in house. . ; ^ 380 34. Effect of taking meals in house and use of barn. . 380 35. Ceasing to be occupied for one of several pur- poses described does not void policy i. 381 36. Dwelling described as a family residence — Con- struction of the word " family " 381 37. When tenement-house vacant and unoccupied. . . 381 38. Construction of the word " vacating " 382 39. Temporary vacancy on change of tenants — Temporary absence 382 40. Time limitations as affecting construction of old forms 383 41. Occupancy of building used for manufacturing purposes 384 43. When mill or factory vacant or unoccupied 384 43. Occupancy of manufacturing establishment gov- erned by known use and character 385 44. When flouring mill not vacant or unoccupied. . . 385 45. When a tannery is occupied 386 46. Occupancy of a boat 386 47. When a storehouse vacant and unoccupied 386 48. When a store is unoccupied 386 xxvi Table of Contents. ■ PAGE. EuLE 49. When a church is vacant or unoccupied 387 50. When an icehouse vacant or unoccupied — Ques- tion of fact 387 51. When elevator vacant or unoccupied 388 53. Occupancy of saloon or storehouse 388 53. Construction and application of Eule 1 as affect- ing waiver or estoppel 389 54. Time limitation as affecting waiver 389 55. Waiver or estoppel when policy issues — Duty of agent — Building in process of erection 390 56. Special permit for vacancy of uncompleted huild- 57. Knowledge of soliciting agent 391 58. Knowledge of agent as affecting occupancy for .other purposes than as described 392 59. Effect of knowledge as to future nonoccupancy . . 398 60. No oral waiver after issue of policy — May be estoppel — Mere knowledge no estoppel 393 61. Waiver or estoppel after issue of policy 394 62. Estoppel by agent — Written permit effective . . . 394 63. Eeceiving premium after fire 394 64. Question of law or fact 396 65. Question of increase of hazard one of fact — Change of occupants permitted 396 CHAPTER SEVENTH. Miscellaneous Provisions and Other Subjects 397 TITLE I. Cancellation 397 Eule 1. As imposed by contract 399 2. Condition as to cancellation strictly construed — Burden of proof u . . . 401 3. Company's right to cancel absolute — Not de- pendent upon motive, reason, or cause 402 4. Notice — Form — Evidence 402 5. Meaning of notice 403 6. Eequisites of notice — Expression of intention ineffectual — Use of mail 403 Table of Contents. xxvii PAGE. EuLE 7. Act of cancellation should precede notice and tender — When takes effect 404 8. Unearned premium must be returned or ten- dered 405 9. Cancellation must be pursuant to terms of policy 406 10. Effect of accounts as payment of premium — ■Effect of credit to broker 406 11. Acceptance of draft for unearned premium- — Insufficient as tender 407 13. When premium not paid, tender not required — Authority of agent 407 13. Premium must have been received by company. 408 14. Effect of acceptance of note for premium 409 15. May be effected by mutual consent — Waiver by insured — Act of partner 409 16. Cancellation by voluntary surrender and deliv- ery — When notice not required — Question of fact 410 17. Surrender of policy upon condition — Authority of agent 411 18. Effect of promise by insured 412 19. Insured must be capable of understanding his acts — Question of fact 412 20. Computation of time 4] 2 21. Company cannot reduce insurance vrithout con- sent of insured 413 22. Cancellation upon request of insured — Un- earned premium 413 23. Request for cancellation by insured 413 24. Insured's right does not depend upon notice- — Duty of insured if policy not satisfactory. . . . 414 25. Cancellation by mail 414 26. Fire occurring before expiration of notice. .... '115 27. Party or mortgagee to whom loss payable cannot consent — Effect of mortgagee clause 415 28. Liability of insured for earned premium 416 29. Policy cannot be canceled when property exposed to fire 417 30. Presumption as to short rate 417 31. Mutual mistake 417 32. Agent cannot delegate authority 418 33. Authority of insured's agent or broker — Cus- tom — Evidence 418 xxviii Table of Contents. PAGE. EuLE 34. Insured's agent or broker having general author- ity as to insurance 420 35. Authority of broker to surrender and cancel — Evidence — Waiver — Liability for earned premium 431 36. Limitation as to authority of broker 432 37. Company's agent may be also authorized by in- sured to consent to cancellation — Evidence — Eatification — Delivery of substituted policy. 433 38. No presumption as to authority of soliciting agent 434 39. Agent no power to revive canceled policy 434 40. Cancellation by substitution of other policies. . . 434 41. Substitution by agreement or upon condition . . . 435 43. As affected by intent — Effect of recognition and payment by substituted company 436 43. Unauthorized substitution as affecting appor- tionment 437 44. Insured may ratify act of agent in replacing in- surance after fire 437 45. When insured does not vraive notice 438 46. Eemedy of insured in equity to compel issue of substituted policy 438 47. Substituted policy not a contract of reinsurance . 438 48. Question of fact or law 439 49. Omission to cancel as evidence of waiver or es- toppel 430 50. Limitation of cancellation as evidence of waiver. 430 51. Same subject — When insurance itemized 431 53. Mere omission to cancel no evidence of waiver. . 431 53. Eight of company to deduct commissions allowed — Eight of broker to commissions 433 54. Construction of agenf s agreement for a percent- age of premiums received 433 55. Duty and liability of company's agent 433 56. When company's agent not charged with duty of cancellation 434 57. Agent cannot use company's fundsto cancel pol- icies in his own interest 435 58. Agent may buy claim for unearned premium. . . 435 59. Agent's act must be authorized to sustain claim for reimbursement 436 60. When trustee of insurance company not entitled to credit for payment of unearned premiums . . 436 Table of Contents. xxix TITLE II. PAGE. Agents 437 EuLE 1. As imposed by contract 441 2. Agency founded upon contract — Consent of principal essential 443 3.- Burden of proof as to agency — Question of fact or law 443 4. Agency clause in policy inoperative when com- pany has clothed a person with apparent au- thority — If no other evidence, conclusive as to status of broker 444 5. Policy not conclusive as to agent's authority — May be clothed with an actual or apparent authority as to waiver 445 6. Agency open to inqiiiry as to facts — Status not determined by policy — Unless policy only evidence 446 7. Authority of a soliciting agent not limited by agency clause in policy 446 8. Acceptance of written application from a solicit- ing agent as ratification — Company can take no advantage of agency clause in the policy. . . 446 9. Form in countersigning by agent 447 10. Effect of insurance company authorizing solicit- ing of insurance — Estoppel 447 11. Eesponsibility for errors or omissions in written application — Authority of agent — Question of fact 449 13. Scope of agent's authority 451 13. Notice to company through its officer or agent — Exceptions 453 14. Scope of authority not limited by private instruc- tions — Authority of local agent not estab- lished by assumption 453 15. Authority, how determined — Insured not bound by secret instructions — Test of authority . . . 4^3 16. Limitation of apparent authority 454 17. Scope of authority as to kind of property or risk 455 18. No authority to insure destroyed property 455 19. Scope of authority as to territory 455 20. Construction of authority as agent or surveyor. . 456 XXX Table of Contents. PAGE. EuLE 21. Partnership or firm as agent of company 456 22. Effect of agent holding commissions from other companies — Presumption as to knowledge and practice in selecting companies — Question of fact , 457 23. Liability of company for acts of agent, in malicious prosecution — Must be authorized. . 457 24. Agent acting after resignation , 457 25. Agency may continue after revocation — Agent may be representative of insured 458 26. Effect of dissolution of partnership of agents — Insured bound to inquire as to authority 458 27. Effect of leaving blank policies with agent — Secret revocation 45& 28. When written authority or commission conclu- sive 459 29. Authority of officers of company — Presumption — Evidence — Question of fact 460' 30. Admissions or declarations of agents as evidence. 461 31. Authority of agent not proved by admission — May be by his testimony — Policy may be evi- dence 462 32. Possession of blank policies as evidence of au- thority — Soliciting agent 463 33. Effect of furnishing an agent with blank appli- cations 464 34. Custom and course of business as evidence of authority 465 35. Conversations with persons in office of company. 465 36. Letters from insurance company as evidence. . . 465 37. When agent not clothed with apparent authority to issue policies 466 38. Company not allowed to prove it would have done differently by another agent or same agent — Agent's understanding and willing- ness not admissible , 466 39. Daily report of agent as evidence 466 40. Insured's construction of agent's meaning not admissible ,. 467 41. Who is a general agent — Soliciting agent 467 42. Limitation in policy as to evidence of agency does not prevent employment of clerks ". 468 43. Clerks and employees of a general agent 469 44. Authority of clerk of general agent — Evidence. 470 Table of Contents. xxxi PAGE. Rule 45. Estoppel by clerk 470 46. Soliciting agent no authority to make contract of insurance — Evidence as to his authority — Question of fact 471 47. Limitation of authority of a soliciting agent. . . 472 48. Soliciting agent no power as to waiver after issue of policy — Authority of same 473 49. Mere solicitation of insurance does not consti- tute a person an agent of company — Must be evidence of authority . . '. 474 50. Allowance of commissions to a person does not make him an agent of company 474 51. Act of soliciting agent may be ratified by the company — Effect 474 52. Broker agent of insured — Authority — Burden of proof — May be company's agent — Evi- dence 475 53. Broker cannot be agent of company without evi- ' dence of authority 476 54. Legal definition of broker — Pa3rment of com- pensation or commission does not make him company's agent — Authority 476 55. Insured responsible for broker as his agent — Evidence of custom — Entries in broker's books — Conversations 477 56. Distinction between broker and company's solicit- ing agent — Payment of commission not con- clusive 478 57. Broker may make delivery of check for premium conditional 479 58. Liability of broker to insured for premium — Eight to recover same 479 59. Broker mav be agent to collect premium — Ques- tion of fact 480 60. Evidence of broker's authority to collect pre- mium — Question of fact 481 61. Eatification by insured of broker's act 481 62. Agent of company placing surplus insurance . . . 482 63. Opinion and representation by broker — Ques- tion of fact 483 64. Duty of broker in procuring or maintaining in- surance — Personal liability 483 65. Eesponsibility of broker — Standard of care — Question of fact — Presumption — Evidence. 484 XXXll Table of Contents. PAGE. EuLE 66. Wheii broker or agent not personally liable 485 67. Broker authorized to collect unearned premium. 485 68. Waiver or estoppel by general agents — Eestric- tions upon authority in policy not binding prior to delivery of policy 486 69. An insurance company cannot prohibit itself from making a waiver 487 70. Insured bound by limitations upon agent's au- thority in an accepted policy — No oral waiver after its issue 487 71. Notwithstanding limitations upon authority in policy general agent may estop the company after its issue — Mere knowledge of agent in- sufiBcient 493 72. Limitation of authority in policy not con- clusive — Effect of conduct in the course of business 493 73. Notice to agent as an element of estoppel — Conduct of company 494 74. Letters as evidence of waiver 495 75. Fraud and collusion as affecting estoppel 495 76. No waiver by delivery of policy after fire 495 77. When company bound by knowledge of its agent when policy issues 496 78. Evidence as to knowledge of agent 497 79. Knowledge of agent as affected by time 497 80. Personal liability of company's agent — Effect of noncompliance with statute upon liability for premiums 498 81. Instructions to agent should be clear and un- ambiguous 498 83. Local agent not liable for fraudulent act of clerk or solicitor 499 83. Company's agent no power to bind company by contract to insure in the future — May be bound personally 499 84. Personal liability of agent under statute 500 85. Agent's personal responsibility to insured for misrepresentation 500 86. As between agent and company damages on breach of contract of agency 500 87. Duration of agency 501 88. Eight of agent after termination of agency. . . 501 89. Property rights in expirations 503 Table of Contents. xxxiii PAGE., EuLE 90. When authority of agent question of fact or law 502 91. Authority of agent question of fact 503 92. Agent cannot act in a dual or double capacity. . 503 93. When agent acts in double capacity 504 94. Agent stockholder, director, and officer of another corporation 505 95. Agent also cashier of a bank 505 96. Agent director of school district ,. . 506 97. Agents and brokers subject to right of a State legislature to regulate the business of foreign insurance companies 507 98. Business of insurance is not commerce — Power of State 507 99. Power of State over its citizens 508 100. Liability of agent or broker to penalty 509 101. Construction of statute defining status of agents 509 108. Statute does not change rule of law as to prin- cipal and agent 510 103. Effect of statute prescribing status of a solicit- ing agent 510 104. Statute fixing status of soliciting agent not extended by construction ,. . 511 105. Status of soliciting agent under statute — Question of fact 512 106. Company cannot plead its own violation of law , 513 TITLE III. Renewal 515 EuLB 1. As imposed by contract 516 2. Construction of contract of renewal. 517 3. Increase of risk not made known 517 4. When notice required of increase of risk — Form •. 518 5. Application of renewal to descriptive clauses. . . 518 6. Payment of premium 518 7. Authority of company's agent to renew 519 8. Limitation of authority from insured to renew. . 519 9. New policy issued instead of renewal — Eef- ormation 520 Vol. II.— iii xxxiv Table of Contents. PAGO. EuLE 10. Eenewal as affecting partnership interests 520 11. Oral or parol contract of renewal — Evidence — Authority of agent — Presmnpfion as to terms 520 12. Xot established by mere negotiation — Minds must meet 522 13. Burden of proof — Question of fact 523 14. Property destroyed at time of renewal 522 15. Waiver or estoppel in renewal 523 16. Waiver or estoppel continues through renew- als — Xotice of increase of risk 523 17. Terms of contract not changed by evidence. . . . 52-t 18. Estoppel by representation of renewal 524 TITLE IV. Premium 525 EuLE 1. As imposed by contract 526 2. Waiver of prepayment of the premium — Evi- dence — Question of fact 527 . 3. Authority of agent to waive prepayment of premium — Authority to waive or collect may be conferred on soliciting agent or broker — Evidence 528 4. Authority of agent as to mode or kind of pay- ment 52^ 5. Effect of personal assumption of debt for pre- mium by agent 530 6. Company may accept note of broker or credit him with payment — Authority — Evidence.. . 530 7. Effect of acknowledgment ia poHey when de- Kvered through broker 531 8. Broker agent of insured — Must be evidence of authority in him from company 532 9. Liability of broker for unearned premium 532 10. Advancement of premium by broker or agent — Eight of recovery — Evidence — Effect 53a 11. If policy in force by delivery and credit for pre- mium, terminated only by cancellation 533 12. Legal tender of payment 534 13. Payment of premium may be made condition precedent 534 14. Policy may make payment of premium condition precedent 534 Table of Contents. xxxv PAGE. EuLE 15. Effect of giving credit for pTemium 535 16. Effect of option to take policy on payment of pre- mium 536 17. Provision in policy modified by usual course of business 536 18. Effect of acknowledgment in policy of receipt of premium 537 19. When insured agent to receive premium 537 20. Payment as affected by an account 538 21. When premium is returnable 538 22. When officer or agent personally liable for return of premium 539 23. Company bound by condition imposed on delivery of note for premium 539 24. When insured not liable for earned premium on surrender for cancellation 540 25. Effect of acceptance of premium after a loss. . . . 540 26. In suit upon policy company entitled to credit for unpaid premium 541 TITLE V. Term 542 EuLE 1. As imposed by contract 543 2. Construction of the words " at noon " 543 3. Burden of proof as to alteration in date of ex- piration 543 4. Effect of omission of date of expiration 543 5. Term may be governed by description 544 6. Continuance in force by special agreement 544 7. Delivery of policy may be conditional as to time takes effect 544 8. Term may be question of fact 544 TITLE VI. Reinsurance 545 EuLE 1. As imposed by contract 546 2. Insurable interest 547 3. No privity of contract between original insured and reinsurer — Exception 547 xxxvi Table of Contents. PAGE. EuLE 4. When original insured may have right of action against either company 548 5. Subject-matter same — Interest different — Compliance with condition as to proof of loss . 548 6. ^Effect of reinsurance contract being made sub- ject to same conditions as adopted by reinsured company 549 7. Construction of the word " risk " in a reinsur- ance contract 549 8. When evidence of usage or custom not admissible. 550 9. Description furnished by reinsured company as affecting construction 550 10. Construction of reinsurance contract 550 11. Construction of clause making loss payable at same time with reinsured — Of the words " may pay " 551 12. Effect of clause making loss payable " pro rata ". 552 13. jSTot within statute of frauds 552 14. Misrepresentation and concealment 553 15. No recovery against reinsurer when reinsured company not liable 553 16. Power of reinsured to consent to assignment of its policy 553 17. Eeinsurer may have right to consent to assign- ment of original policy 554 18. Reinsured cannot consent to increase of risk. . . . 554 19. Eight to assume control of litigation 554 20. Construction of " building " under a reinsurance contract 555 31. When policy not covered by reinsurance 555 22. Effect of coinsurance clause in original policy. . . 556 33. Printed conditions as to appraisal and limitation not applicable 556 34. Liability not affected by apportionment clause in policy 557 85. Liability as affected by insolvency of reinsured company 557 26. Purchase of claims by company or its receiver. . 557 37. Eight of individual underwriter Lloyds policy to enforce contract of reinsurance 558 28. Construction of contract with company retiring from business 558 29. Agent of company cannot act in double capacity. 559 Table of Contents. xxxvii PAGE. EuLE 30. Personal liability of directors of insolvent com- pany 559 31. Unless otherwise provided reinsured is not obliged to first pay loss before claiming rein- surance 560 33. Compromise and settlement by reinsured com- pany 560 33. When proof of loss dispensed with, and adjust- ment as to amount binding 561 34. When reinsurer bound by adjustment 561 TITLE VII. Oral or Parol Contract — Consummation of Contract . . 562 EuLE 1. Parol contract of insurance legally operative and binding — Exceptions 564 2. Essential elements of the contract 565 3. There must be meeting of minds as to terms and property 566 4. "^^Tiat is necessary to establish contract — Evi- dence — Question of fact — Remedy 567 5. Construction of words — Evidence — Presump- tion 568 6. Authority of agent to make parol contract of in- surance 569 7. Usage and custom as affecting authority of agent. 570 8. Contract cannot be established by admissions of agent subsequently made 570 9. Authority of a soliciting affent 571 10. Agent may have authority to bind the company. . 572 11. Liability of agent to repay premium 572 12. When risk deemed to commence 573 13. Amount must be fixed after refusal to renew .... 573 14. Risk may be inferred 573 15. Particular company must be designated to com- plete contract 574 16. Contract may be complete though misunderstand- ing as to term 574 17. As affected by indefiniteness as to time and rate of premium 575 18. As dependent upon payment of the premium. ... 575 19. Rate of premium and term may be implied 575 xxxviii Table of Contents. PAGE. Rule 20. Sufficiency as tested by insured's obligation to pay premium — Contract mutual 576 21. When acceptance of application binds the com- pany — Use of mail 5'''6 22. Must be evidence of acceptance 577 23. Eetention of application insufficient — Accept- ance necessary — Evidence 578 24. As dependent upon acceptance by insured 579 25. Eights of parties fixed at time of fire 579 26. Effect of delay in acting upon application 580 27. Effect of no oral agreement prior to delivery of policy 580 28. Effect i^f acceptance of policy • 580 29. Sufficient parol contract cannot be made condi- tional by telegram 581 30. Contract by deposit of letter 581 31. Effect of statute of frauds 581 32. Subject to conditions in policy 582 33. Conditions requiring indorsement of written con- sent — What conditions operative 583 34. Binder subiect to conditions in policy — Termi- nation under special provision — Cancellation. 584 35. Binder does not contain whole contract 585 36. Effect of binder as renewal — When issued for new insurance — Time limitation 585 37. Binder subject to usase and custom — Cancella- tion Question of fact 586 38. Presumption as to division of risk on binder — When particular company must be designated. 587 39. Binder as dependent upon rate of premium 587 40. Delivery of policy not essential 587 41. As affected by delivery of policy 588 42. Admissibility of parol evidence to establish condi- tion precedent to contract taking effect 589 43. Eenewal without request of insured — ■ Agent di- rected not to deliver 590 44. Deliverv to broker upon condition — Contract as dependent upon condition precedent 590 45. Contract conditioned on termination or cancella- tion of other insurance 590 46. Mistake may be corrected in equity 591 47. As affected by negotiation on Sunday 591 48. Parol contract as affecting right to obtain policy after fire 592 Table op Contents. xxsix PAGE. EuLE 49. Eepudiation of contract after a loss ineffective. . 593 50. Measure of damage 592 51. Burden of proof — Test in mutuality and obliga- tion to pay premium 593 52. Weight of evidence — Question of fact 593 53. Strictness of proof as affected by renewal 594 54. Eemedy for breach of parol contract — Effect of company's refusal to issue policy 594 55. Pleading 595 56. Eetention of jurisdiction by a court of equity. . . . 596 57. Evidence in equity 596 58. Question of fact 596 59. Verdict of jury not disturbed on appeal 597 TITLE Vlll. Reformation 598 EuLE 1. Eeformation cannot make a new contract- 398 2. Eeformation and recovery may be had in same suit 599 3. Mutual mistake or mistake and fraud 599 4. Mistake must be mutual — Burden of proof — Evidence 600 5. No reformation upon proof of claimant's mis- take alone 602 6. Fraud as ground for reformation — Duty ■ in preparation of written contract 602 7. Fraud must be specifically alleged 603 8. When insured bound by acceptance of policy- — His duty to examine policy 603 9. Effect of insured's failing to read policy 604 10. Mutual mistake as to effect of language — As to the law • 605 11. Eeformation as to interest or parties' — Evi- dence 605 12. Effect of changes in a policy requested as a renewal — Eight of assignee to reformation . . 606 13. When not necessary to have policy reformed. . . . 607 14. Eight to reformation as affected by misrepre- sentation 607 15. Eight to reformation as affected by remedy at law 608 xl Table of Contents. PAGE. EuLE 16. Suit to reform not sustainable after failure in action at law 609 17. Eeformation does not require new proof of loss.. 609 18. Correction of mistake by agent after loss 609 TITLE IX. Contract as Affected by Legality or Violation of Statute 610 EuLE 1. Wager policies — No insurable interest 610 2. Intent of insurance contract as afieeting its legality — Contract collateral — Question of fact 610 3. Effect of permission of insured to use for un- lawful purpose . . .• 611 4. Effect of specific provision in policy as to use for unlawful purpose 612 5. As affected by insured's failure to procure license — When contract not void as against public policy — When ownership not unlaw- ful 612 6. Effect of statute imposing a privilege tax 613 7. Contract made on Sunday 614 8. When contract not void as in restraint of trade. . 614 9. Effect of statute requiring foreign corporation to procure certificate to transact business on right to obtain insurance 614 CHAPTER EIGHTH. Statutory Provisions 621 (And see Index under names of the States.) TABLE OF CASES-Vol. 2. A. Abbott V. Hampden Ins. Co., 134. V. Shawmut Ins. Co., 75. Abel V. Phcenix Ins. Co., 521, 594. Abraham v. North German Ins. Co., 60'6. Abrahams v. Agricnltural Ins. Co., 375. Acer V. Merchants' Ins. Co., 133, 157. Ackley v. Phoenix Ins. Co., 344. Adair v. Southern Mutual Ins. Co., 290, 396, 297, 314. Adams v. Manufacturers & Builders' Ins. Co., 419, 420. V. Eocldngham Ins. Co., 240. Addison v. Kentucky Ins. Co., 166. Adema v. Insurance Co., 141, 156, 179. Adler v. Germania Ins. Co., 195. Adler-Weinburger Co. •;;. Eothschild & Co., 500. ^tna Ins. Co. v. Burns, 392. V. Commonwealth, 615. V. Eastman, 115, 492. V. Grube, 42, 46, 53. V. Holcomb, 199, 202. V. Jackson, 128, 255. V. Jacobson, 234. V. Maguire, 405, 411, 431. V. Meyers, 366. V. Miers, 134. V. Norman, 21, 36, 303, 314, 315. V. Eesh, 11, 75. V. Eosenberg, 411. V. Simmons, 37, 46. V. Tyler, 86, 157, 226, 263. V. Weissinger, 401, 410. .^tna Fire & Tornado Ins. Co. v. Olmstead, 49. Agricultural Ins. Co. v. Frith, 374. V. Fritz, 471, 566. V. Hamilton, 370, 373. V. Montague, 8, 127, 144. A. 6. Peuchen Co. v. City Ins. Co., 233. rxiii xlii Table or Cases. Ahlberg v. German Ins. Co., 190, 483. Aiple V. Boston Ins. Co., 59, 360. Alabama State Ins. Co. v. Long Clothing Co., 110, 113. Alamo Ins. Co. v. Brooks, 166. V. Lancaster, 166. V. Schmitt, 273. Albany City Ins. Co. v. Keating, 433. Alberts v. Insurance Co. N. A., 180. Albion Lead Works v. Williamsburg City Ins. Co., 43, 398, 317, 385. Alexander v. Continental Ins. Co., 535. V. Germania Ins. Co., 50, 55, 56, 59, 444, 445. Alkan v. Few Hampshire Ins. Co., 10, 351, 375, 333, 366, 393, 483, 513. Alker v. Ehoades, 556. Allemania Ins. Co. v. Hurd, 113, 488. V. Peek, 333. V. Pittsburg Exposition Soc, 294, 335. ■;;. White, 383. Allen V. Charlestown Ins. Co., 37, 64. - — V. German-American Ins. Co., 89, 475, 476, 478, 479, 480, 481. V. Home Ins. Co., 60, 63, 173. V. Hudson Eiver Ins. Co., 319. V. Massasoit Ins. Co., 390, 392, 311. V. Mutual Ins. Co., 302. V. Sun Mutual Ins. Co., 145. Allesina v. Liverpool, L. & G. Ins. Co., 300. Allgeyer v. Louisiana, 506, 508, 514. Alman-Miller Co. v. Phoenix Ins. Co., 467. Alspaugh V. British-American Ins. Co., 280. Alston V. Greenwich Ins. Co., 392, 311. V. Insurance Co., 375, 383. V. Mechanics' Ins. Co., 16. ■ V. Phoenix Ins. Co., 197. American Artistic Gold Stamping Co. v. Glens Falls Ins. Co., 3, 10, 40, 165, 166, 236, 443. American Casualty Co. v. Arrott, 435. American Central Ins. Co. v. Antram, 15, 541. V. Brown, 19. V. Clarey, 362. V. Donlon, 128. 172. — '■ — V. Hagerty, 434. V. Heath, 98, 144. V. McCrea, 286. Table of Cases. xliii American Central Ins. Co. v. McLanathan, 172, 454, 607. V. Nunn, 3. V. Sweetser, 270. American Ins. Co. v. Brighton Cotton Mfg. Co., 279, 382, 284, 322, 385. V. Brooks, 404, 475, 480. V. First Nat. Bank, 116, 614. V. Foster, 372. V. France, 501. V. Gallatin, 50, 108, 450. V. Gilbert, 7, 10, 47, 53, 73, 451. V. Hampton, 111, 473. • V. Landfare, 126, 130, 202. V. Lnttrell, 108. V. Padfield, 374. V. Keplogle, 102, 103. V. Walston, 17, 49, 248,' 450, 473, 494. American Central Ins. Co. v. White, 130. American Underwriters' Assoc, v. George, 40. ' Ames V. New York Union Ins. Co., 44. A. M. Todd Co. v. Farmers' Ins. Co., 473. Anderson v. Continental Ins. Co., 534, 576. Andes v. Shipman, 64, 72. Angell V. Hartford Ins. Co., 453, 565. Angier v. Western Assnr. Co., 312. Annan v. Hill Union Brewery Co., 477. Antes V. State Ins. Co., 535. Anthony v. German-American Ins. Co., 308, 315. Appleby v. Firemen's Fund Ins. Co., 292, 298. Archer v. Merchants' Ins. Co., 345. Arff V. Star Ins. Co., 117, 469, 476, 479, 572. Arguimbau v. Germania Ins. Co., 57. Arkansas Ins. Co. v. Wilson, 222, 238. Arkell v. Commerce Ins. Co., 354. Arlington Co. v. Colonial Assur. Co., 321. Arlington Mfg. Co. v. Norwich Union Ins. Co., 321. Armenia Ins. Co. v. Paul, 6, 12, 43. Armour v. Transatlantic Ins. Co., 2, 15, 21, 22, 23, 27, 29, 97, 420, 477. Armstrong v. Agricultural Ins. Co., 208, 214, 215. V. State Ins. Co., 464, 472. V. Toler, 611. Arnfeld v. Guardian Assur. Co., 426, 427. Arnold v. Insurance Co., 83, 95. Arrott V. Walker, 484. xliv Table of Cases. Arthur v. Palatine Ins. Co., 3, 4, 10, 200, 480. Ashworth v. Builders' Ins. Co., 376, 380. Assurance Co. 'v. McCarty, 260. V. McPike, 360. Atherton v. British America Assur. Co., 182, 315. Atkinson v. Hawkeye Ins. Co., 571. Atlantic Ins. Co. v. Carlin, 443. V. Garten, 481. V. Goodall, 87, 106,^410, 544. V. Manning, 362. Atlas Eeduction Co. v. New Zealand Ins. Co., 212. Audubon v. Excelsior Ins. Co., 597. Aurora Ins. Co. v. Eddy, 16, 36, 53, 63, 66, 78, 234. V. Johnson, 28. V. Kranieh, 517. Au Sable Lumber Co. v. Detroit Ins. Co., 68, 70, 322. Ayres v. Hartford Ins. Co., 226, 228, 236, 493. - V. Home Ins. Co., 145, 234, 236. V. Phoenix Ins. Co., 173. B. Backus V. Ames, 484. V. Exchange Ins. Co., 405. Badger v. Platts, 349. Baer v. Phoenix Ins. Co., 85. Baile v. St. Joseph Ins. Co., 89, 195, 564, 574, 583, 584, 595, 596. Bailey v. American Central Ins. Co., 225. Baker v. Citizens' Ins. Co., 425. V. Commercial Union Assur. Co., 596, 597. V. Crosby, 261. V. German Ins. Co., 59, 61. v. Home Ins. Co., 35, 49, 448, 450. V. State Ins. Co., 28, 167. Baldwin v. Choteau Ins. Co., 527, 528, 592. V. Citizens' Ins. Co., 66, 190. V. German Ins. Co., 194, 360. V. Hartford Ins. Co., 250. V. Pennsylvania Ins. Co., 401. V. Phoenix Ins. Co., 239, 521. - V. State Ins. Co., 127. Balen v. Hanover Ins. Co., 606. Baley v. Homestead Ins. Co., 220, 254. Ball & Sage Wagon Co. v. Aurora Ins. Co., ,529. Balow V. Tentonia Farmers' Ins. Co., 137. Table of Cases. xlv Baltimore Ins. Co. v. McGown, 517. Bang V. Parmville Ins. Co., 531. Bank of Commerce v. British America Assur. Co., 401. Bank of Glasco v. Springfield F. & M. Ins. Co., 234, 505. Bankhead v. Des Moines Ins. Co., 33. Baptist Church v. Brooklyn Ins. Co., 461, 463, 538, 565, 583. Bardwell v. Conway Ins. Co., 43. Barker v. Citizens' Ins. Co., 283. Barnar-1 v. Faber, 34, 74. V. National Ins. Co., 83, 149, 346, 487. V. Wheeler, 491. Barnes v. Continental Ins. Co., 536. V. Hekla Ins. Co., 131, 548, 603. V. People ex rel. Moloney, 618. V. Union Ins. Co., 343. Barnum v. Merchants' Ins. Co., 346. Barr v. Insurance Co. N. A., 586. BarraclifE v. Trade Ins. Co., 133, 536. Barre v. Council Bluffs Ins. Co., "584, 595. Barrett v. Union Ins. Co., 375. Barry v. Hamburg-Bremen Ins. Co., 234. ■;;. Prescott Ins. Co., 364, 373. Barry & Finan Lumber Co. v. Citizens' Ins. Co., 510. Barteau v. Phoenix Life Ins. Co., 56. Bartholomew v. Merchants' Ins. Co., 49, 351, 450, 473. Bartlett v. British America Assur. Co., 360, 365. V. Firemen's Fund Ins. Co., 461, 553. Basch V. Humboldt Ins. Co., 537. Bastian v. British Assur. Co., 333. Batchelor v. People's Ins. Co., 349, 478. Batchelder v. Queen Ins. Co., 109. Bateman v. Lumberman's Ins. Co., 483. Bates V. Equitable Ins. Co., 349, 363. Battles V. York County Ins. Co., 75. Baughman v. Camden Mfg. Co., 362, 373. Baumgartel v. Providence- Washington Ins. Co., 113. Baxter v. State Ins. Co., 53, 576, 597. Bayles v. Insurance Co., 373. Bayless v. Merchants' Ins. Co., 367. Bayly v. London & Lancashire Ins. Co., 317, 354. Beal V. Park Ins. Co., 449, 450. Bean v. Atlanta Home Ins. Co., 390. Bebee v. Hartford Ins. Co., 3, 6, 444, 449. Beck V. Hibernia Ins. Co., 8, 166. Beebe v. Ohio Farmers' Ins. Co., 203, 464. xlvi Table of Cases. Beechley v. Midville, 616. Beer v. Insurance Co., 346. Behler v. German Ins. Co., 88. Behrens v. Germania Ins. Co., 105, 122. Beirmeister v. City of London Ins. Co., 426. Belding v. Floyd, 639. Bell V. Lycoming Ins. Co., 146. V. Peabody Ins. Co., 566, 569. Bellaty v. Thomaston Ins.^Co., 22. Bellevne EoUer Mill Co. v. London & Lancashire Ins. Co., 209, 285, 385, 430. Belt V. American Central Ins. Co., 585. Bemis v. Harborcreek Ins. Co., 239, 240. Benedict v. Ocean Ins. Co., 89. Benesh v. Mill Owners' Ins. Co., 276, 607. Benjamin v. Palatine Ins. Co., 209, 214. V. Saratoga Ins. Co., 114, 227. BenninghofE v. Agricultural Ins. Co., 44, 248, 260, 263, 364, 265, 451, 460. Bennett v. Agricultural Ins. Co., 42, 49, 53, 64, 866, 374, 382, 383, 450. V. City Ins. Co., 419. V. Council Bluffs Ins. Co., 19, 110, 470, 471. V. Maryland Ins. Co., 407. V. Mutual Ins. Co., 126, 239. V. ISTorth British & M. Ins. Co., 338, 350, 355, 486. V. St. Paul P. & M. Ins. Co., 109. V. Western Underwriters, 394. Bentley v. Columbia Ins. Co., 455, 504, 569, 573. V. Lumbermen's Ins. Co., 343. Ben Franklin Ins. Co. v. Gillett, 599, 602. V. Weary, 478. Bergeron v. Pamlico Ins. Co., 471. Bergson v. Builders' Ins. Co., 403. Bermingham v. Empire Ins. Co., 57. Bernard v. United Ins. Assoc, 448. Berry v. American Central Ins. Co., 136, 171, 190, 486, 487. Bertschy v. Bank, 196. Best V. German Ins. Co., 74. Betcher v. Capital Fire Ins. Co., 311, 338. Bibend v. Liverpool, L. & G. Ins. Co., 272, 273. Bicknell v. Lancaster Ins. Co., 128. Biddeford Savings Bank v. Dwelling-House. Ins. Co., 240. Bienfaisance v. Morris, 528. Bigelow V. Granite State Ins. Co., 101. Table of Cases. xlvii Bigler v. American Ins. Co., 83. V. New York Central Ins. Co., 85, 96, 103, 106. Biggs V. North Carolina Home Ins. Co., 230, 258, 443. Bilbrough v. Metropolis Ins. Co., 63. Billings V. Tolland County Ins. Co., 63, 67. Billington v. Canadian Ins. Co., 110. V. Provincial Ins. Co., 109. Bingham v. North American Ins. Co., 410. Birdseye v. City Ins. Co., 274. Birmingham v. Empire Ins. Co., 75. Birmingham Ins. Co. v. Kroegher, 345. Birnstein v. Stuyvesant Ins. Co., 422, 426. Bishop V. Clay Ins. Co., 251, 601. Bittenger v. Providence- Washington Ins. Co., 39. Blackburn v. St. Paul P. & M. Ins. Co., 265. Blackstone v. AUemania Ins. Co., 551, 552, 557. Blackwell v. Miami Valley Ins. Co., 225, 232. Blake v. Corbett, 196. • V. Exchange Ins. Co., 122. V. Hamburg-Bremen Ins. Co., 581. Blake Opera House Co. v. Home Ins. Co., 601. Blass V. Agricultural Ins. Co., 16, 390. Bleakely v. Nelson, 196. Bleakley v. Niagara Dist. Ins. Co., 472. Bliss V. Potomac Ins. Co., 483. Blood V. Howard Ins. Co., 63, 302. Bloom V. State Ins. Co., 465. Blooming Grove Ins. Co. v. McAnerney, ,75. Blumer v. Phrenix Ins. Co., 35, 71. Boardman v. Merrimack Ins. Co., 611, 612. V. New Hampshire Ins. Co., 42, 46. V. North Waterloo Ins. Co., 313, 373. Bobbitt V. Liverpool, L. & G. Ins. Co., 73, 128. Bodine v. Exchange Ins. Co., 469, 528, 529. Body V. Hartford Ins. Co., 419. Boehen v. Williamsburg City Ins. Co., 528. Boetcher v. Hawkeye Ins. Co., 445, 446. Boggs V. American Ins. Co., 6, 8, 9. Bohn Mfg. Co, V. Sawyer, 133. Bole V. New Hampshire Ins. Co., 283. Bon Aqua Imp. Co. v. Standard Ins. Co., 145. Bondurant v. German Ins. Co., 130. Bonenfant v. American Ins. Co., 247, 267, 373, 377. Bonham v. Iowa Cent. Ins. Co., 73, 168. Bonnet v. Merchants' Ins. Co., 7, 21, 35, 144. xlviii Table or Cases. Born V. Home Ins. Co., 173, 199, 320, 413. Boston & Salem Ice Co., v. Eoyal Ins. Co., 255. Bosworth V. Cleary, 219. Boulden v. Phoenix Ins. Co., 90, 168. Boulware v. Farmers' Ins. Co., 10, 165. Bourgeois v. Mutual Ins. Co., 488, 511, 513. V. Northwestern Nat. Ins. Co., 112. Boutelle v. Westchester Ins. Co., 29, 162, 177. Bouton V. American Ins. Co., 530. Bowditch Ins. Co. v. Winslow, 27. Bowlus V. German- American Ins. Co., 75. V. Phoenix Ins. Co., 28, 83, 450. Bowman v. Agricnltiaral Ins. Co., 528. ~ V. Franklin Ins. Co., 220. V. Pacifie Ins. Co., 355. Boyce v. Hamburg-Bremen Ins. Co., 598. Boyd V. Vanderbilt Ins. Co., 59. Boyer v. Grand Eapids Ins. Co., 333, 339. Bradford v. Hanover Ins. Co., 499. V. Homestead Ins. Co., 465. Bradley v. German-American Ins. Co., 179, 478. V. Potomac Ins. Co., 535. Bradshaw v. Fire Ins. Co. of Phila., 401. Brady v. Northwestern Ins. Co., 517. Bragdon v. Appleton Ins. Co., 575, 588. Brandup v. St. Paul Ins. Co., 110, 448. Breckinridge v. American Central Ins. Co., 260, 270, 327. Brehm Lumber Co. v. Svea Ins. Co., 280, 283, 286. Breedlove v. Norwich Union Ins. Soc, 149, 151, 172. Brennen v. Connecticut Ins. Co., 194. Breuner v. Insurance Co., 292. Brewer v. Herbert, 133. Bridgewater Iron Co. v. Enterprise Ins. Co., 20. Briggs V. Firemen's Fund Ins. Co., 29. Brighton Beach Pacing Assoc. ■;;. Home Ins. Co., 189, 237. Brighton Mfg. Co. v. Fire Assoc, 299. V. Heading Ins. Co., 299, 385. Brink v. Merchants' Ins. Co., 306, 307, 486, 580. British America Ins. Co. v. Bradford, 617. •British America Assur. Co. v. Cooper, 419, 504, 505. British-American' Ins. Co. v. Wilson, 498. Broadwater v. Lion Ins. Co., 78^ 171, 182, 419, 496. Brock V. Des Moines Ins. Co., 465. Brooks V. Brie Ins. Co., 22, 129, 132, 171, 189. Brown v. American Central Ins. Co., 589. Table of Cases. xlix Erown v. Cattaraugus Ins. Co., 108. V. Commercial Ins. Co., 143, 145, 156, 172. V. Commonwealth Ins. Co., 219, 224. V. Cotton Ins. Co., 239. V. Dutchess County Ins. Co., 443, 461. V. Franklin Ins. Co., 452, 453, 570, 572. V. Kings County Ins. Co., 347. . V. People's Ins. Co., 75. V. Westchester Ins. Co., 194. Browne Nat. Bank v. Southern Ins. Co., 241. Brownfield v. Phoenix Ins. Co., 454, 528, 573, 577. Browning v. Home Ins. Co., 3, 43, 60, 225, 338. Bruce v. Phoenix Ins. Co., 360. Brueck v. Phoenix Ins. Co., 516. Brumfield v. Union Ins. Co., 112. Brunswick v. Commercial Union Assur. Co., 241. Bryan v. Farmers' Assoc, 126. V. Peabody Ins. Co., 63, 255, 363, 369. V. Traders' Ins. Co., 228, 229, 234, 240, 255. Bryant v. Poughkeepsie Ins. Co., 345. Bryce v. Lorillard Ins. Co., 57, 59, 61, 599. Buchanan v. Exchange Ins. Co., 262, 355. • V. "Westchester Ins. Co., 239, 432. Buck V. Phoenix Ins. Co., 25, 135, 143, 155. Buckley v. Garrett, 227, 232, 247. Buell V. Connecticut Ins. Co., 42. Bufe V. Turner, 6. Buffalo Steam Engine Works v. Sun Ins. Co., 135, 247. Buick V. Mechanics' Ins. Co., 420, 421. Bnlman v. North British & M. Ins. Co., 267. Burbank v. McCluer, 262. V. Eockingham Ins. Co., 254. Burge V. Greenwich Ins. Co., 21, 35, 97. Burger v. Farmers' Ins. Co., 275. Burges v. Jackson, 485. Burke v. Continental Ins. Co., 127. V. Magara Ins. Co., 91, 145. Burleigh v. Gebhard Ins. Co., 37, 59, 66. Burlington Ins. Co. v. Brockway, 363, 381. V. Campbell, 458. V. Coft'man, 68, 69, 166. V. Gibbons, 360, 488. V. Lowery, 379, 382. V. Threlkeld, 458. Burner v. German-American Ins. Co., 360, 373, 376. Vol. II.— iv 1 Table op Casks. Burnett v. Eufaula Home Ins. Co., 231. Burnham v. Greenwich Ins. Co., 115, 493. V. Eoyal Ins. Co., 333. Burris v. Phoenix Ins. Co., 415. Burritt v. Saratoga Ins. Co., 41, 63. Burson v. Philadelphia Assoc., 44, 164, 173, 448, 530. Bush V. Missouri Ins. Co., 101. Bushnell v. Farmers' Ins. Co., 17, 48, 334, 450. Businessmen's League v. Wa4 1 Q. B. 340 (1893). (In this case a Lloyds policy was "war- ranted to be on same rate, terms, and identical interest as the- Insurance Company," and it was held that the words created a condition precedent, irrespective of use of the word " warranty," and it appearing that the premium and the interest differed in the other policy, the insurance was thereby voided.) 2. Texas Ins. Co. v. Stone, 49 Tex. 4; Wood v. Hartford Ins. Co., supra; Wall v. East Eiver Ins. Co., 7 N. Y. 373. In Wood V. Hartford Ins. Co., supra, the court says : " The general rule in regard to what constitutes a warranty, in a contract of insurance is well settled. Any statement or de- scription, or any undertaking on the part of the insured, on the face of the policy, which relates to the risk, is a warranty.. Whether this is declared to be a warranty totidem verbis, or is as- certained to be such by construction, is immaterial. In either case, it is an express warranty, and a condition precedent. If a house be insured against fire, and is described in the policy as being ' copper roofed,' it is as express a warranty, as if the language had been ' warranted to be copper roofed ; ' and its. truth is as essential to the obligation of the policy, in the one case as in the other. In either case it must be strictly observed. There may often be much difficulty in ascertaining from the construction of the policy whether a fact, quality or circum- stance specified, relates to the risk, or is inserted for some other purpose — as to show the identity of the article insured, etc. This must be settled before the rule can be applied. But when it is once ascertained, that it relates to the risk, and was in- serted in reference to that, it must be strictly observed and kept, or the insurance is void. The word 'warranty' dispels all ambiguity, and supersedes the necessity of construction. Parties may contract as they please. When a condition precedent is adopted, the court cannot inquire as to its wisdom or folly, but must exact its strict observance. An entry on the margin of the policy, or across the lines, or on a separate paper, ex- pressly referred to in the policy, will be construed a warranty, if it relates to the risk; that is, if it defines, or in any respect, limits, the risk assumed. It may indeed, where the explicit Waeeanty. 35 language of a -warranty is not adopted, be difficult to ascertain, whether on a fair construction, the clause was meant to define or limit a risk; but when this is ascertained, the insured has no right to dispense with it, or substitute in its place another risk, however advantageous to the insurer. It is immaterial whether the nonperformance or violation of the warranty, be with or without, the consent or fault of the insured. Its strict observance is exacted by law, and no reason or necessity will dispense with it." Cited and approved in Wall v. East Eiver Ins. Co., 7 N. Y. 373. And see Fowler v. ^tna Ins. Co., 6 Cow. 673, 7 Wend. 270. RULE 3. Express Warranty and Effect — Distinction Between Warranty and Bepresentation — Not Affected by Good or Bad Faith. An express warranty is a stipulation inserted in writing on the face of the policy, or made part of it, on the literal truth or fulfillment of which the validity of the entire contract depends.^ A representation pre- cedes, and is no part of, the contract of insurance.^ In case of warranty it is immaterial whether the state- ments were made in ignorance or fraudulently,^ in good faith or bad faith, or according to belief of in- sured.* 1. Petit V. German Ins. Co., 98 Fed. Eep. 800; Pierce v. Empire Ins. Co., 62 Barb. 636 ; Commonwealth Ins. Co. v. Mon- ninger, 18 Ind. 352; Lycoming Ins. Co. v. Mitchell, 48 Pa. St. 367 ; Blumer v. Phcenix Ins. Co., 45 Wis. 622 ; Wood v. Hartford Ins. Co., 13 Conn. 544; Burge v. Greenwich Ins. Co., Mo. App. , 80 S. W. Eep. 342. 2. Glendale Woolen Co. v. Protection Ins. Co., 21 Conn. 19 ; Pierce v. Empire Ins. Co., supra; Williams v. New England Ins. Co., 31 Me. 219. 3. Baker v. Home Ins. Co., 64 N. Y. 648; Merwin v. Star Ins. Co., 7 Hun, 659, aff'd, 72 JST. Y. 603, without opinion; Gould V. York County Ins. Co., 47 Me. 403; Phenix Ins. Co. *. Copeland, 86 Ala. 551, 6 So. Eep. 143; Menk v. Com.- mercial Ins. Co., 70 Cal. 585. 4. Commonwealth Ins. Co. v. Huntzinger, 98 Pa. St. 41; Fisher v. Crescent Ins. Co., 33 Fed. Eep. 544; Wood v. Hart- ford Ins. Co., 13 Conn. 544. 36 FiKE Insubance. RULE 4. Test of Warranty by Construction. A warranty in an insurance contract is a statement made therein by the assured, which is susceptible of no construction other than that the parties mutually in- tended that the policy shpuld not be binding unless such statement be literally true. Phcenix Assur. Co. v. Hunger Cotton Mfg. Co., 92 Tex. 297, 49 S. W. Eep. 222, 28 Ins. L. J. 248 ; Hoose v. Preseott Ins. Co., 84 Mich. 309, 47 N. W. Eep. 587, 20 Ins. L. J. 506. And see Aurora Ins. Co. v. Eddy, 49 111. 106, 55 111. 213. RULE 5. As Affected by Construction — Ambiguity. The written part, description, or matter inserted in or made part of the policy does not necessarily amount to a warranty. The courts are not inclined to search for and create or establish a warranty, breach, and forfeiture, in or by construction. If a specific thing is warranted in terms, or there is exact language re- lating to the risk clearly showing intention, then in legal effect a warranty results. When it depends upon uncertain language, or words having a double meaning, or there is any ambiguity, requiring con- struction, it favors the insured. If the insurance company does not see fit to protect itself by proper and exact or certain language as a warranty when it issues the policy, it cannot reasonably or legally ex- pect the courts to extend the protection after a fire by construction of ambiguous, doubtful, or uncertain words. United States F. & M. Ins. Co. v. Kimberly, 34 Md. 224; ^tna Ins. Co. v. Norman, 12 Ind. App. 653, 40 N. E. Eep. "Waeraitty. 37 1116, 24 Ins. L. J. 611; Cox v. ^tna Ins. Co., 29 Ind. 586; McGannon v. Michigan Millers' Ins. Co., Mich. , 87 N". W. Eep. 61 ; Parker v. Otsego County Ins. Co., 47 App. Div. 204 62 N. Y. Supp. 190, aff'd, 168 N. Y. 655, without opinion; Cummer v. Associated Manufacturers' Ins. Co., 67 App Div 151, 73 K. Y. Supp. 668, aff'd, 173 N". Y. 633, without opinion; Burleigh v. Gebhard Ins. Co., 90 N. Y. 220, 12 Ins. L. J. 141 ; Fire Association v. Colgin, 33 S. W. Eep. 1004, Tex. Civ. App. . And see Delaware Ins. Co. v. Harris, 26 Tex. Civ. App. 537, 64 S. W. Eep. 867; iEtna Ins. Co. v. Simmons, 49 Nebr. 811, 69 N. W. Eep. 125 ; Jackson v. British America Ins. Co., 106 Mich. 47, 63 K. W. Eep. 899; Hart v. Niagara Ins. Co., 9 Wash. 620, 38 Pac. Eep. 213 ; Wilson v. Conway Ins. Co., 4 E. I. 141, 159 ; Merchants' Ins. Co. v. Schroeder, 18 111. App. 216; Stebbins v. Globe Ins. Co., 2 Hall, 632 (IST. Y.) ; New- man V. Springfield Ins. Co., 17 Minn. 123; Myers v. Council Bluffs Ins. Co., 72 Iowa, 176, 33 N. W. Eep. 453; Gates v. Madison Ins. Co., 2 N. Y. 43 ; McBride v. Eepublic Ins. Co., 30 Wis. 562; Williams v. New England Ins. Co., 31. Me. 219; Howard Ins. Co. v. Bruner, 23 Pa. St. 50; Allen v. Charlestown Ins. Co., 5 Gray, 384 (Mass.) ; Fuller v. New York Ins. Co., 184 Mass. 12, 67 N. E. Eep. 879; Hosford v. Hartford Ins. Co., 127 U. S. 404; Lang v. Hawkeye Ins. Co., 74 Iowa, 673, 39 N. W. Eep. 86; Lamb v. Council Bluffs Ins. Co., 70 Iowa, 238. And see Vol. 1, Fire Insurance as Valid Contract, " Con- struction." RULE 6. When Construction of Warranty Affected by TTsage or Custom — Question of Fact. The construction of a warranty cannot be affected by usage or custom, unless there is proof that the custom was uniform and well settled, and either known to the parties when the contract was made or so gen- erally known or established as to raise a presumption that they had it in mind at the time;^ when qualified by such usage it becomes a question of fact.^ 1. Gough V. Jewett, 32 App. Div. 79, 52 N. Y. Supp. 707. And see Eipley v. ^tna Ins. Co., 30 N. Y. 136 ; Hill v. Hibernia 38 FiKE Insxteance. Ins. Co., 10 Hun, 26; Sims v. State Ins. Co., 47 Mo. 54; Texas Banking Co. ■;;. Hutchins, 53 Tex. 61. 2. Sims V. State Ins. Co., supra; Texas Banking Co. v. Hutchins, supra. See also Vol. 1, Fire Insurance as Valid Contract, "Con- struction," Eules 23 and 24. RULE 7. When Insured Entitled to Betnm of Premium. If policy never takes effect or is void when issued, on account of breach of warranty, in the absence of fraud by the insured, he is entitled to be repaid the premium paid on obtaining the policy. Jones V. Insurance Co. F. A., 90 Tenn. 604, 18 S. W. Eep. 260, 21 Ins. L. J. 377. And see Waller v. Northwestern Assur. Co., 64 Iowa, 101, 13 Ins. L. J. 789; Clark v. Manufacturers' Ins. Co., 2 Woodb. & M. 472 (U. S. Cir.) ; Friesmuth v. Agawam Ins. Co., 10 Cush. 587 (Mass.). RULE 8. Effect of New Agreement to Pay a Loss. A breach of warranty is no defense to an action brought upon a new agreement to pay the amount of the loss, in consideration of the surrender and cancel- lation of the policy, where there is no fraud, and such is the rule even if the insurance company had no knowledge of the breach at the time of the settlement or agreement. Smith V. Glens Falls Ins. Co., 62 N. Y. 85; Stache v. St. Paul Ins. Co., 49 Wis. 89. And see Illinois Ins. Co. v. Arch- deacon, 82 111. 236. Waeeanty. 39 RULE 9. Burden of Proof. The burden rests upon the insurance company to allege and establish a breach of warranty. Liverpool, L. & G. Ins. Co. v. Pamsworth Lumber Co., 72 Miss. 555, 17 So. Eep. 445, 34 Ins. L. J. 876; Weed v. Schenectady Ins. Co., 7 Lans. 452 (N. Y.) ; Kedman v. ^tna Tns. Co., 49 Wis. 431 ; Bittenger v. Providence- Washington Ins. Co., 34 Fed. Eep. 549, 14 Ins. L. J. 893 ; Pangborn v. Conti- nental Ins. Co., 62 Mich. 638. And see Puller v. ISTew York Ins. Co., 184 Mass. 13, 67 N. E. Eep. 879. RULE 10. Burden of Proof — Sprinkler System. An agreement that a sprinkler system is in com- plete working order, and that the insured will use due diligence to maintain it, will not be construed as a warranty, when that word is not used, so as to put the burden of proof upon the insured ; the burden rests upon the insurance company to show that the insured failed to use due diligence. Puller V. New York Ins. Co., 184 Mass. 13, 67 N. E. Eep. 879. RULE II. Contract Severable. A breach of warranty as to part of the property, if separately insured, does not render the entire policy void. Smith V. Home Ins. Co., 47 Hun, 30; Dowley v. Glens Palls Ins. Co., App. Div. , 91 K Y. Supp. 303; Eogers v. Phoenix Ins. Co., 131 Ind. 570, 33 K E. Eep. 498, 19 Ins. L. J. 492; Crook v. Phoenix Ins. Co., 38 Mo. App. 583. Compare 40 FiEE Insueancb. Cuthbertson v. North Carolina Ins. Co., 96 N. C. 480, 16 Ins. L. J. 465. And see Vol. 1, Fire Insurance as Valid Contract, " Con- struction." RULE 12. Bule 1. Applies to Paper Independent of Policy. The words in a policy, "if an application, survey, plan, or description of property be referred to in this policy, it shall be a part of this contract and a war- ranty by the insured, ' ' apply to some paper independ- ent of the policy, and cannot operate to make a descrip- tion in the policy itself a warranty. King Brick Mfg. Co. v. Phoenix Ins. Co., 164 Mass. 291, 25 Ins. L. J. 36, 41 K B. Eep. 377. It was held in Farmers' Ins. Co. ■;;. Curry, 13 Bush, 313, 6 Ins. L. J. 733 (Ky.), that a statute which provided that all state- ments or descriptions in an application " shall be deemed and held representations and not warranties" does not prevent parties from contracting otherwise. But mere reference to application as part of policy does not make statements in ap- plication warranties. Kentucky Ins. Co. v. Southard, 8 B. Mon. 634 (Ky.). RULE 13. Application Made Part of Contract — Both. IXust be Proved. When application is made part of the contract, both constitute the contract, and both must be proved; if in possession of the company, notice to produce it must be served. America Underwriters' Assoc, v. George, 97 Pa. St. 338, 11 Ins. L. J. 841; Lycoming Ins. Co. v. Storrs, 97 Pa. St. 354, 11 Ins. L. J. 519 ; Kogers v. Cedar Eapids Ins. Co., 73 Iowa, 448. Waekanty. 41 RULE 14. Conflict Between Written Application Made Part of Policy and Printed Condition. A written application made part of the policy, and showing by statements of the insured facts which might otherwise be claimed to render the policy void under a printed condition, operates as a waiver of such condition. Lamb v. Council BlufEs Ins. Co., 70 Iowa, 238. RULE 15. When Statements in Application are Warranties — Construction. Statements or answers to specific questions in a written application referred to and in terms made a part of the policy are warranties, and, if untrue, pre- vent recovery and void the insurance,^ without regard to whether such statements were made in good faith or otherwise? If the words of reference to an appli- cation show an intent for purpose of description or identification only, the application does not become part of the contract.* The courts will not extend the effect or operation of statements of the insured by construction,* and if language is ambiguous will con- strue statements as representations merely .° 1. King V. Tioga Fire Assoc, 35 App. Div. 58, 54 N". Y. Supp. 1057 ; Niles v. Farmers' Ins. Co., 119 Mich. 252, 77 N. W. Eep. 933; Pelican Ins. Co. v. Smith, 92 Ala. 428, 9 So. Eep. 327, subsequent appeal, 107 Ala. 313, 18 So. Eep. 105; Fire Assoc. V. American Cement Co., Tex. Civ. App. , 84 S. W. Eep. 1115; Owens v. Holland Purchase Ins. Co., 56 F. Y. 565 ; Le Eoy v. Market Ins. Co., 45 JST. Y. 80 ; Eipley v. Mtaa. Ins. Co., 30 F. Y. 136; Burritt v. Saratoga Ins. Co., 5 Hill, 188 (N. Y.) ; Pierce v. Empire Ins. Co., 62 Barb. 636; Jen- 42 FlEE IsrSUBANCE. nings V. Chenango Ins. Co., 2 Den. 75; Jefferson Ins. Co. v. Cotheal, 7 Wend. 72; Steward v. Phoenix Ins. Co., 5 Hun, 261 ; Columbia Ins. Co. v. Cooper, 50 Pa. St. 331 ; Sheldon v. Hartford Ins. Co., 22 Conn. 235; Philbrook v. New England Ins. Co., 37 Me. 137 ; Eoberts v. ^tna Ins. Co., 58 Cal. 83 ; Bennett v. Agricultural Ins. Co., 50 Conn. 420, 2 Ins. L. J. 569; Chrisman v. State Ins. Co., 16 Oreg. 283, 18 Pac. Eep. 466; Edwards v. Eamiers' Ins. Co., 74 111. 84; Citizens' Ins. Co. V. Hoffman, 128 Ind. 370, 27 N. E. Eep. 745 ; ^tna Ins. Co. V. Grube, 6 Minn. 82; Eoberts v. State Ins. Co., 36 Mo. App. 92. And see Gahagan v. Union Ins. Co., 43 N. H. 176; Byers v. Farmers' Ins. Co., 35 Ohio St. 606, 9 Ins. L. J. 743. 2. Morris v. Imperial Ins. Co., 106 Ga. 461, 32 S. E. Eep. 595, 28 Ins. L. J. 402. 3. Trench v. Chenango County Ins. Co., 7 Hill, 122 (N. Y.) ; Protection Ins. Co. v. Harmer, 2 Ohio St. 462. And see Sanders D. Cooper, 115 N. Y. 279; Clinton v. Hope Ins. Co., 45 IST. Y. 454; Albion Lead Works v. Williamsburg City Ins. Co., 2 Eed. Eep. 479, 9 Ins. L. J. 435. 4. Wilkins v. Insurance Co., 30 Ohio St. 318; Dilleber v. Home Ins. Co., 69 N. Y. 256; Planters' Ins. Co. v. Myers, 55 Miss. 479; Mutual Ins. Co. v. Gordon, 121 111. 366, 12 N. E. Eep. 747 ; Schroeder v. Traders' Ins. Co., 109 111. 157, 13 Ins. L. J. 492; Gates v. Madison County Ins. Co., 2 N. Y. 43, 5 N. Y. 469 ; Phoenix Ins. Co. v. CofEman, 10 Tex. Civ. App. 631, 32 S. W. Eep. 810. 5. Wilson V. Conway Ins. Co., 4 E. I. 141. And see Eule 5 ; Boardman v. New Hampshire Ins. Co., 20 N. H. 551; Buell V. Connecticut Ins. Co., 2 Flippin, 9, 5 Ins. L. J. 274 (H. S. Cir.). RULE i6. Incomplete or XTncertain Statements. All incomplete or uncertain statement in a written application, or an unanswered question, although made part of the policy, does not amount to a warranty; it must clearly appear that the insured made specific statement therein;^ if an answer is not responsive to a question, the application should be returned to the insured if the company desires the information.^ And Wakeanty. 43 ■so, if the company wishes more exact information, other questions should be put accordingly.^ 1. Parker v. Otsego County Ins. Co., 47 App. Div. 304, 63 N". Y. Supp. 199, aff'd, 168 N. Y. 655, without opinion; Meyers V. Lebanon Ins. Co., 156 Pa. St. 430, 37 Atl. Rep. 39, 33 Ins. L. J. 308; Dohn v. Farmers' Ins. Co., 5 Lans. 375 (N. Y.) ; Hosford V. Hartford Ins. Co., 137 U. S. 404; Carson v. Jersey City Ins. Co., 14 Vroom, 300 (N. J.). And see Gates v. Madi- son Ins. Co., 3 N. Y. 43, 5 N". Y. 469 ; Masters v. Madison Ins. Co., 11 Barb. 634; Hall v. People's Ins. Co., 6 Gray, 185 (Mass.) ; Dodge County Ins. Co. v. Eogers, 13 Wis. 337; Tiefen- thal V. Citizens' Ins. Co., 53 Mich. 306; Liberty Hall Assoc. V. Housatonic Ins. Co., 7 Gray, 361 (Mass.) ; Nichols v. Fayette Ins. Co., 1 Allen, 63 (Mass.) ; Bardwell v. Conway Ins. Co., 133 Mass. 90; Peoria Ins. Co. v. Perkins, 16 Mich. 380; Dayton V. Kelley, 34 Ohio St. 345; Sinclair v. Canadian Ins. Co., 40 Tip. Can. Q. B. 306 ; Browning v. Home Ins. Co., 71 N. Y. 508 ; Armenia Ins. Co. v. Paul, 91 Pa. St. 530 ; Jersey City Ins. Co. V. Carson, 44 N. J. L. 310 ; Lorillard Ins. Co. v. McCulloch, 31 Ohio St. 176; Mulville v. Adams, 19 Fed. Eep. 887, 13 Ins. L. J. 435 ; Smith v. Home Ins. Co., 47 Hun, 30 ; Phoenix Ins. Co. V. Coffman, 10 Tex. Civ. App. 631, 33 S. W. Eep. 810. 2. Meyers v. Lebanon Ins. Co., supra. 3. Hall V. People's Ins. Co., supra; Wyman v. People's Ins. Co., 1 Allen, 301 (Mass.). RULE 17. Construction of Questions in Written Application. The questions in a form of written application should call for specific exact statement, and will not be extended by construction if uncertain in meaning, as, for instance, a question as to whether the insured had ever been refused insurance on mill property, has no reference to companies which do not in any case write insurance on mills; hence the insured's answer " no " may be construed as correct, though he has been refused insurance by such company. Phoenix Ins. Co. v. Coffman, 10 Tex. Civ. App. 631, 33 S. W. Eep. 810. And see Stott v. London & L. Ins. Co., 31 Ont. 313. And see Eule 5. 44 FiEE Insurance, RULE i8. When Insured Bound by Application. The insured is not bound by an application or state- ments which he did not make, sign, or authorize to be made,^ unless the reference to the application is merely for the purpose of identification in ascertaining the subject to which the policy applies;^ and an applica- tion made out and delivered by the insured upon the request of the company, subsequent to the issue and delivery of the policy, does not amount to a warranty, unless there is new consideration,* or the policy is made conditional upon the procuring of the survey or application, and its delivery expressly qualified.* This rule does not prevent reference to a survey filed with another company.® 1. Thomas v. Lebanon Ins. Co., 78 Mo. App. 268; Cleavenger V. Franklin Ins. Co., 47 W. Va. 595, 35 S. E. Eep. 998; Denny v. Conway Ins. Co., 13 Gray, 492 (Mass.) ; Sprague v. Holland Purchase Ins. Co., 69 N. Y. 128; Clinton v. Hope Ins. Co., 45 N. Y. 454; Vilas v. New York Central Ins. Co., 72 N. Y. 590 ; Ames v. New York Union Ins. Co., 14 N. Y. 253 ; Benninghoff v. Agricultural Ins. Co., 93 N. Y. 495, 13 Ins. L. J. 45; Commercial Ins. Co. v. Ives, 56 111. 402; Hingston *. .^tna Ins. Co., 42 Iowa, 46 ; Lycoming Ins. Co. v. Jackson, 83 III. 302; Eilenburger v. Protective Ins. Co., 89 Pa. St. 464; Burson v. Philadelphia Assoc., 136 Pa. St. 267, 20 Atl. Eep. 401 ; Sprott v. New Orleans Ins. Co., 53 Ark. 215, 13 S. W. Eep. 799. And see Eichards v. Washington Ins. Co., 60 Mich. 420, 27 N. W. Eep. 586; Germania Ins. Co. v. Hick, 23 111. App. 381, aff'd, 125 111. 361; South Bend Toy Co. v. Dakota Ins. Co., 48 N. W. Eep. 310, 52 N. W. Eep. 866, 20 Ins. L. J. 871 (S. D.) ; State Ins. Co. v. New Hampshire Trust Co., 47 Nebr. 62, 66 N. W. Eep. 9, 25 Ins. L. J. 307, rehearing denied, 47 Nebr. 71, 66 N. W. Eep. 1106. 2. Sanders v. Cooper, 115 N. Y. 279; Clinton v. Hope Ins. Co., supra. 3. Fire Assoc, v. Bynum, 44 S. W. Eep. 579 (Tex. Civ. App.) ; Liverpool, L. & G. Ins. Co. v. Stem, 29 S. W. Eep. 678 Warranty. 45 (Tex. Civ. App.) ; Michigan Ins. Co. v. Wich, 8 Colo. App. 409, 46 Pac. Eep. 687 ; Le Eoy v. Park Ins. Co., 39 N. Y. 56 ; Eankin r. Amazon Ins. Co., 89 Cal. 303, 36 Pac. Eep. 873, 30 Ins. L. J. 844. 4. Le Eoy v. Park Ins. Co., 39 K. Y. 56. 5. Le Eoy v. Market Ins. Co., 45 N. Y. 80. Under special language in the policy insured may be deemed to ratify an application by acceptance of the policy. Eichardson v. Maine Ins. Co., 46 Me. 394. And see Draper V. Charter Oak Ins. Co., 3 Allen, 569 (Mass). RULE ig. Written Application and Policy Must be Construed Together — Application May Iiimit or Qualify the Warranty. A written application made part of the policy by its terms may limit, modify, or qualify the warranty or stipulate under what circumstances the policy shall be void.^ Both the written application and the policy must be construed together, and if there is any doubt as to whether the statement in the application was in- tended as a warranty it will be construed as a repre- sentation only.^ And if the application states that the statements therein are true, so far as " known " to the applicant or " material to the risk," the effect is qualified or limited accordingly, and knowledge or ma- teriality must appear;^ if policy issues upon a prior application or one made to another company, insured is responsible for truth of its statements only at time of such prior application.* 1. Cagle V. Chilicothe Ins. Co., 78 Mo. App. 315; Lindsey V. Union Ins. Co., 3 E. I. 157; Fisher v. Crescent Ins. Co., 33 Fed. Eep. 549; N"oone v. Transatlantic Ins. Co., 88 Cal. 153, 36 Pac. Eep. 103, 30 Ins. L. J. 776; Chase v. Hamilton Ins. Co., 30 N. Y. 53; Haley v. Dorchester Ins. Co., 13 Gray, 545 -(Mass.) ; Lamb v. Council Bluffs Ins. Co., 70 Iowa, 338. 46 FiEE Insubance. 2. ^tna Ins. Co. v. Simmons, 49 Nebr. 811, 69 N. W. Rep. 125 ; Eogers v. Phoenix Ins. Co., 121 Ind. 570, 23 N. E. 498^ 19 Ins. L. J. 492. And see Chrisman v. State Ins. Co., 16 Oreg. 283, 18 Pae. Eep. 466; Byers v. Insurance Co., 35 Ohio St. 606; Edwards v. Farmers' Ins. Co., 74 111. 84; Howard Ins. Co. v. Cornick, 24 111. 455. See Eule 5. 3. ^tna Ins. Co. v. Gmbe, 6 Minn. 82 ; Garcelon v. Hampden Ins. Co., 50 Me. 580; Houghton v. Manufacturers' Ins. Co.,. 8 Mete. 114 (Mass.); Lee d. Howard Ins. Co., 11 Cush. 324 (Mass.); Hall v. People's Ins. Co., 6 Gray, 185 (Mass.); Elliot V. Hamilton Ins. Co., 13 Gray, 139; Prieger v. Ex- change Ins. Co., 6 Wis. 89; First National Bank v. Hartford Ins. Co., 5 Otto, 673, 7 Ins. L. J. 20S; Eedman v. Hartford Ins. Co., 47 Wis. 89 ; Mulville v. Adams, 19 Fed. Eep. 887, 13 Ins. L. J. 435; Miller v. Alliance Ins. Co., 19 Blatchf. 308 (U. S. Cir.) ; Wilkins v. Germania Ins. Co., 57 Iowa, 529, 11 Ins. L. J. 790 ; Lynchburg Ins. Co. v. West, 76 Va. 575, 12 Ins. L. J. 51 ; Waterbury v. Dakota Ins. Co., 6 Dak. 468, 43 N. W. Eep. 697 ; Kerr v. Hastings Ins. Co., 41 Up. Can. Q. B. 317. 4. Schroeder v. Trade Ins. Co., 109 111. 157, 13 Ins. L. J. 492. And see Boardman v. New Hampshire Ins. Co., 20 N. H. 551. RULE 20. Effect of Fraud — Insured Responsible for His Own Misstate- ments in a Written Application — Whether Bound or Not Question of Fact — Presumption. If the agent of the company is guilty of a fraud upon his principal, and the insured knowingly aids in its perpetration, or by neglecting to read the appli- cation suffers it to be perpetrated, he is guilty of par- ticipating in the fraud, and must accept and suffer the consequences.^ The insured is not relieved from the consequence of Ms false statement or a breach, by the mere fact that he signed the application at sug- gestion of the soliciting agent, and did not know what it contained.^ Whether insured is bound or not by a written application may be a question of fact proper to be determined by a jury.^ Insured's signature to Wabranty. 47 an application creates a presumption that he knew its contents.* 1. Hamburg-Bremen Ins. Co. v. Lewis, 4 App. Cas. D. C. 66; Norwich Union Ins. Co. v. Le Bell, 29 Can. S. C. 470; Smith V. Ins. Co., 24 Pa. St. 320; Wilson v. Conwav Ins. Co., 4 E. I. 141; Johnson v. Dakota Ins. Co., 1 K. D. 167", 45 N. W. Eep. 799. 2. Sun Fire Office v. Wich, 6 Colo. App. 103, 39 Pac. Eep. 587; Protection Ins. Co. v. Hall, 15 B. Mon. 411 (Ky.); Ameri- can Ins. Co. V. Gilbert, 27 Mich. 429; Susquehanna Ins. Co. v. Swank, 102 Pa. St. 17; Pottsville Ins, Co. v. Fromm, 100 Pa. St. 347, 12 Ins. L. J. 21. And see Pierce v. Empire Ins. Co., 62 Barb. 636 ; Sarsfield v. Metropolitan Ins. Co., 61 Barb. 479; Southern Ins. Co. v. Yates, 28 Gratt. 585 (Va.) ; Cuth- bertson v. North Carolina Ins. Co., 96 N. C. 480; Kniseley v. British America Assur. Co., 32 Ont. 376. 3. Cronin v. Fire Assoc, 123 Mich. 277, 82 N. W. Eep. 45. And see prior appeal, 112 Mich. 106, 70 N. W. Eep. 448. 4. Hartford Ins. Co. v. Gray, 80 111. 28, 8 Ins. L. J. 611. RULE 21. Agent of Company in Taking and Pilling up Written Applica- tion — Besponsibility for Misstatements — Evidence — Ques- tion for Jury. An agent of the insurance company, with authority to solicit insurance, receive the premium, and deliver policies, in taking and filling a written application, is the representative of the company. The insured has the right to rely upon the knowledge and skill of the agent to properly prepare the application, and to rely upon the authority which the agent assumes. He has the right to consider that, when the agent is told the facts, it is within the apparent scope of his authority to decide upon and frame the answers to the questions in the application; and when, with full knowledge of the facts, the agent assures the applicant that a por- 48 FiEE Insueance. tion of them are immaterial and himself erroneously misstates others, without the slightest suggestion of, fraud or fault on the part of the insured, the company who accredits him must suffer from his mistakes and not the innocent policyholder. Breach of warranty cannot be found in misstatements in the application made part of the policy under such circumstances.* Parol evidence is admissible to show the facts upon theory of an estoppel,^ and the application of the rule is not affected by limitations upon agent's authority in policy,^ unless the policy in express terms provides or contains an express agreement that the agent shall be deemed the agent of the insured and not of the in- surance company under any circumstances whatever ;* the insurance company has the right to show that its agent correctly recorded or stated the facts as given to him, and if there is conflict in the testimony it is a question for the jury.® Possession of blank applica- tions may be evidence of agency.® And the mere fact that assured knows that the application has to be for- warded for approval is no evidence of notice of limita- tion upon the authority of such agent.'' 1. Eissler v. American Central Ins. Co., 150 Mo. 366, 51 S. W. Eep. 755, 28 Ins. L. J. 615 ; Ormsby v. Laclede Ins. Co., 105 Mo. App. 143, 79 S. W. Rep. 733 ; Nixon v. German Ins. Co., 69 Mo. App. 351 ; Cagle v. Chilicothe Ins. Co., 78 Mo. App. 431 ; Eickey v. German Ins. Co., 79 Mo. App. 485 ; Montgomery V. Lebanon Ins. Co., 80 Mo. App. 500; Bushnell v. Farmers' Ins. Co., Mo. App. , 85 S. W. Eep. 103; Gibson v. German-American Ins. Co., 85 Mo. App. 41; Eoss Langford V. Mercantile Ins. Co., 97 Mo. App. 79, 71 S. W. Rep. 720 ; City of De Soto V. American Ins. Co., 102 Mo. App. 1, 74 S. W. Eep. 1 ; Mead v. Saratoga Ins. Co., 81 App. Div. 282, 80 N". Y. Supp. 885; Hays v. Saratoga Ins. Co., 81 App. Div. 287, 80 Warranty. 49 N. Y. Supp. 888 ; Plumb v. Cattaraugus Ins. Co., 18 N. Y. 392 ; Eowley v. Empire Ins. Co., 36 N. Y. 550; Bennett v. Agri- cultural Ins. Co., 106 N. Y. 243; Partridge v. Commercial Ins. Co., 17 Hun, 95; Baker v. Home Ins. Co., 64 N. Y. 648; Cor- nelius V. Farmers' Ins. Co., Iowa, , 81 N. W. Eep. 236; Schaeft'er v. Anchor Ins. Co., 113 Iowa, 652, 85 N. W. Eep. 985; Parno v. Iowa Merchants' Ins. Co., 114 Iowa, 132, 86 N". W. Eep. 210; Taylor v. Anchor Ins. Co., 116 Iowa, 625, 88 N. W. Eep. 807 ; Donnelly v. Cedar Eapids Ins. Co., 70 Iowa, 693, 15 Ins. L. J. 698; Siltz v. Hawkeye Ins. Co., 71 Iowa, 710, 39 N. W. Kep. 605; Bartholomew v. Merchants' Ins. Co., 25 Iowa, 507; Meyers v. Lebanon Ins. Co., 156 Pa. St. 430, 27 Atl. Eep. 39, 33 Ins. L. J. 308; Phenix Ins. Co. v. Stocks, 149 111. 319, 36 N. E. Eep. 408; American Ins. Co. v. Walston, 111 111. App. 133 ; Southern Ins. Co. v. Hastings, 64 Ark. 253, 41 S. W. Eep. 1093 ; Dwelling-House Ins'. Co. v. Brodie, 53 Ark. 11; Sellers v. Commercial Ins. Co., 105 Ala. 382, 16 So. Eep. 798, 24 Ins. L. J. 354; Phoenix Ins. Co. v. Copeland, 86 Ala. 551 ; Parrish v. Eosebud Mining Co., 140 Cal. 635, 71 Pac. Eep. 35 Atl. Eep. 247. RULE 47. Construction of Warranty as to Watclinian. When the policy warrants or requires a watchman to be kept on duty all hours of the night, or that a 68 FiKE Instjbance. constant watch, shall be kept, or at all times when a mill or factory is not in operation, it does not mean that he shall be constantly and continuously present watching; ordinary care is what is required, and a mere temporary cessation of watching for several hours does not constitute a breach of the warranty nor void the policy.^ It is construed as a condition subse- quent to accord with a reasonable presumption as to intent under all the circumstances. It does not require mathematically strict and exact compliance, nor does it imply an agreement that the watchman will never neglect his duty in the slightest particular, hence the mere leaving of the premises for two hours does not, as a matter of law, create a breach or void the policy.' Nor does the mere fact that the watchman is asleep on the premises when the fire breaks out constitute a breach,^ unless the insured had notice of unfitness or had not observed ordinary care in employing and keeping him.* 1. London & Lancashire Ins. Co. v. Gerteson, 106 Ky. 815, 51 S. W. Eep. 617; Hanover Ins. Co. v. Gustin, 40 Nebr. 838, 59 N. W. Eep. 375, 23 Ins. L. J. 651 ; McGannon v. Millers' Xat. Ins. Co., 171 Mo. 143, 71 S. W. Eep. 160 ; McGannon v. Michi- gan Millers' Ins. Co., 137 Mich. 636, 87 ]S^. W. Eep. 61; Au Sable Lumber Co. v. Detroit Ins. Co., 89 Mich. 407, 50 ]N^. W. Eep. 870, 21 Ins. L. J. 311; Kansas Mill Owners' Ins. Co. v. Metcalf, 59 Kans. 383, 53 Pac. Eep. 68. And see King Brick Mfg. Co. V. Phcenix Ins. Co., 164 Mass. 291, 41 X. E. Eep. 377, 25 Ins. L. J. 36; Hovey v. American Ins. Co., 2 Duer, 554 (X. Y.) ; Sierra Milling Co. v. Hartford Ins. Co., 76 Cal. 235, 18 Pac. Eep. 367. 2. McGannon v. Millers' Nat. Ins. Co., 171 Mo. 143, 71 S. W. Eep. 160; Kansas Mill Owners' Ins. Co. v. Metcalf, 59 Kans. 383, 53 Pac. Eep. 68. 3. Burlington Ins. Co. v. CofEman, 13 Tex. Civ. App. 439, 35 S. W. Eep. 406; Phoenix Ins. Co. v. Coffmari, 10 Tex. Civ. Wabranty. 69 App. 631, 33 S. W. Eep. 810. And see McGannon v. Michigan Millers' Ins. Co., 137 Mich. 636, 87 N. W. Eep. 61. 4. Burlington Ins. Co. v. Coffman, supra. RULE 48. Ijiiaitation as to Construction of Warranty as to ■Watchman — Effect of Possession by Sheriff. The last rule of construction as to warranty in keep- ing a watchman is not to be extended beyond reason- able bounds to relieve the insured; hence a watchman who, during the night, visits an insured mill twice, and the rest of the night sleeps in a house from which the mill is only partially visible, is not a substantial nor sufficient compliance with the obligation of the insured to keep a watchman on duty constantly day and night ; and a statutory provision that the insurance company is not exonerated by negligence of the insured or of his agents does not relieve the insured from conse- quences of the breach.^ And so there is a breach when watchman leaves the premises night before the fire which occurs the following morning.^ A levy and tak- ing possession by a deputy sheriff does not relieve the insured from his obligation to keep a watchman.' 1. McKenzie v. Scottish Union & Nat. Ins. Co., 112 Cal. 548, 44 Pac. Eep. 923, 25 Ins. L. J. 561. And see Trojan Mining Co. V. Firemen's Ins. Co., 67 Cal. 27; Wenzel v. Commercial Ins. Co., 67 Cal. 438, 14 Ins. L. J. 625, 809 ; Eankin v. Amazon Ins. Co., 89 Cal. 203, 36 Pac. Eep. 872, 20 Ins. L. J. 844. 2. Glendale Mfg. Co. v. Protection Ins. Co., 21 Conn. 19. And see Sheldon v. Hartford Ins. Co., 23 Conn. 235. 3. First Nat. Bank v. Insurance Co. N. A., 50 N. Y. 45. RULE 49. Ambiguous or Doubtful Statements as to Watchman. Doubtful statement in an application by the insured in regard to a watchman may be modified or qualified 70 FiBE Insukance. by an oral understanding or agreement between the agent who filled it up and the insured, that it should be deemed complied with by service of a watchman em- ployed in that capacity in a sawmill situated in sight of and not more than sixty or seventy yards from the property insured ;^ but such evidence is not admissible to change language of a plain contract.^ 1. Farmers' Ins. Assoc, v. Williams, 95 Va. 248, 28 S. B. Eep. 214. And see Malleable Iron Co. v. Phcenix Ins. Co., 25 Conn. 465, where relief was obtained by the insured in equity. 2. Hovey v. American Ins. Co., 2 Duer, 554 (N. Y.) ; Eipley V. ^tna Ins. Co., 30 N. Y. 136. And see Eule 5. RULE 50. Warranty as to Watchman not Created nor Extended by Con- struction. A warranty as to watchman will not be created or extended by construction, and when in terms the un- derstanding and agreement is that a watchman shall be employed, it is not a warranty that one shall be kept on the premises and does not prevent a recovery un- less the fire was due to the failure to keep the agree- ment as made,^ nor does the statement " watchman kept on the premises " require constant watch and is complied with by exercise of ordinary care according to usage.^ One who performs the duties of a watch- man answers the requirements though not called such.* 1. Hart V. Niagara Ins. Co., 9 Wash. 620, 38 Pac. Kep. 213. 2. Croker v. People's Ins. Co., 8 Cush. 79 (Mass.). 3. Au Sable Lumber Co. v. Detroit Ins. Co., 89 Mich. 407, 50 N. W. Eep. 870, 21 Ins. L. J. 311. And see Eules 5, 47, 48. Wakkanty. 71 RULE 51. When Insured Has Seasonable Time to Comply. If policy issue with a warranty that a watchclock should be kept on the premises, the agent of the in- surance company knowing that there is none kept at the time, the insured has a reasonable time to pro- cure it. Phoenix Ins. Co. v. CofEman, 10 Tex. Civ. App. 631, 33 S. W. Eep. 810. See Kule 41. RULE 52. Warranty of no Begular Watchman. When warranty is "no regular watchman, but one or two hands slept in the mill," the insured is bound to substantial compliance by having one or two of his employees lodge in the mill each night ;^ but when, in answer to question " Who sleeps in the store? " in- sured states ' ' there is a watchman upon the premises all night," it is not a warranty that such watchman will continue to sleep upon the premises.^ 1. Blumer v. Phcenix Ins. Co., 45 Wis. 622, 48 Wis. 535. 2. Virginia F. & M. Ins. Co. v. Buck, 88 Va. 517, 18 S. B. Eep. 973. RULE 53. When Compliance With Warranty as to Watchman Question of Pact. The compliance by the insured with a condition or warranty as to a watchman may be a question of fact proper to be submitted to and determined by a jury;' when language is not exact, as for instance ' ' a watch- man to be on the premises," it invites the question of 72 Fire Insurance. substantial and sufficient compliance;^ and so when the warranty is that ' ' a suitable watch " or " a good watch " will be kept, it becomes a question of fact.^ 1. Spies V. Greenwich Ins. Co., 97 Mich. 310, 56 li. W. Eep. 560, 23 Ins. L. J. 3; Houghton v. Manufacturers' Ins. Co., 8 Mete. 114 (Mass.). 2. Andes Ins. Co. v. Shipman, 77 111. 189. 3. Percival v. Maine Ins. Co], 33 Me. 242 ; Parker v. Bridge- port Ins. Co., 10 Gray, 302 (Mass.). For meaning of the words " constant watch " in connection with construction of the Maine statute, see King Brick Mfg. Co. 1'. Phoenix Ins. Co., 164 Mass. 291, 41 K E. Rep. 277, 25 Ins. L. J. 36. RULE 54. Warranty as to Clear Space. Insured is bound by the terms of an accepted policy warranting that a clear space of a certain number of feet should be kept between the property insured, and any building or other exposure or by any continuing warranty that there are no exposures within a certain number of feet; it is the equivalent of an agreement that there shall be no exposures within the prescribed distance, during the life of the policy, and if there is, it constitutes a breach without regard to any question of an increase of risk, or to any alleged parol agree- ment to contrary prior to the issue and acceptance of the policy, or to the fact that the insured did not read it.^ The measurement of prescribed feet should be made from a shed attached to the main building, and not from the body of the building.^ 1. Keller v. Liverpool, L. & G. Ins. Co., 27 Tex. Civ. App. 102, 65 S. W. Eep. 695 ; Straker v. Phenix Ins. Co., 101 Wis. 413, 77 N. W. Eep. 752, 28 Ins. L. J. 143. 2. Merchants' Ins. Co. v. New Mexico Lumber Co., 10 Colo. App. 223, 51 Pac. Eep. 174, 26 Ins. L. J. 969. Wabeanty. 73 RULE 55. Statements as to Value. A stated value warranted to be the value goes be- yond an expression of opinion and becomes an asser- tion of a fact, operative as a warranty;^ and a sub- stantial overvaluation voids tbe policy without regard to motive or intent.^ Ordinarily an estimate of value is but a mere matter of opinion, and not a statement of fact.^ There may be distinction as to a valued policy.* 1. School District v. State Ins. Co., 61 Mo. App. 597; Lama V. Dwelling-House Ins. Co., 51 Mo. App. 447 ; Bobbitt v. Liver- pool, L. & G. Ins. Co., 66 N. C. 70; American Ins. Co. v. Gilbert, 27 Mich. 429. 2. Sheldon v. Michigan Millers' Ins. Co., 124 Mich. 303, 82 N. W. Eep. 1068. But compare First ISTat. Bank v. Hartford Ins. Co., 5 Otto, 673, 95 U. S. ,7 Ins. L. J. 208 ; Smith v. Home Ins. Co., 47 Hun, 30 ; German Ins. Co. v. Read, 13 S. W. Rep. 1080 (Ky.). 3. Merchants' Ins. Co. v. Schroeder, 18 111. App. 216 ; Home Ins. Co. V. Overturf, Ind. App. , 74 N. E. Rep. 47; Phoenix Ins. Co. v. Wilson, Ind. , 25 N. E. Rep. 592, 20 Ins. L. J. 73; Pickle v. Phoenix Ins. Co., 119 Ind. 291, 21 N. E. Rep. 898 ; Wheaton v. North B. & M. Ins. Co., 76 Cal. 415, 18 Pac. Rep. 758; Cox v. Mtna Ins. Co., 29 Ind. 586; Bonham V. Iowa Cent. Ins. Co., 25 Iowa, 328. 4. Cox V. -(Etna Ins. Co., supra; Schmidt v. Mutual Ins. Co., 55 Mich. 432, 14 Ins. L. J. 207. RULE 56. Incendiary Fire — Other Insurance. If, in answer to a specific question, the insured states there is no danger of an incendiary fire, and does not state the truth, as he has reason with ordinary caution and prudence to believe it, there is a breach;^ a false statement as to other insurance will constitute a breach of warranty;^ but statement that 74 FiBE Insurance. the insurance is on the property does not constitute a warranty that it is upon the interest of the insured.* 1. McBride v. Eepublic Ins. Co., 30 Wis. 563. And see North American Ins. Co. v. Throop, 33 Mich. 146; Campbell v. Vic- toria Ins. Co., 45 Up. Can. Q. B. 412; Herbert v. Mercantile Ins. Co., 43 Up. Can. Q. B. 384; Greet v. Citizens' Ins. Co., 27 •Grant Ch. 121 (Can.). 2. Phoenix Ins. Co. v. Benton, 87 Ind. 133, 11 Ins. L. J. €34; Commonwealth Ins. Co. v. Huntzinger, 98 Pa. St. 43. 3. Planters' Ins. Co. v. Deford, 38 Md. 383. RULE 57. Warranty as to Interest, Title, Lien, or Incumbrance. When a warranty is established as to a statement of ownership or title, or existence or amount of in- cumbrance, lien, or mortgage, if the statement is un- true or false there is a breach rendering the policy void.^ A renewal mortgage is not a breach of war- ranty against future incumbrances.^ And whether there is a breach or not as to statement of amount of mortgage may be determined by the amount due thereon and not by the amount of its face or as originally written.* When warranted the question of materiality is not open to the insured.* A requirement in application that everything material to the risk is stated, is not broken by failure to disclose lien or judgment.^ 1. Planters' Ins. Co. v. Loyd, 67 Ark. 584, 56 S. W. Eep. 44; Niles v. Farmers' Ins. Co., 119 Mich. 253, 77 N. W. Rep. 933; Cerys v. State Ins. Co., 71 Minn. 338, 73 N. W. Eep. 849, 21 Ins. L. J. 258; Barnard v. Faber, L. E. 1 Q. B. 340 (1893) ; Lama v. Dwelljng-House Ins. Co.-, 51 Mo. App. 447 ; Best v. German Ins. Co., 68 Mo. App. 598; Denver Ins. Co. v. Eesor, 95 111. App. 197; Pennsylvania Ins. Co. v. Gottsman, 48 Pa. St. "Wakbanty. 75 151; Blooming Grove Ins. Co. v. McAnerney, 103 Pa. St. 335; Eohrbaeh v. Germania Ins. Co., 63 N. Y. 47 ; Stevens v. Queen Ins. Co., 81 Wis. 335, 51 N. W. Eep. 555, 31 Ins. L. J. 443 ; Friesmuth v. Agawam Ins. Co., 10 Cush. 588 (Mass.) ; Brown V. People's Ins. Co., 11 Cush. 880; Loehner v. Home Ins. Co., 17 Mo. 347 ; Battles v. York County Ins. Co., 41 Me. 308 ; Gould V. York County Ins. Co., 47 Me. 403; Smith v. Empire Ins. Co., 25 Barb. 497 ; Shoemaker v. Glens Falls Ins. Co., 60 Barb. 84; Patten v. Merchants' Ins. Co., 38 IST. H. 338; Hutchins v. Cleveland Ins. Co., 11 Ohio St. 477; Abbott v. Shawmut Ins. Co., 3 Allen, 313 (Mass.) ; Jacobs v. Eagle Ins. Co., 7 Allen, 133 (Mass.); Hinman v. Hartford Ins. Co., 36 Wis. 159; Schu- mitsch V. American Ins. Co., 48 Wis. 36 ; ^tna Ins. Co. ■;;. Eesh, 40 Mich. 341 ; Byers v. Insurance Co., 35 Ohio St. 606 ; Connecti- cut Ins. Co. V. Pyle, 44 Ohio St. 19 ; State Ins. Co. v. Jordan, 24 ISTebr. 358, 38 N. W. Eep. 839 ; Glade v. Germania Ins. Co., 56 Iowa, 400; Crook v. Phenix Ins. Co., 38 Mo. App. 583; Pierce V. Empire Ins. Co., 62 Barb. 636 ; Cuthbertson v. North Caro- lina Ins. Co., 96 N. C. 480; Garver v. Hawkeye Ins. Co., 69 Iowa, 202 ; Birmingham v. Empire Ins. Co., 43 Barb. 457. 2. Bowlus V. Phoenix Ins. Co., 133 Ind. 106, 32 N. B. Eep. 319. 3. Dougherty v. German-American Ins. Co., 67 Mo. App. 536; Hosford v. Germania Ins. Co., 137 IJ. S. 399. And see Titus V. Glens Falls Ins. Co., 81 N. Y. 410; Mutual Millers' Ins. Co. V. Gordon, 30 111. App. 560, aflE'd, 12 111. 366. 4. Cerys v. State Ins. Co., 71 Minn. 338, 73 N. W. 849, 27 Ins. L. J. 258. 5. City Ins. Co. v. Carrugi, 41 Ga. 660. RULE 58. Construction of Variovis Warranties as to Interest or Title. Description or statement " Ms property," does not constitute a warranty as to title ;^ unless in reply to specific inquiry in application made part of the policy, it may be effective as a warranty f an omission to dis- close an existing executory contract to convey is not a breach of condition that an application contains a just, full, and true exposition of all facts in regard to situation, value, and risk of the property;^ an equitable 76 FiBE Insubakce. title or interest in vendee in possession under an exec- utory contract of sale, may satisfy representations as to his ownership and interest in absence of specific inquiry or exact and unambiguous assertions or state- ments ;* but this does not prevent violation of specific conditions in policy as to title or interest;® a state- ment of " fee-simple " is not rendered untrue by ex- istence of wife's contingent right of dower;" so when question as to title is answered " deed," it does not mean an unqualified grant in fee of a freehold estate, any other interest founded on a deed would not make the statement untrue ;'^ a statement that insured " owns " the property is not rendered false by exist- ence of a mortgage f when warranty is by joint owners insured that there is no incumbrance, a mortgage by one on his interest constitutes a breach;® the effect of a deed may be qualified by another writing executed at same time.^** 1. Mutual Ins. Co. v. Deale^ 18 Md. 36; Dohn v. Farmers' Ins. Co., 5 Lans. 275 (N. Y.). 2. MeCormick v. Springfield P. & M. Ins. Co., 66 Cal. 361, 24 Pac. Eep. 1005, 14 Ins. L. J. 373; Dohn v. Farmers' Ins. Co., 5 Lans. 275 (N. Y.). 3. Davis V. Quincy Ins. Co., 10 Allen, 113 (Mass.). 4. Lorillard Ins. Co. v. McCulloeh, 21 Ohio St. 176 ; McCul- loch V. Norwood, 58 N. Y. 562; Franklin Ins. Co. v. Martin, 11 Vroom, 568 (N. J.) ; Eumsey v. Phcenix Ins. Co., 17 Blatchf. 527 (U. S. Cir.). 5. Franklin Ins. Co. v. Martin, supra. 6. Southern Ins. Co. v. Kloeber, 31 Gratt. 739 (Va.). 7. Merrill v. Agricultural Ins. Co., 73 N. Y. 452. And see Dacy V. Agricultural Ins. Co., 21 Hun, 83; Pavey v. American Ins. Co., 56 Wis. 221. 8. Carson v. Jersey City Ins. Co., 14 Vroom, 300 (N. J.). 9. Denver Town Ins. Co. v. Resor, 95 111. App. 197. 10. Farmers & Merchants' Ins. Co. v. Hahn, Nebr. , 96 K W. Eep. 255. Waebanty. 77 RULE 59. Construction of Other Various Warranties. Description as ' ' his building " is no warranty of ownership in absence of specific inquiry and answer as to interest or title;' " will be occupied by a tenant " is a statement of expectation and not a stipulation that it shall be so occupied;^ a statement of judgment or opinion is not a representation of a factf if insured gives orders to his servants to comply with a prom- issory warranty and they neglect to do so, it does not necessarily constitute a breach;* a statement that there is no planing-mill on the premises, is not made untrue by such a machine in an adjoining building not in- cluded in policy;^ when question is whether all stove- pipes passed into good brick chimneys and insured replies ' ' one does not, but that he will build a chimney in the spring," failure of insured to build a chimney does not relieve the company from liability;" when question is as to truth of statement in application as to age of a building, the computation is from date of its erection, and not from the age of materials used in construction -^ description as ' ' brick building ' ' is not a warranty that the building is constructed entirely of brick f a statement that building is used for storage of ice does not amount to a warranty that ice is therein stored when policy issues;^ a description of several buildings adjoining and communicating situate " de- tached, ' ' does not mean detached from each other, but as a whole or mass, detached from other buildings;'** when insured warrants that he will not work in gin- 78 Fire Insurance, * house at night or by artificial light, there is no breach in use of artificial light for a purpose other than work;^^ if insured states that he has no fears that his property is in danger from incendiarism, a breach is not established by an attempt to burn the property and consequent cancellation of another policy;^* an upright portable engine is a steam farm engine, when used within prohibited distance from insured buildings for filling silos upon a farm.^^ 1. mblo V. Insurance Co. of N". A., 1 Sandf. 551 (N. Y.) ; Eohrbach v. Germania Ins. Co., 63 N. Y. 47. 2. Herrick v. Union Ins. Co., 48 Me. 558. 3. Dennison v. Thomaston Ins. Co., 20 Me. 125. 4. Daniels v. Hudson Eiver Ins. Co., 12 Cush. 416 (Mass.) ; Insurance Co. N. A. v. McDowell, 50 111. 120; Aurora Ins. Co. V. Eddy, 55 111. 213. 5. Mulville V. Adams, 19 Fed. Hep. 887, 13 Ins. L. J. 435. 6. Waterbury v. Dakota Ins. Co., 6 Dak. 468, 43 1>[. W. Eep. 697. 7. Phcenix Ins. Co. v. Pickel, 3 Ind. App. 332, 29 F. E. Eep. 432. And see Lamb v. Council Bluffs Ins. Co., 70 Iowa, 238. 8. Gerhauser v. North B. & M. Ins. Co., 7 Fev. 174. 9. Dolliver v. St. Joseph Ins. Co., 131 Mass. 39, 10 Ins. L. J. 380. 10. Broadwater v. Lion Ins. Co., 34 Minn. 465, 15 Ins. L. J. 295. 11. Mechanics' Ins. Co. v. Thompson, 57 Ark. 279, 21 S. W- Eep. 468, 22 Ins. L. J. 383. 12. Home Ins. Co. v. Peyerabend, 7 Kans. App. 231, 52 Pac. Eep. 899. 13. Wilson V. Union Mutual Ins. Co., 75 Vt. 320, 55 AtL Eep. 662. Other Insurance. 79 CHAPTER FOURTH. Other Insurance. EuLE 1. As imposed by contract. 2. Condition as to other insurance reasonable and en- forced. 3. What constitutes double insurance. 4. Joint and severable interests. 5. EfEect of violation of condition — Bstopjjcl — Void- able. 6. Construction of the word " insured." 7. Insurance resulting from operation of law without design — Evidence — Parol contracts — Unac- cepted or rejected policy. 8. Delivery of policy upon condition — As affected by cancellation. 9. Effect of noncompliance with statute. 10. Motive of insured immaterial. 11. Other insurance effected at same time. 12. Effect of binder or certificate of temporary insurance. 13. Effect of insufficient parol contract of insurance. 14. Insurance in excess of permitted amount. 15. Effect of blank permission for other insurance. 16. Interest of mortgagor and mortgagee. 17. Insurance of vendee's interest. 18. Other insurance must be by consent or authority of insured — Act of mortgagee. 19. Cancellation and substitution without authority — Election — Waiver or estoppel. 20. Substitution without authority. 21. Attempted ineffective cancellation and substitution. 22. Policy never delivered or accepted as substitute. 23. Insured bound by his own act in obtaining other in- surance. 24. Insured must be consistent in repudiation — Eatifica- tion of unauthorized act. 25. Effect of permission for other concurrent insurance — Distinction between a requirement and permission — Eepresentation — Warranty. 26. Construction of word " concurrent." 27. Meaning of word "concurrent." 38. Construction of permission for concurrent insurance. 80 Fire Instjeance. Rule 29. Same subject — When permits other insurance. 30. Same subject — Amount left blank. 31. Same subject — Amount left blank — Additional in- surance not permitted. 32. Effect of difference in form. 33. Effect of a coinsurance clause as consent to other in- surance. 34. As between a first and second policy. 35. Distinction between yoid and voidable insurance. 36. As affected by question of validity. 37. Construction and object of insertion of the words "valid or not." 38. Effect of the words " valid or not." 39. Policy voidable only. 40. Estoppel by issue and delivery of policy or renewal with knowledge of facts. 41. Issue and delivery of policy with knowledge does not operate as a waiver — Parol evidence. 42. When knowledge of agent not that of the company. 43. Knowledge of company's soliciting agent — Author- ity — Question of fact. 44. Effect of expression of intention to procure other in- surance — Opinion of agent — Written consent. 45. Limitation upon agent's authority after issue of policy — Authority must be shown. 46. Estoppel after issue of the policy. 47. Effect of alteration in form with knowledge of facts — Consent to assignment. 48. Authority of agent — Presumption — Evidence. 49. Authority of clerk of company's agent — Evidence — Broker. 50. Company not bound by broker's knowledge. 51. Construction of written restriction. 52. Agency in placing surplus line. 53. Agency of company in obtaining policy from another company. 54. When company estopped by silence and failure to cancel. 55. Same subject- — Evidence. 56. Effect of mere omission to cancel. 57. Mutual mistake — Eeformation. 58. Application of written permission for other insur- ance. 59. Effect of removal and merger of stock. 60. Effect of renewal — Substitution. Othbk Insurance. 81 EuLE 61. Contract severable. 63. Evidence of other insurance. 63. Burden of proof — Construction — Evidence — Ques- tion of fact or law. RULE I. As Imposed by Contract. 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 procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy. This rule is imposed by above terms in the standard form of policy prescribed in: New York, North Carolina, Connecticut, North Dakota, Louisiana, * Pennsylvania, Missouri, Ehode Island, New Jersey, Wisconsin. In Michigan the standard form is the same as above except that there is added: " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." By the standard form of policy prescribed in: Maine, Massachusetts, it is provided : " This policy shall be void if the insured now has or shall hereafter make any other insurance on the said property with- out the assent in writing or in print of the company." The standard form of policy prescribed in Minnesota pro- vides that " The policy shall be void if the assured now has or shall hereafter make any other insurance on the said property with- out the assent of the company." * See note to " Concealment," Eule 1, page 2. Vol. 2 — 6 82 FiKE Insueancb. The standard form of policy prescribed in New Hampshire provides that : " This policy shall be void if the insured, at the time of any loss, has any other insurance on the said property without the assent in writing or in print of the company." The South Dakota form is same as in Minnesota, except that the word " obtain " is substituted for the word " make." In the States where no stai^dard form is prescribed, and other than those above named, the New York standard form is in general use. The Michigan statute (1897) providing that no policy of fire insurance shall be declared void by the company for the breach of any condition of the policy, if the company has not been injured by such breach; or where a loss has not occurred during such breach; or by reason of such breach of condition, applies to all policies issued in that State, whether the policy is of the Michigan standard form or not. McGannon v. Michigan Millers' Ins. Co., 127 Mich. 636, 87 ISr. W. Eep. 61. The Ohio E. S., § 3643, in substance requiring an examina- tion by company's agent of property before issue of a policy, and in the absence of change increasing the risk or fraud, mak- ing company liable for amount written in policy, has no appli- cation to the condition in regard to other insurance. If such provision is violated without consent of the company, risk is increased as matter of law, and insurance is forfeited. Sun Fire Office v. Clark, 53 Ohio St. 414, 25 Ins. L. J. 333, 42 IvT. E. Eep. 248. Xor does it have application to a condition in regard to change in title or incumbrance. Webster v. Dwelling-House Ins. Co., 53 Ohio St. 558, 30 L. E. A. 719, 25 Ins. L. J. 488, 42 K E. Eep. 546. The statute relates to the physical condition of the property, such as an inspection would disclose. Webster v. Dwelling-House Ins. Co., 53 Ohio St. 558, 30 L. E. A. 719, 25 Ins. L. J. 488, 42 X. E. Eep. 546. Under an old ^Maine statute it was held that the existence of other insurance as a defense must be shown to have materially increased the risk. Lindley v. Union Ins. Co., 65 Me. 368. The statute was probably superseded or repealed by the statute pre- scribing the standard form. And see E. S. 1903, repealing act, p. 1015. ■ Other Insxteance. 83 RULE 2. Condition as to Other Insurance Seasonable and Enforced. Other insurance on the same property having a tendency to cause carelessness and fraud, a condition in a fire insurance policy requiring permission for the existence of other insurance, and if such permission be not given in writing that the policy shall be void, is customary and reasonable, and will be enforced by the courts. KTorthern Assur. Co. v. Grand View Building Assoc, 183 TJ. S. 308, 22 Sup. Ct. Eep. 133, rev'g 101 Fed. Eep. 77, 41 C. C. A. 207; Phoenix Ins. Co. v. Gray, 107 Ga. 110, 32 S. E. Eep. 948 ; Arnold v. Insurance Co., 106 Tenn. 529, 61 S. W. Eep. 1032 ; MeSparran v. Southern Ins. Co., 193 Pa. St. 184, 44 Atl. Eep. 317; Young v. St. Paul F. & M. Ins. Co., 68 S. C. 387, 47 S. E. Eep. 681; Orient Ins. Co. v. Prather, 25 Tex. Civ. App. 446, 62 S. W. Eep. 89 ; Home Ins. Co. v. Overturf, Ind. App. , 74 N. E. Eep. 47; Bowlus v. PhcEnix Ins. Co., Ind. , 32 N. E. Eep. 319; Planters' Mut. Ins. Assoc. V. Green, Ark. , 80 S. W. Eep. 151; Sanders v. Cooper, 115 N. Y. 279; Bigler v. 'New York Central Ins. Co., 22 N. Y. 402; Johnson v. American Ins. Co., 41 Minn. 396, 43 ]Sr. W. Eep. 59 ; Barnard v. National Ins. Co., 27 Mo. App. 26 ; Queen Ins. Co. v. Young, 86 Ala. 424, 5 So. Eep. 116; Heyl V. ^tna Ins. Co., Ala. , 38 So. Eep. 118; Halliday v. St. Paul F. & M. Ins. Co., 31 111. App. 398; Phoenix Ins. Co. V. Michigan Southern E. Co., 28 Ohio St. 69. And see Harris V. Ohio Ins. Co., 5 Ohio, 467; Insurance Co. v. Slockbower, 26 Pa. St. 199; Kimball v. Howard Ins. Co., 8 Gray, 33 (Mass.) ; David V. Hartford Ins. Co., 13 Iowa, 69; Gilbert v. Phcenix Ins. Co., 36 Barb. 372; Deitz v. Mound City Ins. Co., 38 Mo. 85; Manhattan Ins. Co. v. Stein, 5 Bush, 652 (Ky.) ; Duclos V. Citizens' Ins. Co., 23 La. Ann. 332 ; Walton v. Louisiana Ins. Co., 2 Bob. 563 (La.) ; Phoenix Ins. Co. v. Benton, 87 Ind. 132, nins. L. J. 634. RULE 3. Wliat Constitutes Double Insurance. To constitute double insurance the insured must have or make two or more insurances, either simul- :84 FiEE Insurance.' taneous or successive, on the same subject, same risk, and the same interest. West Branch Linnbermen's Exchange v. American Ins. Co., 183 Pa. St. 366, 37 Ins. L. J. 305, 38 Atl. Rep. 1081; Sloat V. Royal Ins. Co., 49 Pa. St. 14; Copeland v. Phoenix Ins. Co., 11 So. Rep. 746, 22 Ins. L. J. 324; Haire v. Ohio Farmers' Ins. Co., 93 Mich. 481, 53 N". W. Ref . 633, 22 Ins. L. J. 66 ; Wheeler V. Watertown Ins. Co., 131 Mass. 1, 10 Ins. L. J. 354; Roos V. Merchants' Ins. Co., 27 La. Ann. 409; Roots v. Cincinnati Ins. Co., 1 Disn. 138 (Ohio) ; Planters' Ins. Co. ■;;. Rowland, 66 Md. 236, 16 Ins. L. J. 345. And see Tyler v. ^tna Ins. Co., 13 Wend. 507, afE'd, 16 Wend. 385; Jones v. Maine Ins. Co., 18 Me. 155; State Ins. Co. v. New Hampshire Trust Co., 47 Nebr. 62, 66 N. W. Rep. 9, rehearing denied, 47 Nebr. 71, 66 N. W. Rep. 1106. RULE 4. Joint and Several Interests. When a policy covers the joint interest of several owners or tenants in common, the having or procuring of a policy by one of them upon his interest in the same subject or property constitutes other insurance,^ but otherwise when former policy does not cover or include his interest.^ And so when policy is issued on an individual undivided interest, a subsequent policy upon another individual interest is not other insur- ance.* 1. Pitney v. Glens Falls Ins. Co., 65 JST. Y. 6; Horridge v. Dwelling-House Ins. Co., 75 Iowa, 374, 39 JST. W. Rep. 648; Gillett V. Liverpool, L. & G. Ins. Co., 73 Wis. 203, 41 N. W. Rep. 78. 2. Franklin Ins. Co. ■;;. Drake, 2 B. Mon. 47 (Ky.). 3. Hall V. Concordia Ins. Co., 90 Mich. 403, 51 N. W. Rep. 534, 21 Ins. L. J. 724. Other Insurance. 85 RULE 5. Effect of Violation of Condition — Estoppel — Voidable. The policy becomes void by its terms on procuring by the insured of the other insurance, and is not merely suspended ; it cannot thereafter be revived without the consent of the insurer, after knowledge of the fact;* or by facts operating as an estoppel" it is not abso- lutely void, but voidable at the company's election.' 1. Georgia Home Ins. Co. v. Eosenfield, 95 Fed. Eep. 358, 37 C. C. A. 96; Johnson v. American Ins. Co., 41 Minn. 396, 43 N. W. Eep. 59. 2. New York Central Ins. Co. v. Watson, 23 Mich. 486. Contra, New England Ins. Co. v. Schettler, 38 111. 166, where it was held that if the other insurance was only temporary and had ceased to exist at time of the loss, it did not afEect the right to recover. And so where it had expired or had been canceled prior to the loss. Germania Ins. Co. v. Klewer, 139 111. 599, 22 N. E. Eep. 489, 19 Ins. L. J. 126. And see New Orleans Ins. Assoc, v. Holberg, 64 Miss. 51. 3. Farmers' Ins. Co. v. Home Ins. Co., 54 Nebr. 740, 74 N. W. Eep. 1101 ; Slobodisky v. Phenix Ins. Co., 52 Nebr. 395, 73 N. W. Eep. 483, 27 Ins. L. J. 53 ; German Ins. Co. v. Em- poria Loan Assoc, 9 Kans. App. 803, 59 Pac. Eep. 1092 ; Baer V. Phoenix Ins. Co., 4 Bush, 242 (Ky.). And see Bigler v. New York Central Ins. Co., 22 N. Y. 402. And see Vol. 1, Fire Insurance as Valid Contract, "Con- struction and Waiver." RULE 6. Construction of the Word " Insured." The word " insured " is strictly construed, and is limited in its application to the person actually occu- pying the position of the insured at the time the policy issues, or at the time the other insurance is taken. If the party taking or obtaining the other policy does not occupy such relation as the insured, or if his interest 86 FiBE Insurance. is different, there is no such other insurance as will void the former policy. De Witt V. Agricultural Ins. Co., 89 Hun, 229, 36 N. Y. Supp. 570, aff'd, 157 N. Y. 353, 51 N. E. Eep. 977. And see ^tna Ins. Co. v. Tyler, 12 Wend. 507, afE'd, 16 Wend. 305 (N. Y). RULE 7. Insurance Besulting from Operation of Law Without Desigu — Evidence — Parol Contracts — TJnaccepted or Rejected Policy. Other insurance resulting from operation of law, and without design upon the part of the insured, is not a violation of the true spirit and intent of the con- dition, and there being no imputation of fraud, it may be shown by facts and circumstances outside of the policy that it was not the intention of insured to ob- tain other or double insurance.^ And so an attempt to obtain other insurance never completed or effected, or an insufficient parol contract of insurance, is not other insurance f but evidence that the insured thought there was no other insurance is not admissible,^ nor can an officer of the company be asked a hypothetical question as to whether he would have consented to additional insurance.* An unaccepted or rejectied policy does not constitute additional or other insur- ance;" but acceptance of a policy makes it additional or other insurance, without regard to original intent.* 1. Mead v. American Ins. Co., 13 App. Div. 476, 43 N. Y. Supp. 334. And see De Witt v. Agricultural Ins. Co., 157 N. Y. 353; Dwelling-House Ins. Co. v. Garner, 56 111. App. 199; Phcenix Ins. Co. v. Boulden, 96 Ala. 609, 11 So. Eep. 774, 22 Ins. L. J. 176. 2. Sutherland v. Old Dominion Ins. Co., 31 Gratt. 176 (Va.). And see Wilson v. Queen Ins. Co., 5 Fed. Eep. 674, 10 Ins. Other Insurance. 87 L. J. 302; Taylor v. State Ins. Co., 107 Iowa, 275, 77 N. W, Eep. 1032. 3. Zinek v. Phoenix Ins. Co., 60 Iowa, 266; Perry v. Liver- pool, L. & G. Ins. Co., 34 F. B. 380. 4. Eureka Ins. Co. v. Eobinson, 56 Pa. St. 256. 5. Price v. Home Ins. Co., 54 Mo. App. 119; Phoenix Ins. Co. V. Hague, 34 S. W. Eep. 654 (Tex. Ciy. App.). 6. Cutler v. Eoyal Ins. Co., 70 Conn. 566, 40 Atl. Eep. 529, 41 L. E. A. 159. RULE 8. Delivery of Policy upon Condition — As Affected by Cancellation. When the policy is executed and delivered upon the express condition that a prior one in another company should be surrendered and canceled, such prior policy is not other insurance requiring written consent though not canceled until some time subsequently;^ and so when a policy is surrendered to a local agent with mutual intent to cancel same, and the agent is directed to obtain another policy in place of it, which he does, in suit upon the latter policy the former is not con- sidered as other insurance,^ and so when prior insur- ance is canceled or lapses before issue of a subsequent policy, it is not other insurance making latter void.^ 1. Atlantic Ins. Co. v. Goodall, 9 Post. 182 (K. H.) ; Con- tinental Ins. Co. V. Horton, 28 Mich. 173 ; Knowles v. American Ins. Co., 66 Hun, 220, 21 N. Y. Supp. 50, aflE'd, on opinion below, 142 N. Y. 641. 2. Train v. Holland Purchase Ins. Co., 68 IST. Y. 208. 3. German Ins. Co. v. Hayden, 21 Colo. 127, 40 Pac. Eep. 453. RULE 9. Effect of Noncompliance With. Statute. A policy cannot be claimed to be inoperative as other insurance because the company issuing it has not com- 88 FiEE Insurance. plied with a statute governing its admission to the State and authority to transact business. Behler v. German Ins. Co., 68 Ind. 347. RULE 10. Motive of Insured Immaterial. If additional insurance without permission is relied upon as a defense to a claim on the prior policy, the motive or intention of the party or insured in obtaining it is immaterial. Pennsylvania Ins. Co. v. Kittle, 39 Mich. 51. RULE II. Other Insurance Effected at Same Time. Other insurance effected at the same time is within the operative force of the language " if the insured now has, or shall hereafter make or procure any other contract of insurance. ' ' United Firemen's Ins. Co. v. Thomas, 93 Fed. Eep. 127, 34 C. C. A. 240, 28 Ins. L. J. 500, aff'g on rehearing 82 Fed. Eep. 406, 27 C. C. A. 42. RULE 12. Effect of Binder or Certificate of Temporary Insurance. "When the insured holds a binder or certificate, or temporary written agreement for insurance, it is not necessary that consent to other insurance should be indorsed thereon,* but condition requiring such written consent becomes operative upon delivery and accepts Other Insurance. 89 ance of the policy.^ And even in former case the con- ditions of the policy are otherwise legally operative.* 1. Dayton Ins. Co. v. Kelly, 34 Ohio St. 345; Baile v. St. Joseph Ins. Co., 73 Mo. 371, 10 Ins. L. J. 657. And see Cockburn v. British Amer. Assur. Co., 19 Ont. 245 (Can.). 2. Diver v. London & Lancashire Ins. Co., 9 N. Y. St. Eep. 482, 17 Ins. L. J. 156. 3. De Grove v. Metropolitan Ins. Co., 61 N. Y. 594. And see title, " Oral or Parol Contracts." RULE 13. Effect of Insufflcient Parol Contract of Insurance. An insufficient parol contract of insurance is not con- verted into other insurance voiding existing policies, by issue and delivery of a policy after a fire ;' the fact that the insured makes claim under such policy and secures a compromise thereon does not estop him from denying its existence as other insurance when that defense is set up in an action on a prior policy.' 1. Taylor v. State Ins. Co., 107 Iowa, 275, 77 N". W. Eep. 1032. 2. Taylor v. State Ins. Co., supra. And see Commercial Assur. Co. V. Temple, 29 Can. S. C. 206, 210. And see this volume, title " Parol Contracts." RULE 14. Insurance in Excess of Permitted Amount. Where policy permits a certain amount of addi- tional insurance and assured procures or has insurance in excess of such amount it voids the policy. Allen V. German-American Ins. Co., 133 N. Y. 6, 35 N. E. Bep. 309, 19 Ins. L. J. 979; Mussey v. Atlas Ins. Co., 14 N. Y. 79; Benedict v. Ocean Ins. Co., 31 N. Y. 389, aff'g 1 Daly, 8; Commercial Union Assur. Co. v. Norwood, 57 Kans. 610, 47 90 FiBE Insueance, Pac. Eep. 529, 26 Ins. L. J. 177 ; East Texas Ins. Co. v. Flippen, 4 Tex. Civ. App. 576, 23 S. W. Rep. 550, 23 Ins. L. J. 219; Works & Pritehett v. Springfield F. & M. Ins. Co., Tex. Civ. App. , 79 S. W. Eep. 42 ; Colnmbus Ins. Co. v. Walsh, 18 Mo. 229. And see Simpson v. Pennsylvania Ins. Co., 38 Pa. St. 250. Merely substituting one company for another, without ex- ceeding the limit of insurance permitted, is not the procuring of other insurance as to void the policy. Parsons v. Standard Ins. Co., 5 Duval, 233 (Can. Sup.). And see Eule 19 et seq. When the excessive insurance is obtained through mistake of the agent in calculating the total amount of insurance, it does not vitiate older insurance otherwise legal and binding. Boulden v. Phoenix Ins. Co., 96 Ala. 609, 11 So. Eep. 774, 22 Ins. L. J. 176. RULE 15. Effect of Blank Permission for Other Insurance. When there is inserted in the policy " total insur- ance permitted, $ ," the blank not being filled in, such clause does not conflict with the condition of the policy as to other insurance, but is in perfect accord with it. In the absence of any sum being named in the blank it does not import the consent of the com- pany to additional insurance, but the very contrary. Labell v. Georgia Home Ins. Co., 28 S. W. Eep. 133, Tex. Civ. App. RULE 16. Interest of Hortgagor and Mortgagee. An insurance obtained by a mortgagee upon his own interest or for his exclusive benefit is not other insur- ance within the operation of a condition against other insurance in a policy held and obtained by the owner or mortgagor upon his interest;^ so where the mort- gagee intended to insure his interest exclusively, but Other Insurance. 91 policy in form was issued in name of mortgagor with. loss payable to the mortgagee, a subsequent policy ob- tained by the mortgagor upon his interest is not other insurance;^ and so where mortgagee, without knowl- edge or consent of the owner, obtains policy in same form, a prior policy obtained by the owner upon his interest is not other insurance.^ But when policy is procured by the owner and assigned by him to the mortgagee or loss made payable to latter, another policy procured by the owner is other insurance,* but not when it is procured by the wife of the owner as his devisee and executrix.^ 1. Guest V. New Hampshire Ins. Co., 66 Mich. 98, 33 F. W. Eep. 31; Jackson v. Massachusetts Ins. Co., 83 Pick. 418 (Mass.) ; Holbrook v. American Ins. Co., 1 Curt. 193 (U. S. Cir.) ; Eowley v. Empire Ins. Co., 36 K. Y. 550, 3 Keyes, 557; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 518. ^ 2. Woodbury Savings Bank v. Charter Oak Ins. Co., supra.' And see Carpenter v. Continental Ins. Co., 61 Mich. 635, 28 ]Sr. W. Eep. 749, 15 Ins. L. J. 667. 3. Westchester Ins. Co. v. Foster, 90 111. 121. And see Continental Ins. Co. v. Hulman, 93 111. 145. 4. Kempf v. Farmers' Ins. Co., 41 Mo. App. 27; State Ins. Co. V. Eoberts, 31 Pa. St. 438; Continental Ins. Co. v. Hulman, 92 111. 145 ; Guinn v. Phcenix Ins. Co., 31 S. W. Eep. 566 (Tex. Civ. App.). See Vol. 1, Fire Insurance as Valid Contract, " Mortgagor and Mortgagee." 5. Burke v. Niagara Ins. Co., 12 N. Y. Supp. 254. RULE 17. Insurance of Vendee's Interest. An indorsement obtained by a mortgagee to whom loss payable, upon a policy issued to the vendor recog- nizing a vendee under an executory contract of sale as 92 Fire Instjbance. owner of the policy and property, and without the knowledge or authority of such vendee, does not make the policy void, on account of other insurance obtained by such vendee upon his interest. De Witt V. Agricultural Ins. Co., 157 N. Y. 353. RULE i8. Other Insxirance Must be by Consent or Authority of Insured — Act of Mortgagee. Insurance procured by a mortgagee without the knowledge, consent, or authority of the owner, cover- ing the owner's interest, is not other insurance avoid- ing another policy obtained by the owner ;^ the usual clause in the mortgage authorizing the mortgagee to procure insurance in case of the owner's default, to keep property insured, is inoperative until the owner is actually shown to have been in default after notice or demand f there is no ratification by the owner after a loss in making claim under a policy thus procured by the mortgagee without authority, so as to make the procuring of the policy his act;* nor does mere notice by the mortgagee to the owner before a loss that he had taken out insurance without information as to whether it covered the owner's interest or the mort- gagee's interest constitute sufficient evidence of ratifi- cation.* But such insurance so obtained, while not making policy void, may require apportionment of the loss.® As between the mortgagor and mortgagee it is presumed, in absence of any communication of a con- trary intent, that insurance taken out by the mortgagee Other Insurance. 93 is in pursuance of authority contained in the mort- gage.« 1. Church of St. George v. Sun Fire Office, 54 Minn. 163, 55 N. W. Rep. 909 ; Niagara Ins. Co. v. Seammon, 144 111. 490, 28 N. E. Eep. 919, 21 Ins. L. J. 592; Titus v. Glens Palls Ins. Co., 81 N. T. 410 ; Dbran v. Franklin Ins. Co., 86 K Y. 635, 10 Ins. L. J. 842. And see Cannon v. Home Ins. Co., 49 La. Ann. 1367, 22 So. Eep. 387, 26 Ins. L. J. 737; De Witt v. Agricultural Ins. Co., 157 IST. Y. 353; Westchester Ins. Co. ■;;. Foster, 90 111. 121; Continental Ins. Co. v. Hulman, 92 111. 145 ; Sauvey v. Isolated Ins. Co., 44 Up. Can. Q. B. 523. 2. Titus V. Glens Falls Ins. Co., supra; Doran v. Franklin Ins. Co., supra; Cannon v. Home Ins. Co., supra. 3. Titus v. Glens Falls Ins. Co., supra; Doran v. Franklin Ins. Co., supra. 4. Church of St. George v. Sun Fire Office, 54 Minn. 162, 55 K. W. Rep. 909. 5. Doran v. Franklin Ins. Co., supra. 6. Washington Nat. Bank v. Smith, 15 Wash. 160, 45 Pac. Rep. 736, 26 Ins. L. J. 183. RULE ig. Cancellation and Substitution Without Authority — Election — Waiver or Estoppel. When an agent without authority from the insured assumes or attempts to cancel one policy and substitute that of another company, and the insured elects to bring suit on the latter policy, such election does not operate as a ratification of the unauthorized act of the agent in canceling the prior policy and its existence as other insurance is a good and sufficient defense, there being no claim or issue as to waiver or estoppel;^ but may be otherwise when there is claim of waiver or estoppel by notice to or knowledge of the agent as to existence of such other insurance.^ 1. Johnson v. North B. & M. Ins. Co., 66 Ohio St. 6, 63 N. E. Rep. 610. 94 FiBE Insurance. 2. Commercial Union Assur. Co. v. TJrbansky, 113 Ky. 634, 68 S. W. Bep. 653. See this volume, " Cancellation," and Volume 1, Fire Insur- ance as a Valid Contract, "Waiver." RULE 20. Substitution Without Authority. When an agent, without authority from the assured,, marks one policy canceled, and substitutes another policy, but before delivery of the latter the fire occurs, the assured having no knowledge, the first policy re- mains in force and the second one never takes effect; nor does it take effect by delivery to the assured after the fire. Kerr v. Milwaukee Mechanics' Ins. Co., 117 Fed. Eep. 443, 54 C. C. A. 616. And that assured is not bound to give notice of the existence of other insurance of which he has not and cannot have any knowledge, see Commercial Union Assur Co. v. Temple, 39' Can. S. C. 306. RULE 21. Attempted Ineffective CanceUation and Substitution. An attempted but ineffective cancellation of policy by substitution of policy of another company voids policy of latter on account of existence of prior in- surance. Hartford Ins. Co. v. McKenzie, 70 111. App. 615. RULE 22. Policy Never Belivered or Accepted as Substitute. A policy which is never delivered or accepted as a substitute for a prior policy and legally inoperative Other Insubance. 95 as a contract cannot be claimed to be other insurance,, making the prior policy void. Milwaukee Mechanics' Ins. Co. v. Graham, 181 111. 158, 54 K E. Eep. 914. RULE 23. Insured Bound by His Own Act in Obtaining Oth.er Insurance. When insured has directed his agent or broker to procure insurance, and then, without hearing from him or taking any steps to learn, himself obtains a policy, in an action upon a prior policy obtained by his broker or agent, the obtaining of the second policy by the insured renders void the policy obtained by the agent or broker. Arnold v. Insurance Co., 106 Tenn. 529, 61 S. W. Eep. 1032. RULE 24. Insured Must be Consistent in Repudiation — Ratification of Unauthorized Act. If there is another policy or other insurance claimed by the insured to have been obtained without his knowledge, authority, or consent, he must be and re- main consistent in repudiation of the same ; if he rati- fies the unauthorized act in procuring the insurance by making claim therefor and receiving payment, he can- not deny its existence as " other " insurance within meaning of the condition;' but acceptance or ratifica- tion cannot be predicated upon the mere facts that repudiation of the unauthorized act was not immediate, and that after the fire insured sent to the company a proof of loss, but coupled with the statement that the 96 FiKE Insurance. policy was procured without his knowledge or consent, and the company making no payment thereon.* 1, German Ins. Co. v. Emporia Loan Assoc, 9 Kans. App. 803, 59 Pac. Eep. 1092 ; Hughes v. Insurance Co. N. A., 40 Nebr. 626, 59 N. W. Kep. 112, 23 Ins. L. J. 721 ; McKelvy v. German- American Ins. Co., 161 Pa. St. 279, 28 Atl. Eep. 1115, 23 Ins. L. J. 638. And see Bigler v. New York Central Ins. Co., 22 N". Y. 402. 2. Nelson v. Atlanta Home Ins. Co., 120 N. C. 302, 27 S. E. Eep. 38, 26 Ins. L. J. 913 ; Folb v. Phoenix Ins. Co., 109 N. C. 568, 13 S. E. Eep. 798. RULE 25. Effect of Permission for Other Concurrent Insurance — Distinc- tion Between a Requirement and Permission — Bepresenta- tion — Warranty. When permission is given in terms for * ' other con- current insurance," by concurrent insurance is meant that which to any extent insures the same interest, against the same casualty, at the same time as the primary insurance, on such terms that the insurers would bear proportionally the loss happening within the provisions of both policies. It is this last quality of sharing proportionally in the loss that distinguishes concurrent insurance from mere double insurance. The permission of concurrent insurance in contrast with a requirement thereof gives the insured an option as to the time when he will procure other insurance, the length of its duration, and the property it shall cover, provided it shall proportionally aid the primary insurer in bearing whatever loss may occur within the range of their common operation. If other insurance is of this nature, it comes within the express permis- sion. A contention that permission of " concurrent Other Insurance. 97 insurance " is applicable only in case the other in- surance covers all the items of defendant's policy is so narrow as not to be sustained by the courts. There is a distinction between a requirement and a permis- sion of concurrent insurance. When the insurance company in terms requires by representation of the insured or by specific condition concurrent and propor- tionate insurance, in the construction of such require- ment, concurrent means, where there is no qualifying provision, insurance running with the primary insur- ance for all the time and over all the objects covered by the latter.^ A statement or representation as to amount of existing insurance does not require the in- sured to keep the property insured at the amount stated,^ but a representation as to amount of existing insurance may be so material that a verdict to contrary should not be sustained,^ and if made a warranty a false statement constitutes a breach.* 1. New Jersey Eubber Co. v. Commercial Union Assur. Co., 64 N. J. L. 52, 580, 46 Atl. Eep. 777. 2. Hoffman v. Manufacturers' Ins. Co., 38 Fed. Eep. 487. And see Vol. 1, Fire Insurance as Valid Contract, " Appor-r tionment of the Loss," Eule 10. 3. Armour v. Transatlantic Ins. Co., 90 IST. Y. 450, 13 Ins. L. J. 345. 4. Phoenix Ins. Co. v. Benton, 87 Ind. 132, 11 Ins. L. J. 634; Commonwealth Ins. Co. v. Huntzinger, 98 Pa. St. 42. In Burge v. Greenwich Ins. Co., 106 Mo. App. 244, 80 S. W. Eep. 342, it was held, in construing an alleged violation of per- mission for concurrent insurance on stock of merchandise not exceeding three-fourths of the cash value, that the Missouri E. S., § 7979 (see statutory provision, Vol. 1) precluded the company from- denying value when policy was written, hut did not prevent it from showing a reduction in value prior to the fire, and that the value of a stock of goods or the like is limited or governed by value at time of the fire. Vol. 2 — 7 98 FiEE Insxjeance. RULE 26. Construction of the Word " Concurrent." When the policy in terms provides " other concur- rent insurance permitted," the word " concurrent " is' subject to construction and must be construed most strongly against a defendant insurance company; and in the absence of any limitation in amount, should not be construed to require later policies to exactly con- cur in covering all of the property. The insurance company cannot claim that to be " concurrent " the insurance must cover the identical property and no other; insurance may cover only a part of the prop- erty and still be within the terms of the permission ;^ but when the permission is for a certaia amount of concurrent insurance it may be violated by obtaining insurance on a part only of the property.^ 1. "Washington-Halligan Coffee Co. v. Merchants' Ins. Co.,- 110 Iowa, 423, 81 N. W. Bep. 707 ; Gough v. Davis, 24 Misc. 245, 52 N. Y. Supp. 947, affi'd, 39 App. Div. 639, without opinion; Gough V. Selvage, 24 Misc. 763; American Central Ins. Co. V. Heath, 29 Tex. Civ. App. 445, 69 S. W. Eep. 235. And see Palatine Ins. Co. v. Ewing, 92 Fed. Eep. Ill, 34 C. C. A. 236. 2. Union Nat. Bank v. German Ins. Co., 71 Fed. Eep. 473,. 18 C. C. A. 203, 25 Ins. L. J. 539. RULE 27. Meaning of the Word " Concurrent." The word " concurrent " means acting in conjunc- tion, agreeing in the same act, contributing to the same event or effect, co-operating, existing, or happening at the same time, operating on the same objects. L'Bngle v. Scottish Union & Nat. Ins. Co., Fla. ,. 37 So. Eep. 462. Othek Insurance. 99 RULE 28. Construction of Permission for Concurrent Insurance, A permission for a certain amount " total concur- rent insurance " is construed as meaning that there must be a concurrence of the total insurance upon the subjects of the insurance, that is, the total insurance must operate at the same time and upon the same property. Such permission is not construed as allow- ing additional insurance in excess of the limited or prescribed amount on a part of the same subject. Senor & Munz v. Western Millers' Ins. Co., 181 Mo. 104, 79 S. W. Eep. 687. RULE 29. Same Subject — When Permits Other Insurance. When a policy for certain amount, as, for instance, $2,500, contains a clause " $2,500 total concurrent in- surance permitted," it permits other concurrent in- surance not to exceed $2,500. The term " concurrent insurance," used in granting the permission for in- surance, cannot be construed as embracing the one in which the permission is gra:^ted, but necessarily em- braces another amount or another policy, though it may, under some circumstances, include the former; otherwise there would be an amount or a policy con- current with itself alone, which is an impossibility un- der any definition of the word. L'Engle v. Scottish Union & Nat. Ins. Co., Fla. , 37 So. 462. 100 FiKE Insurance. RULE 30. Same Subject — Amount Left Blank. An indorsement or clause reading " $ other concurrent insurance permitted," the amount being left blank, may be construed as permitting additional insurance. Medley v. German Alliance Ins. Co., 55 W. Va. 343, 47 S. E. Eep. 101. RULE 31. Same Subject — Amount Left Blank — Additional Insurance not Permitted. A permission for " $ total concurrent insur- ance," the amount being left blank, does not permit additional or other insurance. Philadelphia Underwriters' Ins. Co. v. Bigelow, Pla. , 37 So. Eep. 310. RULE 32. Effect of Difference in Form. A permission for " other insurance concurrent in form herewith " with loss payable to a third party or mortgagee, is not violated by another policy insuring same property in same form, but omitting the clause making the loss payable to the mortgagee. Caraher v. Eoyal Ins. Co., 63 Hun, 83, 17 K. Y. Supp. 858, aff'd, 136 N. y. 645, on opinion below. RULE 33. Effect of a Coinsurance Clause as Consent to Otlier Insurance. A coinsurance clause in terms requiring the main- tenance by the insured of insurance up to within a certain prescribed limit or percentage of value of the Other Insueance. ^ _ _ 101 property operates as a consent to such total insur- ance ;^ but not to more than the prescribed limit.^ 1. Dolan V. Missouri Town Ins. Co., 88 Mo. App. 666; Pool V. Milwaukee Mechanics' Ins. Co., 91 Wis. 530, 65 N. W. Eep. 54. And see Bush v. Missouri Ins. Co., 85 Mo. App. 155 ; Catoosa Springs Co. v. Linch, 18 Misc. 209, 41 K. Y. Supp. 377, citing Pool v. Milwaukee Mechanics' Ins. Co., supra; Strauss v. Phcenix Ins Co., 9 Colo. App. 386, 48 Pac. Eep. 822, 26 Ins. L. J. 676. It should be noted that there is difference in the language of the various coinsurance clauses. The preceding eases in the appellate courts were decided upon construction of clauses which in terms required the insured to maintain the insurance. This specific provision or requirement is omitted from later clauses which in substance leaves it entirely optional with the insured whether he maintains the insurance or not, and merely stating the effect if he does not. 2. Cutler v. Royal Ins. Co., 70 Conn. 566, 40 Atl. Rep. 529 ; Nestler v. Germania Ins. Co., 44 Misc. 97, 89 N. Y. Supp. 782. And see Rule 14. RULE 34. As Betweeu a First and Second Policy. As between a first and second policy, both contain- ing the clause against other insurance, the first con- tinues valid and enforceable, and the second is void; being void it creates no other insurance and therefore does not impair the validity of the first policy. Sweeting v. Mutual Ins. Co., 83 Md. 63, 32 L. R. A. 570, 25 Ins. L. J. 730, 34 Atl. Rep. 826 (there is a valuable and in- teresting discussion of the question by the chief justice in this case) ; Gee v. Insurance Co., 55 N. H. 65, where it was so held notwithstanding that both policies contained the words " whether valid or not;" Firemen's Ins. Co. v. Holt, 35 Ohio St. 189, 9 Ins. L. J. 212 ; Jersey City Ins. Co. v. Nichol, 35 N. J. Eq. 291 ; Bigelow v. Granite State Ins. Co., 94 Me. 39, 46 Atl. Rep. 808. And see Gale v. Belknap County Ins. Co., 41 K. H. 170; Hubbard v. Hartford Ins. Co., 33 Iowa, 325; Thomas v. Builders' Ins. Co., 119 Mass. 121; Keyser v. Hartford Ins. Co., 102 FiEE Insxjeance. 66 Mich. 664, 33 N". W. Eep. 756; Halliday v. St. Paul F. & M. Ins. Co., 31 111. App. 398; Eobinson v. Fire Assoc, 63 Mich. 90, 16 Ins. L. J. 65; Jackson v. Massachusetts Ins. Co., 23 Pick. 418 (Mass.), and Lackey v. Georgia Home Ins. Co., 42 Ga. 456, where by similar reasoning the first policy was held void, though second might be claimed to be void on account of the prior insurance, under construction of the Georgia statute or code. That first policy is not affected by a second or subsequent policy, if insured could not at any time recover on the second, see also Staeey v. Franklin Ins. Co., 3 Watts & Serg. 506 (Pa.) ; Clarke v. New England Ins. Co., 6 Cush. 343 (Mass.) ; Hardy V. Union Ins. Co., 4 Allen, 217 (Mass.) ; Schenck v. Mercer County Ins. Co., 24 N. J. L. 447; Philbrook v. New England Ins. Co., 37 Me. 137. RULE 35- Distinction Between Void and Voidable Insurance. If the other policy claimed to be other insurance is absolutely inoperative or void, it does not prevent a recovery on the policy under which the claim is made, but such other insurance is a good defense when void- able only at the option of the insurance company, or the invalidity of the policy not appearing on its face ;^ a policy valid on its face, to avoid which proof of ex- trinsic facts is necessary, if accepted by the insured, constitutes other insurance f when policy has ceased to cover by reason of removal of the property, it is not other insurance,* and the words " valid or not " do not prevent such result.* A policy which is never de- livered or accepted as a substitute for a prior policy and legally inoperative as a contract cannot be claimed to be other insurance.^ 1. Landers v. Watertown Ins. Co., 86 N. Y. 414, 10 Ins. L. J. 863; American Ins. Co. v. Eeplogle, 114 Ind. 1, 15 N. E. Eep. Othbk Insueance. 103 810 ; Mitchell v. Lycoming Ins. Co., 51 Pa. St. 403 ; Obermeyer V. Globe Ins. Co., 43 Mo. 573 ; Bigler v. New York Central Ins. Co., 32 N. Y. 403, citing and following Carpenter v. Providence- Washington Ins. Co., 16 Pet. 495 (U. S.), and distinguishing the earlier cases of Jackson v. Massachusetts Ins. Co., 23 Pick. 418; Stacey v. Franklin Ins. Co., 3 Watts & Serg. 514 (Pa.); Clark V. New England Ins. Co., 6 Cush. 343 (Mass.), and Phil- brook V. New England Ins. Co., 37 Me. 137. And see Rising Sun Ins. Co. v. Slaughter, 20 Ind. 530. And see Eules 5 and 39, and Vol. 1, Fire Insurance as a Valid Contract, " Construction," Eule 14. 2. American Ins. Co. v. Eeplogle, 114 Ind. 1, 15 N. E. Rep. SIO; Phoenix Ins. Co. v. Copeland, 90 Ala. 386, 8 So. Eep. 48, 19 Ins. L. J. 961; Lackey v. Georgia Home Ins. Co., 43 Ga. 456. Contra, Dahlberg v. St. Louis Ins. Co., 6 Mo. App. 121. And see Eules 3. Stevens v. Citizens' Ins. Co., 69 Iowa, 658, 16 Ins. L. J. 112. 4. Stevens v. Citizens' Ins. Co., 69 Iowa, 658, 16 Ins. L. J. 112. 5. Milwaukee Mechanics' Ins. Co. v. Graham, 181 111. 158, 54 N. E. Eep. 914; Folb v. Phoenix Ins. Co., 109 N. C. 568, 13 S. E. Eep. 798. RULE 36. As Affected by Question of Validity. Other insurance must be valid insurance to render "the policy void; void or invalid insurance is not other insurance;^ the fact that insured claims and receives payment of the other insurance does not estop him in suit on another policy from asserting that such other insurance was inoperative or invalid;^ if validity of a policy asserted to be other insurance is material its validity must be determined as of the time of its issue, and not at time of the loss.^ 1. Wheeler v. Watertown Ins. Co., 131 Mass. 1, 10 Ins. L. J. 354; Jackson v. Farmers' Ins. Co., 5 Gray, 52 (Mass.) ; Sweeting v. Mutual Ins. Co., 83 Md. 63, 34 Atl. Eep. 826, 25 104 FiEB Iksxjbance. Ins. L. J. 730, 33 L. E. A. 570 ; Fanners' Ins. Co. v. Newman, 58 Kebr. 504, 78 N. W. Eep. 933 ; Woolpert v. Franklin Ins. Co., 42 W. Va. 647, 36 S. E. Eep. 531. And see Woolpert v. Northern Assur. Co., 44 W. Va. 734, 39 S. E. Eep. 1024, where it seems to be so held notwithstanding the words "valid or not;" Gale v- Belknap, 41 N. H. 170 ; Hubbard v. Hartford Ins.. Co., 33 Iowa, 335; Sutherland v. Old Dominion Ins. Co., 31 Gratt. 176 (Va.) ; Insurance Co. v. Holt, 35 Ohio St. 189 ; Knight v. Eureka Ins. Co., 36 Ohio St. 664; Leibrandt v. Firemen's Ins. Co., 35 Fed. Eep. 30 ; Germania Ins. Co. v. Klewer, 139 111. 599, 22 N. E. Eep. 489, 19 Ins. L. J. 126. ' 2. Thomas v. Builders' Ins. Co., 119 Mass. 121 ; Hayes v. Milford Ins. Co., 170 Mass. 492, 49 N. E. Eep. 754, 27 Ins. L. J. 459 ; Insurance Co. v. Holt, supra,; Firemen's Ins. Co. v. Holt, 35 Ohio St. 189, 9 Ins. L. J. 213. And see Folb v. Phoenir Ins. Co., 109 N. C. 568, 13 S. E. Eep. 798. 3. Equitable Ins. Co. v. McCrea, 8 Lea, 541 (Tenn.). RULE 37. Construction and Object of Insertion of the Words " Valid or Not." When the policy in terms provides that it shall be void by reason of other insurance, whether ' ' valid or not," subsequent insurance in form having any ex- istence, even though not binding and enforceable, is other insurance causing a forfeiture ;' and so in action, upon the subsequent policy wherein the defense of other insurance is pleaded, the insured cannot claim invalidity of the first policy;^ the words " valid or not ' ' include an invalid policy, and a policy is avoided by the insured procuring, without consent, a policy from another company on same property, although the last policy is also void because it contains the same condition f it is no answer to a defense founded upon the existence of the other insurance that such insur- Othee Instjeance. 105 ance is invalid,* the words " whether valid or not " were inserted to prevent any controversy as to the validity or invalidity of a policy claimed to be other insurance, and should not be disregarded.^ 1. Donogh V. Farmers' Ins. Co., 104 Mich. 503, 62 K. W. Rep. 721, 25 Ins. L. J. 472; Hughes v. Insurance Co. N". A., 40 Nebr. 626, 59 N. W. Rep. 112, 23 Ins. L. J. 721; Stormes v. Southern California Ins. Co., 26 S. W. Rep. 1104 (Tex.) ; Sugg v. Hart- ford Ins. Co., 98 N. C. 143, 3 S. B. Rep. 732; Stevenson v. Phoenix Ins. Co., 83 Ky. 7. 2. Reed v. Equitable Ins. Co., 17 R. I. 785, 24 Atl. Rep. 833, 21 Ins. L. J. 821. 3. Wilson V. ^tna Ins. Co., 12 Tex. Civ. App. 512, 33 S. W. Rep. 1085. 4. Phcenix Ins. Co. v. Lamar, 106 Ind. 513, 15 Ins. L. J. 686. 5. Continental Ins. Co. v. Hulman, 92 111. 145, 157. And see Royal Ins. Co. v. McCrea, 8 Lea, 531, 11 Ins. L. J. 508 (Tenn.) ; Stevenson v. Phoenix Ins. Co., 83 Ky. 7, 14 Ins. L. J. 65; Punke v. Minnesota Ins. Assoc, 29 Minn. 347, 11 Ins. L. J. 830 ; Emery v. Mutual City Ins. Co., 51 Mich. 469, 12 Ins. L. J. 929; Behrens v. Germania Ins. Co., 64 Iowa, 19, 13 Ins. L. J. 653. RULE 38. Effect of the Words " Valid or Tlot." To a claim upon a policy containing a condition against other insurance without the words " valid or not," it is no defense that there are other policies, obtained either before or after the policy in question, such other policies containing similar conditions against other insurance but with the added words " whether valid or not;" if the other policy was ob- tained before, it becomes void by its terms as soon as policy in question issues ; if issued subsequently, by the same terms, it is void or never takes effect ;^ and even the fact that the claimant has also made claim against 106 FiKE Insubance. such other company and received payment, does not affect his rights under the policy in question.^ 1. Hayes v. Milford Ins. Co., 170 Mass. 492, 49 N. E. Eep. 754, 27 Ins. L. J. 459. 2. Hayes v. Milford Ins. Co., supra; Thomas v. Builders' Ins. Co., 119 Mass. 121. RULE 39. Policy Voidable Only. The policy does not become absolutely void upon the existence or procuring of the other insurance, but void- able only at the option of the insurance company;^ a policy cannot be claimed to be void or inoperative as other insurance when the insured makes claim and receives payment on account of it.^ 1. German Ins. Co. v. Emporia Loan Assoc, 9 Kans. App. 803, 59 Pac. Eep. 1092 ; Atlantic Ins. Co. v. Goodall, 35 N". H. 528; Hubbard v. Hartford Ins. Co., 33 Iowa, 325; Stevenson r. Phcenix Ins. Co., 83 Ky. 7. 2. Bigler v. New York Central Ins. Co., 22 K Y. 402 ; Ger- man Ins. Co. V. Emporia Loan Assoc, 9 Kans. App. 803, 59 Pac. Eep. 1092 ; David v. Hartford Ins. Co., 13 Iowa, 69. And see Gauthier v. Waterloo Ins. Co., 44 Up. Can. Q. B. 490. RULE 40. Estoppel by Issue and Delivery of Policy or Benewal With. Knowledge of Pacts. Issue and delivery of a policy with knowledge by the company or its agent of existing other insurance operates as a waiver or estoppel preventing the com- pany from claiming a forfeiture by reason of such fact;^ and same rule applies to a renewal,^ and so the company is estopped whenever the insured is misled by fraudulent conduct or misstatements of its agent.* Other Insueance. 107 "When policy issues witli knowledge of company's agent as to amount of otlier existing insurance, the continuance of latter, either by renewals or substitu- tion of other policies, does not make it other insurance within the meaning of the policy.* Knowledge of the agent will not be assumed from mere fact that there was sufficient to put him on inquiry, his knowledge must be shown as a distinct fact, and he does not have such knowledge where by mistake he supposes the •other insurance has expired.® 1. Stage V. Home Ins. Co., 76 App. Div. 509, 78 F. Y. Supp. 555; Lewis v. Guardian Assur. Co., 93 App. Div. 157, 87 N. Y. Supp. 525, aff'd, 181 F. Y. 392, 74 N. E. Eep. 224; Pitney v. ■Glens Palls Ins. Co., 65 JST. Y. 6 ; Pechner v. Phoenix Ins. Co., 65 F. Y. 195 ; Eichmond v. Niagara Ins. Co., 79 N. Y. 330 ; MeCarty v. Imperial Ins. Co., 126 N. C. 820, 36 S. B. Eep. 284; Collins v. Insurance Co., 79 K. C. 280; Gandy v. Orient Ins. Co., 52 S. C. 224, 29 S. B. Eep. 555, 27 Ins. L. J. 575; Madden & Co. v. Phoenix Assur. Co., S. C. , 49 S. B. Eep. 855 ; Spalding v. New Hampshire Ins. Co., 71 N. H. 441, 52 Atl. Eep. 858 ; Osborne v. Phoenix Ins. Co., 23 Utah, 428, 64 Pac. Eep. 1103 ; Mutual Ins. Co. v. Ward, 95 Va. 231, 28 S. B. Eep. 209 ; Insurance Co. N. A. v. Coombs, 19 Ind. App. 331, 49 N. E. Eep. 471; Swaine v. Macon Ins. Co., 102 Ga. 96, 29 S. B. Eep. 147; City Ins. Co. v. Carrugi, 41 Ga. 660; Home Ins. Co. v. Bernstein, 55 Nebr. 260, 75 N. W. Eep. 839, 28 Ins. L. J. 73; Home Ins. Co. v. Hammang, 44 Nebr. 566, 62 N. W. Eep. 883, 24 Ins. L. J. 493; First Nat. Bank v. American Central Ins. Co., 68 Minn. 492, 60 N. W. Eep. 345, 24 Ins. L. J. 55; Strauss v. Phenix Ins. Co., 9 Colo. App. 386, 48 Pac. Eep. 822, 26 Ins. L. J. 676 Johnson v. Farmers' Ins. Co., Iowa, , 102 N. W. Eep, 502; Erb v. Fidelity Ins. Co., 99 Iowa, 727, 69 N. W. Eep. 261 Hagan v. Merchants' Ins. Co., 81 Iowa, 321, 46 N. W. Eep. 1114, 20 Ins. L. J. 306; Gurnett v. Atlas Mutual Ins. Co., Iowa, 100 F. W. Eep. 542 ; Niagara Ins. Co. v. Johnson, 4 Kans. App. 16, 45 Pac. Eep. 789; Crescent Ins. Co. v. Griffin, 59 Tex. 509; Hibemia Ins. Co. v. Malevinsky, 6 Tex. Civ. App. 81, 24 S. W. Eep. 804, 23 Ins. L. J. 593 ; McCoUum v. Hartford Ins. Co., 67 Mo. App. 76; Horwitz v. Equitable Ins. Co., 40 108 FiEE Insueance. Mo. 557 ; Hayward v. National Ins. Co., 52 Mo. 181 ; Equitable Ins. Co. V. Alexander, Miss. , 12 So. Eep. 25; Keed v. Equitable Ins. Co., 17 E. I. 785, 24 Atl. Eep. 833, 21 Ins. L. J. 821 ; Hartford Ins. Co. v. Eedding, Fla. , 37 So. Eep. 62; Philadelphia Underwriters v. Bigelow, Pla. , 37 So. Eep. 210; London Assur. Co. ■;;. Saxton, 55 111. App. 664; New- England Ins. Co. V. Schettler, 38 111. 166 ; Insurance Co. N. A. r. McDowell, 50 111. 120 ; Lycoming Ins. Co. v. Barringer, 73 111. 230; American Ins. Co. v. Luttrell, 89 111. 314; Von Bories v. United Ins. Co., 8 Bush, 133 (Ky.) ; Kenton Ins. Co. v. Shea, 6 Bush, 174; Putnam v. Commonwealth Ins. Co., 18 Blatchf. 368 (U. S. Cir.) ; Farmers' Ins. Co. v. Taylor, 73 Pa. St. 342; Sherman v. Madison Ins. Co., 39 Wis. 104; Eoberts v. Conti- nental Ins. Co., 41 Wis. 321; American Ins. Co. v. Gallatin, 48 Wis. 36; Eishbeck v. Phcenix Ins. Co., 54 Cal. 422; Kahn v. Traders' Ins. Co., 4 Wyo. 419, 34 Pae. Eep. 1059, 23 Ins. L. J. 401. And see Kitchen v. Hartford Ins. Co., 57 Mich. 135, 23 N. W. Eep. 616. 2. Carroll v. Charter Oak Ins. Co., 1 Abb. Ct. App. Dec. 316, 10 Abb. N. S. 166 (N. Y.) ; Pechner v. Phcenix Ins. Co., 6 Lans. 411, afE'd, 65 N. Y. 195; Pitney v. Glens Falls Ins. Co., 65 N. Y. 6. 3. McKenzie v. Insurance Co., 9 Heisk. 261 (Tenn.) ; Eivara V. Queens Ins. Co., 62 Miss. 720. 4. Pitney v. Glens Falls Ins. Co., 65 N. Y. 6; Brown v. Cattaraugus Ins. Co., 18 N. Y. 385; Lewis v. Guardian Ins- Co., 93 App. Div. 157, 87 N". Y. Supp. 525, afE'd, 181 N. Y. 392, 74 N. E. Eep. 224. And see Pechner v. Phcenix Ins. Co.,. 65 N. Y. 195. Compare Hutchinson v. Western Assur. Co., 21 Mo. 97. 5. Sanders v. Cooper, 115 N. Y. 279, 22 N. E. Eep. 212. See Eule 14. And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver,"^ Eule 19. This rule which seems now to be generally firmly established throughout the country as one of law, notwithstanding the late decision of the United States Supreme Court in Northern As- sur. Co. V. Grandview Building Assoc, 183 U. S. 308 (see Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eules 8 and 16 and following Eule 41) would appear to have had its origin in equity. See National Ins. Co. v. Crane, 16 Md. 260. Othee Insueance. 109 RULE 41. Issue and Delivery of Policy with. Knowledge Does not Operate as a "Waiver — Parol Evidence. Issue and delivery of a policy with, knowledge by the company's agent of the existence of other insurance does not operate as a waiver; parol evidence is not admissible to affect the express terms of the contract. Northern Assur. Co. v. Grandview Building Assoc, 183 U. S. 308, 22 Sup. Ct. Eep. 133, rev'g 101 Fed. Eep. 77, 41 C. C. A. 207, overruling prior cases in the Federal courts such as Mc- Elroy V. British-American Ins. Co., 94 Fed. Eep. 990, and others. And see Hartford Ins. Co. v. Small, 66 Fed. Eep. 490, 14 C. C. A. 33, 30 U. S. App. 127 ; Bennett v. St. Paul F. & M. Ins. Co., 55 N. J. L. 377, 27 Atl. Eep. 641; Pendar v. American Ins. Co., 12 Cush. 469 (Mass.) ; Conway Tool Co. v. Hudson Eiver Ins. Co., 12 Cush. 144 (Mass.) ; Forbes v. Agawam Ins. Co., 9 Cush. 470 (Mass.) ; Batchelder v. Queen Ins. Co., 135 Mass. 449, 12 Ins. L. J. 813. And see Hendrickson v. Queen Ins. Co., 31 Up. Can. Q. B. 547; Shannon v. Gore District Ins. Co., 2 Ont. App. 396 (Can.) ; Billington v. Prorincial Ins. Co., 3 Duval, 182 (Can.), tlxough this last case admits that there might be an estoppel if the agent knew the amount of the other insurance. See Eule 40, and this volume, " Warranty," Eules 28, 29, note. See Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eule 8, and note. RULE 42. When Knowledge of Agent not That of the Company. When the agent acquires knowledge of the other insurance obtained or existing in violation of the con- dition, by virtue of his relation as attorney for the insured, and in a transaction with which the company w^as not connected, his knowledge is not the knowledge of the company, nor is it estopped thereby, nor can a -waiver be predicated thereon. Union Nat. Bank v. German Ins. Co., 71 Fed. Eep. 473, 34 U. S. App. 397, 18 C. C. A. 203, 25 Ins. L. J. 539. And see Vol. 1, Fire Insurance as a Valid Contract, "'Waiver," Eule 17. 110 FiEE Insubance. RULE 43. Knowledge of the Company's Soliciting Agent — Authority — Question of Fact. An agent authorized or employed by the insurance company to solicit the application for insurance binds the company by his knowledge of the existence of other insurance when policy issues and is delivered through and by him as its agent ;^ but notice to, knowledge, or acts of such an agent after issue and delivery of the policy do not bind the company.^ If an agent is au- thorized to receive notice of the other insurance and forward the policy for action by the company, and to return it to the insured, he is clothed with apparent authority, and what he says and does during the course of the communication binds the company.* The in- sured must have notice of limitations upon the agent's authority.* An agent to take and forward applications, may be the insured's agent, and if he is, the company is not affected by his knowledge of the existence of other insurance;' agency is or may be a question of fact.« 1. Wolf V. Dwelling-House Ins. Co., 86 Mo. App. 580; Turner V. Providence- Washington Ins. Co., 86 Mo. App. 387; Eogers V. Farmers' Assoc., 50 S. W. Eep. 543 (Ky.) ; McBrj'de v. South Carolina Ins: Co., 55 S. C. 589, 594, 33 S. E. Eep. 729 ; Brandup v. St. Paul Ins. Co., 27 Minn. 393, 10 Ins. L. J. 228 ; Gurnett v. Atlas Mutual Ins. Co., Iowa, , 100 N. W. Eep. 542; Bennett v. Council BlufEs Ins. Co., 70 Iowa, 600, IG Ins. L. J. 774; Hagan v. Merchants' Ins. Co., 81 Iowa, 321. 46 N. W. Eep. 1114, 20 Ins. L. J. 306 ; Kitchen v. Hartfor J Ins. Co., 57 Mich. 135, 14 Ins. L. J. 594. Contra, Billingtoii V. Canadian Ins. Co., 39 Up. Can. Q. B. 433. 2. Alabama State Ins. Co. v. Long Clothing Co., 123 Ala. 667, 26^So. Eep. 655; Queen Ins. Co. v. Young, 86 Ala. 424, .5 So. Eep. 116 ; Healey v. Imperial Ins. Co., 5 Nev. 268 ; Heath Other Insurance. Ill V. Springfield Ins. Co., 58 N. H. 414; American Ins. Co. v.. Hampton, 54 Ark. 75, 14 S. W. Rep. 1092 ; Phoenix Ins. Co. V. Copeland, 90 Ala. 386, 8 So. Eep. 48, 19 Ins. L. J. 961; Wilson V. Genesee Ins. Co., 14 N. Y. 418. 3. Eedstrake v. Cumberland Ins. Co., 44 IST. J. L. 394. 4. Phoenix Ins. Co. v. Spiers, 87 Ky. 385; Kenton Ins. Co. V. Shea, 6 Bush, 174 (Ky.). 5. Reed v. Equitable Ins. Co., 17 R. I. 785, 34 Atl. Eep. 833, 31 Ins. L. J. 831. 6. See this volume, chapter " Agents." RULE 44. . Effect of Expression of Intention to Procure Other Insurance — Opinion of Agent — Written Consent. When there is no other insurance at the time of the issue of a certain policy, the fact that the insured in- formed the company's agent when he obtained it, of his intention to subsequently procure other insurance, is insufficient to establish a waiver or estoppel; the insured is not thereby relieved from the necessity of procuring the written consent of the company to such other insurance if, and when, procured;^ unless the agent knows that the other insurance is to be imme- diately procured.^ A representation by the agent that the taking by the insured of additional insurance would not violate condition of the policy is not a representa- tion of a fact, but of an opinion or conclusion of law, not binding upon the company.* But this does not prevent the agent from stating that further insurance will be all right if it does not exceed limit as to amount.* The company may give sufficient written consent without writing same on the policy.* 1. Gray v. Germania Ins. Co., 155 N. Y. 180, 49 N". E. Rep. 675, 37 Ins. L. J. 474 ; Commercial Union Assur. Co. v'. Nord- 112 Fire Insurance. wood, 57 Kan. 610, 47 Pac. Eep. 539, 26 Ins. L. J. 177, criticis- ing Fireman's Fund Ins. Co. v. Norwood, 69 Fed. Eep. 71, 16 C. C. A. 136. And see able dissenting opinion in this case by Sanborn, C. J. ; United Firemen's Ins. Co. v. Thomas, 82 Fed. Eep. 406, 27 C. C. A. 42; Frankfurter v. Home Ins. Co., 10 Misc. 157, 31 N. Y. Supp. 3, 24 Ins. L. J. 76 ; Orient Ins. Co. V. Prather, 25 Tex. Civ. App. 446, 62 S. W. Eep. 89, apparently overruling Hartford Ins. Co. v. McLemore, 7 Tex. Civ. App. 317, 26 S. W. Eep. 928, 23 Ing. L. J. 788; Lippman v. .<3Etna Ins. Co., 108 Ga. 391, 33 S. E. Eep. 897, 28 Ins. L. J. 886; Morris v. Orient Ins. Co., 106 Ga. 472, 33 S. E. Eep. 430, 28 Ins. L. J. 643 ; Home Ins. Co. v. Wood, 50 Nebr. 381, 69 N. W. Eep. 941, 26 Ins. L. J. 686 ; Conway Tool Co. v. Hudson Eiver Ins. Co., 12 Cush. 144 (Mass.) ; Bourgeois v. Northwestern Nat. Ins. Co., 86 Wis. 606, 57 N. W. Eep. 347, 23 Ins. L. J. 860. And see Healey v. Imperial Ins. Co., 5 Nev. 268 ; Kimball r. Howard Ins. Co., 8 Gray, 33 (Mass.) ; Forbes v. Agawam Ins. Co., 9 Cush. 470 (Mass.). Contra, Carrugi v. Atlantic Ins. Co., 40 Ga. 135. And see New Orleans Ins. Assoc, v. Griffin, 66 Tex. 232, 15 Ins. L. J. 503 ; Ordway v. Continental Ins. Co., 35 Mo. App. 426; Bmmfield v. Union tns. Co., 87 Ky. 122, 7 S. W. Eep. 893. 2. Independent School District v. Fidelity Ins. Co., Iowa, , 84 N. W. Eep. 956. And see New Orleans Ins. Assoc. V. Griffin, supra. 3. Union Nat. Bank v. Gorman Ins. Co., 71 Fed. Eep. 473, 18 C. C. A. 203, 25 Ins. L. J. 539. And see Vol. 1, Fire Insurance as a Valid Contract. " Waiver," Eule 20. 4. Grubbs v. North Carolina Home Ins. Co., 108 N. C. 472, 13 S. E. Eep. 236, 20 Ins. L. J. 784. 5. Mattocks v. Des Moines Ins. Co., 74 Iowa, 233, 37 N. W, Eep. 174. RULE 45. Limitation upon Agent's Authority After Issue of Policy — Authority Must be Shown. After the issue of the policy, if the insured contracts or procures other insurance, written consent thereto must be given in writing or indorsed on the policy. An oral waiver of the condition requiring written con- sent cannot be made in the absence of evidence that the Other Insubance. 113 oflScer or agent had authority to give such consent, notwithstanding the provisions or limitations in the policy;^ the authority of the agent to waive written consent after issue of the policy must appear or be shown;* where the restrictions upon an agent's au- thority appear in the policy, and there is no evidence to show that his powers have been enlarged by usage of the company, its course of business, or by its con- sent, express or implied, the authority as expressed and limited in the policy is the measure of his power.^ When policy does not specifically limit the authority of the agent to make written indorsement only, a general agent authorized to make the contract may orally waive or dispense with written consent.* 1. O'Leary v. Merchants' Ins. Co., 100 Iowa, 173, 69 N. W Rep. 420, aff'g, on rehearing, 66 N. W. Eep. 175, 25 Ins. L. J. 394; Taylor v. State Ins. Co., 98 Iowa, 521, 67 N". W. Eep. 547: Zimmerman v. Home Ins. Co., 77 Iowa, 685, 42 N. W. Rep, 462; Robinson v. Fire Assoc., 63 Mich. 90, 16 Ins. L. J. 65 Cleaver v. Traders' Ins. Co., 65 Mich. 527, 71 Id. 414 Allemania Ins. Co. v. Hurd, 37 Mich. 11 ; German Ins. Co. v Heiduk, 30 Nebr. 288, 46 N. W. Rep. 481, 20 Ins. L. J. 206 ^ Baumgartel v. Providence-Washington Ins. Co., 136 N. Y. 547, 32 N". E. Rep. 990 ; Perry v. Caledonian Ins. Co., App. Div. , 93 N". Y. Supp. 50 ; Havens v. Home Ins. Co., Ill Ind. 90, 16 Ins. L. J. 713. And see Golden v. iSTorthern Assur. Co., 46 Minn. 471, 49 N. W. Rep. 246; Worcester Bank v. Hart- ford Ins. Co., 11 Cush. 265 (Mass.) ; Carpenter v. Providence- Washington Ins. Co., 16 Pet. 495 (U. S.) ; Hutchinson v. Western Ins. Co., 21 Mo. 97 ; Day v. Mechanics' Ins. Co., 88 Mo. 325. 2. Alabama State Ins. Co. v. Long Clothing Co., 123 Ala. 667, 26 So. Rep. 655. And see Smith v. Continental Ins. Co., 6 Dak. 433, 43 N. W. Rep. 810. 3. Quinlan v. Providence-Washington Ins. Co., 133 N. Y. 356, 31 N. E. Rep. 31, 21 Ins. L. J. 650. And see Walsh v. Hartford Ins. Co., 73 N". Y. 5; Commonwealth Ins. Co. v. Hnntzinger, 98 Pa. St. 42, 10 Ins. L. J. 618 ; Golden v. Northern Vol. 2 — 8 114 Fire Instjeance. Assur. Co., 46 Minn. 471, 49 K W. Eep. 246, and see Vol. 1, Fire Insurance as a Valid Contract. "Waiver," Eules 8-16, and this volume, title " Agents." 4. Goldwater v. Liverpool, L. & G. Ins. Co., 39 Hun, 176, aif'd, 109 N. Y. 618, 15 IST. E. Eep. 895, 17 Ins. L. J. 365, on opinion below. (The policy in this case contained the clause in frequent use, prior to adoption of the standard form: "The use of general terms, or anything less than a distinct specific agreement clearly expressed and endorsed on this policy shall not be construed as a waiver of any printed or written condition or restriction therein" and the court held that this was not a limitation as to the particular manner in which the agent should exercise the powers confided to him. And see Hamilton v. Home Ins. Co., 94 Mo. 353, 7 S. W. Eep. 261 ; Martin v. Jersey City Ins. Co., 44 N. J. L. 273 ; Havens v. Home Ins. Co., Ill Ind. 90, 12 N. E. Eep. 137. Old forms of policies also contained a clause "N"otice of other insurance must be given and endorsed on the policy, or otherwise acknowledged and approved in writing" and it was held that a written acknowledgment of a letter from the insured containing notice of other insurance, was sufiieient, and policy continued in force unless canceled. Potter V. Ontario Ins. Co., 5 Hill, 147 (K. Y.). And see Westlake v. St. Lawrence Ins. Co., 14 Barb. 206. Mailing notice of other insurance is only presumptive evi- dence of its receipt, which may be rebutted; it is a question of fact. McSparran v. Southern Ins. Co., 193 Pa. St. 184, 44 Atl. Eep. 317. If the policy requires notice, stating the wrong company, if the amount is correct, will not void the policy. Benjamin v. Saratoga Ins. Co., 17 N. Y. 415. That notice of other insurance may be given by telephone, see Sun Mutual Ins. Co. v. Hock, 8 Ohio C. C. 341. RULE 46. Estoppel Alter Issue of the Policy. A local agent who issues the policy and is authorized to grant permits for other insurance waives the de- fense of other insurance or estops the company by Other Insurance. 115 acquiring knowledge or receiving notice of the same and misleading the insured by allowing or inducing him to rely upon the validity of the policy, and failing to cancel same and returning the unearned portion of the premium ;^ an agent with power to make insurance contracts has power to orally waive or consent to ad- ditional insurance? Demand or acceptance of the premium after a fire may be evidence of waiver.^ 1. Thompson v. Traders' Ins. Co., 169 Mo. 13, 68 S. W. Eep. 889; Hamilton v. Home Ins. Co., 94 Mo. 353, 7 S. W. Eep. 261; Stavinow v. Home Ins. Co., 43 Mo. App. 513; Kotwicki V. Thuringia Ins. Co., 134 Mich. 82, 95 N. W. Eep. 976; Continental Ins. Co. v. Coons, 14 Ky. L. Eep. 136; Swedish- American Ins. Co. V. Knutson, 67 Kans. 71, 72 Pac. Eep. 536; Glasscock v. Des Moines Ins. Co., Iowa, , 100 N. W. Eep. 503;. Phoenix Ins. Co. v. Grove, 111. , 74 N. E. Eep. 141 ; German- American Ins. Co. v. Harper, Ark. , 86 KT. W. Eep. 817; Slobodisky v. Phcenix Ins. Co., 52 Nebr. 395, 73 N. W. Eep. 483, 27 Ins. L. J. 53 ; Phoenix Ins. Co. v. Holeombe, 57 Nebr. 622, 78 K W. Eep. 300, 38 Ins. L. J. 238 ; ^tna Ins. Co. v. Eastman, Tex. Civ. App. , 80 S. W. Eep. 355, rehearing denied, and writ of error denied by the Supreme Court. And see Kalmutz v. ISTorthern Mutual Ins. Co., 186 Pa. St. 571, 40 Atl. Eep. 816; Insurance Co. v. Lyons, 38 Tex. 353. 2. Bumham v. Greenwich Ins. Co., 63 Mo. App. 85; Liver- pool, L. & G. Ins. Co. V. Sheffy, 71 Miss. 919, 16 So. Eep. 307 ; Grubhs v. North Carolina Home Ins. Co., 108 N. C. 473, 13 S. E. Eep. 336, 30 Ins. L. J. 784. And see Mentz v. Lancaster Ins. Co., 79 Pa. St. 475, where it was held that company might be bound upon an estoppel. See Eule 45. And see Vol. 1, Fire Insurance as a Valid Con- tract, " Waiver," Eule 28. 3. Lutz V. Anchor Ins. Co., 120 Iowa, 136, 94 N. W. Eep. 274. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eule 45. See also this volume, " Agents " and " Cancellation." 116 FiEE Insueance. RULE 47. Effect of Alteration in Form With. Knowledge of Facts — Con- sent to Assignment. If company, with knowledge of its agent of the ex- istence of other insurance, procures the policy for purpose of making an alteration in the form attached thereto, and does so, and then returns it as a valid obligation to the assured, it operates as a waiver of the condition as to other insurance;^ and such is the effect of a consent to assignment of the policy.^ 1. American Ins. Co. v. First Nat. Bank, 73 Miss. 469, 18 So. Eep. 931. And see Kotwicki v. Thuringia Ins. Co., 134 Mich. 82, 95 ]Sr. W. Eep. 976. 2. Eureka Ins. Co. ■;;. Eobinson, 56 Pa. St. 356. And see this volume, "Assignment of Policy." RULE 48. Authority of Agent — Presumption — Evidence. After policy is issued if the insured desires an in- dorsement of permission for other insurance, he should obtain such written indorsement from the age»t who made, countersigned, and issued the policy to him; while another local agent at a different place may possibly have authority to make such indorsement, such authority will not be assumed from the mere fact that he is a local agent in such place; in the former case authority might be presumed, in the latter it must be estaolished.^ The company may authorize the agent who procured the policy to make the indorsement.^ 1. Security Ins. Co. v. Fay, 32 Mich. 467. 2. Grubbs v. Virginia F. & M. Ins. Co., 110 F. C. 108, 14 S. E. Eep. 516, 21 Ins. L. J. 470. Otheb Insurance. 117 RULE 49. Authority of Clerk of Company's Agent — Evidence — Broker. A person exclusively employed by agents of tlie tjompany as a solicitor, though his compensation is regulated by the application for insurance he procures, and he has a desk in their office for that business, is a clerk of such agents, and notice to him, or knowledge by him, of the existence of other insurance is knowl- edge of the company ;^ but a clerk employed to do mere clerical work, such as to copy or fill out policies, receive premiums, or the like, has no authority as such, in absence of some evidence extending its apparent scope, to consent to other insurance, and notice to him is not notice to the company.^ An insurance broker as such has no authority to bind the insurance company as to other insurance, though he receives commissions on business procured by him.^ 1. Arff V. Star Ins. Co., 135 N. Y. 57, 25 N. E. Eep. 1073, 20 Ins. L. J. 112. 2. Waldman v. North British & M. Ins. Co., 91 Ala. 170, 8 So. Eep. 666, 20 Ins. L. J. 353. 3. Golden v. Northern Ins. Co., 46 Minn. 471, 49 N. W. Eep. 246. And see this volume, "Agents." RULE 50. Company not Bound by Broker's Knowledge. An insurance broker, without authority from an in- surance company, does not bind it by his knowledge of the existence of other insurance,^ although a stat- ute regulating foreign insurance companies includes brokers in its definition of agents.^ An agent, for mere purpose of receiving and remitting premiums. 118 FiEE Insukanoe. has no authority to bind the company as to other insurance.^ 1. United Firemen's Ins. Co. v. Thomas, 92 Fed. Eep. 127, 34 C. C. A. 340, 38 Ins. L. J. 500, aff'g, on rehearing, 83 Fed. Eep. 406, 27 C. C. A. 42; Mellen v. Hamilton Ins. Co., 6 Duer, 101, aff'd, 17 N. Y. 609; Fire Assoc, v. Hogwood, 83 Va. 342, 17 Ins. L. J. 876 ; Golden v. Northern Assur. Co., 46 Minn. 471, 49 N. W. Eep. 346; Eoyal Ins. Co.'^y. MeCrea, 8 Lea, 531, 11 Ins. L. J. 508 (Tenn.). And see McLaehlan v. ^tna Ins. Co., 4 Allen, 173 (N. B.). 2. United Firemen's Ins Co. v. Thomas, supra. 3. East Texas Ins. Co. v. Blum, 76 Tex. 653, 13 S. W. Eep. 572. RULE 51. Construction of Written Bestriotion. A written clause in the policy that no other insur- ance is allowed unless by consent of the company may supersede the printed condition requiring written con- sent, and render an oral consent expressed to the in- sured by the agent through whom the insurance was effected, after an asserted communication with the company sufficient. Minnock v. Eureka Ins. Co., 90 Mich. 336, 51 N". W. Eep. 367. And see Kotwicki v. Thuringia Ins. Co., 134 Mich. 83, 95 N. W. Eep. 976. RULE 52. Agency in Placing Surplus Line. Where an agent of an insurance company applies to another agent of another company for its policy to cover a surplus line which the former is unable to put in companies represented by him, and obtains the policy on such surplus line on such application, the first agent is not the agent of the second company so Other Insurance. 119 that the latter is bound by his knowledge of the exist- ence of other insurance/ unless his status as agent of second company is fixed by statute.^ 1. McElroy v. British-American Assur. Co., 88 Fed. Eep. 563, 28 Ins. L. J. 112. 2. Schomer v. Hekla Ins. Co., 50 Wis. 575, 10 Ins. L. J. 306. And see this volume, " Agents." RULE S3. Agency of Company in Obtaining Policy from Another Company. When a party applies to an insurance company for "the entire amount of insurance desired, and such com- pany obtains a policy for a part of the amount from another company, and delivers the same to the as- sured, the first company may be regarded as the agent of the latter and not of the assured, and its knowledge of the existence of the other insurance estops the other company from maintaining such a defense. Mesterman v. Home Mut. Ins. Co., 5 Wash. 524, 32 Pac. Eep. 458, 22 Ins. L. J. 387. See Rule 52. RULE 54. When Company Estopped by Silence and Pailure to Cancel. Where the company is advised by letter that the insured has taken out additional insurance, and that the policy is not in his possession but in a bank, that he does not remember its conditions, and in terms re- questing to be advised, the insurance company is es- topped by its silence^ and failure to cancel or retention of premium. Rauch V. Michigan Millers' Ins. Co., 131 Mich. 281, 91 N. W. Eep. 160. See this volume, " Cancellation." 120 FiKE Insurance. RULE 55. Same Subject — Evideiice. If the policy is forwarded by the insured to the company's agent, with information of additional in- surance and request for written indorsement of con- sent, and the agent replies that permission will not be given without certain information, which the in- sured furnishes, and the agent makes no reply, retains the policy in his possession, but does not cancel it, inducing the insured to believe that the consent is given, it may be suflficient evidence of a waiver or es- toppel ;^ and so where the agent grants the permission intending to indorse it in writing upon the policy, but forgets to do so;^ and so where the agent indorses consent by his mistake for wrong amount, it may ope- rate as an estoppel;* or notice is given in a manner requiring the company to act by consenting or re- fusing.* 1. Phoenix Ins. Co. v. Johnson, 111. , 33 F. E. Eep. 429, 22 Ins. L. J. 29, aff'g 42 111. App. 66. 2. German Ins. Co. v. Cain, 37 S. W. Eep. 657, Tex. Civ. App. . And see Cobb v. Insurance Co. IST. A., 11 Kans. 93. 3. Greene v. Equitable Ins. Co., 11 E. I. 434. 4. Golden v. Northern Assur. Co., 46 Minn. 471, 49 N. W. Eep. 246. And see Cromwell v. Phoenix Ins. Co., 47 Mo. App. 109; Swedish-American Ins. Co. v. Knutson, 67 Kans. 71, 72 Pac. Eep. 526. In Canada there appears to be a statute requiring the insur- ance company to express its dissent on receipt of notice of other insurance. See McCrea v. Waterloo Ins. Co.. 26 Up. Can. C. P. 431; Fair v. Niagara Ins. Co., 26 Up. Can. C. P. 398. Other Insurance. 121 RULE 56. Effect of Here Omission to Cancel. The mere omission to cancel the policy after acquir- ing knowledge of the existence of other insurance does not of itself justify a legal conclusion that the com- pany elects to continue it in force. Johnson v. American Ins. Co., 41 Minn. 396, 43 N. W. Eep. 59 ; Taylor v. State Ins. Co., 98 Iowa, 521, 67 N. W. Eep. 577. And see Hartford Ins. Co. v. Small, 66 Fed. Eep. 490, 14 C. C. A. 33. See also " Cancellation." RULE 57. Mutual Mistake — Reformation. If there is a mutual mistake as to the total amount of insurance permitted by the terms of the policy, it may be corrected by a suit in equity for reformation of the policy ;^ and so insured may have relief by refor- mation where an agent has by mistake omitted to ex- press the mutual intent in the policy as to other insur- ance.^ 1. Pitchner v. Fidelity Ins. Assoc, 103 Iowa, 376, 73 N. W. Eep. 530. 2. Barnes v. Hekla Ins. Co., 75 Iowa, 11, 39 N. W. Eep. 132. And see " Eeformation." RULE 58. Application of Written Permission for Other Insurance. A written permission for other insurance without notice until required applies to prior or existing as well as to future insurance ;^ but permission for a cer- tain amount of additional insurance, applicable to that amount of existing insurance, should not be construed 122 FiEE Insueance. as authorizing the same amount of subsequent other insurance.^ 1. Blake v. Exchange Ins. Co., 12 Gray, 265 (Mass.) ; Fred- erick Ins. Co. V. Deford, 38 Md. 404. 2. Behrens v. Germania Ins. Co., 58 Iowa, 26, 11 Ins. L. J. 787. And see East Texas Ins. Co. v. Blum, 76 Tex. 653, 13 S. W. Rep. 572. RULE 59. Effect of Removal and Merger of Stock. "When a stock of goods insured by a certain policy is removed and merged in another stock, also insured by a policy covering accruing or changeable stock, it creates a case of other or double insurance, rendering former policy void;^ and so whenever insurance on old stock covers new stock incorporated with it, it is essential to obtain the consent of the company issuing its policy upon the new stock.^ 1. Washington Ins. Co. v. Hayes, 17 Ohio St. 432. 2. Peoria Ins. Co. v. Anapow, 45 111. 86. And see Whitwell D. Putnam Ins. Co., 6 Lans. 166 (N. Y.) ; Vose v. Hamilton Ins. Co., 39 Barb. 302. RULE 6o. Effect of Benewal — Substitution. A renewal is not the effecting or procuring of other insurance, but is a mere contract of continuance of existing insurance ;^ and so the substitution or replac- ing of one policy by another is not other insurance.^ 1. Pitney v. Glens Palls Ins. Co., 65 N. Y. 6; Lewis v. Guardian Assur. Co., 93 App. Div. 157, 87 IST. Y. Supp. 525. 2. Lewis V. Guardian Assur Co., supra. Othee Insurance. 123 RULE 6i. Contract Severable. When under a statute the value of the insured prop- •erty is stated to be a certain amount, and other insur- ance is obtained in excess of such amount on both building and personal property, the policy is void as to the building only, the amount of 'the insurance being separately and specifically named in each case. Thurber v. Eoyal Ins. Co., 1 Marv. (Del.) 351, 40 Atl. Eep. 1111. See Delaware Statute, Vol. 1. And as to the insurance contract being severable when in- surance itemized or subject-matter separately insured, see Mu- tual Ins. Co. V. Ward, 95 Va. 331, 38 S. E. Eep. 309. And see Eule 1. Also Vol. 1, Fire Insurance as a Valid Contract, " Construc- tion," Eule 36, and note RULE 62. Evidence of Other Insurance. While existence of other insurance may be proved by parol evidence,^ and be established by sufficient statement in a proof of loss,^ a statement therein that there is or was other insurance is not necessarily an admission that the assured had or procured it. In- surance had by the insured and other ^iasurance upon the same property do not mean the same thing, and Tvhen the insurance company is thus obliged to sup- plement the statement in the proofs by other evidence the insured has a right to contradict it, and a finding of fact in his favor thereon by a jury becomes conclu- sive in an appellate court.^ Statements in a proof of loss do not operate as an estoppel against the insured.* 1. Knickerbocker Ins. Co. ■;;. Gould, 80 111. 388; McMaster V. Insurance Co. N. A., 55 IST. Y. 333. 124 FiBE Insubance. 2. Continental Ins. Co. v. Hulman, 92 111. 145; Cumber- land Ins. Co. V. Giltiwan, 19 Vroom, 495 (N. J.). 3. McMaster v. Insurance Co. N. A., supra. 4. Hubbard v. Hartford Ins. Co., 33 Iowa, 325. And see Vol. 1, Fire Insurance as Valid Contract, " State- ment or Proof of Loss," Kule 34. RULE 63. Burden of Proof — Construction. — Evidence — Question of Fact or Law. The burden rests upon the insurance company of establishing by competent and satisfactory evidence the breach of the condition, and it is the settled policy of the law to construe such a condition strictly;^ ex- istence of other insurance will not be guessed or as- sumed merely from similar descriptions,^ the applica- tion of which, if ambiguous or doubtful, may be shown by parol evidence,'* and may be a question proper to be determined by a jury as one of fact;* but where there is no dispute as to identity, and question is. whether terms of the different policies are the same, being a subject of comparison between writings, the question is one to be determined by the court.® 1. Mead v. American Ins. Co., 13 App. Div. 476, 43 N. Y. Supp. 334; Eussell v. Fidelity Ins. Co., 84 Iowa, 93, 50 N. W. Eep. 546. And see Sweeting v. Mutual Ins. Co, 83 Md. 63, 34 Atl. Eep. 836, 25 Ins. L. J. 730, 32 L. E. A. 570. 2. Eussell V. Fidelity Ins. Co., supra. And see Clark «. Hamilton Ins. Co., 9 Gray, 148 (Mass.). 3. Stacey v. Franklin Ins. Co., 2 Watts & Serg. 506 (Pa.) ; McMaster v. Insurance Co. N. A., 55 N. Y. 222. 4. Neve v. Columbia Ins. Co., 2 McMullan, 220 (S. C.) ; Mitchell V. Lycoming Ins. Co., 51 Pa. St. 402. 5. Mitchell v. Lycoming Ins. Co., 51 Pa. St. 402. Insurable Interest. ' 125 CHAPTER FIFTH. Relating to Interest or Title. Title 1. Insurable interest. 2. Statement of interest. 3. Interest other than unconditional and sole ownership. 4. Building on ground not owned in fee simple. 5. Incumbrance by chattel mortgage. 6. Foreclosure or notice of sale. 7. Change in interest, title, or possession. 8. Assignment of policy. TITLE I. Insurable Interest. KuLE 1. Must be alleged and proved — Exception — Presump- tion. 2. Eeason for necessity of allegation and proof of insur- able interest — Kot subject of waiver. 3. Test of insurable interest' — Does not depend on title or possession — Equitable interest. 4. May be representative as well as personal. 5. Existence of an insurable interest no answer to viola- tion or breach of conditions in policy. 6. Effect of adjudication in bankruptcy. 7. Pleading and evidence. 8. Who has an insurable interest. 9. When no insurable'interest. RULE I. Must be Alleged and Proved — Exception — Presumption. It is a general rule that an insurable interest in the property must be alleged and proved to have ex- isted at time of the issue of the policy, and at time of the fire or loss;^ there is an exception when the policy attaches to and covers property acquired sub- sequent to its delivery; in such a case it is sufficient 126 FiBE Insukance. to allege and prove insurable interest subsisting dur- ing the risk and at time of the fire or loss? An alle- gation of existence of insurable interest at time of issue of policy in a pleading may create such legal presumption of the continuance of such fact to time of loss as to make it good as a pleading against a de- murrer,^ but ordinarily the law does not presume ownership at time of loss from fact of its existence at time of the issue of the policy,* and in some States the policy itself is regarded as prima facie proof of interest, and if not pleaded it is no ground of demurr^er, and the issue must be raised by answer.^ 1. Davis V. New England Ins. Co., 70 Vt. 317, 39 Atl. Kep. 1095 ; Dickerman v. Vermont Ins. Co., 67 Vt. 99, 30 Atl. Eep. 808, 24 Ins. L. J. 473 ; Bryan v. Farmers' Assoc, 81 App. Div. 543, 81 N. Y. Supp. 145 ; Continental Fire Assoc, v. Bearden, Tex. Civ. App. , 69 S. W. Eep. 983; Pope v. Glens Falls Ins. Co., 136 Ala. 670, 34 So. Rep. 29 ; Bennett v. Mutual Ins. Co., Md. , 60 Atl. Eep. 99 ; German Ins. Co. v. Everett, 36 S. W. Eep. 125 (Tex.) ; Commercial Union Assur. Co. v. Dunbar, 7 Tex. Civ. App. 418, 36 S. W. Rep. 638; Gustin v. Concordia Ins. Co., 90 Mo. App. 373 ; Harness v. National Ins. Co., 63 Mo. App. 245; White v. Merchants' Ins. Co., 93 Mo. App. 383; Milwaukee Ins. Co. v. Todd, 33 Ind. App. 314, 67 N. E. Eep. 697; Vernon Ins. Co. v. Bank of Toronto, 29 Ind. App. 678, 65 N. E. Eep. 33; Farmers' Ins. Co. v. Burris, 33 Ind. App. 507; Phenix Ins. Co. v. Benton, 87 Ind. 132, 11 Ins. L. J. 634; Chrisman v. State Ins. Co., 16 Oreg. 383, 18 Pac. Eep. 466 ; Monroe v. Southern Ins. Co., 63 Ga. 669 ; Howard v. Lancashire Ins. Co., 11 Duval, 92 (Can. Sup.). 2. Davis V. New England Ins. Co., su-praj Sun Ins. OflBee v. Merz, 64 N. J. L. 301, 45 Atl. Eep. 785. And see Lingenfelter V. Phoenix Ins. Co., 19 Mo. App. 253. 3. Eoussel V. St. Nicholas Ins. Co., 9 Jones & Sp. 379 (N. Y.). 4. Eoyal Ins. Co. v. Horton, 14 Ins. L. J. 871 (Ky.). 5. Tabor v. Goss Mfg. Co., 11 Colo. 419. And see Ameri- can Ins. Co. V. Landfare, 56 Nebr. 483, 76 N. W. Eep. 1068. Insured may be relieved from the necessity of alleging in- surable interest by statute. Insurable Intekest. 127 People's Ins. Co. v. Heart, 24 Ohio St. 331; Commercial Ins. Co. V. Capital City Ins. Co., 81 Ala. 320. As to necessity of alleging and proving an insurable interest at time of contract and at time of loss, see also Freeman v. Fulton Ins. Co., 38 Barb. 247 ; Murdock v. Chenango Ins. Co., 3 N. Y. 210; Quarrier v. Peabody Ins. Co., 10 W. Va. 507; Prussian Nat. Ins. Co. v. Peterson, Ind. App. , 64 N. B. Eep. 102; Indiana Ins. Co. v. Pringle, 21 Ind. App. 559, 52 N. B. Eep. 821; Western Assur. Co. v. McCarty, 18 Ind. App. 449, 48 N. E. Eep. 265, 27 Ins. L. J. 187 ; Farmers' Ins. Co. ■;;. Moore, 48 Nebr. 713, 67 N. W. Eep. 764, 25 Ins. L. J. 785. RULE 2. Reason for Necessity of Allegation and Proof of Insurable In- terest — Not Subject of Waiver. The reason for the necessity of alleging and proving an insurable interest is that the policy in law, inde- pendent of its conditions, is void as a wagering con- tract, unless the insured had and has an insurable interest. Such interest and the loss to it constitutes the foundation of his right of action upon the con- tract,^ and is not subject of waiver.^ 1. Gustin V. Concordia Ins. Co., 90 Mo. App. 373, 376; Waugh V. Beck, 114 Pa. St. 422; Freeman v. Fulton, 38 Barb. 247; Baldwin v. State Ins. Co., 60 Iowa, 497, 12 Ins. L. J. 371. 2. Agricultural Ins. Co. v. Montague, 38 Mich. 548. RULE 3. Test of Insurable Interest — Does not Depend on Title or Pos- session — Equitable Interest. A party has an insurable interest in property from the existence of which he receives a benefit or from the destruction of which he will suffer a pecuniary loss; it is not necessary that he should have title or possession;^ an equitable interest is an insurable in- terest.^ 1. Home Ins. Co. v. Mendenhall, 164 111. 458, 45 N". E. Eep. 1078, aff'g 64 111. App. 30; Burke v. Continental Ins. Co., 128 FiEE Insurance. App. Div. , 91 N. Y. Supp. 402; Hebner v. Palatine Ins. Co., 55 111. App. 375 ; Key v. Continental Ins. Co., 101 Mo. App. 344, 74 S. W. Eep. 163; Doyle v. American Ins. Co., 181 Mass. 139, 63 N. E. Eep. 394; Wainer v. Milford Ins. Co., 153 Mass. 335; Farmers & Merchants' Ins. Co. v. Mickel, Nebr. , 100 N. W. Eep. 130 ; Hanover Ins. Co. v. Bohn, 48 Nebr. 743, 25 Ins. L. J. 681, 67 N. W. Eep. 774; Davis v. Pho3nix Ins. Co., Ill Cal. 409, 43 Pac. Eep. 1115; Stone v. Granite State Ins. Co., 69 N. H. 438, 45 Atl. Ee,p. 235; Ciimberland Bone Co. V. Andes Ins. Co., 64 Me. 466; American Central Ins. Co. v. Donlon, 16 Colo. App. 416, 66 Pac. Eep. 249 ; Sussex County Ins. Co. V. WoodrufE, 2 Dutch. 541 (N. J.). And see Vol. 1, Fire Insurance as a Valid Contract, " Parties to Fire Insurance Contract," Eule 1, note 2. Gerringer v. North Carolina Home Ins. Co., 133 N. C. 407, 45 S. E. Eep. 773. RULE 4. May be Representative as Well as Personal. Whoever may be said to have a reasonable expecta- tion of deriving pecuniary advantage from the preser- vation of the subject-matter of insurance, whether that advantage inures to him personally, or as the agent or representative of the rights and interest of another, has an insurable interest. Where a policy is issued to a person so situated, covering or including such in- terests, he can recover the whole value of the property, and after satisfaction of his own special interest the balance will be held by him in trust for the owners. Hope Oil Mill Compress Co. v. Phoenix Ins. Co., 74 Miss. 320, 26 Ins. L. J. 995, 21 So. Eep. 132. And see Hartford Ins. Co. V. Keating, 86 Md. 130, 38 Atl. Eep. 29, 27 Ins. L. J. 406; Bicknell v. Lancaster Ins. Co., 58 N. Y. 677; Kline v. Queen Ins. Co., 7 Hun, 267, aff'd, 69 N. Y. 614, without opinion; ^Etna Ins. Co. v. Jackson, 16 B. Mon. 242 (Ky.) ; Bobbitt v. Liverpool, L. & G. Ins. Co., 66 N. C. 70. And see Vol. 1, Fire Insurance as a Valid Contract, " Parties to the Fire Insurance Contract." Instjbable Interest. 129 RULE 5. ^Existence of an Insurable Interest no Answer to Violation or Breach of Conditions in Policy. The necessity of alleging and proving the existence of an insurable interest to prevent the policy from being void in law as a wagering contract is entirely distinct and independent from the legal operative force of the terms and conditions of the policy as a contract. In other words, the existence of an in- surable interest is no answer to a violation of such terms and conditions. An interest may be insurable, yet it may not be unconditional and sole ownership within the meaning and operation of the contract. An interest may be legally insurable, but it does not necessarily follow that it is insured or covered and included under the terms of the contract. Grabbs v. Farmers' Ins. Co., 125 N. C. 389, 34 S. E. Eep. 503 ; Pittsburg Storage Co. v. Scottish Union & Nat. Ins. Co., 168 Pa. St. 523, 32 Atl. Eep. 58, 24 Ins. L. J. 781; Brooks v. Erie Ins. Co., 76 App. Div. 275, 78 N. Y. Supp. 748. And see Hamburg-Bremen Ins. Co. v. Lewis, 4 App. Cas. D. C. 66. RULE 6. Effect of Adjudication in Bankruptcy. The insurable interest of the assured does not cease with an adjudication by a bankruptcy court that he is a bankrupt. Fuller V. New York Ins. Co., 184 Mass. 12, 67 N. E. Eep. 879. RULE 7. Pleading and Evidence. A statement in the petition or complaint describing the property of the insured as " his " creates an Vol. 2 — 9 130 FiBE Insurance. inference of interest or ownership at least sufficient after verdict to support the judgment;^ so a general allegation of ownership after verdict may be sufficient to sustain insurable interest both at time of issue of policy and at time of loss.^ A defective statement as to insurable interest, if any is alleged, cannot be reached by objection to the introduction of testimony.* When policy describes the property insured as ' ' his- property," testimony that assured was in possession may be prima facie evidence of interest or ownership ;* a general statement as to interest or ownership is. sufficient as against a general demurrer.^ 1. Bondurant v. German Ins. Co., 73 Mo. App. 477 ; Eogers. V. Western Home Ins. Co., 93 Mo. App. 24, ovemiling Clevinger- V. Insurance Co., 71 Mo. App. 73. 2. Prendergrast v. Dwelling-Honse Ins. Co., 67 Mo. App. 426.. 3. Prendergrast v. Dwelling-House Ins. Co., supra. 4. Lindner v. St. Paul P. & M. Ins. Co., 93 Wis. 526, 67 N. W. Eep. 1125, 25 Ins. L. J. 848 ; Canfield v. Watertown Ins.. Co., 55 Wis. 419, 12 Ins. L. J. 111. 5. Pennsylvania Ins. Co. v. Jameson, Tex. Civ. App. , 73 S. W. Eep. 418 ; American Central Ins. Co. v. White, Tex. Civ. App. , 73 S. W. Eep. 827 ; Western Assur. Co. v. Acker- man, 2 Pennyp. 144 (Pa.). In Nebraska the courts go so far as to hold that the policy itself is prima facie evidence of admission by the insurance- company of interest or ownership of the insured. Farmers & Merchants' Ins. Co. v. Peterson, 47 Nebr. 747, 66 N". W. Eep. 847; American Ins. Co. v. Landfare, 56 Nebr. 482, 76 N. W. Eep. 1068. And see Tabor v. Goss Mfg. Co., 11 Colo.. 419; German Ins. Co. v. Gibbs, 35 S. W. Eep. 679 (Tex.). And see Eule 1. RULE 8. Who Has an Insurable Interest. Vendee in possession under an executory contract of sale;^ attaching creditor;^ party's liability for grain under warehouse receipt and right to share in profits. Insueable Inteeest. 131 in payment of salary;^ stockholder;* owner of land in building being constructed under contract f party under contract to cut, deliver, and store ice, though. stored in house belonging to another;" creditor in building of deceased debtor, personal property being insufficient to pay debts ;'^ agent, trustee, or attorney of mortgagee;^ vendee of personal property under conditional contract of sale;* husband as tenant by curtesy initiate ;^'' agent whose profits under an agree- ment with his company may be affected by loss or destruction of property;" vendee in property trans- ferred in fraud of creditors ;^^ tenant at will ;^^ husband retaining possession and use on conveyance to wife ;" superintendent operating manufacturing plant under contract giving him pecuniary profit or interest in preservation of property ;^^ carrier's liability for loss of goods or property;^" landlord in furniture of ten- ant when right to distrain has not been abolished;" husband as trustee of wife under a statute ;^^ vendor under an executory contract of sale, vendee in posses- sion ;" party in goods purchased on credit •^'^ contractor and builder ;^^ shipping broker in advances and inter- est ;^^ of husband in building erected by him on wife's land;^* of wife in building erected partially with her earnings -^ husband in possession under agreement of his wife that amount is due from her and that it shall be a lien ;^ of wife in property conveyed to her in fraud of creditors f^ interest of a widow f husband in pos- session of personal property under claim of a verbal transfer from his wife;^* partner's interest in copart- nership property;^ tenant or leasehold;^" when lessee bound to replace ;^^ of lessor in building erected by 132 FiEE Insurance. lessee ;^^ purchaser at execution sale;*^ any interest under an executory contract while such contract sub- sists f* of vendor under an executory contract of sale ;^ mechanic's lien or builder's interest;^'' of mortgagee;*'' mortgagor,^* who may have insurable interest even after sale on foreclosure, until his right to redemption expires f^ executor or administrator ;*•* but that of ad- ministrator in building may depend on fact whether estate is insolvent or personal estate insufficient to pay debts ;*^ in profits;*^ railroad company under statute in adjacent property for which liable if destroyed by fire ;** sheriff, for goods held by him under process ;** trustee;^ of the State;*® owner of property sold on execution exists until right to redeem expires;*' lia- bility for tax on whisky lost while stored in ware- house ;** warehousemen as bailees ;** property conveyed in fictitious name f^ life interest ;^^ assignee of insolv- ent f^ patentee in royalties f^ bailee or agent f* home- stead;^* contractor moviitg houses;®'' pipe-line com- pany, oil in pipes;*'' liability under an executory con- tract to take care of building;** advances on account of a vessel;*" an equitable interest is an insurable in- terest."'* 1. Brooks V. Erie Ins. Co., 76 App. Div. 275, 78 N. Y. Supp. 748, aff'd, 177 N. Y. 572, on opinion below; Tyler v. ^tna Ins. Co., 16 Wend. 385, 12 Wend. 507; McG-ivney v. Phoenix Ins. Co., 1 Wend. 85 ; Dupuy v. Delaware Ins. Co., 63 Fed. Eep. 680, 24 Ins. L. J. 161 ; Grange Mill Co. ■;;. Western Assur. Co., * 118 111. 396, 16 Ins. L. J. 129; Farmers' Ins. Co. v. Meckes, 10 Ins. L. J. 707 (Pa.) ; Tuekerman v. Home Ins. Co., 9 E. I. 414. And see Oilman v. Dwelling-House Ins. Co., 81 Me. 488, 17 Atl. Rep. 544; MaeCutcheon v. Ingraham, 32 W. Va. 378, 9 S. E. Eep. 260 ; Home Ins. Co. v. Gilman, 113 Ind. 7, 13 N. E. Rep. 118. Insukablb Interest. 133 An insurable interest of a vendee under an executory con- tract may exist though he does not have possession. See Eules 3-5, and Columbian Ins. Co. v. Lawrence, 2 Pet. 25 (U. S.) ; Brewer v. Herbert, 30 Md. 301; Acer v. Merchants' Ins. Co., 57 Barb. 68 (N. Y.). 2. Donnell v. Donnell, 86 Me. 518, 30 Atl. Eep. 67, 34 Ins. L. J. 371. 3. Traders' Ins. Co. v. Pacaud, 150 111. 245, 37 N. E. Rep. 460, 23 Ins. L. J. 624. 4. Crawford v. Aachen & Munich Ins. Co., 100 111. App. 454, aff'd, 199 111. 367, 65 IST. E. Eep. 134; Eiggs v. Commercial Ins. Co., 125 N. Y. 7, 25 IST. E. Eep. 1058, 20 Ins. L. J. 107 ; Sea- man V. Enterprise Ins. Co., 18 Fed. Eep. 250, 14 Ins. L. J. 97 ; Warren v. Davenport Ins. Co., 31 Iowa, 464. But see Sweeney V. Franklin Ins. Co., 20 Pa. St. 337. 5. Foley v. Manufacturers & Builders' Ins. Co., 152 N. Y. 131, 46 N. E. Eep. 318, 26 Ins. L. J. 598. 6. North British & M. Ins. Co. v. McLellan, 21 Can. Sup. 288 7. Creed v. Sun Fire Office, 101 Ala. 522, 14 So. Rep. 323, 23 Ins. L. J. 461. 8. Hartford Ins. Co. v. Keating, 86 Md. 130, 38 Atl. Rep. 29, 27 Ins. L. J. 406. 9. Bohm Mfg. Co. v. Sawyer, 169 Mass. 477, 48 N. E. Eep. 620; Eeed v. Williamsburg City Ins. Co., 74 Me. 537; Holbrook V. St. Paul Ins. Co., 25 Minn. 229 ; Little v. Phoenix Ins. Co., 123 Mass. 380. And see Planters' Ins. Co. v. Lloyd, 71 Ark. 292, 75 S. W. Eep. 725. 10. Doyle v. American Ins. Co., 181 Mass. 139, 63 N. E. Eep. 394; Kyte v. Commercial Union Assur. Co., 149 Mass. 116, 16 Ins. L. J. 330; Insurance Co. v. Drake, 2 B. Mon. 47 (Ky.); Harris v. York Ins. Co., 50 Pa. St. 341; Caldwell v. Stadacona Ins. Co., 11 Duval, 212 (Can. Sup.). But see Clark V. Dwelling-House Ins. Co., 81 Me. 373, 17 Atl. Eep. 303. 11. Hayes v. Milford Ins. Co., 170 Mass. 492, 49 N. E. Eep. 754, 27 Ins. L. J. 459. 12. Forester v. Gill, 11 Colo. App. 410, 53 Pac. Eep. 230. 13. Schaeffer v. Anchor Ins. Co., 113 Iowa, 652, 85 N. W. * Eep. 985. 14. Jacobs V. Mutual Ins. Co., 52 S. C. 110, 29 S. E. Eep. 533, 27 Ins. L. J. 715. And see Horsch v. Dwelling-House Ins. Co., 77 Wis. 4, 45 N. W. Esp. 945, 19 Ins. L. J. 993. That husband may have insurable interest in both the per- sonal and real estate of his wife, see also Barracliff v. Trade Ins. Co., 45 ISr. J. L. 543, 13 Ins. L. J. 190. 134 Fire Insueance. 15. Graham v. American Ins. Co., 48 S. C. 195, 26 S. E.' Eep. 323, 26 Ins. L. J. 744. 16. Minnesota, St. Paul & M. E. Co. v. Home Ins. Co., 64 Minn. 61, 66 N. W. Eep. 132, 25 Ins. L. J. 252; Commonwealth V. Hide & Leather Ins. Co., 112 Mass. 136 ; California Ins. Co. V. Union Compress Co., 133 U. S. 387, 10 Sup. Ct. Eep. 365, 19 Ins. L. J. 385. 17. Mutual Ins. Co. v. Ward, 95 Va. 231, 28 S. E. Eep. 209. 18. Southern Mutual Ins. Co. v. Tumley, 100 Ga. 298, 27 S. E. Eep. 975, 27 Ins. L. J. 57. 19. Hamilton v. Dwelling-House Ins. Co., 98 Mich. 535, 57 N. W. Eep. 735, 23 Ins. L. J. 339. 20. Guiterman v. Grerman-Amer. Ins. Co., Ill Mich. 626, 70 K W. Eep. 135, 26 Ins. L. J. 727. 21. Eoyal Ins. Co. v. Stinson, 103 U. S. 25, 10 Ins. L. J. 687 ; Commercial Ins. Co. v. Capital City Ins. Co., 81 Ala. 320, 16 Ins. L. J. 81. 22. Phoenix Ins. Co. v. Parsons, 129 JST. Y. 86, 29 JST. E. Eep. 87. 23. Abbott V. Hampden Ins. Co., 30 Me. 414. 24. Eockford Ins. Co. v. Nelson, 65 111. 416. 25. Eohrbach v. Germania Ins. Co., 62 IST. Y. 47. A husband's right to use and possession of his wife's property sufficient. Continental Eire Assoc, v. Wingfield, 32 Tex. Civ. App. 194, 73 S. W. Eep. 847. 26. McLean v. Hess, 106 Ind. 555, 16 Ins. L. J. 227. 27. Hartford Ins. Co. v. Haas, 87 Ky. 531, 9 S. W. Eep. 729. 28. Travis v. Continental Ins. Co., 32 Mo. App. 198. 29. Voisin v. Commercial Ins. Co., 62 Hun, 4, 16 F. Y. Supp. 410; Phoenix Ins. Co. v. Hamilton, 14 Wall. 504 (U. S.) ; Man- hattan Ins. Co. V. Webster, 59 Pa. St. 227; Oakman v. Dor- chester Ins. Co., 98 Mass. 57; Converse v. Citizens' Ins. Co., 10 Cush. 37 (Mass.). 30. Philadelphia Tool Co. v. British Amer. Assur. Co., 132 Pa. St. 236, 19 Atl. Eep. 77; Hand v. Williamsburg City Ins. Co., 57 X. Y. 41 ; Lawrence v. St. Marks Ins. Co., 43 Barb. 479 ; Mblo V. Xorth American Ins. Co., 1 Sandf. 551. 31. Imperial Ins. Co. v. Murray, 73 Pa. St. 13. 32. Mayor v. Exchange Ins. Co., 9 Bosw. 424 (N. Y.) ; Mayor V. Brooklyn Ins. Co., 41 Barb. 231, all'd, 4 Keyes, 465. 33. ^tna Ins. Co. v. Miers, 5 Sneed, 139 (Tenn.). 34. Columbian Ins. Co. v. Lawrence, 2 Pet. 25 (F. S.) ; Gil- man V. Dwelling-House Ins. Co., 81 Me. 488, 17 Atl. Eep. 544. Instjbable Interest. 135 35. Morrison v. Tennessee Ins. Co., 18 Mo. 363; Hill v. Cumberland Valley Co., 59 Pa. St. 474; Wood v. Northwestern Ins. Co., 46 N. Y. 431 ; Eedfield v. Holland Purchase Ins. Co., 56 N. Y. 354; Walsh v. Philadelphia Fire Assoc., 127 Mass. 383. 36. Insurance Co. v. Stinson, 13 Otto, 35 (U. S.) ; Stout v. City Ins. Co., 13 Iowa, 371; Longhurst v. Star Ins. Co., 19 Iowa, 364; Carter v. Humboldt Ins. Co., 12 Iowa, 387; Franklin Ins. Co. V. Coates, 14 Md. 385; Protection Ins. Co. v. Hall, 15 B. Mon. 411 (Ky.). 37. Parks v. Hartford Ins. Co., 100 Mo. 373, 12 S. W. Eep. 1058, 19 Ins. L. J. 364; Buck v. Phcenix Ins. Co., 76 Me. 586, 14 Ins. L. J. 413; Mix v. Andes Ins. Co., 9 Hun, 397, rev'd, but on other points, 74 N. Y. 53 ; Davis v. Quiney Ins. Co., 10 Allen, 113 (Mass.) ; Kellar v. Merchants' Ins. Co., 7 La. Ann. 39. 38. Insurance Co. v. Stinson, 13 Otto, 35 (U. S.). 39. Mechler v. Phcenix Ins. Co., 38 Wis. 665; Stephens v. Illinois Ins. Co., 43 111. 337 ; Buffalo Steam Engine Works v. Sun Ins. Co., 17 N. Y. 401 ; Strong v. Manufacturers' Ins. Co., 10 Pick. 40 (Mass.) ; Essex Savings Bank v. Meriden Ins. Co., 57 Conn. 335, 17 Atl. Eep. 930. 40. Sheppard v. Peabody Ins. Co., 31 W. Va. 368, 12 Ins. L. J. 817; Globe Ins. Co. v. Boyle, 21 Ohio St. 119; Herkimer V. Eice, 27 IST. Y. 163. 41. Sheppard v. Peabody Ins. Co., supra; Herkimer v. Eice, supra. 42. Niblo V. North American Ins. Co., 1 Sandf. 551 (N. Y.). 43. Pratt v. Atlantic & St. Lawrence E. Co., 43 Me. 579. 44. White v. Madison, 26 N. Y. 117. 45. Insurance Co. v. Chase, 5 Wall. 509 (U. S.). 46. People v. Liverpool, L. & G. Ins. Co., 2 T. & C. 268 •(N. Y.). 47. Cone v. Niagara Ins. Co., 60 N. Y. 619. 48. Insurance Co. v. Thompson, 5 Otto, 547 (TJ. S.). 49. Eichmond v. Niagara Ins. Co., 79 N. Y. 230 ; Pelzer Mfg. ■Co. V. Sun Fire Office, 36 S. C. 218, 15 S. E. Eep. 562. 50. David v. Williamsburg City Ins. Co., 83 N. Y. 265. 51. Farmers' Ins. Co. v. Archer, 36 Ohio St. 608, 10 Ins. L. J. 370. 52. Sibley v. Prescott Ins. Co., 57 Mich. 14, 14 Ins. L. J. 770. 53. National Filtering Oil Co. v. Citizens' Ins. Co., 106 N. Y. 535, 13 N. E. Eep. 337. 54. California Ins. Co. v. Union Compress Co., 133 U. S. 387, 10 Sup. Ct. Eep. 365, 19 Ins. L. J. 385. 136 FiEE Insueance. 55. Reynolds v. Iowa Ins. Co., 80 Iowa, 563, 46 N. W. Eep. 659. 56. Planters' Ins. Co. v. Thurston, 93 Ala. 255, 9 So. Eep. 368, 20 Ins. L. J. 746. 57. Western & A. Pipe Lines Co. v. Home Ins. Co., 145 Pa. St. 346, 22 Atl. Rep. 665, 21 Ins. L. J. 24. 58. Cross V. National Ins. Co., 132 N. Y. 133, 30 N. E. Rep. 390; Berry v. American Central Ins. Co., 133 N. Y. 49, 30 N. E. Rep. 254, 31 Ins. L. J. 456. 59. Kinsman v. China Ins. Co., 49 Fed. Rep. 876. 60. Carpenter v. German-American Ins. Co., 135 N. Y. 298, 31 N. E. Rep. 1015, 22 Ins. L. J. 57 ; Michigan F. & M. Ins. Co., V. Wieh, 8 Colo. App. 409, 46 Pac. Rep. 687; International Trust Co. V. Norwich Union Ins. Soc, 71 Fed. Rep. 81, 36 U. S. App. 377, 17 C. C. A. 608; Insurance Co. N. A. v. Inter- national Trust Co., 71 Fed. Rep. 88, 36 U. S. App. 391, 17 C. C. A. 616. RULE g. When no Insurable Interest. A judgment creditor, whose judgment is a general lien only, has none in property of the debtor ;^ a lessee of farm bound by written agreement not to sell prod- ucts without written consent of lessor; without such consent former cannot convey such interest in the products to another which will be insurable;* hus- band has none in his wife's separate property;^ ven- dor after absolute conveyance, though in possession, has none in the land;* insurable interest of shipping brokers does not extend to commission for procuring charter;^ a turnpike company which has contributed to expense of building a county bridge, no insurable interest therein for that reason;* a person has no in- surable interest when his only right arises under a void or unenforceable contract either at law or in equity.'^ 1. Grevemeyer v. Southern Ins. Co., 63 Pa. St. 340. But see otherwise when judgment a lien, Spare v. Home Mutual Ins. Co., 17 Fed. Rep. 568, 13 Ins. L. J. 365. Statement of Interest. 137 2. Heald v. Builders' Ins. Co., Ill Mass. 38. 3. Traders' Ins. Co. v. Newman, 120 Ind. 554, 23 N. E. Eep. 428; Planters' Ins. Co. v. Lloyd, 71 Ark. 292, 75 S. W. Eep. 725. Mere loss of a home not sufficient. Tyree v. Virginia F. & M. Ins. Co., W. Va. , 46 S. E. Eep. 706. May be otherwise under a statute. Clark V. Firemen's Ins. Co., 18 La. 431. 4. Balow V. Teutonia Farmers' Ins. Co., 77 Mich. 540, 43 N. W. Eep. 924, 19 Ins. L. J. 231. 5. Phoenix Ins. Co. v. Parsons, 129 N. Y. 86, 29 N. E. Eep. 87. 6. Farmers' Ins. Co. v. New Holland Turnpike Co., 122 Pa. St. 37, 15 Atl. Eep. 563. 7. Pope V. Glens Falls Ins. Co., 136 Ala. 670, 34 So. Rep. 29. TITLE II. Statement of Interest. EuLE 1. As imposed by contract. 2. Good faith required — Effect of misstatement as to title. 3. Construction of language in policy applicable to in- terest — Parol evidence. 4. Construction of word " insured." 5. Application of the word " property." 6. Effect of making loss payable to third party — Policy issued to two jointly. 7. Effect of mortgages, judgments, or liens — No in- quiries. 8. True statement in application sufficient. 9. Company put upon inquiry by ambiguous answer in written application. 10. I^sue of policy without application or representation. 11. when insured may state property to be "his." 12. Individual doing business in firm or corporate name — Void court order — Property held by third party as security. 13. Tenant or created by lease — Executory contract. 14. Estoppel by issue of policy with knowledge of facts. 15. Estoppel in conduct of company's soliciting agent. 138 Fire Insueance, RULE I. As Imposed by Contract. This entire policy shall be void, if the interest of the insured in the property be not truly stated herein. This rule is imposed by above terms in the standard form of policy prescribed in: New York, North Carolina, Connecticut, North Dakota, Louisiana, * Pennsylvania, Michigan, Ehode Island, Missouri, Wisconsin. New Jersey, The standard form of policy prescribed in: Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain above provision. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. RULE 2. Good Paith Bequired — Effect of Misstatement as to Title. An insurance company has the right to know the real owner of the property insured, and the extent of his insurable interest, and the contract of insurance is one in which the utmost good faith is required of the insured. A misrepresentation as to title in state- ment is material, and constitutes a breach of. warranty as well. . Pelican Ins. Co. v. Smith, 92 Ala. 428, 9 So. Eep. 327; subsequent appeal, 107 Ala. 313, 18 So. Rep. 105. * See note to " Concealment," Eule 1, page 2. Statement of Interest. 139 RULE 3. 'Construction of Language in Policy Applicable to Interest — Parol Evidence. If the insurance company issues the policy with words of general description as applicable to interest or interests insured, or words which are uncertain or .ambiguous, showing or indicating an intention to in- clude or cover more than one interest or several inter- ests, the courts will construe them in the most com- prehensive sense that will give validity to the policy or avoid a forfeiture on the ground that interest is not truly stated;^ and so when the language indicates that the interest is or may be a qualified one or not an absolute one, it will be regarded as sufficient in absence of specific inquiry,^ or as a waiver of a more specific statement of interest;^ if words are ambiguous or un- certain in application, parol evidence is admissible to show extent of interest or interests intended,* but otherwise when the terms of the policy are unambigu- ■ous.® 1. Weed V. Hamburg-Bremen Ins. Co., 133 N. Y. 394, 31 N. E. Eep. 231, 21 Ins. L. J. 577. And see Williams v. Eoger Williams Ins. Co., 107 Mass. 377 ; Peck v. New London Ins. Co., 22 Conn. 575. 2. Fowle V. Springfield F. & M. Ins. Co., 122 Mass. 191; De Wolf V. Capital City Ins. Co., 16 Hnn, 116 (N. Y.). And see Lockwood v. Middlesex Ins. Co., 47 Conn. 553. 3. De Wolf V. Capital City Ins. Co., supra. 4. Clinton v. Hope Ins. Co., 45 IST. Y. 454 ; Lee v. Adsit, 37 N. Y. 78; Franklin Ins. Co. v. Drake, 2 B. Hon.' 47 (Ky.). And see Pitney v. Glens Falls Ins. Co., 65 N. Y. 6. 5. Lancaster Mills v. Merchants' Cotton-Press Co., 89 Tenn. 1, 14 S. W. Eep. 317. 140 Fire Insurance. RULE 4. Construction of Word " Insured." The word * ' insured ' ' may be construed in the sense in which it was understood by the immediate parties to the contract, whereby the insurance was effected. Liverpool, L. & G. Ins. Co. v. Davis, 56 Nebr. 684, 77 N. W. Kep. 66. RULE 5. Application of the Word " Property." When the policy requires the interest of the insured in the property to be truly stated therein, the word " property " is not limited in its application to either real or personal, but applies to both. Girard Ins. Co. v. Hebard, 95 Pa. St. 45. RULE 6. Effect of Making Iioss Payable to Third Party — Policy Issued to Two Jointly. Inserting a clause in a policy making loss, if any, payable to a third party as interest may appear, does not establish notice to or knowledge of the company as to title or interest of the insured, who is not thereby relieved of the necessity of making a true statement of his interest ;^ but when the policy, instead of making- the loss payable to a third party, directly insures by name several parties " as interest may appear," it operates either as a sufficient statement or as a waiver of a more specific statement,^ and so when policy is issued to two persons jointly the fact that their inter- ests may be as between them several and distinct is Statement op Interest. 141 BO ground of objection to validity of the policy for insufficient statement of interest.^ 1. Lasher v. St. Joseph Ins. Co., 86 N. Y. 423, 10 Ins. L. J. 845 ; Lasher v. Northwestern Ins. Co., 18 Hun, 104. 2. Dakin v. Liverpool, L. & G. Ins. Co., 77 N. Y. 600; De Wolf *. Capital City Ins. Co., 16 Hun, 116. . 3. Castner v. Farmers' Ins. Co., 46 Mich. 15, 10 Ins. L. J. 458. And see Kausal v. Minnesota Ins. Co., 31 Minn. 17, 13 Ins. L. J. 657. RULE 7. Effect of Hortgages, Judgments, or Liens — No Inquiries. Mortgages, judgments, or liens do not invalidate the insurance in absence of showing made by the insurance company that a particular statement of interest had been required of the insured, and he had made fraudu- lent concealment or misrepresentation of such interest. Unless true ownership or interest in the property is required by the conditions of the policy to be specifi- cally and particularly and accurately set forth, it will be in general sufficient if the assured has an interest Tinder any status of ownership or possession, in cases Tyhere no inquiries are made at the time the applica- tion is presented or the policy executed. The usual printed condition does not require ownership or inter- est in the property insured to be specifically and par- ticularly set forth. McClelland v. Greenwich Ins. Co., 107 La. 134, 31 So. Eep. '691, quoting and citing Adema v. Insurance Co., 36 La. Ann. €60. And see Light v. Insurance Co., 105 Tenn. 480, 58 S. W. S51; De Armand v. Insurance Co., 28 Fed. Eep. 603, 17 Ins. li. J. 634; Vogel v. People's Ins. Co., 9 Gray, 23 (Mass.). 142 FiBE Insueance. RULE 8. True Statement in Application Sufficient. If an application in writing, made part of the policy^ contains a true statement as to interest or title, it is sufficient. Lamb v. Council BlufEs Ins. Co., 70 Iowa, 238, 16 Ins. L. J. 123. RULE 9. Company Put upon Inquiry by Ambiguous Answer in Written. Application. When the company is put upon inquiry by an incom- plete, ambiguous, or uncertain answer relating to title in a written application, and issues a policy without further inquiry, it may be assumed that it intended to insure whatever insurable interest the applicant had in the entire premises. Clawson v. Citizens' Ins. Co., 121 Mich. 591, 80 N. W. Eep. 573. RULE 10, Issue of Policy Without Application or Representation. If an insurance company elects to issue its policy of insurance against a loss by fire without any applica- tion, or without any representation in regard to the title to the property to be insured, it cannot complain,, after a loss has ensued that the interest of the insured was not correctly stated in the policy. Cleavenger v. Franklin Ins. Co., 47 W. Va. 595, 35 S. E. Kep. 998 ; Wolpert v. Northern Assur. Co., 44 W. Va. 734, 29' S. E. Rep. 1024; Morotock Ins. Co. v. Eodefer, 92 Va. 747, 24 S. E. Eep. 393, 25 Ins. L. J. 529. And see Georgia Home Ins. Co. V. Holmes, 75 Miss. 390, 23 So. Eep. 183. Statement of Interest. 143 RULE II. When Insured May State Property to be " His." In the absence of specific inquiry by the insurance company, the interest of the insured in the property described in the policy as " his " is not necessarily rendered untrue by the mere fact that it is a qualified interest or of an equitable character ;^ but this does not relieve the insured if the interest is other than uncon- ditional and sole ownership;^ nor does the insured truly state his interest as " his property " when in fact he is only a part owner or owns only a part f the existelice of an insurable interest does not of itself relieve the insured of the necessity of making a true statement of it.* And when insured is in possession under an executory or conditional contract for sale of personal property, title to be in vendor until paid for, he cannot truly state property to be " his. ' ' ^ Nor can a husband insure his wife 's property as ' ' his. ' ' ® 1. Walsh V. Philadelphia Fire Assoc, 137 Mass. 383 ; Sussex County Ins. Co. v. Woodruff, 2 Dutch. 541 (N. J.) ; Southern Ins. Co. V. Lewis, 43 Ga. 587; Western Ins. Co. v. Mason, 5 Bradw. 141 (111.) ; Carrigan v. Lycoming Ins. Co., 53 Vt. 418, 10 Ins. L. J. 606; Irving v. Excelsior Ins. Co., 1 Bosw. 507 (N. Y.) ; Dohn v. Farmers' Joint Stock Ins. Co., 5 Lans. 275 (N. Y.) ; Farmers' Ins. Co. v. Fogelman, 35 Mich. 481; Wil- liams V. Buffalo German Ins. Co., 17 Fed. Eep. 63, 12 Ins. L. J. 374. And see Newman v. Springfield F. & M. Ins. Co., 17 Minn. 123 ; De Armand v. Home Ins. Co., 28 Fed. Eep. 603, 17 Ins. L. J. 634; East Texas Ins. Co. v. Crawford, 16 S. W. Eep. 1068, 21 Ins. L. J. 39 (Tex.) ; Buck v. Phoenix Ins. Co., 76 Me. 586, 14 Ins. L. J. 412. 2. Mers v. Franklin Ins. Co., 68 Mo. 127, 8 Ins. L. J. 505 ; Lasher v. St. Joseph Ins. Co., 86 N. Y. 423, 10 Ins. L. J. 845 ; Brown v. Commercial Ins. Co., 86 Ala. 189. And see Title 3 this chapter, " Interest other than unconditional and sole owner- ship." 144 FiBE Insurance. 3. Wilbur v. Bowditch Ins. Co., 10 Cush. 446 (Mass.) ; Ca- tron V. Tennessee Ins. Co., 6 Humphr. 176 (Tenn.). And see Columbia Ins. Co. v. Lawrence, 2 Pet. 35 (U. S.) ; Keefer v. Phoenix Ins. Co., 36 Ont. App. Eep. 377, rev'g 29 Ont. 394; German-American Ins. Co. v. Paul, 53 S. W. Eep. 442 (Ind. Ter.). 4. Lasher v. St. Joseph Ins. Co., 86 N. Y. 433, 10 Ins. L. J. 845. 5. Lasher v. St. Joseph Ins.*^ Co., supra; Lasher v. North- western Ins. Co., 18 Hun, 98. 6. Diffenbaugh v. Union Ins. Co., 150 Pa. St. 270. And see Solmes V. Eutgers Ins. Co., 3 Keyes, 416 (F. Y,). Some of the earlier forms of policies contained a specific con- dition requiring the insured to " state whether any other person had an interest in the insured property, and if so, its nature." See Agricultural Ins. Co. v. Montague, 38 Mich. 548. RULE 12. Individual Boing' Business in Firm or Corporate ITamo — Void Court Order — Property Held by Third Party as Security. An individual may do business in a firm or cor- porate name and obtain insurance in such name, in absence of misrepresentation as to title, interest, or ownership, or as to who compose the firm, or specific inquiry;^ statement of interest is not affected by a void court order opening a foreclosure decree under which the assured had obtained title ;^ leaving goods with auctioneer from whom purchased for purpose of sale, with agreement as to application of proceeds and retention as security for advances, does not require specific statement of interest in policy.^ 1. American Central Ins. Co. v. Heath, 29 Tex. Civ. App. 445, 69 S. W. Eep. 235 ; Delaware Ins. Co. v. Bonnet, 20 Tex. Civ. App. 107, 48 S. W. Eep. 1104. And see Bonnet v. Mer- chants' Ins. Co., 48 S. W. Eep. 1110; Irving v. Excelsior Ins. Co., 1 Bosw. 507 (N. Y.) ; Clark v. German Ins. Co., 7 Mo. App. 77. And see Gould v. York County Ins. Co., 47 Me. Statement of Intekest. 145 403 ; Bon Aqua Imp. Co. v. Standard Ins. Co., 34 W. Va. 764, 12 S. B. Rep. 771. 2. Porter v. Orient Ins. Co., 72 Conn. 519, 45 Atl. Rep. 7. 3. Franklin Ins. Co. v. Vaughan, 3 Otto, 516 (U. S.). RULE 13. Tenant or Created by Lease — Executory Contract. When the interest of insured is the creation of a lease or an executory contract by the owner it should be stated. Brown v. Commercial Ins. Co., 86 Ala. 189 ; Allen v. Sun Mutual Ins. Co., 36 La. Ann. 767, 14 Ins. L. J. 575. RULE 14. Estoppel by Issue of Policy With Knowledge of Facts. Issue of policy by company's agent, with knowledge of facts as to interest or title, waives provision in policy requiring that it shall be truly stated, or ope- rates as an estoppel ;^ but it must appear that the agent knew the facts ; it is not enough that he was put upon inquiry.^ L Dupuy V. Delaware Ins. Co., 63 Fed. Rep. 680, 24 Ins. L. J. 161 ; Home Ins. Co. v. Mendenhall, 164 111. 458, 45 N. E. Eep. 1078; Wagner v. Westchester Ins. Co., 92 Tex. 549, 50 S. W. Rep. 569 ; Mers v. Franklin Ins. Co., 68 Mo. 127, 8 Ins. L. J. 505 ; Emery v. Piscataqua Ins. Co., 52 Me. 322 ; Leach v. Republic Ins. Co., 58 IST. H. 245; Peck v. New London Ins. Co., 22 Conn. 575 ; Ayres v. Home Ins. Co., 21 Iowa, 185 ; Gates V. Penn Ins. Co., 10 Hun, 489 (N". Y.) ; Wheeler v. Traders' Ins. Co., 62 F. H. 326, 450 ; California Ins. Co. v. Union Com- press Co., 133 U. S. 387, 10 Sup. Ct. Rep. 365, 19 Ins. L. J. 385; Deitz v. Providence- Washington Ins. Co., 31 W. Va. 851, 8 S. E. Rep. 616. And see Burke v. Niagara Ins. Co., 12 N. Y. Supp. 254, 58 Hun, 605, not reported; German Ins. Co. v. Miller, 39 111. App. 633. Vol. 2 — 10 146 FiBE Instjeance. 2. Bell V. Lycoming Ins. Co., 19 Hun, 238 (N. Y.). But see and compare Skinner v. Norman, 165 N. Y. 565, 59 N. B. Eep. 309; Fame Ins. Co. v. Mann, 4 Bradw. 485 (111. App.). And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver,'* Eule 19. RULE 15. Estoppel in Conduct of Company's Soliciting Agent. The condition of the policy in regard to statement of the interest of the assured, and requiring such interest to be sole and unconditional, may be waived, not only by express agreement, but by the conduct of the solicit- ing agent of the company who solicits the insurance ; the errors or mistakes or misstatements of such solicit- ing agent are chargeable to the company which issues the policy upon the theory of an estoppel, and the company will be held to have contracted to insure such interest as the assured actually had without re- gard to the provisions ia the policy in reference to the title. Miotke V. Milwaukee Mechanics' Ins. Co., 113 Mich. 166, 26 Ins. L. J. 910, 71 N. W. Eep. 463 ; Dwelling-House Ins. Co. V. Dowdall, 55 111. App. 623, aff'd, 159 111. 179, 43 N. E. Eep. 606; Wieh v. Equitable Ins. Co., 2 Colo. App. 484, 31 Pac. Eep. 389 ; Combs v. Hannibal Ins. Co., 43 Mo. 148 ; Hough v. City Ins. Co., 29 Conn. 10. And see this volume, title " Agents." TITLE III. Interest other than Unconditional and Sole Ownership. EuLE 1. As imposed by contract. 2. Breach of condition forfeits insurance — Effect of written description — Evidence. 3. Otherwise provided by written description. 4. An insurable interest no answer to breach of the condition. Unconditional Sole Ownership. 147 EuLE 5. Meaning of unconditional and sole ownership — Con- struction. 6. When ownership sole and unconditional. 7. Requisites of unconditional and sole. 8. Test of sole unconditional ownership. 9. Several parties may together be sole and uncondi- tional owner. 10. Clause applies to ownership when policy issues. 11. When no written application and no inquiry — Pre- sumption. 12. Insurance company may rely upon conditions in policy — Not necessary to make inquiry as to title. 13. Effect of acceptance of policy by insured — Not af- fected by omission to make inquiry. 14. When company put upon inquiry by ambiguous an- swer in written application. 16. Distinction between interest and title — Equitable in- terest ■ — Construction of interest. 16. Ownership of property described in general words as a class or kind. 17. Partnership interest. 18. Admission of third party as a partner. 19. Policy on "use and occupancy " — Effect of pool- ing arrangement. 20. Deed intended as a mortgage — A deed must be de- livered — Effect of recording. 21. Words added to deed after execution may present a question of fact as to spoliation. 22. When insured sole and unconditional owner though title defective — Equitable interest. 23. Instrument creating interest as affected by fraud. 24. Mortgagee as insured. 25. Effect of liens or incumbrances. 26. Interest of vendee under an executory contract of sale. 27. As tested by right to enforce specific performance — Assumption of loss. 28. Effect of executory contract on ownership of vendor. 29. Effect of option to purchase. 30. Vendee of personal property under conditional con- tract of sale — Lessee of personal property. 31. Waiver or estoppel — Parol evidence — Agents — Question of fact — Company not chargeable with knowledge of records. 32. Knowledge of broker. 148 FiEE Insurance. EuLE 33. Pleading — Evidence — Burden of proof — Ques- tion of fact. 34. Contract severable. 35. When insured sole and unconditional owner — Illus- trative cases. 36. When the insured is not sole and unconditional owner — Illustrative cases. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if the interest of the insured be other than un- conditional and sole ownership. This rule is imposed by above terms in the standard form of policy prescribed in: New York, North Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Missouri, Ehode Island, New Jersey, Wisconsin. The standard form prescribed in Michigan is the same, ex- cept there is added : " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." The standard form of policy prescribed in Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain above provision. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. * See note to " Concealment," Eule 1, page 2. Unconditional Sole Ownership. 149 Section 3643 of the Ohio Eevised Statutes providing "that any company insuring a building, shall cause such building or structure to be examined by an agent of the insurer, and a full description thereof to be made and the insurable value thereof to be fixed by such agent; and that in the absence of any change increasing the risk without the consent of the company, and also an intentional fraud on the part of the insured, in case of total loss the whole amount mentioned in the policy or renewal shall be paid" has no application to defenses founded upon specific conditions as to title but is limited in operation to a building itself, its condition and situation as regards surround- ing objects and its value ; and the word " change " must be confined in its reference to the same and to those matters which were open to the sight and observation of the agent. Webster v. Dwelling-House Ins. Co., 53 Ohio St. 558, 7 Ohio C. C. 511. RULE 2. Breach, of Condition Forfeits Insurance — Effect of Written Description — Evidence. Where the policy contains a provision that the in- sured is the unconditional and sole owner of the prop- erty, and it turns out the insured was not the uncon- ditional and sole owner, no recovery can be had, unless it appears there was a waiver or an estoppel, by which the insurance company is precluded from relying on the contract ; or there is some language in the descrip- tion indicating an intention to cover or include other interests than that specifically named ;^ and it is error to exclude statements or admissions of the insured made prior to the fire relevant to an issue in reference to his ownership or title.^ 1. Hebner v. Palatine Ins. Co., 157 111. 144, K. E. Eep. , ail'g 55 111. App. 375; Overton v. American Central Ins. Co., 79 Mo. App. 1 ; Barnard v. National Ins. Co., 27 Mo. App. 26; Grigsbj' v. German Ins. Co., 40 Mo. App. 276; Fire Assoc. V. Calhoun, 28 Tex. Civ. App. 409, 67 S. W. Eep. 153; Breedlove v. Norwich Union Ins. Soc, 124 Cal. 164, 56 Pac. 150 FiEE Insubance. Eep. 770, 38 Ins. L. J. 447 ; McCormick v. Orient Ins. Co., 86 Cal. 260 ; Tyree v. Virginia F. & M. Ins. Co., W. Va. 46 S. E. Eep. 706. See Eule 3. 2. Southern Ins. Co. v. White, 58 Ark. 277, 24 S. W. Eep. 425, 24 Ins. L. J. 47. RULE 3. Otherwise Provided by Written Description. When the written or descriptive part of the policy shows an intention to coyer and protect other interests besides that of an individual or party specifically named, the condition requiring sole and absolute ownership is inoperative, because it is otherwise pro- vided;* so where the written description shows intent to insure a qualified interest or one less or other than unconditional sole ownership,^ or making loss payable to a third party with additional words showing nature of interest, such as making payable to him as a trustee.* 1. Hagan v. Scottish Ins. Co., 186 U. S. 423, 22 Sup. Ct. Eep. 862, rev'g 102 Fed. Eep. 919, 43 C. C. A. 55; Liverpool, L. & G. Ins. Co. V. McNeill, 89 Fed. Eep. 131, 59 U. S. App. 499; Mark v. National Ins. Co., 24 Hun, 565, aff'd, 91 N. Y. 663, on opinion below; Sullivan v. Spring Garden Ins. Co., 34 App. Div. 128, 54 N. Y. Supp. 629 ; West Branch Lumbermen's Exchange v. American Ins. Co., 183 Pa. St. 366. And see Weed V. Hamburg-Bremen Ins. Co., 133 N. Y. 394, 31 N. E. Eep. 231. And see Vol. 1, Fire Insurance as a Valid Contract, chapter " Parties to the Fire Insurance Contract." 2. Creighton v. Homestead Ins. Co., 17 Hun, 78. 3. Commercial Ins. Co. v. Spankneble, 52 111. 53. And see Lewis V. Council Bluffs Ins. Co., 63 Iowa, 193, 13 Ins. L. J. 557. RULE 4. An Insurable Interest no Answer to Breach of the Condition. A person or party may have an insurable interest and yet not be sole and unconditional owner; if he is not such owner under the express condition in the pol- Unconditionai, Sole Ownership. 151 icy it is no answer for tlie insured to claim or establish his insurable interest;^ may be otherwise when the policy does not contain the condition as to sole owner- ship.* 1. Hebner v. Palatine Ins. Co., 157 111. 144, 41 N. E. Eep. '627, afE'g 55 111. App. 275; Dwelling-House Ins. Co. v. Dow- ■dall, 49 111. App. 33; Gettleman v. Commercial Union Assur. Co., 97 Wis. 237, 72 JST. W. Eep. 627, 27 Ins. L. J. 160; Mc- Cormick v. Springfield F. & M. Ins. Co., 66 Cal. 361, 14 Ins. L. J. 373. And see Breedlove v. Norwich Union Soc, 124 Cal. 164, 56 Pac. Eep. 770, 28 Ins. L. J. 447. 2. Farmers' Ins. Co. v. Lecroy, 91 111. App. 41. The contract of fire insurance is one of indemnity, personal to the insured, and does not extend to another person or in- terest without language in or on the policy consenting to the same, or covered or included in the description of the insured or the property. See chapter on "Insurable Interest" in this volume, and Vol. 1, Fire Insurance as a Valid Contract, " Parties to the Fire Insurance Contract," Eule 1, and note See also Walker v. Phoenix Ins. Co., 89 Hun, 335, 35 N. Y. Supp. 374, rev'd, on a question of waiver, 156 N". Y. 628, 51 ]Sr.,E. Eep. 392. RULE 5. Itleaiiiiig of Unconditional and Sole Ownership — Construction. Unconditional and sole ownership does not mean imconditional and sole ownership of the insurable in- terest of the insured ; it means sole and unconditional ownership of the property in which the insurable inter- est may exist ;^ the conditions m the policy relating to ownership are to be construed not in their technical sense, but simply as requiring that the assured shall be the actual and substantial owner.* 1. Hebner v. Palatine Ins. Co., 55 111. App. 275, 279, afE'd, 157 111. 144, 41 N. E. Eep. 627. 2. Yost V. Dwelling-House Ins. Co., 179 Pa. St. 381, 35 Atl. Eep. 517, 26 Ins. L. J. 716; Gaylord v. Lamar Ins. Co., 40 Mo. 13. 152 FiEB Insubance. RULE 6. When Ownership Sole and XTnconditional. An insured's ownership is sole wlien no one else has any interest in the property as owner, and is uncondi- tional when the quality of the estate is not limited or affected by any condition. Steinmeyer v. Steimneyer, 64 S. C. 413, 42 S. E. Eep. 184. RULE 7. Requisites of Unconditional and Sole. To be " unconditional and sole " the interest must be completely vested in the insured, not conditional or contingent, nor for years, or for life only, nor in com- mon, but of such a nature that the insured must sus- tain the entire loss if the property be destroyed; and this is so whether the title is legal or equitable. Hartford Ins. Co. v. Keating, 86 Md. 130, 27 Ins. L. J. 406, 38 Atl. Eep. 29. And see Hanover Ins. Co. v. Shrader, 31 S. W. Eep. 1100 (Tex. Civ. App.). RULE 8. Test of Sole tlnconditional Ownership. A test of sole unconditional ownership is to inquire whether the interest, legal or equitable, as owner, is of suclf a nature that the insured must sustain the entire loss if the property be destroyed;^ another test is to inquire whether the interest is so vested in the individual that he can by no contingency be deprived of it without his own consent.^ 1. Stowell V. Clark, 47 Ajjp. Div. 626, 62 N. Y. Supp. 155, aff'd, 171 N. y. 673, on opinion below; Hough v. City Ins. Co., Unconditional Sole Ownership. 153 29 Conn. 20; Dupreau v. Insurance Co., 76 Mich. 615; Hart- ford Ins. Co. V. Keating, 86 Md. 130, 38 Atl. Eep. 29, 27 Ins. L. J. 406; Elliott v. Ashland Ins. Co., 117 Pa. St. 548, 554; Cottingham v. Firemen's Fund Ins. Co., 90 Ky. 439 ; Liverpool, L. & G. Ins. Co. V. Eicker, 10 Tex. Civ. App. 264, 267 ; Johannes V. Standard Ins. Co., 70 Wis. 196. 2. Hough V. City Ins. Co., 29 Conn. 20 ; Water Power Co. v. Street Ey. Co., 172 U. S. 491; Clay Ins. Co. v. Huron Salt Co., 31 Mich. 346; Lewis v. New England Ins. Co., 29 Fed. Eep. 497. RULE g. Several Parties May Together be Sole and TTnconditional Owner. When the policy is issued to and in the names of several parties, and they together are the sole and unconditional owners, the fact that one has a less interest does not affect the insurance ; such a condition is operative only when the united interest of those in- sured is less or other than sole and unconditional ownership. Eankin v. Andes Ins. Co., 47 Vt. 144; Perry v. Faneuil Hall Ins. Co., 11 Fed. Eep. 482, 11 Ins. L. J. 387. RULE 10. Clause Applies to Ownership when Policy Issues. The clause as to unconditional and sole ownership applies to ownership at the date of issue of the policy, and cannot be made to apply to a condition caused by a subsequent sale. Collins V. London Assur. Co., 165 Pa. St. 298, 30 Atl. Eep. 924, 24 Ins. L. J. 658 ; Southern Cotton Oil Co. v. Prudential Fire Assoc, 78 Hun, 373, 29 N. Y. Supp. 128 ; Eosenstock v. Mississippi Home Ins. Co., 82 Miss. 674, 35 So. Eep. 309. Under the old form of policy providing that " this policy shall become void, unless consent in writing is indorsed by the com- 154 FiBE Insueance. pany hereon, in each of the following instances, viz., if insured is not the sole and unconditional owner, etc., etc., it was held that it related to changes after execution and acceptance of the policy, and did not apply to the existing state or condition at time the policy was issued, and could not be invoked to void the insurance when the insured at the time he applied for it was merely a vendee in possession under an executory contract of purchase. Hall V. Niagara Fire Ins. Co., 93 Mich. 184, 53 N. W. Eep. 737. RULE II. When no Written Application and no Inquiry — Presumption. Where there is no written application, and the as- sured has an insurable interest in the property, and in good faith applies for insurance upon the same, and makes no actual misrepresentation or concealment of his interest therein, and the insurance company re- frains from making inquiry concerning his interest, and issues a policy to him, and accepts and retains his premium, the company is presumed to have knowledge of the condition of his title, and to insure the property with such knowledge; acceptance of policy does not amount to representation or warranty as to interest;* unless there is condition in the policy as to interest or title.=^ 1. Manchester Assur. Co. v. Ahrams, 89 Fed. Eep. 932, 32 C. C. A. 426 ; Sharp v. Scottish Union Ins. Co., 136 Cal. 542, 69 Pac. Rep. 353, 615 (Chief Justice Beatty dissented in vigorous opinion, declaring the decision unwarranted and against de- cided weight of authority) ; German Ins. Co. v. Davis, 6 Kans. App. 368, 61 Pac. Eep. 60, 37 Ins. L. J. 315; Dooly v. Hanover Ins. Co., 16 Wash. 155, 47 Pac. Eep. 507; Hart v. Niagara Ins. Co., 9 Wash. 620, 38 Pac. Eep. 313, 27 L. E. A. 86 ; Slobodiskv V. Phoenix Ins. Co., 53 Nebr. 816, 74 N. W. Eep. 370 ; Hanover Ins. Co. V. Bohn, 48 Nebr. 743, 67 N. W. Eep. 774, 25 Ins. 1. J. 681 ; Farmers & Merchants' Ins. Co. v. Mickel, Nebr. Unconditional Sole Ownebship. 155 , 100 N. W. Eep. 130; Hartford Ins. Co. v. McClain, 85 S. W. Eep. 699' (Ky.) ; Glens Falls Ins. Co. v. Michael, Ind. , 74 N. E. Eep. 964. And see Philadelphia Tool Co. v. Eritish Amer. Assur. Co., 133 Pa. St. 236, 19 Atl. Eep. 77; Euek V. Phcenix Ins. Co., 76 Me. 586; Scottish Union & Nat. Ins. Co. V. Strain, 70 S. W. Eep. 274 (Ky.) ; Continental Ins. Co. V. Gardner, 62 S. W. Eep. 886 (Ky.) ; Liverpool, L. & G. Ins. Co. V. Nations, 34 Tex. Civ. App. 562, 59 S. W. Eep. 817 ; German Ins. Co. v. Niewedde, 11 Ind. App. 624, 39 N. E. Eep. 534. 2. Wytheville Ins. Co. v. Stnltz, 87 Va. 629, 13 S. E. Eep. 77, 20 Ins. L. J. 481 ; Liverpool, L. & G. Ins. Co. v. McGuire, 52 Miss. 227. And see Eules 12, 13. When the insurance is obtained upon a written application, and company omits, among other inquiries, to inquire as to interest or title, it may render the condition in the policy in- operative. O'Neill V. Ottawa Ins. Co., 30 Up. Can. C. P. 151. And see Butler V. Standard Ins. Co., 4 Tupper, 391 (Can. Ont. App.). RULE 12. Insuraince Coinpany May Eeiy upon Conditions in the Policy — Not Necessary to Hake Inquiry as to Title. An applicant for insurance, who is not the uncondi- tional sole owner of the property, and without disclos- ing the facts allows the company to assume or infer that he is such an owner, must see to it that the condi- tions as to title in the policy are complied with. It is not incumbent upon the insurance company to make an investigation or examination of title, as it may legally rely upon the clauses of /the policy in regard thereto. Schmid v. Virginia F. & M. Ins. Co., 37 S. W. Eep. 1013 aff'd, orally by Tennessee Supreme Court, 37 S. W. Eep. 1015 Pelican Ins. Co. v. Smith, 93 Ala. 428, 9 So. Eep. 327, subsequent appeal, 107 Ala. 313, 18 So. Eep. 105; Overton v. American Central Ins. Co., 79 Mo. App. 1; Shaffer v. Mil- waukee Mechanics' Ins. Co., 17 Ind. App. 204; Fire Assoc. V. Calhoun, 28 Tex. Civ. App. 409, 67 S. W. Eep. 153; 156 FiEE Insurance. Syndicate Ins. Co. v. Bohn, 65 Fed. Eep. 165, 12 C. C. A. 531, 27 U. S. App. 564, 27 L. E. A. 614, 24 Ins. L. J. 408 ; Rosen- stock V. Mississippi Home Ins. Co., 82 Miss. 674, 35 So. Rep. 309. And see Crikelair v. Citizens' Ins. Co., 68 111. App. 637, aff'd, 168 111. 309, 48 N. E. Rep. 167; West Rockingham Ins. Co. V. Sheets, 26 Gratt. 854 (Va.). RULE 13. Effect of Acceptance of Policy by Insured — Not Affected by Omission to Hake Inquiry. In accepting a policy in his own name, without quali- fication or otherwise expressed, assured affirms that his interest in the property insured is unconditional sole ownership, and no other person has any interest in it. If this be not true, policy is void;^ and the fact that the insurance company made no inquiry in regard to interest or title does not affect such result.^ 1. Phoenix Ins. Co. v. Public Parks Amusement Co., 63 Ark. 187, 37 S. W. Rep. 959 : Syndicate Ins. Co. v. Bohn, 65 Fed. Rep. 165, 12 C. C. A. 531, 27 U. S. App. 564, 27 L. R. A. 614, 24 Ins. L. J. 408; Lasher v. St. Joseph Ins. Co., 86 IST. Y. 423; Mers V. Franklin Ins. Co., 68 Mo. 127; Overton v. American Central Ins. Co., 79 Mo. App. 1; Brown v. Commercial Ins. Co., 86 Ala. 189, 192; Adema v. Insurance Co., 36 La. Ann. 661, 664; Orient Ins. Co. v. Williamson, 98 Ga. 464, 25 S. E. Rep. 560. 2. Orient Ins. Co. v. Williamson, supra; Syndicate Ins. Co. v. Bohn, supra; Dumas v. Northwestern Nat. Ins. Co., 12 App. D. C. 245, 40 L. R. A. 358. And see previous rules. RULE 14. When Company Put upon Inquiry by Ambiguous Answer in Written Application. When the insurance company is put upon inquiry by an incomplete, ambiguous, or uncertain answer to UNCONDITIOlirAL SOLE OWNERSHIP. 157 question in a written application in regard to title or interest, and issues a policy without further in- quiry, it may be assumed that it intended to insure "whatever insurable interest applicant had in the entire premises;^ and so when the agent of the insurance company is put upon inquiry by a verbal notice or ■communication.^ 1. Clawson v. Citizens' Ins. Co., 131 Mich. 591, 80 N. W. Eep. 573. 2. Weber v. Grermania Ins. Co., 16 App. Div. 596. And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Uule 19. RULE 15. Distinction Between Interest and Title — Equitable Interest — Construction of Interest. There is a distinction between interest and title. "Wlien policy provides that if insured's interest is not absolute, etc., policy shall be void, if the insured is the beneficial owner at the time policy was issued, the mere fact that the naked legal title is in another does not defeat a recovery of the insurance ;^ an equitable inter- est may amount to equitable ownership f interest may be construed as synonymous with title.^ 1. McCoy V. Iowa State Ins. Co., 107 Iowa, 80, 38 Ins. L. J. 163, 77 N. W. Eep. 539. And see Skinner Shipbuilding Co. V. Houghton, 93 Md. 68, 48 Atl. Eep. 85 ; Hough v. City Ins. Co., 39 Conn. 30 ; Hartford Ins. Co. v. Keating, 86 Md. 130, 145 ; Miller v. Alliance Ins. Co., 7 Fed. Eep. 649. 2. Johannes v. Standard Ins. Co., 70 Wis. 196; Pelton v. Westchester Ins. Co., 77 N. Y. 605 ; Acer v. Merchants' Ins. Co., 57 Barb. 68; Dohn v. Farmers' Ins. Co., 5 Lans. 375; ^tna Ins. Co. V. Tyler, 16 Wend. 385; Franklin Ins. Co. v. Martin, 40 N. J. L. 568; Martin v. State Ins. Co., 44 N. J. L. 485; Insurance Co. v. Haven, 95 U. S. 343; Mallery v. Frye, 21 App. D. C. 105; Lebanon Ins. Co. v. Erb, 113 Pa. St. 149, 16 Ins. 158 FiEE Insurance. L. J. 4:7; Millville Ins. Co. v. Wilgus, 88 Pa. St. 107; Chandler V. Commerce Ins. Co., 88 Pa. St. 233; Watertown Ins. Co. v. Simmons, 96 Pa. St. 520, 9 Ins. L. J. 597; Guest v. New Hamp- shire Ins. Co., 66 Mich. 98, 33 N. W. Eep. 31 ; Hall v. Niagara Ins. Co., 93 Mich. 184, 53 N. W. Eep. 727 ; Gaylord v. Lamar Ins. Co., 40 Mo. 13 ; Franklin Ins. Co. v. Crockett, 7 Lea, 725 (Tenn.) ; Wainer v. Milford Ins. Co., 153 Mass. 335, 26 N. E. Eep. 877. 3. Carrigan v. Insurance Co., 53 Vt. 429. Many of the old forms read, "If the interest to be insured be a leasehold interest, or other interest not absolute, it must be so represented to the company, and expressed in the policy in writing, otherwise the insurance shall be void." Such was the form in Hough v. City Ins. Co., supra, wherein it was held that " absolute " meant " vested." In Washington Ins. Co. v. Kelly, 32 Md. 421, the court had the same condition under consideration and said: * * * " the courts of most of the States have, however, held that the nature of the interest of the assured, in cases of ordinary con- tracts of insurance, not mutual, but made by a company insur- ing on its own account, is immaterial to the risk, and an omis- sion to state the nature and extent of his interest where no inquiry has been made on the subject and it is not exacted by conditions, will not avoid the policy, unless failure so to state would operate as an actual fraud (2 Am. Lead. Cas. 638 to 642), and this must be now regarded as the settled law of this State. 14 Md. 298, 18 Md. 48, 20 Md. 36, In the present case there were no written proposals and no specific inquiry as to title or interest, and the general purpose and intent of in- serting a clause like that under consideration very probably was to embody the law announced by the Supreme Court, by making it an express condition in the contract that his interest should be stated, where the assured held an interest of a special or limited nature ; as, for instance, under a precarious title, de- pendent for its continuance upon events which might happen against his will, or over which he had no control. With this view of the law, and the origin and purpose of these clauses, the question is, does the particular language of the clause now before the court embrace a case where there is a mortgage on the insured property, of which the assured is otherwise the entire owner, and where his interest far exceeds all insurance thereon, as, by admitted facts of this case, clearly appears ? " Counsel for the appellant have argued that the words, ' or other interest not absolute' exclude the idea of an interest incumbered by mortgage where the legal title is in the mort- Unconditional Sole Ownekship. ISO' gagee ; that the term ' absolute ' when applied to the owner- ship of an interest in property in its ordinary and common acceptation, means nothing less than an unineimibered fee- simple estate — the whole, clean, sound thing; that he who has. property covered by mortgage, can, in no fair and just sense of the terms, be said to have an absolute interest therein. There is certainly much force in this argument, and it is no easy matter to give it a satisfactory answer. But, looking to the purpose of the clause considering the whole provision, the con- nection in which the term ' absolute ' is used, and giving to the arguments on both sides, the best consideration of which I am capable, I have reached the conclusion that an interest such as the insured had, was not intended by the framers of it to be covered by this clause. It is due to counsel and to the cause, to state more at length, and in addition to what has been said, the reasons that have led me to this result. " In the first place it is to be observed that it is not title but interest that is spoken of, and that ' leasehold interest ' is used in immediate connection with the terms ' or other interest not absolute.' For every purpose of insurance, and' fully within the reasoning of Chief Justice Marshall, a mortgagor, in possession and before foreclosure, has all that interest upon which under- writers usually rely for protection of the property. There is no reason why disclosure of the existence of the mortgage should have enhanced the premium, for the entire loss in case of fire must fall on the mortgagor, and his interest is pledged to every precaution to avoid the calamity insured against. The whole loss is his, and he still remains liable to the mortgagee for the full amount of the mortgage debt. The fire does not ex- tinguish this debt and all the powerful persuasions of interest are just as much on the side of the insurer as if no mortgage existed. Mortgages are now universally regarded, in courts of equity, as mere securities for the payment of money. The mortgagor is still the substantial owner of the property. He can sell, convey, devise, or further incumber it, at pleasure, so long as the right of redemption exists. It may be taken for his debts under execution, and conveyances of it must be recorded under our registry laws. * * * " But again, the term ' absolute ' has no fixed, unvarying meaning. When used in connection with an interest in property it is not always synonymous with ' unqualified.' Used in con- nection with ' estate ' it means an estate in lands not subject to,. or defeasible upon any condition. 1 Burrill's Law Diet. 14. It may be quite as often and as pertinently used in contradistinc- tion to ' contingent ' or ' conditional,' as to ' qualified ' or ' in- 160 FiEE Insurance. cumbered.' That such is the sense in which it is here used is, I think, apparent from the tenor of the whole condition, and especially from the specification of a leasehold interest as one of those required to be stated. The immediately following words, ' or other interest not absolute,' are thus pointed to some other interest of like character with a leasehold, that is, some estate less than a fee or carved out of the fee simple, or de- terminable upon some condition, event, or contingency, as an estate for life, or pur autre vie, which, as well as a leasehold, come within the reasoning of the Supreme Court, as the loss may not fall upon their owners but upon the landlord, or remainder- man, or reversioner; and hence the importance to the insurers of having them stated." RULE i6. Ownership of Property Described in General Words as a Class or Kind. Insured may be the sole and nnconditional owner of personal property described in general words as a class, like household furniture or stock of goods, though there may be other property of the same class belonging to some one else, for which no claim is made. Liverpool, L. & G. Ins. Co. v. Nations, 24 Tex. Civ. App. 562, 59 S. W. Eep. 817. And see St. Paul F. & M. Ins. Co. v. Kelley, 43 Kans. 741, 33 Pac. Eep. 1046, 19 Ins. L. J. 618. RULE 17. Partnership Interests. Where the title to real estate or building insured held by a partnership is in the firm and not in the individual members of it, the transfer of the interest of one of the members, before issue of the policy, has no effect upon the unconditional and sole ownership of the firm. An assignment by one partner of his share simply transfers any interest he may have in the sur- Unconditional Sole Ownership. 161 plus remaining after payment of the firm debts and the settlement of the firm accounts. Whether the purchaser of such an interest takes anything whatever by the transfer cannot be known until all the partner- ship affairs have been settled and adjusted;^ but when the title is in an individual member of the firm, and never conveyed or transferred to it, and the firm has only use of it, then it cannot be said to be the property of the firm.^ 1. Wood V. American Ins. Co., 149 N. Y. 382, 44 N. E. Eep. SO, afE'g 78 Hun, 109, 29 N". Y. Supp. 250. 2. Citizens' Ins. Co. v. Doll, 35 Md. 89. RULE i8. Admission of Third Party as a Partner. If it is claimed that the insured is not the sole and unconditional owner, because there has been a third party made a partner, the inquiry is as to ownership as between the parties themselves, and if there is a positive agreement between them, that must govern; the question as to whether they are partners as to third persons or creditors does not arise ;^ an inten- tion to form a partnership, or an agreement to create one, does not necessarily make a third party a joint owner of the goods used in the business, unless so understood and agreed,^ as for instance the agreement may extend to division of profits only.^ An executory agreement to form a partnership does not affect owner- ship when such partnership is not in fact formed.* 1. Pittsburg Ins. Co. v. Frazee, 107 Pa. St. 521, 14 Ins. L. J. 512. Vol. 2 — 11 162 FiEE Insurance. 2. Lycoming Ins. Co. v. Barringer, 73 111. 330. 3. Boutelle v. Westchester Ins. Co., 51 Vt. 4. 4. Pencil v. Home Ins. Co., 3 Wash. 485, 28 Pac. Eep. 1031. RULE 19. Policy on " Vse and Occupancy " — Effect of Fooling Arrange- mignt. When the policy is in terms upon " use and occu- pancy " of a grain elevator plant, a pooling arrange- ment with, other elevator properties for promotion of common interests and suppression of hostile competi- tion does not affect the sole and unconditional owner- ship of such use and occupancy, when the effect of such arrangement is merely to provide for distribution of earnings placed in a common pool, the business of the elevator continuing under the control and direction of its proprietor, who employs his own employees and pays operating expenses, and makes his own contracts except as to price. Michael v. Prussian Nat. Ins. Co., 171 IST. Y. 25, 63 N". E.. Eep. 810, afE'g 64 App. Div. 182, 71 N. Y. Supp. 918. And see Vol. 1, Fire Insurance as a Valid Contract, "Amount of Loss or Damage," Eule 35. RULE 20. Deed Intended as a Mortgage — A Beed SEust be Delivered — Effect of Recording. The insured remains sole and unconditional owner, notwithstanding the execution and delivery of a deed, absolute upon its face, but shown by proper evidence to have been actually intended as a mortgage.^ A deed must be delivered with intent to deliver ; the recording- Unconditional Sole Owneeship, 163 of it without the knowledge of the grantee is of no avail? 1. Sun Fire Office v. Clark, 53 Ohio St, 414, 42 F. E. Eep. 248, 25 Ins. L. J. 333; German Ins. Co. v. Gibe, 162 111. 251, 44 N. E. Eep. 490. May be otherwise under Georgia Code. See Phoenix Ins. Co. V. Asberry, 95 Ga. 792, 22 S. E. Eep. 717. 2. Franklin Ins. Co. v. Feist, 31 Ind. App. 390, 68 N. E. Eep. 188. RULE 21. Words Added to Deed After Execution May Present a Question of Fact as to Spoliation. When the insurance company relies upon a deed 'to the insured containing the words " in trust for " to sustain its defense that the insured did not own the property in his own right, the insured is permitted to show that the words quoted were added to the deed after its execution and delivery, and with- out his knowledge or consent. The question is not one of reformation of the deed, but simply one of fact of spoliation, proper to be submitted to a jury. Mix V. Eoyal Ins. Co., 169 Pa. St. 639, 32 Atl. Eep. 460. RULE 22. When Insured Sole and Unconditional Owner Though. Title Defective — Equitable Interest. So long as the insured, under claim of right, has the exclusive use and enjoyment of the property, without any assertion of an adverse right or interest by any other person, he may be regarded as sole uncondi- tional owner, notwithstanding his title to the real estate upon which the insured building stands is de- 164 FiEE Insurance. fective;* an equitable interest or ownership may be sole and unconditional.* 1. Miller v. Alliance Ins. Co., 19 Blatchf. 308, 7 Fed. Eep. 649; Williams v. Buffalo German Ins. Co., 17 Fed. Eep. 63, 12 Ins. L. J. 374. 2. Mallery v. Frye, 21 App. D. C. 105. And see Eules 5-8, 15. RULE 23. Instrument Creating: Interest as Affected by Fraud. The insurance company cannot claim that the in- terest or title of the insured created by a certain in- strument is not insured because such instrument is fraudulent and void or obtained by his fraud. Bnrson v. Philadelphia Fire Assoc, 136 Pa. St. 267, 20 Atl. Eep. 401, 20 Ins. L. J. 144; Phoenix Ins. Co. v. Mitchell, 67 111. 43. RULE 24. Mortgagee as Insured. A mortgagee to whom the loss is payable, with mort- gagee clause inserted or attached, and really intended by the parties to be the person insured, may recover, notwithstanding the supposed owner and nominal in- sured has parted with title by quit-claim deed when the policy issued. Liverpool, L. & G. Ins. Co. v. Davis, 56 Febr. 684, 77 N". W. Eep. 66. And see Vol. 1, Fire Insurance as a Valid Contract, " Mort- gagor and Mortgagee." RULE 25. ESect of Liens or Incumbrances. The condition as to unconditional sole ownership has reference only to the quality of the estate or in- Unconditional Sole Ownership. 165 terest, does not necessarily refer to legal title, and a person or party may be an unconditional sole owner within meaning of the language of the policy, notwith- standing the existence of any kind of lien or incum- brance, whether by mortgage, lease, or otherwise;^ so the existence of a deed of trust does not necessarily prevent the assured from being the sole owner, nor does it make the cestui que trust a joint owner.^ This rule may not apply when, by special terms or language of the policy, it is made void if any other person than the insured has a lien on the property insured;^ or when a chattel mortgage conveys the title to the mort- gagee.* 1. Caplis V. American Ins. Co., 60 Minn. 376, 63 N. W. Eep. 440, 24 Ins. L. J. 551 ; Morotoek Ins. Co. v. Eodefer, 92 Ya. 747, 24 S. E. Eep. 393, 25 Ins. L. J. 529; Cleavenger v. Franklin Ins. Co., 47 W. Va. 595, 35 S. E. Eep. 998 ; Hartford Ins. Co. V. Enoch, Ark. , 77 S. W. Eep. 899 ; Huff v. Jewett, 20 Misc. 35, 44 N. Y. Supp. 311; American Artistic Gold Co. V. Glens Falls Ins. Co., 1 Misc. 114; Washington Ins. Co. V. Kelly, 32 Md. 421; Hubbard v. Hartford Ins. Co., 33 Iowa, 325 ; Clay Ins. Co. v. Beck, 43 Md. 358 ; Friezen v. Alle- mania Ins. Co., 30 Fed. Eep. 352, 16 Ins. L. J. 513; Ellis v. Insurance Co. N". A., 32 Fed. Eep. 646; Dojliver v. St. Joseph Ins. Co., 128 Mass. 315; Judge v. Connecticut Ins. Co., 132 Mass. 521, 11 Ins. L. J. 843. And see Omaha Ins. Co. v. Thompson, 50 Nebr. 580, 70 N. W. Eep. 30 ; Boulware v. Farm- ers' Ins. Co., 77 Mo. App. 639; Light v. Insurance Co., 105 Tenn. 480, 58 S. W. Eep. 851 ; Temple v. Western Assur. Co., 35 N. B. 171 ; Hare v. Headley, 54 N. J. Eq. 545, 35 Atl. Eep. 445 ; Lancashire Ins. Co. v. Monroe, 101 Ky. 12, 39 S. W. Eep. 434; Lycoming Ins. Co. v. Haven, 95 U. S. 242, 7 Ins. L. J. 449; Steinmeyer v. Steinmeyer, 64 S. C. 413, 42 S. E. Eep. 184; McClelland v. Greenwich Ins. Co., 107 La. 124, 31 So. Eep. 691 ; Wolf v. Theresa Village Ins. Co., 115 Wis. 402, 91 N. W. Eep. 1014; Hawley v. Liverpool, L. & G. Ins. Co., 102 Cal. 651, 36 Pac. Eep. 926, 23 Ins. L. J. 874; Dumas v. North- western Nat. Ins. Co., 12 App. D. C. 245, 40 L. E. A. 358; 166 Fire InsukancIa Alamo Ins. Co. v. Lancaster, 7 Tex. Civ. App. 677, 28 S. W. Eep. 126; Burlington Ins. Co. v. Coffman, 13 Tex. Civ. App. 439, 35 S. W. Eep. 406; Alamo Ins. Co. v. Brooks, 32 S. W. Eep. 714, Tex. Civ. App. ; Carrigan v. Insurance Co., 53 Vt. 418, 429, 10 Ins. L. J. 606; German Ins. Co. v. Gibe, 162 111. 251, 44 K.E. Eep. 490; Sun Fire Office v. Clark, 53 Ohio St. 414, 42 N. E. Eep. 248, 25 Ins. L. J. 333. 2. Wolpert v. Northern Assur. Co., 44 W. Va. 734, 29 S. E. Eep. 1024; Manhattan Ins. Co. -y. Weil, 28 Gratt. 389 (Va.) ; Union Assur. Soc. v. Nails, 101 Va. 613, 44 S. E. Rep. 896. 3. Martin v. Fidelity Ins. Co., 119 Iowa, 570, 93 N. W. Eep. 562. (The language of the policy was, " If any other per- son than the insured now has or shall hereafter acquire any in- terest in or lien on the property insured or any part thereof " it should be void, and it was therein conceded and held that a judgment lien was clearly within the meaning of the provision.) 4. Woodward v. Eepublic Ins. Co., 32 Hun, 365. But com- pare American Artistic Gold Co. v. Glens Falls Ins. Co., 1 Misc. 114; Hubbard v. Hartford Ins. Co., 33 Iowa, 325; Kronk v. Birmingham Ins. Co., 91 Pa. St. 300. And see Hunt v. Spring- field F. & M. Ins. Co., 196 U. S. 47, 25 Sup. Ct. Eep. 179, aff'g 20 App. D. C. 48.' See " Chattel Mortgage." Some of the old forms of policy required the title or interest in terms to be unincumbered and such clauses were usually held to be effective and the existence of a mortgage to be a violation of such a condition. See Fitchburg Savings Bank v. Amazon Ins. Co., 125 Mass. 431; Warner v. Middlesex Assur. Co., 21 Conn. 444; Addison V. Kentucky Ins. Co., 7 B. Mon. 470 (Ky.) ; Beck v. Hibernia Ins. Co., 44 Md. 95 ; Hosford v. Germania Ins. Co., 127 U. S. 399; Continental Ins. Co. v. Vanlue, 126 Ind. 410, 26 N. B. Eep. 119. And see Georgia Home Ins. Co. v. Holmes, 75 Miss. 390, 23 So. Eep. 183. So under the old forms containing the clause of warranty that the insured " has not omitted to state any information ma- terial to the risk" failure to disclose a mortgage was held to avoid the policy. Westchester Ins. Co. v. Weaver, 70 Md. 536, 17 Atl. Eep. 401. And see chapter on " Concealment." A charge upon land created by a will was held to be an in- cumbrance within the meaning of a condition against incum- brances. Eenninger v. Dwelling-House Ins. Co., 168 Pa, St. 350, 31 Atl. Eep. 1083. Unconditional Sole Owneeshjf. 167 And so a vendor's lien was held to be an incumbrance. Curlee v. Texas Home Ins. Co., 31 Tex. Civ. App. 471, 73 S. W. Eep. 831. RULE 26. Interest of Vendee Under an Executory Contract of Sale. The interest of a vendee under an executory contract of sale, who is not in default, and is in possession under such contract, and is the owner in equity, may be regarded as unconditional sole ownership -^ the ven- dor's lien does not prevent the vendee from being the sole and unconditional owner f but mere possession by a vendee does not of itself necessarily make him the sole unconditional owner f a test is whether the entire loss falls upon him;* when he is in default, though in possession, he is not sole and unconditional owner, specially when he has allowed the land to be sold for taxes ;^ nor can a party in possession under a verbal gift and promise to convey be regarded as sole and unconditional owner.® 1. Wolf V. Theresa Village Ins. Co., 115 Wis. 402, 405, 91 K W. Eep. 1014; Matthews v. Capital Ins. Co., 115 Wis. 272, 91 ISr. W. Eep. 675; Carey v. Liverpool, L. & G. Ins. Co., 92 Wis. 538; Johannes v. Standard Ins. Co., 70 Wis. 196, 35 N. W. Eep. 298; Phcenix Ins. Co. v. Kerr, 129 Fed. Eep. 723, 64 C. C. A. 251 ; Pennsylvania Ins. Co. ■;;. Hughes, 108 Fed. Eep. 497, 47 C. C. A. 459 ; Milwaukee Mechanics' Ins. Co. v. Ehea, 123 Fed Eep. 9, 60 C. C. A. 103 ; Scottish Union & Nat. Ins. Co. V. Train, 70 S. W. Eep. 274 (Ky.) ; Stowell v. Clark, 47 App. Div. 626, 62 N. Y. Supp. 155, afE'd, 171 N. Y. 673, on opinion below; Pelton v. Westchester Ins. Co., 77 K Y. 605; Baker V. State Ins. Co., 31 Oreg. 41, 48 Pac. Eep. 699; Wich v. Equitable Ins. Co., 2 Colo. App. 484, 31 Pac. Eep. 389 ; Lewis V. JSTew England Ins. Co., 29 Fed. Eep. 497; Hamburg-Bremen Ins. Co. V. Euddell, Tex. Civ. App. , 82 S. W. Eep. 826; Dupreau v. Hibernia Ins. Co., 76 Mich. 615, 43 N. W. Eep. 585; Westchester Ins. Co. v. Weaver, 70 Md. 536; Imperial Ins. Co. V. Dunham, 117 Pa. St. 460, 475; Millville Ins. Co. v. 168 FiBE Insurance, Wilgus, 88 Pa. St. 107; Bonham v. Iowa Central Ins. Co., 25 Iowa, 328 ; Hall v. Niagara Ins. Co., 93 Mieh. 184, 53 N. W. Eep. 727. And see Liberty Ins. Co. v. Boulden, 96 Ala. 508, 11 So. Kep. 771, 22 Ins. L. J. 188. 2. Liverpool, L. & 6. Ins. Co. v. Ricker, 10 Tex. Civ. App. 264, 31 S. W. Eep. 248 ; Boulden v. Phcenix Ins. Co., 112 Ala. 422, 20 So. Rep. 587; Insurance Co. ■;;. Estes, 106 Tenn. 472, 62 S. W. Eep. 149, 52 L. E. A. 915; Manhattan Ins. Co. v. Barker, 7 Heisk. 503 (Tenn.) ;.Wooddy v. Old Dominion Ins. Co., 31 Gratt. 362 (Va.) ; Chatillon v. Canadian Ins. Co., 27 Up. Can. C. P. 450. But see and compare Farmers' Ins. Co. V. Curry, 13 Bush, 313 (Ky.) ; Bonham v. Iowa Central Ins. Co., 25 Iowa, 328. 3. Hubbard v. Forth British & M. Ins. Co., 57 Mo. App. 1 ; Harness v. National Ins. Co., 62 Mo. App. 245 ; Mott v. Citizens' Ins. Co., 69 Hun, 501, 23 N. Y. Supp. 400; Porter v. Mtna. Ins. Co., 2 Plipp. 100, 6 Ins. L. J. 928 (U. S. Cir.). 4. Phoenix Ins. Co. v. Kerr, 129 Fed. Rep. 723, 64 C. C. A. 251. See Rule 8, and cases cited thereunder. 5. Hinman v. Hartford Ins. Co., 36 Wis. 159. 6. Wineland v. Security Ins. Co., 53 Md. 276. RULE 27. As Tested by Bight to Enforce Specific Performance ^ Assump- tion of Loss. If the facts show the insured to have been in a posi- tion to enforce specific performance, by which the en- tire title would be placed in him, or if he appears to have been the beneficial owner of the entire property, he may be regarded as sole and unconditional owner, within the meaning of the condition ;* and so a vendee in possession under an executory contract of sale un- der which he assumes all loss from destruction of the property may be regarded as the unconditional and sole owner.* 1. Fire Assoc, v. Calhoun, 28 Tex. Civ. App. 409, 67 S. W. Eep. 153. 2. Stowell V. Clark, 47 App. Div. 626, 62 N. Y. Supp. 155, aff'd, 171 N. Y. 673, on opinion below. Uncoi/ditional Sole Owneeship. 169 RULE 28. Effect of Executory Contract on. Ownership of Vendor. An executory contract to sell unperformed, does not necessarily prevent tlie vendor from being sole and unconditional owner ;^ when the facts are such as to render the vendee a sole unconditional owner, it would seem to logically follow that the vendor is not such owner,^ when there is nothing but naked legal title left in him, with an existing obligation by written contract to transfer it to the vendee in whom is the entire equitable interest or estate.* 1. Erb V. Fidelity Ins. Co., 99 Iowa, 727, 69 F. W. Eep. 261. See also and compare Clay Ins. Co. v. Huron Salt Co., 31 Mich. 346. 2. Hamilton v. Dwelling-House Ins. Co., 98 Mich. 535, 57 N. W. Eep. 735, 23 Ins. L. J. 339; Eosenstock v. Mississippi Home Ins. Co., 82 Miss. 674, 35 So. Eep. 309. And see Skinner Ship Building Co. v. Houghton, 92 Md. 68, 48 Atl. Eep. 85. And see Eules 26, 27. 3. Clay Ins. Co. v. Huron Mfg. Co., 31 Mich. 346. RULE 29. Effect of Option to Purchase. The interest of an owner of property which another party holds under an option to purchase and irrevo- cable by the owner, but which the holder of the option is not bound to accept and is free to abandon, is sole and unconditional ownership, because the owner can- not compel the holder of the option to take the prop- erty or suffer the loss. Phoenix Ins. Co. v. Kerr, 129 Fed. Eep. 723, 64 C. C. A. 251. 170 FiEE Insurance. RULE 30. "Vendee of Personal Property Under Conditional Contract of Sale — Lessee of Personal Property. When the insured holds personal property under a conditional contract of sale, title to be in the vendor, until purchase price is fully paid, and same is not paid, he cannot be said to be the sole and unconditional •owner within the meaning of the policy ;^ when insured is in possession under a bill of sale, though given as a mortgage or security, and has possession after the debt has become due, he may be regarded as a sole and unconditional owner.^ A person who leases per- sonal property, though responsible for its loss, is not sole and unconditional owner.^ 1. Phcenix Ins. Co. v. Public Parks Amusement Co., 63 Ark. 187, 37 S. W. Eep. 959; Hartford Ins. Co. v. Enoch, Ark. , 77 S. W. Eep. 899 ; Ehrsam v. Phoenix Ins. Co., .43 Nebr. 554, 61 N. W. Eep. 723, 24 Ins. L. J. 316; Dumas v. North- western Nat. Ins. Co., 12 App. D. C. 245, 40 L. E. A. 358; Me Williams v. Cascade Ins. Co., 7 Wash. 48 ; Westchester Ins. Co. V. Weaver, 70 Md. 536, 17 Atl. Eep. 401; Lasher v. St. Joseph Ins. Co., 86 N. Y. 423; Lasher v. Northwestern Ins. Co., 18 Hun, 98. 2. Carey v. Liverpool, L. & G. Ins. Co., 92 Wis. 538, 66 N. W. Eep. 693, 25 Ins. L. J. 556. And see Kronk v. Birmingham Ins. Co., 91 Pa. St. 300. 3. Mt. Leonard Mills Co. v. Liverpool, L. & G. Ins. Co., 25 Mo. App. 259. And see Vol, 1, Fire Insurance as a Valid Contract, " Parties to Fire Insurance Contract." RULE 31. Waiver or Estoppel — Parol Evidence — Agents — Question of Fact — Company not Chargeable with Knowledge of Records. Issue and delivery of a policy with knowledge of the company or its agent of existing facts as to the in- Unconditional Sole Ownership. 171 terest or title of the insured, operates as a waiver or estoppel preventing the company from claiming a for- feiture by reason of such facts ;^ and the knowledge of an agent who is authorized by the insurance com- pany to solicit and take the application for the insur- ance may be the knowledge of the company, operating as an estoppel,^ specially when knowing the facts he makes misstatements in a written application he is a,uthorized by the company to take,^ and so the com- pany is estopped when, with knowledge of the facts, it indorses its consent to an assignment upon the policy;* parol evidence is admissible to explain and give effect to the policy;^ renewal of the policy with knowledge of the facts as to interest or title or change therein may also operate as a waiver or estoppel;" if agent is clothed by the insurance company with ap- parent authority, its scope and extent may be a ques- tion of fact proper to be determined by a jury;'^ the company is not chargeable with knowledge of record titles;* knowledge of fact when policy issues will not be inferred from an uncertain casual conversation with an agent two years before policy issues.' 1. Brooks V. Erie Ids. Co., 76 App. Div. 275, 78 N. Y. Supp. 748, aff'd, 177 N. Y. 572, 69 N. E. Eep. 1130, on opinion below; Forward v. Continental Ins. Co., 142 N. Y. 382, 37 N. E. Eep. 615, afC'g 66 Hun, 546, 21 N. Y. Supp. 664; Berry v. American Central Ins. Co., 132 N. Y. 49, 30 N. B. Eep. 254, 21 Ins. L. J. 455 ; Cross v. National Ins. Co., 132 N. Y. 133, 30 K. E. Eep. 390; Brodhead v. Lycoming Ins. Co., 14 Hun, 452; Miagham V. Hartford Ins. Co., 24 Hun, 58; Franklin v. Atlantic Ins. Co., 42 Mo. 456 ; O'Brien v. Greenwich Ins. Co., 95 Mo. App. 301, 68 S. W. 976; Clark v. Knoxville Ins. Co., 61 Mo. App. 181; Deland v. iEtna Ins. Co., 68 Mo. App. 277; Nute v. Hart- ford Ins. Co., Mo. App. , 83 S. W. Eep. 83; Pope v. Glens Falls Ins. Co., 130 Ala. 356, 30 So. Eep. 496; Brown v. 172 FiKE Insubancb. Commercial Ins. Co., 86 Ala. 189 ; Western Assur. Co. v. Stod- dard, 88 Ala. 606, 7 So. Eep. 379 ; American Central Ins. Co. V. Donlon, 16 Colo. App. 416, 66 Pac. Eep. 249 ; Danvers Ins. Co. V. Schertz, 95 111. App. 656; Home Ins. Co. -y. Mendenhall, 164 111. 458, 45 N. B. Eep. 1078; Eockford Ins. Co. v. Nelson, 75 111. 548 ; Andes Ins. Co. ■;;. Fish, 71 111. 630 ; Germania Ins. Co. V. McKee, 94 111. 494; Allen v. Home Ins. Co., 133 Cal. 29, 65 Pac. Eep. 138; Strause v. Palatine Ins. Co., 128 N. C. 64, 38 S. E. Eep. 256; Cowell v. Phoenix Ins. Co., 126 N. C. 684, 36 S. E. Eep. 184; Clapp v. Farmers' Ins. Co., 126 N. C. 388, 35 S. E. Eep. 617; Grabbs v. Farmers' Ins. Co., 125 F. C. 389, 34 S. E. Eep. 503 ; Geninger v. North Carolina Home Ins. Co., 133 N. C. 407, 45 S. E. Eep. 773; Breedlove v. Norwich. Union Soc, 124 Cal. 164, 56 Pac. Eep. 770, 28 Ins. L. J. 447; Ehode Island Underwriters' Assoc, v. Monarch, 98 Ky. 305, 17 Ky. L. Eep. 876, 25 Ins. L. J. 116, 32 S. W. Eep. 959; Hart- ford Ins. Co. V. Haas, 87 Ky. 531, 9 S. W. Eep. 720; London & Lancashire Ins. Co. v. Gerteson, Ky. , 51 S. W. Eep. 617 ; Mutual Ins. Co. v. Hammond, 106 Ky. 386, 50 S. W. Eep. 545 ; Miotke V. Mechanics' Ins. Co., 113 Mich. 166, 71 N. W. Eep. 463, 26 Ins. L. J. 910; Haire v. Ohio Farmers' Ins. Co., 93 Mich. 481, 22 Ins. L. J. 66, 53 N. W. Eep. 623 ; Hoose v. Pres- cott Ins. Co., 84 Mich. 309, 47 N. W. Eep. 587, 20 Ins. L. J. 506; Wagner v. Westchester Ins. Co., 92 Tex. 549, 50 S. W. Eep. 569; Liverpool, L. & G. Ins. Co. v. Bnde, 65 Tex. 118; Queen Ins. Co. V. May, 43 S. W. Eep. 73 (Tex. Civ. App.) ; Continental Ins. Co. V. Cummings, Tex. , 81 S. W. Eep. 705 ; Graham V. American Ins. Co., 48 S. C. 195, 26 Ins. L. J. 744, 26 S. E. Eep. 323 ; King v. Cox, 63 Ark. 204, 37 S. W. Eep. 877 ; Cald- well V. Fire Assoc, 177 Pa. St. 492, 35 Atl. Eep. 612 ; Welsh V. London Assur. Co., 151 Pa. St. 607, 25 Atl. Eep. 142, 22 Ins. L. J. 94; Carey v. Home Ins. Co., 97 Iowa, 619, 66 N. W. Eep. 920; McMurray v. Capitol Ins. Co., 54 N. W. Eep. 354, 22 Ins. L. J. 204 (Iowa) ; Hartford Ins. Co. v. Keating, 86 Md. 130, 27 Ins. L. J. 406, 38 Atl. Eep. 29; Phoenix Ins. Co. v. Searles, 100 Ga. 97, 27 S. B. Eep. 779; Morotuck Ins. Co. v. Pankey, 91 Va. 259, 21 S. E. Eep. 487 ; Manhattan Ins; Co. v. Weil, 28 Gratt. 389 ; Hartford Ins. Co. v. McCarthy, Kans. , 77 Pac. Eep. 90 ; Capitol Ins. Co. v. Bank of Pleasanton, 50 Kans. 449, 22 Ins. L. J. 361, 31 Pac. Eep. 1069; Eockford Ins. Co. V. Farmers' State Bank, 50 Kans. 427, 22 Ins. L. J. 389, 31 Pac. Eep. 1063; American Central Ins. Co. v. Mc- Lanathan, 11 Kans. 533 ; Long Island Ins. Co. v. Great Western Mfg. Co., 2 Kans. App. 377, 42 Pac. Eep. 738; Milwaukee Mechanics' Ins. Co. v. Brown, 3 Kans. App. 225, 44 Pac. Eep. Unconditional Sole Owneeship. 173 35; Smith v. Commonwealth Ins. Co., 49 Wis. 322; Georgia Home Ins. Co. v. Holmes, 75 Miss. 390, 23 So. Eep. 183 ; Welch V. Fire Assoc, 120 Wis. 456, 98 N. W. Eep. 227. 2. Ayres v. Phoeuix Ins. Co., 66 Mo. App. 288 ; Teutonia Ins. Co. V. Howell, 54 S. W. Eep. 852 (Ky.) ; State Ins. Co. v. Latour- ette. Ark. , 74 S. W. Eep. 300 ; Phoenix Ins. Co. v. Max- son, 42 111. App. 164; Continental Ins. Co. v. Ward, 50 Kans. 346 ; Born v. Home Ins. Co., 120 Iowa, 299, 94 N. Y. Eep. 849, 31 Pac. Eep. 1079, 22 Ins. L. J. 373 ; St. Clara Female Academy V. Northwestern Nat. Ins. Co., 98 Wis. 257, 73 N. W. Eep. 767 ; Eeiner v. Dwelling-House Ins. Co., 74 Wis. 89, 42 N. W. Eep. 208 (while the decisions in the last two cases were made on con- struction of the Wisconsin statute, the question of the authority of an agent and its apparent scope, in absence of limitation brought to the notice or knowledge of the insured, may create a question of fact, in any case, where the insurance company has by its own act or conduct clothed him with authority, inde- pendent of any statute. See title " Agents.") ; Phoenix Ins. Co. V. Copeland, 90 Ala. 386, 8 So. Eep. 48, 19 Ins. L. J. 961 ; Burson v. Philadelphia Fire Assoc, 136 Pa. St. 267, 20 Atl. Eep. 401, 20 Ins. L. J. 144. 3. Syndicate Ins. Co. ■;;. Catchings, 104 Ala. 176, 16 So. Eep. 46, 24 Ins. L. J. 447; Continental Ins. Co. v. Chew, 11 Ind. App. 330, 38 N. E. Eep. 417 ; Mullin v. Vermont Ins. Co., 54 Vt. 223 ; Stone V. Hawkeye Ins. Co., 68 Iowa, 737; Key v. Des Moines Ins. Co., 77 Iowa, 174, 41 F. W. Eep. 614. 4. Georgia Home Ins. Co. v. Leaverton, 33 S. W. Eep. 579, Tex. Civ. App. 5. Milwaukee Mechanics' Ins. Co. v. Brown, 3 Kans. App. 225, 44 Pac Eep. 35. 6. Meehler v. Phoenix Ins. Co., 38 Wis. 665 ; Virginia F. & M. Ins. Co. V. Eichmond Mica Co., 102 Va. 541, 46 S. E. Eep. 463. 7. Hough V. City Ins. Co., 29 Conn. 10. And see Vol. 1, Fire Insurance as a Valid Contract, chapter on " Waiver." 8. Tyree v. Virginia F. & M. Ins. Co., W. Va. , 46 S. E. Eep. 706. And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eule 18. 9. Virginia F. & M. Ins. Co. v. Cummings, Tex. Civ. App. , 78 S. W. Eep. 716. And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eule 17. 174 FiEE Insurance. RULE 32. Knowledgre of Broker. There is no waiver or estoppel created by the knowl- edge of a broker when policy issues ;^ unless his status as an agent of the company is determined by a statute.'' 1. McGrath v. Home Ins. Co., 88 App. Div. 153, 84 N. Y. Supp. 374. 2. Welch V. Fire Assoc, 134 Wis. 56, 98 N. W. Eep. 227. And see this volume, title "Agents," and " Statutory Pro- visions." RULE 33. Pleading — Evidence — Burden of Proof — Question of Pact. In an action on an insurance policy with a provision that the assured is the sole and unconditional owner of the property insured, the answer of the company should specify particularly the defects in the title, un- less the defendant relies upon the defense that the plaintiff had no title to the property, in which case it is sufficient to deny that the plaintiff is the sole and unconditional owner (or allege that he was not such owner). When the issue is thus formed the plaintiff establishes prima facie sufficient ownership by proof that he was in possession of the property, claiming it as his own, and exercising acts of ownership over it when the policy was issued,* the burden of proof that the insured was not the unconditional sole owner rests upon the insurance company,^ but where insured's statements as to interest or title are made warranties the burden may rest on him;^ the question of owner- ship becomes one of fact when the evidence is con- flicting.* 1. Sprigg V. American Cent. Ins. Co., 101 Ky. 185, 40 S. W. Eep. 575; Kansas Ins. Co. v. Berry, 8 Kans. 159. And see Franklin Ins. Co. v. Chicago lee Co., 36 Md. 102. Unconditionai, Sole Ownership. 175 2. Morris v. Imperial Ins. Co., 106 Ga. 461, 32 S. E. Eep.. 595, 28 Ins. L. J. 402; Gardner v. Continental Ins. Co., 75 S. W. Eep. 283 (Ky.). 3. Williamson v. New Orleans Ins. Assoc, 84 Ala. 106, 4 So. Eep. 36. 4. Oakland Home Ins. Co. v. Bank of Commerce, 47 Nebr. 717, 66 N. W. Eep. 646. RULE 34. Contract Severable. The entire policy is not void wlien the insurance is voided as to the building, upon the ground that it is not owned solely and unconditionally, and in fee- simple. If the contents are separately insured in the same policy and are owned solely and unconditionally, the insured may recover for the same;^ but when the insurance is contracted upon property as a whole, it is no answer to say that the insured owned part of it.^ 1. Mott V. Citizens' Ins. Co., 69 Hun, 501, 23 N. Y. Supp, 400. And see Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Eule 26. 2. Dow V. National Assur. Co., E. I. , 58 Atl. Eep. 999. RULE 35. When Insured Sole and Unconditional Owner — Illustrative Cases. The fact that the property is used under an agree- ment that the insured should own it and another party have part of the profits with a liability on part of the insured to account for such undivided profits does not prevent the insured from being the sole and uncon- ditional owner ;^ and so where the insured has con- tracted to pay a third party one-third of the proceeds above expenses f insurance of receivers as such neces- 176 FiEE Insurance. sarily implies other interests f a husband in possession and enjoyment may be regarded as sole and uncon- ditional owner of furniture owned by the wife prior to their marriage;* and so as to a building erected after marriage and community property ;® wife may be regarded as sole and unconditional owner, notwith- standing homestead right of husband f where the prop- erty belongs to wife by gift from her husband it is no defense that such gift was in fraud of creditors f party who acquires title by devise in will " to be his forever for his own proper use " subject to restriction as to alienation until he attains the age of thirty years, is sole and unconditional owner.® An owner of an estate in fee upon a condition subsequent and in possession with no condition broken, and a deed has been de- posited in escrow to be delivered upon performance of the condition, is a sole and unconditional owner.® An individual obtaining policy in a firm or partnership name may be regarded as sole and unconditional owner ;^'' so a partnership of four persons described in a corporate name as a company ;^^ an assignment of one of the members of a firm or partnership does not affect the unconditional and sole ownership of the firm;^^ a party-wall does not affect^* nor does a mere defect in the title, not asserted, owing to erection of building beyond line of insured's lot on a street to extent of two feet;^* a grantee in a deed executed by the owner of all the capital stock of a corporation which owned the land, may be regarded as a sole and unconditional owner /^ outstanding contingent right of dower or curtesy does not prevent sole and uncon- ditional ownership,^® mere defect in title by reason of Unconditional Sole Ownership. 177 a reversionary interest of one-seventh does not neces- sarily prevent sole and unconditional ownership ;*''^ may be such owner though deed is not actually de- livered until after the jBire ;^* insured 's ownership may not be affected by his deed recorded but not de- livered ;^® a widow who takes an equitable life estate as devisee and legal title as executrix and trustee, even though subject to a trust, may be sole and uncon- ditional owner.*" 1. Erb V. Fidelity Ins. Co., 99 Iowa, 727, 69 IST. W. Eep. S61 ; Boutelle v. Westchester Ins. Co., 51 Vt. 4. 2. Manchester Assur. Co. ■;;. Abrams, 89 Fed. Eep. 933, 33 C. C; A. 436. 3. Liverpool, L. & G. Ins. Co. v. McNeill, 89 Fed. Eep. 131, 59 U. S. App. 499. 4. Georgia Home Ins. Co. v. Brady, 41 S. W. Eep. 513 (Tex. Civ. App.). And as to right of husband to insure as absolute owner of property under parol agreement, see also Travis v. Continental Ins. Co., 47 Mo. App. 483. 5. Warren v. Springfield F. & M. Ins. Co., 13 Tex. Civ. App. 466, 35 S. W. Eep. 810. 6. Sun Fire Office v. Beneke, 53 S. W. Eep. 98, Tex. Civ. App. . But see and compare Trott v. Woolwich Ins. Co., 83 Me. 363, 23 Atl. Eep. 245. 7. German Ins. Co. v. Heyman, 34 Nebr. 704, 53 N. W. Eep. 401, 21 Ins. L. J. 941. 8. Yost V. Dwelling-House Ins. Co., 179 Pa. St. 381, 35 Atl. Eep. 517, 36 Ins. L. J. 716. 9. Davis V. Pioneer Furniture Co., 103 Wis. 394, 78 N. W. Eep. 596, 38 Ins. L. J. 474. 10. Delaware Ins. Co. v. Bonnet, 30 Tex. Civ. App. 107, 48 S. W. Eep. 1104; Phoenix Ins. Co. v. McKennan, 46 S. W. Eep. 10, 37 Ins. L. J. 870 (Ky.). And see Re Pelican Ins. Co., 47 La. Ann. 935, 17 So. Eep. 427, 24 Ins. L. J. 535. 11. Missouri Savings Assoc, v. German- American Ins. Co., 73 Mo. App. 158. 12. Wood V. American Ins. Co., 149 N. Y. 382, 44 N. E. Eep. 80. Vol. 2 — 12 178 FiEE Insurance. 13. Des Moines lee Co. v. Niagara Ins. Co., 99 Iowa, 193, 68 N. W. Eep. 600, 26 Ins. L. J. 378; Commercial Ins. Co. v. Allen, 80 Ala. 571, 16 Ins. L. J. 641. 14. Haider v. St. Paul F. & M. Ins. Co., 67 Minn. 514, 70 X. W. Eep. 805, 37 Ins. L. J. 222. 15. Phoenix Assur. Co. ■;;. Deavenport, 16 Tex. Civ. App. 283, 41 S. W. Eep. 399. 16. Virginia Ins. Co. v. Kloeber, 31 Gratt. 749 (Va.) ; Com- mercial Ins. Co. V. Spankneble, 52 111. 53. 17. Williams v. Buffalo German Ins. Co., 17 Fed. E«p. 63, 12 Ins. L. J. 374. 18. Mattocks v. Des Moines Ins. Co., 74 Iowa, 233, 37 F. W. Eep. 174. And see Lingenfelter v. Phoenix Ins. Co., 19 Mo. App. 252. 19. Walsh V. Vermont Ins. Co., 54 Vt. 351; Franklin Ins. Co. V. Feist, 31 Ind. App. 390, 68 X. E. Eep. 188. 20. Security Ins. Co. v. Kuhn, 207 111. 166, 69 N. E. Eep. 822, afE'g 108 lU. App. 1. RULE 36. Wheii the Insured is not Sole and Unconditional Owner — Illustrative Cases. The owner of an undivided part interest is not an unconditional sole owner within meaning of the policy;^ and the owner of an interest held jointly with someone else is not an unconditional sole owner ;^ nor is a mortgagee such an owner f a conditional devise is not unconditional sole ownership ;* the interest of one partner in firm property is not such ownership;'' the interest of a purchaser of property at a judicial sale, which at time of issue of the policy had not been con- firmed by the court, is not unconditional ownership;® stockholders who take policy issued to themselves as owners are not sole and unconditional owners of prop- erty owned by the corporation -^ a deed which operates absolutely as a conveyance, though intended as se- curity for a debt, prevents the grantor from being the Uncokditional Sole Owneeship. 179 sole and unconditional owner ;* though it may be other- wise as to a bill of sale so intended f the ownership of property sold on judgment and execution, time for re- demption not having expired, cannot be said to be unconditional and sole ;" an outstanding right or title of assignee or trustee in bankruptcy prevents one in possession under quitclaim deed from being the uncon- ditional sole owner;" a life interest is not sole and unconditional ownership ;^^ a surviving partner who is also the administrator of the deceased partner is not the sole and unconditional owner of partnership property.^^ 1. Hebner v. Palatine Ins. Co., 157 111. 144, 41 N. E. Rep. 627, afE'g 55 111. App. 375; Palatine Ins. Co. v. Dickenson, 116 Ga. 794, 43 S. E. Rep. 52 ; Miller v. Amazon Ins. Co., 46 Mich. 463, 10 Ins. L. J. 581 ; Bradley v. German-American Ins. Co., 90 Mo. App. 369; Eire Assoc, v. Calhoun, 28 Tex. Civ. App. 409, 67 S. W. 153; Springfield F. & M. Ins. Co. v. Green, 36 S. W. Rep. 143 (Tex. Civ. App.); German- American Ins. Co. V. Paul, 53 S. W. Eep. 442 (Ind. Terr.) ; Liverpool, L. & G. Ins. Co. V. Cochran, 77 Miss. 348, 26 So. Rep. 932; Sisk i). Citizens' Ins. Co., 16 Ind. App. 565, 45 N. E. Rep. 804, 26 Ins. L. J. 369; Adema v. Insurance Co., 36 La. Ann. 660; Noyes v. Hartford Ins. Co., 54 N. Y. 668 ; Columbian Ins. Co. V. Lawrence, 2 Pet. 25 (U. S.). And see Capital City Ins. Co. V. Autrey, 105 Ala. 269, 17 So. Rep. 326. The condition does not apply to insurance of oil in pipe lines. Grandin v. Rochester German Ins. Co., 107 Pa. St. 26, 14 Ins. L. J. 447. 2. Schroedel v. Humboldt Ins. Co., 158 Pa. St. 459, 27 Atl. Eep. 1077, 23 Ins. L. J. 240. 3. Ordway v. Chace, 57 N. J. Eq. 478, 42 Atl. Rep. 149. 4. Dwelling-House Ins. Co. v. Dowdall, 49 111. App. 33. 5. McFetridge v. Phoenix Ins. Co., 84 Wis. 200, 54 N. W. Eep. 326, 22 Ins. L. J. 211. 6. Hartford Ins. Co. v. Keating, 86 Md. 130, 38 Atl. Rep. 29, 27 Ins. L. J. 406. 7. Syndicate Ins. Co. v. Bohn, 65 Fed. Rep. 165, 12 C. C. A. 531, 27 IJ. S. App. 564, 24 Ins. L. J. 408 ; McCormick v. Spring- field F. & M. Ins. Co., 66 Cal. 361, 14 Ins. L. J. 373. .180 FiBE Insurance. 8. Williamson v. Orient Ins. Co., 100 Ga. 791, 28 S. E. Kep. 914; prior appeal, 98 Ga. 464, 25 S. E. Eep. 560; Alberts v. Insurance Co. ¥. A., 117 Ga. 854, 45 S. E. Eep. 282. See Eule 20. 9. Kronk v. Birmingham Ins. Co., 91 Pa. St. 300. And see Cook ». Lion Ins. Co., 67 Cal. 368, 14 Ins. L. J. 863. 10. Eeaper City Ins. Co. v. Brennan, 58 111. 158. 11. Southwick V. Atlantic Ins. Co., 133 Mass. 457, 12 Ins. L. J. 49. 12. Garver v. Hawkeye Ins. Co., 69 Iowa, 202 ; Davis v. State Ins. Co., 67 Iowa, 494, 15 Ins. L. J. 533 ; Collins v. St. Paul F. & M. Ins. Co., 44 Minn. 440, 46 N. W. Eep. 906, 20 Ins. L. J. 179. 13. Crescent Ins. Co. v. Camp, 71 Tex. 503, 9 S. W. Eep. 473. TITLE IV. Building on Ground not Owned in Fee Simple. Eule 1. As imposed by contract. 3. Violation of condition voids policy — ^Burden of proof. 3. Effect of written description. 4. Presumption as to estate in fee. 5. Equitable interest or title. 6. Several individual interests insured may together amount to fee simple — When policy void. 7. As dependent upon delivery and record of a deed. 8. Effect of conveyance or deed not signed by wife. 9. Effect of oral application and no inquiries. 10. Duty of insured — Company not bound to inquire — May rely upon conditions of the policy. 11. Company put upon inquiry by ambiguous answer in written application. 12. When breach of condition. 13. Leasehold interest. 14. Partner may be owner in fee simple. 15. Condition operative independent of statute govern- ing a written application. 16. Effect of mortgagee clause — Omission of insured not an " act or neglect." 17. Assignment of lease may be valid as against insur- ance company though not consented to by lessor. 18. Possession under an executory contract of sale. Building on Gbound not Owned in Fee Simple. 181 Rule 19. Waiver or estoppel in issue and delivery of policy with knowledge of facts — Knowledge — Presump- tion. 20. Policy as a written contract not affected by mere knowledge of company's agent. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if the subject of insurance be a building on ground not owned by the insured in fee simple. This rule is imposed by above terms in the standard form of policy prescribed in: Ifew York, North Carolina, Connecticut, North Dakota, Louisiana, * Pennsylvania, Missouri, Ehode Island, New Jersey, Wisconsin. The standard form prescribed in Michigan is the same, except there is added : " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." The standard form of policy prescribed in : Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain the above provision. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in gen- eral use. Under an old Maine statute, it was held that notwithstanding the building insured was on leased ground not owned in fee simple by the plaintiff, in a suit upon the policy, the question of * See note to " Concealment," Rule 1, page 2. 182 FiEE Insurance. increase of risk must be submitted to, and determined by the jury before policy can be avoided. This statute would seem to be repealed by E. S., 1903. See Me. E. S., 1903, and Eepealing Act, Me. E. S., 1903, p. 1015. Atherton v. British America Assur. Co., 91 Me. 389, 39 Atl. Eep. 1006. RULE 2. Violation of Condition. Voids Policy — Burden of Proof. If the subject of insurance be a building on ground not owned by the insured in fee simple, and it is not otherwise provided by agreement indorsed upon or added to the policy, and there is no waiver or estoppel, the policy is void;^ it is an affirmative defense, the burden in allegation and proof rests on the insurance company.^ 1. Overton v. American Central Ins. Co., 79 Mo. App. 1; Home Ins. Co. v. Smith, 39 S. W. Eep. 364 (Tex. Civ. App.) ; Matthie v. Globe Ins. Co., 68 App. Div. 339, 74 N. Y. Supp. 177, aff'd, 174 N". Y. 489 ; Phoenix Ins. Co. v. Searles, 100 Ga. 97, 37 S. E. Eep. 779. And see Leathers v. Insurance Co., 4 Post. 359 (N. H.) ; Bast Texas Ins. Co. v. Brown, 83 Tex. 631, 18 S. W. Eep. 713. 2. India Eiver State Bank v. Hartford Ins. Co., Fla. , 35 So. Eep. 338. RULE 3. EfEect of Written Description. When the written description in the policy shows that the land is not, or could not be, owned in fee simple, the condition is inoperative -^ so the insurance company is estopped by issuing a policy upon a build- ing which, under a statute, is not subject to individual ownership.^ 1. Broadwater v. Lion Ins. Co., 34 Minn. 465, 15 Ins. L. J. 295; Fowle v. Springfield Ins. Co., 133 Mass. 191. 2. German-American Ins. Co. ■;;. Paul, Ind. Terr. , 83 S. W. Eep. 60. And see Broadwater v. Lion Ins. Co., supra. Building on Ground not Owned in Fee Simple. 183 RULE 4. Fresumption as to Estate in Fee. If the insured is in possession under a deed with a claim to the fee, it creates a presumption of an estate in fee. Winneshiek Ins. Co. v. Schueller, 60 111. 465. RULE 5. Equitable Interest or Title. An equitable interest or title in fee may be the equivalent of ownership in fee within meaning of the policy ; the condition does not absolutely require legal title to be in the insured;^ a person who takes an equitable life estate as devisee and the legal title as executor and trustee, even though subject to a trust, may be owner in fee simple.^ 1. Lewis V. Kew England Ins. Co., 24 Blatchf. 181, 29 Fed. Eep. 496; Swift v. Vermont Ins. Co., 18 Vt. 305; Pennsylvania Ins. Co. V. Dougherty, 102 Pa. St. 568, 13 Ins. L. J. 52 ; Elliott V. Ashland Ins. Co., 117 Pa. St. 548, 12 Atl. Eep. 676. And see Phoenix Ins. Co. v. Bowdre, 67 Miss. 620, 7 So. Eep. 596, 19 Ins. L. J. 916; Capital City Ins. Co. v. Caldwell, 95 Ala. 77, 10 So. Eep. 355. 2. Security Ins. Co. v. Kuhn, 207 111. 166, 69 IST. E. Eep. 822, aff'g 108 111. App. 1. RULE 6. Several Individual Interests Insured May Together Amount to Tee Simple — When Policy Void. Even although the several individual interests of several parties insured may not amount to ownership in fee simple, if their combined interest amount to such a title, there is no violation of the condition; to hold 184 Fire Insurance. the policy void because of the condition in respect to the ownership of the land there must be ownership in some person other than the insured. Mascott V. First Nat. Ins. Co., 69 Vt. 116, 37 Atl. Kep. 255. And see Scottish Union & Nat. Ins. Co. v. Petty, 21 Fla. 399. RULE 7. As Dependent upon Delivery and Record of a Deed. When the deed to insured is delivered to and held by a third party until performance of some condition which in fact is not performed, the insured cannot be said to be the owner in fee simple;^ a deed must be delivered with intent to deliver ; the recording of it is of no avail without the knowledge of the grantee.^ 1. Pangborn v. Continental Ins. Co., 63 Mich. 638, 16 Ins. L. J. 62. 2. Franklin Ins. Co. v. Feist, 31 Ind. App. 390, 68 N. B. Eep. 188. RULE 8. Effect of Conveyance or Deed not Signed by Wife. The fact that the insured has title to the land on which building insured is situated by a deed from a married man whose wife did not join in the convey- ance, does not prevent the insured from being the owner in fee simple ; the estate owned by the wife who did not sign the deed is an estate in the land itself, and not a mere incumbrance resting upon it, but it is not until the death of the husband that the wife has any claim, legal or equitable, upon the real estate so conveyed, and if she does not survive her husband, her estate terminates. Ohio Farmers' Ins. Co. v. Bevis, 18 Ind. App. 17, 46 N. E. Eep. 928, 26 Ins. L. J. 623. Building on Geound not Owned in Fee Simple. 185 RULE 9. Effect of Oral Ap-plication and no Inquiries. When the application for the policy is an oral one, and no inquiries are made by the insurance company as to interest or title, and there is no misrepresenta- tion or concealment, and the insured has an insurable interest, the company is presumed to intend to insure such interest and the conditions in the policy as to title or interest are inoperative to prevent a recovery. Farmers & Merchants' Ins. Co. v. Mickel, Nebr. , 100 N". W. Kep. 130; Slobodisky v. Phoenix Ins. Co., 53 Nebr. 816, 74 N. W. Eep. 270 ; German Ins. Co. v. Kline, 44 Nebr. 395, 62 jST. W. Rep. 857 ; Dooly v. Hanover Ins. Co., 16 Wash. 155, 47 Pac. Rep. 507; Glens Palls Ins. Co. v. Michael, Ind. ,74 K. E. Rep. 964. See Rule 10. And see Title, " Interest Other Than Unconditional and Sole Ownership," Rule 11 et seq. RULE 10. Duty of Insured — Company not Bound to Inquire — May Bely upon Conditions of the Policy. When the insured, without disclosing the facts, al- lows the insurance company to assume or infer that his interest or title is, under the terms of the policy, such as not to require disclosure or indorsement of consent, he must see to it that the conditions in the policy are complied with. It is not incumbent upon the insurance company to make inquiries or to make an investigation or examination of title, as it may legally rely upon the clauses or conditions of the policy ;^ but this rule has no application when the issue is upon disputed evidence as to whether the agent who 186 FiBE Insubance, issued the policy did or did not at the time know the faets.^ 1. See Title, "Interest Other Than Unconditional and Sole Ownership," Enles 12, 13, and cases cited thereunder, and Vol. 1, Fire Insurance as a Valid Contract, " Construction and Inter- pretation of Contract," Eule 5. 2. Phoenix Ins. Co. v. Searles, 100 Ga. 97, 27 S. E. Eep. 779. And see Eule 19. RULE II. Company Put upon Inquiry by Ambiguous Answer in Written Application. When the company is put upon inquiry by an incom- plete, ambiguous, or uncertain answer relating to title in a written application, and issues a policy without further inquiry, it may be assumed that it intended to insure whatever insurable interest the applicant had in the entire premises. Clawson v. Citizens' Ins. Co., 121 Mich. 591, 80 N. W. Eep. 573. RULE 12. When Breach, of Condition. There is no breach of the condition requiring owner- ship in fee simple until it is totally broken; if insured owns in fee simple a part of the land on which the building is situated the condition is not broken, al- though he does not own the other part. Haider v. St. Paul F. & M. Ins. Co., 67 Minn. 514, 27 Ins. L. J. 222, 70 K. W. Eep. 805. RULE 13. Xieasehold Interest. A leasehold interest in the insured cannot be claimed to be ownership in fee simple;^ but insured may be Building on Ground not Owned in Fee Simple. 187 owner in fee, notwithstanding he has leased property to a third party .^ Where policy insures a leasehold interest, ownership of fee is immaterial.^ 1. Matthie v. Globe. Ins. Co., 68 App. Div. 239, 74 N. Y.. Supp. 177, aff'd, 174 N. Y. 489; Mers v. Franklin Ins. Co., 68 Mo. 127. And see East Texas Ins. Co. v. Brown, 82 Tex. 631, 18 S. W. Eep. 713; Security Ins. Co. v. Mette, 27 111. App. 324; Dowd V. American Ins. Co., 41 Hun, 139. 2. Insurance Co. v. Haven, 5 Otto, 242 (TJ. S.). 3. Philadelphia Tool Co. v. British Amer. Assur. Co., 132 Pa. St. 236, 19 Atl. Eep. 77. Under the old forms which read " If the interest in the prop- erty to be insured be a leasehold, or other interest not absolute, it must be so represented to the company and expressed in the policy in writing otherwise the insurance shall be void," it was held that a lessee with right to remove building or sell at ap- praised value, etc., might be regarded as the absolute owner and insure or be insured as such without voiding the insurance. See Hope Ins. Co. v. Brolaskey, 35 Pa. St. 282. Also Mitchell V. Home Ins. Co., 32 Iowa, 421 ; David v. Hartford Ins. Co., 13 Iowa, 69; Mayor v. Exchange Ins. Co., 9 Bosw. 424 (N. Y.) ; Stickney v. Magara Ins. Co., 23 Up. Can. C. P. 373. See now Eule 1, and note change in language. RULE 14. Partner May be Owner in Fee Simple. A partner may be and remain the owner in fee simple, though the partnership has use of the building. Weber v. American Central Ins. Co., 35 Mo. App. 521. And see Citizens' Ins. Co. v. Doll, 35 Md. 89. RULE 15. Condition Operative Independent of Statute Governing "Written Application. The condition is operative independently of a stat- ute requiring copy of a written application to be at- tached to or indorsed upon the policy, and it is error to 188 FiBE Insurance, exclude evidence tending to show violation or a breach of the condition upon the ground that such a statute was not complied with. MacKinnon v. Mutual Ins. Co., 89 Iowa, 170, 56 N. W. Kep. 423, 23 Ins. L. J. 39. RULE i6. Effect of Mortgagee Clause — Omission of Insured not an " Act or Wegleot." The mortgagee clause does not relieve the mortgagee to whom loss is payable from the consequences of a failure upon part of the owner, to truly state his in- terest, if other than fee simple, in the insured property. Such an omission is not an " act or neglect " within the meaning of these terms as used in the mortgagee clause. Genesee Falls Savings Assoc, v. United States Ins. Co., 16 App. Div. 587, 44 N. Y. Supp. 979. And see Vol. 1, Fire Insurance as a Valid Contract, " Mortg- agor and Mortgagee." RULE 17. Assignment of Lease May be Valid as Against Insurance Com- pany Though, not Consented to by Iiessor. When the policy insures a building on leased ground, and the lease has been assigned by the original lessee to the insured the day before policy issues, but the lessor has not consented to the assignment as required by the terms of the lease, the assignment of the lease is valid as against the insurance company, and there is no such misrepresentation or concealment or defect in title as to ownership as to void the insurance on those grounds. Caplis V. American Ins. Co., 60 Minn. 376, 62 N. W. Rep. 440, 24 Ins. L. J. 551. Building on Gtround not Owned in Fee Simple. 189 RULE i8. Possession "llnder an Executory Contract of Sale. When the assured is in possession under an en- forceable executory contract of purchase, and is the equitable owner, such ownership may be regarded as in fee simple within meaning of the policy;^ but a specific statement by the insured that he owns the property in fee and has a clear title to it, when in fact he has only an executory contract for purchase, may be such a misrepresentation as to avoid the policy;^ such a contract held by the insured as collateral se- curity for money loaned does not make him an owner in fee simple;^ and such a contract does not neces- sarily make the vendee an owner in fee simple.* 1. Loventhal v. Home Ins. Co., 112 Ala. 108, 30 So. Eep. 419, 25 Ins. L. J. 816, 33 L. E. A. 258; Pennsylvania Ins. Co. v. Hughes, 108 Fed. Eep. 497, 47 C. 'C. A. 459 ; Lewis v. New Eng- land Ins. Co., 24 Blatchf. 181, 29 Fed. Eep. 496; Elliott v. Ashland Ins. Co., 117 Pa. St. 548, 12 Atl. Eep. 676 ; Brighton Eeach Eacing Assoc, v. Home Ins. Co., 93 N. Y. Supp. 654. 2. Wooliver v. Boylston Ins. Co., 104 Mich. 132, 62 N. W. Eep. 149, 24 Ins. L. J. 793. 3. Gettleman v. Commercial Union Asstu. Co., 97 Wis. 237, 72 N. W. Eep. 627, 27 Ins. L. J. 160. 4. Mott V. Citizens' Ins. Co-., 69 Hun, 501, 23 N. Y. Supp. 400; Brooks v. Erie Ins. Co., 76 App. Div. 275, 78 N. Y. Supp. 748. RULE 19. "Waiver or Estoppel in Issue and Delivery of Policy with Knowl- edge of Pacts — Knowledge — Presumption. Issue and delivery of the policy with knowledge by the company or its agent of the fact that the building is on ground not owned by the insured in fee simple, operates as a waiver or estoppel, preventing the com- 190 FiEE Insurance. pany from claiming a forfeiture by reason of such fact;* and so when the insured's written application shows that he is not the owner in fee simple f but the agent's knowledge as to the building being on leased ground may not be imputable to the company when acquired incidentally outside of or independent of any matter connected with the insurance, some months prior, and not present in his mind at time of issue of the policy,^ if such knowledge is acquired in usual course of his business as an insurance agent, even a year prior, the presumption is that such knowledge continues and exists.* 1. Parsons v. Knoxville Ins. Co., 32 Mo. 583, 31 S. W. Eep. 117, 24 Ins. L. J. 852; Flonmoy v. Traders' Ins. Co., 80 Mo. App. 655 ; Farmers' Ins. Co. v. Jackman, Ind. App. , 73^ N. E. Eep. 730 ; Cowell v. Phcenix Ins. Co., 126 N. C. 684, 36 S. E. Eep. 184; Germania Ins. Co. v. Ashby, 112 Ky. 303, 65 S. W. Eep. 611; Phoenix Ins. Co. v. Phillips, 16 Ky. L. Eep. 122; Goss v. Agricultural Ins. Co., 92 Wis. 233, 65 N". W. Eep. 1036; Bowling v. Lancashire Ins. Co., 92 Wis. 63, 65 F. W. Eep. 738, 25 Ins. L. J. 430 ; Home Ins. Co. v. Gibson, 72 Miss. 58, 17 So. Eep. 13, 24 Ins. L. J. 458 ; Van Schoick v. Magara Ins. Co., 68 N. Y. 434; Berry v. American Central Ins. Co., 132 N. Y. 49, 30 N". E. Eep. 254, 21 Ins. L. J. 455 ; Home Ins. Co. V. Stone Eiver Iv'at. Bank, 88 Tenn. 369, 12 S. W. Eep. 915; Baldwin v. Citizens' Ins. Co., 60 Hun, 389, 15 N. Y. Supp. 587. And see Dresser v. United Firemen's Ins. Co., 45 Hun, 298, aff'd, 122 N. Y. 642, without opinion ; Wooliver v. Boylston Ins. Co., 104 Mich. 132, 62 N. W. Eep. 149, 24 Ins. L. J. 793 ; Home Ins. Co. V. Duke, 75 Ind. 535; Germania Ins. Co. v. Hick, 125 111. 361, 17 K E. Eep. 792; Johnson v. ^tna Ins. Co., Ga. , 51 S. E. Eep. 339. And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eules 8 and 16. 2. Davis V. Phcenix Ins. Co., Ill Cal. 409, 43 Pac. Eep. 1115; Lamb v. Council Bluffs Ins. Co., 70 Iowa, 238. 3. Sergent v. Liverpool, L. & G. Ins. Co., 66 App. Div. 46,. 73 N. Y. Supp. 120. 4. Ahlberg v. German Ins. Co., 94 Mich. 259, 53 K. W. Eep. 1102, 22 Ins. L. J. 307. Incumbeance by Chattel Mortgage. 191 And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Rule 17. Also this volume, chapter on "Agents." RULE 20. Policy as a Written Contract not Affected by Mere Knowledge of Company's Agent. The policy, as a written contract, is not affected or superseded by the mere knowledg'e of company's agent. An unambiguous written contract, when sued on in a court of law, is unalterable, and for that reason the knowledge or fraud of company's agent does not prevent a forfeiture on ground that the land was not owned in fee simple. Martin v. Insurance Co. of K. A., 57 N. J. L. 623, 31 AtL Eep. 213. And see and compare Eule 19. And Vol. 1, Mre Insurance, as a Valid Contract, "Waiver," Rules 8 and 16. And this volume, chapter on " Warranty," Rule 29, note 3. TITLE V. Incumbrance by Chattel Mortgage. Rule 1. As imposed by contract. 2. Policy void or voidable — No question of good faith,. concealment, or increase of risk — Burden of proof. 3. Instrument must be legally operative — Delivery. 4. Does not depend upon form — Liens — Construction. 5. Application of rule admitting parol evidence. 6. Chattel mortgage by one partner to another. 7. Stocks of merchandise and the like. 8. Effect of description of property as held in trust or sold but not delivered. 9. If policy voided subsequent release or discharge does- not revive it. 10. As affected by payment or discharge. 11. Existence of' chattel mortgage renders policy void — Omission to make inquiry cannot strike out pro- yision of policy. 192 FiBE Insurance. EuLB 12. Duty of insured — Insurance company not bound to inquire — May be put upon inquiry. 13. Effect of issue of policy upon oral application with- out inquiry. 14. Waiver or estoppel in issue and delivery of policy — When chargeable with knowledge — Newspapers — Public records — Collusion and fraud. 15. Substitution of one mortgage for another — As af- fected by decrease or increase in amount — Change in form. 16. Duty of insured to procure written consent — Oral promise of agent insufficient. 17. Contract severable. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if the subject of insurance be personal property and be or become incumbered by a chattel mortgage. This rule is imposed by above terms in the standard form of policy prescribed in : New York, North Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Missouri, Rhode Island, New Jersey, Wisconsin. The standard form prescribed in Michigan is the same except there is added: " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." The standard form of policy prescribed in Maine', New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain above provision. * See note to " Concealment," Rule 1, page 3'. Incumbrance by Chattel Mortgage. 193 In the States where no standard form is prescribed, and other than those above named the New York standard form is in general use. Under the Tennessee statute governing misrepresentation there must be intent to deceive or defraud, unless risk is in- creased. Light V. Insurance Co., 105 Tenn. 480, 58 S. W. Eep. 851. See statutory provisions. Many of the old forms contained a specific provision against incumbrances, such as " If the property be or become incum- bered by a mortgage, deed of trust. Judgment or otherwise," and it was held that the provision applied to acts of the insured only, or to incumbrances created by his consent. Gerling v. Agricultural Ins. Co., 39 W. Va. 689, 20 S. E. Eep. 691, 34 Ins. L. J. 385; Georgia Home Ins. Co. v. Shild, 73 Miss. 138, 19 So. Eep. 94. A vendor^s lien was held to be an incumbrance. Curlee v. Texas Home Ins. Co., 31 Tex. Civ. App. 471, 73 S. W. Eep. 831. A mechanic's lien was held to be an incumbrance, and the in- sured was liable for acts of third parties. Smith V. St. Paul F. & M. Ins. Co., 106 Iowa, 225, 76 N". W. Eep. 676. And see Greenlee v. Iowa Ins. Co., 102 Iowa, 260, 71 ]Sr. W. Eep. 324. But all the facts necessary to constitute a lien must be proved. Omaha Ins. Co. v. Thomson, 50 Nebr. 580, 70 N. W. Eep. 30. A judgment was- held not to be an incumbrance. Lodge V. Capitol Ins. Co., 91 Iowa, 103, 58 N". W. Eep. 1089, 23 Ins. L. J. 735. Such clauses or conditions were recognized and enforced by the courts. Eamer v. American Cent. Ins. Co., 70 Mo. App. 47; Collins V. Merchants & Bankers' Ins. Co., 95 Iowa, 540, 64 N. W. Eep. 602 ; Houdeck v. Merchants & Bankers' Ins. Co., 102 Iowa, 303, 71 ]Sr. W. Eep. 354. And were subject to waiver. Eockford Ins. Co. v. Williams, 56 111. App. 338; Phoenix Ins. Co. V. Public Parks Amusement Co., 63 Ark. 187, 37 S. W. Eep. 959. Though an agent when policy issued could not waive as to future incumbrances. Milwaukee Mechanics' Ins. Co. v. ISTiewedde, 13 Ind. App. 145, 39 N. B. Eep. 757 ; Dwelling-House Ins. Co. v. Shaner, 53 111. App. 336. Vol. 2 — 13 194 Fire Instjeance. In Eead v. State Ins. Co., 103 Iowa, 307, 72 N. W. Eep. 665, it was held that even if a lease was an incumbrance it was not covered or included under construction of the entire contract and facts of the case. And see this volume, chapter " Change in Interest, Title, or Possession." RULE 2. Policy Void or Voidable — No Question of Good Faith, Conceal- meiiit, or Increase of Bisk — Burden of Proof. A chattel mortgage upon the subject of the insur- ance renders the policy void, or voidable, at election of the insurance company;^ and the result is not affected by any question of bad faith in concealment or increase of risk;^ the chattel mortgage must cover the subject of insurance;^ the burden, both in allegation and proof, rests upon the insurance company.* 1. Walker v. Phcenix Ins. Co., 156 F. Y. 628, 51 K B. Eep. 392 ; Gray v. Guardian Ins. Co., 82 Hun, 380, 31 F. Y. Supp. 237; Thorne v. Mtna, Ins. Co., 103 Wis. 593, 78 N. W. Eep. 920; First Fat.' Bank v. American Cent. Ins. Co., 58 Minn. 492, 60 N. W. Eep. 345, 24 Ins. L. J. 55 ; Crikelair v. Citizens' Ins. Co., 68 111. App. 637, aff'd, 168 111. 309, 48 F. B. Eep. 167; Brown v. Westchester Ins. Co., 9 Kans. App. 526, 58 'Pac. Eep. 376 ; Home Ins. Co. v. Johansen, 59 Febr. 349, 80 F. W. Eep. 1047; Insurance Co. F. A. v. Wicker, 54 S. W. Eep. 300, Tex. Civ. App. , aff'd, 93 Tex. 390, 55 S. W. Eep. 740. And see Baldwin v. German Ins. Co., 105 Iowa, 379, 75 F. W. Eep. 326, 37 Ins. L. J. 794; Brennen v. Connecticut Ins. Co., 99 Mo. App. 718, 74 S. W. Eep. 406. 2. Firemen's Fund Ins. Co. v. Barker, 6 Colo. App. 535, 41 Pac. Eep. 513. 3. Moriarty v. United States Ins. Co., 19- Tex. Civ. App. 669, 49 S. W. Eep. 132. 4. India Eiver State Bank v. Hartford Ins. Co., Fla. , 35 So. Eep. 338. , Incumbrance by Chattel Mortgage. 195 RULE 3. Instrument Must be Legally Operative — Delivery. The chattel mortgage must be legally operative as sueh;^ an instrument executed, but not delivered, is inoperative to void the policy.^ When a chattel mort- gage is executed and delivered in order to take effect as security immediately, and for that purpose only, the delivery cannot be construed as in escrow to avoid a forfeiture.^ It voids the policy even though it is afterward decreed void as in fraud of creditors.* 1. Weigen v. Council Bluffs Ins. Co., 104 Iowa, 410, 73 N". W. Eep. 862, 27 Ins. L. J. 260 ; Baile v. St. Joseph Ins. Co., 73 Mo. 371. 2. Insurance Co. N. A. v. Wicker, 93 Tex. 390, 55 S. W. Eep. 740; Clifton Coal Co. v. Scottish Union & National Ins. Co., 102 Iowa, 300, 71 N. W. Eep. 433, 26 Ins. L. J. 1007; Hanscom v. Home Ins. Co., 90 Me. 333, 38 Atl. Eep. 324, 27 Ins. L. J. 19; Phoenix Ins. Co. v. Overman, 21 Ind. App. 516, 52 N. E. Eep. 771. 3. Adler v. Germania Ins. Co., 17 Misc. 347, 39 N. Y. Supp. 1070, rev'g 15 Misc. 471, 37 N. Y. Supp. 207. 4. Secrest v. Hartford Ins. Co., 68 S. C. 378, 47 S. E. Itep. 680. RULE 4. Does not Depend on Form — Liens — Construction. No particular form of words is necessary to con- stitute a chattel mortgage ; if, without regard to form, the instrument is in legal etfect a chattel mortgage, it voids the policy;^ but a mere lien created under an executory agreement will not be construed as a chattel mortgage f these words, as used in the policy, must be construed in their popular sense and as simply guard- ing against the common ordinary chattel mortgages 196 FiKE Insurance. and instruments of the same general nature, use, and purpose.^ 1. Eoe V. Town Mutual Ins. Co., -78 Mo. App. 452; Fitz- gerald V. Atlantic Home Ins. Co., 61 App. Div. 350, 70 N. Y. Supp. 552; Peet v. Dakota Ins. Co., 7 S. D. 410, 64 K. W. Eep. 206, 25 Ins. L. J. 88; Hunt v. Springfield F. & M. Ins. Co., 20 App. D. C. 48, aff'd, 196 U. S. 47, 25 Sup. Ct. Eep. 179. In this case a trust deed was held to be in legal effect a chattel mortgage. That an instrument is a chattel mortgage when legally opera- tive as such without regard to form, see also Susman v. Whyard, 149 ]Sr. Y. 130; Blake v. Corbett, 120 N. Y. 329; Kochester Distilling Co. v. Easey, 142 N. Y. 579 ; Heyford v. Davis, 102 U. S. 235, 245; Hughes v. Harlan, 37 App. Div. 528, aff'd, 166 N". Y. 427; Ward v. Lord, 100 Ga. 407, 28 S. B. Eep. 446; Lumbert v. Woodard, 144 Ind. 335, 341 ; Bertschy v. Bank, 89 Wis. 473; Lewis v. Bell, 40 S. W. Eep. 747, Tex. Civ. App. 2. Pennsylvania Ins. Co. v. Hughes, 108 Fed. Eep. 497, 47 C. C. A. 459; Caplis v. American Ins. Co., 60 Minn. 376, 62 N. W. Eep. 440, 24 Ins. L. J. 551. 3. Caplis V. American Ins. Co., supra. And see Bleakely v. Nelson, 56 N. J. Eq. 674. RULE 5. Application of Kule Admitting Parol Evidence. The claim that a delivered chattel mortgage was not to become a binding contract until performance or oc- currence of some condition precedent resting in parol is subject to suspicion, and the rule admitting such evidence should be cautiously applied and the facts clearly proven. If the contract is executed and de- livered with intent to take effect, it is not to be there- after avoided by virtue of a condition annexed to the delivery by parol. Thome v. Mtna. Ins. Co., 102 Wis. 593, 78 N. W. Eep. 920. Incumbeance by Chattel Mortgage. 197 RULE 6. Cliattel Mortgage by One Partner to Aaiother. When a firm or partnership is insured, a cliattel mortgage executed by one of the partners to another, to secure advances, conveys only an interest in the surplus of the partnership property after payment of the debts, and introduces no stranger into ownership of the firm property. A chattel mortgage thus exe- cuted does not void a policy previously issued to the firm on the mortgaged property. Moulton V. ^tna Ins. Co., 85 App. Div. 375, 49 N. Y. Supp. 570; Alston v. Phoenix Ins. Co., 100 Ga. 287, 27 S. E. Eep. 981, 27 Ins. L. J. 77. RULE 7. stocks of Merchandise and the Like. When the policy insures only such property as should answer the description at time of the fire, such as stocks of merchandise or grain, malt or grain in process of malting, a chattel mortgage on a part of the malt does not affect the insurance on balance of prop- erty answering to the description at time of fire. Coleman v. Phcenix Ins. Co., 3 App. Div. 65, 38 N. Y. Supp. 986. And see Tompkins v. Hartford Ins. Co., 22 App. Div. 380, 49 F. Y. Supp. 184. RULE 8. EfEeot of Description of Property as Held in Trust or Sold but not Delivered. The written portion of a policy describing property insured as " its own or held by it in trust or on com- mission, or sold, but not delivered, ' ' does not annul or 198 FiEE Insurance. supersede the printed condition against a chattel mortgage. First Nat. Bank v. American Central Ins. Co., 58 Minn. 493, 60 N. W. Eep. 345, 24 Ins. L. J. 55. RULE g. If Policy Voided Subsequent Release or Discliarge Does not Revive It. When a chattel mortgage covering the subject of the insurance is once shown to exist, it voids the policy according to its terms, and a court has no authority to reinstate the policy without the consent of the insur- ance company. A subsequent release or discharge of the mortgage, even the day after the policy issues, does not operate to revive the policy;^ it cannot be claimed that liability on the policy is merely suspended, sub- ject to being revived upon payment of the mortgage debt f it can be revived only by some act or consent of the insurance company.^ 1. Insurance Co. N. A. v. Wicker, 93 Tex. 390, 55 S. W. Eep. 740, afE'g 54 S. W. Eep. 300 ; Gray v. Guardian Ins. Co., 82 Hun, 380, 31 N". Y. Supp. 237. 2. German-American Ins. Co. v. Humphrey, 62 Ark. 348, 35 S. W. Eep. 428, 25 Ins. L. J. 658. 3. Gray v. Guardian Ins. Co., supra. And see Walker v. Phoenix Ins. Co., 156 N. Y. 628, 51 K. E. Eep. 392. RULE 10. As Affected by Payment or Bisdiarge. Payment and discharge of the chattel mortgage be- fore a loss operates to revive the contract and to re- store the protection of the policy as to the property covered or included in the mortgage ;^ and a parol re- Incumbrance by Chattel Moetgage. 199 lease of a chattel mortgage may be effective, though not evidenced of record in any manner.^ 1. Born V. Home Ins. Co., 110 Iowa, 379, 81 N. W. Eep. 676; Home Ins. Co. v. Johansen, 59 Nebr. 349, 80 N". W. Eep. 1047 ; Johansen v. Home Ins. Co., 54 Nebr. 548, 74 N. W. Eep. 866, 27 Ins. L. J. 610 ; Omaha Ins. Co. v. Dierks, 43 Nebr. 473, 61 N. W. Eep. 740. 2. Johansen v. Home Ins. Co., supra. See Eule 9. RULE II. Existence of Chattel Mortgage Renders Policy Void — Omission to Make Inquiry Cannot Strike Out Provision of Policy. When there is no element of waiver or estoppel, arising from knowledge of the company or its agent, the existence of a chattel mortgage renders the policy void. The insured is bound by the terms of the policy which he accepts, and the fact that no inquiries were made by the company or its agent, and no representa- tions by the insured in a written application or other- wise, cannot strike out the provision of the policy. Crikelair v. Citizens' Ins. Co., 68 111. App. 637, aff'd, 168 111. 309, 48 F. B. Eep. 167; Indiana Ins. Co. v. Pringle, 21 Ind. App. 559, 52 N. E. Eep. 821; Shaffer v. Milwaukee Me- chanics' Ins. Co., 17 Ind. App. 204 ; Harding v. Norwich Union Ins. Soc, 10 S. D. 64, 71 N. W. Eep. 755, 26 Ins. L. J. 901; ^tna Ins. Co. v. Holcomb, 89 Tex. 404, 34 S. W. Eep. 915, 25 Ins. L. J. 833; Sulphur Mines Co. ■;;. Phoenix Ins. Co., 01 Va. 355, 26 S. E. Eep. 856. And see Title, " Interest other than Unconditional and Sole Ownership," Eules 12, 13. RULE 12. Duty of Insured — Insurance Company not Bound to Inquire — May be Put upon Inquiry. It is the duty of an applicant for insurance to com- ply with the conditions of the policy and to give the 200 FiEE Insubance. information requisite for its validity. The company may rely on the presumption that the insured has stated all the material facts, and, as a rule, is not bound to make inquiries. But when the company's agent is by the insured put upon inquiry, and fails to make it, then he is chargeable with notice or knowledge of chattel mortgage, which such inquiry would have disclosed, though having no actual knowledge of it when he issued the policy. Skinner v. Norman, 165 N. Y. 565, 59 N. E. Eep. 309. RULE 13. Effect of Issue of Policy upon Oral Application Without Inquiry. "When policy issues upon an oral application without any inquiry by the insurance company or its agent as to liens or other incumbrances upon the property, and without any statement or representation in reference thereto by the insured, and there is no evidence that the insured was informed or knew that, if a mortgage existed, the company would not take the risk, or that it would insert in the policy which it agreed to issue a clause making it void if the property was so incum- bered, the company is deemed by its action to have consented to assume the risk of such liens or incum- brances as may have been upon the property, and to that extent waived or dispensed with the printed con- dition. Arthur v. Palatine Ins. Co., 35 Oreg. 37, 57 Pae. Eep. 63, 38 Ins. L. J. 545; Allesina v. Liverpool, L. & G. Ins. Co., Oreg. , 78 Pac. Rep. 392; Koshland v. Hartford Ins. Co., 31 Oreg. 403, 49 Pac. Eep. 866, 36 Ins. L. J. 945; Sproul v. Incumbrance by Chattel Mortgage. 201 Western Assur. Co., 33 Oreg. 98, 54 Pae. Eep. 180, 28 Ins. L. J. 118; Phoenix Ins. Co. v. Puller, 53 Nebr. 811, 74 iST. W. Eep. 269; Insurance Co. N. A. v. Bachler, 44 Nebr. 549, 02 F. W. Eep. 911, 24 Ins. L. J. 481; Wright v. Insurance Co., 12 Mont. 474, 31 Pae. Eep. 87; Queen Ins. Co. v. Kline, 32 S. W. Eep. 214, 25 Ins. L. J. 236 ; Lancashire Ins. Co. v. Monroe, 101 Ky. 12, 39 S. W. Eep. 434; Cleavenger v. Franklin Ins. Co., 47 W. Va. 595, 35 S. E. Eep. 998 ; Union Assur. Soc. v. Nails, 101 Va. 613, 44 N. E. Eep. 896. While the rule as stated above has been made and enforced by courts of a number of the States, it is suggested that the cases frequently cited to sustain it were really in principle decided upon consideration of the question of concealment or in con- nection with a written application, which presents an entirely different issue from that of a violation of the specific condition relating to a chattel mortgage. See for example of the cases above cited, Lancashire Ins. Co. V. Monroe, supra; Koshland v. Hartford Ins. Co., supra; Sproul V. Western Assur. Co., supra. And see Union Assur. Soc. v. Nails, supra. And see preceeding rules. RULE 14. Waiver or Estoppel in Issue and Delivery of Policy — When Chargeable with Knowledge — Newspapers — Public Records — Collusion and Praud. Issue and delivery of a policy, with knowledge by tlie company or its agent of the existence of a chattel mortgage, operates as a waiver or estoppel preventing the company from claiming a forfeiture by reason of such fact ;^ a soliciting agent of the insurance company may bind it by his knowledge of the fact f the company or its agent is not chargeable with notice or knowledge of an item in a newspaper,^ or of a public record,* but if the agent is put upon inquiry it may operate as sufficient notice or knowledge.^ Collusion and fraud between the company *s agent and the holder of a chat- tel mortgage cannot be predicated upon the agent's 202 FiEE Insubancb. advice not to have loss made payable to him as policy would be canceled." 1. Eobbins v. Springfield Ins.' Co., 149 F. Y. 477, 44 N. E. Eep. 159, affg 79 Hun, 117, 29 N. Y. Supp. 513; Skinner v. Norman, 165 N. Y. 565; McGuire v. Hartford Ins. Co., 7 App. Div. 575, 40 N. Y. Supp. 30O, aff'd, 158 N. Y. 680, without opinion; Neafie v. Woodcock, 15 App. Div. 618, 44 N. Y. Supp. 768 ; Southern Ins. Co. ■;;. Stewart, Miss. , 30 So. Eep. 755; German-American Ins. Co. v. Yeagley, Ind. , 71 N. E. Eep. 897; Fire Assoc, v. Yeagley, Ind. App. , 73 N. B. Eep. 1035; Clay v. Phoenix Ins. Co., 97 Ga. 44, 25 S. E. Eep. 417 ; Hobkirk v. Phcenix Ins. Co., 103 Wis. 13, 78 N. W. Eep. 162; McDonald v. Fire Assoc, 93 Wis. 348, 67 N. W. Eep. 719, 25 Ins. L. J. 708; London & Lancashire Ins. Co. v. Fischer, 92 Fed. Eep. 500, 34 C. C. A. 503, 28 Ins. L. J. 452; McElroy V. British Amer. Ins. Co., 94 Fed. Eep. 990 (these and similar cases in the Federal courts are substantially overruled by North- ern Assur. Co. V. Grand View Building Assoc, 183 U. S. 308. See Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eule 8) ; Eediker v. Queen Ins. Co., 107 Mich. 224, 65 N. W. Eep. 105, following Beebe v. Insurance Co., 93 Mich. 514; Eay- mond V. Farmers' Ins. Co., 114 Mich. 386, 72 N. W. Eep. 254; Cowart r. Capital City Ins. Co., 114 Ala. 356, 27 Ins. L. J. 246, 22 So. Eep. 574; West v. Norwich Union Ins. Co., 10 Utah, 442, 24 Ins. L. J. 367, 37 Pac. Eep. 685. 2. Firemen's Ins. Co. v. Horten, 170 111. 258, 48 N. E. Eep. 955, aff'g 68 111. App. 497; Georgia Home Ins. Co. v. Goode, 95 Va. 751, 30 S. E. Eep. 366. 3. American Ins. Co. v. Landfare, 56 Nebr. 482, 76 N. W. Eep. 1068. 4. Traders' Ins. Co. v. Cassell, 24 Ind. App. 238, 56 N. E. Eep. 259; Milwaukee Mechanics' Ins. Co. v. Niewedde, 12 Ind. App. 145, 39 N. E. Eep. 757 ; United States Ins. Co. v. Moriarty, 36 S. W. Eep. 943, Tex. Civ. App. ; Wicke v. State Ins. Co., 90 Iowa, 4, 57 N. W. Eep. 632; ^tna Ins. Co. v. Holcomb, 89 Tex. 404, 34 S. W. Eep. 915, 25 Ins. L. J. 833; Phoenix Ins. Co. V. Overman, 21 Ind. App. 516, 52 N. E. Eep. 771. But see and compare Collins v. London Assur. Co., 165 Pa. St. 298, 30 Atl. Epp. 924, 24 Ins. L. J. 658 ; Wright v. Insurance Co.. 12 Mont. 474. 31 Pac. Eep. 87. 5. Skinner v. Norman, 165 N. Y. 565. 59 N. E. Eep. 309; Corkery v. Security Ins. Co., 99 Iowa, 382, 68 N. W. Eep. 792, 26 Ins. L. J. 331. Incumbrance by Chattel Mortgage. 203 And see also Vol. 1, Fire Insurance as a Valid Contract, " Waiver." As to waiver after a fire, see Eiernan v. Dutchess County- Ins. Co., 150 N. Y. 190, 44 N. E. Eep. 698, afE'g 80 Hun, 603; Nugent V. Eensselaer County Ins. Co., App. Div. 94 N. Y. Supp. 605. 6. Phffinix Ins. Co. v. McKernan, 46 S. W. Eep. 10, 37 Ins. L. J. 870. In Hammond v. Insurance Co. N. A., 24 Ohio Cir. 101, it was held that mere knowledge or notice to agent who issues the policy was not admissible as tending to vary a written contract. Citing Smith v. Insurance Co., 19 Ohio St. 287, 290. The ques- tion of estoppel does not appear to have been raised. See Vol. 1, Fire Insurance as a Valid Contract, "Waiver," and compare Eules 8, 12, 16. Also this volume, chapter on " Agents." RULE 15. Substitution of One Mortgage for Another — As AfEected by Decrease or Increase in Amount — Change in Porm. When policy is issued, with knowledge by the com- pany of an existing chattel mortgage, the subsequent mortgaging of same property to pay off the first mort- gage, the one being practically a substitute for the other, does not constitute a violation of the condition as to a chattel mortgage; and this is true even al- though the amount be decreased in the new mortgage ; it is only when the amount of the mortgage is increased that a forfeiture may be claimed ;^ and same principle applies to a renewal of a mortgage, or division into two mortgages, amount not being increased,^ and so by a mere change in form without increasing the amount.* 1. Koshland v. Home Ins. Co., 31 Oreg. 321, 49 Pac. Eep. 864, 26 Ins. L. J. 940 ; rehearing denied, 31 Oreg. 327, 50 Pac. Eep. 667, 27 Ins. L. J. 304. 2. Georgia Home Ins. Co. v. Stein, 72 Miss. 943, 18 So. Eep. 414. And see Kansas Farmers' Ins. Co. v. Saindon, 53 Kans. 486, 35 Pac. Eep. 15, 33 Ins. L. J. 208; Kansas Farmers' Ins. Co. V. Saindon, on rehearing, 53 Kans. 623, 36 Pac. Eep. 983; Weiss V. American Ins. Co., 148 Pa. St. 349, 23 Atl. Eep. 991. 204 FiKE Instjbance. But see and compare Pennsylvania Ins. Co. v. Paires, 13 Tex. Civ. App. Ill, 35 S. W. Eep. 55. 3. Farmers' Ins. Co. v. Newman, 58 Kebr. 504, 78 N. W. Eep. 933. RULE i6. Duty of Insured to Procure Written Consent — Oral Promise of Agent Insufficient. If, after the issue of tlie policy, the insured executes a chattel mortgage upon the property covered, it is incumbent upon him, the policy being in his possession or under his control, to procure the required indorse- ment of the company's consent upon the policy; an oral promise on part of the company's agent to attend to it is ineffective to prevent forfeiture. Tompkins v. Hartford Ins. Co., 22 App. Div. 380, 49 K. Y. Supp. 184. Under the Iowa statute (Code, § 1750; see Statutory Pro- visions) defining or fixing the status of an agent, he may oralh' waive or consent to a chattel mortgage after the issue of the policy, notwithstanding limitations in the policy upon his power and authority. Liquid Carbonic Acid Mfg. Co. v. Phoenix Ins. Co., Iowa, , 101 TSr. W. Eep. 749. As to the power of agents to orally waive the conditions of the policy or to estop the company by their declarations or conduct, after its issue and delivery, the courts do not agree. See this volume, chapter on " Agents," and Vol. 1, Fire In- surance as a Valid Contract, " Waiver." RULE 17. Contract Severable. When the policy or contract of insurance is sever- able, and the chattel mortgage covers and includes only a part of the subject of the insurance, the policy is void only as to such part, and remains valid as to the balance of the insurance when separated or item- FOEECLOSUEE OE NoTICE OF SaLE. 205 ized in the policy;^ the construction is that the entire policy shall be void as to the property incumbered by the mortgage.^ While a policy may be severable when covering in specified several amounts several items, and breach of condition as to one item will not void the others as to each item, the contract is entire and indivisible, and if it consists of a number of designated articles, if void for a chattel mortgage on one, it voids the entire item.^ 1. Kiernan v. Agricultural In§. Co., 81 Hun, 373, 30 N. Y. Supp. 892, rev'g, on rehearing, 73 Hun, 519, 25 N. Y. Supp. 438; Knowles v. American Ins. Co., 66 Hun, 220, 21 N. Y. Supp. 50, aff'd, 112 N. Y. 641, on opinion below ; North British & M. Ins. Co. V. Freeman, 33 S. W. Eep. 1091 (Tex. Civ. App.) : Delaware Ins. Co. v. Harris, 64 S. W. Eep. 867, Tex. Civ. App. ; German Ins. Co. v. Luckett, 12 Tex. Civ. App. 139, 34 S. W. Eep. 173 ; Taylor v. Anchor Ins. Co., 116 Iowa, 625, 88 N. W. Eep. 807. 2. Knowles v. American Ins. Co., supra. 3. Home Ins. Co. v. Bernstein, 55 Nebr. 260, 75 N. W. Eep. 839, 28 Ins. L. J. 731 (disapproving Phoenix Ins. Co. v. Lorenz, Ind. , 29 N. E. Eep. 604) ; Vucci v. North British & M. Ins. Co., 88 N. Y. Supp. 986; Fitzgerald v. Atlanta Home Ins. Co., 61 App. Div. 350, 70 N. Y. Supp. 552 ; Wright v. In- surance Co., 12 Mont. 474, 31 Pac. Eep. 87. And see Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Eule 26. TITLE VI. Foreclosure or Notice of Sale. Eule 1. As imposed by contract. 2. Violation of condition void's policy. 3. Effect upon moral risk — What regarded as com- mencement of proceedings. 4. Knowledge of insured — Commencement. 5. Provision has reference to future ■ — Condition subse- quent. 6. Mortgagee protected by mortgagee clause. 206 FiEE Insurance. EuLE 7. Policy void as to both insured owner and mortgagee to whom loss payable. 8. Effect of making loss payable to mortgagee. 9. Action by mortgagee to whom loss is made payable. 10. To what foreclosure proceedings refer. 11. Effect of making loss payable to third party. 12. Proceedings mean judicial proceedings. 13. Effect of advertising for sale under deed of trust. 14. Meaning and application of the phrase " notice given of sale." 15. Waiver or estoppel when policy issues. 16. Ko waiver after issue of policy. 17. When insured not bound by notice of limitation upon agent's authority. 18. Omission to cancel as evidence of estoppel. 19. Insured must be misled as element of estoppel. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed. • This rule is imposed by above terms ill the standard form of policy prescribed in: New York, North Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Missouri, Ehode Island, New Jersey, Wisconsin. The standard form of policy prescribed in Michigan is the same, except there is added : " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." * See note to " Concealment," Eule 1, page 2. FOKECLOSTJEE OR NoTICE OF SaLE. 207 The standard form of policy prescribed in : Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain above provision. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in gen- eral use. Under the old forms which provided that upon " the passing or entry of a decree of foreclosure " policy should become void, it was held that the commencement of foreclosure proceedings did not violate the condition. Minnoek v. Eureka Ins. Co., 90 Mich. 236, 51 JST. W. Rep. 367; Pearman v. Gould, 15 Stew. Eq. 4 (N. J.). When notice was required under the old forms, it was held that the insured was entitled to a reasonable time in giving it. Michigan Ins. Co. v. Lewis, 30 Mich. 41. An advertisement and sale under power in a mortgage was not equivalent of entry of decree in foreclosure. Hanover Ins. Co. v. Brown, 77 Md. 64, 76, 25 Atl. Eep. 989, rehearing denied, 37 Atl. Eep. 314. But an advertisement of sale voided the policy when condition so specifically provided. Pearson v. German Ins. Co., 73 Mo. App. 480. When policy provided that it should be void, " if property be or become involved in litigation," it was held that foreclosure was not covered by the condition. Farmers' Ins. Co. v. Newman, 58 Nebr. 504, 78 N. W. Eep. 933. When the policy in terms provides that if " suit for fore- closure, in which title, ownership, or possession of the property insured is involved, be instituted," it shall be void; if only a part of the property is affected by such a suit, no forfeiture results. Fitzgibbons v. Merchants' Ins. Co., Iowa, , 101 N. W. Eep. 454. RULE 2. Violation of Condition Voids Policy. Commencement of foreclosure proceedings voids the policy according to its terms. Springfield Steam Laundry Co. v. Traders' Ins. Co., 151 Mo. 90, 53 S. W. Eep. 338, 38 Ins. L. J. 760; Hayes v. United 208 FiEE Insxjeancb. States Ins. Co., 133 K. C. 702, 44 S. E. Eep. 404; Gibson Electric Co. v. Liverpool, L. & G. Ins. Co., 159 K^. Y. 418, 54 N. E. Eep. 23, 28 Ins. L. J. 629; Woodside Brewing Co. v. Pacific Ins. Co., 11 App. Div. 68, 42 N. Y. Supp. 620, aff'd, 159 N. Y. 549, on opinion below; Quinlan v. Providence-Wash- ington Ins. Co., 133 N. Y. 356, 31 K. E. Eep. 31; Titus v. Glens Palls Ins. Co., 81 IST. Y. 410; Meadows v. Hawkeye Ins. Co., 62 Iowa, 387, 13 Ins. L. J. 377; Armstrong v. Agricultural Ins. Co., 130 K. Y. 560, 29 N. E. Eep. 991; Hartford Ins. Co. v. Clayton, 17 Tex. Civ. App. 644, 43 S. W. Eep. 910; Merchants' Ins. Co. V. Brown, 77 Md. 79, 25 Atl. Eep. 992. RULE 3. Effect TJpon Moral Kisk — What B.egarded as Commencement of Proceedings. The moral risk is universally recognized as an im- portant consideration in determining the business of a company, and it is clear that this risk is increased when the default of the insured has resulted in pro- ceedings to foreclose his equity. The service of the petition upon the insured must be regarded as the commencement of such proceedings. Pindlay v. Union Ins. Co., 74 Vt. 211, 52 Atl. Eep. 429. RULE 4. Knowledge of Insured — Commencement. When the policy requires knowledge by the insured of the commencement of foreclosure proceedings, such knowledge must be shown or be established to render the condition operative in voiding the policy ;^ the con- dition does not mean that the insured must know of suit at or before commencement; delivery of process to a sheriff may be the equivalent of commencement, but, so far as knowledge of the insured is concerned, commencement is by service on the defendant, and for- FOBECLOSUEE OR NoTICE OF SaLE. 209 feiture takes effect when service is made.^ When a statute defines commencement as the filing of a peti- tion, the mere service of a citation conveys no knowl- edge of the filing of the petition.^ 1. North British & M. Ins. Co. v. Freeman, Tex. Civ. App. , 33 S. W. Eep. 1091; London & Lancashire Ins. Co. V. Davis, Tex. Civ. App. , 84 S. W. Eep. 360 ; Bellevne Eoller Mill Co. v. London & Lancashire Ins. Co., 4 Idaho, 307, 39 Pac. Eep. 196, 24 Ins. L. J. 331. 2. Norris v. Hartford Ins. Co., 55 S. C. 450, 33 S. E. Eep. 566, 38 Ins. L. J. 747 ; Schroeder v. Imperial Ins. Co., 133 Cal. 18, 63 Pac. Eep. 1074. And see Sharp v. Scottish Union Ins. Co., 136 Cal. 543, 69 Pac. Eep. 353, 615. 3. London & Lancashire Ins. Co. v. Davis, Tex. Civ. App. , 84 S. W. Eep. 360. RULE 5. Provision Has Reference to Puture — Condition Subsequent. The condition has no application to proceedings pending when the policy issues; it has reference only to the future. Orient Ins. Co. v. Burrus, 63 S. W. Eep. 453 (Ky.) ; Cooledge V. Continental Ins. Co., 67 Vt. 14, 30 Atl. Eep. 798, question raised but not decided in Benjamin v. Palatine Ins. Co., 80 App. Div. 360, 80 N. Y. Supp. 256, affd, 177 N. Y. 588, on opinion below. And see Day v. Hawkeye Ins. Co., 73 Iowa, 597, 34 ]Sr. W. Eep. 435. RULE 6. Mortgagee Protected by Mortgagee Clause. The condition is inoperative as against a mortgagee, to whom the loss is made payable under the terms of a mortgagee clause. Sun Ins. Office v. Benekc, 53 S. W. Eep. 98 (Tex. Civ. App.). And see Vol. 1, Fire Insurance as a Valid Contract, " Mort- gagor and Mortgagee." Vol. 2 — 14 210 FiEB Insurance. RULE 7. Policy Void as to Both Insured Owner and Mortgagee to Whom Loss Payable. Unless otherwise provided by agreement, or a mort- gagee clause, the policy is rendered void both as to the insured owner and mortgagor and a mortgagee to whom the loss is made payable as interest may appear, if foreclosure proceedings are instituted against the mortgagor, and the latter knows that they have been commenced at any time before the fire, which causes the loss, occurs. Delaware Ins. Co. v. Greer, 120 Fed. Eep. 916, 57 C. C. A. 188, 61 L. E. A. 137. RULE 8. Effect of Making Loss Payable to Mortgagee. A sale of the property insured under a judgment in foreclosure to the mortgagee, to whom the loss in the policy is made " payable as interest may appear," voids the insurance as to both the insured and the mortgagee. The indorsement making loss payable to the mortgagee gives him no right to recover, as his interest has been merged in the perfect legal title, and he can have no greater right than the insured, and, being void by his violation of the conditions, it is void as to the mortgagee. The fact that the mortgagee purchases under an agreement with the wife of the insured, that she could redeem, does not continue the insurance for her benefit, as she is a stranger to the insurance contract. McKinney v. Western Assur. Co., 97 Ky. 474, 30 S. W. Eep. 1004. And see Vol. 1, Fire Insurance as a Valid Oontract, " Mort- gagor and Mortgagee." FOBECLOSUEE OB NoTICE OP SaLE. 211 RULE 9. Action by Mortgagee to Wiom Loss is Made Payable. Commencement of foreclosure proceedings by a mortgagee to whom the loss is made payable does not void the policy, when there is no provision therein making the conditions therein expressed as to the insured applicable to the mortgagee. Henton v. Farmers' Ins. Co., Nebr. 95 N. W. Eep. 670. And see Vol. 1, Fire Insurance as a Valid Contract, " Mort- gagor and Mortgagee," Eules 10 and 20. RULE 10. To What Foreclosure Proceedings Befer. The condition does not apply to proceedings to en- force a vendor's lien or to foreclosure of such a lien;^ issue of a " scire facias " by a mortgagee is not fore- closure within the meaning of the policy f proceedings to sell by execution on a judgment given to secure the same debt, as by a prior mortgage, are not proceed- ings in foreclosure;^ " foreclosure proceedings " do not refer to proceedings to enforce a mechanic's lien,^ nor to enforcement of a statutory lien of lumbermen.* L Insurance Cos. v. Estes, 106 Tenn. 472, 62 S. W. Eep. 149, 52 L. E. A. 915. 2. Weiss V. American Ins. Co., 148 Pa. St. 349, 23 Atl. Eep. 991. 3. Collins V. London Assur. Co., 165 Pa. St. 298, 30 Atl. Eep. 924, 24 Ins. L. J. 658. 4, Colt V. Phcenix Ins. Co., 54 IST. Y. 595. 5, Speagle v. Dwelling-House Ins. Co., 97 Ky. 646, 31 S. W. Eep. 282, 24 Ins. L. J. 829. 212 FiEE Instjbance. RULE II. Effect of making Loss Payable to Third Party. An indorsement after issue of the policy upon both real and personal property, making the loss, if any, payable to a third party as interest may appear, is not sufficient to show the assent of an insurance com- pany to a chattel mortgage, and the knowledge of the company's agent of the existence of the chattel mort- gage will not avail, when such third party, to whom the loss is made payable, holds a mortgage on the real property in addition to the chattel mortgage. Atlas Eeduetion Co. v. New Zealand Ins. Co., 121 Fed. Eep. 929. And see Vol. 1, Fire Insurance as a Valid Contract, " Parties to Fire Insurance Contract." RULE 12. Proceedings Mean Judicial Proceedings. Commencement of foreclosure proceedings means judicial proceedings; waivers of delays and of legal formalities by the insured may have the effect of facili- tating foreclosure proceedings, but they do not of them- selves constitute such proceedings; commencement of such proceedings is by suit. Stenzel v. Pennsylvania Ins. Co., 110 La. 1019, 35 So. Eep. 271. RULE 13, Effect of Advertising for Sale Under Deed of Trust. An advertisement of insured property for sale under a deed of trust is the commencement of foreclosure FOREGLOSUKE OB NoTICE OF SaLE. 213 proceedings, within the meaning of the terms of the policy;^ so notice of sale under a deed of trust voids the policy.^ 1. Springfield Steam Laundry Co. v. Traders' Ins. Co., 151 Mo. 90, 52 S. W. Eep. 238, 28 Ins. L. J. 760. 2. Medley v. German Alliance Ins. Co., 55 W. Va. 342, 47 S. E. Eep. 101. RULE 14. Meaning and Application of the Phrase " Notice Given of Sale." The phrase in the condition, ' ' or notice given of the sale of any property," etc. (see Eule 1), means that the policy shall be void if the insured confers upon the mortgagee the right to enforce the mortgage ex- trajudicially, by merely giving notice of sale, and the mortgagee proceeds to enforce the mortgage in that manner, and is inoperative in a State where such a mode of enforcing mortgages is unknown. Stenzel v. Pennsylvania Ins. Co., 110 La. 1019, 35 So. Eep. 27L RULE 15. Waiver or Estoppel When Policy Issues. The knowledge of the company's agent who issued the policy that foreclosure proceedings were actually pending at the time estops the company from setting up the pendency of such proceedings as a defense to a claim under the policy;^ and so the company may be bound by the knowledge of its soliciting agent in taking application for the insurance;^ but mere knowledge of the existence of the mortgage, and that the debt would mature during the life of the policy, does not 214 FiKE Insurance. affect the condition, and cannot be construed as a waiver,^ nor does the company's consent to a mort- gage operate as a consent to foreclosure proceedings.* 1. Benjamin v. Palatine Ins. Co., 80 App. Div. 260, 80 N. Y. Sup|). 256, aff'd, 177 K. Y. 588, on opinion below; Yesey v. Commercial Union Assur. Co., S. D. , 101 N". W. Eep. 1074; Cronin v. Fire Assoc, 119 Mich. 74, 77 N. W. Eep. 648. And see Miller v. Scottish Union & National Ins. Co., 101 Mich. 49, 59 N. W. Eep. 439, 23 Ins. L. J. 725. 2. Farmers & Merchants' Ins. Co. v. Wiard, 59 ISTebr. 451, 81 ]Sr. W. Eep. 312. 3. Hartford Ins. Co. v. Clayton, 17 Tex. Civ. App. 644, 43 S. W. Eep. 910. 4. Titus V. Glens Falls Ins. Co., 81 K. Y. 410. But see and compare Butz v. Ohio Farmers' Ins. Co., 76 Mich. 263, 42 F. W. Eep. 1119. RULE 1 6. Wo Waiver After Issue of Policy. When the restrictions upon the agent's authority appear in the policy, in the absence of evidence tend- ing to show that his powers have been enlarged by the company, the authority expressed in the policy ope- rates as the measure of his power, and when the policy provides that he has power only to waive by written agreement indorsed thereon or added thereto, a ver- bal notice to the agent or verbal consent by him after the policy issues is not sufficient to prevent the policy from becoming void according to its terms ;^ mere fail- ure or omission of the company to reply to a letter ask- ing for consent to such proceedings does not operate as a waiver or estoppel.^ 1. Woodside Brewing Co. v. Pacific Ins. Co., 11 App. Div. 68, 42 N. Y. Supp. 620, afE'd, 159 N. Y. 549, on opinion below; Moore v. Hanover Ins. Co., 141 N". Y. 319, 36 N. E. Eep. 191, 23 Ins. L. J. 466; Armstrong v. Agricultural Ins. FOEECLOSXJEB OB NoTICE OF SaLE. 215 Co., 130 N. Y. 560, 39 K E. Eep. 991, 21 Ins. L. J. 431; Med- ley V. German Alliance Ins. Co., 55 W. Va. 34S, 47 S. E. Rep. 101. 2. Armstrong v. Agricultural Ins. Co., supra. RULE 17. When Insured not Bound by Notice of Limitation upon Agent's Authority. When the company's agent, on issue of policy, in- dorses written consent to foreclosure proceedings, and delivers the policy so indorsed to the agent procuring it, who delivers it to the insured without notice or knowledge on his part of any limitation upon the agent's authority to make such indorsement, the in- sured is not bound by any verbal notice to the agent who procured the policy that the agent who made the indorsement did so contrary to his orders or instruc- tions. Miller v. Scottish Union & National Ins. Co., 101 Mich. 49, 59 K W. Eep. 439, 23 Ins. L. J. 725. RULE 18. Omission to Cancel as Evidence of Estoppel. In some of the States the rule appears to be that, if the company or its agent acquires knowledge of the commencement of foreclosure proceedings, its omis- sion or failure to cancel the policy and return the un- earned premium may be an element or evidence of waiver or estoppel. Horton v. Home Ins. Co., 122 N. C. 498, 29 S. E. Eep. 944; Springfield Steam Laundry Co. v. Traders' Ins. Co., 151 Mo. 90, 52 S. W. Eep. 238, 28 Ins. L. J. 760. See Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eule 30, and note. And see this volume, " Cancellation." 216 FiBE Insueance. RULE 19. Insured Must be Misled as an Element of Estoppel. If policy is void at time of the fire on account of the commencement of foreclosure proceedings, a statement by the company's agent or officer that it would not rely upon the condition does not operate to revive it; nor does it operate as a waiver or estoppel when the insured is not thereby induced to omit anything to his detriment. Findlay v. Union Ins. Co., 74 Yt. 211, 52 Atl. Eep. 429. As to waiver or estoppel, see also Vol. 1, Fire Insurance as a Valid Contract, " Waiver," and this volume, chapter on " Agents." TITLE VII. Change in Interest, Title, or Possession. Rule 1. As imposed by contract. 2. Provision material and reasonable — Enforced. 3. Condition subsequent — Burden of proof. 4. Djstinetion between interest and title — Partnership — When no distinction. 5. Meaning of the word "interest" — Interest in land. 6. Effect of written description. 7. JSTotice of change not sufficient — Duty of insured to procure written consent. 8. Application of clause " except change of occupants without increase of hazard " — Question of fact. 9. Meaning of " sale or transfer." 10. Change of title increasing interest. 11. Effect of insured parting with all his interest — Ap- plication of the word " interest." 12. Effect of consent to change in interest. 13. Construction of word " sold " in Massachusetts standard form. 14. Legal process to effect change in possession must be valid. 15. Ko change in transfer of legal title to beneficial owner. 16. Effect of consent to transfer — Cannot claim' instru- ment void. Change in Interest, Title, oe Possession. 217 EuLE 17. Sale or mortgage of stocks of merchandise — Sale of same in bulk — Change in partnership. 18. Sale or transfer by one partner to another partner — Parties insured may transfer as between themselves — Dissolution — Death — Taking in third party as partner. 19. Effect of taking in partner with interest in profits only. 20. Executory agreement between partnership insured and third parties to form corporation — Change from partnership to limited liability company. 31. Change by mortgage — Meaning of change — Title or possession — Interest. 32. Chattel mortgage — Parol evidence — Chattel mort- gage by one partner on firm property for individual benefit., 23. Bill of sale must be delivered and accepted. 34. Effect of executory contract of sale. 25. Executory contract for sale and exchange of stock or goods. 36. Change by deed — Delivery and acceptance — Eecord — ■ Void deed. 37. Attornment of tenant to purchaser. 38. Judicial sale — Eedemption — Confirmation. 29. Sale of real estate on execution — Eedemption. 30. Partition — Sale — Confirmation. 31. Sale under deed of trust — Confirmation. 32. Levy by sheriff — Attachment — Possession by sheriff. 33. Appointment of receiver — Eeceiver of partnership — Change of receiver. 34. Void sale — Insured continuing in possession. 35. Effect of adjudication in bankruptcy. 36. Waiver or estoppel when policy issues. 37. Waiver or estoppel after issue of policy. 38. Effect of consent to assignment of policy. 39. Effect of making loss payable to third party. 40. Contract divisible. 41. When contract not divisible. 42. What is a change — • Illustrative cases. 43. What is not a change — Illustrative cases. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be 218 FiEE Instjbance. void if any change, other than by death of an insured, take place in the interest, title, or possession of the subject of insurance (except change of occupants with- out increase of hazard), whether by legal process or judgment, or by voluntary act of the insured, or other- wise. * This mle is imposed by above terms in the standard form of policy prescribed in : Xew York, North Carolina, Connecticut, North Dakota, Louisiana, * Pennsylvania, Missouri, Ehode Island, New Jersey, Wisconsin. The standard form of policy prescribed in Michigan is the same, except there is added: " Provided a loss shall occur on the property insured while such breach of condition continues or such breach of condition is the primary or contributory cause of the loss." The standard form of policy prescribed in: Maine, Massachusetts, provides : " this policy shall be void if without the assent in writing or in print of the company, the said property shall be sold." The standard form of policy prescribed in Minnesota pro- vides: "the policy shall be void, if without the assent of the company the property shall be sold." The standard form of policy prescribed in New Hampshire provides : " this policy shall be void and inoperative during the existence or continuance of the acts or conditions of things stipulated against, as follows: * * * jf^ without the assent in writing or in print, of the company the said property shall be sold." It is furthermore provided by statute made part of the policy : " change in the property insured or in its use or occupa- tion, or a breach of any of the terms of the policy by the in- sured, shall not affect the policy except while the change or breach continues." * See note to " Concealment," Eule 1, page 2. Chakge in Interest, Title, or Possession. 219 The standard form of policy prescribed in South Dakota provides : " this policy shall be void if without the assent of the company the insured shall sell and dispose of all insurable in- terests in the insured property." In the States vifhere no standard form is prescribed, and other than those above named, the New York standard form is in gen- eral use. Section 3643 of the Ohio Eevised Statutes providing "that any company insuring a building, shall cause such building or structure to be examined by an agent of the insurer, and a full description thereof to be made and the insurable value thereof to be fixed by such agent ; and that in the absence of any change increasing the risk without the consent of the company, and also an intentional fraud on the part of the insured, in case of total loss the whole amount mentioned in the policy or renewal shall be paid," has no application to defenses founded upon specific conditions as to title but is limited in operation to a building itself, its condition and situation as regards sur- rounding objects and its value ; and the word " change " must be confined in its reference to the same and to those matters which were open to the sight and observation of the agent. Webster v. Dwelling-House Ins. Co., 53 Ohio St. 558, 7 Ohio C. C. 511. See Statutory Provisions Ohio, Vol. 1, Fire Insurance as a Valid Contract. Many of the old forms contained a clause or condition which in terms provided against a change by " an incumbrance." This specific language was omitted from the standard forms, and the decisions thereunder under the changed language are of doubt- ful application. To those interested, however, reference might be made to Brown v. Commonwealth Ins. Co., 41 Pa. St. 187; Supple V. Iowa State Ins. Co., 58 Iowa, 20; Nassauer v. Susque- hanna Ins. Co., 109 Pa. St. 507; Kister v. Lebanon Ins. Co., 128 Pa. St. 553 ; Gould v. Dwelling-House Ins. Co., 134 Pa. St'. 670, 19 Atl. Eep. 793; Dwelling-House Ins. Co. v. Hoffman, 125 Pa. St. 626, 18 Atl. Eep. 397 ; Phcenix Ins. Co. v. Lorenz, Ind. , 29 N. B. Eep. 604, 33 K E. Eep. 444; Stevens v. Queens Ins. Co., 81 Wis. 335, 51 N. W. Eep. 555, 21 Ins. L. J. 443 ; Hankins v. Eockford Ins. Co., 70 Wis. 1, 35 N. W. Eep. 34 ; Bosworth V. Cleary, 80 Wis. 393, 49 N. W. Eep. 750; Hogue V. Farmers' Ins. Co., Wis. , 93 K. W. Eep. 849; Martin v. Farmers' Ins. Co., 84 Iowa, 516, 51 IST. W. Eep. 516; Hicks V. Farmers' Ins. Co., 71 Iowa, 119, 32 N. W. Eep. 201; Campbell v. Hamilton Ins. Co., 51 Me. 69; Mallory v. Farmers' Ins. Co., 65 Iowa, 450 ; Allen v. Hudson Eiver Ins. Co., 19 Barb. 220 FiEE Insurance. 442 ; Olmstead v. Iowa Ins. Co., 24 Iowa, 503 ; Eussell v. Cedar ^ Eapids Ins. Co., 78 Iowa, 216 ; Mowry v. Agricultural Ins. Co., ^ 64 Hun, 137 (N. Y.) ; Phoenix Ins. Co. v. Hart, 39 111. App. 517; Johansen v. Home Ins. Co., 54 Nebr. 548, 74 X. W. Eep. 866, 27 Ins. L. J. 610. A mortgage which has been paid, though not discharged of record, is no incumbrance. Merril v. Agricultural Ins. Co., 73 N. Y. 452; ISTew Orleans Ins. Assoc. V. Holberg, 64 Miss. 51; Lang v. Hawkeye Ins. Co., 74 Iowa, 673, 39 N. W. Eep. 86. And a void mortgage is no incumbrance. Watertown Ins. Co. v. Grover & Baker Sewing Machine Co., 41 Mich. 131; Lockwood v. Middlesex Ins. Co., 47 Conn. 553. A mechanic's lien is an incumbrance. Eedmon V. Phoenix Ins. Co., 51 Wis. 292. Some forms required " notice of incumbrance or levy." Pennsylvania Ins. Co. v. Gottsman, 48 Pa. St. 151; McCann v. Waterloo County Ins. Co., 34 Ud. Can. Q. B. 376 ; Tarbell v. Vermont Ins. Co., 63 Vt. 53, 22 Atl. Eep. 533, 21 Ins. L. J. 238; Seybert v. Penn Ins. Co., 103 Pa. St. 282; Pennsylvania Ins. Co. v. Schmidt, 119 Pa. St. 449, 13 Atl. Eep. 317. Under these forms a judgment was held to be an incumbrance. Kensington Nat. Bank v. Yerkes, 86 Pa. St. 227; Hench v. Agricultural Ins. Co., 122 Pa. St. 128, 15 Atl. Eep. 671; Bowman v. Franklin Ins. Co., 40 Md. 620, only when a lien; Smith V. Continental Ins. Co., 108 Iowa, 382, 79 N. W. Eep. 126, 28 Ins. L. J. 534. But it was also held that the condition referred to incum- brances created by act of the insured and had no application to incumbrance by judgment, or otherwise created by operation of law. Baley v. Homestead Ins. Co., 80 N. Y. 21 ; Green v. Home- stead Ins. Co., 82 K. Y. 517 ; Phoenix Ins. Co. v. Pickel, 119 Ind. 155, 21 K E. Eep. 546; Phoenix Ins. Co. v. Smith, 9 Ivans. App. 828, 61 Pac. Eep. 501. And see Georgia Home Ins. Co. V. Jones, 49 Miss. 80. And see this volume, title " Chattel Mortgage." It is also held that the incumbering of a part of the property does not void the entire policy. Born V. Home Ins. Co., 110 Iowa, 379, 81 N. W. Eep. 676. A renewal of an existing mortgage is not a breach of a con- dition against mortgaging. Dougherty v. German-Amer. Ins. Co., 67 Mo. App. 526. Some of the old forms provided that " if the title or posses- sion be now or hereafter involved in litigation " and it was held Change in Interest, Title, or Possession. 221 to relate to title and possession of the insured, and had no appli- cation to proceedings to oust a tenant. Hall V. Niagara Ins. Co., 93 Mich. 184, 53 N. W. Eep. 727. Others provided that policy should be void " if any action or proceeding be commenced affecting the title to property in- sured," and it was held that the commencement of the fore- closure of a mechanic's lien worked a forfeiture without regard to the validity of the lien. Smith V. St. Paul F. & M. Ins. Co., 106 Iowa, 225, 76 K. W. Eep. 676. RULE 2. Provision Material and Reasonable — Enforced. The provision is material, as it contemplates the moral risk which experience shows is not the same with all persons, and which may change with a change of circumstances ;^ and is enforced by the courts.^ 1. Xortham v. Dutchess Countv Ins. Co., 166 N. Y. 319, 59 N. E. Eep. 912. 2. Jaskulski v. Citizens' Ins. Co., 131 Mich. 603, 93 N. W. Eep. 98; Home Ins. Co. v. Collins, 61 Nebr. 198, 85 F. W. Eep. 54; Cummins v. National Ins. Co., 81 Mo. App. 291; Eosenstein v. Traders' Ins. Co., 79 App. Div. 481, 79 N. Y. Supp. 736; Ehrsam Machine Co. v. Phoenix Ins. Co., 43 Nebr. 554, 61 F. W. Eep. 722, 24 Ins. L. J. 316. And see Campbell V. German Ins. Co., 31 S. W. Eep. 310 (Tex.). RULE 3. Condition Subsequent — Burden of Proof. The condition applies only to the facts occurring after or subsequent to the issue of the policy;^ and want of consent to a change claimed to void the insur- ance must be pleaded and proved by the company.^ 1. Cowart V. Capital Ins. Co., 114 Ala. 356, 22 So. Eep. 574, 27 Ins. L. J. 246 ; Morotock Ins. Co. v. Eodefer, 92 Va. 747, 24 S. E. Eep. 393, 25 Ins. L. J. 539. 2. Peoria P. & M. Ins. Co. v. Lewis, 18 111. 553. And see Orrell v. Hampden Ins. Co., 13 Gray, 431 (Mass.). 222 Fire Insurance. RULE 4. Distinction Between Interest and Title — Partnersliip — When no Distinction. Under the changed language of the standard forms the word ' ' interest ' ' means something different from the word " title," and is not used synonymously with it; it includes both legal and equitable rights,^ though in case of a partnership the condition applies only to a legal transfer, which divests the insured partnership of title to or control over the property,^ and as to the owner of property there may be no distinction between his interest and title.^ 1. Skinner Ship Building Co. v. Houghton, 92 Md. 68, 48 Atl. Sep. 85 ; Southern Cotton Oil Co. v. Prudential Fire Assoc, 78 Hun, 373, 29 N. Y. Supp. 128; Arkansas Ins. Co. v. Wilson, 67 Ark. 553, 55 S. W. Eep. 933 ; Gibb v. Philadelphia Ins. Co., 59 Minn. 267, 61 K. W. Eep. 137, 24 Ins. L. J. 313; Excelsior Foundry Co. ■;;. Western Assur. Co., Mich. , 98 JST. W. Eep. 9. 2. Wood V. American Ins. Co., 149 K. Y. 382, 44 K B. Eep. 80, alf'g 78 Hun, 109, 29 N. Y. Supp. 250 (Gray, J., dissenting on ground of a change in interest). And see Hanover Ins. Co. V. Brown, 77 Md. 64, 27 Atl. Eep. 314. 3. Tiemann v. Citizens' Ins. Co., 76 App. Div. 5, 78 N. Y. Supp. 620. And see Walradt v. Phoenix Ins. Co., 136 IST. Y. 375, 32 ISr. E. Eep. 1063, 22 Ins. L. J. 81. RULE 5. Meaning of the Word " Interest " — Interest in Land. The word " interest " means a legal interest, and has the same meaning as " right, title, and interest." It means proprietary or an insurable interest. The condition does not contemplate or intend a mere senti- mental interest. When the insured continues to be the sole and exclusive owner and possessor of the Change in Interest, Title, or Possession. 223 property insured, there is no change within the mean- ing of the policy.^ The word ' ' interest ' ' is not used in the sense of an insurable interest, and merely because some third party acquires a possible insurable inter- est it does not necessarily effect a change in that in- sured. No one has an interest in land unless he has some kind of property in it, either legal or equitable.^ 1. Stenzel v. Pennsylvania Ins. Co., 110 La. 1019, 35 So. Eep. 271. 2. Moseley v. Northwestern Nat. Ins. Co., Mo. App. , 84 S. W. Rep. 1000. RULE 6. Effect of Written Description. When the written or descriptive part of the policy shows an intention to cover and protect other inter- ests besides that of a party or individual specifically named, the condition against any change of interest is inoperative because it is otherwise provided. Hagan v. Scottish Ins. Co., 186 U. S. 423, 22 Sup. Ct. Eep. 862, rev'g 102 Fed. Eep. 919, 43 C. C. A. 55. RULE 7. Notice of Change not Sufficient — Duty of Insured to Procure Written Consent. It is not sufficient to give notice to the insurance company of the transfer or change; if the policy re- quires consent in writing to be indorsed it must be obtained and indorsed or attached, and the duty of procuring these things to be done rests with the in- sured. If he fails in his efforts or neglects to comply with the requirements of the policy it is at an end by force of its own terms ;^ but when notice only is re- 224 FiBE Insurance. quired, consent may be implied from failure of tlie company to dissent on receiving such notice.^ 1. Girard Ins. Co. v. Hebard, 95 Pa. St. 45, 10 Ins. L. J. 425. And see Tarbell v. Vermont Ins. Co., 63 Vt. 53, 22 Atl. Eep. 533. 2. Brown v. Commonwealth Ins. Co., 41 Pa. St. 187. RULE 8. Application of Clause " Except Change of Occupants Without Increase of Hazard '' — Question of Fact. The parenthetical clause in the condition, " except change of occupants without increase of hazard," is not limited in its application to buildings or real prop- erty. It applies also to personal property, and the phrase in question includes the place where goods in- sured are situated, and the agreement is in substance that, in case the possession of goods is changed, that fact alone does not void the policy, unless the occu- pancy of the place where they are is also changed so as to become more hazardous; and this is a question of fact for a jury. Walradt v. Phcenix Ins. Co., 136 N. Y. 375, 32 iST. E. Eep. 1063, 22 Ins. L. J. 81. And that the exception applies to insurance of personal prop- erty, title to stocks of merchandise as well as to realty. See also Herman v. Katz, 101 Tenn. 118, 47 S. W. Eep. 86, 41 L. E. A. 700. RULE 9. Meaning of " Sale or Transfer." Under the old forms, which provided that " when the property has been sold and delivered, or otherwise disposed of so that all interest or liability on the part of the insured has ceased, the insurance shall termi- Change in Intebest, Title, or Possession. 225 nate," tlie language means a legal transfer which di- vests the party of title or control over the property;^ and even under the modem forms a " sale or trans- fer " means such transfer as divests the insured of all his interest,^ and taking a partner in the business is not a sale or transfer of the entire interest iu the property.^ 1. Browning v. Home Ins. Co., 71 F. Y. 508, aff'g 6 Daly, 522. And see Scanlon v. Union Ins. Co., 4 Biss. 511 (U. S. ■Cir.) ; Manley v. Insurance Co. N. A., 1 Lans. 20 (N. Y.). 2. Commercial Union Assur. Co. v. Scammon, 123 111. 601, 12 N. B. Eep. 324; Blackwell v. Miami Vallev Ins. Co., 48 Ohio St. 533, 29 K. B. Eep. 278, 21 Ins. L. j" 97; Hennesey v. Manhattan Ins. Co., 28 Hun, 98 (N. Y.). And see Sovereign. Ins. Co. V. Peters, 12 Duval, 33 (Can. Sup.). 3. Blackwell v. Miami Vall'^y Ins. Co., supra. Some of the old forms provided " in case of any transfer or termination of the interest of the assured in this policy, either by sale or otherwise " policy should be void, and it was held that nothing short of a termination or parting with the entire in- terest could work a forfeiture. Holbrook v. American Ins. Co., 1 Curt. 193 (U. S. Cir.). RULE 10. Change of Title Increasing Interest. A change of title which increases the interest of the insured, whether by sale under judicial decree or by voluntary conveyance, is not such change as to defeat the insurance. Continental Ins. Co. v. Ward, 50 Kans. 346, 22 Ins. L. J. 373, 31 Pac. Eep. 1079. And see Dodge v. Hamburg-Bremen Ins. Co., 4 Kans. App. 415, 46 Pae. Eep. 25, 23 Ins. L. J. 255 ; Wich V. Bquitable Ins. Co., 2 Colo. App. 484, 31 Pac. Eep. 389; Heaton v. Manhattan Ins. Co., 7 E. I. 502 ; Bailey v. American Central Ins. Co., 13 Fed. Eep. 250; Diehlman v. Dwelling- House Ins. Co., 78 Mich. 141, 19 Ins. L. J. 256; Bsch v. Home Ins. Co., 78 Iowa, 334, 43 N". W. Eep. 229, 19 Ins. L. J. 113. Vol. 2 — 15 226 FiEE Insueance. RULE II. Effect of Insured Farting with. All His Interest — Application of the Word " Interest." If the insured sells the subject of the insurance or property, and parts with all his interest therein be- fore the occurrence of any loss, the insurance or policy ends, unless assigned to the purchaser with consent of the insurance company;^ so when the policy in terms provides that it shall " cease on termination of the interest of the insured," such condition refers to an absolute termination of interest and not to a mere temporary alienation, and if the interest existed when policy was obtained, and also at time of loss, in- sured is entitled to recover f the word ' ' interest ' ' re- fers to the interest in the property insured, and not in the mere contract of insurance.* 1. Mt-az, Ins. Co. v. Tyler, 16 Wend. 385 (N. Y.) ; Wilson V. Hill, 3 Mete. 66 (Mass.) ; Ayres v. Hartford Ins. Co., 17 Iowa, 176; Manley v. Insurance Co. N. A., 1 Lans. 30 (F. Y.) ; Lahiff V. Ashnelot Ins. Co., 60 N. H. 75, 13 Ins. L. J. 796; Langdon v. Minnesota Ins. Co., 22 Minn. 193 ; Lett v. Guardian Ins. Co., 125 N. Y. 82, 25 W. E. 1088, 20 Ins. L. J. 176 ; Maearty V. Commercial Ins. Co., 17 La. 365; New v. German Ins. Co., Ind. , 31 N". E. Eep. 475, 21 Ins. L.J. 754; Wilson ?». Hill, 3 Mete. 66 (Mass.). And see Jerdee v. Cottage Grove Ins. Co., 75 Wis. 345, 44 N. W. Eep. 636, 19 Ins. L. J. 519. 2. Power v. Ocean Ins. Co., 19 La. 28. 3. Carpenter v. Washington Ins. Co., 16 Pet. 495 (U. S.). And see Lahiff v. Ashuelot Ins. Co., supra. This nile may be operutive independent of Eule 1, or other conditions of the policy. See " Insurable Interest." RULE 12. Effect of Consent to Change in Interest. If the insurance company consents to a change in the interest of the insured, it operates substantially to Change in Intebest, Title, or Possession. 227 create a new contract of insurance between the parties, whereby the old policy covers the interest as changed and consented to. Benjamin v. Saratoga Ins. Co., 17 K Y. 415; Collins v. Charlestown Ins. Co., 10 Gray, 155 (Mass.). And see Buckley V. Garrett, 47 Pa. St. 204; Northrup v. Mississippi Valley Ins. Co., 47 Mo.' 435 ; Gilliat v. Pawtncket Ins. Co., 8 E. I. 282. RULE 13. Construction of Word " Sold " in Massachusetts Standard Form. Under the language of the Massachusetts standard form, providing that the policy shall become void if " the property be sold," a sale which does not operate as an absolute transfer of the entire interest of the insured, completely divesting him of his insurable in- terest, is not within the scope of the condition;^ and so in Maine the sale must be such as to pass the title.^ 1. Clinton v. Norfolk Ins. Co., 176 Mass. 486, 57 JST. E. Eep. 998 (the court in its opinion points out the different results owing to change or difference in language). And see Stuart V. Eeliance Ins. Co., 179, Mass. 434, 60 N. E. Eep. 929. 2. International Wood Co. v. National Assur. Co., Me. , 59 Atl. Eep. 544. The opinion of the court in Clinton v. Norfolk Ins. Co., in pointing out the different results owing to change or difference in language, is so valuable as to warrant its insertion. The court says : "Many of the earlier policies of fire insurance contained no condition against alienation. Inasmuch, however, as the contract of insurance is one of indemnity and not a wager, it is manifest that .where, before the fire, the insured had parted with his entire interest in the property insured, he suffered no loss by its destruction and needed no indemnity. A total transfer of his interest, therefore, defeated the policy. But any change short of a complete transfer of his entire interest did not have that effect. The general rule was and is, that, in the ab- sence of any provision to the contrary in the policy, any change 228 FiEE Insueance. in the insurable interest of the insured, whether by a complete sale of only a part of the property, or a change in the title to a part or the whole of the property, does not avoid the policy which has once attached, provided that at the time of the loss the insured has an insurable interest. It is necessary that there should be an insurable interest at the time of the contract and at the time of the loss, but if at the time of the loss the insured has parted with only a part of his interest, the policy is valid as to the part retained. Lazarus v. Commonwealth Ins. Co., 5 Pick. 76 (Mass.) ; Scanlon v. Union Ins. Co., 4 Biss. 511; Cowan v. Iowa State Ins. Co., 40 Iowa, 551; Stetson v. Massachusetts Ins. Co., 4 Mass. 330; Ayres v. Hartford Ins. Co., 17 Iowa, 176; Hitchcock -y. Northwestern Ins. Co., 26 N. Y. 68. And see further the cases cited in 13 Am. & Bng. Bncye. of Law (2d ed.), 240, and notes. And even a total alienation does not avoid, but only suspends the policy, so that if the insured regain his in- terest or any part of it, and holds it at the time of the loss, he may recover. May Ins., § 101; Worthington v. Bearse, 12 Allen, 382. " In this state of the law insurers began to insert in the policies clauses relating to alienation. These clauses vary in language, and in the examination of the cases on this subject considerable care must be exercised in order to discriminate properly between those cases applicable and those not applicable to the clause which may be under consideration. " The clause in this policy is if ' the said property shall be sold.' Conditions of this kind are strictly construed against the insurer, and the general rule is that such condition refers only to an absolute transfer of the entire interest of the insured, completely divesting him of his insurable interest. Any sale or transfer short of this is not within the, scope of the con- dition. See, in addition to the cases above cited, Bryan v. Traders' Ins. Co., 145 Mass. 389; Holbrook v. American Ins. Co., 1 Curtis C. C. 193; Power v. Ocean Ins. Co., 19 La. 28; and the cases collected in 13 Am. & Eng. Encyc. of Law (2d ed.), 241, and notes. " If it be the intention of the insurers that the contract should be avoided by any partial sale, or by any change short of an absolute sale of the entire interest, there is i\o difficulty in ex- pressing that intent in plain and explicit language, and in many policies such an intention is thus expressed. See Oakes v. Manu- facturers' Ins. Co., 131 Mass. 164, where the condition was that the policy should be void if the property insured should be sold or conveyed in whole or in part. " As an illustration of the different results arising from the Change ik Interest, Title, oe Possession. 229 difference in the language of the clauses as to alienation com- pare the case of Foote v. Hartford Ins. Co., 119 Mass. 359, and Bryan v. Traders' Ins. Co., ubi supra. In the former case, where the condition was that the policy should be void if any change should take place in the title or possession of the property in- sured, whether by sale, transfer, or conveyance, legal process or judicial decree, it was held that a mortgage by way of an absolute deed and an unrecorded instrument of defeasance back was a violation of the condition, while in the latter case it was held that such a mortgage did not avoid the policy where the condition was that the policy should be avoided if 'the said property shall be sold.' " RULE 14. Legal Process to Effect CThange in Possession Must be Valid. If it is claimed that there has been a change in pos- session by legal process, such legal process must be valid. Eunkle v. Citizens' Ins. Co., 6 Fed. Eep. 143, 11 Ins. L. J. 94. RULE 15. No Change in Transfer of Legal Title to Beneficial Owner. When policy is issued to and in the name of a presi- dent of a railroad company, by agent of the insurance company, knowing as matter of fact that the railroad company is the beneficial owner, although legal title is in the president, and subsequently the president con- veys the property to the railroad company, without notice to or consent of the insurance company, there is no such change in the title as to void the insurance, there being, in fact, no change of ownership or pos- session. Ehode Island Underwriters' Assoc, v. Monarch, 98 Ky. 305, 33 S. W. Eep. 959, 25 Ins. L. J. 116. 230 FiEE Insurance. RULE i6. Effect of Consent to Transfer — Cannot Claim Instrument Void. If the company consents to a transfer of tlie policy to a purchaser of property under a bill of sale, it can- not afterward, in a suit upon the policy, set up the de- fense that the bill of sale was inoperative and void as having been made for the purpose of defrauding cred- itors. Clark V. Svea Ins. Co., 102 Cal. 253, 30 Pac. Eep. 587, 23 Ins. L. J. 876. RULE 17. Sale or Mortgage of Stocks of Merchandise — Sale of Same in Bulk — Change in Partnership. When the policy insures only such property as should answer the description at time of fire, such as stocks of merchandise, grain, and malt, the sale or mortgage of any part of it does not affect the in- surance as to the balance,^ unless the insured makes claim for the loss to the mortgaged property;^ other- wise if the property is sold in bulk or mass, or if there is a change in a partnership owning the goods by introduction of a new member.^ 1. Coleman v. Phoenix Ins. Co., 3 App. Div. 65, 38 N. Y. Supp. 986 ; Wolfe v. Security Ins. Co., 39 N. Y. 49 ; Biggs v. Forth Carolina Home Ins. Co., 88 X. c. 141. And see West Branch Ins. Co. v. Helfenstein, 40 Pa. St. 889; Lane v. Maine Ins. Co., 13 Me. 44. 2. Sehnmitsch v. American Ins. Co., 48 Wis. 26. 3. Biggs V. North Carolina Home Ins. Co., supra. Change in Interest, Title, or Possession, 231 RULE i8. Sale or Transfer by One Partner to Another Partner — Parties Insured Hay Transfer as Between Themselves — Dissolution — Death — TaJbIng in Third Party as Partner. A sale or transfer by one partner to another partner of his interest in the property of the firm or partner- ship insured does not constitute such a change in in- terest, title, or possession of the partnership insured as to void the insurance;^ and parties or persons in- sured may make transfers as between themselves with- out making such a change as to void the insurance;^ and agreement to dissolve the partnership is not of itself such a change of title or possession as to work a forfeiture of the insurance, as the possession of the property of the firm by one partner is the possession of the firm;^ so when one of the partners dies and leaves the property to the surviving partner, who con- tinues the business, there is no such change as to void the policy;* but when a partnership insured takes in a third or outside party as a copartner, transferring to him an interest in the property, it is such a change as will void the insurance;® so when an individual in- sured takes in a partner there is a change.** 1. Phoenix Ins. Co. v. Holcombe, 67 liebr. 622, 78 K. W. Eep. 300, 28 Ins. L. J. 238; German Ins. Co. v. Fox, 96 N. W. Rep. 653 (Nebr.) ; Georgia Home Ins. Co. v. Hall, 94 Ga. 630, 21 S. E. Eep. 828 ; Sun Fire Office v. Wich, 6 Colo. App. 103, 39 Pac. Eep. 587; Loeb v. Firemen's Ins. Co., 38 Misc. 107, 77 K Y. Supp. 106; Hoffman v. ^tna Ins. Co., 32 K. Y. 405, distinguishing or overruling Murdock v. Chenango Ins. Co., 2 N". Y. 210, and other prior cases; Dresser v. United Firemen's Ins. Co., 45 Hun, 298, aff'd, 122 N". Y. 642, without opinion; Burnett v. Eufaula Home Ins. Co., 46 Ala. 11; West v. Citizens' 232 FiRK Insubance. Ins. Co., 37 Ohio St. 1 ; Dermani v. Home Ins. Co., 26 La. Ann. 69; Lockwood v. Middlesex Ins. Co., 47 Conn. 553, 11 Ins. L. J. 40; Powers v. Guardian Ins. Co., 136 Mass. 108; New- Orleans Ins. Assoc. V. Holberg, 64 Miss. 51 ; AUemania Ins. Co. V. Peek, 133 111. 220, 24 N. E. Eep. 538 ; Virginia F. & M. Ins. Co. V. Vaughan, 88 Va. 832, 14 S. E. Eep. 754; Texas Ins. Co. V. Cohen, 47 Tex. 406. And see Wood v. American Ins. Co., 149 N. Y. 382, 44 N. E. Eep.80; Cowan v. Iowa State Ins. Co., 40 Iowa, 551 ; Hobbs v. Memphis*Ins. Co., 1 Sneed, 444 (Tenn.). Contra, Oldham v. Anchor Ins. Co., 90 Iowa, 225, 57 N. W. Eep. 861; Jones v. Phcenix Ins. Co., 97 Iowa, 275, 66 N. W. Eep. 169, 25 Ins. L. J. 396; Einley v. Lycoming Ins. Co., 30 Pa. St. 311; Buckley v. Garrett, 47 Pa. St. 204; Keeler v. Niagara Ins. Co., 16 Wis. 523. 2. CoUings V. American Central Ins. Co., 70 Mo. App. 14; Eoyal Ins. Co. v. Sockman, 15 Ohio C. C. 105;. West v. Citizens' Ins. Co., 27 Ohio St. 1; Hoffman v. Mtna Ins. Co., supra,- AUemania Ins. Co. v. Peek, supraj Lockwood v. Middlesex Ins. Co., 47 Conn. 553. 3. Eunkle v. Hartford Ins. Co., 99 Iowa, 414, 68 N. W. Eep. 712, 26 Ins. L. J. 320; Eoby v. American Central Ins. Co., 120- N. Y. 510, 24 N. E. Eep. 808, 19 Ins. L. J. 762. See also, and compare Jones v. Phcenix Ins. Co., supra; Hathaway v. State Ins. Co., 64 Iowa, 229. Dissolution and division of partnership property may con- stitute such change as to void the policy. Dreher v. ^tna Ins. Co., 18 Mo. 128. 4. Virginia F. & M. Ins. Co. v. Thomas, 90 Va. 658, 19 S. E. Eep. 454. 5. Germania Ins. Co. v. Home Ins. Co., 144 N. Y. 195, 39- N. E. Eep. 77, 24 Ins. L. J. 382, 26 L. E. A. 591; Card v. Phcenix Ins. Co., 4 Mo. App. 424; Malley v. Atlantic Ins. Co., 51 Conn. 222, 13 Ins. L. J. 38. And see Shuggart v. Lycoming- Ins. Co., 55 Cal. 408; Blackwell v. Miami Valley Ins. Co., 48 Ohio St. 533. 6. Eoyal Ins. Co. v. Martin, 192 U. S. 149, 24 Sup. Ct. Eep. 247. Some of the old forms in terms prohibited transfer or change of " any undivided interest " and it was held that a sale by one partner to another voided the insurance. See Dix v. Mercantile Ins. Co., 22 111. 272; Hartford Ins. Co. V. Eoss, 23 Ind. 179. These cases have been cited -without noting the change or difference in language. Change in Intebbst, Title, or Possession. 233 RULE 19. Effect of Taking in Partner with. Interest in Profits Only. When partners insured make an agreement with a third party, whereby he acquires and has no interest whatever in the property, but only in profits, it does not void the policy. Hanover Ins. Co. v. Lewis, 38 Fla. 209, 10 So. Eep. 297, 21 Ins. L. J. 316. RULE 20. Executory Agreement Between Partnership and Third Parties to Form Corporation — Change from Partnership to Limited Liability Company. An executory agreement between a partnership in- sured and third parties to form a corporation, which is not performed, does not constitute a change in title or possession or any transfer ;* but changing a partner- ship into a limited liability company may be such a change of interest as to void the policy.'' 1. Drennen v. London Assnr. Co., 113 U. S. 51, 116 U. S. 461, 14 Ins. L. J. 187, 15 Ins. L. J. 209, below, 20 Fed. Eep. 657, 13 Ins. L. J. 706. 2. A. G. Peuchen Co. v. City Ins. Co., 18 Ont. App. 446. RULE 21. Change by Mortgage — Meaning of Change — Title or Posses- sion — Interest. The execution of a mortgage by the insured is not such a change in the interest or title as to void the policy ;^ nor is it voided by the execution and delivery of a deed, absolute on its face, but shown by proper evidence to have been intended as a mortgage;^ the ■234 FiEE Insueance. word " change " in the condition means a transfer of interest or title, and not simply an incumbrance or lien f the words ' ' title or possession ' ' mean an actual change in law or equity, and the word " interest " means a change in the insurable interest of the owner and insured, neither of which is affected by a mere mortgage ;* nor does default of insured to pay the debt secured by mortgage, even though legal title passes to the mortgagee, constitute of itself a change in in- terest, title, or possession.® 1. Germania Ins. Co. v. Stewart, 13 Ind. App. 627, 43 N. E. Eep. 286 ; Bushnell v. Farmers' Ins. Co., Mo. App. , 85 S. W. Rep. 103; Lampasas Hotel Co. v. Phoenix Ins. Co., 38 S. W. Eep. 361 (Tex. Civ. App.) ; Sun Fire Office v. Clark, 53 •Ohio St. 414, 42 N. E. Eep. 348. And see German Ins. Co. v. Gibe, 162 111. 351, 44 E". E. Eep. 490; Hartford Ins. Co. v. Walsh, 54 111. 164; Aurora Ins. Co. v. Eddy, 55 111. 213; Tiefen- thal V. Citizens' Ins. Co., 53 Mich. 306; Quarrier v. Peabody Ins. Co., 10 W. Va. 507; Bryan v. Traders' Ins. Co., 145 Mass. ■389, 14 N". B. Eep. 454; Chadbourne v. German- American Ins. Co., 24 Blatchf. 493, 31 Fed. Eep. 533 ; Carson v. Jersey City Ins. Co., 14 Vroom, 300 (IST. J.) ; Byers v. Insurance Co., 35 Ohio St. 606, 9 Ins. L. J. 743 ; Smith v. Monmouth Ins. Co., 50 Me. 96 ; Conover v. Mutual Ins. Co., 1 N. Y. 390. Contra, East Texas Ins. Co. v. Clarke, 79 Tex. 33, 15 S. W. Eep. 166, 30 Tns.,L. J. 820; Sossaman v. Pamlico Ins. Co., 78 N". C. 145. 2. Sun Fire Office v. Clark, supra; German Ins. Co. v. Gibe, supra; .^tna Ins. Co. v. Jacobson, 105 111. App. 383; Henton v. Farmers' Ins. Co., Nebr. , 95 N. W. Eep. 670; Peck v. Girard F. & M. Ins. Co., 16 Utah, 131, 51 Pac. Eep. 355, 37 Ins. L. J. 265 ; Barry v. Hamburg-Bremen Ins. Co., 110 K. Y. 1, 17 K E. Eep. 405; Wolf v. Theresa Village Ins. Co., 115 Wis. 403, 91 N. W. Eep. 1014; Commercial Ins. Co. v. Spank- neble, 53 111. 53 ; Bank of Glasco v. Springfield F. & M. Ins. Co., 5 Kans. App. 388, 49 Pac. Eep. 339 ; Ayres v. Home Ins. Co., HI Iowa, 185 ; New Orleans Ins. Co. v. Gordon, 68 Tex. 144, 3 S. W. Rep. 718; Jecko v. St. Louis F. & M. Ins. Co., 7 Mo. App. 308 ; ISTussbaum v. Northern Assur. Co., 37 Fed. Eep. 534. And see Nease v. Mtna Ins. Co., 33 W. Va. 283, 9 S. B. Eep. Change in Interest, Title, ok Possession. 235 233. Contra, Western Massachusetts Ins. Co. v. Eicker, 10 Mich. 379. 3. Peck V. Girard F. & M. Ins. Co., 16 Utah, 121, 51 Pac. Eep. 255, 37 Ins. L. J. 265; Mosely v. Northwestern Nat. Ins. Co., Mo. App. , 84 N. W. Eep. 1000. 4. Sun Fire Office v. Clark, supra. And see German Ins. Co. V. Gibe, supra. 5. Ethington v. Dwelling-House Ins. Co., 55 Mo. App. 139. Under the Ontario Act execution of a mortgage has been held to be an alienation or change in interest. Mechanics' So- ciety V. Gore District Ins. Co., 3 Tupper, 151 ; O'Neill v. Ottawa Ins. Co., 30 Up. Can. C. P. 151. Many of these old cases were decided upon a construction of the word " alienation " frequently to be found in the old forms, or of the words " sale, transfer, or title." Under old forms and prior to the insertion of the specific con- dition as to foreclosure (see " Foreclosure ") it was held that a foreclosure did not operate as an alienation so long as the in- sured retained the equity of redemption. Strong V. Manufacturers' Ins. Co., 10 Pick. 40 (Mass.) ; Loy V. Home Ins. Co., 34 Minn. 315; Hopkins Mfg. Co. v. Aurora Ins. Co., 48 Mich. 148. A mortgage is not a change in the title under the Ontario statute. Sands v. Standard Ins. Co., 37 Grant Ch. 167. RULE 22. Chattel Mortgage — Parol Evidence — Chattel Mortgage by One Partner on Pirm Property for Individual Benefit, Execution of a subsequent chattel mortgage, with- out change of possession, is not of itself such a change in interest, title, or possession as to void the policy.^ The mere fact that a written assignment was absolute in form does not preclude parol evidence to show that the transaction was merely a pledge to secure the pay- ment of the moneys advanced.^ When the effect of a chattel mortgage is to pass title, there is a violation of the condition.^ A chattel mortgage given by one 236 FiEB Insubance. partner on firm property for his individual benefit may effect or be a cbange of interest.* 1. Koshland v. Hartford Ins. Co., 31 Oreg. 402, 49 Pac. Eep. 866, 26 Ins. L. J. 945; Union Ins. Co. v. Barwick, 36 Nebr. 223, 54 N. W. Rep. 519, 22 Ins. L. J. 265 ; Forehand v. Niagara Ins. Co., 58 111. App. 162, rev'd, but on other grounds, 169 111. 626; Eice v. Tower, 1 Gray, 426 (Mass.). And see Van Deusen v. Charter Oak Ins! Co., 1 Robt. 55 (N. Y.) ; Taylor v. Merchants' Ins. Co., 83 Iowa, 402, 49 N. W. Rep. 994; Hennesey v. Manhattan Ins. Co., 28 Hun, 98 (N. Y.) ; Sovereign Ins. Co. V. Peters, 12 Duval, 33 (Can. Sup.). Contra, Citizens' Ins. Co. V. Salterio, 23 Can. S. C. 155 ; Torrop v. Imperial Ins. Co., 26 Can. S. C. 585 ; Daeey v. Agricultural Ins. Co., 21 Hun, 83, but note that the policy in this ease contained specific con- dition against incumbrances. 2. Gettleman v. Commercial Union Assur. Co., 97 Wis. 237,. 72 N. W. Rep. 627, 27 Ins. L. J. 160 ; Ayres v. Home Ins. Co., 21 Iowa, 185 ; Ayres v. Hartford Ins. Co., 21 Iowa, 198 ; Chand- ler V. Commerce Ins. Co., 88 Pa. St. 223. 3. Woodward v. Republic Ins. Co., 32 Hun, 365, 372 ; Hanover Ins. Co. V. Connor, 20 111. App. 297. But see and compare American Artistic Gold Co. v. Glens Falls Ins. Co., 1 Misc. 114; Hubbard v. Hartford Ins. Co., 33 Iowa, 325 ; Kronk v. Birming- ham Ins. Co., 91 Pa. St. 300; Van Deusen v. Charter Oak Ins. Co., supra; Tallman v. Atlantic Ins. Co., 29 How. 71 (N. Y.). 4. Olney v. German Ins. Co., 88 Mich. 94, 50 N. W. Rep. 100. But see Rule 18 et seq. And see title " Chattel Mortgage." RULE 23. Eill of Sale Must be Delivered and Accepted. Voluntary execution by the assured of a bill of sale on property insured, and recording of the same without the knowledge of the vendee, or any delivery to him, and without any prior contract, or change of posses- sion, is not such a change in interest as to void the policy. Omaha Ins. Co. v. Thomson, 50 Nebr. 580, 70 N. W. Rep. 30. And see Forward v. Continental Ins. Co., 142 N. Y. 382, 37 N. E. Rep. 615. Change in Interest, Title, ob Possession. 237 RULE 24. Effect of Executory Contract of Sale. An executory contract of sale which, has the effect to create and which actually does create an equitable right in. the vendee as the beneficial owner may effect such a change in the interest of the vendor as to void the policy,^ as when the vendee takes possession of ihe property f but a mere executory agreement to sell, xmaccompanied by delivery of a deed, or possession or right to possession, does not effect a change f a vendor Temaius the owner both in law and equity until . at least the purchaser has performed all the acts neces- sary to entitle him to a deed or specific performance,* or obtained the approval or confirmation by the court "when that is required by a condition of the contract.® An unenforceable executory contract of sale effects no change.*' So when policy in terms provides it shall be void " if a contract of sale or to sell ' ' the contract must be binding to be effective.'^ 1. Skinner Ship Building Co. v. Houghton, 92 Md. 68, 48 Atl. Eep. 85; Excelsior Foundry Co. v. Western Assur. Co., Mich. , 98 N. W. Eep. 9. And see Cottingham v. Firemen's Fund Ins. Co., 14 S. W. Rep. 417, 20 Ins. L. J. 187; Fire Assoc. V. Floumoy, 19 S. W. Eep. 793 (Tex.). 2. Gibb V. Philadelphia Ins. Co., 59 Minn. 367, 61 N. W. Eep. 137, 24 Ins. L. J. 313; Fire Assoc, t;., Flournoy, 84 Tex. 632, 19 S. W. Eep. 793; Davidson v. Hawkeye Ins. Co., 71 Iowa, 532, 32 K. W. Eep. 514; Brighton Beach Eacing Assoc. V. Home Ins. Co., 93 N. Y. Supp. 654. 3. Jones v. Capital City Ins. Co., 122 Ala. 421, 25 So. Eep. 790; Home Ins. Co. ■;;. Tomkies, 30 Tex. Civ. App. 404, 71 S. W. Eep. 812, afE'd, 71 S. W. Eep. 814; Tiemann v. Citi- zens' Ins. Co., 76 App. Div. 5, 78 N. Y. Supp. 620 (in this case it is stated that Germond v. Home Ins. Co., 2 Hun, 540, 238 Fire Insubance, to the contrary, was overruled by later cases) . And see Brown- ing V. Home Ins. Co., 71 N. Y. 508. And see Home Ins. Co. v. Bethel, 142 111. 537, 32 N. E. Eep. 510, 22 Ins. L. J. 104, aff'g 42 111. App. 475; Carey v. Home Ins. Co., 97 Iowa, 619, 66 N. W. Eep. 920; Pringle v. Des Moines Ins. Co., 107 Iowa, 742, 77 ]Sr. W. Eep. 521, 28 Ins. L. J. 138 ; Kemptpn v. State Ins. Co., 62 Iowa, 83; Trumbull v. Portage Ins. Co., 12 Ohio, 305; Eeynolds v. Mutual Ins. Co., 34 Md. 280; Arkansas Ins. Co. V. Wilson, 67 Ark. 553, 55 S. W. Eep. 933 ; Perry County Ins. Co. V. Stewart, 19 Pa. St. 45; Hill v. Cumberland Valley Protection Co., 59 Pa. St. 474; Parcel v. Grosser, 109 Pa. St. 617 ; Grable v. German Ins. Co., 32 Nebr. 645, 49 N. W. Eep. 713, 21 Ins. L. J. 132 4. Phcenix Ins. Co. v. Caldwell, 187 111. 73, 58 N. E. Eep. 314, aff'g 85 111. App. 104; McLarren v. Hartford Ins. Co., 5 'K. Y. 151; Masters v. Madison Ins. Co., 11 Barb. 624. 5. Tiemann v. Citizens' Ins. Co., 76 App. Div. 5, 78 N. Y. Supp. 620. And see Clinton v. Hope Ins. Co., 45' N. Y. 454. 6. Moseley v. Northwestern Nat. Ins. Co., Mo. App. , 84 S. W. Eep. 1000. 7. Swank v. Farmers' Ins. Co., Iowa, , 102 N. W- Eep. 429. RULE 25. Executory Contract for Sale and Exchange of Stock or Goods. An executory contract for sale and exchange of stock insured; never executed, does not effect such a change in the interest of the assured as to render the policy void;* whether goods have been sold, or sale com- pleted so as to transfer the title or not, may be a ques- tion of fact for a jury.^ 1. Erb V. German-American Ins. Co., 98 Iowa, 606, 67 N. W. Eep. 583. 2. Eichardson v. Insurance Co. N. A., 136 N. C. 314, 48 S. E. Eep. 733. RULE 26. Cliange by Deed — Delivery and Acceptance — Kecord — 'Void Deed. A deed in transfer or conveyance to a third party of the property insured is such a change as to void Change in Intbebst, Title, or Possession. 239' the policy,^ even though there is a reconveyance to the: insured or agreement to reconvey before the fire;^ and a transfer of even less than the legal title may operate as a change against the vendor f a conveyance claimed to operate as a change in title or ownership must, to be effective, be fully consummated by delivery and acceptance,* which may be a question of fact;^ the mere fact that the instrument is recorded does not dispense with necessity of delivery and acceptance.* A void deed is inoperative as a change in title or in- terest,'^ as for instance when insured is mentally in- competent to make iif so a deed void for usury may be inoperative as an alienation;® or a deed which has been decreed void in another suit;^° or a transfer in- valid under Statute of Frauds." 1. Bemis v. Harborcreek Ins. Co., 200 Pa. St. 340, 49 Atl. Rep. 769 ; Eitchie Co. Bank v. Firemen's Ins. Co., 55 W. Va. 261, 47 S. E. Rep. 94; Eosenstein v. Traders' Ins. Co., 79 App. Div. 481, 79 N. Y. Snpp. 736; Bennett v. Mutual Ins. Co., Md. ,, 60 Atl. Rep. 99; Northern Assur. Co. v. City Savings Bank, 18 Tex. Civ. App. 721, 45 S. W. Rep. 737; Kabrieh v. State Ins. Co., 48 Mo. App. 393; Richmond v. Phoenix Ins. Co., 88 Me. 106, 33 Atl. Rep. 786, 25 Ins. L. J. 354; Lyford v. Connecticut Ins. Co., Me. , 58 Atl. Rep. 916; Gillon v. Northern Assur. Co., 127 Cal. 480, 59 Pac. Rep. 901; Langdon v. Minnesota Ins. Co., 22 Minn. 193; Farmers & Merchants' Ins. Co. v. Jen- sen, 56 Nebr. 284, 76 N. W. Rep. 577, afE'd, on rehearing, 78 N. W. Rep. 1054; Loring v. Manufacturers' Ins. Co., 8 Gray, 28 (Mass.); Home Ins. Co. v. Hauslein, 60 111. 521; Milwaukee Ins. Co. V. Ketterlin, 24 111. App. 188; Walton v. Agricultural Ins. Co., 116 N. Y. 317; Savage v. Howard Ins. Co., 52 N. Y. 502; Buchanan v. "Westchester Ins. Co., 61 N. Y. 611; Foote v. Hartford Ins. Co., 119 Mass. 259; Smith v. Union Ins. Co., 120 Mass. 90; Oakes v. Manufacturers' Ins. Co., 131 Mass. 164; Brown v. Cotton Ins. Co., 156 Mass. 587, 31 N. E. Rep. 691; Dailey v. Westchester Ins. Co., 131 Mass. 173; Baldwin v. Phcenix Ins. Co., 69 N. H. 164; Fanners' Ins. Co. v. Archer, 240 FiEE Insurance. 36 Ohio St. 608; Gould v. Patrons' Ins. Co., 76 Me. 298; Swenson v. Sun Fire Office, 68 Tex. 461, 5 S. W. Rep. 60. 2. Bemis v. Harborcreek Ins. Co., 200 Pa. St. 340, 49 Atl. Eep. 769; Home Ins. Co. v. Hauslein, 60 111. 521; Farmers' Ins. Co. V. Archer, 36 Ohio St. 608; Mulville v. Adams, 19 Fed. Eep. 887, 13 Ins. L. J. 435. And see New Orleans Ins. Co. v. Gordon, 68 Tex. 144, 3 S. W. Eep. 718; Adams v. Eockingham Ins. Co., 29 Me. 292; Bryan v. Traders' Ins. Co., 145 Mass. 389, 14 N. E. Eep. 454. And see Biddeford Savings Bank v. Dwelling-House Ins. Co., 81 Me. 566. And see under Georgia Code as to effect of agreement for reconveyance, Virginia Ins. Co. V. Feagin, 62 Ga. 515. Contra, German Ins. Co. ■;;. Fox, 96 N. W. Eep. 652 (Nebr.). 3. Northern Assur. Co. v. City Savings Bank, supra; Cothing- ham V. Firemen's Fund Ins. Co., 14 S. W. Eep. 417, 20 Ins. L. J. 187 (Ky.) 4. Magoun v. Firemen's Fund Ins. Co., 86 Minn. 486, 91 N. W. Eep. 5; Whitney v. American Ins. Co., 127 Cal. 464, 59 Pac. Eep. 897; Schaefferi;. Anchor Ins. Co., 113 Iowa, 652, 85 N. W. Eep. 985. And see Humphry v. Hartford Ins. Co., 15 Blatchf. 35 (U. S. Cir.). 5. Eosenstein v. Traders' Ins. Co.y 102 App. Div. 47, 92 N. Y. Supp. 326. 6. Whitney v. American Ins. Co., 127 Cal. 464, 59 Pac. Eep. 897; Franklin Ins. Co. v. Feist, 31 Ind. App. 390, 68 N. E. Eep. 188 ; Hogadone v. Grange Ins. Co., 133 Mich. 339, 94 N, W. Eep. 1045. And see Gilbert v. North American Ins. Co., 23 Wend. 43 (N. Y.). 7. Westchester Ins. Co. v. Jennings, 70 111. App. 539 ; Kitter- lin V. Milwaukee Ins. Co., 134 111. 647; Fitchner v. Fidelity Fire Assoc, 103 Iowa, 276, 72 N. W. Eep. 530; German Ins. Co. V. York, 48 Kans. 488, 29 Pac. Eep. 586, 21 Ins. L. J. 508; School District v. .-Etna Ins. Co., 62 Me. 330; Jeeko v. St. Louis F. & M. Ins. Co., 7 Mo. App. 308. And see Commercial Union Assur. Co. V. Scammon, 123 111. 601, 12 N. E. Eep. 324. 8. Gerling v. Agricultural Ins. Co., 39 W. Va. 689, 20 S. E. Eep. 691, 24 Ins. L. J. 385. 9. Phoenix Ins. Co. v. Asbury, 102 Ga. 565, 27 S. E. Eep. 667. 10. Hartford Ins. Co. v. Warbritton, Kans. , 71 Pac. Eep. 278. 11. Pitney v. Glens Falls Ins. Co., 65 N. Y. 6. Change in Interest, Title, oe Possession. 241 RULE 27. Attornment of Tenant to Purchaser. There may be a change in possession effected by the attornment of a tenant to a purchaser of the property. Northern Assur. Co. v. City Savings Bank, 18 Tex. Civ. App. 721, 45 S. W. Eep. 737. RULE 28. Judicial Sale — Redemption — Confirmation. A judicial sale does not effect a change in interest or title by legal process or judgment until the period allowed by law for redemption has expired;^ and so when confirmation is required by the court, there is no change until the sale is made final by such ratifica- tion or confirmation;^ so when the purchaser fails to consummate or complete the sale,^ or makes no claim,* there is no change in title, ownership, or possession, and there is none when the order of confirmation is vacated and set aside."^ A judicial sale must be con- summated by delivery of the instrument of conveyance, and statutory provisions must be complied with.® 1. Greenlee v. North British & M. Ins. Co., 103 Iowa, 427, 71 N. W. Eep. 534, 26 Ins. L. J. 801; Browne Nat. Bank v. Southern Ins. Co., 22 Wash. 379, 60 Pae. Eep. 1133; Hammel V. Queen Ins. Co., 54 Wis. 72. And see Campbell v. Hamilton Ins. Co., 51 Me. 69; Brunswick v. Commercial Union Assur. Co., 68 Me. 313. 2. Hartford Ins. Co. v. Eansom, Tex. Civ. App. , 61 S. W. Eep. 144; Hanover Ins. Co. v. Brown, 77 Md. 64, 25 Atl. Eep. 989, rehearing denied, 77 Md. 76, 27 Atl. Eep. 314; Slobodisky v. Phoenix Ins. Co., 53 Nebr. 816, 74 N. W. Eep. 270. And see Collins v. London Assur. Co., 165 Pa. St. 298, 30 Atl. Eep. 924, 24 Ins. L. J. 658 ; Manhattan Ins. Co. v. Stein, 5 Bush, 652 (Ky.); Clinton v. Hope Ins. Co., 45 N. Y. 454; Haight V. Continental Ins. Co., 93 N. Y. 51. Vol. 2 — 16 242 FiEE Insurance. 3. Springfield F. & M. Ins. Co. v. Phillips, 16 Ky. L. Eep. 390; Marts v. Cumberland Ins. Co., 44 N. J. L. 478. 4. Lodge V. Capitol Ins. Co., 91 Iowa, 103, 58 N. W. Eep. 1089, 33 Ins. L. J. 735. 5. Eichland County Ins. Co. v. Sampson, 38 Ohio St. 672, 12 Ins. L. J. 283. 6. International Wood Co. v. National Assur. Co., Me. , 59 Atl. Eep. 544. RULfi 29. Sale of Real Estate on Execution — Redemption. When the effect of a sale of real estate upon execu- tion is declared by a statute, providing for redemption within a prescribed time, and the right and title of the judgment debtor is not divested by the sale until the expiration of such period, it cannot be claimed that such a sale effects any change in the interest, title, or possession, until expiration of the period for redemp- tion. Wood V. American Ins. Co., 149 N. Y. 383, 44 N. E. Eep. 80, aff'g 78 Hun, 109, 29 N. Y. Supp. 250, Gray, J., dis- senting on ground that there was a change in interest. And see Hammel v. Queen Ins. Co., 54 Wis. 72. RULE 30. •Partition — Sale — Conflrmation. Partition proceedings wherein the property is set apart for life to the widow of the insured constitute a change in interest, title, or possession;* and so when partition is made under judgment therefor f but when property is sold there is no change until confirmed by the court.^ 1. Trabue v. Dwelling-House Ins. Co., 121 Mo. 75, 35 S. W. Eep. 848, 23 Ins. L. J. 529, below, 49 Mo. App. 331. Change in Intebest, Title, ob Possession. 243 2. Barnes v. TJnion Ins. Co., 51 Me. 110. 3. Terpenning v. Agricultural Ins. Co., 14 Hun, 399 (N. Y.). And see Kule 28 RULE 31. Sale Under Deed of Trust — Confirmation. There is no change in title or possession by a mere sale of insured property under a deed of trust, until after such sale is reported to and confirmed by the court. Hanover Ins. Co. v. Brown, 77 Md. 64, 27 Atl. Eep. 314. RULE 32. Levy by Sheriff — Attacliinent — Possession by Sheriff. A mere technical levy by a sheriff without actual taking of possession is not such a change as will void the policy;^ there must be actual seizure under the process.^ A levy and taking possession under a war- rant of attachment is such change in title and posses- sion as to void the policy, even though the attachment may be vacated or dissolved after the fire.^ Taking possession by a sheriff is a change in the possession.* 1. McClelland v. Greenwich Ins. Co., 107 La. 124, 31 So. Eep. 691; Walradt v. Phoenix Ins. Co., 136 K. Y. 375, 32 N. B. Rep. 1063, 22 Ins. L. J. 81; Phcenix Ins. Co. v. Lawrence, 4 Met. 9 (Ky.); Commonwealth Ins. Co. v. Berger, 42 Pa. St. 285; Smith v. Farmers' Ins. Co., 89 Pa. St. 287; Caraher v. Royal Ins. Co., 63 Hun, 82, 17 N. Y. Supp. 858; Walradt v. Phcenix Ins. Co., 64 Hun, 129, 19 K Y. Supp. 293, aff'd, 136 N. Y. 375, 32 N. E. Rep. 1063, 22 Ins. L. J. 81. And see Clark V. New England Ins. Co., 6 Cush. 342 (Mass.); Rice v. Tower, 1 Gray, 426 (Mass.). 2. McClelland v. Greenwich Ins. Co., supra. 3. Carey v. German-American Ins. Co., 84 Wis. 80, 54 N. W. Rep. 18. 244 Fire Insurance. 4. St. Paul F. & M. Ins. Co. v. Archibold & Kell, Tex. , 16 Ins. L. J. 153. Many of the old forms contained a specific clause, omitted from the standard forms, providing that the insurance should cease or become void if property should be " levied on under an execution, or other proceeding at law or in eqidty." See Philadelphia Ins. Co. v. Mills, 44 Pa. St. 241; Hammel V. Queen Ins. Co., 54 Wis. 72; Pearman v. Gould, 15 Stew. Eq. 4 (N. J.); Insurance Co. v. O'Maley, 83 Pa. St. 400. And it was held that the levy of an execution had reference only to a levy on personal property, as there was no such thing in the law as a levy upon real estate. Colt V. Phoenix Ins. Co., 54 N. Y. 595. Others provided that policy should cease, "if the property shall be levied upon, or taken into possession or custody under any proceeding in law or equity, and it was held that it was not necessary to remove property from possession of the in- sured to effect a forfeiture. Dover Glass Works v. American Ins. Co., 39 Atl. Rep. 1039, 24 Ins. L. J. 12 (-Del.). Some provided that " if the property be levied on or attached, or taken into possession or custody under any proceedings in law or equity," and it was held that the word " attached " had special reference to personal property. Tefft V. Providence-Washington Ins. Co., 19 E. I. 185, 32 Atl. Eep. 914, 25 Ins. L. J. 226. RULE 33. Appointment of Receiver — Receiver of Partnership — Change of Receiver. The appointment of a receiver after the fire cannot have any retroactive effect upon title or possession before the fire as to avoid the insurance upon ground of change therein. A decree subsequent to the fire cannot change the title and possession of property which has ceased to exist ;^ the appointment and pos- session of a partner as receiver of a partnership in- sured is no change in interest or possession,^ and when Change in Interest, Title, or Possession. 245 a receiver is insured a change of receiver is no change in title or possession.* 1. Small V. Westchester Ins. Co., 51 Fed. Eep. 789, 33 Ins. L. J. 660. 2. Keeney v. Home Ins. Co., 71 N. Y. 396. 3. Thompson v. Phoenix Ins. Co., 136 U. S. 387, 10 Sup. Ct. Eep. 1019, 19 Ins. L. J. 481. RULE 34. Void Sale — Insured Continuing in Fosseesion. A decree of a court setting a sale aside on ground of fraud or irregularity makes the same void, not only from the date of th,e decree, but from the begin- ning, where the insured continues in possession, assert- ing his ownership and taking prompt steps to obtain such a decree, although fire occurs before it is obtained. Niagara Ins. Co. v. Scammon, 144 111. 490, '33 N. E. Eep. 914, 28 N. E. Eep. 919, 31 Ins. L. J. 593, 23 Ins. L. J. 157. And see Scammon v. Commercial Union Assur. Co., 136 111. 355, 18 N. E. Eep. 562, aff'g 30 111. App. 500. RULE 35. Eff-ect of Adjudication in Bankruptcy. An adjudication in bankruptcy effects no sale or transfer of property until the bankrupt's estate is vested in the trustee;^ and so the mere adjudication and appointment of a receiver in bankruptcy do not effect a change in interest or title.^ 1. Fuller V. New York Ins. Co., 184 Mass. 13, 67 N. E. Eep. 879 2. Puller V. Jameson, 98 App. Div. 53, 90 N. Y. Supp. 456. 246 Fire Insurance. RULE 36. Waiver or Estoppel When Poliny Issues. Issue of policy with knowledge by the company or its agent of the facts, coupled with acceptance and re- tention of the premium after consummation of the change, operates as a waiver or estoppel;^ but the agent cannot, when policy issues orally, agree to a change after issue of the policy;^ a demand for, and receipt of, the premium, with knowledge of the facts, may operate as evidence of waiver or estoppel;^ con- sent to transfer or change may be orally given by the company's agent, authorized to give such consents, without written indorsement*;* but may be otherwise when the policy limits the authority of the agent to giving consent or making indorsement in writing." There may be waiver or estoppel when the agent makes a written indorsement upon the policy, recognizing it as a valid contract with knowledge of the facts.® So where he makes a false indorsement with knowledge of the facts, upon the principle of estoppel.'^ 1. Millis V. Scottish Union Ins. Co., 95 Mo. App. 211, 68 S. W. Eep. 1066; Smith v. Phoenix Ins. Co., 91 Cal. 333, 27 Pac. Eep. 738, 742, 21 Ins. L. J. 137; German- American Ins. Co. V. Sanders, 17 Ind. App. 134, 46 N. B. Eep. 535. And see McQueen v. Phoenix Ins. Co., 4 Duval, 660 (Can.). Acceptance and retention of premium and omission to cancel may be evidence of estoppel. North British P. & M. Ins. Co. v. Steiger, 26 111. App. 228, afE'd, 124 111. 81, 16 N. B. Eep. 95; German Ins. Co. v. Sand- ers, 17 Ind. App. 134, 46 N. B. Eep. 535. And see Vol. 1, Pire Insurance as a Valid Contract, " Waiver," Eule 30, and see this volume " Cancellation." 2. Cornelius v. Farmers' Ins. Co., 113 Iowa, 183, 84 N. W. Eep. 1037. And see McNierney v. Agricultural Ins. Co., 48 Hun, 239. Cha'nge in Intebest, Title, or Possession. 247 3. Medearis v. Anchor Ins. Co., 104 Iowa, 88, 73 N. W. Eep. 495; German Ins. Co. v. Orr, 56 111. App. 637; Hartford Ins. Co. V. Orr, 56 111. App. 639; Buckley v. Garrett, 47 Pa. St. 204. But see and compare Shuggart v. Lycoming Ins. Co., 55 Cal. 408. 4. Home Ins. Co. v. Nichols, Tex. Civ. App. , 72 S. W. Eep. 440; Continental Ins. Co. v. Brooks, 131 AJa. 614, 30 So. Eep. 876; West Coast Lumber Co. v. State Investment Ins. Co., 98 Cal. 502, 33 Pac. Eep. 258, 22 Ins. L. J. 681 (policy in this case did not contain clause limiting authority to waiver only in writing, etc.); Illinois Ins. Co. v. Stanton, 57 111. 354. 5. See Vol. 1, Pire Insurance as a Valid Contract, " Waiver." And " Agents," this volume. 6. Stuart v. Eeliance Ins. Co., 179 Mass. 434, 60 K. E. Eep. 929. And see Getman v. Guardian Ins. Co., 46 111. App. 490 ; Bonenfant v. American Ins. Co., 76 Mich. 653, 43 N. W. Eep. 682 ; Pratt v. Few York Cent. Ins. Co., 55 F. Y. 505. 7. Nute V. Hartford Ins. Co., Mo. App. , 83 S. W. Eep. 83. RULE 37. Waiver or Estoppel After Issue of Policy. Where tlie company's agent, after issue of the policy, is notiiied of a change in interest or title, the policy not being in the possession or under the control of the assured, and is at the same time paid a balance of premium or the premium then due, on the agent's representation that it would be all right, the agent also giving a receipt for the money, it operates as an equi- table estoppel preventing a claim of forfeiture, and it may be found as a fact that such receipt is given to be added or attached to the policy ;^ but a mere promise to make an indorsement on production of the policy does not operate as a waiver;^ there is no waiver by mere knowledge or notice, after issue of the policy,' though the company may be estopped by the acts and declarations of its agent, upon which insured relies.* 1. Northam v. International Ins. Co., 45 App. Div. 177, 61 N. Y. Supp. 45, aff' d, on opinion below, 165 N. Y. 666. And 248 Fire Insxjbance. see as construed by the Court of Appeals in Northam v. Dutchess County Ins. Co., 166 K. Y. 319, 324, 59 N. E. Eep. 912. 2. Equitable Ins. Co. v. Cooper, 60 111. 509; Northam v. Dutchess County Ins. Co., 177 N. Y. 73, 69 N. E. Eep. 222. 3. !Keith v. Royal Ins; Co., 117 Wis. 531, 94 N. W. Rep. 295. And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Rules 27 and 28. 4. Continental Ins. Co. v. Thomasson, 84 S. W. Rep. 546 (Ky.); Mattingly v. Springfield F. & M. Ins. Co., 83 S. W. Rep. 577 (Ky.). As to the power of agents to orally waive the conditions of the policy after its issue and delivery, the courts do not agree. See this volume, chapter on " Agents," and Vol. 1, Fire In- surance as a Valid Contract, " Waiver." Compare the various rules. RULE 38. Effect of Consent to Assignment of Policy. A consent by company's agent, with knowledge of tlie facts, to an assignment of the policy indorsed thereon, operates as a waiver of any forfeiture, on ground of the change or transfer of the interest in or title to the property;* and without an assignment of the policy the transferee has no interest in the policy and claim thereunder which a waiver could affect.^ 1. Benninghoff v. Agricultural Ins. Co., 93 N". Y. 495, 13 Ins. L. J. 45; Shearman v. Niagara Ins. Co., 46 E". Y. 526; Phoenix Ins. Co. v. Lindley, 111 III. App. 266; Imperial Ins. Co. V. Dunham, 117 Pa. St. 460; Gilliat v. Pawtucket Ins. Co., 8 R. I. 282; Amazon Ins. Co. v. Wall, 31 Ohio St. 628; New Orleans Ins. Assoc, v. Holberg, 64 Miss. 51. And see McNierney V. Agricultural Ins. Co., 48 Hun, 339. 2. Langdon v. Minnesota Ins. Co., 22 Minn. 193. And see Lahiff V. Ashuelot Ins. Co., 60 N. H. 75, 13 Ins. L. J. 796; Lett V. Guardian Ins. Co., 125 N. Y. 82, 25 N. E. Rep. 1088, 20 Ins. L. J. 176. Change in Interest, Title, or Possession. 249 RULE 39. Effect of Making Loss Payable to a Third Party. Making or indorsing the loss, if any, payable to a third party does not of itself imply knowledge of or consent to a sale or transfer, because it is entirely consistent with a mere transfer of the right, if any, of the insured to receive payment in the event of loss ;^ but such an indorsement making payable to a mort- gagee, with- knowledge of the facts, may be evidence of waiver of a forfeiture upon ground of alienation and existence of the mortgage.^ And so when in- dorsement is made making payable to third party with notice of transfer.* 1. Bates V. Equitable Ins. Co., 10 Wall. 33 (U. S.) ; Perry V. Lorillard Ins. Co., 61 N. Y. 314; Fogg v. Middlesex Ins. Co., 10 Gush. 337 (Mass.). And see Northrup v. Mississippi Valley Ins. Co., 47 Mo. 435 ; Loring v. Manufacturers' Ins. Co., 8 Gray, 38 (Mass.) ; Grosvenor v. Atlantic Ins. Co., 17 N. Y. 391; Bates v. Equitable Ins. Co., 3 Cliff. 315 (U. S. Cir.). And see Vol. 1, Fire Insurance as a Valid Contract, " Parties to Fire Insurance Contract," Eule 17. 2. Oakes v. Manufacturers' Ins. Co., 131 Mass. 164, 135 Mass. 348, 13 Ins. L. J. 687. See the mortgagee clause in Massachusetts standard form. 3. Batchelor v. People's Ins. Co., 40 Conn. 56. RULE 40. Contract Divisible. When the insurance is itemized in separate amounts as to several distinct subjects, and there is a change in title or otherwise as to one of these subjects, it does not affect the policy as to the other subjects. Commercial Ins. Co. v. Spankneble, 53 111. 53; Dwelling- House Ins. Co. v. Butterly, 33 111. App. 636; Quarrier v. Pea- 250 Fire Insueakce. body Ins. Co., 10 W. Va. 507; Eoyal Ins. Co. v. Martin, 192 TJ. S. 149, 24 Sup. Ct. Kep. 347. Contra, Baldwin v. Hartford Ins. Co., 60 K. H. 422, 10 Ins. L. J. 433. And see Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Eule 26. RULE 41. When Contract not Divisible. Wlien the policy insures building and machinery therein in separate amounts, and provides that if ' ' any change in title in the property insured in whole or in part," it should be void, the contract is not divisible, and if forfeited for want of title as to the building it is also void as to the machinery. Kahler v. Iowa State Ins. Co., 106 Iowa, 380, 76 N. W. Eep. 734. And see Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Eule 26. RULE 42. What is a Change — Illustrative Cases. The execution, delivery, and acceptance of a volun- tary assignment of insured property for the benefit of creditors, and possession by the assignee under it, effects such a change in the interest, title, and posses- sion as to void the insurance. It can make no differ- ence that the assignment may be void as to creditors for fraud or for noncompliance with the requirements of the statute in regard to such assignments ;^ change is effected by a sale and conveyance in partition be- tween devisees, though devisee insured has not parted with possession under such deed f leasing the property and surrendering the possession by the insured to the lessee is such change in possession as to void the Change in Interest, Title, or Possession. 251 policy;* a change may be effected by a marriage con- tract or settlement, tbough made conditional;* sheriff's deed on foreclosure or a sale in foreclosure effects a change or alienation;^ a lease with agreement to con- vey title on payment of a certain sum;* there is change notwithstanding an agreement for reconvey- ance f there is change of title by cancellation of entry by the Secretary of the Interior,^ by conveyance from insured to his wife.^ 1. Milwaiikee Trust Co. v. Lancashire Ins. Co., 95 Wis. 193, 70 N. W. Eep. 81 ; Orr v. Hanover Ins. Co., 158 111. 149, 41 ]Sr. E. Eep. 854, 25 Ins. L. J. 624; Hartford Ins. Co. v. Orr, 56 111. App. 629; Ohio Farmers' Ins. Co. v. Waters, 65 Ohio St. 157, 61 N. E. Eep. 711; Xortham v. Dutchess County Ins. Co., 166 N. y. 319, 59 N. E. Eep. 912 ; Dadmum Mfg. Co. v. Worces- ter Ins. Co., 11 Met. 429 (Mass.) ; Perry v. Lorillard Ins. Co., 6 Lans. 201, aff'd, 61 IST. Y. 214. And see Dube v. Mascoma Ins. Co., 64 N. H. 527, 15 Atl. Eep. 141. It seems it may be otherwise when insured retains possession. Phoenix Ins. Co. v. Lawrence, 4 Met. 9 (Ky.). 2. Eobinson v. Korth B. & M. Ins. Cd., 53 S. W. Eep. 660 2. Baker v. Crosby, 26 Jones & Sp. 577, 11 N. Y. Supp. 575. RULE 7, Assignment not Inferred. An assignment of the policy will not be inferred from general language in transfer of property, when there is no assignment or delivery of the policy itself and there is evidence of intent otherwise. Kitts V. Massasoit Ins. Co., 56 Barb. 177. And see White v. Bobbins, 21 Minn. 370. RULE 8. Loss Made Payable to Assignee — Must be Evidence of Knowledge and Intent — EfEect of Making Loss Payable to Third Party — Sale of Property Does not Include Policy. While an assignment of the policy must be con- sented to by the insurance company, it does not depend 262 FiEE Insurance. upon any particular form, and such consent may be evidenced by an indorsement making the loss payable to the assignee;^ but there must be some evidence of knowledge and intent either in the language of the in- dorsement or otherwise, as simply making the loss payable to a third party operates only to make him an appomtee to receive the loss due the insured, and does not of itself change the relation of the parties.^ Consent to assignment of the policy to a purchaser may inure to the benefit of a co-owner or joint owner, though not expressly mentioned.^ Statements made by an assignor of the policy after he has parted with the possession of the policy are not admissible in evi- dence to defeat the title of the assignee.* A sale of the property does not include a transfer of the ip.sur- ance or policy.^ 1. Queen Ins. Co. v. Block, 58 S. W. Eep. 471 (Ky.). And see Hanover Ins. Co. v. Brown, 77 Md. 76, 87 Atl. Eep. 314; Gould V. Dwelling-House Ins. Co., 134 Pa. St. 570 ; Martin v. Franklin Ins. Co., 9 Vroom, 140 (N. J.) ; Froehly v. North St. Louis Ins. Co., 32 Mo. App. 303 ; Buchanan v. Exchange Ins. Co., 61 ]^. Y. 26; Griswold v. American Central Ins. Co., 70 Mo. 654; Keeler v. Ningara Ins. Co., 16 Wis. 533; Burbank v. McCluer, 54 X. H. 339; ISTorthrup v. Mississippi Valley Ins. Co., 47 Mo. 435. 2. Vol. 1; Fire Insurance as a Valid Contract;, " Parties to the Fire Insurance Contract," Eule 17. Baughman v. Camden Mfg. Co., 65 Jf. J. Eq. 546, 56 Atl. Eep. 376. And see Moffitt v. Phcenix Ins. Co., 11 Ind. App. 233, 38 X. E. Eep. 835, 24 Ins. L. J. 154; Froehly v. St. Louis Ins. Co., 32 Mo. App. 302 ; Hale v. Mechanics' Ins. Co., 6 Gray, 169 (Mass.) ; Frink v. Hampden Ins. Co., 45 Barb. 384; Bates V. Equitable Ins. Co., 3 CliS. 215 (U. S. Cir.) ; Martin v. Franklin Ins. Co., 9 Vroom, 140 (F. J.) ; ISTorthrup v. Missis- sippi Valley Ins. Co., 47 Mo. 435. 3. Palatine Ins. Co. v. Boyd, 50 S. W. Eep. 643 (Tex. Ci?. App.). Assignment of Policy. 263 4. Muneey v. Sun Ins. Office, 109 Mich. 543, 67 N. W. Eep. 562. And See Pollard v. Somerset Ins. Co., 42 Me. 221. 5. Moffitt V. Phoenix Ins. Co., supra. And see National Ins. Co. V. Crane, 16 Md. 260; White v. Bobbins, 21 Minn. 370; Lett V. Guardian Ins. Co., 125 N. Y. 82, 25 F. E. Eep. 1088, 20 Ins. L. J. 176. RULE 9. An Assignment of the Policy and Sale or Transfer of th.e Prop- erty are Distinct and Independent — Both. Must be Con- sented to. As a fire insurance policy is a contract personal to the insured, a sale or transfer by him of the subject- matter of the insurance does not carry with it the sale or transfer of an unexpired policy against loss by fire on the same, and both must be consented to by the insurance company, or the policy becomes void ;^ but consent to transfer or sale of the property may be implied from a consent to an assignment of the policy with knowledge of the facts,^ specially when evidenced by the language of the indorsement to which consent is given by the insurance company.^ 1. New England Loan & Trust Co. v. Kenneally, 38 Nebr. 895, 57 N. W. Eep. 759; Doggett v. Blank, 70 Mo. App. 499; Watts V. Fire Assoc, 87 Mo. App. 83; Moffitt v. Phoenix Ins. Co., 11 Ind. App. 233, 38 N. E. Eep. 835, 24 Ins. L. J. 154; Simeral v. Dubuque Ins. Co., 18 Iowa, 319; Home Ins. Co. v. Lindsey, 26 Ohio St. 348 ; BenninghofE v. Agricultural Ins. Co., 93 N. Y. 495; JEtna Ins. Co. v. Tjler, 16 Wend. 385 (N. Y.) ; ■ Salterio v. City of London Ins. Co., 23 Can. S. C. 32. And see Vol. 1, Fire Insurance as a Valid Contract, " Parties to the Fire Insurance Contract," Eule 1. 2. See Eule 8. And see Hoyt v. Hartford Ins. Co., 26 Hun, 416, aff'd, 96 N. Y. 650, without opinion; Wolfe v. Security Ins. Co., 39 N. Y. 49 ; Imperial Ins. Co. v. Dunham, 117 Pa. St. 460; New Orleans Ins. Assoc, v. Holberg, 64 Miss. 51; Scottish Union & Nat. Ins. Co. v. Brown, 34 Ohio Cir. 53. 3. Hoyt V. Hartford Ins. Co., supra. 264 FiBE Insurance. RULE 10. While Both Assignment of Policy and Transfer of Property- must be Consented to, Immaterial as to Order in Time. It is no objection that the transfer of the property precedes the consent to the assignment of the policy. The subsequent consent to the assignment may relate back to a previous conveyance, and operate as a con- sent to such conveyance ;^ and so it is immaterial that the policy is assigned before the company's consent is indorbed.^ But after the transfer of the title to the property, the insured can pass no right to an assignee by a mere assignment of the policy; it must be con- sented to as prescribed by the insurance company.^ 1. BenninghofE v. Agricultural Ins. Co., 93 N. Y. 495. And see Imperial Ins. Co. v. Dunham, 117 Pa. St. 460; Clifton CoaL Co. V. Scottish Union & National Ins. Co., 103 Iowa, 300, 71 N. W. Eep. 433, 36 Ins. L. J. 1007. 2. Gould V. Dwelling-House Ins. Co., 134 Pa. St. 570, 19 AtL Eep. 793. 3. New V. German Ins. Co., Ind. , 31 N". E. Eep. 475, 21 Ins. L. J. 754. And see Eule 9. RULE II. Effect of Company's Consent to Assignment of Policy. The company's consent to an assignment of the- policy imports validity, and being informed of the as- signment it is put upon inquiry; prior violations of conditions or forfeitures unknown to either party are waived as against the assignee ;^ but may be otherwise if the facts forfeiting the policy are known to the as- signee;^ when consented to by the company with knowledge of the facts, it operates as a waiver of a Assignment of Policy. 265 violation of any of its conditions.* By consenting to an assignment of the policy to a person named the company may be estopped from making the objection after a loss that the assignee has no insurable interest as owner of the property insured.* The amount or kind of interest may not be material so that it is a subsisting interest.^ 1. Hall V. Niagara Ins. Co., 93 Mich. 184, 53 F. W. Eep. 727. And see Shearman v. Niagara Ins. Co., 46 N. Y. 536. 2. Fire Assoc, v. Flournoy, 84 Tex. 632, 19 S. W. Rep. 793. 3. Manchester Assur. Co. v. Glenn, 13 Ind. App. 365, 40 N. E. Eep. 936; Prane v. Burlington Ins. Co., 87 Iowa, 288, 54 N. W. Rep. 237, 22 Ins. L. J. 364; Steen v. Niagara Ins. Co., 89 N. Y. 315. And see BenninghofI v. Agricultural Ins. Co., 93 N. Y. 495; Ellis v. State Ins. Co., 68 Iowa, 578. 4. Blackburn v. St. Paul F. & M. Ins. Co., 116 K C. 821, 31 S. E. Eep. 922; Shearman v. Niagara Ins. Co., supra. 5. New England Ins. Co. v. Wetmore, 32 111. 221; Home Pro- tection Ins. Co. V. Caldwell, 85 Ala. 607. RULE 12. Assignee Ilust Have Insurable Interest. The assignee of the policy, although the assignment of the policy is consented to by the insurance company, is subject to the same rules as to the necessity of the existence, allegation, and proof of an insurable in- terest, as was the original insured. Fowler v. New York Indemnity Ins. Co., 26 N. Y. 422; Hoyt V. Hartford Ins. Co., 26 Hun, 416, aff'd, 96 N. Y. 650, without opinion; Hooper v. Hudson River Ins. Co., 15 Barb. 413, aif'd, 17 N. Y. 424; Hanover Ins. Co. v. Brown, 77 Md. 76; First Nat. Bank v. Lancaster Ins. Co., 62 Tex. 461. And see "Insurable Interest." 266 FiEB Insurance. RULE 13. Assignee of Policy Takes It Subject to Conditions. An assignee of a policy of fire insurance takes it •subject to all the equities which existed between the original parties at the time of the assignment ;^ if void at the time of assignment in hands of the assignor, it is equally so in the hands of the assignee f the assignee iakes the policy subject to its conditions -^ a naked con- sent of the insurance company to an assignment of the policy does not necessarily make it valid;* though a specific consent indorsed that the policy shall continue in force to an assignee may have that effect.** 1. Wilson V. Mutual Ins. Co., 174 Pa. St. 554, 34 Atl. Eep. 133, 25 Ins. L. J. 549; McCluskey v. Providence^Washington Ins. Co., 126 Mass. 306. 2. Citizens' Ins. Co. v. Doll, 35 Md. 89. 3. Ellis v. State Ins. Co., 68 Iowa, 578; "Wilson v. Hates, 36 111. App. 539; State Mutual Ins. Co. v. Eoberts, 31 Pa. St. 438. And see Hanover Ins. Co. v. Brown, 77 Md. 76; Kimball v. Monarch Ins. Co., 70 Iowa, 513. 4. Eastman v. Carroll County, 45 Me. 307 ; Merrill v. Farm- ers' Ins. Co., 48 Me. 385; Citizens' Ins. Co. v. Doll, 35 Md. 89; McCluskey v. Providence- Washington Ins. Co., 126 Mass. 306. 5. McCluskey v. Providence- Washington Ins. Co., 126 Mass. 306; Tripp v. Pacific Ins. Co., 7 Allen, 230 (Mass.). RULE 14. Assig^nment with. Consent of Company to Purchaser of Property ~ Effect. An assignment of the policy, with the consent of the insurance company, to a purchaser, on sale of the property covered by it, operates as a new insurance contract with the assignee, and is in effect the same as the issue of a new policy to him;* which may be en- ASSIGKMBNT OF PoLICY. 267 forced without regard to what occurred before the transfer, if the assignee is innocent of fraud; a past breach of condition by the original policyholder can- not be set up, even though the breach was unknown to the company at time of its consent f defenses avail- able against the assignor cannot be pleaded against such assignee, except when the policy never had any validity or was void in its inception or obtained by fraud ;^ if the insured had no insurable interest when policy issued, he transfers no rights by assignment.* And condition of the title may be such in obtaining •consent to assignment to the wife of assured in fraud of creditors, as to render its concealment such a fraud on the insurance company as to render the policy void.® 1. Virginia-Carolina Chemical Co. v. Insurance Co., 108 Fed. Eep. 451; Ee Hamilton, 103 Fed. Eep. 683; ContiAentaL Ins. Co. V. Munn, 120 Ind. 30 ; Manchester Assur. Co. v. Glenn, 13 Ind. App. 365, 40 N. E. Eep. 926, 41 N. E. Eep. 47; Manchester Assur. Co. V. Koemer, 13 Ind. App. 372, 40 N. E. Eep. 1110; Bulman v. North British & M. Ins. Co., 159 Mass. 118, 34 N. E. Eep. 169, 22 Ins. L. J. 668; Hayes v. Saratoga Ins. Co., 81 App. Div. 287, 80 K. Y. Supp. 888; Shearman v. Niagara Ins. ■Co., 46 N. Y. 526 ; Eines v. German Ins. Co., 78 Minn. 46, 80 N. W. Eep. 839 ; Bonenfant v. American Ins. Co., 76 Mich. 653, 43 N. W. Eep. 682; Cummings v. Insurance Co., 55 N". H. 457; Southern Fertilizer Co. ■;;. Eeams, 105 N. C. 283, 11 S. E. Eep. 467; City Ins. Co. v. Mark, 45 111. 482; Garland v. Insurance Co. N. A., 9 Bradw. 571 (111.) ; Grant v. Eliot Ins. Co., 75 Me. 196. And see Planters' Ins. Assoc, v. Southern Savings Co., 68 Ark. 8, 56 S. W. Eep. 443; Clem v. German Ins. Co., 36 Mo. App. 560; Flanagan v. Camden Ins. Co., 1 Dutch. 506 (N. J.); Imperial Ins. Co. v. Dunham, 117 Pa. St. 460. 2. Home Ins. Co. v. Nichols, Tex. Civ. App. , 72 S. W. Eep. 440; Bayless v. Merchants' Ins. Co., 106 Mo. App. 684, 80 S, W. Eep. 209; City Ins. Co. v. Mark, 45 111. 482; Ellis «. Council Bluffs Ins. Co., 64 Iowa, 507; Ellis v. Insurance Co. N. 268 FiEE Instjeance. A., 33 Fed. Eep. 646; Continental Ins. Co. v. Munns, 120 Ind. 30, 22 N. E. Eep. 78, 19 Ins. L. J. 57; Imperial Ins. Co. v. Dun- ham, 117 Pa. St. 460. And see Eines v. German Ins. Co., 78 Minn. 46, 80 N. W. Eep. 839; Hall v. Niagara Ins. Co., 93 Mich. 184, 53 K. W. Eep. 727; Fire Assoc, v. Flournoy, 84 Tex. 632, 19 S. W. Eep. 793; Hower v. State Ins. Co., 58 Iowa, 51. 3. Franklin Ins. Co. v. WolfE, 23 Ind. App. 549, 54 N. B. Eep. 772; Phoenix Ins. Co. v. Willis, 70 Tex. 12; Citizens' Ins. Co. •». Doll, 35 Md. 89 ; Froehly v. North St. Louis Ins. Co., 32 Mo. App. 302. And see Eastman v. Carroll County Ins. Co., 45 Me. 307; Eeed v. Windsor Ins. Co., 54 Vt. 413; Charleston Ins. Co. V. Neve, 2 McMul. 237 (S. C.) ; Stanstead Ins. Co. v. Gooley, 9 Eap. Jud. Que. B. E. 324. 4. McCluskey v. Providence Ins. Co., 126 Mass. 306. 5. Home Ins. Co. v. Allen, 93 Ky. 270, 19 S. W. Eep. 743. RULE 15. Assignment May be Made Conditional. An assignment of the policy made to be delivered or operative upon obtaining consent of the insurance company, and such consent is refused, the assignment cannot be claimed to affect the rights of the parties. Smith V. Monmouth Ins. Co., 50 Me. 96 ; Manley v. Insurance Oo. N. A., 1 Lans. 20 (N. Y.). RULE 16. One of Several Insured May Assi^ His Interest. When several distinct interests or owners are in- sured, an assignment by one of his interest in the' policy or insurance with consent of the company is effective in creation of a new and separate insurance contract with such assignee. 1 Manchester Assur. Co. v. Glenn, 13 Ind. App. 365, 40 N. E. Eep. 926 ; Manchester Assur. Co. v. Koerner, 13 Ind. App. 372, 40 N. E. Eep. 1110. Assignment of Policy. 269 RULE 17. EfiPect of General Assignment for Benefit of Creditors. While the policy of insurance is a contract of in- demnity personal with the insured and does not pass ty a transfer or assignment of the property insured -as incident to it, it may pass as an integral part of the insured's property, when all of it is assigned; when the insured makes an assignment for benefit of his creditors and h statute requires a construction that it includes or means a conveyance of all his property, there is no room to contend for any different inten- tion on his part than to include in the assignment the policy of insurance and that, being without consent of the insurance company, renders the policy void. Dube V. Mascoma Ins. Co., 64 N. H. 537, 15 Atl. Eep. 141. RULE 18. Effect of Adjudication in Bankruptcy. A policy of fire insurance is in its nature assign- able, and if fire occurs after an adjudication in bank- ruptcy of the assured, it vests by operation of law in the trustee upon his appointment and qualification. Fuller V. New York Ins. Co., 184 Mass. 12, 67 K E. Eep. 879. And as to right of trustee in bankruptcy to recover insurance, see also Traders' Ins. Co. v. Mann, 118 Ca. 381, 45 S. E. Eep. 426. RULE 19. :Bule as to Statement of Interest Inapplicable to Assignment of Policy. The rule which requires the applicant for insurance to truly state his interest in the property to be insured 270 FiBE Iksueance. does not extend to the assignment of the policy while in force. Lycoming Ins. Co. v. Mitchell, 48 Pa. St. 368; Cumberland Valley Protection Co. v. Mitchell, 48 Pa. St. 374. RULE 20. Assignor of Policy no Power to Impair Validity of Policy. After the policy has been assigned with the consent of the insurance company, the assignor has no power, either by words or acts, to impair the validity of the policy in the hands of the assignee;^ or to bind the assignee by any agreement with the insurance com- pany as to amount of liability.^ 1. Pollard V. Somerset Ins. Co., 42 Me. 321; New England Ins. Co. V. Wetmore, 32 111. 221; Muncey v. Sun Ins. Office, 109 Mich. 542, 67 N". W. Eep. 562; Breckenridge v. American Central Ins. Co., 87 Mo. 62. And see Poster v. Equitable Ins. Co., 2 Gray, 216 (Mass.); Tillou v. Kingston Ins. Co., 7 Barb. 570, modified 5 IST. Y. 405, as to amount. 2. American Central Ins. Co. v. Sweetser, 116 Ind. 370, 19 N. B. Eep. 159. And see Georgia Co-operative Fire Assoc. V. Borchardt, Ga. , 51 S. B. Eep. 429. RULE 21. Insured Cannot Acquire Claim Under Void Policy by Assign- ment from Mortgagee. The owner of insured property whose right to re- cover on the policy is lost by a sale or transfer of the property, the policy having on that account become void as to him, cannot recover thereon as an assignee of a mortgagee under a mortgagee clause attached,, especially after the mortgagee's interest therein has been extinguished by payment and when the policy provides for subrogation of the insurance company to- Assignment of Policy. 271 the mortgagee's rights on payment of the insurance to him. Lett V. Guardian Ins. Co., 53 Hun, 570, aff'd, 125 N. Y. 83, 20 Ins. L. J. 176. And see Dircks v. German Ins. Co., 34 Mo, App. 31. RULE 22. Assignment as Bet-ween Partners. When a partnership is insured the transfer or as- signment of the interest of one partner to the other does not void the insurance. Pierce v. Nashua Ins. Co., 50 N. H. 297; Texas Ins. Co. v. Cohen, 47 Tex. 406. And see this volume, chapter " Change in Interest or Title," Eule 18 et seq. RULE 23. Assignment as Security or Collateral. The clause in the policy making it void if assigned is strictly construed and is limited in its application to absolute transfers; an assignment, transfer, or de- posit with bailee as collateral security for a debt of the insured does not forfeit the insurance;^ and al- though absolute on its face such an assignment may be shown to have been made as security only.^ A policy may be pledged as collateral without written assignment by its delivery with such intent.^ When the policy is assigned after a fire as security for a debt, both the insured or assignor and the assignee may be proper parties to an action to recover the in- surance.* And when so assigned, and the company makes by indorsement the loss, if any, payable to the assignee as interest may appear, the lien thereby 272 FiEE Insubanob. created is superior to that obtained in garnishment by a subsequent creditor.® 1. Griffey v. New York Cent. Ins. Co., 100 N. Y. 417, 15 Ins. L. J. 198; Ellis v. Kreutzinger, 37 Mo. 311; Key v. Continental Ins. Co., 101 Mo. App. 344, 74 S. W. Kep. 162 ; Bibend v. Liver- pool, L. & G. Ins. Co., 30 Cal. 78; True v. Manhattan Ins. Co., 26 Fed. Eep. 83. And see Leinkauf v. Caiman, 110 N. Y. 50, 17 N. E. Eep. 389; Kortham v. IMemational Ins. Co., 45 App. Div. 177, 61 N. Y. Supp. 45, afE'd, 165 N. Y. 666, on opinion below; Wheeling Ins. Co. v. Morrison, 11 Leigh, 354 (Va.); Washington Ins. Co. v. Kelly, 33 Md. 431; MePhillips v. London Ins. Co., 33 Ont. App. 534. Contra, Ferree v. Oxford Ins. Co., 67 Pa. St. 373. The condition in this case prohibited an assignment of the policy " or any interest in it." 2. Matthews v. Capital Ins. Co., 115 Wis. 373, 91 K W. Eep. 675; Merrill v. Colonial Ins. Co., 169 Mass. 10, 47 N. E. Eep. 439, 37 Ins. L. J. 337. 3. Dickey v. Pocomoke City Bank, 89 Md. 380, 398, 43 Atl. Eep. 33. 4. Alamo Ins. Co. v. Schmitt, 10 Tex. Civ. App. 550, 30 S. W. Eep. 833. 5. Glover v. Wells, 140 111. 103, 39 N. E. Eep. 680. As to effect of making loss payable to a creditor or third party, see Vol. 1, Fire Insurance as a Valid Contract, " Parties to the Fire Insurance Contract," Eules 1 and 17. RULE 24. Bight of Assignment. A policy of insurance, like any other chose in action, may be transferred either absolutely or as collateral security, and in the absence of any stipulation in the policy, or any regulation, of the company, by which the assured or his assignee may be bound, if the original insured remains and does not terminate his own con- tract with the company his assignee may collect any sum which may become payable by the company by process in the assignee's own name, if the company Assignment of Policy. 273 has assented to the assignment, and otherwise in the name of the assured; an assignment if it leaves the assignor still interested in the contract and in the loss, does not make the insurance void, because the assignee has no insurable interest in the property. Merrill v. Colonial Mut. Ins. Co., 169 Mass. 10, 47 F. E. Kep. 439, 27 Ins. L. J. 237. And see Rule 12. RULE 25. Effect of Assignment as Security — Lien. When the policy is assigned as collateral security for a debt of the insured with an agreement that in the event of fire the assignee shall collect the money and apply same upon the debt, it operates in equity as a lien upon amount due on the policy as soon as a loss occurs, as against the assignor and all persons assert- ing a claim thereto under him. It is not necessary that the assignee in such a case should have any interest in the property covered by the policy, nor that the in- surance company should consent to the assignment. Bibend v. LiTerpool & L. Ins. Co., 30 Cal. 78; Key v. Con- tinental Ins. Co., 101 Mo. App. 344, 74 S. W. Rep. 162 ; Baugh- man v. Camden Mfg. Co., 65 N. J. Eq. 546, 56 Atl. Rep. 376. And see Rule 23. In Bayles v. Insurance Co., 3 Dutch. 163 (N. J.), it was held that an assignment of the policy as collateral security, without a transfer or conveyance of the subject-matter of the insurance, was ineffectual. RULE 26. When Assigned as Security Subject to Violation of Conditions by Assignor. When a mortgagee takes or has an assignment of the policy merely as collateral security for the pay- Vol. 2 — 18 274 Fire Insubakce. ment of the mortgage debt, such assignment is taken and held subject to a violation of its conditions by the insured assignor, even though subsequent to such as- signment;^ and so whenever the policy is assigned merely as collateral security.^ 1. Buffalo Siteam Engine Wdrks v. Sun Mutual Ins. Co., 17 N. Y. 401; Illinois Ins. Co. v. Fix, 53 111. 151; Swenson v. Sun Fire Office, 68 Tex. 461, 16 Ins. L. J. 858. And see Mechanics' Society v. Gore District Ins. Co., 3 Tupper, 151 (Can.). Also Vol. 1, Fire Insurance a& a Valid Contract, " Mortgagor and Mortgagee." 2. Birdseye v. City Ins. Co., 36 Conn. 165. RULE 27. Assignment by Mortgagee. The condition prohibiting an assignment of the policy has reference to a transfer of the contract of insurance; an assignment, by a mortgagee to whom the loss is made payable, of ' ' his right and interest in the policy," is not an assignment of the policy, but is merely an assignment of his right to receive the pro- ceeds, if any, under it. Whiting V. Burkhardt, 178 Mass. 535, 60 N. B. Eep. 1, 52 L. E. A. 788. And see Sun Fire Office v. Frasei, 5 Kans. App. 63, 47 Pac. Eep. 327. And see Eule 1. RULE 28. Assignment After Loss. Any clause or condition in a policy of insurance prohibiting its assignment after a loss is inoperative and void; the insured has legal right to assign the policy or his claim thereunder after a fire;^ but as- Assignment of Policy. 275 sured who has parted with all interest in the property- can transfer no rights by assignment after a loss f an assignment after a loss is taken subject to all defenses which might be made as against the insured or as- signor^ and to the company's right to rebuild.* The insurance company remains liable to assignee of the claim if it pays the insured after notice of the assign- ment.^ An unaccepted assignment amounts to noth- ing and does not prevent the insured from recovering the whole amount of the insurance.® 1. Alkan v. New Hampshire Ins. Co., 53 Wis. 136, 11 Ins. L. J. 126 ; Frels v. Little Black Farmers' Ins. Co., 120 Wis. 590, 98 N. W. Eep. 522; Nease v. M\ti& Ins. Co., 32 W. Va. 283, 9 S. E. Rep. 233; Combs v. Shrewsbury Ins. Co., 5 Stew. 512 (N. J.); Watertown Ins. Co. v. Grover & Baker Sewing Machine Co., 41 Mich. 131; Carroll v. Charter Oak Ins. Co., 38 Barb. 402, 40 Barb. 292, aff'd, 1 Abb. Ct. App. Dec. 316; Goit v. National Protection Ins. Co., 25 Barb. 189 ; Mellen v. Hamilton Ins. Co., 5 Duer, 101, afE'd, 17 N. Y. 609; Perry v. Merchants' Ins. Co., 25 Ala. 355; Walters v. Washington Ins. Co., 1 Iowa, 404; Carter v. Hnmboldt Ins. Co., 12 Iowa, 287; West Branch Ins. Co. V. Helfenstein, 40 Pa. St. 289 ; Greene v. Eepublic Ins. Co., 84 K Y. 572 ; Hamilton v. East Tex. Ins. Co., 1 Tex. Ct. App. Civ. Cas. 448; Indian Eiver State Bank v. Hartford Ins. Co., Fla. , 35 So. Rep. 228; Georgia Co-operative Fire Assoc. V. Borchardt, Ga. , 51 S. E. Eep. 429. 2. Jecko V. St. Louis P. & M. Ins. Co., 7 Mo. App. 308. 3. Johnston v. Phoenix Ins. Co., 39 Md. 233. And see Home Ins. Co. V. Hauslein, 60 111. 521; Burger v. Farmers' Ins. Co., 71 Pa. St. 422; Barrett v. Union Ins. Co., 7 Cush. 175 (Mass.); Pupke V. Resolute Ins. Co., 17 Wis. 378 ; Joy v. Liverpool, L. & G. Ins. Co., 32 Tex. Civ. App. 433, 74 S. W. Eep. 822. 4. Tolman v. Manufacturers' Ins. Co., 1 Cush. 73 (Mass.). 5. Hall V. Dorchester Ins. Co., Ill Mass. 53. 6. Lamb v. Council Bluffs Ins. Co., 70 Iowa, 238. RULE 29. Effect of Assignment After Loss to a Trustee. An assignment of the policy after a loss to a trustee to collect the amount of the insurance may be valid in 276 FiEE Insukance. legal effect as a general assignment for benefit of creditors. Westchester Ins. Co. v. Blackford, 51 S. W. Eep. 978 (Ind. Terr.). RULE 30. Assignment After Loss Induced by False Kepresentations. When the insured is induced by false representa- tions of a representative of the insurance company as to its ability to pay the amount due, to make an assignment of the policy after a fire for less than the claim under it, such assignment will be decreed void in equity. Derrick v. Lamar Ins. Co., 74 111. 404. And see Burnham V. Lamar Ins. Co., 79 111. 160. RULE 31. Assignment After Fire Includes Right to Reformation. An assignment of the policy and interest in it after the fire transfers to the assignee the right to reforma- tion of it, and suit may be maintained for such purpose by the assignee. Benesh v. Mill Owners' Ins. Co., 103 Iowa, 465, 72 IST. W. Eep. 674. Operation op Manufactueing Establishment. 277 CHAPTER SIXTH. Relating to Use or Occupation. Title 1. Operation of manufacturing establishment. 2. Increase of hazard. 3. Alterations or repairs by mechanics. 4. Illuminating gas or vapor and prohibited articles. 5. Vacant or unoccupied. TITLE I. Operation of Manufacturing Establishment. EuLE 1. As imposed by contract. 2. Violation of condition voids policy — Not revived by subsequent operation — Policy may be suspended by special provision. 3. Provision as to limitation of night work substantial. 4. What is a manufacturing establishment. 5. Establishment not in operation when policy issues. 6. Insured's custom does not relieve him of necessity of procuring consent of the insurance company. 7. As affected by usage or custom. 8. Temporary cessation of operation is not ceasing to operate. 9. Partial cessation of operation. 10. Stoppage of machinery is not of itself a ceasing to operate. 11. When a mill is " shut down " — Opinion evidence. 12. 'No cessation if premises continue came as when policy issues. 13. Effect of permitted repairs and alterations. 14. Keeping a watchman no answer to violation of con- dition. 15. Construction affected by character and use of prop- erty — Presumption as to knowledge of company. 16. Waiver or estoppel when policy issues — After its issue — Effect of written permission to run nights. 17. When policy not divisible. 278 FlEE IsrSUEANCE, RULE I. As Imposed by Contract. This entire policy, unless otherwise provided bj agreement indorsed hereon or added hereto, shall be void, if the subject of insurance be a manufacturing establishment and it be operated in whole or in part at night later than 10 o'clock, or if it cease to be operated for more than ten consecutive days. This rule is imposed by above terms in the standard form of policy prescribed in: Few York, Ifortli Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Missouri, Ehode Island, New Jersey, Wisconsin. The standard form of policy prescribed in Michigan is the same, except there is added: " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss. The standard form of policy prescribed in : Maine, Minnesota, Massachusetts, provides that: " This policy shall be void if it (the premises insured) be a manufacturing establishment, running in whole or in part extra time, except that such establishments may run in whole or in part extra hours not later than 9 o'clock, p. m., or if such estab- lishments shall cease operation for more than thirty days with- out permission in writing indorsed hereon." The standard form of policy prescribed in New Hampshire provides : " This policy shall be void and inoperative during the exist- ence or continuance of the acts or conditions of things stipu- * See note to " Concealment," Eule 1, page 2. Operation of Manufactxjeing Establishment. 279 lated against, as follows : * * * ' if it (premises insured) be a mamifacturing establishment in which the works or ma- chinery are operated more than the customary or legal work- ing hours, or all night, without the written or printed assent of this company thereto ; except that permission is hereby given to operate machinery extra hours not later than 10 o'clock, p. m., for the purpose of equalizing work, a competent man, other than the regular watchman, being kept in charge of those rooms in which shafting and belts are running but where the machinery is not at work; or if such establishment shall cease operation for more than thirty days without permission in writing in- dorsed hereon.' It is furthermore provided by statute made part of the policy : ' a change in the property insured or in its use or occupation or a breach of any of the terms of the policy by the insured, shall not afEect the policy except while the change or breach continues.' " The standard form of policy prescribed in South Dakota pro- vides : " This policy shall be void if the subject of the insurance be a manufacturing establishment and it be operated in whole or in part at night later than 10 o'clock, or if it cease to be operated for more than twenty consecutive days without per- mission in writing indorsed hereon." In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. Many of the old forms simply provided in effect that if the mill or factory should "cease to be operated," that the policy should become void, and the courts held that it meant a per- manent cessation and had no application to a temporary sus- pension of work. Poss V. Western Assur. Co., 7 Lea, 704 (Tenn.) ; Lebanon Ins. Co. V. Leathers, Pa. St. , 8 Atl. Eep. 424, 16 Ins. L. J. 977 ; American Ins. Co. v. Brighton Cotton Mfg. Co., 125 111. 131, 17 N. E. Eep. 771 ; City Planing & Shingle Mill Co. v. Merchants' Ins. Co., 72 Mich. 654, 40 K. W. Eep. 777. And see German-American Ins. Co. v. Steiger^ 109 111. 254. The specific time limitation in the condition as now worded Avould seem to render inapplicable preceding cases and the rea- soning or construction upon which the opinions and decisions therein were founded. 280 FiKE Insurance. RULE 2. Violation of Condition Voids Policy — Not Revived by Subse- quent Operation — Policy May be Suspended by Special Pro- vision. Violation of the condition by the insured, without consent of the insurance company, voids the policy;* a breach makes the policy immediately and wholly void without regard to temporary operation within ten days immediately preceding the fire;^ but this does not prevent the company from temporarily suspend- ing the policy by special provision or condition.^ 1. Strause v. Palatine Ins. Co., 128 N. C. 64, 38 S. B. Eep 256 ; Cronin v. Fire Assoc, 119 Mich. 74, 77 N. W. Eep. 648 subsequent appeal, 123 Mich. 277, 82 N. W. Eep. 45, 86 N. W Eep. 1028; Eeardon v. Faneuil Hall Ins. Co., 135 Mass. 131 El Paso Seduction Co. v. Hartford Ins. Co., 121 Fed. Eep. 937 Brehm Lumber Co. v. Svea Ins. Co., 36 Wash. 520, 79 Pac, Eep. 34. 2. Cronin v. Fire Assoc, supra (see now Eule 1, Michigan standard form). 3. Edwards v. Planters' Fire Assoc, 111 Ga. 449, 36 S. E. Eep. 755. RULE 3. Provision as to Limitation of ITight Work Substantial. The condition that a factory shall not be operated later than 10 o'clock at night is a substantial pro- vision of the contract, and its violation voids the policy. Alspaugh V. British-American Ins. Co., 121 N. C. 290, 27 Ins. L. J. 441, 28 S. E. Eep. 415. RULE 4. What is a Manufacturing Establishment. Insured machinery does not necessarily constitute a manufacturing establishment* or a mill or factory;^ Operation op Manufactueing Establishment. 281 but macliines, machinery, tools, etc., may be so used and insured as to constitute a manufacturing estab- lishment or a part of such establishment.^ A flourmill is a manufacturing establishment.* A manufacturing establishment will not be assumed from a doubtful or ambiguous description; the facts must be specifically pleaded by the insurance company.^ 1. Phenix Ins. Co. v. Holcomb, 57 Kebr. 623, 78 K. W. Eep. 300, 28 Ins. L. J. 238. 2. Halpin v. North American Ins. Co., 120 JST. Y. 73, 23 ]Sr. E. Eep. 989, 19 Ins. L. J. 455. 3. Stone v. Howard Ins. Co., 153 Mass. 475, 27 N. B. Eep. 6, 11 L. E. A. 771. 4. Carlin v. Western Assnr. Co., 57 Md. 515, 12 Ins. L. J. 388. Many of the old forms of policy used the words " mill or factory." See Halpin v. North American Ins. Co., supra, and cases in note to Eule 1. And see Knle 1, and note the change in language to " Manu- facturiiig establishment." 5. ()ueen Ins. Co. v. Excelsior Milling Co., Kans. , 76 Pae. Eep. 423. RULE 5. Establishinent not in Operation When Policy Issues. If the establishment is not in operation when the policy issues, it cannot, after its issue, continuing idle, " cease to be operated " to bring the case within the operation of the condition providing for forfeiture of the insurance upon that ground. Louck V. Orient Ins. Co., 176 Pa. St. 638, 35 Atl. Eep. 247, 33 L. E. A. 712. And see Eule 12. 282 Fire Insxjeance. RULE 6. Insured's Custom Does not Believe Him of ITecessity of Procur- ing Consent of the Insurance Company. The special habit or custom of the insured to cease operation of his factory during the dull season or a general custom of manufacturers to do the same thing does not affect the condition of the policy, nor dispense with the necessity of obtaining the consent of the in- surance company if such cessation of operation con- tinues beyond the specified or prescribed time. Stone V. Howard Ins. Co., 153 Mass. 475, 37 K j;. Eep. 6, 11 L. E. A. 771. RULE 7. As Affected by TJsage or Custom. A permit for a sawmill to remain idle " during the winter season " is subject to evidence of usage in con- struction of the words ' ' winter season ' ' and their extent; the presumption is that the company under- stood the local meaning of the term used, and the burden of proof that the mill was idle later than the winter season rests on the insurance company. Barker v. Citizens' Ins. Co., Mich. , 99 N. W. Eep. 866. RULE 8, Temporary Cessation of Operation is not Ceasing to Operate. A mere temporary cessation of the operation of the machinery in a sawmill by reason of sickness, break down, low water, or other unavoidable cause, without any intention by the insured to cease operating it, is Operation of Manufacturing Establishment. 283 not a ceasing to operate it within meaning of tlie condition. Ladd V. ^tna Ins. Co., 147 N. Y. 478, 42 N". E. Eep. 197, aff'g 70 Hun, 490, 24 N. Y. Supp. 384; Eosenerans v. North American Ins. Co., 66 Mo. App. 352 ; Ehlers v. Aurora Ins. Co., 19 Pa. Co. Ct. 165. RULE g. Partial Cessation of Operation. A manufacturing establishment does not cease to be operated, merely by ceasing to perform any one of the many things required to be done in its operation;^ though a forfeiture may not be saved by the mere fact that some work is done on the premises.^ 1. American Ins. Co. v. Brighton Cotton Mfg. Co., 135 111. 131, 17 N. E. Eep. 771. And see Allemania Ins. Co. v. White, Pa. St. , 11 Atl. Eep. 96; Central Montana Mines Co. V. Firemen's Fund Ins. Co., 93 Minn. 223, 99 N. W. Eep. 1130. 2. Brehm Lumber Co. v. Svea Ins. Co., 36 Wash. 530, 79 Pac. Eep. 34. RULE 10. stoppage of Machinery is not of Itself a Ceasing to Operate. A factory does not cease to be operated merely be- cause the machinery stops, when a foreman or em- ployee remains in charge and occupation, putting to- gether and making sale of engines and other articles. Bole V. New Hampshire Ins. Co., 159 Pa. St. 53, 28 Atl. Eep. 205, 23 Ins. L. J. 857. RULE II. When a Mill is " Shut Down " — Opinion Evidence. When a mill is idle and not running for more than thirty days before the fire, it is " shut down " within 284 FiEE Insurance. the meaning of a clause in the policy, requiring written permission in that event, and the opinion of a witness that the mill was not shut down so long, as they were shipping lumber, has no effect as expert evidence to the contrary;^ an entire plant insured is not " shut down " by closing of a part or partial or temporary suspension.^ 1. McKenzie v. Scottish Union & N. Ins. Co., 112 Cal. 548, 44 Pac. Eep. 923, 25 Ins. L. J. 561. 2. Central Montana Mines Co. v. Firemen's Fund Ins. Co., 92 Minn. 223, 99 N. W. Eep. 1130. RULE 12. ITo Cessation, if Premises Continue Same as When Policy Issues. It cannot be claimed that there is a ceasing to operate if the use of the premises continues the same as it was at the time policy issued. Lebanon Ins. Co. v. Erb, 112 Pa. St. 149; Humphrey v. Hartford Ins. Co., 15 Blatchf. 504 (U. S. Cir.). See Kule 5. RULE 13. EfEect of Permitted Repairs and Alterations. Exercise by the insured of the privilege granted in the policy to make repairs and alterations, requiring a temporary stoppage or suspension of operation, does not render the policy void;^ unless there is a specific provision in the policy that it is suspended until work is resumed-^ 1. American Ins. Co. v. Brighton Cotton Mfg. Co., 24 III. App. 149, aff'd, 125 111. 131, 17 N. E. Eep. 771. 2. Day v. Mill Owners' Ins. Co., 70 Iowa, 710. Operation of Manufacturing Establishment. 285 RULE 14. Seeping a Watchman no Answer to Violation of Condition. When tlie business is discontinued and the establish- ment ceases to be operated for manufacturing pur- poses, it is no answer to the company's claim of for- feiture thereby, that the insured kept a watchman constantly on the premises. Dover Glass Works v. American Ins. Co., Del. , 39 Atl. Eep. 1039, 24 Ins. L. J. 12. RULE 15. Construction Affected by Character and Use of Property — Pre- sumption as to Knowledge of Company. When the character and use of the property insured is known to the company, and in view of the known use and character of the manufacturing business con- ducted on the premises, continuous operation is not contemplated by the company and the insured during a portion of the time covered by the policy, the con- dition is atfected thereby and a forfeiture of the in- surance does not necessarily result ;^ an insurance com- pany issuing its policy upon a manufacturing plant may be presumptively chargeable with knowledge of the usual and customary methods of conducting the business.^ 1. MorotTick Ins. Co. v. Pankey, 91 Va. 259, 21 S. E. Eep. 487; Bellevue EoUer Mill Co. v. London & Lancashire Ins. Co., 4 Idaho, 307, 39 Pac. Eep. 196, 24 Ins. L. J. 331. 2. McKeesport ilachine Co. v. Ben Franklin Ins. Co., 173 Pa. St. 53, 34 Atl. Eep. 16. And see Virginia F. & M. Ins. Co. V. Thomas, 90 Va. 658, 19 S. E. Eep. 454. See also this volume " Vacant or Unoccupied." 286 Fire Insueance. RULE i6. Waiver or Estoppel When Policy Issues — After Its Issue — Ef- fect of Written Permission to Bun Nights. While issue and delivery of the policy with knowl- edge by the company or its agent of facts constituting a breach of the condition may operate as a waiver or estoppel;^ it may be questioned whether the language of the condition does not have reference to the future, that is, to a state of facts arising after issue of the policy, and if it be so construed and applied, the agent, in absence of express authority, does not have power to orally dispense with or waive the condition.^ A written permission to run nights operates as a waiver of previous running.^ 1. Thackery Mining Co. v. American Ins. Co., 63 Mo. App.. 393. And see Improved Match Co. v. Michigan Ins. Co., 133 Mich. 356, 80 N. W. Eep. 1088 ; London & Lancashire Ins. Co. V. Gerteson, Ky. , 51 S. W. Eep. 617; Germania Ins. Co. V. Wingfield, 57 S. W. Eep. 456 (Ky.) ; American Central Ins. Co. V. McCrea, 8 Lea, 513 (Tenn.) ; Humphrey v. Hart- ford ins. Co., 15 Blatchf. 504 (U. S. Cir.). See also Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eule 16. 2. See Eule 1. Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eules- 30, 37, 38. And see this volume, " Agents." 3. North Berwick Co. v. New England Ins. Co., 53 Me. 336. RULE 17. When Policy not Divisible. When a violation of the condition affects the entire property insured the policy is not divisible. Brehm Lumber Co. v. Svea Ins. Co., 36 Wash. 533, 79 Pac. Eep. 34, citing McKenzie v. Scottish Union & Nat. Ins. Co., 113 Cal. 548. See Vol. 1, Fire Insurance as a Valid Contract, " Construc- tion," Eule 26. Increase of Hazard. 287 TITLE 11. Increase of Hazard. EuLE 1. As imposed by contract. 8. Violation of condition voids policy though fire caused by independent means. 3. Change does not mean increase — Burden of proof. 4. Condition has reference to future — Continuation of existing use. 5. Knowledge or control essential element — Acts of tenant. 6. Increase of risk as affected by time — Temporary or permanent. 7. Violation of condition renders policy void or voidable — Not merely suspeifded — Contract not revived by acts of insured. 8. Pleasure of insured cannot legally be substituted for obligations of contract. 9. Increase of risk temporarily suspends policy. 10. Balancing or comparison of risk not admissible. 11. Effect of making ordinary repairs — Unauthorized alterations — Question of fact. 13. Materiality of written application — Violation of specific permission as to use of prohibited article. 13. Effect of consent to removal to new location. 14. As affected by other clauses or conditions in the policy — Application of clause against increase of hazard. 15. Presumption as to assumption of risk. 16. Construction of builder's risk. 17. Construction limited by existing or contemplated uses or occupation. 18. Construction of words " increase of risk." 19. As affecting construction of warranty. 20. Question of increase of risk as affected by acts in violation of law. 31. Interest of mortgagee — Effect of mortgagee clause. 23. ISTo application to liens or judgments — May be ques- tion of fact. 23. As affected by rate of premium — Evidence — Test. 34. Opinion evidence — Experts. 35. When expert testimony admissible. 26. When policy not divisible. 37. Waiver or estoppel. 38. Knowledge or notice to company's agent after issue of policy no waiver. 288 FiEB Insurance. EuLE 29. Effect of demand and receipt of additional premium — Insured has reasonable time to comply with special condition. 30. Pleading — Burden of proof . 31. Increase of hazard may be question of law. 33. No inferences in favor of an insurance company. 33. When proper to set aside verdict. 34. Question of increase of hazard is ordinarily one of fact. 35. What recognized as a fact which may increase hazard — Illustrative cases. 36. What is not an increase of hazard — Illustrative cases. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if the hazard be increased by any means within the control or knowledge of the insured. This rule is imposed by above terms in the standard form of policy prescribed in : ]S;"ew York, ISTorth Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Missouri, Ehode Island, New Jersey, Wisconsin. The standard form of policy prescribed in Michigan is the same, except there is added : " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." The standard form of policy prescribed in: Maine, Massachusetts, provides that " this policy shall be void, if, without the assent in writing or in print of the company, the situation or circimi- stances affecting the risk shall, by or with the knowledge, advice, * See note to " Concealment," Eule 1, page 2. Increase of Hazabd. 289 agency, or consent of the insured, be so altered as to cause an in- crease of such risks." The standard form of policy prescribed in Minnesota provides that " the policy shall be void, if, without the assent of the com- pany, the situation or circumstances affecting the risk, shall, by or with the knowledge, advice, agency, or consent of insured, be so altered so as to cause an increase of such risks." The standard form of policy prescribed in New Hampshire provides, " this policy shall be void and inoperative during the existence or continuance of the acts or conditions of things stipulated against, as follows : if, without the assent in writing or in print of the company, the situation or circumstances affect- ing 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." It is furthermore provided by statute made part of the policy : " a change in the property insured or in its use or occupation, or a breach of any of the terms of the policy by the insured, shall not affect the policy except while the change or breach continues." The standard form prescribed in South Dakota provides: " this policy shall be void, if, without the assent of the company, the situation or conditions affecting the insured property shall be altered so as to materially increase the hazard, if such in- crease in hazard be occasioned by the act or agency of the in- sured." In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. Section 3643 of the Ohio Eevised Statutes providing "that any company insuring a building, shall cause such building or structure to be examined by an agent of the insurer, and a full description thereof to be made and the insurable value thereof to be fixed by such agent; and that in the absence of any change increasing the risk without the consent of the company, and also on intentional fraud on the part of the insured, in case of total loss the whole amount mentioned in the policy or re- newal shall be paid" has no application to defenses founded upon specific conditions as to title but is limited in operation to a building itself, its condition, and situation as regards sur- rounding objects and its value ; and the word " change " must be confined in its reference to the same and to those matters which were open to the sight and observation of the agent. Vol. 2 — 19 290 FiEE Insubancb. Webster v. Dwelling-House Ins. Co., 53 Ohio St. 558, 7 Ohio- C. C. 511. See Vol. 1, Fire Insurance as a Valid Contract, " Statutory Provisions," Ohio. RULE 2. Violation of Condition Voids Policy Though. Tire Caused by- Independent Means. An increase of the risk by means within the knowl- edge or control of the insured, or a violation of the condition, voids the policy, according to its terras;^ though the fire may have been occasioned by some wholly independent cause. ^ 1. Dodge County Ins. Co. ■;;. Eogers, 12 Wis. 337; Williams V. People's Ins. Co., 57 K. Y. 374; Cole v. Germania Ins. Co., 99 N. Y. 36, 14 Ins. L. J. 453 ; Eoberts v. Chenango Ins. Co., 3 Hill, 501 (N. Y.); Murdock v. Chenango Ins. Co., 2 N. Y. 210;, People's Ins. Co. v. Spencer, 53 Pa. St. 353; Pottsville Ins. Co. V. Horan, 89 Pa. St. 438 ; Allen v. Massasoit Ins. Co., 99 Mass. 160; Davis v. Western Home Ins. Co., 81 Iowa, 496, 46 ]sr. W. Eep. 1073; Harris v. Columbiana Ins. Co., 4 Ohio St. 285. And see Hoffecker v. New Castle Ins. Co., 5 Houst. 101 (Del.). 2. Williams v. People's Ins. Co.. supra; Germania Ins. Co. V. Deckard, 3 Ind. App. 361, 28 N. E. Eep. 868; Martin V. Capital Ins. Co., 85 Iowa, 643, 52 N. W. Eep. 534; Daniels V. Equitable Ins. Co., 50 Conn. 551. And see Gardner v, Piscatiquis Ins. Co., 38 Me. 439. RULE 3. Change Does not Mean Increase — Burden of Proof. A change in the risk does not necessarily mean an increase in the risk. The burden of establishing such increase rests upon the insurance company. Greenlee v. North British & M. Ins. Co., 102 Iowa, 427, 71 N. W. Eep. 534, 26 Ins. L. J. 801. And see Adair v. Southern Mutual Ins. Co., 107 Ga. 297, subsequent appeal sui nom. Southern Mutual Ins. Co. v. Hudson, 113 Ga. 434, 38 S. E. Rep. 964. Incbease of Hazaed. 291 RULE 4. Gondition Has Reference to Future — Continuation of Existing Use. The clause in regard to increase of risk has refer- ence to the future and not to existing conditions of the property insured.^ A continuation of an existing use or condition does not constitute an increase of risk.^ 1. Straker v. Phoenix Ins. Co., 101 Wis. 413, 77 N. W. Eep. 752, 28 Ins. L. J. 143. And see Williams v. People's Ins. Co., 57 jST. Y. 274. 2. Whitney v. Black Eiver Ins. Co., 72 N. Y. 117. And see Mayor v. Exchange Ins. Co., 9 Bosw. 424 (N. Y.) ; Mayor v. Ham- ilton Ins. Co., 10 Bosw. 537, affd, 39 N. Y. 45; Commonwealth V. Hide & Leather Ins. Co., 112 Mass. 136; State Ins. Co. V. Taylor, 14 Colo. 499, 24 Pac. Eep. 333, 19 Ins. L. J. 966; Kimball v. Mtna. Ins. Co., 9 Allen, 540 (Mass.) ; Schmidt v. Peoria F. & M. Ins. Co., 41 111. 295. RULE 5. Knowledge or Control Essential Element — Acts of Tenant Knowledge or control of the insured is an essential element in establishing an increase of the risk making the policy void;^ unless the condition omits the words " knowledge or control;"^ when known to the insured he is responsible for acts of other or third parties increasing the risk;^ but when there is a distinct pro- hibited use by the terms of the contract or policy, such prohibited use by a tenant of the insured may void the policy, regardless of notice or knowledge thereof on part of the insured ;* the use by a tenant of insured of a gasoline stove, without the knowledge of the latter, is not such an increase of risk as will void the policy.^ And so when the tenant erects an addition to the building insured.® But when the insured allows an 292 FiBE Insueance, increase of risk in part of the building occupied by tenants, he cannot escape the consequences by showing that he used and occupied another part onlyj 1. East Texas Ins. Co. v. Kempner, 12 Tex. Civ. App. 534, 34 S. W. E«p. 393, writ of error denied 35 S. W. Eep. 1069; Northern Assur. Co. v. Crawford, 24 Tex. Ciy. App. 574, 69 S. W. Rep. 916; State Ins. Co.%. Taylor, 14 Colo. 499, 24 Pac. Eep. 333, 19 Ins. L. J. 966; Waggonick v. Westchester Ins. Co., 34 111. App. 629 ; German Ins. Co. v. Wright, 6 Kans. App. 611, 49 Pac. Eep. 704 ; -Nebraska Ins. Co. v. Christiensen, 29 Nebr. 572, 45 N. W. Eep. 924; Breuner v. Ins. Co., 51 Cal. 101. And see Eife v. Lebanon Ins. Co., 115 Pa. St. 530; Niagara Ins. Co. v. Miller, 130 Pa. St. 504. 2. Long V. Beeber, 106 Pa. St. 466. 3. Jauvrin v. Eockingham Ins. Co., 70 N. H. 35, 46 Atl. Eep. 686. And see McKee v. Susquehanna Ins. Co., 135 Pa. St. 544, 19 Atl. Eep. 1067; Alston v. Greenwich Ins. Co., 100 Ga. 282, 29 S. E. Eep. 266; German Ins. Co. v. Wright, 6 Kans. App. 611, 49 Pac. Rep. 704. In North British & M. Ins. Co. V. Union Stockyard Co., Ky. , 87 S. W. Eep. 285, the court construes the language of the policy (Eule 1) as meaning " if the insured is ignorant, although a matter which he might have controlled had he known it, the policy is not affected ; or al- though he had knowledge, yet if it was a thing beyond his con- trol, neither is it affected." 4. Concordia Ins. Co. v. Johnson, 4 Kans. App. 7, 45 Pac. Eep. 722. And see Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Eule 15. 5. East Texas Ins. Co. v. Kempner, 12 Tex. Civ. App. 534, 34 S. W. Eep. 393, writ of error denied 35 S. W. Eep. 1069. 6. Nebraska Ins. Co. v. Christiensen, 29 Nebr. 572, 45 N. W. Rep. 924. 7. Appleby v. Firemen's Fund Ins. Co., 45 Barb. 454. Some of the old forms required control of the insured and omitted the word " knowledge." Williams v. People's Ins. Co., 57 N. Y. 279. Others required advice, agency, or consent of in- sured. Allen V. Massasoit Ins. Co., 99 Mass. 160. Many of the old forms of policy provided that " if the above mentioned premises shall, during this insurance, be occupied or used so as to increase the risk, or by the erection of any build- ing or buildings, or by the use or occupation of neighboring Increase of Hazard. 293 premises, this company after notice given to the assured, or his, or her, or their representative, of their intention to terminate the insurance, will refund a rebatable proportion of the pre- mium," and it was held that this condition was intended to pro- Tide for increase of risk by acts of third persons over whom the insured had no control. Williams v. People's Ins. Co., 57 N. Y. 274. And see Gardi- ner V. Piscatiquis Ins. Co., 38 Me. 439; Joyce v. Maine Ins. Co., 45 Me. 168. And some provided for notice to be given by the insured of an increase of risk and increase of premium or cancellation of the policy at option of the company. See Eesidence Ins. Co. v. Hannawold, 37 Mich. 103; Lock- wood V. Middlesex Ins. Co., 47 Conn. 553. And some required by special clause action by the company. Farmers' Ins. Co. v. Schaffer, 83 Md. 377, 33 Atl. Eep. 728, 25 Ins. L. J. 552. It is suspected, though perhaps not capable of demonstration, that these and similar cases are the foundation of the doctrine prevailing in few of the States as to the effect of omission to cancel as evidence of waiver. The courts do not always note or distinguish the difference in language, and some of the old forms in terms provided against " act of the assured, his agent, or tenant " in increase of risk. See Gilliat v. Pawtucket Ins. Co., 8 E. I. 282. RULE 6. Increase of Bisk as AfEected by Time — Temporary or Permanent. A clause or condition against an increase of risk is not ordinarily construed as applicable to a merely- occasional or a temporary use,^ wMch. ceases before tbe fire and in no way contributes to or causes the loss,^ but as contemplating something permanent or tabitual;^ though it is not always necessary that the increase of risk should be permanent or habitual to void the policy;* each case must be decided upon its particular facts and circumstances;^ a temporary in- crease of risk arising from manner of use of premises, which is not a casual, inadvertent, or inevitable thing, 294 FiEE Insueance. may void the policy;® whether of a permanent char- acter may be determined by the particular require- ments of the special use.^ 1. Gates V. Madison Ins. Co., 5 N. Y. 469 ; Loud v. Citizens' Ins. Co., 2 Gray, 231 (Mass.) ; Westchester Ins. Co. v. Poster, 90 111. 131 ; Kircher v. Milwaukee Mechanics' Ins. Co., 74 Wis. 470, 43 K. W. Eep. 487, 19 Ins. L. J. 305. And see Rules 7, 8, 9, and notes. 2. Kircher v. Milwaukee Mechanics' Ins. Co., supra. 3. Leggett v. Mtna Ins. Co., 10 Rich. Law 302 (S. C.) ; Allemania Ins. Co. v. Pittsburg Exposition Soc, Pa. St. , 11 Atl. Rep. 573. And see Shaw v. Robberds, 6 Adolph & Ellis, 75, 33 Eng. C. L. 13. 4. Harris v. Columbiana Ins. Co., 4 Ohio St. 385. And see Rule 7 et seq. 5. Meyer v. Queen Ins. Co., 41 La. Ann. 1000, 6 So. Rep. 899, 19 Ins. L. J. 45. And see Jefferson Ins. Co. v. Cotheal, 7 Wend. 72 (N". Y.). 6. Kyte v. Commercial Union Assur. Co., 149 Mass. 116. And see Glen v. Lewis, 8 Wels., Hurl. & Gord. 607 (Eng.). 7. Wilson V. Union Mut. Ins. Co., Vt. , 55 Atl. Rep. 662. RULE 7. Violation of Condition Benders Policy Void or Voidable — Policy not Merely Suspended — Contract not Kevived by Acts of Insured. If, as matter of fact, the risk is increased at any time during the life of the policy it becomes void by its terms or voidable at option of the insurance company, notwithstanding such increase of hazard may have ceased to exist before the fire, and does not contribute to or cause it;^ a subsequent condition, when broken, vitiates the policy, even though the breach of condi- tion may not continue up to the time when the loss by fire occurs.^ When a contract stipulates that it shall become void upon the happening of an event, and such Increase of Hazaed. 295 event, is brought about by one of the parties thereto, the contract as to such party is immediately termi- nated, and cannot, by his acts, without the consent of the other party, be revived or vitalized.^ 1. Imperial Ins. Co. v. Coos County, 151 U. S. 452, 33 Ins. L. J. 282 ; Hill v. Middlesex Assur. Co., 174 Mass. 542, 55 N. B. Eep. 319; Kyte v. Commercial Union Assur. Co., 149 Mass. 116. 2. Hoover v. Mercantile Ins. Co., 93 Mo. App. Ill, 69 S. W. Eep. 42, citing Imperial Ins. Co. v. Coos County, supra, and Kyte V. Assurance Co., 149 Mass. 116. 3. German Ins. Co. v. Eussell, 65 Kans. 373, 69 Pac. Eep. 345. And see Concordia Ins. Co. v. Johnson, 4 Kans. App. 7, 45 Pac. Eep. 722. Some of the old forms of policy provided in terms for a " suspension " of the insurance during any increase of risk from specified causes. See Mayor v. Hamilton Ins. Co., 10 Bosw. 537, afE'd, 39 IST. Y. 45 ; New England P. & M. Ins. Co. v. Wet- more, 32 111. 221. While perhaps not capable of exact demonstration it is sus- pected that these and kindred cases are the foundation of the doctrine as expressed in Eule 9, the courts not always recogniz- ing or considering the difference in language. See that Eule and note. RULE 8. Pleasure of Insured Cannot Legally be Substituted for Obliga- tions of Contract. The contract of insurance ends the moment the con- dition as to prohibited articles is legally violated, with- out regard to time or cause of fire, and cannot be re- vived again without consent, unless the insurance company by some act or line of conduct, waives the breach. The reason of this rule is that to hold other- wise would be to substitute the pleasure of the insured for the legal obligations of the contract, as he could 296 FiEE Insurance. violate the condition, subject the insurance company to increase of the risk, and revive the contract at will. Mead v. Northwestern Ins. Co., 7 F. Y. 530. See and coni- pare Eule 9, and previous Eules. RULE 9. Temporary Increase of Bisk Suspends Policy. Though there be a change of risk by reason of an increased hazard, which would avoid the policy if de- clared void by the company, yet when the company has not declared the policy forfeited, and the cause for the increased hazard no longer exists, and there is no in- creased hazard by reason of former changed condi- tions, then, the policy being for insurance for a certain period, the contract of insurance will be construed, and the fact determined whether there was an increased risk at the time of the fire which in any manner was conducive to the loss. If a loss occurs during the in- creased hazard a recovery will be defeated. If a former increase of hazard has ceased to exist, and that increase of hazard at that former time in no way has affected the risk when the loss occurs, no reason exists why a forfeiture should result from a cause which occasions no damage. Traders' Ins. Co. v. Catlin, 163 111. 256, 45 N". E. Eep. 255, rev'g 59 111. App. 162, but not on this point; Crete Farmers' Ins. Co. V. Miller, 70 111. App. 599; Schmidt v. Peoria F. & M. Ins. Co., 41 111. 395. And see Ohio Farmers' Ins. Co. v. Burget, 65 Ohio St. 119, 61 N. E. Eep. 712; Kennefick-Ham- mond Co. v. Norwich Union Fire Assoc, Mo. App. , 80 S. W. Eep. 694; Adair v. Southern Mutual Ins. Co., 107 Ga. 297, 33 S. E. Eep. 78, 28 Ins. L. J. 510; North British & M. Ins. Co. «. Union Stockyards Co., Ky. , 87 S. W. Eep. 285, Johnston v. Dominion Grange Ins. Co., 23 Ont. App. 739. See previous Eules. Increase of Hazard. 297 Many of the old forms of policies in terms provided that the policy should be suspended while prohibited articles were being used. Hynds v. Schenectady Ins. Co., 11 F. Y. 554. And the same form was probably involved in Gates v. Madi- son Ins. Co., 5 N. Y. 469, 478, though it is not quoted in the report. Putnam v. Commonwealth Ins. Co., 18 Blatchf. 368 (U. S. Cir.); Maryland Ins. Co. v. Whiteford, 31 Md. 219, 338; Phcenix Ins. Co. V. Lawrence, 4 Mete. 9 (Ky.). Others provided that "any change increasing the risk" should make the policy void, and the word " change " was con- strued as referring to a permanent rather than a temporary change. Adair v. Southern Mutual Ins. Co., 107 Ga. 397, subsequent appeal sub nom. Southern Mutual Ins. Co. v. Hudson, 113 Ga. 434, 38 S. E. Eep. 964. And others again did not contain any clause or condition making the policy void for an increase of risk, and it was held that its validity depended upon state of facts existing at time of loss. Mutual Ins. Co. v. Coatesville Shoe Factory, 80 Pa. St. 407. It is suspected, though not capable of exact demonstration, that the rule stated above in the text has its origin in these cases. The courts have not always noted the effect of change or omission in language. RULE 10. Balancings or Comparison of Bisk not Admissible. Wten, as matter of fact, the risk is increased by a specific circumstance, such as in the erection of an adjoining building, the legal effect or consequence is not avoided by real or fancied lessening of the risk in removal of other buildings ;^ but in case of an addition or extension to building insured the risk may in fact be decreased by the improvements made in connection with the extension.^ If there are two or more changes unconnected with each other, and one has increased the risk, it is no answer to a plea for forfeiture of the 298 FiKE Insukance. insurance to say that something else has diminished it,^ or that the insured occupied only a part of the premises described in the policy.* 1. Pottsville Ins. Co. v. Horan, 89 Pa. St. 438. And see Heneker v. British America Assur. Co., 13 Up. Can. C. P. 99; Lomas v. British America Assur. Co., 22 Up. Can. Q. B. 310. 2. Meyer v. Queens Ins. Co., 41 La. Ann. 1000, 6 So. Eep. 899, 19 Ins. L. J. 45. 3. Albion Lead Works v. Williamsburg City Ins. Co., 3 Fed. Eep. 479, 9 Ins. L. J. 435. 4. Appleby v. Firemen's Fund Ins. Co., 45 Barb. 454. RULE II. HfiEect of Making Ordinary Bepairs — tJnautliorized Alterations — Question of Fact. The condition against an increase of risk is not so construed as to forbid the making of ordinary repairs in a reasonably safe way, even though it involves a temporary increase of risk ;^ thus it cannot be said, as matter of law, that the use of gasoline or naphtha torches to burn off or remove old paint from building insured in order to repaint it increases the risk within the meaning of those words in the policy, where there is evidence that it is proper and customary to remove old paint in this manner, but the question is proper to be submitted to a jury f such work or repairs may be so done, or continued or prolonged as, for instance, nearly every day for a month, as to effect such a change in the situation or circumstances affecting the risk as to make the clause or condition applicable.* And so unauthorized alterations, not in nature of ordinary repairs, may void the policy, even though Increase of Hazard. 299 ■completed before the fire, and do not contribute to or ■cause it.* 1. Smith V. German Ins. Co., 107 Mich. 370, 65 JST. W. Rep. 236, 25 Ins. L. J. 193, 30 L. E. A. 368; Townsend v. North- western Ins. Co., 18 N. Y. 168; Cummer Lumber Co. v. Asso- .ciated Mfrs.' Ins. Co., 67 App. Div. 151, 73 N. Y. Supp. 668, aff'd, 173 N. Y. 633, without opinion; Brighton Mfg. Co. v. Reading Ins. Co., 33 Fed. Rep. 233; and Brighton Mfg. Co. v. Fire Assoc., 33 Fed. Rep. 234. And see Washington Ins. Co. V. Davison, 30 Md. 91. 2. Smith V. German Ins. Co., supra. 3. First Congregational Church v. Holyoke Ins. Co., 158 Mass. 475, 33 N. E. Rep. 572, 22 Ins. L. J. 449. And see Meyer V. Queen Ins. Co., 41 La. Ann. 1000, 6 So. Rep. 899, 19 Ins. L. J. 45. 4. Hill V. Middlesex Assur. Co., 174 Mass. 542, 55 N. E. Rep. 319. RULE 12. Materiality of Written Application — Violation of Specific Per- mission as to Use of Prohibited Articles. In determining the question of an increase of risk, representations in an application of the insured as to -certain usages and practices observed, as to mode of conducting the business, and as to precautions taken to ^ard against fire, are material as basis in comparison of changes whereby it is claimed the risk was in- creased;^ and so when insured is permitted to use naphtha in his business, he is bound by his specific agreement in connection therewith limiting the use of fire or lights, and if he violates such agreement it causes such an increase of the risk as to void the policy.^ 1. Houghton V. Manufacturers' Ins. Co., 8 Met. 114 (Mass.); Newhall V. Union Ins. Co., 52 Me. 180. And see Loud v. Citi- zens' Ins. Co., 2 Gray, 221 (Mass.); Virginia F. & M. Ins. Co. v. Thomas, 90 Va. 658, 19 S. E. Rep. 454. 2. Daniels v. Equitable Ins. Co., 50 Conn. 551. 300 FiEE Insueance. RULE 13. Effect of Consent to Bemoval to New I Crane v. City Ins. Co., 3 Fed. Eep. 558; Kireher v. Mil- waukee Mechanics' Ins. Co., 74 Wis. 470, 43 N. W. Eep. 487^ 19 Ins. L. J. 305. Old forms of policy in terms provided against " any material increase of risk." See Allen v. Mutual Ins. Co., 3 Md. 111. And see Gardiner V. Piscatiquis Ins. Co., 38 Me. 439. RULE ig. As AfEecting Construction of a Warranty. The clause or condition against an increase of risk is potent in connection with the construction of a war- ranty as to occupation of the building insured, which,, unless otherwise plainly expressed, will be construed as affirmative only, and as not intended to apply to the future condition of the property. Blood V. Howard Ins. Co., 13 Cush. 473 (Mass.). And see "Warranty." Inceease of Hazard. 303 RULE 20. Question of Increase of Bisk as Affected by Acts in Violation of Law. When the sale of the subject-matter of the insurance is a mere incident of a lawful business, and the policy does not provide against the use or sale of the same, and the insurance is not effected with a purpose or to advance and encourage acts in violation of law, the validity of the policy is not affected by the fact that some illegal sales are subsequently made. There is material d-istinction between such a case and where the insurance is of an illegal traffic or of a business that directly and necessarily violates the law, such as poli- cies on lotteries, or if marine insurance on unlawful voyages;^ the illegal sale of intoxicating liquors in a dwelling does not, as matter of law, increase the risk.^ 1. Insurance Co. N". A. v. Evans, 64 Kans. 770, 68 Pae. Eep. 623. 2. Martin v. Capital Ins. Co., 85 Iowa, 643, 52 IST. W. Eep. 534. Alid see Miua Ins. Co. v. Norman, 12 Ind. App. 652, 40 N. B. Eep. 1116. And see this volume, chapter Seventh, Title 9, " Contract as Affected by Legality." RULE 21. Interest of Mortgag'ee — Effect of Mortgagee Clause. Under the operation of a mortgagee clause an in- crease of risk does not invalidate the policy in favor of the mortgagee to whom the loss is payable, unless the mortgagee is bound by its terms to notify the in- surance company of such increase, in which case his failure to give the notice voids the insurance. Cole V. Germania Ins. Co., 99 IST. Y. 36, 14 Ins. L. J. 453. And see Vol. 1, Fire Insurance as a Valid Contract, " Mort- gagor and Mortgagee." 304 FiBE Insurance. RULE 22. No Application to Liens or Judgments — May be Question of Fact. The condition against increase of risk has no ap- plication or relation to liens or judgments ; it was in- tended to protect the property during the life of the policy from fire by change^ in structure, methods in heating, addition of new outbuildings on the premises, and like means within the knowledge or control of the owner whereby the hazard might be increased;^ but whether the execution of a mortgage increases the risk or not may be a question of fact.^ 1. Collins v London Assur. Co., 165 Pa. St. 298, 30 Atl. Rep. 924, 24 Ins. L. J. 658. And see Greenlee v. North Brit- ish & M. Ins. Co., 102 Iowa, 427, 71 N. W. Rep. 534, 26 Ins. L. J. 801. 2. Collins V. Merchants & Bankers' Ins. Co., 95 Iowa, 540, 64 F. W. Rep. 602 ; Crittenden v. Springfield F. & M. Ins. Co., 85 Iowa, 652, 52 N. W. Rep. 548, 21 Ins. L. J. 726 ; Lee v. Agri- cultural Ins. Co., 79 Iowa, 379, 44 N. W. Rep. 683. RULE 23. As Affected by Rate o^ Premium — Evidence — Test. Upon a question or issue of an increase of risk the insurance company may show by experts as to rates of premium that the rate would be increased by the facts claimed to constitute the increase of risk, the relative rates usual for insurance under different cir- cumstances are or may be treated as facts proper to be considered by a jury in determining the risk;^ but while the rate of premium may be proper and com- petent evidence it is not conclusive, even if it is undis- puted;^ the test is the actual increase of danger from Increase of Hazaed. 305 fire, and not the rating established by the insurance companies.^ 1. First Congregational Church v. Holyoke Ins. Co., 158 Mass. 475, 32 N. E. Eep. 572, 22 Ins. L. J. 449; Luce v. Dor- chester Ins. Co., 105 Mass. 297; Planters' Ins. Co. v. Eowland, 66 Md. 236. 2. Taylor v. Security Ins. Co., 88 Minn. 231, 92 N. W. Eep. 952; Sun Mutual Ins. Co. v. Tufts, 20 Tex. Civ. App. 147, 50 S. W. Eep. 180 ; Planters' Ins. Co. v. Eowland, supra. 3. Carroll v. Home Ins. Co., 51 App. Div. 149, 64 N. Y. Supp. 522. Some of the old forms of policy provided that " if the risk be increased, so as to increase the rate of insurance," and it was held that the erection of a frame carriage factory fifty feet distant from the building insured did not void the policy, it not being shown that the insured knew or ought to have known that the rate was increased. Lebanon Mutual Ins. Co. v. Losch, 109 Pa. St. 100, 15 Ins. L. J. 104. RULE 24. Opinion Evidence — Experts. Opinion evidence as to whether a risk is or is not increased by erection of a boiler-house, adjacent to building insured or proximity of new buildings is not competent ;^ testimony of a practical, experienced fire- man may be received as to effect of certain alterations in a building;^ underwriters are not ordinarily per- mitted to express their opinion as to nature of a risk, whether it is more or less hazardous f whether taking out and putting in fixtures, putting in new floors and stairs, having a store, increases the risk or not, is within the common knowledge of men involving no peculiar information, and opinion of experts is not admissible;* witnesses are not allowed to express an opinion that leaving a house unoccupied increases the Vol. 2 — 20 306 FinE Insurance. risk;' one who has charge of a certain business of manufacturing with special opportunities to know, and actual knowledge of details and processes, and liability to fire, may be competent to express an opinion as to the effect of certain changes f while not proper to re- ceive a naked opinion that risk is increased by use of a " drier," the facts and circumstances in connection with its actual use are admissible ;'' expert evidence may be receivable as to " burr " and " roller " process in a mill, to assist the jury in determining whether or not risk is increased by change in the machinery.* 1. Jefferson Ins. Co. v. Cotheal, 7 Wend. 72; Franklin Ins. Co. V. Gruver, 100 Pa. St. 266. 2. Schenek v. Mercer County Ins. Co., 4 Zabr. 447 (N. J.). 3. Merchants' Ins. Co. v. Washington Ins. Co., 1 Handy, 40S (Ohio). And see German-American Ins. Co. v. Steiger, 109 111. 254. 4. Lyman v. State Ins. Co., 14 Allen, 329 (Mass.). 5. Luce V. Dorchester Ins. Co., 105 Mass. 297. And see Cannell v. Phoenix Ins. Co., 59 Me. 582; Thayer v. Providence Ins. Co., 70 Me. 531; Kirby v. Phoenix Ins. Co., 9 Lea, 142 (Tenn.). 6. Brink v. Merchants' Ins. Co., 49 Vt. 442. 7. German-American Ins. Co. v. Steiger, 109 111. 254. 8. Planters' Ins. Co. v. Eowland, 66 Md. 236. RULE 25. When Expert Testimony Admissible. Expert testimony may be admissible upon an issue as to increase of risk when the question of the ma- teriality of circumstances as affecting the risk arises, when its determination calls for a degree of knowledge not likely to be possessed by an ordinary jury;^ but an insurance agent should not be permitted to give an Inceease of Hazabd. 307 opinion as an expert when he has no personal knowl- edge of the premises, and the question to him is not based on a hypothetical question embracing the ma- terial facts appearing in the case f if the opinion of an expert witness is admissible, it is not conclusive f and opinion evidence of experts is not admissible upon a matter of common knowledge or observation.* 1. Traders' Ins. Co. v. Catlin, 163 111. 356, 45 N. E. Eep. 355; Schmidt v. Peoria Ins. Co., 41 111. 395; Schenck v. Mer- cer County Ins. Co., 4 Zabr. 447 (N. J.); Brink v. Merchants' Ins. Co., 49 Vt. 443; Planters' Ins. Co. v. Eowland, 66 Md. 336, 16 Ins. L. J. 345. And see Citizen Ins. Co. v. McLaughlin, 53 Pa. St. 485. 2. Carroll v. Home Ins. Co., 51 App. Div. 149, 64 N. Y. Supp. 533. And see Stennett v. Pennsylvania Ins. Co., 68 Iowa, 674, 15 Ins. L. J. 536. 3. Taylor v. Security Ins. Co., 88 Minn. 331, 93 N. W. Eep. 953; Cornish v. Farms Buildings Ins. Co., 74 N. Y. 395. 4. Hahn v. Guardian Assur. Co., 33 Oreg. 576, 33 Pac. Eep. 683 ; Jefferson Ins. Co. v. Cotheal, 7 Wend. 73 (N. Y.) ; Northrup V. Mississippi Valley Ins. Co., 47 Mo. 435, 443; Merchants' Ins. Co. V. Washington Ins. Co., 1 Handy, 408 (Ohio); Lyman V. State Ins. Co., 14 Allen, 339 (Mass.). RULE 26. When Policy not Divisible. The policy is not divisible when the increase of risk affects the entire property or subject of the insurance, even although itemized in the policy. Miller v. Delaware Ins. Co., Okla. , 75 Pac. Eep. 1131, 65 L. E. A. 173. And see Vol. 1, Fire Insurance as a Valid Contract, "Con- struction," Eule 36 and note. RULE 27. Waiver or Estoppel. Issue and delivery of the policy with knowledge of the company or its agent as to the facts or use of build- 308 FiKE Insurance. ing insured operate as an estoppel preventing the com- pany from claiming a forfeiture on account of such, facts or use as an increase of the risk ;^ when, after the issue of the policy, company's agent is notified of the increase of risk, but treats the policy as continuing in force and retaining the premium or omitting to cancel same, it may operate as evidence of waiver or estop- pel f specially when the agent makes a written indorse- ment upon the policy consenting to the repairs which effect the change claimed to increase the risk;* or by indorsement increases the amount at risk;* and in those States where notice of an increase of risk with no action by the insurance company or oral consent of its agent may become evidence of waiver, such notice is effective when knowledge is acquired by the com- pany's adjuster charged with the duty of supervising the repairs afterward claimed to constitute an increase of hazard.® 1. Columbia Planing Mill Co. v. American Ins. Co., 59 Mo. App. 204; Vesey v. Commercial Union Assur. Co., S. D. , 101 N. W. Eep. 1074; Phoenix Ins. Co. v. Eandle, 81 Miss. 720, 33 So. Eep. 500. 2. Orient Ins. Co. v. McKnight, 197 111. 190, 64 N. E. Eep. 339, affg 96 111. App. 525; Fireman's Fund Ins. Co. v. Sholom, 80 111. 558; Anthony v. German- American Ins. Co., 48 Mo. App. 65; Viele v. Germania Ins. Co., 26 Iowa, 9; Lattomus v. Farmers' Ins. Co., 3 Houst. 404 (Del.). So held as to an officer of the company. Martin v. Jersey City Ins. Co., 44 N". J. L. 273. And see Naughter v. Ottawa Co., 43 Up. Can. Q. B. 121; Peek V. Phoenix Ins. Co., 45 Up. Can. C^ B. 620. 3. Phoenix Ins. Co. v. Coomes, Ky. , 20 S. "W. Eep. 900, 22 Ins. L. J. 155. 4. Eathbone v. City Ins. Co., 31 Conn. 194. And see Peo- ple's Ins. Co. V. Spencer, 53 Pa. St. 353. 5. Mechanics' Ins. Co. v. Hodge, 149 111. 298, 37 N. E. Eep. 51, aff'g 46 111. App. 479. And see Eule 28. Also Vol. 1, Fire Insurance as a Valid Contract, " Waiver," and this volume, " Agents." Increase of Hazaed. 309 RULE 28. Knowledge or Notice to Company's Agent After Issue of Policy- no Waiver. When the form of the insurance contract or policy is prescribed by the State, and such prescribed form requires written consent to an increase of the risk, the knowledge of company's agent of an increase of risk and his failure to make objection, after issue of the policy and before the fire, cannot and do not operate as a waiver/ mere notice to company's agent does not waive or dispense with written consent when required by express terms of the policy.^ 1. Straker v. Phcenix Ins. Co., 101 Wis. 413, 77 N. W. Eep. 753, 28 Ins. L. J. 143. See Eule 27. 2. Pottsville Ins. Co. v. Horan, 89 Pa. St. 438, 10 Ins. L. J. 771 ; Gladding v. Insurance Assoc, 66 Cal. 6. See also Vol. 1, Fire Insurance as a Valid Contract, " Waiver," and this volume, " Agents." RULE 29. Effect of Demand and Receipt of Additional Premium — Insured Has Reasonable Time to Comply with. Special Condition. If the insurance company, knowing the facts which increase the risk, demand and receive an additional premium for such variation in the risk, it may be re- garded as evidence of waiver;^ and so acceptance of premium on renewal, with knowledge of an increase of risk, may operate as a waiver;^ and so when agent agrees to continue the policy upon condition that an iron door is put in without any limitation as to time, the insured has a reasonable time to comply with such condition and if he makes all reasonable effort before the fire there is no breach of the condition.^ 1. North Berwick Co. v. ISTew England F. & M. Ins. Co., 53 Me. 336. 310 FiEE Insueance. 2. Story v. Hope Ins. Co., 37 La. Ann. 254, 15 Ins. L. J. 119. And see Liddle v. Market Ins. Co., 29 N. Y. 184. See also Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eules 16, 31, 45. 3. Viele v. Germania Ins. Co., 26 Iowa, 9. RULE 30. Pleading — Burden of Proof. An answer or plea by the insurance company that the risk was increased, without alleging the facts or means by which it is claimed to have been increased, is objectionable, and is subject to a demurrer,^ or mo- tion as may be prescribed by local practice ; an increase of risk is an aflSrmative defense which must be pleaded by the insurance company to be available;^ material evidence affecting such an issue should not be ex- cluded.^ 1. Germania Ins. Co. v. Stewart, 13 Ind. App. 627, 42 N. E. Eep. 286. 2. Tischler v. California Ins. Co., 66 Cal. 178; Pierce v. Cohasset Ins. Co., 123 Mass. 572. 3. Traders' Ins. Co. v. Catlin, 71 111. App. 569. RULE 31- Increase of Hazard May be Question of law. While ordinarily the question of increase of hazard is one of fact, proper to be submitted to and de- termined by a jury, there may be such a state of facts established by uncontradicted evidence as to require a court to decide it a matter of law in granting a non- suit or in directing the verdict, as for instance, when the assured knowingly permits the storage of un- slacked lime which causes the fire, it is such a manifest Increase of Hazabd. 311 increase of risk as to require a direction of the verdict in favor of the insurance company;^ so when insured permits another person to store a large quantity of hay in a storehouse, it appearing that the hazard is thereby increased, it is not error to grant a nonsuit, and such result is not affected by the fact that hay belonging to the insured was covered by the policy;^ so storage of fireworks increases the risk as matter of law f or other inflammable matter like gasoline ;* or in erection of a contiguous building specially where the fire spreads therefrom;^ change in occupation from that of dwelling to a hotel is one material to the risk f so placing an engine and boiler near to a corn crib insured increases the riskJ 1. School District v. German Ins. Co., 7 S. D. 458, 64 F. W. Eep. 537, 25 Ins. L. J. 132. 2. Alston V. Greenwich Ins. Co., 100 Ga. 282, 29 S. E. Eep. 266. And see Ditmer v. Germania Ins. Co., 23 La. Ann. 458. 3. Betcher v. Capital Fire Ins. Co., 78 Minn. 240, 80 N". W. Eep. 971. 4. Cassimus v. Scottish Union & Nat. Ins. Co., 135 Ala. 256, 33 So. Eep. 163. And see Yentzer v. Farmers' Ins. Co., 200 Pa. St. 325, 49 Atl. Eep. 767. 5. Pottsville Ins. Co. v. Horan, 89 Pa. St. 438. And see Yentzer v. Farmers' Ins. Co., supra; Allen v. Massasoit Ins. Co., 99 Mass. 160 ; Washington Ins. Co. v. Davison, 30 Md. 91. 6. Guerin v. Manchester Assur. Co., 29 Can. S. C. 139. 7. Davis V. Western Home Ins. Co., 81 Iowa, 496, 46 N. W. Eep. 1073, 20 Ins. L. J. 363, 10 L. E. A. 359. RULE 32. No Inferences in Tavor of an Insurance Company. While it may be determined, as matter of law, that there is an increase of risk when that effect is ap- parent or obvious from an undisputed state of facts, the courts will not indulge in any assumption or in- 312 FiEE Insurance. ferences in favor of the insurance company; for in- stance, a defense of increase of risk is not sustained by proof that an addition brought the building insured a few feet nearer certain houses, there being no evi- dence how far distant such houses were, and whether danger of fire was thereby increased ;* so a division of the stock between partners insured and removal of part of the goods does not, as matter of law, increase the hazard;^ starting a fire in or near one of the build- ings insured for the purpose of burning up some rub- bish or debris, and while the assured is away from the building at noon the fire escapes or spreads so that it communicates with the insured building and destroys it, does not, as matter of law, constitute an increase of the risk or hazard voiding the insurance where there is no design to burn the building;^ so use of kerosene oil in kindling a fire in a cook-stove, although a neg- ligent act, is not an increase of hazard in the sense of the term as used in the policy;'' a mortgage does not, as a matter of law, increase the hazard,® nor a judg- ment and sale thereon f but is none the less a question of fact;'' vacating a house is not per se, as matter of law, an increase of the risk,* nor is mere change in the use or occupation;" there is no increase of risk in the freezing of sprinkler pipes and necessary repairs.^" 1. Mitchell V. Mississippi Home Ins. Co., 72 Miss. 53, 18 So. Eep. 86. And see Mark v. National Ins. Co., 24 Hun, 565, aff'd, 91 N. Y. 663, on opinion below. 2. Eunkle v. Hartford Ins. Co., 99 Iowa, 414, 68 JST. W. Eep. 712, 26 Ins. L. J. 320. 3. Des Moines lee Co. v. Niagara Ins. Co., 99 Iowa, 193, 68 N. W. Eep. 600, 26 Ins. L. J. 378. 4. Angler v. Western Assur. Co., 10 S. D. 82, 71 N. W. Eep. 761, 26 Ins. L. J. 795. Inckease of Hazaed. 313 5. Collins V. Merchants & Bankers' Ins. Co., 95 Iowa, 540, 64 N. W. Eep. 602; Light v. Insurance Cos., 105 Tenn. 480, 58 S. W. Eep. 851; Koshland v. Fire Assoc, 31 Oreg. 362, 49 Pac. Rep. 865, 26 Ins. L. J. 943. 6. Lodge V. Capitol Ins. Co., 91 Iowa, 103, 58 N. W. Eep. 1089, 23 Ins. L. J. 735. 7. Collins V. Merchants & Bankers' Ins. Co., 95 Iowa, 540, 64 N. W. Eep. 603. 8. Boardman v. North "Waterloo Ins. Co., 31 Ont. 525. 9. Niagara Ins. Co. v. Johnson, 4 Kans. App. 16, 45 Pac. Eep. 789. 10. Cummer Lumber Co. v. Associated Mfrs. Ins. Co., 67 App. Div. 151, 73 N. Y. Supp. 668, aff'd, 173 N. Y. 633, with- out opinion. RULE 33- When Proper to Set Aside Verdict. When the increase of risk is apparent, obvious, or self-evident, while it may properly be submitted to a jury as a question of fact, a verdict to the contrary should not be allowed to stand and should be set aside as contrary to law and evidence;^ as, for instance, when a drying-house is erected six or seven feet from main building insured;^ or when the fire originates in or is communicated from a newly-erected adjoining building,' or when insured violates his agreement limiting fire and lights in connection with use of naphtha.* 1. Cole V. Germania Ins. Co., 99 N. Y. 36, 14 Ins. L. J. 453; Pottsville Ins. Co. v. Horan, 89 Pa. St. 438; Daniels v. Equi- table Ins. Co., 50 Conn. 551. And see Denkla v. Insurance Co., 6 Phila. 233 (Pa.); Hobby v. Dana, 17 Barb. Ill; Eeid v. Gore District Ins. Co., 11 Up. Can. Q. B. 345. 2. Cole V. Germania Ins. Co., supra. 3. Pottsville Ins. Co. v. Horan, supra. 4. Daniels v. Equitable Ins. Co., supra. 314 FiBE Insubance. RULE 34. Tlie Question of Increase of Hazard is Ordinarily One of Fact. The question of increase of hazard is one of fact to be determined by a jury,^ unless the facts be undis- puted and the inferences therefrom so certain and ob- vious that it must be self-evident to any ordinary man that the risk was increased.^ Whether conducting a gambling establishment increases the risk requires the issue as one of fact to be submitted to the jury;^ so change in use of premises from a drug store to an unlicensed drinking saloon;* so introduction by in- sured of broommaking and storage of broom corn into building insured as a dwelling,^ or use of inflammable sulphur candles to fumigate a store ;^ or substitution of a " fire drier " for a steam drier in a hominy mill,'' or a temporary use of a steam thresher.* 1. Taylor v. Security Ins. Co., 88 Minn. 331, 92 K W. Eep. 953 ; Orient Ins. Co. v. McKnight, 197 111. 190, 64 N. E. Kep. 339, aflE'g 96 111. App. 535; Crete Farmers' Ins. Co. v. Miller, 70 111. App. 599; Greenwich Ins. Co. v. State, Ark. , 84 S. W. Eep. 1025; Minneapolis Threshing Machine Co. v. Damall, 13 S. D. 379, 83 N. W. Eep. 266 ; Jauvrin v. Eocking- ham Ins. Co., 70 IST. H. 35, 46 Atl. Eep. 686 ; Eureka F. & M. Ins. Co. V. Baldwin, 62 Ohio St. 368, 57 K E. Eep. 57; Adair v. Southern Mut. Ins. Co., 107 Ga. 397, 33 S. E. Eep. 78, 28 Ins. L. J. 510; Western Assur. Co. v. Eay, 105 Ky. 523, 49 S. W. Eep. 326, 38 Ins. L. J. 326; North British & M. Ins. Co. v. Union Stockyard Co., Ky. , 87 S. W. Eep. 385; Smith v. German Ins. Co., 107 Mich. 270, 65 K W. Eep. 236, 25 Ins. L. J. 192, 30 L. E. A. 368; Luce v. Dorchester Ins. Co., 105 Mass. 297; Hill v. Middlesex Assur. Co., 174 Mass. 542, 55 K B. Eep. 319; ^tna Ins. Co. v. Norman, 12 Ind. App. 652, 40 N. E. Eep. 1116, 34 Ins. L. J. 611 ; Grant v. Howard Ins. Co., 5 Hill, 10; Eager v. Firemen's Fund Ins. Co., 71 Hun, 352, 25 N. Y. Supp. 35, aff'd, 148 N. Y. 726, on opinion below; LeEoy v. Park Ins. Co., 39 N. Y. 56; Williams v. People's Ins. Increase of Hazard. 315 ■Co., 57 N. Y. 274; Jones v. Firemen's Fund Ins. Co., 51 N. Y. 318; Atherton v. British. America Assur. Co., 91 Me. 289, 39 Atl. Eep. 1006; Curry v. Commonwealth Ins. Co., 10 Pick. 535 (Mass.); Girard F. & M. Jns. Co. v. Stephenson, 37 Pa. St. 293; Northrup v. Mississippi Valley Ins. Co., 47 Mo. 435; Gris- wold V. American Central Ins. Co., 70 Mo. 654; Farmers' Ins. Co. V. Moyer, 97 Pa. St. 441 ; Franklin Ins. Co. v. Graver, 100 Pa. St. 266; Lockwood v. Middlesex Ins. Co., 47 Conn. 553; Lodge V. Capital Ins. Co., 91 Iowa, 103, 58 N. W. Eep. 1089, 23 Ins. L. J. 735; Nicholas v. Iowa Merchants' Ins. Co., Iowa, , 101 N. W. Eep. 115. 2. Taylor v. Security Ins. Co., 88 Minn. 231, 92 N". W. Eep. 952. See preceding rules. 3. Moriarty v. United States Ins. Co., 19 Tex. Civ. App. 669, 49 S. "W. Eep. 132. 4. ^tna Ins. Co. v. Norman, 12 Ind. App. 652, 40 N. E. Eep. 1116, 24 Ins. L. J. 611. 5. Anthony v. German-Amer. Ins. Co., 48 Mo. App. 65. 6. Pool V. Milwaukee Mechanics' Ins. Co., 91 Wis. 530, 65 N. W. Eep. 54. 7. German-Amer. Ins. Co. v. Steiger, 109 111. 254; North B. & M. Ins. Co. V. Steiger, 124 111. 81. 8. Long V. Beeber, 106 Pa. St. 466. RULE 35. "What Recognized as a Pact Whicli May Increase the Hazard — Illustrative Cases. Erection of a frame addition to building insured, putting in it a fireplace and stove,^ or erection of other buildings, near to property insured, so as to increase the risk, voids the policy;* so when insurance is on barley and malt in malthouse and brewery, carrying on distilling, increases the risk;^ so change in occupa- tion from a store to a printing ofl&ce;* or from a dwelling to a liquor saloon.' 1. Eoberts v. Chenango Ins. Co., 3 Hill, 501 (N. Y.). 2. Murdock v. Chenango Ins. Co., 2 N. Y. 210. Specially when cause of the loss. See Howard v. Kentucky & Louisville Ins. Co., 13 B. Monr. 282 (Ky.). 316 FiEE Insurance. 3. People's Ins. Co. v. Spencer, 53 Pa. St. 353. 4. Harvey v. Mutual Ins. Co., 11 Up. Can. C. P. 394. 5. Lappin v. Charter Oak Ins. Co., 58 Barb. 335; Western. Assur. Co. V. McPlke, 62 Miss. 740. As to effect of change from dwelling to a disorderly house of prostitution, see Indiana Ins. Co. v. Brehm, 88 Ind. 578, 1^ Ins. L. J. 607. RULE 36. What is not an Increase of Hazard — Illustrative Cases. Neglect to repair steam chest of a pump is not an. increase of the risk;^ nor is commencement of fore- closure proceedings as against the mortgagee holding policy with mortgagee clause ;^ nor killing of a horse, in an adjoining field, by lightning;^ a building twenty- five feet distant is not contiguous;* it will not be as- sumed, as a fact, that a change in the machinery of a flour mill from the burr process to the roller process increases the risk f removal of goods insured from the first floor to the basement does not increase the risk;* and so an addition or extension to building insured does not necessarily create an increase of risk.'' The mere change of occupants does not increase the risk;* nor does the process of reducing liquor by the mixing of water and the making of cocktails, as matter of law, increase the risk of an insurance upon a stock of groceries;^ nor is lighting a building with gasoline necessarily construed as using the building for a more hazardous business;^" nor is the mere vacation of a house by the insured or occupants or change of tenants a change material to the risk;" though vacancy may amount to an increase of the risk,^^ and vacancy creates a presumption of increase of risk under the Maine statute ;^^ the placing and use of a steam thresher near Inoeease of Hazabd. 317 l)arn insured is not an increase of risk when in temporary use in course of insured's business." 1. Albion Lead Works v. ■Williamsburg City 'Ins. Co., 2 Fed. Eep. 479, 9 Ins. L. J. 435. 2. Phoenix Ins. Co. v. Union Mutual Ins. Co., 101 Ind. 392, 14 Ins. L. J. 461. 3. Haws V. Philadelphia Fire Assoc., 114 Pa. St. 431. 4. Olson V. St. Paul P. & M. Ins. Co., 35 Minn. 432. 5. Planters' Ins. Co. v. Eowland, 66 Md. 236. 6. Plinsky v. Germania Ins. Co., 32 Fed. Eep. 47. 7. Meyer v. Queen Ins. Co., 41 La. Ann. 1000, 6 So. Eep. S99. 8. Planters' Ins. Co. v. Sorrels, 1 Baxt. 352 (Tenn.). 9. Bayly v. London & Lancashire Ins. Co., 4 Ins. L. J. 503 (U. S. Cir.). 10. Mutual Ins. Co. v. Coatesville Shoe Factory, 80 Pa. St. 407. 11. Georgia Home Ins. Co. v. Kinnier, 28 Gratt. 88 (Va.). And see Herrman v. Merchants' Ins. Co., 81 N". Y. 184; Game- well V. Merchants' Ins. Co., 12 Cush. 167 (Mass.); Lockwood V. Middlesex Ins. Co., 47 Conn. 553; Gilliat v. Pawtucket Ins. Co., 8 E. I. 282; Miller v. Oswego Ins. Co., 18 Hun, 525 CR. Y.) ; Somerset County Ins. Co. v. Usaw, 112 Pa. St. 80. 12. Lancy v. Home Ins. Co., 82 Me. 492, 20 Atl. Eep. 79, 19 Ins. L. J. 878. 13. White V. Phcenix Ins. Co., 83 Me. 279, 22 Atl. Eep. 167, 20 Ins. L. J. 900. 14. German Ins. Co. v. Hart, 16 Ky. L. Eep. 344. See Eules 33, 34. In Luce v. Dorchester Ins. Co., 110 Mass. 361, where policy provided it should be void if any increase of risk, the trial court refused to instruct the jury " that if under this policy plaintiff might have recovered even for the consequences of the acts of vicious or bad tenants, yet he cannot recover if the building was wholly unoccupied for so long a time as to render the risk greater than it would have been with tenants of ordi- nary care and habits," and on appeal such refusal was held to be error, and that the insurance company was entitled to the charge as requested. 318 Fire Insurance. TITLE III. Alterations or Repairs by Mechanics. EuLE 1. As imposed by contract. 2. If condition violated policy rendered void without regard to any question of increase of risk. 3. Test of time substituted for former test of reason- ableness — Change commendable. 4. Permission limited to property described — Admis- sion of parol evidence — Construction of addition. 5. Effect of permission for repairs and alterations. 6. Limitation of special permission for alterations and repairs. 7. Permission applicable to building in course of erec- tion. 8. Effect of carpenter's risk only. 9. Eisk must not be increased further than necessary. 10. As affected by construction. 11. Eepairs not extended by construction. 13. Construction of the vrord " mechanics." 13. Application of permission or condition to tenants. 14. When policy contains no condition as to repairs — Question of fact — Effect of special permission. 15. Suspension of policy when hazard increased. 16. Eemoval of automatic sprinkler equipment. 17. Assignee of policy not affected by subsequent acts of" grantor. 18. Effect of condition against alteration by specific- means. 19. Expert evidence. 20. "Waiver or estoppel when policy issues. 31. Oral agreement by agent to grant a permit ineffec- tual. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if meeha,nics be employed in building, altering, or repairing the within-described premises for more than fifteen days at any one time. AliTEKATIONS OK EePAIES BY MECHANICS. 319 This rule is imposed by above terms in the standard form of policy prescribed in: New York, Forth Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Missouri, Rhode Island, New Jersey, Wisconsin. The standard form of policy prescribed in Michigan is the same, except there is added: "Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." The standard form of policy prescribed in Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain above provision. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. Many of the old forms contained a specific provision declar- ing that " the working of carpenters, roofers, gasfitters, plumb- ers, and other mechanics, in building, altering, or repairing any building or buildings covered, will cause a forfeiture of all claim under this policy, without the written consent of the company indorsed hereon," and it was held that the altering by carpenters of a grocery store into a building for drying fruit was so manifestly a violation of the condition that it was proper for the trial court to direct a verdict in favor of the insurance company. Mack V. Eochester German Ins. Co., 106 N. Y. 560, 13 N. E. Eep. 343. And under same or similar condition it was held that the clause did not apply to casual ordinary necessary repairs. Franklin Ins. Co. v. Chicago Ice Co., 36 Md. 103; James v. Lycoming Ins. Co., 4 Cliff. 272 (U. S. Cir.). Specially as applied to a dwelling, when by a clause in addition five days were allowed for incidental repairs without notice or indorsement, and the repairs in question had been in progress less than the five days allowed. Rann v. Home Ins. Co., 59 N. Y. 387. * See note to " Concealment," Rule 1, page 3. 320 Fire Insurance. ' And so, under same or similar condition, a carpenter who had been instructed to make certain alterations had gone upon the premises the day before the fire and removed two small pieces of stair rail, it was held that there was no violation of the condition. Summerfield v. Phoenix Ins. Co., 65 Fed. Eep. 293. RULE 2. If Condition Violated Policy Rendered Void Without Regard to Any Question of Increase of Risk. If mechanics are employed in building, altering, or repairing the premises described in the policy for more than the specified time, or in violation of the condition, without written consent indorsed, it renders the policy void, according to its terms, without any regard to increase of hazard, which question is not necessarily involved, though fire may have occurred while the work was in progress ;^ if there is a breach .of the con- dition it voids the policy without reference to any question of increase of risk; the two conditions are independent of each other.^ 1. Newport Improvement Co. v. Home Ins. Co., 163 N. Y. 237, 57 N. E. Rep. 475. 2. Imperial Ins. Co. v. Coos County, 151 U. S. 452, 33 Ins. L. J. 282. RULE 3. Test of Time Substituted for Pormer Test of Reasonableness — Cliange Commendable. The time limit applied and imposed by the condition (Rule 1), is operative in all cases, without regard to reasonableness or character of the repairs. The test of time is substituted for the former test of reason- ableness, and the change in the language of the con- Alterations ok Ebpaies by Mechanics. 321 dition is commeiidable and worthy of support by the courts. German Ins. Co. v. Hearne, 117 Fed. Eep. 389, 54 C. C. A. 537. RULE 4. Permission Limited to Property Described — Admission of Parol Evidence — Construction of Addition. A permission for " additions, alterations, and re- pairs " is limited in its application to the property certainly described in the policy, and cannot be ex- tended by construction or admission of parol evidence, to a separate building not included in or covered by the description;^ a building forty feet distant from the insured building, although connected by a bridge and an underground passage, cannot be called an " addition " covered by an indorsement permitting " additions, alterations, and repairs."^ When the de- scription in the policy may be construed as covering or extending to an entire plant, the word ' ' additions ' ' refers to additions to the plant and may include new buildings constructed thereon.^ 1. Arlington Mfg. Co. v. Norwich Union Ins. Co., 107 Fed. Eep. 663, 46 C. C. A. 543. 2. Peoria Sugar Eefining Co. v. People's Ins. Co., 34 Fed. Eep. 773, 15 Ins. L. J. 53. And see 53 Conn. 581. 3. Arlington Co. v. Colonial Assur. Co., 180 N. Y. 337, 73 K E. Eep. 34. RULE 5. Effect of Permission for Repairs and Alterations. "When the policy permits repairs and alterations whatever is necessary or usual to be done in the proper performance of the work may be done without voiding Vol. 2 — 21 322 FiKE Insukance. the insurance under other clauses or conditions; for instance,* if it is necessary to stop or suspend the operation of a factory to make the repairs, the policy cannot be claimed to be void under the clause declar- ing it void, if the factory should cease to be operated;^ so a clause forbidding the^use of open lights is not violated by the use of a torch necessary for the com- pletion of permitted repairs.^ Any increase of risk incident to the making of reasonable and necessary repairs is part of the general risk assumed by the in- surance company, and hence the clause or condition against an increase of hazard is inoperative.^ 1. American Ins. Co. v. Brighton Cotton Mfg. Co., 34 111. App. 149, afE'd, 135 111. 131, 17 N. E. Rep. 771. 2. Au Sable Lumber Co. v. Detroit Ins. Co., 89 Mich. 407, 50 N. W. Rep. 870, 31 Ins. L. J. 311. 3. Townsend v. ISTorthwestern Ins. Co., 18 N. Y. 168. And see Washington Ins. Co. v. Davison, 30 Md. 91. RULE 6. Limitation of Special Permission for Alterations and Bepairs. When the insurance company, by special clause or indorsement, gives permission for " necessary altera- tions and repairs " such consent does not necessarily operate to authorize a material enlargement of the building insured; and if additions and enlargements are in terms specifically prohibited by the policy, such enlargement or addition voids the insurance without regard to whether the risk be increased or not. Frost "Works v. Millers & Manufacturers' Ins. Co., 37 Minn. 300, 34 N. W. Rep. 35. Alterations or Repairs by Mechanics. 323 RULE 7. Permission Applicable to Building' in Course of- Erection. If the insurance company having a policy on a build- ing in course of erection gives or indorses a consent " thirty days granted to complete construction and occupy as dwelling," such permission supersedes the printed condition allowing fifteen days for building, altering, or repairing, and the limit of thirty days so prescribed cannot be extended by tacking on to it the fifteen days. Burnham v. Eoyal Ins. Co., 75 Mo. App. 394, 27 Ins. L. J. 928. RULE 8. Effect of " Carpenter's Risk Only." When the insurance company, by a special clause or indorsement, inserts " carpenter's risk only," it does not necessarily limit the insurance to completion of the repairs. Alkan v. New Hampshire Ins. Co., 53 Wis. 136, 11 Ins. L. J. 125. RULE 9. Bisk Must not be Increased Eurtber Tban Necessary. If the insurance company gives permission to make alterations, additions, and repairs, such consent can- not be limited to such as do not increase the risk. The reasonable construction is that insured cannot increase the risk further than necessary in availing himself of such permission. Firemen's Ins. Co. v. Appleton Paper Co., 161 111. 9, 43 N. E. Eep. 713, 25 Ins. L. J. 634, afE'g 59 111. App. 511. 324 FiEE Insurance. RULE 10. As Affected by Construction. In the construction or interpretation of clauses or conditions relating to repairs, alterations, and the work of carpenters and mechanics, the insurance com- pany has the right to insist upon their due observance, and to the benefit of every restriction and limitation upon liability provided for, but care should be taken that a strained and unnatural effect should not be given to words and terms to the prejudice of the in- sured, and in no case should they be extended by im- plication, so as to embrace cases not clearly or reason- ably within the very words of the condition, as such words are ordinarily used and understood. Kann v. Home Ins. Co., 59 N. Y. 387. And see Vol. 1, Fire Insurance as a Valid Contract, "Con- struction," Eule 17. RULE II. Bepairs not Extended by Construction. The word " repairs " will not be extended by con- struction to apply and cover a substantial or material addition; as, for instance, the putting in a new cotton gin, press, and mule power, will not be considered re- pairs to the ginhouse. Noyes v. Hartford Ins. Co., 54 N. Y. 668, 3 Ins. L. J. 44. RULE 12. Construction of the Word " Mechanics." The word " mechanics " is not construed to mean any and every person who may do some work on the Alterations or Repairs by Mechanics. 325 building ; for instance, painters are not ' ' mechanics ' ' within the meaning of that word as employed in the policy. Smith V. German Ins. Co., 107 Mich. 270, 65 N. W. Kep. 236, 25 Ins. L. J. 192, 30 L. R. A. 368. RULE 13. Application of Permission or Condition to Tenants. A clause or condition in the policy providing that mechanics will be allowed to make ordinary alterations and repairs to building not exceeding fifteen days, as against one of several tenants insured, may be con- strued to apply only to buildings under control of the insured;^ but ordinarily possession of a tenant is tho possession of the landlord, and a condition against alteration is violated by an alteration by the tenant, though without the authority or knowledge of the land- lord insured.^ 1. Mechanics' Ins. Co. v. Hodge, 149 111. 298, 37 N. E. Eep. 51, afE'g 46 111. App. 479. 2. Diehl v. Adams County Ins. Co., 58 Pa. St. 443. When knowledge is an essential element it must be shown that it extended to character of the improvement or changes. Merrill v. Insurance Co. JST. A., 23 Fed. Eep. 245, 14 Ins. L. J. 457. And see "Increase of Hazard." RULE 14. When Policy Contains no Condition as to Bepairs — Question of Fact — Effect of Special Permission. If the policy contains no provision or condition in regard to repairs, the insured may make all such repairs as may be usual and necessary in ordinary 326 FiBE Insueance. acts of ownership without affecting the insurance, but when such repairs extend beyond such limitation, ma- terially increasing the risk, then the policy may be voided; the question is to be determined by a jury, and not by the court ;^ and when the insurance com- pany gives specific permission to make alterations and repairs incidental to the business, the rule is substan- tially the same.^ 1. Jolly V. Baltimore Society, 1 Harr. & G. 295 (Md.). And see Curry v. Commonwealth Ins. Co., 10 Pick. 535 (Mass.); Stetson V. Massachusetts Ins. Co., 4 Mass. 330; Jones Mfg. Co. V. Manufacturers' Ins. Co., 8 Cush. 83 (Mass.); Young v. Washington County Ins. Co., 14 Barb. 645 (N. Y.) ; Dorn v. Germania Ins. Co., 5 Ins. L. J. 183 (IT. S. Cir.). 2. Crane v. City Ins. Ca., 3 Fed. Eep. 558. RULE IS. Suspension of Policy When Hazard Increased. When the question of increase of hazard is con- nected with the repairs the effect is to suspend the policy only during such increase. Insurance Co. N. A. v. McDowell, 50 111. 120. See also this volume, chapter "Increase of Hazard." RULE i6. Removal of Automatic Sprinkler Equipment. Removal of an automatic sprinkler equipment in or)der to replace it with a better system, does not void the policy, when permission is given to make altera- tions and repairs, and when the presence of the sprink- ler is not made a condition of the risk. Firemen's Ins. Co. v. Appleton Paper Co., 161 111. 9, 43 N. E. Eep. 713, 25 Ins. L. J. 634, a.Tg 59 111. App. 511. Altebations ok Repairs by Mechanics. 327 RULE 17. Assignee of Policy not AfEected by Subsequent Acts of Grantor. An assignee of the policy, witli the consent of the company, is not affected by the subsequent unauthor- ized act of his grantor in causing repairs to be made. Breckinridge v. American Central Ins. Co., 87 Mo. 62. RULE 18. Effect of Condition Against Alteration by Specific Means. When policy in terms provides against alterations by specific means, such as in introduction of steam or a steam engine, violation of the condition voids the policy without regard to whether the engine introduced is used merely as an experiment, or as a mode of carrying on the business, or whether used for a longer or shorter time. Glen V. Lewis, 8 Wels., Hurls. & Gord. 607 (Eng.). RULE 19. Expert Evidence. When the question of an increase of hazard is rele- vant to or connected with that raised by alterations and additions, a properly qualified and experienced insurance officer or agent may give his opinion as an expert as to the effect of such alterations and addi- tions upon the risk and rate. Kern v. South St. Louis Ins. Co., 40 Mo. 19. And see " Increase of Hazard." 328 FiEE Insurance. RULE 20. Waiver or Estoppel When Policy Issues. Issue and delivery of the policy with knowledge by the company or its agent of existing facts in violation of the condition operates as a waiver or estoppel, pre- venting the company from claiming a forfeiture by reason of such facts. Hackett v. Philadelphia Underwriters, 79 Mo. App. 16. And see and compare the various rules governing waiver, Vol. 1, Fire Insurance as a Valid Contract, chapter 10, " Waiver." RULE 21. Oral Agreement by Agent to Grant a Permit InefEectual. An agent with authority to grant permits for vacan- cies and also for repairs by attaching written or printed permits to policies and sending copies of same to the company does not have authority to bind the company by an oral agreement to grant a permit. Even if the agent says, " when the mechanics begin work we will put on (the policy) a mechanic's per- mit," it implies that notice must be given before the permit should be attached, and cannot be construed as a present permit or agreement for a future permit without notice. The fact that the agent is also agent of the insured in respect to caring for the property and has possession of the policy is immaterial. A per^ mission to be unoccupied cannot be construed to in- clude a permit for repairs, so as to prevent effect of the latter as an increase of the risk without per- mission. Hill V. Commercial Union Assur. Co., 164 Mass. 406, 41 N. E. Rep. 657, 25 Ins. L. J. 185. Alterations ok Repairs by Mechanics. 329 Mere knowledge • of an agent after issue of the policy is inoperative as evidence of waiver or estoppel against the in- surance company. Sykes v. Perry County Ins. Co., 34 Pa. St. 79; Eobinson v. Mercer County Ins. Co., 3 Dutch. 134 (X. J.). And see Vol. 1, Eire Insurance as a Valid Contract, the vari- ous rules governing "Waiver," chapter 10. Also this volume, " Agents." Under the old forms repairs and alterations did not have the effect to void the insurance unless the risk was increased. See Rules 1, 3, 3, and cases thereunder, and Kern v. South St. Louis Ins. Co., 40 Mo. 19. Some contained specific provisions that alterations should not affect the insurance unless the risk was increased. Merriam v. Middlesex Ins. Co., 21 Pick. 162 (Mass.). And see Girard Ins. Co. v. Stephenson, 37 Pa. St. 293; Lyman v. State Ins. Co., 14 Allen, 329 (Mass.); Troy Ins. Co. v. Car- penter, 4 Wis. 20; Sykes v. Perry County Ins. Co., 34 Pa. St. 79; Ottawa Forwarding Co. v. Liverpool, L. & G. Ins. Co., 28 Up. Can. Q. B. 518. But this did not mean that alterations should be of a per- manent character, nor that they should cause the fire, to void the policy. Lyman v. State Ins. Co., supra. Other forms provided that the company should not be liable for a loss caused by material repairs when made without con- sent. Howell V. Baltimore Soc, 16 Md. 377; Troy Ins. Co. v. Carpenter, 4 Wis. 20. And others contained specific provision requiring notice of erection or alteration of any building. Calvert v. Hamilton Ins. Co., 1 Allen, 308 (Mass.). TITLE IV. Illuminating Gas or Vapor and Prohibited Articles. Rule 1. As imposed by contract. 2. Construction — Violation voids policy without re- gard to increase of risk or cause of fire. 3. Ignorance no excuse. 4. Construction of the word " premises." 330 FiKE Insurance. EuLE 5. Construction of the words " kept and used on prem- ises." 6. Construction of word "allowed." 7. Construction of parenthetical words in Eule 1 ap- plicable to kerosene. 8. Construction of the words " for lights and hy day- light." 9. Eeduced oil residuum of petroleum — Increase of hazard — Question, of fact. 10. Every occupation is not trade or manufacture — Usage and custom. 11. Judicial notice — ■ Effect of use of general words. 13. Construction of special permission or privilege. 13. Special permit limited in time by its terms. 14. Ordinary repairs. 15. Use of gasoline without permission. 16. Keeping in bam does not prevent forfeiture for use in dwelling. 17. Keeping of gasoline not excused by abandonment of specific purpose. 18. Bate of premium conveys no notice. 19. Custom in use of gasoline for exhibition purposes. 20. Contract ends when condition violated — Not re- vived without consent of the insurance company. 21. Occasional or temporary necessary use — Eepairs — Household purposes — Cleaning machinery. 22. Limitation of preceding rule. 23. Written description construed as agreement provid- ing otherwise. 24. Effect of written description — Evidence — Eisk of particular business. 25. Limitation of rule as to assumption of risk of par- ticular business. 26. A sale incidental to a business does not permit manu- facture. 27. Drawing of kerosene. 28. Keeping of gunpowder. 29. Effect of permission to be occupied for hazardous or extrahazardous purposes. 30. Usage or custom — Ambiguity in description. 31. Opinion evidence — Experts. 32. Keeping or use by tenant. 33. "Waiver or estoppel when policy issues — After issue. 34. Waiver as to use of small quantity not extended. Illuminating Gas and Prohibited Articles. 331 EuLE 35. Burden of proof. 36. Article may not be prohibited yet violate condition as to increase of hazard — Question of fact. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if illuminating gas or vapor be generated in the described building (or adjacent thereto) for use therein; or if (any usage or custom of trade or manu- facture to the contrary notwithstanding) there be kept, used, or allowed on the above-described premises, benzine, benzole, dynamite, ether, fireworks, gasoline, greek fire, gunpowder, exceeding twenty-five pounds in quantity, naphtha, nitro-glycerine, or other ex- plosives, phosphorous, or petroleum or any of its products of greater inflammability than kerosene oil of the United States standard (which last may be used for lights, and kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lamps filled by daylight, or at a distance not less than ten feet from artificial light). This rule is imposed by above terms by the standard form of policy prescribed in: ISTew York, ISTorth Carolina, Connecticut, Iforth Dakota, Louisiana, *PennsyIvania, Missouri, Ehode Island. New Jersey, The standard form of policy prescribed in Michigan is the same, except there is added: "Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." * See note to " Concealment," Eule 1, page 2. 332 Fire Insubance. The standard form of policy prescribed in Wisconsin is the same, except that " Wisconsin " is substituted for " United States" in the clause prescribing standard of kerosene oil. The standard form of policy prescribed in: Maine, Minnesota, Massachusetts, provides : " This policy shall be void, if gunpowder or other articles subject to legal restriction shall be kept in quantities or manner different from those allowed or prescribed by law, or if camphene, benzine, naphtha, or other chemical oils or burning fluids, 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, and in dwelling- houses kerosene oil-stoves may be used for domestic purposes — to be filled when cold, by daylight, and with oil of lawful fire test only." The standard form of policy prescribed in Wew Hampshire provides : " This policy shall be void and inoperative during the existence or continuance of the acts or conditions of things stipulated against, as follows: * * * jf gunpowder or other articles subject to legal restriction shall be kept in quan- tities or manner different from those allowed or prescribed by law; or if camphene, benzine, naphtha, or other chemical oils or burning fluids shall be kept or used by the insured on the premises insured, except that what is known as refined petro- leum, kerosene, or coal oil may be used for lighting." It is fur- thermore provided by statute made part of the policy: "A change in the property insured, or in its use or occupation, or a breach of any of the terms of the policy by the insured, shall not affect the policy except while the change or breach con- tinues." The standard form of policy prescribed in South Dakota pro- vides : " This policy shall be void if without the assent of the insurer, illuminating gas or vapor be generated in the de- • scribed building (or adjacent thereto) for use therein, or if without the assent of the insurer there be kept on the above- described premises dynamite, gunpowder exceeding twenty-five pounds in quantity, naphtha, nitro-glyeerine or other explosives, or petroleum or any of its products of greater inflammability than gasoline or kerosene oil of lawful fire test (which gasoline and kerosene may be kept and used for lights and usual do- Illuminating Gas and Pkohibited Aeticles. 333 mestie purposes), and kerosene may be kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lights filled by daylight, or at a distance not less than ten feet from artificial light." In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. RULE 2. Coustruction — Violation Voids Policy Without Regard to In- crease of Bisk or Cause of Fire. The language of the policy must be construed to mean what it says, and when the keeping of gasoline is in violation of its terms or of the terms of a special permit for its use, it is sufficient ground of forfeiture without regard to results, or any question as to in- crease of risk, and without reference to the cause or origin of the fire ;^ and so the insured voids his insur- ance by placing in his house a lot of fireworks, especi- ally when they cause the damage for which claim is made f and so the insurance is voided by having gun- powder over the prescribed quantity.^ 1. JSTorwaysz v. Thuringia Ins. Co., 204 111. 334, 68 N. B. Eep. 551, aff'g 104 111. App. 390; Kennefick-Hammond Co. V. JSTorwich Union Fire Assoc, Mo. App. , SO S. W. Eep. 694 : Turnbull v. Home Ins. Co., 83 Md. 312, 34 Atl. Eep. 875; Bastian v. British American Assur. Co., 143 Cal. 287, 77 Pac. Eep. 63, 66 L. E. A. 255. And see Cassimus v. Scottish Union & Nat. Ins. Co., 135 Ala. 256, 33 So. Eep. 163; Boyer V. Grand Eapids Ins. Co., 124 Mich. 455, 83 N. W. Eep. 124, Hutton V. Patrons Mutual Ins. Co., 191 Pa. St. 369, 43 Atl. Eep. 219; Pennsylvania Ins. Co. v. Paires, 13 Tex. Civ. App. Ill, 35 S. W. Eep. 55; Fischer v. London & Lancashire Ins. Co., 83 Fed. Eep. 807, 27 Ins. L. J. 417; Mead v. Northwestern Ins. Co., 7 N. Y. 530. 2. Heron v. Phoenix Ins. Co., 180 Pa. St. 257, 36 Atl. Eep. 740, 26 Ins. L. J. 690. 3. Faulkner v. Central Ins. Co., 1 Kerr, 279 (N. B.). 334 Fire Insukance. RULE 3. Ignorance no Excuse. The insured cannot escape the legal consequence of a violation of a condition as to prohibited articles by a plea of ignorance;^ if their use is habitual the law imputes to the insured knowledge and permission.^ 1. Eeeve v. Phoenix Ins. Co., 23 La. Ann. 219; Kohlmann V. Selvage, 34 App. Div. 380, 54 N. Y. Supp. 230. And see Rule 2, also Vol. 1, Fire Insurance as a Valid Con- tract, " Construction," Eule 5. 2. Farmers & Meehanics' Ins. Co. v. Simmons, 30 Pa. St. 299. RULE 4. Construction of the Word " Premises." The word " premises " is construed to mean only those buildings which are described or mentioned in the written description or part of the policy, and does not extend to and include the lot outside upon which none of the buildings stand ; hence benzine may be kept in an open shed on the same lot, eight or ten feet from the building described and in no way connected with any of them;^ and so gasoline may be stored on lot outside of the building in reasonable quantities;^ or fireworks may be kept in another building upon the same lot.^ But rule may be otherwise when the build- ings are connected by a pipe through which the pro- hibited article flows.* 1. Eau V. Westchester Ins. Co., 36 App. Div. 179, 55 N. Y. Supp. 459, 28 Ins. L. J. 182 ; sulDsequent appeal, 50 App. Div. 428, affd, 168 IST. Y. 665, without opinion; Firemen's Fund Ins. Co. V. Shearman, 20 Tex. Civ. App. 343, 50 S. W. Eep. 598. And see Kohlmann v. Selvage, 34 App. Div. 380, 54 N. Y. Supp. 230; Hears v. Humboldt Ins. Co., 92 Pa. St. 15; Sperry V. Insurance Co. N. A., 22 Fed. Eep. 516. 14 Ins. L. J. 141. •Illuminatiistg Gas and Peohibited Articles. 335 2. Northwestern Life Ins. Co. v. Germania Ins. Co., 40 Wis. 446; LaForce v. Williamsburg City Ins. Co., 43 Mo. App. 518. 3. Allemania Ins. Co. v. Pittsburg Exposition Soc, Pa. St. , 11 Atl. Eep. 573. 4. White V. Western Assur. Co., Pa. St. , 16 Ins. L. J. 233. RULE 5. Construction of the Words " Kept " and " Used on Premises." The word " kept," in a policy, implies a use of the premises as a place of deposit for the prohibited articles for a considerable period of time; naphtha is used " on the premises," although actually used out- side to burn off old paint. First Congregational Church v. Holyoke Ins. Co., 158 Mass. 475, 32 N. E. Eep. 572, 22 Ins. L. J. 449. Under old forms the word " kept " was construed as meaning keeping as objects of merchandise or manufacture. Putnam v. Commonwealth Ins. Co., 18 Blatchf. 368 (U. S. Cir.). RULE 6. Construction of Word " Allowed." The word ' ' allowed " is to be construed as meaning in the clause or condition " allowed to be kept or used," and as so construed does not apply when the insured permitted gasoline to be carried through the building or store, without leaving or depositing it there. London & Lancashire Ins. Co. v. Fischer, 92 Fed. Rep. 500, 34 C. C. A. 503, 28 Ins. L. J. 452. And see Springfield F. & M. Ins. Co. V. Wade, Tex. , 68 S. W. Rep. 977. RULE 7. Construction of Parenthetical Words in Rule 1 Applicable to Kerosene. The words in pareiithesis made applicable to kero- sene oil i" which last may be used for lights only, pro- 336 ' FiEE Insurance. vided the oil be drawn and the lamps trimmed and filled solely by daylight,") import a regulation of the use of kerosene oil used for lighting purposes, and the condition will not be construed to prohibit its use for any other purpose than for lights; a policy is not avoided by the mere use of kerosene in a lamp as part of an oil stove used for cooking, the oil being of the prescribed standard;* but drawing kerosene by lamp- light whereby loss is caused, voids the insurance? 1. Snyder v. Dwelling-House Ins. Co., 59 N. J. L. 544, 37 Atl. Eep. 1023, 36 Ins. L. J. 905, rev'g 59 N. J. L. 18, 25 Ins. L. J. 715, 34 Atl. Eep. 931. 2. Gunther v. Liverpool, L. & G. Ins. Co., 134 U. S. 110, 19 Ins. L. J. 417, afE'g 34 Fed. Rep. 501. And see previous appeal, 116 U. S. 113, 15 Ins. L. J. 161, rev'g 30 Blatchf. 362. RULE 8. Construction of tlie Words " For Lig^hts " and " By Daylight." The words " for lights " are restricted in their meaning to lighting the insured premises only, and the words ' ' by daylight ' ' are intended to prevent the use of artificial light from which the oil might catch fire. Gunther v. Liverpool, L. & G. Ins. Co., 134 U. S. 110, 10 Sup. Ct. Eep. 448, 19 Ins. L. J. 417, afE'g 34 Fed. Eep. 501. And see previous appeal, 116 U. S. 113, 15 Ins. L. J. 161, rev'g 20 Blatchf. 362. RULE 9. Keduced Oil, Residuum of Petroleum, Increase of Hazard — Question of Fact. The standard form of policy does not prohibit the use of reduced oil, a residuum of petroleum, as a fuel under boilers. The only question is whether the use and manner of use increases the hazard, and this is a Illuminating Gtas and Pbohibited Akticlks. 337 question of fact proper to be submitted to a jury, whose determination is conclusive. Grand Eapids Hydraulic Co. ■;;. American Ins. Co., 93 Mich. 396, 53 N. W. Rep. 538, 22 Ins. L. J. 158. (In this case experts testified that the reduced oil in question was safer than kerosene oil, Michigan State standard, and that it was less inflammable than crude petroleum, and less so than kerosene.) RULE 10. Every Occupation is not Trade or Manufacture — Usage and Custom. It is not every occupation that is a trade or manu- facture within meaning of the policy; for instance, operating a laundry is not such a trade or manufacture as to require the exclusion of evidence of usage or custom in use of gasoline. Korthern Assur. Co. v. Crawford, 24 Tex. Civ. App. 574, 59 S. W. Eep. 916. And see Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Rule 33. RULE II. Judicial Notice — Effect of Use of General Words. The courts will not take judicial notice that a certain article claimed to be an explosive is such in fact ; same must be proved as matter of fact, and cannot be as- sumed as matter of law;^ and same rule applies when language used is " any other inflammable "^ or " burning fluid ;"^ or " coal or earth oil;"* and when such general words are used, they are construed in connection with the context, and if specific articles are there prohibited, the proof must be that the article in question is of the same nature.^ 1. Willis V. Germania Ins. Co., 79 N. C. 285 ; Wood v. North- western Ins. Co., 46 N. Y. 421. Vol. 2 — 22 338 FiEE Insurance. 2. Wood V. ISTorthwestern Ins. Co., supra; Moseley v. Vermont Ins. Co., 55 Vt. 143, 13 Ins. L. J. 97. 3. Mears v. Humboldt Ins. Co., 93 Pa. St. 15; Putnam v. Commonwealth Ins. Co., 18 Blatchf. 368; Wheeler v. American Central Ins. Co., 6 Mo. App. 335; Mark v. National Ins. Co., 24 Hun, 565, aff'd, 91 N. Y. 663, on opinion below. 4. Bennett v. North British & M. Ins. Co., 8 Daly, 471, affd, 81 K, Y. 273. 5. Mears v. Humboldt Ins. Co., supra; Wheeler v. American Central Ins. Co., supra. And see Morse v. Buffalo Ins. Co., 30 Wis. 534. RULE 12. Construction of Special Permission or Privilege. A permission or privilege indorsed or inserted for the keeping or use of prohibited articles, is not con- strued as a warranty unless the language is in terms explicit requiring such construction ; hence such a per- mission is to be substantially rather than literally and exactly complied with, having reasonable reference to enjoyment of its benefits. Maryland Ins. Co. v. Whiteford, 31 Md. 219. (In this case the permission was " permission given to keep one barrel of benzine in tin cans," and the benzine was brought in a barrel and transferred by syphon into a single can, and it was held that procuring it by the barrel was a substantial com- pliance, and then transferring it was allowable by every fair intendment, and was not a keeping it therein.) See this volume, " Warranty." RULE 13. A Special Permit Iiim.ited in Time by Its Terms. A permit for storing or keeping for a certain pre- scribed period of time does not operate as an implied permission for continuance after its expiration ; if not renewed, policy becomes void, even though company's agent may know of the continuance. Betcher v. Capital Ins. Co., 78 Minn. 340, 80 N. W. Eep. 971. Illuminating Gas and Prohibited Articles. 339 RULE 14. Ordinary Repairs. The condition against prohibited articles does not apply if their use be reasonably safe and proper in making ordinary repairs. If naphtha has been used to burn off old paint, the question for the jury is whether the company, familiar with the condition of the build- ing and the methods usually adopted in making re- pairs, should have contemplated when policy was is- sued that the insured would burn off the paint at such a time and in such a way as he did! Was such a use of naphtha a reasonably safe and proper way of mak- ing repairs under the circumstances?^ And so the keeping of a five-gallon can of gasoline in the building for several weeks from which to supply torches used in removing old paint from the outside of the building preparatory to repainting it, does not, as matter of law, constitute a violation of the condition.^ 1. First Congregational Church v. Holyoke Ins. Co., 158 Mass. 475, 33 F. E. Eep. 572, 23 Ins. L. J. 449. And see Smith V. German Ins. Co., 107 Mich. 270, 65 N. W. Eep. 336, 25 Ins. L. J. 192, 30 L. E. A. 368. 2. Smith V. German Ins. Co., supra. RULE 15. tJse of Gasoline Without Permission. When gasoline is brought upon the premises for purpose of using it in a gasoline stove, without per- mission of the company, it voids the policy, the loss occurring during a breach of the condition, and while the terms of the contract are being violated. Boyer v. Grand Eapids Ins. Co., 124 Mich. 455, 83 N. W. Eep. 124. And see Fischer v. London & Lancashire Ins. Co., 83 340 FiBE Insxjkance. Fed. Eep. 807, 27 Ins. L. J. 417 ; McFarland v. St. Paul F. & M. Ins. Co., 46 Minn. 519, 49 N. W. Eep. 253. See Eule 1, Michigan standard form. RULE i6. Keeping in Barn Does not Prevent Forfeiture for Use in Dwelling. When there is no evidence of permission being given to use gasoline, the fact that the vessel in which it is kept is stored in a barn does not relieve the insured of a forfeiture, brought about by the use of the gas- oline in a residence containing household and kitchen furniture insured. Pennsylvania Ins. Co. v. Faires, 13 Tex. Civ. App. Ill, 35 S. W. Eep. 55. RULE 17. Keeping: of Gasoline not Excused by Abandonment of Specific Purpose. A permission or privilege to use a gas machine or apparatus, not actually exercised, nor intended to be exercised, but in fact abandoned, does not protect the insured in keeping or storing gasoline not intended for use in such apparatus. Liverpool, L. & G. Ins. Co. v. Gnnther, 116 U. S. 113, 15 Ins. L. J. 161, rev'g 20 Blatchf. 362. RULE 18. Rate of Premium Conveys no Notice. The rate of premium does not convey notice to the insurance company that gasoline is to be used or kept. Turnbull v. Home Ins. Co., 83 Md. 312, 34 Atl. Eep. 875. Illuminating Gas and Peohibited Abticles. 341 RULE 19. Custom in Use of Gasoline for Exhibition Purposes. The custom of the insured and other dealers in use of gasoline in a business (such as stove and tinware) not necessarily connected with it, but simply for ex- hibition or explanatory purposes in selling stoves, will not prevent a forfeiture of the insurance. Fischer v. London & Lancashire Ins. Co., 83 Fed. Eep. 807, 37 Ins. L. J. 417. RULE 20. Contract Ends Whfen Condition Violated — Not Revived Without Consent of Insurance Company. The contract of insurance ends the moment the con- dition as to prohibited articles is legally violated, with- out regard to time or cause of fire, and cannot be re- vived again without consent, unless the insurance com- pany, by some act or line of conduct, waives the breach. The reason of this rule is, that to hold otherwise would be to substitute the pleasure of the insured for the legal obligations of the contract, as he could violate the condition, subject the insurance company to in- crease of the risk, and revive the contract at will. Mead v. Northwestern Ins. Co., 7 N. Y. 530. See and compare Eule 21 et seq. ; and also this volume, "Increase of Hazard." Old forms in express terms provided for suspension of the policy while prohibited articles were used. Hynds v. Schenectady Ins. Co., 11 N". Y. 554; Putnam v. Commonwealth Ins. Co. Co., 18 Blatchf. 368 (U. S. Cir.) ; Maryland Ins. Co. v. Whiteford, 31 Md. 219, 228 ; Phoenix Ins. Co. V. Lawrence, 4 Mete. 9 (Ky.). And see " Increase of Hazard," Rules 5, 7, 9, and notes. 342 FiEE Insukance. RULE 21. Occasional or Temporary Necessary Use — Repairs — Household Ptirposes — Cleaning Machinery. The provision in the policy prohibiting the keeping, using, or allowance of benzine, gasoline, etc., applies to the habitual keeping, using, or allowing of the same, and not to their occasional introduction for a tem- porary purpose ordinarily and necessarily connected with the occupation of the premises,^ such as the mak- ing of ordinary or necessary repairs;^ so the tem- porary having of a small quantity of gasoline on in- sured premises, to be used for household purposes, other than for fuel;^ or the use of gasoline by female inmates of house to clean their clothes, being brought upon the premises in pint or quart bottles,* does not void the policy. A temporary use of benzine in an insured dwelling to clean carpets and furniture is not such an increase of risk as to void the insurance.^ So temporary and occasional use of benzine for cleaning machinery;® or occasional use of gasoline to kill cock- roaches'^ does not void the insurance. 1. Smith V. German Ins. Co., 107 Mich. 270, 65 N. W. Eep. 336, 25 Ins. L. J. 192, 30 L. E. A. 368. And see Hinckley v. Germania Ins. Co., 140 Mass. 38; Farmers & Mechanics' Ins. Co. V. Simmons, 30 Pa. St. 299 ; Springfield P. & M. Ins. Co. ■V. Wade, Tex. , 68 S. W. Rep. 977; State Ins. Co. V. Hughes, 10 Lea, 461 (Tenn.) ; Hynds v. Schenectady Ins. Co., 11 N. Y. 554; Merchants' Ins. Co. v. Washington Ins. Co., 1 Handy, 408 (Ohio). And see Eule 20. 2. Smith V. German Ins. Co., supra. 3. Springfield F. & M. Ins. Co. v. Wade, Tex. , 68 S. W. Eep. 977. And see Firemen's Fnnd Ins. Co. v. Shearman, 30 Tex. Civ. App. 343, 50 S. W. Eep. 598. 4. Columbia Planing Mill Co. v. American Ins. Co., 59 Mo. App. 204. Illuminating Gas and Prohibited Aeticles. 343 5. Bentley v. Lumbernien's Ins. Co., 191 Pa. St. 276, 43 Atl. Eep. 209. 6. Humboldt Ins. Co. v. Mears, Pa. St. , 11 Ins. L. J. 847. 7. La Force v. Williamsburg City Ins. Co., 43 Mo. App. 518. In Dobson v. Sotheby, 1 Moody & M. 90, 22 Eng. C. L. 481, the policy was on a building "where no fire is kept, and no hazardous goods deposited." A tar barrel was introduced and from it the building caught fire. And it was held that the con- dition referred to the habitual use of fire, and the ordinary deposit of goods, not to the occasional introduction. This old case is probably the origin of the doctrine or rule stated in the text. RULE 22. Limitation of Preceding Bule. The doctrine of temporary use ordinarily and neces- sarily connected with occupancy (see Eule 21) does not extend or apply to a case when the insured buys and places a lot of fireworks in his residence for use on the next day, being the fourth of July, taking fire the same day, causing the damage for which the claim is made. Heron v. Phoenix Ins. Co., 180 Pa. St. 257, 36 Atl. Eep. 740, 26 Ins. L. J. 690. In Wheeler v. Traders' Ins. Co., 62 N. H. 326, 12 Ins. L. J. 834, it was held that a temporary use of naphtha immediately preceding the fire, for purpose of destroying moths in wool, voided the insurance. RULE 23. Written Description Construed as Agreement Providing Other- wise. When the written description of the property in- sured covers and includes the prohibited articles like gasoline, benzine, etc., it is construed as an agreement, providing otherwise than as stated in the printed con- 344 FiBE Insueance. dition, indorsed on the policy, or added thereto, ac- cording to its terms. Ackley v. Phcenix Ins. Co., 25 Mont. 272, 64 Pac. Eep. 665. And see Phcsnix Ins. Co. v. Walters, 24 Ind. App. 87, 56 N. E. Eep. 257 ; Hall v. Insurance Co. N. A., 58 N. Y. 292. RULE 24. EfEect of ■ Written Description — Evidence — Kisk of Particular Business. When the written description of property insured, or containing that insured, describes and assumes the risk of a particular business, the keeping of an article necessarily used in such business, like benzine or gas- oline, will not void the policy unless it is shown that it was kept in unnecessarily large quantities, or for pur- poses not contemplated by the policy ;^ when the policy covers a building occupied as a furniture store and repair shop, the keeping of benzine for necessary use in the repair shop does not void the insurance;" so when the policy covers " watchmaker's materials," parol evidence is admissible to show that the phrase includes benzine;* or when property insured is ' ' merchandise in a drug store, ' ' the keeping and stor- ing of one pound of ether, same being shown to be a necessary part of such merchandise, does not void the policy.* So when description is " such other mer- chandise as is usually kept for sale in a retail hard- ware store," the insured has the right to carry a small quantity of dynamite, it being shown that it was customary among merchants in the vicinity to keep this Illuminating Gas and Pkohibited Abticles. 345 article in stock, and the question of custom is one for the jury.^ 1. Davis V. Pioneer Furniture Co., 102 Wis. 394, 78 N. W. Eep. 596, 28 Ins. L. J. 474. And see Fraim v. National Ins. Co., 170 Pa. St. 151, 32 Atl. Eep. 613; Fraim v. Manchester Ins. Co., 170 Pa. St. 166, 32 Atl. Eep. 616; Faust v. American Ins. Co., 91 Wis. 158, 64 N. W. Eep. 883, 35 Ins. L. J. 176, 30 L. E. A. 783; Maril v. Connecticut Ins. Co., 95 Ga. 604, 23 S. E. Eep. 463 ; Mechanics & Traders' Ins. Co. v. Floyd, 49 S. W. Eep. 543 (Ky.) ; Virginia F. & M. Ins. Co. v. Thomas, 90 Va. 658, 19 S. E. Eep. 454; Citizens' Ins. Co. v. McLaughlin, 53 Pa. St. 485 ; White v. Western Assur. Co., Pa. St. 16 Ins L. J. 233; Harper v. Albany Ins. Co., 17 N. Y. 194; Harper v. City Ins. Co., 1 Bosw. 520, afE'd, 22 N. Y. 441; Phoenix Ins. Co. v. Taylor, 5 Minn. 492; Viele v. Germania Ins. Co., 26 Iowa, 9; Archer v. Merchants' Ins. Co., 43 Mo. 434; Steinbach v. LaFayette Ins. Co., 54 IST. Y. 90; Hall v. In- surance Co. N. A., 58 ISr. Y. 292 ; Harper v. New York City Ins. Co., 22 N. Y. 441 ; Harper v. Albany Ins. Co., 17 N. Y". 194; Bryant v. Poughkeepsie Ins. Co., 17 N. Y. 200; Mayor 'v. Hamilton Ins. Co., 10 Bosw. 537 (N. Y.) ; Wheeler v. Traders' Ins. Co., 62 N. H. 326, 450. 2. Faust V. American Ins. Co., supra. 3. Maril v. Connecticut Ins. Co., supra. 4. Fink v. Lancashire Ins. Co., 60 Mo. App. 673. 5. Traders' Ins. Co. v. Dobbins, Tenn. , 86 S. W. Eep. 383. The courts do not agree as to effect of the printed condi- tions prohibiting certain articles, when it is claimed they are covered or included by words of general description in the written part of the policy. When policy was upon stock of fancy goods * * * " and other articles in his (assured's) line of business," it was held that if keeping of fireworks was in his line of business the company was liable. Steinbach v. LaFayette Ins. Co., 54 N. Y. 90 ; whereas in same V. Eelief Ins. Co., 13 Wall. 183 (U. S.), it was held to the contrary. " Stock of merchandise " does not include a prohibited article, though same may be usually kept. Birmingham Ins. Co. v. Kroegher, 83 Pa. St. 64. " Stock usually kept for sale in a country store " does not permit the keeping of gunpowder. Cobb V. Insurance Co. N. A., 17 Kans. 492. 346 FiEE Insueance. " Drugs and medicines " may include saltpetre kept in small quantities as a drug. Collins V. Insurance Co., 79 N". C. 279. " General merchandise all kinds usually kept in a country retail store " did not include, cover, or permit benzine even though usually kept in country stores. This case appears to have been so decided upon construction that the insurance wsls in terms against loss or damage except as hereinafter provided. " Stock of drugs and medicines' and merchandise usually kept in country stores," covers or permits benzine if a drug or usually kept. It is a question for the jury. Carrigan v. Lycoming Ins. Co., 53 Vt. 418, 10 Ins. L. J. 606. " Stock of wholesale grocer comprising all kept for sale in such stocks " may cover or permit saltpetre, though prohibited by printed condition. Stout V. Commercial Union Assur. Co., 13 Fed. Eep. 554, 11 Biss. 309. " Stock of fancy goods and Yankee notion store," if firecrack- ers and fireworks constitute a part of an ordinary and usual stock of fancy goods and Yankee notions, the keeping of same does not void the insurance. Barnum v. Merchants' Ins. Co., 97 F. Y. 188, 14 Ins. L. J. 50. " Stock of family groceries, wines, liquors, tobacco and cigars " does not allow or permit keeping of fireworks as part of stock described, in absence of evidence to such effect. Georgia Home Ins. Co. v. Jacobs, 56 Tex. 366. " General stock of hardware and agricultural implements " does not include gunpowder, and proof of usage or custom to keep it as part of stock is not admissible. Beer v. Insurance Co., 39 Ohio St. 109. And see Mason v. Hartford Ins. Co., 29 Up. Can. Q. B. 585. " Stock of general merchandise, consisting of dry goods, cloth- ing and groceries," does not permit gunpowder even though custom includes it in general merchandise. Liverpool, L. & G. Ins. Co. v. Van Os, 63 Miss. 431. " Stock, of candies, toys, fruit, and all such other stuff usually kept for sale in confectionery stores," may permit fireworks when shown to be usually kept, etc. Plinsky v. Germania Ins. Co., 32 Fed. Eep. 47. " General store " may permit proof as to quantity usually kept in a general store. Barnard v. National Ins. Co., 27 Mo. App. 26. When policy issued to a druggist covered his stock of drugs, chemicals, and other merchandise, " hazardous and extra-hazard- ous," it was held that the policy vas not rendered void on ac- Illuminating Gas and Prohibited Articles. 347 count of a fire occasioned by the insured putting upon a stove about five gallons of an inflammable ointment for purpose of warming it, it being usual for druggist to mix and melt oint- ments in that manner. Brown v. Kings County Ins. Co., 31 How. 508 (N. Y.). RULE 25. Iiimitation of Bule as to Assumption of Bisk of Particular Business. The preceding rule as to the assumption of risk of a particular business does not extend to a case where the use of gasoline is unnecessary in the prosecution of the business, even though it may be customary to so use it in the particular business; as, for instance, when a dealer in stoves and tinware was accustomed to use gasoline in exhibiting and explaining his stoves to purchasers. Fischer v. London & Lancashire Ins. Co., 83 Fed. Kep. 807, 27 Ins. L. J. 417. And see Harper v. City Ins. Co., 1 Bosw. 530, aff'd, 22 N. Y. 441. RULE 26. A Sale Incidental to a Business Does not Permit Manufacture. Insurance of building occupied by dealer in photo- graph supplies, while it might allow the customary sale of flashlight powder in small packages as inci- dental to the business, does not permit the manu- facture of such a powder, and being an explosive, if it causes an explosion, followed by fire, the insurance company is not liable. Lutz V. Koyal Ins. Co., 205 Pa. St. 159, 54 Atl. Rep. 721. 348 FiEE Insurance. RULE 27, Drawing of Kerosene. While the written description may cover and include the keeping and sale of kerosene oil, it is, nevertheless, subject to the printed condition that it shall be drawn by daylight or not less than ten feet from artificial light. The policy is void if kerosene be drawn in any other manner than that so provided. Vandervolgen v. Manchester Assur. Co., 123 Mich. 291, 82 N". W. Eep. 46; Gunther v. Liverpool, L. & G. Ins. Co., 134 U. S. 110, 10 Sup. Ct. Eep. 448, 19 Ins. L. J. 417, afl'g 34 Fed. Eep. 501. And see previous appeal, 116 U. S. 113, 15 Ins. L. J. 161, rev'g 20 BlatcM. 362. RULE 28. Keeping of Gunpowder. When the policy permits the keeping of gunpowder not exceeding twenty-five pounds and other merchan- dise not more hazardous usual to general stocks of merchandise, the keeping of three or four boxes of squibs holding a pound of gunpowder does not void the insurance. Mechanics & Traders' Ins. Co. v. Floyd, Ky. , 49 S. W. Eep. 543. RULE 29. Effect of Permission to be Occupied for " Hazardous or Extra- Hazardous " Purposes. When the policy permits a building " to be occupied for hazardous or extra-hazardous purposes " it per- mits the use of benzine and gasoline in a paint factory, notwithstanding the printed prohibition. The latter Illuminating Gas and Peohibited Akticlbs. 349 cannot be construed as a qualification or limitation of the written privilege. Eussell V. Manufacturers & Builders' Ins. Co., 50 Minn. 409, 52 N. W. Eep. 906, 31 Ins. L. J. 944. RULE 30. Usage or Custom — Ambiguity in Bescription. Evidence of usage or custom may be admissible when the descriptive words in the policy are ambigu- ous or uncertain in their meaning and application. Liverpool, L. & G. Ins. Co. v. Van Os, 63 Miss. 431. And see Vol. 1, Fire Insurance as a Valid Contract, " De- scription," Eule 4; "Construction," Rules 17-25. RULE 31. Opinion Evidence — Experts. When the question is whether prohibited articles are included under words of general or uncertain descrip- tion, it is not to be answered by experts whose opinions are not admissible, but by an investigation of the facts. Steinbach v. La Fayette Ins. Co., 54 N. Y. 90. RULE 32. Keeping or TJse by Tenant. The fact of violation of the terms of the policy or of a permit for use of prohibited article is a sufficient defense to an action on the policy, though such pro- hibited keeping or use is by a tenant without knowl- edge of the insured, and whether it be shown that the fire resulted from such violation or not. Thuringia Ins. Co. v. Norwayz, 104 111. App. 390, afE'd, 204 111. 334, 68 N. E. Rep. 551; Badger v. Platts, 68 N. H. 222, 350 Fire Insurance. 44 Atl. Eep. 396; Kohlmann v. Selvage, 34 App. Div. 380, 54 N. Y. Supp. 230. And see German Ins. Co. v. Shawnee County, 54 Kans. 732, 39 Pac. Eep. 697, 25 Ins. L. J. 466; Liverpool, L. & G. Ins. Co. V. Gunther, 116 U. S. 113, 15 Ins. L. J. 161, rev'g 20 Blatchf. 362. Exception. — It was held in East Texas Ins. Co. v. Kempner, 12 Tex. Civ. App. 534, 34 S. W. Eep. 393, that the policy was not rendered void by tenant's use of a gasoline stove without the knowledge of the assured. .This case, however, appears to have been decided on an issue of increase of risk. See this volume, " Increase of Hazard." RULE 33. Waiver or Estoppel When Policy Issues — After Issue. Issue and delivery of the policy with knowledge by the company or its agent of existing facts constituting a violation of the clause or condition as to prohibited articles operates as a waiver or estoppel, preventing the company from claiming a forfeiture by reason of such facts ;^ and in some of the States verbal permis- sion of company's agent, even after issue of the policy, may operate as evidence of a waiver or estoppel f but a mere soliciting agent, without evidence of authority otherwise, cannot bind the company by a verbal con- sent to the use of prohibited article by the insured.* And the fact that the company had knowledge of the use of prohibited article by a former tenant does not justify a finding that assured had permission for its continued or future use.* 1. Cassimus v. Scottish Union & Nat. Ins. Co., 135 Ala. 256, 33 So. Eep. 163; Hartley v. Pennsylvania Ins. Co., Minn. , 98 N. W. Eep. 198 ; Peoria Ins. Co. v. Hall, 12 Mich. 202; Winans v. Allemania Ins. Co., 38 Wis. 342; Bennett v. North British & M. Ins. Co., 81 N. Y. 273 ; Carrigan v. Lycom- ing Ins. Co., 53 Vt. 418 ; Kings County Ins. Co. v. Swigert,. 11 111. App. 590; Eivara v. Queens Ins. Co., 62 Miss. 720; Kruger Illuminating Gas and Prohibited Articles. 351 V. Western P. & M. Ins. Co., 73 Cal. 91, 13 Pac. Eep. 156; Kenton Ins. Co. v. Downs, 13 S. W. Eep. 883, 19 Ins. L. J. 933; Farmers' Ins. Co. v. Nixon, 3 Colo. App. 365, 30 Pac. Eep. 43, 31 Ins. L. J. 860 ; Insurance Co. N. A. v. Melvin, 1 Walker, 363 (Pa.) ; Couch v. Eochester German Ins. Co., 35 Hun, 469; Wheeler v. Traders' Ins. Co., 63 N. H. 336, 450, 15 Ins. L. J. 184. 2. Merchants' Ins. Co. v. Obennan, 99 111. App. 357. That mere knowledge of the agent does not operate as a waiver or estoppel, see Fischer v. London & Lancashire Ins. Co., 83 Fed. Eep. 807; West End Hotel Co. v. American Ins. Co., 74 Fed. Eep. 114. And as to the subject of " Waiver " see also Vol. 1, Fire In- surance as a Valid Contract, " Waiver," compare the various Eules 8, 9, 13, 16, 37, and 38. And see this volume, "Agents." 3. Bartholomew v. Merchants' Ins. Co., 35 Iowa, 507; Gar- retson v. Merchants' Ins. Co., 81 Iowa, 737, 45 IST. W. Eep. 1047, 19 Ins. L. J. 913; Liverpool, L. & G. Ins. Co. v. Van Os, 63 Miss. 431. 4. Minzesheimer v. Continental Ins. Co., 5 Jones & Sp. 333 (N. Y.). RULE 34. Waiver as to Use of Small Quantity not Elxtended. The company's knowledge of tlie use of a small quantity of a prohibited article (saltpetre) to preserve stock pf meat insured, is no waiver of a defense founded upon the keeping of a quantity and as mer- chandise on sale, whether such keeping be dangerous or not. Commercial Ins. Co. v. Mehlman, 48 111. 313. RULE 35. Burden of Proof. The burden of proof in establishing a violation of the condition rests upon the insurance company;^ the existence of an oil pump in the house insured, not used at time of the fire, nor six months previously, is not 352 FiEE Insurance. sufficient evidence that gasoline was stored on the in- sured premises, or, if so, that it was adjacent, near, or close to the building.^ 1. Phoenix Ins. Co. v. Shearman, 17 Tex. Civ. App. 456, 43 S. W. Eep. 930; Willis v. Germania Ins. Co., 79 N. C. 285. And see Hieks v. Empire Ins. Co., 6 Mo. App. 254; Kau v. Westchester Ins. Co., 50 App. Div. 428, 64 N. Y. Supp. 290, afE'd, 168 K. Y. 665, without opinion. 2. Hanover Ins. Co. v. Stoddart, 52 Nebr. 745, 73 N. W. Eep. 291, 37 Ins. L. J. 120. RULE 36. Article May not be Prohibited yet Violate Condition as to In- crease of Hazard — Question of Fact. A certain article may not come within the terms of the prohibitory condition, yet that does not prevent the same thing coming within the legal operative force of the condition against an increase of hazard. The latter is a question of fact which, if found affirmatively, renders the policy void ;^ no matter how large or how small the quantity may be, it is a question of fact for a jury to determine.^ 1. Williams v. People's Ins. Co., 57 N. Y. 274. And see Jones V. Firemen's Pund Ins. Co., 51 N. Y. 318. 2. Williams v. People's Ins. Co., supra. And see this volume, " Increase of Hazard." Note as to changes in language. — The express restriction as to lights would seem to prevent the application of the construc- tion by the court of the old form which did not contain it in Carlin v. Western Assur. Co., 57 Md. 515, 12 Ins. L. J. 388. And so the change in the language as to usage or custom of trade would seem to render inapplicable the ruling or reason- ing of the court in Pittsburg Ins. Co. v. Frazee, 107 Pa. St. 521, 14 Ins. L. J. 512. But see Eules 23-26. Some of the old forms provided that " this company will not be liable for any loss, occasioned by camphene or other inflam- mable liquid," and it was held to mean, not that the fire must Illuminating Gas and Peohibitbd Aeticles. 353 originate with the eamphene, by its own ignition, but as a medium of its communication from outside or other cause, thus occasioning a fire which would not have happened but for the presence of that article on the premises. Harper v. City Ins. Co., 1 Bosw. 520, aff'd, 33 N. Y. 441. Some provided that " if gunpowder or other articles subject to legal restriction should be kept in greater quantities or in a different manner than was provided by law " the policy should be void, and it was held to have reference only to articles of an intrinsically dangerous nature, as liable to cause injury ac- cidentally or by carelessness, and not to refer to liquors, the traflBc in which was made illegal by statute. Niagara Ins. Co. v. De Graff, IS Mich. 124. Other forms provided that " whenever any article subject to legal restriction should be kept in quantity or manner different from that allowed by law, unless the use or keeping was specially provided for in the policy," it should be void. Jones V. Firemen's Fund Ins. Co., 51 N. Y. 318. Some prohibited the use of kerosene oil, except in dwellings, ^nd it was held that the policy was rendered void by the use of such oil in a lamp left upon the counter of a store, as a protection against burglars, and that the store could not be -considered a dwelling because the clerk slept in a small room back of the store. Cerf V. Home Ins. Co., 44 Cal. 320. And so under a similar condition prohibiting "petroleum, or crude earth or coal oils, except kerosene oil for lights in dwellings," it was held that the use of "headlight oil," being a petroleum product for lights in a factory, constituted a breach of the condition. Couch V. Eochester German Ins. Co., 25 Hun, 469 (N. Y.). The term "refined coal or earth oils" was held not to in- clude kerosene. Morse v. Buffalo Ins. Co., 30 Wis. 534. Some provided that the insurance should " immediately cease if the assured uses naphtha," and it was held that the insur- ance ceased when his use of naphtha involved the insured prop- erty in a substantial naphtha risk. Wheeler v. Traders' Ins. Co., 62 N. H. 326. Others that the company would not be liable " for the use of kerosene," and it was held that the insurance was not affected by the use of kerosene if the loss was not caused by such use. Jones V. Howard Ins. Co., 117 N. Y. 103, 22 N. B. Eep. 578. And see Matson v. Farm Buildings Ins. Co., 73 N. Y. 310. Some prohibited use of building "for purpose of storing or Vol. 2 — 23 354 FiEE Insurance. keeping " such articles as were within a clause relating to hazard- ous articles, and it was held that the keeping of articles to be exhibited or used as means of a public exhibition was not a use of the building for purpose of storing or keeping therein. Mayor v. Hamilton Ins. Co., 10 Bosw. 537 (N. Y.). Some prohibited " storing," and that " keeping " for purpose of retailing was not storing. That storing meant in the con- dition a keeping for safe custody, to be delivered out in the same condition, substantially the same as when received, and applied only when the storing or safe-keeping was the principal object of the deposit, and not when it was merely incidental. New York Equitable Ins. Co. v. Langdon, 6 Wend. 62S (N. Y.), aff'g 1 Hall, 226. As to effect of the addition or insertion of the word "keep- ing," see Hynds v. Schenectady Ins. Co., 11 N. Y. 554. Many prohibited " storing and keeping " and it was held . that the words meant storing or keeping in a mercantile sense, in considerable quantities, with view to commercial trafBc, and could not be construed to forbid the keeping and use of several quarts of crude petroleum as a medicine. Williams v. Firemen's Fund Ins. Co., 54 N. Y. 569. And it was held that keeping a small quantity of saltpetre- for purpose of preserving meat was not a " storing " of it. Bayly v. Lancashire Ins. Co., 4 Ins. L. J. 503 (U. S. Cir.). A condition against keeping or storing oil on premises was held not broken by the fact that there was a gallon kept for lubricating purposes. Mitchell V. City of London Assur. Co., 15 Ont. App. 262. Some prohibited "lighting the premises insured by a cam- phene or spirit gas," and it was held to apply to insurance on merchandise as well as on buildings. Stettiner v. Granite Ins. Co., 5 Duer, 594 (N. Y.). Some prohibited "the generating or evaporating within the building or contiguous thereto, of any substance for a burning gas, or the use of gasoline for lighting," and it was held that a building iifty feet distant was not contiguous, and that the condition did not prohibit the use of gas for lighting if made from gasoline; that gasoline and gas do not mean the same thing. Arkell v. Commerce Ins. Co., 69 IST. Y. 191, afE'g 7 Hun, 455. Some provided that "petroleum, rock and earth oils should not be stored or used and that camphene, spirit gas or burn- ing fluid, phosgene or any other inflammable liquid should not be used in factories as light," and it was held that this did not prohibit the keeping of kerosene oil for lights in a paper Illuminating Gas and Prohibited Articles. 355 mill to extent of a reasonable quantity (forty gallons), that the kerosene was not stored, and that its use for lights was not prohibited, it being proved that it was not properly classified as an " inflammable liquid.' Buchanan v. Exchange Ins. Co., 61 N. Y. 26. Others provided that " if camphene, burning fluid or refined or earth oils are kept for sale, stored or used on the premises without written consent " policy should be void, and it was held that this did not prohibit ordinary use of kerosene for lighting purposes. Bennett v. North British & M. Ins. Co., 81 N. Y. 373, afE'g 8 Daly, 471. Some of the old forms were construed to prohibit " storing " and not to prohibit " keeping " for sale. Eenshaw v. Missouri State Ins. Co., 103 Mo. 595, 15 S. W. Eep. 945, 20 Ins. L. J. 385. Some required " groceries and gunpowder to be specified and to pay a higher rate of premium," and it was held that the keep- ing of gunpowder voided the policy. Fire Assoc, v. Williamson, 26 Pa. St. 196. Some prohibited " the storing of gunpowder on the prem- ises," and it was held that the placing of gunpowder in a build- ing with a lighted match for the purpose of blowing it up, to prevent the spread of a conflagration, was not a " storing " of it. City Ins. Co. v. Corlies, 21 Wend. 367 (N. Y.). Some provided that "the keeping of gunpowder for sale or on storage upon or in the premises insured," should void the policy, and it was held that where none was sold or offered for sale after the policy issued, the fact that the insured had a small quantity in his store and for sale, before it issued, did not void the policy. Protection Ins. Co. v. Harmer, 2 Ohio St. 452. And that the word " premises " referred to buildings insured, and that gunpowder was not kept upon or in the premises in- sured, when kept by a storekeeper whose stock was insured. Leggett V. MtnsL Ins. Co., 10 Eich. Law, 202 (S. C). And see Mosley v. Vermont Ins. Co., 55 Vt. 142, 13 Ins. L. J. 97. And it was held that the keeping of fireworks was not a viola- tion of a clause prohibiting the keeping or using of gunpowder upon the premises. Tischler v. California Ins. Co., 66 Cal. 178. Some required the gunpowder to be kept in tin or metallic canisters, in any amount, and not exceeding twenty-five pounds. Bowman v. Pacific Ins. Co., 27 Mo. 152. Others limited quantity of gunpowder to one barrel. 356 FiEE Insurance. Insurance Co. v. Slaughter, 12 Wall. 404. Giant powder is nitro-glycerine under the terms of the policy, and the prohibition cannot be waived by any parol understand- ing at the time the policy issues, nor can custom or usage avoid the consequences of violation of such prohibition. Sperry v. Springfield F. & M. Ins. Co., 36 Fed. Eep. 334, 15 Ins. L. J. 270. TITLE V. Vacant or Unoccupied. EuLE 1. As imposed by contract. 2. Condition reasonable and binding. 3. Condition subsequent — Burden of proof. 4. Construction not governed by rules of a board of fire underwriters — Nor by those of the company. 5. Effect of action by board of underwriters. 6. Not dependent upon insured's knowledge or control, or that breach willful. 7. Distinction between "vacant or unoccupied" and " vacant and unoccupied." 8. Property may be vacant in part. 9. Making repairs does not constitute occupancy. 10. Effect of written permission for vacancy. 11. When description not construed a warranty. 12. Permission for unoccupancy may extend to renewals — Construction of the words " during the summer." 13. Oral application and no inquiry do not prevent for- feiture. 14. Effect of time limitation. 15. Violation voids policy — Not revived by subsequent occupation. 16. Policy suspended during violation — Eevived by sub- sequent occupation. 17. Limitation as to time — Authority of agent. 18. Not necessary to claim risk increased — Effect of statute — Question of fact — Evidence — Expert — Custom. 19. Vacancy may be claimed to increase risk — Burden of proof. 20. Divisibility of contract. 21. When policy not divisible. 32. Construction of " occupied " and " unoccupied " — Governed by nature and character of building and use — Knowledge of company's agent. Vacant ob Unoccupied. 357 EuLE 23. Construction as affected by description — Effect not limited to building. 84. When nature or character of occupation changed. 25. Meaning of " vacant " or " unoccupied " as applied to a dwelling. 26. When house unoccupied — Occupancy of house and barn. 87. Furniture remaining in dwelling does not constitute occupancy or living in it. 28. House may not be vacant and yet be unoccupied. 89. Occupation of a dwelling — Temporary absence — Governed by intention — Question of fact. 30. Temporary absence from dwelling. 31. Use of house for partial purpose of a dwelling. 32. Cleaning of dwelling not occupation. 33. Effect of sleeping in house. 34. Effect of taking meals in house and use of barn. 35. Ceasing to be occupied for one of several purposes described does not void policy. 36. Dwelling described as a family residence — Con- struction of the word " family." 37. When tenement-house vacant and unoccupied. 38. Construction of the word " vacating." 39. Temporary vacancy on change of tenants — Tempo- rary absence. 40. Time limitation as affecting construction of old forms. 41. Occupancy of building used for manufacturing pur- poses. 42. When mill or factory vacant or unoccupied. 43. Occupancy of manufacturing establishment governed -by known use and character. 44. When flouring mill not vacant or unoccupied. 45. When a tannery is occupied. 46. Oceupaiicy of a boat. 47. When a storehouse vacant and unoccupied. 48. When a store is unoccupied. 49. When a church is vacant or unoccupied. 50. When an icehouse vacant or unoccupied — Question of fact. 51. When elevator vacant or unoccupied. 52. Occupancy of saloon or storehouse. 53. Construction and application of Kule 1 as affecting waiver or estoppel. 54. Time limitation as affecting waiver. 358 FiEE Insurance. EuLE 55. Waiver or estoppel when policy issues — Duty of agent — Building in process of erection. 56. Special permit for vacancy of uncompleted building. 57. Knowledge of soliciting agent. 58. Knowledge of agent as afEeeting occupancy for other purposes than as described. 59. Effect of knowledge as to future nonoccupancy. 60. ISTo oral waiver after issue of policy — May be es- toppel — Mere knowledge no estoppel. 61. Waiver or estoppel after issue of policy. 62. Estoppel by agent — Written permit effective. 63. Eeceiving premium after fire. 64. Question of law or fact. 65. Question of increase of hazard one of fact — Change of occupants permitted. RULE I. As Imposed by Contract. This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, if a building herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied and so remain for ten days. This rule is imposed by above terms in the standard form of policy prescribed in: New York, JSTorth Carolina, Connecticut, Forth Dakota, . Louisiana, * Pennsylvania, Missouri, Ehode Island. JSTew Jersey, The standard form of policy prescribed in Michigan is the same, ^cept there is added: " Provided a loss shall occur on the property insured while such breach of condition continues, or such breach of condition is the primary or contributory cause of the loss." * See note to " Concealment," Eule 1, page 2. Vacant or Unoccupied. 359 The standard form of policy prescribed in Wisconsin is the same, except there is added: " And continuing until the time of the fire." The standard form of policy prescribed in Maine, Massachusetts, provides : " This policy shall be void if the premises hereby insured shall become vacant by the removal of the owner or occupant, and so remain vacant for more than thirty days, without the assent in writing or in print of the company." The standard form of policy prescribed in Minnesota pro- vides : " The policy shall be void if the premises hereby insured shall become vacant by the removal of the owner or occupant, and so remain vacant for more than thirty days without the assent of the company." The standard form of policy prescribed in New Hampshire provides : " This policy shall be void and inoperative during the exist- ence or continuance of the acts or conditions of things stipu- lated against, as follows: * * * jf ^j^g premises hereby in- sured shall become vacant by the removal of the owner or occu- pant, and so remain vacant for more than thirty days, without the assent in writing or in print of the company." It is fur- thermore provided by statute made part of the policy : " A change in the property insured, or in its use or occupation, or a breach of any of the terms of the policy by the insured, shall not affect the policy except while the change or breach con- tinues." The standard form of policy prescribed in South Dakota pro- vides : " This policy shall be void if the premises hereby insured shall remain vacant and unoccupied for more than thirty days without the assent of the company." In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. The purpose of the Minnesota statute (chap. 175, Laws 1895), § 25, requiring an examination of the property insured before issue of policy is not to determine whether the premises are 360 Fire Insueance. occupied and has no relation to that subject. The failure of the company to so inspect or examine is evidence of a waiver of the right to claim premises of less value than that fi;Eed in the policy, but cannot be construed as charging it with notice that the premises were vacant. Aiple V. Boston Ins. Co., 92 Minn. 337, 100 N. W. Eep. 8. See Vol. 1, Fire Insurance as a Valid Contract, " Statutory Provisions," Minnesota. RULE 2. Condition Beasonable and Binding. The condition in regard to vacancy is recognized and enforced by the courts as a reasonable and proper pro- vision binding upon the insured. Hackett v. Philadelphia Underwriters, 79 Mo. App. 16; Bart- lett V. British American Assur. Co., 35 Wash. 535, 77 Pac. Eep. 812; Piscatequa Savings Bank v. Traders' Ins. Co., 8 Kans. App. 241, 55 Pac. Rep. 496; Eoyal Ins. Co. v. Lubelsky, 86 Ala. 530; Burner v. German-American Ins. Co., 103 Ky. 370, 45 S. W. Eep. 109, 27 Ins. L. J. 732 ; Phoenix Ins. Co. v: Eogers, 11 Ind. App. 72, 38 N. E. Eep. 865; Thomson v. Southern Mutual Ins. Co., 90 Ga. 78, 15 S. E. Eep. 652, 21 Ins. L. J. 1043 ; Baldwin v. German Ins. Co., 105 Iowa, 379, 75 N. W. Eep. 326, 27 Ins. L. J. 794; Bruce v. Phcenix Ins. Co., 24 Oreg. 486, 34 Pac. Eep. 16; Lester v. Mississippi Home Ins. Co., 19 So. Eep. 99 (Miss.); Assurance Co. v. McPike, 62 Miss. 740; Copp V. Home Ins. Co., 89 Hun, 611, 35 K Y. Supp. 1105; Eidge V. Scottish Commercial Ins. Co., 9 Lea, 507 (Tenn.) ; Sun Fire Office v. Hodges, 3 Tex. Ct. App. Civ. Cas., § 268; Watertown Ins. Co. v. Cherry, 84 Va. 72, 3 S. E. Eep. 876; Burlington Ins. C'o. v. Gibbons, 43 Kans. 15, 22 Pac. Eep. 1010, 19 Ins. L. J. 546. RULE 3. Condition Subsequent — Burden of Proof. Those clauses which provide that the poli'cy shall become void, or that company shall be relieved wholly or partially, upon the happening of some event, or the doing or omission to do some act are not in any proper Vacant ob Ukoccupied. 361 sense conditions precedent. If conditions, they are conditions subsequent, and matters of defense, wMcli, together with their breach, must be pleaded by the in- surance company, and the burden of establishing it rests upon the company. Hence it is not incumbent upon the insured to prove that house was occupied, but upon the defendant to prove that it was vacant and unoccupied. Moody V. Insurance Co., 52 Ohio St. 12, 38 N. B. Eep. 1011, 24 Ins. L. J. 81, 26 L. E. A. 313. RULE 4. Construction not Governed by Kules of a Board of Fire TJnder- writers — Uor by Those of the Company. The construction of the condition as to vacancy is not governed by that of the rules of a board of fire underwriters; the meaning and application are gov- erned by the ordinary sense of the words used;* nor does a rule of the company, in granting permits for vacancy, ajBfect the contract or policy as actually made and issued.^ 1. Stone V. Granite State Ins. Co., 69 N. H. 438, 45 Atl. Rep. 235. 2. Rogers v. Phoenix Ins. Co., 121 Ind. 570, 23 N. B. Rep. 498, 19 Ins. L. J. 492. RULE 5. EfEect of Action by Board of TTnderwriters. Neither implied permission for nonoccupancy nor estoppel can be based upon the action of a local board of underwriters of which defendant company's agent is a member, having power to establish rates and classify risks, in voting that permission be granted .362 FiEE Insurance. free of charge for the hotel property in question to be unoccupied a portion of the year, such action not being communicated to the owner of the property or assured, and there being no application for a vacancy permit. Such action of the board is in effect simply permis- sion to the insurance companies to grant vacancy per- mits free of charge if they chose. Quinsigamond Steamboat Co. v. Phcenix Ins. Co., 172 Mass. 367, 53 N". B. Eep. 531, 28 Ins. L. J. 311. And see subsequent ■appeal, 177 Mass. 10, 58 N. E. Eep. 174. RULE 6. Hot Dependent upon Insured's Knowledge or Control, or that Breach Willful. The condition as to the effect of the premises in- sured becoming vacant or unoccupied can, on no prin- ciple of construction, be made to depend upon the as- sured 's knowledge of the. fact ;^ or his control;^ or that breach is willful and substantial.^ 1. Schuermann v. Dwelling-House Ins. Co., 161 111. 437, aff'g 57 111. App. 200; MeClure v. Watertown Ins. Co., 90 Pa. St. 277. And see Sleeper v. Insurance Co., 56 K. H. 401. 2. Moriarty v. Home Ins. Co., 53 Minn. 549, 55 N. W. Eep. 740. 3. Watertown Ins. Co. v. Cherry, 84 Va. 72, 3 S. E. Eep. 876. Under old forms whieh read " if premises shall become vacant and unoccupied, or the risk be increased by erection of neighbor- ing buildings, or by any means whatever within the control of the assured " policy should be void, it was held that house being vacant, assured could not recover without proof that the vaca- tion was beyond his central. Insurance Co. N". A. v. Zaenger, 63 111. • 464. And see Atlantic Ins. Co. v. Manning, 3 Colo. 224; American Central Ins. Co. V. Clarey, 28 111. App. 195. And so when condition was " if premises shall become vacant " * * * and policy was on an outbuilding it was held that the Vacant or Unoccupied. 363 insurance was not forfeited by a disuse of such building, the ■other buildings on the premises remaining occupied. Kimball v. Monarch Ins. Co., 70 Iowa, 514. But see Herrman v. Adriatic Ins. Co., 85 N". Y. 162, where the . words " above-mentioned premises " were held to be used distributively and to be applied to each item of property as separately stated in the policy. RULE 7. Distinction Between " Vacant or Unoccupied " and " Vacant and Unoccupied." There is a material distinction in the use and ap- plication of the language " vacant or unoccupied," and " vacant and unoccupied;"^ though vacant and unoccupied may be construed as the equivalent of each other.^ A vacant house is literally an empty house; one or more persons may live in a house, and in either case it is occupied; they may have much or little furniture and in neither event is it vacant.* 1. Hoover v. Mercantile Ins. Co., 93 Mo. App. Ill, 69 S. W. Eep. 42; Herrman v. Adriatic Ins. Co., 85 N. Y. 162; Herr- man V. Merchants' Ins. Co., 81 N. Y. 184. And see Huber v. Manchester Ins. Co., 92 Hun, 223, 36 N. Y. Supp. 873. 2. Dohlantry v. Blue Mounds Ins. Co., 83 Wis. 181, 53 N. W. Eep. 448. 3. Woodruff V. Imperial Ins. Co., 83 F. Y. 133. RULE 8. Property May be Vacant in Part. Property insured may be vacant in part, without voiding the insurance. Bryan v. Peabody Ins. Co., 8 W. Va. 605. And see Burling- ton Ins. Co. V. Brockway, 39 111. App. 43, aff'd, 138 111. 644, 28 K E. Eep. 799, 21 Ins. L. J. 624. 364 FiEE Insurance. ■ RULE 9. Making Bepairs Does not Constitute Occupancy. The fact that mechanics are employed in a building making repairs under a permission in the policy does not constitute occupancy;^ nor does plastering and whitewashing constitute occupancy.^ 1. Limburg v. German Ins. Co., 90 Iowa, 709, 57 K W. Eep. 626, 23 Ins. L. J. 321. And see Snyder v. Firemen's Fund Ins. Co., 78 Iowa, 146, 42 IST. W. Eep. 630. 2, Barry v. Prescott Ins. Co., 35 Hun, 601. RULE 10. Effect of Written Permission for Vacancy. A written permit for vacancy of insured property is operative from the time of the delivery of the policy by the insured to the company's agent for the purpose without regard to the time when such permit is in fact attached;' and supersedes or controls the printed condition,^ when made by an agent having au- thority.* A permit without time limitation may be construed to cover any subsequent vacancy, provided its terms are complied with.* 1. Sullivan v. Germania Ins. Co., 89 Mo. App. 106. 2. Joy V. Pennsylvania Ins. Co., 35 Mo. App. 165, 3. Continental Ins. Co. v. Euckman, 127 111. 364, 20 N. E. Eep. 77. 4. Steen v. Niagara Ins. Co., 89 N. Y. 315, 11 Ins. L. J. 523. RULE II. When Description not Construed a Warranty. If building insured is described as " occupied for store and dwelling purposes and saloon, ' ' the descrip- Vacant ob Unoccupied. 365 lion will not be construed as a warranty, if permission for thirty days* vacancy from date of policy is in- dorsed thereon when it issues. Pabst Brewing Co. v. Union Ins. Co., 63 Mo. App. 663. RULE 12. Tenuission for TJnoccupancy KEay Rstend to Renewals — Con- struction of the Words " During^ the Summer." A permission for the insured to leave house unoc- cupied during the summer of each year, indorsed upon or inserted in the original policy, exte'nds to all renewals of the policy, and the words " during the summer " may be construed to mean the " farming season," when so understood by the company's agent when he issued the policy. Vanderhoef v. Agricultural Ins. Co., 46 Hun, 328. And as to effect of agent's construction of meaning, see also Steen v. Niagara Ins. Co., 89 N. Y. 315; Hotchkiss v. Phoenix Ins. Co., 76 Wis. 269, 44 K. W. Eep. 1106. RULE 13. Oral Application and no Inquiry do not Prevent Forfeiture. The fact that the application for the insurance is made orally, without any representation by the in- sured, and without any inquiry by the insurance com- pany, does not prevent forfeiture of the insurance for a breach or violation of the condition. Bartlett v. British American Assur. Co., 35 Wash. 525, 77 Pac. Eep. 812. RULE 14. Effect of Time Limitation. The limitation of time does not define the words •" vacate " and " unoccupied," which must therefore 366 FiEE Instjrance. be given the meaning which usually attaches to them. If a house is never vacant nor unoccupied the limita- tion as to time has no effect. McMurray v. Capital Ins. Co., 87 Iowa, 453, 54 N. W. Eep. 354, 22 Ins. L. J. 204. It should be noted that many of the old forms in terms pro- vided that " if during the insuraiice the above-mentioned prem- ises shall become vacant or unoccupied, then and from thence- forth so long as the same shall continue vacant or unoccupied, this policy shall cease and be of no force or effect." Wheeler v. Phenix Ins. Co., 53 Mo. App. 446 ; ^tna Ins. Co. V. Meyers, 63 Ind. 238 ; Hartshorne v. Agricultural Ins. Co., 50' N. J. L. 427, 14 Atl. Eep. 615. The change in the language is marked, but has not always been considered by the courts. Some provided " if the premises hereby insured shall become vacant or unoccupied, or if the property insured be a mill or manufactory, shall cease to be operated and so remain for a period of more than fifteen days, without notice to the com- pany and consent indorsed thereon, in every such case the policy shall be void," and it was held that the limitation of fifteen days applied to dwellings as well as to mills and factories. Miaghan v. Hartford Ins. Co., 24 Hun, 58. Others provided that "no liability shall exist under this policy for loss on any vacant and unoccupied building, unless a consent for such vacancy or unoccupancy be hereon indorsed," and it was held to apply to a vacancy occurring after issue of the policy as well as to vacancy at time of its issue. Snyder v. Firemen's Fund Ins. Co., 78 Iowa, 146, 42 N. W. Eep. 630. Others provided that "if the dwelling hereby insured shall cease to be occupied by the owner or occupant * * * policy shall be void," and it was held that the condition had no appli- cation to a risk taken upon an unoccupied dwelling. Bennett v. Agricultural Ins. Co., 106 N. Y. 243, 12 N E Eep. 609. Other old forms simply provided against vacancy or unoccu- pancy after issue of the policy. Carr v. Insurance Co., 60 IST. H. 513 ; Alkan v. New Hampshire Ins. Co., 53 Wis. 136. Vacant oe Unoccupied. 367 RULE 15. Violation Voids Policy — Not Revived by Subsequent Occupation. When the unoecupancy of the building insured is extended beyond the prescribed period of ten days, it renders the policy void, and the defense is not affected by the fact that the insured returned to the house be- fore the fire, or because the risk may not have been increased by his absence i^ when void by its terms on account of building being unoccupied for a longer period than that prescribed, the policy is not revived by a subsequent occupancy which continues until the fire.^ 1. Couch V. Farmers' Ins. Co., 64 App. Div. 367, 73 N". Y. Supp. 95 ; Moore v. Phoenix Ins. Co., 62 N. H. 240. 2. Hoover v. Mercantile Ins. Co., 93 Mo. App. Ill, 69 S. W. Rep. 42. And see German Ins. Co. v. Eussell, 65 Kans. 373, 69 Pac. Eep. 345. See also this volume, " Increase of Hazard " and " Illumi- nating Gas and Prohibited Articles." RULE 16. Policy Suspended During Violation — Kevived by Subsequent Occupation. The company insures the property with the agree- ment and upon the condition that, being vacant at the time, or becoming vacant at any future time while the policy continues in force, such vacancy shall not con- tinue longer than ten days ; and if it does so continue longer than ten days, the policy shall then become void. If the loss occurs while the vacancy continues to exist, the company is not necessarily rendered liable because, knowing the fact, it has not meantime can- celed or forfeited the policy. But if it does not exer- 368 FiKE Insubance. cise its right in this respect, and the premises are again occupied, and are not vacant or unoccupied when the loss occurs, the liability on the policy would again attach. Stephens v. Phoenix Assur. Co., 85 111. App. 671. And see Detroit F. & M. Ins. Co. v. Chetlain, 61 111. App. 450. RULE 17. Limitation as to Time — Authority of Agent. A vacancy permit is limited as to time by its terms ;* and when the company's agent is instructed to cancel the policy at its expiration, to knowledge of the in- sured, the agent has no authority to extend the time.* 1. Maness v. Sun Ins. Co., 32 S. W. Eep. 326 (Tex. Civ. App.) ; McLeary v. Orient Ins. Co., 32 S. W. Eep. 583 (Tex. Civ. App.). 2. McLeary v. Orient Ins. Co., supra. In Phenix Ins. Co. v. Burton, 39 S. W. Eep. 319 (Tex. Civ. App.) a dwelling was vacated during the evening of January 1st, and the fire occurred during the evening of January 10th, ai)d it was held that the ten days allowed hy the policy for vacancy had not expired. RULE 18. Not Necessary to Claim Risk Increased — Effect of Statute — Question of Fact — Evidence — Expert — Custom. It is not necessary for the insurance company to sustain a defense of violation of the condition as to vacancy or occupancy to allege and prove that there was an increase of the risk;^ unless required to do so by statute,^ when the general situation and circum- stances surrounding the property may be sufficient to establish a presumption of such an increase of risk; if there is no other evidence it sustains the burden Vacant or Unoccupied. 369 resting upon the company; if there is other evidence and the proof is equally balanced, then the company fails to sustain the burden of proof f the question of increase of risk is one to be determined ordinarily by a jury ;* the testimony of an insurance expert as to the effect upon rate of premium caused by owner vacat- ing a dwelling is not admissible,^ though it may be proper and competent to prove a general custom of insurance companies not to take a risk on vacant or unoccupied property.® 1. Doten V. ^tna Ins. Co., 77 Minn. 474, 80 N. W. Rep. 630; Insurance Co. v. Long, 51 Tex. 89. And see Dennison V. Phoenix Ins. Co., 53 Iowa, 457. 2. Jones v. Granite State Ins. Co., 90 Me. 40, 37 Atl. Eep. 326, 26 Ins. L. J. 611; Moody v. Insurance Co., 52 Ohio St. 12, 38 K E. Eep. 101, 24 Ins. L. J. 81, 26 L. E. A. 313; Cannell v. Phoenix Ins. Co., 59 Me. 682; Thayer v. Providence Ins. Co., 70 Me. 531. 3. Jones v. Granite State Ins. Co., supra; Lancy v. Home Ins. Co., 82 Me. 492, 20 Atl. Rep. 79, 19 Ins. L. J. 878 ; White v. PJienix Ins. Co., 83 Me. 279, 22 Atl. Eep. 167, 30 Ins. L. J. 900. 4. Moody V. Insurance Co., supra; Thayer v. Providence Ins. Co., supra. 5. Joyce v. Maine Ins. Co., 45 Me. 168. 6. Kirby v. Phoenix Ins. Co., 13 Lea, 340 (Tenn.). RULE 19. Vacancy May be Claimed to Increase the Bisk — Burden of Proof. Vacancy may not be sufficient ground of forfeiture under the special condition in regard thereto, yet it may be claimed and established that such vacancy, as matter of fact, increased the risk ; the burden of proof rests upon the insurance company. Bryan v. Peabody Ins. Co., 8 W. Va. 605. Vol. 2 — 24 370 FiEB Insurance. RULE 20. Divisibility of Contract. A violation of the condition as to vacancy or unoc- cupancy of a dwelling-house forfeits the entire policy, notwithstanding personal property therein is also covered;^ but vacancy of one of several houses sepa- rately insured in the same policy does not prevent recovery for loss of the other; such a contract is severable.^ 1. Agricultural Ins. Co. v. Hamilton, 82 Md. 88, 33 Atl. Eep. 439, 35 Ins. L. J. 339, 30 L. E. A. 633. 2. Speagle v. Dwelling-House Ins. Co., 97 Ky. 646, 31 S. W. Eep. 283, 34 Ins. L. J. 839 ; Connecticut Ins. Co. v. Tilley, 88 Va. 1034, 14 S. E. Eep. 851, 21 Ins. L. J. 558; prior appeal, 86 Va. 811. In Dohlantry v. Blue Mounds Ins. Co., 83 "Wis. 181, 53 N. W. Eep. 448, the insurance was in several items on a house and other buildings on a farm, and it was held that the contract was not divisible when forfeiture was claimed on the ground that the house was vacant and unoccupied. See also Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Eules 26, 27. RULE 21, When Policy not Divisible. Although a policy of insurance so written as to place separate valuations upon separate subjects of insur- ance will ordinarily be severable, it will not be so unless it can be said the risk intended to be excluded by a violated condition of the policy did not affect the item of property for the destruction of which a re- covery is sought; thus when the insurance is itemized on house, bam, and other outbuildings on a farm, the Vacant or Unoccupied. 371 vacancy of the house voids the entire policy, which is not divisible in such a case. Eepublie County Ins. Co. v. Johnson, Kans. , 76 Pac. Eep. 419, citing Dohlantry v. Blue Mounds Ins. Co., 83 Wis. 181, 53 N. W. Eep. 448. RULE 22. Construction of " Occupied " and " Unoccupied " — Governed by Nature and Character of Building and Use — Knowledge of Company's Agent. The words " occupied " and " unoccupied " are always to be construed with reference to the nature and character of the building, the purpose for which it is designed, and the uses contemplated by the par- ties as expressed in the contract. The occupancy of a dwelling, of a barn, and of a mill is in each case essentially different in its scope and character. The term " occupied " always implies a substantial and practical use of the building for the purposes for which it is intended and as contemplated by the policy;^ and the knowledge of company's agent when policy issues may be relevant.^ 1. Hampton v. Hartford Ins. Co., 65 N. J. L. 265, 47 Atl. Eep. 433, 52 L. E. A. 344; Central Montana Mines Co. v. Fire- men's Fund Ins. Co., 93 Minn. 223, 99 N. W. Eep. 1120; Halpin v. Phoenix Ins. Co., 118 N. Y. 165, 33 N. E. Eep. 482, 19 Ins. L. J. 289 ; Hoover v. Mercantile Ins. Co., 93 Mo. App. Ill, 69 S. W. Eep. 42; East Texas Ins. Co. v. Kempner, 12 Tex. Civ. App. 534, 34 S. W. Eep. 393 ; writ of error denied, 35 S. W. Eep. 1069 (the opinion in this case is both interest- ing and valuable as containing review of the cases) ; Phoenix Ins. Co. V. Swann, 41 S. W. Eep. 519 (Tex. Civ. App.) ; Lim- burg V. German Ins. Co., 57 N. W. Eep. 626, 23 Ins. L. J. 321 2. Fritz V. Home Ins. Co., 78 Mich. 565, 44 N. W. Eep. 139, 19 Ins. L. J. 270. 372 FiEE Insurance. RULE 23. Construction as Affected by Description — Effect not Limited to Building. The condition as to nonoccupancy must be con- strued to refer to the particular building specified and described as containing the property insured. Its character or nature as thus described governs the con- sideration of its occupancy, and if not occupied, the effect cannot be limited to the building itself, as the condition or clause was necessarily designed to affect the risk on the personal property insured. Huber v. Manchester Assur. Co., 92 Hun, 223, 36 N. Y. Supp. 873. RULE 24. When Nature or Character of Occupation Changed. When a schoolhouse insured for a period of years is subsequently changed into a dwelling and erected and used as such, it cannot be claimed that the nature or character of a schoolhouse continued to govern in a question of construction as to occupation in permitting a vacancy during the vacation season. American Ins. Co. v. Foster, 92 111. 335. RULE 25. Heaning of Vacant or Unoccupied as Applied to a Dwelling. Vacant or unoccupied as applied to a dwelling- house means habitation and without an occupant — without some person living in it. An actual use of the house as a place of abode or habitation is what is re- quired. Such a house becomes vacant or unoccupied on removal of insured to another dwelling, notwith- Vacan't or Unoccupied. 373 standing the fact that some of the employees of in- sured may occasionally sleep there; that some pro- visions are kept in the house, and members of in- sured's family daily visit the house for purpose of getting provisions therefrom;* occupancy of a dwell- ing means actual use of the building by human beings as their customary place of abode ;^ occupation of a dwelling is living in it ;^ leaving furniture in the house is not occupation of it;* a dwelling that is nobody's home cannot be said to be occupied,^ and the fact that several blankets remain in the house, which is visited twice every day, is not occupying it;® though leaving furniture in the house may prevent a claim of vacancy^ 1. Agricultural Ins. Co. v. Hamilton, 83 Md. 88, 30 L. E. A. 633, 33 Atl. Eep. 439, 35 Ins. L. J. 339 ; Home Ins. Co. v. Boyd, 19 Ind. App. 173, 49 N. E. Eep. 285 (the opinion in this case contains an interesting and valuable review of the cases). 2. Burner v. German- American Ins. Co., 45 S. W. Eep. 109, 27 Ins. L. J. 733, 103 Ky. 370; Herrman v. Adriatic Ins. Co., 85 N. Y. 162. And see Eureka F. & M. Ins. Co. v. Baldwin, 63 Ohio St. 368, 57 N. E. Eep. 57 ; Weidert v. State Ins. Co., 19 Oreg. 361, 34 Pac. Eep. 343, 19 Ins. L. J. 740; Craig v. Springfield F. & M. Ins. Co., 34 Mo. App. 481; Bonenfant v. American Ins. Co., 76 Mich. 653, 43 N". W. Eep. 682. 3. Hoover v. Mercantile Ins. Co., 93 Mo. App. Ill, 69 S. W. Eep. 42. And see Morgan v. Illinois Ins. Co., 130 Mich. 437, 90 N. W. Eep. 40; Boardman v. North Waterloo Ins. Co., 31 Ont. 525 ; Paine v. Agricultural Ins. Co., 5 T. & C. 619 (N. Y.) ; Cook V. Continental Ins. Co., 70 Mo. 610; Sonneborn v. Manu- facturers' Ins. Co., 44 N. J. L. 330; Moore v. Phoenix Ins. Co., 64 N. H. 140. 4. Home Ins. Co. v. Boyd, supra; Eobinson v. ^tna Ins. Co., Ky. , 38 S. W. Eep. 693, 26 Ins. L. J. 823 ; Corrigan v. Connecticut Ins. Co., 123 Mass. 298 ; Huber v. Manchester Ins. Co., 92 Hun, 223, 36 N. Y. Supp. 873; Barry v. Prescott Ins. Co., 35 Hun, 601; Sexton v. Hawkeye Ins. Co., 69 Iowa, 99; 374 FiEE Insurance. Schuermann v. Dwelling-House Ins. Co., 161 111. 437, 43 N. E. Eep. 1093 ; American Ins. Co. v. Padfield, 78 111. 1G7 ; Agricul- tural Ins. Co. V. Frith, 21 111. App. 593 ; Kichards v. Continental Ins. Co., 83 Mich. 508, 47 N. W. Rep. 350, 20 Ins. L. J. 366; Farmers' Ins. Co. v. Wells, 42 Ohio St. 519 ; Cook i). Continental Ins. Co., 70 Mo. 610. 5. Thomas v. Hartford Ins. Co., 53 S. W. Eep. 297 (Ky.) ; rehearing denied, 56 S. W. Kep. 264. 6. Stapleton v. Greenwich Ifls. Co., 16 Misc. 483, 38 X. Y. Supp. 973 ; previous appeal to same effect, 15 Misc. 642, 37 N". Y. Supp. 347. And see Hartshome v. Agricultural Ins. Co., 50 1^. J. L. 427, 14 Atl. Rep. 615. 7. JSTorman v. Missouri Town Ins. Co., 74 Mo. App. 456; Omaha Ins. Co. v. Sinnott, 54 Nebr. 522, 74 N. W. Rep. 955; Herrman v. Merchants' Ins. Co., 81 N. Y. 184. In Gibbs v. Continental Ins. Co., 13 Hun, 611, it was held that premises did not cease to be occupied when the insured slept in an adjoining house, leaving furniture and wearing apparel in the former, to which he was accustomed to return daily. Some of the old forms provided that " if the premises became vacant " policy should be void, and it was held that the insurance on house and baxn was not forfeited on proof that the house only became vacant. Worley v. State Ins. Co., 91 Iowa, 150, 59 N". W. Eep. 16, 23 Ins. L. J. 580 ; McQueeney v. Phoenix Ins. Co., 52 Ark. 257, 12 S. W. Rep. 498. But see and compare Herrman v. Adriatic Ins. Co., 85 N. Y. 162. Some provided that " if the insured premises became vacant by the removal of the owner or occupant, without immediate notice to the company and consent indorsed " the policy should become void, and it was held that the fact of vacancy did not work a forfeiture, but imposed a duty of giving notice upon the assured, and gave to the company the right of cancellation ; that immediate notice must be construed to mean notice within a reasonable time in view of the circumstances and position of the parties. Strunk v. Firemen's Ins. Co., 160 Pa. St. 345, 28 Atl. Rep. 779, 23 Ins. L. J. 475. Others provided that "if the dwelling-house hereby insured shall cease to be occupied as such, the policy shall be void," and it was held that it ceased to be occupied on removal of tenant. Bennett v. Agricultural Ins. Co., 50 Conn. 420, 12 Ins. L. J. 569. Others provided that if the dwelling " shall cease to be occu- pied by the owner or occupant in the usual and ordinary manner Vacant ob Unoccupied. 375 in which dwelling-houses are occupied as such, this policy shall be void until the written consent of the company at the home office is obtained," and it was held governed in construction and ap- plication by knowledge of the company's agent when the policy issued. Vanderhoef v. Agricultural Ins. Co., 46 Hun, 328. Some of the old forms provided that "unoccupied premises must be insured as such. Houses, barns, or other buildings in- sured as occupied premises, or on occupied premises the policy becomes void when the occupant personally vacates the prem- ises, unless immediate notice be given to this company, and ad- ditional premium paid," and it was held that the insured was bound to give notice or pay or offer to pay additional premium. Wustum V, City Ins. Co., 15 Wis. 138. Others provided that the company should not be liable for any loss which may happen while the house " is left without an occupant or person actually residing therein." Abrahams v. Agricultural Ins. Co., 40 Up. Can. Q. B. 175. Others provided that " if the premises should become vacated by the removal of the owner or occupant without notice or eon- sent " it should be void, and it was held that the insured was bound to give notice. Sleeper v. Insurance Co., 56 N. H. 401, overruling Chamber- lain V. Insurance Co., 55 N. H. 249. And in reasonable time. Alston V. Insurance Co., 80 N. C. 326. And see under similar condition requiring notice or consent. Hill V. Equitable Ins. Co., 58 N. H. 82; Cummins v. Agricul- tural Ins. Co., 67 N. Y. 260, where it was held a question for the jury whether house had been vacated or not. Others did not have any condition that vacancy should affect the insurance, and it was held that a temporary vacancy arising from a change in tenants was part of the risk, that it was suffi- cient to give notice, and that any question of increase of risk should be submitted to the jury. Lockwood V. Middlesex Ins. Co., 47 Conn. 553. Others provided that " if the premises shall begome vacant or unoccupied and so remain with the knowledge of the assured without notice and consent in writing, " policy should be void." Kelley v. Home Ins. Co., 5 Ins. L. J. 134 (U. S. Cir.). 376 FiKE Insurance. RULE 26. "WTien House Unoccupied — Occupancy of House and Barn. A house becomes and is unoccupied when vacated by a tenant and not occupied by a subsequent lessee ;^ Occupancy of a house implies its actual use as a dwelling-house; and of a barn, its use as ordinarily incident to a barn belonging to an occupied house; leaving farming implements in the house is not occu- pying it.2 1. Stoltenberg v. Contmental Ins. Co., 106 Iowa, 565, 76 N. W. Eep. 835. 2. Martin v. Rocliester German Ins. Co., 86 Hun, 35, 33 N. Y. Supp. 404. And see Ashworth v. Builders' Ins. Co., 112 Mass. 423. "RULE 27. Furniture Bemaining in Dwelling Does not Constitute Occupancy or Living in It. In case of a dwelling-house insured, the fact that the furniture remains in the house and that the as- sured 's hired man makes frequent inspection of the household goods and has a general oversight of the building during the day, is not a full equivalent for the constant supervision involved in the occupancy of the premises as a customary place of abode and the actual presence in the building of those who are living in it and using it as a dwelling-house day and night ;* a dwelling may be unoccupied, notwithstanding it is imder the charge, supervision, and control of a third party living within same inclosure.^ 1. Hanscom v. Home Ins. Co., 90 Me. 333, 38 Atl. Rep. 324, 27 Ins. L. J. 19. 2. Burner v. German-American Ins. Co., 103 Ky. 370, 45 S. W. Rep. 109, 27 Ins. L. J. 732:. And see Cook v. Continental Vacant ok Unoccupied. 377 Ins. Co., 70 Mo. 610; Herrman v. Adriatic Ins. Co., 85 N. Y. 162; Bonenfant v. American Ins. Co., 76 Mich. 653, 43 N. W. Eep. 682. RULE 28. House May not be Vacant and yet be TTnoccupied. While a building described as a dwelling containing insured property may not be vacant within the mean- ing of the policy, yet it may be unoccupied when the house is left by a tenant and ceases to be the customary place of abode, and the place of usual return and habitual stoppage. Huber v. Manchester Assur. Co., 92 Hun, 223, 36 N. Y. Supp. 873. And see Eobinson v. ^tna Ins. Co., 38 S. W. Kep. 693, 18 Ky. L. Eep. 865, 26 Ins. L. J. 823. RULE 29. Occupation of a Dwelling — Temporary Absence — As Governed by Intention — Question of !Fact. While a dwelling-house must be habitually occupied by human beings as a place of living or residence, this does not prevent a temporary absence of the family, the furniture being left undisturbed in the house, and without any intention of permanent abandonment; under such circumstances the house does not become either vacant or unoccupied within meaning of the policy;^ nor does habitual occupation of a dwelling necessarily mean constant occupation for all pur- poses ; occupation may be to a limited extent both in reference to time and the nature of use, and the build- ing still be and remain occupied;^ if temporarily ab- sent there must be intention to return within reason- 378 FlEE iNStTBANCE. able time,* and the question of sucli intent is proper to submit to a jury.* 1. McMurray v. Capital Ins. Co., 87 Iowa, 453, 54 N. W. Eep. 354, 22 Ins. L. J. 204; Home Ins. Co. ■;;. Peyson, 54 Nebr. 495, 74 N". W. Eep. 960 ; Phoenix Ins. Co. v. Burton, 39 S. W. Eep. 319 (Tex. Civ. App.) ; Hill v. Ohio Ins. Co., 99 Mich. 466, 58 N. W. Eep. 359, and note pp. 466, 467; Stupetski v. Transatlantic Ins. Co., 43 Mich. 373; Shackelton v. Sun Fire Office, 55 Mich. 288 ; Morgan v. Illinois Ins. Co., 130 Mich. 427, 90 X. W. Eep. 40; Franklin Ins. Co. v. Kepler, 95 Pa. St. 492; Chandler v. Commerce Ins. Co., 88 Pa. St. 223; Laselle v. Hoboken Ins. Co., 43 N. J. L. 468 ; Springfield F. & M. Ins. Co. V. McLimans, 28 Nebr. 846, 45 N. W. Eep. 171. In Home Ins. Co. v. Peyson, the key was left with a neighbor, and in Hill v. Ohio Ins. Co. and McMurray v. Capital Ins. Co., the property was left in charge and control of neighbors. In Phcenix Ins. Co. v. Burton, the family had been absent about sixty days, but had returned home before the fire. 2. Moody V. Insurance Co., 52 Ohio St. 12, 38 N. E. Eep. 1011 24 Ins. L. J. 81, 36 L. E. A. 313; Western Assur. Co. ■;;. Mason 5 Bradw. 141 (111.) ; Eockford Ins. Co. v. Storig, 31 111. App, 486, 19 Ins. L. J. 928. 3. Thomas v. Hartford Ins. Co., 53 S. W. Eep. 297 (Ky.) rehearing denied, 56 S. W. Eep. 264. 4. Phcenix Ins. Co. v. Tucker, 92 111. 64. In Moody v. Insurance Co., the plaintiff, who was the owner of the property, occupied the building as a dwelling-house when the policy was issued, and until the following March, when he rented it and placed his tenant in possession, who continued until the next spring. It was then let to another tenant, who moved his household goods into it; and those used by his married daughter and son-in-law for housekeeping were also placed in the house. The goods were such as were generally used by a family for housekeeping. Members of both families occupied the house to a limited extent. They slept there occasionally and did some work there, such as quilting. Some member of the family was there every day, sometimes only once, but often twice a day, and the tenant and his family so used the property, had full control of it, and watched and cared for it up to the time it was burned, though they usually slept and took their meals in another house nearby, which belonged to the tenant, and it was held that the evidence sustained finding by a jury that the building was occupied. Vacakt OB Unoccupied. 379 In Eoekford Ins. Co. v. Storig the insured changed the use of his dwelling-house to a kitchen, dining-room, and storage place, used during the day in connection with an adjoining ■dwelling. RULE 30. Temporary Absence from Dwelling. While a dwelling-house will not be regarded as occupied unless it is the home or dwelling place of some person, yet temporary absence, leaving the prop- erty for a short period unoccupied, will not be re- garded as a breach of the condition, while absence for a fixed definite period, even with the intention to re- turn and occupy the property, will violate the con- dition and render the policy void. Couch V. Farmers' Ins. Co., 64 App. Div. 367, 72 N. Y. Supp. 95, citing Halpin v. Phoenix Ins. Co., 118 K. Y. 165. And see Burlington Ins. Co. v. Lowery, 61 Ark. 108, 33 S. W. Eep. 383, 25 Ins. L. J. 610; Herrman v. Adriatic Ins. Co., 85 N. Y. 162. RULE 31. Use of House for Partial Purposes of a Dwelling. When a house built for a dwelling is used by the insured for cooking and general work in connection with an adjacent house where insured and his family sleep and eat, the former building is not vacant or unoccupied. Dwelling-House Ins. Co. v. Oshorn, 1 Kans. App. 197, 40 Pac. Eep. 1099, 24 Ins. L. J. 751. RULE 32. Cleaning of Dwelling not Occupation. The cleaning of a dwelling preparatory to occupa- tion is not occupation of it within meaning of the 380 FiBE Insueance. policy;^ though in connection with moving furniture therein, the house cannot be claimed to be vacant.* 1. Thomas v. Hartford Ins. Co., 53 S. W. Eep. 397 (Ky.) ■„ rehearing denied, 56 S. W. Eep. 264. And see Litch v. North. British & M. Ins. Co., 136 Mass. 491, 13 Ins. L. J. 381; Peshe V. Council Bluffs Ins. Co., 74 Iowa, 676, 39 N. W. Eep. 87. 2. Eddy v. Hawkeye Ins. Co., 70 Iowa, 473. RULE 33. Effect of Sleeping in tlie House. If some one sleeps in the house and maintains a watch over the premises, though not having access ta the entire building, or to all the rooms, it does not cease to be occupied;^ a dwelling is not unoccupied if some one habitually sleeps in it.^ 1. Insurance Co. v. Hancock, 106 Tenn. 513, 63 S. W. Eep. 145, 53 L. E. A. 665. And see also German-American Ins. Co. V. Evants, 94 Tex. 490, 63 S. W. Eep. 417; denying writ of error, 61 S. W. Eep. 536; Hartford Ins. Co. v. Smith, 3 Colo. 432; Home Ins. Co. v. Wood, 47 Kans. 531, 38 Pae. Eep. 167, 21 Ins. L. J. 179 ; Traders' Ins. Co. v. Eace, 143 111. 338, 31 N". E. Eep. 392. 2. Thieme v. Niagara Ins. Co., App. Div. , 91 N. Y. Supp. 499. RULE 34. Effect of Taking Meals in House and Use of Bam. Merely temporarily taking meals in a house, and use of the barn for storing hay and tools, by a farmer and his servants, who live elsewhere, does not con- stitute occupancy of either. Ashworth v. Builders' Ins. Co., 113 Mass. 423; Moore v. Phoenix Ins. Co., 64 N. H. 140. And see Fitzgerald v. Con- necticut Ins. Co., 64 Wis. 463, 15 Ins. L. J. 277. Vacant oe Unoccupikd. 381 RULE 35. Ceasing to be Occupied for One of Several Purposes Described Does not Void Policy. When a building is insured as an occupied dwelling and country store, ceasing to be occupied as a dwelling only does not void the policy. Burlington Ins. Co. v. Brockway, 138 111. 644, 38 K. E. Eep. 799, 21 Ins. L. J. 624. RULE 36. Dwelling Described as a ramily Residence — Construction of the Word " Family." A dwelling described and insured as " occupied as a. family residence," does not cease to be occupied merely because it is occupied by only one person who has access to the entire building for purpose of caring for it;^ no specific number is required to constitute a family ; it is not necessary that they should eat in the iouse where they live.^ 1. Imperial Ins. Co. v. Kiernan, 83 Ky. 468. 2. Poor V. Hudson Ins. Co., 2 Fed. Eep. 432, 9 Ins. L. J. 428. RULE 37. When Tenement-House Vacant and Unoccupied. A tenement-house is vacant and unoccupied when the tenants have moved out, although a few articles are left in one room by one of them;^ a tenement block insured as a single building cannot be regarded as unoccupied with several of the tenements in actual use and occupation as residences.^ 1. Schuermann v. Dwelling-House Ins. Co., 161 111. 437, 43 IS. E. Eep. 1093, aff'g 57 111. App. 200. 2. Harrington v. Fitchburg Ins. Co., 124 Mass. 136. 382 FiKE Insurance. RULE 38. Construction of " Vacating." Leaving property insured exposed to an approach- ing forest fire to remove and care for a sick wife, and returning as soon as possible, but unable to re-enter on account of the flames, does not constitute *' vacat- ing insured premises " within the meaning of those words as used in a policy. Eaymorid v. Farmers' Ins. Co., 114 Mich. 386, 72 N. W. Rep. 254. RULE 39. Temporary Vacancy on Change of Tenants — Temporary Absence, A temporary vacancy necessarily resulting while one tenant moves out and another moves into the building does not void the policy;^ and so temporary absence of the insured and members of his family^ or of a tenant,^ does not void the insurance. 1. East Texas Ins. Co. v. Kempner, 13 Tex. Civ. App. 534, 34 S. W. Eep. 393 ; writ of error denied, 35 S. W. Eep. 1069. And see previous appeal, 87 Tex. 229. Contra^ Bennett v. Agricultural Ins. Co., 50 Conn. 430, 51 Conn. 504, 13 Ins. L. J. 569. The difficulties suggested by the opinions of the courts in these cases would seem to be removed by the insertion in the standard forms of the express and positive limitation of ten days. 2. Georgia Home Ins. Co. v. Brady, 41 S. W. Eep. 513 (Tex.. Civ. App.). And see Eule 29. 3. Burlington Ins. Co. v. Lowery, 61 Ark. 108, 32 S. W. Eep. 383, 25 Ins. L. J. 610. A temporary absence by the occupant of a dwelling, leaving furniture and other household effects therein, with intention tO' return, does not make premises " vacant by the removal of the occupant." Stone V. Granite State Ins. Co., 69 N. H. 438, 45 Atl. Rep. 235; Johnson v. Norwalk Ins. Co., 175 Mass. 529, 56 N. E. Vacant or Unoccupied. 383 Eep. 569. And see Johnson v. New York Bowery Ins. Co., 39 Hun, 410. In Ring v. Phoenix Assur. Co., 145 Mass. 426, 14 N. E. Rep. 525, there was an express stipulation that the house was to be " occupied all the year round" and it was held to be satisfied if permanent occupation was resumed so long before the fire that temporary absence appears to have no connection with the loss. RULE 40. Time Limitatiou as Affecting Construction of Old Forms. Under old forms of policies the difficulty and differ- ence of opinion among the judges as to whether a temporary vacancy owing to a change of tenants, and discussions as to whether any time should be allowed for the purpose, or a reasonable time according to the circumstances of each particular case,^ would seem to be removed by the clear and specific limitation as to time inserted in the standard form.^ 1. East Texas Ins. Co. v. Kempner, 87 Tex. 229, 27 S. W. Eep. 122, rev'g 25 S. W. Eep. 999, 23 Ins. L. J. 549; Woodruff V. Imperial Ins. Co., 83 N. Y. 133 ; Worley v. State Ins. Co., 91 Iowa, 150, 59 K. W. Eep. 16, 23 Ins. L. J. 580; Home Ins. Co. V. Mendenhall, 64 111. App. 30, aff'd, 164 111. 458, 45 N. E. Eep. 1078; Germania Ins. Co. v. Klewer, 129 111. 599; Niagara Ins. Co. V. Deda, 19 111. App. 70 ; Liverpool, L. & G. Ins. Co. V. BuckstafE, 38 Nebr. 146, 56 N. W. Eep. 695; German Ins. Co. V. Davis, 40 Nebr. 700, 59 N. W. Eep. 698, 23 Ins. L. J. 768; Union Ins. Co. v. McCullough, Nebr. , 96 N. W. Eep. 79; Omaha Ins. Co. v. Sinnott, 54 Nebr. 522, 74 N. W. Eep. 955; Norman v. Missouri Town Ins. Co., 74 Mo. App. 456. And see Insurance Co. N. A. v. Coombs, 19 Ind. App. 331, 49 N. E. Eep. 471 ; Doud v. Citizens' Ins. Co., 141 Pa. St. 47, 21 Atl. Eep. 505 ; Alston v. Insurance Co., 80 N. C. 326 ; Bennett V. Agricultural Ins. Co., 50 Conn. 420, 51 Conn. 504; Continen- tal Ins. Co. V. Kyle, 124 Ind. 132, 24 N. E. Eep. 727. 2. See Eule 1 ; Huber v. Manchester Ins. Co., 92 Hun, 223,. 229, 36 N. Y. Supp. 873 ; Eoe v. Dwelling-House Ins. Co., 149 Pa. St. 94 ; Ohio Farmers' Ins. Co. v. Vogel, Ind. App. , 73 N. E. Eep. 612. 384 Fire Insurance. In Hotchkiss v. Phoenix Ins. Co., 76 Wis. 269, it was held that the insured might rely upon statement of the company's agent that policy would remain valid for thirty days after re- moval of a tenant. RULE 41. , Occupancy of Building TTsed for Manufacturing Purposes. To constitute occupancy of a building used for manufacturing purposes, there must be some practical use or employment of the property ; thus when closed, and in hands of an agent to rent, it is unoccupied though occasionally visited by the agent and a watch- man who resides next door;' it is not occupancy when tools or machinery remain in a shop, which is visited by the insured or representative to see if things are right.^ 1. Halpin v. Phcenix Ins. Co., 118 N. Y. 165, 23 N. E. Eep. 482, 19 Ins. L. J. 289. And see Keith v. Quiney Ins. Co., 10 Allen, 228 (Mass.) ; Halpin v. JEtna. Ins. Co., 120 N". Y. 70, 23 N". B. Eep. 988, 19 Ins. L. J. 459; Halpin v. Insurance Co. N. A., 120 N. Y. 73. 2. Keith v. Quiney Ins. Co., supra; Moore v. Phoenix Ins. Co., 64 F. H. 140. RULE 42. When Mill or Factory Vacant or Unoccupied. A mere temporary cessation of the operation of the machinery in a mill, by reason of sickness, breakdown, low water, or other unavoidable cause, without any intention by the assured to cease operating it, does not constitute such vacancy or unoccupancy as to vio- late the condition in regard thereto;* and so when mill shuts down to repair machinery and a number of Vacant or Unoccupied. 385 employees continue in and about the mill engaged in usual work, the building does not cease to be occupied.'' 1. Ladd V. ^tna Ins. Co., 147 N. Y. 478, 35 Ins. L. J. 382, 43 N. E. Kep. 197, afE'g 70 Hun, 490, 24 N. Y. Supp. 384. And see Whitney v. Black Eiver Ins. Co., 73 N. Y. 117; Albion Lead Works v. Williamsburg City Ins Co., 2 Fed. Eep. 479, 9 Ins. L. J. 435. 2. American Ins. Co. v. Brighton Cotton Mfg. Co., 125 111. 131, 17 N. E. Rep. 771; Brighton Mfg. Co. v. Reading Ins. Co., 33 Fed. Eep. 233, 334. RULE 43. Occupancy of Manufacturing Establishment Governed by Known Use and Character. The condition as to vacancy or occupancy of a manu- facturing establishment is rendered inoperative when from the known use and character of the business, continuous personal occupancy is not practicable nor contemplated by the insurer and the insured ;^ a manu- facturing establishment insured as an entire plant is not vacant or unoccupied when a part is in use.* 1. Morotock Ins. Co. v. Pankey, 91 Va. 359, 31 S. E. Rep. 487. 2. Central Montana Mines Co. v. Firemen's Fund Ins. Co., 93 Minn. 223, 99 N. W. Rep. 1130. RULE 44. When Flouring Mill not Vacant or Tlnoccupied. A flouring mill is not vacant or unoccupied, although ^' shut down," the machinery remaining in place. Bellevue Roller Mill Co. v. London & Lancashire Ins. Co., 4 Idaho, 307, 39. Pac. Rep. 196, 24 Ins. L. J. 331. Vol. 2 — 25 386 FiBE Insurance, RULE 45. When a Tannery is Occupied. A tannery is occupied if only occupied in part by a shoemaker, who uses the liquor left in the vats to tan some hides, and the finishing-room to complete his, work. Lebanon Ins. Co. v. Brb, 112 Pa. St. 149. RULE 46. Occupancy of a Boat. A boat left lying on the beach without any occu- pants and her furniture removed, and no use made of her, is unoccupied. Eeid V. Lancaster Ins. Co., 19 Hun, 284 (N. Y.). RULE 47. When a Storehouse Vacant and TTnoccupied. When tenants, just before expiration of their term,, abandon a building insured as a storehouse, leaving therein a small quantity of meat and a few empty barrels and boxes, the meat being sold and removed before the term ends, the building becomes vacant and unoccupied, notwithstanding the tenants retain the key and occasionally make a sale of the boxes or barrels. Home Ins. Co. v. Scales, 71 Miss. 975, 15 So. Kep. 134, 2a Ins. L. J. 712. RULE 48. When a Store is Unoccupied. A store building insured, occupied by a tenant as a cigar store and manufactory, becomes unoccupied Vacant ok Unoccupied. 387 when the tenant removes all his property except a counter, and nothing remains in the building but a few bottles of liquor, which the tenant gives permission to a neighboring saloon-keeper to store there. Limburg v. German Fire Ins. Co., 90 Iowa, 709, 57 N. W. Eep. 626, 23 Ins. L. J. 321. RULE 49. When a Cliurch. is Vacant or TJnoccupied. If church buildings are kept for use for the purposes for which they are designed, and used as occasion pre- sents, and as the convenience of the congregation may require, and there is no intent shown to abandon them for the purposes of their use by the temporary periods of nonuser, even though these periods may exceed the ten-day limit in the policy, such act is not per se a leaving of a church building vacant or unoccupied, within the forfeiture clause of the policy;^ a church building does not become vacant because services may be discontinued, everything necessary for services re- maining therein and sexton in charge.^ 1. Hampton v. Hartford Ins. Co., 65 N. J. L. 265, 47 Atl. Eep. 433, 52 L. E. A. 344. 2. Caraher v. Eoyal Ins. Co., 63 Hun, 82, 17 N. Y. Supp. 858. RULE 50. When an Icehouse Vacant or TJnoccupied — Question of Fact. An icehouse is not, as a matter of law, vacant or unoccupied when, at time of the fire, there was yet a small quantity of ice in store not merchantable and all of the tools used in putting up ice were then stored 388 FiEE Insubance, in the building; the fact that there was no merchant- able ice in the building is not evidence that it was unoccupied or vacant ; considering the fact that it was insured as an icehouse, it is proper to submit the question to the jury. D'es Moines Ice Co. v. Niagara Ins. Co., 99 Iowa, 193, 68 ]Sr. W. Eep. 600, 36 Ins. L. J." 378. RULE SI. When an Elevator Vacant or Unoccupied. An elevator building insured as such, but not in operation at the time, and the company knowing that it would not be so used again, but was then and at the time of the fire used as a storehouse for the tools and machinery, preparatory to removal to a new location, is not vacant or unoccupied within the meaning of the policy; the removal of the engine does not change the character of the risk ;^ and so an elevator is not vacant or unoccupied if occasionally used, and men around it all the time, insured being there frequently, and leav- ing his papers there.^ 1. Clifton Coal Co. v. Scottish Union & Nat. Ins. Co., 102 Iowa, 300, 71 N. W. Eep. 433, 36 Ins. L. J. 1007. 2. Williams v. North German Ins. Co., 34 Fed. Eep. 635, 14 Ins. L. J. 708. RULE 52. Occupancy of Saloon or Storehouse. A building described as a saloon,^ or a storehouse,* is not vacant or unoccupied, when in possession of the insured, who is getting the place in order and making the ordinary preparation for such purposes. 1. Stensgaard v. National Ins. Co., 36 Minn. 181, 30 N. W. Eep. 468. 2. Eockford Ins. Co. v. Wright, 39 111. App. 574. Vacant ok Unoccupied. 389 RULE 53. Construction and Application of Bule 1 as Affecting Waiver or Estoppel. The provision (Rule 1) predicates the avoidance of the insurance upon either of two conditions: (a) the property being vacant and so remaining for ten days, or (b) its becoming vacant after being occupied and then remaining vacant for ten days.' The former has reference to a state of things presently existing when the policy is issued and continuing thenceforth with- out interruption; the latter assumes a policy already existing and valid in its inception and refers to a vacancy commencing in the future. The condition con- templates the insurance of an unoccupied building for a limited period as prescribed, and hence knowledge of the company's agent as to unoccupancy when the policy issues does not operate as a waiver or estoppel when the building, having been occupied after policy issues, again becomes unoccupied, and so remains for more than ten days, until destroyed by fire. Moore v. Niagara Ins. Co., 199 Pa. St. 49, 48 Atl. Eep. 869. And see England v. Westchester Ins. Co., 81 Wis. 583, 51 N. W. Eep. 954. RULE 54. Time Limitation as Affecting Waiver. Under a specific time limitation as to nonoccupancy, mere knowledge by the company or its agent when policy issues that the property is vacant does not operate as a waiver. Queen Ins. Co. v. Chadwick, 13 Tex. Civ. App. 318, 35 S. W. Bep. 36; England v. Westchester Ins. Co., 81 Wis. 583, 51 N. W. Eep. 954; Newmarket Savings Bank v. Eoyal Ins. Co., ] 50 Mass. 374, 23 N. E. Eep. 210, 19 Ins. L. J. 437. And see Eules 1, 40. 390 FiEE Insurance. RULE 55. Waiver or Estoppel When Policy Issues — Duty of Agent — Building in Process of Erection. Issue and delivery of the policy with knowledge by the company or its agent of existing facts as to vaca:ncy or nonoccupancy, or that building will be un- occupied for more than the limited or prescribed period, operates as waiver or estoppel, preventing the company from claiming a forfeiture by reason of such facts ;^ when policy is issued on a building in process of erection, agent having knowledge of the vacancy, and no definite time being fixed within which comple- tion and occupancy are to take place, it becomes the duty of the- agent to notify the insured that the com- pany would elect to cancel or consider the policy void, if, after a reasonable time, the premises should still remain unoccupied. Otherwise the policy continues in force.^ 1. Blass V. Agricultural Ins. Co., 18 App. Div. 481, 46 N. Y. Supp. 393, afE'd, 162 N. Y. 639, without opinion; Short v. Home Ins. Co., 90 X. Y. 16; Bean v. Atlanta Home Ins. Co., 34 Misc. 613, 70 N. Y. Supp. 581 ; Cone v. Niagara Ins. Co., 60 N. Y. 619; Vanderhoef v. Agricultural Ins. Co., 46 Hun, 328 ; Woodruff v. Imperial Ins. Co., 83 IST. Y. 133 ; Haight v. Continental Ins. Co., 92 N. Y. 51 ; Queen Ins. Co. v. Straughan, Kans. , 78 Pac. Eep. 447 ; Hilton v. Phcenix Ins. Co., 92 Me. 272, 42 Atl. Kep. 412 ; Prendergast v. Dwelling-House Ins. Co., 67 Mo. App. 426; Hackett v. Philadelphia Under- writers, 79 Mo. App. 16 ; Chamberlain v. British American Ins. Co., 80 Mo. App. 589 ; German Ins. Co. v. Frederick, 57 Febr. 538, 77 K. W. Eep. 1106; Eochester Loan Co. v. Liberty Ins. Co., 44 Nebr. 537, 62 N. W. Eep. 877, 24 Ins. L. J. 665; German Ins, Co. v. Penrod, 35 Nebr. 273, 53 N. W. Eep. 74, 22 Ins. L. J. 41 ; Queen Ins. Co. v. Kline, Ky. , 32 S. W. Eep. 214, 25 Ins. L. J. 236; Commercial Union Assur. Co. Vacant ob Unoccupied. 391 V. Dunbar, 7 Tex. Civ. App. 418, 26 S. W. Eep. 638; Devine V. Home Ins. Co., 32 Wis. 471 ; St. Paul Ins. Co. v. Wells, 89 111. 82; Imperial Ins. Co. v. Shimer, 96 111. 580; Commercial Ins. Co. V. Spankneble, 52 111. 53; Kimball v. iEtna Ins. Co., 9 Allen, 540 (Mass.) ; Williams v. Niagara Ins. Co., 50 Iowa, 661; Georgia Home Ins. Co. v. Kinnier, 28 Gratt. 88 (Va.). 2. Milwaukee Mechanics Ins'. Co. v. Brown, 3 Kans. App. 225, 44 Pac. Eep. 35. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eules 16, 20, and 31. Many of the old forms provided that " if during the insurance the above-mentioned premises shall become vacant or unoccu- pied, then and from thenceforth so long as the same shall con- tinue vacant or unoccupied this policy shall cease and be of no force or effect." Wheeler v. Phoenix Ins. Co., 53 Mo. App. 446. RULE 56. Special Permit for Vacancy of Uncompleted Building. When the company's agent, on issue of the policy upon a building not completed and unoccupied, in- dorses consent for thirty days' vacancy and at same "time promising assured to indorse same permit every thirty days until the building is completed, and sub- sequently makes the indorsement on two occasions, but through accident or inadvertence omits to make the indorsement on expiration of the last period and property is destroyed more than ten days thereafter, it operates as a waiver of the condition. Dupuy V. Delaware Ins. Co., 63 Fed. Eep. 680, 34 Ins. L. J. 161. RULE 57. Knowledge of Soliciting Agent. The knowledge of a mere soliciting agent does not operate as an estoppel ;^ though it may when such an 392 FiBB Insurance. agent is clothed by the insurance company with ap- parent authority and his acts are within scope of it, without notice to the insured of any limitation upon his authority,^ or his status as agent is determined by a statute.^ 1. Hamburg-Bremen Ins. Co. v. Lewis, 4 App. Cas. D. C. 66. 2. Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eules 9 and 23. And see this volume, " Agents." 3. Alkan v. Few Hampshire Ins. Co., 53 Wis. 136, 11 Ins. L. J. 126. RULE s8. Knowledge of Agent as Affecting Occupancy for Other Purpose? Than as Described. If company, through its agent, knows that building described as ' ' occupied as a lodge room ' ' is also, at time of issue of policy, used for other purposes, it can- not claim a forfeiture for nonoccupancy because the use as a lodge room ceases before the fire, the other uses continuing. Driscoll V. German- American Ins. Co., 74 Hun, 153, 26 N. Y. Supp. 646. RULE 59. Effect of Knowledge as to Future Nonoccupancy. When the building is occupied at time of the issue of the policy, the knowledge of the company as to future nonoccupancy will not operate as a waiver of the condition, provision being made for the cessation of occupancy. Herrman v. Adriatic Ins. Co., 85 K. Y. 163; Hartford Ins. Co. V. Davenport, 37 Mich. 609. And see ^tna Ins. Co. v. Bums, 5 Ins. L. J. 69 (Ky.). And Eules 53, 54. See also Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eule 20. Vacant or Unoccupied. 393 RULE 60. ITo Oral Waiver After Issue of Policy — May be Estoppel — Here Knowledge no Estoppel. When the only evidence of authority of the agent is that contained in the policy, or if the insured knows that the agent is without authority, he cannot, after issue of the policy, orally waive or dispense with the necessity of written consent to vacancy or nonoccu- pancy,^ unless there is some element of estoppel in misleading the insured by an agent having authority f or by an oflScer of the company;' the agent's consent to an assignment of the policy, with notice or knowl- edge that the building is then unoccupied, does not operate as a waiver;* there is no estoppel by mere knowledge of an agent.^ 1. Sutherland v. Eureka F. & M. Ins. Co., 110 Mich. 668, 68 N. W. Rep. 985 ; Messelback v. Norman, 123 F. Y. 578, 26 N. E. Eep. 34; O'Brien v. Preseott Ins. Co., 134 N". Y. 28, 31 N. B. Eep. 265, 21 Ins. L. J. 83 ; Walsh v. Hartford Ins. Co., 73 N. Y. 5 ; Connecticut Ins. Co. v. Smith, 10 Colo. App. 121, 51 Pac. Eep. 170, 26 Ins. L. J. 929; Phoenix Ins. Co. v. Maxson, 42 III. App. 164; Sprague v. Western Home Ins. Co., 49 Mo. App. 423. And see Harrison v. City Ins. Co., 9 Allen, 231 (Mass.) ; Harrison v. Hartford Ins. Co., 30 Eed. Eep. 863. 2. Home Ins. Co. v. Scales, 71 Miss. 975, 15 So. Eep. 134 23 Ins. L. J. 713 ; Queen Ins. Co. v. Straughan, Kans. 78 Pac. Eep. 447. And see Palmer v. St. Paul Ins. Co., 44 Wis, 201 ; Eockford Ins. Co. v. Wright, 39 111. App. 574. 3. Adams v. Greenwich Ins. Co., 9 Hun, 45, aff'd, 70 N. Y 166. And see Lamberton v. Connecticut Ins. Co., 39 Minn 139; Wilkins v. State Ins. Co., 43 Minn. 177, 45 N. W. Eep 1, 20 Ins. L. J. 478. 4. Eanspach v. Teutonia Ins. Co., 109 Mich. 699, 67 N. W Eep. 967, 25 Ins. L. J. 713; Insurance Co. N. A. v. Garland 108 111. 220, 13 Ins. L. J. 427. 5. Comnierciial Union Assur. Co. v. Dunbar, 7 Tex. Civ. App, 418, 26 S. W. Eep. 628. As to waiver, see Vol. 1, Fire Insurance as a Valid Contract, " Waiver." See also this volume, " Agents." 394 FiKE Insurance. RULE 6i. Waiver or Estoppel After Issue of Policy. Wten the company's agent, on being notified of an intended vacancy after issue of the policy, informs the insured that the policy would not be canceled for vacancy without notice to him, and no such notice is given, it is proper to hold that the terms of the insur- ance contract have been changed or waived. Wilson V. Commercial Union Assur. Co., 51 S. C. 540, S9 S. E. Eep. 245. (The authority of this ease is much affected by the brief but strong dissenting opinion of Chief Justice Mclver, p. 549.) And see Vol. 1, " Waiver," and this volume, " Agents." RULE 62. Estoppel by Agent — Written Permit Effective. When the assured leaves the policy in the possession of the company's agent who issued it, to have a va- cancy permit attached, and is afterward informed by the agent that it is attached, the insured has a right to rely upon such statement ;^ and if a written permit be signed, it is not essential that it be attached to the policy to be effective.^ 1. Morgan v. Illinois Ins. Co., 130 Mich. 427, 90 N". W. Eep. 40. 2. Bennett v. Western Underwriters, 130 Mich. 216, 89 N. W. Itep. 702. RULE 63. Receiving Premium After Pire. Receipt of and retention by the insurance company of the premium after a fire, with knowledge of the Vacant ok Unoccupied. 395 facts as to vacancy or nonoccupancy, operates as a waiver or estoppel. Frasier v. New Zealand Ins. Co., 39 Oreg. 348, 64 Pac. Eep. 814. And see "Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eule 45. As to whether the omission by the company to cancel the policy, having knowledge of the facts, becomes evidence of waiver the courts do not agree. That omission to cancel is not evidence of waiver, see Suther- land V. Eureka P. & M. Ins. Co., 110 Mich. 668, 68 N. W. Bep. 985. That it may be, see Clay v. Phoenix Ins. Co., 97 Ga. 44, 25 S. E. Eep. 417. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eules 27, 28, and 30, note 2. And this volume, " Cancellation." When the company, on being notified of vacancy, refuses to return the unearned premium and cancel the policy, it may be- ■come evidence of waiver. Phoenix Ins. Co. v. Boyer, 1 Ind. App. 330, 27 N. E. Eep. 628. There is an obvious distinction between a mere omission to ■cancel and a refusal to cancel on notice when required. When the condition as to vacancy requires the insured to give notice to the company, the object of requiring notice is accom- plished by receipt of such notice, and the company having re- ceived it, can terminate the insurance only by notice and pay- ment of the unearned premium. Wakefield v. Orient Ins. Co., 50 Wis. 532. This case also points out a distinction, and, though sometimes ■cited, would not seem to be authority for any such proposition that in all cases mere omission to cancel of itself becomes evi- dence of waiver. An alleged waiver by the company of the condition as to vacancy must be pleaded by the insured to be available, when required bv local rules of practice. Evans d." Queen Ins. Co., 5 Ind. App. 198, 31 N". E. Eep. 843. Local rules of practice are beyond the scope of this work, but see and compare Vol. 1, Fire Insurance as a Valid Contract, ■" Waiver," Eules 60 and 61. 396 Fire Insurance. RULE 64. Question of Law or Fact. What is meant by the term " vacant " or " unoccu- pied " in a policy of insurance is a question of law, but whether the building is or was vacant or unoccu- pied, within the meaning of the policy, is a question of fact for determination by a jury/ unless the evi- dence is undisputed or uncontradicted, when it may be proper to dismiss the complaint,^ or to direct the verdict.^ 1. Home Ins. Co. v. Mendenhall, 164 111. 458, 45 N. E. Eep- 1078, afE'g 64 111. App. 30 ; Scheurmann v. Dwelling-House Ins. Co., 161 111. 437, 43 N. B. Eep. 1093; Stone v. Granite Ins. Co., 69 N. H. 438, 45 Atl. Eep. 235; Can v. Insurance Cos., 60 N. H. 513 ; Hampton v. Hartford Ins. Co., 65 N. J. L. 265, 47 Atl. Eep. 433, 52 L. E. A. 344; Hunt v. State Ins. Co., 66 ISTebr. 121, 92 F. W. Eep. 921 ; Woodruff v. Imperial Ins. Co., 83 N. Y. 133 ; Cummins v. Agricultural Ins. Co., 67 N. Y. 260; Wait v. Agricultural Ins. Co., 13 Hun, 371; Caraher v. Eoyal Ins. Co., 63 Hun, 82; Chandler v. Commerce Ins. Co., 88 Pa. St. 223 ; Poor v. Hudson Ins. Co., 2 Fed. Eep. 432. 2. Copp V. Home Ins. Co., 89 Hun, 611, 35 N. Y. Supp. 1105. 3. Scheurmann v. DwelUng-House Ins. Co., supra. RULE 65. Question of Increased Hazard One of Pact — Change of Occu- pants Permitted. The standard form permitting change of occupants without increased hazard, the question of increased hazard, if raised, is one of fact to be determined by a jury. Driscoll V. German-American Ins. Co., 74 Hun, 153, 26 N. Y. Supp. 646. Cancellation. 397 CHAPTER SEVENTH. Miscellaneous Provisions and other Subjects. Title 1. Cancellation. 2. Agents. 3. Eenewal. 4. Premium. 5. Term. 6. Reinsurance. 7. Oral or parol contract — Consummation of contract. 8. Reformation. 9. Contract as affected by legality or violation of statute. TITLE I. Cancellation. EuLE 1. As imposed by contract. 2. Condition as to cancellation strictly constnied — Burden of proof. 3. Company's right to cancel absolute — Kot dependent upon motive, reason, or cause. 4. Notice — Form — Evidence. * 5. Meaning of notice. 6. Requisites of notice — Expression of intention in- effectual — Use of mail. 7. Act of cancellation should precede notice and tender — When takes effect. 8. TJnearned premium must be returned or tendered. 9. Cancellation must be pursuant to terms of policy. 10. Effect of accounts as payment of premium — Effect of credit to broker. 11. Acceptance of draft for unearned premium — Insuffi- cient as tender. 12. When premium not paid, tender not required — Au- thority of agent. 13. Premium must have been received by company. 14. Effect of acceptance of note for premium. 15. May be effected by mutual consent — Waiver by in- sured — Act of partner. 16. Cancellation by voluntary surrender and delivery — When notice not required — Question of fact. 17. Surrender of policy upon condition — Authority of agent. 398 FiEE Insueance. EuLE 18. Effect of promise by insured. 19. Insured must be capable of understanding his acts — Question of fact. 20. Computation of time. 31. Company cannot reduce insurance without consent of insured. 22. Cancellation upon request of insured — Unearned premium. 23. Request for cancellation by insured. 24. Insured's right does not depend upon notice — Duty of insured if policy not satisfactory. 25. Cancellation by mail. 26. Fire occurring before expiration of notice. 27. Party or mortgagee to whom loss payable cannot con- sent — Effect of mortgagee clause. 28. Liability of insured for earned premium. 29. Policy cannot be canceled when property exposed to fire. 30. Presumption as to short rate. 31. Mutual mistake. 32. Agent cannot delegate authority. 33. Authority of insured's agent or broker — Custom — Evidence. 34. Insured's agent or broker having general authority as to insurance. 35. Authority of broker to surrender and cancel — Evi- dence — ^Waiver — Liability for earned premium. 36. Limitation as to authority of broker. 37. Company's agent may be also authorized by insured to consent to cancellation — Evidence — Ratifica- tion — Delivery of substituted policy. 38. No presumption as to authority of soliciting agent. 39. Agent no power to revive canceled policy. 40. Cancellation by substitution of other policies. 41. Substitution by agreement or upon condition. 42. As affected by intent — Effect of recognition and pay- ment by substituted company. 43. Unauthorized substitution as affecting apportionment. 44. Insured may ratify act of agent in replacing insur- ance after fire. 45. When insured does not waive notice. 46. Remedy of insured in equity to compel issue of sub- stituted policy. 47. Substituted policy not a contract of reinsurance. 48. Question of fact or law. Cancellation. 399' Rule 49. Omission to cancel as evidence of waiver or estoppel. 50. Limitation of cancellation as evidence of waiver. 51. Same subject — When insurance itemized. 52. Mere omission to cancel no evidence of waiver. 53. Eight of company to deduct commissions allowed — Eight of broker to commissions. 54. Construction of agent's agreement for a percentage of premiums received. 55. Duty and liability of company's agent. 56. When company's agent not charged with duty of can- cellation. 57. Agent cannot use company's funds to cancel policies in his own interest. 58. Agent may buy claim for unearned premium. 59. Agent's act must be authorized to sustain claim for reimbursement. 60. When trustee of insurance company not entitled to credit for payment of unearned premiums. RULE I. As Imposed by Contract. This policy shall be canceled at any time at the request of the insured; or by the company, by giving five days' notice of such cancellation. If this policy shall be canceled as hereinbefore provided, or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate, except that, when this policy is canceled by this company by giving notice, it shall retain only the-pro rata premium. This rule is imposed by above terms in the standard form of policy prescribed in: 'New York, New Jersey, Connecticut, North Carolina, Louisiana, North Dakota, Michigan, *Pennsylvania, Missouri, Rhode Island. ■ ■ • * See note to " Concealment," Rule 1, page 2. 400 FiEE Insxjbance. The standard form of policy prescribed in Wisconsin provides : " This policy shall be canceled at any time at the request of the insured; or by the company by giving five days' notice of such cancellation. Unless during a time in which the hazard shall be increased solely by the act of God, and in such case and during such time of such increase of hazard, the company shall not cancel this policy except upon sixty days' notice of such cancellation without the consent of the assured. If this policy shall be canceled as helfeinbefore provided, or become void or cease, the premium having been actually paid, the un- earned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except that when this policy is canceled by this company by giving notice it shall retain only the pro rata premium. The standard form of policy prescribed in: Maine, Minnesota, Massachusetts, New Hampshire, provides : " This policy may be canceled at any time at the request of the insured, who shall thereupon be entitled to a return of the portion of the above premium remaining, after deducting the customary monthly short rate for the time this policy shall have been in force. The company also reserves the right, after giving written notice to the insured, and to any mortgagee to whom this policy is made payable, and tendering to the insured a ratable proportion of the premium, to cancel this policy as to all risks subsequent to the expiration of ten days from such notice, and no mortgagee shall then have the right to recover as to such risks." The standard form of policy prescribed in South Dakota provides : " This policy may be canceled at any time at the request of the insured, who shall thereupon be entitled to a return of the portion of the above premium remaining after deducting the cus- tomary short rates for the time this policy shall have been in force. The company also reserves the right to cancel this policy as to all risks subsequent to the expiration of five days after the giving of such notice in writing to the insured, and to any mortgagee or trustee, to whom this policy is made payable, and tendering to the insured the ratable proportion of the premium. It shall be the duty of the insurer in order to avail himself of any provision in this policy rendering it void, to promptly Cancellation. 401 cancel the policy as provided herein upon having or obtaining notice or knowledge of the existence of any facts or circum- stances which would, according to the terms of the policy, render it void ; otherwise, it will be deemed to have waived such provision or provisions voiding the policy. Provided, that if the grounds for cancellation under the last clause shall be dis- tinctly specified in the written notice, such cancellation may be effected upon twenty-four hours' notice to the insured; and actual notice to, or the knowledge of, any agent of the com- pany as above mentioned* shall be deemed notice to, and knowl- edge of, the company." In the States where no standard form of policy is prescribed, and other than those above named, the New York standard form is in general use. RULE 2. Condition as to Cancellation Strictly Construed — Burden of Proof. Cancellation to be effective must be in strict accord- ance with the condition as prescribed in the policy/ or by a statute/ and the burden of establishing a can- cellation after issue of the policy, when the undisputed evidence shows there was a completed contract, rests upon, the insurance company.^ 1. Davison v.- London & Lancashire Ins. Co., 189 Pa. St. 332, 42 Atl. Eep. 2, 28 Ins. L. J. 152; Baldwin v. Pennsylvania Ins. Co., 206 Pa. St. 248, 55 Atl. Eep. 970; Bradshaw v. Fire Ins. Co. of Phila., 89 Minn. 334, 94 N. W. Eep. 866. And see Wicks Bros. v. Scottish Union & Nat. Ins. Co., 107 Wis. 606, 83 N. W. Eep. 781 ; John E. Davis Lumber Co. v. Hart- ford Ins. Co., 95 Wis. 226, 70 N. W. Eep. 84, 37 L. E. A. 131 ; Lattan v. Eoyal Ins. Co., 45 N. J. L. 453; iEtna Ins. Co. v. Weissinger, 91 Ind. 297; Eunkle v. Citizens' Ins. Co., 6 Fed. Eep. 143. 2. Bank of Commerce v. British America Assur. Co., 18 Ont. 234; Joshua Handy Machine Works v. American Ins. Co., 86 Cal. 248, 24 Pac. Eep. 1018. 3. Phoenix Assur. Co. v. McArthor, 116 Ala. 659, 22 So. Eep. 903. * See chapter on " Agents," Eule 1, South Dakota form. Vol. 2 — 26 '402 Fire Insueance. RULE 3. Company's Bight to Cancel Absolute — Not Dependent upon Motive, Beasou, or Cause. The option or right of an insurance company to can- cel its policy does not depend upon any change in risk, or upon a knowledge of any fact acquired after the making of the insurance, or upon any change in the circumstances or condition of the insured or the in- surers of the premises. The motive, or the suffi- ciency of the cause for exercise of the right, is not to be passed upon by any tribunal, but the will of the company and its election must stand for the reason of its action, and is cause for terminating the risk. International Ins. Co. v. Franklin Ins. Co., 66 IST. Y. 119; Sun Fire Office v. Hart, L. E. 14 App. Cas. 98 (Bng.). RULE 4. Notice — Form. — Bvidence. Cancellation cannot be effective in absence of no- tice to the insured;^ the form of notice is not pre- scribed, and may be given over the telephone;^ but when premium has been paid the notice must be con- current with tender or payment of the unearned pre- mium.^ Cancellation is not evidenced by mere entry on the books of the company.* 1. Partridge v. Milwaukee Mechanics' Ins. Co., 13 App. Div. 519, aff'd, 163 N. Y. 597, without opinion; Yoshimi v. Fidelity Ins. Co., 99 App. Div. 69, 91 F. Y. Supp. 393 ; John E. Davis Lumber Co. v. Hartford Ins. Co., 95 Wis. 336, 70 N. W. Eep. 84, 37 L. E. A. 131 ; Cassville Eoller Milling Co. v. Mina Ins. Co., 105 Mo. App. 146, 79 S. W. Eep. 730 ; Fowler Cycle Works V. Western Ins. Co., Ill 111. App. 631 ; Scott v. Sun Fire Office, Cancellation. 403 133 Pa. St. 322. And see Bergson v. Builders' Ins. Co., 38 Cal. 541; London & Lancashire Ins. Co. v. TurnbuU, 86 Ky. 230; Commercial Union Assur. Co. v. State, 113 Ind. 331, 15 N. E. Eep. 518; Carson «>. German Ins. Co., 62 Iowa, 433, 17 N. W. Eep. 650, 19 Ins. L. J. 626. 2. Manchester Ins. Co. v. Insurance Co. of Illinois, 91 111. App. 609. 3. Continental Ins. Co. v. Busby, 3 Tex. Ct. App. Civ. Cas., § 101, 15 Ins. L. J. 736. And see Eule 8. 4. King V. Enterprise Ins. Co., 45 Ind. 44. The specific time limitation would seem to preclude any dis- •cussion as to reasonable time such as appears to have been in- volved, for instance, in Chadboume v. German- American Ins. Co., 24 Blatchf. 492, 31 Fed. Eep. 533, 16 Ins. L. J. 897. RULE 5. Meaning of Notice. Notice means notice to the insured.^ Wlien the policy in terms provides for notice to insured or his representative, a party to whom the loss is payable may be regarded as the assured 's representative, and notice to him may be sufficient notice of cancellation when the premium has not been paid.^ 1. London & Lancashire Ins. Co. v. Turnbull, 86 Ky. 230, 5 S. W. Eep. 542. 2. Mueller v. Southside Ins. Co., 87 Pa. St. 399. And see Vol. 1, Fire Insurance as a A^alid Contract, " Parties to Fire Insurance Contract " and " Legal Eepresentatives." RULE 6. Requisites of Notice — Expression of Intention Ineffectual — Use of Mail. Notice to effect cancellation must be positive, dis- tinct, and unequivocal; to effect a cancellation there must be an actual cancellation and not a mere inten- tion to cancel ; the assured must be informed not that 404 Fire Insurance. policy will be canceled, but that it is canceled. If evidence shows only a mere intention to cancel, it is not sufficient.^ When notice of cancellation is sent by mail, its receipt must be shown to become operative; and the five days' notice runs from time of its receipt and not from time of mailing. There must be some act of cancellation after expiration of the time thus limited;^ if policy is in the mail on its way to the company or its agent, and the unearned premium" being unpaid and not tendered, and fire occurs, com- pany is liable for the loss.^ 1. Gardner v. Standard Ins. Co., 58 Mo. App. 611; American Ins. Co. V. Brooks, 83 Md. 22, 34 Atl. Eep. 373, 26 Ins. L. J. 3 ; State Ins. Co. v. Hale, Nebr. , 95 N. W. Eep. 473 ; Southern Ins. Co. v. Williams, 62 Ark. 382, 35 S. W. Eep. 1101 ; John E. Davis Lumber Co. v. Hartford Ins. Co., 95 Wis. 226, 70 N. W. Eep. 84, 37 L. E. A. 131; Petersburg Ins. Co. v. Manhattan Ins. Co., 66 Ga. 446 ; Newark Ins. Co. v. Sammons, 110 111. 166. And see Goit v. Katioaal Protection Ins. Co., 25 Barb. 189 (N. Y.). 2. American Ins. Co. v. Brooks, supra; Farnum v. Phoenix Ins. Co., 83 Cal. 246, 23 Pac. Eep. 869. 3. Southern Ins. Co. v. Williams, supra. RULE 7. Act of Cancellation Should Precede Notice and Tender — When Takes Effect. The act of cancellation should precede the notice and tender, but does not take effect until five days after the giving of the notice and the tender; an ex- pression of a desire or intention to cancel is not effect- ive as an act of cancellation. Continental Ins. Co. v. Daniel, 78 S. W. Eep. 866 (Ky.). CancehiaAtion. 405 RULE 8. TTnearned FremlunL Must lye Keturaed or Tendered. Notwithstanding the change in the language of the standard form, cancellation cannot be made effective by mere notice, when premimn has been paid ; in addi- tion to the notice required, the insurance company is bound to seek out the insured and return or tender to him the whole, amount of the unearned premium. Tisdell V. New Hampshire Ins. Co., 155 N. Y. 163, 49 N. E. Eep. 664, 27 Ins. L. J. 385, 40 L. E. A. 765, affg 11 Misc. 20, and overruling Walthear v. Pennsylvania Ins. Co., 2 App. Div. 328, and Backus v. Exchange Ins. Co., 26 App. Div. 91. And see also as to the necessity of tender or payment of the unearned premium, Chrisman & Sawyer Banking Co. v. Hartford Ins. Co., 75 Mo. App. 310; Hartford Ins. Co. v. Cameron, 18 Tex. Civ. App. 237, 45' S. W. Eep. 158; Phoenix Assur. Co. v. Hunger Cotton Mfg. Co., 92 Tex. 297, 49 S. W. Rep. 222, 28 Ins. L, J. 248;Hartford Ins. Co. v. McKenzie, 70 111. App. 615;Peter- Bon V. Hartford Ins. Co., 87 111. App. 567, rev'd, 187 111. 395, but on a question of practice; Peoria F. & M. Ins. Co. v. Botto, 47 111. 516; ^tna Ins. Co. v. Maguire, 51 111. 342; German Ins. Co. V. Rounds, 35 Nebr. 752, 53 N. "W. Eep. 660, 22 Ins. L. J. 48 ; Marshall v. Eeading Ins. Co., 78 Hun, 83, 29 K. Y. Supp. 334, aff'd, 149 IST. Y. 617, without opinion; Van Valken- burgh V. Lenox Ins. Co., 51 N. Y. 465; Griffey v. New York Central Ins. Co., 100 N. Y. 417; HoUingsworth v. Germania Ins. Co., 45 Ga. 294; Home Ins. Co. v. Curtis, 32 Mich. 402; White V. Connecticut Ins. Co., 120 Mass. 330 ; Scott v. Sun Fire Office, 133 Pa. St. 322, 19 Atl. Eep. 360; Lattan v. Royal Ins. Co., 16 Vroom, 453 (N. J.) ; Rankin v. Amazon Ins. Co., 89 Cal. 203, 26 Pac. Eep. 872, 20 Ins. L. J. 844, aflE'g on rehear- ing, 25 Pac. Eep. 260, 20 Ins. L. J. 278; Manlove v. Commercial Ins. Co., 47 Kans. 309, 27 Pac. Rep. 979, 21 Ins. L. J. 174. Contra, Schwarzchild & Sulzberger Co. v. Phoenix Ins. Co., 115 Fed. Eep. 653, aff'd, 59 C. C. A. 572, 124 Fed. Eep. 52, refus- ing to follow Tisdell v. New Hampshire Ins. Co., 155 N. Y. 163, 49 N. E. Eep. 664, and holding that it was not necessary to return or tender the unearned premium; that the condition as now worded required the return of the premium only upon the surrender of the policy by the insured to the company. This 406 FiBE Insurance. ease appears to have been decided in part upon findings of fact as to course of business and statement of account showing a suffi- cient amount of money to cover the unearned premium in the hands of an agent on an open account. See also Insurance Co. V. Brecheisen, 50 Ohio St. 542, 35 N. E. Rep. 53, 23 Ins. L. J. 56, where it was held that the return of the unearned premium was not a condition precedent to cancellation. Also El Paso Eeduction Co. v. Hartford Ins. Co., 121 Fed. Eep. 937. j RULE g. Cancellation Must be Pursuant to Terms of Policy. There must be a notice of cancellation served on proper person, accompanied with tender or payment of the unearned premium. A tender and a demand for the surrender of the policy made for the purpose of a rescission, and for canceling it from the begin- ning and refused on that ground, forms no legitimate basis for claiming a cancellation pursuant to condition contained in the policy. John E. Davis Lumber Co. v. Hartford Ins. Co., 95 Wis. 226, 70 N. W. Rep. 84, 37 L. R. A. 131. RULE 10. Effect of Accounts as Payment of Premium — Effect of Credit to Broker. A transaction of account as between the company and its agent, without the knowledge or request of the assured, whereby the amount of premixun is charged to the agent, and when policy is canceled the unearned portion credited to him, does not operate as a payment of the premium by the assured so as to require repayment or tender of the unearned portion to effect cancellation;^ but the company may give Cancellation. 407 credit to insured's agent or broker in sucli a way as to operate in legal effect as a payment of the pre- mium, preventing cancellation without payment or tender of the unearned premium,^ but when the pre- mium has not, in fact, been paid, a naked credit given to the insured's broker does not amount to payment so as to require tender or payment of the unearned premium.^ 1. Van Wert v. St. Paul F. & M. Ins. Co., 90 Hun, 465, 36 N. Y. Supp. 54. And see subsequent appeal, 8 App. Div. 107, 40 N. Y. Supp. 463. 2. Bennett v. Maryland Ins. Co., 14 Blatchf. 422 (U. S. Cir.). 3. Stone v. Franklin Ins. Co., 105 N". Y. 543, 12 N. E. Eep. 45. And see Hartford Ins. Co. v. Eeynolds, 36 Mich. 502. Also Eules 12, 13. RULE II. Acceptance of Draft for TIneamed Premium — Insufficient as Tender. While a draft for amount of unearned premium may not ordinarily be sufficient as payment or tender to effect cancellation, it will have that effect, when so treated. Lampasas Hotel Co. ■;;. Home Ins. Co., 17 Tex. Civ. App. 615, 43 S. W. Rep. 1081. RULE 12. When Premium not Paid Tender not Required — Authority of Agent When the premium has not been paid in fact, and only credit has been given for the same to the insured or his broker, tender or payment of the unearned premium is not essential to effect cancellation,^ which may be effected by notice to the insured or his agent, 408 Fire Insueance. aaid if either knows that company's agent is instructed to cancel, the latter has no power to continue policy in force.^ 1. Stone V. Franklin Ins. Co., 105 N. Y. 543, 13 N. E. Kep. 45. And see Hartford Ins. Co. v. Eeynolds, 36 Mich. 503; Lipman v. Niagara Ins. Co., 131 N. Y. 454, 34 N. E. Eep. 699; Little V. Eureka Ins. Co., 38 Ohio St. 110, 11 Ins. L. J. 417. 2. Springfield Fire & Marine Ins. Co. v. MeKinnon, 59 Tex. 507, 12 Ins. L. J. 889. And see Colonial Assur. Co. v. National Ins. Co., 110 111. App. 471. RULE 13. Premium Must Have Been Received by tte Company. It is not necessary to return the premium or un- earned portion thereof to the insured in order to effect a cancellation, when the premium has never been received by the company and is retained by the broker or agent of the insured. Mississippi Valley Ins. Co. v. Bermond, 45 111. App. 23. Some of the old forms provided that " this company shall not be liable by virtue of this policy, or any renewal thereof, xinless the premium therefor be actually paid to them or to their duly commissioned agent, within thirty days from date of the policy or renewal," and it was held that premium not being paid the company might cancel the policy after the ex- piration of the thirty days, without notice to the insured. Eedfield v. Paterson Ins. Co., 6 Abb. N. C. 456 (N. Y.). In Goodfellow v. Times & Beacon Ins. Co., 17 Up. Can. Q. B. 411, it was held that a binding receipt for insurance, subject to approval, could be terminated by notice at any time of re- jection; but when such a receipt stated that it was made sub- ject to all the conditions of printed form of policy, and such form required a notice of ten days and payment of the unearned premium, the company was bound to comply with such require- ments to cancel the insurance. Cancellatiok. 409 RULE 14. Effect of Acceptance of Note for Premium. Acceptance of a note, which is not paid, does not amount to payment of the premium so as to require tender or payment of the unearned premium on can- cellation;^ if the company holds obligation of a third party, which it has accepted in payment of the pre- mium, a surrender of it is essential to effect a termi- nation of the risk.^ 1. Little V. Eureka Ins. Co., 38 Ohio St. 110. 2. Chadboume v. German-Ameriean Ins. Co., 24 Blatehf. 492, 31 Fed. Rep. 533, 16 Ins. L. J. 897. In Carlwitz v. Gemiania Ins. Co., 12 Ins. L. J. 127 (U. S. Cir.), the court held that the company could not cancel by notice when the company by its agent had agreed to accept pa;y- ment of premium in trade or groceries. And see this volume, " Premium." RULE 15. May be Effected by Mutual Consent — Waiver by Insured — Act of Partner. Cancellation may be effected by mutual consent without regard to the terms of the policy;' notice of cancellation and refunding, or tender of unearned premium, may be waived by the assured,^ who may agree to accept less than what would otherwise be due to him.^ It is not essential to cancellation that the policy be actually surrendered and marked can- celed,* and the insured may agree to a cancellation as of a certain date, though the policy may not actually be received by the company until afterward.^ The insured's acts may also operate as an estoppel against 410 • FiEE Insurance. him.*' A partner's consent to cancellation binds his firm.'' 1. Sea Ins. Co. ■;;. Johnston, 105 Fed. Eep. 386, 44 C. C. A. 477; Wicks Bros. v. Scottish Union & Nat. Ins. Co., 107 Wis. 606, 83 N. W. Eep. 781; Walters v. St. Joseph Ins. Co., 39 Wis. 489; Kooistra v. Eockford Ins. Co., 122 Mich. 626, 81 N. W. Eep. 568 ; Miller v. Firemen's Ins. Co., 54 W. Va. 344, 46 S. E. Eep. 181; Train v. iToUand Purchase Ins. Co., 62 N. Y. 598; Kirby v. Phrenix Ins. Co., 13 Lea, 340 (Tenn.). And see German Ins. Co. v. Davis, Ark. , 13 S. W. Eep. 155; King v. .^tna Ins. Co., 36 Mo. App. 128, 142; Citi- zens' Ins. Co. V. Henderson, 84 S. W. Eep. 580 (Ky.) ; Hamburg- Bremen Ins. Co. V. Browning, 102 Va. 890, 48 S. E. Eep. 2. 2. Southern Ins. Co. v. Williams, 62 Ark. 382, 35 S. W. Eep. 1101; Bingham v. North American Ins. Co., 74 Wis. 498, 43 N. W. Eep. 494, 19 Ins. L. J. 897 ; Springer v. Anglo Nevada Ins. Co., 11 N. Y. Supp. 533, 58 Hun, 601, memo, not reported. And see preceding cases under 1. 3. ^tna Ins. Co. v. Weissinger, 91 Ind. 297, 14 Ins. L. J. 151. 4. Sammons v. Newark Ins. Co., 110 111. 166, 13 Ins. L. J. 837. And see Bingham v. North American Ins. Co., 74 Wis. 498, 43 N. W. Eep. 494, 19 Ins. L. J. 897. 5. Atlantic Ins. Co. v. Goodall, 35 N. H. 328. 6. Hopkins v. Phcenix Ins. Co., 78 Iowa, 344, 43 N. W. Eep. 197, 19 Ins. L. J. 90. 7. Bingham v. North American Ins. Co., 74 Wis. 498, 43 N. W. Eep. 494, 19 Ins. L. J. 897. RULE i6. CanceUation by Voluntary Surrender and Delivery — When no- tice not Required — Question of Fact. Cancellation of the policy is ejffected by its volun- tary surrender and delivery to the insurance company or its agent, without reserve, the premium not having been paid. The five days' notice is not required in such a case, or the clause requiring it is inoperative. The five days' notice of cancellation has reference to a policy in force either by actual payment or a con- Cancellation. 411 iinued credit for it; such credit may be terminated at any time, and company's act in taking back the policy is explicit notice to assured of such termina- tion;^ if the policy is once surrendered, and the sur- render accepted, it is canceled, and the taking of it back by the insured cannot revive the contract or make a new one, though the question of the surrender may be one of fact to be determined by a jury.^ 1. Van Wert v. St. Paul P. & M. Ins. Co., 8 App. Div. 107, 40 N. Y. Supp. 463. And see previous appeal, 90 Hun, 465, 36 N. Y. Supp. 54. 2. Train v. Holland Purchase Ins. Co., 63 N. Y. 598. RULE 17. Surrender of Policy upon Condition — Authority of Agent. Cancellation is not effected by surrender and de- livery of the policy by the assured to company 's agent, for that purpose, when such surrender and delivery are made upon conditions as to replacing with other insurance not performed by the agent,^ but such a sur- render may be an absolute cancellation when the agent has no authority to make such a condition.^ 1. Hickey v. Hartford Ins. Co., 15 App. Div. 224, 44 N. Y. Supp. 191, and see previous appeal, 92 Hun, 192, 36 N". Y. Supp. 329; Edwards v. Sun Ins. Co., 101 Mo. App. 45, 73 S. W. Eep. 886. And see Wilkins v. Insurance Co., 30 Ohio St. 317; Queen Ins. Co. v. Leonard, 2 Ohio Dec. 122, 9 Ohio C. C. 46; ^tna Ins. Co. v. Eosenberg, 62 Ark. 507, 36 S. W. Eep. 908. And see .^tna Ins. Co. v. Maguire, 51 111. 342; Poor V. Hudson Ins. Co., 2 Fed. Eep. 432, 9 Ins. L. J. 428; Cald- well V. Stadacona Ins. Co., 11 Duval, 213 (Can. Sup.). 2. Miller v. Firemen's Ins. Co., 54 W. Va. 344, 46 S. E. Eep. 181 (there is an able dissenting opinion in this case). And see this volume, "Agents." 412 FlEE iNStlRANCE. RULE i8. BSect of Promise by Insured. A promise by tlie insured to bring the policy to the; company's office to be canceled, when he is to be paid or to receive the return or unearned premium, is not a valid agreement to deem the policy canceled without return of the premium, nor is it a waiver of the con- dition upon which rests the right of cancellation. Hathom v. Germania Ins. Co., 55 Barb. 28 (N. Y.). RULE 19. Insured Must be Capable of Understanding His Acts — Question of Fact. If cancellation is claimed to result from the volun- tary surrender of the policy by the insured with that intent, the insured must understand his act; if he is incapable of understanding, by reason of mental dis- ease, it may not be effective. The question is proper to be submitted to a jury. McClosky V. Springfield F. & M. Ins. Co., 76 Vt. 151, 5r> Atl. Rep. 662. RULE 20. Computation of Time. The stipulation in an insurance policy, providing that the risk begins and terminates at noon of the days named, is limited as thus provided, and has no application to the period of five days required for notice of cancellation ; in latter case, the clause, is gov- erned by the general rule of excluding the first day, and counting the days as legal days beginning and ending at midnight. Penn Plate Glass Co. v. Spring Garden Ins. Co., 189 Pa. St. 255, 42 Atl. Eep. 138, 28 Ins. L. J. 223. Cancellation. 413 RULE 21. Company Cannot Reduce Insurance With.out Consent of Insured. The insurance company cannot reduce the amount of its policy, without the consent of the insured. McLean v. American Ins. Co., 123 Iowa, 355, 98 N. W. Rep. 146. RULE 22. Cancellation upon Request of Insured — Unearned Premium, When requested by the insured, cancellation must be made or effected by the insurance company, but there is no obligation to repay an unearned premium to an assignee of the insured in absence of such re- quest, nor upon a void policy.^ When a statute makes it the duty of an insurance company to cancel its policy upon request of the insured, it has reference to a valid and subsisting contract; if policy is voided by violation of its conditions, the insured cannot claim the return of the unearned premium.^ 1. Colby V. Cedar Eapids Ins. Co., 66 Iowa, 577, 14 Ins. L. J. 698." 2. Farmers' Ins. Co. v. Home Ins. Co., 54 Nebr. 740, 74 N. W. Eep. 1101. And see also, under Nebraska statute. State Ins. Co. v. Farm- ers' Ins. Co., 65 Nebr. 34, 90 K. W. Eep. 997; Farmers' Ins. Co. V. Phoenix Ins. Co., 65 Nebr. 14, 90 N. W. Rep. 1000. See also, under the Iowa statute. Born v. Home Ins. Co., Iowa, , 81 N. W. Eep. 676. RULE 23. Request for Cancellation by Insured. A request for cancellation of an insurance policy, and claim of unearned premium, takes effect from 414 FiBB Insurance. the time of its receipt by the insurer, with tender of the policy. Farmers' Ins. Co. v. Phoenix Ins. Co., 65 Nebr. 14, 90 N. W. Eep. 1000, rev'd on rehearing for purpose of an accounting, but above rule expressly reaffirmed, 95 N. W. Eep. 3. RULE 24. Insured's Bight Does not Depend upon Kotice — Duty of Insured if Policy not Satisfactol^. The insured's right to have policy canceled on his request does not depend upon notice. In the absence of any stipulation in the contract requiring such no- tice to be given, the reasonable construction of the insured's contractual right to terminate the policy is that he may do so by delivering it to an agent of the company, with a request that it be canceled, or with notice that he surrenders it for cancellation, or with any direct manifestation of his intent to terminate it at that time. By such action the policy is termi- nated;^ if the policy is not acceptable to the insured, he should at once return it for cancellation.^ 1. Insurance Co. v. People's Ins. Co., 68 N. H. 51, 44 Atl. Rep. 82, 28 Ins. L. J. 931 ; Crown Point Iron Co. v. Mtaa, Ins. Co., 127 jSr. Y. 608, 28 N. E. Eep. 653, 21 Ins. L. J. 31, 14 L. E. A. 147. 2. Clem V. German Ins. Co., 29 Mo. App. 666. RULE 25. Cancellation by Mail. When the insured incloses his policy for cancella- tion in a letter and sends same by the mail, the com- pany continues liable while the letter remains in the mail, and cancellation is not effected until it is actually Cancellation. 415 received by the insurance company or its representa- tive. Crown Point Iron Co. v. JEtna. Ins. Co., 127 N. Y. 608, 28 N. E. Eep. 653, 21 Ins. L. J. 31, 14 L. E. A. 147. RULE 26. Fire Occurring Before Expiration of Notice. If fire occurs before expiration of the five days^ notice of cancellation required, policy remains in force, though it may have been sent by mail to the agent for purpose of cancellation and procuring other insurance. There must be evidence of intention to consent to immediate cancellation. Wicks Bros. v. Scottish Union & Nat. Ins. Co., 107 Wis. 606, 83 N. W. Eep. 781. RULE 27. Party or Mortgagee to Whom Loss Payable Cannot Consent — Effect of Mortgagee Clause. A party or mortgagee to whom the loss of the in- sured is made payable, or holding policy as security, cannot consent to a cancellation of the policy, in ab- sence of consent or authority from the insured;' but when a mortgagee clause is added or attached, con- taining a provision as to cancellation, both the insured and mortgagee are bound by its terms.^ 1. Matter of Moore, 6 Daly, 541 (N. Y.) ; Edwards v. Sun Ins. Co., 101 Mo. App. 45, 73 S. W. Eep. 886; Marrin v. Stada- cona Ins. Co., 43 Up. Can. 556, 4 Tupper, 330; Peterson v. Hartford Ins. Co., 87 111. App. 567, revM, 187 111. 395, upon a question of practice. 2. Burris v. Phoenix Ins. Co., 65 Mo. App. 157. The mortgagee clause varies in language but usually requires notice of cancellation to both the insured and the mortgagee. 416 FiEB Insueancb. For forms see Vol. 1, Fire Insurance as a Valid Contract, chapter 13. See also same volume, title " Mortgagor and Mort- gagee." It has heen held or intimated that notice of cancellation should also be given to a mortgagee to whom the loss is payable, though ■whether or not there was a mortgagee clause does not appear in the report. Lattan v. Eoyal Ins. Co., 45 N. J. L. 453; East Texas Fire Ins. Co. V. Flippen, 4 Tex. Civ-. App. 576, 23 S. W. Eep. 550, 33 Ins. L. J. 319. In Lattan v. Eoyal Ins. Co. the court says : " So far as the interest of the mortgagee is concerned, cancellation without notice to him would be unavailing." There is a material distinction in the. two classes of cases: (1) when the loss is merely made payable to the mortgagee; (3) where in addition to making the loss payable to him there is inserted and made a part of the contract a mortgagee clause. In the former case the mortgagee is a mere appointee to re- ceive the loss sustained by the insured, in the latter there is an independent contract protecting the interest of the mortgagee. See Eule 1 and compare difference in forms. And see also and compare the various rules in Vol. 1, Fire Insurance as a Valid Contract, under " Mortgagor and Mortgagee," Eules 1, 3, 10, and 30. In Shawnee Ins. Co. v. Bayha, 8 Kans. App. 169, 55 Pac. Eep. 474, it was held that as between the insurance company and (assured) owner and mortgagor, it is not essential to notify the mortgagee to whom loss is made payable with mortgagee clause, of the cancellation of a prior policy containing same provisions. And in Sun Ins. Co. v. Greenville Building & Loan Assoc, 58 N. J. L. 367, 33 Atl. Eep. 962, 25 Ins. L. J. 657, it was held that when the insurance company upon the trial in suit brought by the mortgagee, to whom the loss was made payable, gives evidence that notice was given to the mortgagee of can- cellation, and that the mortgagee before the occurrence of the fire agreed that it should be canceled and promised to sur- render it to the insurance company, it is error to direct a verdict for the plaintiff, as the question of fact should be submitted to the jury. RULE 28. liiability of Insured for Earned Premium. The insured has no right to avoid the payment of the earned premium, upon a plea that the policy was Cancellation. 417 void, without having demanded a return of the pre- mium, and returning or offering to return the policy. St. Paul P. & M. Ins. Co. ■;;. Neidecken, 6 Dak. 494, 43 N, W. Eep. 696, 19 Ins. L. J. 369. RULE 29. Policy Cannot be Canceled When Property Exposed to Eire. An insurance company cannot exercise its option of cancellation of a policy when the property covered thereby is exposed to the danger or risk of an immi- nent or pending fire. Home Ins. Co. v. Heek, 65 111. Ill ; Lipman v. Niagara Ins. Co., ISI N. Y. 454, 34 N. B. Eep. 699, 19 Ins. L. J. 985. RULE 30. Presumption as to Short Rate. If there is no evidence as to " short rate," it will be presumed to be the same proportionately as the long one. Home Ins. Co. v. Burnett, 36 Mo. App. 175. Some of the old forms provided for retention of the "cus- tomary short rate together with the expenses of writing the risk," and it was held that " expenses of writing the risk " in- cluded commissions paid to the agent. State Ins. Co. v. Horner, 14 Colo. 391, 33 Pac. Eep. 788, 19 Ins. L. J. 837. RULE 31. Hutual Mistake. Cancellation of a policy of insurance, both parties being at the time in ignorance of a loss thereunder, is such a mutual mistake as to warrant relief in equity Vol. 2 — 27 418 Fire Insurance. by rescinding tlie same;^ and so the insured will be relieved from tbe consequences of a mistake in sur- rendering a policy to the company upon which he has paid the premium, instead of another which he in- tended to surrender, and on which the premium has not been paid.^ 1. Duncan v. N. Y. Mutual Ins. Co., 18 N. Y. Supp. 863, 46 X. Y. St. Eep. 241, affi'g 16 N. Y. Supp. 842. 2. Yon Wien v. Scottish Union & Nat. Ins. Co., 118 N. Y. 94, 23 N. E. Eep. 123. And as to relief when policy canceled by mistake, see also Marsh v. Northwestern Nat. Ins. Co., 3 Biss. 351 (U. S. Cir.). RULE 32. Agent Cannot Delegate Authority. If an agent has the power or authority to cancel a policy, such power cannot be delegated' by him to another person; but such person may deliver the no- tice and pay or tender the unearned or return pre- mium. Eunkle v. Citizens' Ins. Co., 6 Fed. Eep. 143. RULE 33- Authority of Insured's Agent or Broker — Custom — Evidence. The authority of an agent or broker to procure insurance terminates when such insurance is pro- cured and the policy or policies are delivered to his principal, and the agent or broker has no power there- after to consent to a cancellation of the policy or in- surance, or to receive notice of the same, and consent to substitution of other companies or policies;^ the authority of an agent of the insured for such purposes Cancellation. 419 must be established,^ and cannot be established by cus- tom, unless uniform and known to the insured.^ And when the policy in terms provides that notice shall be given to the insured, custom cannot supersede the ex- press provision of the contract.* The authority of insured's bookkeeper or agent to receive notice of cancellation may become, on proper evidence, a ques- tion of fact to be determined by a jury.' 1. Martin v. Palatine Ins. Co., 106 Tenn. 523, 61 S. W. Eep. 1024; Grace v. American Central Ins. Co., 109 TJ. S. 278; Merchants' Ins. Co. v. Shults, Kans. App. , 57 Pac. Eep. 306; Kooistra v. Eockford Ins. Co., 122 Mich. 626, 81 N. W. Eep. 568; Snedicor v. Citizens' Ins. Co., 106 Mich. 83, 64 N. W. Eep. 35 ; Healy v. Insurance Co. Pa., 50 App. Div. 327, 63 jST. Y. Supp. 1055; Van Valkenburgh v. Lenox Ins. Co., 51 AT. Y. 465; Von Wien v. Scottish Union Ins. Co., 118 N". Y. 94; Hermann v. Niagara Ins. Co., 100 N". Y. 411; Johnson v. North British & M. Ins. Co., 66 Ohio St. 6, 63 N. E. Eep. 610; Commercial Union Assur. Co. v. Urbansky, 113 Ky. 624, 68 S. W. Eep. 653; Wilson v. Hartford Ins. Co., 17 App. D. C. 14; John E. Davis Lumber Co. v. Hartford Ins. Co., 95 Wis. 226, 70 N. W. Eep. 84, 37 L. E. A. 131; Body v. Hartford Ins. Co., 63 Wis. 157; Wight v. Eoyal Ins. Co., 53 Fed. Eep. 340; East Texas Ins. Co. v. Blum, 76 Tex. 653, 13 S. W. Eep. 572 ; Quong Tue Sing v. Anglo Nevada Ins. Co., 86 Cal. 566, 25 Pac. Eep. 58, 20 Ins. L. J. 322, 10 L. E. A. 144; North American Ins. Co. V. Forcheimer, 86 Ala. 541, 5 So. Eep. 870; Niagara Ins. Co. V. Eaden, 87 Ala. 311, 5 So. Eep. 876; Mutual Assur. Soe. v. Scottish Union & Nat. Ins. Co., 84 Va. 116; Eothschild v. ./American Central Ins. Co., 74 Mo. 41 ; McCartney v. State Ins. Co., 45 Mo. App. 373; Edwards v. Home Ins. Co., 100 Mo. App. 695, 73 S. W. Eep. 881; Latoix v. Germania Ins. Co., 27 La. Ann. 113; Broadwater v. Lion Ins. Co., 34 Minn. 465; Wilson V. New Hampshire Ins. Co., 140 Mass. 210; Bennett v. City Ins. Co., 115 Mass. 241. 2. British America Assur. Co. ■;;. Cooper, 26 Colo. 452, 58 Pac. Eep. 592; Taylor v. Glens Falls Ins. Co., 44 Fla. 273, 32 So. Eep. 887. And see preceding cases under 1. 3. Hodge V. Security Ins. Co., 33 Hun, 583 (N. Y.) ; Her- mann V. Niagara Ins. Co., 100 N. Y. 411; Adams v. Manu- 420 FiEE Insukance. faeturers & Builders' Ins. Co., 17 Fed. Eep. 630, 12 Ins. L. J. 787. 4. Mutual Assur. Soc. v. Scottish Union & Nat. Ins. Co., 84 Va. 116, 4 S. E. Rep. 178. And see Lipman v. Niagara Ins. Co., 121 N. Y. 454, 24 N. E. Eep. 699, 19 Ins. L. J. 985; Hermann v. Niagara Ins. Co., 100 N. Y. 415. 5. Edwards v. Sun Ins. Co., 101 Mo. App. 45, 73 S. W. Eep. 886. RULE 34. Insured's Agent or Broker Having General Authority as to Insurance. If a broker or agent has general authority from his principal not only to obtain, but to maintain, in- surance, placing and replacing same according to cir- cumstances in his discretion, having general charge of his principal 's insurance, then he may be the agent of the insured for purposes of cancellation and substitu- tion;^ and the five days* notice required may be dis- pensed with or waived by him;^ the authority of such an agent or broker becomes a question of fact;^ a broker is an agent of the insured, and an insurance company is justified in regarding him as clothed with full authority to act for the insured in procuring, modifying, or canceling a policy, and his acts in re- spect thereto are the same as if done by his prin- cipal.* 1. Snyder v. Commercial Ins. Co., 67 N. J. L. 7, 50 Atl. Eep. 509 ; Ikeller v. Hartford Ins. Co., 24 Misc. 136, 53 N. Y. Supp. 323 ; Stone v. Franklin Ins. Co., 105 N. Y. 543, 12 N. E. Eep. 45; Armour v. Transatlantic Ins. Co., 15 Jones & Sp. 352, afE'd, 90 N. Y. 450 ; Gardner v. Standard Ins. Co., 58 Mo. App. 611; Trundle v. Providence- Washington Ins. Co., 54 Mo. App. 188; Edwards v. Home Ins. Co., 100 Mo. App. 695, 73 S. W. Eep. 881 ; Buick v. Mechanics' Ins. Co., 103 Mich. 75, 61 N. W. Eep. 337, 24 Ins. L. J. 375; Schauer v. Queen Ins. Co., 88 Cancellation. 421 Wis. 561; Kerr v. Milwaukee Mechanics' Ins. Co., 117 Fed. Kep. 442, 54 C. C. A. 616; White v. Insurance Co. IST. 'Y., 93 Fed. Eep. 161 ; Dickert v. Farmers' Ins. Assoc, 52 S. C. 413, 29 S. E. Eep. 786. 2. Buick V. Mechanics' Ins. Co., 103 Mich. 75, 61 IST. W. Eep. 337, 24 Ins. L. J. 375 ; Schauer v. Queen Ins. Co., 88 Wis. 561 ; Ikeller v. Hartford Ins. Co., 24 Misc. 136, 53 N. Y. Supp. 333. 3. Snyder v. Conunercial Ins. Co., 67 N. J. L. 7, 50 Atl. Eep. 509 ; Dickert v. Farmers' Ins. Co., 53 S. C. 412, 29 S. E. Eep. 786; Eoger Williams Ins. Co. v. Carrington, 43 Mich. 252. And see Edwards v. Sun Ins. Co., 101 Mo. App. 45, 73 S. W. Eep. 886. 4. Standard Oil Co. v. Triumph Ins. Co., 64 JST. Y. 85. RULE 35. Authority of Broker to Surrender and Can.cel — Evidence — Waiver — Liability for Earned Premium. If the insured returns a policy to the broker through whom he obtained it, upon request for its cancellation by the company, the broker has special authority to surrender and cancel the policy;^ the in- sured may waive notice and consent to cancellation by the surrender of the policy without such notice ; leav- ing policy in the hands of his agent for such purpose clothes him with sufficient authority to surrender in cancellation, and the insured is bound by his act;^ the cancellation is effective without regard to instructions given by the insured to the broker, not disclosed to the company's agent, to the effect that he could de- liver up the policy for cancellation, but not until he should be insured in some other good company to the same amount.^ When the insured returns policy for cancellation through his broker, he is liable for the premium at short rate to time of surrender.* 1. Parker & Young Mfg. Co. v. Exchange Ins. Co., 166 Mass. 484, 44 N. E. Eep. 614; Faulkner v. Manchester Assur. Co., 171 Mass. 349, 50 N. E. Eep. 539. 422 FiKE Insukance. 2. Kooistra v. Eockford Ins. Co., 123 Mich. 626, 81 N. W. Eep. 568. And see Walters v. St. Joseph Ins. Co., 39 Wis. 489 ; Birnstein v. Stuyvesant Ins. Co., 83 App. Div. 436, 82 N. Y. Snpp. 140, rev'g 39 Misc. 808, 81 N. Y. Supp. 306. 3. Faulkner v. Manchester Assur. Co., supra. 4. Manhattan Ins. Co. v. Harlem Eiver Lumber Co., 26 Misc. 394, 56 N. Y. Supp. 186. Some of the old forms provided in terms "this insurance may be determined at any time * * * ^jy ^^g company on giving notice to that effect to the assured, or to the person who may hav^ procured this insurance to he taken iy the company." Lipman v. Niagara Ins. Co., 121 K. Y. 454, 24 N. E. Eep. 699, 19 Ins. L. J. 985, and the court says, p. 460, that "the special language of the above condition was inserted to meet the objection pointed out in Hermann v. Niagara Ins. Co., 100 N. Y. 415. Others provided that "any broker or other person than the insured -who procured the policy shall be assumed to be the agent of the insured, and not of the company, in any transaction relating to the insurance," and under both forms it was held notice of cancellation might be given to the broker. Karelsen v. Sua Fire Office, 122 N. Y. 545, 25 N. E. Eep. 921, 20 Ins. L. J. '44. And see Young v. Newark Ins. Co., 59 Conn. 41, 19 Ins. L. J. 423. And compare White v. Connecti- cut Ins. Co., 120 Mass. 330. Under such form it was held that an insurance agent in at- tempting substitution of one policy for another could not give notice to himself of cancellation as the person who procured the insurance. Niagara Ins. Co. v. Eaden, 87 Ala. 311. , RULE 36. Iiimitation as to Authority of Broker. While possession of a policy by a broker confers or may be evidence of implied authority in him to consent to cancellation, such implication is rebutted when the insurance company is informed that the broker has ceased to be the agent of the insured, or it appears that he is the agent only for the purpose of Cancellation. 423 obtaining certain additional insurance and having the form of policies changed. Fowler Cycle Works v. Western Ins. Co., Ill 111. App. 631. RULE 37. Company's Agent May be Also Authorized by Insured to Consent to Cancellation — Evidence — Ratification — Delivery of Sub- stituted Policy. An insurance agency, representing several com- panies, with authority to act on applications and issue policies, as well as to cancel the same in a proper case, may also act as the agent of the insured in waiving notice of cancellation or consenting to same, and in accomplishing the delivery of a new policy when sub- stituted for the one canceled; and such agency may be established by a long course of conduct and unin- terrupted custom, without express authority being conferred either in writing or by parol, but will not be presumed from one transaction;^ nor does the in- sured ratify the unauthorized act of cancellation of one policy and substitution of another by bringing suit on the latter after a loss f the delivery of the new or substituted policy is complete, though it may remain in the hands of the agent.* 1. Johnson v. North British & M. Ins. Co., 66 Ohio St. 6, 63 N. E. Eep. 610; Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St. 649, 35 N. B. Eep. 1060, 23 Ins. L. J. 349 ; Hamm Eealty Co. v. New Hampshire Ins. Co., 80 Minn. 139, 83 N. W. Eep. 41, reaff'd, 84 Minn. 336, 87 N. W. Eep. 933. And see Commercial Undon Assur. Co. v. Urbansky, 113 Ky. 624, 68 S. W. Eep. 653 ; Dibble v. Northern Assur. Co., 76 Mich. 1, 37 N. W. Eep. 704. 2. Johnson v. North British & M. Ins. Co., supra. 424 Fire Insurance. 3. Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St. 549, 35 N. E. Eep. 1060, 23 Ins. L. J. 349; Dibble v. Northern Assur. Co., 70 Mich. 1, 37 N. W. Eep. 704. And see Lum v. United States Ins. Co., 104 Mich. 397, 62 N. W. Eep. 562, 25 Ins. L. J. 53. RULE 38. No Fresumption as to Authority of Soliciting Agent. There is no presumption that a soliciting agent of the company has authority to cancel a policy upon re- quest of the insured. Phenix Ins. Co. v. Eadford, Nebr. , 93 N. W. Eep. 1000. RULE 39. Agent no Powder to Revive Canceled Policy. An agent has no power to continue or revive a can- celed policy, without evidence of express authority, which cannot be presumed;^ cancellation once effected on notice by special agent is final, and the policy can- not be subsequently revived by his consent to let it stand unless newly authorized by the company.^ 1. Hartford Ins. Co. v. Eeynolds, 36 Mich. 503. 2. Colonial Assnr. Co. v. National Ins. Co., 110 111. App. 471. RULE 40. Cancellation by Substitution of Other Policies. Cancellation cannot be effected by attempted sub- stitution of other policies without consent or author- ity of the insured, or without notice and payment or tender of the unearned premium/ if the substitution is without authority, the substituted company is not liable,^ and the rights of the parties being fixed at Cancellation. 425 time of a loss, there can be no ratification by the in- sured thereafter;^ there can be no cancellation after a loss •* but the insured having agreed to the substitu- tion, the first policy may be surrendered and the sub- stituted policy delivered after a loss by the agent rep- resenting both companies, and the latter is liable.^ 1. Partridge v. Mil-waukee Mechanics' Ins. Co., 13 App. Div. 519, 43 N. Y. Supp. 632, aff'd, 162 N. Y. 597, without opinion; Yoshimi v. Fidelity Ins. Co., 99 App. Div. 69, 91 N". Y. Supp. 393 ; Kerr v. Milwaukee Mechanics' Ins. Co., 117 Fed. Eep. 442, 64 C. C. A. 616; Insurance Co. N. A. v. Wisconsin Central Ey. Co., 134 Fed. Eep. 794, C. C. A. ; Wisconsin Central Ey. Co. V. Phcenix Ins. Co., Wis. , 101 N. W. Eep. 703 ; Clark V. Insurance Co. IST. A., 89 Me. 26, 35 Atl. Eep. 1008, 35 L. E. A. 276; Wilson v. New Hampshire Ins. Co., 140 Mass. 210, 16 Ins. L. J. 408; Commercial Union Assur. Co. v. Urbaji- sky, 113 Ky. 634, 68 S. W. Eep. 653. And see Wilkins v. In- surance Co.", 30 Ohio St. 317. 2. Martin v. Palatine Ins. Co., 106 Tenn. 523, 61 S. W. Eep. 1024; Lancashire Ins. Co. v. Nill, 114 Pa. St. 248. 3. Clark v. Insurance Co. N. A., 89 Me. 26, 35 Atl. Eep. 1008, 35 L. E. A. 276; Crawford v. Aachen & Munich Ins. Co., 100 111. App. 454, affd, 199 111. 367, 65 F. E. Eep. 134; Lancashier Ins. Co. V. Nill, 114 Pa. St. 248; Wilson v. New Hampshire Ins. Co., 140 Mass. 210, 16 Ins. L. J. 408. And see Gardner V. Standard Ins. Co., 58 Mo. App. 611; Niagara Ins. Co. v. Eaden, 87 Ala. 311, 5 So. Eep. 876. 4. Baker v. Citizens' Ins. Co., 51 Mich. 243 ; Eitchie v. Home Ins. Co., 104 Mo. App. 146, 78 S. W. Eep. 341. And see John- son V. North British & M. Ins. Co., 66 Ohio St. 6, 63 N. E. Eep. 610 ; Stone v. Franklin Ins. Co., 105 N. Y. 543, 12 N. B. Eep. 45; Yoshimi v. Fidelity Ins. Co., 99 App. Div. 69, 91 N. Y. Supp. 393 ; Cassville Boiler Milling Co. v. ^tna Ins. Co., 105 Mo. App. 146, 79 S. W. Eep. 720. 5. Whiteman v. American Central Ins. Co., 14 Lea, 327 (Tenn.). RULE 41. Substitution ty Agreement or upon Condition. "When the insured applies for and obtains a certain policy under the agreement or condition that a prior 426 FiEE Insurance. policy is to be canceled, and the former to be substi- tuted or to take its place, the same agent acting for both companies, and fire occurs before actual cancella- tion, the insured cannot claim or enforce the substi- tuted policy, independent of the agreement or condi- tion upon which it is issued, and hence, making claim thereunder, he cannot enforce the prior policy, which must be regarded as canceled. Beirmeister v. City of London Ins. Co., 15 N". Y. Supp. 433, 39 N. Y. St. Eep. 741, 61 Hun, 620 (memo, not reported), aflE'd, 133 N. Y. 564, without opinion. RULE 42. As Affected, by Intent — Effect of Kecognition and Payment by Substituted Company. If the insured by his agent obtains a policy in a certain company, and the purpose in so doing is not to increase the insurance, but to substitute such policy for another on account of a notice of cancellation, and the company thus substituted recognizes its responsi- bility and pays the insured the amount of its policy, the moment the risk is covered in the substituted policy the other is thereby canceled. Amfeld v. Guardian Assur. Co., 173 Pa. St. 605, 34 Atl. Eep. 580; Larsen v. Thuringia American Ins. Co., 208 111. 166, 70 N. E. Rep. 331, aff'g 108 111. App. 420. And see White v. Insurance Co. of N. Y., 93 Fed. Rep. 161; Hopkins v. Phoenix Ins. Co., 78 Iowa, 344, 43 N. W. Eep. 197, 19 Ins. L. J. 90; Beirmeister v. City of London Ins. Co., 15 N". Y. Supp. 433, 39 N. Y. St. Rep. 74i, aff'd, 133 N. Y. 564, without opinion; Birn- stein V. Stuyvesant Ins. Co., 83 App. Div. 436, 82 N". Y. Supp. 140, rev'g 39 Misc. 808, 81 N. Y. Supp. 306. Cancellation. 427 RULE 43. "CTnautliorized. Substitution as AfiEecting Apportionment. A wrongful or unauthorized substitution of one policy for another by the company's agent may call for apportionment of the loss under the apportion- ment clause in the first policy, upon which the claim is made, when the insured also makes claim against the other company. Hartford Ins. Co. v. Peterson, 209 111. 112, 77 JST. B. Eep. 757, rev'g 111 111. App. 466. RULE 44. Insured May Katify Act of Agent in Replacing Insurance After Fire. When an agent of the insurance company is in- structed to cancel a certain policy, and without notice to the insured obtains another policy in another com- pany to replace it, paying the premium therefor, the insured may after a fire elect to accept the new or sub- stituted policy and to surrender the old policy. And this result is not affected by the fact that the old policy is figured or included in the adjustment by the other companies as part of the whole insurance in apportionment of the loss. Larsen v. Thuringia American Ins. Co., 208 111. 166, 70 K. B. Eep. 31, aff'g 108 111. App. 420, citing and following Arnfeld V. Guardian Assur. Co., 172 Pa. St. 605, 34 Atl. Eep. 580. See Eule 42. 428 FiEE Insurance. RULE 45. When Insured Does not Waive Notice. The insured does not waive the five days' notice required by applying for other insurance in its place which is not operative as a contract when fire occurs. Milwaukee Mechanics' Ins. Co. v. Graham, 181 111. 158, 54 N. E. Eep. 914. RULE 46. Remedy of Insured in Equity to Compel Issue of Substituted Policy. When the insured and the company's agent agree on transfer or removal of property, and for that pur- pose the insured gives up his old policy, and agrees to take a new one for the return premium at pro rata rates, and the company issues a new policy at short rate, which makes the policy terminate prior to the date of the old policy, and before latter is delivered, but after its expiration, fire occurs, but within a date covered by the old policy, the insured has remedy in equity to compel issue of policy as agreed. Hardin v. Alexander Ins. Co., 90 Va. 413, 18 S. E. Eep. 911. RULE 47. Substituted Policy not a. Contract of Reinsurance. An agreement by one insurance company with the agent of another to take a risk and issue a policy to certain property-owners, in lieu of one which latter company has ordered canceled, is not a contract of reinsurance of such canceling company against its risk so as to enable it to reimburse itself by suit in its own name for payment of a loss occurring before . Cancellation. 429 the first policy is actually canceled and the latter de- livered; if there is any right of action it is vested in the owners of the property; but second policy not having been accepted or delivered, the first company, on paying its loss and taking an assignment of all rights of the owners of the property in the unde- livered policy, acquires no enforceable cause of action in its own name. Merchants' Ins. Co. v. Union Ins. Co., 162 111. 173, 44 N. E. Eep. 409, rev'g 58 111. App. 611. RULE 48. Question of Pact or Law. When the evidence is conflicting, the question of cancellation must be submitted to the jury;^ and so when there is evidence of custom as affecting cancel- lation of oral insurance the question is for the jury;" when there is no dispute as to the facts, the verdict of a jury is not conclusive in an appellate court, and it is its duty to apply to the uncontroverted facts the legal result flowing from them.^ 1. Van Wert v. St. Paul F. & M. Ins. Co., 90 Hun, 465, 36 N. Y. Supp. 54; Phoenix Assur. Co. v. McAuthor, 116 Ala. 659, 32 So. Eep. 903; Sun Ins. Co. v. Greenville Building & Loan Assoc, 58 N. J. L. 367, 33 Atl. Eep. 962, 25 Ins. L. J. 657. And see Edwards v. Sun Ins. Co., Mo. App. , 73 S. W. Eep. 886. 2. Insurance Co. of 111. v. Manchester Assur. Co., 77 111. App. 673. And see Underwood v. Greenwich Ins. Co., 161 N. Y. 413, 54 App. Div. 386, 66 App. Div. 531. 3. Gardner v. Standard Ins. Co., 58 Mo. App. 611. 430 FiBE Insukance. RULE 49. Omission to Cancel as Evidence of Waiver or Estoppel. When the company, through its local or general agent, authorized to contract and issue policies, is advised by the insured of a fact which may work a forfeiture under a condition in the policy, the com- pany should, within a reasonable time, notify the in- sured of its determination to cancel the policy and re- turn the unearned premium; its failure to do so may be evidence tending with the other facts to show a waiver or estoppel in misleading the insured. Phoenix Ins. Co. v. Grove, 111. , 74 N". E. Eep. 141 Horton v. Home Ins. Co., 123 N. C. 498, 29 S. E. Eep. 944 ISTorris v. Hartford Ins. Co., 57 S. C. 358, 35 S. E. Eep. 572 Pearlstone v. Westchester Ins. Co., S. C. , 49 S. E. Eep 4; Madden & Co. v. Phoenix Assur. Co., S. C. , 49 S. E Eep. 855; Grerman- American Ins. Co. v. Harper, Ark. 86 S. W. Eep. 817; Clay v. Phoenix Ins. Co., 97 Ga. 44, 25 S. e! Eep. 417; Bellevue Eoller Mill Co. v. London & Lancashire Ins Co., 4 Ida. 307, 39 Pae. Eep. 196, 24 Ins. L. J. 331; Schmurr V. State Ins. Co., 30 Oreg. 29, 46 Pae. Eep. 363, 26 Ins. L. J. 373 ; North British & M. Ins. Co. v. Steiger, 26 111. App. 228, aff'd, 124 111. 81, 16 N. E. Eep. 95. And see Texas Banking Co. V. Hntchins, 53 Tex. 61; Hamilton v. Home Ins. Co., 94 Mo. 253 ; Crescent Ins. Co. v. Griffin, 59 Tex. 509 ; East Texas Ins. Co. V. Crawford, Tex. , 16 S. W. Eep. 1068, 21 Ins. L. J. 39; Farmers & Merchants' Ins. Co. v. Nixon, 2 Colo. App. 265, 30 Pae. Eep. 42; Mississippi Home Ins. Co. v. Dobbins, 81 Miss. 623, 33 So. Eep. 504; Swedish-American Ins. Co. V. Knutson, 67 Kans. 71, 72 Pae. Eep. 526; Glens Falls Ins. Co. V. Michael, Ind. , 74 N". E. Eep. 964; Eichard v. Springfield F. & M. Ins. Co., La. , 38 So. Eep. 563. And see Vol. 1, Fire Insurance as a Valid Contract, " Waiver." Also this volume, title "Agents." RULE so. Limitation of Cancellation as Evidence of Waiver. By claiming and maintaining the right to cancel the policy with full knowledge of the facts, and retaining Cau-cellation. 431 the earned premium, an insurance company waives its right to object that valid insurance had never been effected. New Jersey Eubber Co. ■;;. Commercial Union Assur. Co., 64 N. J. L. 580, 46 Atl. Rep. 777 ; Commercial Assur. Co. v. New Jersey Eubber Co., 61 N. J. Eq. 446, 49 Atl. Eep. 155; ^tna Ins. Co. V. Maguire, 51 111. 342. RULE 51. Same Subject — When Insurance Itemized. When the insurance is itemized, but there is only- one premium in the aggregate, and the policy is for- feited as to one of the items, the failure or omission to return the unearned premium is no evidence of waiver of the forfeiture. Miller v. Insurance Co. N. A., Mo. App. , 80 S. W. Eep. 330. In Senor & Muntz v. Western Millers' Ins. Co., 181 Mo. 104, 79 S. W. Eep. 687, it is suggested, though not actually decided, that the omission to return the unearned premium is no evidence of waiver when the policy has not been surrendered by the in- sured. RULE 52. Mere Omission to Cancel no Evidence of Waiver. When the insured has incurred a forfeiture by vio- lation of the conditions of the policy, it is not neces- sary for the company to pay or to tender the un- earned premium as a condition precedent to its right to assert the breach and claim the forfeiture;^ the mere omission or failure to cancel is no evidence of waiver.^ 1. Davison v. London & Lancashire Ins. Co., 189 Pa. St. 132, 28 Ins. L. J. 152, 42 Atl. Eep. 2 ; Keith v. Eoyal Ins. Co., 117 Wis. 531, 94 N. W. Eep. 295; Phosnix Ins. Co. v. Stevenson, 78 Ky. 150; Medley v. German Alliance Ins. Co., 55 W. Va. 342, 432 FiKE Insueance. 47 S. E. Eep. 101; Johnson v. American Ins. Co., 41 Minn. 396, 43 N. W. Eep. 59 ; English v. Franklin Ins. Co., 55 Mich. 273, 14 Ins. L. J. 377. And see Buchanan v. Westchester Ins. Co., 61 N. Y. 611. 2. West End Hotel Co. v. American Ins. Co., 74 Fed. Eep. 114; Fischer v. London & Lancashire Ins. Co., 83 Fed. Eep. 810; Girard Ins. Co. v. Hebard, 95 Pa. St. 45, 10 Ins. L. J. 425; Smith v. Continental Ins.. Co., 6 Dak. 433, 43 N". W. Eep. 810; Palmer v. Continental Ins. Co., 31 Mo. App. 467; also preceding cases under 1. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eule 30, note. Some of the old forms in terms provided that the policy might be canceled on increase of risk in certain specified contin- gencies, and upon the facts it was held that such contingencies occurring, the omission to cancel could be regarded as evidence of waiver. There is an obvious distinction suggested by language of such conditions, not always considered Sy the courts, and which will probably account to some extent for the confusion. See Albany City Ins. Co. v. Keating, 46 111. 395; and for ex- ample of old forms see also Williams v. People's Ins. Co., 57 JSr. Y. 274, where the condition read as follows : " If the above-mentioned premises shall, during this insurance, be oc- cupied or used so as to increase the risk, or by the erection of any building or buildings, or by the use or occupation of neigh- boring premises, this company, after notice given to the in- sured, or his or her representative, of their intention to termi- nate the insurance, will refund a ratable proportion of the premium." And in Lattomus v. Farmers' Ins. Co., 3 Houst. 404 (Del.), it was held that the company was bound on notice of increase of risk to exercise its option of cancellation, and if it did not do so, the omission became evidence of waiver of for- feiture on that ground. And to same effect was Eclipse Ins. Co. ■;;. Schoemer, 2 Cin. Supr. 474; Firemen's Fund Ins. Co. v. Sholom, 80 111. 558. And see Joyce v. Maine Ins. Co., 45 Me. 168. In Phoenix Ins. Co. v. Boyer, 1 Ind. App. 329, 37 N. E. Eep. 628, the company was notified of the fact of vacancy, and refused to return the unearned premium and cancel the policy, and it was held evidence of waiver. And so when a condition required the insured to notify the company of vacancy and he did so, it was held that the com- pany could terminate the insurance only by cancellation. Wakefield v. Orient Ins. Co., 50 Wis. 532. Cancellation. 433 RULE 53. ^Riglit of Company to Deduct Commissions Allowed — Kight of Broker to Commissions. Upon cancellation by the insurance company, it has no right as between it and the insured to deduct from the unearned premium the amount it has allowed or paid a broker as commissions;^ the broker on cancel- lation is only entitled to commissions upon the earned premium.^ 1. McKenna v. Firemen's Ins. Co., 30 Misc. 727, 63 N. Y. Supp. 164. 2. Deverenx v. Eochester German Ins. Co., 98 N. C. 6, 3 S. E. Kep. 639. RULE 54. Construction of Agent's Agreement for a Percentage of Pre- miums Received. When agents under an agreement are entitled to a percentage ' ' of the premiums received, ' ' this means the premiums as and when received, and not the bal- ance after deducting the unearned portion in case of cancellation. Garfield v. Rutland Ins. Co., 69 Vt. 549, 38 Atl. Eep. 335, 26 Ins. L. J. 1019. RULE 55. Duty and Liability of Company's Agent. An agent of the insurance company, whose duty it is to cancel policies upon receiving instructions to that effect, must promptly comply therewith, and is personally liable to the company for any loss which it may be compelled to pay on account of the negligent Vol. 2 — 28 434 Fire Insurance. omission to perform such duty;^ it may be a defense if the agent has effected insurance in another com- pany as a substitute.^ The agent is not relieved by an ineffectual attempt to cancel through insured's broker,^ even though he acts in accordance with a local custom.^ 1. Phoenix Ins. Co. v. Pratt, 36 Minn. 409, 31 N. W. Eep. 454, 16 Ins. L. J. 301; Franklin Ins. Co. v. Sears, 31 Fed. Rep. 290, 13 Ins. L. J. 768; Washington Ins. Co. v. Chesebro, 35 Fed. Eep. 477; American Central Ins. Co. v. Hagerty, 21 Misc. 213, 45 N. Y. Supp. 617; Norwood v. Alamo Ins. Co., ]3 Tex. Civ. App. 475, 35 S. W. Eep. 717; PhcEnix Ins. Co. v. Frissell, 142 Mass. 513, 16 Ins. L. J. 75. 2. North British & M. Ins. Co. v. Lambert, 26 Oreg. 199, 37 Pac. Rep. 909. 3. Franklin Ins. Co. v. Sears, 21 Fed. Rep. 290, 13 Ins. L. J. 768. 4. Sun Fire Office v. Ermentrout, 11 Pa. Co. Ct. 21. RULE 56. When Company's Agent not Charged with Duty of Cancellation. If, under a written contract of appointment, the company's agent is not charged with the duty of see- ing to the cancellation of policies, unless it is shown, independent of the written contract, that this addi- tional matter of agency has been conferred upon such agent and by him accepted, he is not charged with the duty of cancellation, and if not so charged with such duty he cannot be guilty of negligence, justifying a recovery for damages in neglecting to cancel a policy as instructed by the company. Norwood V. Alamo Ins. Co., 13 Tex. Civ. App. 475, 35 S. W. Rep. 717. Cancellation. 435 RULE 57. Agent Cannot use Company's Funds to Cancel Policies in His Own Interest. An agent cannot use his company's funds to cancel policies to further his own interests, knowing that the company is retiring from business, such cancellation not being regularly required by the holders of the policies. If he makes such wrongful use of the money he will have to account for it to receivers of the com- pany subsequently appointed;^ and same principle ap- plies where the agent, knowing that his agency is about to be revoked, makes use of his company 's funds in same way. His cancellation and payment of return premiums is no defense to a suit brought by the com- pany against him to recover the premiums on policies canceled.^ An agent is not entitled to credit for re- turn or unearned premiums on policies canceled by him to serve his own personal ends, and not at the request of either party .^ 1. American Casualty Co. v. Arrott, 180 Pa. St. 1, ,36 Atl. Eep. 319. And see Franzen v. Zimmer, 90 Hun, 103, 35 JST. Y. Supp. 612. 2. Northern Assur. Co. v. Hamilton, 60 Febr. 248, 69 JST. W. Eep. 781, 26 Ins. L. J. 824. And see Merchants' Ins. Co. v. Prince, 50 Minn. 53, 52 K W. Eep. 131. 3. German- American Ins. Co. v. Tribble, 86 Mo. App. 546. RULE 58. Agent May Buy Claims for Unearned Premiums. An agent of an insurance company who has ceased to act as such may buy from the holders of policies previously issued by him as such agent, and as as- 436 FiKE Insubance. signee thereof enforce their claims for unearned pre- miums; the policyholders have an absolute right to cancel their policies, and the fact that they were in- duced to do so by the former agent is no defense. Scottish Union & Nat. Ins. Co. v. Dangaix, 103 Ala. 388, 15 So. Rep. 956. And see Pranzen v. Hutchinson, 94 Iowa, 95, 62 N. W. Eep. 698. RULE 59. Agent's Act Must be Authorized to Sustain Claim, for Beimburse- ment. When an agent, contrary to the instructions re- ceived from his company, and of his own individual motion, and not at request of the assured, cancels policies and pays the unearned premiums to policy- holders who had not requested cancellation, for such willful and unauthorized action, he has no claim for reimbursement against his company or its receiver. ■Equitable Ins. Co. v. Wildberger, 74 Miss. 375, 30 So. Rep. 858. RULE 6o. When Trustees of Insurance Company not Entitled to Credit for Payment of Unearned Premiums. When the trustees of an insurance company orally guarantee to policyholders the payment of unearned preniiums in case of cancellation by the company, such agreement is not enforceable as within the statute of frauds, and the trustees cannot deduct from the funds of the company in their possession amounts paid by them under such an agreement. Garfield v. Rutland Ins. Co., 69 Vt. 549, 38 Atl. Rep. 235, 26 Ins. L. J. 1019. Agents. 437 TITLE II. Agents. Rule 1. As imposed by contract. 2. Agency founded upon contract — Consent of prin- cipal essential. 3. Burden of proof as to agency — Question of fact or law. 4. Agency clause in policy inoperative when company has clothed a person with apparent authority — If no other evidence, conclusive as to status of broker. 5. Policy not conclusive as to agent's authority — May be clothed with an actual or apparent authority as to waiver. 6. Agency open to inquiry as to facts — Status not de- termined by policy — Unless policy only evidence. 7. Authority of a soliciting agent not limited by agency clause in policy. 8. Acceptance of written application from a soliciting agent as ratification — Company can take no ad- vantage of agency clause in the policy. 9. Form in countersigning by agent. 10. Effect of insurance company authorizing soliciting of insurance — Estoppel. 11. Eesponsibility for errors or omissions in written ap- plication — Authority of agent — Question of fact. 12. Scope of agent's authority. 13. Notice to company through its officer or agent — Exceptions. 14. Scope of authority not limited by private instruc- tions — Authority of local agent not established by assumption. 15. Authority, how determined — Insured not bound by secret instructions — Test of authority. 16. Limitation of apparent authority. 17. Scope of authority as to kind of property or risk. 18. No authority to insure destroyed property. 19. Scope of authority as to territory. 20. Construction of authority as agent or surveyor. 21. Partnership or firm as agent of company. 23. Effect of agent holding commissions from other com- panies — Presumption as to knowledge and prac- tice in selecting companies — Question of fact. 23. Liability of company for acts of agent, in malicious prosecution — Must be authorized. 438 FiEE Insurance. EuLE 24. Agent acting after resignation. 25. Agency may continue after revocation — Agent may be representative of insured. 26. Effect of dissolution of partnership of agents — In- sured bound to inquire as to authority. 27. Effect of leaving blank policies with agent — Secret revocation. 28. When vrritten authority or commission conclusive. 29. Authority of of&cers of company — Presumption — Evidence — Question of fact. 30. Admissions or declarations of agents as evidence. 31. Authority of agent not proved by admission — May be by his testimony — Policy may be evidence. 32. Possession of blank policies as evidence of author- ity — Soliciting agent. 33. Effect of furnishing an agent vt^ith blank applica- tions. 34. Custom and course of business as evidence of au- thority. 35. Cotiversations with persons in ofBce of company. 36. Letters from insurance company as evidence. 37. When agent not clothed with apparent authority to issue policies. 38. Company not allowed to prove it would have done differently by another agent or same agent — Agent's understanding and willingness not ad- missible. 39. Daily report of agent as evidence. 40. Insured's construction of agent's meaning not ad- missible. 41. Who is a general agent — Soliciting agent. 42. Limitation in policy as to evidence of agency does not prevent employment of clerks. 43. Clerks and employees of a general agent. 44. Authority of clerk of general agent — Evidence. 45. Estoppel by clerk. 46. Soliciting agent no authority to make contract of insurance — Evidence as to his authority — Ques- tion of fact. 47. Limitation of authority of a soliciting agent. 48. Soliciting agent no power as to waiver after issue of policy — Authority of same. 49. Mere solicitation of insurance does not constitute a person an agent of company — Must be evidence of authority. Agekts. 439 EULE 50. Allowance of commissions to a person does not make him agent of company. 51. Act of soliciting agent may be ratified by the com- pany — Effect. 53. Broker agent of insured — Authority — Burden of proof — May be company's agent — Evidence. 53. Broker cannot be agent of company without evi- dence of authority. 54. Legal definition of broker — Payment of compensa- tion or commission does not make him company's agent — Authority. 55. Insured responsible for broker as his agent — Evi- dence of custom — Entries in broker's books — Conversations. 56. Distinction between broker and company's soliciting agent — Payment of commission not conclusive. 57. Broker may make delivery of check for premium conditional. 58. Liability of broker to insured for premium — Eight to recover same. 59. Broker may be agent to collect premium — Question of fact. 60. Evidence of broker's authority to collect premium — Question of fact. 61. Eatification by insured of broker's act. 63. Agent of company placing surplus insurance. 63. Opinion and representation by broker — Question of fact. 64. Duty of broker in procuring or maintaining insur- ance — Personal liability. 65. Eesponsibility of broker — Standard of care — Ques- tion of fact — Presumption — Evidence. 66. When broker or agent not personally liable. 67. Broker authorized to collect unearned premium. 68. Waiver or estoppel by general agents — Eestrictions upon authority in policy not binding prior to de- livery of policy. 69. An insurance company cannot prohibit itself from making a waiver. 70. Insured bound by limitations upon agent's authority in an accepted policy — No oral waiver after its issue. 71. Notwithstanding limitations upon authority in pol- icy general agent may estop the company after its issue — Mere knowledge of agent insufficient. 440 FiKE Insurance. Rule 73. Limitation of authority in policy not conclusive — ■' Effect of conduct in the course of business. 73. Notice to agent as an element of estoppel — Conduct of company. 74. Letters as evidence of waiver. 75. Fraud and collusion as affecting estoppel. 76. No waiver by delivery of policy after fire. 77. When company bound by knowledge of its agent when policy issues. 78. Evidence as to knowledge of agent. 79. Knowledge of agent as affected by time. 80. Personal liability of company's agent — Effect of noncompliance with statute upon liability for premiums. 81. Instructions to agent should be clear and unam- biguous. 83. Local agent not liable for fraudulent act of clerk or solicitor. 83. Company's agent no power to bind company by con- tract to insure in the future — May be bound per- sonally. 84. Personal liability of agent under statute. 85. Agent's personal responsibility to insured for mis- representation. 86. As between agent and company damages on breach of contract of agency. 87. Duration of agency. 88. Eight of agent after termination of agency. 89. Property rights in expirations. 90. When authority of agent question of fact or law. 91. Authority of agent question of fact. 98. Agent cannot act in a dual or double capacity. 93. When agent acts in double capacity. 94. Agent stockholder, director, and ofiBcer of another corporation. 95. Agent also cashier of a bank. 96. Agent director of school district. 97. Agents and brokers subject to right of a State legis- lature to regulate the business of foreign insur- ance companies. 98. Business of insurance is not commerce — Power of State. 99. Power of State over its citizens. 100. Liability of agent or broker to penalty. 101. Construction of statute defining status of agents. Agents. 441 EuLE 102. Statute does not change rule of law as to principal and agent. 103. EfEect of statute prescribing status of a soliciting agent. 104. Statute fixing status of soliciting agent not extended by construction. 105. Status of soliciting agent under statute — Question of fact. 106. Company cannot plead its own violation of law. RULE I. As Imposed by Contract. In any matter relating to this insurance no person, unless duly authorized in writing, shall be deemed the agent of this company. * * * This policy is made and accepted subject to the foregoing 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 repre- sentative of this company shall have power to waive any provision or condition of this policy except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto, and as to such provisions and conditions no officer, agent, or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permis- sion affecting the insurance under this policy exist or be claimed by the insured unless so written or at- tached. 442 FiEE Insueancb. This rule is imposed by above terms in the standard form of policy prescribed in: Few York, North Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Missouri, Ehode Island. New Jersey, The standard form of policy prescribed in Michigan is the same, except the first clause, as follows : " In any matter relating to the procuring of this insurance no person, unless duly authorized in writing, shall be deemed the agent of this company." The standard form of policy prescribed in Wisconsin docs not contain the first clause. It does contain the second clause or paragraph beginning with the words " this policy is made and accepted subject, etc.," but there is added at the end a clause as follows : "Up to the time of the delivery of this policy to as- sured, in all transactions relating to this policy or to the prop- erty herein insured, between the assured and any agent of the company, knowledge of the agent shall be knowledge of the com- pany; and in all transactions relating to the subject of insur- ance, between the insured and any agent of the company after loss, knowledge of the agent shall be knowledge of the company." The standard form of policy prescribed in South Dakota pro- vides : "Any person who solicits insurance or issues policies of in- surance, or procures applications therefor, shall be held to be, and considered, the general agent of the insurer issuing the policy or making a renewal thereof, except as to proof of loss and adjustment thereof." The standard form of policy prescribed in:. Maine, Minnesota, Massachusetts, New Hampshire, does not contain either or any of the above provisions, or relat- ing thereto. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. * See note to " Concealment," Eule 1, page 3. Agents. 443 RULE 2. Agency Pounded upon Contract — Consent of Principal Essential. Agency springs from contract, the consent of the principal, express or implied, being essential to its creation ; and if an insurance company has not clothed a supposed agent with any authority, real or apparent, the acts and declarations of such person, as to the company, are res inter alios acta, not affecting the company, and the insurance company cannot be es- topped from asserting a contractual right by the acts, declarations, or mistakes of such person. Sellers v. Commercial Ins. Co., 105 Ala. 282, 24 Ins. L. J. 354, 16 So. Eep. 798. RULE 3. Burden of Proof as to Agency — Question of Pact or Law. Agency is a fact the burden of proving which rests upon the party affirming its existence; and it must be proved by other evidence than the acts or declara- tions of the supposed agent before it can be assumed that he represents and has authority to affect or bind the principal. When the facts are ascertained the existence of agency is a question of law. Sellers v. Commercial Ins. Co., 105 Ala. 282, 16 So. Eep. 798, 24 Ins. L. J. 354; Continental Ins. Assoc, v. Bearden, 29 Tex. Civ. App. 569, 69 S. W. Eep. 982. And see O'Leary v. German- American Ins. Co., 100 Iowa, 390, 69 N. W. Eep. 686, 27 Ins. L. J. 510; Brown v. Dutchess County Ins. Co., 64 App. Div. 9, 71 N". y. Supp. 670; Devens v. Mechanics & Traders' Ins. Co., 83 N. Y. 168; Eeynolds v. Continental Ins. Co., 36 Mich. 131; Carpenter v. Continental Ins. Co., 61 Mich. 635, 15 Ins. L. J. 667 ; Atlantic Ins. Co. v. Carlin, 58 Md. 337 ; American Under- writers' Assoc. V. George, 97 Pa. St. 238; Lancashire Ins. Co. v. Mil, 114 Pa. St. 248; Biggs v. North Carolina Home Ins. Co., 88 N. C. 141, 13 Ins. L. J. 302. 444 Fire Insueance. RULE 4. Agency Clause in Policy Inoperative when Company has Clothed a Person with Apparent Authority — If no Other Evidence, Conclusive as to Status of Broker. An insurance company may clothe a person with authority to represent it as its agent, and if it does, no agency clause in the policy can operate to make its agent the agent of the insured ;^ in the absence of evi- dence of authority, an agency clause in the policy is conclusive as to status of a broker.^ 1. Hart V. Niagara Ins. Co., 9 Wash. 620, 38 Pac. Eep. 213, 27 L. E. A. 86; Meyers v. Lebanon Ins. Co., 156 Pa.. St. 420, 27 Atl. Eep. 39, 23 Ins. L. J. 308 ; Landes v. Safety Ins. Co., 190 Pa. St. 536, 42 Atl. Eep. 961; Eilenberger v. Protective Ins. Co., 89 Pa. St. 464; Lebanon Ins. Co. v. Humes, 113 Pa. St. 591 ; Coles v. JefEerson Ins. Co., 41 V/. Va. 261, 23 S. B. Eep. 732, 25 Ins. L. J. 247 ; Cans v. St. Paul Ins. Co., 43 Wis. 108 ; Whited V. Germania Ins. Co., 76 N. Y. 415 ; Chase v. People's Ins. Co., 14 Hun, 456; North British & M. Ins. Co. v. Crutch- field, 108 Ind. 518, 16 Ins. L. J. 178; Commercial Ins. Co. v. Allen, 80 Ala. 571; South Bend Toy Mfg. Co. v. Dakota P. & M. Ins. Co., 2 S. D. 17, 48 N. W. Eep. 310, 20 Ins. L. J. 871; Sullivan v. Phoenix Ins. Co., 34 Kans. 170; Planters' Ins. Co. V. Myers, 55 Miss. 479; Commercial Ins. Co. v. Ives, 56 111. 402. And see Spragvie v. Holland Purchase Ins. Co., 69 N. Y. 128; Joy v. Pennsylvania Ins. Co., 35 Mo. App. 165; Beebe v. Hartford Ins. Co., 25 Conn. 51; Graham v. Ontario Ins. Co., 14 Ont. 358 (Can.). 2. McGrath v. Home Ins. Co., 88 App. Div. 153, 84 N. Y. Supp. 374. Old forms contained a clause reading as follows : " It is a part of this contract, that any person other than the assured, who may have procured this insurance to be taken by this company, shall be deemed to be the agent of the assured named in this policy, and not of this company under any circumstances whatever, or in any transaction relating to this insurance," and it was held binding upon the assured and to prevent waiver or estoppel by knowledge of a soliciting agent of the company authorized to take or receive applications for insurance. Eohrbach v. Germania Ins. Co., 62 N. Y. 47; Alexander v. Germania Ins. Co., 66 N. Y. 464. Agents. 445 Both of these cases were, however, limited in Whited v. Ger- mania Ins. Co., 76 IST. Y. 419; and in Chase v. People's Ins. Co., 14 Hun, 456, Alexander v. Germania Ins. Co. is referred to as having been overruled. In Millville Ins. Co. v. Collerd, 9 Vroom, 480 (N. J.), it was held that such a clause was binding upon the assured, who must be regarded as assenting to it when he accepts the policy. But in South Bend Toy Mfg. Co. v. Dakota P. & M. Ins. Co., 2 S. D. 17, 48 N. W. Eep. 310, 20 Ins. L. J. 871, it was held that such a clause was not binding upon the assured as to any act prior to the delivery of the policy, or unless notice was given to him prior to the completion of negotiation. And see also Boetcher v. Hawkeye Ins. Co., 47 Iowa, 253 ; Gates v. Penn Ins. Co., 10 Hun, 489 (N". Y.) ; Hoose v. Prescott Ins. Co., 84 Mich. 309, 47 K W. Eep. 587; Crouse v. Insurance Co., 79 Mich. 249. Other old forms provided that " If any broker or other per- son than the assured have procured this policy or any renewal thereof, or any indorsement thereon, he shall be deemed to be the agent of the assured, and not of this company in any trans- action relating to the insurance." And it was held to determine the status of a broker, in receiving amount of premium upon an issue of cancellation for nonpayment of the premium. Wilber v. Williamsburg City Ins. Co., 122 N". Y. 439, and as determining status of a broker. See also Wood v. Firemen's Ins. Co., 126 Mass. 316. RULE 5. Policy not Conclusive as to Agent's Authority — May be Clothed with Actual or Apparent Authority as to Waiver. The tendency of the weight of authority is against making restrictions in the policy upon an agent's au- thority conclusive upon the assured; the company, or any agent with general or unlimited powers, clothed with an actual or apparent authority, may, either orally or in writing, waive any written or printed condition in the policy, notwithstanding such restric- tions. Pope V. Glens Falls Ins. Co., 130 Ala. 356, 30 So. Eep. 496 ; Niagara Ins. Co. v. Lee, 73 Tex. 641, 11 S. W. Eep. 1024. And see following rules. 446 Fire Insurance. RULE 6. Agency open to Inquiry as to Facts — Status not Determined by Policy — Unless Policy only Evidence. Agency is open to inquiry as to the facts, and the legal status of any particular person is not necessarily or conclusively fixed and determined by the language of the policy/ unless the policy is the only evidence of authority.^ 1. Lumbermen's Ins. do. v. Bell, 166 111. 400, 45 N. E. Eep. 130; Quinlan v. Providence-Washington Ins. Co., 133 N. Y. 356, 31 N. E. Eep. 31 ; Frost v. North British & M. Ins. Co., Vt. , 60 Atl. Eep. 803. 2. Quinlan v. Providence- Washington Ins. Co., supra; Meigs V. London Assur. Co., 126 Fed. Eep. 781. And see McGrath V. Home Ins. Co., 88 App. Div. 153, 84 N. Y. Snpp. 374. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eules 9, 10, and 27. RULE 7. Authority of a Soliciting Agent not Limited by Agency Clause in Policy. Where an insurance company has clothed a solicit- ing agent with authority to take applications, the scope of such authority is not limited by an agency clause in the policy subsequently delivered. Kausal v. Minnesota Farmers' Ins. Co., 31 Minn. 17, 12 Ins. L. J. 657; South Bend Toy Mfg. Co. v. Dakota P. & M. Ins. Co., 2 S. D. 17, 48 N. W. Eep. 310, 20 Ins. L. J. 871; Boetcher v. Hawkeye Ins. Co., 47 Iowa, 253. And see Com- mercial Ins. Co. V. Ives, 56 111. 402; Crouse v. Hartford Ins. Co., 79 Mich. 249, 44 N. W. Eep. 496. See and compare Millville Ins. Co. V. Collerd, 9 Vroom, 480 (N. J.). See also Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Eule 23. RULE 8. Acceptance of Written Application from a Soliciting Agent as Batiflcation — Company can Take no Advantage of Agency Clause in Policy. After an insurance company, upon a written appli- cation taken by one who acted as its agent, issues its Agents. 447 policy thereon, it cannot escape responsibility for his errors in such application upon the plea that such agent had no written authority to act for the company, as required by the terms of the policy; acceptance of an application purporting to have been taken by its agent, and issue of the policy, amounts to ratification. Landes v. Safety Mut. Ins. Co., 190 Pa. St. 536, 43 Atl. Eep. 961. And see Meyers v. Lebanon Ins. Co., 156 Pa. St. 430, 37 Atl. Eep. 39, 33 Ins. L. J. 308. RULE 9. Form in Countersigning by Agent. Although policy provides that it shall not be valid unless countersigned by an agent, the insurance com- pany cannot object that a policy is not formally coun- tersigned when both policy and renewal receipt are issued with the agent's name written upon them as completed instruments. Hibernia Ins. Co. v. O'Connor, 29 Mich. 341. And see Ger- man Ins. Co. V. Laggart, 47 Kans. 663. But see Lynn v. Bur- goyne, 13 B. Mon. 400 (Ky.), where it was held that a policy signed by " B. for the agent " was void. RULE 10. Effect of Insurance Company Auth.orizing Soliciting of Insurance — Estoppel. Where an insurance company authorizes the solicit- ing of insurance, it clothes the agent for that purpose with apparent authority to bind it by all acts within the scope of his authority, not only when he inserts false answers in a written application; even if they are all true, if he knows of facts affecting the insur- 448 FiEB Insueance. ance, the company is bound by his knowledge;^ and it operates as an estoppel notwithstanding a clause in the policy subsequently delivered that no person shall be deemed the company's agent unless authorized in writing.^ 1. Dryer v. Security Ins. Co., Iowa, , 82 K. W. Eep. 494; Jacobs v. St. Paul Ins. Co., 86 Iowa, 145, 53 N. W. Rep. 101; Medearis v. Anchor Ins. Co., 104 Iowa, 88, 73 N. W. Rep. 495; Jordan v. State Ins. Co., 64 Iowa, 216, 13 Ins. L. J. 779; Gurnett v. Atlas Mutual Ins. Co., Iowa, , 100 N. W. Eep. 543; Stone v. Hawkeye Ins. Co., 68 Iowa, 737; ArfE V. Star Ins. Co., 125 JST. Y. 57 ; Carpenter v. German- Amer. Ins. Co., 135 N. Y. 298, 31 N. E. Rep. 1015, 32 Ins. L. J. 57; Chase v. People's Ins. Co., 14 Hun, 456; Bernard v. United Ins. Assoc, 17 Misc. 115, 39 N". Y. Supp. 1143; Davis v. Lamar Ins. Co., 18 Hun, 230; Baker v. Home Ins. Co., 64 N. Y. 648; Mead V. Saratoga Ins. Co., 81 App. Div. 282 ; Hayes v. Saratoga Ins. Co., 81 App. Div. 387; McGonigle v. Susquehanna Mutual Ins. Co., 168 Pa. St. 1, 31 Atl. Eep. 868, 34 Ins. L. J. 808; Burson V. Philadelphia Fire Assoc, 136 Pa. St. 267, 30 Atl. Rep. 401; Poster V. Pioneer Ins. Assoc, Wash. , 79 Pac. Rep. 798; London & Lancashire Ins. Co. v. Gerteson, 106 Ky. 815, 51 S. W. Rep. 617 ; Kausal v. Minnesota Farmers' Ins. Co., 31 Minn. 17; Brandup v. St. Paul F. & M. Ins. Co., 37 Minn. 393; Germania Ins. Co. v. Wingfield, 57 S. W. Rep. 456 (Ky.) ; Citizens' Ins. Co. v. Crist, 56 S. W. Rep. 658 (Ky.) ; Wolf V. Dwelling-House Ins. Co., 86 Mo. App. 580; Combs v. Han- nibal Ins. Co., 43 Mo. 148; Hart v. Niagara Ins. Co., 9 Wash. 620, 38 Pac. Eep. 213, 27 L. E. A. 86; Harding v. Norwich Union Ins. Soc, 10 S. D. 64, 71 N. W. Eep. 755, 26 Ins. L. J. 901; Woolpert v. Franklin Ins. Co., 42 W. Va. 647, 26 S. E. Rep. 631; Deitz v. Insurance Co., 31 W. Va. 851; Simmons v. Insurance Co., 8 W. Va. 474; Steele v. German Ins. Co., 93 Mich. 81, 53 N. W. Rep. 514; Tubbs V. Dwelling-House Ins. Co., 84 Mich. 646, 48 N. W. Eep. 296; Kitchen v. Hartford Ins. Co., 57 Mich. 135, 14 Ins. L. J. 594; German Ins. Co. v. Eounds, 35 Nebr. 752, 53 N. W. Eep. 660; Home Ins. Co. v. Gumey, 56 Nebr. 306, 76 N. W. Eep. 553; State Ins. Co. v. Jordan, 29 Nebr. 514, 45 N. W. Eep. 792; Hahn v. Guardian Assur. Co., Oreg. , 32 Pac. Eep. 683; Wooldridge v. German Ins. Co., 69 Mo. App. 413; Wil- liams V. Bankers & Merchants' Ins. Co., 73 Mo. App. 607; Agents. 449 Beebe v. Hartford Ins. Co., 25 Conn. 51; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517; Planters' Ins. Co. V. Meyers, 55 Miss. 479 ; Sias v. Roger Williams Ins. Co., 8 Fed. Eep. 183, 10 Ins. L. J. 500 ; Farmers' Ins. Co. v. Williams, 39 Ohio St. 584, 13 Ins. L. J. 133 ; Insurance Co. v. McGookey, 33 Ohio St. 555; Packard v. Dorchester Ins. Co., 77 Me. 144, 15 Ins. L. J. 475; Eockford Ins. Co. v. Boirum, 40 111. App. 129; Union Ins. Co. v. Chipp, 93 111. 96; State Ins. Co. v. Taylor, 14 Colo. 499, 24 Pac. Eep. 333; Indiana Ins. Co. v. Hartwell, 123 Ind. 177, 24 N. E. Eep. 100 ; Mullin v. Vermont Ins. Co., 58 Vt. 113 ; Hanson v. Milwaukee Mechanics' Ins. Co., 45 Wis. 321. And see Phoenix Ins. Co. v. Searles, 100 Ga. 97, 27 S. B. Eep. 779; Beal v. Park Ins. Co., 16 Wis. 241. And see Eules 7 and 8. 2. Hart v. Niagara Ins. Co., 9 Wash. 620, 38 Pac. Eep. 213, 27 L. E. A. 86; Planters' Ins. Co. v. Myers, 55 Miss. 479; Deitz V. Providence- Washington Ins. Co., 31 W. Va. 851, 8 S. E. Eep. 616; Smith v. Home Ins. Co., 47 Hun, 30 (N. Y.) ; Partridge V. Commercial Ins. Co., 17 Hun, 95; Susquehanna Ins. Co. V. Cusick, 109 Pa. St. 157. And see Kausal v. Minnesota Ins. Co., 31 Minn. 17; Commercial Ins. Co. v. Ives, 56 111. 402. See also Eule 7. RULE II. Besponsibility for Errors or Omissions in Written Application — Authority of Agent — Question of Pact, When the company's agent is correctly informed as to the facts, his errors or omissions in filling up an application for insurance are chargeable to the com- pany and not to the assured;^ it makes no difference if the insured knows that he has no authority to issue policies f and the authority of the agent may be a proper question for the jury.* When not correctly informed by the insured, a misdescription is not the act of the agent so as to estop the company.* The insured is responsible for his own misstatements,® or for what he expressly or impliedly authorizes.*^ And whether the agent is agent of the insured or of the company in taking or making the application is a Vol. 2 — 29 450 FiEE Insurance. proper question for the jury.^ An agent of tlie com- pany cannot be regarded as agent of the assured in filling up an application without some evidence of request or authority.® 1. Farmers' Ins. Assoc, v. Williams, 95 Va. 248, 28 S. E. Kep. 214; Lynchburg Ins. Co. v. West, 76 Va. 575, 12 Ins. L. J. 51; Steele v. German Ins. Co., 93 Mich. 81, 53 N. W. Eep. 514, 22 Ins. L. J. 377 ; State Ins. Co. v. DuBois, 7 Colo. App. 214, 44 Pac. Eep. 756; Meyers v. Lebanon Mut. Ins. Co., 156 Pa. St. 420, 27 Atl. Eep. 39, 23 Ins. L. J. 308; Smith v. Farmers & Mechanics' Ins. Co., 89 Pa. St. 287; Kansas Farmers' Ins. Co. V. Saindon, 52 Kans. 486, 35 Pac. Eep. 15, 23 Ins. L. J. 208, reaff'd on rehearing, 53 Kans. 623, 36 Pac. Eep. 983 ; Sullivan V. Phcenix Ins. Co., 34 Kans. 170; Manchester Assur. Co. v. Lowell, 80 S. W. Eep. 207 ; American Ins. Co. v. Walston, 111 111. App. 133 ; Ormsby v. Laclede Ins. Co., 105 Mo. App. 143, 79 S. W. Eep. 733; Bushnell v. Fanners' Ins. Co., Mo. App. , 85 S. W. Eep. 103 ; Phoenix Ins. Co. v. Lorenz, 34 N. B. Eep. 495, 22 Ins. L. J. 712, denying rehearing of 33 N. E. Eep. 444; Phcenix Ins. Co. v. Wartenberg, 79 Fed. Eep. 245, 24 C. C. A. 547, 48 U. S. App. 344, 26 Ins. L. J. 552 ; Campbell V. Merchants' Ins. Co., 37 N. H. 35 ; Eowley v. Empire Co., 36 N. Y. 550; Plumb v. Cattaraugus Ins. Co., 18 N. Y. 392; Bennett v. Agricultural Ins. Co., 106 N. Y. 243, 12 N. E. Eep. 609, 16 Ins. L. J. 971 ; Malleable Iron Works v. Phoenix Ins. Co., 25 Conn. 465 ; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517; Kelly v. Troy Ins. Co., 3 Wis. 254; Key V. Des Moines Ins. Co., 77 Iowa, 174, 41 N. W. Eep. 614; Bartholemew v. Merchants' Ins. Co., 25 Iowa, 507; Donnelly V. Cedar Eapids Ins. Co., 70 Iowa, 693 ; James Eiver Ins. Co. V. Merritt, 47 Ala. 387 ; Simmons v. Insurance Co., 8 W. Va. 474; Insurance Co. v. McGookey, 33 Ohio St. 555; Farmers' Ins. Co. V. Williams, 39 Ohio St. 584, 13 Ins. L. J. 133 ; Pro- tection Ins. Co. V. Harmer, 2 Ohio St. 452; Hough v. City Ins. Co., 29 Conn. 10 ; Guardian Ins. Co. v. Connelly, 20 Can. S. C. 208. And see Baker v. Home Ins. Co., 64 N. Y. 648; Beal V. Park Ins. Co., 16 Wis. 241. 2. Bowlus V. Phcenix Ins. Co., 113 Ind. 106, 32 N. E. Eep. 319 ; American Ins. Co. v. Gallatin, 48 Wis. 36. 3. Coles V. Jefferson Ins. Co., 41 W. Va. 261, 23 S. E. Eep. 732, 25 Ins. L. J. 247. Agents. 451 4. Sarsfield v. Metropolitan Ins. Co., 61 Barb. 479 (K Y.) ; Lowell V. Middlesex Ins. Co., 8 Cush. 127 (Mass.). And see Sexton V. Montgomery Ins. Co., 9 Barb. 191 (N. Y.). 5. Wilson V. Conway Ins. Co., 4 E. I. 141. And see Liberty Hall Assoc. V. Housatonic Ins. Co., 7 Gray, 361 (Mass.). 6. Smith V. Empire I'ns. Co., 35 Barb. 497 (N. Y.) ; Ameri- can Ins. Co. V. Gilbert, 37 Mich. 429. 7. Commercial Ins. Co. v. Ives, 56 111. 402. 8. Hingston v. ^tna Ins. Co., 42 Iowa, 46; Lycoming Ins. Co. V. Jackson, 83 111. 303; Sprague v. Holland Purchase Ins. Co., 69 N. Y. 138; BenninghofE v. Agricultural Ins. Co., 93 K Y. 495. And sec " Warranty." RULE 12. Scope of Agent's Authority. An insurance company which has conferred general power on an agent cannot escape responsibility for a particular act of the agent within the scope of the general power ;^ a generg,! agent, unless specially re- stricted, has powers coextensive, as to the business in which engaged, with those of his principal f but the company cannot be affected by any act of the agent not within the scope of his authority.* 1. Franklin Ins. Co. v. Bradford, 201 Pa. St. 33, 50 Atl. Eep. 286; Medley v. German Alliance Ins. Co., 55 W. Va. 343, 47 S. E. Bep. 101 ; Euggles v. American Central Ins. Co., 114 N. Y. 415; Lightbody v. JSTorth American Ins. Co., 23 Wend. 18; Farnum v. Phcenix Ins. Co., 83 Cal. 346, 33 Pac. Eep. 869 ; German-American Ins. Co. v. Yellow Poplar Lumber Co., 84 S. W. Eep. 551 (Ky.). And see Carrigan v. Lycoming Ins. Co., 53 Vt. 418; Perkins v. Washington Ins. Co., 4 Cow. 645 (N. Y.); BenninghofE v. Agricultural Ins. Co., 93 K Y. 495, 13 Ins. L. J. 45 ; Imperial Ins. Co. v. Dunham, 117 Pa. St. 460 ; Richard v. Springfield F. & M. Ins. Co., La. , 38 So. Eep. 563. 2. Steen v. Niagara Ins. Co., 89 IST. Y. 315. 3. Kelly v. Troy Ins. Co., 3 Wis. 354; Duluth Fat. Bank V. Knoxville Ins. Co., 85 Tenn. 76, 1 S. W. Eep. 689. 452 FiBE Insurance. RULE 13. Notice to Company Through, its Officer or Agent — Exceptions. The general doctrine is that notice communicated to or knowledge acquired by the officers or agents of a corporation when acting in their official capacity or within the scope of their agency is notice to or knowl- edge of the corporation. It is said there are but three exceptions — matters which the agent has forgotten entirely or may have forgotten under the circum- stances of the case ; matters which for special reasons he could not impart to his principal, and matters which the previous conduct of the agent, or the fact that he is engaged in some fraud upon the principal make it certain that he will conceal. German Ins. Co. v. Shader, Nebr. , 93 N". W. Eep. 973. RULE 14. Scope of Authority not Limited by Private Instructions — Au- thority of Local Agent not Established by Assumption. The authority of an agent, acting within the ap- parent scope of it, is not narrowed by private or undisclosed instructions unless there is something in the nature of the particular business transacted or in the facts or circumstances of the case to indicate that the agent is acting under special instructions or lim- ited powers;^ a local agent as such does not have un- limited authority and his power cannot be established by his assumption in doing the act relied upon.^ L Brown v. Franklin Ins. Co., 165 Mass. 565, 43 N". E. Eep. 612, 25 Ins. L. J. 630 ; Parker & Young Mfg. Co. v. Exchange Ins. Co., 166 Mass. 484, 44 E". E. Eep. 614; Michigan F. & M. Agents. 453 Tns. Co. V. Wieh, 8 Colo. App. 409, 46 Pac. 687 ; Howard Ins. Co. V. Owens, 94 Ky. 197, 21 S. W. Eep. 1037. 2. Eeynolds v. Continental Ins. Co., 36 Mich. 131. RULE 15. Authority, how Determined — Insured not Bound by Secret In- structions — Test of Authority. The authority of an agent as to those dealing with him must be determined by the nature of his business, and is prima facie coextensive with its requirements ; persons dealing with insurance agents, acting within the apparent scope of their authority, are not bound by instructions or limitations which are not brought to the knowledge of such persons ;^ the question is not what power the agent did in fact possess, but what power did the insurance company hold him out to the public as possessing.^ 1. Eobinson v. ^tna Ins. Co., 128 Ala. 477, 30 So. Eep. 665 ; Commercial Ins. Co. v. Morris, 105 Ala. 498, 18 So. Eep. 34; Syndicate Ins. Co. v. Catchings, 104 Ala. 176, 16 So. Eep. 46, 24 Ins. L. J. 447; Medley v. German Alliance Ins. Co., 55 W. Va. 342, 47 S. E. Eep. 101; Fire Ins. Co. of Philadelphia V. Sinsabaugh, 101 111. App. 55; Hartford Ins. Co. v. Farrish, 73 111. 166; Hartford Ins. Co. v. Wilcox, 57 111. 180; Eockford Ins. Co. V. Nelson, 65 111. 415 ; Eclectic Ins. Co. v. Fahrenkrug, 68 111. 463 ; Forward v. Continental Ins. Co., 142 N. Y. 382, 37 N". E. Eep. 615; Euggles v. American Central Ins. Co., 114 N. Y. 415; Lewis v. Guardian Assnr. Co., 181 IST. Y. 392, 74 N. E. Rep. 224, aff'g 93 App. Div. 157; Goldwater v. Liverpool, L. & 6. Ins. Co., 39 Hun, 176, afE'd, 109 N. Y. 618, 15 N. B. Eep. 895, on opinion below; Angell v. Hartford Ins. Co., 59 IST. Y. 171; Fire Assoc v. Masterson, Tex. Civ. App. , 83 S. W. Eep. 49 ; Insurance Co. N. A. v. Bell, Tex. Civ. App. , 60 S. W. Eep. 262 ; Insurance Co. v. Lyons, 38 Tex. 253 ; Coles v. Jefferson Ins. Co., 41 W. Va. 261, 23 S. E. Eep. 732, 25 Ins. L. J. 247 ; Sheppard v. Peabody Ins. Co., 21 W. Va. 368; Brown v. Franklin Ins. Co., 165 Mass. 565, 43 N. E. Eep. 454 Fire Insttrance, 512, 25 Ins. L. J. 630 ; Parker & Young Mfg. Co. v. Exchange Ins. Co., 166 Mass. 484, 44 N. E. Eep. 614; California Ins. Co. V. Gracey, 15 Colo. 70, 24 Pac. Eep. 577 ; State Ins. Co. v. Du Bois, 7 Colo. App. 314, 44 Pac. Eep. 756; Johnson v. Scottish Union & Nat. Ins. Co., 93 Wis. 223, 67 N. W. Eep. 416, 26 Ins. L. J. 59; Teutonia Ins. Co. v. Ewing, 90 Fed. Eep. 217, 32 C. C. A. 583, 28 Ins. L. J. 282; Germania Ins. Co. v. Columbia Encaustic Tile Co., 15 Ind. App. 623, 43 N. E. Eep. 41 ; Com- mercial Union Assur. Co. v. State, 113 Ind.'331, 15 N. E. Eep 158 ; Hartford Ins. Co. v. Trimble, Ky. , 78 S. W. Eep 462; Howard Ins. Co. v. Owens, 94 Ky. 197, 21 S. W. Eep 1037; Phoenix Ins. Co. v. Spiers, 87 Ky. 285, 8 S. W. Eep 453; Kenton Ins. Co. v. Shea, 6 Bush, 174 (Ky.) ; Virginia F. & M. Ins. Co. V. Eichmond Mica Co., 102 Va. 429, 46 S. E, Eep. 463; Mutual Ins. Co. ■;;. Ward, 95 Va. 231, 28 S. E. Eep, 209 ; Continental Ins. Co. v. Kasey, 25 Gratt. 268 (Va.) ; Wood bury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517 Pierce v. Nashua Ins. Co., 50 N. H. 297; Dayton Ins. Co. v. Kelley, 24 Ohio St. 345; Insurance Co. v. McGookey, 33 Ohio St. 555; Lattomus v. Farmers' Ins. Co., 3 Houst. 404 (Del.) American Central Ins. Co. v. McLanathan, 11 Kans. 533 Western Home Ins. Co. v. Hogue, 41 Kans. 524, 21 Pac. Eep, 641; Insurance Co. v. McCain, 6 Otto, 84 (U. S.) ; Millville Ins. Co. V. Mechanics' Loan Assoc, 43 N. J. L. 652 ; Brownfield V. Phoenix Ins. Co., 26 Mo. App. 390 ; St. Paul F. & M. Ins. Co. V. Parsons, 47 Minn. 352, 50 N. W. Eep. 240, 21 Ins. L. J. 72 ; Eivara v. Queens Ins. Co., 62 Miss. 720. And see De Grove V. Metropolitan Ins. Co., 61 N. Y. 594; Miller v. Scottish Union & Nat. Ins. Co., 101 Mich. 49, 59 N. W. Eep. 439, 23 Ins. L. J. 725. 2. Coles V. Jefferson Ins. Co., 41 W. Va. 261, 23 S. E. Eep. 732, 25 Ins. L. J. 247. And see McCabe v. Dutchess County Ins. Co., 14 Hun, 599 (N. Y.). RULE i6. Limitation of Apparent Authority. An agent has apparent authority only to insure in the modes authorized by the charter of the company, and upon the terms and conditions inserted in its policies in ordinary use. De Grove v. Metropolitan Ins. Co., 61 N. Y. 594. Agents. 455 RULE 17. Scope of Authority as to Kind of Property or Bisk. If an agent lias authority to insure one kind of prop- erty it does not necessarily include authority to take risks of any kind, and if there is any such presump- tion it is rebutted by the fact that the agent receives and forwards the application to the company to pass upon and determine its acceptance or rejection. Smith V. State Ins. Co., 58 Iowa, 487. RULE 18. No Authority to Insure Destroyed Property. An agent has no authority to insure property which has been destroyed. Stebbins v. Lancashire Ins. Co., 60 N. H. 65, 13 Ins. L. J. <;98; Bentley v. Columbia Ins. Co., 17 N. Y. 421, afE'g 19 Barb. 595; Mead v. Phoenix Ins. Co., 158 Mass. 134. And see Vol. 1, Fire Insurance as a Valid Contract, " Fraud or False Swearing," Eule 23. RULE 19. Scope of Authority as to Territory. A general agent authorized to issue policies in a particular city and its vicinity may act within the scope of his authority in issuing a policy upon prop- erty in another city 100 miles distant, and the com- pany cannot escape liability to the insured by private instructions to such agent ;^ the insurance company must be prompt in repudiating or canceling a risk taken by an agent outside of his territory, as other- wise it may be deemed to have ratified his act.^ 1. Lightbody v. North American Ins. Co., 23 Wend. 18. And gee St. Paul F. & M. Ins. Co. v. Parsons, 47 Minn. 352, 50 N. W. 456 FiEE Insubance. Eep. 340, 21 Ins. L. J. 73 ; Mohr v. Ohio Ins. Co., 13 Fed. Rep. 74; Hanover Ins. Co. v. Ames, 39 Minn. 150; Howard Ins. Co. V. Owens, 94 Ky. 197, 21 S. W. Rep. 1037, 32 Ins. L. J. 614. 2. Mohr V. Ohio Ins. Co., supra. And see Knox v. Lycoming Ins. Co., 50 Wis. 671. RULE 20. Construction of Authority as Agent or Surveyor. Wlien an insurance agent, by written commission or authority, is authorized to act as " agent or sur- veyor," the word " surveyor " is not construed to limit or qualify the effect of the word " agent." Lycoming Ins. Co. v. Woodworth, 83 Pa. St. 233. And see Phoenix Ins. Co. v. Spiers, 87 Ky. 285, 8 S. W. Rep. 453. RULE 21. Partnership or rirm as Agent of Company. If a partnership or firm is authorized by the insur- ance company to act as its agent, one member of such firm has all the power of the firm;^ a commission to two agents jointly expires with the death of one, and .the survivor cannot bind the company without evi- dence of authority or subsequent ratification;^ when the commission is issued to one person only who is a member of a partnership, it is authority to him only, unless extended to the partnership by acts of the firm recognized and ratified by the company.* 1. Kennehec Co. ■;;. Augusta Ins. Co., 6 Gray, 304 (Mass.). 2. Hartford Ins. Co. v. Wilcox, 57 111. 180. 3. United Ins. Co. v. Insurance Co. N. A., 42 Ind. 588; Newman v. Springfield F. & M. Ins. Co., 17 Minn. 133. Agents. 457 RULE 22. Effect of Agent Holding Commissions from Other Companies — Presumption as to Knowledge and Practice in Selecting Com- panies — Question of Fact. When an insurance company makes a person agent for it who at same time holds commissions from other companies, they must be held to know that it is the practice of such agencies to make selections of the in- surer or company which is to assume a particular risk, and after loss they cannot be heard to deny that such agent had authority to do so. At most the question is usually one of fact if not of law. Fire Ins. Co. of Philadelphia v. Sinsabaugh, 101 111. App. 55. RULE 23. Liability of Company for Acts of Agent in IVCalicious Prosecu- tion — Must be Authorized. An insurance company may be liable for the acts of its agent within the scope of his authority in malicious prosecution in the company's name by his conniv- ance;^ his acts must be within the scope of his authority.^ 1. Turner v. Phoenix Ins. Co., 55 Mich. 236. 2. Kelly v. Troy Ins. Co., 3 Wis. 354. RULE 24. Agent Acting After Resignation. An agent may resign and still bind the company if he continues to supervise the work of his successor with the knowledge and consent of the company. Ganser v. Firemen's Fund Ins. Co., 38 Minn. 74, 17 Ins. L. J. 105. 458 FiEE Insueance. RULE 25. Agency May Continue After Bevocation — Agent May be Bepre- sentative of Insured. When third parties have dealt with an agent clothed with general powers, the agency continues as to them, after revocation, until they have notice thereof. And the principal may be liable for acts of the agent after revocation, to third persons, who never dealt with him previously, if they, in common with the public at large, are justified in believing that such agency existed, and have no notice of its revocation;^ rule may be other- wise when an agent ceases to q,ct for the company upon removal.^ And in such a case he may be deemed the representative of the insured in receiving and trans- mitting a notice required by the company.* 1. Continental Ins. Co. v. Brooks, 131 Ala. 614, 30 So. Eep. «76; Merchants' Ins. Co. v. Oberman, 99 111. App. 357; Spring- field F. & M. Ins. Co. V. Davis, 18 Ky. L. Eep. 654; Burling- ton Ins. Co. V. Threlkeld, 60 Ark. 539, 31 S. W. Eep. 265, 25 Ins. L. J. 32: Ee Pelican Ins. Co., 47 La. Ann. 935, 17 So. Eep. -127, 34 Ins. L. J. 535; Insurance Co. v. McCain, 6 Otto, 84 (U. S.). 2. Burlington Ins. Co. v. Campbell, 42 ISTebr. 208, 60 N. W. Eep. 599, 24 Ins. L. J. 379. And see Montross v. Williams, 49 Mich. 477, where the court admits company might be bound if consideration is paid to the agent in absence of knowledge. 3. Strunk v. Firemans' Ins. Co., 160 Pa. St. 345, 28 Atl. Eep. 779, 23 Ins. L. J. 475. RULE 26. EfEect of Dissolution of Partnership of Agents —Insured Bound to Inquire as to Authority. When a policy is obtained from a firm of insurance agents, subsequently dissolved, one of them continuing ihe insurance business with another partner, but ceas- Agents. 459 ing to represent the company issuing the policy, no- tice afterward given to him by the assured is in- effectual to bind the first company, even although the assured is ignorant of the dissolution of the firm, and that .the company had ceased to be represented or terminated its agency; the insured is bound to inquire as to authority of the agent. Greenwich Ins. Co. v. Sabotnick, 91 Ga. 717, 17 S. E. Eeu. 1036, 23 Ins. L. J. 154. RULE 27. Effect of Leaving Blank Policies with Agent — Secret Revocation. When an agent has acted as the general agent of the company in issuing policies, and his acts have been adopted by the company, and so long as it leaves policies with him, thus enabling him to continue deal- ing with the public upon the strength of his previous agency, and to use its policies, no secret revocation of his power can absolve the company from liability to third persons dealing upon the strength of such ap- parent authority without any knowledge of the revoca- tion of such authority. Marshall v. Heading Ins. Co., 78 Hun, 83, 29 N. Y. Supp. .334, afE'd, 149 N. Y. 617, without opinion. RULE 28. When Written Authority or Commission Conclusive. The written authority or commission of an agent is -conclusive, in the absence of evidence that the com- pany has ever held out the agent as possessing greater 460 Fire Insuhancb. or other powers than therein contained;^ but ceases to he conclusive as soon as there is any such evidence.^ 1. Trask v. German Ins. Co., 58 Mo. App. 431. And se& Wilson V. Genesee Ins. Co., 14 F. Y. 418 ; BenninghofE v. Agri- cultural Ins. Co., 93 N. Y. 495, 13 Ins. L. J. 45. And se& Eobinson v. JStna Ins. Co., 135 Ala. 650, 34 So. Rep. 18. 2. Farmers' Ins. Co. v. Taylor, 73 Pa. St. 343. See Eule 6, and compare various rules under this title. In BenninghofE v. Agricultural Ins. Co., 93 K. Y. 495, 13 Ins. L. J. 45, it was held not proper on a trial for company's counsel to ask an oflBcer of the insurance company "what was 's authority as agent of the company ? " as the question calls for opinion of the witness, and that such authority is properly proved by his written commission or power of attorney, or by a resolution of the company's board of directors. RULE 29. Authority of Officers of Company — Presumption — Evidence — Question of Fact. An insurance company necessarily acts and speaks by its officers, and what they say and do in the dis- charge of their duty as such is evidence against the company;^ and their authority as such, in absence of evidence to contrary, may be presumed;^ or if neces- sary to be proved, it is not essential that it be estab- lished by a formal resolution of the board of directors ; usual course of business without objection or repudia- tion by the company is sufficient to make the question, of authority one for the jury.' 1. Muhleman v. National Ins. Co., 6 W. Va. 508. And see Sussex County Ins. Co. v. Woodruff, 2 Dutch. 541 (N. J.) ; Davis V. Farmers' Ins. Co., 134 N. C. 60, 45 S. B. Eep. 955. 2. Conover v. Mutual Ins. Co., 3 Den. 254, aff'd, 1 N. Y. 290; Sanders v. Hillsborough Ins. Co., 44 N. H. 238. 3. Conover v. Mutual Ins. Co., supra. Agents. 461 RULE 30. Admissions or Declarations of Agent as Evidence. The statements or declarations of an oflBcer or agent are inadmissible to affect the insurance com- pany, unless in respect to a transaction in which he is authorized to appear for the company, and he has no authority to bind the company by any statements as to past transactions. Hearsay evidence of this char- acter is only permissible when it relates to statements loj the agent, which he was authorized by his principal to make, or to statements by him which constitute part of the transaction which is at issue between the parties ;^ admissions or declarations of an agent may "be admissible though related to a past transaction with which he had no connection, if made while acting within the scope of his agency, and relating to a sub- ject in reference to which he is empowered to act for the company.^ If the evidence of such statements is not legally competent, it is not made competent and proper for purpose of disproving the agent's denial •of the alleged admission.^ Admission of an agent that he had delivered a policy may be admissible as res c/estce.* 1. BaptisfChurch v. Brooklyn Ins. Co., 38 N". Y. 153; Brown V. Dutchess County Ins. Co., 64 App. Div. 9, 71 N. Y. Supp. €70; Continental Ins. Co. v. Cummings, Tex. , 81 S. W. Eep. 705; Bartlett v. Firemen's Fund Ins. Co., 77 Iowa, 155, 18 Ins. L. J. 554 ; Idaho Forwarding Co. v. Firemen's Fund Ins. Co., Utah, , 29 Pac. Eep. 836, 21 Ins. L. J. 756; Mer- ■ehants' Bank v. Clark, 139 N. Y. 314, citing Morawetz on Pri- vate Corporations. And see Scott v. Home Ins. Co., 53 Wis. 238, 11 Ins. L. J. 177. 2. Bartlett v. Firemen's Fund Ins. Co., supra; Euthven v. American Ins. Co., 102 Iowa, 550, 71 N. W. Eep. 574, 37 Ins. L. J. 593. 462 FiEE Insurance. 3. Baptist Church v. Brooklyn Ins. Co., supra. i. Scott V. Home Ins. Co., 53 Wis. 338. In White v. Miller, 71 N. Y. 118, 135, the New York Court of Appeals says : " The general rule is, that what one person says, out of court, is not admissible to charge or bind another. The exception is in cases of agency; and in cases of agency, the declarations of the agent are not competent to charge the prin- cipal, upon proof merely that the relation of principal and agent existed when the declarations were made. It must further appear that the agent, at the time the declarations were made, was engaged in executing the authority conferred upon him, and that the declarations related to, and were connected with, the business then depending, so that they constituted a part of res gestae." In Farlie «. Hastings (10 Ves. 137) Sir William Grant expressed, with great clearness and accuracy, the doctrine upon this subject. He said : " What an agent has said may be what constitutes the agreement of the principal or the represen- tations or statements made may be the foundation of, or the in- ducement to the agreement. Therefore, if a writing is not neces- sary by law, the evidence must be admitted, to prove the agent did make that statement or representation. So, with regard tO' acts done, the words with which these acts are accompanied fre- quently tend to determine their quality. The party therefore,. to be bound by the act, must be affected by the words. But, ex- cept in one or the other of these ways, I do not know how, what is said by an agent can be evidence against the principal. The mere assertion of the fact cannot amount to proof of it, though it may have some relation to the business in which the person making that assertion was employed as agent. (See also Story on Ag., §§ 134, 137; Thalheimer v. Brinckerhoff, 4 Wend. 394; Hubbard v. Elmer, 7 Wend. 446; Luby v. H. E. E. Co.. 17 ir. Y. 131.) The rule that the declarations of the agent are inadmissible to bind the principal, unless they constitute the agreement which he is authorized to make, or relate to and accompany an act done in the course of the agency, is ap- plicable in all cases, whether the agent is a general or special one, or the principal is a corporation or private person. (Angell & Ames on Corp., § 309, 1 Gr. Bv., § 114a.) " RULE 31. Authority of Agent not Proved by Admission — May be by His Testimony — Policy May be Evidence. While the rule is that the authority of an agent cannot be proved by his admission or declaration this Agents. 463 does not prevent proof of his authority by his testi- mony;^ the policy itself may also acknowledge the status of a certain person as agent,^ creating a ques- tion of fact as to acts being within apparent scope of authority.^ 1. O'Leary v. German-Amer. Ins. Co., 100 Iowa, 390, 6& N. W. Eep. 686, 27 Ins. L. J. 510; Murphy v. Mechanics & Traders' Ins. Co., 83 Mo. App. 481; Eobinson v. ^tna Ins. Co., 135 Ala. 650, 34 So. Eep. 18 ; Wilson v. Commercial Union Assur. Co., 51 S. C. 540, 29 S. E. Rep. 245. 2. Wilson V. Commercial Union Assur. Co., supra; Lewis v. Guardian Assur. Co., 181 N". Y. 392, 74 N. E. Eep. 224, aTg 93 App. Div. 157. 3. Lewis V. Guardian Assur. Co., supra. RULE 32. Possession of Blaxik Policies as Evidence of Authority — Solicit- ing Agent. , The possession of blank policies and renewal re- ceipts, signed by the officers of an insurance company, by an agent with power to fill up the blanks, to countersign, and issue the same as completed con- tracts of insurance, is evidence of a general agency;^ but the mere fact that soliciting agent authorized to take applications, is required to indorse or counter- sign a policy which might be issued by the company, is not evidence of a general agency or authority to make a contract of insurance, such agent not being supplied with policies, and having no power to issue them.^ 1. Grabbs v. Farmers' Ins. Co, 125 K. C. 389, 34 S. B. Rep. 503; Grubbs v. North Carolina Home Ins. Co., 108 N. C. 472, 13 S. E. Eep. 336, 20 Ins. L. J. 784 ; Medley v. German Alliance Ins. Co., 55- W. Va. 343, 47 S. E. Eep. 101; Parsons v. Knox- 464 FiEE Insubance. ville Ibs. Co., 132 Mo. '583, 31 S. W. Eep. 117, 34 Ins. L. J. 853 ; German-Amer. Ins. Co. v. Humphrey, 63 Ark. 348, 25 Ins. L. J. 658, 35 S. W. Eep. 438; Howard Ins. Co. v. Owens, 94 Ky. 197, 31 S. W. Eep. 1037, 33 Ins. L. J. 514; Marshall v. Eeading Ins. Co., 78 Hun, 83, 39 K. Y. Supp. 334, aff'd, with- out opinion, 149 ^t. y. 617; Post v. ^tna Ins. Co., 43 Barb. 351 (N'. Y.) ; Carroll v. Charter Oak Ins. Co., 40 Barb. 393, aS'd, 10 Abb. Pr. N. S. 166, 1 Abb. Ct. App. Dec. 316 (X. Y.) ; Gold- water V. Liverpool, L. & G. Ins. Co., 39 Hun, 176, affd, 109 N. Y. 618, on opinion below; Forward v. Continental Ins. Co., 143 N. Y. 383, 37 N. E. Eep. 615, aff'g 66 Hun, 546, 31 N. Y. Supp. 664; Pitney v. Glens Falls Ins. Co., 65 K. Y. 6; Lightbody V. North American Ins. Co., 33 Wend. 18 (F. Y.) ; Smith v. Farmers' Ins. Co., Ill Ga. 737, 36 S. E. Eep. 957; Hartford Ins. Co. V. Keating, 86 Md. 130, 38 Atl. Eep. 39, 37 Ins. L. J. 406 ; Wytheville Ins. Co. v. Teiger, 90 Va. 277, 18 S. E. Eep. 195 ; Hardin v. Alexandria Ins. Co., 90 Va. 413, 18 S. E. Eep. 911; Mutual Ins. Co. v. Ward, 95 Va. 331, 38 S. E. Eep. 309; Beebe v. Ohio Farmers' Ins. Co., 93 Mich. 514, 53 N. W. Eep. 818; Phoenix Ins. Co. v. Public Parks Amusement Co., 63 Ark. 187, 37 S. W. Eep. 959; Wass v. Maine Ins. Co., 61 Me. 537; Gloucester Mfg. Co. v. Howard Ins. Co., 5 Gray, 497 (Mass.) ; Putnam v. Home Ins. Co., 133 Mass. 334; Dayton Ins. Co. V. Kelley, 24 Ohio St. 345; Continental Ins. Co. v. Euckman, 127 111. 364, 30 N. E. Eep. 77; German-Amer. Ins. Co. v. Yellow Poplar Lumber Co., 84 S. W. Eep. 551 (Ky.) ; Eichard V. Springfield F. & M. Ins. Co., La. , 38 So. Eep. 563. 2. Armstrong v. State Ins. Co., 61 Iowa, 312, 12 Ins. L. J. 673. RULE 33- Effect of Furnishing an Agent with Blank Applications. An insurance company which furnishes an agent with blank applications for the purpose of procuring insurance thereby clothes bim with apparent au- thority as soliciting agent, notwithstanding an agency clause in the policy, and the company is bound by his knowledge, when the policy issues. Partridge v. Commercial Ins. Co., 17 Hun, 95 (N. Y.). And see Union Ins. Co. v. Chipp, 93 lU. 96. Agents. 465 - RULE 34. Custom and Course of Business as Evidence of Authority. The custom or usual course of business of an agent acquiesced in or ratified by the insurance company becomes evidence of authority in such agent binding the company;^ but evidence of custom of other com- panies is not admissible.^ 1. Illinois Ins. Co. v. Stanton, 57 111. 354; Farmers' Ins. Co. V. Taylor, 73 Pa. St. 342 ; Day v. Mechanics & Traders' Ins. Co., 88 Mo. 335 ; Zell v. Herman Farmers' Ins. Co., 75 Wis. 531, 44 N. W. Eep. 838. And see Fayles v. National Ins. Co., 49 Mo. 380; McCabe v. Dutchess County Ins. Co., 14 Hun, 599 (N. Y.); Phoenix Ins. Co. v: Munger, Kans. , 30 Pac. Eep. 130, 31 Ins. L. J. 683. 2. Bradford v. Homestead Ins. Co., 54 Iowa, 598, 10 Ins. L. J. 141. RULE 35. Conversations with. Persons in Office of Company. Conversations with persons in the office of an in- surance company, when acted upon by the company, may be competent evidence, although the insured can- not say positively ihat they were officers or agents. Brock V. Des Moines Ins. Co., 106 Iowa, 30, 75 F. W. Eep. 683, 37 Ins. L. J. 893. rule' 36. I. American Central Ins. Co., 197 Pa. St. 254, 47 Atl. Eep. 232; Smith & Wallace Co. v. Prussian Nat. Ins. Co., 68 N. J. L. 674, 54 Atl. Eep. 458; Zimmerman v. Dwelling-IIouse Ins. Co., 110 Mich. 399, 68 N. W. Eep. 215, 26 Ins. L. J. 77; Wild- berger v. Hartford Ins. Co., 72 Miss. 338, 17 So. Rep. 282, 28 L. E. A. 320; British American Assur. Co. v. Cooper, 6 Colo. App. 25, 40 Pac. Eep. 147, 25 Ins. L. J. 437 ; Manchester Assur. Co. V. Insurance Co., 91 111. App. 609; Hartford Ins. Co. v. Mc- Kenzie, 70 111. App. 615; People's Ins. Co. v. Paddon, 8 Bradw. 447 (111.); Glens F^lls Ins. Co. v. Hopkins, 16 Bradw. 220, 14 Ins. L. J. 317(Ill.);Eickey v. German Mut. Ins. Co., 79 Mo. App. 485 ; Fiske v. Eoyal Exchange Assur. Co., 100 Mo. App. 545, 75 S. W. Rep. 382 ; London & Lancashire Ins. Co. v. Turnbull, 86 Ky. 230, 5 S. W. Rep. 542 ; Northrup v. Germania Ins. Co., 48 Wis. 420; Georgia Home Ins. Co. v. City of Smithville, 49 S. W. Eep. 412 (Tex. Civ. App.) ; Hanover Ins. Co. v. Shrader, 31 S. W. Rep. 1100 (Tex. Civ. App.) ; White v. Lancashire Ins. Co., 27 Grant Ch. 61 (Can.). 2. Pratt V. Dwelling-House Ins. Co., 130 N. Y. 206, 29 N. E. Rep. 117, 21 Ins. L. J. 146. RULE 93. ■When Agent Acts in Double Capacity. An insurance agent does not act in a dual or double capacity when he is authorized by the insured to ob- tain or place excess insurance in other offices or com- panies ;^ but he does act in double capacity, if he is the Agents. 505 general agent of the insured in respect to the insured property, with general charge and supervision thereof, and charged with the duty to have and keep same in- sured, and to deal fully with respect to the insurance thereon and attempts to issue policies thereon as agent of companies represented by himself.^ 1. Marsh Oil Co. v. ^tna Ins. Co., 79 Mo. App. 31. 2. British Amer. Ins. Co. v. Cooper, 6 Colo. App. 25, 40 Pac. Eep. 147, 25 Ins. L. J. 437. And see Eule 92. RULE 94, Agent Stockholder, Director, and Officer of Another Corporation. An insurance agent cannot bind his company with- out authority or ratification by it, by issuing a policy upon property of a corporation in which he is a stock- holder, director, and an officer ;^ but the fact that com- pany 's agent was also the agent and small stockholder and one of the managing officers of the assured, his appointment by the insurance company having been made with full knowledge of the facts, and there being no fraud or concealment, is not sufficient to relieve the insurance company from being bound by the acts and knowledge of such agent.^ 1. Greenwood Ice Co. v. Georgia Home Ins. Co., 72 Miss. 46, 17 So. Eep. 83. And see New York Central Ins. Co. v. National Protection Ins. Co., 14 N. Y. 85. 2. Bank of Glasco v. Springfield P. & M. Ins. Co., 5 Kans. App. 388, 49 Pac. Eep. 329. RULE 95. Agent also Cashier of a Bank. When the agent of the insurance company who issues the policy is also the cashier of a bank which 506 FiKE Insueance. owns the property insured, his dual capacity prevents his sustaining the relation of agent as to the insurance company, and it is not liable, even although notice is not communicated to the assured until after the fire. Eoekford Ins. Co. ■;;. Winfield, 57 Kans. 576, 47 Pac. Eep. 511, 26 Ins. L. J. 785. RULE 96. Ag'ent Director of School District The fact that the agent of the insurance company who makes the contract of insurance covering public school property is at the same time one of the di- rectors of the school district does not disqualify him from binding the insurance company by such contract. German Ins. Co. v. Independent School District, 80 Fed. Eep. 366, 49 U. S. App. 371, 25 C. C. A. 492. RULE 97. Agents and Brokers Subject to Bight of a 'State Legislature to Regulate the Business of Foreign Insurance Companies. A State legislature has the right to subject an agent or a broker to a license or penalty for obtaining in- surance in companies not authorized to do business within the State, even though the property or subject- matter of the insurance is not situated within the State. The right of the legislature to regulate the transaction of business by foreign corporations or to forbid it altogether is beyond question;^ and such power may be delegated to a city.^ 1. Commonwealth v. Eoswell, 173 Mass. 119, 53 N. E. Eep. 132, citing Hooper v. California, 155 U. S. 648, 652; Paul v. Virginia, 8 Wall. 168 (TJ. S.), and distinguishing Allgeyer v. Louisiana, 165 U. S. 578. And see Orient Ins. Co. v. Daggs, Agents. 507 172 U. S. 557, aff'g 136 Mo. 383, 38 S. W. Eep. 85, 25 Ins. L. J. 67, 35 L. E. A. 227; Liverpool, L. & G. Ins. Co. v. Massachusetts, 10 Wall. 566 (U. S.) ; Commonwealth v. Nut- ting, 175 Mass. 154, 55 N. E. Eep. 895 ; Pierce v. People, 106 111. 11; StaJihilber v. Mutual Ins. Co., 76 Wis. 285, 45 N. W. Eep. 221; Fire Department v. Halfenstein, 16 Wis. 136; State V. Farmer, 49 Wis. 459; Farmers' Ins. Co. v. Harrah, 47 Ind. 236; Phcenix Ins. Co. v. Burdett, 112 Ind. 204; Commonwealth V. Gaither, 107 Ky. 572, 54 S. W. Eep. 956; Hickman v. State, 62 N. J. L. 499, 41 Atl. Eep. 942, afE'd on opinion below, 44 Atl. Eep. 1099 ; Ehnnan v. Teutonia Ins. Co., 1 Fed. Eep. 471 ; Depuy V. Delaware Ins. Co., 63 Fed. Eep. 680, 24 Ins. L. J. 161; People v. Gray, 107 Mich. 422, 65 N. W. Eep. 292, 25 Ins. L. J. 141, 30 L. E. A. 464 ; Hartford Ins. Co. v. Eaymond, 70 Mich. 485 ; Indiana Millers' Ins. Co. v. People, 65 111. App. 355; Insurance Co. N. A. v. Commonwealth, 87 Pa. St. 173; State V. Stone, 118 Mo. 388, 24 S. W. Eep. 164, 23 Ins. L. J. 193. When a broker is deemed an agent or broker within the meaning of the Massachusetts statute prohibiting him from acting as such unless licensed, etc., and preventing his recovery for commission, see Pratt v. Burdon, 168 Mass. 596, 47 N. E. Eep. 419. 2. Hartford Ins. Co. v. Peoria, 156 111. 420, 40 N. E. Eep. 967. RULP 98. Business of Insurance is not Commerce — Power of State. The business of insurance is not commerce. A State has the power to exclude foreign insurance companies altogether from its territory; and it has the further right to prohibit its citizens from contracting within its jurisdiction with any foreign company which has not complied with the conditions imposed, either in their own behalf or through an agent. If such insur- ance is obtained for the resident by a broker who is himself a resident, this is "procuring" insurance within the State. The Fourteenth Amendment to the United States Constitution does not guarantee the citizen the right to make within his State, either di- 508 FiEB Insurance. rectly or indirectly, a contract the making whereof is constitutionally forbidden by the State. Hooper v. California, 155 U. S. 648, 24 Ins. L. J. 678. And see cases cited under Eule 97. RULE 99. Power of State over its Citizens. When the insurance contract is made outside and beyond the limits of the jurisdiction of the State, being made and to be performed within another State, the State cannot constitutionally prohibit a citizen from making such a contract. Allgeyer v. Louisiana, 165 U. S. 578, rev'g 48 La. Ann. 104, 18 So. Eep. 904, and distinguishing but approving Hooper v. California, 155 U. S. 648. And see Pierce v. People, 106 111. 11, 19; Commonwealth v. Nutting, 175 Mass. 154, 55 N. E. Eep. 895; French v. People, 6 Colo. App. 311, 40 Pac. Eep. 463, 24 Ins. L. J. 678; Lamb v. Bowser, 7 Biss. 315 (U. S. Cir.) ; Marine Ins. Co. v. St. Louis, I. M. & S. E. Co., 41 Fed. Eep. 643. An insurance company of one State may make a valid contract of insurance with one of its citizens upon property situated in another State where it has no authority to do business. Scamans v. Knapp, S. & Co., 89 Wis. 171, 61 N". W. Eep. 757. A State statute declaring all contracts void made by a foreign corporation with citizens of such State, unless it has first com- plied with its laws, does not afEect contracts affecting property within the State, between foreign corporations and persons who are not citizens of the State. St. Louis, Ark. & Tex. E. Co. v. Fire Assoc, 60 Ark. 325, 30 S. W. Eep. 350, 28 L. E. A. 83. A statute requiring conditions in a policy to be printed in type as large or larger than that known as long primer, or to be written with pen and ink in or on the policy, and providing that if not complied with, failure to perform such conditions shall not be a valid defense in an action on the policy, is not unconstitutional. Agents. 509 Dupuy V. Delaware Ins. Co., 63 Ped. Rep. 680, 24 Ins. L. J. 161. A State statute requiring an insurance company to make cer- tain prescribed returns and reports is a valid exercise of the police power of the State, and hence is not unconstitutional. Eagle Ins. Co. v. Ohio, 153 U. S. 446, 14 Sup. Ct. Eep. 868. The collection of a tax upon gross receipts of a fire insurance company for maintenance and use of a local fire department cannot be enjoined. Kunz V. National Fire Ins. Co., 169 111. 577, 48 JST. E. Eep. 683. Nor can the superintendent of an insurance department be enjoined from making effective the provisions of a statute pre- scribing the adoption of a standard form. Businessmen's League v. Waddill, 143 Mo. 495, 45 S. W. Eep. 262, 40 L. E. A. 501. A company having elected to do business in another State, under the terms of a statiite governing its admission, must be held to have assented to be governed by the laws of that State, and to have its contracts construed as would be a like contract by a home company. Commercial Union' Assur. Co. v. Meyer, 9 Tex. Civ. App. 7, 20 S. \Y. Eep. 93. RULE 100. Liability of Agent or Broker to Penalty. If the property is situated within the State, the lia- bility of an agent or a broker to the penalty imposed cannot be escaped by obtaining the policy in another State upon an application by mail. Indiana Mutual Ins. Co. v. People, 65 111. App. 355. RULE loi. Construction of Statute Defining Status of Agents. A State statute limiting and defining the status of agents and including as such all who in any manner aid in transacting the insurance business of any in- surance company, not incorporated by the laws of the State, makes an insurance company responsible not 510 FiKE Insukance. only for the acts of its acknowledged agents, but also for the acts of all persons who aid ia the transaction of its business. The mere assumption of authority is not sufficient of itself to 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 lq its insurance business;* the statute does not operate to increase an agent's authority or make a principal liable upon his own representations or admissions as to authority.* 1. Pollock V. German Ins. Co., 127 Mich. 460, 86 N. W. Rep. 1017. 2. Barry & Finan Lnmber Co. v. Citizens' Ins. Co., Mich. , 98 N. W. Eep. 761. RULE 102. Statute Does not Change Bule of Law as to Principal and Agent. A statute regulating foreign insurance companies and defining the word ' ' agents ' ' and specifying those included in the terms, relates to the matter of agency as between foreign companies and the State authori- ties, and does not change the rules of law as to prin- cipal and agent as between the company and a policy- holder. United Firemen's Ins. Co. v. Thomas, 92 Fed. Eep. 127, 34 CCA. 240, 28 Ins. L. J. 500, aff'g, on rehearing, 82 Fed. Rep. 406, 27 C C A. 42. RULE 103. £ffect of Statute Prescribing Status of a Soliciting Agent. A statute prescribing the status of a soliciting agent as the agent of the company does not prevent an agent who procures a policy for the assured from Agents. 511 acting as a broker or as the assured 's agent. It is only when the two relations conflict that the statute prevails. Hence an agreement by such a broker when procuring insurance from other agents of insurance companies that his principal or assured will not take or accept additional insurance in same companies from other agents is binding upon the assured, even though he has no knowledge of such agreement until after a loss ; if he then insists upon taking benefit of policies obtained in violation of such agreement it operates as a ratification of the agreement, whether originally au- thorized or not. Such an agreement is not waived by the company's ineffectual attempt to cancel the poli- cies obtained by the broker. John R. Davis Lumber Co. v. Hartford Ins. Co., 95 Wis. 226, 70 N. W. Eep. 84, 37 L. E. A. 131. And see Wisconsin Central Ey. Co. v. Phoenix Ins. Co., Wis. , 101 N. W. Rep. 703. RULE 104. Statute Fixing Status of Soliciting Agent Not Extended by- Construction. A statute which undertakes to be specific in fixing the status of a soliciting agent and specific as to his authority will not be extended by construction so as to confer power on him to waive in behalf of the insur- ance company a breach of warranty by his mere knowledge when the policy issues. Hartford Ins. Co. v. Walker, 94 Tex. 473, 61 S. W. Rep. 711, rev'g 60 S. W. Eep. 820. And see Bourgeois v. Mutual Ins. Co., 86 Wis. 402, 57 N. W. Eep. 38, 23 Ins. L. J. 299. When the authority to solicit the insurance and to make out and forward written applications is derived from the com- 512 FiEE Insueance. pany itself, the rules of agency and its scope would seem to apply, independent of any statute. See Rules 7, et seq., 33; German Ins. Co. v. Everett, 18 Tex. Civ. App. 614, 46 S. W. Eep. 95. RULE 105. Status of Soliciting Agent Tinder Statute — Question of Fact. The status of a soliciting agent as an agent of the insurance company as determined by a statute may be a question of fact proper to be submitted to a jury;^ the statute creates a presumption subject to rebuttal.^ 1. Norris v. Hartford Ins. Co., 57 S. C. 358, 35 S. E. Eep. 572. 2. Madden & Co. v. Phenix Assur. Co., S. C. , 49 S. E. Eep. 855. The statutes of the different States defining and governing the legal status of agents will be found in this volume in the chapter containing statutory provisions. See preliminary note to that chapter. In addition the cases cited might be examined, as to status of agents under the Iowa statute: Liquid Carbonic Acid Mfg. Co. v. Phoenix Ins. Co., Iowa, , 101 N. W. Eep. 749 ; Hartman v. Hollowell, Iowa, , 102 N". W. Eep. 524; St. Paul F. & M. Ins. Co. v. Shaver, 76 Iowa, 282. Under the Maine statute. Day v. Dwelling-House Ins. Co., 81 Me. 244. A broker who procured the policy is not the agent of the in- ■ surance company under the Maine statute to receive notice of a sale or transfer and consent to same. Eichmond v. Phoenix Assur. Co., 88 Me. 105, 33 Atl. Eep. 786, 25 Ins. L. J. 354. A clause in an insurance policy making the broker or other person than the assured who procured it, the agent of the assured and not of the company, is valid under Massachusetts law. Davis V. Mtaz. Mut. Ins. Co., 67 N. H. 335, 39 Atl. Eep. 902, 27 Ins. L. J. 549. When a citizen of North Carolina applies for a policy in a foreign corporation, through a broker in that State, and the application is accepted and the policy is delivered, such broker, in an action in North Carolina under the statute, will be deemed the agent of the company. Agents. 513 Commonwealth Ins. Co. v. Edwards, 134 N. C. 116, 33 S. E. Eep. 404. And BO a broker may " aid " in the transaction of the busi- ness of an insurance company, as to come within the operative force of the Wisconsin statute fixing his status as agent. Welch V. Fire Assoc, 130 Wis. 456, 98 N". W. Eep. 337; Schemer v. Helda Ins. Co., 50 Wis. 575, 10 Ins. L. J. 306; Alkan v. New Hampshire Ins. Co., 53 Wis. 136, 11 Ins. L. J. 136; St. Clara Female Academy v. Northwestern Nat. Ins. Co., 98 Wis. 357, 73 N. W. Eep. 767. And see Wisconsin Central Ey. Co. V. Phoenix Ins. Co., Wis. , 101 N. W. Eep. 703; Stanhilber v. Mutual Ins. Co., Wis. , 45 N. W. Eep. 331; Stehlick v. Milwaukee -Mechanics' Ins. Co., 87 Wis. 333, 58 N. W. Eep. 379, 33 Ins. L. J. 547 ; Bourgeois v. Mutual Ins. Co., 86 Wis. 403, 57 N. W. Eep. 38, 33 Ins. L. J. 299; Fred Miller Brewing Co. v. Council Bluffs Ins. Co., 95"Iowa, 31, 63 N. W. Eep. 565, 35 Ins. L. J. 17. RULE io6. Company Cannot Plead its Own Violation of Law. A foreign company which issues a policy in a State through its agent who has not complied with statutory provisions cannot successfully plead its own violation of the law as an excuse for refusing to fulfill its contract. Marshall v. Beading Ins. Co., 78 Hun, 83, 39 N. Y. Supp. 334, aff'd, 149 N. Y. 617, without opinion; Swan v. Watertown Ins. Co., 96 Pa. St. 37 ; Hoge v. Dwelling-House Ins. Co., 138 Pa. St. 66, 30 Atl. Eep. 939 ; Clay Ins. Co. v. Huron Mfg. Co., 31 Mich. 346; Ganser v. Firemen's Fund Ins. Co., 34 Minn. 373, 15 Ins. L. J. 555; Pennypacker v. Capital Ins. Co., 80 Iowa, 56, 45 N. W. Eep. 408, 8 L. E. A. 336. And see Water- town Ins. Co. V. Eust, 141 111. 85, 30 N. E. Eep. 773, aff'g 40 111. App. 119; Columbia Ins. Co. v. Kinyon, 8 Vroom, 33 (N. J.). But see and compare Franklin Ins. Co. v. Louisville Packet Co., 9 Bush, 590 (Ky.) ; Eising Sun Ins. Co. ■;;. Slaughter, 20 Ind. 530; Haverhill Ins. Co. v. Prescott, 42 N. H. 547; Lycoming Ins. Co. v. Wright, 55 Vt. 536. While a State legislature has a perfect right to regulate in- surance companies and business within the State, it cannot Vol. 2 — 33 514 FiEB Insxjkance. legally or constitutionally prevent a citizen of the State from obtaining through a broker or agent a valid contract of insur- ance on his property in the State by an insurance company in another State where the contract is made and to be performed, even though such company is not authorized to do business within the State; and the insurance company may maintain an action in the State to recover the premium. Western Mass, Ins. Co. v. Hilton, 43 App. Div. 52, 58 N. Y. Supp. 996, citing Allgeyer v. Louisiana, 165 IT. S. 578. And see Columbus Ins. Co. v. Walsh, 18 Mo. 229. Such a contract of insurance, while it may be valid and en- forceable in the State where made, may not be enforced in the State where the insured resides and the property is located. Swing V. Munson, 191 Pa. St. 582, 43 Atl. Eep. 342. A note made for uncollected premiums by insurance agents of a foreign insurance company which has not complied with a State statute is void. New Hampshire Ins. Co. v. Kennedy, 96 Tenn. 711, 36 S. W. Eep. 709. A policy or contract of a foreign insurance company, which has not complied with the laws prescribed by the State, is void ; and a note given for the premium in consideration of same cannot be enforced in an action in such State, as it is without consideration. Swing V. Clarksville Cider Co., 77 Mo. App. 391. And see Ee Mutual Guaranty Fire Ins. Co., 107 Iowa, 143, 77 N. W. Eep. 868, 28 Ins. L. J. 205. An insurance company which has not complied with statutory requirements of the State of Minnesota and authorized to do business in that State cannot recover premiums on policies in- suring property in that State, whether the policies were made within or without the State ; it makes no difference whether the company is a foreign corporation or a foreign unincorporated association. Seamans v. Christian Brothers' Mill Co., 66 Minn. 205, 68 N. W. Eep. 1065. The policy of a foreign insurance company is not rendered void by reason of noncompliance with a statute prescribing the conditions upon which it may legally transact business within the State. State Mut. Ins. Co. v. Brinkley Stave Co., 31 S. W. Eep. 157, 29 L. E. A. 712 (Ark.). The failure of an insurance company to comply with a statute requiring every foreign insurance company to have one head oflBce in the State under the charge of a general agent does not Renewal. 515 prevent it from enforcing a mortgage taken as security for a payment of a balance due from a former agent. Continental Ins. Co. v. Kiggen, 31 Oreg. 336, 48 Pac. Eep. 476, 36 Ins. L. L. 590. In an action brought by a receiver of a Massachusetts insur- ance company not authorized to do business in Maryland, under the statute of that State, to recover assessments on a policy which had been issued to the defendant, it appeared that the assured had made application to an insurance broker in Baltimore, who wrote to another insurance broker in New York, who in turn made application to the insurance company which issued the policy. The policy was signed in Boston, mailed by the com- pany to the New York broker, and by him sent to the broker in Baltimore, who delivered the same to the defendant and col- lected the premium, and after deducting his commission re- mitted the balance to the New York broker, by whom it was paid to the insurance company in Massachusetts. Held, that the contract of insurance was made in Maryland and not in Massa- chusetts, for the reason that it was not completed until the policy was delivered and premium collected by the broker in Baltimore who acted as the agent of the insurance company for such purposes, and that as the contract was made contrary to the statute that the plaintiff could not recover. Stevens v. Basin Fertilizer Co., 87 Md. 679, 41 Atl. Eep. 116. TITLE lU. Renewal. EuLE 1. As imposed by contract. 3. Construction of contract of renewal. 3. Increase of risk not made knovm. 4. When notice required of increase of risk — Form. 5. Application of renewal to descriptive clauses. 6. Payment of premium. 7. Authority of company's agent to renew. 8. Limitation of authority from insured to renew. 9. New policy issued instead of renewal — Reformation. 10. Eenewal as affecting partnership interests. 11. Oral or parol contract of renewal — Evidence — Au- thority n-f agent — Presumption as to terms. 12. Not established by mere negotiation — Minds must meet. 13. Burden of proof — Question of fact. 14. Property destroyed at time of renewal. 516 FiEE Insurance. Edle 15. Waiver or estoppel in renewal. 16. Waiver or estoppel continues through renewals — No- tice of increase of risk. 17. Terms of contract not changed by evidence. 18. Estoppel by representation of renewal. RULE I. As Imposed by Contract. This policy may, by a renewal, be continued under the original stipulations, in consideration of the premium for the renewed term, provided that any in- crease of hazard must be made known to this company at the time of renewal or this policy shall be void. This rule is imposed by above terms in the standard form of policy prescribed in : New York, North Carolina, Connecticut, North Dakota, Louisiana, * Pennsylvania, Michigan, Ehode Island, Missouri, Wisconsin. New Jersey, The standard form of policy prescribed in: Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain any such provision. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in gen- eral use. Some of the old forms required notice of " any change in the risk " upon renewal, and it was held that there was no change of risk, unless the risk was increased by the change. Parker v. Arctic Ins. Co., 59 N. Y. 1 ; Brueck v. Phoenix Ins. Co., 21 Hun, 542 (N. Y.). And that the clause had no application to a change in the parties. Lancey v. Phoenix Ins. Co., 56 Me. 562. And see Firemen's Ins. Co. V. Floss, 67 Md. 403, 10 Atl. Eep. 139. * See note to " Concealment," Eule 1, page 2. Renewal. 517 RULE 2. Construction of Contract of Renewal. A renewal is not tlie effecting of new or other in- surance, but is merely a specific contract for the con- tinuance of existing insurance upon same terms and conditions ;^ yet it is a new contract, and is subject to local laws in force at the time of the renewal;^ and may be issued to and enforced by an assignee of the policy,^ or an executor of a deceased insured,* and will cover their respective interests. There is no legal ob- jection to a renewal being issued to one of several parties originally insured.^ If a new policy is issued it is not considered as a renewal.*' 1. Pitney v. Glens Falls Ins. Co., 65 N. Y. 6; Hay v. Star Ins. Co., 77 N. Y. 235; Aurora Ins. Co. v. Kranich, 36 Mich. 389; Sheppard v. Peabody Ins. Co., 21 W. Va. 368, 12 Ins. L. J. 817; New England F. & M. Ins. Co. v. Wetmore, 33 111. 321; Hartford Ins. Co. v. Walsh, 54 111. 164; Shearman v. Niagara Ins. Co., 46 N. Y. 526. And see Howard v. Lancashire Ins. Co., 11 Duval, 93 (Can. Sup.) ; Baltimore Ins. Co. v. McGown, 16 Md. 47; Planters' Ins. Co. v. Eay, 53 Miss. 335. 2. Brady v. Northwestern Ins. Co., 11 Mich. 425. 3. Peoria Ins. Co. v. Hervey, 34 111. 46. And see New England Ins. Co. v. Wetmore, 32 111. 221; Wyman v. Imperial Ins. Co., 16 Duval, 715 (Can. Sup.). 4. Phelps V. Gebhard Ins. Co., 9 Bosw. 404 (N. Y.). 5. Lockwood v. Middlesex Ins. Co., 47 Conn. 553. 6. Marthinson v. North British & M. Ins. Co., 64 Mich. 372 ; Healey v. Imperial Ins. Co., 5 Nev. 368. RULE 3. Increase of Risk not Made Known. An increase of risk not made known to the insurance company at the time of renewal renders it void. Daniels v. Equitable Ins. Co., 48 Conn. 105, 10 Ins. L. J. 417; Peoria Sugar Eefinery Co. v. People's Ins. Co., 15 Ins. L. J. 52 (U. S. Cir.). And see 52 Conn. 581; Cole v. Germania Ins. Co., 99 N. Y. 36. 518 FiEE Insueancb. RULE 4. When Notice Required of Increase of Bisk — rorm. When notice is required on renewal of an increase of risk, and there is no express stipulation requiring it to be given in writing, it is sufficient to orally com- municate the fact to the insurance company. Liddle v. Market Ins. Co., 29 N. Y. 184. RULE 5. Application of Renewal to Descriptive Clauses. • Descriptive clauses in the original policy apply to the insured premises at the time of the assumption by the insurance company of the last contract of re- newal;^ and if the representations in the original ap- plication are then true, and there is no cause of for- feiture then existing, a renewal operates to- continue the insurance notwithstanding prior causes of for- feiture.^ A policy is to be treated as written on day of its renewal.^ 1. Garrison v. Farmers' Ins. Co., 56 N". J. L. 235, 28 Atl. Eep. 8. 2. Titus V. Glens Falls Ins. Co., 81 N. Y. 410. 3. Foyes v. Hartford Ins. Co., 54 N. Y. 668, 3 Ins. L. J. 44. And see Chapman v. Gore District Ins. Co., 26 Up. Can. C. P. 89. RULE 6. Payment of Premium. The consideration, or premium, for renewal of a policy may be paid by a party to whom the loss is made payable. Mechler v. Phoenix Ins. Co., 38 Wis. 665. Renewal,. 519 RULE 7. Authority of Company's Agent to Kenew. The authority of an agent to renew a policy cannot be questioned when the company has furnished such agent with blank policies and renewal receipts, signed by its officers, to be filled up by such agent when issued, and the renewal receipt in question, when so furnished the agent, contained a clause that it was not valid unless countersigned by him ;^ and so when the acts of an agent in making renewals have been several times ratified by the company, it becomes evidence of au- thority;^ and when the agent has authority to renew, limitations on such authority as to manner of renewal, not known to the insured, do not prevent the agent" from renewing the insurance contrary to such limi- tations.^ 1. Carroll v. Charter Oak Ins. Co., 40 Barb. 393, aflE'd, 1 Abb. Ct. App. Dec. 316. 2. Franklin Ins. Co. v. Massey, 33 Pa. St. 331. 3. Western Home Ins. Co. v. Hogue, 41 Kana. 534, 31 Pac. Eep. 641. And see this volume, title, "Agents." RUI.E 8. Limitation of Authority from Insured to Renew. Consent or authority from the insured to a local agent to renew a certain policy does not make such local agent his agent to apply for other insurance to agents for another company in another State. South Bend Toy Mfg. Co. v. Dakota Ins. Co., 2 S. D. 17, 48 N. W. Eep. 310, 20 Ins. L. J. 871, aff'd on rehearing, 53 N. W. Eep. 866. 520 FiEE Instjeance. RULE 9. New Policy Issued Instead of Renewal — Reformation. When the insurance company agrees to renew an in- surance upon the same terms as the policy previously issued, and instead of a renewal receipt issues a new policy containing clauses or conditions (such as a co- insurance clause) not in the old policy, the insured is entitled to have the new policy reformed on the ground of mistake by striking out such clause or clauses; in the promise of renewal there is sufficient legal justi- fication for the insured's omission to examine the new policy. Palmer v. Hartford Ins. Co., 54 Conn. 488, 9 Atl. Eep. 248, 16 Ins. L. J. 341 ; Burson v. Philadelphia Fire Assoc., 136 Pa. St. 267, 20 Atl. Eep. 401, 20 Ins. L. J. 144. And see this volume, " Eef ormation." RULE 10. Renewal as Affecting Partnership Interests. A renewal receipt issued to and in the name of a partnership by its firm name covers the interest of such firm as constituted at time of the renewal, and notice to the insurance company of a change in such firm is not essential. Firemen's Ins. Co. v. Floss, 67 Md. 403, 10 Atl. Eep. 139, 16 Ins. L. J. 831. RULE II. Oral or Parol Contract of Renewal — Evidence — Authority of Agent — Presumption as to Terms. An oral contract of renewal of insurance is binding, without payment of the premium, where credit is given, or it appears from the circumstances and situa- Renewal. 521 tion of the parties that the payment of the premmm was not exacted at the time ;^ such a contract must be established by a clear preponderance of evidence,^ and cannot be made by an agent without actual or ostensible authority to make it f if nothing said about premium, the presumption is that previous rate is to be paid ;* if nothing said about time, the law presumes that the renewal is for one year f but when expressed it cannot be enlarged or extended by construction.* An agreement to renew implies that the terms of an existing policy are to be continued.'' 1. King V. Cox, 63 Ark. 204, 37 S. W. Eep. 877 ; Squier v. Hanover Ins. Co., 162 N. Y. 552, 57 N. E. Eep. 93, aff'g 18 App. Div. 575, 46 K. Y. Supp. 30; Abel v. Phoenix Ins. Co., 47 App. Div. 81, 62 N. Y. Supp. 218 ; Springer v. Anglo-Nevada Ins. Co., 58 Hun, 601, 11 N. Y. Supp. 533 ; Baldwin v. PhcEnix Ins. Co., 107 Ky. 356, 54 S. W. Rep. 13; Mallette v. British America Ins. Co., 91 Md. 471, 46 Atl. Eep. 1005; King v. Hekla Ins. Co., 58 Wis. 508. And see Mechanics & Traders' Ins. Co. V. Mutual Eeal Estate Assoc, 98 Ga. 262, 25 S. E. Eep. 457; Post V. Mtna. Ins. Co., 43 Barb. 351 (N. Y.) ; Zigler v. Phoenix Ins. Co., 82 Iowa, 569, 48 N. W. Eep. 987. 2. Abel V. Phcenix Ins. Co., supra; King v. Hekla Ins. Co., supra; Johnson v. Connecticut Ins. Co., 84 Ky. 470. 3. Stewart v. Helvetia- Swiss Ins. Co., 102 Cal. 218, 36 Pac. Eep. 410, 24 Ins. L. J. 475. 4. Post V. Mtaa Ins. Co., 43 Barb. 351 (N. Y.). 5. Scott V. Home Ins. Co., 53 Wis. 238, 11 Ins. L. J. 177. 6. Fuchs V. Germantown Ins. Co., 60 Wis. 286, 13 Ins. L. J. 469. 7. Hay v. Star Ins. Co., 77 N. Y. 235. But see, under the Georgia statute which requires insurance contracts to be evi- denced by writing, Eoberts v. Germania Ins. Co., 71 Ga. 478; Crogham v. Underwriters' Agency, 53 Ga. 109. 522 FiEE Insueance. RULE 12. Not Established by Mere Negotiation — Itlinds Must Meet. A parol contract of renewal cannot be established by mere negotiation; tbe minds of the parties must meet upon terms well understood,* without anything being left for future determination.^ Silence of the company or its agent when renewal is requested can- not be construed as an assent.^ 1. King V. Hekla Ins. Co., 58 Wis. 508, 13 Ins. L. J. 146; Eoyal Ins. Co. v. Beatty, 119 Pa. St. 6, 12 Atl. Eep. 607. And see Zigler v. Phoenix Ins. Co., 82 Iowa, 569, 48 JST. W. Eep. 987; Continental Ins. Co. v. Jenkins, 5 Ins. L. J. 514 (Ky.). 2. Johnson v. Connecticut Ins. Co., 84 Ky. 470, 16 Ins. L. J. 369; O'Eeilly v. London Assnr. Co., 101 N. Y. 575, 15 Ins. L. J. S30. 3. Eoyal Ins. Co. v. Beatty, supra. RULE 13. Burden of Proof — Question of Tact. The burden of proof to establish a renewal rests upon the insured, and when there is a conflict in the evidence as to a parol contract of renewal the ques- tion is properly submitted to and determined by a jury. Giddings v. Phoenix Ins. Co., 90 Mo. 372, 16 Ins. L. J. 510 ; King V. Hekla Ins. Co., 58 Wis. 508. RULE 14. Property Destroyed at Time of Renewal. If the property is destroyed after expiration of the original policy, and the fact is not communicated to the insurance company at the time of a subsequent Renewal. 523 agreement to renew, such agreement will not be enforced. Dodd V. Home Ins. Co., 22 Oreg. 13, 28 Pac. Eep. 3, 21 Ins. L. J. 359; rehearing denied, 28 Pac. Eep. 881, 21 Ins. L. J. 352. RULE 15. Waiver or Estoppel in. Renewal. Eenewal of a policy by the company or its agent with knowledge of existing facts, which by its terms or conditions would render it void, operates as a waiver or estoppel preventing the company from claiming a forfeiture by reason of such facts. Carey v. Home Ins. Co., 97 Iowa, 619, 66 N". W. Eep. 920; Virginia P. & M. Ins. Co. v. Eichmond Mica Co., 102 Va. 429, 46 S. B. Eep. 463 ; King v. Cox, 63 Ark. 204, 37 S. W. Eep. ■877 ; Mechler v. Phoenix Ins. Co., 38 Wis. 665 ; Miner v. Phoenix Ins. Co., 27 Wis. 693; Shafer v. Phoenix Ins. Co., 53 Wis. 361; Whited V. Germania Ins. Co., 76 N. Y. 415 ; Liddle v. Market Ins. Co., 4 Bosw. 179, afE'd, 29 IST. Y. 184; Carroll v. Charter Oak Ins. Co., 38 Barb. 402, 40 Barb. 292, 1 Abb. Ct. App. Dec. 316 ; Ludwig v. Jersey City Ins. Co., 48 K Y. 379 ; Eobinson V. Pacific Ins. Co., 18 Hun, 395; Witherell v. Maine Ins. Co., 49 Me. 200; State Ins. Co. v. Todd, 83 Pa. St. 272; Law v. Hand-in Hand Ins. Co., 29 Up. Can. C. P. 1; Story v. Hope Ins. Co., 37 La. Ann. 254. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eules 16 and 17. RULE 16. "Waiver or Estoppel Continues Through Renewals — Notice of Increase of Bisk. A waiver, estoppel, or permission, operative at the time the policy is originally issued, continues through subsequent renewals; and so notice of an increase of jisk before renewal of an original policy runs through 524 Fire Insurance. all subsequent insurances, even though a new policy is afterward substituted.^ 1. Kruger v. Western Ins. Co., 72 Cal. 91, 13 Pac. Kep. 156; Vanderhoef v. Agricultural Ins. Co., 46 Hun, 338. And see Carrugi v. Atlantic Ins. Co., 40 6a. 135. 2. People's Ins. Co. ■;;. Spencer, 53 Pa. St. 353. RULE 17. Terms of Contract not Changed by Evidence. The terms of the insurance contract or policy cannot be changed on contradictory evidence as to a parol understanding or agreement. Shopp V. Patrons Ins. Co., 197 Pa. St. 219, 47 Atl. Eep. 201. RULE 18. Estoppel by Representation of Benewal. When the agents of an insurance company, who are duly authorized to solicit and make contracts of in- surance, deliberately represent to the assured that a given policy issued by the company has been renewed, and subsequently receive and appropriate money which they have good reason to believe is paid to cover the cost of such extended insurance, the company will be estopped to allege, after a loss has occurred, that the policy in question was not renewed. International Trust Co. v. Norwich Union Ins. Soc, 71 Fed. Eep. 81, 36 U. S. App. 277, 17 C. C. A. 608. Premium. 525 TITLE IV. Premium. BuLE 1. As imposed by contract. 2. Waiver of prepayment of the premium — Evidence — Question of fact. 3. Authority of agent to waive prepayment of premium — Authority to w^aive or collect may be conferred on soliciting agent or broker — Evidence. 4. Authority of agent as to mode or kind of payment. 5. Effect of personal assumption of debt for premium by agent. 6. Company may accept note of broker or credit him with payment — Authority — Evidence. 7. Effect of acknowledgment in policy when delivered through broker. 8. Broker agent of insured — Must be evidence of au- thority in him from company. 9. Liability of broker for unearned premium. 10. Advancement of premium by broker or agent — Eight of recovery — Evidence — Effect. 11. If policy in force by delivery and credit for premium, terminated only by cancellation. 12. Legal tender of pajnnent. 13. Payment of premium may be made condition prece- dent. 14. Policy may make payment of premium condition pre- cedent. 15. Effect of giving credit for premium. 16. Effect of option to take policy on payment of pre- mium. 17. Provision in policy modified by usual course of busi- ness. 18. Effect of acknowledgment in policy of receipt of pre- mium. 19. When insured agent to receive premium. 20. Payment as affected by an account. 21. When premium is returnable. 22. When officer or agent personally liable for return of premium. 23. Company bound by condition imposed on delivery of note for premium. 24. When insured not liable for earned premium on sur- render for cancellation. 526 Fire Iksubance. Rule 25. Effect of acceptance of premium after a loss. 26. In suit upon policy company entitled to credit for un- paid premium. RULE I. As Imposed by Contract. In consideration of the stipulations herein named and of dollars premium, does insure The above clause or provision is contained in the standard form of policy prescribed in : New York, North Carolina, Connecticut, North Dakota, Louisiana, * Pennsylvania, Michigan, Rhode Island, Missouri, Wisconsin. New Jersey, The standard form of policy prescribed in: Maine, South Dakota, Massachusetts, provides: " In consideration of dollars to it paid by the insured, hereinafter named, the receipt whereof is hereby ac- knowledged, does insure The standard form of policy prescribed in Minnesota pro- vides: " In consideration of dollars to be paid by the insured, hereinafter named, the receipt whereof is hereby ac- knowledged, does insure The standard form of policy prescribed in New Hampshire provides: " In consideration of dollars to them paid by the insured, hereinafter named, the receipt whereof is hereby ac- knowledged, do insure In the States where no standard form is prescribed, and other than those above named, the New York standard form is in gen- eral use. * See note to " Concealment," Rule 1, page 2. Premium. 527 RULE 2. Waiver of Prepayment of the Premium — Evidence — Question of Fact. An insurance company waives prepayment of the premium in cash by the delivery of the policy without such payment;^ whenever credit is given for the premium it operates as a waiver of prepayment;^ waiver may be inferred from any conduct inconsistent with an intent to insist upon, prepayment of the premium;* and this rule applies even if the policy provides that it is not binding until the premium is paid;* if there is any evidence from which it may be inferred that credit was given, the question of waiver must be submitted to a jury,^ and it may be inferred from previous action of the company in connection with another policy." 1. Commonwealth Ins. Co. v. Knabe Mfg. Co., 171 Mass. 265, 50 N. E. Eep. 516; Kollitz v. Equitable Ins. Co., 92 Minn. 234, 99 X. W. Eep. 892; Healy v. Insurance Co. N". A., 50 App. Div. 327, 63 X. Y. Supp. 1055; Germania Ins. Co. v. Miller. 110 111. App. 190; Gosch v. State Mutual Ins. Co., 44 111. Anp. 263. 2. Firemen's Fund Ins. Co. v. Pekor, 106 Ga. 1, 31 S. E. Eep. 779 ; Newark Machine Co. v. Kenton Ins. Co., 50 Ohio St. 549, 35 N. B. Eep. 1060, 23 Ins. L. J. 349 ; Church v. Lafayette Ins. Co., 66 N. Y. 222; La Societe Bienfaisance v. Morris, 24 La. Ann. 347; Latoix v. Germania Ins. Co., 27 La. Ann. 113. And see Lebanon Ins. Co. v. Hoover, 113 Pa. St. 591, 16 Ins. L. J. 679, 882; Baldwin v. Chouteau Ins. Co., 56 Mo. 151; Euggles V. American Central Ins. Co., 114 E". Y. 415. 3. Gaysville Mfg. Co. v. Phoenix Ins. Co., 67 N. H. 457, 36 Atl. Eep. 367; Estes v. Home Manufacturers' Ins. Co., 67 N. H. 462, 33 Atl. Eep. 515. And see Mallory v. Ohio Farmers' Ins. Co., 90 Mich. 112, 51 N. W. Eep. 188; Washoe Mfg. Co. ■;;. Hibernia Ins. Co., 66 N. Y. 613; Hallock v. Commercial Ins. Co., 2 Dutch. 268 (N. J.). 528 FiBE Insubance. 4. Bodine v. Exchange Ins. Co., 51 N. Y. 117; Boehen v. Williamsburg City Ins. Co., 35 N. Y. 131; Wood v. Pougli- keepsie Ins. Co., 32 N. Y. 619 ; Hodge v. Security Ins. Co., 33 Hun, 583 ; Sheldon v. Atlantic Ins. Co., 36 N. Y. 460 ; Goit v. National Protection Ins. Co., 25 Barb. 189 ; Baptist Church v. Brooklyn Ins. Co., 28 N. Y. 153 ; Pino v. Merchants' Ins. Co., 19 La. Ann. 214; Heaton v. Manhattan Ins. Co., 7 E. I. 503; North Alabama Home Protection Co. v. Avery, 85 Ala. 348; East Texas Ins. Co. v. Mims, l.Tex. Ct. App. Cit. Cas., § 1333; Equitable Ins. Co. v. McCrea, 8 Lea, 541 (Tenn.) ; Parnum V. Phoenix Ins. Co., 83 Cal. 246, 33 Pac. Eep. 869; Nebraska Ins. Co. V. Christiensen, 29 Nebr. 572, 45 N. W. Eep. 924; Brownfield v. Phoenix Ins. Co., 35 Mo. App. 54; Daft v. Drew, 40 111. App. 266 ; Mason v. Citizens' Ins. Co., 10 W. Va. 572. 5. Church v. Lafayette Ins. Co., 66 N. Y. 233; La Societe Bienfaisanee v. Morris, 34 La. Ann. 347; Latoix v. Germania Ins. Co., 27 La. Ann. 113; Baldwin v. Choteau Ins. Co., 56 Mo. 151. And see Bowman v. Agricultural Ins. Co., 59 N. Y. 531. 6. Bowman v. Agricultural Ins. Co., supra. RULE 3. Authority of Agent to Waive Prepayment of Premium — Au- thority to Waive or Collect May be Conferred on Soliciting Agent or a Broker — Evidence. It is within the scope of the authority of a general agen't authorized to make the insurance contract by countersigning and issue of the policy or his clerk to waive the immediate payment of the premium and to make contracts for credit ;' and an insurance company may clothe a soliciting agent or even a broker with authority to collect the premium, or waive its prepay- ment f but, in absence of other evidence, his status may be governed by an agency clause in the policy.' The authority of a broker to collect the premium may be established by course of business, mutual accounts, and habit of the insurance company in giving him policies Pkemium. 529 to deliver to the insured •* but is not established by a single transaction.^ 1. Famum v. Phoenix Ins. Co., 83 Cal. 246, 33 Pac. Eep. 869 ; Bodine v. Exchange Ins. Co., 51 N. Y. 117; Ball & Sage Wagon Co. V. Aurora Ins. Co., 20 Fed. Eep. 232, 13 Ins. L. J. 367; Monitor Ins. Co. v. Young, 111 Mass. 537 ; Slobodisky v. Phoenix Ins. Co., 53 Nebr. 816, 74 N. W. Eep. 270. 2. Home Ins. Co. v. Oilman, 112 Ind. 7, 13 N. E. Eep. 118 ; Elkins V. Susquehanna Ins. Co., 113 Pa. St. 387; Cahill v. Andes Ins. Co., 5 Biss. 211 (U. S. Cir.) ; Lycoming Ins. Co. v. Ward, 90 111. 545 ; Newark Ins. Co. v. Sammons, 110 111. 166. And see Planters' Ins. Co. v. Meyers, 55 Miss. 479; Universal Ins. Co. V. Block, 109 Pa. St. 535; Eiley v. Commonwealth Ins. Co., 110 Pa. St. 144; Lebanon Ins. Co. v. Erb, 112 Pa. St. 149. See also this volume, title "Agents." 3. Wilber v. Williamsburg City Ins. Co., 122 N. Y. 439, 25 N. E. Eep. 926. 4. Globe & Eutgers Ins. Co. v. Eobbins & Myers Co., 43 Misc. 65, 86 N. Y. Supp. 493; upon subsequent appeal reaff'd, 88 N. Y. Supp. 996. 5. Citizens' Ins. Co. v. Swartz, 21 Misc. 671. RULE 4. Authority of Agent as to Slode or Kind of Payment. When the mode of payment of the premium is not prescribed by the company, its agent authorized to re- ceive it may accept in payment a check payable to his own order ;^ but ordinarily, in absence of evidence of express authority, or of ratification, he is not author- ized to receive or accept anything but money ;^ yet, when he actually pays the premium in cash to the company, it ends the matter so far as the company is concerned.^ L Tayloe v. Merchants' Ins. Co., 9 How. 390 (U. S.). And see Universal Ins. Co. v. Block, 109 Pa. St. 535. 2. Polb V. Firemen's Ins. Co., 133 F. C. 179, 45 S. E. Eep. 547; Herring v. American Ins. Co., 123 Iowa, 533, 99 N. W. Vol. 2 — 34 530 Fire Insurance. Eep. 130. And see Hoffman v. John Hancock Ins. Co., 93 U. S. 161; Equitable Ins. Co. v. Cole, 13 Tex. Civ. App. 486; Will- cuts V. Northwestern Ins. Co., 81 Ind. 300; Frazer v. Gore Dis- trict Ins. Co., 2 Ont. 416. In Carlwitz v. Germania Ins. Co., 13 Ins. L. J. 137 (U. S. Cir.), the court seems to incline to the opinion that an agent might bind his company in making agreement with the as- sured to accept payment of the premium in trade. 3. Herring v. American Ins. Co., 123 Iowa, 533, 99 F. W. Eep. 130. RULE 5. Effect of Personal Assumption of Debt for Premiiim by Agent. If an agent in usual course of business charges him- self with the ijremium, and upon delivery of the policy is obliged to pay it as his own debt, the insured be- comes debtor to the agent, and the agent to the com- pany, and this in view of such course of business may be the equivalent of actual payment ;^ so an agent hav- ing authority to receive the premium may, by agree- ment with the insured, assume a personal responsi- bility for the same, which, in legal effect, may con- stitute a payment as between the insured and the company.^ 1. Elkins V. Susquehanna Ins. Co., 113 Pa. St. 386, 16 Ins. L. J. 78. And see Lebanon Mutual Ins. Co. v. Hoover, 113 Pa. St. 591, 16 Ins. L. J. 679 ; Long v. North British Ins. Co., 137 Pa. St. 335 ; Home Ins. Co. v. Curtis, 33 Mich. 403. 2. Bouton V. American Ins. Co., 25 Conn. 542; Sheldon v. Connecticut Ins. Co., 25 Conn. 307. • RULE 6. Company May Accept Note of Broker or Credit Him with Pay- ment — Authority — Evidence. An insurance company may accept a negotiable promissory note of a broker in payment of a pre- Premium. 531 mium ;' and so the company may accept the individual obligation or credit of a broker as a payment of the premium;^ and by charging premimns to the broker and delivering policies to him to deliver to the as- sured, may clothe the broker with apparent authority to receive the premium,^ and if authorized to receive the premium for the company, he may take a note for same, and as soon as he receives the money on such note by having it discounted, the premium is actually paid,* and this is so notwithstanding an agency clause in the policy making the broker the agent of the insured.® 1. Union Ins. Co. v. Grant, 68 Me. 329. 2. White V. Connecticut Ins. Co., 120 Mass. 330; Bang v. Farmville Ins. Co., 1 Hughes, 290 (U. S. Cir.). And see Blkins V. Susquehanna Ins. Co., 113 Pa. St. 386. 3. Greenwich Ins. Co. v. Union Dredging Co., 14 Daly, 237 (N. Y.) ; Lebanon Ins. Co. v. Erh, 112 Pa. St. 149. 4. Carson v. Jersey City Ins. Co., 14 Vroom, 300 (IST. J.). 5. Carson v. Jersey City Ins. Co., supra. And see this volume, title "Agents." In White v. Connecticut Ins. Co., supra, it was the custom of the company to deliver policies to the broker without requiring cash payment of the premium, charging the same to his indi- vidual account, and rendering to him monthly bills, deducting an agreed commission for obtaining risks. In his monthly set- tlements the broker paid the premiums charged to him, whether he had collected them or not, and in this case he offered to pay the premium at his first settlement after the issue of the policy and after the fire. And to same effect was Elkins v. Susquehanna Ins. Co., supra. RULE 7. Effect of Acknowledgement in Policy when Delivered Through Broker. If a policy is sent by the company to a broker to deliver to the insured, containing or having indorsed 532 FiKE IWSUKANCE. an acknowledgment or receipt for the premium, it clothes him with authority to receive the premium, and payment of same to him is payment to the company;* so sending a policy to an insurance agent, not a broker, to deliver to the insured, clothes him with authority to receive the premium.^ 1. Lebanon Ins. Co. v. Erb, 112 Pa. St. 149. And see Uni- versal Ins. Co. V. Block, 109 Pa. St. 535. See also this volume, title "Agents." 2. Pulaski Mutual Ins. Co. v. Dawson, 87 111. App. 514. RULE 8. Broker Agent of Insured — Must be Evidence of Authority in Him from Company. A broker is ordinarily an agent of the insured and not of the company; hence, in absence of some evi- dence clothing him with authority by the company, payment of the premium to him is not a payment to the company ;* nor is the insurance company bound by any credit or arrangement or waiver made by the broker with the insured.^ 1. Pottsville Ins. Co. v. Minnequa Springs Improvement Co., 100 Pa. St. 137, 11 Ins. L. J. 892; Peoria Sugar Eefinery t;. Susquehanna Ins. Co., 20 Fed. Rep. 480, 14 Ins. L. J. 333. 2. Marland v. Royal Ins. Co., 71 Pa. St. 393. And see Riley V. Commercial Ins. Co., 110 Pa. St. 144; Hambleton v. Home Ins. Co., 6 Biss. 91 (U. S. Cir.). And see this volume, title "Agents." RULE 9. Liability of Broker for Unearned Premium. A broker is not liable to the receiver of insured for unearned premium not actually paid over by the in- surance company to him, upon theory of a conversion. Taylor v. Bowen, 52 App. Div. 126, 65 N. Y. Supp. 36. And see this volume, title "Agents." Pbemium. 533 RULE 10. Advancement of Premium by Broker or Agent — Kigh.t of Be- covery — Evidence — Effect. An insurance agent or a broker who advances and pays the premium upon an insurance policy at the re- quest of the assured may recover same from the latter ;^ request or authority to make such payment to the company must be shown.^ When an agent ad- vances premium to the company and takes a note of the insured for the same, the company cannot dispute liability on the ground that the premium is not paid.' 1. Hughson V. Hardy, 63 Minn. 209, 64 N". W. Eep. 389; De Wolf V. Washington, 119 Wis. 554, 97 N. W. Eep. 220. And see this volume, title " Agents." 2. Eoss V. Silverman, 24 Misc. 762, 53 N. Y. Supp. 901; Boss V. Eubin, 25 Misc. 479, 54 N". Y. Snpp. 1036. And see Degroot v. Clark, 51 App. Div. 606, 64 N. Y. Supp. 282; Waters v. Wandless, 35 S. W. Eep. 184 (Tex. Civ. App.); Holmes v. Thomason, 61 S. W. Eep. 504 (Tex. Civ. App.) ; Colby V. Thompson, 16 Cola. App. 271, 64 Pae. Eep. 1053. 3. Home Ins. Co. v. Curtis, 32 Mich. 402. And see Eule 4. RULE II. If Policy in Porce by Delivery and Credit for Premium, Ter- minated Only by Cancellation. Where policy has been delivered to the insured without prepayment of the premium, and credit given therefor, it must be held to be in force subject to right of the company to cancel. John E. Davis Lumber Co. v. Home Ins. Co., 95 Wis. 542, 70 N. W. Eep. 59. See this volume " Cancellation." 534 FiBE Insxjeance. RULE 12. Legal Tender of Payment. A legal tender of payment of the premium •within the time of credit allowed is a sufficient compliance with any condition requiring payment. Farnum v. Phcenix Ins. Co., 83 Cal. 346, 23 Pac. Eep. 869. RULE 13. Payment of Premium May be Made Condition Precedent. An insurance company may make the prepayment of the premium a condition precedent to the existence of insurance, notwithstanding delivery of the policy to the insured or through a broker. Pottsville Mutual Ins. Co. ■;;. Minnequa Springs Improve- ment Co., 100 Pa. St. 137, 11 Ins. L. J. 893 ; Peoria Sugar Ee- iinery v. Susquehanna Ins. Co., 20 Fed. Eep. 480, 14 Ins. L. J. 333 ; Flint v. Ohio Ins. Co., 8 Ohio, 501. And see Union Build- ing Assoc. V. Eockford Ins. Co., 83 Iowa, 647, 49 K W. Eep. 1032, 14 L. E. A. 248; Anderson v. Continental Ins. Co., 105 N. Y. 666, memo, reversing judgment in favor of plaintiff on dissenting opinion of Davis, P. J., in court below. See 21 Wkly. Dig. 35. Marland v. Eoyal Ins. Co., 71 Pa. St. 393 ; Mulvey v. Shavraiut Ins. Co., 4 Allen, 116 (Mass.) ; Lycoming Ins. Co. v. Ward, 90 111. 545. RULE 14. Policy May Make Payment of Premium. Condition Precedent. When the policy in terms provides that the company shall not be liable, or that it shall not take effect until the premium be actually paid, it is binding upon the insured;* so policy may provide for payment of the premium upon the first day of a certain month in each year, and that the company shall not be liable while a premium is due and unpaid, but each premium Premium. 535 covers an entire year from the date of the policy, so that the company cannot claim a forfeiture for non- payment of a premium which became due before the expiration of such year.^ 1. Moore v. Eockford Ins. Co., 90 Iowa, 636, 57 IST. W. Rep. 597, 23 Ins. L. J. 620; German Ins. Co. v. Shader, 96 F. W. Eep. 604 (Nebr.). And see Bradley v. Potomac Ins. Co., 32 Md. 108; Mulrey v. Shawmut Ins. Co., 4 Allen, 116 (Mass.). 2. Kimbro v. Continental Ins. Co., 101 Tenn. 245, 47 S. W. Eep. 413. Some policies contain a specific clause or condition providing for forfeiture of the insurance if a note given for the premium is not paid, and same is enforced by the courts. Palmer v. Continental Ins. Co., 132 Cal. 68, 64 Pac. Eep. 97; Palmer v. Continental Ins. Co., Cal. , 61 Pac. Eep. 784; Ohio Farmers' Ins. Co. v. Wilson, 70 Ohio St. 354, 71 K E. Eep. 715; Antes v. State Ins. Co., 61 ISTebr. 55, 84 N. W. Eep. 412; Houston v. Fanners' InS. Co., 64 'Nehr. 138, 89 K W. Eep. 635 ; Hooker v. Continental Ins. Co., Nebr. , 96 E". W. Eep. 663; Carlock v. Phoenix Ins. Co., 38 111. App. 283 ; Dale v. Continental Ins. Co., 95 Tenn. 38, 31 S. W. Eep. 266, 25 Ins. L. J. 10; Jefferson Ins. Co. v. Murray, Ark. , 86 S. W. Eep. 813 ; Mooney v. Home Ins. Co., 80 Mo. App. 192 ; Harle v. Council Bluffs Ins. Co., 71 Iowa, 401 ; Moore V. Continental Ins. Co., 107 Ky. 273, 63 S. W. Eep. 652; Potter V. Continental Ins. Co., 107 Ky. 326, 53 S. W. Eep. 669; Continental Ins. Co. v. Browning, 114 Ky. 183, 70 S. W. Eep. 660; Walls v. Home Ins. Co., 114 Ky. 611, 71 S. W. Eep. 650; Home Ins. Co. v. Wood, 72 S. W. Eep. 15 (Ky.), though subject to waiver; Home Ins. Co. v. Holder, 74 S. W. Eep. 267 (Ky.) ; Alexander v. Continental Ins. Co., 67 Wis. 422; Carlock v. Phoenix Ins. Co., 38 111. App. 283; Texas Ins. Co. v. Knights of Tabor, 32 Tex. Civ. App. 328, 74 S. W. Eep. 809. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver." RULE 15. Effect of Giving Credit for Premium. Where credit is given for the premium, the failure of the assured to pay it within a definite or at a fixed time does not work a forfeiture of the policy in ab- 536 Fir.E Insurance. sence of any provision in it to that effect ;^ and so it is no defense if the assured fails to pay a note given for the premium, there being no provision in the policy making actual payment of the premium a condition precedent, or default in payment a cause of for- feiture;^ rule is otherwise when the policy contains such a provision.^ 1. Ohio Farmers' Ins. Co. v. Stowman, 16 Ind. App. 205, 212, 44 N. B. Eep. 558 ; rehearing denied, 44 N. E. Eep. 940. And see Huggins Cracker Co. v. People's Ins. Co., 41 Mo. App. 530. 2. BarracliS v. Trade Ins. Co., 45 N. J. L. 543. 3. Mclntyre v. Michigan State Ins. Co., 52 Mich. 188, 13 Ins. L. J. 216 ; Eobinson v. Continental Ins. Co., 76 Mich. 641, 43 N. W. Eep. 647; Barnes v. Continental Ins. Co., 30 Mo. App. 539. And see Eule 14, note. RULE i6. Effect of Option to Take Policy on Payment of Premium. An option of taking a policy at any time during the month by paying the premium thereon is not an ex- tension of credit but is rather a direct refusal of credit. The option cannot be exercised after the prop- erty is destroyed. Home Ins. Co. v. Field, 42 111. App. 392. RULE 17. Provision in Policy Modified by TTsual Course of Business. A provision in a policy to the effect that it shall be void if the insured has not paid the premium is or may be modified by usual course of business in pay- Premium. 537 ment of same after delivery of the policy and even after the fire. Lebanon Ins. Co. v. Hoover, 113 Pa. St. 591. And see Long V. North British Ins. Co., 137 Pa. St. 335 ; Universal Ins. Co. V. Block, 109 Pa. St. 535 ; Riley v. Commonwealth Ins. Co., 110 Pa. St. 144. RULE i8. Effect of Acknowledgment in Policy of Receipt of Premium. If a policy delivered in terms contains an acknowl- edgment of the receipt of the premium it is not con- clusive upon the insurance company, which may still show that it has not been paid ;* but it may operate as an estoppel preventing the company from alleging a want of consideration,^ or from setting up as a defense the nonpayment of the premium,^ or from assailing the legal existence of the policy.* 1. Sheldon v. Atlantic Ins. Co., 26 N. Y. 460; Dircks v. Ger- man Ins. Co., 34 Mo. App. 31. And see Western Assur. Co. v. Provincial Ins. Co., 5 Tupper, 190 (Can.). 2. Consolidated Real Estate Co. v. Cashow, 41 Md. 59. 3. Basch V. Humboldt Ins. Co., 6 Vroom, 429 (N. J.); Michael v. Mutual Ins. Co., 10 La. Ann. 737. 4. Home Ins. Co. v. Gilman, 112 Ind. 7, 13 N. E. Rep. 118. And see Universal Ins. Co. v. Block, 109 Pa. St. 535. Also Rule 7. RULE 19. When Insured Agent to Receive Premium. If the insured is himself an agent to receive or col- lect premiums, payment to himself as such agent may not bind the company;^ but when it is so mutually understood the agent crediting the company with the premium in his accounts operates as payment.^ 1. Harle v. Council Bluffs Ins. Co., 71 Iowa, 401, 32 N. W. Eep. 396. 2. Lungstrass v. German Ins. Co., 48 Mo. 201. 538 FiEE Insurance. RULE 20, Payment as Affected by an Account. Premium may be paid in legal effect by the com- pany's agent crediting the amount to the insured and being himself charged with same in an account with and by the company;^ and so when the agent has money of the insured in his hands he may charge the premium against such account, and if he does, it may be the equivalent of payment;^ but when the insured has not in fact paid the premium, a mere matter or regulation of accounts as between the company and its agent, without the request, knowledge, or privity of the insured, even if it be called a payment, it is not one of which the insured can take advantage.* 1. Train v. Holland Purchase Ins. Co., 62 N. Y. 598. And see Planters' Ins. Co. v. Eay, 53 Miss. 335; Pennsylvania Ins. Co. V. Carter, Pa. St. , 11 Atl. Eep. 103; Huggins Cracker Co. v. People's Ins. Co., 41 Mo. App. 530 ; Mooney v. Home Ins. Co., 80 Mo. App. 193. 2. Woody V. Old Dominion Ins. Co., 31 Gratt. 363 (Va.) ; Phoenix Ins. Co. v. Meier, 38 Nebr. 134, 44 N. W. Eep. 97. And see Jones v. ^tna Ins. Co., 8 Ins. L. J. 415 (TJ. S. Cir.). 3. Van Wert v. St. Paul F. & M. Ins. Co., 90 Hun, 465. And see this volume, " Cancellation." RULE 21. When Premium is Betumable. If the policy is void when issued and no risk ever attaches, in the absence of fraud, no premium is earned, and if paid, the insured is entitled to recover same back from the insurance company;^ when policy is obtained by fraudulent misrepresentations, and Premium. 539 never attaches for that reason no premium is return- able.2 1. Jones V. Insurance Co. N. A., 90 Tenn. 604, 18 S. W. Eep. 260, 21 Ins. L. J. 377; Clark v. Manufacturers' Ins. Co., 2 Woodb. & Min. 472 (U. S. Cir.) ; Waller v. Northern Ins. Co., 64 Iowa, 101. And see 10 Fed! Eep. 232; Hawke v. Niagara District Ins. Co., 23 Grant Ch. 139 (Can.) ; Mulrey v. Gore District Ins. Co., 25 Up. Can. Q. B. 424. 2. Friesmuth v. Agawam Ins. Co., lO.Cush. 587 (Mass.). RULE 22. "When Officer or Agent Personally Liable for Betum of Premium. An officer of an insurance company who issues policies and receives premiums, knowing that his com- pany has not complied with statutory requirements authorizing its organization, is guilty of fraud, and personally liable for the payment of the premiums;' and so an agent of a foreign company who receives a premium after he knows of revocation of its license, may be personally liable to the insured for its return.^ 1. Belding v. Floyd, 17 Hun, 208 (N. Y.). 2. McCutcheon v. Eivers, 68 Mo. 122. RULE 23. Company Bound by Condition Imposed on Delivery of ITote for Premium. When a note is given by the assured for the premium upon condition that it should be returned in case of the rejection or nonacceptance of the policy, and the policy is rejected, the company is bound by the con- dition, and cannot claim that its agent's agreement was without authority and sue on the note. Jacoway v. Insurance Co., 49 Ark. 320. 540 FiEE Insxjeance. RULE 24. When Insured not Liable for Earned Premium on Surrender for Cancellation. The insured is not liable to the insurance company for the earned premium due on its immediate sur- render by him and cancellation on demand for the premium, when such policy is obtained by a third party under an independent obligation to keep the property insured for his benefit, there being no privity of contract as between the insured and the company to pay the premium ; rule may be otherwise if the insured retains or accepts the policy with knowledge of the facts. Northern Assur. Co. v. Goelet, 69 App. Div. 108, 74 N. Y. Siipp. 553, afE'g 31 Misc. 361, 65 N. Y. Supp. 403. RULE 25. Effect of Acceptance of Premium After a Loss. Acceptance of the premium after a loss, becomes evidence of a waiver of objection or forfeiture, for nonpayment ;^ and so where it is accepted after a fire, with knowledge of the facts, it may become evidence of a waiver of forfeiture on other grounds,^ but not when policy by specific language provides in effect for collection of the premium without prejudice,* or a note given for balance of a premium due, is paid after a' loss.* A mere demand for the premium does not waive a forfeiture for nanpayment.^ An entry or charge for premium in books of another agent is not the equiva- Premium. 541 lent of acceptance and cannot be claimed to operate as an estoppel." 1. Phoenix Ins. Co. v. Tomlinson, 125 Ind. 84; Continental Ins. Co. V. Chew, 11 Ind. App. 330, 38 N. B. Eep. 417; Western Home Ins. Co. v. Eichardson, 40 Nebr. 1, 58 N. W. Eep. 597, 23 Ins. L. J. 501 ; Smith v. St. Paul P. & M. Ins. Co., 3 Dak. 80. And see Phenix Ins. Co. v. Lansing, 15 Nebr. 494. 2. Continental Ins. Co. v. Busby, 3 Tex. Ct. App. Civ. Cas., § 101, 15 Ins. L. J. 736; Mershon v. National Ins. Co., 34 Iowa, 87 ; Bsch v. Home Ins. Co., 78 Iowa, 334, 43 N. W. Eep. 229; Southern Ins. Co. v. Hannah, Miss. , 37 So. Eep. 506. And see Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eule 45. 3. Curtin v. Phoenix Ins. Co., 78 Cal. 619, 21 Pac. Eep. 370. 4. Shimp V. Cedar Eapids Ins. Co., 134 111. 354, aff'g 26 111. App. 254, 16 N. E. Eep. 229. 5. Cohen v. Continental Ins. Co., 67 Tex. 325, 3 S. W. Eep. 296. 6. McElroy v. British America Ins. Co., 88 Fed. Eep. 863, 28 Ins. L. J. 112. And acceptance by company's agent with knowledge of the facts, after he has remitted or advanced the premium to the company, does not amount to waiver when the policy was pro- cured by fraudulent misrepresentation. American Central Ins. Co. V. Antram, Miss. , 38 So. Eep. 626. RULE 26. Tn Suit upon Policy Company Entitled to Credit for tTnpaid Premium. If the premium is not paid at time of the fire, and suit is brought upon the policy, without same having been paid, the insurance company is entitled to credit for the unpaid premium. Home Ins. Co. v. Adler, 71 Ala. 516. 542 Fire Insurance. TITLE V. Term. EuLE 1. As imposed by contract. 2. Construction of the words " at noon." 3. Burden of proof as to alteration in date of expiration. 4. Effect of omission of date of expiration. 5. Term may be governed by description. 6. Continuance in force by special agreement. 7. Delivery of policy may be conditional as to time takes effect. 8. Term may be question of fact. RULE I. As Imposed by Contract. Does insure for the term of from the day of , 190 . . , at noon, to the day of , 190 . . , at noon. The above clause or provision is contained in the standard form of policy prescribed in: New York, North Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Michigan, Ehode Island, Missouri, Wisconsin. New Jersey, The standard form of policy prescribed in: Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, provides : " Said property is insured for the term of beginning- on the day of in the year nineteen hundred , at noon, and continuing until the day of in the year hundred and , at noon." In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. * See note to " Concealment," Eule 1, page 2. Teem. 543 RULE 2. Construction of the words " at noon." The words ' ' at noon ' ' in the clause stating the term of the insurance, refer to the common or solar time and not to standard railroad time. Jones V. German Ins. Co., 110 Iowa, 75, 81 1^. W. Eep. 188. And see Henderson v. Eeynolds, 84 Ga. 159. This rule is sub- ject to parol evidence as to custom. Eochester German Ins. Co. V. Louisville Lead Co., Ky. , 87 S. W. Eep. 1115. RULE 3. Burden of Proof as to Alteration in Date of Expiration. When the policy bears no evidence upon its face of any alteration after its issue in the date of its expira- tion the burden of proof as to such alteration rests upon the insurance company. Insurance Co. N. A. v. Brim, 111 Ind. 281, 12 N. E. Eep. 315. RULE 4. Effect of Omission of Date of Expiration. The mere omission to insert in the policy the date of expiration or the time it is to run does not affect the liability of the insurance company; the contract is legally operative for at least a reasonable time, and the burden rests upon the insurance company of estab- lishing that it was not in force at time of the fire ;^ the parties may agree as to mode and manner of fixing time when insurance should terminate.^ 1. Schroeder v. Traders' Ins. Co., 109 111. 157, 13 Ins. L. J. 492. (In this case the fire occurred fourteen days after issue of the policy.) 2. Imboden v. Detroit F. & M. Ins. Co., 31 Mo. App. 321. 544 FiEE Insueance. RULE 5. Term May be Grovemed by Description. The term as stated in the policy may be governed or qualified by specific language of the description of the risk or of property insured; for instance, if policy covers a hophouse ' ' while drying hops, ' ' the insurance ceases when the insured ceases drying hops. Langworthy v. Oswego Ins. Co., 85 N. Y. 632, 10 Ins. L. J. 546. RULE 6. Continuance in Force by Special Agreement. When, by special agreement, a policy is to continue in force after date of expiration until notice of discon- tinuance, the assured to pay pro rata for the time, the sending of a check for an additional month's insurance is not the equivalent of a notice of discontinuance at the end of that month. Greenwich Ins. Co. v. Providence Steamship Co., 119 U. S. 481. RULE 7. Delivery of Policy May be Conditional as to Time it Takes Effect. The delivery of the policy may be made conditional as to the time it takes eflFect, notwithstanding its date ;* though ordinarily the risk commences as specified by the date in the policy.^ 1. Atlantic Ins. Co. v. Goodall, 35 N. H. 338. 2. Hubbard v. Hartford Ins. Co., 33 Iowa, 335. And see this Tolume, title " Oral or Parol Contract." RULE 8. Term May be Question of Fact. When a policy is written by the company's agent for a term of three years, and the company, in defense Eeinsubance. 545 "to an action at law to recover a loss thereunder, claims that the policy was only for one year, that preminm was paid for only one year, and that the agent had made a mistake in writing three years, and that the assured knew it was a mistake, and the assured testi- fies that the policy was in same condition when he re- ceived it, that he accepted it in good faith for three years, and knew nothing of any mistake, the question of a contract for three years is for the jury. Davidson v. Guardian Assur. Co., 176 Pa. St. 525, 35 Atl. Eep. 220. TITLE YI. Reinsurance. JRuLE 1. As imposed by contract. 2. Insurable interest. 3. No privity of contract between original insured and reinsurer — Exception. 4. When original insured may have right of action against either company. 5. Subject-matter same — Interest different — Compli- ance with condition as to proof of loss. 6. Effect of reinsurance contract being made subject to same conditions as adopted by reinsured company. 7. Construction of the word "risk" in a reinsurance contract. 8. When evidence of usage or custom not admissible. 9. Description furnished by reinsured company as af- fecting construction. 10. Construction of reinsurance contract. 11. Construction of clause making loss payable at same time with reinsured ■ — Of the words " may pay." 12. Effect of clause making loss payable " pro rata." 13. Not within statute of frauds. 14. Misrepresentation and concealment. 15. No recovery against reinsurer when reinsured com- pany not liable. 16. Power of reinsured to consent to assignment of its policy. Vol. 2 — 35 546 Fire Insurance. Eule 17. Eeinsurer may have right to consent to assignment of original policy. 18. Eeinsured cannot consent to increase of risk. 19. Eight to assume control of litigation. 30. Construction of "building" under a reinsurance contract. 31. When policy not covered by reinsurance. 33. Effect of coinsurance clause in original policy. 33. Printed conditions as to appraisal and limitation not applicable. 34. Liability not affected by apportionment clause in policy. 35. Liability as affected by insolvency of reinsured com- pany. 36. Purchase of claims by company or its receiver. 37. Eight of individual underwriter Lloyds policy to- enforce contract of reinsurance. 38. Constmction of contract with company retiring from business. 39. Agent of company cannot act in double capacity. 30. Personal liability of directors of insolvent company. 31. Unless otherwise provided reinsured is not obliged to first pay loss before claiming reinsurance. 33. Compromise and settlement by reinsured company. 33. When proof of loss dispensed with, and adjustment as to amount binding. 34. When reinsurer bound by adjustment. RULE I. As Imposed by Contract. Liability for reinsurance shall be as specifically" agreed hereon. This rule is imposed by above terms in the standard form of policy prescribed in: New York, North Carolina, Connecticut, North Dakota, Louisiana, *Pennsylvania, Michigan, Ehode Island, Missouri, Wisconsin. New Jersey, * See note to " Concealment," Eule 1, page 3. Reinsurance. 547 The standard form of policy prescribed in: Maine, New Hampshire, Massachusetts, South Dakota, Minnesota, does not contain any such provision. In the States where no standard form is prescribed, and other than those above named, the New York standard form is in general use. RULE 2. Insurable Interest. The insurance company which issues the original policy has such insurable interest as to sustain a con- tract of reinsurance by another company, to the whole extent of its liability;* and so the reinsuring company has an insurable interest.^ Insurance Co. N. A. v. Hibemia Ins. Co., 140 U. S. 565, 11 Sup. Ct. Eep. 909, 20 Ins. L. J. 689 ; Manufacturers' Ins. Co. V. Western Assur. Co., 145 Mass. 419, 14 N. E. Eep. 632; Sun Ins. Office V. Merz, 63 N. J. L. 365, 43 Atl. Eep. 693. And see New York Bowery Ins. Co. v. New York Ins. Co., 17 Wend. 359 (N. Y.) ; Goodrich's Appeal, 109 Pa. St. 533; Consolidated Eeal Estate Co. v. Cashow, 41 Md. 59. 2. Yonkers Ins. Co. v. Hoffman Ins. Co., 6 Eobt. 316 (N. Y.). RULE 3. No Privity of Contract Between Original Insured and Reinsurer — Exception. There is no privity of contract between the reinsur- ing company and the insured in the original policy, and hence in absence of express terms in the reinsur- ance contract such original insured cannot maintain any action on the reinsurance contract;* when the re- insurance contract in terms assumes or agrees to pay the original insured, latter may maintain suit thereon f 548 FiBE Insurance. when policy is issued directly to the original insured it cannot be claimed to be a reinsurance contract.^ 1. Carrington v. Commercial Ins. Co., 1 Bosw. 153 (N. Y.) ; Herckenrath v. American Ins. Co., 3 Barb. Ch. 63 (N. Y.) ; Travelers' Ins. Co. v. California Ins. Co., 1 N. D. 151, 45 N. W. Eep. 703, 19 Ins. L. J. 636. And see Goodrich's Appeal, 109 Pa. St. 523. Contra, Shoaf v. Palatine Ins. Co., 137 N. C. 308, 37 S. E. Eep. 451. 2. Travelers' Ins. Co. v. California Ins. Co., supra; Johannes V. Phoenix Ins. Co., 66 Wis. 50, 15 Ins. L. J. 449; Kuohs v. Traders' Ins. Co., Tenn. , 78 S. W. Eep. 85. And see Eule 4. 3. Excelsior Ins. Co. v. Eoyal Ins. Co., 55 N. Y. 343. RULE 4. When Original Insured May have Bight of Action Against Either Company. When an insurance company issues a policy to the insured and subsequently reinsures the risk with an- other company, which reinsurance contract includes an express promise to pay the insured any loss which might be suffered, and the reinsuring company be- comes insolvent and the insured files his claim to the insurance with its assignee, these facts constitute nq defense in action by the insured upon the first policy ; the insured has a right of action against either com- pany, although he can have but one satisfaction. Barnes v. Hekla Ins. Co., 56 Minn. 38, 57 N. W. Eep. 314, 23 Ins. L. J. 305. RULE 5. Subjsct-Matter Same — Interest Different — Compliance with Condition as to Proof of Loss. The subject-matter of the insurance is the same m the policy of reinsurance as in the original insurance, Eeinsueance. 549 though the interest is different. The condition in the reinsurance policy as to the furnishing of the state- ment or proof of loss is complied with by the first company delivering or transmitting to the reinsurer the proofs made by the original insured. Kew York Bowery Ins. Co. v. New York Ins. Co., 17 Wend. 359 (N. Y.). And see Vol. 1, Fire Insurance as a Valid Contract, " State- ment or Proof of Loss," Eule 31. RULE 6. Effect of Beiusurance Contract Being Idade Subject to Same Conditions as Adopted by Reinsured Company. When the policy or contract of reinsurance provides that it is subject to the same conditions as are or may be adopted by the company reinsured, the reinsuring company binds itself by what might be adopted by the reinsured company, properly pertaining to the risk, such as a consent to a transfer or change in title and assignment of the policy. Manufacturers' Ins. Co. v. Western Assur. Co., 145 Mass. 419, 14 N. E. Eep. 632. RULE 7. Construction of tbe Word " Bisk " in a Reinsurance Contract. When an open policy of reinsurance is indorsed ' ' on and after this date this policy covers the Insurance Company as reinsurance to the extent of one-half the amount of each and every risk which equals or exceeds in value the sum of $15,000 ; ' ' the word " risk " refers to the written or entered value in each case and not to that fixed after a loss by adjustment. Continental Ins. Co. v. ^tna Ins. Co., 138 N. Y. 16, 33 N. E. Eep. 724, 22 Ins. L. J. 501. 550 FiKE Insueance. RULE 8. When Evidence of Tlsage or Custom not Admissible. Wlien the words of a reinsurance contract are plain, certain, and unambiguous, evidence of usage or custom is not admissible to affect their meaning and applica- tion ;^ parol evidence is not admissible, in such a case, to vary, modify, or change the terms of the contract.^ 1. Hone V. Mutual Safety Ins. Co., 1 Sandf. 137, aff'd, 3 N. Y. 235. And see Imperial Marine Ins. Co. v. Fire Ins. Co., L. E. 4 C. P. Div. 166 (Eng.). And see Vol. 1, Fire Insurance as a Valid Contract, "Con- struction," Eules 21 to 25. 2. Home Ins. Co. v. Continental Ins. Co., 89 App. Div. 1, 85 N. Y. Supp. 262; prior appeal, 62 App. Div. 63, aff'd, 180 K Y. 389, 73 N. E. Eep. 65. RULE 9. Description Furnished by Beinsured Company as Affecting Con- struction. When the description of the risk in a reinsurance policy is prepared and furnished by the reinsured company, any ambiguity therein in construction of same is solved against the reinsured company as being the party who caused it. London Assur. Co. v. Thompson, 170 N. Y. 94, 62 N. E. Eep. 1066. RULE 10. Construction of Reinsurance Contract. When the policy of reinsurance provides that it is ' ' subject to the same risks, conditions, mode of settle- ment, and, in case of loss, payable at the same time and in the same manner as the policies reinsured," it Eeinsubance. 551 •does not mean that the terms of the reinsured policies as to risks, conditions, mode of settlement, time and manner of payment in case of loss, and limitations, are incorporated in and made part of the contract of re- insurance, but that the original policies furnish in these partictdars the basis on which the reinsurance contract stands, and that in all the dealings with the original insured the provisions of the policy issued "to him shall be observed. Paneuil Hall Ins. Co. v. Liverpool, L. & G. Ins. Co., 153 Mass. 63, 26 N. E. Eep. 344, 20 Ins. L. J. 289, 10 L. E. A. 423. RULE II. Construction of Clause Haking Loss Payable at Same Time with Beinsured — Of the Words " May Pay." When the reinsurance contract provides that it is payable at the same time with the reinsured, such clause refers to time of payability and not to the fact of payment, and fixes the same period for the duty of payment by the reinsurer as was fixed for payment by the reinsured;^ it is not necessary that actual pay- ment precede or accompany payment by the rein- surer f when loss is payable at such time and in such manner as the reinsured company " may pay," the words " may pay " are equivalent to liable to pay.* 1. Blackstone v. Allemania Ins. Co., 56 N. Y. 104; Con- solidated Eeal Estate Co. v. Cashew, 41 Md. 59. 2. Consolidated Eeal Estate Co. v. Cashow, supra. And see Gantt V. American Central Ins. Co., 68 Mo. 503; Cass County V. Mercantile Ins. Co., Mo. , 86 S. W. Eep. 237 ; Fame Ins. Co.'s Appeal, 83 Pa. St. 396. 3. Fame Ins. Co.'s Appeal, supra. 552 FiKE Insurance. RULE 12, Effect of Clause Making Loss Payable " Pro Rata." If the reinsurance contract is for one-half of the original amount, and provides that the " loss, if any, payable pro rata at the same time with the reinsured, ' ' and the loss is less than the amount of the original insurance, the reinsuring company is liable only to pay such proportion of the amount of the loss as is in the ratio of the amount of reinsurance to the amount originally insured, or one-half;^ if there is no pro- vision for prorating the loss or otherwise limiting liability, the reinsuring company is liable for the whole amount of its policy, without reference to the proportion paid by the reinsured company.^ 1. Blaekstone v. Allemania Ins. Co., 56 N. Y. 104; Home Ins. Co. V. Continental Ins. Co., 62 App. Div. 63, 70 IST. Y. Supp. 834; subsequent appeal, 89 App. Div. 1, 85 N. Y. Supp. 262, afE'd, 180 N. Y. 389, 73 ^. E. Eep. 65 ; Consolidated Eeal Estate Co. v. Cashow, 41 Md. 59. And see Illinois Mutual Ins. Co. V. Andes Ins. Co., 67 111. 362 ; Norwood v. Eesolute Ins. Co., 4 Jones & Sp. 552 (N. Y.); Jackson v. St. Paul F. & M. Ins. Co., 99 N. Y. 124, 14 Ins. L. J. 546. 2. Detroit F. & M. Ins. Co. v. Commercial Ins. Co., 38 Ohio St. 11, 11 Ins. L. J. 549. And see Vol. 1, Fire Insurance as a Valid Contract, "Amount of Loss or Damage," Eule 32. RULE 13. Not Within Statute of Frauds. A reinsurance contract is not within the statute of frauds in requiring a writing as assuming payment of a debt, or on default of another. Bartlett v. Firemen's Fund Ins. Co., 77 Iowa, 155. Keinsueance. 553 RULE 14. llisrepresentation and Concealment. A reinsurance contract, like any other insurance contract, is rendered void by the material misrepre- sentation^ or concealment^ of the reinsured company; but misrepresentation cannot be predicated upon mere description or representation of the risk reinsured when that is correctly stated.^ 1. Louisiana Mutual Ins. Co. v. New Orleans Ins. Co., 13 La. Ann. 246. 2. New York Bowery Ins. Co. v. New York Ins. Co., J,7 Wend. 359 (N. Y.). 3. Jackson v. St. Paul F. & M. Ins. Co., 99 N. Y. 124, 14 Ins. L. J. 546. RULE 15. mo Recovery Against Beinsurer when Keinsured Company not Liable. When the reinsured company is not liable on the original policy, a recovery cannot be had against the reinsurer company which may make every defense the reinsured could make, when the loss remains unad- justed between the reinsured and the party originally insured on the terms and conditions of the policy. Eagle Ins. Co. v. Lafayette Ins. Co., 9 Ind. 443. And see Ex parte Norwood, 3 Biss. 504 (U. S. Cir.) ; Cashan v. North- western Nat. Ins. Co., 5 Biss. 476 (U. S. Cir.). RULE 16. Power of Reinsured to Consent to Assignment of its Policy. The reinsured company has power to consent to the transfer of its policy according to its provisions, un- less there is some provision in the reinsurance con- 554 FiEE Insubance. tract or policy expressly forbidding it;^ even if the reinsuring company is made the agent of the original insurer for such purpose, that does not make it the sole agent, or prevent the original insurer from con- senting to a transfer? 1. Faneuil Hall Ins. Co. v. Liverpool, L. & G. Ins. Co., 153 Mass. 63, 26 N. E. Eep. 244, 20 Ins. L. J. 289. 2. Fanenil Hall Ins. Co. v. Liverpool, L. & G. Ins. Co., supra. RULE 17. Keinsurer May have Bight to Consent to Assignment of Origi- nal Policy. When the reinsuring company, by agreement, has the right to consent to an assignment of the original policy, such consent is binding in a subsequent suit by the insured against the reinsured company. Chauncey v. German-American Ins. Co., 60 N. H. 428. RULE 18. Beinsured Cannot Consent to Increase of Bisk. The reinsured company has no right to consent to an increase of the risk without the consent of the re- insuring company, and if it does, the reinsurance policy becomes void. St. Nicholas Ins. Co. v. Merchants' Ins. Co., 83 N. Y. 604. RULE 19. Bight to Assume Control of Litigation. When the reinsuring company is notified of an action against the reinsured company upon the origi- nal policy, it has the right to assume control of the Eeinsubance. 555 litigation in protection of its own interests, and if it -does not do so it is bound by the result of the litiga- tion, in absence of proof of fraud, b'ad faith, or collu- sion on part of the reinsured company. Gantt V. American Central Ins. Co., 68 Mo. 503; Strong v. Phoenix Ins. Co., 62 Mo. 289. And see Jackson v. St. Paul P. & M. Ins. Co., 99 N. Y. 124, 14 Ins. L. J. 546 ; Cass County V. Mercantile Ins. Co., Mo. , 86 S. W. Eep. 337. RULE 20. Construction of " Building " under a Beinsurance Contract. When a reinsurance contract limits liability to a cer- iain amount in " any one building or risk," a ware- house, with common outer wall, and partition walls, dividing the building into several parts designated as " stores Nos. 1, 2, and 3, respectively," but conneet- ing and communicating by doors in each wall, and devoted to same use, and under one management, con- stitutes only one building. German-Amer. Ins. Co. v. Commercial Ins. Co., Ala. , 11 So. Rep. 117, 31 Ins. L. J. 636. And see Vol. I, Fire Insur- ance as a Valid Contract, " Location " and " Description." RULE 21. When Policy not Covered by Reinsurance. When a policy of reinsurance is expressed to be ■" a reinsurance of policy or policies (blank not filled) and subject to same terms, conditions, and clauses as original policy or policies, and to pay as may be paid thereon," and the assured has two policies in force when this reinsurance is effected, and these two policies having terminated and a new one issued, dif- 556 FiEE Instjkance. fering in material respects, under which a loss and claim occurs, this last policy is not covered by the reinsurance. Lower Ehine & Wurtenberg Ins. Assoc, v. Sedgewick (1899), 1 Q. B. 179, rev'g (1898) 1 Q. B. 739. rul£ 22. Effect of Coinsuraiice Clause in Original Policy. When the property the reinsured company has in- sured is described as " cotton subject to coinsurance clause," and the policy of reinsurance provides that it should be subject to the same risks, conditions, valu- ations, indorsements, assignments, and mode of settle- ment as might be assumed or adopted by the rein- sured company, the reinsuring company is liable for the loss suffered by the reinsured company on its policies without the coinsurance clause as well as those containing it. Imperial Ins. Co. v. Home Ins. Co., 68 Fed. Eep. 698, 30 TJ. S. App. 409, 15 C. C. A. 609. RULE 23. Printed Conditions as to Appraisal and Ijimitation not AppUcable. Such clauses or conditions in the usual printed forms or policies as those relating to appraisal or award and prescribing the time in which suit must be brought are not applicable to a contract of rein- surance. Jackson v. St. Paul F. & M. Ins. Co., 99 N. Y. 124, 14 Ins. L. J. 546 ; Alker v. Ehoades, 73 App. Div. 158, 76 N. Y. Supp. Beinsubange. 557 808. And see Insurance Co. of Pa. v. Telfair, 37 Misc. 247. Contra, Victoria Ins. Co. v. Home Ins. Co., 35 Can. S. C. 208, where the limitation clause was held binding by a divided court. And see Vol. 1, Fire Insurance as a Valid Contract, " Limi- tation as to Suit or Action," Eule 4. RULE 24. liiability not Affected by Apportionment Clause in Policy. The liability of the reinsuring company is not af- fected or reduced by the apportionment clause or con- dition in the policy, as that must be construed to refer to a case where there is other reinsurance. Mutual Safety Ins. Co. v. Hone, 2 N. Y. 235. RULE 25. Liability as Affected by Insolvency of Keinsured Company. Under its contract of reinsurance, the extent of the liability of the reinsuring company is not affected by the insolvency of the reinsured company nor by its inability to fulfill its own contract with the original insured. Blackstone v. Allemania Ins. Co., 56 K. Y. 104; Hone v. Mutual Safety Ins. Co., 1 Sandf. 137, aff'd, 2 N. Y. 235; •Consolidated Eeal Estate Co. v. Cashow, 41 Md. 59; Eagle Ins. Co. V. Lafayette Ins. Co., 9 Ind. 443 ; Hunt v. New Hampshire Ins. Co., 68 N. H. 305, 38 Atl. Eep. 145. And see Goodrich's Appeal, 109 Pa. St. 623 ; Ex parte Norwood, 3 Biss. 504 (U. S. Cir.); Cashan v. Northwestern Nat. Ins. Co., 5 Biss. 476 (U. S. Cir.). RULE 26. Purchase of Claims by Company or its Beceiver. The reinsuring company may purchase claims un- der the policies reinsured by it, and set off the amount 558 FiBB Insurance. of such claims against its liability under the policy or contract of reinsurance;^ and so an insurance com- pany, or its receiver, when claim is made for insur- ance upon a policy issued by it, and when the question of its liability is not clear, may purchase and take by assignment a claim for the insurance upon the prop- erty issued by another company and enforce the same.^ 1. Hovey v. Home Ins. Co., 3 Ins. L. J. 815, 13 Am. Law Eeg. N. S. 511 (U. S. Cir.). 2. Excelsior Ins. Co. v. Eoyal Ins. Co., 55 IST. Y. 343. RULE 27. Bight of Individual tJnderwriter Uoyds Policy to Enforce Con- tract of ReinsTiranoe. An individual underwriter upon a Lloyds policy cannot maintain an action upon a contract of rein- surance with the association by another company, without joining with him the other members of the association; all of the parties interested in the re- covery must be before the court. Thompson v. Colonial Assnr. Co., 60 App. Div. 335, 70 N. Y- Supp. 85. RULE 28. Construction of Contract with. Company Ketiring from Business.. An insurance company going out of business which contracts with another company to the effect that it. would discharge its own outstanding obligations, while the latter company is to assume its trade, contingent liabilities and good-will, is not relieved from liability for a loss occurring before the making of the contract. Olsen & Walke v. California Ins. Co., 11 Tex. Civ. App. 371,- 32 S. W. Eep. 446. Eeinsukance. 559 RULE 29. Agent of Company Cannot Act in Double Capacity. An agent of two companies acting in a dual or double capacity as such agent cannot make a valid contract of reinsurance witliout the consent, express authority, or ratification of his principal. Empire State Ins. Co. v. American Central Ins. Co., 138 N. Y. 446, aff'g 64 Hun, 485, 19 K Y. Supp. 504; New York Central Ins. Co. V. Kational Protection Ins. Co., 14 N. Y. 85; Utica Ins. Co. V. Toledo Ins. Co., 17 Barb. 133 (N. Y.). And see this volume, title "Agents." RULE 30. Personal Liability of Directors of Insolvent Company. While the directors of an insolvent insurance com- pany may render themselves personally liable under the provisions of a statute imposing such liability when they transfer the assets in contemplation of in- solvency with intent to give preference to particular creditors, by reinsuring a certain part or class of the policies issued by the company, and paying the premium therefor out of its assets, upon recovery from them it is proper to deduct from the amount so paid for the reinsurance, the sum which the company or its receiver would have been obliged to pay to the holders of the reinsured policies under which losses had occurred. Casserly v. Manners, 9 Hun, 695. 560 FiEE Instjeance. RULE 31. Unless Otherwise Provided Beinsured is not Obliged to First Pay Xoss Before Claiming Keinsurance. In absence of restraining or governing words to the contrary in the reinsurance contract, the reinsured is not obliged, in order to maintain an action against the reinsurer, to show that it'has paid the loss. It may at once resort to an action against the reinsurer, and to such action the reinsurer may make the same de- fenses which the reinsured could make against the original insured, or the reinsured may W'ait suit by the original insured against it, and when it is brought, give notice of it to the reinsuring company, and if subjected to damages, it may recover them, with the costs and expenses of the litigation of the reinsuring company. Gantt V. American Central Ins. Co., 68 Mo. 503. And see Strong V. Phoenix Ins. Co., 62 Mo. 289 ; Few York Central Ins. Co. V. National Protection Ins. Co., 30 Barb. 468, rer"d on another point, 14 N. Y. 85; Hone v. Mutual Safety Ins. Co., 1 Sandf. 137, afc'd, 2 N. Y. 235; Eagle Ins. Co. v. Lafayette Ins. Co., 9 Ind. 443; Jackson v. St. Paul F. & M. Ins. Co., 99 N". Y. 124, 14 Ins. L. J. 546. RULE 32. Compromise and Settlement by Beinsured Company. When it is understood and agreed that the rein- sured company shall defend the claim made against it by the original insured, and is authorized to do so by the reinsuring company, the former cannot effect a compromise and settlement, binding upon the latter, without its knowledge and consent. Commercial Union Assur. Co. v. American Central Ins. Co., 68 Cal. 430. KrEINSUEANOE. 561 RULE 33. "WTien Proof of Loss Dispensed with, and Adjustment as to Amount Binding. When the reinsurance contract or policy provides that it is " subject to same risks, valuations, condi- tions, and mode of settlement as are or may be adopted or assumed " by the reinsured company, it dispenses with preliminary proof as between them, and the re- insuring company is bound by the settlement and ad- justment made by the reinsured company and the original insured as to the amount of the loss. Consolidated Eeal Estate Co. v. Cashow, 41 Md. 59. RULE 34. When Keinsurer Bound by Adjustment. When a contract of reinsurance provides that it is subject to the same risks, valuations, indorsements (excepting transfers of location), and conditions as the original insurance, and loss, if any, to be settled and paid pro rata with the reinsured, and at the same time and place, and upon the same conditions, ' ' the re- insuring company being notified of a loss, is bound by an adjustment subsequently made between the original insured and the reinsured company, specially when it is customary for the reinsurer to pay the reinsured its proportion of the adjustment expenses; the reinsurer cannot escape liability unless it is alleged and proved that the reinsured company has acted fraudulently or collusively to its injury. Insurance Co. State of New York v. Associated Manufactur- ers' Ins. Co., 70 App. Div. 69, 74 N. E. Supp. 1038, aff'd, 174 N". Y. 541, without opinion. And see Consolidated Eeal Estate Co. V. Cashow, 41 Md. 59. Vol. 2 — 36 562 Fire Insubance. TITLE VII. Oral or Parol Contract — Consummation of Contract. Rule 1. Parol contract of insurance legally operative and bind- ing — Exceptions. 2. Essential elements of the contract. 3. There must be meeting of minds as to terms and property. * 4. What is necessary to establish contract — Evidence — Question of fact — Remedy. 5. Construction of words — Evidence — Presumption. 6. Authority of agent to make parol contract of insur- ance. 7. Usage and custom as affecting authority of agent. 8. Contract cannot be established by admissions of agent subsequently made. ! 9. Authority of a soliciting agent. 10. Agent may have authority to bind the company. 11. Liability of agent to repay premium. 13. When risk deemed to commence. 13. Amount must be fixed after refusal to renew. 14. Risk may be inferred. 15. Particular company must be designated to complete contract. 16. Contract may be complete though misunderstanding as to term. 17. As affected by indefiniteness as to time and rate of premium. 18. As dependent upon payment of the premium. 19. Rate of premium and term may be implied. 30. Sufficiency as tested by insured's obligation to pay premium — Contract mutual. 31. When acceptance of application binds the company — Use of mail. 33. Must be evidence of acceptance. 33. Retention of application insufficient — Acceptance necessary — Evidence. 24. As dependent upon acceptance by insured. 35. Rights of parties fixed at time of fire. 36. Effect of delay in acting upon application. 37. Effect of no oral agreement prior to delivery of policy. 38. Effect of acceptance of policy. Oeal OB Parol Contracts. 563 EuLE 29. Sufficient parol contract cannot be made conditional by telegram. 30. Contract by deposit of letter. 31. Effect of statute of frauds. 33. Subject to conditions in policy. 33. Conditions requiring indorsement of written consent — What conditions operative. 34. Binder subject to conditions in policy — Termination under special provision — Cancellation. 35. Binder does not contain whole contract. 36. Effect of binder as renewal — When issued for new insurance — Time limitation. 37. Binder subject to usage and custom — Cancellation — Question of fact. 38. Presumption as to division of risk on binder — When particular company must be designated. 39. Binder as dependent upon rate of premium. 40. Delivery of policy not essential. 41. As affected by delivery of policy. 42. Admissibility of parol evidence to establish condition precedent to contract taking effect. 43. Eenewal without request of insured ■ — Agent directed not to deliver. 44. Delivery to broker upon condition — Contract as de- pendent upon condition precedent. 45. Contract conditioned on termination or cancellation of other insurance. 46. Mistake may be corrected in equity. 47. As affected by negotiation on Sunday. 48. Parol contract as affecting right to obtain policy after fire. 49. Eepudiation of contract after a loss ineffective. 50. Measure of damage. 51. Burden of proof — Test in mutuality and obligation to pay premiimi. 53. Weight of evidence — Question of fact. 53. Strictness of proof as affected by renewal. 54. Eemedy for breach of parol contract — Effect of com- pany's refusal to issue policy. 55. Pleading. 56. Eetention of jurisdiction by a court of equity. 57. Evidence in equity. 58. Question of fact. 59. Verdict of jury not disturbed on appeal. 564 FiEE Insueance. RULE I. Parol Contract of Insurance Legally Operative and Binding — Exceptions. An oral or parol contract of fire insurance is legally operative and binding upon the parties to it;^ unless required by a statute,^ or charter,' to be expressed in writing. 1. Firemen's Ins. Co. v. KueSsner, 164 111. 275 ; Fire Ins. Co. Philadelphia v. Sinsabaugh, 101 111. App. 55; Continental Ins. Co. V. Eoller, 101 111. App. 77, 79; Fire Assoc, v. Smith, 59 111. App. 655; Goodhue v. Hartford Ins. Co., 175 Mass. 187, 55 N. E. Eep. 1039 ; Sanford v. Orient Ins. Co., 174 Mass. 416, 54 N". E. Eep. 883; Phoenix Ins. Co. v. Hale, 67 Ark. 433, 55 S. W. Eep. 486; Phoenix Ins. Co. v. Ireland, 9 Kans. App. 644, 58 Pae. Eep. 1024; Vining v. Franklin Ins. Co., 89 Ma App. 311; Western Assur. Co. v. McAlpine, 23 Ind. App. 220, 55 N. E. Eep. 119; Eeynolds v. Westchester Ins. Co., 8 App. Div. 193, 40 N. Y. Supp. 336; Van Loan v. Farmers' Ins. Co., 90 N. Y. 280 ; Northam v. Dutchess Co. Ins. Co., 177 K Y. 73, 69 N. E. Eep. 222; Post v. ^tna Ins. Co., 43 Barb. 351 (N. Y.) ; Springer v. Anglo Nevada Ins. Co., 68 Hun, 601 ; Security Ins. Co. V. Kentucky Ins. Co., 7 Bush, 81 (Ky.) ; Commercial IJnion Assur. Co. V. Urbansky, 113 Ky. 624, 68 S. W. Eep. 653; Strohn v. Hartford Ins. Co., 33 Wis. 648 ; Eoger Williams Ins. Co. V. Carrington, 43 Mich. 252, 9 Ins. L. J. 577 ; Home Ins. Co. V. Adler, 71 Ala. 516 ; McCabe v. ^tna Ins. Co., 9 N. D. 19, 81 N. W. Eep. 426 ; Pitton v. Fire Ins. Assoc, 20 Fed. Eep. 766, 14 Ins. L. J. 923 ; Gold v. Sun Ins. Co., 73 Cal. 216, 14 Pae. Eep. 786; City of Davenport v. Peoria Ins. Co., 17 Iowa, 276. And see Kelly v. Commonwealth Ins. Co., 10 Bosw. 82 (K Y.). 2. Planters' Fire Assoc, v. De Loach, 113 Ga. 802, 39 S. E. Eep. 466; Clark v. Brand, 62 Ga. 23; McKay v. O'Neill, 22 N. S. 346. And see Stoelke v. Hahn, 55 111. App. 497. 3. Henning v. United States Ins. Co., 47 Mo. 425 ; Haslett v. Allegheny Ins. Co., 4 Ins. L. J. 372 (Pa.). But see and com- pare Dayton Ins. Co. v. Kelly, 24 Ohio St. 345; Security Ins. Co. V. Kentucky Ins. Co., 7 Bush, 81 (Ky.) ; Baile v. St. Joseph Ins. Co., 73 Mo. 371, 10 Ins. L. J. 657. (The distinction seems to be that in the first two cases above cited (under 3), the charter, in terms, required all contracts of insurance to be in Okai, OB Paeol Contracts. 565 writing, and in the last three, the charter required all policies issued should be in writing.) In Eelief Ins. Co. v. Shaw, 94 U. S. 574, it was held that a person dealing with a New York company in Massachusetts could not be presumed to know the terms of its charter, which eould not limit an agent's authority to make a binding parol contract of insurance. In Spitzer v. St. Mark's Ins. Co., 6 Duer, 6 (N. Y.), it was held that under company's charter a parol contract to cover property removed to new location was inoperative. RULE 2. Essential Elements of the Contract. To make a valid contract of insurance there must concur these essential conditions: (a) the subject-mat- ter to which the policy is to attach must exist, (b) the risk insured against, (c) the amount of indemnity must be definitely fixed, (d) the duration of the risk, (e) the premium must be agreed upon and paid or exist as a valid charge ;^ if the rate of premium is not definitely known and fised, but it is understood that it is to be taken from a certain compilation of rates or rate-book, that is capable of definite ascertainment and may be sufficient.^ 1. Worth V. German Ins. Co., 64 Mo. App. 583; Baptist Church V. Brooklyn Ins. Co., 28 N. Y. 153; Hartford Ins. Co. V. Trimble, Ky. , 78 S. W. Eep. 462; Eames v. Home Ins. Co., 4 Otto, 621 (U. S.); Insurance Co. N. A. v. Bird, 175 111. 42, 51 N. E. Eep. 686; People's Ins. Co. v. Paddon, 8 Bradw, 447 (111.) ; Cleveland Oil Co. v. Norwich Ins. Soc, 34 Oreg. 228, 55 Pac. Eep. 435 ; Diver v. Liverpool, L. & G. Ins. Co., 9 N. Y. Supp. 482, 17 Ins. L. J. 156. And see Hartford Ins. Co. v. Wilcox, 57 111. 180; Penley v. Beacon Ins. Co., 7 Grant Ch. 130 (Can.). 2. Worth V. German Ins. Co., 64 Mo. App. 583. And see Eames v. Home Ins. Co., 4 Otto, 621 (U. S.). 566 FiEE Insubance, RULE 3. There Must be Meeting of Minds as to Terms and Property. To make a binding verbal contract of insurance there must be a meeting of the minds between the par- ties thereto so as to leave nothing to be done thereafter but to execute it as made. The terms and property must be specified ;^ it is only where an agent authorized to make contracts and issue policies binding on the ■company, makes an agreement complete in every par- ticular, but states that the company might refuse to carry the risk after it was reported, that the court will hold the contract binding until canceled, and no- tice of the cancellation given to the insured f negotia- tion not completed does not constitute a contract.' 1. J. E. Davis Lumber Co. v. Scottish Union & N. Ins. Co., 94 Wis. 472, 69 N. W. Kep. 156; Mattoon Mfg. Co. v. Oshkosh Ins. Co., 69 Wis. 564, 35 N. W. Eep. 12; Milwaukee Mechan- ics' Ins. Co. V. Graham, 80 111. App. 549, aff'd, 181 111. 158, on opinion below; Manchester Assur. Co. v. Benson, 66 111. App. 615; People's Ins. Co. v. Paddon, 8 Bradw. 447 (111.); Kimball V. Lion Ins. Co., 17 Ped. Eep. 625; Phoenix Ins. Co. v. Schultz, 80 Fed. Eep. 337, 25 C. C. A. 453; Lingenfelter v. Phcenix Ins. Co., 19 Mo. App. 252; Vining v. Franklin Ins. Co., 89 Mo. App. 311. And see Agricultural Ins. Co. v. Fritz, 61 N. J. L. 211, 39 Atl. Eep. 910, 27 Ins. L. J. 710; Bell v. Pea- body Ins. Co., 49 W. Va. 437, 38 S. E. Eep. 541. 2. J. E. Davis Lumber Co. v. Scottish Union & N. Ins. Co., suipra. 3. German Ins. Co. v. Downman, 115 Fed. Eep. 481, C. C. A. ; Continental Ins. Co. v. Jenkins, 5 Ins. L. J. 514 (Ky.); Johnson v. Continental Ins. Co., 84 Ky. 470; Haskin v. Agricultural Ins. Co., 78 Va. 700; Sanford v. Trust Ins. Co., 11 Paige, 547 (N. Y.). In Ganser v. Firemen's Fund Ins. Co., 38 Minn. 74, 17 Ins. L. J. 105, it appears to be held that the insured may be allowed to testify that he understood from the negotiation that his property in question was insured. Oeai, or Parol Contracts. 567 RULE 4. 'What is Necessary to Establish Contract — Evidence — Ques- tion of Eact — Bemedy. Before a contract of insurance, or to insure, is bind- ing, all the essential elements and terms of the con- tract must be understood and mutually assented to. A mere expression of a desire by one intending to procure insurance, or a proposition made to an in- surance agent to insure property, and an assent or acceptance by the agent to insure without more, would not amount to a contract of insurance or an agreement to insure. The subject-matter, period, rate to be paid, -and amount of insurance and, perhaps, other elements must be agreed upon expressly or by implication be- fore there can be an absolute binding agreement be- tween the parties ; nor would the mere fact that there had been previous dealings of insurance between the parties alone, without some reference to such previous dealings, be sufficient to show a completed and binding contract that the parties intended to and did adopt the provisions of the former dealings. Where, however, there exists a contract of insurance, not expired, and there is an agreement between the parties to renew the policy, and no change is suggested or agreed upon, it will be implied that the renewal contract included and adopts all the provisions of the existing contract of insurance. Such a contract is complete in all re- spects, and upon failure to comply with the agree- ment, the party offending may be compelled by bill in equity, specifically to perform the agreement, or held liable in a court of law for damages resulting from a breach of the agreement. Where the evidence shows 568 FiBE Insurance. that the parties contracted with reference to pro- visions of previous dealings, it is competent to show the terms of such previous dealings, in order to arrive at the intention of the parties and to ascertain all the terms of the contract made ; and where the agreement was to renew an existing contract of insurance, it is proper and necessary to admit in evidence such exist- ing contract of insurance. Whether or not there was a parol contract to insure, or a parol contract to renew or of renewal, is a question of fact to be determined by the jury. Commercial Ins. Co. v. Morris, 105 Ala. 498, 18 So. Eep. 34; Home Ins. Co. v. Adler, 71 Ala. 516. And see Eules 2 3, 52, 54 and 58. RULE 5. Construction of Words — Evidence — Presumption. Plain ordinary words, without any ambiguity, used in a conversation between an applicant and company's agent claimed to constitute a parol contract of insur- ance must be given their ordinary meaning; if it is claimed they have acquired a special import and mean- ing in a particular locality among insurance agents, the fact must be established by a preponderance of the evidence, and it must appear that the party or agent using such words understood and intended to use them in their special or technical sense. His knowledge may be presumed from the generality of the understanding of such meaning. Potter V. Phoenix Ins. Co., 63 Fed. Rep. 383. Oral oe Parol Contracts. 569 RULE 6. Authority of Agent to Make Parol Contract of Insurance. A general agent intrusted with blank policies, with, authority to fill up, countersign, and deliver the same as effective contracts of insurance, has power to bind ' the insurance company by a parol agreement of in- surance. If the agent has authority to make a con- tract of insurance by a policy it is within the scope of such authority to make a binding oral agreement to insure;^ and to fill up the policy in accordance there- with after a loss;^ so a clerk of such general agent may be clothed with authority to bind the company by a parol contract of insurance;^ an agent has no au- thority to make any contract of insurance on destroyed property or to make agreements to pay for losses already incurred.* 1. Ellis V. Albany City Ins. Co., 50 N. Y. 402; Angell v. Hartford Ins. Co., 69 F. Y. 171 ; Bell v. Peabody Ins. Co., 49 W. Va. 437, 38 N. E. Eep. 541; Weeks v. Lycoming Ins. Co., 7 Ins. L. J. 552 (U. S. Cir.) ; Smith & Wallace Co. v. Prussian Nat. Ins. Co., 68 N. J. L. 674, 54 Atl. Eep. 458, King v. Phoenix Ins. Co., 101 Mo. App. 163, 76 S. W. Eep. 55; San- bom V. Firemen's Ins. Co., 16 Gray, 448 (Mass.); Sanford v. Orient Ins. Co., 174 Mass. 416, 54 K E. Eep. 883. And see McCabe v. ^tna Ins. Co., 9 N. D. 19, 81 F. W. Eep. 436. 2. Insurance Co. v. Colt, 20 Wall. 560 (U. S.). 3. Cooke V. ^tna Ins. Co., 7 Daly, 555 (N. Y.). And see this volume, title "Agents." 4. Bently v. Columbia Ins. Co., 17 N. Y. 421; Dodd v. Home Ins. Co., 22 Oreg. 3, 28 Pac. Eep. 881, 21 Ins. L. J. 352, re- hearing denied, 22 Oreg. 13, 29 Pac. Eep. 3. See Eules 12, 48, and this volume, title "Agents." Also Vol. 1, Fire Insurance as a Vahd Contract, Fraud or False Swearing," Eule 23. 570 Fire Insurance. RULE 7. Usage and Custom as Affecting Authority of Agent. In an action upon an alleged oral contract of insur- ance, evidence of a general custom and usage author- izing a soliciting agent to bind the company, until notice of refusal to accent the risk is received by the agent and communicated to the applicant, is admissible. Brown v. Franklin Mutual Ins. Co., 165 Mass. 565, 43 N. E. Eep. 513, 25 Ins. L. J. 630. And see Pish v. Cottenet, 44 N. Y. 538. See Kule 37. RULE 8. Contract Cannot be Established by Admissions of Agent Subse- quently ]JIade. It is not competent to prove a contract of insurance by the declarations or admissions of an agent subse- quently made. Such declarations or admissions are no part of the res gestce, but are mere declarations or admissions of a past transaction and are never com- petent to prove the fact of a contract by the principal of the agent making them. On cross-examination the agent may be questioned as to his making such declara- tions, giving time and place, etc., and, upon his denial, it may be proper to contradict him ; the evidence might then be admissible, not to show a contract, but as affecting his credibility as a witness;^ if the evidence is incompetent it is not made competent by contra- diction.^ 1. Commercial Ins. Co. v. Morris, 105 Ala. 498, 18 So. Rep. 34; Idaho Forwarding Co. v. Firemen's Fund Ins. Co., 8 Utah, 41, 29 Pac. Eep. 826; King v. Phoenix Ins. Co., 101 Mo. App. 163, 76 S. W. Eep. 55. But see and compare Sussex Oral or Parol Contracts. 571 County Ins. Co. v. WoodrufE, 2 Dutch. 541 (N. J.), where it was held that a declaration or admission by an officer of the company, the secretary, that he had sent the policy by mail to the insured was evidence as to execution and delivery of the policy. 2. King V. Phoenix Ins. Co., 101 Mo. App. 163, 76 S. "W. Eep. 55. And see this volume, title "Agents," Eules, 30, 31. RULE 9. Authority of a Soliciting Agent. An agent with authority only to solicit, receive, and forward or submit applications for insurance to the company for its action, and without authority to make contracts of insurance, cannot bind the company by a parol contract of insurance;^ specially when the per- son dealing with such agent knows or has notice that the application for insurance must be submitted to and acted upon by someone else.^ But such an agent or special agent may be clothed with apparent authority to bind the company by a parol contract, and a mere reservation of a right of approval does not operate as a limitation upon such authority,* and the insurance company may be bound if the insured has no knowl- edge of any limitation upon his power,* And so, un- less restriction upon his authority is brought to the notice or knowledge of the insured, a statute defining the status of such an agent, may establish his authority to make a valid parol contract of insurance.^ 1. Stockton V. Firemen's Ins. Co., 33 La. Ann. 577, 10 Ins. L. J. 834; Fleming v. Hartford Ins. Co., 42 Wis. 616; More V. New York Bowery Ins. Co., 130 N. Y. 537, 21 Ins. L. J. 228; Atkinson v. Hawkeye Ins. Co., 71 Iowa, 340, 32 N. W. Eep. 371; Walker v. Farmers' Ins. Co., 51 Iowa, 679; Winne- sheik Ins. Co. v. Holzgrafe, 53 111. 516. And see Summers v. Commercial Union Ins. Co., 6 Duval, 19 (Can.); Faughner v. 572 FiBE Insubancb. Manufacturers' Ins. Co., 86 Mich. 536, 49 X. W. Eep. 643, 21 Ins. L. J. 154. 2. rieming v. Hartford Ins. Co., 42 Wis. 616; More v. New- York Bowery Ins. Co., 130 N. Y. 537, 21 Ins. L. J. 228. 3. Palm V. Medina Ins. Co., 20 Ohio 529; Harron v. London Ins. Co., 88 Cal. 16, 25 Pac. Kep. 982, 20 Ins. L. J. 713. And see Chase v. Hamilton Ins. Co., 22 Barh. 527; rev'd on another point, 20 X. Y. 52; Collins v. Phcenix Ins. Co., 14 Hun, 534 (N. Y.). And see this volume, title "Agents." 4. More v. Xew York Bowery Ins. Co., supra; Arff v. Star Ins. Co., 125 N. Y. 57, 64. And see this volume, title "Agents." 5. Stehlick v. Milwaukee Mechanics' Ins. Co., 87 Wis. 322, 58 N. W. Eep. 379, 23 Ins. L. J. 547. RULE 10. Agent May Have Authority to Bind tlie Company. An agent may have limited authority to bind the company pending the receipt, consideration, and ac- ceptance or rejection of the risk or application. Fish V. Cottenet, 44 N. Y. 538; Perkins v. Washington Ins. Co., 4 Cow. 645 (N. Y.); Brown v. Franklin Ins. Co., 165 Mass. 565, 43 N. E. Eep. 512, 25 Ins. L. J. 630. And see CoUins «. Phoenix Ins. Co., 14 Hun, 534 (N. Y.); Otterhein v. Iowa State Ins. Co., 57 Iowa, 274; Eowland v. Springfield Ins. Co., 18 m. App. 601. RULE II. Iiiability of Agent to Bepay Freminm. As between the agent and the insured, the former is liable to repay the premium received on an oral con- tract to deliver a policy, which is never done, notwith- standing the latter might have possibly recovered on the oral contract had there been a fire. Collier v. Bedell, 39 Hun, 238. Oeal oe Parol Contracts. 573 RULE 12. Wben Bisk Seemed to Commeiice. If there are no circumstances indicating the inten- tion of the parties and no time is specified in the con- tract, the risk is deemed to have commenced at the date of the contract; if before the contract of insur- ance is made the property has ceased to exist, al- though unknown to the parties, the risk never at- taches;^ unless the contract by its terms covers property " lost or not lost."^ 1. Union Ins. Co. v. American Ins. Co., 107 Cal. 337, 40 Pac. Eep. 431, 24 Ins. L. J. 785, 38 L. R. A. 692. And see €ity of Davenport v. Peoria Ins. Co., 17 Iowa, 276; Lightbody V. North American Ins. Co., 23 Wend. 18 (N. Y.); Brownfleld V. Phoenix Ins. Co., 35 Mo. App. 54; Bentley v. Columbia Ins. €o., 17 N. Y. 421. See Eules 6, 48. 2. Marx v. Rational Ins. Co., 25 La. Ann. 39. And see Security Ins. Co. v. Kentucky Ins. Co., 7 Bush, 81 (Ky.). RULE 13. Amount ISust be Fixed After Befusal to Benew. A policy having expired and the company having declined to renew for same amount, an alleged oral ■contract to continue or renew the insurance a month later is not valid unless the amount is fixed and de- termined upon. Sater v. Henry County Farmers' Ins. Co., 92 Iowa, 579, 61 N. W. Eep. 209, 24 Ins. L. J. 220. RULE 14. Bisk May be Inferred. When all the elements of a sufficient parol contract of insurance by both a fire and marine insurance com- 574 FiEE Insurance. pany are shown to exist, excepting the risk, it may be inferred from the situation and circumstances of the property that the insurance intended is against fire. Baile v. St. Joseph Ins. Co., 73 Mo. 371, 10 Ins. L. J. 657.. RULE 15. Particular Company Must be Designated to Complete Contract. A mutual understanding with a local agent who is to " keep applicant insured," but choice of companies and details being left to him, is inoperative as a suf- ficient parol contract of insurance -^ so when an agent makes a verbal contract to insure in one of the com- panies represented by him, the selection being left to him, the designation of the particular company is essential to complete the contract.^ 1. Sargent v. National Ins. Co., 86 N. Y. 626, 10 Ins. L. J. 852. 2. Sheldon v. Hekla Ins. Co., 65 Wis. 436, 15 Ins. L. J. 623; Kleis V. Niagara Ins. Co., 117 Mich. 469, 76 N. W. Eep. 155, 27 Ins. L. J. 912. And see Connecticut Ins. Co. v. Bennett, 1 Ohio Dec. 60. RULE 16. Contract May be Complete Though. Misunderstanding as to Term. An oral contract of insurance may be deemed com- plete and enforced in equity, notwithstanding the in- sured understood the term to be one year, and the agent of the company three years, the rate agreed being the usual one for three years, and the amount and the company being left to the agent to determine, such determination being evidenced by a memorandum made by him. Croft V. Hanover Ins. Co., 40 W. Va. 508, 21 S. E. Eep. 854,, 24 Ins. L. J. 756. Oeal or Parol Contracts. 575 RULE 17. As Affected by Indefiniteness as to Time and Bate of Premium. A parol contract of insurance, indefinite as to time and rate of premium, is incapable of enforcement. Strohn v. Hartford Ins. Co., 37 "Wis. 625. And see Christie V. North British Ins. Co., 3 Cas. Ct. Sess. 360 (Scotland). See Rules 16, 19. RULE 18. As Dependent upon Payment of the Premium.. Unless made a condition precedent, the validity of a parol contract of insurance does not depend upon the actual payment of the premium; an agreement to pay the premium is a sufficient consideration for the agree- ment to insure or issue a policy;^ prepayment of the premium is waived by evidence of credit to the in- sured or his broker,^ and if not demanded it is evidence of such waiver.* 1. Campbell v. American Ins. Co., 73 Wis. 100, 40 F. W. Eep. 661. And see Kelly v. Commonwealth Ins. Co., 10 Bosw. 83 (K. Y.); Western Massachusetts Ins. Co. v. Duffey, 3 Kans. 347; Bragdon v. Appleton Ins. Co., 42 Me. 259; Millville Ins. Co. V. Collerd, 9 Vroom, 480 (N. J.). 2. Euggles V. American Central Ins. Co., 114 IST. Y. 415. And see Bragdon v. Appleton Ins. Co., 42 Me. 359. 3. Continental Ins. Co. v. Eoller, 101 111. App. 77. And see this volume, " Premium." RULE 19. Bate of Premium and Term May be Implied. To sustain a completed parol contract, it is not essential that the rate of premium and the term be named or fixed in the negotiation, when there is a fixed annual rate for the class of property insured, location ,576 FiEE Insurance. and description being given, and the insured's agent knowing the rate of premium and usual term as one year. The elements as to rate and term may be im- plied from custom and usage known to the parties, or from their previous dealing. Michigan Pipe Co. ■;;. North British & Mercantile Ins. Co., 97 Mich. 493, 56 N. W. Eep. 849 ; Concordia In*. Co. v. Heff- ron, 84 111. App. 610; Baxter v. Massasoit Ins. Co., 13 Allen, 320 (Mass.). And see Cooke v. ^tna Ins. Co., 7 Daly, 555 (N. Y.) ; Scott V. Home Ins. Co., 53 Wis. 338. RULE 20. Sufficiency as Tested by Insured's Obligation to Pay Premium — Contract Mutual. All the elements of the contract must be agreed upon and both parties bound — the one to insure and the other to pay the premium, before a sufficient parol contract can be established ;^ the contract of insurance is mutual, and if the assured is not indebted for the premium at time of the loss, the company is not liable.* 1, Taylor v. State Ins. Co., 107 Iowa, 275, 77 N. W. Eep. 1032; Milwaukee Mechanics' Ins. Co. v. Graham, 80 111. App. 549, afif'd, 181 IlL 158, on opinion below. And see Home Ins. Co. V. Field, 43 ill. App. 393; Insurance Co. N. A. v. Schall, 96 Md. 325, 53 Atl. Eep. 925. . 2. Home Ins. Co. v. Field, 42 111. App. 393; Mattoon Mfg. Co. V. Oshkosh Ins. Co., 69 Wis. 564, 35 N". W. Eep. 13; An- derson V. Continental Ins. Co., 105 N. Y. 666, memo., 13 N. E. Eep. 793, rev'g judgment in favor of plaintiff .on dissenting opinion of Davis, P. J., in court below. See 21 Wkly. Digest, 35. See Eule 51. RULE 21. When Acceptance of Application Binds the Company — Use of Mail. The acceptance of a written application by a com- pany, forwarded to it by its agent, binds the company Oral, oe Parol Conteacts. 577 as a complete contract of insurance, without regard to the issue and delivery of the policy;- but a proposition does not become a contract until its maker or his agent is notified of' acceptance,^ though when accept- ance or policy is deposited in the mail it takes effect at that time.* 1. Hartford Ins. Co. v. King, 106 Ala. 519, 17 So. Eep. 707; Goodall V. New England Ins. Co., 5 Fost. 169 (N. H.). And see Gloucester v. Howard Ins. Co., 5 Gray, 497 (Mass.) Whitaker v. Farmers' Union Ins. Co., 39 Barb. 312 (N. Y.) Brownfield v. Phoenix Ins. Co., 35 Mo. App. 54. 2. Perry v. Dwelling-House Ins. Co., 67 IST. H. 291, 33 Atl Eep. 731, 26 Ins. L. J. 120; Hening v. American Ins. Co., 133 Iowa, 533, 99 N. W. Eep. 130. And see Milville Ins. Co. v, Collerd, 9 Vroom, 480 (N. J.). See Enle 22 et seq. 3. Tayloe v. Merchants' Ins. Co., 9 How. 390 (U. S.) Hallock V. Commercial Ins. Co., 2 Dutch. 268, aff'd, 3 Dutch 645 (N". J.); Northhampton Ins. Co. v. Tuttle, 11 Vroom, 476 (N. J.). And see Whitaker v. Farmers' Union Ins. Co., 29 Barb. 313 (N. Y.). RULE 22. Must be Evidence of Acceptance. When a written application for insurance is made through an agent not authorized to make contracts of insurance, and such application provides that no lia- bility shall attach until it is accepted at the home ofifice of the company, there is no liability for a loss hap- pening before such acceptance;^ so when the applica- tion is subject to approval and acceptance by the com- pany, there must be evidence of acceptance before loss occurs f and when contract is subject to approval and acceptance of the insured, there inust be evidence of acceptance before occurrence of loss.* 1. St. Paul F. & M. Ins. Co. v. Kelley, Nebr. , 89 N. W. Eep. 997; Pickett v. German Ins. Co., 39 Kans. 697, 18 Pac. Eep. 903. Vol. 2 — 37 578 FiEE Insukance. 2. Easley v. New Zealand Ins. Co., 5 Ida. 593, 51 Pac. Eep. 418, 27 Ins. L. J. 289; Haskin v. Agricultural Ins. Co., 78 Va. 700; Stockton v. Firemen's Ins. Co., 33 La. Ann. 577; Lingenfelter v. Phoenix Ins. Co., 19 Mo. App. 252; Lungstrass V. German Ins. Co., 48 Mo. 201; Faughner v. Manufacturers' Ins. Co., 86 Mich. 536; Hallock v. Commercial Ins. Co., 2 Dutch. 268 (N. J.); More v. New York Bowery Ins. Co., 130 N. Y. 537; Welsh v. Continental Ins. Co., 47 Hun, 598 (N. Y.) ; Walker v. Farmers' Ins. Co'., 51 Iowa, 679. 3. Millville Ins. Co. v. Collerd, 9 Vroom, 480 (N. J.) ; Lan- cashire Ins. Co. V. Mil, 114 Pa. St. 248. And see Van Tassel V. Greenwich Ins. Co., 151 N. Y. 130, rev'g 83 Hun, 612, 72 Hun, 386. RULE 23. Retention of Application Insufficient — Acceptance necessary — Evidence. Mere retention of an application for insurance for- warded by a broker, or a soliciting agent, does not constitute a sufficient parol contract of insurance;^ to bind the company there must be actual acceptance,^ which may be inferred from the facts and course of business pursued by the company or its officers.^ While acceptance must be evidenced by some overt act, it is not necessary that such act should come to the knowledge of the proposer.* 1. Faughner v. Manufacturers' Ins. Co., 86 Mich. 536, 49 N. W. Eep. 643, 21 Ins. L. J. 154. And see Walker v. Farmers' Ins. Co., 51 Iowa, 679. 2. More v. New York Bowery Ins. Co., 130 N. Y. 537, 29 N. E. Eep. 757; Walker v. Farmers' Ins. Co., 51 Iowa, 679. See Eule 22. 3. Krumm v. Jefferson Ins. Co., 40 Ohio St. 225. 4. Milwaukee Mechanics' Ins. Co. v. Graham, 80 111. App. 549, aff'd, 181 111. 158, on opinion below. And see National Church Ins. Co. v. Trustees M. E. Church, 105 111. App. 143. And see Eule 26. Oral oe Parol Contracts. 579 RULE 24. As Dependent upon Acceptance by the Insured. When an application is forwarded by a soliciting agent to the company, which materially alters the ap- plication and issues a policy to conform to the altera- tion, and sends the policy to the agent and fire occurs previous to its delivery to the assured, the policy not having been accepted by the insured, it is not a com- plete contract at tirae of the fire ;^ but when the policy is sent to the agent, in conformity to the application, it is a complete contract as soon as made out and sent.^ 1. Stephens v. Capital Ins. Co., 87 Iowa, 283, 54 N. W. Eep. 139, 32 Ins. L. J. 208. And see Hamblet v. City Ins. Co., 36 Fed. Eep. 118. 2. W^iitaker v. Farmers' Union Ins. Co., 29 Barb. 312 (N. Y.). RULE 25. Rights of Parties Fixed at Time of Fire. If an application forwarded to the company is mutually intended and agreed merely as a description of the property and that it would not impair insured's right under a parol agreement with the agent of the company, and a letter from the company is received by the agent rejecting the application before delivery of the iDolicy, but after the fire, it does not affect in- sured's right to recover the insurance. Under such circumstances assured 's right to the policy is vested before the fire, and the delivery of it to him by the agent after the fire is no more than a court of equity would compel the company to do. Howard Ins. Co. v. Owens, 94 Ky. 197, 21 S. W. Eep. 1037, 22 Ins. L. J. 514. 580 FiEE Insukance. RULE 26. Effect of Delay in Acting upon Application. Company is not liable for a loss on the ground that a soliciting agent failed to forward an application to the company or to return it to the insured within a reasonable time ; having no authority to bind the com- pany by contract, his delay cannot make one. If there is unreasonable delay the insured should assume the application rejected and protect himself by pro- curing other insurance;^ unreasonable delay in acting upon an application is not acceptance.^ 1. Trask v. German Ins. Co., 53 Mo. App. 635. Z. Brink v. Merchants & Farmers' Ins. Co., S. D. , 95 N. W. Eep. 939. And see Eule 33. RULE 27. Effect of no Oral Agreement Prior to Delivery of Policy. Until the delivery of the policy or payment of the premium, there is no contract of insurance, in the ab- sence of any oral agreement for insurance prior to the policy, although the insured previously makes ap- plication and is notified by the company's agent that a policy is ready for him. Wainer v. Milford Ins. Co., 153 Mass. 335, 26 K E. Eep. 877, 11 L. E. A. 598; Consiuners' Match Co. v. German Ins. Co., 70 N. J. L. 336, 57 Atl. Eep. 440. And see Myers v. Liverpool, L. & G. Ins. Co., 131 Mass. 338. RULE 28. Effect of Acceptance of Policy. One who accepts a policy cannot ignore it and sue upon an alleged prior parol contract; if the policy Oral or Parol Contracts. 581 differs from the contract as made, the remedy is by reformation. Kleis V. Niagara Ins. Co., 117 Mich. 469, 76 N. W. Eep. 155, 27 Ins. L. J. 912. See this volume, " Eeformation." RULE 29. Sufficient Parol Contract Cannot be Made Conditional by- Telegram. After sufficient meeting of the minds to effect a parol contract of insurance by correspondence and telegram between the assured and the company's agent, the latter cannot, by subsequent telegram, change the contract from one of absolute insurance to one of conditional insurance. Schultz V. Phoenix Ins. Co., 77 Fed. Rep. 375. RULE 30. Contract by Deposit of Letter. If the insurance contract is claimed to be effected by deposit of a letter, same must be properly de- posited, stamped, and postpaid. Blake v. Hamburg-Bremen Ins. Co., 67 Tex. 160, 17 Ins. L. J. 436. RULE 31. EfEect of Statute of Frauds. Neither an agreement to issue a policy of insurance, nor an agreement to renew an existing policy or a contract of insurance, is within the statute of frauds, and such contracts or agreements need not be in writ- ing,^ but may be within the statute when the policy is 582 Fire Insurance. not to be delivered for more than two years after the contract.^ 1. Commercial Ins. Co. v. Morris, 105 Ala. 498, 18 So. Rep. 34; Sanborn v. Firemen's Ins. Co., 16 Gray, 448 (Mass.); Se- curity Ins. Co. V. Kentucky Ins. Co., 7 Bush, 81 (Ky.); Mattingly v. Springfield F. & M. Ins. Co., Ky. , 83 S. W. Eep. 577; German-American Ins. Co. v. Yellow Poplar Lumber Co., 84 S. W. Rep. '551 (Ky.); Roger Williams Ins. Co. V. Carrington, 43 Mich. 252, 9 Ins. L. J. 577; Van Loan v. Farmers' Ins. Co., 24 Hun, 132, afE'd, 90 K. Y. 280; Baptist Church V. Brooklyn Ins. Co., 19 N. Y. 305. 2. Klein V. Liverpool, L. & G. Ins. Co., 57 S. W. Eep. 250 (Ky.). And see Rule 1 and (leorgia statute. RULE 32. Subject to Conditions in Policy. An oral contract of fire insurance in legal effect adopts and makes the standard form of policy pre- scribed a part of it, and the insured is bound to com- ply with its terms-/ a parol contract of insurance as- sumes or presumes the policy ordinarily employed by the company, and the contract is subject to its pro- visions f though such presumption is not always con- clusive, and may be affected by the oral agreement otherwise f but after acceptance of the policy, assured cannot abandon it, and maintain a suit on the oral agreement to avoid operation of the limitation clause ;* so an oral contract for additional insurance is subject to the terms and conditions of policy then on the risk.'^ 1. Ilicks V. British America Assur. Co., 162 N". Y. 284, 56 N. B. Rep. 743. And see Springer v. Anglo-lSTevada Ins. Co., 58 Hun, 601, 33 N. Y. Supp. 543. Contra, Hardwick v. State Ins. Co., 23 Oreg. 290, 31 Pac. Rep. 656, 22 Ins. L. J. 262. Is subject to statutory conditions of the Ontario Insurance Act. Dominion Grange Ins. Co. v. Bradt, 25 Can. S. C. 154. Oeal ok Pakol Contkacts. 583 2. Sproul V. "Western Assur. Co., 33 Oreg. 98, 54 Pae. Eep. 180, 28 Ins. L. J. 118; Young v. St. Paul P. & M. Ins. Co., 68 S. C. 387, 47 S. E. Eep. 681; Vining v. Franklin Ins. Co., 89 Mo. App. 311; DeGrove v. Metropolitan Ins. Co., 61 N. Y. 594; Eames v. Home Ins. Co., 4 Otto, 621 (TJ. S.); Eureka Ins. Co. V. Eobinson, 56 Pa. St. 256; Home Ins. Co. v. Favorite, 46 111. 263; Hubbard v. Hartford Ins. Co., 33 Iowa, 325; Smith V. State Ins. Co., 64 Iowa, 716; McCann v. Mina. Ins. Co., 3 ISTebr. 198. And see Eule 34. 3. Salisbury v. Hekla Ins. Co., 32 Minn. 458, 14 Ins. L. J. 550; Humphry v. Hartford Ins. Co., 15 Blatchf. 504 (U. S. Cir.); Nebraska Ins. Co. v. Seivers, 27 Nebr. 541, 43 N. W. Eep. 351, 19 Ins. L. J. 903. 4. Farmers' Ins. Co. v. Barr, 94 Pa. St. 345. And see Kleis V. Niagara Ins. Co., 117 Mich. 469, 76 N. W. Eep. 155, 27 Ins. L. J. 912. 5. Green v. Liverpool, L. & G. Ins. Co., 91 Iowa, 615, 60 N. W. Eep. 189, 24 Ins. L. J. 180. And see Kennebec Co. v. Augusta Ins. Co., 6 Gray, 204 (Mass.). RULE 33- Conditions Requiring Indorsement of Written Consent — What Conditions Operative. In case of an oral contract of insurance, or when the company has refused to issue its policy thereon, conditions requiring written consent to be indorsed, as, for instance,- if there is other insurance, are in- operative, and mere notice of same to the company or its agent is sufficient;^ but conditions precedent to loss becoming due and payable in event of fire are operative,^ so the condition prescribing time in which suit must be brought,^ unless waived.* L Baile v. St. Joseph Ins. Co., 73 Mo. 371, 10 Ins. L. J. 657; Dayton Ins. Co. v. Kelley, 24 Ohio St. 345; Eureka Ins. Co. V. Eobinson, 56 Pa. St. 256. And see Cockburn v. British- America Assur. Co., 19 Ont. 245 (Can.) ; Parsons v. Queen Ins. Co., 43 Up. Can. Q. B. 271. See also Vol. 1, Fire Insurance as a Valid Contract, "Waiver," Eule 16. 584 Fire Insueance. 2. Hicks V. British America Ins. Co., 163 N. Y. 284, 56 N. E. Rep. 743; McCann v. ^tna Ins. Co., 3 Nebr. 198; Barre v. Council BlufEs Ins. Co., 76 Iowa, 609, 41 N. W. Eep. 373. Proofs need not be served in limited time. JSTebraska Ins. Co. v. Seivers, 27 Nebr. 541, 43 N. "W. Rep. 351, 19 Ins. L. J. 902. See Vol. 1, Fire Insurance as a Valid Contract, " Statement or Proof of Loss," Rule 10. And see Rule 32. 3. De Grove v. Metropolitan Ins. Co., 61 K. Y. 594. But see Penley v. Beacon Ins. Co., 7 Grant Ch. 130 (Can.). 4. Baile v. St. Joseph Ins. Co., 73 Mo. 371; Hicks v. British America Ins. Co., 162 N. Y. 284, 56 N". E. Rep. 743. In Baile v. St. Joseph Ins. Co., the court held that refusing to issue the policy and denial of liability waived proofs, and to same effect is Weeks v. Lycoming Ins. Co., 7 Ins. L. J. 552 (U. S. Cir.). Caldwell v. Stadacona Ins. Co., 11 Duval, 212 (Can.) ; Campbell v. American Ins. Co., 73 Wis. 100, 40 N. W. Rep. 661 ; Gold v. Sun Ins. Co., 73 Cal. 216. And see Taylor v. Merchants' Ins. Co., 9 How. 390 (U. S.). In Hicks v. British America Ins. Co. the court held that a local agent who was alleged to have made the oral contract had no authoriiy as such to make such waiver either by refusal to issue the policy, or by denial of the contract. And see Vol. 1, Fire Insurance as a Valid Contract, " State- ment or Proof of Loss" and "Waiver;" also this volume, title "Agents." The courts agree on the proposition that proofs of loss may be waived by refusal to issue policy and denial, of liability, but differ as to the authority of the agent. See Hicks v. British America Ins. Co., supra. RULE 34. Binder Subject to Conditions in Policy — Termination Tinder Special Provision — Cancellation. A binding slip is subject to the terms and conditions of the policy in ordinary use by the company ;i and if that in terms provides that the insurance may be de- termined at any time on giving notice to the assured, or to the person who may have procured it, a notice to the broker who procured the insurance may be good Okal or Parol Contracts. 585 notice, and the insurance terminates eo instanti on such notice.^ Otherwise it may be canceled on five days' notice.* 1. Lipman v. Niagara Ins. Co., 131 N. Y. 454, 24 N. E. Eep. 699, 19 Ins. L. J. 985, 8 L. R. A. 719, affg 48 Hun, 503; Karelsen v. Sun Fire Office, 133 N. Y. 545, 25 N. E. Eep. 931, 30 Ins. L. J. 44; Belt v. American Central Ins. Co., 29 App. Div. 546, aff'd, 163 IST. Y. 555, without opinion; Concordia Ins. Co. V. Heffron, 84 111. App. 610. 2. Lipman v. Niagara Ins. Co., supra; Karelsen v. Sun Eire Office, supra. And see King v. Hekla Ins. Co., 58 Wis. 508. 3. Colonial Assur. Co. v. National Ins. Co., 110 111. App. 471. And see this volume, " Cancellation." RULE 35. Binder Does not Contain Whole Contract. A certificate of insurance is not sufficient to sustain a claim and recovery when it shows on its face that it does not contain the whole agreement;^ a binding receipt does not constitute the contract.^ 1. Underwriters' Agency v. Sutherlin, 46 Ga. 653. 2. De Grove v. Metropolitan Ins. Co., 61 N. Y. 594. And see Eule 36, et seq. RULE 36. Effect of Binder as Renewal — When Issued for New Insurance — Time Limitation. When the insured applies for a renewal of an ex- isting policy and pays the premium, receiving a bind- ing receipt, admitting payment and stating that re- ceipt is binding for thirty days, and to be invalid on issue of renewal, the company is bound as though policy actually issued, though it declined to renew, but fails to notify the assured and return the premium;^ a binder does not effect a renewal when it does not, 586 FiEE Insueance. ■upon its face, purport to be a renewal;^ wlieii the binder is issued for entirely new insurance and is limited in express terms to thirty days, pending con- sideration of the application by the company, the in- surance ceases on expiration of the thirty days, with- out regard to any notice of rejection by the company.* 1. Phoenix Ins. Co. v. Hale, 67 Ark. 433, 55 S. "W. Eep. 486. 2. Underwood v. Greenwich Ins. Co., 161 N. Y. 413, 55 K E. Eep. 936. 3. Barr v. Insurance Co. N. A., 61 Ind. 488. RULE 37. Binder Subject to Usage and Custom — Cancellation — Question of Fact. A binding slip not containing all the terms of the insurance contract is subject to parol evidence of usage and custom between insurance brokers and in- surance companies and also of actual intention and design of the parties as bearing upon the temporary character of the instrument pending consideration of the application and termination of same on rejection and notice to the insured;^ if, as matter of fact, the binder is a mere temporary arrangement, the five days' notice of cancellation required by the standard form of policy is inoperative,^ and the question is one of fact which should be submitted to and determined by a jury.* 1. Underwood v. Greenwich Ins. Co., 161 N". Y. 413, 55 K E. Eep. 936, rev'g 28 App. Div. 163. And see previous appeal, sub nom. Van Tassel v. Greenwich Ins. Co., 151 jST. Y. 130, rev'g 83 Hun, 612, and 72 Hun, 386; Thompson v. Adams, L. E. 23 Q. B. Div. 361. Oral oe Pakol Contracts. 587 2. Underwood v. Greenwich Ins. Co., 54 App. Div. 386, 66 N. Y. Supp. 651. 3. Underwood v. Greenwich Ins. Co., 66 App. Div. 531, 73 N. Y. Supp. 351. RULE 38. Presumption as to Division of Kisk on Binder — When Particular Corapany Must be Designated. When the binder by an agent is for certain amount in several named companies, the legal presumption is that the risk is to be equally divided among them and each is severally bound in equal proportionate amounts;^ the agent representing several companies, the particular company must be designated.^ 1. Fitton V. Phoenix Assur. Co., 35 Fed. Eep. 880. 2. Hartford Ins. Co. v. Trimble, Ky. , 78 S. W. Eep. 463. And see Eule 15. RULE 39. Binder as Dependent upon Rate of Premium. A binding slip is legally operative as a temporary contract of insurance, though the exact rate of pre- mium may not be agreed upon at time of its issue and delivery; the insured is bound to pay a reasonable rate. J. C. Smith & Wallace Co. v. Prussian Nat. Ins. Co., 68 K J. L. 674, 54 Atl. Eep. 458. See Eules 17, 19, et seq. RULE 40. Delivery of Policy not Essential. When policy has been actually issued by the com- pany or its agent, and is simply retained by the agent for his individual protection until reimbursed by the assured for the premium which the agent has paid or 588 FiKE Insukance. for which he has become responsible, the manual de- livery of the policy to the assured is not essential. Firemen's Fund Ins. Co. v. Pekor, 106 Ga. 1, 31 S. E. Eep. 779. RULE 41. As Affected by Delivery of Policy. Whether or not a policy is delivered depends not upon its manual possession by the assured after its issuance, but rather upon the intention of the parties as manifested by their acts or agreements; whatever the parties have agreed to as a delivery, or whatever their conduct shows to have been considered as a de- livery by them controls. Where the evidence tends to show that the policy was completed in writing, and the assured was notified by the agent that this has been done, and that the policy was in his possession for the assured, it may be sufficient evidence to estab- lish a delivery;^ so when the assured leaves the policy in the hands of the company's agent subject to the order and control of a third person, it is sufficient delivery though such third party has not called for it or received it.^ A test is not who has actual posses- sion, but who has the right to possession; an agent made custodian by request or acquiescence is suf- ficient.^ 1. Phcenix Assur. Co. v. McAuthor, 116 Ala. 659, 33 So. Eep. 903. And see Morrison v. Insurance Co. N. A., 64 N H 137, 16 Ins. L. J. 966; Wheeler v. Watertown Ins'. Co., 131 Mass. 1; Bragdon v. Appleton Ins. Co., 43 Me. 359; Phoenix Ins. Co. V. Meier, 38 Nebr. 134, 44 N". W. Eep. 97; Dibble v. JNorthern Assur. Co., 70 Mich. 1, 37 N. W. Eep. 704. 2. Home Ins. Co. v. Curtis, 3?- Mich. 403. 3. Young V. St. Paul F. & M. Ins. Co., 68 S. C. 387, 47 S E Eep. 681. , . . Oral oe Parol Contracts. 589 RULE 42. Admissibility of Parol Evidence to Establish. Condition Prece- dent to Contract Taking Effect. Parol evidence is admissible to show that a written policy which is in form a complete contract was not to and did not become a binding contract until the per- formance or occurrence of some condition precedent resting in parol. When company's agent retains pos- session of the completed policy, or it is placed in hands of a third party, until it can be ascertained whether the company would assent to and carry the risk there is no delivery of the policy, and there is no completed contract of insurance between the parties. The com- pany acquires no right to the money of the assured for the policy, when it is to be operative upon a con- dition that does not occur, namely, that the defendant would accept the risk. The failure of the agent to notify the assured, or his broker, of the insurance company's refusal to carry the risk does not place it under any contract obligation to the assured ;^ so com- pany may retain policy and make its delivery optional with insured by payment of the premium within a cer- tain time,^ but such option or condition must be com- plied with before a fire,* unless there is a waiver by an authorized agent.* 1. Nutting V. Minnesota Ins. Co., 98 Wis. 36, 73 N. W. Eep. 432; Brown v. American Central Ins. Co., 70 Iowa, 390. 2. Home Ins. Co. v. Field, 43 111. App. 393. 3. Home Ins. Co. ». Field, supra. 4. Home Ins. Co. v. Field, supra, subsequent appeal, 53 111. App. 119. 590 FiEE Insurance. RULE 43- Benewal Without Request of Insured — Agent Directed not to Deliver. When the property is destroyed by fire while a policy thereon, issued voluntarily without application in anticipation of a desire of a renewal of an expired policy, is in course of transmission by mail to an agent, who receives it the day after the fire, and is directed not to deliver it, there is no valid contract of insurance. New York Lumbor Co. v. People's Fire Ins. Co., 96 Mich. 20, 55 N. W. Kep. 434, 22 Ins. L. J. 632. RULE 44. Delivery to Broker upon Condition — Contract as Dependent upon Condition Precedent. The policy may be delivered to the assured 's broker upon a condition, for instance, subject to a survey or inspection, and it ceases to be binding upon notice to the broker of rejection, though the policy may be ac- cidentally or inadvertently sent to the assured;^ so if anything remains to be done by the insured as a con- dition precedent, the contract of insurance is not com- plete, and no recovery can be had thereon.^ 1. Hartford Ins. Co. v. Wilson, 187 U. S. 467, 23 Sup. Ct. Eep. 189, rev'g 17 App. D. C. 14. 2. Mattoon Mfg. Co. v. Oshkosh Ins. Co., 69 Wis. 564, 35 N. W. Eep. 12. RULE 45. Contract Conditioned on Termination or Cancellation of Other Insurance. A contract of insurance may be conditioned on termination or cancellation of other insurance which Oeaii oe Pakol Contracts. 591 it is intended to replace as a substitute ;^ but this must be with knowledge or authority of the insured.^ 1. Massasoit Steam Mills v. Western Assur. Co., 135 Mass. 110. And see Stebbins v. Lancashire Ins. Co., 60 N. H. 65; Dibble v. Northern Assur. Co., 70 Mich. 1, 37 N. W. Eep. 704. And see this volume, " Cancellation." 2. Lancashire Ins. Co. v. Mil, 114 Pa. St. 248; Dibble v. Northern Assur. Co., supra. RULE 46. Mistake May be Corrected in Equity. A mistake of the company's agent in entering a memorandum of an oral or parol agreement of insur- ance may be corrected in suit in equity on the execu- tory oral agreement ;^ or for reformation of the policy if issued and delivered.^ But the fact that there is no entry of the risk on company's books is not evi- dence in its favor that an oral contract was not made.' 1. Croft V. Hanover Ins. Co., 40 W. Va. 508, 21 S. E. Eep. 854, 24 Ins. L. J. 756. 2. Kleis V. Niagara Ins. Co., 117 Mich. 469, 76 N. W. Eep. 155, 27 Ins. L. J. 912; Liverpool, L. & G. Ins. Co. v. Wyld, 1 Duval, 604 (Can.). And see this volume, '' Eeformation." 3. Sanborn v. Fireman's Ins. Co., 16 Gray, 448 (Mass.). RULE 47. As Affected by Negotiation on Sunday. A contract of insurance by a policy dated, executed, and delivered on a week day cannot be defeated be- cause the terms were talked over, or even agreed to, upon a Sunday. Wooliver v. Boylston Ins. Co., 104 Mich. 132, 62 N. "W. Eep. 149, 24 Ins. L. J. 793. 592 FiBB Insubancb. RULE 48. Parol Contract as AfEecting Eight to Obtain Policy After Pire. If there is a sufficient parol contract of insurance at time of the fire, such contract remains binding not- withstanding the insured goes to the company, pays the premium, and receives the policy, without first notifying the company of the fire ;' so when the agent holds policy for the insured he is bound to deliver it after a fire.^ 1. Keim v. Home Ins. Co., 43 Mo. 38; Baldwin v. Chouteau Ins. Co., 56 Mo. 151. And see Whitaker v. Farmers' Union Ins. Co., 29 Barb. 31S (N. Y.). See Eules 6, 12. And see this volume, title "Agents," Eule 18; and Vol. I, Fire Insurance as a Valid Contract, " Fraud or False Swearing," Eule 23. 2. Young V. St. Paul F. & M. Ins. Co., 68 S. C. 387, 47 S. B. Eep. 681. RULE 49. Repudiation of Contract After a Loss Ineffective. Where the making of the contract is in dispute, the insurance company cannot be relieved from liability by proving that it repudiated liability after a loss. Germania Ins. Co. v. Encaustic Tile Co., 15 Ind. App. 623, 43 N. E. Eep. 41. RULE 50. Measure of Damage. The measure of damages for a breach of agreement to insure property which is burned is its value or amount of the loss, not exceeding the sum which the policy was to insure. Campbell v. American Ins. Co., 73 Wis. 100, 40 N. W. Eep. 661; Lion Ins. Co. v. Starr, 71 Tex. 733, 12 S. W. Eep. 45; Eockwell V. Hartford Ins. Co., 4 Abb. Pr. 179 (N. Y.). Oeal oe Paeol Conteacts. 593 RULE 51. Burden of Proof — Test in Mutuality and Obligation to Pay Premium. The burden of proof is on the insured, who alleges the existence of a parol contract, to show by satisfac- tory evidence that the negotiations were concluded and contract in fact made, by which the parties became mutually bound; an infallible test is to determine whether both parties are bound ; unless the assured is obligated to pay the premium, on a tender of the policy, the company is not to deliver it or to pay the loss, if one occurs. Wlien the insured is not bound to pay the premium, the company cannot be bound to pay the loss. J. R. Davis Lumber Co. v. Scottish Union & N. Ins. Co., 94 "Wis. 472, 69 N. W. Rep. 156. And see Waldron v. Home Mutual Ins. Co., 9 Wash. 534, 38 Pac. Rep. 136. And see Rule 20. RULE 52. Weight of Evidence — Question of Pact. Plaintiff, in an action against an insurance com- pany upon an oral contract of insurance, is not re- quired to establish such contract by clear and conclu- sive proof ; so far as weight of testimony is concerned, there is no distinction between such a case and any case where the burden of proof rests upon the plain- tiff, and its sufficiency or weight is to be determined by a jury;^ a preponderance of the evidence is suffi- cient.^ 1. Waldron v. Home Mut. Ins. Co., 16 Wash. 193, 47 Pae. Rep. 435. And see Rules 4, 58. Vol. 2 — 38 594 Fire Insurance. 2. Farmers' Society v. German Ins. Co., 97 Iowa, 749, 6Q 'N. W. Rep. 878; Abel v. Phcenix Ins. Co., 57 App. Div. 639, 68 F. Y. Supp. 19, prior appeal, 47 App. Div. 81 ; Denning v. Phoenix Ins. Co., 68 111. 414 ; Continental Ins. Co. v. Jenkins, 5 Ins. L. J. 514 (Ky.) ; McCabe v. Mtna. Ins. Co., 9 N. D. 19, 81 N. W. Rep. 426. RULE 53. strictness of Proof as AfEeoted by Renewal. In controversies arising out of parol contracts to renew existing insurance, less strictness of proof may be required than when it is sought to establish an en- tirely new and distinct oral contract. Continental Ins. Co. v. Jenkins, Ky. , 5 Ins. L. J. 514. And see Rules 4, 36. See and compare Taylor v. Phoenix Ins. Co., 47 Wis. 365. RULE 54- Bemedy for Breach of Parol Contract — EfEect of Company's Be- fusal to Issue Policy. The remedy for the breach of a parol contract of insurance may be either in equity for specific perform- ance, or at law upon the agreement;^ when an action is based upon an alleged oral contract for a policy on the usual terms, which the company refused to issue, such refusal is the breach of such contract, and hence, having failed to issue the policy, the company can claim no exemption from liability on account of any provisions the policy might or would have contained had it been issued.^ 1. SproTil V. "Western Assur. Co., 33 Greg. 98, 54 Pac. Rep. 180, 28 Ins. L. J. 118; Hardwick v. State Ins. Co., 20 Greg. 547, 26 Pac. Rep. 840; Gold v. Sun Ins. Co., 73 Cal. 216, 14 Pac. Rep. 786; Commercial Ins. Co. v. Morris, 105 Ala. 498, 18 So. Rep. 34; Home Ins. Co. v. Adler, 77 Ala. 242; Insurance Co. F. A. V. Bird, 175 111. 42, 51 N. E. Rep. 686; Carpenter v. Oral ob Parol Contracts. 595 Mutual Ins. Co., 4 Sandf. Ch. 408 (N. Y.) ; Humphrey v. Hart- ford Ins. Co., 15 Blatehf. 35, 504 (U. S. Cir.); Wooddy v. Old Dominion Ins. Co., 31 Gratt. 362 (Va.). 2. Hardwick v. State Ins. Co., 23 Oreg. 290, 31 Pac. Eep. 656, 22 Ins. L. J. 262; Sanford v. Orient Ins. Co., 174 Mass. 416, 54 N. E. Eep. 883; Baile v. St. Joseph Ins. Co., 73 Mo. 371, 10 Ins. L. J. 657; Campbell v. American Ins. Co., 73 Wis. 100, 40 N. W. Eep. 661 ; Nebraska Ins. Co. v. Seivers, 27 Nebr. 541, 43 N. W. Eep. 351; Clarkson v. Western Assur. Co., 92 Hun, 527, 37 K. Y. Supp. 53. Contra, Hicks v. British America Ins. Co., 162 ]Sr. Y 284, 56 N. E. Eep. 743. And see McCann v. .Etna Ins. Co., 3 Neb/. 198 ; Barre v. Council Bluffs Ins. Co., 76 Iowa, 609, 41 N. W. Eep. 373. And see Eules 4, 32, 55. The distinction between the remedy in equity, for specific performance, and at law, for breach of the oral agreement, would seem to no longer exist, at least in those States which have a Code of Practice, like New York, and where there is a standard form of insurance contract prescribed. See Hicks v. British America Ins. Co., supra. This subject is governed by local rules and practice, to which reference should be had. RULE 55. Pleading. When the assured depends upon and pleads an oral contract of insurance, it is not necessary for him to plead the conditions in the policy and allege perform- ance ; if defendant relies for defense on nonperform- ance of any of the conditions in the policy to be issued, such conditions should be pleaded as part of the con- tract as well as nonperformance;^ the insured may state his cause of action upon both the oral contract and the policy in separate statements or counts, with- out being required to elect as between them.^ 1. Duff V. Fire Assoc, 129 Mo. 460, 30 S. W. Eep. 1034, rev'g 56 Mo. App. 355. And see Ganser v. Firemen's Fund Ins. Co., 34 Minn. 372; Merchants' Ins. Co. v. Arnold, 32 S. W. Eep. 579. 596 Fire Insueance. See and compare various rules under this title and Vol. 1, Fire Insurance as a Valid Contract, " Waiver," Rules 60, 61. 2. Velie v. Newark Ins. Co., 65 How. Pr. 1, 13 Abb. N. C. 309 (N. Y.). RULE 56. Betention of Jurisdiction by a Court of Equity. If suit be brought in equity for specific performance of the oral contract, to avoid circuity the court will retain jurisdiction and adjudge damages as on an executed contract. Security Ins. Co. v. Kentucky Ins. Co., 7 Bush, 81 (Ky.) ; Tayloe v. Merchants' Ins. Co., 9 How. 390 (U. S.); Gerrish V. Insurance Co., 55 IST. H. 355; Franklin Ins. Co. v. Taylor, 53 Miss. 441; Baile v. St. Joseph Ins. Co., 73 Mo. 371; Phoenix Ins. Co. V. Eyland, 69 Md. 437, 16 Atl. Rep. 109. RULE 57. Evidence in Equity. If suit is in equity to compel the issue and delivery of the policy upon a parol contract, the proof of such contract should be clear, satisfactory, and conclusive ; if there is any doubt, the suit should be dismissed. McCann v. Mtna. Ins. Co., 3 ISTebr. 198. And see Franklin Ins. Co. V. Taylor, 52 Miss. 441, 5 Ins. L. J. 671; Weeks v. Lycoming Ins. Co., 7 Ins. L. J. 553 (U. S. Cir.). RULE 58. Question of Tact., Whether or not there is complete oral contract of insurance is a question proper to be submitted to and determined by a jury. Michigan Pipe Co. v. Michigan Ins. Co., 93 Mich. 483, 53 N. W. Rep. 1070; Baker v. Commercial Union Assur. Co., 163 Oral or Parol Contracts. 597 Mass. 358, 38 K E. Eep. 1124, 24 Ins. L. J. 512; Insurance Co. N. A. V. Bird, 175 111. 42, 51 N. E. Eep. 686 ; Duff v. Fire Assoc, 129 Mo. 460, 30 S. W. Rep. 1034; Commercial Ins. Co. V. Morris, 105 Ala. 498, 18 So. Eep. 34; Waldron v. Home Ins. Co., 16 Wash. 193, 47 Pac. Eep. 425 ; Sanborn v. Fireman's Ins. Co., 16 Gray, 448 (Mass.); Baxter v. Massasoit Ins. Co., 13 Allen, 320 (Mass.); Putnam v. Home Ins. Co., 123 Mass. 324; Audubon v. Excelsior Ins. Co., 27 N. Y. 216; Eockwell v. Hart- ford Ins. Co., 4 Abb. Pr. 179 (N. Y.). RULE 59. Verdict of Jury not Disturbed on Appeal. When the evidence tends to show that the agent of the company, when a policy was about to expire, orally agreed with the insured to hold the policy in force as a valid contract of insurance on the terms stated in it for an additional time, for the purpose of enabling the insured to ascertain in what terms it was wished to take a new policy in writing, and until one of the parties should terminate the temporary arrangement, or until the arrangement should end by the expiration of the reasonable time which was agreed to be allowed for that purpose, and while the policy is so held, prop- erty is burned, the question as to the existence of a sufficient oral contract of insurance is for the jury, and their verdict in favor of the insured will not be disturbed on appeal. Baker v. Commercial Union Assur. Co., 162 Mass. 358, 38 N. E. Eep. 1124, 24 Ins. L. J. 512. 598 FiKE Insurance. TITLE VIII. Reformation. EuLE 1. Eeformation cannot make a new contract. 3. Reformation and recovery may be had in same suit. 3. Mutual mistake or mistake and fraud. 4. Mistake must be mutual — Burden of proof — Evi- dence. 5. No reformation upon proof of claimant's mistake alone. 6. Fraud as ground for reformation — Duty in prepa- ration of written contract. 7. Fraud must be specifically alleged. 8. When insured bound by acceptance of policy — His duty to examine policy. 9. Effect of insured's failing to read policy. 10. Mutual mistake as to efEect of language — As to the law. 11. Reformation as to interest or parties — Evidence. 13. EfEect of changes in a policy requested as a renewal — Right of assignee to reformation. 13. When not necessary to have policy reformed. 14. Right to reformation as affected by misrepresenta- tion. 15. Right to reformation as affected by remedy at law. 16. Suit to reform not sustainable after failure in action at law. 17. Reformation does not require new proof of loss. 18. Correction of mistake by agent after loss. RULE I. Reformation Cannot Make a New Contract. The court cannot by reformation make a contract wMcli was not in fact made. Mead v. Westchester Ins. Co., 64 IST. Y. 453; Gary Mfg. Co. V. Merchants' Ins. Co., 42 App. Div. 201, 59 N. Y. Supp. 7; Thompson v. Phoenix Ins. Co., 136 U. S. 287, 19 Ins. L. J. 481; Hartford Ins. Co. v. Haas, 87 Ky. 531, 9 S. W. Rep. 720; Farmville Ins. Co. v. Butler, 55 Md. 233; Boyce v. Hamburg- Bremen Ins. Co., 24 Pa. Super. Ct. 589. And see Rule 4. Refoemation. 599 RULE 2. Beformation and Kecovery May be Had in Same Suit. Reformation of the policy and recovery of the claim thereunder as reformed may be had in the same suit or action. Grerman Ins. Co. v. Davis, 6 Kans. App. 368, 51 Pac. Eep. 60, 37 Ins. L. J. 315; Maryland Home Ins. Co. v. Kimraell, 89 Md. 437, 43 Atl. Rep. 764, 38 Ins. L. J. 739; Ben Frank- lin Ins. Co. V. Gillett, 54 Md. 313; Maher v. Hibernia Ins. Co., 67 N. Y. 393; Hammel v. Queen Ins. Co., 50 Wis. 340. (This subject is also governed by local rules or codes of practice, to which reference should be had.) RULE 3. Mutual Mistake or Mistake and Fraud. The mistake which will warrant a court of equity to reform a contract in writing must be one made by both parties to the agreement, so that the intentions of neither are expressed in it, or it must be the mistake of one party by which his intentions have failed of correct expression, and there must be fraud by the other party in taking advantage of the mistake and obtaining a contract with the knowledge that the one dealing with him is in error in regard to what are its terms. Bryce v. Lorillard Ins. Co., 55 IST. Y. 340 ; Maher v. Hibernia Ins. Co., 67 N". Y. 383; Hay v. Star Ins. Co., 77 N. Y. 335; Cary Mfg. Co. v. Merchants' Ins. Co., 43 App. Div. 301, 59 N. Y. Supp. 7; Ben Franklin Ins. Co. v. Gillett, 54 Md. 313; Hartford Ins. Co. v. Haas, 87 Ky. 531, 9 S. W. Eep. 730; Farmville Ins. Co. v. Butler, 55 Md. 333. 600 FiKE Insubance. RULE 4. Mistake Must be Mutual — Burden of Proof — Evidence. To justify a reformation of the policy the mistake must have been mutual/ and may be established by parol evidence f it must appear what the actual agree- ment between the partieg was and that same is not in the written contract;* the burden of proof rests upon the complainant, and the evidence must be clear, satisfactory, exact, and convincing ;* free from reason- able doubt ;^ mutual mistake is not established when the assured 's testimony is denied or contradicted by that of defendant's agent;" a mere preponderance of evidence is not sufficient.'' 1. Dougherty v. Greenwich Ins. Co., F. J. , 33 Atl. Eap. 295; Underwriters' Fire Assoc, v. Henry, Tex. Civ. App. , 79 S. W. Eep. 1072; Hartford Ins. Co. v. McCarthy, Kans. , 77 Pac. Eep. 90; Milwaukee Mechanics' Ins. Co. V. Palatine Ins.' Co., 128 Cal. 71; Warner-Moore Co. v. West- ern Assur. Co., Va. , 49 S. E. Eep. 499; Home Ins. Co. V. Wood, 50 Nebr. 381, 69 N. W. Eep. 941, 26 Ins. L. J. 686; Trustees St. Clara Academy v. Delaware Ins. Co., 93 Wis. 57, 66 N". W. Eep. 1140; Durham v. Insurance Co., 22 Fed. Eep. 468, 14 Ins. L. J. 285; Home Ins. Co. v. Myer, 93 111. 271; German Ins. Co. v. Gueck, 130 111. 345, 23 N. E. Eep. 112, 19 Ins. L. J. 228; Cary Mfg. Co. v. Merchants' Ins. Co., 42 App. Div. 201, 59 N. Y. Supp. 7; Dougherty v. Lion Ins. Co., 41 Misc. 285, 84 N. Y. Supp. 10, aff'd, on opinion below, 95 App. Div. 618. And see Phoenix Ins. Co. v. Gurnee, 1 Paige, 278 (N. Y.); Hartford Ins. Co. v. Haas, 87 Ky. 531, 9 S. W Eep 720; Farmville Ins. Co. v. Butler, 55 Md. 233. 2. Eilenberger v. Protective Ins. Co., 89 Pa. St. 464; Man- hattan Ins. Co. V. Webster, 59 Pa. St. 227; Globe Ins.'Co v Boyle, 21 Ohio St. 119. 3. Slobodisky v. Phoenix Ins. Co., 52 Nebr. 395, 72 N. W. Eep. 483, 27 Ins. L. J. 53; Home Ins. Co. v. Gurney 56 Yebr 306, 76 N. W. Eep. 553; Thompson v. Phcenix Ins! Co., 136 U. S. 287, 19 Ins. L. J. 481 ; Dalton v. Milwaukee Mechanics' Ins. Co., Iowa, , 102 N. W. Eep. 120; Phcenix Ins. Co. Eefoemation. 601 V. Eogers, 11 Ind. App. 72, 38 K E. Eep. 865; Le Gendre v. Scottish Union & Nat. Ins. Co., 95 App. Div. 562, 88 N. Y. Supp. 1012; Mitchell v. Capital City Ins. Co., 110 Ala. 583, 17 So. Eep. 678; Guernsey v. American Ins. Co., 17 Minn. 104; Harrison v. Hartford Ins. Co., 30 Fed. Eep. 862, 16 Ins. L. J. 787; Clem v. German Ins. Co., 29 Mo. App. 666; Knox v. Lycoming Ins. Co., 50 Wis. 671. And see preceding cases under 1. 4. Mitchell v. Capital Ins. Co., 110 Ala. 583, 17 So. Eep. 678; Johnson v. Farmers' Ins. Co., Iowa, , 102 N. W. Eep. 502; German- Amer. Ins. Co. v. Davis, 131 Mass. 316; Milwaukee Mechanics' Ins. Co. v. Palatine Ins. Co., 128 Cal. 71; Famell v. Home Ins. Co., 136 Fed. Eep. 93, C. C. A. ; Westchester Ins. Co. ■;;. Wagner, 38 S. W. Eep. 214 (Tex. Civ. App.) ; Slobodisky v. Phoenix Ins. Co., 52 Nebr. 395, 72 N. W. Eep. 483, 27 Ins. L. J. 53; Meade v. Westchester Ins. Co., 64 N. Y. 453; Miaghan v. Hartford Ins. Co., 12 Hun, 321; German- Amer. Ins. Co. v. Davis, 131 Mass. 316; Bishop V. Clay Ins. Co., 49 Conn. 167; Blake Opera House Co. v. Home Ins. Co., 73 Wis. 667, 18 Ins. L. J. 373; Suydam v. Columbus Ins. Co., 18 Ohio, 459; National Ins. Co. v. Crane, 16 Md. 260; Farmville Ins. Co. v. Butler, 55 Md. 233; Tesson v. Atlantic Ins. Co., 40 Mo. 33; Epstein v. State Ins. Co., 21 Oreg. 179; Guernsey v. American Ins. Co., 17 Minn. 104; Phoenix Ins. Co. v. Hoffheimer, 46 Miss. 645; Cooper v. Farmers' Ins. Co., 50 Pa. St. 299. 5. Steinberg v. Phenix Ins. Co., 49 Mo. App. 255; Home Ins. Co. V. Wood, 50 Nebr. 381, 69 N. W. Eep. 941, 26 Ins. I. J. 686; Connecticut Ins. Co. v. Smith, 10 Colo. 121, 51 Pac. Eep. 170; Devereux v. Sun Fire Office, 51 Hun, 147; Harrison V. Hartford Ins. Co., 30 Fed. Eep. 862, 16 Ins. L. J. 787. And see preceding cases under 3. 6. Westchester Ins. Co. v. Wagner, 38 S. W. Eep. 214 (Tex. Civ. App.); McHoney v. German Ins. Co., 52 Mo. App. 94; German- Amer. Ins. Co. v. Davis, 131 Mass. 316; Devereux v. Sun Fire Office, 51 Hun, 147; Harrison v. Hartford Ins. Co., 30 Fed. Eep. 862, 16 Ins. L. J. 787; Meiswinkel v. St. Paul F. & M. Ins. Co., 75 Wis. 147, 43 N. W. Eep. 669, 6 L. E. A. 200. 7. Trustees St. Clara Academy v. Delaware Ins. Co., 93 Wis. 57, 66 N. W. Eep. 1140. 602 FiBB Insueance. RULE 5. No Reformation, upon Proof of Claimant's Mistake Alo"". A policy cannot be reformed upon proof of claim- ant's mistake alone; it is an agent's duty to assume rights of applicants for insurance to be just as stated, and when he draws the policy accordingly there is no ground for reformation. Moeller v. American Ins. Co., 53 Minn. 336, 54 N. W. Eep. 189, 33 Ins. L. J. 309; Steinberg v. Phcenix Ins. Co., 49 Mo. App. 355; Hartford Ins. Co. v. Haas, 87 Ky. 531, 9 S. W. Eep. 730. And see Snow v. National Cotton Oil Co., 34 S. W. Eep. 177 (Tex. Civ. App.) ; Mead v. Westchester Ins. Co., 64 N. Y. 453; Farmville Ins. Co. v. Butler, 55 Md. 333; Dougherty v. Lion Ins. Co., 41 Misc. 385, 84 N. Y. Supp. 10, afE'd, 95 App. Div. 618, on opinion below. RULE 6. Fraud as Ground for Reformation — Duty in Preparation of Writ- ten Contract. An agent whose duty it is to prepare a written con- tract in pursuance of a previous agreement, by pre- paring one materially changing the terms of such pre- vious agreement and delivering it as in accordance therewith, commits a fraud, which entitles the other party to relief. Equity will reform a written instru- ment when there is mistake on one side and fraud upon the other. Hay V. Star Ins. Co., 77 N. Y. 335; Schuessler v. Fire Ins. Co. Phila., 103 App. Div. 13, 92 N. Y. Supp. 649 ; Ben Frank- lin Ins. Co. V. Gillett, 54 Md. 213; Dalton v. Agricultural Ins. Co., Iowa, , 103 N. "W. Eep. 135; German Ins. Co. v. Gueek, 130 111. 345, 33 N. E. Eep. 112, 19 Ins. L. J. 238; Medley v. German Alliance Ins. Co., 55 W. Va. 343, 47 S. E. Eep. 101; Farnell v. Home Ins. Co., 136 Fed. Eep. 93, Refokmation. 603 C. C. A. ; Williams v. North German Ins. Co., 34 Fed. Eep. 625, 636. And see Jamison v. State Ins. Co., 85 Iowa, 329, 52 N". W. Rep. 185; Dalton v. Providence-Washington Ins. Co., Iowa, , 103 N. W. Eep. 136; Barnes v. Hekla Ins. Co., 75 Iowa, 11, 39 N. W. Eep. 132; Franklin Ins. Co. v. Martin, 11 Vroom, 568 (IST. J.). And see Enle 3. RULE 7. Fraud Mtist be Specifically AUeg'ed. Assured can have no remedy in equity upon the theory that, having paid the premium for a policy of insurance on his house, it is a fraud on him, having sustained a loss, not to pay it, because certain condi- tions are incorporated in the contract of which he was ignorant; if fraud is relied upon as ground of relief it must be specifically alleged; specific facts must be stated ; a general charge is not sufficient. Tolbert v. Caledonian Ins. Co., 101 Ga. 741, 28 S. E. Eep. 991. RULE 8. When Insxired Bound by Acceptance of .Policy — His Duty to Examine Policy. When the evidence shows that there were no state- ments on part of the company's agent to mislead the assured or throw him off his guar J, and the policy of insurance is accepted and held by the assured, and he does not discover the error until after the property is destroyed by fire, equity will afford no relief against such a mistake which resulted from carelessness and neglect.* It is the duty of insured to examine the policy, and when he retains it without objection for 604 FiEE Insurance. over three months he cannot insist upon reformation after a loss.^ 1. Westchester Ins. Co. v. Wagner, 38 S. W. Rep. 214 (Tex. Civ. App.). 2. Steinberg v. Phcenix Ins. Co., 49 Mo. App. 355; Mc- Honey v. German Ins. Co., 52 Mo. App. 94. And see Rule 9. And see Vol. 1, Fire Insurance as a Valid Contract, " Con- struction," Rule 5. RULE 9. EfEect of Insured's Pailing to Kead Policy. While the policy may be reformed, although the in- sured has held it until after a loss, in silence and ignor- ance, from omission to read the policy or careless reading, of necessity for reformation,^ his mere ignor- ance affords no ground for relief when he has not been misled by some act or representation on the part of the insurance company or its agent ;^ the negli- gence of the assured in not discovering the mistake or change in language, and his laches in not seeking re- lief, are merely questions which make the propriety of granting reformation in a given case discretionary;* or a circumstance proper to be considered by the court in weighing the testimony in determining whether a mistake was made.* 1. Palmer v. Hartford Ins. Co., 54 Conn. 488, 9 Atl. Rep. 248; Fitchner v. Fidelity Ins. Assoc, 103 Iowa, 276, 72 N. W. Rep. 530; Medley v. German Alliance Ins. Co., 55 W. Va. 343, 47 S. E. Rep. 101; Van Tuyl v. Westchester Ins. Co., 55 N. Y. 657; Farnell v. Home Ins. Co., 136 Fed. Rep. 93, C. C. A. . And see Franklin Ins. Co. v. Hewitt, 3 B. Mon. 231 (Ky.). 2. McCormick v. Orient Ins. Co., 86 Cal. 260, 24 Pac. Rep. 1003; Palmer v. Hartford Ins. Co., 54 Conn. 488, 9 Atl. Rep. 348, 16 Ins. L. J. 241 ; Maher v. Hibernia Ins. Co., 67 IST. Y. 283. And see Rule 8. Reformation. 605 3. Hay v. Star Ins. Co., 77 N. Y. 235. 4. Van Tuyl v. Westchester Ins. Co., 55 N. Y. 657, afE'g 67 Barb. 72. RULE 10. Mutual Mistake as to Effect of Language — As to the Law. A mutual mistake as to the effect of language used affords sufficient ground in equity for reformation of the contract by proper expression of what both parties intended to express ;^ so a mutual mistake as to the law induced by representations of the company's agent may be corrected in equity by reformation.^ 1. Maher v. Hibernia Ins. Co., 67 N. Y. 283. And see Texas Ins. Co. v. Stone, 49 Tex. 4; Insurance Co. v. Lewis, 48 Tex. 622; New York Ice Co. v. Northwestern Ins. Co., 23 N. Y. 357. 2. Sias V. Eoger Williams Ins. Co., 8 Fed. Eep. 183, 10 Ins. L. J. 500; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517; Longhurst v. Star Ins. Co., 19 Iowa, 364; Man- hattan Ins. Co. V. Webster, 59 Pa. St. 227. RULE II. Reformation as to Interest or Parties — Evidence. A policy may be reformed in equity to state the cor- rect name, interest, or parties mutually intended to be insured,^ so when policy is issued to and in name of a deceased owner, heirs or other parties in interest may be substituted by reformation f to Justify reformation of a policy, by substituting or adding to the person in- sured, it must be established by the clearest and most satisfactory evidence that the policy as written does not contain or express the intention of both parties as to the person upon whom their minds actually met. The desire or intention of one of the parties alone is 606 FiEE Insueance. not sufficient. A mere preponderance of evidence is not sufficient.^ 1. McCoubray v. St. Paul P. & M. Ins. Co., 50 App. Div. 416, 64 N. Y. Supp. 112, aif'd, 169 K. Y. 590, without opinion; Lancashire Ins. Co. v. Lucas, 34 S. W. Eep. 899 (Ky.) ; Thoma- son V. Capital Ins. Co., 92 Iowa, 72, 61 N. W. Eep. 843; Jami- son V. State Ins. Co., 85 Iowa, 239, 52 N". W. Eep. 185; Croft V. Hanover Ins. Co., 4(f W. Va. 508, 21 S. E. Eep. 854, 24 Ins. L. J. 756; Spare v. Home Ins. Co., 15 Fed. Eep. 708, 19 Fed. Eep. 14; Abraham v. Forth German Ins. Co., 40 Fed. Eep. 717, 19 Ins. L. J. 511; "Williams v. North German Ins. Co., 24 Fed. Eep. 625, 14 Ins. L. J. 708; Eseh v. Home Ins. Co., 78 Iowa, 334, 43 N". W. Eep. 229; Devereux v. Sun Fire Office, 51 Hun, 147; Manhattan Ins. Co. v. Webster, 59 Pa. St. 227; Keith v. Globe Ins. Co., 52 111. 518; Fink v. Queen Ins. Co., 24 Fed. Eep. 318, 16 Ins. L. J. 314; German Ins. Co. v. Gueck, 130 111. 345, 23 N. B. Eep. 112, 19 Ins. L. J. 228. And see Lansing v. Commercial Union Assur. Co., Nebr. , 93 N. W. Eep. 756; Balen v. Hanover Ins. Co., 67 Mich. 179, 34 N. W. Eep. 654; Globe Ins. Co. v. Boyle, 21 Ohio St. 119. 2. Taylor v. Glens Falls Ins. Co., 44 Fla. 273, 32 So. Eep. 887. 3. Trustees St. Clara Academy v. Delaware Ins. Co., 93 "Wis. 57, 66 N. "W. Eep. 1140; Phoenix Ins. Co. v. HofEheimer, 46 Miss. 645. And see Schmidt v. "V^irginia F. & M. Ins. Co., 37 S. "W. Eep. 1013, afE'd, orally, by Tenn. Sup. Ct., 37 S. "W. Eep. 1015; Snow v. National Cotton Oil Co., 34 S. "W. Eep. 177 (Tex. Civ. App.); Gushing v. "Williamsburg City Ins. Co., 4 Wash. 538, 30 Pac. Eep. 736. It was held in Pelzer Mfg. Co. v. Hamburg-Bremen Ins. Co., 73 Fed. Eep. 826, afE'd, 76 Fed. Eep. 479, that a judgment might be reformed in equity to correct a clerical error in a ver- dict, there being no remedy at law. RIFLE 12. EfEfect of Changes in a Policy Requested as a Renewal — Right of Assignee to Reiormation. When a renewal is requested of an existing policy, to which the insurance company agrees, and a policy Reformation. 607 issues upon such request, the mutual intent is to renew the insurance as asked for, and if the insurance com- pany inserts new clauses or conditions without assent of the insured it is proper to strike same out by refor- mation;^ an assignee of the policy with interest in it after a fire may maintain a suit for reformation.^ 1. Thomason v. Capital Ins. Co., 92 Iowa, 72, 61 K "W. Rep. 84.3; Palmer v. Hartford Ins. Co., 64 Conn. 488, 9 Atl. Eep. 248, 16 Ins. L. J. 241. 2. Benesh v. Mill Owners' Ins. Co., 103 Iowa, 465, 72 K W. Eep. 674. RULE 13. When not Necessary to Have Policy Eeformed. When the facts are such as to create an estoppel or waiver, preventing the company from taking advan- tage of a defense or breach of a condition it is not necessary to have the policy reformed by a bill in equity;^ so when building is sufficiently identified as the one intended by knowledge of the agent who wrote the policy, his error in description of location on a corner of certain named streets, in stating one of the streets by wrong name, does not require reformation.^ 1. German Ins. Co. v. Miller, 39 111. App. 633; Smith v. Commonwealth Ins. Co., 49 Wis. 322. And see Vol. 1, Fire Insurance as a Valid Contract, chapter on " Waiver and Estoppel." 2. American Central Ins. Co. v. McLanathan, 11 Kans. 533. RULE 14. Bight ito Reformation as Affected by Misrepresentation. A court of equity will not reform a contract of in- surance if its execution was procured by the false rep- 608 FiEE Insukance. resentations of the party who is seeking to have it corrected; it will not decree its specific performance. And this is the rule even if the party did not know of its falsity and had no intent to deceive; nor does his belief in its truth make any difference. The question is, has the other party been misled by a false represen- tation relating to the substance or essence of the con- tract; for instance, the title to the property insured? Policy having been obtained in name of one owner, when in fact the property described, or part of it, was, in fact, owned by another, upon a misrepresentation as to title, a bill for relief by reformation to cover all the property should be dismissed. Cushman v. New England Ins. Co., 65 Vt. 569, 37 Atl. Eep. 426, 23 Ins. L. J. 41. RULE 15. Right to Beformation as Affected by Remedy at Law. It is no answer to a suit by the insured for reforma- tion that there is or might have been a remedy in ac- tion at law;^ but the insurance company can have no relief in equity after a loss in respect to those matters which by law afford a complete defense in an action upon the policy.^ 1. Western Assur. Co. v. Ward, 75 Fed. Eep. 338, 41 IT. S. App. 443; Delaware State Ins. Co. v. Gillett, 54 Md. 219. 2. Imperial Ins. Co. v. Gunning, 81 111. 236. Eefobmation. 609 RULE i6. ;Suit to Reform not Sustainable After Failure in Action at Law. After the insured has failed in an action at law upon the policy as written, he cannot sustain a suit for reformation. Washburn v. Great Western Ins. Co., 114 Mass. 175. And see Steinbach v. Eelief Ins.^ Co., 77 N. Y. 498; Thomas v. United Firemen's Ins. Co., 108 111. App. 278. Contra, Grand View Building Assoc, v. Northern Assur. Co., Nebr. , 102 N. W. Eep. 246. RULE 17. Reformation Boes not Require New Proof of Iioss. A reformation of the policy does not require the insured to furnish new or further statement or proof of loss. Maher v. Hibernia Ins. Co., 67 N. Y. 283. RULE 18. Correction of Mistake by Agent After Loss. An agent who has by mistake omitted a clause in the policy may insert same as originally agreed, even after a loss has occurred, specially when the policy remains in his custody and not delivered. McLaughlin v. American Ins. Co., Iowa, , 101 N". W. Eep. 765. Vol. 2 — 39 610 FiEB Insueance. TITLE IX. Contract as Affected by Legality or Violation of Statute. EuLE 1. Wager policies — No insurable interest. 2. Intent of insurance contract as affecting its legality — Contract collateral — Question of fact. 3. Effect of permission of insured to use for unlawful purpose. 4. Effect of specific provision in policy as to use for un- lawful purpose. 5. As affected by insured's failure to procure license — When contract not void as against public policy — When ownership not unlawful. 6. Effect of statute imposing a privilege tax. 7. Contract made on Sunday. 8. When contract not void as in restraint of trade. 9. Effect of statute requiring foreign corporation to procure certificate to transaqt business on right to obtain insurance. RULE I. Wager Policies — Ho Insurable Interest. Mere wager policies of fire insurance, without in- surable interest to sustain them, are void at common law, irrespective of any statute;^ a policy may cover future products or production of the insured in course of his business, trade, or calling, without being subject to objection that it is a wager policy.^ 1. Freeman v. Fulton Ins. Co., 14 Abb. Pr. 398 (S. Y.).. And see this volume, title " Insurable Interest." 2. Sawyer v. Dodge County Ins. Co., 37 Wis. 503. RULE 2. Intent of Insurance Contract as Affecting its Legality — Contract Collateral — Question of Fact. When the direct purpose or intent of the insurance contract is to effect, advance, or encourage acts in vio- Contract as ArrECTED by Legality. 611 lation of law it is void ; but if collateral and independ- ent, though in some measure connected with acts done in violation of law, the contract cannot be claimed to be void. Collateral contracts, in which no illegal de- sign enters, are not affected by an illegal transaction with which they may be remotely connected. The dis- tinction is between the cases where the contract is void in its inception, entered into for the purpose of pro- tecting a prohibited traffic, and those cases where the contract is collateral, and into which no illegal design enters, although by subsequent acts of the assured it becomes remotely connected with illegal transactions ;^ the question is one proper to be determined by a jury.^ 1. Carrigan v. Lycoming Ins. Co., 53 Vt. 418; Niagara Ins. Co. V. DeGrafE, 12 Mich. 134; Boardman v. Merrimack Ins. Co., 8 Cush. 583 (Mass.); Kelly v. Home Ins. Co., 97 Mass. 288; Johnson v. Union Ins. Co., 127 Mass. 556; Armstrong v. Toler, 11 Wheat. 271 (II. S.); Ocean Ins. Co. v. Polleys, 13 Pet. 157 (U. S.) ; Erb v. German-Amer. Ins. Co., 98 Iowa, 60G. And see Shedlinsky v. Budweiser Brewing Co., 163 N. Y. 439. While this last ease was not an insurance case, it very tersely states the rule or principle. The court says: "It is a gen- erally accepted rule that when a contract is to do a thing which cannot be performed without the violation of the law, it is void; but when it may be performed lawfully, as well as in violation of the law, it is valid, in the absence, at least, of proof that the intention of both parties was that the law should be violated. The construction of a contract should be, when it is possible, in favor of its legality." 2. Carrigan v. Lycoming Ins. Co., supra. RULE 3. Effect of Permission of Insured to Use for TTnlawful Purpose. The insured may permit an insured building to be used for a purpose made unlawful by statute, such as. 612 FiEE Insubance. the drawing of a lottery, and if there is no language in the policy prohibiting same it does not affect the insurance. Boardman v. Merrimack Ins. Co., 8 Cush. 583 (Mass.). See Eule 4. RULE 4. Effect of Specific Provision in Policy as to Use for trnla-^ul Purpose. When the policy provides that, if the premises should be used for an unlawful purpose, it shall be- come void, the mere fact that the insured, a druggist, has not complied with a statute as to registry does not establish a breach of the condition; the law does not require that the owner of the property, or one con- ducting such business, shall be a registered pharma- cist; the insured may conduct such business by em- ploying a duly qualified pharmacist. Erb V. German Ins. Co., 99 Iowa, 398, 68 N. W. Rep. 701; Erb V. Fidelity Ins. Co., 99 Iowa, 737, 69 K. W. Rep. 261. Some of the old forms in terms prohibited use of building " for unlawful purposes," and it was held that the habitual use for an unlawful pui-pose voided the policy, even if unknown to the assured. Kelly V. Worcester Ins. Co., 97 Mass. 384. But see also Hinckley v. Germania Ins. Co., 140 Mass. 38, where it was held that policy may be only suspended while illegality exists, and revives when the illegality ceases. And see this volume, " Increase of Hazard," Rule 30. RULE 5. As Affected by Insured's Failure to Procure License — When Contract not Void as Against Public Policy — When Owner- ship not TTnlawful. The insured is not affected by his mere failure to procure a license as required by statute to sell liquors ;^ CONTRA-OT AS AfFEOTED BY LEGALITY. 613 SO conducting a business in violation of a statute does not void the insurance,^ unless the statute in terms makes the contract void.* When policy covers a stock of drugs and liquors, the fact that the assured uses a part of the property covered for an unlawful pur- pose, that is susceptible of legitimate use in his busi- ness, does not render the insurance contract void as against public policy;* though it may be put in issue whether liquors covered by the policy were owned by the insured with intent or for the purpose of sale in violation of the law, and if he does not intend to sell them in the State, or if he intends to sell them outside of the State, his ownership is not unlawful.^ 1. Manchester Assur. Co. v. Feibelman, 118 Ala. 308, 23 So. Eep. 759, 27 Ins. L. J. 855. And see prior appeal, 108 Ala. 180, 197; Niagara Ins. Co. v. DeGraff, 12 Mich. 124; Erb V, German-Amer. Ins. Co., 98 Iowa, 606, 67 N. W. Eep. 583. 2. Petty V. Mutual Ins. Co., Ill Iowa, 358, 82 N. W. Rep. 767. 3. See Eules 2-4, 6. 4. Erh V. German-Amer. Ins. Co., 98 Iowa, 606, 67 N. W. ■Eep. 583. 5. Erb V. German-Amer. Ins. Co., supra. And see Kelly v. Home Ins. Co., 97 Mass. 288; Carrigan v. Lycoming Ins. Co., 53 Vt. 418, 10 Ins. L. J. 606. RULE 6. Effect of Statute Imposing a Privilege Tax. "When a statute imposes what is called a privilege tax upon stocks of goods, the failure of the insured to comply therewith renders his business illegal, and when such a statute in terms provides that " all con- tracts made with any person who violates the law shall be null and void," it includes a policy of insurance 614 FiEB Insubanoe. which thereby becomes void, and no recovery can be had thereon;^ but the statute affords no defense if the tax is fully paid at tiijie the policy issues,^ or if the jBre occurs before the insured begins business.' 1. American Ins. Co. v. First Nat. Bank, 73 Miss. 469, 18 So. Eep. 931; Sun Mutual Ins. Co. v. Searles, 73 Miss. 62, 18 So. Eep. 544; Pollard v. PhcEnix Ins. Co., 63 Miss. 244, 15 Ins. L. J. 376. 2. Springfield F. & M. Ins. Co. v. Fowler, Miss. , 31 50. Eep. 810; Sneed v. British America Assur. Co., 72 Miss. 51, 17 So. Eep. 281. 3. Home Ins. Co. v. Lowenthal, Miss. , 36 So. Eep. 1042. RULE 7. Contract Made on Sunday. A contract of insurance made on Sunday is void, unless there is evidence of subsequent ratification. Heller v. Crawford, 37 Ind. 279. RULE 8. When Contract not Void as in Bestraint of Trade. A policy which provides that the insurance shall not inure to the benefit of any carrier cannot be claimed to be void as being in restraint of trade. Insurance Co. K. A. v. Easton, 73 Tex. 167. RULE 9. Effect of Statute Requiring Foreign Corporation to Procure Cer- tificate to Transact Business on Right to Obtain Insurance. A statute which requires a foreign corporation to procure a certificate of the Secretary of State before it can legally transact business within the State, or maintain any action upon any contract made by it in CONTKACT AS AfFECTED BY LEGALITY. 615 the State, does not prevent a foreign corporation f roni obtaining through a broker a policy of insurance against fire upon its property in another State, and enforcing the same by action, without such certificate. Cummer Lumber Co. v. Associated Manufacturers' Ins. Co., 67 App. Div. 151, 73 ]Sr. Y. Supp. 668, afE'd, 173 N. Y. 633, ■without opinion. While beyond the scope of this work, the following notes may be found useful : Combination to maintain rates. — It is not criminal at com- mon law for insurance companies to combine or agree to main- tain rates. ^tna Ins. Co. v. Commonwealth, 106 Ky. 864, 51 S. W. Eep. 624, 45 L. E. A. 355. But it may be made so by statute. State V. Firemen's Fund Ins. Co., 152 Mo. 1, 52 S. "W. Eep. 595, 45 L. E. A. 363. And see State v. Mtna. Ins. Co., 150 Mo. 113, 51 S. W. Eep. 413, 28 Ins. L. J. 856. A combination of fire companies for the purpose of main- taining rates, prevention of rebates, regulating compensation of agents, and intercourse between themselves and those com- panies which are not members, is not an illegal combination or conspiracy, and the making effective such objects by lawful means will not be enjoined upon a bill filed by a nonmember. Dismissal of an agent for refusal to represent the associated companies exclusively, and refusal to place insurance for out- side companies, are lawful means. Falsely advertising authority to cancel for an outside com- pany, and threats to boycott agents and customers of outside companies, are illegal and will be enjoined. Continental Ins. Co. v. Board of Fire Underwriters, 67 Fed. Eep. 310, 24 Ins. L. J. 561. Fire insurance companies may Join in a suit in equity against the State Insurance Commissioner to' restrain him from ille- gally revoking their certificates of authority to do business in the State and canceling their bonds; the fact that a number of them are members of an alleged illegal combination to sup- press competition does not prevent the maintenance of such a suit. Liverpool, L. & G. Ins. Co. v. Clunie, 88 Fed. Eep. 160. Insurance is a commodity within the Iowa statute forbidding combinations or confederations between individuals or corpora- 616 FiBE Insueance. tions to regulate or fix the price of any commodity. An agree- ment between local agents to fix rates is within the operation of the statute, but an agent who was a party to such a compact cannot afterward recover damages from the other agents on account of the withdrawal of his agency, where he has violated the compact agreement. As the compact was illegal, he lost nothing but an illegal business, made so by a conspiracy to which he was a party. Beechley v. Mulville, 103 loHrsL, 602, 70 IST. W. Eep. 107, re- hearing denied, 102 Iowa, 611, 71 K W. Eep. 428. A combination by insurance companies to fix rates of insur- ance and commissions of agents is not prohibited by chapter 117, Acts of Twenty-first Legislature of Texas, page 141, en- titled "An act to define trusts and to provide for penalties and punishment of corporations, persons and firms, and associa- tions, etc., to promote free competition in the State of Texas."^ Such a combination is not a " restriction in trade." Insurance is not a commodity; nor is it commerce, but an aid to com- merce. Cases applicable to combinations in restraint of trade,, cited and distinguished. Queen Ins. Co. v. State, 86 Tex. 250, 24 S. W. Eep. 397, 23 Ins. L. J. 166. The business of fire insurance companies is within the mean- ing and application of the statute of Mississippi prohibiting trusts and combinations. Fire Insurance Companies v. State, 75 Miss. 24, 22 So. Eep. 99, 26 Ins. L. J. 860. Insurance business is not interstate commerce, and the word "trade" in the Kansas statute (L. 1889, chap. 257), declaring- unlawful trusts and combinations in restraint of trade, etc., does not mean interstate commerce. Foreign insurance com- panies that combine to control and increase rates of insuranca fiolate the provisions of such act, and their local agents are liable to prosecution thereunder and to imposition of the pen- alty. The Kansas Legislature has the power to declare upon irhat terms and conditions a foreign insurance company may do business within that State. State V. Phipps, 50 Kans. 609, 31 Pac. Eep. 1097, 22 Ins. L. J. 345. See also Southern Ins. Co. v. Williams, 62 Ark. 382. And as to legality of pooling agreements between com- panies as to rates, see also Metzger v. Cleveland, 28 Ins. L. J. 176 (Ind. Supr.); the same opinion is also reported in 13 Ins. L. J. 855. The Iowa statute (Code, § 1754) directed against agreements by insurance companies to maintain rates has been lately held Contract as Affected by Legality. 617 to be unconstitutional on a demurrer. Greenwich Ins. Co. v. Carroll, 125 Fed. Eep. 121. It is understood that an appeal has been or will be taken to U. S. Supreme Court. Attorney's fees. — The courts do not agree as to the consti- tutionality of statutes imposing attorney's fees. That such a statute is unconstitutional: Phcenix Ins. Co. v. Hart, 112 Ga. ,765, 38 S. E. Eep. 67. That it is constitutional: Continental Ins. Co. v. Whitaker, Tenn. , 79 S. W. Eep. 119; L'Engle v. Scottish Union & Nat. Ins. Co., Fla. , 37 So. Eep. 462; Insurance Co. N. A. v. Bachler, 44 Nebr. 549, 62 N. W. Eep. 911, 24 Ins. L. J. 481; Farmers' Ins. Co. V.Cole, Nebr. , 93 N. W. Eep. 730; British America Ins. Co. V. Bradford, 60 Kans. 82, 55 Pac. Eep. 335, 28 Ins. L. J. 262; German Ins. Co. v. Allen, Kans. , 77 Pac. Eep. 529. The courts do not always seem to note the distinction be- tween a statute imposing attorney's fees as such as part of the costs or expenses of an action, and a statute imposing a penalty by way of percentage upon the amount of the claim or insur- ance. One might be constitutional and the other not. See Vol. 1, Fire Insurance as a Valid Contract, "Payment of the Loss," Eule 14, note. Lloyds. — The validity of Lloyds insurance, when the lia- bility for loss under the contract rests upon the individual underwriters, in the absence of statutes prohibiting the same, is well established, and so their power to do business in other States than the one in which the association was forined is unqualified in absence of limiting or prohibitory statutes. Enterprise Lumber Co. v. Mundy, 62 N". J. L. 16, 42 Atl. Eep. 1063. At common law a number of individuals might properly enter into mutual covenants to indemnify each other against loss by fire, and unless restricted by statute such agreements are still valid. A temporary Lloyds association or organiza- tion, acting through an attorney in fact, and temporary only pending proceedings to incorporate under the statute, is legal, and the liability of the individual subscribers for a loss may be enforced, and if necessary the assessment of the proportion- ate share of liability may be ascertained and decreed by suit in equity. Clark V. Spafford, 47 111. App. 160. There being no restriction or prohibition by statutes of Illi- nois against the legal right of citizens of that State to engage in the insurance business in the making of individual contracts of insurance, a citizen of a foreign State may in that State ^18 FiBE Insurance. exercise the same right, and a general provision of the Illinois statute, or Insurance Act, making it applicable to " all foreign companies, partnerships, associations, and individuals, whether incorporated or not," cannot constitutionally impose a restric- tion on the citizens of other States not imposed upon the citi- zens of Illinois. Therefore held that an agent of a New York Lloyds in Illinois was not subject to the penalty imposed by the Insurance Act of Illinois (E. S. 1874). Barnes v. People ex rel. Moloney, 168 111. 425, 48 E". E. Eep. 91. When a Lloyds organization or association in effect limits their liability to the amount of money contributed by each -subscriber, and assumes to give perpetuity to the business by making membership certificates transferable by the assign- ment of the member or his personal representatives, it is acting as a corporation without being legally incorporated, and hence in Illinois, under the statute of that State, cannot legally transact business, being liable to the judgment of ouster in quo warranto proceedings. The fact that the subscribers may be legally individually liable does not change the result. Indi- viduals may insure property against loss by fire, and if they will carry on that business must either openly act upon their responsibility as individuals or they must become incorporated. Greene v. People, 150 111. 513, 37 N. E. Eep. 843. The business of insurance against loss by fire is, by reason of its magnitude, its importance to property-owners, and the na- ture of the business, a proper subject for the exercise of the police power of a State. The Pennsylvania Act of 1870, pro- hibiting any person, partnership, or association, from making any contract of insurance against loss by fire, without au- thority expressly conferred by a charter of incorporation, is a valid exercise of the police power. It does not prohibit but regulates the business. It excludes no one from engaging in it, but prescribes the preliminary qualifications necessary for all alike, to entitle them to enter tlie business. It is open to all under general laws and is not burdensome. Its only effect is to secure adequate capital at the beginning and State super- vision during the continuance of the business. Nature of the police power of a State as applicable to the insurance business considered at length. Commonwealth v. Vrooman, 164 Pa. St. 306, 30 Atl Eep 317, 25 L. E. A. 250. ^ The decision in this case was by a divided court. Three of ihe judges concurred in a dissenting opinion. Under the Pennsylvania Act of May 1, 1876, section 47, and Contract as Affected by Legality. 619 April 4, 1873, the 'words " insurance companies " refer only to incorporated companies and not to Lloyds or individual under- writers. An insurance agent who, without the prescribed li- cense, acts as agent of such Lloyds of another State is not liable to the penalty by such statute imposed. Commonwealth v. Eeinoehl, 163 Pa. St. 287, 29 Atl. Eep. 896. Upon request of the Insurance Commissioner for advice, the Attorney-General held (December 10, 1894) that in the then present state of the law and decisions in Pennsylvania, citing Commonwealth v. Vrooman, 164 Pa. St. 306, that no license to do an insurance business in Pennsylvania should be granted to a Lloyds association organized in New York; that such business was unlawful and subjected persons in that State, acting for them, to the penalties prescribed. Re Lloyds Association, 15 Pa. Co. Ct. 586. The insurance statute of Ohio applies to foreign insurance companies and associations whether incorporated or not. A Xiloyds organization or association of another State, whose acts are such as appertain to corporations or are done after the manner of corporations, is bound to obtain a certificate of authority as prescribed by the Ohio statute; if they attempt to conduct the business without such authority, they unlaw- fully exercise a franchise, or act as a corporation contrary to the statute, and in either view judgment of ouster will be entered in quo warranto proceedings. State V. Ackerman, 51 Ohio St. 163, 37 N. B. Eep. 828. Under the Texas statute of 1887, an agent of a Lloyds asso- ciation of another State is not liable to penalty imposed. The law in question was held to apply only to chartered or in- corporated companies. The court expressly recognized the power of the Legislature to change or amend the law so as to make such associations and their agents subject thereto. Fort V. The State, 92 Ga. 8, 18 S. B. Eep. 14. Citizens of New York associated in business as Lloyds, for the purpose of doing a foreign insurance business and not in- corporated, are entitled to engage in that business with the same privileges and immunities as unincorporated citizens of the State of Alabama, and they are not required by the statute law of the latter State to obtain any license to do business in that State. Hoadley v. Purifoy, 107 Ala. 276, 18 So. Eep. 220, 30 L. E. A. 351. But note that it was so decided upon the ground that there was no statute law in force in the State of Alabama at the 620 Fire Insurance. time of the decision which embraced within its terms indi- Tiduals or associations from other States not incorporated. In Pennsylvania there is a prohibitory clause which covers the Lloyds. Commonwealth v. Vrooman, 164 Pa. St. 306. It has been held, however, that where the State statute is in terms broad enough to include unincorporated associations, firms, and individuals, all nonresident individuals composing a Lloyds association are entitled to transact business within such State upon the same terms as its own citizens. Under the United States Constitution there can be no discrimination. State ex rel. Hoadley v. Florida Ins. Comrs., 37 Fla. 564, 20 So. Eep. 772, 33 L. E. A. 288. There is (or was) no statute preventing an insurance agent from doing business in the State of Indiana for a foreign asso- ciation not incorporated under a foreign statute. State V. Campbell, 17 Ind. App. 442, 46 N. E. Eep. 944. As to taxation of Lloyds see Fire Department v. Stanton, 28 App. Div. 334, 51 N. Y. Supp. 242. Statutoey Pbovisions. 621 CHAPTER EIGHTH. Statutory Provisions. Alabama, Montana, Arkansas, Nebraska, California, *]Srew Hampshire, Colorado, New York, Connecticut, North Carolina, Florida, North Dakota, Georgia, Ohio, Illinois, Oklahoma, Iowa, Pennsylvania, Kansas, Ehode Island, Kentucky, South Carolina, Louisiana, South Dakota, Maine, Tennessee, Maryland, Texas, Massachusetts, Vermont, Michigan, Virginia, Minnesota, Washington, Mississippi, Wisconsin. Missouri, (The following statutory provisions are intended to be in- serted as relevant to the subject-matter of the previous chapters or titles of this volume, and do not include the statutes of the various states prescribing the conditions upon which fire insur- ance companies may be authorized to transact business, impos- ing penalties, or otherwise regulating the details of the business as to agents, reinsurance, etc., as between the state and the companies or their agents or penal statutes. It is intended to limit the insertion to such as afEect the subjects as between the insured and the company. There may be occasional provisions inserted beyond such limitation and as affecting a subject as between the state and the company or an agent, but this is done for purpose of comparison or distinction. For instance, com- pare the statutory provisions of Alabama, Illinois, Iowa, and Wisconsin in regard to agents, and see this volume, title ''Agents," Eules 97-106. This chapter includes legislation down to and including 1905, except in the case of Georgia, where the legislature is still in session as the work goes to press.) * See statutory provisions, Vol. 1. 622 FiEE Insueance. ALABAMA. Civil Code, 1896, Volume 1. § 2602. Contracts of insurance to be in plain language, free from ambigruity; rebates on premiums prohibited; penalty. — No life, nor any other insurance company, nor any agent thereof, shall make any contract of insurance, nor agreement as to policy-contract, other than is plainly expressed in the policy issued thereon; nor shall any such company or agent pay or allow, or offer to pay or allow as inducement to insurance, any rebate of premiums payable on the policy, nor shall any particular policy-holder of the same class be allowed any ad- vantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever not speci- fied in the policy-contract of insurance. Any company or agent directly or indirectly violating this section shall be held guilty of a misdemeanor, and upon conviction shall be fined not less than one hundred dollars nor more than five hundred dollars for the first offense, and shall be fined not less than two hundred and fifty dollars for each subsequent offense. § 2603. Who are agents of foreign companies; penalty for acting without license. — Any person who solicits insurance on behalf of any insurance company not organized under or incor- porated by the laws of this state, until such company has fully complied with all the requirements of this article, and until such company has received from the insurance commissioner the certificate of authority to transact business of insurance in this state, or takes or transmits, other than for himself, any application for insurance, or any policy for insurance, to or from such company, or in any way gives notice that he will receive or transmit the same, or receives or delivers a policy of insurance of any such company, or examines or inspects a risk, or receives, collects, or transmits any premium of insur- ance, or makes or forwards any diagram of any building or buildings, or does or performs any other act or thing in the making or consummating of any contract of insurance with or for any insurance company, other than for himself, or examines or adjusts, or aids in adjusting any loss or on behalf of any such insurance company, whether any such acts shall be done at th'i request or instance or by the employment of such insurance company, or of or by any other person, shall be guilty of a misdemeanor, and upon conviction by a court having jurisdic- tion, shall be fined not less than one hundred dollars nor more than five hundred dollars, or may be imprisoned in the county Statutoey Provisions. 623 jail not more than thirty days, or both, at the discretion of the court. § 2604. Liability of agent for loss sustained on contract un- lawfully made by him. — Any agent or person shall be person- ally liable for the full amount of loss sustained on all contracts of insurance unlawfully made by or through him, directly or indirectly for or in behalf of any insurance company not au- thorized by insurance commissioner to do business in this state at the time the application for such insurance was made, or at the date when such insurance policy became efEective. § 2606. When contracts of insurance regarded as made in this state. — All contracts of insurance, the application for which is taken within the state, shall be deemed to have been made within this state, and subject to laws thereof. ARKANSAS. Laws of 1895, Act CXVII. § 1. That any person, who shall hereafter solicit insurance or procure applications, shall be held, to be soliciting agent of the insurance company or association issuing a policy on such application, or on a renewal thereof, anything in the applica- tion or policy to the contraiy notwithstanding. Laws of 1899, Act LXXXV. § 1. That in all actions against any fire insurance company, individual or corporation, for any claim accruing or arising upon or growing out of any policy upon personal property issued by any such company, individual or corporation, proof of a substantial compliance with the terms, conditions and war- ranties of such policy, upon the part of the assured, or party, individual, person or corporation to whom it may have been issued, or their assigns, shall be deemed sufficient, and entitle the plaintifE to recover in any such action. CAnrORNIA. Pomeroy's Civil Code (1901). § 2546. Insurable Interest, what.— -Every interest in prop- erty, or any relation thereto, or liability in respect thereof, of such a nature that a contemplated peril might directly damnifj^ the insured, is an insurable interest. 624 FiBE Insurance. § 2547. In what may consist. — An insurable interest in property may consist in: 1. An existing interest; 2. An inchoate interest founded on an existing interest; or, 3. An expectancy, coupled with an existing interest in that out of which the expectancy arises. § 2548. Interest of carrier or depositary. — A carrier or depositary of any kind has an insurable interest in a thing held by him as such, to the extent of its value. § 2549. Mere expectancies.— A mere contingent or expect- ant interest in anything, not founded on an actual right to the thing, nor upon any valid contract for it, is not insurable. § 2550. Measure of interest in property. — The measure of an insurable interest in property is the extent to which the insured might be damnified by loss or injury thereof. § 2551. Insurance without interest, illegal. — The sole object of insurance is the indemnity of the insured, and if he has no insurable interest, the contract is void. § 2552. When interest must exist. — An interest insured must exist when the insurance takes effect and when the loss occurs, but need not exist in the meantime. § 2553. Effect of transfer. — Except in the cases specified in the next four sections, and in the cases of life, accident, and health insurance, a change of interest in any part of a thing insured, unaccompanied by a corresponding change of interest in the insurance, suspends the insurance to an equivalent ex- tent, until the interest in the thing and the interest in the insurance are vested in the same person. § 2554. Transfer after loss. — A change of interest in a thing insured, after the occurance of an injury which results in a loss, does not affect the right of the insured to indemnity for the loss. § 2555. Change of interest. — A change of interest in one or more of several distinct things, separately insured by one policy, does not avoid the insurance as to the others. § 2556. In case of death of the insured. — A change of in- terest, by will or succession, on the death of the insured, does not avoid an insurance; and his interest in the insurance passes to the person taking his interest in the thing insured. § 2557. In the case of transfer between cotenants. — A transfer of interest by one of several partners, joint owners, or owners in common, who are jointly insured,, to the others, does not avoid an insurance, even though it has been agreed that the insurance shall cease upon an alienation of the thing in- sured. Statutory Provisions. 625 § 2558. Policy, when. void. — Every stipulation in a policy of insurance for the payment of loss, whether the person in- sured, has or has not any interest in the property insured, or that the policy shall be received as proof of such interest, and every policy executed by way of gaming or wagering, is void. § 2561. Concealment, what. — A neglect to communicate that which a party knows, and ought to communicate, is called a concealment. § 2562. Effect of concealment. — A concealment, whether in- tentional or unintentional, entitles the injured party to rescind a contract of insurance. § 2563. What must be disclosed. — Each party to a contract of insurance must communicate to the other, in good faith, all facts within his knowledge which are or which he believes to be material to the contract, and which the other has not the means of ascertaining, and as to which he makes no warranty. § 2564. Matters which need not be communicated without inquiry. — Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other: 1. Those which the other knows; 2. Those which, in the exercise of ordinary care, the other ought to know, and of which the former has no reason to sup- pose him ignorant; 3. Those of which the other waives communication; 4. Those which prove or tend to prove the existence of a risk excluded by a warranty, and which are not otherwise material; and, 5. Those which relate to a risk excepted from the policy, and which are not otherwise material. § 2565. Test of materiality. — Materiality is to be deter- mined, not by the event, but solely by the probable and reason- able influence of the facts upon the party to whom the com- munication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. § 2566. Matters which each is bound to know. — Each party to a contract of insurance is bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may afEect either the political or material perils contemplated; and all general usages of trade. § 2567. Waiver of communication. — The right to informa- tion of material facts may be waived, either by the terms of insurance or by neglect to make inquiries as to such facts, where they are distinctly implied in other facts of which infor- mation is communicated. Vol. 2 — 40 626 FiKE Insurance. § 3568. Interest of insured. — Information of the nature or amount of the interest of one insured need not be communi- cated unless in answer to an inquiry, except as prescribed by section twenty-five hundred and eighty-seven. § 3569. Fraudulent warranty. — An intentional and fraudu- lent omission, on the part of one insured, to communicate in- formation of matters proving or tending to prove the falsity of a warranty, entitled the insurer to rescind. § 3570. Matters of opinion. — Neither party to a contract of insurance is bound to communicate, even upon inquiry, infor- mation of his own judgment upon the matters in question. § 3571. Representation, what. — A representation may be oral or written. § 3573. When made. — A representation may be made at the same time with issuing the policy, or before it. § 3573. How interpreted. — The language of a representa- tion is to be interpreted by the same rules as the language of contracts in general. § 3574. Representation as to future. — A representation as to the future is to be deemed a promise, unless it appears that it was merely a statement of belief or expectation. § 3575. How may affect policy. — A representation cannot be allowed to qualify an express provision in a contract of insur- ance; but it may qualify an implied warranty. § 3576. When may be withdrawn. — A representation may be altered or withdrawn before the insurance is effected, but not afterward. § 3577. Time intended by representation. — The completion of the contract of insurance is the time to which a representa- tion must be presumed to refer. § 3578. Representing information. — When a person insured has no personal knowledge of the fact, he may nevertheless repeat information which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others, or he may submit the informa- tion, in its whole extent, to the insurer; and in neither case is he responsible for its truth, unless it proceeds from an agent of the insured, whose duty it is to give the intelligence. § 8579. Falsity.— A representation is to be deemed false when the facts fail to correspond with its assertions or stipu- lations. § 3580. Effect of falsity. — If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false. Statutoey Pbovistons. 627 § 2581. Materiality. — The materiality of a representation is determined by the same rule as the materiality of a con- cealment. § 2582. Application of provisions of this article. — The pro- visions of this article* apply as well to a modification of a contract of insurance as to its original formation. § 2583. Right to rescind. — Whenever a right to rescind a contract of insurance is given to the insurer by any provision of this chapter, such right may be exercised at any time pre- vious to the commencement of an action on the contract. § 2687. Wliat must be specified in a policy. — .A policy of insurance must specify: 1. The parties between whom the contract is made; 2. The rate of premium; 3. The property or life insured; 4. The interest of the insured in property insured, if he is not the absolute owner thereof; 5. The risk insured against; and, 6. The period during which the insurance is to continue. § 2588. Whose interest is covered. — When the name of the person intended to be insured is specified in a policy, it can be applied only to his own proper interest. § 2589. Insurance by agent or trustee.— When an insur- ance is made by an agent or trustee, the fact that his principal or beneficiary is the person really insured may be indicated by describing him as agent or trustee, or by other general words in the policy. § 2590. Insurance by part owner. — To render an insurance effected by one partner or part owner applicable to the interest of his copartners or of other part owners, it is necessary that the terms of the policy should be such as are applicable to the joint or common interest. § 2591. General terms. — When the description of the in- sured in a policy is so general that it may comprehend any person or any class, of persons, he only can claim the benefit of the policy who can show that it was intended to include him. § 2592. Successive owners. — A policy may be so framed that it will inure to the benefit of whomsoever, during the continu- ance of the risk, may become the owner of the interest insured. § 2593. Transfer of the thing insured. — The mere transfer of a thing insured does not transfer the policy, but suspends it until the same person becomes the owner of both the policy and the thing insured. * Sections 2561-2582. 628 FiEE Insueance. § 3594. Open and valued policies. — A policy is either open or valued. § 2595. Open policy, what. — An open policy is one in which the value of the thing insured is not agreed upon, but is left to be ascertained in case of loss. § 2596. Valued policy, what. — A valued policy is one which expresses on its face an agreement that the thing, insured shall be valued as a specified sum. § 2597. Running policy, what, — A running policy is one which contemplates successive insurances, and which provides that the obgect of the policy may be from time to time defined, especially as to the subjects of insurance, by additional state- ments or indorsements. § 2598. Effect of receipt. — An acknowledgment in a policy of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipu- lation therein that it shall not be binding until the premium is actually paid. § 2599. Agreement not to transfer, — An agreement, made before a loss, not to transfer the claim of a person insured against the insurer after the loss has happened is void. § 2603. Warranty, express or implied. — A warranty is either express or implied. § 2604. Form. — No particular form of words is necessary to create a warranty. § 2605. Warranty must be in policy. — Every express war- ranty, made at or before the execution of a policy, must be con- tained in the policy itself, or in another instrument signed by the insured, and referred to in the policy, as making a part of it. § 2606. Past, present, and future warranties. — A warranty may relate to the past, the present, the future, or to any or all of these. §2607. Warranty as to past or present. — A statement in a Solicy, of matter relating to the person or thing insured, or to le risk, as a fact, is an express warranty thereof. § 2608. Warranty as to the future. — A statement in a policy, which imports that it is intended to do or not to do a thing which materially affects the risk, is a warranty that such act or omission shall take place. § 2609. Performance excused. — When, before the time ar- rives for the performance of a warranty relating to the future, a loss insured against happens, or performance becomes unlaw- ful at the place of the contract, or impossible, the omission to fulfill the warranty does not avoid the policy. Statutory Provisions. 629 § 2610. What acts avoid the policy. — The violation of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind. § 2611. Policy may provide for avoidance. — A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy. § 2612. Breach without fraud. — ^A breach of warranty, with- out fraud, merely exonerates an insurer from the time that it occurs, or where it is broken in its inception, prevents the policy from attaching to the risk. § 2616. When premium is earned. — An insurer is entitled to payment of the premium as soon as the thing insured is exposed to the peril insured against. § 2617. Return of premium. — A person insured is entitled to a return of premium paid as follows : 1. To the whole premium, if no part of his interest in the thing insured be exposed to any of the perils insured against; 2. Where the insurance is made for a definite period of time, and the insured surrenders his policy, to such proportion of the premium as corresponds with the unexpired time, after deduct- ing from the whole premium any claim for loss or damage under the policy which has previously accrued. § 2618. When return not allowed. — If a peril insured against has existed, and the insurer has been liable for any period, how- ever short, the insured is not entitled to return of premiums, so far as that particular risk is concerned. § 2619, Return for fraud. — A person insured is entitled to a return of the premiimi when the contract is voidable, on ac- count of the fraud or misrepresentation of the insurer, or on account of facts of the existence of which the insured was igno- rant without his fault; or when, by any default of the insured other than actual fraud, the insurer never incurred any lia- bility under the policy. § 2641. Double insurance. — A double insurance exists where the same person is insured by several insurers separately in re- spect to the same subject and interest. § 2646. Reinsurance, what. — A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance. § 2647. Disclosures required. — Where an insurer obtains re- insurance he must commimicate all the representations of the original insured, and also all the knowledge and information he possesses, whether previously or subsequently acquired, which are material to the risk. 630 FiEE Insurance. § 3648. Eeinsurance presumed to be against liability.— A reinsurance is presumed to be a contract of indemnity against liability, and not merely against damage. § 3649. Original insured has no interest. — The original in- sured has no interest in a contract of reinsurance. § 3753. Alteration increasing risk. — An alteration in the use or condition of a thing insured from that to which it is limited by the policy, made without the consent of the insurer, by means within the control of the insured, and increasing the risk, entitles an insurer to rescind a contract of fire insurance. § 3754. Alteration not increasing risk. — An alteration in the Tise or condition of a thing insured from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance. § 3755. Acts of the insured. — A contract of fire insurance is not affected by any act of the- insured subsequent to the execu- tion of the policy, which does not violate its provisions, even though it increases the risk and is the cause of a loss. COLORADO. Mill's Annotated Statutes, 1891. § 3334. Superintendent of insurance shall have power to examine form of policy contract — cancellation. — That the superintendent of insurance shall have power and it shall be his duty to examine the form of all policy contracts hereafter issued, or proposed to be issued, by any fire insurance company, association or corporation now authorized by law, or that may hereafter apply to be authorized to transact business of fire insurance in this state. The superintendent of insurance shall refuse to authorize any such company, association or corpora- tion to do business in this state whenever the form of policy contract issued, or proposed to be issued, by any such company, association or corporation does not provide for the cancellation of the same at the request of the insured, upon equitable terms, nor whenever the form of policy does not provide that in case the policy shall be cancelled at the request of the iasured, the premium having been actually paid, that the unearned portion thereof shall be returned on surrender of the policy or last renewal, the company in no event retaining an amount in excess of the amount shown to be the earned portion of said premium, as per the customary short rate table. Statutory Peovisions. 631 CONNECTICUT. General Statutes, 1902. § 3536. Notice before cancellation of policy. — No insurance company or association shall cancel a policy issued against loss by fire on property in this state without giving the party insured at least five days' notice, in writing, of such intention and re- turning the ratable proportion of the premium for the unex- pired term of the policy. § 3616. When agent is personally liable. — The agent of any insurance company of another state or of any foreign govern- ment, which has not been admitted tO' transact business in this state, shall be personally liable upon all contracts of insurance made by or through him, directly or indirectly, for or in behalf of any such company. § 3630. Term " agent " defined.— The term " agent " or " agents " used in this title shall include an acknowledged agent or surveyor, and any person who shall in any manner aid in transacting the business of an insurance company. § 3630. Term " insurance broker " defined. — Whoever for compensation acts or aids in any manner in negotiating con- tracts of insurance or reinsurance, or placing risks, or efEecting insurance or reinsurance for a person other than himself, and not being the appointed agent or ofiicer of the company in "which such insurance or reinsurance is effected, shall be deemed an insurance broker, and no such person shall act as such broker except as provided in §§ 3631, 3633, and 3633. § 3496. Conditions, to be stated in body of policy. — In all policies of insurance against loss by fire, made by companies chartered by or doing business in this State, no condition shall be valid unless stated in the body of the policy. § 3631. Powers of agents. — The authorized agent of any company legally admitted to do business in this state may, without being deemed a broker or procuring a broker's cer- tificate of authority, negotiate or effect contracts of insurance or reinsurance with any qualified domestic insurance company or its agents, and with the authorized agents in this state of any foreign insurance company admitted to do business in this state. § 3632. License to insurance broker. — The insurance com- missioner may, upon the payment of a fee of ten dollars, issue to any person a certificate of authority to act as an insurance broker to negotiate contracts of insurance or reinsurance or place risks or effect insurance or reinsurance with any quali- fied domestic insurance company or its agents, and with the 632 FiEE Insubance. authorized agents in this state of any foreign insurance com- pany duly admitted to do business in this state. Said com- missioner may pro-rate the fee for such certificate in propor- tion to the time such certificate has to run; but no such cer- tificate shall be issued for less than three dollars. § 3633. License; term and revocation. — Such certificate shall remain in force as provided in § 3634, unless it is other- wise stated therein, or unless revoked by the commissioner for cause. Such cause shall exist upon conviction of the holder of such certificate of a violation of the insurance laws, or whenever it shall appear to the commissioner upon due proof after notice, that the holder has unreasojiably failed and neglected to pay over to the company or agent entitled thereto any premium or part thereof collected by him on any policy of insurance. The commissioner shall publish such revocation in such manner as he deems suitable for the protection of the public. (Section 3634 provides for continuance in force of certificate or license until first of April following unless otherwise provided or revoked. ) FLORIDA. Revised Statutes, 1891. § 2224. Agents. — Any person or firm in this State who re- ceives or receipts for any money on account of or for any contract of insurance made by him or them, or for any such, insurance company, association, firm or individual, aforesaid, or who receives or receipts for money from other persons to be transmitted to any such company, association, firm or indi- vidual, aforesaid, for a policy of insurance, or any renewal thereof, although such policy of insurance is not signed by him or them, as agent or representative of such company, asso- ciation, firm or individual, or who in any wise, directly or indirectly makes or causes to be made any contract of insurance for or on account of such insurance company, association, firm or individual, shall be deemed to all intents and purposes an agent or representative of such company, association, firm or individual. (As amended by L. 1895, chap. 4380, § 7.) Laws 1905. § 1. That in the event of a total loss or destruction of any personal property on which the amount of the appraised or agreed loss shall be less than the total amount insured thereon, the insuring company or companies shall return to Statutory Pbovisions. 633 the insured the unearned premium for the excess of insurance over the appraised or agreed loss, to be paid at the same time and in the same manner as the loss shall be paid, and the said unearned premium shall be a just and legal claim against the said insurance company or companies. § 2. That all laws or parts of laws in conflict with the provisions of this act be and the same are hereby repealed. § 3. That this act shall be of full force and effect from and after its passage and approval by the Governor. Approved May 16, 1905.' GEORGIA.* Code of 1895, Vol. 11, part I. § 2054. Definition of insurance agent. — Any person who solicits in behalf of any insurance company, or agent of the same, incorporated by the laws of this or any other State or foreign government, or who taies or transmits, other than for himself, any application for insurance or any policy of insur- ance to or from such company, or agent of the same, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine or in- spect any risk at any time, or receive or collect or transmit any premiums of insurance, or make or forward any diagram of any building or buildings, or do or perform any other act or thing in the making or consummating of any contract of insur- ance for or with any such insurance company, other than for himself, or who shall examine into or adjust or aid in adjust- ing any loss for or in behalf of any such company, whether any such acts shall be done at the instance or request or by the employment of such insurance company, or of, or by, any broker or other person, shall be held to be the agent of the company for which the act is done or the risk is taken. § 2055. Penalty on agents of unauthorized companies. — Any person who shall do or perform any of the acts or things men- tioned, for any insurance company or agent of said company, without such company having first received a certificate of authority from the insurance commissioner of this State as required by law, shall be guilty of a misdemeanor, and shall also pay a sum equal to the State, county and municipal taxes and licenses required to be paid by insurance companies legally * The Legislature is in session as book is being printed, hence it is impossible to insert amendments in Laws of 1905. €34 FiBE Insurance. doing business in this State; and it is hereby made the duty of the insurance commissioner to see that all violators of the pro- Tisions of this section are prosecuted. § 2056. Civil liability. — Any person who shall do any of the acts mentioned in the preceding sections shall also be person- ally liable to the holder of any policy of insurance, in respect of which such act was done, for any loss covered by the same: Provided, that the penalties provided for shall not apply to adjusters or inspectors of auttorized insurance companies from whom the citizens of this Slate have purchased insurance for themselves, as provided for in this section, whenever the per- son or persons purchasing said insurance shall immediately notify the insurance commissioner, giving the name and local- ity of said company in which they have policies, and at the same time pay to said insurance commissioner the same licenses, fees and taxes for each company as are now or may hereafter be required of fire-insurance companies authorized to do business by the laws of this State; and when the license fees for any company have been paid in any one year by any person or per- sons who have purchased insurance from said company, then, in that case, any person or persons purchasing insurance from said company thereafter shall not be liable for the license fees of said company during the said year, but only for such taxes on premiums as may be required from time to time of insur- ance companies authorized to do business in this State: Pro- vided further, that it shall not be lawful for said inspectors to solicit business for their companies. § 3089. Contract of fire insurance. — The contract of fire in- surance is one whereby an individual, or company, in considera- tion of a premium paid, agrees to indemnify the assured against loss by fire to the property described in the policy, according to the terms and stipulations thereof. Such contract, to be bind- ing, must be in writing; but delivery is not necessary if, in other respects, the contract is consummated. § 2090. Interest of assured.— To sustain any contract of in- surance, it must appear that the assured has some interest in the property or event insured, and such as *here presented himself to have. A slight or contingent interest is sufficient, whether legal or equitable, and several having different inter- ests may unite in procuring one policy; so a husband or parent may insure the separate property of his wife or child, the re- covery being held by him in trust for them; but a mere expecta- tion of an interest is not insurable. * So in statute as printed. Doubtless a typographical error for " he represented." Statutory Provisions. 635 § 3091. Insuring interest of another. — If one undertakes to insure the interest of another, it must be done by his consent, or be subsequently ratified by him ; but an insurer may reinsure to protect himself against loss on his contract. § 2092. Insurance on changing property. — A policy of in- surance may be made to cover property changing daily in its specific articles, as a stock of goods. § 2093. Construction. — The contract of insurance should be construed so as to carry out the true intention of the parties. § 2095. Loss unknown to the parties. — If the loss has al- ready occurred, and both parties are ignorant of it, the con- tract is valid; but the slightest grounds of suspicion known to the insured will vitiate the contract, unless made known to the insurer. § 2097. Application, good faith. — Every application . for in- surance must be made in the utmost good faith, and the repre- sentations contained in such application are considered as cov- enanted to be true by the applicant. Any variation by which the nature, or extent, or character of the risk is changed, will void the policy. § 2098. Effect of misrepresentation. — Any verbal or written representations of facts by the assured to induce the accept- ance of the risk, if material, must be true, or the policy is void. If, however, the party has no knowledge, but states on the representation of others, bona fide, and so informs the" insurer, the falsity of the information does not void the policy. § 2099. Concealment. — A failure to state a material fact, if not done fraudulently, does not void; but the willful conceal- ment of such a fact, which would enhance the risk, will void the policy. § 2100. Increasing risk. — Any change in the property, or the use to which it is applied, without consent of the insurer, whereby the risk is increased, voids the policy. § 2101. Willful misrepresentation voids policy. — Willful misrepresentation by the assured, or his agent, as to the inter- est of the assured, or as to other insurance, or as to any other material inquiry made, will void the policy. § 2102. Effect of alienation. — An alienation of the property insured, and a transfer of the policy, without the consent of the insurer, voids it; but the mere hypothecation of the policy, or creating a lien on the property, does not void. § 2103. Transfer to one of several. — A policy issuing to sev- eral, may be transferred to one of the assured without the con- sent of the insurer. 636 FiKE Insueance. § 2104. Partial sale. — A partial sale of property insured, voids the policy only pro tanto. A sale not fully executed, and possession remaining with the assured, does not void. § 2107. Second insurance. — A second insurance on the same property, unless by consent of the insurer, voids his policy. ILLINOIS. Agents. — Under the Illinois statute prescribing upon what terms foreign Insurance Companies may do business in the State. " The term agent or agents used in the statute shall include any acknowledged agent, surveyor, broker, or any other person or persons, who shall in any manner aid in transacting the business of any insurance company not incorporated by the laws of one of the United States." Hinds E. S. 111. 1901, p. 1020. IOWA. Code of 1897. § 1741. Copy of application. — All insurance companies or associations shall, upon the issue or renewal of any policy, at- tach to such policy, or indorse thereon, a true copy of any appli- cation or representation of the assured which, by the terms of such policy, are made a part thereof, or of the contract of insurance, or referred to therein, or which may in any manner affect the validity of such policy. The omission so to do shall not render the policy invalid, but if any company or associa- tion neglects to comply with the requirements of this section it shall forever be precluded from pleading, alleging or proving any such application or representations, or any part thereof, or falsity thereof, or any parts thereof, in any action upon such policy, and the plaintiff in any such action shall not be required, in order to recover against such company or association, either to plead or prove such application or representation, but may do so at his option. § 1749. Advertisements — Soliciting agents. — ^Every agent of any insurance company shall, in all advertisements of such agency, publish the location of the company, giving the name of the city, town or village in which it is located, and the state or government under the laws of which it is organized. Any per- son who shall hereafter solicit insurance or procure application therefor shall be held to be the soliciting agent of the insurance company or association issuing a policy on such application or Statutoky Peovisions. 637 on a renewal thereof, anything in the application, policy or con- tract to the contrary notwithstanding. § 1750. Who deemed agent. — The term agent used in the foregoing sections of this chapter shall include any other person who shall in any manner directly or indirectly transact the insurance business for any insurance company complying with the laws of this state. Any officer, agent or representative of an insurance company doing business in this State who may solicit insurance, procure applications, issue policies, adjust losses or transact the business generally of such companies, shall he held to be the agent of such insurance company with au- thority to transact all business within the scope of his employ- ment, anything in the application, policy, contract, by-laws or articles of incorporation of such company to the contrary not- withstanding. KANSAS. Laws of 1903, Chapter 333. § 1. Any condition or stipulation in an application, policy or contract of fire insurance hereafter made making the policy void in case the insured premises become vacant shall not pre- vent recovery on such policy, if it shall be shown by the plaintiff that the insured premises had ceased to be vacant and were occupied at the time of the loss. KENTUCKY. Statutes, 1903. § 633. Agents of foreign companies ^ Who are — Penalty for doing business without license. — Licenses to agents of for- eign companies must be renewed annually" in the same manner as original licenses, upon a finding by the Commissioner that the company represented by the agent has fully complied with the law and maintains its required capital or reserve; and who- «ver solicits and receives application for insurance on behalf of any insurance company, or transmits for any person other than himself an application for insurance or a policy of insur- ance to or from such company, or advertises that he will receive or transmit the same, or who shall, in any manner, directly or indirectly, aid or assist in transacting the insurance business of any insurance company, shall be held to be an agent of such company within the meaning of this article, anything in the policy or application to the contrary notwithstanding; and any 638 FiEE Insubance. person acting as the agent of any company within the meaning of this section, without first procuring and having a license from the Commissioner to act as sach agent, or, after such license has expired, been suspended or revoked, or who shall procure any premium or obligation therefor by fraudulent representations, shall be deemed and held to be guilty of a misdemeanor, and, upon conviction for such offense, shall be fined not less than fifty nor more than one hundred dollars for each offense. § 638. Insurance made in violation of law — ^Penalty upon agent. — If insurance is made by any company as authorized by this law to be made, but without a compliance with the require- ments of the laws of this State, the contract shall be valid; but the agent or person making the insurance shall be liable to a fine not exceeding one thousand dollars for each offense. § 639. Warranties — Statements by insured that are not. — All statements or descriptions in any application for a policy of insurance shall be deemed and held representations and not warranties; nor shall any misrepresentations, unless material or fraudulent, prevent a recovery on the policy. lOITISIANA. 1. Revised Laws of, 1904. § 4 (p. 858). Who shall be deemed agents. — Be it further enacted, etc.. Any person who in this State solicits or procures policies or risks from, or in any insurance company, corpora- tion, association, partnership or combination of persons, men- tfoned in Section 3, except such risks be upon his own property or person, or who in any manner, except as provided in the aforesaid Section 3, aids the transaction of business in this State by any such company, corporation, association, partnership, or combination of persons, that has neglected or refused to com- ply with all the laws of this .State relative to such companies, corporations, associations, partnerships or combination of per- sons, shall be fined not less than one hundred dollars nor more than three hundred dollars or imprisoned for not less than thirty (30) days nor more than ninety (90) days. § 23 (p. 864). No commissions to any but authorized agents. — Any person who solicits insurance for a consideration on behalf of any insurance company, or transmits for a person other than himself an application for, or a policy of insurance to or from such company, or offers or assumes to act in the negotiation of such insurance, shall be deemed an insurance agent within the intent of this Act, should he receive from the Statutory Peovisions. 639' company any compensation whatsoever, either for himself or for any other person, partnership, or corporation, and shall thereby become liable to ail the duties, requisitions, liabilities. and penalties to which an agent of such company is subject. § 5 (p. 895). Acting as agent without certificate, penalty. — Be it further enacted, etc.. That any person who in this State, solicits or procures policies or risks from or in any insurance company, corporation or association, partnership or combina- tion of persons, except such risks be upon his own property, or life or health, or who in any manner aids the transaction, of business in this State, by any such company, corporation or association, partnership or combination of persons, without having first secured a certificate of authority from the Secretary of State, showing his authority to act as such agent, shall lay himself liable to a penalty for having failed to do so, of a fine of not less than one hundred dollars, nor more than three hun- dred dollars, or to imprisonment for not less than thirty days, nor more than ninety days, upon conviction before a court of competent jurisdiction. Any agent, solicitor or representative, who attempts to solicit insurance or represent a company, cor- poration or association after his certificate of authority has been revoked will subject himself to the same penalty and Uability. MAINE. Eevised Statutes of 1903* (Chap. 49). § 14 (p. 475). Insurance effected by a husband or wife on a dwelling-house owned by the insured and on the furniture therein, is valid for all the furniture, although part is owned by the husband and part by the wife. § 23. Person deemed agent; notice to him binding. — An agent authorized by an insurance company, whose name is borne on the policy, is its agent in all matters of insurance; any notice required to be given to said company or any of its ofiicers, by the insured, may be given to such agent. § 76 (p. 486). Inquest into insurance frauds. — On applica- tion in writing to the commissioner by an officer of any insur- ance company doing business in the state, stating that he has reason to believe and does believe that any person has, by false representations, procured from said company an insurance, or that the company has sustained a loss by the fraudulent act of the insured, or with his knowledge or consent, and requesting * The R. S. 1903, and Repealing Act, Id. p. 1015, would seem ta repeal other material provisions of prior statutes. 640 FiEE Insurance. an investigation thereof, said commissioner, or his deputy or such magistrate as he appoints, shall summon and examine, under oath, at a time and ]ilace designated by him, any per- sons, and require the production of all books and papers neces^ sary for a full investigation of the facts, and make report thertof, with the testimony by him taken, to the company mak- ing such application. § 96 (p. 490). Insurance agents and brokers. — The insur- ance commissioner may issue §, license to any person to act as an agent of a domestic insurance company, or of any steam boiler insurance company authorized to do business in the state, upon his filing with the commissioner a certificate from the company or association, or its authorized agent, empowering him so to act; and to any resident of the state to act as an agent of any foreign insurance company, which has received a license to do business in the state as provided in section seventy-nine upon his filing such certificate. Such license shall continue until the first day of the next July. If any person solicits, re- ceives or forwards any risk or application for insurance to any company, without first receiving such license, or fraudulently assumes to be an agent and thus procures risks and receives money for premiums, he forfeits not more than fifty dollars for each offense; but any policy issued on such application binds the company if otherwise valid. Agents of duly authorized insurance companies may place risks with agents of other duly authorized companies when necessary for the adequate insur- ance of property, persons or interests. An insurance agent shall be personally liable on all contracts of insurance unlawfully made by or through him, directly or indirectly, for or in behalf of any company not authorized to do business in the state. Nothing herein contained shall require a duly licensed insurance agent or broker to obtain any license for an employee doing only clerical office work in the office of said agent or broker. MAHYLAND. Public General Laws, 1903. Art. 23. § 195 (p. 418). Insurance broker. — All licenses for the purpose of conducting the occupation or business of an insurance broker shall be granted by the insurance commis- sioner of the State of Maryland, and all such licenses granted by said commissioner shall expire on the first day of May there- after. Whoever, for compensation, acts or aids in any manner in negotiating contracts of insurance or reinsurance, or placing Statutoey Pbovisions. 641 risks, or effecting insurance or reinsurance for a person other than himself, and not being duly appointed solicitor, agent or officer of the company in which such insurance or reinsurance is effected, shall be deemed an insurance broker within the meaning of this article. MASSACHUSETTS. 2. Revised laws of, 1902. Chap. 118. § 31 (p. 1128). Misrepresentation and war- ranty. — No oral or written misrepresentation or warranty 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 mis- representation or warranty is made with actual intent to deceive or unless the matter misrepresented or made a war- ranty increased the risk of loss. § 59 (p. 1146). Statement of conditions — Application. — In all insurance against loss by fire the conditions of insurance shall be stated in full, and neither the application of the in- sured nor the by-laws of the company shall be considered as a warranty or a part of the contract, except so far as they are incorporated in full into the policy. § 91 (p. 1162). Agent or broker — Preminm.^ — -An insur- ance agent or broker who acts for a person other than himself in negotiating a contract of insurance by an insurance com- pany shall, for the purpose of receiving the premium therefor, be held to be the company's agent, whatever conditions or stipulations may be contained in the policy or contract. Such agent or broker who knowingly procures by fraudulent repre- sentations payment, or an obligation for the payment, of a premium of insurance shall be punished by a fine of not less than one hundred nor more than one thousand dollars or by imprisonment for not more than one year. § 92. Personal liability of agents. — An insurance agent shall be personally liable on all contracts of insurance unlaw- fully madfe by or through him, directly or indirectly, for or in behalf of any company not authorized to do business in this commonwealth. § 93 Broker. — Whoever, for compensation, not being the appointed agent or of&cer of the company in which such insur- ance or reinsurance is effected, acts or aids in any manner in negotiating contracts of insurance or reinsurance or placing risks or effecting insurance or reinsurance for a person other Vol. 2 — 41 642 FiEE Insurance, than himself, shall be an insurance broker, and no person shall act as suck broker, except as provided in section ninety.* Laws of 1904. Chap. 240. § 1. Co-nstruotion of word " noon."— The word "noon," occurring in the Massachusetts standard fire insur- ance policy, shall be construed to be the noon of standard time of the place where the property covered by the policy is. situated. MICHIGAN. Compiled laws, 1897. § 5136. Certain acts of certain agents, etc., unlawful.^ It shall not be lawful for any person or persons as agent, solicitor, broker, surveyor, or in any other capacity, to transact or to aid in any manner, directly or indirectly, in transacting or soliciting within this state, business for any fire, fire and marine, or marine and inland insurance company or associa- tion not incorporated by the laws of this state, or in any other capacity to procure or assist to procure a fire or inland marine policy or policies of insurance in any company or association which is violating the provisions of section two of this act, or whose agent or agents are violating the provisions of section three hereof, f § 5180. When policy not to be void. — The People of the State of Michigan enact. That no policy of fire insurance shall hereafter be declared void by the insurer for the breach of any condition of the policy if the insurer has not been injured by such breach, or where a loss has not occurred during such breach, or by reason of such breach of condition. § 5181. Unoccupied building. — If a building that is insured, whether intended for occupancy by owner or tenant be or- become vacant or unoccupied and so remain for ten days, with- out the consent of the company endorsed on the policy, such vacancy shall not avoid said policy of insurance. § 5182. Clause added to standard policy to contain what. — There shall hereafter be inserted in, or by stamp or rider affixed upon, the standard form of insurance policies used in this state,, after the clause which contains the conditions for a breach of which without the consent of the company endorsed thereon the policy is declared void, a proviso in substance as follows: * Section 90 requires license or certificate of authority. t Sections 2 and 3 prescribe the conditions upon which foreign com- panies may transact business. Statutoey Provisions. 643. Provided, A loss shall occur on the property insured while such treaeh of condition continues or such breach of condition is, the primary or contributory cause of the loss. MINNESOTA, laws of 1895, Chapter 175. § 91. Agents — Solicitors. — ^ Whoever for compensation acts or aids in any manner in negotiating contracts of insurance or reinsurance or placing risks or effecting insurance or reinsur- ance for a person other than himself, and not being the ap- pointed agent or officer of the company in which such insur- ance or reinsurance is effected, shall be deemed an insurance broker, and no person shall act as such insurance broker save as provided in this section.* * * * § 30. Misrepresentation. — No oral or written misrepresenta- tion made in the negotiation of a contract or policy of insur- ance, by the assured or in his behalf, shall be deemed material or defeat or avoid the policy or prevent its attaching, unless Buch misrepresentation is made with actual intent to deceive and defraud, or unless the matter misrepresented increase the risk of loss. § 52. Conditions must be stated in full — Warra'Aty. — In all insurance against loss by fire the conditions of insurance shall be stated in full, and neither the application of the insured nor the by-laws of the company shall be considered as a war- ranty or a part of the contract, except so far as they are incor- porated in full into the policy. § 87. Personal liability of agent.-:- An insurance agent shall be personally liable on all contracts of insurance unlawfully made by or through him, directly or indirectly, for or in behalf of any company not authorized to do business in this state. § 88. Agents — Who are. — An insurance agent or broker who acts for a person other than himself in negotiating a con- tract of insurance by an insurance company shall, for the purpose of receiving the premium therefor be held to be the company's agent, whatever conditions or stipulations may be contained in the policy or contract ; such agent or broker know- ingly procuring by fraudulent representations payment or an obligation for the payment of a premium of insurance shall be punished by fine of not less than twenty-five dollfij'fa nor more than two hundred and fifty dollars, or by imprisonment for not more than one year. * The balance of the section prescribes license or certificate and fees. 644 FiBE Insurance. MISSISSIPPI. Laws of 1902, Chapter 59. § 33. Amount of insurance; three-quarters clause; partial loss. — No insurance company shall knowingly issue any fire insurance policy upon property within this state for an amount which, together with any existing insurance thereon, exceeds the fair value of the property, nor for a longer term than five years. When real property or buildings, household or kitchen furniture, insured against loss by fire and situated within this state are totally destroyed by fire, the company shall not be permitted to deny that the property insured was worth, at the time of the issuing of the policy, the full value upon which the insurance was calculated. And in case the policy contains a three-quarter valuation clause, the insurer shall not deny that the amount of the policy was but three-fourths the value at the date o_f its issuance, and a similar rule shall apply, it matters not what proportion the amount of insurance bears to valuation according to the terms of the policy; but the measure of damages shall be the amount for which the property was insured. In case of partial loss or damage by fire to real prop- erty or buildings the measure of damage shall be an amount equal to the 'damage done the property not to exceed the amount written in the policy. In case of destruction or dam- age of property by fire where the same is insured against fire, it. shall be the duty of the insurance company or companies liable for such loss, within a reasonable time after receiving notice thereof, to furnish to the insured proper blanks upon which to make the required proof of such loss, with full direc- tions as to what proof is required to secure the payment of the policy, and if the insurance company fails to comply with this section, the failure of the insured to make proper proof of loss prior to the suit shall be no defense to a suit upon the policy, and in all eases the insured shall have a reasonable time in which to make such proof after the blanks and directions are received. Every insurance company transacting business in this state shall, upon receiving notice of loss by fire of prop- erty in Mississippi, on which it is liable under a policy of insur- ance, forthwith notify the insurance commissioner thereof, and no insurance upon any such property shall be paid by any com- pany until one week after such notification, except by permis- sion of the insurance commissioner. Any company violating this section may be fined by the insurance commissioner the sum of ten dollars ($10) for each and every offense, and for refusal to comply with its provisions have its license cancelled Statutory Provisions. 645 "by said commissioner. (Chap. 59, § 33, Laws of 1902, as amended by chap. 79, § 5, Laws of 1904.) § 34. Mortgages protected in order of priority. — When by an agreement with the assured or by the terms of a fire insur- ance policy taken out by a mortgagor, the whole or any part of the loss thereon is payable to the mortgagee or mortgagees of the property for their benefit, the company shall, upon satis- factory proof of the rights and title of the parties in accordance with such terms and agreement, pay all mortgages protected by such policy in the order of their priority of claim, as their claims shall appear, not beyond the amount for which the company is liable, and such payments shall be to the extent thereof, payments and satisfaction of the liabilities of the com- pany under such policy. Mortgage clause. — Each fire insurance policy on buildings taken out by a mortgagor or grantor in a deed of trust shall have attached or shall contain substantially the following mort- gagee clause, viz. : " Loss or damage, if any, under this policy, shall be payable to (here insert name of the party), as mortgagee (or trustee), as interest may appear, and this insurance, as to the interest of the mortgagee (or trustee) only therein, shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property, nor by any foreclosure or other proceedings or notice of sale relating to the property, nor by any change in the title or ownership of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by this policy, provided that in case the mortgagor or owner shall neglect to pay any premium due under this policy the mortgagee (or trustee) shall, on demand, pay the same; provided also, that the mortgagee (or trustee) shall notify this company of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee (or trustee), and, unless permitted by this policy, it shall be noted thereon and the mortgagee (or trustee) shall, on demand, pay the premium for such increased hazard for the term of the use thereof; otherwise this policy shall be null and void. This company reserves the right to cancel this policy at any time as provided by its terms, but in such case this policy shall continue in force for the benefit only of the mortgagee (or trustee) for ten days after notice to the mortgagee (or trustee) of such cancellation and shall then cease, and this company shall have the right on like notice to cancel this agreement. In case of any other insurance upon the within described prop- 646 FiBE Insukance. erty this company shall not be liable under this policy for a greater proportion of any loss or damage sustained than the sum hereby insured bears to the whole amount of insurance on said property, issued to or held by any party or parties, having an insurable interest therein, whether as owner, mort- gagee or otherwise. Whenever this company shall pay the mortgagee (or trustee) any sum for loss or damage under this policy and shall claim that as to the mortgagor or owner, no liability therefor existed, this company shall, to the extent of such payment, be thereupon legally subrogated to all the rights of the party to whom such payment shall be made, under all security held as collateral to the mortgage debt, or may, at its option, pay to the mortgagee (or trustee) the whole principal due or to grow due on the mortgage with interest, and shall thereupon receive a full assignment and transfer of the mort- gage and of all such other securities; but no subrogation shall impair the right of the mortgagee (or trustee) to recover the full amount of -. . claim." Provided, nothing in the foregoing prescribed form shall be construed to in any manner modify the provisions of section 5 of this act. (Sec. 34 of chap. 59, Laws 1902, as amended by sec. 7, chap. 79, Laws 1904.) § 50. Agent defined; penalty for fraudulent representation. — Every person who solicits insurance on behalf of any insurance company, or who takes or transmits, other than for- himself, an application for insurance, or a policy of insurance, to or from isuch company, or who advertises or otherwise gives notice that I he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine or inspect any risk, or receive, collect, or transmit any premium of insurance, or make or forward a diagram of any building, or do or perform any other act or thing in the making or consummation of any contract of insurance for or with any such insurance company, other than for himself, or who shall examine into or adjust, or aid in adjusting any loss for or on behalf of any such insurance company, whether any of such acts shall be done at the instance or request or by the employ- ment of the insurance company, or of or by any broker or other person, shall be held to be the agent of the company for which the act is done or the risk is taken as to all the duties and lia- bilities imposed by law, whatever conditions or stipulations may be contained in the policy or contract; such person knowingly procuring by fraudulent representations payment or the obliga- tion for the payment of a premium of insurance, shall be pun- ished by a fine of not less than one hundred dollars nor more than five hundred dollars, or be imprisoned for not more than one year. Statutory Provisions. 647 § 51. Personal liability of agent. — An insurance agent shall Toe personally liable on all c6ntracts of insurance unlawfully made by or through him, directly or indirectly, for or in behalf of any company not authorized to do business in the State. mssoimi. 2 Bevised Statutes, 1899. § 7973. Construction of warranties of fact, etc. — That the "warranty of any fact or condition hereafter made by any per- son in his or her application for insurance against loss by fire, tornado or cyclone, which application, or any part thereof, shall thereafter be made a part of a policy of insurance, by being iittached thereto, or by being referred to therein, or by being incorporated in such policy, shall, if not material to the risk insured against, be deemed, held and construed as representa- tions only, in any suit brought at law or in equity in any of the ■courts of this state, upon such policy to enforce payment thereof, on account of loss of or damage to any property in- sured by such policy. § 7974. Same. — That the warranty of any fact or condition hereafter incorporated in or made a part of any fire, tornado or cyclone policy of insurance, purporting to be made or as- sented to by the assured which shall not materially affect the risk insured against, shall be deemed, taken and construed as representations only in all suits at law or in equity brought upon such policy in any of the courts of this state. § 7975. Evasion of preceding sections prohibited. — No in- surance company, corporation or association of persons doing ■a fire, cyclone or tornado insurance business in this state, shall have the right, power or authority, by contract or otherwise, to contract agaiast or in any manner whatever evade the provi- sions of sections 7973 and 7974 of this article. § 8000. "Agent," defined — Liabilities. — Any person or per- sons in this state who shall receipt for any money on account of or for any contract of insurance made by him or them for any insurance company or association not at the time authorized to do business in this state, or who shall receive or receipt for any money from other persons, to be transmitted to any such insurance company or associa tion, either in or out of this state, for a policy or policies of insurance issued by such company or association, or for any renewal thereof, although the same m.ay not be required by him of them as agents, or who shall make or cause to be made, directly or indirectly, any contract 648 FiBE Insubanoe, of insurance for such company or association, shall be deemed to all intents and purposes an agent of such company or associa- tion, and shall be subject to all the provisions and regulations and liable to all the penalties jirovided and fixed by this chapter. Any person who shall be appointed, or who shall act as agent for any insurance company within this state, or who shall, as^ such agent, solicit applicaUons, deliver policies or renewal receipts and collect premiums thereon, or who shall receive or collect moneys from any source or on any account whatsoever,, as such agent, for any insurance company doing business in this state, such person shall be held responsible in a trust or fiduciary capacity to such company for any money so collected or received by him for such company. Any such agent or person who shall embezzle or convert to his own use, or shall take or secrete or otherwise dispose of with intent to embezzle or use, or who shall fraudulently withhold or appropriate, invest or make use of without the consent of such company, or contrary to its instructions, any money belonging to such company which shall have come into liis possession, or shall be under his care by reason of such agencies, he shall be deemed by so doing^ to be guilty of a crime, and, upon conviction thereof, shall be punished in the manner prescribed by law for stealing property of the value of the money so embezzled, converted, taken, used or secreted. MONTANA. Civil Code, 1895. § 3400. Insurable interest. — Any interest in property, or any relation thereto, or liability in respect thereof, of such a nature that a contemplated peril might directly damnify, the insured, is an insurable interest. § 3401. In what may consist. — An insurable interest in property may consist in: 1. An existing interest; 2. An inchoate interest founded on an existing interest; or, 3. An expectancy, coupled with an existing interest in that out of which the expectancy arises. § 3403. Interest of carrier or depositary. — A carrier or de- positary of any kind has an insurable interest in a thing held by him as such, to the extent of its value. § 3403. Mere expectancies. — A mere contingent or expect- ant interest in anything, not founded on an actual right to the thing, nor upon any valid contract for it, is not insurable. Statutoby Provisions. 649 § 3404. Measure of interest. — The measure of an insurable interest in property is the extent to which the insured might be damnified by loss or injury thereof. § 3405. Insurance without interest, illegal. — The sole ob- ject of insurance is the indemnity of the insured, and if he has no insurable interest, the contract is void. § 3406. When interest must exist. — An interest insured must exist when the insurance takes effect and when the loss occurs, but need not exist in the meantime. § 3407. Effect of transfer. — Except in the cases specified in the next four sections, and in the cases of life, accident, and, health insurance, a change ol interest in any part of a thing insured, unaccompanied by a corresponding change of interest in the insurance, suspends the insurance to an equivalent extent until the interest in the thing and the interest in the insurance are vested in the same person. § 3408. Transfer after loss. — A change of interest in a thing insured, after the occurrence of an injury which results in a loss, does not affect the right of the insured to indemnity for the loss. § 3409. A change of interest in one or more of several dis- tinct things, separately insured by one poUey, does not avoid the insurance as to the others. § 3410. In case of death of the insured. — A change of in- terest, by will or succession, on the death of the insured, does not avoid an insurance; and his interest in the insurance passes to the person taking his interest in the thing insured. § 3411. In the case of transfer betwieen cotenants. — A transfer of interest by one of several partners, joint owners, or owners in common, who are jointly insured, to the others, does not avoid an insurance, even though it has been agreed that the insurance shall cease upon an alienation of the thing insured. § 3412. Policy, when void. — Every stipulation in a policy of insurance for the payment of loss, whether the person insured has or has not any interest in the property insured, or that the policy shall be received as proof of such interest, and every policy executed by way of gaming or wagering, is void. § 3420. Concealment. — A neglect to communicate that which a party knows, and ought to communicate, is called a concealment. § 3431. Effect of concealment. — A concealment, whether in- tentional or unintentional, entitles the injured party to rescind a contract of insurance. § 3422. What must be disclosed. — Each party to a contract of insurance must communicate to the other, in good faith, all -650 FiBE Insukance, facts within his knowledge which are or which he believes to be material to the contract, and which the other has not the means of ascertaining, and as to wlaich he makes no warranty. § 3433. Matters which need not be communicated without inquiry.— Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other: 1. Those which the other knows; 2. Those which, in the exercise of ordinary care, the other ought to know, and of which the former has no reason to sup- pose him ignorant; 3. Those of which the other waives communication; 4. Those which prove or tend to prove the existence of a risk excluded by a warrantj-^, and which are not otherwise ma- terial; and, 5. Those which relate to a risk excepted from the policy, and which are not otherwise material. § 3424. Test of materiality. — Materiality is to be deter- mined, not by the event, but solely by the probable and reason- able influence of the facts upon the party to whom the commu- nication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. § 3425. Matters which each is bound to know. — Each party to a contract of insurance is bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may affect either the political or material perils contemplated; and all general usages of trade. § 3426. Waiver of communication. — The right to informa- tion of material facts may be waived, either by the terms of insurance or by neglect to make inquiries as to such facts, where they are distinctly implied in other facts of which infor- mation is communicated. § 3427. Interest of insured. — Information of the nature or amount of the interest of one insured need not be communi- cated unless in answer to an inquiry, except as prescribed by section thirty-four fifty-one. § 3428. Fraudulent warranty. — An intentional and fraudu- lent omission, on the part of one insured, to communicate in- formation of matters proving or tending to prove the falsity of a warranty, entitles the insurer to rescind. § 3429. Matters of opinion. — Neither party to a contract of insurance is bound to communicate, even upon inquiry, infor- mation of his own Judgment upon the matters in question. § 3430. Representation. — A representation may be oral or written. Statutory Provisions. 651 § 3431. WTien made. — A representation may be made at the same time with issuing the policy, or before it. § 3432. How interpreted. — The language of a representa- tion is to be interpreted by the same rules as the language of contracts in general. § 3433. Representation as to future. — A representation as to the future is to be deemed a promise, unless it appears that it was merely a statement of belief or expectation. § 3434. How may affect policy. — A representation cannot be allowed to qualify an express provision in a contract of in- surance; but it may qualify an implied warranty. § 3435. When may be withdrawn. — A representation may be altered or withdrawn before the insurance is effected but not afterwards. § 3436. Time intended by representation.- — The completion of the contract of insurance is the time to which a representa- tion must be presumed to refer. § 3437. Eepresenting information. — When a person insured has no personal knowledge of the fact, he may nevertheless re- peat information which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others, or he may submit the information, in its whole extent, to the insurer; and in neither case is he respon- sible for its truth, unless it proceeds from an agent of the in- sured, whose duty it is to give the intelligence. § 3438. Falsity. — A representation is to be deemed false when the facts fail to correspond with its assertions or stipulations. § 3439. Effect of falsity. — If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false. § 3440. Materiality. — The materiality of a representation is determined by the same rule as the materiality of a concealment. § 3441. Application of provisions of this article. — The pro- visions of this article* apply as well to a modification of a con- tract of insurance as to its original formation. § 3451. What must be specified in a policy.— A policy of insurance must specify: 1. The parties between whom the contract is made; 2. The rate of premium; 3. The property or life insured; 4. The interest of the insured in property insured, if he is not the absolute owner thereof; * Sections 3420-3441. 652 FiKE Insurance. 5. The risk insured against; and, 6. The period during which the insurance is to continue. § 3453. Whose interest is covered. — When the nanie of the person intended to be insured is specified in a policy, it can be applied only to his own proper interest. § 3453. Insurance by agent or trustee. — When an insur- ance is made by an agent or trustee, the fact that his principal or beneficiary is the person really insured may be indicated by describing him as agent or trustee, or by other general words in the policy. § 3454. Insurance by part owner. — To render an insurance effected by one partner or part owner applicable to the interest of his copartners or of other part owners, it is necessary that the terms of the policy should be such as are appUcable to the joint or common interest. § 3455. General terms. — \¥hen the description of the in- sured in a policy is so general that it may comprehend any per- son or any class of persons, he only can claim the benefit of the policy who can show that it was intended to include him. § 3456. Successive owners. — A policy may be so framed that it will inure to the benefit of whomsoever, during the continu- ance of the risk, may become the owner of the interest insured. § 3457. Transfer of the thing insured. — The mere transfer of a thing insured does not transfer the policy, but suspends it until the same person becomes the owner of both the policy and the thing insured. § 3458. Open and valued policies. — A policy is either open or valued. § 3459. Open policy. — An open policy is one in which the value of the thing insured is not agreed upon, hut is left to be ascertained in case of loss. § 3460. Valued policy.— A valued poUcy is one which ex- presses on its face an agreement that the thing insured shall be valued at a specified sum. § 3461. Running policy, what. — A running policy is one which contemplates successive insurances, and which provides that the object of the policy may be from time to time defined, especially as to the subjects of insurance, by additional state- ments or indorsements. § 3462. Effect of receipt. — An acknowledgment in a policy of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipu- lation therein that it shall not be binding until the premium i? actually paid. Statutory Provisions. 653 § 3463. Agreement not to transfer. — An agreement, made before a loss, not to transfer the claim of a person insured against the insurer after the loss has happened is void. § 3470. Warranty, express or implied. — A warranty is either express or implied. § 3471. Form. — No particular form of wordB is necessary to create a warranty. § 3473. Warranty must be in policy. — Every express war- ranty, made at or before the execution of a policy, must be contained in the policy itself, or in another instrument signed by the insured, and referred to in the policy, as making a part of it. § 3473. Past, present, and future warranties. — A warranty may relate to the past, the present, the future, or to any or all of these. § 3474. Warranty as to past or present. — A statement in a policy, of matter relating to the person or thing insured, or to the risk, as a fact, is an express warranty thereof. § 3475. Warranty as to the future. — A statement in a pol- icy, which imports that it is intended to do or not to do a thing which materially afFects the risk, is a warranty that such act or omission shall take place. § 3476. Performance excuse^. — When, before the time ar- rives for the performance of a warranty relating to the future, a loss insured against happens, or performance becomes unlaw- ful at the place of the contract, or impossible, the omission to fulfill the warranty does not avoid the policy. § 3477. What acts avoid the policy. — The violation of a ma- terial warranty, or other material provision of a policy, on the part of either, party thereto, entitles the other to rescind. § 3478. Policy may provide for avoidance. — A policy may declare that a violation of specified provisions shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy. § 3479. Breach without fraud. — A breach of warranty, with- out fraud, merely exonerates the insurer from the time that it occurs, or where it is broken in its inception, prevents the policy from attaching to the risk. § 3490. When premium is earned. — An insurer is entitled to payment of the premium as soon as the thing insured is oxposed to the peril insured against. § 3491. Return of premium. — A person insured is entitled to a return of premium as follows: 1. To the whole premium, if no part of his interest in the thing insured be exposed to any of the perils insured against; 654 FiKE Insueance. 2. Where the insurance is made for a deiinite period of time,, and the insured surrenders his policy, to such proportion of the premium as corresponds with the unexpired time, after deduct- ing from the whole premium any claim for loss or damage under the policy -which has previously accrued. § 3493. When return not allowed. — If a peril insured against has existed, and the insurer has been liable for any period, however short, the insured is not entitled to return of premiums, so far as that particular risk is concerned. § 3493. Return for fraud. — A person insured is entitled to a return of the premium vrhen the contract is voidable, on ac- count of the fraud or misrepresentation of the insurer, or on account of facts of the existence of which the insured was ignorant without his fault; or when, by any default of the in- sured other than actual fraud, the insurer never incurred any liability under the policy. § 3530. Double insurance. — A. double insurance exists where the same person is insured by several insurers separately in re- spect to the same subject and interest. § 3530. Reinsurance. — A. contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance. § 3531. Disclosures required. — Where an insurer obtains re- insurance he must communicate all the representations of the original insured, and also all the knowledge and information he possesses, whether previously or subsequently acquired, which are material to the risk. § 3532. Reinsurance presumed to be against liability. — A reinsurance is presumed to be a contract of indemnity against liability, and not merely against damage. § 3533. Original insured has no interest. — The original in- sured has no interest in a contract of reinsurance. § 3550. Alteration increasing risk. — An alteration in the use or condition of a thing insured from that to which it is limited by the policy, made without the consent of the insurer, by means within the control of the insured, and increasing th? risk, entitles an insurer to rescind a contract of fire insurance. § 3551. Alteration not increasing risk. — An alteration in the use or condition of a thing insured from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance. § 3558. Acts of the insured. — A contract of fire insurance is not affected by any act of the insured subsequent to the execu- tion of the policy, which does not violate its provisions, even though it increases the risk and is the cause of a loss. Statutory Provisions. 655- NEBRASKA. Compiled Statutes, 1901. 1683. Agents. — Any person or firm in this state who shall receive or receipt for any money, on account of or for any con- tract of insurance made by him or them, or for any such in- surance CD'Hlpany or individual aforesaid, or who shall recei've or receipt for money from other persons, to be transmitted lo any such company or individual aforesaid, for a policy or poli- cies of insurance or any renewal thereof, although such policy or policies of insurance may not be signed by him or them, as agent or agents of such company, or who shall in any wise,, directly or indirectly, make or cause to be made any contract or contracts of insurance, for or on account of such company aforesaid, shall be deemed to all intents and purposes an agent or agents of such company, and shall be subject and liable to all the provisions of this chapter. 3450. Cancelling policies. — Any person, company, associa- tion, or corporation transacting the business of fire, or firu, wind, storm, and tornado insurance, in this state, shall cancel any policy of insurance hereafter issued or renewed, at any time, by request of the party insured, or his legal representa- tive, and shall return to the said party, or his representative, as- aforesaid, the net amount of premium received by the company, after deducting the actual compensation of the agent or solicitor for securing the issue of said policy, and also deducting the customary short-rate premium for the expired time of the full term for which said policy was issued or renewed, any thing in the policy to the contrary notwithstanding. 3453f . Unauthorized insurance — Liability. — Any company, corporation, association, partnership or persons who shall solicit or place insurance in a iire insurance company, corporation, association or partnership not authorized to do or transact busi- ness in this state shall, in the. event of the failure of such un- authorized company, corporation, association or partnership to pay any claim or loss within the policy issued, be liable to the insured for the amount thereof to the extent that such com- pany, corporation, association or partnership would have been liable. NEW YORK. 2 Birdseye's Statutes, 1901, Page 1862. (Insurance Law.) § 122. Payment of return premiums on cancellation of policy. — Any corporation, person, company or association trans- 656 FiEE Insukance. acting the business of fire insurance in this state shall cancel any policy of insurance upon the request of the insured or his legal representatives, and shall return to him or to such repre- sentative the amount of premium paid, less the customary short- rate premium for the expired time of the full term for which the policy has been issued or renewed, notwithstanding any- thing in the policy to the contrary. Where the laws of any state permit corporations organized under its laws to cancel policies of insurance upon different terms than herein set forth, corporations organized under the laws' of this state may cancel policies upon risks in any such state upon the same terms as are provided for corporations organised under its laws. NORTH CAEOIINA. Public Laws of 1899, Chapter 54. § 42. Conditions must be stated in full. — In all insurance against loss by fire the conditions of insurance shall be stated in. full, and the rules and by-iaws of the company shall not be considered as a warranty or a part of the contract, except so far as they are incorporated in full into the policy. § 69. Agent as to premium. — An insurance agent or broker who acts for a person other than himself in negotiating a con- tract of insurance company shall, for the purpose of receiving the premium therefor, be held to be the company's agent, what- ever conditions or stipulations' may be contained in the policy or contract; such agent or broker knowingly procuring by fraudulent representations payment, or the obligation for the payment of a premium of insurance, shall be punished by a fine of not less than one hundred nor more than five hundred dol- lars, or be imprisoned for not more than one year. § 70. Agents personally liable. — An insurance agent shall be personally liable on all contracts of insurance unlawfully made by or through him, directly or indirectly, for or in behaK- of any company not authorized to do business in the state. NORTH DAKOTA. Revised Cod«s, 1899. § 4442. Insurable interest. — Any contingent or unknown event, whether past or future, which may damnifv a person having an insurable interest or create a liability against him may be insured against, subject to the provisions of this chapter, with the exception of an insurance for or against the drawing Statutory Provisions. 657 of any lottery or for or against any chance or ticket in a lottery drawing a prize. § 4450. Insurable interest. — Every interest in property, or any relation thereto, or liability in respect thereof, of such a nature that a contemplated peril might directly damnify the insured, is an insurable interest. § 4451. Classified. — An insurable interest in property may consist in : 1. An existing interest; 2. An inchoate interest founded on an existing interest; or, 3. An expectancy, coupled with an existing interest in that out of which the expectancy arises. § 4452. Carrier or depositary. — A carrier or depositary of any kind has an insurable interest in a thing held by him as such, to the extent of its value. § 4453. Contingent or expectant. — A mere contingent or expectant interest in anything, not founded on an actual right to the thing, nor upon any valid contract for it, is not insur- able. § 4454. Measure of interest. — The measure of an insurable interest in property is the extent to which the insured might be damnified by loss or injury thereof. § 4455. Insurance without interest. — The sole object of in- surance is the indemnity of the insured, and if he has no in- surable interest, the contract is void. § 4456. When interest must exist. — An interest insured must exist when the insurance takes efPect and when the loss occurs, but need not exist in the meantime. § 4457. Change in interest. — Except in the cases specified in the next four sections, and in the cases of life, accident, and health insurance, a change of interest in any part of a thing insured, unaccompanied by a corresponding change of interest in the insurance suspends the insurance to an equivalent extent until the interest in the thing and the interest in the insurance are vested in the same person. § 4458. Change after loss. — A change of interest in a thing insured, after the occurrence of an injury which results in a loss, does not affect the right of the insured to indemnity for the loss. § 4459. Change in distinct things. — A change of interest in one or more of several distinct things, insured by one policy, does not avoid the insurance as to the others. § 4460. Incumbrance or reinsurance of one of several things. — The procurement of any other contract of insurance upon or the incumbrance of one or more of several distinct things in- Vol. 2 — 42 658 FiEE Instjbance. sured by one policy does not render void any insurance upon the things not covered by such other contract of insurance or incumbrance; but in case of loss or damage such an amount shall be deducted from the insurance as the value of prop- erty so incumbered or doubly insured bears to the value of all the property covered by the policy. Any agreement made to waive the provisions of this or the preceding section is void. § 4461. Change by death. — A change of interest, by will or succession, on the death of the insured, does not avoid an insurance; and his interest in the insurance passes to the person taking his interest in the thing insured. § 4463. Change among joint owners. — A transfer of interest by one of several partners, joint owners, or owners in com- mon, who are jointly insured, to the others, does not avoid an insurance, even though it has been agreed that the insurance shall cease upon an alienation of the thing insured. § 4463. Policy, when void. — Every stipulation in a policy of insurance for the payment of loss, whether the person in- sured has or has not any interest in the property insured, or that the policy shall be received as proof of such interest, and every policy executed by way of gaming or wagering, is void. § 4464. Concealment. — ^A neglect to communicate that which a party knows, and ought to communicate, is called a concealment. ■ § 4465. Bescission. — A concealment, whether intentional or unintentional, entitles the injured party to rescind a contract of insurance. § 4466. Mutual disclosure. — Each party to a contract of in- surance must communicate to the other, in good faith, all facts within his knowledge which are or which he believes to be material to the contract, and which the other has not the means of ascertaining, and as to which he makes no warranty. § 4467. What not bound to disclose. — Neither party to a contract of insurance is bound to communicate information of the matters following, except in answer to the inquiries of the other. 1. Those which the other knows; 2. Those which, in the exercise of ordinary care, the other ought to know, and of which the former has no reason to suppose him ignorant; 3. Those of which the other waives communication; 4. Those which prove or tend to prove the existence of a risk excluded by a warranty, and which are not otherwise material; and, 5. Those which relate to a risk excepted from the policj', and which are not otherwise material. StatuIoby Provisions. 659 § 4468. How materiality determined. — Materiality is to be determined, not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disad- vantages of the proposed contract, or in making his inquiries. § 4469. Presumption of knowledge. — Each party to a con- tract of insurance is bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may affect either the political or material perils con- templated; and all general usages of trade. § 4470. Waiver of information. — The right to information of material facts may be waived, either by the terms of insur- ance or by neglect to make inquiries as to such facts, when they are distinctly implied in other facts of which informa- tion is communicated. § 4471. Information as to interest.— Information of the nature or amount of the interest of one insured need not be communicated unless in answer to an inquiry, except as pre- scribed by section forty-four eighty-eight. § 4473. Rescission for fraudulent concealment. — An inten- tional and fraudulent omission, on the part of one insured, to communicate information of matters proving or tending to prove the falsity of a warranty, entitles the insurer to rescind. § 4473. Matters of opinion. — Neither party to a contract of insurance is bound to communicate, even upon inquiry, in- formation of his own judgment upon the matters in question. § 4474. Representation. — A representation may be oral or written. § 4475. When made. — A representation may be made at the same time with issuing the policy, or before it. § 4476. Rules of interpretation. — The language of a repre- sentation is to be interpreted by the same rules as the language of contracts in general. § 4477. What deemed promise. — A representation as to the future is to be deemed a promise, unless it appears that it was merely a statement of belief or expectation. § 4478. Cannot qualify — May warranty. — A representation cannot be allowed to qualify an express provision in a con- tract of insurance; but it may qualify an implied warranty. § 4479. When may be withdrawn. — A representation may be altered or withdrawn before the insurance is effected, but not afterwards. § 4480. Time to which refers. — The completion of the con- tract of insurance is the time to which a representation must be presumed to refer. 660 FiEE Insueance. § 4481. On information and belief.— When a person insured has no personal knowledge of a fact, he may nevertheless re- peat information which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others, or he may submit the informa- tion, in its whole extent, to the insurer; and in neither case is he responsible for its truth, unless it proceeds from an agent of the insured, whose duty it is to give the intelligence. § 4482. When deemed false.*— A representation is to be deemed false when the facts fail to correspond with its as- sertions or stipulations. § 4483. Effect of falsity. — If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false. § 4484. How materiality determined. — The materiality of a representation is determined by the same rule as the material- ity of a concealment. § 4485. When not material. — No oral or written misrepre- sentation made in the negotiation of a contract or policy of insurance by the insured 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 misrepresented increased the risk of loss. § 4486. Modification, rescission. — The provisions of this article* apply as well to a modification of a contract of insur- ance as to its original formation. Whenever a right to rescind a contract of insurance is given to the insured by any pro- vision of this chapter, such right may be exercised at any time previous to the commencement of an action on the con- tract. § 4488. What must be specified in policy. — A policy of in- surance must specify: 1. The parties between whom the contract is made; 2. The rate of premium; 3. The property or life insured; 4. The interest of the insured in property insured, if he is not the absolute owner thereof; 5. The risk insured against; and, 6. The period during which the insurance is to continue. § 4499. Effect of receipt for premium. — An acknowledgment in a policy of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwith- * Sections 4464-4486. Statutory Provisions. 661 standing any stipulation therein that it shall not be binding until the premium is actually paid. § 4500. Agreement not to transfer. — An agreement, made before a loss, not to transfer the claim of a person insured against the insurer after the loss has happened is void. § 4501. Holder may surrender for cancellation. — The holder of any policy of insurance against loss or damage to property by fire or other casualty hereafter issued by any in- surance company doing business in this state may, notwith- etanding any provision thereof or contract to the contrary, at any time surrender the same for cancellation; and upon such surrender the company issuing such policy shall retain or re- ceive such proportion and not more of the premium paid or agreed to be paid as corresponds vsrith the usual short rates upon term policies as adopted and maintained by the Min- nesota and Dakota fire underwriters' union of St. Paul, Min- nesota, for the time the policy remained in force. § 4502. Notice necessary to forfeit.^ No such policy of in- surance shall by virtue of any condition or provision thereof be forfeited, suspended or impaired for nonpayment of any note or obligation taken for the premium, or any part tliereof, unless the insurer shall, not less than thirty days prior to the maturity of such premium, note or obligation, mail, postage prepaid, to the assured at his usual post ofBce a notice, stating: 1. The date when such note or obligation will become due. 2. The amount of principal and interest that will then be due. 3. The effect upon the policy of nonpayment. 4. Such notice shall further inform the assured of his right at his own election either to pay in full and keep the policy in full force, or to terminate the insurance by surrendering the policy and paying such part of the whole premium as it shall have earned and must further state the amount which the assured is lawfully required to pay, or which on account of previous payment may be due him in case of his election to terminate the insurance on the day of the maturity of the premium, note or obligation. § 4503. Warranty, express or implied. — A warranty is either express or implied. § 4504. Form. — No particular form of words is necessary i o create a warranty. § 4505. Express warranty must be written. — Every express warranty, made at or before the execution of a policy, must be contained in the policy itself, or in another instrument signed by the insured, and referred to in the policy, as making a part of it. 662 FiEE Insueancb. § 4506. To what time may relate. — A warranty may relate to the past, the present, the future, or to any or all of these. § 4507. What express warranty. — A statement in a policy, of matter relating to the person or thing insured, or to the risk, as a fact, is an express warranty thereof. § 4508. Statement of intention a warranty. — A statement in a policy, which imports that it is intended to do or not to do a thing which materially affects the risk, is a warranty that such act or omission shall.take place. § 4509. As to future, when need not be fulfilled. — When before the time arrives for the performance of a warranty re- lating, to the future a loss insured against happens or perform- ance becomes unlawful at the place of the contract or impos- sible, the omission to fulfill the warranty does not avoid the policy. § 4510. Rescission for violation of warranty. — The viola- tion of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind. § 4511. What avoids policy. — A policy may declare that a violation of specified provisions thereof shall avoid it, other- wise the breach of an immaterial provision does not avoid the policy. § 4513. Breach without fraud. — A breach of warranty, with- out fraud, merely exonerates an insurer from the time that it occurs, or when it is broken in its inception, prevents the policy from attaching to the risk. § 4513. When premium payable. — An insurer is entitled to the payment of the premium as soon as the thing insured is exposed to the peril insured against. § 4514. When insured entitled to return. — A person in- sured is entitled to a return of premium as follows: 1. To the whole of the premium, if no part of his interest in the thing insured is exposed to any of the perils insured against ; 2. When the insurance is made for a definite period of time, and the insured surrenders his policy, to such proportion of the premium as corresponds with the unexpired time, after deducting from the whole premium any claim for loss or dam- age under the policy which has previously accrued. § 4515. Premium defined.— The term premium within the meaning of sections 4501, 4502 and 4514 includes policy fees in excess of two dollars on any one policy and all other sums of money paid or agreed to be paid in consideration of the policy of insurance. Statutory Peovisions. 663 § 4516. Return wli«n insurance voidable.— A person insured is entitled to a return of the premium when the contract is voidable, on account of the fraud or misrepresentation of the insurer, or on account of facts of the existence of which the insured was ignorant without his fault; or when, by any de- iault of the insured other than actual fraud, the insurer never incurred any liability under the policy. § 4517. Not entitled to return. — If a peril insured against has existed and the insurer has been liable for any period, how- ever short, the insured is not entitled to a return of premium so far as that particular risk is concerned, unless the insurance was for a definite period of time, in which case he is entitled to a proportionate return under sections 4501 and 4514. § 4518. Return in over insurance by several. — In case of an over insurance by several insurers the insured is entitled to a ratable return of the premium, proportioned to the amount by which the aggregate sum insured in all the policies exceeds the insurable value of the thing at risk. § 4519. Contribution to return. — When an over insurance is effected by simultaneous policies the insurers contribute to the premium to be returned in proportion to the amount insured by their respective policies. § 4530. Same. — When an over insurance is effected by suc- cessive policies, those only contribute to a return of the premium who are exonerated by prior insurances from the liability assumed by them and in proportion as the sum for which the premium was paid exceeds the amount for which on account of prior insurance they could be made liable. § 4631. Double insurance. — A double insurance exists when the same person is insured by several insurers separately in Jespect to the same subject and interest. § 4533. Reinsurance, what. — A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance. § 4534. Disclosure required. — When an insurer obtains. re- insurance he must communicate all the representations of the original insurer,* and also all the knowledge and information he possesses, whether previously or subsequently acquired, Tvhich are material to the risk. § 4535. Contract of indemnity. — A reinsurance is presumed io be a contract of indemnity against liability, and not merely against damage. § 4536. Original insured no interest. — The original insured lias no interest in a contract of reinsurance. * So in original as printed. 664 FiEE Insukance. § 4604. Rescission for alteration— An alteration in the use or condition of a thing insured from that to which it is limited by the policy, made without the consent of the insurer, by means within the control of the insured, and increasing the risk, entitles an insurer to rescind a contract of fire insurance. § 4605. Alteration not increasing risk. — An alteration in the use or condition of a thing insured from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance. § 4606. When contract unaffected though risk increased. — A contract of iire insurance is not affected by any act of the insured subsequent to the execution of the policy, which does not violate its provisions, even though it increases the risk and is the cause of a loss. OHIO. 2 Bates' Annotated Statutes, 1902. § 3644. Agents. — A person who solicits insurance and pro- cures the application therefor, shall be held to be the agent of the party, company or association thereafter issuing a policy upon such application or a renewal thereof, anything in the application or policy to the contrary notwithstanding. (As amended by laws of 1904, N"o. 361, p. 160.) § 3664. Insured may require fire policy to be canceled. — Any fire insurance company doing business under the laws of this state which hereafter issues policies of insurance cover- ing any property located in this state, and on such policies receives from the persons insured either cash payments of premium, or notes subject to assessment for payment, of losses, or notes for the installments of premium, shall be required to insert in every policy so issued an obligation to cancel the policy at any time, upon the written request of the person insured on conditions as provided in the following five* sec- tions. § 3665. Rates for cancellation of cash policies. — When a policy issued on the cash plan is canceled, in accordance with the provisions of the preceding section, the companies so issu- ing may retain customary short rates, as now established and charged by companies doing a cash business, for the time the policy has been in force, and return to the insured the un- earned premium on the policy for unexpired time. * The following four sections relate to mutual companies, rates when premium paid in installments, premium notes not negotiable, and en- forcement of provisions by superintendent of insurance. Statutory Provisions. 665 OKLAHOMA. 1 Bevised Statutes of 1903. § 3200. Policy to contain copy of application. — All insur- ance policies issued in this Territory under this act, must be accompanied by a copy of the application for insurance upon which the policy was issued, and such copy shall be evidence in favor of the assured of the matter in his application con- tained. § 3201. Alteration of use; increasing the risk. — An altera- tion in the use or condition of a thing insured, from that to which it is limited by the policy, made without the consent of the insurer, by means within the control of the insured, and increasing the risk entitles the insurer to rescind a con- tract of fire insurance. § 3802. Same; not increasing the risk. — An alteration in the use or condition of a thing insured, from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance. § 3203. Act of insured not increasing risk. — 'A contract of fire insurance is not affected by any act of the insured subse- quent to the execution of the policy, which does not violate its provisions, even though it increases the risk, and is the cause of a loss. PENNSYLVANIA. 1 Pepper and Lewis' Digest, 1894, Title " Insurance." § 68. Copy of application to be attached to policy. — All life and fire insurance policies upon the lives or property of persons within this commonwealth, whether issued by com- panies organized under the laws of this state, or by foreign companies doing business therein, which contain any refer- ence to the application of the insured or the constitution, by- laws or other rules of the company, either as forming part of the policy or contract between the parties thereto, or having any bearing on said contract, shall contain, or have attached to said policies, correct copies of the application, as signed by the applicant, and the by-laws referred to; and, unless so attached and accompanying the policy, no such application, constitution or by-laws shall be received in evidence in any controversy between the parties to, or interested in the said policy, nor shall such application or by-laws be considered a part of the policy or contract between such parties. § 70. Copy of lost policy to be furnished. — Whenever any policy of insurance upon any property, real or personal, granted 666 Fire Insxjkance, by any body corporate or politic, shall have been lost or ■destroyed, such body corporate or politic shall, on proof of the loss or destruction of the same, in the manner hereinafter provided, furnish to the person or persons, whose policy has been so lost or destroyed, a copy of the same, together with the transfers which have been approved and recorded on the books of such body corporate, if any, which may have been made by the original or any subsequent grantee of such policy to the person or persons having the same, at the time of the loss or destruction thereof; the copy so made to be as effectual for the security and indemnification of the person or persons hold- ing the same, as the original, and subject like if to transfer to any person purchasing the property insured. § 71. Proceedings in case of lost policy. — On the applica- tion of any person or persons to the court of common pleas of the county in which the property has been insured, setting forth the loss or destruction of the policy of insurance, on oath or affirmation, together with a description of the property, the amount for which it was insured, the person or persons to Tvhom granted, if practicable, together with the mesne trans- fers thereof, the court shall grant a rule on the body corporate or politic which granted such policy of insurance, commanding such body corporate or politic to appear before said court, on a day certain, not less than twenty days from the service of said rule, to show cause why a copy of such policy of insurance should not be supplied, in pursuance of the provisions of the first section of this act; and on the default of such body cor- porate or politic to appear and show cause why such copy as aforesaid should not be supplied, the court shall issue a man- date to such body corporate or politic, to furnish such copy in ten days after service of the same; and on the neglect or Tefusal of such body corporate or politic, to furnish a copy as aforesaid, the court, on due proof of the service of such mandate, and the neglect or refusal of such body corporate or politic to furnish such copy, shall direct a judgment to be entered by the prothonotary in favor of the person or persons making the application against the said body corporate or politic, for the sum for which the said policy of insurance was granted, which said judgment shall stand for security of the plaintiff or plaintiffs, for such time as the policy of insurance itself would have done, and for the like purposes; and the costs of the proceedings shall be paid by the defendant; and the officers rendering services shall receive the like ■ fees as are now allowed by law for similar services. § 135. Definition of insurance broker.— Whoever acts or aids m any manner in negotiating contracts of insurance, or re- Statutory Provisions. 667 insurance, or placing risks, or effecting insurance or re-insur- ance, for any person other than himself, receiving compensa- tion therefor, and is not the ofBcer, member or agent of the company or companies in which such insurance is eSected, shall be deemed to be an insurance broker. (Balance of the statute prescribes the obtaining of certificate by brokers, and penalties.) § 130. Personal liability of agents of foreign companies. — The agent of any insurance company of any other state or government, which does not comply with the laws of this commonwealth, 'shall be personally liable on all contracts of insurance made by or through him, directly or indirectly, for or in behalf of any such company. RHODE ISLAND. Hevised Statutes, 1896. § 10. Who is to be deemed an agent of a foreign insurance ■company. — Every person who acts or aids in any manner in negotiating contracts of insurance or re-insurance, or placing risks, or effecting insurance or re-insurance, for any person other than himself, and receiving compensation therefor, and «very person who shall so far represent any insurance com- pany, established in any other state or country, as to receive or transmit proposals for insurance, or to receive for delivery policies founded on proposals forwarded from this state, or otherwise to procure insurance to be effected by such company for persons residing in this state, shall be deemed and taken io be acting as agent for and undertaking to make insurance as agent for and in behalf of such company, and shall be sub- ject to the restrictions and liable to the penalties herein made applicable to agents of such companies. Laws 1896, September Session, Chapter 416. § 1 (p. 5). Insurance brokers, who deemed to be. — Who- ever, for compensation, acts or aids in any manner in negotiat- ing contracts of insurance or reinsurance or placing risks or effecting insurance or reinsurance for a person other than him- self, and not being the appointed agent or officer of the com- pany in which such insurance or reinsurance is effected, shall be deemed an insurance broker, and no person shall act as such broker save as provided in this section. (Balance of the Act prescribes the obtaining of a license and penalties.) 668 Fire Insueance. SOUTH CAEOiniA. 1 CivU Code, 1902. § 1810. Who to be considered agents of foreign insurance companies. — Any person who solicits insurance in behalf of any insurance company not organized under or incorporated by the laws of this State, or who takes or transmits other than for himself any application for insurance or any policy of insur- ance to or from such company, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine and inspect any risk, or re- ceive, collect, or transmit any premium of insurance, or make or forward any diagram of any building or buildings, or do or perform any other act or thing in the making or the con- summating of any contract of insurance for or with any such company, other than for himself, or who shall examine into and adjust, or aid in adjusting, any loss for or in behalf of any such insurance company, whether any such acts shall be done at the instance or request or by the employment of such insurance company, shall be held to be acting as the agent of the company for which this act is done or the risk is taken. SOUTH DAKOTA. Revised Codes, 1903. § 1794. What may be insured. — Any contingent or un- known event, whether past or future, which may damnify a person having an insurable interest, or create a liability against him, may be insured against, subject to the provisions of this chapter, with the exception of an insurance for or against the drawing of any lottery, or for or against any chance or ticket in a lottery drawing a prize. § 1802. Insurable interest. — Every interest in property, or any relation thereto, or liability in respect thereof, of such a nature that a contemplated peril might directly damnify the insured, is an insurable interest. § 1803. Insurable interest classified. — An insurable inter- est in property may consist in: 1. An existing interest; 3. An inchoate interest founded on an existing interest; or, 3. An expectancy, coupled with an existing interest in that out of which the expectancy arises. § 1804. Carrier or depositary. — A carrier or depositary of any kind has an insurable interest in a thing held by him as such, to the extent of its value. Statutory Peovisions. 669 § 1805. Contingent interests. — A mere contingent or expect- ant interest in anything, not founded on an actual right to the thing, nor upon any valid contract for it, is not insurable. § 1806. Measure of interest. — The measure of an insurable interest in property is the extent to which the insured might be damniiied by loss or injury thereof. § 1807. Insurance without interest. — The sole object of in- surance is the indemnity of the insured, and if he has no in- surable interest, the contract is void. § 1808. When interest must exist. — An interest insured must exist when the insurance takes effect and when the loss occurs, but need not exist in the meantime. § 1809. Effect of transfer. — Except in the cases specified in the next four sections, and in the cases of life, accident, and health insurance, a change of interest in any part of a thing insured, unaccompanied by a corresponding change of interest in the insurance, suspends the insurance to an equivalent extent until the interest in the thing and the interest in the insurance are vested in the same person. § 1810. Transfer after loss. — A change of interest in a thing insured, after the occurrence of an injury which results in a loss, does not affect the right of the insured to indemnity for the loss. § 1811. A change of interest in one or more of several dis- tinct things, separately insured by one policy, does not avoid the insurance as to the others. § 1812. Change by death. — A change of interest, by will or succession, on the death of the insured, does not avoid an insurance; and his interest in the insurance passes to the person taking his interest in the thing insured. § 1813. Transfer by joint owners. — A transfer of interest by one of several partners, joint owners, or owners in common, who are jointly insured, to the others, does not avoid an insur- ance, even though it has been agreed that the insurance shall cease upon an alienation of the thing insured. § 1814. Policy, when void. — Every stipulation in a policy of insurance for the payment of loss, whether the person in- sured has or has not any interest in the property insured, or that the policy shall be received as proof of such interest, and every policy executed by way of gaming or wagering, is void. § 1815. Concealment. — ^A neglect to communicate that which a party knows, and ought to communicate, is called a conceal- ment. § 1816. Effect of concealment. — A concealment, whether in- tentional or unintentional, cniitles the injured party to rescind a contract of insurance. 670 FiKE Insurance. § 1817. Mutual disclosures. — Each party to a contract of insurance must communicate to the other, in good faith, all facts within his knowledge which are or which he believes to be material to the contract, and which the other has not the means of ascertaining, and as to which he makes no warranty. § 1818. Not bound to disclose. — Neither party to a contract of insurance is bound to communicate information of the mat- ters following, except in answer to the inquiries of the other. 1. Those which the other knows; 2. Those which, in the exercise of ordinary care, the other ought to know, and of whicli the former has no reason to sup- pose him ignorant; 3. Those of which the other waives communication; 4. Those which prove or tend to prove the existence of a risk excluded by a warranty, and which are not otherwise material; and, 5. Those which relate to a risk excepted from the policy, and which are not otherwise material. § 1819. legal construction. — Materiality is to be deter- mined, not by the event, but solely by the probable and reason- able influence of the facts upon the party to whom the commu- nication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. § 1830. Presumption as to knowledge. — Each party, to a contract of insurance is bound to know all the general causes which are open to his inquiry, equally with that of the other, and which may affect either the pohtical or material perils con- templated; and all general usages of trade. § 1821. Waiver of information. — The right to information of material facts may be waived, either by the terms of insur- ance or by neglect to make inquiries as to such facts, where they are distinctly implied in other facts of which information- is communicated. § 1832. Information as to interest. — Information of the na- ture or amount of the interest of one insured need not be com- municated unless in answer to an inquiry, except as prescribed by section eighteen hundred and thirty-eight. § 1823. Fraud by insured. — An intentional and fraudulent omission, on the part of one insured, to communicate informa- tion of matters proving or tending to prove the falsity of a warranty, entitles the insurer to rescind. § 1824. Matters of opinion. — Neither party to a contract of insurance is bound to communicate, even upon inquiry, informa- tion of his own judgment upon the matters in question. § 1825. Bepresentation. — A representation may be oral or "written. Statutoby Provisions. 671 § 1826. When made. — A representation may be made at the same time with issuing the policy, or before it. § 1827. Interpretation. — The language of a representation is to be interpreted by the same rules as the language of con- tracts in general. § 1828. Representation as to future. — A representation as to the future is to be deemed a promise, unless it appears that it was merely a statement of belief or expectation. § 1829. May qualify implied warranty. — A representation cannot be allowed to qualify an express provision in a contract of insurance; but it may qualify an implied warranty. § 1830. Representation withdrawn. — A representation may be altered or withdrawn before the insurance is effected, but not afterwards. § 1831. Time to which representation refers. — The comple- tion of the contract of insurance is the time to which a repre- sentation must be presumed to refer. § 1832. Information and belief. — When a person insured has no personal knowledge of a fact, he may nevertheless repeat information which he has upon the subject, and which he be- lieves to be true, with the explanation that he does so on the information of others, or he may submit the information, in its whole extent, to the insurer; and in neither case is he respon- sible for its truth, unless it proceeds from an agent of the in- sured, whose duty it is to give the intelligence. § 1833. Falsity of representation, — A representation is to be deemed false when the facts fail to correspond with its asser- tions or stipulations. § 1834. Effect of falsity. — If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false. § 1835. Materiality. — The materiality of a representation is determined by the same rule as the materiality of a conceal- ment. § 1836. Modification — Rescission. — The provisions of this article* apply as well to a modification of a contract of insur- ance as to its original formation. Whenever a right to rescind a contract of insurance is given to the insurer by any provision of this chapter, such right may be exercised at any time previous to the commencement of an action on the contract. § 1838. Specification of policy. — A policy of insurance must specify: 1. The parties between whom the contract is made; ' "^ * Sections 1815-1836. 672 FiEE Insubance. 2. The rate of premium; 3. The property or life insured; 4. The interest of the insured in property insured, if he is not the absolute owner thereof; 5. The risk insured against; and, 6. The period during which the insurance is to continue. § 1839. Name of person insured. — When the name of the person intended to be insured is specified in a policy, it can be applied only to his own proper iaterest. § 1840. Insurance by agent or trustee. — When an insurance is made by an agent or trustee, the fact that his principal or benefician- is the person really insured may be indicated by describing him as agent or trustee, or by other general words in the policy. § 1841. Terms applicable to joint and common interest. — To render an insurance effected by one partner or part owner applicable to the interest of his copartners or of other part own- ers, it is necessary that the terms of the policy should be such as are applicable to the joint or common interest. § 1842. Specific person. — When the description of the in- sured in a policy is so general that it may comprehend any per- son or any class of persons, he only can claim the benefit of the policy who can show that it was intended to include him. § 1843. Policy may run to whomsoever. — A policy may be so framed that it wiU inure to the benefit of whomsoever, dur- ing the continuance of the risk, may become the owner of the interest insured. § 1844. Transfer of thing insured. — The mere transfer of a thing insured does not transfer the policy, but suspends it until the same person becomes the owner of both the policy and the thing insured. § 1845. Classes of policies. — A policy is either open or Talued. § 1846. Open policy. — An open policy is one in which the value of the thing insured is not agreed upon, but is left to be ascertained in case of loss. § 1847. Valued policy. — A valued policy is one which ex- presses on its face an agreement that the thing insured shall be valued at a specified sum. § 1848. Successive insurance. — A running policy is one which contemplates successive insurances, and which provides that the object of the policy may be from time to time defined, especially as to the subjects of insurance, by additional state- ments or indorsements. Statutoby Provisioks. 673 § 1849. Receipt in policy. — An acknowledgment in a policy of the receipt of premium is conclusive evidence of its payment. BO far as to make the policy binding, notwithstanding any stipulation therein that it shall not be binding until the pre- mium is actually paid. § 1850. Agreement not to transfer. — An agreement, made before a loss, not to transfer the claim of a person insured against the insurer after the loss has happened is void. § 1851. Warranty, classified. — A warranty is either express or implied. § 1853. Form.— No particular form of words is necessary to create a warranty. § 1853. Express warranty must be written. — Every express warranty, made at or before the execution of a policy, must be contained in the policy itself, or in another instrument signed by the insured, and referred to in the policy, as making, a part of it. § 1854. Time of warranty. — A warranty may relate to the past, present, future, or to any or all of these. § 1855. Construction of statement in policy. — A statement in a policy, of matter relating to the person or thing insured, or to the risk, as a fact, is an express warranty thereof. § 1856. Statement in policy as to intention. — A statement in a policy, which imports that it is intended to do or not to do a thing which materially affi.'cts the risk, is a warranty that such act or omission shall take place. § 1857. Omission does not void policy. — When, before the time arrives for the performance of a warranty relating to the future, a loss insured against happens, or performance becomes unlawful at the place of the contract, or impossible, the omis- sion to fulfill the warranty does not avoid the policy. § 1858. When entitled to rescission. — The violation of a material warranty, or other material provisions of a policy, on the part of either party thereto, entitles the other to rescind. § 1859. What avoids policy, — A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy. § 1860. Breach without fraud. — A breach of warranty, with- out fraud, merely exonerates an insurer from the time that it occurs, or where it is brolcen in its inception, prevents the policy from attaching to the risk. § 1861. Premium payable when. — An insurer is entitled to payment of the premium as soon as the thing insured is ex- posed to the peril insured against. Vol. 2 — 43 674 FiBE Insueancb. § 1862. Eetum of premium.— A person insured is entitled to a return of premiiun as follows: 1. To the whole premium, if no part of his interest in the thing insured be exposed to any of the perils insured against; 2. Where the insurance is made for a definite period of time, and the insured surrenders his poUcj-, to such proportion of the premium as corresponds with the unexpired time, after deduct- ing from the whole premium any claim for loss or damage under the polic}' which has previously accrued. § 1863. Same. — A. person insured is entitled to a return of the premium when the contract is voidable, on account of the fraud or misrepresentation of the insurer, or on account of facts of the existence of which the insured was ignorant with- out his fault; or when, by any default of the insured other than actual fraud, the insurer never incurred any HabUity under the policy. § 1864. When, not entitled. — If a peril insured against has existed, and the insurer has Leen liable for any period, however short, the insured is not entitled to return of premiums, so far as that particular risk is concerned. § 1865. Eetum in ratio. — In case of an over insurance by several insurers, the insurer is entitled to a ratable return of the premium, proportioned to the amount by which the aggre- gate sum insured in aU the policies exceeds the insurable value of the thing at risk. § 1866. Contributions on over insurance. — When an over in- surance is effected by simultaneous policies, the insurers contrib- ute to the premium to be recurned, in proportion to the amount insured by their respective policies. § 1867. Same. — When an over insurance is effected by suc- cessive policies, those only contribute to a return of the pre- mium who are exonerated by prior insurances from the liability assumed by them, and in proportion as the sum for which the premitmi was paid exceeds the amount for which on account of prior insurance they could be made liable. § 1877. Double insurance. — A double insurance exists where the same person is insured by several insurers separately in re- spect to the same subject and interest. § 1879. Eeinsurance. — A contract of reinsurance is one by which an insurer procures a third person to insure him again.st loss or liability by reason of sv.eh original insurance. § 1880. Disclosures required. — Where an insurer obtains re- insurance he must communicate all the representations of the original insurer* and also all the knowledge and information * So printed in statutes. Statutory Provisions. 675 he possesses, whether previously or subsequently acquired, which are material to the risk. § 1881. Nature of reinsurance. — A reinsurance is presumed to be a contract of indemnity against liability, and not merely against damage. § 1882. Original insured no interest. — The original insured has no interest in a contract of reinsurance. § 1950. Alteration of use. — An alteration in the use or con- dition of a thing insured from that to which it is limited by the policy, made without the consent of the insurer, by means within the control of the insured, and increasing the risk, en- titles an insurer to rescind a contract of fire insurance. § 1951. Same not increasing risk. — An alteration in the use or condition of a thing insured from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance. § 1952. Act of the insured. — A contract of fire insurance is not affected by any act of the insured subsequent to the execu- tion of the policy, which does not violate its provisions, even though it increases the risk and is the cause of a loss. TENNESSEE. Code of 1896. § 3306. Misrepreseintation not to avoid policy, when. — No written or oral misrepresentation or warranty therein made in the negotiations of a contract or policy of insurance, or in the application therefor, by the assured or in his behalf, shall be deemed material or defeat or void the policy, or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter represented increase the risk of loss. (Laws 1895, chap. 160, § 22.) § 3316. Agent's liability on unlawfully issued policies. — An agent or person shall be personally liable on all contracts of insurance unlawfully made by or through him, directly or indirectly, for or in behalf of any insurance company not au- thorized to do business in this state. TEXAS. 2 Sayles Civil Statutes, 1897. Art. 3061. Insurance unlawful unless authorized by com- missioner of insurance. — It shall not be lawful for any person to act within this state, as agent or otherwise, in soliciting or 676 Fire Insurance. receiving applications for insurance of any kind whatever, or in any manner to aid in the transaction of the business of any insurance company incorporated in this state or out of it, with- out first procuring a certificate of authority from the commis- sioner of agriculture, insurance statistics and history. Art. 3093. Who are agents. — Any person who solicits in- surance on behalf of any insurance company, whether incor- porated under the laws of this or any other state or foreign government, or who takes or transmits other than for himself any application for insurance or any policy of insurance to or from such company, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine or inspect any risk, or receive, or collect, or transmit any premium of insurance, or make or forward any diagram of any building or buildings, or do or perform any other act or thing in the making or consummating of any con- tract of insurance for or with any such insurance company other than for himself, or who shall examine into, or adjust or aid in adjusting any loss for or on behalf of any such insurance com- pany, whether any of such acts shall be done at the instance or request, or by the employment of such insurance company, or of or by any broker or other person, shall be held to be the agent of the company for which the act is done, or the risk is taken, as far as relates to all the .liabilities, duties, re- quirements and penalties set forth in this chapter; provided, that the provisions of this chapter shall not apply to citizens of this state who arbitrate in the adjustment of losses between the insurers and the insured, nor to the adjustment of particu- lar or general average losses of vessels or cargoes by marine adjusters who have paid an occupation tax of two hundred dol- lars for the year in which the adjustment is made; provided further, that the provisions of this chapter shall not apply to practicing attorneys at law in the state of Texas, acting in the regular transaction of their business as such attorneys at law, . and who are not local agents nor acting as adjusters for any insurance company. Art. 3095. Penalty, etc.— Any person who shall do any of the acts mentioned in article 3093 for or on behalf of any in- surance company without such company has first complied with the requirements of the laws of this state, shall be- personally liable to the holder of any policy of insurance in respect of which such act was done for any loss covered by the same. Statutory Provisions. 677 VERMONT. Statutes, 1894. § 4199. Foreign companies not to do business, unless, etc. — Foreign fire insurance companies are prohibited from taking insurance in this state, unless such companies are responsible by the laws of the state in which they are situated, or by their acts of incorporation, or by a proviso to that effect in their policies of insurance, for the acts and neglect of their agents as between said companies and the insured, and as between said companies and the applicants for insurance therein. § 4200. Penalty for acting as agent in certain cases. — If a person takes an application or makes a survey intending to effect insurance on property in a foreign fire insurance com- pany, said company not being liable for the acts and neglects of such persons as specified in the preceding section, said per- son shall be fined not less than seven dollars, one-half to go to the person prosecuting the same, and one-half to the town where the offense is committed. § 4201. Application taken by agent, deemed act of company. — When application for fire insurance is taken or transmitted by or through a local or traveling agent of a fire insurance company, or a person acting under the employment of an agent of such company, it shall be deemed to be the act of the com- pany; and in questions arising as to the facts stated in such application, such agent or sub-agent shall be deemed to be the agent of the insurers and not of the insured. VIRGINIA. 2 Code, 1904. § 3253. When failure to perform a condition of a policy, or the violation of a provision thereof, not to avail as a defence. — In any action against an insurance company or other insurer, founded on a policy of insurance issued after the first day of July, eighteen hundred and seventy-eight, no failure to per- form any condition of the policy, nor violation of any restric- tive provision thereof, shall be valid defence to such action unless it appears that such condition or restrictive provision is printed in type as large as or larger than that commonly known as long primer type, or is written with pen and ink in or on the policy. § 3344a. Evidence in suits upon insurance policy, as to im- material allegations in such policy. — No answer to any inter- rogatories made by an applicant for a policy of insurance shall 678 FiKE Insueance. bar the right to recover upon any policy issued upon such application, by reason of any warranty in said application or policy contained, unless it be clearly proved that such answer wa£ wilfully false or fraudulently made or that it was material. WASHINGTON. Laws of 1899, Chapter CXLIV. § 9. Agents. — Any person through whom any insurance company writing insurance upon any property in this state shall deliver a policy of insurance shall be deemed the agent of such company as to all transactions relating to such insurance had between such person and the insured named in the policy, prior to and at the delivery thereof. WISCONSIN. 1 Statutes of 1898. § 1945a. Application attached to policy. — All fire insur- ance corporations, except mutual fire insurance corporations organized under the laws of this state, shall, upon the issue or renewal of any policy, attach to such policy or indorse thereon a true copy of any application or representations of the as- sured, which by the terms of such policy are made a part thereof or of the contract of insurance or referred to therein, or which may in any manner affect the validity of such policy. The omission so to do shall not render the policy invalid, but, if any corporation neglect to comply with the requirements of this section, it shall forever be precluded from pleading, al- leging or proving such application or representations or any part thereof, or the falsity thereof or any part thereof in any action upon such policy; and the plaintiff in any such action shall not be required, in order to recover, either to plead or prove such application or representations, but may do so at his option. (As amended Laws 1905, chap. 37.) § 1945e. Business done through agents; penalty. — No fire insurance company not incorporated under the laws of this state shall write or cause to be Avritten any policy on property herein except through its resident agent duly authorized by the com- missioner of insurance. Any company or person who shall solicit or place insurance in a fire insurance company not author- ized to do business in this state shall, in the event of the failure of such unauthorized company to pay any claim or loss within Statutory Provisions. 679 the policy issued, be liable to the insured for the amount thereof to the extent that such company would have been liable.* * * * § 1946d. Cancellation of policy. — Any company, association or corporation transacting the business of insuring property against loss or damage from any cause shall, except as is other- wise provided by any provision applicable to any class of insur- ance companies, cancel any policy at any time, by request of the party insured or his assignee, and return to said party the amount of premium paid less the customary short-rate premium for the expired portion of the full term the policy has been issued. § 1977. Who are agents. — Whoever solicits insurance on be- half of any insurance corporation or person desiring insurance of any kind, or transmits an application for or a policy of insur- ance, other than for himself, to or from any such corporation, or who makes any contract for insurance, or collects any premium for insurance, or in any manner aids or assists in doing either, or in transacting any business of like nature for any insurance corporation, or advertises to do any such thing, shall be held to be an agent of such corporation to all intents and pur- poses unless it can be shown that he receives no compensation for such services. This section shall not apply to fraternal assessment orders or societies. * Balance of section prescribes penalties in revocation or suspension of license, etc. INDEX TO VOLUME 11/ (• Index to both volumes, see page 725.) PAGE. Adjustment, under reinsurance contract 560, .561 Agents, statute as affecting misrepresentation 15 responsibility for misstatements in written application 47 effect of expression of opinion Ill effect of limitation upon authority after issue of policy 112 estoppel by, after issue of the policy 114 authority of, presumption and evidence as affecting other in- surance 116 in obtaining policy from another company and placing surplus line 118, 119 knowledge of, as affecting waiver or estoppel 189 when insured not bound by limitation on authority 215 no authority to extend vacancy permit 368 authority of, as affecting cancellation. . 407, 411, 418, 420,423, 424 duty and liability of, in connection with cancellation 433-436 as imposed by contract 441 agency founded upon contract 443 consent of principal essential 443 burden of proof as to agency 443 evidence of agency 443 when agency clause in policy inoperative 444-446, 448 agency clause as affecting status of broker 444 policy not conclusive as to agent's authority 445, 446, 493 agency open to inquiry as to facts 446 when policy only evidence of authority 446 authority of a soliciting agent : 446 acceptance of written application from soliciting agent as rati- fication 446 form in countersigning 447 effect of company authorizing soliciting of insurance as affect- ing waiver or estoppel 447 responsibility for errors or omissions in written application . . . 449 question of fact as to responsibility for errors in application . . 449 scope of authority 451 notice to company through officer or ager.t, exceptions 45iJ [681] 682 Index. (Index to both volumes, see page 725.) Agents — Continued. page. scope of authority not limited by private instructions .... 452, 453 authority not established by assumption 452 authority, how determined 453 test of authority 453 limitation of apparent authority 454 scope of authority as to kind of property or risk 455 no authority to insure destroyed property 455 scope of authority as to territory 455 • construction of authority as to agent or surveyor 456 partnership as agent of company 45(5 effect of holding commissions from other companies 457 presumption of knowledge and practice in selecting companies . . 457 liability for acts of, in malicious prosecution 457 acting after resignation 457 agency may continue after revocation 458 company's agent may become representative of insured 458 effect of dissolution of partnership 458 insured may be bound to inquire as to authority 458 effect of leaving blank policies with agents 459 secret revocation of authority 459 when written authority or commission conclusive 459 authority of ofBcers of company 460 evidence of authority 460-466 authority of agents 460-467 admissions or declarations of agent as to evidence 461, 462 policy may contain evidence as to authority !...;.... 463 possession of blank policies as evidence of authority 463 effect of furnishing agents with blank applications 464 custom and course of business as evidence of authority 465 conversations with persons in the office of company 465 letters from insurance company as evidence 465 when not clothed with apparent authority to issue policies 466 company not allowed to prove it would have done differently by another or same agent 460 understanding and willingness of, not. admissible 466 daily report of agent as evidence 4e)t) insured's construction of agent's meaning not admissible 467 who is a general agent 407 soliciting agent not a general agent 407 limitation in policy does not prevent employment of clerks .... 468 clerks and employees of a general agent 469 authority of clerk of general agent 470 evidence as to authority of clerk 117 470 Index. 683 (Index to both volumes, see page 725.) Agents — Continued. page. estoppel by clerk 470 soliciting agent no authority to malce contract of insurance. . . 471 evidence as to authority of soliciting agent 471 limitation of authority of a soliciting agent 472 authority as to waiver after issue of policy 473 mere solicitation of insurance does not create agency 474 allowance of commissions does not make agent of company .... 474 ratification by company of act of soliciting agent 474 broker agent of insured 475 authority of broter 475 burden of proof as to authority of broker 475 evidence as to authority of broker, as company's agent 475 broker cannot be agent of company without evidence of au- thority 476 legal definition of broker 476 payment of commission to broker does not make him company's agent 476 insured responsible for broker as his agent 477 evidence of custom among brokers 477 entries in broker's books 477 conversations with broker 477 distinction between broker and company's soliciting agent 478 payment of commission not conclusive 474, 47 ij broker may make delivery of check for premium conditional ... 479 liability of broker to insured for premium 479 broker may be agent to collect premium, question of fact. . 480, 481 agent of company placing surplus insurance 482 opinion and representation by broker 483 duty of broker in procuring or maintaining insurance .... 483, 484 personal liability of broker 483-485 ratification by insured of broker's act 481 broker authorized to collect unearned premium 485 waiver or estoppel by general agent 486 restrictions upon authority not binding prior to delivery of policy 486 company cannot prohibit itself from making waiver 487 insured bound by limitations upon authority in policy 487 notwithstanding limitations in policy general agent may estop company after its issue 492 mere knowledge not suflicient as estoppel 492 limitation of authority in policy not conclusive 493 effect of conduct and course of business 493, 494 notice to, as element of estoppel 494 684 Index. (Index to both volumes, see page 725.) Agents — Continued. page. letters as evidenpe of waiver 495 fraud and collusion as affecting estoppel 495 no waiver by delivery of policy after fire 495 when company bound by knowledge when policy issues 496 knowledge of agent as affected by time 497 personal liability of comi,:iny's agent 498 instructions to, should be clear and unambiguous 498 local agents not liable for fraudlilent act of clerk or solicitor. . 499 no power to bind company by contract to insure in the future . . 499 personal liability under- statute 500 personal responsibility to insured for misrepresentation 500 damages on breach of contract of agency 500 duration of agency 501 right of agent after termination of agency ■ 501 property rights in expirations 502 when authority question of fact or law . . 110, 443, 457-, 463, 502, 503 cannot act in a dual or double capacity 503, 559 when agent acts in double capacity 504 stockholder, director, or officer of another corporation 505 also cashier of bank 505 also director of school district 506 subject to right of state legislature to regulate business 506 business of insurance not commerce, power of state 507 power of state over its citizens 508 liability of agent or broker to penalty 509 construction of statute defining status of 509 statute does not change rule of law as to princfpal and agent. . 510 effect of statute prescribing status of a soliciting agent 510 statute fixing status of agent not extended by construction 511 status of soliciting agent under statute, question of fact 512 status of broker under statute 513 company cannot plead its own violation of law 513 authority of, as affecting renewal 519 520 authority of, to waive prepayment of premium 528 authority of, as affecting oral or parol contracts 569-572 duty of, in issuing policy as affecting reformation 602 Alabama statute ,. ., 622 Arkansas statute 623 Connecticut statute 631 Florida statute 632 Georgia statute 633, 634 Illinois statute 636 Iowa statute 636, 637 Index. 685 (Index to both volumes, see page 725.) Agents — Continued. page. Kentucky statute 637, 638 Louisiana statute 638, 639 Maine statute 639, 640 Massachusetts statute 641 Michigan statute 642 Minnesota statute 643 Mississippi statute 646, 617 Missouri statute 047 Nebraska statute 655 North Carolina statute 656 Ohio statute , 664 Pennsylvania statute 667 Rhode Island statute 667 South Carolina statute 668 Tennessee statute 675 Texas statute 676 Vermont statute 677 Washington statute 678 Wisconsin statute, 678, 679 see " Broker." , Alabama, statutory provisions 622 who are agents of foreign companies 622 personal liability of agent 623 Alterations or Repairs, as affecting operation of manufacturing es- tablishment 284 as affecting increase of hazard 298 as imposed by contract 318 violation renders policy void without regard to increase of risk. 320 test of time is substituted for former test of reasonableness . . . 320 construction of " additions " 321 permission limited to property described 321 admissibility of parol evidence 321 effect of permission for repairs and alterations 321 limitation of special permission for alterations or repairs 322 permission applicable to building in course of erection 323 effect of carpenter's risk only 323 risk must not be increased further than necessary 323 as affected by construction 324 repairs not extended by construction 324 construction of the word " mechanics " 324 application to tenants 325 when policy contains no condition as to repairs 325 686 Index. (Index to both volumes, see page 725.) Alterations or Repairs — Continued. page. question of fact 325 eflfeet of special permission 325 suspension of policy when hazard increased 326 removal of sprinkler equipme^nt 326 assignee of policy not affected by subsequent acts of grantor . . 327 effect of condition against alteration by specific means 327 expert evidence 327 as affected by waiver or estoppel 328 does not constitute occupancy 364 California statute 630 Montana statute 654 North Dakota statute 664 Oklahoma statute 665 South Dakota statute . ., 675 see " Illuminating Gas and Prohibited Articles.'' Ambiguity, see " Evidence." Application, statement of interest in 142 effect of ambiguity 142, 156 statutes requiring attachment to policy, does not affect condi- tion as to title 187 materiality of, as affecting increase of hazard 299 acceptance of, by company as ratification of agency 446 responsibility for errors or omissions 449 Georgia statute 635 Iowa statute 636 Massachusetts statute 641 Minnesota statute 643 Olilahoma statute 665 Pennsylvania statute 665 Wisconsin statute 678 see " Concealment;" " Misrepresentation;" " Oral or Parol Con- tract ; " " Warranty." Apportionment, as affected by unauthorized substitution 427 no effect on reinsurance contract 557 Appraisal, no application to reinsurance contract 556 Arkansas, statutory provisions • 623 status of agent 623 substantial compliance with policy sufficient 623 Assignment of Policy, effect of consent to, as waiver of change in in- terest 248 as imposed by contract 256 Index. 687 (Index to both volumes, see page 725.) Assignment of Policy — Continued. page. condition valid and reasonable 258 violation voids insurance 258 consent may be in writing on separate paper 258 application of Iowa statute 258 duty to procure written consent 259 estoppel by officers of company 259 need not be in writing 260 may be equitable assignment 260 not dependent upon form, question of intention 261 not inferred 261 effect of making loss payable to assignee or third party 261 sale of property does not include policy 261 assignment of policy and sale of property independent — both must be consented to 2B3 order in time immaterial 264 effect of company's consent 259, 264 assignee must have insurable interest 265 assignee takes it subject to conditions 266 whem consent of company to purchaser of property, effect 266 may be made conditional 268 one of several insured may assign his interest 268 effect of general assignment for benefit of creditors 269 effect of adjudication in bankruptcy 269 rule as to statement of interest inapplicable 269 assignor no power to impair validity of policy 270 insured no claim under void policy by assignment to mort- gagee 270 as between partners 271 as security or collateral 271 right of assignment 272 effect of assignment as security, subject to violation of condi- tion by assignor 273 by mortgagee • 274 after loss 274, 275 induced by false representations 276 includes right to reformation 276 assignee not affected by subsequent acts of assignor 327 as affected by reinsurance contract 553, 554 right of assignee to reformation 606 Bankruptcy, effect of, as change in interest 245 effect of proceeding in assignment of interest or policy 269 Binder, see "Oral or Parol Contract;" "Other Insurance." 688 Index. (Index to both volumes, see page 725.) PAGE. Broker, concealment by 9 as agent of insured in filling up application 50 knowledge of, as afi'ecting warranty 57 company not bound by broker as to other insurance 117 knowledge of, as waiver or estoppel 174 effect of credit for premium to broker as affecting cancellation. 406 authority of, as affecting cancellation 418, 422 right to commissions on cancellation 433 status of, as affected by agency clause in policy 444 may be company's agent 475 cannot be agent of company without evidence of authority .... 476 legal definition of broker 476 payment of commission does not make him company's agent 476, 478 evidence of custom 477 insured responsible for broker as his agent 477 entries in books of 477 conversations with 477 distinction between broker and company's soliciting agent .... 478 may make delivery of check for premium conditional 479 liability of broker to insured for premiums 479 may be agent of company to collect premium 480, 481 agent of company placing surplus insurance 482 opinion or representation by, question of fact 483 duty of, in procuring or maintaining insurance 483, 484 personal liability 483-485 ratification by insured 481 authorized to collect unearned premium , 485 subject to right of state legislature to regulate business 506 liability to penalty 509 status of, under statute. , -. 512 513 and see various statutes under names of states. authority of, as to premium 528, 530-533 agent of insured 475, 532 liability for unearned premium 532 advancement of premium by 533 Connecticut statute 631 Maryland statute 640 Massachusetts statute 641 Pennsylvania statute 666 Rhode Island statute 667 Building, as affected by warranty 59 66 distance of, as affected by warranty 61 Index. 689 (Index to both volumes, see page 725.) Building — Continued. page. construction of promissory warranty 65 construction of, in reinsurance contract 555 see " Misrepresentation." Building on Ground not Owned in Fee Simple, as imposed by con- tract 181 violation of condition \oi(l3 policy, burden of proof 182 effect of written description 182 presumption as to estate in fee 183 equitable interest or title 183 combination of several individual interests may amount to fee simple, when policy void 183 as dependent on delivery and recording of deed 184 effect of deed not signed by wife 184 effect of oral application and no inquiries 185 duty of insured, company not bound to inquire 185 company put upon inquiry by ambiguous answer in application. 186 when breach of condition 186 leasehold interest 186 as affected by partnership 187 condition not affected by statutes as to written application ... 187 effect of mortgagee clause 188 assignment of lease may be valid as against insurance company. 188 effect of possession under an executory contract of sale 189 waiver or estoppel in issue of policy 189, 191 mere knowledge of company's agent does not change policy .... 191 California, statutory provisions 623 insurable interest 623, 624 change in interest or transfer 624 concealment 625, 626 misrepresentation 626 what must be specified in policy 627 whose interest is covered 627 insurance by agent or trustee 627 interest by part owner 627 use of general terms 627 successive owners 627 transfer of thing insured 627 open, valued, and running policies 628 acknowledgment in policy of receipt of premium 628 assignment after loss 628 warranty 628, 629 premium 629 Vol. II.— 44 690 Index. (Index to both volumes, see page 725.) California — Continued. page. other insurance 629 reinsurance 629, 630 alterations and acts of the insured 630 Cancellation, as affecting other insurance 87, 93, 95 as evidence of estoppel after issue of policy 115 omission to cancel as evidence of estoppel.. 119, 121, 215, 390-395 430-432 as imposed by contract .*. 399 condition strictly construed 401 burden of proof 401 company's right absolute, not dependent upon motive or cause. 402 notice essential 402 form of notice 402 tender or payment of unearned premium must accompany no- tice 402 not evidenced by entry on company's books 402 meaning of notice 403 requisites of notice 403 expression of intention not enough 403 when takes effect 404 unearned premium must be returned or tendered 405 must be pursuant to terms of policy 406 effect of accounts as payment of premium 406 effect of credit to broker 406 acceptance of draft for unearned premium 407 draft insufficient as tender of unearned premium 407 when premium not paid 407 authority of agent 407 premium must have been received by the company 408 effect of acceptance of note for premium 409 may be by mutual consent 409 waiver by insured 409 consent of partner 409 by voluntary surrender and delivery 410 when notice not required 41 question of fact 410, 412, 419, 429 surrender of policy upon condition 410 as affected by authority of agent 411 effect of promise by insured 412 insured must be capable of understanding his acts 412 computation of time 412 company cannot reduce insurance without consent of insured. . 413 upon request of insured 413 Index. 691 (Index to both volumes, see page 725.) Cancellation — Continued. page. when insured not entitled to unearned premium 413 insured's right does not depend upon notice 414 duty of insured if policy not satisfactory 414 by mail 403, 414, 415 fire occurring before expiration of notice 415 party or mortgagee to whom loss payable cannot consent 415 effect of mortgagee clause 415 can be none when property exposed to fire 417 presumption as to short rate 417 mutual mistake 417 agent cannot delegate authority 418 authority of insured's agent or broker 418 as afl'ected by custom 418 evidence of authority of insured's agent 418 as affected by authority of broker 418—422 insured's agent or broker having general authority as to in- surance 420 authority of broker to surrender and cancel 421 evidence of waiver by insured 421 limitation as to authority of broker 422 company's agent may be authorized by insured to consent .... 423 as affected by authority of agent 423 evidence of authority to cancel 423 delivery of substituted policy 423 no presumption as to authority of soliciting agent 424 agent no power to revive canceled policy 424 by substitution of other policies 424 substitution by agreement or upon condition 425 substitution as affected by intent 426 recognition and payment by substituted company 426 unauthorized substitution as affecting apportionment 427 insured may ratify act of agent in replacing insurance 427 ratification by insured 423, 424, 427 when insured does not waive notice 428 insured may compel issue of substituted policy 428 substituted policy not a contract of reinsurance 428 question of fact or law 429 right of company to deduct commissions 433 right of broker to commissions 433 effect of agent's agreement for percentage of premiums received. 433 liability of company's agent 433 when company's agent not charged vvith duty 434 cannot use company's funds to cancel 435 692 Index. CIndex to both volumes, see page 725.) Cancellation — Continued. page. agent may buy claim for unearned premiums 435 agent's act must be authorized to be reimbursed 436 when trustees of company not entitled to credit for unearned premium 436 as affected by credit for premium 533 liability of insured for earned premium 416, 421, 540 of binder 584, 586 of oral or parol contract 586 Colorado statute 630 Connecticut statute 631 Nebraska statute , 655 New York statute 655 North Dakota statute 661 Ohio statute 664 Wisconsin statute 679 Change in Interest, Title or Possession, as imposed by contract 217 application of Ohio statute 219 of forms of contract 219-221 condition material and reasonable, enforced 221 condition subsequent 221 burden of proof 221 distinction between interest and title 222 meaning of word " interest " 222, 233 interest in land 222 effect of written description 223 notice insufficient, duty to procure consent 223 application of clause "' except change of occupants without in- crease of hazard " 224 meaning of sale or transfer 224 question of fact 224, 238 change increasing interest 225 effect of insured parting with all his interest 226 application of the word " interest " 226 effect of consent to change 226, 230 construction of word " sold " in Massachusetts' form 227 effect of legal process 229 no change in transfer of legal title to beneficial owner 229 sale or mortgage of stocks of merchandise 230 as between or by partners or partnership insured. . . . 222, 230, 233 parties insured may transfer as between themselves 231 effect of taking in partner with interest in profits only 233 executory agreement between partnership and third parties to form corporation 233 Index. 693 (Index to both volumes, see page 725.) Change in Interest, Title or Possession — Continued. page. no change by mortgage 233 meaning of the word " change " 233 meaning of the words " title or possession " 233 effect of chattel mortgage 235 admissibility of parol evidence 235 chattel mortgage by one partner on firm property 235 bill of sale must be delivered and accepted 236 effect of executory contract of sale 237 executory contract for sale and exchange of stock of goods .... 238 change by deed 238 attornment of tenant to purchaser 241 effect of judicial sale 241 sale of real estate on execution 242 effect of partition 242 sale under deed of trust 243 levy or possession by sheriff 243 appointment of receiver, and change in receivership 244 receiver of partnership 244 void sale, insured continuing in possession 245 effect of bankruptcy proceedings 245 waiver or estoppel when policy issues '. . 246 waiver or estoppel after issue of policy 247 effect of consent to assignment of policy 248 effect of making loss payable to third party 249 contract divisible 249 when contract not divisible 25D what is a change, illustrative cases 250 what is not a change, illustrative cases 252 California statute 624, 627 Georgia statute 635, 636 Montana statute 649, 652, 653 North Dakota statute 657, 658 South Dakota statute 669, 672, 673 Chattel Mortgage, as affecting change in interest, etc 235 see "Incumbrance by Chattel Mortgage." Clerks, see Agents. Coinsurance, as consent to other insurance 100 effect on reinsurance contract 556 Colorado, statutory provisions 630 cancellation ^^^ Combinations, to maintain rates 615 694 l5fDEX. (Index to both volumes, see page 725.) PAGE. Concealment, as imposed by contract 2 independent of contract 2 effect of no written application and no inquiry 3, 4 when insured chargeable with intentional concealment 3 waiver of knowledge by company, exception 4 when insured bound to make disclostire though no inquiry. ... 4 not assumed 4 effect of defective written application 5 none when company has knowledge or put upon inquiry 6 effect of insured's knowledge of material fact 6 as affecting reinsurance 6 fact must be known to the insured 6 fact must be material 7 materiality question of fact 7 burden of proof 7 evidence as to rate of premium 8 test of materiality, effect of inquiries 8 by insured's agent or broker 9 by owner acting as agent for mortgagee 9 as affecting interest or title 9 question of fact 10 as affected by warranty 9 when company put upon inquiry as to interest 11 none as to value 11 effect of diagram 12 as affecting reinsurance 553 California statute 685, 626 Georgia statute 635 Montana statute 649, 650 North Dakota statute 658 South Dakota statute 669, 670 Connecticut, statutory provisions 631 cancellation 631 personal liability of agent 631 agent defined 631 insurance broker defined 631 statement of conditions 631 Constitution, statute relating to attorney's fees 617 see "Agents;" "Lloyds;" " Combinations." Construction, as affecting other insurance 124 as affecting alterations or repairs by mechanics 324 of statute as affecting status of agent 511 Index. 695 (Index to both volumes, see page 725.) Construction — Continued. page. of the words " at noon " 543 of word " risk " in reinsurance contract 549 of reinsurance contract as affected by description 550 as affecting contract of reinsurance 550-552, 558 as affecting oral or parol contracts 568 under Georgia statute 635 under Michigan statute 642 see "Incumbrance by Chattel Mortgage;" "Vacant or Unoc- cupied;" "Warranty;" "Words and Phrases." Consummation of Contract, see " Oral or Parol Contract." Contract, effect of executory contract of sale 167-170, 189 as affected by legality or violation of statute, see " Increase of Hazard;" "Legality." See also "Vendor and Vendee." Custom, as affecting warranty 37 as affecting operation of manufacturing establishment 282 as affecting condition against illuminating gas and prohibited articles 337, 341, 349 as affecting vacancy or unoccupancy 368 as affecting cancellation 418 evidence of, as affecting broker 477 when does not affect reinsurance contract 550 as affecting authority of agent to make oral contract 570 as affecting binder or oral contract 586 Seed, as affecting interest or title 162, 163, 184 as affecting change in interest or title 238 Description, effect of, on condition against prohibited articles .. 343, 344 as affecting condition against vacancy or unoccupancy 372 effect on renewal 518 may govern term 544 furnished by reinsured company affects construction 550 of building •. . . . 555 see " Warranty." Diagram, as concealment 12 Entirety and Divisibility of Contract, as affected by misrepresenta- tion 29 as affected by braach of warranty 39 as affected by other insurance 123 as affected by condition in regard to interest or title 175 as affected by condition in regard to chattel mortgage 204 696 Index. (Index to both volumes, see page 725.) Entirety and Divisibility of Contract — Continued. page. • as affected by change in interest or title 249, 250 as affected by operation of manufacturing establishment 286 as affected by increase of hazard 307 as affected by vacancy or unoccupancy 370 Evidence, as affecting misrepresentation 21 premium as affecting misrepresentation 23 as affecting responsibility for written application 47 admissibility of, as affecting warranty 57 knowledge of broker 57 ambiguity 59 as affecting other insurance 86, 123, 124 authority of clerk of company's agent 117 insui-able interest 129 parol, as affecting interest 139 as to ownership, interest, or title 149, 174 admissibility of parol, as affecting interest or title 170 parol, as affecting chattel mortgage 196 newspapers and public records as affecting knowledge of com- pany 201 admissibility of parol evidence as affecting chattel mortgage. . 235 of experts as affecting operation of manufacturing establish- ment , 283 rate of premium as affecting increase of hazard 304 of experts as affecting increase of hazard 305, 306 parol, as affecting alterations or repairs by mechanics 321 admissibility of expert, as affecting alterations or repairs by mechanics 327 as affected by waiver or estoppel 328 admissibility of parol as affecting condition against prohibited articles 344 custom as affecting condition against prohibited articles 349 admissibility of expert, as affecting condition against prohibited articles 349 admissibility of expert, as affecting condition against vacancy or unoccupancy 36S cancellation 402 of insured's agent or broker as affecting cancellation 418 of authority to cancel 421, 423 agency 443 authority of soliciting agent 471 of authority of broker as company's agent 475, 476 of custom as affecting broker 477 entries in broker's book and conversations with him 477 Index. 697 (Index to both volumes, see page 725.) Evidence — Continued. pa^qe_ as affecting personal liability of broker 484, 485 as to knowledge of agents 497 oral contract of renewal 520 waiver of prepayment of premium 527, 528 authority of broker as to premium 530, 533 not admissible to change contract 524, 550 oral or parol contracts 567, 568 as affecting authority of agent to make oral or parol contract . . 570 contract not established by admissions of agent 570 parol, as affecting making of contract 589. in equity of oral contract 59"g reformation 600, 605 see " Warranty." Execution, sale on, as affecting change in interest, etc 242 Executory Contract, effect of, on interest or title 167-170 see "Contract;" "Interest or Title;" "Vendor and Vendee." Fact, question of, materiality in concealment 7, 8, 10 question of, opinion or representation 20 question of, materiality as affecting misrepresentation 21 question of, as affecting warranty 37 question of, as affecting responsibility for statements in writ- ten application 46, 47, 449 question of, as to promissory warranty 64 question as to other insurance 124 question of, as affecting interest or title 174 question of, as affecting change in interest 224 question of, as to change in interest or title 238 question of, increase of hazard 298, 304, 314, 336, 352, 368, 3S6 question of, as to alterations or repairs by mechanics 325 question of, as to vacancy or unoccupancy 377, 387, 396 question of, cancellation 410, 412, 419, 429 question of, agency 443, 457 question of, as to authority of agent. . . 110, 171, 460^67, 502, 503 question of, authority of soliciting agent 471 question of, authority of broker to collect premium 480, 481 question of, opinion or representation by broker 483 question of, personal responsibility of broker 484, 485 question of, status of soliciting agent under statute 512 question of renewal 522 question of, waiver of prepayment of premium 527, 528 question of, term 544 question of oral or parol contracts 567, 593, 596, 597 698 Index. (Index to both volumes, see page 725.) Fact — Continued. page. question of cancellation of oral contract or binder 586 question of, as affecting legality 610 Fee Simple, see " Building on Ground not Owned in Fee Simple." Florida, statutory provisions 632 status of agents 632 return of unearned premium after loss 632 Foreclosure or Notice of Sale, as imposed by contract 206 violation voids policy 207 effect of, upon moral risk 208 what is commencement of proceeding 208 knowledge of insured 208 condition subsequent 209 effect of loss payable to mortgagee, and mortgagee clause. 209-211 to what foreclosure proceedings refer 211 effect of making loss payable to third party 212 proceedings mean judicial proceedings 212 effect of advertising sale under deed of trust 212 construction of phrase " notice given of sale " 213 waiver or estoppel when policy issues 213 no waiver after issue of policy 214 when insured not bound by notice of limitation of agent's au- thority 215 omission to cancel, as evidence of estoppel 215 insured must be misled as element of estoppel 216 Fraud, see " Reformation." Gasolene, see " Illuminating Gas and Prohibited Articles." Georgia, statute as affecting warranty 54 statutory provisions 633 definition of agent 033 personal liability of agent 634 contract of fire insurance must be in writing 634 insurable interest 634, 635 application 635 construction 635 loss unknown to parties 635 misrepresentation '. C33 concealment 035 increase of hazard 635 change in interest 635, 636 other insurance 636 Index. 699 (Index to both volumes, see page 725.) PAGE. Gunpowder, see " Illuminating Gas and Prohibited Articles." lUinois, statutory provisions 636 agents egg Illuminating Gas or Vapor and Prohibited Articles, use of, as aflfect- ing increase of hazard 299 as imposed by contract 331 construction of the condition 333 policy void without regard to increase of risk or cause of fire . . 333 ignorance no excuse 334 construction of the word " premises " 334 construction of the words " kept and used on premises " 335 construction of the word " allowed " 335 construction of parenthetical words applicable to kerosene 335 construction of the words " for lights," and " by daylight " 336 reduced or residuum of petroleum 336 may be increase of hazard 336 every occupation not trade or manufacture 337 judicial notice 337 effect of use of general words 337 construction of special permission or privilege 338 special permit limited in time by its terms 338 does not prevent ordinary repairs 339 use of gasolene without permission 339 keeping in barn does not prevent forfeiture for use in dwelling. 340 keeping of gasolene not excused by abandonment of specific purpose 340 rate of premium conveys no notice 340 custom in use for exhibition purposes 341 contract ends when condition violated 341 contract not revived without consent of company 341 occasional or temporary necessary use for household purposes or cleaning machinery 342, 343 as aflfected by ordinary repairs 342 effect of written description 343, 344 admissibility of parol evidence 344 risk of particular business described 344^347 sale incidental to business does not permit manufacture 347 drawing of kerosene 348 keeping of gunpowder 348 effect of permission to be occupied for hazardous or extra-haz- ardous purposes 348 as affected by usage or custom 349 700 Index. (Index to both volumes, see page 725.) Illuminating Gas or Vapor and Prohibited Articles — Continued, page. admissibility of expert evidence 349 keeping, or use by tenant 349 as aflfected by vjraiver or estoppel 350, 351 burden of proof 351 article not prohibited may constitute increase of hazard 352 effect of change in language 352-355 Incendiary Fire, see " Warranty." Increase of Hazard, as imposed by contract 288 effect of Ohio statute 289 policy void though fire caused by independent means 290 change does not mean increase 290 burden of proof 290 condition has reference to future 291 continuation of an existing use 291 knowledge or control essential element 291 acts of tenant .291 as affected by time 293 temporary or permanent 293 policy rendered void or voidable and not merely suspended .... 294 contract not revived by acts of insured 294 pleasure of insured cannot be substituted for obligations of contract 295 temporary increase suspends policy 295 balancing or comparison of risks not admissible 297 effect of ordinary repairs 298 unauthorized alterations 298 effect of use of prohibited articles 299 materiality of written application 299 effect of consent to removal to new location 300 as affected by other clauses or conditions in the policy 300 application by construction to other conditions 300 presumption as to assumption of risk 300 construction of builders' risk 301 limited by existing or contemplated uses or occupation 301 construction of the words " increase of risk " 302 as affecting construction of a warranty 302 as affected by acts in violation of law 303 interest of mortgagee, and effect of mortgagee clause 303 no application to liens or judgments 304 as affected by rate of premium 304 test of 304 as affected by opinion evidence of experts 305, 306 Index. 701 (Index to both volumes, see page 725.) Increase of Hazard — Continued. age. when policy not divisible 307 as affected by waiver or estoppel 307, 308 knowledge or notice to company's agent after issue of policy . . 309 eflfect of demand and receipt of additional premium 309 insured has reasonable time to comply with special conditions . . 309 pleading 310 burden of proof 310 may be a question of law 310 no inference in favor of the insurance company 311 when proper to set aside verdict 313 ordinarily a question of fact 298, 304, 314, 336, 352, 368, 396 what may increase hazard — illustrative cases 315 what is not an increase of hazard — ■ illustrative cases 316 as affected by alterations or repairs 323, 326, 328 as affected by condition against prohibited articles 336 as affected by vacancy or unoccupancy 369 as affecting renewal 517, 518 reinsured company cannot consent to 554 Georgia statute 635 North Dakota statute 664 Oklahoma statute 665 South Dakota statute 675 Incumbrance, misrepresentation 27 see " Warranty." Incumbrance by Chattel Mortgage, as imposed by contract 192 violation of condition voids policy 194 no question of good faith, concealment, or increase of risk 194 burden of proof 194 instrument must be legally operative, delivery 195 not dependent on form 195 lien not chattel mortgage 195 construction of condition 195 application of rule admitting parol evidence 196 by one partner to another 197 stocks of merchandise and the like 197 effect of description as " held in trust or sold but not deliv- ered " 197 as affected by subsequent release, payment, or discharge 198 company not bound to make inquiry, duty of insured 199 effect of oral application without inquiry 200 waiver or estoppel in issue of policy 201 when company chargeable with knowledge, newspapers, public records 201 702 Index. (Index to both volumes, see page 725.) Incumbrance by Chattel Mortgage — Continued. page. substitution of one mortgage for another 203 as affected by decrease or increase in amount 203 change in form 203 duty of insured to procure written consent, agent's oral promise insufficient 204 contract severable 204 effect of making loss payable to third party whose mortgage also includes real property t 212 Insurable Interest, must be alleged and proved, exception — Pre- sumption 125 reason for necessity of allegation and proof 127 not subject of waiver 127 test of, not dependent on title or possession, equitable interest. 127 may be representative as well as personal 128 effect of adjudication in bankruptcy 129 pleading and evidence 129 when 130 when none 138 no answer to breach of condition 129, 150 assignee of policy must have , 265 reinsurance 547 wager policies without interest void 610 California statute 623, 624 Georgia statute 634, 635 Montana statute 648, 649, 652 North Dakota statute 656 South Dakota statute 668, 672 Interest or Title, concealment of 9, 11 as affecting misrepresentation 23, 24 insurable interest 125 statement of interest 137 other than unconditional and sole ownership 146 building on ground not owned in fee simple 180 incumbrance by chattel mortgage 191 foreclosure or notice of sale 205 change in interest, title, or possession 21o assignment of policy 255 and see the several above subjects in tbis index. California statute 627 Maine statute, as affecting husband or wife 639 see "Warranty." Index. 703 (Index to both Tolumes, see page 725.) PAGE. Interest Other Than Unconditional and Sole Ownership, as imposed by contract 148 breach of condition forfeits insurance 149 effect of written description 149, 150 evidence I49 insurable interest, no answer to breach of condition 150 meaning of unconditional sole ownership 151 construction of condition 151 when ownership sole and unconditional 152 requisite of unconditional and sole 152 test of sole and unconditional ownership 152 several may together be sole and unconditional owners 153 condition applies to ownership when policy issues 153 when no written application and no inquiry, presumption 154 company may rely upon condition, not necessary to inquire as to title 150-156 effect of acceptance of policy 156 company put upon inquiry by ambiguous answer in applica- tion 156 distinction between interest and title 157 equitable interest 157 construction of " interest " 157 ownership of property described in general words as class or kind 160 partnership interest 160, 161 policy on use and occupancy, effect of pooling arrangement .... 162 deed intended as mortgage 162 a deed must be delivered, efifect of recording 162 adding words to deed after execution 163 effect of defective title 163 equitable interest 163 effect of fraud 164 mortgagee as insured 164 effect of liens or incumbrances 164 vendee under an executory contract of sale 167 as tested by right to enforce specific performance, assumption of loss 168 effect of executory contract on ownership of vendor 169 effect of option to purchase 169 vendee of personal property under conditional contract of sale lessee of personal property 170 as affected by waiver or estoppel 170 admissibility of parol evidence 170 704 Ikdex. (Index to both volumes, see page 725.) Interest Other Than Unconditional and Sole Ownership — Cont'd, page. company not chargeable with knowledge of records 170 effect of knowledge of broker 174 pleading, evidence, burden of proof 174 contract severable 175 when insured sole and unconditional owner 175 when insured is not sole and unconditional owner 178 Iowa, statute as affecting assignmen,!; of policy 258 statutory provisions 636 status of agents 636, 637 copy of application attached to policy 636 Kansas, statutory provisions 637 vacant or unoccupied 637 Kentucky, statutory provisions 637 status of agents 637, 638 warranty 638 personal liability of agents 638 Kerosene, see " Illuminating Gas and Prohibited Articles." Landlord and Tenant, see " Tenant." Lease, as affecting interest or title 186 see " BuUding on Ground not Owned in Fee Simple." Legality, contract as affected by 610 intent of contract as affecting 610 question of fact 610 effect of permission to use for unlawful purpose 611 effect of specific provision as to use for unlawful purposes 612 as affected by insured's failure to procure license 612 when contract not void as against public policy 612 when ownership not unlawful 012 effect of statute imposing privilege tax 613 contract made on Sunday 614 when contract not void as in restraint of trade 614 effect of statute requiring foreign corporation to procure license to transact business 614 combinations 615 Lloyds . . . : ..'. 616 see " Constitution.'' License, see " Legality." Liens or Incumbrances, see " Interest or ' " '' Warranty." Index. 705 (Index to both volumes, see page 725.) PAGE. Ximitation, no application to reinsurance contract 556 Lloyds, right to enforce contract of reinsurance 558 see " Legality." Location, as affecting increase of hazard 300 see " Warranty." Loss or Damage, effect of making loss payable to third party on statement of interest 140 Louisiana, statutory provisions 638 status of agents 638, 639 Xail, use of, in cancellation 403, 414, 415 use of, as affecting oral contracts or consummation of contract. 576 jy[aine, statute as affecting other insurance 82 statutory provisions 639 insurable interest,' husband or wife 639 status of agents 639, 640 Manufacturing Establishment, see " Operation of Manufacturing Es- tablishment." Maryland, statutory provisions 640 Massachusetts, statutory provisions 641 misrepresentation . . '. 641 warranty 641 application must be made part of policy 641 agent or broker 641 personal liability of agent 641 construction of the word " noon " 642 Materiality, see "Concealment;" "Misrepresentation;" "War- ranty." Mechanics, see "Alterations or Repairs." Michigan, statute as affecting other insurance 82 statutory provisions 642 provision added to standard policy 642 acts of agents 642 limitation, as to effect of breach of condition 642 vacant or unoccupied 642 Minnesota, application of statute to condition as to occupancy .... 359 statutory provisions 643 Vol. II.— 45 706 Index. (Index to both volumes, see page 725.) Minnesota — Continued. paoe. status of agents 643 misrepresentation 643 warranty ' 643 application must be part of policy 643 personal liability of agent 643 Misrepreseiitatiou, as imposed by contract 13 independent of contract , 15- effect of Wisconsin statute 15 agency statute 15 representation distinguished from warranty 15 representations basis of insurance, effect of falsity 15 as affecting reinsurance 16 representation relates to past or existing fact 16 when insured bound by written application 16 effect of filling application by company's agent 17 responsibility of insured for his own misstatements 17 not predicated on defective answers in application 18 furnished memoranda or description as 18 when insured not bound by verbal representations 18 influence of ^ not assumed 19 none when company knows the facts 19 expression of opinion or belief 20 opinion or representation question of fact 20- by insured's agent 20 must be material 21 materiality question of fact 21 burden of proof, evidence 21 rate of premium as evidence 23 company put upon inquiry as to interest or title. 23 when representation as to interest or title material 21 when no misrepresentation as to interest or title 24 as affecting construction or situation of building 25 when none as to building or other subject of insurance 26 as to other insurance 27 incumbrance 2T as to value 28 contract severable 29 as affecting reinsurance 553 as affecting right to reformation 607 California statute 626 Georgia statute 635 Massachusetts statute 641 Minnesota statute 643 Montana statute 65q 651 Index. 707 (Index to both volumes, see page 725.) Misrepiesentation — Continued. pagh:. North Dakota statute 659 South Dakota statute 670 67 1 Tennessee statute 675 Mississippi, statutory provisions 644 valued policy 644 statement or proof of loss 644 mortgagor and mortgagee 645 status of agents 646 personal liability of agent 647 Missouri, statute as affecting warranty 33 statutory provisions 647 warranty 647 status of agent 647 Mistake, see " Reformation." Montana, statutory provisions 648 insurable interest 648, 652 change in interest, etc 649, 652 concealment 649, 650 misrepresentation 650, 651 insurance by agent or trustee 652 insurance by part owner 652 use of general terms 652 successive owners 652 open, valued, and running policies 652 effect of acknowledgment, receipt of premium 652 warranty 653 premium 653, 654 other insurance 654 reinsurance 654 alterations and acts of the insured 654 Mortgagee, owner acting as agent of, as affecting concealment .... 9 right to assign his interest in policy 274 Mortgagor and Mortgagee, construction of the words " act or neg- lect " in mortgagee clause 188 as affected by foreclosure or notice of sale 209-211 interest of mortgagee as affected by increase of hazard 303 effect of mortgagee clause, as to cancellation 415 Mississippi statute 645 see " Other Insurance." Nebraska, statutory provisions 655 status of agents 655 708 Index. (Index to both volumes, see page 725.) Nebraska — Continued. page. personal liability of agents 655 cancellation 655 New York, return of premium on cancellation 655 Worth Carolina, statutory provisions 656 conditions as to warranty 656 agents, personal liability 656 North Dakota, statutory provisions 656 insurable interests 656, 657 change in interest, etc 657, 658 concealment 658 misrepresentation 659 premium 660, 662, 663 cancellation 661 warranty 661, 662 other insurance 663 reinsurance 663 alterations, etc ■ 664 increase of hazard 664 Notice of Sale, see " Foreclosure or Notice.'' Occupation, see " Use and Occupation.'' Ohio, statute as affecting warranty 33 statute as affecting other insurance 82 application of statute to change in interest, etc 219 statute as affecting increase of hazard 289 statutory provisions 664 status of agents 664 cancellation 664 Oklahoma, statutory provisions 665 application attached to policy 665 alteration in use and increase of hazard 665 Operation of Manufacturing Establishment, as imposed by contract. 278 violation of condition voids policy 280 not revived by subsequent operation 280 policy may be suspended by special provisions 280 provision as to limitation of night work substantial 280 what is a manufacturing establishment 280 not in operation when policy issues 281 as affected by usage or custom 282 temporary cessation not ceasing to operate 282 partial cessation of operation 283 Index. 709 (Index to both volumes, see page 725.) Operation of Manufacturing EstabUshment — Continued. page. stoppage of machinery not ceasing to operate 283 when mill is shut down 283 opinion evidence 28.3 no cessation if premises continue same as when policy issued. . . 284 effect of permitting repairs and alterations 284 effect of keeping watchman 285 affected by character and use of property 285 presumption as to knowledge of company 285 as affected by waiver or estoppel 286 when policy not divisible 286 see "Vacant or Unoccupied." Oral or Parol Contract — Consummation of Contract, as affecting other insurance 86, 89 renewal 520, 522 legally operative and binding, exceptions 564 essential elements 565 must be meeting of minds as to terms and property 566 what is necessary to establish 567 evidence 567, 568 remedy 567, 594 as affected by construction 568 authority of agent 569-572 liability of agent to repay premium 572 when risk deemed to commence 573 none when property destroyed 573 amount must be fixed after refusal to renew 573 risk may be inferred 573 particular company must be designated 574 contract may be complete though misunderstanding as to term. 574 as affected by indefiniteness as to time or rate of premium. . . . 575 as dependent upon payment of premium 575 rate of premium and term may be implied 575 tested by insured's obligation to pay premium, contract mutual 576, 593 when acceptance of application binds company 576 use of mail 576 must be evidence of acceptance 577, 578 retention of application insufficient 578 as dependent upon acceptance by insured 579 rights of parties fixed at time of fire 579 effect of delay in acting upon application 580 effect of none prior to delivery of policy 580 710 Index. (Index to both volumea, see page 725.) Oral or Parol Contract — Consummation of Contract — Cont'd. paoe. effect of acceptance of policy 580 sufficient cannot be made conditional by telegraph 581 contract by deposit of letter 581 as affected by statute of frauds 581 subject to conditions in policy 582, 584 conditions requiring written indorsement inoperative 583 when conditions operative 583 binder subject to conditions in policy 584 termination of binder under special provision 584 cancellation of binder 584, 586 binder does not contain whole contract 583 binder as renewal 585 when binder issued for new insurance 585 effect of specific time limitation on binder 585 binder subject to usage and custom 586 binder as dependent upon rate of premium 587 presumption as to division of risk on binder 587 particular company must be designated 587 delivery of policy not essential 587 as affected by delivery of policy 588 admissibility of parol evidence as affecting making of contract. 589 renewal without request of insured 590 delivery of policy to broker upon condition 590 contract conditioned upon termination or cancellation of other insurance 590 mistake may be corrected in equity 591 as affected by negotiation on Sunday 591 as affecting right to obtain policy after fire 592 repudiation after loss ineffective 592 measure of damage 592 burden of proof 593 question of fact 567, 593, 596, 597 as aflfected by weight of evidence 593 strictness of proof as aflfected by renewal 594 pleading 595 retention of jurisdiction by court of equity 596 evidence in equity 596 verdict of jury not disturbed on appeal 597 Other Insurance, as affected by misrepresentation 27 as affected by warranty 73 as imposed by contract 81 as affected by Maine statute 82 Index. 711 (Index to both volumes, see page 725.) Other Insurance — Continued. page. as aflfected by Michigan statute 82 as affected by Ohio statute 82 condition reasonable and enforced 83 what constitutes 83 joint and several interests 84 effect of violation of condition 85 construction of the word " insured " 85 resulting from operation of law without design 86 delivery of policy upon condition 87 as affected by cancellation 87 effect of non-compliance with statute 87 motive of insured immaterial 88 effected at same time 88 effect of binder or certificate of temporary insurance 88 effect of insufficient parol contract of insurance 89 in excess of permitted amount 89 effect of blank permission 90 interest of mortgagor and mortgagee 90 of vendee's interest 91 must be by consent or authority 92, 95 as affected by act of mortgagee 92 cancellation and substitution without authority 93-95 as affected by waiver or estoppel 93 as affected by permission for other concurrent insurance . . . 96-100 effect of a coinsurance clause as a consent ■. 100 as between a first and second policy 101 distinction between void and voidable insurance 102 as affected by question of validity 103 construction of the words "' valid or not " 101, 104, 105 policy voidable only 106 estoppel by issue of policy or renewal with knowledge of facts. 106 knowledge of agent not assumed 107 effect of knowledge of otber insurance 106, 109, 110, 111 issue of policy with knowledge does not operate as waiver — admissibility of parol evidence 109 when knowledge of agent not that of the company 109 knowledge of company's soliciting agent 110 authority of soliciting agent 1 10 effect of expression of intention to procure Ill effect of expression of opinion by agent Ill not necessary if consent in writing that it be written on the policy Ill 712 Index. (Index to both volumes, see page 725.) Other Insurance — Continued. page- eflfect of limitation upon agent's authority after issue of the policy 112 authority of agent as to waiver after issue of policy must be shown 112 estoppel after issue of the policy, authority of agent 114 consent to assignment as waiver 116 authority of agent, presumption, evidence 116 effect of alteration in form as waiver 116 authority of clerk of company's agent — evidence 117 company not bound by broker 117 construction of written restriction 118 agency in placing surplus lines 118, 119 estoppel by failure to cancel 119, 121 reformation 121 application of written permission 121 eflfect of removal and merger of stock 122 eflfect of renewal or substitution 122 contract severable 123 evidence of 123 burden of proof 124 as affected by construction 124 question of fact or law 124 California statute 629 Georgia statute 636 Montana statute 654 North Dakota statute 663 South Dakota statute 674 Ownership, see " Interest or Title." Partition, as affecting change in interest or title 242, Partnership, as affecting interest or title 160, 161, 187 chattel mortgage by one partner to another 197 application of condition as to change in interest 222 effect of taking a partner in business 225 change in interest, title or possession 230-233 chattel mortgage by one partner on firm property 235 receiver of, as change in interest 244 as affected by receivership 244 assignment of interest of one partner' to another 271 act of partner as affecting cancellation 409 as agent of company 456 dissolution of, .ns affecting authority of agents 458 as affected by renewal 52(V Index. 713 (Index to both volumes, see page 725.) PAGE. Pennsylvania, statutory provisions 665 copy of application attached to policy 665 copy of lost policy to be furnished 665, 666 definition of broker 666 personal liability of agent 666 Pleading, insurable interest 129 oral or parol contract 595 Premium, rate of, as affecting concealment 8 rate of, as affecting misrepresentation 23 acceptance of, as evidence of waiver 115 rate of, as affecting increase of hazard 304 effect of demand for additional, upon increase of hazard 309 rate of, as affecting condition against prohibited articles 340 when insured entitled to return of 388 receipt of, after fire as waiver 394 effect of, accounts as payment 406 receipt of, as affecting cancellation 408 as affected by acts or authority of broker 479-481 personal liability of company's agent 498 payment on renewal 518 as imposed by contract 526 waiver of prepayment , 527, 528 authority of agent to waive prepayment 528 authority of agent as to mode or kind of payment 529 effect of personal assumption of debt for premium by agent .... 530 company may accept note of broker or credit him with pay- ment 530 authority of broker 530 effect of acknowledgment in policy when delivered through broker 531 broker agent of insured must be evidence of authority from company 532 liability of broker for unearned premium 532 advancement of premium by broker or agent 533 legal tender of 534 payment may be made condition precedent 534 policy may make payment condition precedent 534 effect of giving credit for 534 effect of option to take policy on payment 536 terms of policy modified by usual course of business 536 effect of acknowledgment in policy of receipt of premium 537 when insured, agent to receive 537 714 Index. (Index to both volumes, see page 725.) Premium — Continued. page. payment as affected by an account 538 when returnable 538 personal liability of officer or agent to return 539 company may be bound by condition imposed on delivery of note for 539 when insured not liable for earned, on surrender for can- ccUation 540 effect of acceptance after loss, as* waiver 540 effect of delivery of policy with credit on cancellation 533 in suit, company entitled to credit for unpaid 541 liability of agent to repay 572 as affecting oral or parol contracts 575, 576 insured's obligation to pay as test of oral or parol contract. 576, 593 rate of, as affecting binder 587 California statute 628, 629 Florida statute 632 Montana statute 652, 654 North Dakota statute 660, 662, 663 South Dakota statute 673, 674 Privilege Tax, see " Legality." Prohibited Articles, see " Illuminating Gas and Prohibited Articles." Promissory Warranty, see " Warranty." Receiver, effect of appointment and change 244 iteformation, as to other insurance 121 as affecting renewal 520 as affecting oral or parol contract 591 cannot make new contract 598 recovery may be had in same suit 599 mutual mistake or mistake and fraud 599 mistake must be mutual 600 burden of proof 600 evidence 600 none upon proof of claimant's mistake alone 602 fraud as ground of 602 agent's duty in preparation of policy 602 fraud must be specifically alleged 603 effect of acceptance of policy and insured's duty 603, 604 effect of insured failing to read policy 604 mutual mistake as effect of language 605 mutual mistake as to law 605 as to interest or parties 605 Index. 715 (Index to both volumes, see page 725.) Reformation — Continued. page. evidence ; g05 effect of changes in policy requested as renewal 606 right of assignee g06 when not necessary to have policy reformed 607 as affected by misrepresentation 607 as affected by remedy at law 608 suit not sustainable after failure in action at law 609 does not require new proof of loss 609 correction of mistake of agent after loss 609 Reinsurance, as affected by concealment 6 as affected by misrepresentation 16 as imposed by contract 546 insurable interest 547 no privity of contract between original insured and reinsurer, exception 547 when original insured may have right of action against either company 548 subject-matter same, interest different 548 compliance with condition as to proof of loss 548 effect of contract subject to same conditions as adopted by reinsured company 549 construction of the word " risk " 549 when evidence of usage or custom not admissible 550 description furnished by reinsured company affects construc- tion 550 construction of the contract 550-552 construction of clause making loss payable at same time and pro rata 551, 552 construction of the words " may pay " 551 not within statute of frauds 552 no recovery when reinsured company not liable 553 power of reinsured to consent to assignment of its policy .... 553 as affected by misrepresentation and concealment 553 right to assume control of litigation 554 reinsurer may have right to consent to assignment of policy . . . 554 construction of " building " under a reinsurance contract 555 when policy not covered by 555 effect of coinsurance clause in original policy 556 printed conditions as to appraisal and limitation inapplicable . . 556 not affected by apportionment clause 557 liability as affected by insolvency 557 purchase of claims by company or its receiver 557 right of individual underwriter Lloyds policy to enforce con- tract 558 716 Index. (Index to both Tolumes, see page 725.) Reinsurance — Continued. page. construction of contract with company retiring from business . . 558 agent cannot act in double capacity 559 personal liability of directors of insolvent company 559 reinsured not obliged to first pay loss unless otherwise provided. 560 compromise and settlement by reinsured company 560 when proof of loss dispensed with, and adjustment binding. . . . 561 as affected by adjustment 560, 561 California statute .*. 629, 630 Montana statute 654 North Dakota statute 663 South Dakota statute 674, 675 Renewal, with knowledge of facts as estoppel 106 not other insurance 122 as affected by permission for unoccupancy 365 as imposed by contract 51ft construction of contract '. 517 new policy not renewal 517, 520 increase of risk not made known 517, 518 payment of premium 518 form of notice of increase of hazard 518 application to descriptive clauses 518 authority of agent to renew 519, 520 limitation of authority from insured 519 reformation 520 oral or parol contract 520, 522 evidence of oral or parol contract 520 authority of agent 520 partnership interests 520 not established by mere negotiations 522 burden of proof 522 question of fact 522 property destroyed at time of 522 as affected by waiver or estoppel 523, 524 terms of contract not changed by evidence 524 agent directed not to deliver 590 as affecting proof of oral contract 594 reformation 606 Repairs, see "Alterations or Repairs;" " Illuminating Gas and Pro- hibited Articles." Rhode Island, statutory provisions 667 status of agents and brokers 667 South Carolina, status of agents 668 Index. 717 (Index to both volumes, see page 725.) PAGE, South Dakota, statutory provisions 668 insurable interest 688, 669, 672 change in interest, etc 669 672 concealment 669 670 misrepresentation 670 671 insurance by agent or trustee 672 open, valued, and running policies 672 effect of acknowledgment, receipt of premium 673 warranty 673 premium 673, 674 other insurance 674 reinsurance 674 alterations, etc 675 increase of hazard 675 Sprinkler System, as affected by warranty 39 •Statement of Interest, as imposed by contract 138 good faith required, effect of misstatement 138 construction of language in policy applicable to interest 139 admissibility of parol evidence 139 effect of making loss payable to third party 140 policy issued to two jointly 140 construction of word " insured " 140 application of the word " property " 140 effect of mortgages, judgments, or liens, no inquiries 141 construction of condition 141 true statement in application sufficient 142 company put upon inquiry by ambiguous answer in applica- tion 142 issue of policy without application or representation 142 when insured may state property to be his 143 individual doing business in firm or corporate name 144 as affected by void court order 144 property held by third party as security 144 tenant or created by lease, executory contract 143, 145 estoppel by issue of policy with knowledge 145 estoppel in conduct of company's soliciting agent 146 Statement or Proof of Loss, furnishing by reinsured company 548 when dispensed with under reinsurance contract S61 as affected by reformation 609 Mississippi statute 644 Statute, effect of violation of 610 718 Index. (Index to both volumes, see page 725.) PAGE. Statute of Frauds, as affecting reinsurance contract 552 effect on oral or parol contracts 581 Statutory Provisions, Alabama 621, 622 Arkansas 623 California 623 Colorado 630 Connecticut 631 Florida 632 Georgia : 633 Illinois 636 Iowa 636 Kansas 637 Kentucky 637 Louisiana 638- Maine 639 Maryland 640 Massachusetts 641 Michigan 642 Minnesota 643 Mississippi 644 Missouri 647 Montana 648 Nebraska 655 New York 655 North Carolina 650 North Dakota 656 Ohio 664 Oklahoma 665 Pennsylvania 60.> Rhode Island 667 South Carolina OU:-; South Dakota 06S Tennessee 67.> Texas 67.> Vermont 677 Virginia 677 Washington 678 Wisconsin 67S Sunday, see " Legality." Tax, see " Legality." Index. 719' (Index to both volumes, see page 725.) PAGE. Tenant, effect of warranty 60 attornment by, to purchaser, as affecting change in interest, etc. 241 acts of, as affecting increase of hazard 291 application of condition as to alteration or repairs by mechan- ics 325 lieeping or use of prohibited articles by 34& Tennessee, statute as affecting warranty 33 statutory provisions 675 misrepresentation 675 personal liability of agent 675 Tenn, as imposed by contract 542 construction of the words " at noon " 543 burden of proof as to alteration in date 543 effect of omission of date of expiration 543 may be governed by description 544 continuance by special agreement 544 delivery of policy may be conditional as to time 544 may be question of fact 544 as affected by oral or parol contract 573 may be implied in oral contract 575 Construction of " noon " under Massachusetts statute 642 Texas, statutory provisions 675 status of agents 676 Title, see " Interest or Title." Usage, see " Custom." Use or Occupation, operation of manufacturing establishment 277 increase of hazard 287 alterations or repairs by mechanics 318 illuminating gas or vapor and prohibited articles 329 vacant or unoccupied 356 see also these various subjects; "Warranty.'' Vacant or Unoccupied, company's permission not construed to allow repairs to prevent increase of hazard 328 as imposed by contract 358 application of Minnesota statute 359 condition reasonable and binding 360 condition subsequent 360 burden of proof 361 construction not governed by rules of board of underwriters or by company 361 720 Index. (Index to both volumes, see page 725.) Vacant or Unoccupied — Continued. page. effect of action by board of underwriters 361 not dependent upon insured's knowledge or control 362 distinction between " vacant or unoccupied," and " vacant and unoccupied," 363 may be vacant in part , 363 making repairs not occupancy 364 effect of written -permission for vacancy 364 when description not construed a warranty 364 permission for unoccupancy may extend to renewals 365 construction of words " during the summer " 365 oral application and no inquiry 365 effect of time limitation 365, 368, 383, 389 violation voids policy, not revived by subsequent occupation .... 367 as affected by custom 368 admissibility of expert evidence 368 as affected by authority of agent 368 not necessary to claim risk increased 368 may be claimed to increase hazard 369 divisibility of contract 370 construction of " occupied " and " unoccupied," 371 governed by nature and character of building and use 371 effect of knowledge of company's agent 371 construction as affected by description 372 vacant not limited to building 372 when nature or character of occupation changed 372 as applied to dwelling 372-383 when house unoccupied, occupancy of house and barn 376 furniture remaining in dwelling not occupancy 376 house may not be vacant, yet unoccupied 377 temporary absence from dwelling governed by intention, ques- tion of fact 377-379 use of house for partial purpose of dwelling 379 cleaning of dwelling not occupation 379 effect of sleeping in house 380 effect of taking meals in house and use of barn 380 ceasing to be occupied for one of several purposes described 381 dwelling described as family residence 381 when tenement-house vacant or unoccupied 381 construction of vacating 382 temporary vacancy on change of tenant 382 temporary absence 382 occupancy of building used for manufacturing purposes 384 when mill or factory vacant or unoccupied 384 Index. 721 (Index to both volumes, see page 725.) Vacant or Unoccupied — Continued. pa.gb. occupancy of manufacturing establishment governed by known use and character 385 when flouring mill not vacant or unoccupied 385 when tannery is occupied 386 occupancy of boat 386 when a storehouse vacant and unoccupied 386 when a church is vacant or unoccupied 387 when an icehouse is vacant or unoccupied 387 when an elevator vacant or unoccupied 388 occupancy of a saloon or storehouse 388 as affected by waiver or estoppel 389-394 time limitation as affecting waiver 389 waiver or estoppel when policy issues 390 building in process of erection, duty of agent 390 omission to cancel as evidence of waiver 390, 395 special permit for vacancy of vmcompleted building 391 knowledge of soliciting agent .• 391 knowledge of agent as affecting occupancy for other purposes than described 392 effect of knowledge as to future non-occupancy 392 no oral waiver after issue of policy 393 may be estoppel after issue of policy 392 mere knowledge does not operate as estoppel 393 waiver or estoppel after issue of policy 393 estoppel by agent 394 written permit effective without attaching to policy 394 receiving premium after fire 394 meaning of the terms " vacant or unoccupied," question of law. 396 effect of standard form permitting change of occupants 396 as question of law or fact 387, 396 Kansas statute 637 Michigan statute 642 Value, no concealment 11 misrepresentation 28 see " Warranty." Valued Policy, California statute 628 Mississippi statute 644 Montana statute 652 South Dakota statute 672 Vendor and Vendee, interest of, under an executory contract. . . 167, 170 effect of executory contract of sale 189, 237 see "Interest or Title;" "Other Insurance.'' Vol. II.— 46 722 Index. (Index to both Tolumes, see page 725.) PAGE, Vennont, statutory provisions 677 status of agents 677 Virginia, statutory provisions 677 limitation as to defense 677 warranty 677, 67& Waiver or Estoppel, as affecting foreclosure or notice of sale. . .213-216 as affecting change in interest or title 246, 247 as affecting assignment of policy 259, 264 as affecting operation of manufacturing establishment 286 as affecting increase of hazard 307, 309 as affecting alterations or repairs by mechanics 328 as affecting condition against prohibited articles 350-351 as affecting condition against vacancy or unoccupaney 389-394 by insured as affecting cancellation 409, 421, 428 omission to cancel, as evidence of 430-432 in renewal 523-524 acceptance of premium after loss 540 see "Agents ; '' " Building on Ground Not Owned in Fee Sim- ple; " " Incumbrance by Chattel Mortgage; " " Interest Other Than Unconditional Sole Ownership ; " "Other Insurance ; " " Premium ; " Statement of Interest ; " " Vacant or Unoccu- pied; " "Warranty." Warranty, as imposed by contract 32, 40 as affected by Ohio statute 33 Missouri statute 33 as affected by Tennessee statute 33 what construed as 3? express warranty and effect 35 distinction between, and representation 15, 3.5 not affected by good or bad faith 35 test of, by construction 30 as affected by usage or custom 37 effect of new agreement to pay a loss 38 burden of proof 39 when insured entitled to return of premitun 3& contract severable 39- application made part of contract 40 conflict between application and printed condition 41 when statements in application are warranties 41 incomplete or uncertain statements 42 construction of questions in written application 43 when insured bound by application 44 application and policy must be construed together 45- Index. 723 (Index to both volumes, see page 725.) Warranty — Continued. page. eflFect of fraud 46 responsibility of insured for misstatements 46 agent filling up written application, responsibility for mis- statements 47 broker agent of insured, in filling up written application 50 effect of statute requiring application to be made part of policy 51 statutory requirements as affecting 51, 52, 54 no question as to materiality 52 Georgia statute 54 effect of statute requiring examination of property 54 as affected by waiver or estoppel 54, 55 knowledge of broker, as affecting 57 admissibility of parol evidence 57 waiver as applicable to promissory warranty 57 waiver by agent after issue of policy 58 relating to situation, condition, or occupation of building 59 effect of, as to occupation 60 building as affected by description 60 when breach as to occupation 61 distance of buildings 61 distinction between affirmative and promissory 62 compliance with and construction of promissory warranty 64 insured may have reasonable time to comply with promissory warranty 64 construction of promissory warranty as applied to building. ... 65 promissory, as affected by impossibility 65 construction of detached 66 effect of specific statement as to exposure 66 application to new location 67 construction of statement as to occupation 67 as to watchman 67-71 clear space 72 value 73 incendiary fire 73 other insurance 73 as to interest, title, lien, or incumbrance 74 construction of various warranties 77 ajs affected by increase of hazard 302 Arkansas statute 623 California statute 628, 629 Kentucky statute 638 Massachusetts statute 641 Minnesota statute 643 724 Index. (Index to both volumes, see page 725.) Warranty — Continued. page. Missouri statute 647 Montana statute 653 North Carolina statute 656 North Dakota statute 661, 662 South Dakota statute 673 Virginia statute 677 Washington, statutory provisions . .'. 678 status of agents 678 Watchman, warranty 67-71 as affecting operation of manufacturing establishment 285 Wisconsin, statute as affecting misrepresentation 15 statutory provisions 678 application attached to policy 678 status of agents 678, 679 cancellation 679 Words and Phrases, " detached " 66 " valid or not " 104, 105 " insured " 85, 140 " property " 140 " act or neglect " in mortgagee clause 188 " notice given of sale " 213 " interest " in property or land 222 " sale or transfer " 224 " except change of occupants without increase of hazard " 224 " sold " 227 " change " • -. 233 " title or possession " 233 " interest " 157, 226, 233 " increase of risk " 302 " additions '' 321 " mechanics " 324 " premises " 334 " kept," and " used on premises " 335 '■ allowed " 335 " used for lights only," and " oil drawn and the lamps trimmed and filled solely by daylight " 335 " for lights " and " by daylight " 336 " during the summer " 365 " occupied " and " unoccupied " 37I " family " 381 " at noon " 543 " risk " in reinsurance contract 549 " may pay," in reinsurance contract 551 INDEX TO VOLUMES I AND II. Action, parties to, California statute, i, 528 and see "Parties;" "Payment of the Loss;" "Pleading." Adjuster and Adjustment, i, 45 Adjuster, authority of, i, 45, 402 power limited, cannot delegate, i, 46 apparent scope of authority, i, 47 necessary incidents of his power, i, 47 notice of limitation iipon his authority, i, 48 authority, how established, i, 49 authority of, as to proof of loss, i, 226 authority of, as affecting option to take at appraised value, i, 292 power of, in exercising options of company, i, 296 policy, limitations of authority, no application to, i, 441 authority of, as affecting waiver, i, 442 judged by what he does, i, 443 cannot treat policy as both void and valid, i, 443 non-waiver agreements, i, 272b, 443-445 may assert invalidity and suggest proofs, i, 445 Alabama statute, i, 521 Georgia statute, i, 534, 535 Minnesota statute, i, 555 Mississippi statute, i, 556 Missouri statute, i, 561 North Carolina statute, i, 571 and see " Waiver." Adjustment, parties to, i, 17 subject to terms of policy, i, 48 does not necessarily include promise to pay, i, 49 effect of performance, i, 50 effect of fraud or misrepresentation, i, 50 effect of receipt in full, i, 51 with assignee holding policy as security, i, 51 agreement to take less than due, i, 52 and promise to pay as estoppel, i, 52 effect of offer in compromise, i, 52 ignorance and misrepresentation as to law, mistake of fact, i, 53 [725] 726 Index to Vols. I and II. Adjustment — Continued. to set aside, not essential to return amount received, i, 53 effect of duress, i, 54 company may make indorsement on policy after fire, i, 54 recovery back by company of money paid, i, 55 legal business, right to follow, i, 55 policy of law as to place of, i, 152 does not include promise to pay, i, 388 under reinsurance contract, ii, 560, 561 Georgia statute, i, 534 Missouri statute, i, 559 Tennessee statute, i, 585 Vermont statute, i, 589 Administrator, duty to give notice of loss, i, 10 see " Executor or Administrator.'' Agents, authority of local, as to notice of loss, i, 9 obtaining of policy by, i, 18 not included in legal representatives, i, 29 knowledge of, as affecting location, i, 62 knowledge as affecting description, i, 70 authority of local as to appraisal, i, 150 delivery of proof of loss to, 1, 204 authority of local, i, 205 local, waiver by, of proofs, i, 217, 219, 224 knowledge of, as waiver, iron safe clause, i, 270, 271 fraud by agent of insured, i, 280 insured, when bound by limitations on authority in policy, i, 411, 417 local, waiver by, of limitation clause, i, 402 authority of soliciting, as affecting waiver, i, 423 power to employ clerks, as affecting waiver, i, 425 limitation on authority in policy, when operative after issue, i, 426 427 test of authority, as affecting waiver, i, 428 authority of local, as to waiver, i, 440 statute as affecting misrepresentation, ii, 15 responsibility for misstatements in written application, ii, 47 effect of expression of opinion, ii. 111 effect of limitation upon authority after issue of policy, ii, 112 estoppel by, after issue of the policy, ii, 114 authority of, presumption and evidence as affecting other insurance, ii, 116 in obtaining policy from another company and placing surplus line, ii, 118, 119 Index to Vols. I and II. 727 Agents — Continued. knowledge of, as affecting waiver or estoppel, ii, 189 when insured not bound by limitation on authority, ii, 215 no authority to extend vacancy permit, ii, 368 authority of, as affecting cancellation, ii, 407, 411, 418, 420, 423, 424 duty and liability of, in connection with cancellation, ii, 433^36 as imposed by contract, ii, 441 agency founded upon contract, ii, 443 consent of principal essential, ii, 443 burden of proof as to agency, ii, 443 evidence of agency, ii, 443 when agency clause in policy inoperative, ii, 444^46, 448 agency clause as affecting status of broker, ii, 444 policy not conclusive as to agent's authority, ii, 445, 446 agency open to inquiry as to facts, ii, 446 when policy only evidence of authority, ii, 446 authority of a soliciting agent, ii, 446 acceptance of written application from soliciting agent as ratifica- tion, ii, 446 form in countersigning, ii, 447 effect of company authorizing soliciting of insurance as affecting waiver or estoppel, ii, 447 responsibility for errors or omissions in written application, ii, 449 question of fact as to responsibility for errors in application, ii, 449 scope of authority, ii, 451 notice to company through ofScer or agent, exceptions, ii, 452 scope of authority not limited by private instructions, ii, 452, 453 authority not established by assumption, ii, 452 authority, how determined, ii, 453 test of authority, ii, 453 limitation of apparent authority, ii, 454 scope of authority as to kind of property or risk, ii, 455 no authority to insure destroyed property, ii, 455 scope of authority as to territory, ii, 455 construction of authority as to agent or surveyor, ii, 456 partnership as agent of company, ii, 456 presumption of knowledge and practice in selecting companies, ii, 457 effect of holding commissions from other companies, ii, 457 liability for acts of, in malicious prosecution, ii, 457 acting after resignation, ii, 457 agency may continue after revocation, ii, 458 company's agent may become representative of insured, ii, 458 effect of dissolution of partnership, ii, 458 insured may be bound to inquire as to authority, ii, 458 728 Index to Vols. I and II. Agents — Continued. effect of leaving blank policies with agents, ii, 459 secret revocation of authority, ii, 459 when written authority or commission conclusive, ii, 459 authority of officers of company, ii, 460 evidence of authority, ii, 460-466 authority of agents, ii, 460-467 admissions or declarations of agent as evidence, ii, 461, 462 policy may contain evidence as to authority, ii, 463 possession of blank policies as evidence of authority, ii, 463 effect of furnishing agents with blank applications, ii, 464 custom and course of business as evidence of authority, ii, 465 conversations with persons in the office of company, ii, 465 letters from insurance company as evidence, ii, 465 when not clothed with apparent authority to issue policies, ii, 466 company not allowed to prove it would have done differently by another or same agent, ii, 466 imderstanding and willingness of, not admissible, ii, 466 daily report of agent as evidence, ii, 466 insured's construction of agent's meaning not admissible, ii, 467 who is a general agent, ii, 467 soliciting agent not a general agent, ii, 467 limitation in policy does not prevent employment of clerks, ii, 468 clerks and employees of a general agent, ii, 469 authority of clerk of general agent, ii, 470 evidence as to authority of clerk, ii, 117, 470 estoppel by clerk, ii, 470 soliciting agent no authority to make contract of insurance, ii, 471 evidence as to authority of soliciting agent, ii, 471 limitation of authority of a soliciting agent, ii, 472 authority as to waiver after issue of policy, ii, 473 mere solicitation of insurance does not create agency, ii, 474 allowance of commissions does not make agent of company, ii, 474 ratification by company of act of soliciting agent, ii, 474 broker agent of insured, ii, 475 authority of broker, ii, 475 burden of proof as to authority of broker, ii, 475 may be company's agent, ii, 475 evidence as to authority of broker, as company's agent, ii, 475 broker cannot be agent of company without evidence of authority, ii, 476 legal definition of broker, ii, 476 payment of commission to broker does not make him company's agent, ii, 476 i insured responsible for broker as his agent, ii, 477 Index to Vols. I and II. 729 Agents — Continued. evidence of custom among brokers, iij 477 entries in broker's books, ii, 477 conversations with broker, ii, 477 distinction between broker and company's soliciting agent, ii, 478 payment of commission not conclusive, ii, 478 broker may make delivery of check for premium conditional, ii, 479 liability of broker to insured for premium, ii, 479 broker may be agent to collect premium, question of fact, ii, 480, 481 agent of company placing surplus insurance, ii, 482 opinion and representation by broker, ii, 483 duty of broker in procuring or maintaining insurance, ii, 483, 484 personal liability of broker, ii, 483-485 ratification by insured of broker's act, ii, 481 broker authorized to collect unearned premium, ii, 485 waiver or estoppel by general agent, ii, 486 restrictions upon authority not binding prior to delivery of policy, ii, 486 company cannot prohibit itself from making waiver, ii, 487 insured bound by limitations upon authority in policy, ii, 487 notwithstanding limitations in policy general agent may estop company after its issue, ii, 492 mere knowledge not sufficient as estoppel, ii, 492 limitation of authority in policy not conclusive, ii, 493 effect of conduct and course of business, ii, 493, 494 notice to, as element of estoppel, ii, 494 letters as evidence of waiver, ii, 495 fraud and collusion as affecting estoppel, ii, 495 no waiver by delivery of policy after fire, ii, 495 when company bound by knowledge when policy issues, ii, 496 knowledge of agent as affected by time, ii, 497 personal liability of company's agent, ii, 498 instructions to, should be clear and unambiguous, ii, 498 local agents not liable for fraudulent act of clerk or solicitor, ii, 499 no power to bind company by contract to insure in the future, ii, 499 personal liability under statute, ii, 500 personal responsibility to insured for misrepresentation, ii, 500 damages on breach of contract of agency, ii, 500 duration of agency, ii, 501 right of agent after termination of agency, ii, 501 property rights in expirations, ii, 502 when authority question of fact or law, ii, 110, 443, 457, 463, 502, 503 730 Index to Vols, I and II. Agents — Continued. cannot act in a dual or double capacity, ii, 503, 559 when agent acts in double capacity, ii, 504 stockholder, director, or officer of another corporation, ii, 505 also cashier of bank, ii, 505 also director of school district, ii, 506 subject to right of state legislature to regulate business, ii, 506 business of insurance not commerce, power of state, ii, 507 power of state over its citizens, ii, 508 liability of agent or broker to penalty, ii, 509 construction of statute defining status of, ii, 509 statute does not change rule of law as to principal and agent, ii, 510 effect of statute prescribing status of a soliciting agent, ii, 510 statute fixing status of agent not extended by construction, ii, 511 status of soliciting agent under statute, question of fact, ii, 512 status of broker under statute, ii, 513 company cannot plead its own violation of law, ii, 513 authority of, as affecting renewal, ii, 519, 520 authority of, to waive prepayment of premium, ii, 528 authority of, as affecting oral or parol contracts, ii, 569-572' duty of, in issuing policy as affecting reformation, ii, 602 Alabama statute, ii, 622, 623 Arkansas statute, ii, 623 Connecticut statute, ii, 631 Florida statute, ii, 632 Georgia statute, ii, 633, 634 Illinois statute, ii, 636 Iowa statute, ii, 636, 637 Kentucky statute, ii, 637, 638 Louisiana statute, ii, 638, 639 Maine statute, ii, 639, 640 Massachusetts statute, ii, 641 Michigan statute, ii, 642 Minnesota statute, ii, 643 Mississippi statute, ii, 646, 647 Missouri statute, ii, 647 Nebraska statute, ii, 655 North Carolina statute, ii, 656 Ohio statute, ii, 664 Pennsylvania statute, ii, 667 Rhode Island statute, ii, 667 South Carolina statute, ii, 668 Tennessee statute, ii, 675 Texas statute, ii, 676 Index to Vols. I and II. 731 -Agents — Continued. Vermont statute, ii, 677 WasMngton statute, ii, 678 Wisconsin statute, ii, 678, 679 see " Broker." Alabama, statutory provisions, i, 521 ; ii, 622 adjuster, i, 521 penalty, i, 522 tariff association, i, 522 appraisal, i, 522 notice of loss, i, 522 statement or proof of loss, i, 522 who are agents of foreign companies, ii, 622 personal liability of agent, ii, 623 Alterations or Repairs, as affecting operation of manufacturing estab- lishment, ii, 284 as affecting increase of hazard, ii, 298 as imposed by contract, ii, 318 violation renders policy void without regard to increase of risk, ii, 320 test of time is substituted for former test of reasonableness, ii, 320 permission limited to property described, ii, 321 admissibility of parol evidence, ii, 321 construction of " additions," ii, 321 effect of permission for repairs and alterations, ii, 321 limitation of special permission for alterations or repairs ii, 322 permission applicable to building in course of erection, ii, 323 effect of carpenter's risk only, ii, 323 risk must not be increased further than necessary, ii, 323 as affected by construction, ii, 324 repairs not extended by construction, ii, 324 construction of the word " mechanics," ii, 324 when policy contains no conditions as to repairs, ii, 325 question ol fact, ii, 325 application to tenants, ii, 325 effect of special permission, ii, 325 suspension of policy when hazard increased, ii, 326 removal of sprinkler equipment, ii, 326 assignee of policy not affected by subsequent acts of grantor, ii, 327 effect of condition against alteration by specific means, ii, 327 expert evidence, ii, 327 as affected by waiver or estoppel, ii, 328 732 Index to Vols. I and II. Alterations or Repairs — Continued. does not constitute occupancy, ii, 364 California statute, ii, 630 Montana statute, ii, 654 North Dakota statute, ii, 664 Oklahoma statute, ii, 665 South Dakota sta.tute, ii, 675 see " Illuminating Gas and Prohibited Articles." Ambiguity, in description of location, i, 61 and see " Construction; " " Evidence." Amount of Loss or Damage, property for which insured liable, i, 20 when insurance for account of whom it may concern, i, 21 property under conditional sale, i, 23 when payable as interest may appear, i, 25, 27 claim of administrator or executor as legal representative, i, 3ft claim of mortgagee to whom loss payable, i, 39 limitation as imposed by contract, i, 90 amount of policy, not measure, i, 91 insurance itemized, i, 91 policy continues in force as to balance, i, 91 construction of doubtful language, i, 92 to personal property, i, 92 limitation to coat of repairing or replacing, i, 92, 93, 95, 96, 111 valued policy by contract, i, 93 profits, i, 94 as affected by special interests insured, i, 94 meaning of cash value, i, 94, 98 manufacturers, i, 94, 95 cost not conclusive, i, 95, 96 market value, i, 96 auction price as evidence, i, 96 allowance for depreciation, i, 96 amount paid for assignment of policy, not evidence, i, 97 when property destroyed, i, 97 assured competent witness, i, 97 two-thirds, three-fourths, and coinsurance clauses, i, 98, 99 household furniture and wearing apparel, i, 99 stock of merchandise, i, 100, 105 inventory as evidence, i, 103, 104 books of accouni as evidence, i, 101, 104 property in bonded warehouse, duty unpaid, i, 105 value of machines, i, 105, 106 evidence of, as aflFected by time, i, 106 Index to Vols. I and II. 733 Amount of Loss or Damage — Continued. property no market value, i, 106, 107 value as affected by patent, i, 106 patterns, no market value, i, 107 loss payable to third party, i, 10-7 insurance of tenant, i, 107 value of building, i, 108 et seq. reinsurance payable pro rata, i, 108 cost of building not proper measure, i, 108 insurable interest insured may extend to whole value of building, i, 109 when intecest limited, i, 110 limitation to cost of repairing, etc., applied to buildings, i. 111 effect of local ordinances or statutes, i. 111, 112, 116, 130 cash value as applied to building, i. 111 actual not relative value of building, i, 112 partial loss to building, i, 112 opinions of witnesses as to value, i, 113 •effect of valued policy statute, i, 113, 121 no evasion of valued policy statute, i, 115 laurden of proof under valued policy statute, i, 116 ■depreciation under valued policy statute, i, 116 effect of fraud as to personal property, undervalued policy statute, i, 117 when building a total loss, i, 117-121 California statute, i, 527 Georgia statute, i, 533 Massachusetts statute, i, 546 Montana statute, i, 563 North Dakota statute, i, 574 Oklahoma statute, i, 576 South Dakota statute, i, 585 see "Damage;" "Loss or Damage;" "Valued Policy;" "Ex- emptions, Exceptions, and Limitations." Application, statement of interest in, ii, 142 effect of ambiguity, ii, 142, 156 statutes requiring attachment to policy does not affect condition as to title, ii, 187 materiality of, as affecting increase of hazard, ii, 299 acceptance of, by company as ratification of agency, ii, 446 responsibility for errors or omissions, ii, 449 Georgia statute, ii, 635 Iowa statute, ii, 636 Massachusetts statute, ii, 641 734 Index to Vols. I and II. Application — Continued. Minnesota statute, ii, 643 Oklahoma statute, ii, 665 Pennsylvania statute, ii, 665 Wisconsin statute, ii, 678 see "Concealment, Misrepresentation;" "Oral or Parol Contract;"' " Warranty." Apportionment of Loss, not necessary in proofs, i, 210 effect of exercise of option to rebuild, i, 298 as imposed by contract, i, 305 not governed by rules of contribution, i, 306, 307 construction, i, 306, 328, 330-339 insured must disclose other insurance, i, 307 liability of each company severally limited, i, 307 liability of each company determined by its own contract, i, 308 when loss equals or exceeds insurance, i, 308 other policies must be effected by insured or by his authority, i, 309' admission of parol evidence, i, 309 when insurance made binding by agent of different companies, i, 309 insured not obliged to maintain insurance, i, 310 void or invalid insurance included, i, 310 other insurance must cover same subject, i, 311 when other policy covers other property, i, 311 how difficulty removed, i, 311, 312 how whole insurance determined when other policy covers other property, i, 312 - exception when insurance itemized as to amount, i, 313 other insurance must cover same interest and risk, test, i, 313 when policy covers other interests beside that of insured, i, 314 effect of specific insurance, i, 314, 328, 329 effect of mortgagee clause; rights of mortgagee, i, 315, 317 effect of insurance upon interest of mortgagee, i, 316 when all the policies insure interest of different mortgagees, i, 316 effect of coinsurance clause, i, 317, 318, 324, 329, 341 three-fourths clause must be considered, i, 326 effect of fractional itemized insurance, i, 326 effect of limitation as to amount on specific subjects, i, 327 when subjects in different places and different limitations as to amount, i, 328 not construed to relieve from liability, i, 328 modification or limitation by special clauses, i, 328 loss must be made good; exceptions, i, 329 general and specific policies, i, 330-339, 342 Index to Vols. I and II. 735 Appoitionment of Loss — Continued. how whole insurance determined; insurance itemized, i, 331, 332 meaning of " described property " and " covering such property/' i, 339 imder Lloyds policy, i, 341 effect of valued policy statutes, i, 341 old rules rejected by the courts, i, 342 may be superseded by stipulation, i, 342 must be pleaded in defense, i, 343 material inquiries in all cases, i, 344 arithmetical rules of proportion, i, 346 insured at fault, i, 347 as affected by unauthorized substitution, ii, 427 no effect on reinsurance contract, ii, 557 Georgia statute, i, 533 Iowa statute, i, 539 Minnesota statute, i, 552 Missouri statute, i, 558, 559 South Carolina statute, i, 581 and see " Contribution." Appraisal, as affecting mortgagee, i, 38 required, i, 90 as imposed by contract, i, 135 rights and duties of both parties, i, 138 must be exercised in reasonable time, i, 138 condition precedent, i, 139 exceptions, i, 140 not necessary to admit liability, i, 141 effect of denial of liability, i, 141 effort must be made to agree; must be disagreement, i, 142 disagreement must be as to amount, i, 142 insured estopped by his request for, i, 143 must be demanded, effect of omission, i, 143 demand must be clear, i, 145 must follow terms of policy, i, 145 as affected by form of several policies, i, 146 effect of several companies selecting same appraiser, i, 146 demand should be promptly made, i, 147 delay by insured in making demand, i, 147 duty to keep damaged goods, i, 148 demand by mail, i, 149 what demand must include, i, 149 motive immaterial, i, 149 demand cannot be split, i, 149 736 Index to Vols. I and II. Appraisal — Continued. authority of officer of company, i, 150 authority of local agent, i, 150 right to make agreement for, not restricted, i, 151, 154, 175 limited to determination of amount, i, 151 when loss payable to mortgagee, i, 152 partners, i, 152 policy of law, as to place of selection of appraisers, i, 152 exact distance not prescribed, i, 153 operative only on damaged property, i, 154 what it may include, i, 154 demand for exclusive appraisal of damaged goods, i, 155 agreement may include property wholly destroyed, i, 151, 154, 156, 175. duty of both parties to act in good faith, i, 156 effect of negotiations for compromise, i, 156 good faith in selection of umpire, question of fact, i, 157 umpire refusing to act, i, 158 insured may make his consent to new appraisal conditional, i, 158 duty of parties when one appraiser refuses to act, i, 159 effect of failure to agree upon umpire, when no fault or bad faith, i, 159 when fails, without fault of company, i, 159 must be some evidence of bad faith on part of company, i, 160 when fails, without fault of either party, i, 160, 161 effect of appraiser's disagreement and refusal to proceed, i, 161 waiver of right to new appraisal, i, 161 appraisers act quasi-judicially, i, 162 should be free from bias or partiality, i, 162, 165 burden of proof as to incompetency of appraiser, i, 162 meaning of "disinterested," i, 162 appraiser not an agent or representative, i, 162, 163 concealment, i, 162 responsibility for neglect or misconduct of appraisers, i, 162, 166 appraisers not partisans; must be impartial, i, 163 company must name appraiser to act promptly, i, 164 effect of prevention or delay, i, 164 previous employment by company, i, 164, 165 con-cealment or misrepresentation, as to appraiser, i, 164, 165 appraiser, public adjuster, partner, or agent, i, 165 competency of appraiser, question of fact, i, 165 appraisers must not delay on advice of assured's counsel, i, 166 not obliged to follow unsigned directions, i, 166 insured bound by his inventory, i, 167 Ikdex to Vols. I and II, 737 Appraisal — Continued. fraud of adjuster, i, 167 insured entitled to notice and opportunity of being heard, i, 167, 16S taking evidence, experts, i, 168, 171, 177 duty of appraisers substantially arbitrators, i, 169, 170 not an ordinary arbitration, i, 169' effect, when required in standard policy, i, 170 distinction, as to evidence, when property wholly destroyed, i, 171 application of description in policy, i, 172 effect of improper proposal, i, 172 mus,t follow submitted schedule, i, 172 not rendered invalid for want of oath, i, 173 must follow limitations in policy, i, 173 must allow for depreciation, i, 173 when umpire may be selected, i, 173 when umpire has authority to act, i, 174 duty of the umpire, i, 174 no right to make additional award, i, 175 binding effect of award, i, 175, 176, 177, 179, 183 does not depend upon acceptance, tender, or payment, i, 175 when award void, i, 176, 177, 178, 179, 181 strong proof required, i, 177 cannot exceed amount of policy, i, 178 award binding only to extent of subject-matter submitted, i, 179 concealment of evidence by insured, i, 179 authority of adjuster cannot be disputed, when fraud, i, 180 meaning of misconduct by appraisers, i, 180 duty of parties, when award objected to for fraud or misconduct, i, 181 award not limited by two-thirds clause, i, 181 not necessary to return or tender money received on award to obtain relief in equity, i, 182 recovery of interest, when award set aside, i, 182 remedy of insured when award claimed to be void, i, 182 distinction between common law and equity practice, i, 183 burden of proof on claim of invalid award, i, 183 competency of evidence of appraisers, i, 184. remedy of insurance companies to enforce a\^ard, i, 184 insured may have relief from effect of limitation clause by cross- bill, i, 185 __ - . waiver of, i, 185-190 ' . insured may create evidence by notice, i, 187 denial of liability as waiver, i, 187, 188 Vol. II.— 47 738 Index to Vols. I and II. Appiaisal — Continued. company's refusa,! to appraise does not affect right to competent Cividenee, i, 188 ex parte appraisal, no evidence, i, 188 no waiver, when demanded in time, i, 189 when policy provides for written request, i, 189 failure to demand, as evidence of waiver, i, 190 may waive proofs of loss, i, 190 no waiver by appraisal under standard forms, i, 191, 192 effect of other acts, in connection, i, 191 waiver of options or time, i, 191 appraisal agreement may govern waiver, i, 191 effect of statute fixing amount of loss, i, 192, 193 distinct from statement or proofs of loss, i, 225 effect as waiver of proofs of loss, i, 225 as waiver of plans and specifications, i, 240 waived by option to replace or rebuild, i, 302 effect of appraisal agreement, i, 303 waiver by, of option to replace or rebuild, i, 303 as waiver of limitation clause, i, 402 no waiver by, i, 408 no application to reinsurance contract, ii, 5S6 Alabama statute, i, 522 Iowa statute, i, 538 Maine statute, i, 545 Massachusetts statute, i, 548 Minnesota statute, i, 554 Missouri statute, i, 559 New Jersey statute, i, 566 North Carolina statute, i, 570 Vermont statute, i, 589 Virginia statute, i, 591 option to take at appraised value, see " Option," etc. Arizona, statement or proof of loss, i, 523 statutory provisions, i, 523 Arkansas, statutory provisions, i, 523; ii, 623 valued policy, i, 523 limitation, i, 524, 525 status of agent, ii, 623 substantial compliance with policy sufficient, ii, 623 Ascertainment of loss or damage, i, 56 Assignee, holding policy as security, effect of settlement with, i, 51 Pennsylvania statute, i, 577 Index to Vols. I and II. 739 Assignment, right of insurance company to demand, of insured's claim, i, 360, 367 right of insurance company acquired by subrogation, i, 377 Assignment of Policy, amount paid not evidence of value, i, 97 subject to options of company, i, 295 effect of consent to, as waiver of change in interest, ii, 248 as imposed by contract, ii, 256 condition valid and reasonable, ii, 258 violation voids insurance, ii, 258 consent may be in writing on separate paper, ii, 258 application of Iowa statute, ii, 258 duty to procure written consent, ii, 259 estoppel by officers of company, ii, 259 need not be in writing, ii, 260 may be equitable assignment, ii, 260 not dependent upon form, question of intention, ii, 261 not inferred, ii, 261 effect of making loss payable to assignee or third party, ii, 261 sale of property does not include policy, ii, 261 assignment of policy and sale of property independent; both must be consented to, ii, 263 order in time immaterial, ii, 264 effect of company's consent, ii, 259, 264 assignee must have insurable interest, ii, 265 assignee takes it subject to conditions, ii, 266 when consent of company to purchaser of property, effect, ii, 266 may be made conditional, ii, 268 one of several insured may assign his interest, ii, 268 effect of general assignment for benefit of creditors, ii, 269 effect of adjudication in bankruptcy, ii, 269 rule as to statement of interest inapplicable, ii, 269 assignor no power to impair validity of policy, ii, 270 insured no claim under void policy by assignment to mortgagee, ii, 270 as between partners, ii, 271 as security or collateral, ii, 271 right of assignment, ii, 272 effect of assignment as security, subject to violation of condition by assignor, ii, 273 by mortgagee, ii, 274 after loss, i, 28; ii, 274, 275 induced by false representations, ii, 278 includes right to reformation, ii, 276 assignee not affected by subsequent acts of assignor, ii, 327. 740 Index to Vols. I akd II. Assignment of Policy — Continued. as aflFected by reinsurance contract, ii, 553, 554 right of assignee to reformation, ii, 606 Average clause, forms, i, 511 Bankruptcy, eifect of, as change in interest, ii, 245 eifect of proceeding in assignment of interest or policy, ii, 269 Bill of Lading, effect of stipidation in, on subrogation, i, 367, 373, 375 Bills, see " Books of Account," etc. Binder, see "Other Insurance;" "Oral or Parol Contract." Boat, see " Vessel."" Books, as evidence of amount of loss, i, 101, 104 under examination, cannot be required to bring to company's office, i, 254 Books of Account, Bills, and Invoices, production of, imposed by con- tract, i, 259 demand must be in reasonable time, i, 260 when coupled with demand for proofs, i, 260 demand for certified copies, i, 260 when insured excused, i, 260 duplicate, not certified, copy, i, 261 demand should follow condition, i, 261 objection must be specific, i, 261 waiver of defects in, i, 261 place of examination, i, 262 when policy contains iron safe clause, i, 262 waiver of forfeiture, i, 262 waiver of limitation, i, 263 effect of failure to produce, i, 263 eflfect of alterations and erasures, i, 280 Maine statute, i, 543 Missouri statute, i, 560 see " Iron Safe Clause." Broker, concealment by, ii, 9 as agent of insured in filling up application, ii, 50 knowledge of, as aflfecting warranty, ii, 57 company not bound by broker as to other insurance, ii, 117 knowledge of, as waiver or estoppel, ii, 174 eflfect of credit for premium to broker as aflfecting cancellation, ii, 406 authority of, as aflfecting cancellation, ii, 418, 422 Index to Vols. I and II. 741 Broker — Continued. right to commissions on cancellation, ii, 433 status of, as affected by agency clause in policy, ii, 444 may be company's agent, ii, 475 cannot be agent of company without evidence of authority, ii, 476 legal definition of broker, ii, 476 payment of commission does not make him company's agent, ii, 476, 478 evidence of custom, ii, 477 insured responsible for broker as his agent, ii, 477 entries in books of, ii, 477 conversations with, ii, 477 distinction between broker and company's soliciting agent, ii, 478 may make delivery of check for premium conditional, ii, 479 liability of broker to insured for premiums, ii, 479 may be agent of company to collect premium, ii, 480, 481 agent of company placing surplus insurance, ii, 482 opinion or representation by, question of fact, ii, 483 duty of, in procuring or maintaining insurance, ii, 483, 484 personal liability, ii, 483—485 ratification by insured, ii, 481 authorized to collect unearned premium, ii, 485 subject to right of state legislature to regulate business, ii, 506 liability to penalty, ii, 509 status of, under statute, ii, 512, 513, and see various statutes under names of states authority as to premium, ii, 528, 530-533 agent of insured, ii, 475, 532 liability for unearned premium, ii, 532 advancement of premium by, ii, 533 Connecticut statute, ii, 631 Maryland statute, ii, 640 Massachusetts statute, ii, 641 Pennsylvania statute, ii, 666- Rhode Island statute, ii, 667 Building, location, i, 58-60 when total loss, i, 117-121 Ohio statute, i, 576 as affected by warranty, ii, 59, 66 distance of, as affected by warranty, ii, 61 construction of promissory warranty, ii, 65 construction of, in reinsurance contract, ii, 555 . see "Amount of Loss or Damage;" "Fall of Building;" Location," '' Description;" " Misrepresentation." 742 Index to Vols. I and II. Building on Ground not Owned in Fee Simple, as imposed by contract, ii,181 violation of condition voids policy, burden of proof, ii, 182 effect of written description, ii, 182 presumption as to estate in fee, ii, 183 equitable interest or title, ii, 183 combination of several individual interests may amount to fee simple, when policy void, ii, 183 as dependent on delivery and recording of deed, ii, 184 effect of deed not signed by wife, ii, 184 .effect of oral application and no inquiries, ii, 185 duty of insured, company not bound to inquire, ii, 185 company put upon inquiry by ambiguous answer in application, ii, 186 when breach of condition, ii, 186 leasehold interest, ii, 186 condition not affected by statutes as to written application, ii, 187 as affected by partnership, ii, 187 effect of mortgagee clause, ii, 188 assignment of lease may be valid as against insurance company, ii, 188 effect of possession under an executory contract of sale, ii, 189 waiver or estoppel in issue of policy, ii, 189, 191 mere knowledge of company's agent does not change policy, ii, 191 California, statutory provisions, i, 525; ii, 623 mortgagor and mortgagee, i, 525 valued policy, i, 525 return of premium, i, 526 loss or damage, i, 526 notice of loss, i, 526 statement or proof of loss, i, 526 waiver, i, 527 certificate, i, 527 contribution, i, 527 construction act of insured, i, 527 amount of loss or damage, i, 527 valued policy, i, 527 parties to action, i, 528 insurable interest, ii, 623, 624 change in interest or transfer, ii, 624 concealment, ii, 625, 626 misrepresentation, ii, 626 what must be specified in policy, ii, 627 whose interest is covered, ii, 627 Index to Vols. I and II. 743 California — Continued. insurance by agent or trustee, ii, 627 interest by part owner, ii, 627 use of general termSj ii, 627 successive owners, ii, 627 transfer of thing insured, ii, 627 open, valued, and running policies, ii, 628 acknowledgment in policy of receipt of premium, ii, 628 assignment after loss, ii, 628 warranty, ii, 628, 629 premium, ii, 629 other insurance, ii, 629 reinsurance, ii, 629, 630 alterations and acts of the insured, ii, 630 Cancellation, as affecting other insurance, ii, 87, 93, 95 as evidence of estoppel after issue of policy, ii, 115 , omission to cancel as evidence of waiver or estoppel, i, 428; ii, 119, 121, 215, 390-395, 430-432 as imposed by contract, ii, 399 condition strictly construed, ii, 401 burden of proof, ii^ 401 company's right absolute, not dependent upon motive or cause, ii, 402 notice essential, ii, 402 form of notice, ii, 402 tender or payment of unearned premium must accompany notice, ii, 402 not evidenced by entry on company's books, ii, 402 meaning of notice, ii, 403 requisites of notice, ii, 403 expression of intention not enough, ii, 403 when takes effect, ii, 404 unearned premium must be returned or tendered, ii, 405 must be pursuant to terms of policy, ii, 406 effect of accounts as payment of premium, ii, 406 effect of credit to broker, ii, 406 acceptance of draft for unearned premium, ii, 407 draft insuflBcient as tender of unearned premium, ii, 407 when premium not paid, ii, 407 authority of agent, ii, 407 premium must have been received by the company, ii, 408 effect of acceptance of note for premium, ii, 409 may be by mutual consent, ii, 409 waiver by insured, ii, 409 744 Index to Vols. I and II. Cancellation — Continued. consent of partner, ii, 409 by voluntary surrender and delivery, ii, 410 when notice not required, ii, 410 surrender of policy upon condition, ii, 410 as affected by authority of agent, ii, 411 effect of promise by insured, ii, 412 insured must be capable of understanding his acts, ii, 412 question of fact, ii, 412 computation of time, ii, 412 company cannot reduce insurance without consent of insured, ii, 413 upon request of insured, ii, 413 when insured not entitled to unearned premium, ii, 413 insured's right does not depend upon notice, ii, 414 duty of insured if policy not satisfactory, ii, 414 by mail, ii, 403, 414, 415 fire occurring before expiration of notice, ii, 415 party or mortgagee to whom loss payable cannot consent, ii, 415 effect of mortgagee clause, ii, 415 can be none when property exposed to fire, ii, 417 presumption as to short rate, ii, 417 mutual mistake, ii, 417 agent cannot delegate authority, ii, 418 as aifected by authority of broker, ii, 418-422 authority of insured's agent or broker, ii, 418 as affected by custom, ii, 418 evidence of authority of insured's agent, ii, 418 insured's agent or broker having general authority as to insurance, ii, 420 authority of broker to surrender and cancel, ii, 421 evidence of waiver by insured, ii, 421 limitation as to authority of broker, ii, 422 company's agent may be authorized by insured to consent, ii, 425 as affected by authority of agent, ii, 423 evidence of authority to cancel, ii, 423 delivery of substituted policy, ii, 423 no presumption as to authority of soliciting agent, ii, 424 agent no power to revive canceled policy, ii, 424 by substitution of other policies, ii, 424 substitution by agreement or upon condition, ii, 425 substitution as affected by intent, ii, 426 recognition and payment by substituted company, ii, 426 unauthorized substitution as affecting apportionment, ii, 427 insured may ratify act of agent in replacing insurance, ii, 427 Index to Vols, I and II. 745 Cancellation — Continued. ratification by insured, ii, 423, 424, 427 when insured does not waive notice, ii, 428 insured may compel issue of substituted policy, ii, 428 substituted policy not a contract of reinsurance, ii, 428 question of fact or law, ii, <110, 419, 429 right of company to deduct commissions, ii, 433 right of broker to commissions, ii, 433 effect of agent's agreement for percentage of premiums received, ii, 433 liability of company's agent, ii, 433 when company's agent not charged with duty, ii, 434 agent cannot use company's funds to cancel, ii, 435 agent may buy claim for iinearned premium, ii, 435 agent's act must be authorized to be reimbursed, ii, 436 when trustees of company not entitled to credit for unearned pre- mium, ii, 436 as affected by credit for premium, ii, 533 liability of insured for earned premium, ii, 416, 421, 540 of binder, ii, 584, 586 of oral or parol contract, ii, 586 Colorado statute, iij 630 Connecticut statute, ii, 631 Nebraska statute, ii, 655 New York statute, ii, 655 North Dakota statute, ii, 661 Ohio statute, ii, 664 Wisconsin sta;tute, ii, 679 Cash Value, see "Amount of Loss or Damage." Certificate of Magistrate or Notary, duty to furnish, i, 242, 243 requirement must be express and. specific, i, 244 substantial compliance, i, 245 no part of proof of loss, i, 245 delay in furnishing, i, 245 meaning of " living nearest place of fire," i, 246 duty of company when it objects to certificate, i, 246 when •' nearest " magistrate or notary declines to act, i, 246 effect of location of office and knowledge of insured, i, 247 distance of few feet or yards immaterial, i, 247 effect of company employing nearest notary or magistrate, i, 248 when notary disqualified, i, 248, 249 defects must be pointed out promptly, i, 249, 250 waiver of, i, 246, 248, 249, 250 insured not bound by amount in, i, 251 California statute, i, 527 746 Index to Vols. I and II. Certificate of Magistrate or Notary — Continued. Indiana statute, i, 536 Maine statute^ i, 542 Minnesota statute, i, 551 Montana statute, i, 563 North Dakota statute, i, 573 South Dakota statute, i, 584 Wisconsin statute, i, 594 Change in Interest, Title, or Possession, as imposed by contract, ii, 217 application of Ohio statute, ii, 219 of forms of contract, ii, 219-221 condition material and reasonable, enforced, ii, 221 condition subsequent, ii, 221 burden of proof, ii, 221 distinction between interest and title, ii, 222 interest in land, ii, 222 efifect of written description, ii, 223 notice insufficient, duty to procure consent, ii, 223 application of clause " except change of occupants without increase of hazard," ii, 224 meaning of sale or transfer, ii, 224 change increasing interest, ii, 225 effect of insured parting with all his interest, ii, 226 application of the word " interest," ii, 226 effect of consent to change, ii, 226, 230 construction of word " sold " in Massachusetts form, ii, 227 effect of legal process, ii, 229 no change in transfer of legal title to beneficial owner, ii, 229 sale or mortgage of stocks of merchandise, ii, 230 as between or by partners or partnership insured, ii, 222, 230, 233 parties insured may transfer as between themselves, ii, 231 effect of taking in partner with interest in profits only, ii, 233 executory agreement between partnership and third parties to form corporation, ii, 233 no change by mortgage, ii, 233 meaning of the word " change," ii, 233 meaning of the words " title or possession," ii, 233 meaning of the word " interest," ii, 222, 233 chattel mortgage by one partner on firm property, ii, 235 effect of chattel mortgage, ii, 235 admissibility of parol evidence, ii, 235 bill of sale must be delivered and accepted, ii, 236 effect of executory contract of sale, ii, 237 executory contract for sale and exchange of stock of goods, ii, 238 question of fact, ii, 224, 238 Index to Vols. I and II. 747 •Change in Interest, Title, or Possession — Continued, change by deed, ii, 238 attornment of tenant to purchaser, ii, 241 effect of judicial sale, ii, 241 sale of real estate on execution, ii, 242 effect of partition, ii, 242 sale under deed of trust, ii, 243 levy or possession by sheriff, ii, 243 appointment of receiver, and change in receivership, ii, 244 receiver of partnership, ii, 244 void sale, insured continuing in possession, ii, 245 effect of bankruptcy proceedings, ii, 245 waiver or estoppel when policy issues, ii, 246 waiver or estoppel after issue of policy, ii, 247 effect of consent to assignment of policy, ii, 248 «ffect of making loss payable to third party, ii, 249 contract divisible, ii, 249 when contract not divisible, ii, 250 what is a change, illustrative cases, ii, 250 what is not a change, illustrative cases, ii, 252 California statute, ii, 624, 627 Georgia statute, ii, 635, 636 Montana statute, ii, 649, 652, 653 North Dakota statute, ii, 657, 658 South Dakota statute, ii, 669, 672, 673 -Chattel Mortgage, as affecting change in interest, etc., ii, 235 see " Incumbrance by Chattel Mortgage." Clerks, see "Agents." 'Coinsurance, effect of, on amount of loss, i, 98 effect on apportionmgnt of the loss, i, 317, 318, 324, 329, 341 as consent to other insurance, ii, 100 effect on reinsurance contract, ii, 556 forms, i, 512, 517-520 Indiana statute, i, 536 Iowa statute, i, 538 TVlichigan statute, i, 550, 551 Minnesota statute, i, 551, 552, 555 New Jersey statute, i, 566 Tennessee statute, i, 587 Wisconsin statute, i, 594 Colorado, statutory provisions, i, 528 ; ii, 630 subrogation, i, 528 cancellation, ii, 630 748 Index to Vols. I and II, Combinations, to maintain rates, ii, 615 Complaint, see " Pleading." Compromise, effect of oflfer in, i, 52 see " Waiver." Concealment, as imposed by contract, ii, 2 independent of contract, ii, 2 effect of no written application ^d no inquiry, ii, 3, 4 when insured chargeable with intentional concealment, ii, 3 waiver of knowledge by company, exception, ii, 4 when insured bound to make disclosure though no inquiry, ii, 4 not assumed, ii, 4 effect of defective written application, ii, 5 none when company has knowledge or put upon inquiry, ii, 6 effect of insured's knowledge of material fact, ii, 6 as affecting reinsurance, ii, 6 fact must be known to the insured, ii, 6 fact must be material, ii, 7 materiality question of fact, ii, 7 burden of proof, ii, 7 test of materiality, effect of inquiries, ii, 8 evidence as to rate of premium, ii, 8 by owner acting as agent for mortgagee, ii, 9 by insured's agent or broker, ii, 9 as affecting interest or title, ii, 9 question of fact, ii, 10 as affected by warranty, ii, 9 when company put upon inquiry as to interest, ii, 11 none as to value, ii, 11 effect of diagram, ii, 12 as affecting reinsurance, ii, 553 California statute, ii, 625, 626 Georgia statute, ii, 635 Montana statute, ii, 649, 650 North Dakota statute, ii, 658 South Dakota statute, ii, 669, 670 Gonnecticut, standard form of policy, i, 474, 529; ii, 631 statutory provisions, i, 529 mortgagor and mortgagee, i, 530 statement or proof of loss, i, 530 limitation, i, 531 cancellation, ii, 631 personal liability of agent, ii, 631 Index to Vols. I and II. 749 Connecticut — Continued, agent defined, ii, 631 insurance broker defined, ii, 631 statement of conditions, ii, 631 Constitution, statute relating to attorney's fees, ii, 617 see "Agents;" "Legality;" "Lloyds;" "Combinations." Construction, of written description and printed condition, i, 67 favors indemnity, i, 92 of iron safe clause, i, 265 of apportionment clause, i, 306, 328, 330-339 as affecting waiver of two classes of conditions, i, -110 of non-waiver agreements, i, 443-445 of standard forms, i, 450, 460 construed as a contract, i, 451, 460 may affect waiver, but not estoppel, i, 451 presumption as to language of standard forms, i, 451 how doubtful questions solved, i, 451 eflfeet of prescribing standard form of one state by another, i, 452 insured bound by terms of accepted policy, i, 452 cannot plead ignorance, i, 453 exception as to estoppel, i, 453 when terms clear and unambiguous, i, 454 parol evidence not admissible i, 454, 458 of policy same as any other instrument, i, 455 technical words in trade or business, i, 455 all parts must be considered and harmonized, i, 456 mere inconsistency does not justify striking out provision, i, 456 mot aflfected by tariff association, i, 457 distinction as to two classes of conditions, i, 457 •does not relieve insured of obligation of performance, if possible, i, 457 cannot make new or different contract, i, 458 meaning of word " void," i, 459 insured responsible for own acts only, i, 459 may be responsible for acts of one to whom commits control, i, 459 favors insured, when ambiguity, i, 460 against forfeiture, i, 462 governed by that of the parties, i, 462 conflict between written or descriptive part and printed condi- tions, i, 463 parol evidence admitted, when ambiguity, i, 464 as affected by custom, i, 465, 466 the word " entire " as affecting divisibility of contract, i, 467 750 Index to Vols. I and II. Construction — Continued. when policy divisible, i, 467, 468 as to what law governs, i, 469-472 when policy not affected by failure to comply with state laws, i, 475 rights of parties fixed on forfeiture, not affected by statute, i, 473 as affecting other insurance, ii, 124 as affecting alterations or repairs by mechanics, ii, 324 of statute as affecting status of agent, ii, 511 of the words " at noon,'' ii, 543 of word " risk " in reinsurance contract, ii, 549 as affecting contract of reinsurance, ii, 550-552, 558 of reinsurance contract as affected by description, ii, 550 as affecting oral or parol contracts, ii, 568 California statute, i, 527 Georgia statute, ii, 635 Iowa statute, i, 537, 538 Michigan statute, ii, 642 North Dakota statute, i, 575 see " Description " and " Words and Phrases ; " " Entirety and Divisibility of Contract; " " Incumbrance by Chattel Mortgage; " " Vacant or Unoccupied ; " " Warranty." Consummation of Contract, see " Oral or Parol Contract." Contract, effect of executory contract of sale, i, 110; ii, 167-170, 189 as affected by legality or violatioii of statute, see " Increase of Hazard;" "Interest or Title." see "Legality;" "Vendor and Vendee." Contribution, California statute, i, 527 Montana statute, i, 563 North Dakota statute, i, 573 South Dakota statute, i, 585 see "Apportionment of the Loss." Custom, as affecting location, i, 61 of adjusters, in ascertaining loss, i ,104 of local agent, to receive proof of loss, i, 205 evidence of, when admissible, i, 465, 466 as affecting warranty, ii, 37 as affecting operation of manufacturing establishment, ii, 282 as affecting condition against illuminating gas and prohibited articles, ii, 337, 341, 349 ■ as affecting vacancy or unoceupancy, ii, 368 as affecting cancellation, ii, 418 evidence of, as affecting broker, ii, 477 Index to Vols. I and II. 751 Custom — Continued. when does not affect reinsurance contract, ii, 550 as affecting authority of agent to make oral contract, ii, 570 as affecting binder or oral contract, ii, 586 see "Construction;" "Description;" "Evidence." Damage, company not liable for that caused by neglect of insured, to save, preserve, or protect, etc., i, 3, 11 separation and invento^ry of damaged property, i, 13 when insured may dispose of damaged property, i, 16 see "Amount of Loss or Damage ; " "Loss or Damage." Death, of insured, effect on notice of loss, i, 10 of insured, effect on claim to insurance, i, 30 effect on limitation clause, i, 389 Declaration, see " Pleading." Deed, as affecting interest or title, ii, 162, 163, 184 as affecting change in interest or title, ii, 238 Delaware, statutory provisions, i, 531 valued policy, i, 531 Desciipticn, must apply to property, i, 66 addition of words after fire, i, 67 false in part only, i, 67 repugnancy between written and printed conditions, i, 67 doubtful meaning, evidence, i, 68 uncertain or ambiguous, i, 68 general words controlled by specific condition, i, 69 governed by nature and methods of business, i, 70 knowledge of agent, i, 70 limitation as to presumption of company's knowledge, i, 71 as affected by custom, i, 71 stocks of merchandise, i, 72 building and addition, i, 72, 73, 76 adjoining and communicating, i, 74, 75 mill building and additions, i, 74 effect of consent to addition, i, 74, 75 effect of moving part of building, i, 75 building subsequently built, i, 76 building includes walls, i, 76 knowledge of company, i, 76 building includes fixtures, i, 77 boiler, engine, and machinery, i, 77 fixtures, i, 77, 78 752 Index to Vols. I and II. Description — Continued. not specifically insured, i, 79 liberally construed, i, 79 ■when language plain, i, 81 general does not include specific exemption, i, 131 effect of, on condition against prohibited articles, ii, 343, 344 as aff'ecting condition against vacancy or unoecupaney, ii, 372 effect on renewal, ii, 518 may govern term, ii, 544 furnished by reinsured company affects construction, ii, 550 of building, ii, 555 Kansas statute, i, 539 see " Warranty." Diagram, as concealment, ii, 12 Duress, effect of, on settlement, i, 54 Electricity, forms, i, 512 Entirety and Divisibility of Contract, under valued policy statute, i, 117 as affected by misrepresentation, ii, 29 as affected by breach of warranty, ii, 39 as affected by other insurance, ii, 123 as affected by condition in regard to interest or title, ii, 175 as affected by condition in regard to chattel mortgage, ii, 204 as affected by change in interest or title, ii, 249, 250 as affected by operation of manufacturing establishment, ii, 2S6 as affected by increase of hazard, ii, 307 as affected by vacancy or unoecupaney, ii, 370 and see " Construction." Estate, insurance of, i, 23, 24 Estoppel, in adjustment, i, 52 knowledge of agents as to location^ i, 62 insured not estopped by his proofs of loss, i, 216 insured not estopped by examination, i, 257 failure to read policy as an element of, i, 453 see "Evidence;" "Waiver, or Estoppel." Evidence, burden of proof as to failure to save and preserve property, i, 3 presumption from mailing notice of loss, i, 7 admissibility of parol evidence, when insurance account whom it may concern, i, 21 admissibility of, to show who intended by estate, i, 23 to establish interest of party to whom loss payable, i, 25, 26 Index to Vols. I and II. 753 Evidence — Continued. to establish distinct promise to pay after a loss, i, 49 parol, as affecting location, i, 60, 61 parol, as affecting description, i, 68 of cash or market value, i, 96 auction price, i, 96 burden of proof as to depreciation, i, 96 amount paid for assignment of policy, not, i, 97 assured witness as to value, i, 97 of value, of household furniture and wearing apparel, i, 99 of loss on stock of merchandise, i, 100-104 books of account, i, 101-104 inventory of stock, i, 103, 104 of custom of adjusters in ascertaining loss, i, 104 value of building, i, 108 et seq. opinions of witnesses, experts, i, 113 burden of proof under valued policy statute, i, 116 photographs of building claimed to be total loss, i, 120 burden of proof as to damage caused by lightning, i, 126 burden of proof as to fall of building, experts, i, 129 presumption from mailing demand for appraisal, i, 148 burden of proof as to incompetency of appraiser, i, 162 burden of proof as to setting aside award of appraisers, i, 183 competency of evidence of appraisers, i, 184 ex parte appraisal, none, i, 188 presumption from mailing proof of loss, i, 203 authority of local agent to receive proof of loss, i, 205 statement or proof of loss, as, i, 215 refreshing recollection by proof of loss, i, 215 of authority of adjuster, i, 49, 226 of waiver of certificate, i, 246 examination as, i, 258 intentional fire, i, 286 to establish exercise of option to rebuild, i, 301 parol, as affecting apportionment of the loss, i, 309 parol, cannot alter contract, i, 411 authority of agent, i, 414 burden of proof as to knowledge of company on question of waiver, i, 418 authority of agent's clerks as affecting waiver, i, 425 admission of parol evidence to show estoppel, i, 425 of waiver or estoppel, as against affirmative defense, i, 448 failure to read policy as an element of estoppel, i, 453 parol, not admissible to explain intent, i, 454, 458 Vol. II.— 48 754 Index to Vols. I and II. Evidence — Continued. parol, admissible to explain ambiguity, i, 464 of custom, not admissible when language clear, 465 of custom, when admissible and binding, i, 465, 466 as affecting misrepresentation, ii, 21 premium as aflfecting misrepresentation, ii, 23 as aflfecting responsibility for written application, ii, 47 admissibility of, as aflfecting warranty, ii, 57 ambiguity, ii, 59 ., as aflfecting other insurance, ii, 86, 123, 124 authority of clerk of company's agent, ii, 117 insurable interest, ii, 129 parol, as aflfecting interest, ii, 139 as to ownership, interest, or title, ii, 149, 174 admissibility of parol, as aflfecting interest or title, ii, 170 parol, as aflfecting chattel mortgage, ii, 196, 235 newspapers and public records as aflfecting knowledge of company, ii, 201 of experts as aflfecting operation of manufacturing establishment, ii, 283 rate of premium as aflfecting increase of hazard, ii, 304 of experts as affecting increase of hazard, ii, 305, 306 parol, as affecting alterations or repairs by mechanics, ii, 321 admissibility of expert, as affecting alterations or repairs by me- chanics, ii, 327 admissibility of parol, as affecting condition against prohibited articles, ii, 344 custom as affecting condition against prohibited articles, ii,-349 admissibility of expert as affecting condition against prohibited articles, ii, 349 admissibility of expert as affecting condition against vacancy or occupancy, ii, 368 cancellation, ii, 402 of insured's agent or broker as affecting cancellation, ii, 418 of authority to cancel, ii, 421, 423 agency, ii, 443 authority of soliciting agent, ii, 471 of authority of broker as company's agent, ii, 475, 476 of custom as affecting broker, ii, 477 entries in broker's book and conversations with him, ii, 477 as affecting personal liability of broker, ii, 484, 485 as to knowledge of agents, ii, 497 oral contract of renewal, ii, 520 waiver of prepayment of premium, ii, 527, 528 authority of broker as to premium, ii, 530, 533 Index to Vols. I and II. 755 Evidence — Continued. not admissible to change contract, ii, 524, 550 oral or parol contracts, ii, 567, 568 as affecting authority of agent to make oral or parol contract, ii, 570 contract not established by admissions of agent, ii, 570 parol, as affecting making of contract, ii, 589 in equity of oral contract, ii, 596 reformation, ii, 600, 605 see "Warranty." Examination under Oath, required by contract, i, 251 is no part of proof of loss, i, 252 does not waive proof of loss, i, 253 condition precedent, i, 253 effect of insured absenting himself, i, 253 must be required, essentials of demand, i, 253 time and place, i, 253 what is not requirement, i, 254 cannot be required to bring books to company's office, i, 254 insured may have attorney present, i, 255 material or relevant questions must be answered, i, 255 what is material, i, 256 must be specific demand for signing, i, 256 insured must be permitted to sign, i, 256 effect of misstatements, i, 256 not satisfactory, no ground of objection, i, 257 waiver, by renewal of negotiations, i, 257 waiver, by examination of third party, i, 257 insured not estopped by, i, 257 as evidence, i, 258 rule as to waiver, i, 258 no waiver by, i, 408 Maine statute, i, 543 Execution, sale on, as affecting change in interest, etc., ii, 242 Executor or Administrator, duty to give notice of loss, i, 10 payment of loss to, i, 30 see "Amount of Loss or Damage;" "Legal Representatives." " Payment of the Loss." Executory Contract, effect of, on interest or title, ii, 167-170 see " Interest or Title; " " Vendor and Vendee." Exemptions, Exceptions, and Limitations, liability for explosion, i, 122-125 lightning, i, 125, 126 (,7£i6 Index to Vols. I and II. Exemptions, Exceptions, and Limitations — Continued, fall of building, i, 126-129 . as specified by contract^ i, 129 Specific exception not covered under general description, i, 131 when specific insurance excepted, i, 131 see "Description; " "Neglect." Expense, putting in order, etc., i, 15 Explosion, liability limited by contract, i, 122 no preceding fire, i, 122 explosion in another building, i, 123 fire preceding explosion, i, 123 question of fact, i, 123 meaning of word " fire," i, 124 caused by lightning, i, 125 Fact, question of, as to failure of duty to save and preserve, i, 3 meaning of " immediate,'' as applied to notice of loss, i, 6 question of, as to adjoining and communicating, i, 75 question of, total loss, i, 121 question of, connection with explosion, i, 123 question of, as to fall of building, i, 127 question of, demand for appraisal by mail, i, 148 question of, good faith in selection of umpire on appraisal, i, 157 question of, as to competency of appraiser, i, 165 question of, as to failure of appraisal, i, 179 question of, as to waiver in appraisal, i, 191 question of, as to waiver of proofs of loss by local agent, i, 217, 219 question of, as to waiver of proofs of loss, i, 230 question of, as to delay in furnishing certificate, i, 245 question of, diligence of insured in complying with iron safe clause, i, 268 question of, waiver iron safe clause, i, 271 question of, fraud or false swearing, i, 281, 285 question of, contributory negligence of insured on claim acquired by subrogation, i, 365 question of, concealment by insured as affecting subrogation, i, 375 question of, as to authority of agent as affecting waiver, i, 414 question of, as to waiver, i, 446 question of, materiality in concealment, ii, 7, 8, 10 question of, opinion or representation, ii, 20 question of, materiality as affecting misrepresentation, ii, 21 I question of, as affecting warranty, ii, 37 question of, as affecting responsibility for statements in written application, ii 46, 47, 449 Index to Vols. I and II. 757 Fact — Continued. question of, as to promissory warranty, li, 64 question of, as to other insurance, ii, 124 question of, as affecting interest or title, ii, 174 question of, as affecting change in interest, ii, 224 question of, as to change in interest or title, ii, 238 question of, increase of hazard, ii, 298, 304, 314, 336, 352, 368, 396 question of, as to alterations or repairs by mechanics, ii, 325 question of, as to vacancy or unoccupancy, ii, 377, 396 question of, cancellation, ii, 410, 412, 419, 429 question of, agency, ii, 443, 457 question of, authority of agents, ii, 110, 171, 460^67, 502, 503 question of, authority of soliciting agent, ii, 471 question of, authority of broker to collect premium, ii, 480, 481 question of, opinion or representation by broker, ii, 483 question of, personal responsibility of broker, ii, 484, 485 question of, status of soliciting agent under statute, ii, 512 question of, renewal, ii, 522 question of, waiver of prepayment of premium, ii, 527, 528 question of, term, ii, 544 question of, cancellation of oral contract or binder, ii, 586 question of, oral or parol contract, ii, 567, 593, 596, 597 question of, as affecting legality, ii, 610 Fall, of wall, after fire, i, 86 Fall of Building, rule as imposed by contract, i, 126 question of fact, i, 127 result of fire, i, 127 not result of fire, i, 127 meaning of " fall," i, 128 meaning of part of building, i, 128 burden of proof, experts, i, 129 caused by explosion within it, i, 129 Fee Simple, see " Building on Ground not Owned in Fee Simple." Fire, what is meant by, i, 86 see " Loss or Damage." Fire Insurance, parties to contract and adjustment, i, 17 personal contract, i, 17, 36 Fixtures, permanent or otherwise, i, 77, 78 Florida, valued policy, i, 532 statutory provisions, i, 532; ii, 632 status of agents, ii, 632 return of unearned premium after loss, i, 532; ii, 632 758 Index to Vols. I and II. foreclosure or Notice of Sale, as imposed by contract, ii, 206 violation voids policy, ii, 207 effect of, upon moral risk, ii, 208 what is commencement of proceeding, ii, 208 knowledge of insured, ii, 208 condition subsequent, ii, 209 effect of loss jjayable to mortgagee and mortagee clause, ii, 209— 211 to what foreclosure proceedings refer, ii, 211 effect of making loss payable to third party, ii, 212 proceedings mean judicial proceedings, ii, 212 effect of advertising sale under deed of trust, ii, 212 construction of phrase " notice given of sale," ii, 213 waiver or estoppel when policy issues, ii, 213 no waiver after issue of policy, ii, 214 when insured not bound by notice of limitation of agent's authority, ii, 215 omission to cancel as evidence of estoppel, ii, 215 insured must be misled as element of estoppel, ii, 216 Forms, clauses or riders, i, 511 see " Standard Forms." Forthwith, meaning of, i, 14 Fraud, recovery back of money paid by insurance company,' i, 55 see "Reformation.'' Fraud or False Swearing, effect of, as imposed by contract, i, 274 must be fraudulent intent, i, 275 what it means, i, 276 mistake or reliance on information, i, 277 effect of intentional attempt, i, 277 effect not obviated by amount of loss, i, 277 not necessary to establish beyond reasonable doubt, i, 278 may be inferred, i, 278 upon what depends, i, 278 circumstantial evidence, i, 279 must be material, i, 279 alterations and erasures in books, i, 280 by agent of insured, i, 280 effect of difference in amount inl^proofs and on trial, i, 281 question of fact, i, 281, 285 waiver, i, 285 amount of loss affects intent, i, 282 raising amounts in invoices, i, 282 Index to Vols. I and II. 759 Traud or False Swearing — Continued. statements as to the property or interest, i, 282 what is not, i, 283 claiming money payable to third party, i, 284 statements as to title, i, 284 not fraud to pay premium after loss, i, 284 voids entire contract, i, 285, 287 intentional fire, i, 286 effect of valued policy statute, i, 287 when fraud to obtain insurance on destroyed property, i, 288 Gasolene, see " Illuminating Gas and Prohibited Articles." Georgia, statutory provisions, i, 533; ii, 633 loss or damage, i, 533 duty of insured, i, 533 notice of loss, i, 533 statement or proof of loss, i, 533 amount of loss, i, 533 apportionment, i, 533 valued policy, i, 534 option to rebuild, i, 534 adjustment, i, 534 payment of loss, i, 534 penalty, i, 534 adjuster, i, 534, 535 definition of agent, ii, 633 personal liability of agent, ii, 634 contract of fire insurance must be in writing, ii, 634 insurable interest, ii, 634, 635 application, ii, 635 construction, ii, 635 loss unknown to parties, ii, 635 misrepresentations, ii, 635 warranty, ii, 54 concealment, ii, 635 increase of hazard, ii, 635 change in interest, ii, 635, 636 other insurance, ii, 636 Gunpowder, see " Illuminating Gas and Prohibited Articles." Hay, in stack, location, i, 63 Heir, duty to give notice of loss, 1, 10 Idaho, statutory provisions, i, 536 return of premium, i, 536 760 Index to Vols. I and II. nUnois, statutory provisions, ii, 636 Illuminating Gas or Vapor and Prohibited Articles, use of, as affecting increase of hazard, ii, 299 as imposed by contract, ii, 331 construction of the condition, ii, 333 policy void without regard to increase of risk or cause of fire, ii, 333 ignorance no excuse, ii, 334 construction of the word " premises," ii, 334 construction of the words " kept and used on premises," ii, 335 construction of the word " allowed," ii, 335 construction of parenthetical words applicable to kerosene, ii, 335 construction of the words " for lights," and " by daylight," ii, 336 reduced or residuum of petroleum, ii, 336 may be increase of hazard, ii, 336 every occupation not trade or manufacture, ii, 337 judicial notice, ii, 337 effect of use of general words, ii, 337 construction of special permission or privilege, ii, 338 special permit limited in time by its terms, ii, 338 does not prevent ordinary repairs, ii, 339 use of gasolene without permission, ii, 339 keeping in barn does not prevent forfeiture for use in dwelling, ii, 340 keeping of gasolene not excused by abandonment of specific purpose, ii, 340 rate of premium conveys no notice, ii, 340 custom in use for exhibition purposes, ii, 341 contract ends when condition violated, ii, 341 contract not revived without consent of company, ii, 341 occasional or temporary necessary use for household purposes or cleaning machinery, ii, 342, 343 as affected by ordinary repairs, ii, 342 effect of written description, ii, 343, 344 admissibility of parol evidence, ii, 344 risk of particular business described, ii, 344-347 sale incidental to business does not permit manufacture, ii, 347 drawing of kerosene, ii, 348 keeping of gunpowder, ii, 348 effect of permission to be occupied for hazardous or extra-hazardous purposes, ii, 348 as affected by usage or custom, ii, 349 admissibility of expert evidence, ii, 349 Index to Vols. I and II. 761 Illuminating Gas or Vapor and Prohibited Articles — Continued, keeping or use by tenant, ii, 349 as affected by waiver or estoppel, ii, 350, 351 burden of proof, ii, 351 article not prohibited may constitute increase of hazard, ii, 352 effect of new language, ii, 352-355 Incendiary Fire, see " Warranty." Increase of Hazard, as imposed by contract, ii, 288 effect of Ohio statute, ii, 289 policy void though fire caused by independent means, ii, 290 change does not mean increase, ii, 290 burden of proof, ii, 290 condition has reference to future, ii, 291 continuation of an existing use, ii, 291 knowledge or control essential element, ii, 291 acts of tenant, ii, 291 as affected by time, ii, 293 temporary or permanent, ii, 293 policy rendered void or voidable and not merely suspended, ii, 294 contract not revived by acts of insured, ii, 294 pleasure of insured cannot be substituted for obligations of contract, ii, 295 temporary increase suspends policy, ii, 295 balancing or comparison of risks not admissible, ii, 297 effect of ordinary repairs, ii, 298 unauthorized alterations, ii, 298 effect of use of prohibited articles, ii, 299 materiality of written application, ii, 299 effect of consent to removal to new location, ii, 300 as affected by other clauses or conditions in the policy, ii, 300 application by construction to other conditions, ii, 300 presumption as to assumption of risk, ii, 300 construction of builders' risk, ii, 301 limited by existing or contemplated uses or occupation, ii, 301 construction of the words " increase of risk," ii, 302 as affecting construction of a warranty, ii, 302 as affected by acts in violation of law, ii, 303 interest of mortgagee, and effect of mortgagee clause, ii, 303 no application to liens or judgments, ii, 304 as affected by rate of premium, ii, 304 test of, ii, 304 as affected by opinion evidence of experts, ii, 305, 306 762 Index to Vols. I and II. Increase of Hazard — Continued. when policy not divisible, ii, 307 as affected by waiver or estoppel, ii, 307, 308 knowledge or notice to company's agent after issue of policy, ii, 309 effect of demand and receipt of additional premium, ii, 309 insured has reasonable time to comply with special conditions, ii, 309 pleading, ii, 310 burden of proof, ii, 310 may be a question of law, ii, 310 no inference in favor of the insurance company, ii, 311 when proper to set aside verdict, ii, 313 ordinarily a question of fact, ii, 298, 304, 314, 336, 352, 368, 396 what may increase hazard — illustrative cases, ii, 315 what is not an increase of hazard — illustrative cases, ii, 316 as affected by alterations or repairs by mechanics, ii, 323, 326, 328 as affected by condition against prohibited articles, ii, 336 as affected by vacancy or unoccupancy, ii, 369 as affecting renewal, ii, 517, 518 reinsured company cannot consent to, ii, 554 Georgia statute, ii, 635 North Dakota statute, ii, 664 Oklahoma statute, ii, 665 South Dakota statute, ii, 675 Incumbrance, misrepresentation, ii, 27 see " Warranty." Incumbrance by Chattel Mortgage, as imposed by contract, ii, 192 violation of condition voids policy, ii, 194 no question of good faith, concealment or increase of risk, ii, 194 burden of proof, ii, 194 instrument must be legally operative, delivery, ii, 195 not dependent on form, ii, 195 lien not chattel mortgage, ii, 195 construction of condition, ii, 195 application of rule admitting parol evidence, ii, 196 by one partner to another, ii, 197 stocks of merchandise and the like, ii, 197 effect of description as " held in trust or sold but not delivered," ii, 197 as affected by subsequent release, payment or discharge, ii, 198 company not bound to make inquiry, duty of insured, ii, 199 effect of oral application without inquiry, ii, 200 Index to Vols. I and II. 763 Incumbrance by Chattel Mortgage — Continued. waiver or estoppel in issue of policy, ii, 201 ■when company chargeable with knowledge, newspapers, public rec- ords, ii, 201 substitution of one mortgage for another, ii, 203 as affected by decrease or increase in amount, ii, 203 change in form, ii, 203 duty of insured to procure written consent, agent's oral promise in- sufficient, ii, 204 contract severable, ii, 204 effect of making loss payable to third party whose mortgage also includes real property, ii, 212 Indiana, statutory provisions, i, 536 notice of loss, i, 536 certificate, i, 536 limitation, i, 536 coinsurance, i, 536 Infant, contract with, i, 20 Insurable Interest, distinction, i, 19 must be alleged and proved, exception — presumption, ii, 125 reason for necessity of allegation and proof, ii, 127 not subject of waiver, ii, 127 test of, not dependent on title or possession, equitable interest, ii, 127 may be representative as well as personal, ii, 128 effect of adjudication in bankruptcy, ii, 129 pleading and evidence, ii, 129 when, ii, 130 when none, ii, 136 no answer to breach of condition, ii, 129, 150 assignee of policy must have, ii, 265 reinsurance, ii, 547 wager policies without interest void, ii, 610 California statute, ii, 623, 624 Georgia statute, ii, 634, 635 Montana statute, ii, 648, 649, 652 North Dakota statute, ii, 656 South Dakota statute, ii, 668, 672 Insured, duty to save and preserve property, i, 1 standard of care, time of fire, i, 2 interference by, with efforts of others to save, i, 3 duty to save life superior, i, 3 764 Index to Vols. I and II. Insured — Continued. death of, as aflfeeting notice of loss, i, 10 duty to protect from further damage, i, 11 duty to separate inventory, and exhibit remains, i, 13 effect of death on claim to insurance, i, 30 see " Parties." Interest, when added to claim, i, 354 effect of independent promise to pay, i, 355 effect of trustee process, i, 355 on claim acquired by subrogation, i, 362 " Interest May Appear," meaning and effect of, i, 25, 26 Interest or Title, concealment of, ii, 9, 11 as affecting misrepresentation, ii, 23, 24 insurable interest, ii, 125 statement of interest, ii, 137 other than unconditional and sole ownership, ii, 146 building on ground not owned in fee simple, ii, 180 incumbrance by chattel mortgage, ii, 191 foreclosure or notice of sale, ii, 205 change in interest, title, or possession, ii, 216 assignment of policy, ii, 255 and see the several above subjects in this index California statute, ii, 627 Maine statute as affecting husband or wife, ii, 639 see " Warranty." Interest Other Than Unconditional and Sole Ownership, as imposed by- contract, ii, 148 breach of condition forfeits insurance, ii, 149 effect of written description, ii, 149, 150 evidence, ii, 149 insurable interest no answer to breach of condition, ii, 150 meaning of unconditional sole ownership, ii, 151 construction of condition, ii, 151 when ownership sole and unconditional, ii, 152 requisites of unconditional and sole, ii, 152 test of sole and unconditional ownership, ii, 152 several may together be sole and unconditional owners, ii, 153 condition applies to ownership when policy issues, ii, 153 when no written application and no inquiry, presumption, ii, 154 company may rely upon condition, not necessary to inquire as to title, ii, 150-156 effect of acceptance of policy, ii, 156 Index to Vols. I and II. 765 Interest Other Than Unconditional and Sole Ownership — Cont'd. company put upon inquiry by ambiguous answer in application, ii, 156 distinction between interest and title, ii, 157 equitable interest, ii, 157 construction of " interest,'' ii, 157 ownership of property described in general words as class or kind, ii, 160 partnership interest, ii, 160, 161 policy on use and occupancy, effect of pooling arrangement, ii, 162 deed intended as mortgage, ii, 162 a deed must be delivered, effect of recording, ii, 162 adding words to deed after execution, ii, 163 «ffect of defective title, ii, 163 equitable interest, ii, 163 «ffect of fraud, ii, 164 mortgagee as insured, ii, 164 effect of liens or incumbrances, ii, 164 ■vendee under an executory contract of sale, ii, 167 as tested by right to enforce specific performance, assumption of loss, ii, 168 ■effect of executory contract on ownership of vendor, ii, 169 effect of option to purchase, ii, 169 vendee of personal property under conditional contract of sale lessee of personal property, ii, 170 company not chargeable with knowledge of records, ii, 170 admissibility of parol evidence, ii, 170 as affected by waiver or estoppel, ii, 170 pleading evidence, burden of proof, ii, 174 effect of knowledge of broker, ii, 174 contract severable, ii, 175 when insured sole and unconditional owner, ii, 175 when insured is not sole and unconditional owner, ii, 178 Interpleader, by company, on claim of mortgagee, i, 41 effect on limitation clause, i, 398 Interpretation, see " Construction." Inventory, damaged and undamaged property, i, 13 distinct from proofs, i, 14 object of, i, 14 effect of failure to make, i, 14 substantial compliance sufficient, i, 15 "when not required, i, 15 of stock, as evidence, i, 103, 104 766 Index to Vols. I and II. Invoices, raising amounts, i, 282 see " Books of Account," etc. ; " Iron Safe Clause." Iowa, statute prescribing period before loss payable, i, 349 statutory provisions, i, 537; ii, 636 valued policy, i, 537 notice of loss, i, 537, 538 statement or proof of loss, i, 537, 538 construction act of insured, i, 537, 538 appraisal, i, 538 option to rebuild, i, 538 payment of loss, i, 538 limitation, i, 538 coinsurance, i, 538 apportionment, i, 539 statute as aflFeeting assignment of policy, ii, 258 copy of application attached to policy, ii, 636 status of agents, ii, 636, 637 Iron Safe Clause, reasonable and enforceable, i, 264 vrhen promissory representation, i, 265 when warranty, i, 265 construction, i, 265 tendency and weight of modern authority, i, 267 standard of care, i, 268 meaning of failure to produce books, i, 268 duty and diligence of insured, i, 268 question of fact, i, 268 insured responsible for negligence of employees, i, 269 inventory requisites, invoices, i, 269-271 knowledge of agent, no waiver, i, 271 knowledge may be element of estoppel, i, 272 waiver by agent after policy issues, i, 272 waiver by adjuster, i, 272a. eflFect of examination of books by adjuster, i, 272b non-waiver agreement, i, 272b destruction of safe and contents, i, 272b meaning of fire-proof safe, i, 273 viola-tion affects stock only, i, 273 form of, i, 520 Jury, question for, see " Fact." Kansas, statutory provisions, i, 539 ; ii, 637 valued policy, i, 539 description, i, 539 vacant or imoccupied, ii, 637 Index to Vols. I and II. 767 Kentucky, statutory proviaions, i, 540; ii, 637 valued policy, i, 540 status of agents, ii, 637, 638 warranty, ii, 638 personal liability of agents, ii, 638 Kerosene, see " Illuminating Gas and Prohibited Articles." Landlord and Tenant, see "Amount of Loss or Damage;" "Tenant." Law, question of meaning of " immediate " as applied to notice of loss, i, 6 question of, as to diligence in furnishing statement or proof of loss, i, 201 question of, as to waiver of proof of loss, i, 230 see " Construction." Lease, as affecting interest or title, ii, 186 see " Building on Ground not Owned in Fee Simple." Legality, intent of contract as affecting, ii, 610 contract as affected by, ii, 610 question of fact, ii, 610 effect of permission to use for unlawful purpose, ii, 611 effect of specific provision as to use for unlawful purposes, ii, 612 as affected by insured's failure to procure license, ii, 612 when contract not void as against public policy, ii, 612 when ownership not unlawful, ii, 612 effect of statute imposing privilege tax, ii, 613 when contract not void as in restraint of trade, ii, 614 effect of statute requiring foreign corporation to procure license to transact business, ii, 614 contract made on Sunday, ii, 614 combinations, ii, 615 Lloyds, ii. 618 sec " Constitution." Legal Representative, duty to give notice of loss, i, 10 who included, i, 28, 29 ordinary meaning, i, 29 Legatee, duty to give notice of loss, i, 10 Liable, meaning of, i, 20 License, see "Legality." Lien, of mortgagee upon insurance, i, 41 Liens or Incumbrances, see "Interest or Title;" "Warranty." 768 Index to Vols. I and II. Lightning, liability limited by contract, i, 125 burden of proof, i, 126 form, i, 513 Limitation, insured may obtain relief by cross-bill in suit by companies to enforce award, i, 185 waiver of, by demanding books, bills, and vouchers, i, 263 as imposed by contract, i, 386 condition valid and binding, i, 387 part of a parol contract, i, 387" effect of war, i, 388 does not apply to independent agreement, i, 388 distinction between adjustment and promise to pay, i, 388 effect of death of insured, i, 389 binding upon mortgagee, i, 389 runs from date of fire, i, 390 may not run until loss is payable, i, 390 when time expires on Sunday, i, 392 computation of time, i, 392 effect of attempt to commence action under statute, i, 392 Sling prsecipe for summons, i, 393 distinction between setting aside service and summons, i, 393 amendments, i, 394, 397 failure of previous action, i, 394 continuance of action in law or equity, exceptions, i, 394, 395 statute may permit new action, i, 396 effect of garnishee proceedings, i, 396 effect of injunction, i, 396, 398 relief by cross-bill in equity, i, 396, 398 effect of bad faith on part of insurance company, i, 397 effect of insurance on mechanic's lien interest, i, 397 effect of impossibility of complying vdth policy, i, 397 effect of interpleader by third party, i, 398 waiver of, i, 399 no waiver when opportunity to commence suit, i, 401 waiver of, by providing fund for payment by insolvent company, i, 401 waiver in appraisal, i, 402 waiver by local agent or adjuster, i, 402 extension of time, i, 403 effect of statute prescribing different limitation, i, 403 as applied to Lloyds policy, i, 404 no application to reinsurance contract, i, 388 ; ii, 556 Arkansas statute, i, 524, 525 Connecticut statute, i, 531 Index to Vols. I and II. 769 Ximitation — Continued. Indiana statute, i, 536 Iowa statute, i, 538 Minnesota statute, i, 551 Mississippi statute, i, 555 North Carolina statute, i, 568, 570 Vermont statute, i, 589 Xloyds, apportionment of loss under, i, 341 provisions for suit, i, 355 limitation clause, i, 404 right to enforce contract of reinsurance, ii, 558 New York statute as to use of policy, i, 568 see " Legality." Location, as limited by contract, i, 56 property must be in place specified, i, 57 block of buildings, one entrance, i, 58 dwelling and additions, i, 58 eflfect of separation into items, i, 59 general description covering entire plant, i, 59 meaning of word " factory," i, 59 admission of parol evidence, i, 60 part of description false, i, 60 ambiguity in description, i, 61 usage and custom, i, 61 consent of removed agents, i, 62 knowledge or verbal permission of agent, i, 62 mistake in written application, i, 62 eflfect of consent to removal to new, i, 63 hay in stack, i, 63 as affected or modified by written description, i, 63 removal of property endangered by fire, i, 64 as aflfeeting increase of hazard, ii, 300 see " Warranty.'' Xoss or Damage, caused by neglect to save and preserve, i, 1 failure to protect from further damage, i, 11 eflfect of, making payable to third party, i, 26 ascertainment of, i, 56 by fire as imposed by contract, i, 84 meaning of " direct," i, 85 what is proximate cause, i, 85 caused by removing property endangered by fire, i, 86 fall of wall after fire, i, 86 -what includes, i, 86 Vol. II.— 49 770 Index to Vols. I and II. Loss or Damage — Continued. smoke and steam, overheating, i, 87 caused by insured, i, 88 duty to keep damaged goods, i, 148 effect of making loss payable to third party on statement of in-^ terest, ii, 140 California statute, i, 526 Georgia statute, i, 533 Montana statute, i, 562 North Dakota statute, i, 572 South Dakota statute, i, 584 see "Amount of Loss or Damage;" "Damage;" "Payment of Loss." Louisiana, standard form of policy, i, 474, 541 statutory provisions, i, 540; ii, 638 valued policy, i, 540, 541 return of premium, i, 540, 541 option to replace, etc., i, 541 status of agents, ii, 638, 639 Mail, notice of loss by, i, 7 demand for appraisal, i, 149 service of proof of loss by, i, 200, 203 use of, as affecting oral contracts or consummation of contract, ii,. 576 use of, in cancellation, ii, 403, 414, 415 see " Evidence." Maine, standard form of policy, i, 494, 544 statutory provisions, i, 542; ii, 639 notice of loss, i, 542 statement or proof of loss, i, 542 certificate, i, 542 books of account, etc., i, 543 examination, i, 543 mortgagor and mortgagee, i, 543 subrogation, i, 544 appraisal, i, 545 as affecting other insurance, ii, 82 insurable interest, husband or wife, ii, 639 status of agents, ii, 639, 640 Manufacturers, see "Amount of Loss or Damage." Manufacturing Establishment, see " Operation of Manufacturing Estab- lishment;" "Vacant or Unoccupied." Index to Vols. I and II. 771 Haiket Value, see "Amount of Loss or Damage." Maryland, statutory provisions, ii, 640 broker, ii, 640 Massachusetts, standard form of policy, i, 497, 546 statutory provisions, i, 546; ii, 641 amount of loss, i, 546 return of premium, i, 546 mortgagor and mortgagee, i, 546 appraisal, i, 548 misrepresentation, ii, 641 ■warranty, ii, 641 application must be made part of policy, ii, 641 agent or broker, ii, 641 personal liability of agent, ii, 641 construction of the word " noon," ii, 642 Materiality, see "Concealment;" "Misrepresentation;" "Warranty." Mechanics, see "Alterations or Repairs." Michigan, standard form of policy, i, 481, 548 statutory provisions, i, 548; ii, 642 coinsurance, i, 550, 551 statute as affecting other insurance, ii, 82 provision added to standard policy, ii, 642 acts of agents, ii, 642 limitation, as to effect of breach of condition, ii, 642 vacant or unoccupied, ii, 642 Minnesota, standard form of policy, i, 501, 553 statutory provisions, i, 551; ii, 643 limitation, i, 551 coinsurance, i, 551, 552, 555 certificate, i, 551 valued policy, i, 552 apportionment, i, 552 mortgagor and mortgagee, i, 552 appraisal, i, 554 adjuster, i, 555 application of statute to condition as to occupancy, ii, 359 status of agents, ii, 643 misrepresentation, ii, 643 warranty, ii, 643 a.pplication must be part of policy, ii, 643 personal liability of agent, ii, 643 772 Index to Vols. I and II. Misrepresentation, as imposed by contract, ii, 13 independent of contract, ii, 15 eflfect of Wisconsin statute, ii, 15 agency statute, ii, 15 representation distinguished from warranty, ii, 15 representations basis of insurance, efifeet of falsity, ii, 15 as affecting reinsurance, ii, 16 representation relates to past or existing fact, ii, 16 when insured bound by written application, ii, 16 eflfect of filling application by company's agent, ii, 17 responsibility of insured for his own misstatements, ii, 17 not predicated on defective answers in application, ii, 18 furnished memoranda or description as, ii, 18 when insured not bound by verbal representations, ii, 18 influence of, not assumed, ii, 19 none when company knows the facts, ii, 19 expression of opinion or belief, ii, 20 opinion or representation question of fact, ii, 20 by insured's agent, ii, 20 must be material, ii, 21 materiality question of fact, ii, 21 burden of proof, evidence, ii, 21 rate of premium as evidence, ii, 23 company put upon inquiry as to interest or title, ii, 23 when representation as to interest or title material, ii, 24 when no misrepresentation as to interest or title, ii, 24 as aflfecting construction or situation of building, ii, 25 when none as to building or other subject of insurance, ii, 26 as to other insurance, ii, 27 incumbrance, ii, 27 as to value, ii, 28 contract severable, ii, 29 as aflfecting reinsurance, ii, 553 as aflfecting right to reformation, ii, 607 California statute, ii, 626 Georgia statute, ii, 635 Massachusetts statute, ii, 641 Minnesota statute, ii, 643 Montana statute, ii, 650, 651 North Dakota statute, ii, 659 South Dakota statute, ii, 670, 671 Tennessee statute, ii, 675 see "Fraud." Index to Vols. I and II. 773 Itlississippi, statutory provisions, i, 555; ii, 644 limitation, i, 555 valued policy, i, 556; ii, 644 statement or proof of loss, i, 556 ; ii, 644 mortgagor and mortgagee, i, 556; ii, 645 adjuster, i, 556 status of agents, ii, 646 personal liability of agent, ii, 647 Missouri, standard form of policy, i, 474, 560 statutory provisions, i, 558; ii, 647 valued policy, i, 588 apportionment, i, 558, 559 rebuild, repair, etc., i, 559 adjustment and adjuster, i, 559, 561 appraisal, i, 559 books of account, etc., i, 560 statement or proof of loss, i, 560 notice of loss, i, 561 penalty, i, 561 statute as affecting warranty, ii, 33 warranty, ii, 647 status of agent, ii, 647 Mistake, see " Reformation." Idontana, statutory provision, i, 561 ; ii, 648 mortgagor and mortgagee, i, 561 valued policy, i, 562 return of premium, i, 562 loss or damage, 1, 562 notice of loss, ij 562 statement or proof of loss, i, 563 waiver, i, 563 certificate, i, 563 contribution, i, 563 amount of loss, i, 563 insurable interest, ii, 648, 652 change in interest, etc., ii, 649, 652 concealment, ii, 649, 650 misrepresentation, ii, 650, 651 insurance by agent or trustee, ii, 652 reinsurance by part owner, ii, 652 use of general terms, ii, 652 successive owners, ii, 652 774 Index to Vols. I and II. Montana — Continued. open, valued, and running policies, ii, 652 effect of acknowledgment, receipt of premium, ii, 652 warranty, ii, 653 premium, ii, 653, 654 other insurance, ii, 654 reinsurance, ii, 654 alterations and acts of the insured, ii, 654 Mortgagee, interest of, i, 31 effect of mortgagee clause, i, 33 effect of neglect or wrongdoing by, i, 33 meaning of act or neglect by, i, 34 limitation on effect of mortgagee clause, i, 34 subrogation or assignment under mortgagee clause, i, 35 effect of assignment by, i, 36 effect of payment of loss to, i, 36 effect of settlement with mortgagor on void policy, i, 36 insurance of interest of, i, 37 effect of making loss payable to, without mortgagee clause, i, 37 settlement or adjustment as affecting, i, 38, 39 effect of appraisal, i, 38 may claim waiver, i, 42 notice of change of title, foreclosure, i, 43 company must exercise right to assignment in reasonable time, i, 43 special rule of construction affecting, i, 44 forms of mortgagee clause, i, 513-515 effect of making loss payable to mortgagee, i, 26 claim of, when payable to him, i, 39 effect of repairs by owner, i, 41 lien of, upon insurance, i, 41 company may interplead on claim of, i, 41 may claim benefit of specific promise to pay, i, 49 owner acting as agent of, as affecting concealment, ii, 9 right to assign his interest in policy, ii, 274 Mortgagor and Mortgagee, appraisal, when loss payable to mortgagee, i, 152 duty as to furnishing proof of loss, i, 208 effect of option to rebuild, i, 299 rights of, as affected by apportionment clause, i, 315-317 insurance company may demand assignment, i, 360 subrogation, i, 375-382 mortgagee's right to settle with other companies, i, 378 limitation clause binding, i, 389 Index to Vols. I akd II. 775 Mortgagor and Mortgagee — Continued. construction of the words " act or neglect," in mortgagee clause, ii, 188 as afiFected by foreclosure or notice of sale, ii, 209-211 interest of mortgagee as affected by increase of hazard, ii, 303 effect of mortgagee clause, as to cancellation, ii, 415 California statute^ i, 525 Connecticut statute, i, 530 Maine statute, i, 543 Massachusetts statute, i, 546 Minnesota statute, i, 552 Mississippi statute, i, 556; ii, 645 Montana statute, i, 561 North Carolina statute^ i, 569 North Dakota statute, i, 571 South Dakota statute, i, 583 see "Other Insurance;" "Parties;" "Subrogation." Ifame, see " Parties." JTehraska, valued policy, i, 563 statutory provisions, i, 563; ii, 655 status of agents, ii, 655 personal liability of agents, ii, 655 cancellation, ii, 655 neglect, to save and preserve at time of fire, i, 1 to protect from further damage, i, 11 New Hamx>shire, standard form of policy, i, 504, 564 statutory provisions, i, 564 New Jersey, standard form of policy, i, 474, 564 statutory provisions, i, 564 coinsurance, i, 566 appraisal, i, 566 Nevada, statutory provisions, i, 564 return of premium, i, 564 New York, standard form of policy, i, 474, 567 statutory provisions, i, 567 ; ii, 655 Lloyds use of standard policy, i, 568 statement or proof of loss, i, 568 return of premium on cancellation, ii, 655 North Carolina, standard form of policy, i, 474, 569 statutory provisions, i, 568; ii, 656 776 Index to Vols. I and II. North Carolina — Continued, limitation, i, 568, 570 return of premium, i, 569 mortgagor and mortgagee, i, 569 appraisal, i, 570 adjuster, i, 571 conditions as to warranty, ii, 656 agents, personal liability, ii, 656 North Dakota, standard form of policy, i, 474, 574 statutory provisions, i, 571; ii, 656 mortgagor and mortgagee, i, 571 parties, i, 571, 572 valued policy, i, 572 loss or damage, i, 572 notice of loss, i, 573 statement or proof of loss, i, 573 waiver, i, 573 certificate, i, 573 contribution, i, 573 amount of loss, etc., i, 574 construction, i, 575 insurable interests, ii, 656, 657 change in interest, etc., ii, 657, 658 concealment, ii, 658 misrepresentation, ii, 659 premium, ii, 660, 662, 663 cancellation, ii, 661 warranty, ii, 661. 662 other insurance, ii, 663 reinsurance, ii, 663 alterations, etc., ii, 664 increase of hazard, ii, 664 Notice of Loss, duty to give, i, 4 when damage by lightning or cyclone, 1, 5 when required by statute, i, 5 meaning of word " immediate," ij 5 proof of loss as, i, 6 by whom given, i, 7 by mail, i, 7 when not immediate, i, 8 waiver of, i, 8 authority of local agent, i, 9 death does not relieve, i, 10 Ikdex to Vols. I and II. 777 Notice of Loss — Continued. Alabama statute, i, 522 California statute, i, 526 Georgia statute, i, 533 Indiana statute, i, 536 Iowa statute, i, 537, 538 Maine statute, i^ 542 Missouri statute, i, 561 Montana statute, i, 562 North Dakota statute, i, 573 Pennsylvania statute, i, 579 South Dakota statute, i, 584 Tennessee statute, i, 586 Notice of Sale, see " Foreclosure or Notice." Occupation, see " Use or Occupation.'' Ohio, statutory provisions, i, 575 ; ii, 664 valued policy, i, 575 building, i, 576 statute as affecting warranty, ii, 33 statute as aflfecting other insurance, ii, 82 application of statute to change in interest, etc., ii, 219 statute as affecting increase of hazard, ii, 289 status of agents, ii, 664 cancellation, ii, 664 Oklahoma, statutory provisions, i, 576; ii, 665 valued policy, i, 576 amount of loss, etc., i, 576 application attached to policy, ii, 665 alteration in use and increase of hazard, ii, 665 Operation of Manufacturing Establishment, as imposed by contract, ii, 278 violation of condition voids policy, ii, 280 not revived by subsequent operation, ii, 280 policy may be suspended by special provisions, ii, 280 provision as to limitation of night work substantial, ii, 280 what is a manufacturing establishment, ii, 280 not in operation when policy issues, ii, 281 as affected by usage or custom, ii, 282 temporary cessation not ceasing to pperate, ii, 282 partial cessation of operation, ii, 283 stoppage of machinery not ceasing to operate, ii, 283 when mill is shut down, ii, 283 opinion evidence, ii, 283 778 Index to Vols. I and II. Operation of Manufacturing Establishment — Continued. no cessation if premises continue same as when policy issued, ii, 284 effect of permitted repairs and alterations, ii, 284 effect of keeping watchman, ii, 285 affected by character and use of property, ii, 285 presumption as to knowledge of company, ii, 285 as affected by waiver or estoppel, ii, 286 when policy not divisible, ii, 286 Option to Repair, Rebuild, or Reiplace, waiver of, by appraisal, i, 191 as affected by delivery of proofs to local agent, i, 217 as imposed by contract, i, 293 right of insured to repair, i, 295 notice by insured, i, 295 effect of removal or disposition of property, i, 295 assignment subject to, i, 295 power of adjuster, i, 296 as affected by time, i, 296 must be in limited time, i^ 297 affects money demand, i, 297 effect of exercise, as building contract, i, 297 when more than one company on loss, i, 298 effect of apportionment clause, i, 298 effect of notice, i, 299 effect on mortgagee, i, 299 rents as damage, i, 300 effect of refusal to permit, i, 300 effect of city ordinances, i, 300 effect of expense being less than insurance, i, 301 equity will not interfere, remedy at law, i, 301 does not depend upon written evidence, i, 301 notice must be unconditionalj i, 301 effect of valued policy statute, i, 302 exercise of, as waiver, i, 302 waiver of appraisal, i, 302 effect of appraisal agreement, i, 303 waiver by appraisal, i, 303 Georgia statute, i, 534 Iowa statute, i, 538 Louisiana statute, i, 541 Missouri statute, 1, 559 Option to Take at Appraised Value, as imposed by contract, i, 289 valid and enforceable, i, 290 as affected by time, i, 290 Index to Vols. I and II. 779 Option to Take at Appraised Value — Continued, effect of, disposition of damaged goods, i, 290 effect of notice, i, 290 when company not prejudiced, i, 291 exercise of, as waiver, i, 291 effect of repudiation of award, i, 292 authority of adjuster, i^ 292 Oral or Parol Contract — Consummation of Contract, as affecting other insurance, ii, 86, 89 renewal, ii, 520^ 522 legally operative and binding, exceptions, ii, 564 essential elements, ii, 565 must be meeting of minds as to terms and property, ii, 566 what is necessary to establish, ii, 567 evidence, ii, 567, 568 remedy, ii, 567, 594 as affected by construction, ii, 568 authority of agent, ii, 569-572 liability of agent to repay premium, ii, 572 when risk deemed to commence, ii, 573 none when property destroyed, ii, 573 amount must be fixed after refusal to renew, ii, 573 risk may be inferred, ii, 573 particular company must be designated, ii, 574 contract may be complete though misunderstanding as to term, ii, 574 AS affected by indefiniteness as to time or rate of premium, ii, 575 as dependent upon payment of premium, ii, 575 rate of premium and term may be implied, ii, 575 tested by insured's obligation to pay premium, contract mutual, ii, 576, 593 when acceptance of application binds company, ii, 576 use of mail, ii, 576 must be evidence of acceptance, ii, 577, 578 retention of application insuflficient, ii, 578 as dependent upon acceptance by insured, ii, 579 rights of parties fixed at time of fire, ii, 579 effect of delay in acting upon application, ii, 580 effect of none prior to delivery of policy, ii, 580 ■effect of acceptance of policy, ii, 580 sufficient cannot be made conditional by telegraph, ii, 581 contract by deposit of letter, ii, 581 as affected by statute of frauds, ii, 581 .subject to conditions in policy, ii, 582, 584 780 Index to Vols. I and II. Oral or Parol Contract — Consummation of Contract ■ — Continued. conditions requiring written indorsement inoperative, ii, 583 when conditions operative, ii, 583 binder subject to conditions in policy, ii, 584 termination of binder under special provision, ii, 584 cancellation, ii, 584, 586 binder does not contain whole contract, ii, 583 binder as renewal, ii, 585 when binder issued for new insurance, ii, 585 effect of specific time limitation on binder, ii, 585 binder subject to usage and custom, ii, 586 binder as dependent upon rate of premium, ii, 587 presumption as to division of risk on binder, ii, 587 particular company must be designated, ii, 587 delivery of policy not essential, ii, 587 as affected by delivery of policy, ii, 588 admissibility of parol evidence as affecting making of contract, ii, 589 renewal without request of insured, ii, 590 delivery of policy to broker upon condition, ii, 590 contract conditioned upon termination or cancellation of other insurance, ii, 590 mistake may be corrected in equity, ii, 591 as affected by negotiation on Sunday, ii, 591 as affecting right to obtain policy after fire, ii, 592 repudiation after loss ineffective, ii, 592 measure of damage, ii, 592 burden of proof, ii, 593 question of fact, ii, 567, 593, 596, 597 as affected by weight of evidence, ii, 593 strictness of proof as affected by renewal,' ii, 594 pleading, ii, 595 retention of jurisdiction by court of equity, ii, 596 evidence in equity, ii, 596 verdict of jury not disturbed on appeal, ii, 597 Oregon, statutory provisions, i, 576 valued policy, i, 576 return of premium, i, 577 Other Insurance, as affected by misrepresentation, ii, 27 as affected by warranty, ii, 73 as imposed by contract, ii, 81 as affected by Maine statute, ii, 82 as affected by Michigan statute, ii, 82 as affected by Ohio statute, ii, 82 Index to Vols. I and II. 781 Other Insurance — Continued. condition reasonable and enforced, ii, 83 ■what constitutes, ii, 83 joint and several interests, ii, 84 effect of violation of condition, ii, 85 construction of the word " insured," ii, 85 resulting from operation of law without design, ii, 86 delivery of policy upon condition, ii, 87 as affected by cancellation, ii, 87 effect of non-compliance with statute, ii, 87 motive of insured immaterial, ii, 88 effected at same time, ii, 88 effect of binder or certificate of temporary insurance, ii, 88 effect of insTiflScient parol contract of insurance, ii, 89 in excess of permitted amount, ii, 89 effect of blank permission, ii, 90 interest of mortgagor and mortgagee, ii, 90 of vendee's interest, ii, 91 must be by consent or authority, ii, 92, 95 as affected by act of mortgagee, ii, 92 cancellation and substitution without authority, ii, 93-95 as affected by waiver or estoppel, ii, 93 as affected by permission for other concurrent insurance, 96-100 effect of a coinsurance clause as a consent, ii, 100 as between a first and second policy, ii, 101 distinction between void and voidable insurance, ii, 102 as affected by question of validity, ii, 103 construction of the words " valid or not," ii, 101, 104, 105 policy voidable only, ii, 106 estoppel by issue of policy or renewal with knowledge of facta, ii, 106. knowledge of agent not assumed, ii, 107 effect of knowledge of other insurance, ii, 106, 109, 110, 111 issue of policy with knowledge does not operate as waiver — ad- missibility of parol evidence, ii, 109 when knowledge of agent not that of the company, ii, 109 knowledge of company's soliciting agent, ii, 110 authority of soliciting agent, ii, 110 effect of expression of intention to procure, ii. 111 effect of expression of opinion by agent, ii. 111 not necessary if consent in writing that it be written on the policy, ii. 111 effect of limitation upon agent's authority after issue of the policy, ii, 112 1 782 Index to Vols. I and II. Othei Insurance — Continued. authority of agent as to waiver after issue of policy must be shown, ii, 113 estoppel after issue of the policy, authority of agent, ii, 114 consent to assignment as waiver, ii, 116 effect of alteration in form as waiver, ii, 116 authority of agent, presumption, evidence, ii, 116 authority of clerk of company's agent — evidence, ii, 117 company mot bound by broker; ii, 117 construction of written restriction, ii, 118 agency in placing surplus lines, ii, 118, 119 estoppel by failure to cancel, ii, 119, 121 reformation, ii, 121 application of written permission, ii, 121 effect of removal and merger of stock, ii, 122 eflfeet of renewal or substitution, ii, 122 contract severable, ii, 123 evidence of, ii, 123 burden of proof, ii, 124 as affected by construction, ii, 124 question of fact or law, ii, 124 California statute, ii, 629 Georgia statute, ii, 636 Montana statute, ii, 654 North Dakota statute, ii, 663 South Dakota statute, ii, 674 Ownership, see " Interest or Title." Parties, to the fire insurance contract and to adjustment, i, 17 individuals insured as a company, corporation, i, 19 contract with infant, i, 20 property for which insured liable, i, 20 account of whom it may concern, i, 21 receiver, i, 21 property held in trust, i, 22 property under conditional sale, i, 23 estate, i, 23 deceased owner, i, 24 wrong name, i, 24, 25 meaning of " as interest may appear," i, 25, 26 policy assignable after fire, i, 27 legal representatives, i, 28 mortgagor and mortgagee, i, 31 California statute, i, 528 Index to Vols. I and II. 783 Parties — Continued. North Dakota statute, i, 571, 572 South Dakota statute, i, 583 Partition, as affecting change in interest or title, ii, 242 Partnership, hound by appraisal, i, 152 as affecting interest or title, ii, 160, 161, 187 chattel mortgage by one partner to another, ii, 197 application of condition as to change in interest, ii, 222 effect of taking a partner in business, ii, 225 change in interest, title, or possession, ii, 230-233 chattel mortgage by one partner on firm property, ii, 235 receiver of, as change in interest, ii, 244 as affected by receivership, ii, 244 assignment of interest of one partner to another, ii, 271 act of partner as affecting cancellation, ii, 409 as agent of company, ii, 456 dissolution of, as affecting authority of agents, ii, 458 as affected by renewal, ii, 520 Patterns, no market value, i, 107 Payment of Loss, to executor or administrator, i, 30 when loss becomes payable, and right to sue, as imposed by con- tract, i, 348 when time commences to run, i, 350 time as affected by form of statement or proof of loss, i, 350, 351 period prescribed, condition precedent, i, 350 under Iowa statute, i, 349 time not extended by requirements of company, i, 352 effect upon right to sue, i, 352 effect of waiver of proof of loss, i, 352 denial of liability as waiver of prescribed period, i, 352 demand not necessary, i, 354 when interest added, i, 354 effect on interest of independent promise to pay i, 355 effect of trustee process on interest, i, 355 claim and suit under Lloyds policy, i, 355 several claims under same policy, i, 356 statutory penalty for refusing payment, i, 356 Georgia statute, i, 534 Iowa statute, i, 538 Penalty, statutory, for refusing payment, i, 356 Alabama statute, i, 522 Georgia statute, i, 534 784 Index to Vols. I and II. Penalty — Continued. Missouri statute, i, 561 Tennessee statute, i, 588 Pennsylvania, authority of local agent to receive proofs, i, 205 proof of loss, building, i, 214 prescribed form of policy, i, 474, 577 statutory provisions, i, 577; ii, 665 assignee, i, 577 notice of loss, i, 579 statement or proof of loss, i, 579 copy of application attached to policy, ii, 665 copy of lost policy to be furnished, ii, 665, 666 definition of broker, ii, 666 personal liability of agent, ii, 666 Photographs, as evidence, i, 120 Plans and Specifications, duty to furnish, i, 239 when independently procured, i, 240 effect of appraisal, i, 240 effect of valued policy statute, i, 241 objections must be promptly made, i, 241 demand for, not necessarily waiver, i, 241 Pleading, apportionment, i, 343 waiver of conditions precedent should be pleaded, i, 447 as affecting waiver of an affirmative defense, i, 448 insurable interest, ii, 129 evidence, ii, 129 oral or parol contract, ii, 595 Premium, receipt for, as evidence of waiver, i, 429 waiver of, i, 446 rate of, as affecting concealment, ii, 8 rate of, as affecting misrepresentation, ii, 23 when insured entitled to return of, ii, 38 acceptance of, as evidence of waiver, ii, 115 rate of, as affecting increase of hazard, ii, 304 effect of demand for additional, upon increase of hazard, ii, 309 rate of, as affecting condition against prohibited articles, ii, 340 receipt of, after fire as waiver, ii, 394 effect of accounts as payment, ii, 406 receipt of, as affecting cancellation, ii, 408 as affected by acts or authority of broker, ii, 479-481 personal liability of company's agent, ii, 498 payment on renewal, ii, 518 Index to Vols. I and II. 785 Premium — Continued. as imposed by contract, ii, 526 waiver of prepayment, ii, 527, 528 authority of agent to waive prepayment, ii, 528 authority of agent as to mode or Icind of payment, ii, 529 effect of personal assumption of debt for premium by agent, ii, 530 company may accept note of broker or credit him with payment, ii, 530 authority of broker, ii, 530 effect of acknowledgment in policy when delivered through broker, ii, 531 broker agent of insured, must be evidence of authority from company, ii, 532 liability of broker for unearned premium, ii, 532 advancement of premium by broker or agent, ii, 533 eflfect of acceptance after loss as waiver, i, 438 ; ii, 540 effect of delivery of policy with credit on cancellation, ii, 533 legal tender of, ii, 534 payment may be made condition precedent, ii, 534 policy may make payment condition precedent, ii, 534 eflfect of giving credit for, ii, 535 effect of option to take policy on payment, ii, 536 terms of policy modified by usual course of business, ii, 536 effect of acknowledgment in policy of receipt of premium, ii, 537 when insured, agent to receive, ii, 537 payment as affected by an account, ii, 538 when returnable, ii, 538 personal liability of ofl&cer or agent to return, ii, 539 company may be bound by condition imposed on delivery of note for, ii, 539 when insured not liable for earned on surrender for cancellation, ii, 540 in suit company entitled to credit for unpaid ii, 541 liability of agent to repay, ii, 572 as affecting oral or parol contracts, ii, 575, 576 insured's obligation to pay as test of oral or parol contract, ii, 576, 593 rate of, as affecting binder, ii, 587 California statute, i, 526; ii, 628, 629 Florida statute, i, 532; ii, 632 Idaho statute, i, 536 Louisiana statute, i, 540, 541 Massachusetts statute, i, 546 Montana statute, i, 562; ii, 652, 654 Vol. II.— 50 786 Index to Vols. I and II. Premium — Continued. Nevada statute, i, 564 North Carolina statute, i, 569 North Dakota statute, ii, 660, 662, 663 Oregon statute, i, 577 South Dakota statute, ii, 673, 674 Tennessee statute, i, 587 Virginia statute, i, 590 Washington statute, i, 592 , Privilege Tax, see " Legality.'' Profits, insurance of, i, 94 Prohibited Articles, see " Illuminating Gas and Prohibited Articles." Promissory Warranty, see " Warranty.'' Proof of Loss, see " Statement or Proof of Loss." Question of Fact, see " Fact." Rebuild, see " Option," etc. Receipt, effect of, i, 51 Receiver, as party to contract, i, 21 legal representative, i, 29 efifect of appointment and change, ii, 244 " Reformation, as to other insurance^ ii, 121 as affecting renewal, ii, 520 as affecting oral or parol contrtuct, ii, 591 cannot make new contract, ii, 598 recovery may be had in same suit, ii, 599 mutual mistake or mistake and fraud, ii, 599 mistake must be mutual, ii, 600 burden of proof, ii, 600 evidence, ii, 600 none upon proof of claimant's mistake alone, ii, 602 fraud as ground of, ii, 602 agent's duty in preparation of policy, ii, 602 fraud must be specifically alleged, ii, 603 effect of acceptance of policy and insured's duty, ii, 603, 604 effect of insured failing to read policy, ii, 604 mutual mistake as to effect of language, ii, 605 mutual mistake as to law, ii, 605 as to interest or parties, ii, 605 Index to Vols. I and II. 787 Reformation — Continued, evidence, ii, 605 effect of changes in policy requested as renewal, ii, 606 right of assignee, ii, 606 when not necessary to have policy reformed, ii, 607 as affected by misrepresentation, ii, 607 as affected by remedy at law, ii, 608 suit not sustainable after failure in action at law, ii, 609 does not require new proof of loss, ii, 609 correction of mistake of agent after loss, ii, 609 Seinsuiance, amount of liability, i, 108 statement or proof of loss, i, 214 application of limitation clause, i, 388 as affected by concealment, ii, 6, 553 as affected by misrepresentation, ii, 16, 553 as imposed by contract, ii, 546 insurable interest, ii, 547 no privity of contract between original insured and reinsurer, ex- ception, ii, 547 when original insured may have right of action against either company, ii, 548 subject-matter same, interest different, ii, 548 compliance with condition as to proof of loss, ii, 548 effect of contract subject to same conditions as adopted by rein- sured company, ii, 549 construction of the word "risk," ii, 549 construction of the contract, ii, 550-552 description furnished by reinsured company affects construction, ii, 550 when evidence of usage or custom not admissible, ii, 550 construction of clause making loss payable at same time and pro- rata, ii, 551, 552 construction of the words " may pay,'' ii, 551 not within statute of frauds, ii, 552 no recovery when reinsured company not liable, ii, 553 power of reinsured to consent to assignment of its policy, ii, 553 reinsurer may have right to consent to assignment of policy, ii, 554 right to assume control of litigation, ii, 554 construction of "building" under a reinsurance contract, ii, 555 when policy not covered by, ii, 555 effect of coinsurance clause in original policy, ii, 556 printed conditions as to appraisal and limitation inapplicable, ii, 556 not affected by apportionment clause, ii, 557 788 Index to Vols. I and II. Reinsurance — Continued. liability as affected by insolvency, ii, 557 purchase of claims by company or its receiver, ii, 557 right of individual underwriter Lloyds policy to enforce contract, ii, 558 construction of contract with company retiring from businass, ii, 558 agent cannot act in double capacity, ii, 559 personal liability of directors of insolvent company, ii, 559 reinsured not obliged to first pay loss unless otherwise provided, ii, 560 compromise and settlement by reinsured company, ii, 560 when proof of loss dispensed with and adjustment binding ii, 561 as affected by adjustment, ii, 560, 561 California statute, ii, 629, 630 Montana statute, ii, 654 North Dakota statute, ii, 663 South Dakota statute, ii, 674, 675 Benewal, with knowledge of facts as estoppel, ii, 106 not other insurance, ii, 122 as affected by permission for unoccupaney, ii, 365 as imposed by contract, ii, 516 construction of contract, ii, 517 new policy not renewal, ii, 517, 520 increase of risk not made known, ii, 517, 518 payment of premium, ii, 518 form of notice of increase of hazard, ii, 518 application to descriptive clauses, ii, 518 authority of agent to renew, ii, 519, 520 limitation of authority from insoured, ii, 519 reformation, ii, 520 partnership interests, ii, 520 oral or parol contract, ii, 520, 522 evidence of oral or parol contract, ii, 520 authority of agent, ii, 520 not established by mere negotiations, ii, 522 burden of proof, ii, 522 question of fact, ii, 522 property destroyed at time of, ii, 522 as affected by waiver or estoppel, ii, 523, 524 terms of contract not changed by evidence, ii, 524 agent directed not to deliver, ii, 590 as affecting proof of oral contract, ii, 594 reformation, ii, 606 Index to Vols. I and II. 789 Hepaiis, see "Alterations or Repairs;" " Option," etc. Keplace, see " Option," etc. Rhode Island, prescribed form of policy, i, 474, 579 statutory provisions, i, 579 ; ii, 667 status of agents and brokers, il, 667 Settlement, see "Adjustment." Smoke, damage by, i, 87 South Carolina, statutory provisions, i, 581; ii, 668 valued policy, i, 581 apportionment, i, 581 status of agents, ii, 668 South Dakota, prescribed form of policy, i, 520a-e, 581 statutory provisions, i, 520f, 581; ii, 668 mortgagor and mortgagee, i, 583 parties, i, 583 valued policy, i, 584, 585 loss or damage, i, 584 notice of loss, i, 584 statement or proof of loss, i, 584 waiver, i, 584 certificate, i, 584 contribution, i, 585 amount of loss, i, 585 insurable interest, ii, 668, 669, 672 change in interest, etc., ii, 669, 672 concealment, ii, 669, 670 misrepresentation, ii, 670, 671 insurance by agent or trustee, ii, 672 open, valued, and running policies, ii, 672 eflfect of acknowledgment, receipt of premium, ii, 673 warranty, ii, 673 premium, ii, 673, 674 other insurance, ii, 674 reinsurance, ii, 674 alterations, etc., ii, 675 increase of hazard, ii, 675 Sprinkler System, as affected by warranty, ii, 39 Standard Forms of Policy, Connecticut, i, 474, 529 Louisiana, i, 474, 541 Maine, i, 494, 544 '790 Index to Vols. I and II. Standard Forms of Policy — Continued. Massachusetts, i, 497, 546 Michigan, i, 481, 548 Minnesota, i, 501, 553 Missouri, i, 474, 560 New Hampshire, i, 504, 564 New Jersey, i, 474, 564 New York, i, 474, 567 North Carolina, i, 474, 569 • North Dakota, i, 474, 574 Pennsylvania, i, 474, 577 Rhode Island, i, 474, 579 South Dakota, i, 520a-e, 581 Wisconsin, i, 487, 592 Table of Statutes, i, 520h Statement of Interest, as imposed by contract, ii, 138 good faith required, effect of misstatement, ii, 138 construction of language in policy applicable to interest, ii, 139 admissibility of parol evidence, ii, 139 effect of making loss payable to third party, ii, 140 policy issued to two jointly, ii, 140 construction of word " insured," ii, 140 application of the word "property," ii, 140 effect of mortgages, judgments, or liens, no inquiries, ii, 141 , construction of condition, ii, 141 true statement in application siiffieient, ii, 142 company put upon inquiry by ambiguous answer in application, ii, 142 issue of policy without application or representation, ii, 142 when insured may state property to be his, ii, 143 individual doing business in firm or corporate name, ii, 144 as affected by void court order, ii, 144 property held by third party as security, ii, 144 tenant, or created by lease, executory contract, ii, 143, 145 estoppel by issue of policy with knowledge, ii, 145 estoppel in conduct of company's soliciting agent, ii, 146 Statement or Proof of Loss, effect of offer in compromise as waiver, i, 52 appraisal as waiver of, i, 190, 191 as imposed by contract, i, 196 condition precedent, i, 197 time commences to run from termination of fire, i, 198 must be furnished in specified time, i, 198 when excuses for delay, i, 198 Index to Vols. I and II. 791 Statement or Proof of Loss — Continued. if mailed must be received in prescribed time, i, 200 distinction as to time and defects in form, i, 200 when required " forthwith," i, 201 question of due diligence, i, 201 when time not essence of contract, i, 201 rule in some states as to furnishing in time, i, 201, 202 when time expires on Sunday, i, 203 presumption from mailing, delivery, i, 203 when insured dead, i, 204 delivery to company or agent, i, 204 authority of local agent, i, 205 insured must furnish, exceptions, i, 206 duty of mortgagee, i, 208 by attaching creditor, i, 209 when policy covers other interests besides insured, i, 209 when loss payable to third party, i, 209 substantial compliance sufficient, i, 209 not necessary to apportion loss, i, 210 when policy covers property in possession or for which liable, i, 211 other insurance, i, 211 carpenter's bill not sufficient, i, 211 stocks of merchandise, i, 212 actual cash value should be stated, i, 212 limited to particulars called for, i, 212 when insured has more than one policy in same company, i, 213 conditions operative when required independent of, i, 213 statements refer to date of fire, i, 213 effect of overestimate of value, i, 214 under reinsurance policy, i, 214 when building total loss in Pennsylvania, i, 214 not evidence, i, 215 insured not bound by, i, 216 waiver by local agent, i, 217, 219, 224 defects not specifically pointed out waived, i, 219 objections must be made promptly, i; 220 insured must have opportunity to supply defects, i, 221 insured must have reasonable time to comply with objections, i, 222 company not obliged to return proofs, i, 222 waiver as to time, i, 223 company not obliged to furnish blanks, i, 223 waiver by refusal to adjust or pay, i, 223 reference to policy not sufficient objection, i, 224 effect of refusal to deliver policy, i, 224 792 Index to Vols. I and II. Statement or Proof of Loss — Continued. eflfect of adjustment as to amount of loss, i, 224 distinct from appraisal, i, 225 authority of adjuster, i, 226 waiver by adjuster, i, 226, 227 eflfect of non-waiver agreements, i, 227, 232 denial of liability as waiver, i, 228-231 waiver as question of fact or law, i, 230 waiver and estoppel, i, 232-238 waiver once made final, i, 233 eflfect of valued policy statute, i, 234 certificate no part of, i, 245 examination no part of, i, 252 examination does not waive, i, 253 as aflfecting time when loss becomes payable, i, 350, 351 waiver of, as aflfecting time when loss payable, i, 352 furnishing by reinsured company, ii, 548 when dispensed with under reinsurance contract, ii, 561 as aflfected by reformation, ii, 609 Alabama statute, i, 522 Arizona statute, i, 523 California statute, i, 526 Connecticut statute, i, 530 Georgia statute, i, 533 Iowa statute, i, 537, 538 Maine statute, i, 542 ' Mississippi statute, i, 556 ; ii, 644 Missouri statute, i, 560 Montana statute, i, 563 New York statute, i, 568 North Dakota statute, i, 573 Pennsylvania statute, i, 579 South Dakota statute, i, 584 Texas statute, i, 589 Virginia statute, i, 590 Statute, effect of violation of, ii, 610 Statute of Frauds, as aflfecting reinsurance contract, ii, 552 eflfect on oral or parol contracts, ii, 681 Statutory Provisions, Alabama, i, 521; ii, 621 Arizona, i, 523 Arkansas, i, 523; ii, 623 California, i, 525; ii, 623 Index to Vols. I and II. 793 statutory Provisions — Continued. Colorado, i, 528; ii, 630 Connecticut, i, 529; ii, 631 Delaware, i, 531 Florida, i, 532; ii, 632 Georgia, i, 533; ii, 633 Idaho, i, 536 Illinois, ii, 636 Indiana, i, 536 Iowa, i, 537; ii, 636 Kansas, i, 539; ii, 637 Kentucky, i, 540; ii, 637 Louisiana, i, 540; ii, 638 Maine, i, 542; ii, 639 Maryland, ii, 640 Massachusetts, i, 546; ii, 641 Michigan, i, 548; ii, 642 Minnesota, i, 551; ii, 643 Mississippi, i, 555; ii, 644 Missouri, i, 558 ; ii, 647 Montana, i, 561 ; ii, 648 Nebraska, i, 563; ii, 655 Nevada, i, 564 New Hampshire, i, 564 New Jersey, i, 564 New York, i, 567 ; ii, 655 North Carolina, i, 568; ii, 656 North Dakota, i, 571; ii, 656 Ohio, i, 575; ii, 664 Oklahoma, i, 576; ii, 665 Oregon, i, 576 Pennsylvania, i, 577; ii, 665 Rhode Island, i, 579; ii, 667 South Carolina, i, 581 South Dakota, i, 520a-e, 581; ii, 668 Tennessee, i, 585 ; ii, 675 Texas, i, 588; ii, 675 Vermont, i, 589 ; ii, 677 Virginia, i, 590; ii, 677 Washington, i, 591 ; ii, 678 West Virginia, i, 592 Wisconsin, i, 592 ; ii, 678 Table of Statutes, relating to standard forms, i, 520h. Steam, damage by, i, 87 794 Index to Vols. I and II. store Fixtures, meaning of, i, 78 Subrogation, right of, as created by contract, i, 359 exists independent of contract, i, 360 insurance company may demand assignment, i, 360, 367 dependent upon right of insured, i, 360, 366 insured's right may exist at common law or under statute, i, 361 right of company to be put in place of insured, limitation, i, 361 not affected by failure of company to comply with state laws, i, 362 as against railroad or transportation company, i, 362-374 interest, i, 362 rights of insured, i, 363 effect of first collecting entire loss from railroad company, i, 363, 366 concealment by insured, i, 363, 375 settlement with railroad company not conclusive, i, 364 insurance and its payment no defense to railroad company, i, 364 effect of general release by insured to railroad company, i, 365, 370, 373 contributory negligence of insured, i, 365 insured has legal right to place property near tracks, i, 366 effect of settlement with railroad before payment of insurance, i, 366 effect of release excepting or reserving insurance, i, 367 effect of stipulations in a bill of lading, i, 367, 373, 375 does not depend upon written assignment, i, 368 right of company to sue in its own name, i, 368-370 parties to such suit, i, 369, 370 distinction in practice, i, 370 insured a trustee, i, 370, 372 company not obliged to sue in state where fire occurred, i, 371 practice when loss exceeds the insurance, i, 372 action by insured against railroad company after payment of insur- ance, i, 372 rights of insured and insurance company in judgment and pro- ceedings, i, 372 effect of insured preventing or defeating subrogation, i, 373 to claim of mortgagee, i, 375-382 effect of mortgagee clause, i, 375-378 forfeiture as to owner not assumed, i, 376 insurance company's right to, assignable, i, 377 insurance company must be prompt in protection of its interests, i, 377, 378 mortgagee's right to settle with other companies, i, 378 effect of delay in obtaining assignment of mortgage, i, 378 what tender must include, i, 378 Index to Vols. I and II. 795 Subrogation — Continued. mortgage must be paid or tendered in full, i, 378 what insurance company bound to credit on the mortgage, i, 379 effect of independent insurance by mortgagee on his interest, i, 379 mortgagor subrogated to rights of mortgagee, i, 381 sureties subrogated to claim of mortgagee, i, 382 effect of owner and mortgagee preventing-, i, 382 vendor and vendee, i, 382-384 Colorado statute, i, 528 Maine statute, i, 544 Sunday, see " Legality." Tariff Association, Alabama statute, i, 522 Tax, see " Legality." Tenant, effect of warranty, ii, 60 attornment by, to purchaser, as affecting change in interest, etc., ii, 241 acts of, as affecting increase of hazard, ii, 291 application of condition as to alteration or repairs by mechanics, ii, 325 keeping or use of prohibited articles by, ii, 349 see "Amount of Loss or Damage." Tennessee, statutory provisions, i, 585; ii, 675 adjustment, i, 585 notice of loss, i, 586 valued policy, i, 586 return of premium, i, 587 coinsurance, i, 587 penalty, i, 588 statute as affecting warranty, ii, 33 misrepresentation, ii, 675 personal liability of agent, ii, 675 Term, as imposed by contract, ii, 542 construction of the words " at noon," ii, 543 burden of proof as to alteration in date, ii, 543 effect of omission of date of expiration, ii, 543 may be governed by description, ii, 544 continuance by special agreement, ii, 544 delivery of policy may be conditional as to time, ii, 544 may be question of fact, ii, 544 as affected by oral or parol contract, ii, 573 may be implied in oral contract, ii, 575 construction of " noon " under Massachusetts statute, ii, 642 796 Index to Vols. I and II. Texas, statutory provisions, i, 588; ii, 675 valued policy, i, 588 statement or proof of loss, i, 589 status of agents, ii, 676 Title, see " Interest or Title." Total Loss, as applied to vessel or boat, i, 12 as applied to building, i, 117-121, Tiust, property held in, i, 22 Usage, see " Custom." Use and Occupation, as affected by warranty, ii, 60, 61 operation of manufacturing establishment, ii, 277 increase of hazard, ii, 287 alterations or repairs by mechanics, ii, 318 illuminating gas or vapor and prohibited articles, ii, 329 vacant or unoccupied, ii, 356 see also these various subjects, and " Warranty." Vacant or Unoccupied, company's permission not construed to allow re- pairs to prevent increase of hazard, ii, 328 as imposed by contract, ii, 358 application of Minnesota statute, ii, 359 condition reasonable and binding, ii, 360 condition subsequent, ii, 360 burden of proof, ii, 361 construction not governed by rules of board of underwriters or by company, ii, 361 effect of action by board of underwriters, ii, 361 not dependent upon insured's knowledge or control, ii, 362 distinction between " vacant or unoccupied," and " vacant and un- occupied," ii, 363 may be vacant in part, ii, 363 making repairs not occupancy, ii, 364 effect of written permission for vacancy, ii, 364 when description not construed a warranty, ii, 364 permission for unoccupancy may extend to renewals, ii, 365 construction of words " during the summer," ii, 365 oral application and no inquiry, ii, 365 effect of time limitation, ii, 365, 368, 383, 389 violation voids policy, not revived by subsequent occupation, ii, 367 as affected by authority of agent, ii, 368 not necessary to claim risk increased, ii, 368 admissibility of expert evidence, ii, 368 Index to Vols. I and II. 797 Tacant or Unoccupied — Continued, as affected by custom, ii, 368 may be claimed to increase hazard, ii, 369 divisibility of contract, ii, 370 construction of "occupied" and "unoccupied," ii, 371 governed by nature and character of building and use, ii, 371 effect of knovpledge of company's agent, ii, 371 construction as affected by description, ii, 372 vacant not limited to building, ii, 372 "when nature or character of occupation changed, ii, "72 as applied to dwelling, ii, 372-383 when house unoccupied, occupancy of house and barn, ii, 376 furniture remaining in dwelling not occupancy, ii, 376 house may not be vacant yet unoccupied, ii, 377 temporary absence from dwelling governed by intention, question of fact, ii, 377-379 use of house for partial purpose of dwelling, ii, 379 ■cleaning of dwelling not occupation, ii, 379 ■effect of sleeping in house, ii, 380 effect of taking meals in house and use of barn, ii, 380 ceasing to be occupied for one of several purposes described, ii, 381 ■dwelling described as family residence, ii, 381 when tenement-house vacant or unoccupied, ii, 381 ■construction of " vacating," ii, 382 temporary vacancy on change of tenant, ii, 382 temporary absence, ii, 382 occupancy of building used for manufacturing purposes, ii, 384 when mill or factory vacant or unoccupied, ii, 384 occupancy of manufacturing establishment governed by known use and character, ii, 385 when flouring mill not vacant or unoccupied, ii, 385 when tannery is occupied, ii, 386 occupancy of boat, ii, 386 when a storehouse vacant and unoccupied, ii, 386 when a church is vacant or unoccupied, ii, 387 when an icehouse is vacant or unoccupied, ii, 387 when an elevator vacant or unoccupied, ii, 388 occupancy of a, saloon or storehouse, ii, 388 as affected by waiver or estoppel, ii, 389-394 time limitation as affecting waiver, ii, 389 waiver or estoppel when policy issues, ii, 390 building in process of erection, duty of agent, ii, 390 omission to cancel as evidence of waiver, ii, 390, 395 special permit for vacancy of uncompleted building, ii, 391 knowledge of soliciting agent, ii, 391 798 Index to Vols. I and II. Vacant or Unoccupied — Continued. knowledge of agent as affecting occupancy for other purposes than, described, ii, 392 • effect of knowledge as to future non-occupancy, ii, 392 no oral waiver after issue of policy, ii, 393 may be estoppel after issue of policy, ii, 392 mere knowledge does not operate as estoppel, ii, 393 waiver or estoppel after issue of policy, ii, 394 estoppel by agent, ii, 394 written permit effective without attaching to policy, ii, 394 receiving premium after fire, ii, 394 meaning of the terms " vacant or unoccupied," question of law,: ii, 396 effect of standard form permitting change of occupants, ii, 396 as question of law or fact, ii, 387, 396 Kansas statute, ii, 637 Michigan statute, ii, 642 Value, no concealment, ii, 11 misrepresentation, ii, 28 see " Warranty." Valued Policy, by contract, i, 93 effect of statute, i, 98, 99, 113-121 effect on appraisal, i, 192, 193 effect on statement or proof of loss, i, 234 effect of, as to plans and specifications, i, 241 effect on fraud or false swearing, i, 287 effect on option to rebuild, i, 302 effect on apportionment, i, 341 Arkansas statute, i, 523 California statute, i, 525, 527; ii, 628 Delaware statute, i, 531 Florida statute, i, 532 Georgia statute, i, 534 Iowa statute, i, 537 Kansas statute, i, 539 Kentucky statute, i, 540 Louisiana statute, i, 540, 541 Minnesota statute, i, 552 Mississippi statute, i, 556; ii, 644 Missouri statute, i, 558 Montana statute, i, 562; ii, 652 Nebraska statute, i, 563 North Dakota statute, i, 572 Index to Vols. I akd II. 799 Valued Policy — Continued. Ohio statute, i, 575 Oregon statute, i, 576 Oklahoma statute, i, 576 South Carolina statute, i, 581 South Dakota statute, i, 584, 585; ii, 672 Tennessee statute, i, 586 Tesas statute, i, 588 Washington statute, i, 591 West Virginia statute, i, 592 Wisconsin statute, i, 594 Vendor and, Vendee, Interest of, under an executory contract, ii, 167-170 effect of executory or conditional contract of sale, i, 110; ii, 189, 237 subrogation, i, 382-384 see "Interest or Title;" "Other Insurance." Vermont, statutory provisions, i, 589; ii, 677 limitation i, 589 appraisal, i, 589 adjustment, i, 589 status of agents, ii, 677 Vessel, duty of insured to raise, i, 12 Virginia, statutory provisions, i, 590; ii, 677 statement or proof of loss, i, 590 return of premium, i, 590 appraisal, i, 591 limitation as to defense, ii, 677 warranty, ii, 677, 678 Vouchers, see " Books of Account," etc. Waiver or Estoppel, of notice of loss in proof of loss, i, 6 of notice of loss, i, 8, 9 by adjuster, i, 47 effect of offer in compromise, i, 52 as to time in furnishing proof of loss, i, 52 of appraisal, i, 143, 145, 147, 154, 161, 185, 190 by appraisal, i, 191, 192 by local agent of proofs, i, 217, 219, 224 by not pointing out defects in proofs, i, 219 of time in furnishing proofs of loss, i, 223 refusal to furnish blank proof as, i, 223 of proofs, by refusal to adjust or pay, i, 223 of proofs of loss by adjustment, i, 224 800 Index to Vols. I and II. Waiver or Estoppel — Continued. effect of appraisal as to proofs of loss, i, 225 by adjuster of proofs of loss, i, 226, 227 written evidence not required as to proofs of loss, i, 227 effect of non-waiver agreements as to proofs of loss, i, 227, 232 denial of liability as waiver of proofs of loss, i, 228-231 of statement or proofs of loss, i, 232-238 of plans and specifications, i, 240, 241 demand for plans and specifications not necessarily evidence of, i, 241 of certificate, i, 246, 248-250 examination does not waive proof of loss, i, 253 by renewal of negotiation after refusal to be examined, i, 257 of examination by examination of third party, i, 257 none by examination, i, 258 defects in bills and invoices, i, 261 of forfeiture by demanding bills, invoices, etc., 1, 262 by agent or adjuster, iron safe clause, i, 271, 272a non-waiver agreement as affecting iron safe clause, i, 272b of fraud or false swearing, i, 285 by exercise of option to take at appraised value, i, 291 effect of repudiation of an award of appraisers, i, 292 exercise of option to repair or rebuild, i, 302 of appraisal by option to repair or rebuild, i, 302 effect of appraisal agreement on option to repair or rebuild, i, 303 by appraisal of option to repair or rebuild, i, 303 of proof of loss as affecting time when loss payable, i, 352 by denial of liability, i, 352 of limitation clause, i, 389, 399, 401, 402 as governed and limited by contract, i, 407 none by appraisal or examination, i, 408 as affected by standard form of policy, i, 409 distinction between, and estoppel, i, 409, 411, 415 irrevocable, i, 233, 410 inoperative as to future, i, 410 as affected by construction of two classes of conditions, i, 410 insured, when bound by limitation on agents' authority in policy, i, 411-417 law does not presume, i, 411 parol evidence not admissible to alter contract, i, 411 insurance company may be estopped, i, 414 construction by company's agent, i, 414, 422 may be evidence of authority, i, 414 limitation on authority no application to estoppel, i, 415 Index to Vols. I and II. 801 Waiver or Estoppel — Continued. nor to inception of contract, prior to delivery, i, 416 limitation to certain officer, i, 417 limitation no application to officers, i, 417 may be effective though not in mode specified, i, 417 issue and delivery of policy with knowledge of facts, i, 418 burden of proof as to knowledge, i, 418 knowledge of facts acquired previously, i, 420 must be actual knowledge, i, 421 constructive notice, i, 421 public records, i, 421 sufficient if company put upon inquiry, i, 421 knowledge as to future, no estoppel, i, 421 oral promise and opinion by agent, i, 421 none as to future acts or omissions, i, 422 effect of promise to make indorsement on policy in possession of third party, i, 423 authority of soliciting agents as an element of estoppel, i, 423 authority of clerks, i, 425 parol evidence admissible to establish estoppel, i, 425 estoppel as to written application, i, 425 power of agents to employ clerks, i, 425 limitation on agent's authority, when operative after issue of policy, i, 426, 427 test of authority of agent, i, 428 effect of failure to cancel, i, 428 effect of receipt for premium, i, 429 effect of a written consent held for insured, i, 43& statement of agent as estoppel, i, 430 effect of written indorsement for another purpose, i, 430 by treating policy as in force after fire, i, 431 company may point out what insured has contracted to do, distinc- tion, i, 432 forfeitures not favored in law, i, 433 effect of officer or agent acting in ignorance of what another has done, i, 433 if not express, must be some elements of estoppel, i, 434 silence as an element of, i, 434 silence may be element of estoppel, i, 435 dependent on intention, i, 435 may be inferred, i, 435 knowledge essential, j, 436 refusal to pay on specified ground, i, 437 omission to disclose defense, i, 437 Vol. XL— 51 802 Index to Vols. I and II. Waiver or Estoppel ^Continued. not prevented by assertion of no waiver, i, 438 acceptance of premium after fire, i, 438 effect of compromise agreement, i, 439 effect of offer in compromise, i, 440 authority of local agents, i, 440 policy, limitation of authority no application to adjuster, i, 441 authority of adjuster, i, 442 policy cannot be treated as both void and valid, i, 443 adjuster judged by what he does, i, 443 non-waiver agreements, i, 443-445 adjuster may assert policy void, and suggest proofs, i, 445 as question of fact or law, i, 446 of premium, i, 446 of conditions precedent should be pleaded, i, 447 pleading and evidence of, as to an affirmative defense, i, 448 as affected by construction of standard forms, i, 451 as affecting foreclosure or notice of sale, ii, 213-216 as affecting change in interest or title, ii, 246, 247 as affecting assignment of policy, ii, 259, 264 as affecting operation of manufacturing establishment, ii, 286 as affecting increase of hazard, ii, 307, 309 as affecting alterations or repairs by mechanics, ii, 328 as affecting condition against prohibited articles, ii, 350-351 as affecting condition against vacancy or unoccupancy, ii, 389-394 by insured as affecting cancellation, ii, 409, 421, 428 omission to cancel, as evidence of, ii, 430-432 in renewal, ii, 523-524 acceptance of premium after loss, ii, 540 California statute, i, 527 Montana statute, i, 563 North Dakota statute, i, 573 South Dakota statute, i, 584 see "Agents;" "Building on Ground Not Owned in Fee Simple;" "Incumbrance by Chattel Mortgage;" "Interest Other Than Unconditional Sole Ownership;" "Other Insurance;" "Pre- mium;" "Statement of Interest;" Vacant or Unoccupied;" " Warranty." Warranty, as imposed by contract, ii, 32, 40 as affected by Ohio statute, ii, 33 Missouri statute, ii, 33 as affected by Tennessee statute, ii, 33 what construed as, ii, 33 express warranty and effect, ii, 35 Index to Vols. I and II. 803 Warranty — Ckintinued. distinction between, and representation, ii, 15, 35 not affected by good or bad faith,, ii, 35 test of, by construction, ii, 36 as affected by usage or custom, ii, 37 when insured entitled to return of premium, ii, 38 effect of new agreement to pay a loss, ii, 38 burden of proof, ii, 39 contract severable, ii, 39 application made part of contract, ii, 40 conflict between application and printed condition, ii, 41 when statements in application are warranties, ii, 41 incomplete or uncertain statements, ii, 42 construction of questions in written application, ii, 43 when insured bound by application, ii, 44 application and policy must be construed together, ii, 45 effect of fraud, ii, 46 responsibility of insured for misstatements, ii, 46 agent filling up written application, responsibility tor misstate- ments, ii, 47 broker agent of insured in filling up written application, ii, 50 effect of statute requiring application to be made part of policy, ii, 51 statutory requirements as affecting, ii, 51, 52, 54 no question as to materiality, ii, 52 Georgia statute, ii, 54 effect of statute requiring examination of property, ii, 54 as affected by waiver or estoppel, ii, 54, 55 knowledge of broker, ii, 57 admissibility of parol evidence, ii, 57 waiver as applicable to promissory warranty, ii, 57 waiver by agent after issue of policy, ii, 58 relating to situation, condition, or occupation of building, ii, 59 building as affected by description, ii, 60 effect of, as to occupation, ii, 60 when breach as to occupation, ii, 61 distance of buildings, ii, 61 distinction between affirmative and promissory, ii, 62 compliance with and construction of promissory warranty, ii, 64 insured may have reasonable time to comply with promissory war- ranty, ii, 64 construction of promissory warranty as applied to building, ii, 65 promissory, as affected by impossibility, ii, 65 construction of detached, ii, 66 804 Index to Vols. I and II. Warranty — Continued. eflfect of specific statement as to exposure, ii, 66 construction of statement as to occupation, ii, 67 application to new location, ii, 67 as to watchman, ii, 67-71 clear space, ii, 72 value, ii, 73 other insurance, ii, 73 incendiary fire, ii, 73 as to interest, title, lien, or incumbrance, ii, 74 construction of various warranties, ii, 77 as affected by increase of hazard, ii, 302 substantial compliance sufficient under Arkansas statute, ii, 623 California statute, ii, 628, 629 Kentucky statute, ii, 638 Massachusetts statute, ii, 641 Minnesota statute, ii, 643 Missouri statute, ii, 647 Montana statute, ii, 653 North Carolina statute, ii, 656 North Dakota statute, ii, 661, 662 South Dakota statute, ii, 673 Virginia statute, ii, 677 Washington, statutory provisions, i, 591 ; ii, 678 valued policy, i, 591 return of premium, i, 592 status of agents, ii, 678 Watchman, warranty, ii, 67-71 as affecting operation of manufacturing establishment, ii, 285 West Virginia, statutory provisions, i, 592 valued policy, i, 592 Wisconsin, standard form of policy, i, 487, 592 statutory provisions, i, 592; ii, 678 valued policy, i, 594 coinsurance, i, 594 certificate, i, 594 statute as affecting misrepresentation, ii, 15 application attached to policy, ii, 678 status of agents, ii, 678, 679 cancellation, ii, 679 Words and Phrases, " immediate," i, 5 " forthwith," i, 14, 201 Index to Vols. I and II. 805 Words and Phrases — Continued. " liable," i, 20 " in trust," i, 22 " estate," i, 23, 24 " as interest may appear," i, 25, 26 " legal representatives," i, 28, 29 " dwelling and additions," i, 58 " factory," i, 59 " yard," i, 61 "hay in stack," i, 63 " building and addition," i, 72-76 " adjoining and communicating," i, 74, 75 " fixtures," i, 77, 78 " implement," i, 79 " grain, i, 79 " millet," i, 79 " grain and seed," i, 79 " furniture," i, 79 " farming utensils," i, 79 " packages," i, 79 " furniture and family stores," i, 79 " merchandise kept for sale," i, 79 " household furniture," i, 79, 82 " groceries," i, 80 " tools," i, 80 " guano," i, 80 " grain in stack," i, 80, 82 " eggs in pickle," i, 80 " wholesale stock of drugs and other goods not more hazardous, i, 80 "store," i, 80 " building," i, 80 " stock of timber," i, 80 " stock in trade," i, 80 " machinery," i, 80 " steam sawmill," i, 80 " starch manufactory," i, 80 " machinery and implements used in business," i, 81 " usually kept," i, 81 " stock and materials," i, 82 "other articles usually kept," i, 82 " lumber, lath, and pickets," i, 82 " decorations to walls and ceilings," i, 82 " on a bridge," i, 82 806 Index to Vols. I and II. Words and Phrases — Continued. " property in freight building," i, 82 " stock of hair, manufactured or in process," i, 82 " building used for mercantile purpose," i, 82 " jewelry and clothing stock," i, 82 " English, American, and West India goods," i, 82 " merchandise," i, 82 " materials," i, 82 " wearing apparel, furniture, and stock," i, 82 " new bark now being built," i, 83 " building occupied as tannery," i, 83 " refined oil," i, 83 " implements of trade," i, 83 " furniture, instruments, appliances, material incidental to dental office," i, 83 " direct," i, 85 " fire," i, 86, 124 " cash value," i, 94, 96, 111 "total loss," i, 117-121 " fall," of building, i, 128 " part of building," i, 128 " disinterested " as applied to appraiser, i, 162 "misconduct," i, 180 " living nearest place of fire," i, 246 " failure to produce books," i, 267 " inventory," i, 268-270 " fire-proof safe," i, 273 " fraud or false swearing," i, 276 " described property " and " covering such property " in apportion- ment clause, i, 399 "void," i, 459 "entire," i, 467 "detached," ii, 66 "valid or not," ii, 104, 105 " insured," ii, 85, 140 "property," ii, 140 "act or neglect," in mortgagee clause, i, 34; ii, 188 " notice given of sale," ii, 213 " interest " in property or land, ii, 222 " except change of occupants without increase of hazard," ii, 224 " sale or transfer," ii, 224 " sold," ii, 227 " change," ii, 233 "title or possession," ii, 233 Index to Vols. I and II. 807 Words and Phrases — Continued, "interest," ii, 157, 226, 233 " increase of risk," ii, 302 " additions," ii, 321 " mechanics," ii, 324 " premises," ii, 334 " kept," and " used on premises," ii, 335 "allowed," ii, 335 " used for lights only," and " oil drawn and the lamps trimmed and filled solely by daylight," ii, 335 "' for lights " and " by daylight," ii, 336 during the summer," ii, 365 ■occupied" and "unoccupied," ii, 371 " family," ii, 381 " at noon," ii, 543 " risk," in reinsurance contract, ii, 549 " may pay," in reinsurance contract, ii, 551 Yard, construction of word, i, 61 [Whole Number of Pages 925.] Date Due 1 1 1 1 I,' Library Bureu iCat. No. 1137 _KF 1196 c6a i9cg> Author Vol. Clement^ George Ansel Title fjtj^e law of fire insurance, ^""^ "by George A. Clement ...