■■■. TREATISE ON THE LAW OF INSURANCE. >i*: BY S. R. CLAIiKE, OF OSGOODE HALL, I!A1UUSTEB-AT-LAW. TORONTO: PRINTED AND PUBLISHED AT THE OFFICE OF THE "MONETARY TIMES." 1873. Entered according to the Act of the Parliament of Canada, in the year 1873, by John Malcolm Trout, in the Office of the Minister of Agriculture. PREFACE. The necessity for a work treating specially of the law of insurance, as applicable to Canada, was suggested to me by those immediately interested in the subject. On exami- nation I found that a large number of cases relating to insurance had been decided in the Dominion ; and con- sidering the importance of insurance itself, arising from the advantages it confers on the community, I could not but arrive at the conclusion that such a work as I have attempted to produce would be useful, and would meet with the approval of those for whose benefit it has been pre- pared. It will be found to embrace the whole Insurance law of Canada. On fire, marine, and life insurance, every reported Canadian case is given ; but as to marine and life insurance, I do not pretend that my work is complete. To these two branches of insurance law I have contributed all that is to be found in the Canadian rej)orts. On marine insurance I have given all Canadian cases in the form of a digest ; and as to life insurance, most of the cases will be found interspersed throughout the work. On fire insur- rance alone I have sought to make the work complete. In addition to the Canadian cases, the work contains all English and a selection from the American cases. On this branch of insurance law I trust the work will be found more useful to the Canadian reader than any foreign production. For the practical usefulness of the chapter on the ad- IV PREFACE. justment of losses, I am indebted to Hugh Scott, Esq., of Toronto, whose valuable services and suggestions in the preparation of this portion of the work I here gladly acknowledge. I am also under great obligations to N. H. Meagher, Esq., Barrister, of Halifax, Nova Scotia, who has very kindly furnished me with the recent cases on marine insurance decided in that Province. I also beg to express my thanks to Mr. W. D. Hogg, student-at-law, who pre- pared the index of subjects and table of cases. Toronto, 12^// May, 1873. TABLE OF CONTENTS. PAGE. Table of Abbreviations ^^ Table of Cases Cited vii CHAPTER I. The Contract of Insurance -^ CHAPTER II. The Parties to the Contract • ^ CHAPTER III. The Subjects of Insurance or Insurable Interest 02 CHAPTER IV. The Extent and Nature of the Risk ^^2 CHAPTER V. Warranty, Misrepresentation and Concealmen t 1 1^0 CHAPTER VI. The Conditions of the Policy 130 CHAPTER VII. Alienation of Pi'operty and Assii^'ument of Policy 102 CHAPTER Vni. The Proofs of Loss, etc 211 CH.\t»TER IX. Adjustment, Re-Building, etc 230 CHAPTER X. The Proceedings at Law upon Policies 267 BOOK II. Marine Insurance '^03 BOOK III. • Life Insurance -545 Appendix 267 TABLE OF ABBREVIATIONS. Allen— Allen's Reports, New Brunswick, Cochran— Cochran's Reports, Nova Scotia. E. & A. Reps.— Error and Appeal Reports, Ontario. Grant— Grant's Chancery Reports, Ontario. Hannay— Hannay's Reports, New Brunswick. James— James' Reports, Nova Scotia. Kerr— Kerr's Reports, New Brunswick. L. C. J . — Lower Canada Jurist. L. C. R. — Lower Canada Reports. Oldright- Oldright's Reports, Nova Scotia. Revue Critique-La Revue Critique de Legislation et de Jurispru- dence du Canada, Montreal. Rob. Dig.— Robertson's (Andrew) Digest of Reports, Quebec. Thomson— Thomson's Reports, Nova Scotia. U. C. C. P.— Common Pleas Reports, Ontario. U. C. L. J.— Upper Canada Law Journal. , U. C. P. R. - Practice Reports, Ontario. U. C. Q. B.— Queen's Bench Reports, Ontario. The other abbreviations being of English and American Reports only, will be readily understood without the aid of a table. TABLE OF CASES CITED. A PAGE Abbot V. Hampden Ins. Co 69 Abbott V. Shawmiitt Fire Ins. Co 119 Acey V. Fernie 5 Adams v. Lindsell 37 Adams v. Rockingham Ins. Co 193 Adamson v. Kentucky Ins. Co 22 .Etna Ins. Co. v. Tyler 3 yEtnalns. Co. Re 22 ^tna Ins. Co. v. Grube 120 Alchome v. Saville 33 Alderman v. West of Scotland Ins. Co 218 Allan V. Franklin Fire Ins. Co 68 Allan V. Mutual Fire Ins. Co 22 Allen V. Vermont Mutual Ins. Co 170 Alleyn V. Quebec Ins. Co .. 181 Alsager v . St. Katharines Dock Co 16 Alston V. Mechanics' Ins. Co 24 Ames V. New York Union Ins. Co 155 Amicable Society v. Bolland 351 Anderson v. Fitzgerald 16 Anderson v. Thornton 27 Anderson v. Edie 349 Andree v. Fletcher 263 Andrews v. Ellison , 33 Andrews V. Union Mutual Ins. Co 96 Appleby v. Fireman's Fund Ins. Co 149 Aquilars v. Rogers 25 Armstrong v. Tarquand 56 Ashford v. Victoria Mutud Ins. Co 128 Ashley v . Ashley 350 Ashley v. Pratt 317 Atwell V. Western Ass. Co 153 Attwood V. Emery 216 Audubon v. Excelsior Ins. Co 23 Austin V. Drew 103 Australian Steam Navigation Co. v. Morse 320 Avon Mutual Ins. Co. v. Barteaux 344 Ayres v. Hartford Fire Ins. Co 3 Ayres v. Home Ins. Co. 27 B. Babcock v. Montgomery Co. M. Ins. Co 96 Vlll TABLE OF CASES CITED. PAGE Baltimore Fire Ins. Co. v. Louey 248 Bambridge v. Wilson 320 Bank of Toronto v. European Ass. Co 103 Banting V. Niagara District M. F. lus.Co 222 Baptist Church v. Brooklyn Fire Ins. Co 7, 37 Barber v. Cox 33 Barclay v. Cousins 44 Barnes v. Union Mutual Fire Ins. Co 40 Barrett v. Jermy 151 Barrett V. Union Mutual Fire Ins. Co 168 Barsolou v. Royal Ins. Co 120 Barteau v. Cobequid Mutual Ins. Co 320 Bates V. Hamilton 337 Batesv. Hewett, L. 11 135 Battles V. N ew York Comity Mutual Ins. Co 110 Baxendale V. Harvey 80 Baxter v. Massassit Ins. Co 24 Beacon Fire and Life Ins. Co. v. Gibb 13, 15, 142 Beales v. Home Ins. Co 250 Beebe v. Hartford Mutual Ins. Co 54 Beemer V. Anchor Ins. Co 107 Bell V. Gardiner 20 Bell V. Hudson 318 Bell V. Janson 277 Bell V. Nixon 324 Benedict v. Ocean Ins. Co 17 Berry v. Columbian Ins. Co 203, 333 Bersche v. Globe Mutual Ins. Co 124 Biccard v. Sheppard 305 Biglar V. New York County Mutual Co IG5 Bird V. ^rown 58 Bishop V. Pentland 104 Blackett v. Royal Exchange Ass. Co 14 Blake v. Exchange Mutual Ins. Co 237 Blakeleyv. Ph(enix Ins. Co 219 Bleakley v. Niagara District Mut\uil Ass. Co 28 Bodle V. Chenango Co. M. Ins. Co 236 Boehen V. Williamsburgh County Ins. Co 7 Boehm V. Bell 80 Bonar v. MacDonald 353 Bonner v. Home Ins. Co 227 Borradaile v. Hunter , Ill Boiistiold V. Barnes 4 Box V. Provincial Ins. Co 65 Brady v. North Western Ins. Co 11 Brady v. Western Ins. Co 171 Brannsteui V. Accidental Death Ass. Co 227 Brewer v. Chelsea Mutual Fire Ins. Co 7 Brichta v. New York Life Ins. Co 45 Briggs V. Traders Ins. Co 79 Brimley v. National Ins. Co 107 British American Ins. Co. v. Joseph 05 British Life Ass. v. Ward 51 TABLE OF CA.SES CITED. IX PAfJK Britton v. Royal Ins. C(. 232 Brown v. Erie & Ontario Ins. Co 248 Brown V. Gore District Mutual Ins. Co 120 Brown v. Hartford Ins. Co 288 Brown V. King's County Fire Ins. Co 104 Brown V. Peoples Mutual Ins. Co 123 Brown V. Roger Williams Ins, Co 208 Brown V . Royal Ins. Co 261 Bruce v. Gore District Mutual Fire Ins. Co 34 Brush V. ^tna Ins. Co 15 Bryant v. Poughkeepsie Mutual Jns. Co 17 Buckley v. Garrett 195 Bufe V. Turner 65 Buftalo, S. E. W., V. Sun Mutual Ins. Co 206 Bullock V. Doods 275 Bunistead v. Dividend Mutual Ins. Co 224 Burbank v. Rockingham Ins. Co 100 Burgess v. Nackham 153 Burgoss V. Alliance Ins. Co 94 Burritt v. Saratoga County Mutual F. I. Co 110 Burt V. Peoples Mutual Ins. Co 168 Burton v. Gore District Mutual Fire Ins, Co 49, .50 Busk V. Royal Exchange lua. Co 104 Busk V. Royal Ins. Co 305 Butler V, Waterloo Mutual Fire Ins. Co 153 C, Caballero v. Home Mutual Ins. Co 101 Gabion v. Tennessee Ins. Co 20 Cain V . Lancashire Ins. Co 152 Calloway v. Ward 09 Calvin v. Provincial Ins. Co 57 Cameron v. Monarch Ins. Co 79 Cameron v. Times & B. F. Ins. Co 79, 222 Campbell v. .lEtna Ins. Co 104 Campbell v. Liverpool & L. Fu-e Ins. Co 178 Campbell v. Merchants tt F. M. Ins. Co 120 Canada L. C. Co, v. Canada Ins, Co 19, 143 Carroll v. Charter Oak Ins, C(j 51 Carbis ex parte in re Croggan 203 Carover v , Mutiuil Ins. Co 193 Carpenter v. American Ins, Co 114 Carpenter v. Mutual Ins, Co 30 Carpenter V, Washington Ins. Co 49, 50 Carruthfc-rs V. Sheddeu 132 Carter v. Boehm 28 Carter v. Humboldt Fire Ins. Co 80 Carter v. Niagara District Mutual Ins. Co 221 Case V. HarTford Fire Ins. Co 97 Casey v. Goldsmith 92 Castelli V. Boddington 49 Catlin V. Springfield Fire Ins. Co 104 Chalmers v. Mutual Fire Ins. Co 61 31 TABLE OF CASES CITED. PAGE Chandler v . Worcester Mutual Fire Ins. Co 104 Chapman v. Fraser 28 Chapman v. Lancashire Ins. Co 51 Chase V. Hamilton Mut\ial Fire Ins.' Co 55 Chisholm V. Provincial Ins. Co 209 Cinqmars v. Equitable Ins. Co 221 City Fire Ins. Co. v. Corlies 99 City of Davenport v. Peoria M. & F. Ins. Co 24, 34 Clapham v. Langton 304 Clark V. Hamilton Mutual Ins. Co 132 Clark V. Manufacturers Ins. Co 28, 134 Clark V. New England Mutual Fire Ins. Co 165 Clark V. Western Ass. Co 67 Collettv. Morrison 25, 38 Columbia Ins. Co. v. Cooper .55 Columbian Ins. Co. v. Lawrence 71 Commonweath Ins. Co. v . Monningers 110 Commonwealth Ins. Co. v. Sennett 108 Constable v. Noble 319 Converse v. Citizens Fire Ins. Co 72 Cooke V. Field 349 Coons V. .Etna Ins. Co 309, .320 Cooper V. Farmers Mutural Fire Ins. Co 25 Conway v. Britannia Life Ass. Co 271 Cornell V. Le Roy 212 Cornell v. Liverpool & L. Ins . Co 371 Cornell V. Mill waukee Mutual Fire Ins. Co 215 Courtney v. New York City Ins. Co 203 Cowie V. Barber 28 Crawford V. Hunter 80 Crawford v. St. Lawrence 1 ns. Co 50 Creighton v. Union Mutual Ins. Co 11 Crombie v. Portsmouth Mutual Ins. Co 109 Crowley v. Agricultural Mutual Ass. Co 233 Crowley v. Cohen 44 Crozier v. Phcenix Ins. Co 3 Cumberland Valley M.P. Co. v. Schell ]20 Curry v. Conunon wealth Ins. Co 109 Cusack v. Montreal Ass. Co 339 Cusack V. Mutual Ins. Co 75 Cushman v. North Western Ass. Co 4 D. Da Costa v. Firth 247 Dafoe V. Johnstown D. M. Ins. Co , 34,58, 59 Dalby v . India it L. L. Ass. Co 1 D.algiish v. Jarvie 350 Daniel v. Robinson 40 Daniels V. Hudson R. F. Ins. Co 32 Dapin v. Mutual Ins. Co 105 Date V. Gore District Mutual Ins. Co 40, 41 David V. Hartford Ins. Co 166 Davies V. Home Ins. Co 3, 64 TABLE OF CASES CITED. XI PAGE Davis V. Scottish Provincial Ass. Co 52 Davis V . St. Lawrence I. M. Ins. Co 333 Dawes v. North River Ins. Co 215 Dawson v. Home Ins. Co ?10 Day V. Charter Oak F. Ins. Co 128 De BoUe v. Pennsylvania Ins. Co 58 De Foresh v. Fulton Fire Ins. Co 46 DeKahn v. Hartley 112 Delonqnemare v. Tradesman's Ins. Co 112 Demill v. Hartford Ins .Co 154 Dennison V. Thomaston Mutual Ins. Co 133 Denny v. Conway S. & M. Ins. Co 120 Devaux v. J. Clanson 70 Dickson v. Equitable Fire Ins. Co 19, 20 Diggs V. Albany Ins. Co 83 Dill V. Quebec Ass. Co 217 Dimock V. New Brunswick Mutual Ass. Co 32 Dix V. Mercantile Ins. Co 195 Dixon V. Sadlier Ill Dobson V. Sotheby 90 Dodge County Mutual Ins. Co. v. Rogers ]48 Dot d. Pitt V. Laming 11 Doe d. Pitt V. Shewin 7 Doemay v. Barrowdale 354 Dowker V. Canada Life Ass. Co 29, 38 Downes v. Craig 09 Dresser v. Norwood 54 Drew V. Whetten 25 Drinkwater v. London Ass. Co 105 Duncan v. Sun Fire Ins. C<> Ill Dunlopv. .-Etna Ins. Co 209 Dupin V. Mutual Ins. Co 105 Durar v. Hudson Coimty Miitual Ins. Co 61 Dutton V. New E'lgland Mutual Fire Ins. Co 128 Dwyerv. Edie 349 E. Eagle Ins. Co. v. Lafayette Ins. Co 264 Edes V. Hamilton Mutual Ins. Co '. 208 EdAvards V. Baltimore Ins. Co 213 Elliott V. Royal Exchange Ass. Co 216 Ellis V. Beaver & Toronto Mutual Ins. C( 300 Ellis V. Kre utgruger 204 Elmaker V. Franklin Ins. Co 106 Elt Fitzgerald V. Gore District Mutual Ins. Co 220 Fitzherbert v. Mather 10, 53 Fitzsimmons v. City Fire Ins. Co 249 Fletcher V. Connnon wealth Ins. Co 73 Flenst V. Waters 340 Flin V. Tobin Ill Flint V. Flennying 70 Flint V. LeMesurier 44 Flint V. Ohio Ins. Co 5 Fogg V. Middlesex Mntiial Ins. Co 190 Foley V. Moline 337 Foley V. Tabor 135 Forbes V. Agawan, 111., Ins Co 150 Forbush V. Western Mutual Ins. Co 249 Forgie v. Royal Ins. Co 202 Fort V. Lee 337 Fortescue v. Barnett 354 Fordrinier v. Hartford Fire Ins. Co U, 9, 10, 34 Fowkes V. Manchester Ass. Co 10 Fowkes V. Manchester & L. Ass. Association 1, 7, 1'8 Fowler v. ^tna Ins. Co 290 Fowler v. Scottish E(j[uitable Ins. Co 25, 27, 55 Foy V. ^tna Ins. Co 84 Francis v. Ocean Ins. Co 230 Franklin Fire Ins. Co. v. Coates 124 Franklin Fire Ins. Co. v. Culver 222 Franklin Fire Ins. Co. v. Drake 27 Franklin Fire Ins. Co. v. Findlay 74 Franklin Fire Ins. Co. v. rpdegratl' i:) Freeman v. Fulton (52 P'riedlaiiilui' v. London Ass. Co 90 Friosinitli v. Agawan Mutual Ins. Co 28 Frost v. Knight 274 G. Gahaghan V. Union Ins. Co 119 (ianiwell v. Merchant's A- Farmer's Mutual P'ire Ins. Co 170 Gardiner v. Piscatatjuis Alutual Fire Ins. Co 147 Gardner v. Home Ihs. Co 300 Garrett v. Pnnincial Ins. Co Ill Gaston v. Wald 258 (Jeach v. Ingall 132 GiHord v. Queens Ins. Co 58 Gilbert v. North American Ins. Co 215 Gilbert v. Stockton 319 Gilbert V. IJritish American Fire tt Life Ass. C( 113 Gladstone V. King 351 Glen V. Lewis 88 TABLE OF CASES CITED. xiii PAGE Glendale ^Y. M. Co. v. Protection Ins. Co 26 Ooit V. National Provincial Ins. Co fl Goodall V. New England Mutual Fire Ins. Co 34, 36 Goodfellow V. Times «fc B. Ass. Co 35 Goodwyn v. Cheveley 296 Goss V. Citizens' Ins. Co 17 Goss V. Lord Nugent I7I Gould V. British American Ass. Co I4.9 Gould V. York County Mutual Fire Ins. Co 40 Goulstone v. Royal Ins. Co 69 Graham v . Barras 304 Grah'im v. Van Diemans Land Co 296 (Jrant v. ^Etna Ins. Co 121 Grant v. Equitable Fire Ins. Co *. 142 Grant v. Howard Fire Ins. Co 110 Grant v. Lexington Ins. Co 276 Great Western Ins. Co. v. Staaden 237 Greaves v. Niagara District Mutual Ins. Co 221 Grenier V. Muiiarch Fire and Life Ass. Co 291 Grevier v. Queen Ins . Co 232 Grim v. Phcenix Ins. Co 99 Grosven(jr v. Atlantic Ins. C< 208 Groves v. Boston Mutual Fire Ins. Co 25 H. Hageden v. Oliverson ,58 59 Haigh v. De La Cour 19 Hale V. Mechanics Mutual Fire Ins Co I55 Haldhead v. Young 10 Halford V. Kymer 348 Hallock V. Commercial Ins. Co Hamilton v. Lycoming Ins. Co 37 Hamilton v. Mendes 329 Hamilton v. Mcmtreal Ass. Co 34O Hare v. Barstow 26 Harkley v. Provincial Ins. Co 323 Harman v. Kingston 44 Harper v. Albany Mutual Ins. Co I7 Harris v. Eagle Ins. Co 4 Harris v. London and Liverpool Fire In.s. Co 99 Harris v. Mantle 286 Harris v. York Mutual Fire Ins. Co 09 Hart V. Western R. R 203 Hartford P. Ins. Co. v. Harmer 237 Hartigan V. Internatiimal Life Ass. Co 121 Hatton V. Beacon Ins. Co 172 Hatton V. Provincial Ins. Co 274 Hay ward v. Liverpool and London F. »$: L. Ins. Co 101 Hay ward V. New England Mtitual Ins. Co 123 Hay ward v. North Western Ins. Co I7 Heath v. Franklin Ins. Co I3 Hebden v. West 72 Heckman v. Isaac 70 XIV TABLE OF CASES CITED. PAGE Hendrickson v. Queen Ins. Co 55, 56 Heneker v. British America Ins. Co 1 25 Henkle v. Royal Exchange Ins. Co. : 25 Hennessey V. New York Mutual M. Ins. Co 319 Henry v. Agricultural Mutual Fire Ins. Co 52, 55 Herkimer V. Rice 79 Hersey v. Merrimack County Mutual Fire Ins, Co 291 Hervey V. Mutual Fire Ins. Co 146 Hickey v. Anchor Ins. Co 36 Hickman v. North British and Mercantile Ins. Co 78 Higgins V. Aquila 334 Hill V. Secretan 46 Hillier v. Alleghany County Mutual Ins. Co 97 Hobson V. W. D. M. F. Ins. Co 177 Hodgkins v. Montgomery Co. Mutual Ins. Co., New York 138 Hodson V. Observer Life Ass. Co 38 Hochster v. De La Tour 274 Hoen. V. Anglo Australian, &c., Life Ins. Co 352 Hoffman v. JEtna Fire Ins. Co ]3 Hoffman V. Western M. & F. Ins. Co 108 Holdsworth V. Wise 305 Holhook V. American Ins. Co 168 Hollingworth v. Brodrick 104 Holmes V. Mutual Fire Ins. Co 116 Home V. Mutual Safety Ins. Co 264 Home District Mutual Ins. Co. v. Thompson 259 Honnick V. Phoenix Ins. Co 26 Hopkins V. Provincial Ins. Co 18, 114 Houghton V. Manufacturers M. F. Ins. Co 118 Houghton V. Reynolds 280 Howard v. Kentuckj'^ and Louisville Mutual Ins. Co 149 Howard Ins. Co. v. Bruner 128 Huff V. Marine Ins. Co 215 Humphrey v. London & Lancashire Ass. Co 359 Hunt V. Royal Exchange Ins. Co 33] Hutchins v. Bowker 16 Hutchinson V. Western Ass. Co 156 Hyatt v. Waif 13 Hyde v. Bruce Ill Hygum v. ^tna Ins. Co 249 Hynds v. Schnectady Co. Mutual Ins. Co 174 I. Illinois M. Ins. Co. v. O'Neill 26 Independent M. Ins. Co. v. Ague w 98 Indiana Ins. Co. v. Rutledge 274 Inman v. Western F. Ins. Co 213 Insurance Co. v. Chase 46 Irvine v. Nova Scotia M. Ins. Co 342 Irvirg v. Manning 4, 323 Ining V. Richardson 3, 4, 49 Isaac V. Royal Ins. Co 9 TABLE OF CASES CITED. XV J. PAGE Jackson V. Massachusetts M. F. Ins. Co 193 Jacobs V. Equitable Ins. Co 51, 144 Jefferson Ins. Co v. Cotheal Ill Johnston v. Berkshire M. F. Ins. Co 104 Johnston v, Graham 193 Johnston V. Niagara District M. Ins. Co 132 Joice V. Swaim 73 Jones V. Dana 21 Jones V. Provincial Ins. Co 23 Joult V. Keene • 354 Joyce V. Maine Ins. Co 122 K. Keeler V. Niagara F. Ins. Co 195 Kelly V. Commonwealth Ins. Co 23 Kelly V. Troy F. Ins. Co 53 Kennedy V. St. Lawrence Co. M. Ins. Co 119 Kenniston v. Mer. Co. M. Ins. Co 9G Kenny v. Halifax Mar. Ins. Co 329 Kenyon v. Berthon 110 Kern v. South St. Louis M: Ins. Co 147 Kernschan v. New York B. F. Ins. Co 50 Kerr v. British America Ass. Co 79 Ketchum v. Protection Ins. Co 64 Kimball v. ^tna Ins. Co 177 Kimball v. Howard F. Ins. Co 40 King V. Prince Edward C. M. Ins. Co 243 King V. Walker 278 King V. Western Ass. Co 320 Knight V. Faith 322 Kreutz v. Niagara M. K. Ins. Co 160 Kunzze V. American Ex. F. Ins. Co 93 Kuntz V. Niagara District M. F. Ins. Co 40 Lafarge V. Liverpool L. «fc G. Ins. Ci 216 Laidlaw v . Liverpool & London Ins. Co 19 Lampkin v, Ontario M. & F. Ins. Co 235 Lampkin v. Western Ins. Co 51 Lane v. Maine M. F. Ins. Co 94 Langel V. Mutual Ins Co., Prescott 140 Laurie v. Douglas 321 Lawrence v. Hoiyoke Ins. Co 208 Lawrent v. Chatham F. Ins. Co 246 Lazare v. Phoenix Ins. Co 292 Leadbetter v. ^tna Ins. Co 230 Leclaire v. Crasper 263 Lecras v. Hughes 80 Leduc v. Prov. Ins. Co 322 Lee v. Brown - 355 Lee V. Jonea 353 XVI TABLE OF CASES CITED. PAGE Leggett V. ^Etna Ins. Co 174 Leonarda v. Phcenix Ass. Co 106 Levy V. Baillee 19 Lewis V. Monmouth M. F. Ins. Co.. 237 Liberty Hall Ass. Co. v. Housatonic M. F, Ins. Co 121 Lightbody v. North Am. Ass. Co 36 Linford v. Prov. H. & C. Ins. Co 55 Lingley v. Queen Ins. Co 20 Livingstone V, Western Ass. Co 1, 16, 24 Lumas V. British Am. Ass. Co 125 London Ass. Co. v. Montefiore 199 London Dock Co. v. Sinnott 57 London & N. W. R. Co. v. Glyn 3, 45 Longdale v. Mason 105 Longhhurst v. Star Ins. Co 80 Lonnsbury v. Protection Ins. Co 226 Lothian v. Henderson 110 Longhhurst v. Conway F. Ins. Co 530 Loughhurst v. Star Ins. Co 80 Lovejoy v . Augusta M. F. Ins. Co 40 Lowry v. Bourdieu 28 Liicas V. Jefierson Ins. Co 249 Lucas V. Worswick 29 Lucena v. Crawford 58 Luckie v. Bushby 239 Lycoming Ins. Co. v. Mitchell 5 Locoming Co. M. Ins. Co. v. Schollenberger 213 Lynch v. Dalzell 192 Lyndsay V. Niagara D. M. F. Ins. Co 143 Lynn v . Burgoyne 32 M. Macarthy v. Commercial Ins. Co 73 Macpherson v. St. Lawrence F. M. Ins. Co 276 Mahoney v. Prov. Ins. Co 338 Mann v. Western Ass. Co ,.. 71 Manning v. Bowman 205 Mansfield v. Maitland 79 Marchesson v. Merchants Ins. Co 108 Marion v. Great Republic Ins. Co 233 Markle v. Niagara D. M. F. Ins. Co 226 Marks v. Hamilton 78 Marsden v. City & C. Ass. Co 102 Marsden v. Reed 317 Marshall v. Emperor L. Ass. Co 141 Marshall v. Times F. Ins. Co 116 Martin v. Gilham 286 Martin V. Home Ins. Co 126 Mason v. Agric 'Uural M. Ins. Co 124 Mason v. Hart rd F. Ins. Co 75 Mason v. Harvey 216 Masters v. Madison M. Ins. Co 54 TABLE OF CASES CITED. XVU PAGE Mathewson V. Western Asa. Co 1, 49 Matthews V. Howard Ins. Co 104 Mayall v. Mitford 115 Mayor of N. Y. v. Hamilton Ins. Co 174 Mead v. Davison 9 Meagher V. J^tna Ins. Co 16, 31 Meagher v. Home Ins. Co 180 Mellen V. Hamilton F. Ins. Co 162 Menzies V. North British Ins. Co 106 Mercantile Mar. Ass. Co. v. Fetherington 16 Merchants Ins. Co. v. Edmond 12 Merchants & M. M. Ins. Co. v. Washington M. Ins. Co 122 Merrick V. Germania F. Ins. Co 13 Merrick v. Provincial Ins. Co 77 Merritt V. Niagara Cistrict Mutual F. Ins. Co 158 Miall V. Western Ins. Co 43 Michael v. Mutual Ins. Co 6 Millandon V. Atlantic Ins. Co 95 Millandon V. New Orleans Ins. Co 100 Miller v. Western Ins. Co 11 Milligan v. Equitable Ins. Co 71 Mitchell V. Lycoming M. Ins. Co 299 Mittleberger V. British America F. & L. Ass. Co 308 Moadinger v. Merchants F. Ins. Co 94 Moens V. Hayworth 135 Molteaux V. Lond .n Ass. Co 24, 36 Montgomery V. Gore Dis. M. Ins. Co 302 Montreal Ass. Co. v. McGillivray 7, 22, 55 67 Montreal F. Ins. Co. v. Stanstead S. & C. Ry. Co 302 Moody V. ^tna Ins. Co 229 Moore v. Home Ins. Co 76 Moore v. Protection Ins. Co 173 Morrells V. Irving F. Ins. Co 260 Morrison v. Tennessee Marine and F. Ins. Co 134 Morton V. Patillo 344 Mose V. Hastings Gas Co 262 Motley V. Manufacturers Ins. Co 49 Moxam v. Atkins '. 334 Mulvey V. Gore D. M. F. Ins. Co 27 Mulvey v. Shawmut M. F. Ins. Co 7 Muma v. Niagara D. M. Ins. Co 131 Murdock v. Chenango Mutual Ins Co 149 Murphy V. Peoples Equitable M. F. Ins. Co 119 Mutual Ins. Co. v. Deale 118 Myers V. Sari 15 Myles V. Montreal Ass. Co 309 Myles V. Thompson 288 Mu. .,-.-. ^.->^ McBride v. Gore District M. F. Ins. Co 47 McCoUumv. ^tna Ins. Co 266 McConnell v. Delaware Ins. Co 293 2 XVlll TABLE OF CASES CITED. PAGE McCuaigv. Unity F. Ins. Co 338 McCulloch V. Gore District M. & F. Ins. Co 244 McDonnell V. Beacon F. Ins. Co ...• 136 McEvers V. Lawrence 213 McEwan v. Gutteridge , 93 McFaulv. Montreal F. Ins. Co 28 McGibbon v. Queen Ins. Co 99 McGillivary V. Montreal Ass. Co 277 McGivera V. Prov. Ins. Co 14 McGivney V. Phcenix Ins. Co 71 Mclnnes V. Western Ass. Co 298 McKenziev. Times & B. Ins. Co 286 McLachlan V. ^tna Ins. Co 166 McLean v. Phoenix Ins. Co 240 McMillan V. Gore Dis. M. F. Ins. Co .-... 295 McQuaig V. Quaker City Ins. Co 109 McSiviney V. Royal Ass. Co 79 N. . - ' '^ National F. Ins. Co. v. Crane 25 Nave V. Home M. Ins. Co 95 Naylor v. Taylor 329 Newby v. Reed 107 Newcastle F. Ins. Co. v. McMorran 7 N. E. Fire & M. Ins. Co. v. Schettler 23 New England F. & M. Ins. Co. v. Wetmore 11 Newhall v. Union M. Ins. Co 124 New Mark v. London & L. F. Ins. Co 99 New York Ins. Co. v. Thomas 17 New York B. F. Ins. Co. v. New York F. Ins. Co 263 New York B. & P. Co. v. Washington F. Ins. Co 14 New York C. Ins. Co. v. National P. Ins. Co 6 New York Equitable Ins. Co. v. Langdon 173 Niagara F. Ins. Co. v. De Graff. 67 Niagara District M. Ins. Co. v. Lewis 237 Niblo V. North American F. Ins. Co 69 Nichols V. Fayette M. F. Ins. Co 4 Nichol V. American Ins. Co 54 Noad V. Prov. Ins. Co 153 Noonan v. Hartford Fire Ins. Co 230 North B. «ScM. Ins. Co. v Moffatt 358 Norton v. Ransselaor and Saratoga Ins. Co 224 O. Ocean Ins. Co. v. Francis 215 O'Connor v. Imperial Ins. Co 34 Ogden V. Montreal Ins. Co 49, 58, 63 Oldman v. Bewicke 230 O'Neill V. Buffalo Ins. Co 174 Orchard v. JEtna Ins. Co 79 Osser V. Prov. Ins. Co 156 Ott V. Liverpool, London and [Globe Ins. Co 286 Ottawa F. Ins. Co. v. Liverpool, London and Globe Ins. Co 178 TABLE OF CASES CITED. WL P. PAGE Pacaud v. Monarch Ins. Co 169 Paddock V. Franklin Ins. Co 342 Palmer V. Pratt 84 Park V. Phoenix Ins. Co 19, 20 Parson v. Bignold 25, 55 Paterson v. Harris 320 Patrick v. Farmers' Ins. Co 215 Patterson v. Continental Ins. Co 30 Patterson v. Powell 63 Patterson V. Provincial Ins. Co 279 Patterson v. Ritchie 329 Patterson V. Royal Ins. Co 36,54, 57 Pearson V. Commercial Union Ass. Co 103 Peddie v. Quebec F. Ins. Co 1, 244 Pemberton v. Oakes 353 Penley v. Beacon Ass. Co 36, 53 Pennsylvania Ins. Co. v. Bowman 202 People's Ins. Co. v. Spencer 53 Peoria Ins. Co. v. Lewis 213 Peoria M.&F. Ins. Co. v. Frost 270 Peoria M. & F. Ins. Co. v. Hall 272 Peoria M. & F. Ins. Co. v. Hervey 270 Peoria M. & F. Ins. Co. v. Whitehill 272 Perkins V. Equitable Ins. Co 130 Perkins V. Washington Ins. Co 36 Perry v. British America F. & L. Ins. Co 53 Perry V. Newcastle D. M. F. Ins. Co 29, 30, 33 Perry Ins. Co. v. Stewart 196 Phoenix Ins. Co. v. Lawrence 175 Phoenix Ins. Co. v. Taylor 174 Philhook V. New England M. Ins. Co 165 Philips v. Protection Ins. Co 227 Pim V. Reid 86 Pimm V. Lewis 134 Plahts v. Merchants Ins. Co 51 Piatt V. Gore District M. F. Ins. Co 232 Pole V. Leask 288 Post V. ^tna Ins, Co II Potter V. Ontario & L. M. Ins. Co 154 Powles V. Innes 3 Prince of Wales Ins. Co. v. Harding 6 Prince of Wales Ins. Co. v. Palmer 28 Pritchard V. Merchants & T. L. Ins. Co 7 Protection Ins. Co. v. Hall 20 Protection Ins. Co. v. Harmer Iji3 Protection Ins. Co. v. Pherson 229 Provincial Ins. Co. v. ^tna Ins. Co 275 Pupke v. Resolute F. Ins. Co 206 Q. Quebec F. Ins. Co. v. Molson 262 Quebec Marine Ins. Co. v. Commercial Bank of Canada 303 tl TABLE OF CASES CITED. R. PAGE Racine v. Equitable Ins. Co 230 Rafael v. Nashville M. & F. Ins. Co 45 RafFerty v. New Brunswick F. Ins. Co 176 Ramsay v. Gregory 214 Ramsay W. C. M. Co. v. Mutual Ins. Co 42 Ramsbottom v. Gordon 25 Rathbone v. City F. Ins. Co 92 Reach v. Niagara District M. Ins. Co 118 Redpath v. Sun Mutual Ins. Co 52 Reed v. McLaughlin 319 Reed v. Philps 308 Reed v. Royal Exchange Ass. Co 346 Reed v. Weldon 314 Regnierv. Louisana L. M. & F. Ins. Co 293 Reid V. Gore D. M. & F. Ins. Co 149 Rex V. Doran 292 Rex V. Insurance Co 50 Riach V. Niagara District M. Ins. Co 117 Rice V. Provincial Ins. Co 20 Rice V. Tower 194 Richards V. Liverpool & L. F. Ins. Co 49 Richardson v. Canada W. F. M. & S. Ins. Co 180 Richardson v. Home Ins. Co 49 Richmondville Un. Sem. v. Hamilton Ins. Co 250 Rickman v. Carstairs 15 Ries V. Equitable Ass. Co 286 Ripley v. ^tna Ins Co 27 Ripon V. Cape.' 104 Rising Sun Ins. Co. v. Slaughter 165 Roach \ . New York & Erie Ins. Co 272 Roberts v. French 317 Robertson v. Clarke 334 Robertson V. French 11, 12, 16 Robertson v. New Brunswick M. Ass. Oo 218 Robertson v. Provincial M. & G. Ins. Co 61 Rockingham M. F. Ins. Co. v. Bosher 270 Rodgson V. Richardson Ill Rogers v. Payne 204 Rolland v. North British & Mercantile Ins. Co 92 Roots v. Cincinnati Ins. Co 166 Roper v. Lendor 216 Ross v. Commercial Union Ass. Co 166 Ross V. Bradshawe 307 Roth V. City Ins. Co 113 Routh V. Thompson 58, 59 Routledge v. Burrill ; 230 Routledge V. Grant 37 Roumage V. Mechanics F. Ins. Co.. 216 Roux V. Salvador 324 Rowe V. London & L. F. Ins. Co 60 Royal Canadian Bank v. European Ass. Co 141 TABLE OF CASES CITED. XXI PAGE Riidsen v. Pope 206 Riiss V. Mutual F. Ins. Co 194 S. Sadlers Co, v. Badcock 63 Salvin v. Longston 8 Sandford v. Mechanics M. F. Ins. Co 212 Sayles V. North Western Ins. Co 110 Sayres v. Hartford F. Ins. Co 75 Scatcherd V. Equitable F. Ins. Co 48 Schenck V. Mercer Cy. M. Ins Co 156 Schmidt V. New York Union F. Ins. Co 294 Scottv. Avery 297 Scott V. Niagara D. Ins. Co 17' Scott V. Phoenix Ins. Co 215 Scott V. Quebec F. Ins. Co 12 Scriptur V. Lowell M. Ins. Co 99 Seghetti v. Queen Ins. Co 232 Sexton V. Montgomery County Ins. Co 156 Shaw V. Phoenix Ins. Co 64 Shaw V. Robberds 85 Shaw V. St. Lawrence County M. Ins. Co 18 Sheldon V. Hartford Ins. Co 26 Sherboneau V. Beaver M. Ins. Co 236 Sheridan v. Phoenix Ass. Co 6 Sibbald v. Hill 116 Sillem V. Thornton 87 Sim V. Edwards 281 Simeral V. Dubuque M. F. Ins. Co •. 200 Simpson v. Accidental Death Ins. Co 7 Simson v. Cooke 353 Simsouv. Scottish M. F. & L. Ins. Co 258 Sinclair V. Maritime B. A. Co 352 Sloat V. Royal Ins. Co 166 Smith V. Commercial Union Ins. ^Co ., 357 Smith V. Mechanics & Traders F. Ins. Co 122 Smith V. Monmouth M. F. Ins. Co 193 Smith V. Packard 49 Smith V. Provincial Ins. Co 70 Smith V. Queen Ins. Co 217 Smith V. Roe 288 Smith V. Royal Ins. Co 67 Snyder V. Farmers Ins. Co 120 Somers V. AthensBum Ins. Co 89 South, ex parte 354 South A. Ins. Co. v. Randell L. R 47 South L Cal. Co. v. Waddle 57 Sparkes v. Marshall 3, 64 Spitta V. Woodman 317 Stainbank v. Fenning 72 Stainbank v. Shepard 80 Stanley V. Western Ins. Co 12 Stark County M. Ins. Co. v. Hurd J57 XXll TABLE OF CASES CITED. PAGE State M. Ins. Co. v. Roberts 206 Steele v. Franklin F. Ins. Co 46 Sterling V. Vaughan 80 Stevenson v. London & L,|F. Ins. Co 81 Stevenson v. Snow 27 Stewart V. Greenock Marine Ins. Co 324 Stinson V. Pennock 258 St. Louis V. Kyle 213 Stockdale v. Dimlop 72 Stokes V. Cox 16 Stone V. Elliott F. Ins. Co 26 Storms V. Canada F. M. Ins. Co 209 Stout V. City F. Ins. Co 80 Strickland v. Turner 27 Strong V. Harvey 227 Stronpr V. Manufacturers Ins. Co 67 Suffolk F. Ins. Co. v. IBoydnn 262 Sun M. Ins. Co. v. Masson 247 Supple V. Cann 11, 56 Sussex County Ins. Co. v. Woodruff 134 Sutherland v. Pratt 44 Sweet V. Farlie , 351 T. Talaman v. Home & C. M. Ins Co 98 Tallman V, Atlantic F. & M. Ins. Co 63 Tallman v. Mutual F. Ins. Co 275 Tarleton v. Stamforth 6-8 Tarr v, Desjardins 313 Tasker v. Scott 69 Tate V. Citizens M. F. Ins. Co 269 Taunton v. Royal Ins. Co 101 Tayloe v. Merchants Ins. Co 36 37 Taylor v. Smith 328 Tesson V. Atlantic M. Ins. Co 25 Thames v. Times & B. F. Ins. Co 225 Thames I. Co. v. Royal M. S. P. Co 172 Theobald v. Railway P. A. Co 353 Thompson v. Hopper 14g Thompson v. Montreal Ins. Co 98 Thompson v. Royal Exchange Ass. Co 33I Thurtell v. Beaumont 294 Tidswell v. Ankerstein 4g Tilt v. Silverthome 6^ Tilton v. Hamilton F. Ins. Co 98 Tittemore V. Vermont M. F, Ins. Co I93 Todd V. Liverpool & L Ins. Co 26 Toms V. Wilson 228 Toronto S. B. v. Canada L. Ass. Co 247 Tourville v. Ruchle 342 Townsend v. North Western Ins. Co I47 Townsend v. Shangoon 25 • • • TABLE OF CASES CITED. XXIU PAGE Trail v. Baring 121 Trew V. Railway P. A. Co 352 Trull V. RoxburyM. Ins. Co 109 Trumbull V. Portage County M. Ins. Co 195 Trustees, &c. v. Brooklyn F. Ins. Co 203 Trustees, &c. v. Western Ass. Co 254 Tucker v. Provincial Ins. Co 23, 61 Tunno v. Edwards 323 Turley v. North American Ins. Co 229 Turner v. Harvey 354 Turquand v. Armstrong 143 Tyler v. ^tna Ins. Co 71 Tyler v. Home 28 Tyrie v. Fletcher 27 U. Ulhde v. Walters 25 Union Ins. Co. v. Hoge 7 Vance v. Foster 4 Van Denser v. Charter Oak M. & F. Ins. Co 236 . W. Wainwright v. Bland 349 Walden v. Louisana Ins. Co 133 Walker v. Maitland 104 Walker v. Provincial Ins. Co 5 Walker v. Western Ass. Co 235 Wallv. Howardlns. Co 119 Wallace v. Insurance Co 4 Walroth V. St. Lawrence C. M. Ins. Co 127 Walters V. Washington Ins. Co 203 Washington County M. Ins. Co. v. Merchants & Mar. I. Co 106 Washington Union Ins. Co. v. Wilson 294 Watchorn v. Langford 83 Waters v. Louisville Ins. Co 99 Waters V. Monarch F. & L. Ins. Co 45 Watson V. Summers 291 Waydell V. Provincial Ins. Co 287 Wedderburnv. Bell 133 Weinaugh V. Provincial Ins. Co 34 Weir v. Anderson 303 West V. Lockyer 230 Weatv. Old Colony Ins. Co 92 West Branch Ins. Co. v. Heffensteiu 195 Western V. Genesee M. Ins. Co 31 Western Ass. Co. v. Atwell 51 Westlake V. St. Lawrence County M. Ins. Co 236 Wheelton v. Hardisty 351 White V. Agricultural M. Assce. Co ,,... ,,..,, 131 XXIV TABLE OP CASES CITED. PAGE White V. British &M. L. Ass. Co.. 352 White V. Madison 51 Whitehead V. Brice 115 Whitehunist V. Fayetteville M. Ins. Co , 98 Whyte V. Home Ins. Co 72 Wiggins V. Queen Ins. Co 238 Wightman v. Western Marine & Fire Ins. Co 237 Wilbur V. Bowditch M. Ins. Co 19, 123 Williams V. G. W. R. Co 295 Williams v. New England F. Ins. Co 112 Williamson V. Gore District M. Fire Ins. Co 244 Williamson V. Niagara District M. F. Ins. Co 130 Wilson V. ^tna Ins. Co 273 Wilson V. Duckett 28 Wilson V. Hill ; 200 Wilson V. Martin 80 Wilson V. Merchants M. Ins. Co 316 Wilson V. R. E. A. Co 28 Wilson V. State F. Ins, Co 212 Wilson V. Tummun 58 Wing V.Harvey 56 Wise V. Metcalf 69 Witherell v. Maine Ins. Co 98 Wood V. Poughkeepsie M. Ins. Co 7 Woodbury, S. B. v. Charter Oak Ins. Co 52 Woodhouse V. Provincial Ins. Co 321 Wolf V. Howard Ins. Co 107 Wolft" V. Horncastle 59 Worcester Bank V. Hartford F. Ins. Co 156 Workman V. Royal Ins. Co 280 Worsleyv. Wood 231 Wright V. Poole 79, 246 Wyman v. Prosser 271 Wyman v. Wyman 271 X. • Xenosv. Wickham 34, 42, 65 Young v. Austin 281 Young V. Eagle F. Ins. Co 193 THE LAW OF INSURANCE. CHAPTER I. THE CONTRACT OF INSURANCE. Insurance is a contract whereby, for a stipulated con- sideration, one party undertakes to indemnify the other against damage or loss on a certain subject by certain perils (a). The principle of indemnity is a general principle which runs through the whole contract of insurance, and it is applicable to insurances against fire as well as to marine insurance. The contract in a life policy is, however, not one of indemnity (h). In determining, therefore, the loss or damage for w^hich indemnity is to be made, the state of things at ihe time of action brought is to be considered and whether at that time any actual damage exists. Thus, where before action brought, the premises destroyed by fire had been rebuilt, and restored to the insured in as good condition as before, it was held that he could not recover (c). In this case, the insured was only interested in the property as mortgagee to the extent of his security, and the court considered the security was as perfect after the (o) lAvimjatoner. Weatei'u Aaace. Co., 14 Grant, 403. See ahnPcddic r. (Quebec F. Asace. Co., Stuart's L. V. Appeals 177. (6) Dalby V. India d- L. L. Aaacc. Co., 15 C B., 3G5 fcj Mathcwson r. Western Aasce. Co., 4 L. C. J., 57. 2 THE LAW OF INSURANCE. rebuilding as it was before ; and that, therefore, no loss had been sustained ; and on this ground the action was dismissed. In all forms of policy which the writer has seen, the express language of the contract to pay renders it merely a contract of indemnity. The contract is only to pay all such immediate loss or damage by fire as may happen to the subject insured during a specified period of time. The word " immediate " is inserted to protect the in- ourers from losses of a consequential or constructive character, for although the rule is that the proximate and noi; the remote cause of the loss is to be looked to in determining the liability of the insurers, yet in its appli- cation the words " proximate cause " are not to be under- stood in their stric^. ind limited sense as meaning only that cause that immediately precedes and directly occa- sions a loss. It is settled now that insurers, both upon marine and fire policies, are not only responsible for losses produced by the direct action of a peril insured against, but losses in their nature consequential. On the principle already explained, that the contract is one of indemnity only, if the insured transfers all his interest in the property insured, he has no claim apon the policy as he can show no damage, and all claim for subsequent loss will be at an end unless the policy has been regularly assigned with the assent of the company, and then only in favour of the assignee of the policy on whose behalf as a nominal plaintitf the party origin! lly interested must sue. In order to recover the insured must have an interest in the property protected by the insurance, and if he has not, he is met either by ti plea denying his interest, or by a plea alleging that he has not been damnified by the loss. Hut the assignment of the pro- perty insured does not invalidate the policy, provided THE CONTRACT OP INSURANCK. . 8^ the parties keep the contract of insurance alive lor the benefit of the assignee (a). If on a sale the insured still retains a partial interest in the property, the policy will protect such interest if there is no provision therein to the contrary (b). In general when the interest ceases as to part of the property, the policy is good at law for the remainder (c). But it would be safer in every instance of the discontin- uance ofinterest, for the insured to give notice to the office and thereby create aprivityof contracton the altered basis. In the case of mutual companies, any alienation by sale or otherwise is in general prohibited, without written notice or consent, and a similar condition is sometimes inserted in the policies of proprietary companies. It seems that if, during the currency of the policy, the insured parts with his interest, but afterwards regains it, the policy will re-attach if the insurers are not pre- judiced: the subject and the risk remaining the same as described in the policy. Thus where the insured, after making the policy, assigned the property insured to A., and also purported to assign the poHcy to him by a form of assignment, which however the court held invalid, but alterwards, before the loss, the goods were retrans- ^erred to the insured, and he was in possession of them at the time of the fire, it was held that he could recover the amount insured, the assignment of the policy not being effectual to transfer the contract to A (d). The policy is either open or valued. In fire insurance (a) Da vies v. Home Ins. Co., 24 U. C. Q. B., .'iC4. London dk iV. W. R. Co. V. Oh/n, 1 E. & E., i)')2. Sparkes v. Marsha/I, 2 IMng. N. C, 701. Poiolesv. iHTies, 11 M. & W. 10. (6) .mnu Ins. Co. v. Tyler, 16 Wend, X Y., ;<85. Aijresv. Hartford F. Int. Co., 17 Iowa, 17(i. (<;) Irvinm' Iii<'h In order to construe a term in a written instrument, where it is used in a peculiar sense differing from its or- dinary meaning, evidence is admissible to prove the pe- culiar sense in which the parties understood the word, but it is not admissible to contradict or vary what is plain. (a) Merchnnts Ins. Co. v. Edmond, 17 Gratt (va. ), 138. (6) Stanley v. Western Ins. Co., L. R., 3 Ex., 71. (c) Robertson v. French, 4 Ea. , 130, Ante. p. 11. (d) Scott V. Quebec F. Assce. Co., Stuarts L.fC, Appeals, 147. THE CONTRACT OF lNSUllA>fCE. IS Where a policy of insurance effected on a steamer pro- hibited the keeping of more than 20 pounds of gunpow- der on the " premises," it was held that the meaning of the word "premises" must be gathered from the con- tract itself, and not from any external evidence, and that parol evidence was not admissible to show that the word "i)remises" was not intended to include the steam- er (a). ■ .* • • ' '■-■■ , i ■ ■ ," '- In the construction of a policy, a particular description which is clearly false, may be rejected as surplusage, in order to give effect to other descriptive words, when such words are sufficient to define the building intended to be described (b). .. The conditions of the policy are to be construed strict- ly against the insurers, as they tend to narrow the range and limit the force of the principal obligation (c). So where the insurers have left their design doubtful, by using obscure language, the construction will be most unfavourable to them (d). The policy being a deed-poll, can only be construed as containing the language of the party executing, and not the language of both parties, as in the case of an in- denture. In the case of a mutual company, in order to arrive at a proper understanding as to the rights and obligations of the parties to the contract, the charter of the company, the policy issued by it, and the conditions annexed there- to, must be read together (ej. (a) Beacon F. rint, because they are the immediate terms selected by the parties, and may be assumed to have received their special attention, whereas the others are a general formula {d). Thus, where a vmtten condition on the i'ace of the l)olicy provided " that the vessel was insured against total loss only, and that no claim for general average loss or particular average loss shall attach under the policy," it was held that this condition must prevail, although there were printed conditions endorsed on the policy in- consistent with it (e). In general, when the policy contains written and printed stipulations which are inconsistent with each (a) Andermn v, Fitztferald, 4 U. L. C, 484. Fowkes v. Mavchestev Aatce. Co., ;12L.J., (Q.B.), 153. {b) ^Stokes v. Cox, 1 II. & N., USS. Bunyon on V. Ins., 54. (e) Hutchim r. lioivkcr, 5 M. & W., 542. Arnould on M. Ixw. 1051. ((/) Livingstone r. Western /I .sacr. Co., 14 (Jraut, 471. Alacujer v. St. Kutfuivine'it Dock Co., 14 M. & W., 798, per Pollock, (J.B. Hafhead v. Young, K. & B., ;<'20. per Erie J. Rolertson r. French, 4 Ea., l.'WJ. (f) Meagher r. .Etna Fns. Co., 20 U. C. g. B., (i07 ; S.C., 11 U. C. (!. P., ;{2H. And, »ee ako Mercantile Mar. Asare. Co., v. Titheriugton, 5 B. & 8., 705. THE CONTRACT OF INSURANCE. 17 other, the written clauses must prevail (a); and, iu several cases in the United States where, by the written words of description in the policy, the insurance was on articles which, by the printed conditions^ were prohibited as hazardous, the insured was, nevertheless, held en- titled to recover (h). But the construction is the same whether the contract is wholly written or wholly printed, for, in both cases, it is of equal validity (c). In construing an ambiguous instrument prepared by the company, and submitted by them to the party effecting insurance for his signature, it must, according to the principle already explained, be construed most strongly against the company, and the language used by the latter ought to be construed in the sense in which it would be reasonably understood by the insured (d). Thus, if, in the application for insurance, questions are put in such a way that the applicant may be misled as to the information required of him, he will not lose his insurance if he has acted in good faith, and has honestly given what he believed was sought of him, and has really been led into the difficulty by the carelessness of the company itself in framing the questions which they desired him to answer. The application for insurance, though purporting to be put forth by the assured as the basis on which the insur- ance is to be effected, must be considered as the notice by the company to intending insurers of the information they wish communicated to them, and in all fairness (rt* Goss V. Citizens Ins. Co., 18 La. An., 1)7. Benedict v. Ocean Int. Co., 31 N. Y., :WJ. {b) See Hayxoard v. North Western Ins. Co., 19 Abb. Pr., N. Y., IIG. /?»•,«• ant V. Poutjhkeepsie M. Ins. Co., 17 N. Y., 200 ; 21 Barb., N. Y., 154. Harpa^ 0. Albanp M. Ins. Co., 17 N. Y., 1J)4. (r) New Yoi'k Ins. Co. v. Thoims, 1 John'H 1. (d) Fowkes c. Man. A L. Asscc. Association, '.i B. & S. 925. B 18 THE LA.W OF INSURANCE. should contain such cl ar intimations of information as would enable the signer of the application to give it with- out any hesitation or doubt as to what was intended. Thus, where the application required the insuied to say whether he was owner ol the premises or not, and by the terms of the policy the applicant was bound to represent fairly every material fact and circumstance in regard to the risk, and the condition, situation and value of ilie pro- perty, and a proviso was inserted that if any material foct or circumstance should not be fairly represented, the policy should be void, an answer in good faith by the insured that he was owner, he being such in one sense, was held not to avoid the policy {a). Held also that in order fairly to judge of the answers of plaintitf, evidence might be given of the surrounding facts as to the ownership of the building and of the land, and that to establish the bona fides ol' the plaintiffs an- swers he might shew that defendant's agent, who drew up the statement, had been informed by plaintiff, or some one else, to plaintitf's knowledge, of the state of the title to the premises (h). Any fraud or misrepresentation in procuring the in- surance will render the policy void. Where the plaintiff applied for an insurance with the defendants, as if the property were his ovnii stating that it was occupied by himself, and unencumbered, and ob- tained a policy for two-thirds of the value which he represented it to be ; and it appeared that he was only in possession of the land as lessee for years, and that he had grossly overstated its value, and especially his in- terest in it, it was held that the policy was void (c). (o) Hopkins v. Prov. Ins. Co. 18 U. C. C. P., 74. (b) lb. (c) Shaw V. St Lavyrence Cy. M. Ins. Co., 11 U. C. Q. B., 73. THE CONTRACT OF INSURANCE. 19 In o-eneral, an overvaluation of the^property insured is a fraud upon the insurers which will make the contract void (a). But as to the valuation of property insured, there is a manifest difference between marine risks and risks upon buildings, t^hips when insured arc generally not in a situation to be ii\spected and examined by the insurer, w^ho is, therefore, obhged to depend on the account of the ship given by the owner ; but it is not so with buildings on shore. The company or their agent has generally convenient means of inspecting them, seeing their real condition, and judging ol their value; and thus the same strictness is not required in giving the value of buildings as in the case of ships (h). The overvaluation of the amount of loss or damage, in order to avoid the policy within the meaning of the or- dinary condition, must not arise from mistake or inad- vertence, but must be done either for the fraudulent purpose of obtaining a sum greater thnn the value of the property destroyed, or with the fraudulent design of leading the insurers more readily to acquiesce in the claim made upon them, and to forbear examining so scrupulously into the actual amount of the loss, as they otherwise might have done (c). The plaintilf eflected an insurance with del'endants on certain buildings for SHOO, stating their value to be $3000. In an action on this policy, it appeared that ten days before he had insured the same buildings, together with a driving shed worth $400, in another office, for (o) Haiijh V. De fa Cour, 3 Camp., 319. Levi/ v. Baillee, 7 Bing., 349. WUbar V. Bowditch M. Ins. Co. 10 Cusb. (Mass.), 44G. (6) Dickson v. Equitable F. Ins. Co., 18 U. 0. Q. B., 249, per Robinson, C. J. (c) Park V. Pkctnix Ins. Co., 19 U. C. Q. B., 110. And see Dickson v. Equi- table F. Ins. Co., 18 U. C. Q. B., 248. Laidlaiv v. Liverpool d- L. Ins. Co., 13 Grant, 379. Canada L. 0. Co. v. Canada Ins. Co. 17 Grant, 418, M THE LAW OF INSURANCE. 1900, and had then vakied the whole at from SI 200, to S1400. The poHcy contained no warranty or condition as to fraudulent valuation. The plaintiff only estimated his loss at $2089. The evidence as to the actual value was contradictory, and the great difference in the plain- tiff's two valuations was not explained. The court i.a- clined to the opinion that the manifest overvaluation without any fraudulent intention on the part of the plaintiff" would avoid the policy ; but, as a jury alone can draw inferences of fraud, they held that the case must be submitted to them, and granted a new trial. On the second trial, the jury found for plaintiffj and the court refused to disturb the verdict (ft). ■ > The question of overvaluation or fraud in a policy of insurance is properly left to the jury ; and, although the court may be dissatisfied with the value put upon his pro- perty by the assured, still, unless it appears that the valua- tion was in.a,de mala Jide for a fraudulent purpose, and not by error of judgment, they will not disturb the verdict, (b). Where a house was insured for £250, and proved to be worth at least .£400 ; but there being no exact evidence as to value, it did not appear that the house was not worth £500, it was held that there was no overvaluation, though the plaintiff, as widow, was only entitled, under the statute of distributions, to recover one half the value of the house (c). A slight over-estimate such as might reasonably be accounted for from difference of opinion will not avoid the policy {d). (a) Dicksmi r. EquUahle Fire Ins, Co., 18 U. C. Q. B. 240. (b) Rice i\ Pror. Ins. Co., 7 U. ('. 0. P., 548. Park i\ Pliunix Ins. Co., 19 u. V. q. B., 110. (c) Lintjleij r. Queen Ins. Co., 1 Hannay, 280. (). By the provisions of the Statute of Canada, 31 Vic, c. 48, no company (unless transacting ocean marine in- surance exclusively) can issue any policy or take any risk, or receive any premium, or transact any business of insurance in Canada, or prosecute or maintain any suit, action, or proceeding, either at law or in equity, or file any claim in insolvency without first obtaining a licence from the Minister of Finance to carry on business in Canada. By the same Act the Hcence is not to be granted until the company has deposited, in the hands of the Receiver-Greneral of Canada, the sum of fifty thousand dollars as security to the policy-holders. Pro- vision is also made that until the deposit shall equal one hundred thousand dollars, the company shall, each year, deposit in the hands of the Receiver-Greneral a certain portion of its premiums. The deposit required to be made by foreign fire insur- ance companies under the 28 Vic, c. 33, is intended for (a) Jon^i V. Dana, 24 Barb., N. Y., 395. '{b) See Con, Stats. L. C, c. 68, s. 3, s-s. 2. Con. Stats. U. C, c. 52, s. 62 24 Vic, c. .32, s. 5. 22 THE LAW OF INSURANCE. the security of Canadian policy-holders, who have sus- tained loss by fire, and on the insolvency of any such company, the general .creditors of the company are not entitled to share the deposit with the policy-holders, not- withstanding the provisions of s, 7, that on judgment recovered against such company, execution may be levied on such deposit as aforesaid. In case of a deliciency of assets, the costs of creditors in proving claims, are to be added to the debts and paid proportionally, and are not entitled to be paid in priority to the debts {a). It is in all cases important that the company should conform to the provisions of their charter in making their contracts and in doing other acts, for it would seem that the company has no authority to issue policies except in conformity with the limitations and restrictions con- tained in their charter and by-laws, and it is at least doubtful whether an insurance by parol would be good when the charter provides that policies may be made by writing under the corporate seal (6). An incorporated'insurance company cannot, it seems, bind themselves by a parol contract of insurance, and where there is an application for insurance and payment of the premium, but no issue of the policy to the plaintfff, he cannot sustain an action on the agreement as for an actual insurance, but if he can prove an agreement to insure, in which the terms have been so fully settled by the parties, that nothing remains to be done but to deliver the policies, then the insured has a remedy at (ft) Re .Etna Ins. Co., 17 Grant, 160. (ft) Allen V. Mutual F. Ins. Co., 2 Md., Ill, citing A ■ To afford grounds for reforming a policy for mistake, the mistake must appear to have been mutual (d). Parol evidence, though not admissible to control the meaning of a policy or of any other written instrument, is admissible as in cases of other mercantile instruments to explain the language of the policy with reference to the usual practice of trade, e.g., to show that the Gulf of Fin- land is considered by mercantile men as part of the Baltic (e). . - : (a)Dretvv. Whetten, 8 Wend {'N.Y.),1Q6. Ewerv. Wnshington Ins. Co., 16 Pick. (Mass.), 503. Groves v. Boston M. Ins. Co., 2 Cranch., 418. Townsend v. Stran- goon, 6 Vera., 328. Ramsbotton v. Gordon, 1 Ves. & Beames, 165. Collett v. Morrison, 9 Hare, 162. Henklc v. Royal Ex. Ins. Co., 1 Ves. Sr., 317. (6) Angell on Ins. 58, and see Parsons v. Bi{niold 15 L. J. (Ch.), 379. Fowkr V. Scottish Eq. Assce. Co., 4 Jur., N.S., 1169. (c) Tesson v. Atlantic M. Ins. Co. 40 Mo., 33; National F, Ins. Co. v. Crane, 16 Md., 260. (rf) Cooper V. Farmers' M. F. Ins. Co., 50 Penn. st., 299. (e) Smith's Mer. Law, 343. Aquilars v. Rogers, 7 T. R., 421 ; and Uhde v. Walters, 3 Camp. 16. 26 THE LAW OF INSUllANCii. But no usage of the company, nor even the express agreement of the parties, whether made previous to or at the time of the execution of the pohc}^ can be ad- mitted to explain, modify, or control the writteu con* tract {a). So, verbal conversations had between parties at the time of efiecting a policy, cannot be relied on to vary its terms (h). Parol testimony is admissible to explain a latent am- biguity in regard to the merchandize intended by the parties to be embraced in the policies (c). "Where the policy was for "=£1000 on oil mill; on steam engine therein, £300 ; on logwood warehouse, in which chopping dyewood is performed, communicating with the mill, £200; on warehouse on the other side of the mill, to the east side, merely for storing goods, £300 " ; it was held that there was no ambiguity in the policy, and that evidence to shew that it was intended to insure the machinery and gear in the logwood house, was inad- missible ((?). Parol evidence is not admissible to vary the terms of the policy or to shew what risks were intended to be covered and protected by the policy («), nor to vary the terms of the policy and survey, when the latter has been made a part of the contract, and there is no ambiguity in either (/). But it seems such evidence w^ould be admissible to («) IIHnois M. Ins. Co. v. VmUl, 13 III, 89. (6; Todd V. Liverpool and L. Ins. Co. 18 U. C. C. P., 192. ■' -'■'■ ' ' (c) titone V. Elliott F. Ins. Co., 45 Me. 175. (rf) Harev. Bar8toto,8Jur., 928. (e) Honnick v. Plmnix Ins. Co., 22 Mo. 82. (/) Glendale W. M. Co. v. Protection Ins. Co., 21 Conn. 19, Sheldon v. Hart- ford Ins. Co., 22 Conn. 236. THE CONTRACT OF INSURANCE. 27 shew the extent of the interest intended to be protected, if it does not contradict the terms of the policy itself {(t). Such evidence cannot be received to control, explain or modify a warranty in a policy of insurance (6) ; nor can a statement in the policy which is in terms a war- ranty, be shown by parol evidence to have been inserted by mistake (c). But parol evidence is admissible to shew that an as- signment of the interest insured made after the issue of the policy, and before the loss was in fact made, as col- lateral security only, though the assignment was abso- lute on its iiice (d). By the general principles of insurance, whenever the risk to be run is entire, there is no return of premium, though the contract should cease and determine the next day after its commencement. This rule applies to insurances against fire, which generally are made for one entire and connected portion of time which cannot be severed ; and, therefore, if the policy is avoided, and the insurers are discharged the very day after its taking effect, there can be no apportionment or return of pre- mium (e). But where the policy never attaches, the insured may recover back the premium (/). And no doubt he might do so in any case of cesser of interest, if there was an ex- press condition to that effect in the policy. When the policy is void the insured is entitled to a re- turn of the premiums ; but the return of the premiums («) Franklin Ins. Co. v. Drake, 2 B. Monroe, Ky., 47. (6) Eiplei/ V. Jitna Ins. Co., m N. Y., 13«. ■ / (c) Cooper V. Farmers' M. F. Ins. Co., 50 I'enn. St., 299. (d) Ayers v. Home Ins. Co., 21 Iowa, 185. (e) Tyrie v. Fletcher, Cowp. G66. Ste»enson v. Snow, 3 Burr. 237. Fowler v. Scottish Eq., 4 Jur. N. S., 1169. Anderson v. Thornton, 8 Ex., 425. {/) Mulvey v. Gore D. M. F. Ins. Co., 25 U, C. Q. B. 424. See also Strickland V. Turner, 7 Ex., 208. 28 THE LAW or INSURANCE. cannot be ordered in a suit in which the insured fails to shew any right to recover on the poHcy, for this would be g-ranting some relief to a party who has failed in establishing an equity {a). Where the risk never attaches, the premium must be returned, as already explained, provided there is no fraud {b). But, if the policy is obtained by fraudulent misrepre- sentations, and never attached for that reason, no pre- mium is returnable (c) ; and, in general, when there is fraud on the part of the insured or his agent, the pre- mium cannot be recovered back (d). If, however, there is fraud on the part of the insurers, who, at the time of underwriting, privately know cir- cumstances rendering the contract void, the premium may be recovered from them {e). Where the contract is illegal the premium cannot be recovered back, for in such case the maxim, in pari de- lictu potior eat conditio possidentis applies (/"). Where the 14 Geo. III., c. 48, s. 2, was not complied with, the party effecting the insurance having" omitted to insert the name of the person interested as that of the person interested, and the policy not shewing that the insurance was effected by one person in trust for an- other, the names of both being inserted in the policy, it was held that this omission of compliance with the statute (ff) Bleakhji r. Niagara D.M. I»h. (h>., 1(! Grant, l'.)8. (b) Clark v. Maniifarfnrers' Ins. Co., 2 Wood & Minnot, C, C. U. S., 472. (c) Frifxmiith v. Affawavi Mat. Ins. Co., lOCnsh. (Mohh.), .'iSZ. (d) Prince of Walfn Ilia, Co. v. Palmer, 25 lieav., (iOr). WUmn v. Duckett,'.\ Burr., VMM. Tyler r. Iforne, Park oji Ins, ."{2!). Chnpman v. Fraaer, ib. Me- Paul V. Montreal F. Ins. Co., 2 U. C. Q. B., H. See alno Hen V, Gardiner, 4 M. & (Jr., 11. (c) Lucas >: Worswick, I M. (rt) Daniels v. Hudson R. F. Ins. Co., 12 Cuwh. (Mass.), 41G. {b) Dimock v. New Branswwk M. Aaavt. Co., 1 Allen, 31)8. i ((•) Ltiun r. Biir-atory upon the compiiny. Hiough no actual policv issues until after the lire (r . * Where the agreement foi" insurance was made before the lire, and the parties afterwards, in ignorance of the hre, executed and delivered a })olicy in accordance with the agreement, it was held valid and binding ( ;:-,./. (c) Hickey v. Anchor Assce. Co., 18 U. C. Q. i ., 438. (d) Carpenter v. Mutual S. Ins. Co., 4 Sandf. Ch. (N. Y.), 408. (e) Tayloev. Merchants Ins. Co., 9 How,. U. S., 390. (/) Lightbodyv. North Am. Ins. Co., 23 Wend. (N. Y.), 18. THE CONTRACT OF INSURANCE. 87 The rule that the assent of both parties is necessary to complete a contract is as applicable to policies of insur- ance as to any other description of contract, and in order that the contract may be binding, the minds of the parties must meet as to the premises, the risk and its duration, the premium and the amount insured (a). As a proposal for insurance may be made by letter, it is sometimes material to consider when the necessary assent is given to bind the contract. The general doctrine on this point is, that the acceptance of a written proposal for insurance, consummates the contract, provided the offer is standing at the time of acceptance (b). Where the company offered to insure on certain terms by letter, and the insured replied accepting the terms and inclosing the premium, the contract was held to be consummated from the date of mailing the acceptance, though the property was destroyed before receipt of the same by the company (c). The statute, 28 G-eo. III., c. 56, directs that there must be inserted in the policy the naijie or names of one or more of the persons interested, or of consignor or con- signee of the property, or of the persons resident in Great Britain who shall receive the order and effect the policy, or of the person who shall give the order to the agent immediately employed to effect it. The 14 Greo. III., c. 48, provides that it shall not be lawful to make any policy or policies on the life or lives of any person or persons, or other event or events with- out inserting in such policy or policies the person or per- sons' name or names interested therein, or for whose use, («) Baptist (Vi. r. Brooklyn F. Ins. Co., 28 N. Y., 153. (t) Adams r. LindseU, 1 B. & Aid, 681. Routled{)e v. Grant, 6 Hing., 6.5;{. HamUton v. Lycominy Ins. Co., 5 Penn., 339. (c) Tayloe v. Merchants F. Ins. Co., 9 How,, U. S., 390. . -. 38 THE LAW OF INSURANCE. benefit, or on whose account such policy is so made or underwrote. Under the 14 Geo. Ill, c. 48, it is not sufficient that the name of the person interested is inserted in the poHcy, but the name must be inserted an that of the person in- terested (a). A pohcy of insurance recited that the plaintiffs had proposed to effect an insurance on the joint lives of M. and his wife, and had delivered to defendants a declara tion in writing, which was the basis of the contract, and paid the first half-yearly premium. By a declaration of trust the plaintiffs declared that in case of the death of either M. or his wife, they would hold the insurance money for the survivor and for their children. Held, that such policy was illegal under 14GreorgeIII.,c.48,s. 2, for the name of the person interested therein, or on whose account it was made was not inserted in it as such person, and the declaration of trust which shewed that the plain- tiff had no interest could not be incorporated as part of the policy, {b). Where the trustee has no legal interest in the property, as in the case of a husband, devisee or executor, in re- gard to the property of the minor, or wife or legatee, no insurance can be effected in the name of the trustee without also inserting in the policy the name of the per- son beneficially interested {c). "When several properties are covered by the policy, it is sometimes very material to consider whether a separate insurance is effected upon each, for if the insur- ances are separate and distinct, if one is avoided the other will not be effected ; but if they are connected and («) ffodsoti c. Observer L. Asscc. Co., 8 E. & B., 40. - I ._ {b) Dowker a. Canada Life Assce., 24 U. C. Q. B., 591. (<:) Collett v. Morrison, 9 Hare, 162. Hodson i.\ Observer L. Co., 8 E. & B., 40. THE (.'ONTUACT OF [NSUllANCE. IV.) entile, the whole policy fails, by reason ol" any delect avoiding the policy as to any part of the property. Thus, in the case of second insurances, it has often been a question whether they both cover the same proper! y> and if the contract in the lirst policy is divisible as to the different subjects of insurance and creates a separate insurance upon each, a second insurance upon one of these subjects, will only avoid the policy as to that par. ticular subject, and it ^vill remain valid as to tlie others on which the insurance is distinct. It seems clear that by express contract a policy oi in" surance may be made divisible as to the different sub- jects of insurance, and when there are separate sums secured upon each, and a distinct remedy in ease of loss by fire to any one of them without regard to the other buildings, the insurance lor the full amount upon anv one of the properties might be recovered by the assiu-ed, even although he pulled down or removed the other build- ings or subjects of insurance altogether. 8ome d(?fences more particularly applicable to a part of the subjects in- sured may perhaps be held to defeat the insurance upon the whole, and it would seem that in anv case the divi- sibility of the policy as to the different subjects of insur- ance depends upon its terms ; and if the parties desire that the policy should be divisible as to any particular subject, they should be careful to use languaue to that effect in the policy. Thus, where the condition of a policy provided that the •' alteration of cw// huildinii' within the limits described in the application will vitiate the policy,"' and the evidence shewed that there were three different subjects of insurance within the limits described by the apphcation, namely, a frame dweliino- house, barn No. 1, and barn No. 2, insured in different 40 THE LAW OF INSURANCE. sums, it was held that an alteration as to the dwellinj^ house and barn No. 2 avoided the policy as to barn No. 1, although no alteration as to the latter was pleaded, the evidence showing the alteration of a buildmg within the limits described by the application (a). But where an insurance was effected at different rates of premium on two different subjects of property in no wav connected with each other, it was held that the contract was divisible, and that a fact which avoided the policy as to one property, did not affect it as to the other {})) ; and where the insurance was for different sums on several houses, with a clause that if any build- ing should contain any furnace or stove used, etc., the policy should be void in respect to such building, a plea in answer to the whole count, setting out that certain of the buildings did contain furnaces and stoves, was held bad, for the policy might be void as to those buildings, and ptill the plaintiff' be entitled to recover on account of the loss of other buildings insured in the policy (e). In the Con. Stat. U. C, c. 52, s. 27, (see ante p. 32), the expression " the policy shall be void," etc., should be read in the same manner as in the first branch of the section, namely, the " policy of insurance thereon," and the latter expression should be read as meaning the policy of in- surance effected thereon, rather than as meaning the policy as an entire instrument, so that the objectionable part of the policy, if there be any such part in it, may alone be avoided. Where, for instance, a policy covers distinct properties, effecting a separate insurance upon («) Kiintz V. Niauara Dis. M. F. Ins. Co., 16 U. C. C. P., ^iTA. (6) Bale r. (,'oir D. M. Ins. Co., 14 U. C. C. P., 548. (r.) Daniel r. Robinson, Batty, (taO. As to cases where the jjolicy is not ilivis- able, see Barnes v. Union M. F. Ins. Co., 51 Me., 110. Gonld r. York Co. M. F. Ills. Co., 47 Me., 403. Lowjoii i: Augusta M. F. Ins. Co., 45 Me., 472. Kimball v. Hoimrd F. Ins. Co., 8 (Jray (Ma>8.), 33. THE CONTRACT OF INSURANCE. 41 <:^ach at different rates of premium, and the insurance is void as to one property by reason of its being incum- bered within the meaning of the section, the expression "the policy" should be read as above mentioned, so as only to render void that part of the insurance effected on the incumbered property, unless indeed the contract is so expressed, and is so inseparable, that if one part of it is avoided, the rest of it must of necessity be avoided also. There is no doubt that circumstances may render the V). {h) Xenos r. Wilkhain, h. 11,, 2 E. k T. App., \m. THE CONTRACT OF INSUIUNCE. 43 the former, this, it seems, would be a good cancellation in law of the former policy (a). Although a policy of insurance is duly executed and assigned to a third party, with the consent of the com- pany, if an action is afterwards brought, as well on be- half of the assignee as of the original insured, the fact that the assignee was never interested in the insured property, and that before the loss the policy was can- celled by an arrangement between the insurers and in- sured, by which a policy on other goods is substituted, and the unearned part of the premium credited by the insurers to the insured, will be a good answer to the action in equity, and it seems also at law (b). When an alteration is required in a policy, it may be made by an endorsement, if it is such as is provided lor by the conditions of the policy ; but, if not, and the contract becomes a new one, a new policy should be issued (c). («) Afi,tn 0. Western fun. Co., 19 U. C. C. P.. 27G. (6) MiaU a. Western Ins. Co., V.) U. C. C. P., 270. f) (rillson's case, 2 Leach, 1007; 1 Taun., 95. CHAPTER II. THE PARTIES TO THE CONTRACT. The general rule is that any person capable of entering into a contract on his own behalf may insure against fire. No company can, however, become insurers without ob- taining a licence from the Minister of Finance, as already explained (a). A pledgee, or person holding goods for advances, may insure in his own name ib). As may also an agent or consignee to the extent of his lien on goods in his pos- session, where he is paid by a commission on the pro- ceeds or out of the profits of the sale (c). An alien enemy cannot insure in this country, but where the policy is originally valid, and the insured be- comes an alien enemy after the loss and before the action, the right to sue is not lost, but suspended during the war. {d) It seems that a carrier by sea cannot effect an insur- ance against the perils of the navigation, as he has the bill of lading for his indemnity; but an inland carrier may in general insure (e). Where carriers effect an insurance " on goods their own and in (rust" as carriers, they may recover the full value of the goods, although, by reason of non-compli- ance with the Carriers' Act, 11 Greo. IV. and 1 Wm. IV., c. 68, they would not be responsible to the owners for («) Set- Ante p. 21, :U Vic, o. 4H. ih) Siitlnrhniti r. I'rutt, 11 M. & W., 21K». (>•) Flint V. Lc Memtricr, cited in Parke on Ins., 503. Barclaii i: Couitint, 2 Fill., r>44. J'Umt I UK. Co. r, JiirkiMii, 10 B., Monroe, Ky., 242. { their loss. In order to protect their own interest as car- riers, it is not necessary that the goods should be insured as " in trust or on commission ;" but where a condition of the policy provides that *' goods in trust or on com- mission must be insured as such, otherwise the policy will not extend to cover such property," the condition must be complied with to entitle the carrier to recover the entire value of the goods (a). If the condition is not complied with, and the policy is merely in the name of the insured, he cannot recover in respect of goods held in trust {b). "Warehousemen and wharfingers may insure the pro_ perty of their customers deposited with them in the way of their business for safe custody, under the description of "goods in trust or on commission," although they have no express authority to do so from the owners of the goods, and would not be liable to the latter for their loss And where wharfingers insured their own i>roperty and that of their customers in one policy, by which the in- surers contracted to pay " all such loss and damage as may happen by fire to the property insured," it was held that they might recover the fyill sum insured in truitt, and that their claim was not limited merely to their charges for landing, wharfage and cartage, but being satisfied the amount of their lien for these, they would be trustees of the residue lor the benefit of the owners {c). So, if factors insure " goods as well the property of the insured as those held by them on commission," they may (a) Loudon rk L. Int. Co.. 2 Hall (N. Y.), 372. (r) WatirBi: Momirch F. and L. Asscf. Co.,n E. & B., 870. 46 THE LAW OF INSURANCE. recover the whole value of the property, and not merely their lien or advances thereon {a). An insurance by a warehouseman upon " merchandize ji'enerallv in a certain warehouse for whom it mav con- cern," protects only such interests as were intended to be insured at the time of the execution of the policy (h). In these cases, however, the carrier or wharfinger could recover for himself only to the extent of his per- sonal interest, and would be a trustee of the surplus foi- the benefit of the owner. Evidence would be admissible to shew the interest of the owner, and that the poUcy was effected for his benefit, and it would be for the jury to find this as a question of fact (c). A trustee may insure for the benefit of his cestui que trust, and on recovering the insurance moneys, he will hold them for the benefit of the party beneficially in- terested ; nor will his right to recover be affected by the fact that the name of the party beneficially interested is not inserted in the policy {d). If, however, a trustee desires to effect an insurance, he should be careful to remember that roarly all the offices require by their conditions thjit the goods held in trust must be insured as such, otherwise the policy will not cover such property ; and, in case of loss, the names of the respective owners must be set forth in the prelimi- nary proofs oi" loss, together with their respective in- terests therein. The expression "goods in trust or on commission," means goods with which the insured are entrusted, in the ordinary sense of the term, and not those in which he («) De Forest v. Fulton F. Ins. Co., 1 Hall (N. Y.), 84. (b) Steele v. Franklin F. Ins. Co., 17 Penn. St., 21)0. ((•) Rirh'irdnoi) r. Home Ins. Co., 21 IF. C. C. P., 297. (., 5E. & B., 870. (h) Soiitl, A. liiH. Co. r. Jlandvfl L. Ft., 3 P. V.. App., 101. (r) Ixing r. Home Ins. Co., li E & A. Keps., 209. («/) Af('Rri6i^«oii named is in- sured. (J)). This statute only applies w^hen the vessel is registered, and the mortgagor of a non-registered vessel has not such an interest as is saleable under a /••.(«.; for, by tlu^ mortgage, the legal interest passes to the mortgage*^ Where the plaintiff at the trial claimed, as owner, by purchase, of the mortgagor's interest, at a sale, under a //. fa., and, on the judge ruling against him, applied, and was allowed to prove his interest as mortgagee, which, in fact, he was. Upon a motion for a nonsuit on this uround, it was held to be within the discretion of {\u- judge at nisi prius to permit such amendment and vari- ance in the line of proof; and the defendants not shewing themselves damnified by the exercise of this discretion, a nonsuit was refused (c). In such case the plaintiff can only recover the amount due on the mortgage with interest. A mortgagee may insure to tlie full value of the pro- p(»rty, but can only recover to the extent of his mortgage ih^bt, unless it appears that in effecting the policy he in- tended to cover, noc his own interest only, as mortgagee, but that of the mortgagor also. In the latter case, he can recover the full sum insured, and. after deducting- his debt, he will be a trustee of the surplus lor the mort- gagor. If, however, he intended to cover only his own interest as mortgagee, and the amount of the insurance (a)Richardwn r. Home Iiih. Co., 21 V. C.Q. P., 2!)1. (h) lb. (v) Scatchn-d r. Equifuhh F. Ihk. Co., H V. i\ (". l'., i\r>. THE PAETIES TO THE CONTRACT. 49 is greater than that of the mortgage debt, he can recover to the extent only of his Hen (a). Persons ha^'ing different interests in the same subject may insure their several interests, and therefore, a mortgagor and mortgagee may both insure the same building, and in such case the particular interest of each need not, as a gen- eral rule, be described in the policy, but it may be described as the property of the insured. The mortgagee can insure for himself only to the extent of his debt, whereas, the mortgagor can insure to the full value of the property, not- withstanding the incumbrance upon it ; and, in this respect the insurable interests of mortgagor and mortgagee differ essentially (/>). Where a mortgagee effects an insurance for his own in- demnity only on the mortgage property, he cannot be held to insure the specific property mortgaged, but only so much of it as is sufficient to satisfy the mortgage debt. In effect, the security only is insured, and the insurance is limited to the interest specified in the policy, not exceeding the amount of the mortgage debt. Thus, if the policy covered several properties, and only one was destroyed by fire, it might be doubted whether the mortgagee could recover in respect of this property, if the remaining value of the premises insiu-ed was more than sufficient to secure his debt (c). It has, however, been held in the United States, that a suit by the mortgagee is not to be defeated by reason of the fact, that notwithstanding the loss by fire, the mortgaged premises are still ample security for the debt. The insurers («) Richardson v. Home Ins. Co., 21 U. C. C. P. 301-2; Burton v. Gore D. M. F. Ins. Co. 12 Grant, 167; Irving v. Richanh'm 2 B. & Ad., 193.. See also CasteUi v. BoMin U. S. 529. (d) lb. (e) Masters v. Madison M. Ins. Co. 11 Barb., N. Y., 624. THE PARTIES TO THE CONTRACT. 55 he does not deviate from his instructions in so doing, but simply communicates the information given, he will be con- sidered as the agent of the applicant (a). A stipulation in a policy, that if any agent of the com- pany, in the transaction of their business, shall violate the conditions, the violation shall be construed to be the act of the insured, and shall avoid the policy, will not render the insured responsible for the mistakes of the agent (h). The authority of the agent must always be exercised sub- ordinately to the conditions of the particular policy, and to the special duty with which he is entrusted (c). An agent has no authority to go beyond the ordinary conditions of insurance, or to do anything outside of those conditions not sanctioned by the practice of the company (d). Where the conditions j)rovide that no order for insurance shall be of any effect unless the premium is first paid at the office, the agent has no authority to take a promissory note for the premium, instead of cash (e) ; nor has he the power to grant a policy, or to bind the company to do so, for they are the authority to judge of such a matter themselves. Nor can he grant a receipt to bind the company as if a policy had been granted, unless specially authorized so to act (/) ; nor has he power to cancel or alter a policy, as representing the insured, without express authority (g). But a company whose local agent had notice from the assignee of the insured that the insured was residing beyond the specified limits without the license of the directors of the company, and nevertheless received the premiums from the assignee for several years, transmitting them to the company, saying to (a) Parsons v. Bignold 15 L. J. (Ch.) 379. (b) Columbia Ins. Co. v. Cooper 50 Penn. St., 331. (c) Hendrickson v. Queen Ins. Co. 30 U. 0. Q. B., 117. (d) Henry v. Agricultural M. Ins. Co. 11 Grant, 125. («) Montreal Assce. Co. v. McGillivray 13 Moore's P. C. Cases, 87. (/) Linfordv. Prov. H. & C. Ins. Co. 10 Jur. N. S., 1066 ; Fowler v. Scottish Eq. L. Ins. Soc'y 4 Jur. N. S., 1169 ; Acey v. Feruie 7 M. ds W., 151 ; Chase V. Hamilton M. Ins. Co. 22 Barb. N.Y., 527. (g) Xenos v. Wickham, L. R. 2 H. L., 296. 56 THE LAW OF INSURANCE. the assignee that the policy would not be invalidated, was held to have had constructive notice of the breach of the condition, a.id to be precluded by their agent's conduct from insisting on the forfeiture [a). The true question is not. in all cases, what was the real extent of the authority expressly or in fact given to the agent by the insurers, but what they have held him out to the world to persons with whom tlusy had dealings, and who had no notice of any limitation of his powers, as authorized to do for them. An agent may bind his princi- pals by acts done within the scope of his general and ostensible authority, although those acts may exceed his actual authority as between himself and his principal, the private instructions which limit that authority, and the circumstance that his acts are in excess of it, being unknown to the persons with whom h§ is dealing. An agent's auchority will ordinarily be limited by any restrictions on the powers of his principal, unless the principal lias assumed to exceed those powers, and has held out the agent to the world as also authorized to exceed them. Where, there- fore, the charter and by-laws of an insurance company only authorized them to enter into insurance contracts by policy signed by three directors and countersigned by the manager and secretary, and under the seal of the corporation, it was held, in the absence of evidence, that the company had expressly delegated to the agent, or had assumed the power to nuike contracts of lire insuranc(! by parol, and had held out their agcsnt as having authority to make such contracts without restriction ; that they were not l)()und by a parol insurance effected l)y their agent not in conformity with th(!ir cliarter and by-laws ; that the limitations and r(!stric- tions in the manner of effecting insurance being contained in a public statute, must be taken to be well known, and (a) Wing V. Uarvfy 18 .Tur., 391. See also Armstromj v. Turquand{) li. C. L. 11., 32; Supple v. Cann, 9 Ir. C. L. It., 1; IfcndrickHon v. Qiieen In$. Co. 30 U. C. Q. B., 117-8. THE PARTIES TO THE CONTRACT. 57 were therefore binding on the party contracting with the agent (a). An insurance company can only carry on business by agents, managers, and others ; and if the contracts made by those persons are contracts which relate to objects and purposes of the company, and which are not required by their act of incorporation to be under seal, and are not inconsistent with the rules and regulations which govern their acts, they are valid and l)inding upon the company, though not under seal. The seal is only required in matters of unusual and extraordinary character, which arf> not likely to arise in the ordinary course of business (/>). But the agent of a marine company, empowered by their con- tracts to recover and repair vessels sunk or damaged, has no power to submit to arl)itration, by parol agreement, the question whether the insured or the insurers ought to pay the expense of raising and repairing a vessel sunk in the lakes, for the contract does not relate to the purposes for which such company is formed ; and, moreover, as the appointment of an arbitrator would have to be made by a sul)mission deed under the seal of the company, and as a parol contract to enter into another contract under seal cannot be enforced against a corporation, the agreement is not l)inding on the company (r). The agent of an insurance company has, in general, authority to lund the company by an interim or provisional receipt in such form as is furnished ])y the company ; and this provisional receipt entitles the insured to have one of the usual forms of policy of the company executed and delivered tc him, unless the insurance is rejected or altered, and a special form of policy stipulated for (d). No pci'son can by any subsequent act entitle himself to (a) Montreal Assce. Co. v. McGUlivray 13 Moore'H P. C. Cases, 87. (6) South. I. Col. Co. V. Waddle, L. R. 4 C. P., 463. (c) Calvin v. Prov. Ins. Co. 20 U. C. C. P., 207. Seo also London Dock Co. V. Sinnott 8 E. A B., 847. (d) rattenon v. Royal Ins. Co. 14 Grant, 169. » 58 The law of insurance. claim the benefit of an insurance made by another, if it ap- pears that his interest was not intended to be embraced by it when it was made, for a policy effected by a person who has himself no interest to be insured, and who at the time does not intend it for the benefit of any one who has, is a gambling pohcy {(i). But where a policy of insurance is made for the benefit of a party having an interest in the property, it is competent to him to adopt it even after the fire, although previously ignorant of its existence and such ignorance will be no de- fence to an action by him (h). A party may insure in his own name the property of another for the benefit of the owner, without the previous authority or sanction of the latter, and it will enure to the interest of the party intended to be protected on his subsequent adoption of it even after a loss has occurred and a fortiori ; this rule will apply if he insures in the owner's own name (c). And where a party has insured with one company and this company re-insure the property in the name of the original insured, with another company, without the knowledge or authority of the insured, the latter being ignorant of the trans- action is not obliged to communicate any circumstances re- lating to the risk, and he may recover on afterwards adopting the policy {d) The ratification by the insured of a policy effected by another person for his benefit, though without his previous authority, has the same eftect as if the insured himself procured the making of the policy, provided the ratification takes place at a time, and under circumstances, when the ratifying party might himself have lawfully done the act which he ratifies (f). But us already explained a party can- (a) Angell on Inf. 12<\, DtBoUe v. Pennsyhatiin Inx, Co. 4, Whart.Penn, 68. (/>) Oijden V. Motitreal Ins. Co. 3 U. C. C.T. 511, Lucena v. Crawford, 3 B. <& P. 75. See also Dnfoe v. Johnxtown, D. M. Ins. Co. 7 U. C, C. P. 55. (c) Qiffard v. Queen Ins. Go. 1 Hannay 439, Routh v. Thompson, 13 Ea. 284, Ilagedcrn v. OUversou, 2 M. & 3. 405. (d) GiJI'ard v. Queen Ins. Co., supra. (e) See Wilson v. Tumman, 6 M. & O. 239; Bird v. Brown, 4 Ex. 798. THE PARTIES TO THE CONTRACT. 59 not be affected by the wholly unauthorized act of a stranger in effecting a policy without his previous authority or subsequent ratification. If for instance a third person without authority effected a second insurance on the pro- perty in the name of the insured, this would not avoid the policy within a condition against second insurances, provid- ed the insured immediately on discovering the second insur- ance repudiated the act and declined to take any benefit under it. If he, however, adopted and ratified the second insurance, he would be bound and the policy would be avoided (a). Where the father of the plaintiff without any express autho- rity effected a second insurance on part of the premises with another company, and paid the premium and received an in- terim receipt but no policy was issued till after the fire. It was held (th^ plaintiff having ratified the act of his father and received the insurance money under the second policy) that this constituted a second insurance within meaning of the ordinary condition (h). The subsequent adoption of the policy by the party for whom it was intended to be made, constitutes the party mak- ing it "a person receiving the order to effect the insurance" within the meaning of the Act 28, Geo. 3, c. 56, which pro- vides for inserting in the policy the name " of the person who shall give the order to the agent immediately employed to effect it (c). Where, in the form of application used by an insurance company, and signed by an applicant for insurance, the following notice was printed — " Applications for insurance on manufacturing establishments where steam is used for propelling machinery, must be approved of by the head ofiice at Montreal " — it was held that this notice did not refer to a vacant distillery which had not been in operation for some years, and which, at the time of the application, (a) Dafoe v. Johmtown D. M. Im. Co. 7 U. C, C. P. 55. {})) Dnfoc V. Johnntown Dis. M. Im. Co. 7 U. C, C. P. 55. (<■) Wolf V. Horncastlf, 1 B. A P. 31G ; Routh v. Thompson, 13 Ea. 274 ; Ilagedern v, OUvenon, 2 M. & S. 486. 60 THE LAW OF INSURANCE. it was not contemplated to put in operation, and that, therefore, the agent had- authority to bind the company by an interim receipt for insurance on such distillery, for the words above mentioned did not limit his ordinary authority in effecting insurances (a). So the following note in the form of application was held not to restrict the authority of the agent to bind the com- pany by an interim receipt, where two of the questions on the application were not answered, no fraud being shown : " The applicant is requested to answer the above questions fully, as it is expressly agreed on the part of the applicant that this survey, as well as the diagram of the premises, shall form a part and be a condition of this insurance con- tract." It was held that the answering of all the questions was not a condition precedent to the validity of the contract, and that the agent might, in some cases, dispense with answers to the questions, when they were not referred to in the policy or conditions endorsed {h). An agent of an insurance company effected an insurance upon wheat belonging to hirpself and his partner for the sum of .£3,000, there being at the time an insurance on the mill in which the wheat was stored of 4*750. The rule of the company was that not more than i^3,000 should be taken on any one building and its contents, and this rule was contained in printed instructions sent to the agent. The usual proposal was transmitted by the agent to the head office on the 23rd, and on the 27th of the same month the premises and wheat were destroyed by fire, no action having in the meantime been taken by the company upon the application sent in by their agent, who, on making the proposal, liad refrained from drawing the attention of the company to the fact of the previous insurance on the build- ing, and the then secretary of the company swore that, had he been aware, or had his attention been drawn to the fact of such prior risk, the second application would have been immediately rejected. After the loss occurred, the company (a) Rowe v. London and L. F. Ins. Co. 12 Grant, 811. (b) lb. THE PARTIES TO THE CONTRACT. 61 paid the sums of £750 (insured on the building) and .£2,250 (on the wheat), together making the sum of $3,000 allowed by the rules to be on one building and its contents. Under these circumstances, a bill filed by the agent and his partner to compel the payment of the additional £750 was dismissed with costs (a). In order to prove that a person acting as the agent o2 a foreign insurance company, by issuing policies in their name and receiving premiums thereon, is their accredited agent, it is not necessary to show his appointment under the corporate seal. A policy of insurance of a foreign com- pany declared that it should not be valid until counter- signed by W., agent at Saint John. In an action on the policy, proof that it was signed l)y W., and that he acted as the agent of the company at Saint John, and had jiaid a loss on a similar policy, is sufficient under the Act of that Province (13 Vic. c. 37), if not contradicted, to show that he was the accredited agent of the company, and to dispense with the proof of their corporate seal the policy being countersigned by the agent, and having the corporate seal affixed, and it being proved that the agent was recognized as such [b). An endorsement on a policy of insurance issued under the provisions of the 4 Wni. 4, c. 33, authorizing the removal of the goods insured from the building described in the policy to another building, and signed by the secretary alone, is binding on the company, without the president's signature (c). So, where the charter gave the directors the power of assenting to assignments, and the secretary alone consented to an assignment of the policy, it was held that after entering it upon the books, subject to the inspection of the directors, without any disapproval being manifested on their part, the act was binding on the company (d). (a) Tiicker v. Prov. Jns. Co. 7 Grant, 122. (6) RohcrtHon v. Prov. M. d- G. Ins. Co. 3 Allon, 379. (.) Chalmerx v. Mutual. F. fun. Co. 3 L. C. J., 2. {(l) Durar v. Hudson Co. M. Inn. Co. 4 Zabr. N. J., 171. CHAPTER III. THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. As a result of the principle already explained, that insu- rance is a contract of ir demnity, it is necessary that the insured, or the party on wnose behalf the action is brought, should have an interest in the property at the time of the loss, for no indemnity can be made to a person who has sustained no damage. There is also strong reason for requiring that the insured should be interested in the pro- perty during the currency of the policy, as otherwise he would be under the temptation of wilfully setting fire to the premises in order to recover the insurance money. There are some subjects of property in which the party may have the most perfect interest, and yet they are not deemed objects of insurance. Thus, the conditions of most policies provide that books of accounts, written securities, or evidences of debt, title deeds, bonds, bills, notes, writings, money, or bullion, are not deemed objects of insurance. So in the case of mutual companies, no allowance is to be made in any case for gilding, historical or landscape paint- ing, stucco or carved work (a). At common law a policy of fire insurance is void unless the party insured has at the time an insurable interest in the property insured {h), and wager policies of fire insurance are void at common law irrespective of any statute ((•)• But the 1 ^icessity for an insurable interest in the property has not been allowed to rest on the authority of the common law. It has also been created by various statutes passed with a view to check wagering and blank policies. The first statute was the 19 Geo. 2, c. 37, for the regulation of insurance on (fl.) Con. Stat. U. C, c. 52 s. 79 : Con. Stat. L. C, c. 68 s. 27. (h) Freeman v. Fulton F. Ins. Co. 38 Barb. N.Y., 247. (c) S. C. 14 Abb Pr., 398. THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. 63 ships or effects laden thereon. The next statute was the 14 Geo. 3, c. 48, which provided that no insurrnce should be made by any person, etc. on the life of any person, etc., or on any other event or events whatsoever, wherein the person etc. for whose use, benefit, or on whose account such policy should be made, should have no interest or by way of gam- ing or wagering, and that every assurance made contrary to the true intent and meaning thereof should be null and void to all intents and purposes whatosever. The 28 Geo. 3, c, 56 and the former statutes also provide that the name of the person interested must be inserted in the policy, the 14 Geo. 3, c. 48, requiring the names of all interested to be so inserted, though under the 28 Geo. 3, c. 56, it is sufficient to insert the name or names of one or more though less than all {a). A contract, in consideration of forty guineas, to pay one hundred pounds in case Brazilian shares should be down at a certain sum on a certain day, subscribed by several per- sons, each for himself, is void as a gambling policy of insu- rance under 14 Geo. 3, c. 48 (/>). To sustain an action on the policy, the insured must have an interest in the property at the time of effecting the insur- ance and at the time of the loss (c). Where the party in- sured has no interest in the property at the time of the loss, the policy is void, although the loss is by the terms of the policy made payable to a third person, and such third per- son, at the time of the loss, has an interest in the property {d). If, however, the policy is regularly assigned or the insured sues for the benefit of the assignee or vendee of the property, a recovery may be had as hereafter explained, and therefore the general doctrine above enunciated, that the insured must have an interest in the property at the time of the loss, re- quires some qualification. (a) See Ogden v. Montreal Ins. Co. 3 U. C, 0. P. 513. (b) Patterson v. Powell, 9 Biug. 320. (c) Sadlcrs Co. v. Badcock, 1 Wilson 10, 2 Atk. 534. (d) Tallman v. Atlantic F. <£• M. Ins. Co. 29 How, N. Y., 71. 64 THE LAW OF INSURANCE. If the interest ceases by operation of law before the loss occurs, the insured cannot recover. Thus if a man holds as a tenant for the life of -another, land on which he has a house insured and the person for whose life the land is held dies, so that the estate determines, if the house is burned the day after the death, it would seem that in the absence of any conditions as to paying for improvements or allowing their removal, he could not recover on the policy, for the con- tract is one of indemnity and he would have no interest at the time of the loss (a). The construction to be placed upon a policy, should have relation to the condition of things as they were at the time of the making of the policy, unless there be something in it requiring a different construction to be put upon it, and if the plaintiff has an insurable interest at the time the policy is effected, no change which may afterwards take place in the property, can have any effect in relieving the underwriters from their liability, as the plaintiff may sue upon the policy for the benefit of the party to whom the property has passed (h). This doctrine, however, presupposes the fact that the con- ditions of the policy are complied with on a transfer of in- terest. Where the conditions provide that the interest of the insured is not assignable without the written consent of the directors, and that in case of any transfer or termination of interest without such consent the policy shall be void ; if such consent were not obtained, the policy would be avoided by force of tjie condition. If the plaintiff is interested in any part of the goods insured, he is entitled to recover to the amount of loss he sustains by virtue of such interest and therefore a traverse in a plea that the plaintiff is not inter- ested in the goods insured to the whole amount of their value is too large (c). (a) Shaw v.Pluvnix Ins. Co. 20 U. C, C. P. 179. {h) Davies v. Home Inx. Co. U E. & A., Heps. 278-9 ; Sparkes v. Marshall, 2 Biiig., N. C. 771. (c) Ketchum v. Protection Ins. Co, 1 Allen 136. THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. 65 At the time of insurance the property must be in existence and not on fire and not at that moment exposed to a dan- gerous fire in the immediate neighbourhood, (a). If, however, a proposal is made for insurance upon pro- perty at a distance, and at the time of the aj)plication the j3roperty is actually destroyed by fire, this will not invali- date the contract, if both parties are ignorant of the loss at the time of the consummation of the contract, (b) But if the property is actually destroyed before the time at which the policy commences the contract will be void and the insured entitled to a return of the premium, if paid. It may be laid down in general terms that any subsisting right or interest in the property to be insured which will be recognized as such in any court, either of law or equity, is an insurable interest (c). It seems that it is not in all cases necessary that the insured should have a property in the subject of insurance. If he has a right in the property, or a right derivable out of some contract about the property, it will be sufficient, for it is the impossibility of valuing the loss and not the want of property that renders a particular interest an uninsurable. Thus, where a warehouseman sold 3,500 bushels of wheat, part of a larger quantity which he had in store, and gave the purchaser a warehouseman's receij^t under the statute acknowledging that he had received from him that quantity of wheat, to be delivered pursuant to his order endorsed on the receipt, it was held that the 3,500 bushels not having been ascertained and specified or separted from the other wheat of the seller, no property passed therein, but that, nevertheless, the purchaser had a right derivable out of some contract in respect of the wheat, and therefore an insurable interest {d). (a) Bufe. V. Turner 6 Tauu., 328. (6) City of Davenport v. Peoria M. d- F. Ins. Co. 17 Iowa, 276. (c) Bunyon on F. Ins. 6. (d) Box V. Pvov. Ins. Co. 18 Grant, 280 (in E. and A.) reversing the judg- ments of tjie court below, S. C. 15, Grant 337 ; ib. 552. E 66 THE LAW OF INSUKANCE. In an action on a policy of insurance by A, brought for the benefit of B, an incorporated bank, to whom the policy had been assigned on a traverse of any insurable interest in B; held that a warehouse receipt for wheat, the property of A, given by a clerk of the warehouseman, in his own name, was sufficient under the 24 Vic, c. 23, s. 1, to pass the pro- perty in the wheat so as to confer an insurable interest in B (a). This case was reversed on appeal on the ground that the clerk was not a warehouseman within the Con. Stat. U. C, c. 54, s. 8, and that the receipt was not in com- pliance with 24 Vic. c. 23, s. 1, not being signed by the warehouseman (b). The court will recognize the usual course of dealing among warehousemen in Canada, that by which the iden- tical grain received from one person is not severed or dis- tinguished from that received from another, but the whole is blended together, so that the receipt is not an undertaking by the warehouseman to deliver the identical grain received, but an equal quantity of the same kind as that specified in the receipt. Where, therefore, a policy is issued upon grain for which the owner holds a warehouse receipt, and the insurance is effected in general terms, without any special language, fixing the identity of the grain, it will be assumed that the insurer has contracted in reference to the well understood course of business in the receiving, storing, and delivering wheat into and from warehouses, and it will not be necessary for the insured, in case of loss, to prove that the identical grain insured was destroyed ; it will be suffi- cient for him to show that the quantity claimed for was in the warehouse during the whole period between the insur- ance and the fire. But if at any time after the date of the policy the quantity of grain for which the policy was effected was not in the warehouse, the liability of the insurer will be proportionally diminished, and will not be restored (a) Todd V. Liverpool <& L. (&. O. Ins. Co. 18 U. C. C. P. 192. (6) S. C. 20U. C. 0. P. 523. THE SUBJECTS OP INSURANCE OR INSURABLE INTEREST. 67 although other grain is subsequently brought in sufficient to satisfy the existing claim of the plaintiff. But if, during the whole period covered by the policy, the necessary quan- tity of grain continues in the warehouse, the plaintiff's claim will not be affected by the fraudulent conduct of the warehouse-man in transferring a portion of the grain to a third party («). The ordinary risks covered by the policy are such as arise from accidents, and not such as are the consequences of illegal acts. Therefore, spirituous liquors illegally kept for sale may, notwithstanding he lawfully insured against de- struction by fire {b). Both the mortgagor and the mortgagee of property have an insurable interest (c). Where a policy is effected on the plaintiff's interest in certain property, and after the making of the policy, but before the loss, the plaintiff con- veys the property to another by way of mortgage, but continues in possession with a right to redeem at the time of the loss, he has an insurable interest cognizable in a court of law (d). Such interest will not be divested by a sale of the equity of redemption under execution, but will continue until the right to redeem expires (e). A and B were mortgagees of a vessel (the latter, however, not being named in the mortgage) and an insurance was effected by A in his own name, after which the vessel was wrecked and totally lost. A not being in possession did not abandon the vessel, and no notice of abandonment was given, but there was an actual abandonment by the mort- gagor, after which the agent of the defendants took charge (a) Clark v. Western Assce. Co. 25 U. C. Q, B. 209 ; Tilt v Silverthorne 11 U. C. Q. B. 620. See also Box v. Prov. Ins. Co. 18 Grant 284. (h). Niagara F. Ins. Co. v. DeGraff, 12 Mich. 124. (c) Richards v. Liverpool and L. Ins. Co. 25 U. C, Q. B. 400 ; Ogdcn v. Mon- treal Ins. Co. 3 U. C. C. P. 497. (rf). Smith V. Royal Ins. Co. 27 U. C. Q. B. 54 ; Davies v. Home Ins. Co. 24 U. C. Q. B. 364. (e). Strong v. Manufacturers Ins. Co. 10 Pick (Mass.) 40. 68 THE LAW OF INSURANCE. of her. Held, that A had an insurable interest in the vessel to the amo; nt of the mortgage, and that he could recover this amount in an action brought on his own behalf and on behalf of B (a). <. ^ A party having a chattel mortgage on goods as mort- gagee, has an insurable interest in the goods before default in payment of the mortgage, although the mortgagor con- tinues in actual possession of the goods (b). But in such case, if the mortgage is under seal, and the insurance is efifected before default, the mortgagee is not entitled to re- cover on his policy more than the amount appearing on the face of the mortgage at the time of insurance. He could not tack other advances made to the mortgagor to the sum covered by the mortgage, so as to acquire an insurable interest in respect of such other advances, nor wo^ild he be permitted to prove such advances by parol evidence. But it seems if the policy was effected for the joint benefit of mortgagor and mortgagee, and this was notified to the insurers at the time the mortgagee might recover in respect of the mortgagor's inierest as well as his own {<•). But where there is an equitable mortgage created by the deposit of title deeds, or a pawn of the goods, or a lien thereon, subsequent advances, or other and additional debts, may be tacked by oral declaration or charge, and after de- fault, equity would not decree redemption without the pay- ment of the whole. But in the case of a chattel mortgage, where the mortgagor continues in possession the mortgagee has not such actual possession as to entitle him to tack by analogy to the above cases (d). The mortgagor of per- sonalty has also an insurable interest (e). A hub'jand who is tenant by the curtesy, and has had issue born to him has an insurable interest in the property (a). Crawford v. St. Latorence Im. Co. 8 U. C. Q. B. 136. \h) Ofiden v. Montreal Im.\Co. 3 U. C. C. P. 497. (f/) Offden V. Montreal Im. Co. 3 U. C. C. P. 497. («) Allan V. Franklin F. Ins. Co. 9 How, N. Y., 501. ^ - THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. 69 of his wife and may recover the whole amount of loss not exceeding the sum insured though the wife's title is only in the right of a joint tenant (a). In such case the husband may effect a valid insurance on the property in his own name (b). A husband has an insurable interest in goods settled to his wife's separate use, they residing together and sharing in the use of the property (c). So a husband has an insurable interest in a Iiousq built on land in which his wife has an estate for years (d). The holder of a bill drawn by the captain of a ship on the owners for supplies in a foreign port has an insurable interest in the vessel on the bill being refused acceptance, he being told by the captain to insure if the bill was not hon- ored and the amount to be charged to his and the ship's account (e). A tenant from year to year has an insurable interest in the buildings demised to him, though he cannot recover the value of the buildings in case of loss by fire, but only the value of the lease, his interest being merely the right to possess and occupy the buildings for the unexpired portion of the year for which they were demised (/). So a lessee holding over after the expiration of his lease, and who would at law be a tenant at will, or after payment of rent, tenant from year to year, has an insurable interest (g). So the incumbent of a bcnifice, who is bound to repair and is responsible for dilapidations, has an insurable interest {h). (a) Franklin Im. Co. v. Drake 2 B. Monroe, Ky., 47. (b). Harris v. York Mutual Im. Co. 50 Poun. St., 341. (c) Davies v. Home Ins. Co. 24 U. C. Q. B. 375 ; Goulntone v. Royal Ins. Co. 1 F. cfeF. 276. (d) Abbott V. Hampden Ins. Co. SO Me., Hi. (e) Taskerv.Scott(jTmu,2d'i. *' (/) Niblo V. North Am. F. Ins. Co. 1 Sandf. N. Y., 651. C^) Calloway v. Ward 1 Vph. Sr., 318. {h) Wise V. Afetcalf 10 B. & C.,290 ; Bird v. Smithi B. & Ad., 826 ; Doicnea V. Craig, 9 M. & W., 166. 70 THE LAW OF INSURANCE. A tenant having his landlord's covenant to pay the value of the buildings erected upon the premises, or else renew the lease at the end of the term, has an insurable interest during the continuance of the term. It would seem that this insurable interest would continue after the expiration of the term if the covenant were binding on the personal represen- tatives of the landlord (a). But such a covenant by a rector will not give the tenant of glebe lands an insurable interest in the premises after the death of the rector if the covevant is not binding upon his successors, and the latter repudiate the leube ttnd eject tho lessee. The insurable interest of the tenant will it seems datermine as soon as his interest in the term and his rights under the covenant cease and deter- mine (6). In the ordinary case of a covenant to renew if the landlord elect not to renew he should consider the premises his own for the purposes of insurance (j). A covenant by the lessee to insm'e premises demised to him will give an insurable interest even after the expiry of the term. A granted to B by one instrument a lease of certain pre- mises for five years and a half, and also of certain other pre- mises for sixteen years the rent for both being i)120 dur- ing the first five years and a half and £100 during the resi- due. B covenanted ** during the said terms" to insure the said premises in the sum of £2,000. There was no provi- sion for any reduction in the amount of insurance after the expiration of the five and a half years term. It was held that B was bound to insure for .£2,000 during the continu- ance of the longer term and that the covenant did not ceasG with the expiration of the shorter term (d). A covenant to insure contained in a mortgage would, it seems, create an insurable interest as much as such covenant in a lease (e). (a) Lucena v. Crawford 2 N. R., 324 ; Shaw v. Phixnix Ins. Co. 20 U. C. C. P., 170. (6) Shaiv V. Phatnix Ins. Co. supra. (c) lb. 181. (d) Heckman v. Isaac, 6 L. T., N. S. 383. •(«) Smith V. Prov. Ins. Co. 18 U. C, C. P. 226. THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. 71 An insurable interest does not mean a perfect legal interest and a person having an equitable interest in property, of "which he is in possession under a contract of purchase may insure, and this though he has failed in making his payments punctually, if notwithstanding, he has obtained a decree for specific performance of the contract (a) ; and it is laid down that the cestui que trust or equitable owner may insure in his own name although the legal estate may be outstanding and the actual possession may be in another (6). The general doctrine that a purchaser in possession of the property purchased, has an insurable interest, is well settled in the courts of the United States. Nor does it seem to make any difference whether the whole of the pur- chase money is paid or not (c). A and B being in partnership, bought a piece of land from C. giving a bond for the balance of the purchase money. There was no actual conveyance between the parties, held that this was sufficient to give an insurable interest. On the dissolution of the partnership, B. did not by any legal instrument con- vey his equitable estate to A. He merely in the deed of dis- solution consented that A his co-partner should have pos- sess and enjoy it. The deed contained no operative words of grant, and both still continued bound to the vendor for the unpaid purchase money, held that B had sufficient interest in the property to enable him to join in an action at law up- on the policy though he might be considered as allowing bis name to be used for the benefit of A. {d) But if B. had assigned his interest to a stranger and not to (a) Milligan v. Equitable Ins. Co. 16 U. C. Q. D. 314 ; Laidlaw v. Liver- pool d- L. Ins. Co. 13 Grant 377. (b) Bunyon on F. Ins., 8, citing ex parte yallop 15 ves. 60; Ex parte Hough- ton, 17 ves. 253. (c) See McGivney v Ph). In order, however, to create an insurable interest, there must be such a right as the law will recognize and enforce, and a mere moral title will not be sufficient. Thus, if a purchase of personalty is void for want of compliance with the formalities prescribed by the statute of frauds, it will not give the purchaser an insurable interest (c). Upon the same principle, the purchaser of an estate who has merely entered into a verbal contract cannot insure the {a) Mann v. Western Assce. Co. 19 U. C. Q. B. 325 ; Potcles v. Innes 11 M. & W. 10. {/>) Whijte V. Home Ins. Co. 14 L. C. J. 301 ; Converse v. Citizens F. Ins Co^ 10 CuHh. Mass. 37. (c) Stockdale v. Dunlop, 6 M. «& W. 224. See also Stainbank v. Penning ft Eng. L. & E. Reps., 412; Ilebden v. West, 9 Jur. N. S., 747. THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. 73 property, but if any act has been done constituting such a part fulfilment of it as would entitle him to a specific per- formance of it in a court of equity, he may insure, for an equitable title creates an interest which the law will recog- nize (a). There must be some vested interest such as the law can recognize, and a mere expectancy, as that of an heir at law who has a moral certainty of succeeding to the estate of his ancestor, will not confer an insurable interest (h). Yet still it can scarcely be said that the insured must have an actual interest in the property, for if he is respon- sible to the owner for its destruction, he may insure, though he has no other interest in the property. Thus, in the case of re-insurance, the re-insurer has no interest in the property beyond his liability to the original insurer for its loss by fire (c) ; an<.l thus it will be seen that insurable interest is distinguishable from ownership, and independent of actual interest in the subject insured. A case decided in Canada illustrates this proposition (d). It was there held that a creditor had a right to insure his debtor's chattels, on the ground that their destruction would diminish his security for the debt, and lessen the ability of the debtor to pay, though the creditor had no actual interest in or title to the goods. Thus where A effected an insur- ance on goods which he afterwards sold to B, to whom, with the assent of the insurer, he assigned the policy, and B afterwards sold the goods to C, taking his (C's) notes in part payment, it was held that D, who had endorsed these notes for C's accommodation, on the understanding that the goods should be sold and the proceeds paid to D to retire, (a) Tidswell v. Ankerstein, Peake, 151 ; Fletcher v. Commonwealth Ins. Co. 18 ; 18 Pick (Mass.) 419; Angell on Ins. 112. (6) Lucena v. Crawford 2 N. R., 324; Macarty v. Commercial Ins. Co. 17 La., 365. (c) See Joyce v. Swann 17 C. B. N. S., 104. '" ' " ■ (d). See Davis v. Home Ins. Co. 3 E. & A. Reps. 209, reversing the judg- ment in 24 U. C. Q. B. 364. 74 THE LAW OP INSURANCE. the note had an insurable interest in the goods on the policy being subsequently assigned to him with the assent of the company. On the same principle, although A is merely the agent of B in obtaining from C an advance of money on certain goods, yet if he renders himself liable to C for any loss which might arise after the sale of the goods, he has an in- surable interest in the goods, and can therefore legally insure them in his own name to the full extent of the loan {a). A sheriff's title to goods seized by him under an execu- tion is defeasible on a tender or payment by the execution debtor of the amount of the debt and costs, and notwith- standing the levy by the sheriff the execution debtor may still have an insurable interest in the goods. Thus, where the sheriff took actual pusbession of the goods under execu- tion, but left them in the store of the insured with the doors and windows fastened up, and then went out of town, taking the key of the store with him, a fire having destroyed the goods in his absence, it was held that the insm-able interest of the debtor was not affected (6). So a sheriff, who has goods in his custody under process, has a special property giving him an insurable interest therein (c). If a consignee who has never been in possession of the goods sues for indemnity under a policy effected in his own name upon goods belonging to another, and consigned to him, he must show an insurable interest in such goods to entitle him to recover, and he can only recover to the ex- tent of such interest. But a consignee, factor or agent having a lien on goods in his possession to the amount of his advances, acceptances, and liabilities in respect to them, stands in this respect precisely in the situation of a mort- (o). O'Gmnor V. Imperial Ins, Co. 14 L. C. J. 219. ^ (b). Franklin Ins. Co. V. Findlay, GWhaxt. (Pa.) ^83. (c). White V.Madison, 261^. Y. ,117. THE PARTIES TO THE CONTRACT. 75 gagee. A debt is due to him by his principal for which he holds the property as collateral security ; he has, therefore, an insurable interest to the amount of his lien, and whether this lien arises from expenses or charges on account of the specific goods, or is for a general balance, can make no difference. If the lien exists, the right of indemnity at- taches (a). The assignee of a bond conditioned for the conveyance of real estate, upon which valuable improvements have been made by the obligee, has an insurable interest in the prop- erty therein described (b). The deposit by the insured of bills of sale and documents requisite for shewing ownership of a vessel with the collector of customs for registration pursuant to the Con. Stats. Can. c. 41 is sufficient to give an insurable interest although actual registration is not made until after the destruction of the vessel by fire. And even if this were not cuffi- cient, the insured might fall back upon any anterior title registered, from which he can deduce insurable interetjt. On the 10th day of April, 1865, A the registered owner of the steamer Empress, executed a bill of sale thereof, to B and C as trustees for a certain company. This bill of sale, as also a bill of sale by way of mortgage from B and C to A were duly registered pursuant to the statute on the 11th day of April, 1865. On the 3rd of December, 1867, the mort- gage was discharged. On the 19th of April, 1866, B. and C. executed an instrument pm-porting to be a bill of sale of the steamer, to the company for which they were trustees. On the 20th March, 1867, the steamer was sold to B at public auction, and from that date until the fire, she remained in his possession. The bill of sale was formally executed by the company on the 3rd of July, 1867. The release of the mortgage to A was deposited with the collector of customs (a). Cusack v. Mutual Int. Co. 6 L. C. J., 97. See also De Forest v. Fulton i?. /ns. Co. 1 HaU (N.Y.) 84. (b). Sayres v. Hartford F. Ins. Co. 17 Iowa, 176. 76 THE LAW OF INSURANCE. at Kingston for registration on the 3rd of December, 1867, the clay of its date, and the bill of sale from B and C to the company, together with their bill of sale to B after the auction were deposited with the collector of customs for registration between the 8th and lOLh days of July, 1867, and remained so deposited until the 5tli day of December, 1868, but these instruments were not registered by the collector of customs until the latter date because the certificate of ownership was not produced. The fire occurred between the time of their actual registration and their delivery to the collector. Held that B was not bound to produce to the collector the certifi- cate of ownership), that B had done all he contracted to do, on the deposit of the instrument for registration that it was then the duty of the collector to have promptly registered, the bills of sale presented to him, and that B could not be pre- judiced by his default, that even if this was not sufficient, B might rely upon the registered instrument from A to B and C, dated the 10th of April, 1865, and before the fire; that the fact of B and C being trustees for the company as found by the jur\ , though not expressed in the instrument, was imriaterial for no condition of the policy required B to declare particularly his interest as that of trustee or mortgagor. Nor did the mortgage from B and C to A dated 11th April, 1865, affect the insurable interest, for unler the actit didnot change the ownership of the steamer; he..l further that it was immaterial that B and C were not each regis- tered for 32-64ths of the steamer in conformity with the statute for this objection could only be good, if at all, before registration {a). Where the insured held the fee simple in the property insured, which consisted of a mill, etc., but an agreement was entered into between the assured and one H. J., that ** the expenses incurred thereby, and profits derived there- from, should be equally borne and shared;" it was held that this did not vitiate the policy, or show that the insured (a) Moore v. Home Ins. Co. 14 L. C. J. 77. THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. 77 owned only half the property, and that he was not estopped from showing that he "vn as legal owner of the whole, and recovering the full amount of the policy by reason of a statement in the notice of loss that H. J. had a joint in- terest with him in the mill (a). The ownership of the property insured is a proper ques- tion for the jury, and when it is fairly left to them the court will not disturb their verdict, though on the evidence they may be somewhat dissatisfied with the finding (b). A bailment in trust implies that there is reserved to the bailor the right to claim a re-delivery of the property de- posited in bailment. Whenever there is a delivery of pro- perty on a contract for an equivalent in money or some other valuable commodity, and not for the return of the identical subject matter in its original or an altered form, this is a transfer of property for value, it is a sale and not a bail- ment. Where, therefore, corn was deposited by farmers with a miller to be stored and used as part of the current con- sumable stock or capital of the miller's trade, and was by him mixed with other corn deposited for the like purpose, subject to the right of the farmers to claim at any time an equal quantity of corn of the like quality without reference to any specific bulk from which it was to be taken, or in lieu thereof the market price of an equal quantity on the day on which he made his demand, with a small charge for general pm-poses ; but they had no right to claim a re-delivery of the identical tvheat, or a share of the specific bulk m which it was mixed by their consent ; held that such a transaction amounted to a sale by the farmer to the miller, and was not a bailment of the corn, and entitled the miller to claim in respect thereof upon a policy of insurance against fire as for his own property, notwithstanding that such corn was not specifically insured or described as re- quired by the conditions of the policy as "goods held in (a). Rice v. Prov. Ins. Co. 7 U. C. C. P. 548, (6). Merrick v. Prov. Ins. Co. 14 U. C. Q. B. 439. 78 THE LAW OF INSURANCE. trust and on commission " upon which condition the claim was resisted by the insurers (a). A widow having continued for four years after her hus- band's death in possession of a house built on land of which he was the lessee for years and paid the ground rent, in- sured the house in her own name. No administration was taken out to the husband's estate, nor was any claim made thereto on behalf of any legal representative of the deceased husband, held that she had an insurable interest on any one of these several grounds : first, as the presumptive owner of the house ; secondly, as executrix de son tort, and thirdly as widow under the statute of distribution (b). If a party holds lands under a deed obtained from a luna- tic, this will be sufficient to give him an insurable interest, as against the insurers strangers to the lunatic and his heirs, and not claiming in any way, by, through, or under him or them, and this will be the law, though the deed is obtained by fraud or without consideration, for it will be valid until avoided, and only the party defrauded, or his representatives, have a right to complain of the validity of the deed (c). A person in possession of property as apparent owner, and responsible to those who are the real owners, has an insurable interest. A party was on his own petition dis- charged under the Insolvent Debtors Act 1 & 2 Vic. c. 110. He afterwards acquired property and insured it in his own name, but after insuring the original order of discharge was annulled, and he was adjudged to be imprisoned for twelve months ; held, nevertheless, that he had an insurable interest (d). (a) South Australian Ins. Co. v. Randell L. E. 3 P. C. App 101. (b) Lingley v. Queen Ins. Co. 1 Hannay, 280 ; see also Marks v. Hamilton, 7 Ex., 323. (c) Hickman v. North B. (& M. Ins. Co. 2 Hannay, 235. (d) Marks v. Hamilton 7 Ex., 323. THE SUBJECTS OF INSURANCE OR INSURABLE INTEREST. 79 The assignee of the estate and effects of an insolvent, has an inpuraMe interest after the assignment (a). So an action has been maintained by such an assignee, where the estate vested in him by assignment after the loss occurred (6). No person can have an insurable interest in freight, except the owner of the vessel, or the shipper or owner of the goods, who has advanced the whole or a portion of the freight as freight to the owner or charterer of the vessel, in anticipation of its being earned, but before it is earned. Such advances must be made strictly on account of, and in part payment of, the freight expected to be earned and to become due, and without recourse against the owner or charterer of the vessel personally. The advance must bear analogy to hottomry or respondentia loans in which the advance is put in hazard, and risked upon the success of the adventure or expected voyage, and a stranger to the pro- perty in both the vessel and the goods, cannot create an insurable interest in the freight by spontaneously g-dvancing the amount to the master or owner of the vessel, by way of loan to him, and not in part payment of the expected freight, without personal recourse against the master or owner (c). The following interests may be insured : — Freight {d) ; money advanced on freight {e) ; the profits on a cargo (/) ; the profits of a business {g) ; salvage paid by the owner, for he has a lien for the same on the goods {h). Property con- signed, though consignees have only a defeasible interest for the goods, may be stopped in transitu, or the consignees (a) Cameron v. Monarch Ins. Co. 7 U. C. C. P., 2.15 ; Cameron v. Times (S; B. F. Ins. Co. 7 U. C. C. P., 234. See also Herkimer v. Rice 27 N. Y., 163. (b) Kerr v. British Am. Asscc. Co. 32 U. C. Q. B., 569. (c) Orchard v. JEtna Ins. Co. 5 U. C. C. P., 445. (d) Flint V. Flemyng 1 B. & Ad. 45 ; Devaux v. J' Aanson SBing N. C, 519. (e) Mansfield v. Maitland 4 B. & A., 582. (/) Barclay V. Cousins 2 Ea. 55i; McSwiney v. Royal .4sscc. Co. 14 Q.B., 634. (g) Wright V. Poole 1 A. &E.,G21. {h} Briggs v. Traders' Assce. Co. 13 Q. B., 174. ' . ';. • -i THE LAW OF INSURANCE. may be changed (a) ; a pawn of goods created by endorse- ment of bill of lading (b) ; a pledge of a bill of lading (c); a vessel under hypothecation, though by such an instrument the creditor has no property in the vessel, but a claim or privilege only, to be Enforced by the process of the court {d). Goods consigned to one to be delivered to another may be insured by the one to whom they are to be delivered, though he did not order them to be sent (e). Inchoate rights, founded on subsisting titles, unless for- feited by positive law, are insurable. Freight respondentia and bottomry are of this description, the profit is prospec- tive, but they are founded on existing charter-parties, bonds and agreements (/). Ships seized by the officers of the crown as prizes of war before condemnation, though they may be restored by the crown before condemnation (g). So a bill of exchange drawn for freight, which, therefore, pledges the freight, is an equitable assignment of the freight, and consequently creates an insurable interest (h). Several cases have been decided in the United States, showing that a mechanic has an insurable interest in build- ings or other subjects on which he has expended his time, labor and skill, and that this interest is co-extensive with his lien (i). (a) Sterling v. Vaughan 11 Ea., 628; Boehm v. Bell 8 T. R. 158—161; lAwena v. Crawford 2 N. R. 293. (6) Sutherland v. Pratt, 12 M. & W., 16. (c) lb. ; Wolfe V. Horncastle 1 B. & P., 323. (d) Stainbank v. Penning 11 C. B., 88; Stainbank v. Shepard 13 C. B. 438, 442. (e) Hill V. Secretan, 1 B. & P. 315 ; Lucena v. Crawford, 2 N. R. 291 (/) Lucena v. Crawford, 2 N. R. 294. {g) Crawford v. Hunter, 8 T. R. 13 ; Boehm v. Bell, 8 T. R. 154 ; Lecras V. HughcK, 3 Doug. 81. {h) Wilson V. Martin, 11 Ex. 684. (i) Longhurst v. Star Ins. Co. 19 Iowa, 364 ; Carter v. Humboldt F. Ins. Co. 12 Iowa, 284 ; Stout v. City F. Ins. Co. 12 Iowa, 371 ; Protection Ins. Co. v. Hall, 15 B. Monro, 8 Ky. 411. THE SUBJECTS OF INSURANCE OR INSURABLE, INTEREST. 81 A recent Act of the Ontario Legislature has created a lien in favor of mechanics, machinists, builders, etc., and under this Act no doubt the mechanic will have an insur- able interest in all property subject to his lien. It would seem that an Insurance company with whom the actual owner of a house, without fraud or wilful misrepre- sentation, effects an insurance cannot set up the legal title of a stranger to the land on which the house stands, as a defence against the claim of the insured and to show that the latter as no insurable interest. But the company are not, it seems, in the situation of third parties, who could not dispute the title of the claimant on the ground of their having no interest in it ; if so, the in- surers have an undeniable right to dispute the interest of the plaintiff in the subject matter insured. The plaintiff insured with defendants a house in his possession, which he had purchased with the land on which it stood, as part of lot A, but, which was afterwards found to be upon the adjoining lot B, having been built there in consequence of an unskilful survey. The Con. Stats. U. C. c. G3 s. 53, enacts, that if an action of ejectment is brought against a person who, in consequence of unskilful survey, has im- proved upon land not his own, the value of the improve- ments shall be assessed by the jury, and no writ of posses- sion shall be awarded until such value is paid. Held, that this statute gave the plaintiff, as purchaser, an insurable interest in the property, although he had no actual legal title thereto (a). (a) Stevenson v. London <& L. F. Ins. Co. 26 U. C. Q. B., 148. ; • » 1 CHAPTEE IV. THE EXTENT i.ND NATUEE OF THE BISK. In determining the extent and nature of the risk assumed by the underwriter various circumstances are to be con- sidered. The losses for which he is liable, when the insur- ance is against fire, are only such as result directly and immediately from the peril, and even this liability may be subject to slight modification by the terms of the particular policy. In some policies the contract is to pay all ** imme- diate " loss or damage, etc., in others the word "immediate'^ is not inserted. The memorandum articles which are not covered by the policy, unless specificially insured, may be different in different policies. So the liability of the com- pany for losses by theft or for injuries to goods in removal will in many cases depend on the terms of the contract. It is therefore in all cases material to refer to the conditions and stipulations of the particular policy, for the rights and liabilities of the insurer and insured are entirely governed thereby, and in the present state of insurance law in Canada the conditions of the policies are not by any means uniform. It would scarcely be apparent to the ordinary reader that there is any difference in the liability of the insurers under a condition that they shall be liable for loss on property in- jured by lightning and a condition imposing such liability when! the property is burnt by lightning. Yet such a distinction has been taken as is recognized by the courts. In the former case, when any damage or injury is done by lightning, though the property is not burnt by fire, the insurer will be liable ; in the latter there must be an actual burning by fire. In all these cases the courts endeavor to arrive at the meaning of the parties to the contract and construe it according to th^ir intention, as collected from the words they have used. The difficulty with the party THE EXTENT AND NATURE OF THE RISK. 83 proposing to insure is to become acquainted with the terms of the contract, to understand the effect of the conditions of the [policy by which he is insured ; for in addition to the fact that the conditions are not all uniform, new conditions are constantly being adopted, or old conditions are being modified to meet the exigencies of new cases decided by the the courts. For instance, when the courts decided that a condition prohibiting alterations in the building insured did not apply to additions to such building several of the companies framed their conditions so as to prohibit altera- tions in the additions to the building insured as well as the building itself. It is also material to consider what property is covered by the policy. What, for instance, will be the effect of a particular description of a specified subject of insurance ? Thus, if a persor who is not a linen draper insures his " stock in trade, household furniture, linen, wearing apparel, and plate," this will not protect linen drapery goods subsequently pur- chased on speculation, for the word linen in the policy must be confined to household linen or linen used by way of ap- parel, (a) The rule is to construe the subjects covered by the policy according to the maxim nos citur a sociis. In other words, the meaning of anj particular expression in the policy is to beascertainedbyreierenceto the other expressions with which it is connected. The contract of insurance is to be construed liberally and according to the intention of the parties, and whether a specific commodity or building is covered by a policy must be inferred from the general scope of the policy, (h) Although the subject matter of the insurance must be properly de- scribed, the value of the interest may in general be left at large. Thus, where carriers by water insured goods on board their boats " as interest may appear hereafter " it was (a) Watchorn v. Langford 3 Camp., 422. (6) Ellis un Ins. 27 ; Diggs v. Albany Ins. Co. 10 Barb., 440, 84 THE LAW OF J[NSURA^CE. held that they could recover the full value of the goods, (a) But in the absence of a condition to the contrary a misde- scrii)tion only takes place where the representation made is false at the time of making it. If, therefore, in effecting an insur- ance the building insured is described as of a particular charac- ter and the representation is true at the time of the making of the po^^'^v, its subsequently ceasing to conform to the de- scription, will not avoid the policy, provided the conditions thereof as to giving notice, etc., are complied with on such change taking place, (b). ' ' The policy usually contains a condition that applications for insurance must be in writing and specify the cons^.ruc- tion and materials of the building to be insured, by whom occupied, whether, as a private dwelling house, or how otherwise, its situation with respect to contiguous buildings and their construction and materials, and whether any manufacture is carried on within or about it. It will thus be seen that the giving of a full and accurate description of the property is incumbent on the insured by the terms of the contract. A policy was effected on premises by the description of a ** granary" and " a kiln for drying corn, in use." The conditions of the policy provided, that persons insuring should forfeit their right to the sums insured, unless the buildings insured, or containing the goods insured, were accurately described, the trades carried on therein specified, and the nature of the property correctly stated ; and the sixth condition provided, that if any alteration were made either in the buildings, or the business carried on therein, notice should be given to the insurers, an additional pre- mium if required paid, and an endorsement made on the policy, otherwise the same should be void. The insured carried on no trade but that of drying corn, but on one occasion a vessel laden with bark sunk near the (a) Croivley v. Gohev 8 B. df Ad., 478 ; andsee Palmer v. Pratt, 2Bing. 185. (6) Foy V. Etna ^ . Co. 3 Allen, 35 6. THE EXTENT AND NATURE OF THE RISK. SI premises, and he allowed the Hark to be dried gratuitously at his kiln. ' The jury found that corn drying and bark drying were different trades, that the latter was more dangerous than the former, and chat the loss happened from the use of the kiln in drying the bark. It was held, that there was no misdescription, for the condition applied only to the state of the premises at the time of insuring, and nothing which occurred afterwards, not even a change of business, could bring the case within that condition, which was fully per- formed when the risk attached. It was held, further, that there was no breach of the sixth condition, for it related only to an alteration of business, a change of a permanent and habitual character, as by dropping the one business and taking up the other, but in the case in question there was no change of business, the permission being granted gratu- itously on one occasion only (a). If the description of the premises is substantially correct when made at the date of the policy, this will in the absence of fraud and of a condition to the contrary, be sufficient to entitle the assured to recover, notwithstanding a subsequent change in their construction and arrangement or the carry- ing on of a more hazardous trade on the premises ; and where a condition provided that, "In the insurance of goods, etc., the building or place in which the same are deposited is to be described, the quantity and descrii^tion of such goods, also, whether any hazardous trade is carried on, or any hazardous articles deposited therein ; and if any person shall insure his or their building or goods, and shall cause the same to be described otherwise than as they really are, to the prejudice of the company, or shall misrepresent or omit to communicate any circumstance which is material to be made known to the company ill order to enable them to judge of the risk they have undertaken or are required to undertake, such insurance shall be of no force," It was (a) Shaw v. liobberds 6 A. & E., 76. 86 ^ THE LAW OF INSURANCE. held, that the condition referred only to the date of the policy, and the policy was not avoided by the circumstance that subsequently to the date of the policy, a more hazar- dous trade had, without notice to the company, been carried on upon the premises {a). The decision in this case has rendered it necessary for the insurers, if they wish to protect themselves against the risk arising from the subsequent comruencement of a hazardous trade on the premises, that they should provide for it by an appropriate condition. A condition is now usually inserted in the policy to the efifect that if, after insurance effected, the building or premises insured shall be occupied in any way so as to render the risk more hazardous than at the time of insuring, the insurance shall be void and of no effect. When the policy contains such a condi- tion, the insured is not at liberty to commence a hazardous trade, or in any other manner increase the risk after the date of the policy. If there be such a variance between the description of the property intended to be insured and its actual descrip- tion as will amount to a breach of warranty in any material respect, the policy will be void, although the insured intended to effect an insurance on the property by whatever description might be correct {h). And where the descrip- tion amounts to a warranty, as where a building is described as of one class instead of another, where a larger premium would have been required for that other, the policy becomes completely void ; and in such case it is utterly immaterial whether or no the misdescription produces the loss or increases the risk (c). Where the description of the premises is incorporated into and forms the basis of the contract, on the faith of which +he underwriter subscribes the policy, the descrip- (a) Pirn V. Reid 6 M. <& G., 1. (6) Teason v. Atlantic M. Ins. Co. 40 Mo. 33. (c) Newcastle F. Ins. Co. v. McMoran 3 Dow, 255. THE EXTENT AND NATURE OF THE RISK. 87 tion amounts to a warranty that the assured shall not, during the time specified in the policy, voluntarily do any- thing to make the condition of the premises vary from that description so as thereby to increase the risk or liability of the underwriter. Thus, where a description was made out in October, 1850, on the faith of which the policy was executed on the 7th of April, 1851, covering a risk from the 1st of February, 1851, it was held that the description amounted to a warranty that the premises corresponded with it at the date of the policy ; and the warranty not having been complied with, and the risk of the underwriters being thereby in some degree increased, that the insured could not recover (a). In this case the house was changed from a two to a three story house, and its value increased about £1,000 ; and it was admitted that the insurer was liable to make good any partial loss on the increased value. It does not, therefore, directly overrule that of Pirn v. Reed, (h) though the judges lay down a principle at variance with the principle enun- ciated in that case. Where the subject matter of insurance, as described in the body of the policy so far as material, was as follows : — -" On a range of buildings of three stories, etc., part of lower story being used as a stable, coach-house, and boiling- house. No steam engine employed on the premises, the Bteam from the said boiler being used for heating water and warming the shops." A memorandum at the end of the description of the property was this : — *' N. B. The process of melting tallow by steam in the said boiler-house, and the use of two pipes, are hereby allowed." After the making of the policy the insured erected a steam engine in the stable, and worked it by steam generated in the existing boiler. More steam was used than before, but the jury found that the risk was in no way increased. Held, that it was an essential part of the contract that there should be (a) Sillem v. Thornton 3 E. ). It seems, also, it would be immaterial that the agent was aware of the communication, for if a man own a store comprised of three or ten houses in a street, any one of these may be the subject of insurance, though they are all connected together and used in one trade, and make up one establishment of the insured. So an insurance company may insure a flat of a house, or goods in it, or goods in a wing o# a house (c). A condition is sometimes inserted in the policy, providing that on the removal of personal property from the place mentioned in the application, the policy shall be void unless the removal is approved of by endorsement on the policy. An agreement endorsed on the policy, authorising the removal of the goods to another building, and continuing the policy in force after the removal, is valid and binding, and constitutes a new contract between the parties, and a new risk taken by the company, and it is immaterial that some elements of risk prohibited by the original policy still exist if they are known to the company when the new risk is taken (d). (a) Rolland v. North British Mer. Ins. Co. 14 L. C. J., 72. See also Casey V. Ooldsmid 4 L. C. R., 107 ; 2 L. C. R., 200. (6) Rolland v. North British Mer. Ins. Co. 14 L. C. J., 69. (c) lb. 73. (d) Rathbone v. City ^. Ins. Co. 31 Conn., 183. See also West v. Old Col- ony Ins. Co. 9 Allen (Mass.), 316. THE EXTENT AND NATURE OF THE RISK. 93 A condition preventing the use of gunpowder upon the premises is not unreasonable. A condition declared that the policy should be void if there should at any time be more than 56 pounds weight of gunpowder on the premises, unless specially provided for in the policy ; and another condition enumerated certain hazardous goods, among which was gunpowder. The policy was effected " on stock in trade of general merchandise, including hazardous." It was held, that this description of the subjects insured did not nullify the condition as to gunpowder, or amount, to a special provision in the policy allowing its introduction ; and it appearing that more than 56 pounds were on the premises when the fire occurred, the policy was held void, though the insured were dealers in gunpowder (a). In the ordinary case of a merchant insuring his stock in trade, as the policy is a continuing contract of indemnity, it attaches on any goods of a like description with those insured which may be brought into the premises during the continuance of the policy, although they are not the iden- tical goods which were insured ; nor does it make any difference that the merchant sells out his whole stock by one contract of sale to an individual purchaser, and after- wards gets back the same goods, or others of a similar des- cription, from the purchaser. In other words, the rescission of such a sale, and the revesting of the goods in the vendor, would not prevent the revival of the risk, although it was suspended during the currency of the contract of sale (h). So it has been held in the United States, that when a merchant insures his stock in trade, the risk is a continuing one to the amount specified upon such goods as the insured has in his store within the term covered by the policy, and it is not, confined to such as were there at the time of assum- ing the risk. An alienation of the specific goods in the sto]?e at the date of the policy, and the purchase of others (a) McEwan v. Gutteridge 13 Moore's P.O. Cases, 304, (6) Crozier v. Phoenix Ins. Go. 2 Hannay, 200. See also Kunzze v. Amer- can Ex. F. Ins. Co. 2 Robert, (N. Y.) 443. THE LAW OF INSURANCE. from time to time, will not prevent the policy from attach- ing on such goods as are in the store at the time of the loss (a). An open policy upon merchandise will not cover articles kept wholly or partially for use in and about the building, but only articles kept for sale ; but an open policy upon " property " contained in specific buildings, will cover articles kept for use as well as those kept for sale (b). The terms " stock in trade," as used in a policy in reference to the business of a mechanic, have a more extended mean- ing than when applied to the business of merchants. In the former cases not only the stock in trade but all tools and implements necessary for carrying on the business will be protected, (c) A factor or commission merchant who has the consign- ments of the merchandise of several employers may cover the whole with one insurance in the name of the consignee who has the actual possession and charge of the whole, and the same special property in all. The form now in use is a general policy in the name of the commission merchant on all the goods that may be in his warehouse at any time within a given period to a specified amount, whether held by him as owner, or in trust, or on commission. Under such a con- tract the insurers will be answerable for loss or damage by fire within the terms of the insurance to whatever merchan- dise or property may happen to be in the warehouse at the time of the fire, and be then held by the insured as general or special owner, without regard to the time of his receipt of the goods in store or the persons who may be in- terested in them. A policy thus made cannot be con- sidered as attaching specifically and solely on the goods in the hands of the factor at the date of the policy, for it will and must often happen that no part of the specific goods (a) Lane v. Maine M. F. Ins. Co. 3 Fairf. (Me.), 44. (b) Burgoss v. Alliance Ina. Co. 10 Allen (Ma88.)221. (c) Moadinger v. Mechanics F. Ins. Co. 2 Hall (N. Y.), 490. THE EXTENT AND NATURE OF THE RISK. §5' originally covered by the policy is exposed to loss when any fire may take place, (a) A policy of insurance upon a building is an insurance upon the building as such and not upon the materials of which it is composed. If from any defect of construction or over- loading the building fall into ruins and subsequently the materials take fire, the insurer is not liable for the loss, (b) If the building falls it ceases to exist as such by reason of a peril not insured against, for to recover fire must be the efficient cause, and the loss the direct effect of the fire. To meet a loss arising from the fall of a building a condition is sometimes inserted in the policy that if a building shall fall except as the result of a fire, all insurance on it or its con- tents shall immediately cease and determine. When the insurance is against fire the loss must of course arise from fire ; but a policy against fire covers all losses which neces- sarily follow from the occurren.^ of a fire whenever the injury arises directly or immediately from the peril or neces- sarily from incidental and surrounding circumstances, the operation and influence of which could not be avoided, (c) The extent of the liability of the insurers may of course be modified by the language of the particular policy ; but in general it is as already explained restricted to such imme- diate loss or damage as may arise from the peril insured against. An insurance against fire effected upon a certain quantity of coal covers not only the coals deposited at the time of insurance but those deposited afterwards, and covers also risk 8 rising from the spontaneous combustion of coal, (d) The term '* fire " in a policy of insurance signifies ignition or actual combustion. The terra should be construed in its ordinary signification ; that i ., it should not be confined to {a) Be. Forest v. Fulton F. Ins. Co. 1 Hall (N. Y.), 84; MiUaxulon v. At- lantic Ins. Co. 8 La, 567 ; Angell on Ins, 138-9. (6) Nave v. Home M. Ins. Co. 37 Mo, 431. (c) Brady v. North W. Ins. Co. 11 Mich., 425. (d) British Am. Ins. Co. v. Joseph 9 L. C. R., 448, 96 THE LAW OF INSURANCE. any technical and restricted meaning which might be ap- plied to it by a scientific analysis of its nature and proper- ties, nor sh( aid it receive that general and extended signifi- cation which, by a figure of speech, is sometimes applied to the term, but it should be construed in its ordinary and popular sense. Therefore in the case of live stock struck by light- ning the mark of fire must appear upon the carcass, other- wise it may be a case of death occasioned by the eleciric shock alone, which is not a loss by fire (a). A loss by light- ning without any combustion is not a loss by fire (h). Where the policy covers losses from " fire" produced by "lightning" the insurers are not liable for the destruction of the dwelling house insured by its being rent and torn in pieces by light- ning without being burnt, and in such case unless there be an actual ignition and combustion, which is the proximate cause of the loss, the insurers are not liable, (c) But if the terms of the contract gave the insured a right to indemnity for property injured by lightning it seems the company would be liable in such case as above. Fire insurance companies are liable for all losses which are the immediate consequences of fire or burning, and, therefore they would be liable in cases where goods are in- jured by the fire engines in putting out a fire when the building containing the goods waj actually on fire, or by the removal of the goods under the same circumstances, although the goods may not have been burnt, but in fact were injured by water, or by breaking in the act of saving them from fire, and this is on the ground that the fire is the proximate cause of the injury, and by a liberal construction of the policy the goods may be said to have suffered damage by means of fire, and it has been, it is believed, the custom of insurers to pay losses in such cases, (d) (a) Beaum. on Ins., 39. (6) Kenniston v. Mer. Co. ; M. Ins. Co. 14 New Hamp., 841. (c) Dabcock v. Montgomery Co. M. Ins. Co. 6 Barb. N.Y., 637 ; see also Andrews v. Union. M. Ins. Co. 87 Me., 256. (d) Angell on Ins., 161. THE EXTENT AND NATURE OF THE RISK. 9T It is clear that an injury to goods by water thrown upon them to extinguish a fire would not be an injury to goods by actual ignition, and yet no case can be found wheie an insurance against damage by fire has been held not to extend to such a case, (a) . If neither the stock of goods insured nor the house con- taining them are touched by the fire, but the goods are damaged in the removal, under a reasonable apprehension, that if allowed to remain they will be burnt, the fire having taken the fourth house from that of the insured in the same block ; the injury sustained by the insured in the removal of his goods, is not a loss covered by a policy against fire (6). But whatever loss or damage is necessarily sustained by the insured, in the removal of the property when the danger of its destruction by fire is so direct and immediate that a failure to have made the removal while he had the power, would have been gross negligence on his part, he is entitled to recover under the policy (c). Goods may be so carelessly removed, and so wantonly and unnecessarily exposed, as to relieve the insurance company from all liability on account of the injury (d), and an omission by the insured to remove his goods when he has the power, when the building con- taining them is on fire, or the danger of their destruction is direct and immediate, would be gross negligence, and the company would not be liable. On this point the condi- tions generally provide, that in case of fire, or of exposure to loss or damage thereby, it shall be the duty of the insured to use all possible diligence in saving and preserving the property, and if they shall fail to do so, the company shall not be held answerable to make good the loss and damage sustained in consequence of such neglect. But, damage done in removal, where it takes place in the exercise of a just discretion, would seem as much within the risk as an (a) Case v. Hartford F. Ins. Co. 13 Illinois, 676. (6) Ilillier v. Alleghany Co. Mut. Ins. Co., 3 Penn. 470. (c) Case V. Hartford F. Int. Co., 13 Illinois 676. (d) Case v. Hartford F. Ins. Co.. 13 Illinois 676. a 98 THE LAW OF INSURANCE. injury done by the actual burning of the property (a.) A con- dition is inserted in some policies, that in case of damage by removal from a building in which the property is exposed to loss by fire, the damage shall be borne by the insured and the insurers, in such proportion as the whole sum insured bears to the whole value of the property insured. The policy usually contains a condition, that in case of removal of pro- perty to escape conflagration, the company will contribute rat- ably with the insured and other companies, to the expenses of salvage and the damage the property may sustain by such re- moval, but the company will not hold itself liable for any loss or damage upon property removed from any building not actually on fire, contrary to the declared desire of the officer or agent of the said company. When the policy contains such a condition as this injuries to goods by wet or in any other man- ner from the exposure during the confusion, etc., before they can be got to a place of safety, and goods lost or stolen in the confusion occasioned by the fire, are within the terms of the policy ; but in suing for such loss the plaintiff should describe the occasion and manner of loss according to the facts, (b). Where the plaintiff declares alleging that the goods were burnt, consumed, and destroyed by fire and issue is joined on this allegation, in strictness he can only recover for such goods as he shews to have been destroyed or injured by fire or for such as the jury, in the absence of any other account given of the loss, may fairly presume to have been destroyed by fire, (c) In the ordinary case of insurance against fire, where the policy contains no exception as to losses by theft, the insurers will be liable for goods stolen while in process of removal from a building actually on fire, (d) (a) Bunyon on F. Ins., 44 ; Tindall v. Bell, 11 M. & W. 228. (b) Thompson v. Montreal Ins. Co. 6 U. C. Q.B., 319 ; see also Whitehurst V. tayetteviUe M. Ins. Co.; 6 Jones Law N.C., 352. (c) lb. (d) Independent M. Ins. Co. v. Agnew 34 Ponn. St., 96 ; Tilton v. Hamilton F. Ins. Co. 1 Bosw. (N.Y.) 367 ; S. C. 14 How. N.Y., 363 ; Witherell v. Maine Im. Co. 49 Me., 200 ; Talaman v. Home <& C. M. Ins. Co. 16 La. An., 426. THE EXTENT AND NATURE OF THE RISK. If the theft is occasioned directly by the fire, the precise time of its occurrence is unimportant, as the liability of the insurers is not restricted to the period when the fire is ex- tinguished, (a) But it seems if the goods are stolen after their removal from the burning building the insurers would not be liable. (&) A claim for goods injured will include goods destroyed, because goods injured are partly destroyed, but there must be satisfactory evidence that any missing goods claimed for were insured, and in the absence of satisfactory evidence that certain goods, the value whereof is claimed under a tire policy are either actually destroyed or damaged by fire or stolen the claim therefor cannot be recovered, (c) In all cases of claims for goods lost or stolen in removal, reference must be had to the conditions of the policy, the particular loss may be altogether excluded or left unprovided for, as already explained. - ~ If the premises are blown up by gunpowder by order of the municipal authorities of a city, to arrest the progress of a conflagration, this 'is a loss by fire and is covered by the policy, where it appears that the buildings all around were on fire and were afterwards destroyed, and according to every probability the fire would have destroyed the premises in ques- tion if they had not been blown up (d). So a loss l)y the explosion of gunpowder is a loss by fire, for as the explosion is caused by fire, the latter is the proxi- mate cause of the loss (e). So " loss or damage by fire " includes a loss caused partly by an explosion of gunpowder on the premises and partly by burning (/). (o) Neiv Mark*v. London & L. F. i& L. Im. Co. 30 Mo. 160. (b) McGibhon v. Qiwen Ins. Co. 10 L.C. J., 227. (c) Harris v. London dt L. F. Ins. Co. 10 L.C. J., 268 ; see also McGibbon V. Queen Ins. Co. supra. (d) City F. Ins. Co. v. Corlies 21, Wend (N. Y.) 367. (c) Waters v. Louisville Ins. Co. 11 Peters, (U. S.) 213; Orim v. Phoenix Ins. Co. 13 John's (N. Y.) 451. (/) IScripturv. Lowell M. Ins. C. 10 Gush. (Mass.) 856. 100 THE LAW OF INSURANCE. But if the whole damage is produced by the explosion and not by the fire, the insurers will not be liable (a). A policy of fire insurance contained the following excep- tion: "Neither will the company be responsible for loss or damage by explosion, except for such loss or damage as shall arise from explosion by gas. It was held that the word gas in the policy meant ordinary illuminating coal gas. Second- ly, that the exemption of liability for loss by explosion, was not limited to cases where the fire was originated by the ex- plosion but included cases where the explosion occurred in the course of the fire, and that it exempted the defendants in respect, both, of the damage from the explosion itself and of the damage done by the further fire caused by the explo- sion (b). If the proximate cause of the loss is the concussion of the atmosphere caused by an explosion, the insurers are not liable. Thus when the insurance is "from loss or damage by fire according to the exact tenor of the conditions and stipulations endorsed" on the policy, and the conditions pro- vide "that losses by lightning will be made good where the property insured by the corporation has been actually set on fire thereby and burnt in consequence," and that "gunpow- dew will not be insured or comprehended in any insurance effected by the company, nor will any loss be made good when more than 25 pounds of gunpowder shall be deposited or kept on the premises." Loesses under such an insurance are confined to such as occm* from the direct action of fire on the premises as the proximate and immediate cause of the loss, and the insured are not entitled to be indemnified for the shattering of the windows and window frames, and the damaging of the structure generally by the atmospheric con- cussion caused by the explosion of a large quantity of gun- powder about half a mile from the premises, by which no (a) Millaudon v. New Orleans Ins. Co. 4 La. An., 15. (b) Stanley v. Western Ins. Co. L. R. 3 Ex. 71. THE EXTENT AND NATURE OP THE RISK. 101 part of the premises are set on fire or burnt, heated or scorched (a). The same rule applies when the fire breaks out in a con- tiguous building and causes the explosion. If, however, the explosion is caused by a fire upon the premises insured, the loss occasioned by the explosion will, in the absence of a con- dition to the contrary, be within the policy (&). And where there is a condition providing that the insurers shall not be liable for explosion of any kind, they will not be liable for loss by explosion caused by a steam engine covered by the insurance, even though the engine was necessary and ordinarily used in carrying on the business on the premises insured (c). ,. In all insurances the proximate and not the remote cause of the loss is to be looked at in determining the liability of the insurers, and when the insurance is against fire, the insurers are not liable unless fire is the proximate cause of the loss. - Thus, where by a policy of insurance, plate glass in the plaintiff's shop front was insured against '* loss or dam- age originating from any cause whatever, except fire, breakage during removal, alteration or repair of premises," none of the glass being "horizontally placed or moveable." A fire broke out in premises adjoining those of the plaintiff, and slightly damaged the rear of his shop, but did not approach that part where the plate glass was. Whilst the plaintiff, assisted by neighbours, was removing his stock and furniture to a place of safety, a mob attracted by the fire, tore down the shop shutters and broke the windows, for the purpose of plunder. Held, that the proximate cause of the damage was the lawless act of the mob, and that it did not (o) Everett v. London Assce. Co. 19 C. B, N. S. 126 ; See also Taunton v. Royal Ins. Co. 10 Jur. N. S. 291. (h) Caballero v. Home M. Ins. Co. 15 La. An. 217. (c) Hayward v. Liverpool and L. F. <& L. Ins. Co. 7 Bosw. (N. Y.) 385. 102 THE LAW OF INSURANCE. * originate from fire or breakage during the removal, within the exception in the policy (a). Any loss resulting from an apparently necessary and bona fide effort to put out a fire, whether it be by spoiling the goods by water, or throwing the articles of furniture out of the window, or even the destroying of a neighbouring house by an explosion, for the purpose of checking the progress of the flames ; in a word, every loss that clearly and proximately results, whether directly or indirectly from the fire, is within the policy (J)). When the insurance is against fire, there must be an accident by fire to lay the foundation of a claim, but, it is not necessary that the property insured should be on fire, for losses by smoke and water when the fire has not touched the objects insured, are covered. All that appears to be necessary is, that something should have caught fire and damage have been thereby occasioned to the insured pro- perty (c). The loss must arise from some of the causes insured against. Thus, where the policy was for an insurance against fire in a manufactory for sugar baking, containing some seven or eight stories, fitted up with a stove on the ground floor, and a flue or chimney therefrom up through the several stories, with a register at each floor, with an aperture into the room whereby more or less heat could be introduced at pleasure. One morning when there was only the usual fire in the stove necessary to carry on the manu- facture, through a neglect to open the register, the smoke, sparks and heat, were completely intercepted in their pro- gress through the flue, and were forced into one of the rooms where the sugars were drying. The sugar was much dam- aged in consequence ; but nothing was consumed by fire, and the loss arose from the negligent management of the machi- (a) Marsden v. City dt C Assce. Co., L, R. 1. 0. P. 232 ; see also Hillier V. Alleghany Co. M. Ins. Co., 3 Barr. (Penn.) 470. (6) Stanley v. Western Ins. Co., L. R. 8 Ex. 71. (c) Bunyon on F. Ins. 32-3. THE EXTENT AND NATURE OF THE RISK. 103 nery and the confinement of the heat. It was held not a loss within the terms of the policy (a). A policy of insurance against fire wats effected " on the hull of the steamship Indian Empire, lying in the Victoria Docks, London, with liberty to go into dry dock and light the boiler fires once or twice during the currency of the policy." It was held, that these words did not confine the risk to the Victoria Docks, and the dry docks adjoining thereto, or to any particular dry dock ; nor did it exclude the risk of transit from one dock to another, but that never- theless, the risk did not attach on the ship while moored in the river Thames not for the mere purpose of transit from one dock to another ; and therefore, wb-^re it appeared that the vessel proceeded from the Victoria Docks to Lungley's Dry Dock, about two miles up the Thames from the Victoria Docks, and after being there repaired, was towed down to the Government Buoys, off Deptford, between 600 and 700 yards from the Victoria Docks, and was burned while lying there at her moorings ; the insurers were not liable, it appearing that the risk in the river was greater than in the dry dock (h). The allowing by a bank manager of over drafts without security is an irregularity within the meaning of a policy guaranteeing the bank against such loss as might be occasioned to the bank by the want of integrity, honesty and fidelity, or by the negligence, defaults or irregularities, of the manager, where, in the opinion of the court, the evi- dence established that the manager concealed the fact of the over drafts from the head office by fictitious returns, and acted in improper concert with the parties whom he allowed to withdraw (c). One of the objects of insurance against fire is to guard (a) Austin v. Dreive, 6 Taun. 436, 4 Camp. 360 ; see also Sun M. Ins. Co. v. Masson, 4 L. C. J. 23. (6) Pearson v. Coml. Union Assce. Co., 15 C. B. N. S. 304, O^L. T. N. S. 442. (c) Bank Toronto v. European Assce. Co. 14 L. C. J. 186 ; S. C, 13 L. C. J. 63 •overruled. 104 THE LAW OP INSURANCE. against the negligence cf servant and others, and therefore, the simple fact of negligence has never been held to consti- tute a defence. Nor does it make any difference whether the negligence is that of a servant or of the assured himself. In all such eases, in the absence of fraud, the proximate cause of the loss is alone to be regarded (a). Where a risk has not been increased within the conditions of a policy, it is not a defence to an action upon it, that the plaintiff might have been more careful in the management of a business, which he was permitted by the terms of the policy to carry on (b). • If the negligence be so gross as to amount to wilful mis- conduct or fraud, the insured could not recover, (c) And the insured may be guilty of such gross misconduct not amounting to a fraudulent intent to burn the building as to deprive him of his right to recover on the policy, (d) Losses by the negligence of tenants on policies against fire are within the risks taken, and so losses by the criminal wantonness or misconduct of mere trespassers, or intruders or felons, are within the common policies against fire, (c) In the absence of any condition restraining the liability of the insurers they would be liable for the wilful or felonious- acts of servants or strangers, and therefore a condition is usually inserted in the policy protecting the insurers from liability for losses arising from invasion, insurre'ction, riot, civil commotion, or any military or usurped power. The Con. Stats. L. C. c. 68. s, 3, and the Con. Stats. U. C. c. 52, (a) Shaw v. Robberds, 6 A. & E, 75 ; see also Busk v. Royal Ex. Assce^ Co., 2B.& Aid. 73; Walker v. Maitland, 5 B. ). The actual damage only is recoverable, irrespective of the sum insured ; and in estimating such actual damage, the cost of replacing the building or other property with new materials may be ascertained, and from this the actual value of the building or other property immediately before its destruction may be deducted, and thus the actual value of the subject insured may be determined (c). When the true and actual cash value of the property at the time of the loss, is the criterion of damage the insured may recover the actual value of imported goods then in the custom house, although the duties have not been paid or secured (d). A clause providing that the loss or damage shall be esti- mated according to the true and actual cash value of the property at the time of the loss, must be construed strictly. (a) Newby v. Reed 1 W, Black. 416. \ (6) Brinley v. National Ins. Co., 11 Met. (Mass.) 195. (c) Vance v. Forster, 2 Craw. & Dix. C. Rep. (Irish) 118. (d) Wolfv. Howard Ins. Co. 1 Sandf. (N. Y.) 124; affirmed 3 Seld. (N. Y.) 683. 108 THE EXTENT AND NATURE OF THE RISK. For instance, in the case of machinery, the cost of construc- tion could not be taken into consideration, when, through a defective principle of construction, the machine is only valu- able for the materials of which it is composed, it being wholly unadapted for the purpose for which it was intended. In such case, the actual value of the wood and iron com- posing the machine would be the measure of damages {a). When goods insured against fire are destroyed the insurer is bound to pay their value at the time of the loss ; but if damaged only he is bound for the difference between their value in their sound and damaged condition. When the goods are so much damaged as not to be saleable in the ordinary mode a fair sale at auction made by the insured after reasonable notice to the insurers, or with their know- ledge, may be considered by a jury in estimating the damage and in ascertaining the amount of the indemnity. But the price for which such damaged goods are sold at auction by the insured without notice to or knowledge by the insurers of the sale is not sufficient evidence of the value of the goods in their damaged condition (b). The amount for which indemnity is to be made is the market value of the articles at the time and place of the commencement of the risk, and when they have been pur- chased near that time and place, the cost to the insured is the most satisfactory, though not the only criterion of their value (c) If the goods are those which the insured deals in at whole- sale or are manufactured, the price for which similar goods are generally sold by wholesale dealers or manufacturers, may be considered by the jury in estimating their value in an action upon a policy to recover for their loss (rt). (a) Commonwealth Ins. Co. v. Sennett, 37 Penn. St. 205. (6) Hoffman v. We»tern M. dt F. Ins. Co. 1 La. Au., 216. (c) Marchenseau i\ Merchants Ins. Co. 1 Rob. La., 438. (d) Hoffman v. Etna Ins. Co. 1 RpLert (N.Y.) 501 ; affirmed 32 N.Y., 406. THE EXTENT AND NATURE OF THE RISK. 109 A policy of insurance on a steamer provided that the loss or damage should be estimated " according to the true and actual cash value of the said property at the time the same shall happen." Held, that in estimating the loss the plain- tiffs were not entitled to have taken into account a depression in the market value of steamers generally, which might only be temporary, arrising from circumstances occm'ring recently before the loss, and having no reference to the original cost or actual condition of the boat (a). If the policy contains a provision " that the insurers shall not be liable for more than the sum insured in any case whatever," or " that partial losses shall be paid in full not exceeding the amount insured," the insurers will not in any case be liable for more than the amount insm-ed ; and if they have already on one loss occurring paid a portion of the sum insured, they will only, on a subsequent loss, be liable for the balance of that sum. Thus, if the whole amount insured was $1,000, and a loss occurred of $300, and was duly paid, the insurers would not, on a second loss occurring, be liable for more than $700, though the amount of loss equalled or exceeded the sum insured. In other words, the sum paid on any loss will reduce the liability pro tanta, and when the total payments equal the amount insm'ed, the liability ceases (b). Where a mutual company undertake to pay all such loss or damage not exceeding the amount insured which shall happen during the currency of the policy, their liability is not extinguished by the payment of one loss not equal to the amount insured. Thus, when the buildings, being destroyed by fire, were reinstated by the company at a cost less by $550 than the amount insured, it was held that the insured, on a loss afterwards occurring before the expiry of the term, was entitled to recover this $550, making up the full amount insured, notwithstanding the previous loss and reinstatement (c). (a) McCuauj v. Quaker City Im. Co. 18 U. C. Q. B,, 130. (h) Crovibie v. Portsmouth M. Ins. Co. 6 Fost. N. H., 389 ; Curry v. Com- monwealth Ins. Co. 10 Pick. (Mass.) 535. (c) Trull V. Roxbury M. Ins. Co. 8 Cusb. (Mass.), 263. CHAPTEKV. WAERANTY, MISREPRESENTION, AND CONCEALMENT. An express warranty in the law of insurance is a stipula- tion inserted in writing on the face of the policy, on the literal truth or fulfilment of which the entire contract de- pends (a). ' r No particular form of words is necessary to constitute an express warranty, the word "warranty " or "warranted," for instance, is in no case necessary. Thus, in marine insurance the words "to sail on such a day," or " in port," or "all well," on such a day, " or carrying so many guns and so many m^n," would amount to an express warranty requiring a literal fulfilment as much as though there was a formal clause to the same effect (b). To make a stipulation an express warranty it should be inserted in writing on the face of the policy, or in a detached paper expressly stipulated to be a part of the policy (c). A warranty in whatever form created is a condition or contingency, and unless that be performed there is no con- tract. It is styled a condition precedent, which means that it is perfectly immaterial for what purpose ihe war- ranty is introduced, and that no contract exists unless the warranty be literally complied with. The only conceivable cases in which a compliance with an express warranty might be excused would be "if the state of things contemplated by the warranty were to cease, or if a subse- quent law should pass rendering a compliance with a pre- vious law illegal." {d) (a) Sayles v. North-western Ins. Co. 2 Curtis C.C. U.S. 612 ; seo also Com- monwealth Ins. Co. V. Monninger infra. (6) Amould on Ins. 544 ; Kenyon v. Berthon, 1 Doug. 12. (c) Commonwealth Ins. Co. v. Monninger 18 Ind. 352 ; Lothian v ffender- fon, 8 B. & P. 499 ; Paumm v. Watson, Cowp. 790. I (d) 1 Amould on Ins. 546-8 ; 8ee also Nicol v, American Ins. Co., 3 Wood. A Min. C. C. U. S. 529. WARRANTY, MISREPRESENTATION, AND CONCEALMENT. Ill A non-compliance with an express warranty that certain things shall be done by a certain time does not vac the contract from the commencement of the risk, but oni ? and after such non-compliance. Where the warranty is clear and explicit no parol evidence 0^ (nde can be admitted to contradict control, restrain or extv-.iJ it. (a) An implied warranty is something contracted for which necessarily results from the terms of the contract, (b) A warranty will in no case be extended by construction to include anything not necessarily implied in its terms. Thus where there was a warranty that "the ship should have twenty guns," and it appeared that although in fact the ship did carry twenty guns, yet she had only twenty-five men, a number short of the necessary complement for twenty guns, it was held that this warranty did not imply that she should carry a competent number of men to work the guns, and therefore as there was no ground to impute fraud that the warranty had been sufficiently complied with. (c). A warranty may apply either to matters subsequent or to matters precedent {d). It appears from the case of Borradailc v. Hunter ( L. Ins. Co. 7 U. C. Q. B., 119 ; De Hahn v. Hartley 1 T. R., 343. (c) Angell on Ins. 178 ; Williams v. Neio England F. Ins. Co. 31 Me. 219. (d) 1 Arnould on Ins., ill. (e) Roth V. City Ins. Co., 6 McLean C. C. U. S. 324, H 114 THE LAW OF INSURANCE. policy is equally fatal, whether made with the knowledge or consent of the principal or not (a). It would seem that statements of facts material to be known, made on applying for a fire policy, are more in the nature of warranties than of representations, at all events, under policies in which the party applying " covenants and engages, amongst other things, that his application contains a full, just, and true exposition of his interest in the property insured, so far as the same are known to him (b). There is a material destinction between representations made to an insurance company of the condition of the pre- mises at the time the policy is granted, and representations that may be considered as expressing the intention of the parties, that the premises during the whole period the policy is in force, will continue in the same condition as they are when the insurance is applied for. The former is called an affirmative and the latter a promissory misrepresentation. If there be a misdescription of the risk at the time the policy is granted, and such description is made a part of the policy, which provides that if any material fact or cir- cumstance shall not be fairly represented, the policy shall be void then, whether in a life, fire or marine policy the in- surance is void, if the misrepresentation consists in omitting a statement of a fact, which ought in fairness to be stated according to the reasonable requirements made on the ap- plicant. Even if such misrepresentation by the assured or his agent were made innocently through inadvertence, mis- take or negligence, without any fraudulent intention what- ever, it will vitiate the policy and discharge the insurer as much as if there had been an actual fraud; with this difi'erence that in all cases where an actual fraud has been committed by the assured or his agent, the underwriter is allowed to retain the premium, but when the misrepresenta- tion arises from a mistake he cannot do so (c). (a) Carpenter v. American Ins. Co., 1 Story C. C. U. S. 57. (i) Hopkins v. Prov. Ins. Co. 18 U.C.C.P., 81. (c) Ilopkiua V. Prov. Ins. Co. 18 U. C. C. P. 80. WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 115 The rule that on sales of property a warranty does not extend to defects which are known to the purchaser, does not apply to warranties in contracts of insurance, and if the warranty is not complied with the knowledge by the insurer that the fact was otherwise than as warranted is immaterial (a). Where a policy on cotton mills contained a warranty that they "worked by day only," and to a declaration on this policy, the defendant pleaded that a steam engine and horizontal shafts being par^s of the mills, were without de- fendant's consent worked by night and not by day only; the plea was held bad, as showing no breach of warranty, for a part of the mills might be worked as for suppljdng water, and yet the mills not be worked in their usual way (6) ■-,. i ,. ■,.. A policy of insurance was effected on certain cotton mills, millwrights' work, including standing and going gear therein, engine house adjoining and the steam engine therein, and recited ; that the aforesaid buildings were brick-built and slated ; warmed exclusively by steam ; lighted by gas ; worked by the steam engine above mentioned ; in tenure of one firm only ; standing apart from all other mills, and "ivork- ed by day only.'' It was held that the words " worked by day only " referred to the mills only and not to the steam engine or the shafts connected with it, by which the moving power of the steam engine was conveyed to other mills, and that it was no breach of the policy that the steam engine was kept going by night, and that the machinery in other mills were turned by it, the mills insured being worked by day only, conformably to the terms of the policy (c). The importance of a representation in effecting a contract of insurance, depends upon its materiality, and upon a sub- stantial compliance with it. The test of the materiality is (a) Kennedy v. Ins. Co., 10 Barb. (N. Y. 285.) (b) Mayall v. Mitford, 6 A. & E. 670. (c) Whitehead v. Price, 2 C. M. A R. 447. 116 THE LAW OF INSURANCE. ^ the probable influence made on the mind of the underwriter in his determining to assume a responsibility he would not otherwise have assumed (a). The materiality of a representation is matter of fact for a jury (b). But, if the jury find the representation to be material, the consequence is matter of law, that the policy is void (c) ; and it seems, that if the materiality of the rep- resentation appears from the policy and conditions, it is not a question for the jury (d). In regard to representations, there is a distinction between marine and fire insurance. In the former cases, a misrep- resentation or concealment of a fac1> material to the risk, will avoid the policy, although no fraud was intended, and the error or suppression was the result of mistake, accident, negligence, or forgetfulness. The insured is bound, although no inquii-y is viade, to disclose every fact within his know- ledge which is material to the risk. But this doctrine is not applicable in its full extent to policies against fire. In the latter case, if the insurer makes no enquiry, he cannot complain if the risk proves greater than he anticipated, un- less the insured is chargeable with some misrepresentation concerning the nature and extent of the risk. It is there- fore necessary, and it is believed to be usual with companies which 'usure against fire, to make enquiries of the insured in some form, concerning all such matters as are deemed material to the risk, or which affect the amount of premium to be paid. When this enquiry is made of the insured, he is bound to give a true and full representation concerning all matters brought to his notice (e). This is on the ground (a) 1 Amould on Ins., 493; Sibbald v. Hill, 2 Dow P. C. 263. (6) Grant v. Howard F. Ins. Co., 5 Hill (N. Y.) 10. (c) Dcaum. on Ins., 30 ; Rodgson v. Richardson, 1 Bl. 463 ; Lindenau v. Desborough, 8 B. & C. 586. (d) Marshall v. Times F. Ins. Co., 4 Allen 618. (e) Burritt v. Saratoga Co. M. F. Ins. Co., 5 Hill N. Y. 188 ; Holmes v. Mutual F. Ins. Co., 10 Met. (Mass.) 211. WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 117 that an enquiry will make a fact material which otherwise would not be so (a). This distinction between marine and fire insurance arises from the fact, that the owner of a vessel is generally in a situation to ascertain her state and condition, and the underwriter is not ; whereas, in the case of fire insurance, the property is generally available to inspection by the insurer. There is really no difference in principle between the two classes of insurance in regard to concealment, the question in each being, whether the special facts upon which the contingent chance is to be computed, are within the knowledge of the underwriter (h). By express stipulation a representation in relation to par- ticular facts may be placed on the same footing as a war- ranty (c). And in the same way what would otherwise be a warranty may, by express stipulation be converted into a representa- tion only (d). Where in the case of a mutual insurance company the ap- plication is to be read as part of the policy, and the latter provides that any misrepresentation in the answers given to the several queries in the application will vitiate the policy, etc., a representation as to the "present estimated cash value" of the property is not a warranty, but should be treated as a representation on the part of the insured, that the amount stated is really and truly a fair and reasonable estimate of the value stated ; and if to the knowledge of the insured it is not such, the policy will be void (e). If the insured signs a declaration, which is to be taken as the basis of the contract that the goods are of the value of $ , it would seem that he would so warrant them to be (a) Strong v. Manvfacturers^ Ins. Co. 10 Pick. (Mass.) 44. ' •. " < (b) Carter v. Boehm, 3 Burr. 1909 ; Vale v. Phomix Ins. Co., 1 Wash. C.C. 283. (c) Burritt v. Saratoga C. M. F. Ins. Co. 5 Hill, N. Y. 188. (d) Arnould on Ins. 478. (e) Riach v. Niagara Dis. M. Ins. Co. 21 U. C. C. P. 464. 118 ' ' THE LAW OP INSURANCE. of that actual value, and his belief that they were so, would not suffice if they were not so in fact (a). When the application is made a part of the policy and the party in the application calls the property " his pro- perty," this does not constitute a warranty on his part that he holds the fee simple thereof unencumbered (b). Where an insurance company required applications for in- surance to be made on printed forms containing certain ques- tions which were to be minutely answered and were declared to form the basis of the insurance and one of the questions was : Is the property involved in law or mortgaged, if the latter, to whom and for what amount? The answer was "There is a mortgage on the house for £300," which was untrue. This application was referred to in the policy, one of the conditions of which, was, that if the buildings were de- scribed otherwise than they really were, the insured should not be entitled to any benefit under the policy. It was held that the answer to this question formed an essential part of the contract, and being untrue, rendered the policy void (c). The various answers contained in an application and referred to in the policy as representations are rather to be regarded as having the legal effect of representations than of warranties, as understood in the law of marine insurance, though partaking of the character of both, and it is sufficient if they are made in good faith and are substantially correct as to existing circumstances, and substantially complied •with so far as they are executory and regard the future {d). In fact, where the policy contains no covenant making the answers of the insured to questions in the application warranties, the answers are representations only, and a mistake or false answer does not necessarily avoid the policy (e). (a) Reach v. Niagara Dis. M. Im. Co. 21 U. C. C. P., 471; Fowkes v. Man- chester and L. Assce. Co. 3 B. <& S. 930. (6) Mutual Ins. Co v. Deale, 18 Md. 26. (c) Marshall v. Times F. Ins. Co. 4 Allen 618. (d) Houghton v. Manufacturers M. F. Ins. Co. 8 Met. (Mass.), 114. (e) Columbia F. Ins. Co. v. Cooper, 50 Penn. St. 331. WARRANTY, MISREPRESENTATION, AND CONCEALMEIST. 119 But if an application for insurance is expressly made a part of a policy, an answer in the application falsely deny- ing the existence of encumbrances on the property to be insured will avoid the policy {a). If the application is referred to in the policy, ** as forming a part thereof," it becomes a part of the contract and war- ranty (b). But a mere reference to the application does not make it a part of the contract unless expressly stated (c). It has, however, been held that a reference to a survey was in effect incorporating it into the contract, and that all answers applicable to the subject matter insured were obli- gatory on the insured (d). To make an application, the conditions, or any other document, a part of the contract, there must be an express stipulation that the policy was made and accepted in reference to such other document or paper. An application describing a building is not a warranty unless thus referred to in the policy (e). But where the policy refers to the appli- cation for a description of the property insured, the applica- tion must be regarded the same as if incorporated in the policy itself (/). When the statements in the application are made a war- ranty, the policy will be rendered invalid if there is any inaccuracy or defect in the answers to the questions in the application (g). Though a survey is referred to in the policy, if it is not expr jssly made a part thereof it will be a representation (o) Murphy v. Peoples Equitable M. F. Ins. Co. 7 AJlen (Mass.), 239. (6) Burritt v. Saratoga M. F. Ins. Co. 5 Hill, N.Y., 188; Kennedy v. 8t. Lawrence Go. M. Ins. Co. 10 Barb., N.Y., 285 ; Williams v. New England M. F. Ins. Co., 31 Me., 219 ; Battles v. New York Co. M. Ins. Co., 41 Me., 208. (c) Wall V. Howard Ins. Co., 14 Barb. (N.Y.), 383. (d) Sheldon v. Hartford F. Ins. Co., 22 Conn., 235. (c) Jefferson Ins. Co. v. Cotheal 7 Wend. (N. Y.) 72. (/) Gahaghan v. Union ins. Co. 43 N. H., 176. (g) Abbott V. Shawmut F. Ins. Co. 3 Allen (Mass.) 218. 120 THE LAW OF INSURANCE. merely, and not a warranty (a). But the survey and description accompanying the written application may, by express contract, be made to contain a warranty, and if they are false no recovery can be had on the policy (6), The word " survey " in the policy imports only a plan and description of the present existing state, condition, and mode of use of the property (c). On the principle already explained, that the party employing an agent is responsible for his mistake or negli- gence if^an application is intentionally defective on a point well known to the agent of the insurers, the latter and not the insured must be the sufferers (d). When the risk is taken on the faith of representations made by the insured, he is required truly and completely to express his knowledge of the dangers to which the pro- perty is exposed, and the contract will be void if he does not ; but where the insurers depend on their own know- ledge, the representations of the insured are immaterial, though a withholding of information increasing the risk would be in bad faith, and would avoid the contract. As to these matters, the insured, even in a mutual company, deals with the company as a stranger (e). The insured is responsible for the truth of representations in his application if signed by his agent, although the agent signed it in blank, and left it to be filled up by the company, or one of the company's officers, unless the latter exceed their implied authority conferred upon them by the insured, by sending them the application in blank. If they exceed their authority, then to that extent and no further the insured are absolved from all liability for the represen- tations contained i: the application. If the signature and (a) Snyder v. Farmerti' Ins. Co. 13 Wend. (N. T.) 92 ; affirmed 16 Wend^ (N. Y.) 481. (6) jEtna Ins. Co. v. Grube 6 Minn., 82. (c) Denny v. Conway S. d- M. Ins. Co. 13 Gray (Mass.) 492. (d) Campbell v. Merchants' <& F. M. Ins. Co. 37 N. H., 35. (c) Cumberland Valley M. P. Co. v. Schell, 29 Penn. St. 31. WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 121 authority of the insured's agent is admitted, any evidence to show that it is not their application would be inadmis- sible (a). All false statements made by the applicant for insurance absolutely avoid the policy. Thus, where an applicant for life insurance in answer to the printed questions misstates his age, or declares that his health is good when it is bad, or fails to disclose the name of medical attendants, and answers that he has none when he has several, and a policy is issued upon such answers, which, with the ap- plication, form a part of the contract between the parties, the policy is void (&). A representation made by the insured to the first under- writer extends to all the subsequent ones on the same policy, and if the representation is such as to avoid the policy against the first, all the others may take advantage of it unless the misrepresentation has been corrected and the true state of the facts explained to them. The rule, however, is strictly confined to those matters of intelligence relating to the subject insured, with regard to which it is reasonable to suppose that the fiirft underwriter would re- quire information, and without which it may be presumed he would not have subscribed the policy (c). When the applicant for insurance represents to the in- surer that another company have accepted the risk at a particular rate of premium, and this representation is false and made with the intent to induce the insurer to accept the risk at the same rate, the policy will be void (d). A description of premises sought to be insured in reference to the uses to which thoy are then being applied is not to be regarded as a warranty that they shall not be used dur- ing the existence of the policy for any other purpose. The application is a mere representation of the insu7*ed, and he (a) Liberty Hall Assce. Co. v. Housatonic M. F. Ins. Co. 7 Gray f Mass.) 261. (t) Hartigan v. International L. Assce. Co. 8 L. C. J. 203. (c) Qraiit V. ^tna Ins. Co. 11 L. C. B. 128. (d) Sibbald v. Hill, 2 Dow, 263 ; Trail v. Baring, 10 Jur. N. S. 377. 122 ' THE LAW OF INSURANCE. is not bound to set it out and prove its truth. Its falsity is a matter of defence (a). In such a case as the foregoing the statement is a war- ranty only as to the present use. To make a continuing warranty it must be so expressed by appropriate words (b). So a description of a house in a policy of insurance as " occupied by " the insured, is a description merely, and is not an agreement that the insured should continue in the occupation of it ; and if vacant at time of fire, the policy will not be void (c). The occasional use of articles denominated hazardous, or the occupation of the premises insured for purposes called hazardous in the conditions annexed to a policy, will not avoid the policy if such an occupation was connected with the building insured. There must be a direct appropriation of the property to such use or purpose before the covenant is broken. And if, during such occasional or temporary use, the property should be destroyed, the underwriters will still be held if there is no fraud on the part of the insured (d). Where a policy is silent in reference to the use of premises adjoining those insured, and there has been no representa- tion or suppression of any fact relating to the subject-mat- ter, the insured has the same right to use his adjoining property, and is governed by the same obligations is respect to its use, as any other owner would be (e). Whenever the nature of the interest irsured might have an influence upon the underwriter, either not to underwrite at all, or not to underwrite except at a higher premium, it must be deemed material to the risk, and a misrepresenta- tion or concealment of it will avoid the policy. A decisive (a) New England F. <& M. Ins. Co. v. Wetmore, 32 111., 221. (6) Smith V. Mechanics (& Traders F. Ins. Co., 29 How. (N.Y.), 384. (c) Joyce V. Maine Ins. Co., 45 Me., 168. {d) Merchants <& Manufacturer* M. Ins. Co. v. Washington Mutual Ins. Co., 1 Hand., Ohio, 408. (e) Miller v. Western Farmers Mutual Ins. Co., 1 Hand., Ohio, 208. WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 123 test of materiality is to ascertain whether, if the true state of the title had been known, it would have enhanced the premium. This question of materiality is one of fact for the jury ; and, there is no presumption of law that a mis- description of the premises material to the risk, did reduce the premium ; the inference in such case being one of fact to be left to the jury (a). In mutual insurance, the representations of the insured in respect to the title, stand upon the same ground with other representations, and the legal presumption is, that they are true until they are proven false (b). If a representation as to encumbrances upon the property is untrue, but not fraudulently made, and the agent of the company knows the true state of the facts, and writes the statement from his own knowledge, and fails to state it truly, Ruch misrepresentation will not avoid the policy, although the statement is adopted and signed by the agent of the insured (c). Where applicant stated that the premises to be insured were encumbered for " about $3,000," when in fact there was a mortgage on them for $4,000. Held, that the repre- sentation as to incumbrance was a material one, which assured was bound to make substantially true ; and that having failed to do so, he could not recover {d). If the property is represented as unincumbered, when in fact it has been sold for taxes, it is a misrepresentation that will avoid the policy (c). A bond for the conveyance of the premises insured, upon the payment of a sum of money, at a specified time, is not an encumbrance on such premises, if the time has expired, (a) Columbian Ins. Co. v. Lawrence, 10 Pet. U. S. 507. (6) Nichols V. Fayette M. Ins. Co., 1 Allen (Mass.) 63. (c) Protection Ins. Co. v. Harmer, 2 Ohio St. 452. (d) Ilayward v. New Egland M. Ins. Co., 10 Cush. Mass. 444 ; see also Brown v. Peoples' M. Ins. Co., 11 Cash. Mass. 280. (e) Wilbur v. Bowdilch M. Ins. Co., 10 Cush. Mass. 446. 124 THE LAW OP INSURANCE. and the money has not been paid, even if the obligor has verbally waived the time (a). It would seem that if the vendor take a bond from the vendee for the unpaid purchase money the bond would not form such a lien on the land of the vendee in case of an insurance thereof by him, as to amount to an "encum- brance" within the meaning of a condition. Thus when A and wife conveyed to B and wife in consideration of B giv- ing a bond for the maintenance of A and wife during their lives, and^B gave the bond and afterwards insured the pro- perty, the court were of opinion there was no encumbrance on the property within the meaning of a condition against incumbrances (b). The condition in a policy that ** it shall be void if the party insuring his goods or buildings shall cause the same to be described in the policy otherwise than as they really are, so as the same be charged at a lower premium than is herein proposed" relates to a mib description of the property, and not to the character of title or interest in it (c). The insurer may waive the benefits of a condition that any misrepresentation or concealment on the part of the in- sured shall avoid the policy (d). A notice by an insurer, under a condition of the policy authorizing him at his election to rebuild or repair in case of loss, that he elects to rebuild or repair, is a waiver of any defence based upon misrepresentations by the assured at the time of the application; if the fact of such misrepresenta- tions be known to the insurer when he gives the notice (e). If the insurers renew the policy after having obtained full knowledge of the risk, any misrepresentations contained in (a) Newhnll v. Union M. Ins. Co. 52 Me. 180. {h) Million V. A(friritltnral M. Jssce. Co. 16 U. C. C. P. 493, affirmed in ap- peal, 18 U. C. C. P. 19. (c) Franklin F. Inn. Co. v. Coates 14 Ind. 285. . (rf) Benclie v. Globe M. In». Co. 31 Mo. 546. (e)Ib. - ■ - - .— ^ -^- WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 125 the original application must be deemed to be waived and the insurers are bound by the policy {a). It is a usual condition of the policy that all insurances original or renewed shall be considered as made under the original representation so far as it mey not be varied by a new representation in writing which in all cases it shall be incumbent on the insured to make, when the risk has been changed, either within itself or by the surrounding or ad- jacent buildings. This condition does not bind the insured to make a new representation during the currency of the policy. And although there has been a change in the risk, yet if the original representation is true and the time for renewal has not arrived. "When the fire occurs the policy is not avoided, for the insured is only required to make the repre- sentation at the time of the renewal (b). To obviate the eJBfect of this decision a few of the offices require the new statement to be made immediately after the risk has been changed or • varied without reference to the time for renewal. Where the policy containing this condition prohibited carrying on upon the premises any hazardous trade, except after notice and consent, etc., and after the original insur- ance a hazardous trade was commenced and carried on upon the premises, it was held that the insured was bound to communicate this fact on renewing the policy, and on neglect to do so that he could not recover (c). A policy was subject to this condition, and the insured covenanted that his application contained a just and true exposition of all the facts respecting the condition, etc., of the property insured, and that if any material fact should not have been fairly represented the policy should be void. On the application for insurance the insured was asked (a) IVitherell v. Maine Ins. Co. 49 Me. 200. (ft) Hfiu'ker v. BritUh Am. Assce. Co. 13 U. C. C. P. 99; Lonias v. British Am. Assce. Co. 22 U. 0. Q. B. 310. (c) ifcrrick V. Prov. Ins. Co. 14 U. C. Q. B. 439. 126 THE LAW OF INSURANCE. whether there was any incumbrance on the property, to which he answered in the negative. Subsequently in con- sequence of an agreed reduction in the premium a new pohcy was issued on the same property and for the same amount, no new application being made or questions asked or answered. It turned out that there was in fact an en- cumbrance on the property. Held, that in the absence of direct evidence to the contrary, this latter policy must be assumed to have been based on the then existing written statement by the assured as to the general state and title of the property, and that the insurers, unless explicitly notified to the contrary, had a right so to consider it, and consequently the insured could not recover (a). The concealment of an incumbrance on the property will vitiate the policy, though its existence is known to the local agent of the company with whom the insurance is effected {h). The contract of insurance is a contract iiberrimace Jidei, and all matters material to the risk must be disclosed. Where the plaintiffs in applying for an insurance with the defendants, a mutual company had represented themselves as owners of an unincumbered estate in fee simple in the premises to be insured, it appearing that they were in- terested only as mortgagees in fee, and for a less sum than that insured for. Held that they had not represented their title truly as the statute requires, and that they could not recover on the policy (c). ' i The plaintiff's application for an insurance with defendant contained the following questions and answers: — Question. Oc- cupied by applicant or tenant ? Answer. Tenant. Q. Title by deed or how? A. Deed. Q. Encumbered or not; if not, say no? A. No. The plaintiff afterwards made affi- davit "that he is the bona fide owner of the said property (a) Martin v. Home Ins. Co. 20 U. C. C. P. 447. (6)76. (c) Brown v. Oore D. M. Ina. Co. 10 U. C. Q. B. 353. , .: WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 127 and of the said policy ; that the said property is not and was not in any way encumbered by mortgage or otherwise." It appeared that the plaintiff was assignee of one J. P., who had a lease from one M. at a yearly rent, with a right of purchase at a certain price, and that there was a mort- gage from M. to one H., including the property insured. Held that, irrespective of the mortgage, the plaintiff had misrepresented his title, and could not recover on the policy (a). - In this case there was evidence that the fact of any in- cumbrance on the property was material to be made known to the insurers. When, by a decree of the Court of Chancery, the insured was declared to be mortgagee in possession of the insured property, it was held that an answer to this effect in his application was not an untrue representation of his title, the decree being at the time unreversed, though an appeal therefrom was pending (h). Where a party, on applying to effect an insurance, in answer to one of the interrogatories indorsed on the printed form of application (which, by the conditions, he was bound to answer fully), said that he was the owner of the estate, subject to a mortgage in favor of a building society for $1,500, the facts being that he only held a contract of pur- chase, and that a portion of the purchase money — not, however, exceeding $1,500 — remained unpaid and that a mortgage for the amount mentioned had been agreed for, but not executed, of which facts the company, through their agent, were aware. Held, that the insurance was not avoided by the inaccuracy of the statements in the applica- tion, it not being shown that such misstatement was inten- tional or material (c). To an action on a policy of insurance of chattel property {a) iralroth v. St. Lawrence C. M. Ins. Co. 10 U. C. Q. B., 526. (6) Rowe V. London di L. Ins. Co. 12 Grant, 311. (c) Laidlaw v. Liverpool tO L. Ins. Go. 13 Grant 377. 128 THE LAW OF INSURANCE. defendants pleaded that plaintiff in his application falsely, etc., stated that he held the property in which the goods insured were by deed and unencumbered, whereas said pro- perty was largely mortgaged, and that this should have been communicated to defendants, by reason of which, etc. The evidence given in support of this plea was that to a question contained in a printed form tf application, wholly inapplicable in many of the questions to an insurance on chattel property alone, whether the property was encum- bered, defendants agent at plaintiff's dictation filled in the answer that there was no encumbrance. It further appear- ing that on this question being put plaintiff was about to explain that the land was mortgaged, when the agent stopped him, stating that this was of no importance, as the propo- sition was merely for insurance of goods, and that the question related only to realty, whereupon the goods not being in- cumbered the agent wrote the answer accordingly. Held that the question must be considered as relating to the goods insured and not to the real property, and that the plea was therefore not proved (a). If it is intended that the insured shall disclose all subse- quent incumbrances as soon as they are created the condi- tion must be express to that effect, for under the ordinary condition requiring the applicant to disclose all incumbrances existing on the property he is not bound to disclose such as are created after the date of the policy (h). Where a policy granted upon several parcels of property, each separately valued, requires that the insured should accurately state his title, a failure to disclose his true title as to any one of the parcels will avoid his policy as to all of them (c). Where an insurance is effected in separate sums on differ- (a) Ashford v. Victoria M. Ins. Co., 20 U.C. C.P., 434. [b) Howard Ins. Co. v. Druner, 23 Penn. St., 50; Dutton v. New England M. F. Ins. Co., 9 Post, (N.H.), 153. {c) Day V. Charter Oak F. Ins. Co., BlUe., 91. . WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 129 ent subjects of property, one of which is not covered by mortgage, while the others are ; the non-disclosure of the mortgage as to the latter, contrary to the conditions of the policy, will vitiate the contract as to the' whole, if the dififer- ent subjects of insurance are included in one policy, and the property unincumbered is within such a distance from the other buildings insured, as to increase the risk of each (a). Where by its terms a policy is to be void " unless the true title of the assured and the encumbrances on the same be expressed therein," the existence of an encumbrance is a fact material, as a matter of law, to be disclosed ; and, if not set forth, the policy will be void, unless it be shown that the encumbrance was known to the insurer, and not fraudulently concealed (b). When there is entire good faith, non-disclosures are not to be deemed material simply because their communication might have excited suspicjion in the insurer. Where there is no intention to deceive, and the disclosure is withheld sim- ply, from a conviction of its unimportance, it should appear clearly in order to avoid the policy, that the facts would have been deemed material by every prudent underwriter, as really enhancing the risk, and justifying an increase of premium (c). A party on applying to insure, omitted, unintentionally, from his description of the property, some particulars which he was not asked respecting, but which, had the company's agent known he swore, he would not have insured. Held, there being no fraudulent concealment, the omission to set forth the particulars referred to, did not render the policy void {d). In Barsalow v. Royal Ins. Co. (c), it was held under (a) Bleakley v Niagara D. M. Ins. Co., 16 Grant, 198. ♦ . (6) Qahagan v. Union M. Ins. Co., 43 N.H., 176. (c) Qrant V. Aitna Ins. Co., 11 L. C. R. 140. {d) I.aidlaxp V Liverpool & L. Ins. Co., \^ Ov&ni^ll. (e) 15 L. C. l\. 1. I 130 THE LAW OF INSURANCE. the facts shewn in that case, that there was conceal- ment on the part of the insured, in not stating that a wing alleged to contain merchandise,- was also partly occupied as a kitchen, and that such concealment, although not fraud- ulent, avoided the policy. The plaintiff in his application to insure a building stated that it was owned by himself and one P. and worked by them as a mill. At that time the mill was in possession of a tenant, under a lease for five years, was mortgaged to its full value, and a line of railway had been laid out through the land for which the plaintiff claimed damages, alleging that it de- stroyed the mill. There was nothing in the policy or the application requiring these matters to be disclosed. Held, that the materiality of their disclosure was a proper question for the jury (a). A mortgagor may insure to the value of his property without disclosing the incumbrance, unless there is a stipu- lation in the policy requiring it. Under the Con. Stats. U. C, c. 52, s. 27, when the as- sured has a fee simple unincumbered, he need state noth- ing whatever about his title or incumbrances in his api3lica- tion for insurance, for when no estate is expressed it will be assumed he has a fee simple unincumbered. If he insure as having such a title, whether he state so expressly or say nothing about it, from which therefore such a title is to be inferred, but have in fact a less estate, or if the premises be incumbered, then the policy shall be void. If he have such lesser estate, or if the premises be incumbered, he must then state his true title, and the incumbrance on the premises, otherwise the policy will be void (/>). If there is anij encumbrance on the property, and it is not communicated to the company at tho time of the insm'- ance, the policy will be void under the Con. Stat U. C, c. 52 8. 27. It is immaterial that in the case of a mortgage "o'^^o'- (a) Perkins v. Equitable Ins. Co. 4 Allen, 602. (b) Williamson v. Niagara Dis. M. F. Ins. Co. 14 U. C. C. P. 15, WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 131 there is only a small sum due thereon, and that the property- is ample security as well for moneys due on the mortgage as for the premium notes, and evidence as to the value of the land would be inadmissable (a). Where the policy was avoided by the non-communication of an encumbrance, as above mentioned, the court inclined to think that the insured could obtain no relief in equity, though he acted as agent of the mortgagee, on the agree- ment that any moneys due to him for services should be credited on account of the mortgage, and before applying for the policy, delivered to the latter a claim against certain persons, which was accepted, and this claim, together with the moneys then paid, having equalled the mortgage debt the same was cancelled and paid, but no formal legal discharge executed before making application for the policy {b). Under a simple issue as to whether the plaintiff has a title in fee simple to the premises, the plaintiff will be entitled to recover, though it appears there is an outstanding mort- gage on the property (c). Where, at the time of the application and of the execu- tion of the policy, a mortgage to one B existed on the property, and the provisions of Con. Stats. U. C, c. 52 s. 27, as to notice of the encumbrance, were not complied with, but afterwards the agent of the company, acting for the insured, gave a notice of the mortgage to the company, and recommended an assignment of the policy to the mortgagee, but the notice did not state that the mortgage was made before the insurance was effected, nor did it state the true sum for which the mortgage was given ; the company, in fact, believing that the mortgage was given after the policy, assented to the assignment of the policy to the mortgagee. Held, that their assent was not l)iuding on them, there (a) Mima v. Niagara D. M. Ins. Co., 22 U. C, Q. B.. 214. (6) Ih. (c) JVhitev. Agricultural M.Assce. Co. 22 '[J.Q:.Q,V.,^^. 132 THE LAW OF INSURANCE. being at least a concealment, if not an actual misrepresen- tation of the date of the mortgage (a). If neither in the policy nor conditions any mention is made of a particular class of goods, which in the insurers instructions to their agents only is classed as extra hazar- dous, the omission of the insured to inform the insurer that such goods are stored on the premises, will not necessarily vitiate the policy, for the insured cannot be taken to be aware of what is stated in the instructions to the insurer's agents (b). The omission of a mortgagor in effecting an insurance in the name of the mortgagee to mention the amount of the mortgage does not render the policy void ; (c) for if the in- sured has an insurable interest in the property that is sufficient, although the nature of such interest be not de- clared or inserted in the application or policy (d). Where several fires have occurred in and about the house before applying for insurance, a failure to disclose such facts to the insurers is a concealment fatal to the policy ; but if enough is made knowTi to put the insurers or their agent upon enquiry for more, and they fail to enquire, the insured is not bound to enforce his knowledge upon them (e). It has been held that an omission when application is made for a policy to disclose to the insurers repeated incen- diary attempts to destroy the property of the applicant will not avoid the policy (/). The fact that a fire has occurred adjoining the building insured on the day the application is made is material to be communicated, though the fire is extinguished before the insurance is applied for, and the plaintiff is not guilty of (a) Johnston v. Niagara Dis. M. Ins. Co. 13 U. C. C. P., 331. (6) Merrick v. Prov. Ins. Co., 14 U. C. Q. B. 439. (c) Ogden v. Montreal Ins. Co. 3 U. C. C. P. 497. (d) Geach v. Ingall, 14 M. & W. 95 ; Croivley v. Cohen, 3 B. & Ad. 478 ; Carruthers v. Shedden 6 Taun 14. (e) Beebe v. hartford M. Ins. Co., 25 Conn., 51. ' (/) Clark V. Hamilton M. Ins. Co., 9 Gray, (Mass.) 148. WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 133 any fraud in the matter, and the conditions of the policy do not require such fact to be disclosed {a) So, if a party insuring a dwelling house, omitted to dis- close the fact that its windows overlooked some dangerous manufactory, he could not recover, although the loss was not occasioned by the existence of the structure not dis- closed to the insurer (6). The general rule is that it is the duty of the insured to communicate all facts that are material to the risk, and which are not known or presumed to be known to the underwriter; and the neglect to disclose all such circum- stances, even through inadvertance and without fraud, will vitiate the policy (c). The suppression or misrepresentation of material facts, though from ignorance, mistake, or negligence, stands on the same ground in its effect on a policy as if such suppres- sion or misrepresentation were wilful ; but the principle on which this rule is founded can have no application to the conduct of the insured subsequent to the making of the contract (d). The underwriter is bound to know everything that is open to enquiry, and nothing need be disclosed which he waives being informed of, but he is not bound to seek elsewhere for information that might be given by the insured. A condition that the policy shall be void if the assm'ed omit to communicate any matter material to be made known to the insurer, does not apply to something which it may be well presumed was known to the insurers or their agent. The jury may presume such knowledge if the subject insured is used openly and publicly for the purpose in question, and the company's agent resides in the neighbor- (a) Biife V. Turner, 6 Taun. 338 ; see also Waldni v. Louisana Ins. Co., 12 La. 134 ; Uzielll v. Coml. Union Ins. Co., 12 L. T. N. S. 399. (6) Wedderhurn V. Bell,lCgimT^.l. -., . - (c) Beehe v. Hartford M. Ins. Co. 25 Conn., 51; Carter v. Boehm 3 Burr., 965 ; Dennison V . Thomaston M. Ins. Co. 20 Me., 125. (d) Miller v. Western F. M. Ins. Co. 1 Hand. (Ohio) 208. . \ 134 1HE LAW OF INSURANCE. hood, and is well acquainted with the subject of insur- ance (a). ■ . If the insurer takes the risk without enquiry, relying on his own knowledge, the policy will not be avoided unless there is something unusual to enhance the risk (h). Assured is not bound to disclose the nature of his title to the insurers, unless it is enquired about, or required to be dis- closed by a condition of the policy (c) ; and a failure to disclose the true title or extent of interest, in absence of fraudulent concealment or misrepresentation, will not avoid the policy, no enquiry as to title or interest being made {d). Where assured has only a qualified interest, the mere fact of not disclosing the nature and extent of that interest, in the absence of enquiry on the subject, and calling the property " his " in the policy, will not avoid it, unless that interest be misrepresented, or some artifice is used to con- ceal it, or to prevent the insurer from enquiry respecting it, in which case it is a question for the jury to decide whether the misrepresentation or concealment is of a character to prejudice the insurer and amounts to a fraud (e). The insured is not bound to communicate his own con- clusions, speculations, apprehensions, hopes, or fears as to the risk. His duty of communication is limited to facts. The concealment, to avoid a policy, must be of something which the assured was, a priori, bound to disclose, of a fact material to be known as bearing upon the amount of pre- mium, or the nature, or situation, or state of the property respecting which the insurance was proposed, or of some matter the knowledge of which was essential to enable the insurer to understand fully what his undertaking would extend to, so that the risk undertaken would not be different from that which was contemplated by him, varying the (a) Pimm V. Lems 2 F. & F., 778. (6) Clark v. Manufacturing Ins. Co. 8 How. (U. S.) 235. (c) Curry v. Commonwealth Ins. Co. 10 Pick. (Mass.) 535. (d) Morrison v. Tennessee Marine (& F. Ins. Co. 18 Mo. 262. («) Sussex Co. Ins. Co. v. Woodruff 2 Dutch (N. J.) 541. ~^" WARRANTY, MISREPRESENTATION, AND CONCEALMENT. 135 object of the policy so far as he is concerned. Therefore, the not communicating at the time of the proposal for an insurance the fact that there was an insurance already effected with another company is not such wrongful con- cealment as to sustain a plea that the policy was obtained from defendants by plaintiff by the fraud, covin, and wrongful concealment of certain material information which ought to have been communicated to defendants, and by the misrepresentations of the plaintiff's, etc. {a) The assured must communicate to the insurer every fact known to the assured and not known to the insurer, material for his guidance in respect of the premium to be demanded. Actual knowledge, however, is not essential if the insurer has the means of knowing the fact, as by making an enquiry at a particular place and he choose not to make it (b). But perfect good faith must be observed by the assured towards the insurer and any material untruth or conceal- ment, fraud or misrepresentation will avoid the policy (c). The criterion for determining whether any fact should be communicated, depends upon whether it is in itself material and not upon the opinion of the party whether it is so {d). An applicant for insurance is bound to state to the assurers all material facts and he is not excused by his ignorance that material facts undisclosed are really material [c). This be- ing the law, it seems the applicant would be bound to in- form the company of the existence of a mortgage on the property, even independent of the provisions of the Con. Stats. U. C. c. 52 s. 27. Where, by the terms of the policy, the agent of the company is to be considered as the agent of the applicant in effecting the insurance and the company are (a) McDonell v. Beacon F. Ins. Co. 7 U. C. C. P., 308. (6) Foleij V. Tabor 2 F. - - . . . (c) Dodge Co. M. Im. Co., v. Rogers 12 "Wis. 337. THE CONDITIONS OF THE POLICY. 149 avoid the policy, although the goods insured are not in that part of the building so let (a). ' The erection of other buildings by assurred on his own premises, near the property insured, so as to increase the risk, avoids the policy under this condition (b). In the absence of any stipulation to that effect, the erec- tion of a building adjacent to the one insured, by the pai-ty holding the policy, though it may increase the risk, will not avoid the policy. But if such an act of the assured party is the cause of the loss to the company, the insured cannot recover, as the loss is occasioned by his own misconduct (c). Where alterations were effected and the insured was in- formed by the agent of the company that if such alterations were made he would have to apply and pay an additional premium, but, nevertheless, the insured made no such application, but endeavoured to effect an insurance at other offices which was refused, the risk being considered too hazardous after the alterations, an acknowledgement by the insured that he knew the policy was void in consequence of his not arranging with the company for the increase of risk produced by the alterations was proved. Held that the policy was clearly avoided under the condition, but as a matter of form it was necessary to submit to the jury, whether the risk was in fact increased by the alterations (d). It is in most cases a question for the jury whether the circumstances alleged as increasing the risk has in fact in- creased it, and their finding in the affirmative or negative will ordinarily be conclusive (e). In some cases the question of increase of risk is for the court. Thus, if the ordinary condition as to increase of risk sets forth various trades which are considered hazardous, and which are to subject the building to such additional pre- (o) Appleby v. Firemen's Fund Ins. Co., 45 Barb N. Y. 45-4. (6) Murdoch v. Chenango Mat. Ins. Co., 2 Comst. N. Y. 210. (c) Howard v. Kflitucky d- Louisville M. //(.s. Co., 13 B. Monroe Ky. 282. (d) Reid v. Gore, D. M. F. Ins. Co., 11 U. C. Q.B. 345. \e) Gould V. British Am. Assce. Co., 27 U. C. Q. B. 473. 160 THE LAW OF INSURANCE. mium as shall be agreed on, there is no question for the jury, because the court can see what trade or business is classed among those for which an extra premium is ex- acted (a). Under the ordinary condition a mere increase of the risk in one pert of the premises .yhere there is also such a diminution thereof in another part, that on the whole the risk is not increased, will not avoid the policy ; in other words, the increase of risk in one part may be counter- balanced by the diminution in another (b). But it would seem if the condition had prohibited any increase of risk or alteration of any kind the policy would have been avoided, and where a plea averred that after the policy was made divers buildings and erections were added to the buildings insiaed, and by such erections and buildings the risk was increased, and the jury found that the external risk was increased and the internal risk diminished, and on the whole the risk diminished by the alteration, the court held that it was not proper to strike a balance between the increased and diminished risk, and that the alteration was such as io avoid the policy {c). In this case additional buildings were erected adjacent to the insured premises, and this erection undoubtedly in- creased the risk, but the insured contended he had removed iVom the interior of one of the insured buildings certain heating apparatus and dyeing kettles and placed them in the adjoining building and there had them secured in a much more careful and safe manner than when in the other building, so that on the whole the risk was diminished. In the case of Date v. Gore Dis. M. F. Ins. Co. there was no additional building erected or additional heating process used, but the same number of kettles used and the same number of flues, but their construction and situation within (a) Merrick r Prov. Ins. Co., U U.C. Q.B., 4B9. (6) Date v. Gore Dis. M. F. Ins. Co., 15 U.C. C.r., 175.' (c) Henekcr v. British Am. Assoc. Co., 18 U.O. C.P., 90. THE CONDITIONS OF THE POLICY. 151 the building insured was so altered as, on the whole, not to increase the risk. The alteration consisted merely in a change in the interior arrangements of the building insured; whereas in the case of Ileneker v. British Am. Assce. Co. •additional buildings were erected, which no doubt increased the risk. The insurers pleaded a condition, that in the event of any ulteration or addition being made by which the risk is increased, notice thoreof must be given, otherwise the policy shall be void ; and it appeared that two boilers were re- moved from an adjoining yard into the building insured ; held, that the question was, whether the removal, coupled with the use of the boilers, increased the risk, and the jury having been directed to find whether the mere removal increased the risk, a new trial was ordered (a). When the defendants plead that the risk upon the pro- perty insured has been increased, and that thereby the policy has been avoided within the meaning of a condition to that effect, the onus of proving this plea lies on tii'^ defendants, and if the plaintiff makes out a prima facie case, he will not be non-suited, though his evidence is contradic- tory as to the increase of risk (/>). In addition to that part of the condition already referred to, there is usually inserted in the Canadian policy a further clause, that if during the insurance the risk be increased by the erection of buildings, or by the use or occupation of neighbouring premises, or otherwise ; or if for any other cause the company shall so elect, it shall l)e optional with the company to terminate the insurance, etc. The two conditions or parts of conditions, are quite independent of each other ; and if the lirst condition is not complied with, the policy will be void, though the company do not elect to take advantage of the second (c). (a) Barrett v. Jerimj, 3 Ex. 535. {b) Date v. Gore Din. M. F. Im. Co., 14 U. C. C. P. 502. (c) Hcncker v. liritbh Am. Ashcc. Co., 13 U. C. C. P. 99 ; Loman v. British Am. Assce. Co., 22 U. C. g. B. 310. 152 THE LAW OF INSURANCE. The first part of the condition relates to the acts of the assured, or any one within his control ; the last, to increase of risk by the erection of buildings by any one, for instance, by the owner of adjoining land. In the above case, the facts pleaded did not show that the company had notice of the violation of the second con- dition before the fire happened. Under this last condition there seems no doubt that the giving of the notice and the termination of the risk may be contemporaneous, and the defendants have a right to ter- minate the risk at any moment by simply notifying the plaintiff to that effect, and refunding to him their unearned portion of the premium, provided, of course, the circum- stances contemplated by the condition concur (a). A plea under this condition alleged that before the fire the company elected to terminate the insurance, and gave notice to the plaintiff of their intention to do so, and did thcrehij terminate the insurance, and after the said termina- tion and before the loss tendered to plaintiff a rateable pro- portion of the premium which he refused to accept. It was objected on demurrer that the condition required a termina- tion after election and notice, and that tlu; introduction of the word " thereby," shewed that the insurance was terminated l)y and at the time of giving the notice, etc. Held, nevertheless, that the plea was good (b). A condition is always attached to the policy, providing that notice of all previous assurances upon property assured by the company, shall b(! given to them and endorsed on the policy, or otherwise acknowledged by the company in writing, at or Ijefore the time of making assurance thereon, otherwise the policy subscribed l)y the company shall cease and l)e of no effect. And in case of subsequent assurance on any interest in property assured l)y the company (wlu^ther the same interest assured by the same as that assured by (a) Cain v. LancuHhire Ins, Co., 27 U. C. Q. B. 453. (b) Cain V. Lanca»hirp Ins. Co., 27 U. C. Q. B. 217. THE CONDITIONS OF THE POLICY. 153 the company or not), notice thereof must also be given in writing at once, and such subsequent assurance endorsed on the poHcy granted by the company, or otherwise acknowledged in writing, in default whereof such policy shalt henceforth cease and be of no effect. The object of this condition is not merely that the first insurers may know who are bound to contribute with them in case of loss, but also to guard against the effect of a temptation to fraud, which anybody is under when his pro- perty is over insured (a). A non-compliance with this condition will avoid the policy (h). It will not be sufficient to give notice merjly of the other insurance, the notice must also be endorsed on the policy, or otherwise acknowledged by the company in writing, in compliance with the condition (c). The condition requires that both these formalities should be complied with, and as the condition is within the scope of the company's powers, and not contrary to any act of parliament, it must be observed in all its terms. It is no defence that the consent is not endorsed by reason of the neglect of the company, or its officers. The insured, by effecting the insurance, undertakes to comply with the condition, and he must do so liteially. If the endorsement is required as evidence of the consent of the company, there could be jio remedy against the latter for refusing to endorse, though there might ])e for neglecting to endorse, if it could be proved that they did in fact con- sent to the double insurance id). Where a condition as to second insurance provides that if the insured " shall not with all reasonable diligence give notice thereof to the insurers, and have the same endorsed (a) Jacobs v. EquiUihle Im. Co., 18 U. C. Q. B. 14 ; bco also Ihitler v. Waterloo M. F. Im, Co., 29 U. C. Q. B. r»oG. {b) Chapman v. Lancanhirc Ins. Co., 13 L. C J. 30. (c) lb. 4!) ; ^Ucell r. IVi'i^Um Ahscc. Co., 1 L. C. J. 279 ; per Day, J. {(l) Noad i\ I*rov. Ins. Co., 18 U. C. Q. B. M4. 164 THE LAW OF INSURANCE. on the said policy, or otherwise acknowledged by them in writing, the said policy shall cease and be of no further effect." If notice of the second insurance is given and the insurers neglect and refuse to endorse the condition will not be violated, though the policy is not tendered to them for endorsement, nor is it shewn that any special request to endorse or acknowledge in writing is made. It is doubtful whether the inRurers could be charged with a breach of duty in refusing to endorse without a tender of the policy for that purpose ; but an averment in a declaration that it is de- fendant's duty to endorse may be rejected as surplusage (a). In this case the condition provided that the insurers might, on notice of the second insurance, cancel the policy on paying the unexpired premium pro rata, and the court held that when they neglected to take advantage of this proviso and yet refused to endorse after notice they could not retain the whole consideration of the contract and at the same time get rid of all liability thereon by treating the policy as void for want of the endorsement of the second insurance and its acknowledgment in writing. These two cases as to endorsir^^ consent to the second insurance may seem to be conflicting — on the one hand a mere nec/lect on the part of the company to endorse on notice duly given would seem to be no defence, and yet it would seem reasonable that the insured should be relieved from compliance with the condition if the insurers absolutely refuse to make the endorsement. The precise rights and liabilities of the parties under these circumstances do not as yet appear to be fully settled. If the secretary reply to a letter giving notice of otner insurance " I have received your notice of additional insur- ance," this will be a sufficient acknowledgement in writing under the condition (h). The acknowledgment need not be in any writing addressed (a) Demill v. Hartford Ins. Co., 4 AUon, 341. (6) Potter V. Ontario d; L. M. Ins. Co., 5 Hill, N.Y., 147. THE CONDITIONS OF THE POLICY. 155 to the insured or in his possession ; a letter from the com- pany to their own agent will suffice (a). So a recitation of prior insurance, in the body of the policy, is a compliance with a condition requiring such in- surance to be noted on the application or endorsed on the policy, or otherwise approved in writing by the secretary (b). An endorsement written by the insurers across the face of a policy of a privilege of additional insurance is a waiver of notice of such additional insurance (c). The privilege of other insurance without notice till re- quested, admits of any amount of additional insurance, either prior or subsequent, without question notwithstand- ing the printed condition of the policy to the contrary. But if the privilege is restricted to any specified sum it limits the further insurance to the sum named. Any insurance beyond the limit specified, without further specific consent of the first insurers, avoids the policy, under the stipulation requiring " notice and consent." At law, whatever may be the rule in a case in equity, parol notice is not a compliance with the condition of the policy requiring other insurance to be endorsed in ivriting on the policy (d). And where the condition requires written consent to the second insurance such consent must be obtained unless it is formally dispensed with (c). Most of the policies in use in Canada would require a written notice under the general condition that whenever by the policy or by any condition endorsed thereon notice is required for any purpose such notice must be in writing or it will be of no effect. It would seem also that the gen- eral terms of the condition call for a written notice, for the notice must be endorsed on the policy in writing. (a) Osser v. Prov. Ins. Co., 12 U.C. C.P., 133. (b) j4mr8 v. New York Union Ins. Co., U N.Y., 258. (c) Benedict v. Ocean Ins. Co., .31 N.Y., 389. (d) Carpenter v. Washington Ins. Co., 16 Pet. (U.S.), 495. (e) Hale v. Mechanics M. F. Ins. Co., 6 Gray, Mass., 169. 156 THE LAW OF INSURANCE. The notice need not be in writing unless so required by the condition. Verbal notice of a prior insurance given at the time of making application to an agent authorized to make surveys and receive the cash per centage, and the premium note is sufficient where the condition relating to prior insurance only requires " that notice thereof shall be given to the company " (a). But a verbal notice will not suffice where the very nature of the condition requires a notice in writing. Thus where the condition requires the notice to be endorsed on the policy, an indorsement in writing on the policy is a condi- tion precedent, (b). In general whatever the conditions require must be strict- ly com^ilied with, and mere knowledge of other insurance upon the part of the agent of the company is of no avail to insured if not endorsed on the policy, where a clause in the policy requires such endorsement (c). When such an endorsement is required, if the insured give a memorandum to the agent to be entered on the records of the company, the policy not being at hand, and the agent saying that such entry would answer every porpose, if the agent afterwards returns the memorandum saying that he made the entry, but has not in fact done so, the condition will be violated (d). The notice should be given to the company themselves or to snch of their officers as can exercise the option of cancell- ing the policy, and of returning the proportional part of the premium. It W' idd not be sufficient to give it to an agent in the absence of express authority to the latter to receive it, (a) Sexton v. Afontunmcrij Co. In.i. Co., 9 Barb. N. Y. 101 ; Bee also Schenck V. Mercer Cy. M. /»s. Co., 4 Zabr. (N. J.), 447. (6) Hutchinson v. Western Ins. Co., 21 Mo. 97. (c) Forbes v. Agawam M. Ins. Co., 9 Cuflh. (Mass) 470. ' (d) Worcester Bk. v. Hartford F. Ins. Co., 11 Cush (Mass) 265. THE CONDITIONS OF THE POLICY. 157 or of implied authority to him to be presumed by reason of his previous dealings, (a). The conditions of some policies require the notice to be given to the company, at its head office, and when such a condition is inserted it supersedes the general law, and the notice must be given as required by the condition. When a by-law provides that consent to additional in- surance may be given by the president and secretary, and no other mode of giving such consent is provided for, it cannot be given by a secretary or director {h). The Consolidated Statutes of Upper Canada, c. 52, s. 29, as to mutual insurance companies, provides, that whenever notification in writing shall be given to any compr.ny by an applicant for insurance, or by a person already insured, of his intention to insure, or of his having insured an addi- tional sum on his property in some other company, the said additional insurance shall be deemed to be assented to, unless the company so notified shall, within two weeks after the receipt of such notice, signify to the party in writing their dissent. It seems this clause applies to any subject which the com- pany has the right to insure, and to goods as well as to buildings (c). The provisions of the statute are to be applied when the parties have made no provision on the subject, for the insurers and insured may, notwithstanding the statute, make whatever conditions they please, not opposed to it. Thus, where one of the conditions of a policy issued by a mutual insurance company provided, that further insurance on the propercy should be notified to the board, and their consent thereto endorsed on the policy, signed by the presi- dent and secretary ; it was held, that the insured was bound to comply with this condition, although by the statute, only (a) Ileudricksonv. Queen Ins. Co., 30 TJ.C. Q. B. 108 ; affirmed on appeal 31 U. C. Q. B. 547. (b) Stark Co. M. Ins. Co. v. Hurd., 19 Ohio 149. (c) Butler v. Waterloo C. M. F. Ins. Co., 29 U. C. Q. B. 553. 168 THE LAW OF INSURANCE. a notification in writing would be required, and on failure of the company to dissent therefrom in two weeks, their assent would be presumed (a).- Section 28 of this statute provides, that if an insurance on any house or building, subsists in the company, and in any other office, or by any other person at the same time, the insurance in the company shall be void, unless the double insurance subsists with the consent of the directors, signified by endorsement on the back of the policy, signed by the president and secretary. The provisions of the statute must be strictly complied with, and they cannot be waived by consent of parties, notice, or verbal, or tacit acquiescence. Courts of equity are bound by the provisions of the statute equally with courts of law, and no replication on equitable grounds can be of any avail, when the provi- sions of the statute are not literally observed. The sole question in case of double insurance, whether it is effected before or after the policy alleged to be avoided, is, whether the consent of the directors is signified by endorsement on the back of the policy signed by the preside-it and secretary, as required by the statute (b). A court of equity has no more authority than a court of law to deprive the insurers of the benefit of any condition on which they have taken a risk, if the latter have not by anything they have done fairly lost the benefit of that con- dition. Thus a person insured can no more be allowed in a court of equity than in a court of law, to set up against a defence founded on the breach of a condition in the policy on which he is suing that he had not the policy in his possession, and did not know what it contained, having never applied for it or asked to be allowed to see it, and being in no way deceived or misled as to ite contents. In an action on a policy of insurance, defendants pleaded an insurance by the plaintiff, with another company, without notice to the de- (a) Butler v. Waterloo M. F. Ins. Co,, 29 U. C. Q. B. 553. (6) Merritt v. Niagara Dis. Mat. F. Ins. Co., 18 U. 0. Q. B., 529. THE CONDITIONS OF THE POLICY. 159 fendants, or endorsement thereof on their policy contrary to one of the conditions. The plaintiff replied on equitable grounds that he effected the insurance with the defendants, through N their agent, residing at E., that when he effected the second insurance complained of, he had not received the policy from defendants, and had no notice or knowledge of the said condition, that as soon as he became aware of it he gave notice to said N, that he had effected the insurance mentioned in the plea, and another insurance with the B. A. Co., and as the insurance mentioned in the plea had been cancelled at the time of giving such notice, the said N promised to have the insurance with the B. A. Co., endorsed on defendants' policy, and told the plaintiff that it was not necessary to have the other noted, and that defendants' policy would still bind them, that after said notice the defen- dants made a memorandum on their policy of insurance with the B. A. Co., and returned said policy to the plaintiff as valid and subsisting,and defendants gave no notice to the plaintiff that they considered said policy cancelled, because the omission to note the insurance in the plea mentioned arose from the neglect of the defendants and not of the plaintiff, that at the time of the loss the plaintiff had no other in- surance except that with the B. A. Co., and by reason of the premises, defendants waived the endorsement of the insur- ance mentioned in the plea. Held that the replication shewed no equitable answer to the plea {a). The insured therefore is not relieved froru compliance with the conditions of the policy, by reason of ignorance of the requirements of such conditions. The fact that the policy is not in his possession, and that therefore he cannot ascertain what is required of him, is no defence if the con- ditions are not complied with. The sole question seems to be, has the insured fully conformed to the terms of the contract ? If he has not, a court of equity has no more (o) Jacob! V. Equitable Ins. Co., 18 U. C. Q. B. 14. 160 THE LAW OF INSURANCE. authority to relieve him than a court of law. The agent has not, in an ordinary case, authority to dispense with a performance of the terms of the contract, and if the agent has such power, the insured should be careful to see that the waiver is clearly expressed in writing, and in entire accordance with the condition as to waiver. The general rule when an act of parliament makes a thing void is, that the act does not merely avoid the bad part and allow the rest to stand, but makes the whole void. Thus, where a condition is framed in accordance with section 28 of the statute, and a double insurance subsists on part only of the property, covered by one risk, and it does not appear that there are several properties comprised in one policy, upon which there are several and separate sums, taken with separate and distinct risks, the policy will be avoided as to the whole, though the insurance is effected in separate sums as to the different subjects of insurance comprised in the policy (ft). In this case the insurance was effected in three different sums on a wooden building, on the machinery in it, and on the stock in it ; and, the second insurance was on the build- ing and machinery, but the stock being also in the building, was subject to the same liability to loss as the other. It seems doubtful whether the fact that the subjects of insurance were wholly unconnected, would make any differ- ence. The notice of the previous or subsequent insurance must in all cases bo given before the fire, for, after the destruction of the goods insured, and the consequent determination of the policy, the company have no election as to whether they will or will not allow their risks to be increased or diminish- ed. Matters must then be determined between the insurer and insured as they stood at the time of the accrual of the case of action, the time of the fire, with respect to the pro- perty the preservation of which was the subject of the con- (a) Bamsay W. C. M. Co. v. ^futual F. Ins. Co. D. J., 11 U. C. Q. B. 516. THE CONDITIONS OF THil POLICY. 161 tract. Anything done after its destruction based on its continuing existence must be inoperative, unless it be done by the express agreement of the parties with a perfect knowledge of the ooadition of affairs at the time. It is only, however, by a positive and express agreement that the rights and liabilities of the parties can be altered after the destruction of the subject insured. Thus it was held that under the Con. Stats. U. C. c. 52 s. 29 the notice of addi- tional insurance there referred to, could not be given after the destruction of the goods by fire, or a loss upon them to the amount insured, so that the policy had ceased to cover a continuing risk, and that an agreement to waive the notice of the further insurance, and an assent thereto, as provided by the statute, could not be raised against the company, at such time and under such circumstances, by implication merely, whether that inference was sought to be exercised in respect of their negative conduct by virtue of an Act of Parliament or otherwise (a). But so long as the subject insured has not been totally destroyed or not destroyed to the extent of the sum insured, so long, in fact as the policy covers a continuing risk, a notice of the additional insurance may be effectually given after a loss by fire (b). In determining whether the two insurances are on the same property, the position of affairs at the time of the fire is not to be disregarded. Thus where an insurance is effected on a stock in trade of a merchant, it is not confined to goods actually in his store when the policy is granted. Therefore, if the merchant effecting the insurance has separate policies on two different stocks, but before the fire they are both blended in one common stock, the policies still continuing, there will be a dou])le insurance on the stock in trade (c) In the course of trade the insurer is selling off his stock as (a) Butler v. Waterloo M. Ins. Co., 29 U. C. Q. B. 553. (b) lb. 558. (c) Harris v. London <& L. Ins. Co., 10 L. C. J. 268. L 162 THE LAW OF INSURANCE. fast as he can, and any other goods of the description mentioned [in the policy being brought into the premises aftei wards for the same pm-pose are covered by the policy. Where the condition says nothing as to the time within which the notice is to be given, it would be of no avail for the plaintiff to set up that he had a reasonable time for the giving of notice, for by the terms of the condition, the notice must not only be given to the company, but also endorsed on the policy. The condition requires both, and if a loss occurs before the whole requirements of the condition are satisfied, it would be useless for the plaintiff to set up a legal excuse for non compliance with one part of the condi- tion when the other remained wholly unsatisfied, (a). Where the policy requires the assured to give notice of subsequent insurance with all ** reasonable diligence " a notice, given after the destruction of the property by fire, and seven months subsequently to the d^ce of the second policy, is not a compliance with the condition. (&). So where twenty days before the fire a second policy was taken out on the same property, of which no notice was given to the first insurers until after the fire. J/eW that the unexplained delay of nineteen days, was a conclusive proof of a want of that "reasonable diligence" which was necessary to be shown, to continue the policy in force (c). Where there is an absolute independent condition requir- ing the assured to at once give notice in writing to the head office, of any additional insurance, and have the consent of the directors thereto, if given endorsed on the policy, other- wise it shall be void ; and this condition is declared in the policy to be, notwithstanding anything contained in another condition requiring such notice to be given with all reason- able diligence ; the first condition practically nullifies the second, and no question can in any case arise as to the (a) Jacobs v. Equitable Ins. Co., 19 U. C. Q. B. 267. (b) Kimball v. Howard F. Ins. Co., 8 Gray (Mase) 88. (c) Mellen v. Hamilton F. Ins. Co., 5 Duer. N. Y. 101. THE CONDITIONS OF THE POLICY. 163 notice being given with reasonable diligence. The insured is bound to conform to the first condition, though a fire occurs before he could with reasonable diligence give notice of the second insurance, and if the company do not receive notice of the second insurance until after the fire, they nevertheless, may avoid their policy on receiving such notice (a). When the facte are not in dispute, it is the province of the court to determine, as a question of law, what is reason- able diligence in giving notice of a subsequent insurance to the first insurers (b). Where a condition requires notice of any subsequent insurance to be given to the company, with all reasonable diligence, and endorsed on the policy, or otherwise acknow- ledged in writing, it is not necessary to state in the notice the particular company in which the second insurance is effected, and an inadvertent mistake in the name of the company, made without any intention to defraud, and by which the insurers are not prejudiced, will not vitiate the notice. So, where there is no substantive issue raised as to the particular company with which the second insurance is effected, it need not be proved at the trial ; nor would a mistake in the amount insured, stating it to be larger than it really was, made without fraud, be material, if the assured before the fire, by a second notice, informed the company of the true amount (c). A policy provided, that, " if the assured, or his assigns, shall hereafter make any other insurance on the same pro- perty, and shall not with all reasonable diligence give notice thereof to this company, and have the same endorsed on this instrument, or otherwise acknowledged by them in writing, then this policy shall cease and be of no further (a) Weinaugh v. Prov. Ins. Co., 20 U. 0. C. P. 406 ; Bruce v. Q). If there is a second insurance, in fact, existing on the property, although it may be voidable, or not executed in (a) Campbell v. Mtna Im. Co. Decided iu Sup. Ct. Halifax, Nova Scotia, May 31, 1860. (h) Bruce v. Gore Dis. M. Ins. Co., 20 U. C. C. P. 207 ; Weinauflh v. Prov. Im. Co., 20 U. C. C. P. 405. THE CONDITIONS OP THE POLICY. 165 proper form, yet the policy will be invalid within the mean- ing of the condition. The question is not whether the in- sured could legally recover on the second policy against the company effecting it, but whether a second insurance de facto exists (a). hit if the second policy is actually void, no notice need be given thereof, and the condition will not be violated. (6). If the subsequent insurance is neither void nor voidable on its face, but merely voidable by the underwriters upon due proof of the facts, it is such an insurance as the party is required to give notice of (c). If the other insurance is apparently valid on its face, and can only be shewn to be void by pleading matters in avoidance it is to be deemed only voidable. The privilege of pleading such matters can only be claimed by the company, and the insured is not entitled to show them in order to establish that notice is not required (d). It is immaterial that the second insurance is with a foreign company and therefore not capable of being enforced here, for the statute and condition apply to an insurance in fact (e). The proof of there being a second insurance on the pro- perty, lies on the defendants ; and when the second insur- ance is effected with a foreign company by a person residing within their jurisdiction, and is such, that by the law of this country, neither the plaintiff nor the person effecting the insurance could sue on the policy, it not appearing that the party insured had in fact a second insurance, the policy being in the name of another person ; it is necessary for (a) Jacobs v. Equitable Ins. Co., 19 U. C. Q. B. 250. (h) Clark v. New England M. F. Ins. Co., 6 CiihIi (Mass) 342 ; Schenck v. Mercer Cij., M. Ins. Co., 4 Zabr (N. J.) 447 ; Philhrook v. New England M. Ins. C, 37 Me. 137 ; Rising Sun Ins. Co. v. Slaughter, 20 Ind 520. (c) Bigler v. New York C. M. Co., 20 Barb. N. Y. G35; affirmed 22 N. Y. 402. (d) David v. Hartford Ins. Co., 13 Iowa 69. (<>) Ramsay W. C. Co. v. Mutual F. Im. Co., D. J. 11 U. C. Q. B. 516. /• 166 THE LAW OF INSURANCE. the defendants to prove that the second insurance entitled the party insured to sue thereon, according to the law of the foreign country (a). When the second insurance is proved, it is incumbent on the insured to shew that he has given notice thereof accord- ing to the condition (b). Forfeitures are not favored in law, and the breach of the condition of a policy which is to work a forfeiture, must be proved strictly. Where, therefore, it was alleged that the plaintiff effected a second insurance without giving notice, etc., and the proof was, that the insurance was effected by one S, in his own name, after the policy sued upon, and was assigned before the loss happened, to the party for whom the plaintiff, as trustee, brought the action ; it was held, that the breach was not made out (c). It has been held, that the second insurance, in order to avoid the policy, must be on the same property or interest (d) The conditions of some of the companies, now provide, that notice must be given of a second insurance, whether the interest insured be the same as that insured by the company or not. Of course, by such a condition the effect of the above cases is obviated. An insured may take policies upon different parts of the same building, or of the merchandise within the building, or upon different interests in both, without effecting a double insurance {e). But where the assured makes two or more insurances on the same subject, risk and interest, it is a case of double insurance (/). (o) McLachlan v. Mtna Int. Co., 4 Allen, 173. (6) lb. (c) Krcutz V. Niagara M. F. Ins. Co.. 16 U. C. C. P., 131 ; Park v. Phoenix Ins. Co., 19 U. C. Q. B., 110. (d) Franklin F. Ins. Co. v. Updegraff, 43 Penn. St. 850 ; Park v. Phmnix Ins. Co., 19 U.C. Q.B., 110; see also Ross v. Coml. Union A»sce. Co., 26 U. C. Q. B. 558. (e) Roots V Ci}icinnati Ins. Co., 1 Disn. Ohio, 138. (/) Sloat V. Royal Ins. Co., 49 Penn. St. 14. THE CONDITIONS OF THE POLICY. 167 In an action on a policy of insurance, in which the defence relied upon is a subsequent insurance contrary to the terms of the first policy, the burden of proving that the two policiea cover the same property, is upon the defendants (a). Where the proposal for subsequent insurance refers to the existing insurance with the defendants and- plaintiff in his proof of loss, swears to the fact and no evidence is offered in any way meeting this, while plaintiff, also, in his declaration admits the property insured to be the same, the question of the identity of the property sufficiently appears and should not be submitted to the jury (b). But if the plaintiff were in a position to prove distinctly that it was a mistake, and that the properties covered by the first and second insurance were not the same, too much weight should not be given to the statement in the pro- posal (c). A second insurance to avoid the policy must be by the same person or his assignee, of the same interest, in other words it must be made by the iusured, or ou his behalf. When, therefore, toan action by the mortgagee of the origi- nal insured, the defendants pleaded a subsequent insurance by another mortgagee of the insured, the plea was held no defence (d). But a second Insurance by the mortgagor after an assign- ment of the policy to the mortgagee, and a ratification of the assignment by the company, will be a second insurance of the same interest (e). The condition in general only prohibits the insured, and his assigns from making a second insurance (/). Insurance by a mortgagee of his interest is not within the (a) Clark v. Hamilton Mat. Im. Co., 9 Gray, (Mass.) 148. (6) Weinaiigh v. Prov. Ins. Co., 20 U. C. C. P. 405. (c) lb. (d) Livinrjston v. Western Assce. Co., 14 Grant 461 ; Burton v. Oore D. M, F. Ins. Co. 14 U. C. Q. B. 342, S. C. 12 Grant 166. (e) lb. (/) Etna Ins. Co. v. Tyler, 12 Wend (N. Y.) 507 ; 16 Wend (N. Y.) 386. 168 THE LAW OF INSURANCE. clause of a prior policy in favor of the mortgagor, prohibit- ing him from making other insmrance without notice ; but if such insurance is mpjde at the expense of the mortgagor, and may be applied to his benefit, it is within the clause and would avoid the prior policy {a). When a mortgage interest was intended to be insured, but the policy was issued to the mortgagor, loss if any, payable to the mortgagee ; a second insurance by the mortgagor has held not to avoid the policy (b). The by-laws provided that ** if a previous policy exists, and is not disclosed, the policy in this company will be void." Held that a previous insurance effected by a third party (who had an interest in the property), in the name of the assured, but without their knowledge or consent, was not in violation of the above provision (c). Where the by-laws provide, that prior insurance, unless expressed in the policy, shall avoid it, the by-laws must be complied with, or the policy will be void ; and will be so avoided even against the assignee of a party, to whom in case of loss the policy is made payable (d). The condition as to subsequent insurance must be con- strued strictly. Where it was stipulated that a subsequent insurance by any other company or person, without con- sent, should avoid the policy, and at the time of issue an endorsement of $3,000 insurance already made, was written on the policy ; it was held, that a second insurance after- wards obtained without the knowledge or consent of the company, avoided the policy, although it was to take the place of the insurance existing at the time of issue of this policy, and was for a less amount (e). But the mere substitution of one office for another, will not avoid the policy. Thus, where an insurance already (a) Holbrook v. American Ins. Co., 1 Curtis C. C. U. S. 193. (6) Woodbury, S. B. v. Charier Oak Ins. Co., 31 Conn. 518. (c) Nichols V. Fayette M. F. Ins. Co., 1 Allen (Mass) 63. (d) Barrett v. Union M. F. Ins. Co., 7 Cush. (Mass.) 175. (e) Burt V. People's M. Ins. Co., 2 Gray (Mass.) 397. THE CONDITIONS OF THE POLICY. 169 subsisting on the property with one company, was, with the knowledge and consent of the defendants, transferred to another office, but there was no alteration in the amount insured ; it was held, that this did not amount to a second insurance, within the meaning of the ordinary condition (a). Where a second insurance exists for a time, as a fortnight, on the property, and is then cancelled, but during its ex- istence it is not notified to the company, or their agent, this will avoid the policy though the agent is informed of the existence of the second insurance after it is cancelled, and then declares it is immaterial to have it noted. It seems, also, that the insured would not in such case be entitled to any relief in equity, though by reason of the defendants's agent keeping possession of the policy, (as is usual in such cases), he had no knowledge that it contained any condition obliging him to give notice, and as soon as he became aware of such condition, he gave notice to the agent, the policy being at that time cancelled, and that the agent told him it was then of no consequence to have it noted, it not being proved that the neglect to note the policy during its existence, was chargeable to the defendants, or that they had waived the forfeiture (h). The condition usually endorsed on policies of insurance respecting double insurance, is binding in law, and its per- formance will not be held to be waived by the company, if their agent on being notified of such double insurance after the fire make no specific objection to the claim of the as- sured on that ground (c) An omission to give notice of the second insurance as required by the conditions of the policy will be cured if the insurer with full knowledge of the facts, accepts the (a) Facaud v. Monarch Ins. Co., 1 L. C. J. 284. (6) Jacobs V. Equitable Ins. Co., 17 U. C, Q. B. 36 ; S. C. 18 U. C. Q. B. 14. (c) Western Assce. Co. and Atwell, 2 L. C. J. 181 ; S. C. 1 L. C. J. 278, reyersed. 170 THE LAW OF INSURANCE. premium for renewal, and renews the insurance. In such case the insurer will be deemed to declare the contract to be valid, and will be precluded from asserting either that the renewal was inoperative, or that the policy became void immediately after it was renewed (a) The receipt of assessments after the insured property was destroyed by fire, for losses occurring during continu- ance of the policy, such losses also occurring after the policy had been forfeited by act of the insured, is no waiver of the forfeiture (b) Where the company, after knowledge of certain facts avoiding the policy, receive from the insured the amount of an assessment on the premium notes, which was payable before the fire, and before the company had notice of any- thing wrong in the insurance, this will not set up a void policy, or entitle the assured to recover (c). The proof of a waiver will be wholly inadequate, unless it be shewn that the insurers knew of the forfeiture at the time of doing the act, which is alleged to have deprived them of the power to enforce it, because, a waiver is essen- tially a question of intention, and cannot arise out of an act done in ignorance, or without a full knowlege of all the material circumstances. In this case it was held, that a submission of the amount of loss and damage occasioned by the fire, to arbitration, in ignorance of the fact creatin'" the forfeiture, did not waive it (d). So, part payment of the loss does not amount to a waiver of the forfeiture, for so long as the whole has not been paid, the company may resist the demand for any part which remains unpaid (e). A condition of a policy under seal, made by an incorpo- rated insurance company cannot in the absence of any (a) Carroll v. Charter Oak Ins. Co., 38 Barb. (N. Y.) 402. (6) Gardiner v. Piscataquis M. Ins. Co., 38 Me. 439. (c) Bleakley v Niagara D. M. Ins. Co., 16 Grant, 198. id) Chapman v. Lancashire Ins. Co.. 13 L. C. J. 36 ; Allen v. Vermont M. Ins. Co., 12 Vt. 366. (c) 16., 60. THE CONDITIONS OF THE POLICY. 171 special provision to that '.fifect in the act of incorporation, be waived by parol, and it boems the condition could only be waived by an agreement to that effect under the seal of the company. A leaor from the secretary, written after the fire, stating that the company declined paying, as the insured had not substantiated any claim for loss as required by the conditions of the policy, would not be sufficient. The president of such a company has not, on the general principles which govern corporate acts and liabilities, where no special authority is conferred, a right to waive such condition, it not being one of the ordinary matters which, from necessity, the company may do without employing the common seal. When, therefore, the plaintiff attempted to prove a conversation with the president of a company, not at their place of business, during which, it was alleged the president waived compliance with a condition requiring all actions to be brought within twelve months ; it was held, that evidence of such conversation was rightly rejected (a). The condition of a policy not under seal may before breach be waived by a parol agreement founded on a sufficient consideration (b). Some of the offices provide by their conditions that the waiver must be clearly expressed in writing, signed by the secretary of the company, and delivered to the insured or his representative. Where such a condition is endorsed on the policy, it would be useless to set up a parol waiver. It seems that a parol waiver by an agent of a condition in the policy would be of no avail if the agent's authority were not shown, for it would be setting up a substituted parol contract in answer to the sealed policy (c). The Statute of Canada 27 & 28 Vic. c. 38, gave no (a) Lampkin v. Western Assce. Co., 13 U. C. Q. B. 237. (h) Brady v. Western Ins. Co., 17 U. C. C. P. 697 ; Goss v. Ld. Nugent, 5 A. & E. 58. (c) Lyndsay v. Niagara Dis. M. Ins. Co., 28 U. C. Q. B. 326 ; Scott v. Niagara D. Ins. Co., 25 U. C. Q. B. 126 ; see, however, Johnston v. Niagara S. M. Ins. Co., 13 U. C. C. P. 333. 172 THE LAW OP INSURANCE. authority to the directors to waive by parol the performance of a condition precedent, and it seems that a parol waiver would in"no case have any effect, for it would be setting up a substituted parol contract in answer to a sealed instrument. Evidence of such parol waiver would not be admissible under a simple traverse of a plea setting up a breach of the condition (a) Such waiver must be specially replied (h) . A mutual company incorporated under the Con. Stat. U. C. c. 62, might by instrument under seal, made according to their by-laws, rules and regulations, alter or rescind a contract they had made, by consent of the other party, provided they did not attempt to dispense with any thing positively negatived by the statute, which is their charter of incorporation (c). The conditions generally provide, that no greater quan- tity of gunpowder shall be allowed in any house or building insured by the company, or the premises connected there- with, than twenty-five pounds, unless specially provided for in the policy, and that if there shall be at any time any greater quantity without such provision, the policy shall be void. Under this condition, the deposit of gunpowder over the above mentioned weight, though for a temporary purpose, and though no damage is actually caused thereby, will avoid the policy, and this, though the gunpowder is depos- ited long after the making of the policy, and is removed before the loss occurs. It would be no defence, that the powder was put on the premises without the plaintiff's privity, and remained only two days, because a vessel on which it was intended to ship it to another port, had sailed without it, and that the insured had used every exertion to (o) Scott V. Niagara D. M. Ins. Co., 25 U. C. Q. B. 119. (b) Mulvey v. Gore D. M. Ins. Co., 25 U. C. Q. B. 424 ; Hatton v.'Beacon Ins. Co., 16 U. 0. Q. B. 317 ; but see Scott v. Niagara D. M. Ins. Co., Supra, 125 ; Thames I. Co. v. Eoyal M. S. P. Co., 13 C. B. N. S. 358. (c) Scott V. Niagara D. M. Ins. Co., Supra 126. THE CONDITIONS OF THE POLICY. 173 find another conveyance without success, in consequence of which, it remained on the premises until a fire broke out, which eventually consumed the premises ; and that long before it reached the premises, the gunpowder was removed and thrown into the harbor, and no loss or damage occa- sioned thereby to the goods insured (a). It is a general condition of all policies, that goods on storage must be separately and specifically insured. It is necessary, that a condition of this description should be inserted in the policy, for where the insurance is general on the building, or where a store in general terms is insured, all kinds of business may be carried on, and all kinds of goods and merchandise kept in the building, except such as are ex- pressly prohibited. Storing, within the meaning of the condition signifies, keeping for safe custody, to be delivered out in the same condition, substantially the same, as when received, and applies only where storing or safe keeping is the principal object of the deposit, and not where it is merely incidental (&) . Placing gunpowder in a building with a lighted match for the. purpose of blowing it up, to prevent the spread of a conflagration, is not a storing of it, within the meaning of the clause prohibiting ** the storing of gunpowder on the premises" (c). The condition against storing or keeping hazardous articles in the premises insured, is intended merely as a protection against the appropriation of the building for the business of storing and keeping such articki, and where the policy is on merchandize, the keeping of a few hazardous articles required by the ordinary course of trade, will not violate the condition (d). (a) Faulkner v. Central F. Ins, Co., 1 Kerr, 279. (6) New York Eq. Ins. Co. v. Langdon, 6 Wend. N. Y., 623; affirming 1 Hall, N. Y. 22fi. (c) City F. Ins. Co. v. Corlies, 21 Wend. (N. Y) 367. (d) Moore v. Protection Ins. Co., 29 Me. 97. 174 THE LAW OF INSURANCE. Where among the trades and articles included in classes of hazards were those of " houses building, or repairing," and *' oil, turpentine and paint." At the time of the fire, the house was being repaired and painted, and "oil, turpentine and paint " were in the building for that purpose. Held that the repairing of the house insured and the deposit of the oil, turpentine and paint for that purpose were not the trade of "houses repairing," or "storing" of the articles within the meaning of the condition (a). So if a hazardous article is merely temporarily left on the premises with no intention of having it regularly stored or kept there, and the building is not devoted to nor used for that purpose, the policy will not be avoided (b). The clause would seem only to prevent the appropriation or chief use of the building insured for any of the forbidden purposes and not the incidental keeping of small quantities of the forbidden articles for retail along with a general stock of goods (c). In fact, when an article is ordinarily and usually kept in a retail store, the keeping of it for retail purposes, in such store is not a violation of the condition, and if the written portion of the policy authorizes the storing or keeping of a hazardous article, it will prevail notwithstanding the printed conditions to the contrary (d). The keeping of articles to be exhibited, or to be used as means and instruments of a public exhibition, is not a use of the building " for the purpose of storing or keeping therein " such articles within a clause in the policy relating to hazardous articles {e). If, by the terms of the contract, the policy is suspended while certain articles are stored on the premises, the policy (a) O'Neill v. Buffalo F. Ins. Co., 3 Comst (N. Y.) 122. (b) Hynds v. Schenectady Cy. M. Ins. Co., 16 Barb. (N.Y); 119 ; aflarmed 1 Kern (N. Y.) 554. (c) Leggett v. Mtna Int. Co., 10 Rich. Law S. C. 202. (d) Phanix Ins. Co. v. Taylor, 6 Minn. 492. (e) Mayor of N. Y. v. Hamilton Ins. Co., 10 Bobw. (N. Y.) 587. THE CONDITIONS OF THE POLICY. 175 is not rendered void, though such articles are, at times, kept in the insured premises (a). The keeping of " liquors " in a boarding house for sale to boarders, does not avoid the policy under the condition prohibiting the "storing therein of extra-hazardous articles,'* among which are included " spirituous liquors " (b) An insurance company cannot set up the mere fact of non-occupation as a ground for avoiding the policy, in the absence of a special condition to that effect. If there is no special condition, it must be proved that the non-occupa- tion increased the risk in the particular case. If, however, the occupation is abandoned with a fraudulent view to the destruction of the premises, such fraud will vitiate the policy, without reference to any condition (c). A condition is usually inserted in the policy, that all changes of occupation, either by tenant or otherwise ; or any vacancy of the buildings, if the same be left vacant for one month, shall be immediately notified to the manager of the company, in writing, and acceded to in writing by him, otherwise the policy shall be void. A condition provided that in case the premises became vacant or unoccupied, the fact should be communicated to the company, and that unless such notice was given, and the company consented to retain the risk, the policy should be void. It was held that this condition did not relate to an absence from personal occupation for a day or so. When the non-occupation is longer, the policy remains valid until the assured has had a reasonable time for giving notice to the company, and if a fire occurs before the expiry of such reasonable time, the company remains bound (d) The time within which notice is to be given is not uniform in all the policies. Some offices require it to be given in (a) Phcenix Int. Co. v. Lawrence, 4 Meto. Ky. 9. (6) Rafferty v. New Brunswick h. Ins. Co., 3 Harrison N. J. 480. (c) Foy V. JEtna Int. Co., 8 Allen, 29. (d) Cane if. L. C. Co. v. Canada A. Ins. Co., 17 Grant 418. 176 THE LAW OF INSURANCE. ten days, a period which must under ordinary circumstances be unreasonably short. The mere fact of a building insured as a "dwelling house" being subsequently vacated, will not avoid the policy, although the risk be thereby inc reased, if the insured in- tended it to be used as a dwelling house, and was making reasonable efforts to get a new tenant (a). A policy of insurance against fire, on a dwelling house, contained a condition, that if after the insurance was effect- ed the risk was increased by any means within the control of the assured, or if the building should, with the assent of the assured, be occupied in any way so as to render the risk more hazardous than at the time of insuring, the insur- ance should be void. A memorandum on the policy speci- fied a number of establishments which would only be insured at special rates of premium, and a number of others which were not to be insured at any rate of premium, but an unoccupied house was not in any way specified in the memorandum. The policy described the house as belonging to the assured, and occupied by him as a dwelling house and shoe maker's shop, but at the time of the fire it was unoccupied, the plaintiff having moved away from it about three months before. There was no evidence to prove that the risk was increased by non-occupation, except the gen- eral opinion of an insurance agent, that the risk on a house would be much increased by non-occupation. It did not appear that the insured had left the house with a fraudulent intent ; held, that this was not an increase of risk within the meaning of the condition, unless it was proved that under the circumstances and situation of the building insured, its destruction by fire was more probable when unoccupied than if the assured had continued to reside in it (b). A policy of insurance which is issued upon a dwelling house, in consequence of an express oral promise, by the (a) Gamwell v. Merchants <& Farmera M. F. Ins. Co., 12 Cuah. (Mass) 167. (6) Foy V, ^Etna Im, Co., 3 AUeu, 29. # THE CONDITIONS OF THE POLICY. 177 applicant, that it shall be occupied, will not be avoided by the failure to fulfil such promise, unless fraud is proved ; even though the risk is thereby increased (a). The Consolidated Statutes of Upper Canada c. 52 s. 34, provides that if any alteration be made in any house or building by the proprietor thereof after an insurance has been made thereon with the company, whereby it is exposed to greater risk or hazard from fire than it was when in- surance was effected, the insurance therepon shall be void unless an additional premium and deposit after such altera- tion be settled with and paid to the directors, but no altera- tions or repairs in buildings not increasing such risk or hazard shall affect the insurance previously made thereon. A by-law passed for the purpose of carrying this clause into effect can refer only to the purpose for which the build- ing is occupied, and not to any mere change of the occupant, and it seems that such change where there is no other alteration in the manner or purpose of occupation, will not avoid the policy (h). A policy cannot be held invalid for non-compliance with a by-law in the absence of any provision in the by-law, that on non-compliance, etc., the policy shall be void (c). In the case of insurance on buildings, described as dwellings, subject to a condition that should any change of occupation occur which would entitle the insurer to charge a higher premium notice of such change should be given to the insurers in writing, the approval by the in- surers endorsed on the policy, and the extra premium paid to the insurers, and that in default thereof, the insurance should be null and void : the change of occupation to a tavern without formal notice to, or consent by the company, it being found by the jury that their agent was aware of it, does not render the policy void when it appears that an intermediate (o) Kimball v. yEtna Im. Co., 9 Allen, Mass. 540. (6) Hobson v. W. D. M. F. In». Co., 6 U. C. Q. B. 536. (c) lb. M 178 THE LAW OF INSURANCE. change of occupation into a vinegar factory had been sanctioned by the company, and that the risk of the tavern was not greater than that of the vinegar factory (a) Where a condition in a policy provides, that if any alter- ation or addition shall be made in or to any risk, whether by the erection of apparatus for producing heat, or the introduction of articles more hazardous than allowed, or change in the nature of the occupation, or, in any other manner tvhatsoever by which the degree of risk is increased, notice thereof shall be given, and an additional premium paid, etc. ; the means of increasing the risk are not limited to those above specified. If the risk is increased, the par- ticular means are of no consequence, for the condition applies to an alteration of risk " in any other manner what- soever." For the same reason, whether the change is in the occupation of the premises, or in the nature of the occu- pation, is immaterial. These expressions may not mean the same thing. It seems, that the expression " change in the occupancy," would signify a change in the business, trade or employment, carried on in the premises, although in strictness a change of occupancy ought to be construed as a change of the possession, a transfer of the occupation of the property from one person to another {h). If one means a change of the person occupying, and the other means a change by the person in his manner of occupying, as by changing the nature of his business carried on in the building, it will still be immaterial ; for the question all the while is, can a change in the occupation, whichever way the expression is construed, create an alteration in the risk ? and this latter is for the jury to determine (c). A mere change of the occupant will not avoid the policy on a condition prohibiting a change of occupation (d) ; but, (a) Campbell v. Liverpool <& L. F. Ins. Co., 13 L. C. J. 309. (b) Kreutz v. Niagara Bis. M. F. Ins. Co. 16 U. C. C, P. 573. (c) Ottaiva F. Co. v. Liverpool, L. d; O. Ins. Co., 28 U. C. Q. B. 518. (d) Hobson v. Western Dis. Ins. Co., 6 U. C. Q. B. 536 ; Qould v. Britiih Am. Assce. Co., 27 U. 0. Q. B. 480. THE CONDITIONS OP THE POLICY. 179 if the condition is specifically directed against a change of the occupant, it must be given effect to (a). It seems, however, that the mere temporary introduction of painters and carpenters for the purpose of repairs, will not avoid the policy within the meaning of the condition, and that therefore, a plea alleging an increase of the risk by such means would not be sufficient, but in this particular case the court inclined to think the plea was good, because they could not know judicially, whether what was alleged as to the introduction of the painters, etc., could increase the risk, and they suggested that the plaintiffs should reply specially the circumstances under which the painters and carpenters were introduced (&). It seems that the words " a change in the nature of the occupation," do not point to a mere temporary cesser of the occupation, but rather to an application of the premises insured to a purpose different from that described in the application. If the insurers desire to guard themselves against loss on unoccupied buildings, or to make continued res- idence a condition precedent to the right of recovering in the case of a building described as a dwelling house occupied by a tenant, they must use express language to meet the case. It seems also, if the change of occupation, etc., does not come within the legal meaning of the condition, the words "or in any other manner whatsoever," will not enlarge the operation of the condition (c) It seems that a plea alleging that the building was used for and occupied as a tavern only, yet, after the issuing of the policy, the building, or a large portion of it, was occupied by J. D. as and for a store, and the business of store-keep- ing was carried on therein, would signify rather a change in the mode of occupying or using the building, than a change of the occupants (d). (a) Ottaioa F. Co. v. Liverpool, L. & O. Ins. Co., 28 U. C. Q. B. 523, per A. Wilson, J. (6) lb. (c) Gould V. British Am. Assce. Co., 27 U. C. Q. B. 473. {d) KreuU v. Niagara D. M. F. Ins. Co., 16 U.C. O.P. 673. 180 THE LAW OP INSURANCE. A condition that if the premium note is not paid at maturity, the full amount of premium shall be considered as earned, and the policy shall become void, whilo the note remains unpaid, only applies during the existence of the subject insured (a). An assignee of the policy from the original insured is not an ** applicant " within the meaning of a condition, that if after insurance effected the applicant incumbers his pro- perty by way of mortgage, the policy should be void unless certain notice were given, etc. Thus, where after the in- surance was effected by A, he assigned the policy to B, and the latter before the fire encumbered the property by a mortgage without giving notice to the company, and with- out making any application for insurance, it was held that the condition was not violated (b) The Con. Stat. L. C. c. 68 s. 30 only applies to an insur- ance on any house or building, and not to an insurance on goods. Where, therefore, a second insurance was effected on goods without the provisions of the act being complied with, it was held that the policy was not avoided (c). This statute, in terms, applies only to " any house or building." Aylwin, J. dissented from the judgment of the court, holding that the words included insurance on goods contained in houses or buildings. The proprietor of a house destroyed by fire, can insist strictly upon the clause contained in the policy, that the works shall be seen and examined by experts, and so long as the insurance company has not complied with this con- dition, even for inconsiderable works, the proprietor is not bound to receive his house in that state, and can sue the insurance company to compel it to surrender the posses- sion of the premises in the state in which they ought to be, and after compliance with the condition of an expertise. (a) Mf inhcr v. Home Ins. Co., 10 U.C. O.P. 822. (6) RLuardson v. Caiiada W. F. M. <& S. Ins. Co., 16 U.C. C. P. 430. (c) Chalmers v. Mutual F. Ins, Co., 3 L. C. J. 2. THE CONDITIONS OP THE POLICY. 181 The circumstance of the proprietor having during recon- struction, made suggestions to the builder as to the manner of such reconstruction cannot be interpreted so as to de- prive him of his right to an expertisp, (a). The usual conditions of the policy have been referred to in different parts of this work. They will now be briefly enumerated, and such as are unusual will be pointed out. The application for insurance is almost invariably required to be in writing, and it must specify the construction and materials of the building to be insured, its occupation, and situation with respect to contiguous buildings. If the building contains any steam engine, furnace, kiln, stove, oven, or other instrument by which heat is produced, the construction^and circumstances of the same must be par- ticularly described, or if subsequently introduced, either in the building insured, or in any addition thereto, due notice must be given to the company, and the same sanctioned by them, otherwise the policy will be void. As to the insur- ance of goods and merchandise, the application must state whether or not they are of the description denominated hazardous, extra hazardous, or included in the memoran- dum of special rates. In the event of misrepresentation or concealment or in- crease of risk by means within the control of the insured, or any tenant or occupant of the building insured, an option is usually reserved to the company, to terminate the insurance and cancel the policy. No insurance original or renewed is to be binding on the company till actual pay- ment of the premium. Goods in trust or on commission must be insured as such and goods on storage must be specifically insured. Policies are not assignable without the consent of the company, endorsed in writing on the policy. All previous insurances must be notified to the company when the insurance is effected, and all subsequent in- {a) Alleyn v. Quebec Ins. Co., 11 L. C. R. 394. 18$i THE LAW OF INSURANCE. surances must be notified -"lith reasonable diligence, and in both cases the consent of the company must be endorsed in writing on the policy. A clause is usually inserted as to contribution between co-insuring companies in the event of several insurances, and each company is made liable for a rateable proportion of the loss, without reference to the dates of the different policies. In case of fire the insured is required to use all possible diligence in saving and preserving the property and is not allowed to abandon the subject insured to the company. The company will contribute l-ateably with other com- panies to the expenses of salvage. If property is removed from a building not actually on fire, the company will not be liable if such removal is contrary to the declared desire of an officer or agent of the company. The company will be liable for losses on property burnt by lightning, but not for loss by fire happening by explosion, or by means of any invasion, insurrection, riot, or civil commotion, or any military or usurped power, or any loss by theft at or after the fire. Certain articles, such as jewels, plate, medals, etc., are usually mentioned, which the policy is not to cover unless they are specifically insured. In the event of loss, notice thereof must immediately be given, and a particular account verified by oath or affirma- tion, delivered into the office. The insured must also declare on oath, whether any, and what, other insurance has been made on the property ; also, the value of the pro- perty, and his interest therein ; the manner in which the building was occupied, and when and how the fire originated. The insured must also procure a certificate under the hand and seal of a magistrate or notary public (most contiguous to the place of the fire, and not concerned in the loss as a creditor or otherwise, or related to the insured or sufferer), that he is acquainted with the character and circumstances of the person or persons insured, and has made diligent THE CONDITIONS OF THE POLICY. 183 enquiry into the facts set forth in their statement, and Imows or verily believes, that he, she or they, really, and by misfortune, and without fraud or evil practice, hath or have sustained by such fire loss and damage to the amount therein mentioned ; and also, if required, shall produce their books of account and other proper vouchers, and shall also, if required, submit to an examination under oath, by the agent or attorney of the company, and answer all ques- tions touching his, her or their knowledge of anything relating to such loss or damage, or to their claim therefor, and subscribe such examination, the same being reduced to writing ; and until such proofs, declarations, and certifi- cates are produced, and examination had, the loss is not deemed payable. If there appear any fraud or false swear- ing, the insured shall forfeit all claim under the policy. In case of assignment where the assignee does not become the absolute owner of the property, the proofs of loss must be made by the assignor. Ke-insurance for any other com- pany to be on the basis of joint liability with said company, and in no event will the company be liable for a sum greater than such portion as the sum re-insured bears to the whole sum insured on the property by the company re-insured, and in case of loss, the company to pay their -pro rata pro- portion at the same time, manner and form, as the com- pany re-insured. Payment of losses are to be made immediately, or within sixty days after the loss has been ascertained and proved. It is optional with the company to replace the articles lost or damaged with others of the same kind and equal good- ness, and to rebuild or repair the premises within a reason- able time, giving notice of their intention so to do within thirty days after the preliminary proofs are received at the office of the company. The privilege of referring the adjust- ment of the loss to arbitration is usually reserved to the company. Insurances once made may be continued for such further 184 THE LAW OF INSURANCE. time as may be mutually agreed upon, the premium requir- ed therefor being paid and endorsed on the policy, or & receipt given for the same, . and all insurances whether original or renewed, are considered as made under the original representation, in so far as it may not be varied by a new representation in writing, which in all cases it is incumbent on the party insured to make, when the risk has been changed either within itself or by the surrounding or adjacent buildings at any time during the currency of the policy, whether it be at the renewal of the policy or at any other time. "When a policy is made upon a survey and description of the property, such survey and description is taken and deem- ed to be a part and portion of such policy, and a warranty on the part of the insured. There is always a special clause in the policy as to keep- ing gunpowder or other hazardous articles on the premises. The insured is usually required to have good and sub- stantial stone or brick chimneys in the building insured, and the stove pipe must be carried into such chimney, and the insured is not allowed to deposit ashes or embers in wooden vessels, nor is he allowed to deviate from the laws or regulations of police made to prevent accidents from fire, A special agreement must be made as to camphene burning fluid and other materials wh.sh are highly inflammable. All changes of occupation in the building insured must be notified to the company within a certain time, and their consent thereto obtained. All actions against the company must in general be brought within the period of six or twelve months. Whenever notice is required by the policy it must be in writing, and in some cases it is provided that no waiver of the breach of any condition shall have any effect unless clearly expressed in writing on the policy. The foregoing conditions the writer believes are all that are usually found in the policies of companies doing busi- THE CONDITIONS OF THE POLICY. 185 ness in Canada. There are, of course, some exceptions, but the person who is familiar with these condition will easily notice any other special conditions in the policies of particular companies. The Commercial Union and the Queen Insurance Com- panies require that notice be given when any other insurance on the property is dropped. Thus if a policy is obtained from either of these companies and the insured has also policies in other companies on the same property, if the latter are permitted to expire and no notice is given thereof to the Commercial Union, etc., the latter company by virtue of its conditions is only liable for such rateable proportion of the loss as it would have been liable for under the ordinary contribution clause if the other insurances had been kept up. The Commercial Union policy also provides that unless otherwise described in the policy, the insured shall be deemed to have been represented to the company as the absolute beneficial owner of the property insured, and if not so entitled the policy shall be absolutely void. The insured is also required in case of loss to produce his title deeds to the property and an abstract of the title there- to from the Eegistrar of the county or city in which the loss occurs. The agents of the company shall in no case be made personally responsible on account of any legal or other investigation which they may find it necessary to institute for the satisfaction of the company, nor can their personal property be attached on account of any alleged loss by the insured. This condition as to the liability of the agent, is also to be found in the Queen Ins. Co., the Liverpool & London & Globe Ins. Co., and the Northern Ins. Co. The conditions as to the description of the property by the insured, the form of application, the construction and circumstances of contiguous buildings misrepresentations by the insured, etc., are, also, very special in the Commercial Union Ins. Co., and require very careful attention on the part of the insured. The company, 186 THE LAW OF INSURANCE. also, is not answerable for losses which shall happen or arise after war shall have been declared against the country wherein the insured property is situate, or after the invasion of any territory of such country, or during the administra- tion of martial law, nor for any loss or damage occasioned by earthquakes or hm'ricanes, or by the burning of forests. A condition of the Citizens Ins. Co. provides that if with- in fifteen days after the reception of a policy by the insured, he does not notify the company of any ertor, misdescription or omission therein, such policy shall be conclusively held to be in conformity with the representations of the insured in respect of the property therein mentioned, and every descriptive statement contained in the policy shall be held to be a guarantee of the continuance of the state of things therein described. A condition is also inserted, that if hypotheques or priv- ileged claims upon real estate be insured, the company shall be entitled, upon payment of the amount of loss, to demand and obtain from the assured a subrogation of such hypoth- eque or claim pro tanto, and applications for insurance shall be accompanied by a registrar's certificate, shewing the amount and rank of previous claims upon the property affected by the hypotheque or charge intended to be insured. The Liverpool d- London d Globe insurance company provides by its conditions, that the breach of any condition of the policy shall ipso facto render the policy void. Also, that the reports of the company's inspectors, or other offi- cers or agents to the directors, or resident secretary, or chief agent, in relation to any alleged or actual loss or damage by fire, shall in every case be, and be held to be, strictly confidential. It is also provided in the Liverpool d London d Globe policy, that the insurance on any building shall not be held to include anything outside thereof, such as clap-boarding, blinds, galleries, porches, appentis, sheds or other buildings, except the same be specially mentioned and valued in the THE CONDITIONS 0^ THE POLICY. 187 policy, and that no furniture usually denominated fixtures, machinery, or other legal or constructive immoveables, or shop or store fixtures ; and furniture contained in any building? shall be held to b*^ insured as appertaining or belong- ing thereto, except such fix cures shall be especially named in the body of the policy. A condition to the same effect is con- tained in the British America Assce. Co., the Commercial Union Assce. Co., and the Queen Ins. Co. The policy of the Liverpool d- London dc Globe also provides, that persons desirous of continuing annual or other periodical insurances, must pay their respective premiums thereon on or before the commencement of each succeeding year or other period- ical term, otherwise such insurance will expire, and the only evidence of such payments shall be the printed receipts issued from the of&ce, and witnessed by one of the clerks or agents of the company. The North British and Mercantile Ins. Co. has a condition to the same effect in its policy. The Liverpool d London d Globe policy also excepts losses from lightning on buildings having spires or steeples with- out metal conductors. The British America Assce Co. also contains a condition to the same effect. The Liverpool d London d Globe policy also provides that on notice of other insurance being given the company shall have the right either to endorse it on the policy and continue the insurance, or cancel the policy. The proviso as to cancelling in such cases is also inserted in the Commercial Union Ins. Co. and the Queen Ins. Co, The Liverpool & London & Globe policy only requires notice in writing to be given of other insurances whether prior or subsequent ; it is not, also, required that a consent thereto be endorsed on the policy. The usual condition it will be remembered, requires that the notice shall be given and also endorsed on the policy (a). The Queen City Ins. Co. the British America Assce Co., and the Lancashire Ins. Co. do not require that the notice (a) See Jnte p. 163. 188 THE LAW OF INSURANCE. of subsequent insurance should be endorsed on the policy, but only that notice in writing thereof shall be given to the end that it may be endorsed on the policy or otherwise acknowledged in writing. The Liverpool & London & Globe policy also provides that at the death or at the insolvency (under an insolvency act) of the insured, and on returning to his legal representative or assignee, the premium for the unexpired term, it shall be competent to the company either to cancel the policy or by an endorsement to continue it in force. The British America Assce. Co., the Guardian Ins. Co., the Northern Ins. Co., the Royal Ins. Co., and the Imperial Ins. Co., provide by their conditions, that the interest of any deceased person in any policy may be continued to the executor or administrator respectively, or the person other- wise entitled to the property, provided the person so en- titled, shall procure his or her interest therein, to be en- dorsed on the policy at the office of the company. The British America Assce. Co., the Queen Ins. Co., the Northern Ins. Co., and the Liverpool & London & Globe Ins. Co., except losses by fire in any building under construc- tion or repair. The London Assce. Co. and the North British & Mercantile Ins. Co. except losses arising from the burning of forests or the clearing of lands. It is also provided, that the policy shall cease to be in force as to any property which shall pass from the insured otherwise than by will or by operation of law, unless notice is given and consent endorsed. The policy of the latter company also con- tains an express clause authorizing the company or its agejits or servants, in case of loss or damage, to enter on the premises and remain in possession a reasonable time, etc. It is also provided, that where the policy is void or has ceased to be in force under any of the conditions, all monies paid to the corporation in respect thereof shall be forfeited. The Imperial Ins. Co. requires proof of loss to be made THE CONDITIONS OF THE POLICY. 189 by the insured, or by his servants or other credible persons (not less than three in number), who were present at the time of the accident. It also provides, that all insurances for any period less than a twelvemonth, shall terminate at four o'clock in the afternoon of the day specified in the policy. The Lancashire Ins. Co. excepts losses arising from the burning of forests or the clearing of lands. The Provincial Ins. Co. contains a special clause in the body of its policy to the effect that whenever the company shall pay any loss, the assured agrees to assign over all his rights to recover satisfaction therefor from any other person or persons, town or other corporation, or to prosecute therefor at the charge, and for the account of the company if requested. All the policies in use in Canada contain an arbitration clause. Few of these clauses are so worded as to make a prior reference to arbitration, a condition precedent, but an express clause is contained in the policy of the Queen City Ins. Co., declaring that the obtaining the decision of arbitrators as provided in the clause, shall be a condition precedent to the right of the insured to maintain any action or suit. The Guardian Fire & Life Ins. Co. requires every person effecting an insurance to state his name, place of abode and occupation. This company excepts losses arising from natural heating of hay, corn, or agricultural produce, or from bush fires, or the burning of forests, also losses from earth- quakes, hurricanes or volcanic eruptions. The policy of this company also contains a special limitation clause, providing that if no claim is made within three months after the fire, or if the claim is made and rejected, and is not then judicially insisted on ^\lthin three months after such rejection the claimant shall forfeit all right under the policy. The Northern Insurance Co. provides by its conditions that each distinct building, also, each addition or appentis to 190 THE LAW OP INSURANCE. any building and property contained in any such distinct, or added building must be separately insured and mentioned in the policy. Stock in trade and household furniture must be separately insured, neither shall furniture, usually denominated fixtures, machinery, or immoveables, legally or constructive- ly, so called, contained in any building, be held to be in- sured, unless the same be specially mentioned in the policy. This policy also excepts losses arising from any volcano earthquake or hurricane, and from the natural heating of hay, corn or other property. The Queen Ins. Co. requires the applicant for insurance to state his or her full name, address and occupation. It is also provided, that any person other than the insured who may have procured the insurance, to be taken by the company or assisted in any way thereto, shall be deemed to be the agent of the insured named in the policy, and not of this company, under any circumstances whatever, or in any transaction relating to the insurance. Some other policies contain the same condition expressed in a different form. This company and several other English companies contain special provisions as to evidence of the payment of the premium. The printed receipts issued from the office are alone evidence of payment. Losses arising from natural heating of hay, corn, or agricultural produce are excepted, so also losses arising from the burning of forests or clearing of lands. It is also provided, that if a building shall fall except as the result of a fire, all insurance by the company on it or its contents shall immediately cease and deter- mine, and no liability shall attach to the company in con- sequence of the falling of the building. It is further provided, that if the insured, or any other person shall have made, or shall therafter make specific insurance in this or in any other company on any of the articles, property, or interests included in the more general and written description of this policy, and such specific in- THE CONDITIONS OF THE POLICY. 191 Burance not being acknowledged or permitted by this com- pany in writing hereon, then the insurance which would be otherwise covered by this policy on such articles, property, or interest, shall be, and is hereby declared void. The con- dition as to proof of loss requires the assured to produce his title deeds as the sole owner of the property. And, an express clause is added, making compliance with the con- dition as to proof of loss in all its terms a condition pre- cedent. Nearly all the English companies insert a clause in their policies, to the effect that, if the insured hold any other policy on the same property, subject to average, then the policy held with this company shall be subject to average, in the same manner. It might be advisable for Parliament to establish a Can- adian standard policy for use by all companies doing busi- ness in Canada. Such policy might have an appropriate name to distinguish it from all others, and only those com- panies who adopted the provisions of this policy should be permitted to use the name. It would perhaps, not be expedient to make the adoption of this policy compulsory, but companies that did not choose to adopt it should be required to file a copy of their policy and conditions with a person to be appointed for that purpose by the act, and as often as any change was made in the policy or conditions, a statement of the change should also be filed. If this plan were adopted, when the words ** Canada standard policy " were stamped on the policy the public would know that it contained only such conditions and stipulations as were sanctioned by Parliament, and when these words were not to be found on the policy, its material variations from the standard policy would appear by the books of the insur- ance commissioner or person appointed by the Act. A form of policy will be found in the appendix, which, it is believed, contains all the conditions and stipulations which are ne- 'jessary and reasonable, and if such a form as this were adopted it might in a short time become quite familiar to the general public. CHAPTEK VII. ALIENATION OF PROPERTY AND ASSIGNMENT OF POLICY. If, after effecting an insurance, the property covered by the policy is alienated this will on the principles of the common law, irrespective of the conditions of the policy, prevent the insured from recovering, for he must have an interest in the property at the time of the loss (a). Where, therefore, the insured sells the property and parts with all his int erest therein before the loss happens the insurance is at an end, unless the policy is assigned to the purchaser with the assent of the insurer, and if the insured retains but a partial interest in the property, only such interest will be protected {b). But a change of property taking place after effecting the insurance will not affect the right to recover on the policy if it is the intention of the parties to continue it ; unless such change is made in direct violation of any of the con- ditions of the policy (c). The Consolid ated Statutes of Upper Canada, c. 52 s. 30 provide that " In case any house or other building be alienated by sale or otherwi se, the policy shall be void and shall be surrendered to the directors of the company to be cancelled, and thereupon the insured shall be entitled to receive his deposit note, or notes upon payment of his pro- portion of all losses and expenses that had occurred prior to such suriender, but the grantee or alienee may have the policy assigned to him, and upon certain terms may have the policy ratified and confirmed to him for his own (a) See Ly nch v. Dalzell, 3 Brown, P.O., 497 ; Sadlers Co, v. Badcock, 2 Atk., 554. (6) Etna Ins. Co. v. Tyler, 16 Wend (N.Y.), 885. (c) Davies v. Home Ins. Co., 3 E & A Reps. 272 ; Powles v. Innes, 11 M. & W., 10 ; Sparkes v. Marshall, 2 Bing., N.C.; 761. ALIENATION OF PROPERTY AND ASSIGNMENT OF POLICY. 193 use and benefit, and by such ratification and confirmation the party causing the same shall be entitled to all the rights and privileges, and be subject to all the liabilities to which the original party insured was entitled and subjected. The provisions of this statute are intended chiefly for the benefit of the insured, that he may not continue to be assessed on his note for losses after he has parted with the property insured, to which he would be liable if no such provision had been made (a). Where a member of a mutual insurance company made a mortgage to A before the insurance was effected, but made no alienation of the property after making the insurance, and merely assigned the policy to A., it was held that the case did not come within the statute, but was merely the assignment of an ordinary chose in action (6). An alienation, to come within the statute, must be an alienation upon sale, or otherwise, i. e. by gift, exchange, devise, etc., so that the insured ceases to be owner; and a demise of the premises insured for one year is not an alien- ation within the act (c). The execution of a mortgage is not an alienation within the statute (d), nor is a conditional sale an alienation (c). It has been held in the United States, where the condi- tion provided that if the property should "in any way be alienated the policy should be void," that a voluntary assignment in insolvency was an alienation within the meaning of the condition (/). Such is also the law in this country. (a) Kreutz v. Niagara Dis. M. F. Ins. Co., 16 U. C. C. P. 134. (6) Johnston v. Graham, 14 U. C, C. P. 9. (c) Hobson V. W. D. M. F. Ins. Co., 6 U. C. Q. B. 536. (d) Jackson v. Massachusetts M. F. Ins. Co., '23 Pick. (Mass.), 418 ; Con- over v. Mutual Ins. Co., 3 Denio (N. Y.) 254 ; Smith v. Monmouth M. F. Ins. Co., 50 Me. 96. (e) Tittemore v. Vermont M. F. Ins. Co., 20 Vt. 546; see Burton v. Gore D. M^ F. Ins. Co., 14 U. C. Q. B. 342. (/) Young v. Eagle F. Ins. Co., 14 Gray (Mass.) 150; Adams v. Rocking- ham M. Ins. Co., 29 Me. 292. N 194 THE LAW OP INSURANCE. One of the conditions of a mutual insurance policy pro- vided, that " whenever any one hereafter insured shall alienate conditionally by mortgage, his policy shall be void,"^ unless written notice thereof be given to the board of direc- tors, etc. ; held, looking at the rest of the condition (which referred to the sale of real estate), and the constitution and working of mutual insurance companies, that the alienation referred to was of the land on which the premises insured were situate (a). In this case the plaintiff had insured a house and furni- ture in separate sums. The land on which the house stood had been devised to his wife, and a mortgage in fee was proved, of which no notice had been given, executed by himself after the insurance, his wife joining to bar dower. It was not proved when she was married or acquired the property, so as to shew whether the Married Woman's Act, Con. Stat. U. C, c. 73, would apply. Held, that the policy was void, for, unless that act applied, his conveyance would pass a freehold interest in the land, and as against him it would be presumed j9ri/7irt/). A compliance with the condition as to notice and particu- lars of loss in the terms required ])y the contract is a con- dition precedent to the right to recover (c). Thus if the notice is required to be given within any par- ticular time, .the condition must be complied with as to time ((I). But under the ordinary condition ju'oviding that tlu; par- ticular account of the loss shall be givi "as soon aft<'r as possibhi," it is only to Ix; gi\en within a reasonable time after giving the notice of the loss, and this reasonable time is a question of fact for the jury, depending .'n the circum- stances of the particular case. Where there are no circum- stances accounting for the delay, and where the delay has been great it may be a proper questicm for the court (c). \Vht>re a condition requires thiit the insunnl shall " give immediate notice of any loss or damage by ih'e within four- teen days, to the agent of the company, and as soon after («) Ldl'arijr r. Liirrpaof, L. it (I. Inn. Co., i\ Ilcvud Critiquo, /59. (b) liduiittujt' V. AfcchanicH' F. Inn. (Jo. 1 Groon, N. .1. 110. (c) McFanl v. Montrful I. Im. Co. 2 U. C. Q. IJ. r,!); Mnxon v Harvey 8 Ex. SIO; lloixr V. Lendon 5 Jur. N. H. 491; Elliott v. Royal Ex. Assce. Co. L. R. 'J Ex. 214-5. {d) llojii'r r. Lniilon, Hupra. (e) Mann v. lyentern Anfcr. Co. 19 U. (J. Q. IJ. 314 ; aflirmotl on appeal ib. 829; See alno Attwood v. Emery 1 C. B. N. S. 110. THE PROOFS OF LOSS, ETC. 217 as possible are to deliver in a particular account of such loss and damage," etc. ; the notice of the loss must he given within the fourteen days, hut the particular account, etc., as soon as it reasonably and conveniently can he delivered considering all the circumstances (a). Where by the conditions of the policy the insured was required to make affidavit as to the particulars of his loss, within iifteen days after tlu? fire, and it was declared, that until such ailidavit were made, ihv loss should not b(! pay- able ; and, another condition of the policy i)rovided, that no money should be payabk^ until sixty days after the ad- justment of the loss ; it was held, that as no money was payable until the lapse of these sixty days, tlu; penalty for non-compliaiuM! with the conditicm as to particulars of loss, viz. : that tlie loss should not be payable, could only opcirate after tin? lapse of the sixty days, c(msequently, the stipula- tion requiring the particular account to be furnished within fifteen days, was nugatory, and that the plaintiff was en- titled to succeed, though his aOidavit was made after the expiration of sixty days (/>). Where a condition provides that the insured shall forth- with give notice of the loss to the company, and within fourtecjn days thereaftisr, deliver in an account, etc. ; the word thereafter, refers to the last antecedent, and an account of the loss delivered within fourteen days after knowledge thereof, and th(! giving of notice is sullicient, though Tnore than fourteen days has elapsed since the fire (r). The delay fixed by the regulations of an insurance com- pany for giving notice of the fire, and the circumstances connected with it is not in all cases so fatal as to deprive a party who has not complied literally with the regulations from all njcourse (<1). (a) Mrtjm v. H^estem Arkcp. Co., 17 U. C. Q. B. 190. (h) Lajariie v. Liverpool, L. d- Gluhr fnn, Co., li llcvuo Critique, 59. (c) Smith V. Queen Ins. Co., 1 Ilfinimj', :J11. (d) Dill V. Quebec Asace. Co., Rob. Di^. 209. 218 THE LAW OF INSURANCE. Where a policy of insurance contains a proviso that the loss is to be paid within sixty days after proof of loss, and adjustment and proof of interest in the property, the furnishing of such preliminary proof is a condition prece- dent to the plaintiffs right to recover unless there is an averment that it has been waived (a). So compliance with the condition as to particulars of loss is a condition precedent to the right to recover (h). The affidavits proving the loss must comply with the conditions of the policy, and where a declaration averred that affidavits were made by three persons named, it was held that proof that the affidavits were made by these particular persons was necessary, and th). It is not necessary that the insured should, in his pre- liminary proofs, negative the occurrence of the loss from (o) Perkins v. Equitable Iiis. Co., 4 Allen 662. (6) Thomas v. Times <£ B. F. Ins. Co., 3 L. C. J., 162. P 226 THE LAW OF INSURANCE. any of the excepted causes stated in the policy, such as invasion, insurrection, riot or civil commotion, etc. (a) The insured need not in the proof describe the manner in which the loss occurred, or the cause thereof, for the *' par- ticular account of loss and damage" required by the condition refers to the articles lost and damaged, and not to the manner or cause of the loss {h). Under that part of the condition requiring the insured to " declare on oath whether any and what other insurance or incumbrance has been made on the property," the insured must show that he has given a notice not only of any in- cumbrance whether made before or after the date of the policy, if one has been made, but must also show that he has given a notice, even if no encumbrance has been made^ stating the fact that no encumbrance has been made. In other words, in any case of loss the notice must refer to the subject of incumbrance, and whether there is any such or not on the premises and must state how the fact is (c). But under this part of the condition all that is incumbent on the plaintiff is to make the declaratian on oath. He need not inform the defendants whether there is any other insurance on the premises or not, nor is he required to deliver the declaration or inform the defendants of the fact if its being made. It is the defendants duty to inform themselves of what has been done, if they do not choose to do so having the declaration before them it is their own fault (d). But the declaration must be made on oath before the commencement of the suit. That part of tide condition requiring the insured to sub- mit to an examination under oath is complied with if he (a) Catlin v. Springfield Ins. Co. 1 Sumner, C. C. U .S., 434 ; Lounsbury V. Protection Ins. Co. 8 Conn., 459. (6) lb. (c) Marhle v. {Niagara Bis. M. F. Ins. Co., 28 U. C. Q. B. 625. (d) Williamson v. Niagara Dis. M. F. Ins. Co. 14 U. C. C. P. 15. THE PROOFS OF LOSS, ETC. 227 submit to one examination, although he refuses to answer under oath questions asked subsequently («). If without excuse or justification the insured refuses to comply with such a condition he cannot recover, but his re- fusal is to some extent a question of fact and intention. If it was to gain time and lessen the chances of detecting fraud it would be fatal, but if it was to save the insured or his family from an epedemic it would not (b). So if the condition requires the insured to subscribe, the examination after it is reduced to writing, if he refuse to do so he cannot recover (c). When the conditions stipulate for such evidence as shall be satisfactory to the directors of the company, this does not mean such evidence as caprice may require, but satis- factory means sufficient, or such as would satisfy reason- able men (d). Where a condition, besides requiring a particular account of the loss and damage, provides, that the insured " shall produce such other evidence as the directors may reason- ably require," it is within the province of the court to decide as to what particular evidence may be required under this condition, and it is for the jury to say whether what is furnished is sufficient as a compliance with a requisition therefor under the condition. In the absence of special circumstances, the question of reasonable time for requiring such evidence cannot arise. It seems this condition would authorise the company in requiring from the insured, a builder's certificate as to the value of the buildings destroyed, they being, by another condition, empowered to re-build instead of paying the sum insured. If such a certificate can be reasonably required, and it is demanded before (a) Moore v. Protection Ins. Co., 29 Me. 97. . (b) Philips V. Protection Ins. Co. 14 Mo. 220. (c) Bonner v. Home Ins. Co., 13 Wis. 677. (d) Strong v. Harvey, 3 Bing. 304 ; Braunston v. Accidental Death Assce. Co., 2 B. & S. 523 ; Bunyon on F. Ins., 91. 228 THE LAW OF INSURANCE. action, the furnishing of it before action is a condition pre- cedent to the right to recover, and the plaintiff, failing to produce it, must submit to a non-suit (a). It seems, that a demand under the condition, may be made by an inspector, whose duty it is to visit agencies and adjust losses, at all events, if the directors adopt the act. The conditions must also be complied with in every par- ticular as to the magistrate's certificate, and where the conditition requires that the certificate shall be under his hand and seal it must be so made. So if the condition requires the magistrate to certify the amount of loss he must do so (b). So when a condition requires that the certificate should set forth the loss or damage *' on the subject insured," a certificate stating the amount of loss, but not stating it to be on the subject assured is bad (c). The certificate must also state that the insured (according to the knowledge and belief of the magistrate), really by misfortune, and without fraud or evil practice, sustained the loL,s or damage, etc., and if after the occurrence of the ]oss the insured becomes insolvent, a certificate alleging that the assignee, without fraud, etc., sustained the loss will be insufficient. An assignee in insolvency standing in the place of the insured cannot recover until the condition is complied with {d). A coroner, whose name is not in the commission of the the peace, is such a magistrate as may give the certificate. A strict compliance with this part of the condition is necessary. Thus where the condition requires the certifi- cate of a magistrate " most contiguous " to the place of the (a) Fawcett v. Liverpool, L. & G. Ins. Co., 27 U. C. Q. B. 225; Toms v Wilsoji, 4 B. & S. 442. {b) Mann v. Western Assce. Co., 17 U. C. Q. B., 190 ; Scott v. Phcenix Assce. Co., Stuart's L. C. Appeals, 354. (c) Langel v. Mutual Ins. Co., Prescott, 17 U. 0. Q. B., 624 ; Kerr v. Brit- ish Am. Assce. Co., 22 U. 0. C. P., 669. (d) Kerr v. British Am. Assce. Co., 22 U. C. C. P., 669. THE PROOFS OF LOSS, ETC. 229 fire, it will not be sufficient to produce the certificate of a magistrate living at the distance of twelve miles from the place where the fire occurred when there are others living nearer ; and in such case without the certificate of the nearest magistrate the insured cannot maintain an action (a). Although the conditions must be strictly complied with, it seems the court will not enter into a nice calculation touch- ing a discrepancy of a few feet in the distances of the resi- dences of the different magistrates. Where it appeared that a notary lived a few feet nearer than the certifying magis- trate, but whether his office was nearer did not appear, it was held that the office might be regarded in ascertaining the magistrate most contiguous (b). There would seem, however, to be no doubt on principle as well 8,8 by authority, that any, even the least difference in point of distance from the place where the fire occurred, be- tween the residences of the justices will be material, and if the certifying magistrate is not in point of fact "most con- tiguous" to the place of the fire the condition will not be complied with (c). If the difference in distance is clearly shown to the court it is apprehended they would be bound to regard it no mat- ter how trifling, except in so far as the maxim de minimis non curat lex may apply. It seems, however, that the court will in a proper case gladly evade the rigor of the rule, and will refrain from enter- ing into a nice calculation of the distances. Thus where it was proven that several magistrates or notaries had their places of business nearer to the fire than the place of busi- ness of the magistrate whose certificate had been furnished, but there was no evidence that their places of residences were nearer to the fire than the one who gave the certificate . (a) Moody v. ^tna Ins. Co., 2 Thomson; 173 ; Lampkin v. Western Atsce. Co., 13 U. C. Q. B., 237. (6) Turley v. North Am. Ins. Co. 25 Wend. N. Y. 374. (c) See Protection Ins. Co. v. Pherson 5 Port (Ind.) 417. 230 THE LAW OF INSURANCE. It was held that the certificate was sufficient, and that the distances would not be nicely calculated when the magistrate signing was near by and ' acquainted with all the circum- stances (a). And where the residence of the certifying magistal was most contiguous to the place of the fire, but the office of another magistrate was nearer than the residence of the former, it was held that the condition was substantially com- plied with {b). If the certificate of the nearest magistrate is not in com- pliance with the condition, it will not be sufficient to obtain the certificates of t^vo other magistrates residing at a greater distance though the two last named certificates are in other respects in conformity with the policy (c). So if two of the nearest magistrates refuse the certifi- cate, and that of the next nearest is obtained it will not be sufficient (d). A party to whom the company consent to pay the loss, by endorsement in writing on the policy, is not constituted the assured, so as to require proof that the magistrate was not related to him, if it is not shewn that he is in any way interested in the policy ((0. By the course of judicial decisions, both in England and the United States, the production of the certificate is a con- dition precedent to the payment of any losn, so that its being wrongfully witheld will make no difference ; nor, is the insured entitled to vary the terms of the contract, as to the production of the certificate, by substituting other terms or conditions in lieu of those which all the parties to the contract have originally made (/). (o) Longhurst v. Conway F. Lib. Co. U. S. D. Ct. lowu. (6) Peoria M. & F. Ins. Co. v. IVhitchill 25 III. 4G6. (c) Noonaiiv. Hartford F. Inx. Co. 21 "^lo.f^l. (d) Lcadhctter v. ^Etna Ins. Co. 13 Me. 2(55. (<') Kctchum V. Protection Ins. Co., 1 Alien, 136. (/) See fy-est v. Lockyer, 2 H. Ijl 574; (5 T. R. 710 ; Oldman v. Bewicke, 2 H. Bl. 577 u. ; Houtled). It was proved that the insured had sent a cirtificate in fulfilment of the condition, but that the general agent of the insurers who had received it, returned it for some (o) Worsley v. Wood, 6 T.R., 710. (ft) Rice V. Prov. Ins. Co., 7 U. C. C. P., 548. • 232 THE LAW OF INSURANCE. alleged insufficiency. The certificate was not produced at trial by the insured, nor was he called on to produce it, nor was any evidence given of its contents. Held, that a prima facie compliance with the conditions was shown on the part of the insured, and that the burden of proving the insufficiency of the certificate justifying their rejection of it rested on the insurers {a). The condition generally goes on to provide that if there appear any fraud or false swearing in the proofs, declara- tions or certificates the insured shall forfeit all claim under the policy. Such a condition as this is fully in accordance with legal principles and sound policy {h). And a false and fradulent statement as to the loss and damage will avoid the policy under the condition (c). In general if the claim for loss is unjust and fraudulent it cannot be maintained {d). So a grossly fraudulent over charge will deprive the assured of all remedy under the policy {e). It seems, that "false swearing," within the meaning of the condition, signifies swearing wilfully and fraudulently false. Thus, where, after the loss by fire, the plaintiff made a statement under oath, that he was the absolute owner of the property, when in fact he was not the owner, but a ten- ant in common with his wife, of the property insured, it was held, that this was not " false swearing, " for it was merely an untrue statement, which did not appear to have been wilfully or fraudulently made (/). The only fraud or attempt at fraud, or false swearing, which will vitiate a policy within the meaning of the con- dition, is such as has reference to the claim of the plaintiff, (a) Piatt V. Gore Dis. M. F. Ins. Co., 9 U. C. C. P. 406. (6) Britton v. Royal Ins. Co., 4 F. & F. 905. (c) Seyhetti v. Queen Ins. Co., 10 L. C. J. 243. (d) (ireiiirr v. Monarch F. «t L. Assce Co., 3 L. C. J. 100. (e) Thomas v. Times iC li. F. Assce. Co.,3 L. C. J. 162. (/) Mason v. Ayricultural M. Asset. Co., 18 U. C. C. P. 19; 8. C. 16 U. C. C. P. 493, reversed. ^ THE PROOFS OF LOSS, ETC. 233 and bears on the proof of his loss, and not on any imma- terial or collateral subject (a). False swearing, therefore, as to payment of premiums, or assessments on a mutual policy, will not be within the condition (b). In order that the false swearing may avoid the policy, it must appear that the oath is intentionally false, and taken with intent to deceive the insurers as to some material point (c). But it seems, that if the claim made is wilfully false in any substantial respect, the insured cam.ot recover (d). The plaintiff effected a policy of insurance against fire with a condition that the plaintiff should forfeit all benefit under tlfe policy, if there were any fraud or false swearing in the claim made. In the plaintiff's affidavit proving the loss he claimed for goods damaged to the extent of £1085. The jury on the trial only found a verdict for the plaintiff with .£500 damages. The court granted a new trial con- sidering that the verdict of the jury established that there was false swearing in the claim made {e). One of the conditions of a fire policy required that per- sons insured should within fourteen days give ir writing an account of their loss or damage, such account of loss to have reference to the value of the property destroyed or damaged immediately before the fire and should verify the same by their accounts and by affidavit and such vouchers as in the judgment of the company might tend to prove such account and value, and should produce such further evidence and give such explanations as might be reasonably required, and if their should appear any fraud or false state- (a) Croxoley v. Aprietiltural M. Asxcf. Co., 21 U. C.C.P. 667 ; Ro$sv. Coml. Union Asscc. Co., 2G U. C. Q. B. 552. (b) Ih. (c) Marion v. Great Republic Ins. Co., 35 Mo. 148 ; Franklin t. Int. Co. V. Updegraff, 43 Penn. St. 350 ; Franklin Ins. Co. v. Culver, 6 Ind. 137. (rf) Ooulstone v. Royallns. Co., 1 F. dk F. 229. («) Levy V. £at//te 7 Bing. 849. — r- . 234 THE LAW OF INSURANCE. ment in such account of loss or damage, or in any of such accounts evidence or explanations or if such affidavit should contain any untrue statement the policy should be void. The statement complained of was that the plaintiff in his affidavit proving the loss, stated that he was absolute owner of the building insured, which was unincumbered, whereas he had not yet paid for the land. Held that as an affidavit could be required only to verify the account of lossordamage, the "untrue statement" must refer also to such account and that an untrue statement in the affidavit as to the plain- tiff's title would not avoid th^ policy {a). Nor would it make any difference if the affidavit stated only the title to goods and not to lands {h) The plaintiff had lived with his father for about 37 years on land belonging to the crown. A barn had been built on it resting on abutments of loose stones, which the plain- tiff in October, 1867, insured with defendants. In Decem- ber, 1867, a patent issued to one F , and in June, 1869, T claiming through the patentee recovered judgment in eject- ment against the plaintiff and his father and placed a Hah. fac.pos in the sheriff's hands. A few days after, and before it had been executed the barn was burned. Proceedings in chancery were then pendi ng by the plain ' Iff contesting the claim of T. The policy required that the plaintiff, in his account of the loss, should shew the true nature of his title at the time of the fire, and the plaintiff in such account stated that he was honajide owner, and that his title was by possession for thirty years by himself and his father. HM that the account did not give a true statement of the plain- tiff's title ; that the barn was part of the freehold, and that he could not recover. Wilson J. dissenting on the ground that the plaintiff being in possession, and prosecuting his claim in equity had an insurable interest ; that as against an adverse claimant he might treat the baru as a chattel (a) Rosa v. Coml. Union Asnce. Co., 26 U. C. Q. B. 552. ; V . "^ (b) 8.C.Ib.5U., . . , THE PROOFS OF LOSS, ETC. 235 which he could remove, and in this view his statement of title was correct (rt). The notice of loss and the particulars of it may be waived by the insurers expressly, or by their conduct in dealing with the assured. Where the fire occurred on the 13th June, and the notice of loss and particulars were furnished on the 11th of July, and the insurers did not then object that they were not in time, but entered into a correspondence with the insured as to furnishing better particulars which the latter did. On being again applied to the insurers declined to pay on the ground that the circumstances attending the fire were suspicious, but after action brought paid the* amount due on another policy to which the notice of loss and particulars equally ajiplied, it was held that the preliminary proof was waived by the conduct of the in- surers (b). The plaintiff had effected an insurance on a cargo of wheat on board a vessel which was afterwards lost. The premium had been paid, but no formal policy was executed before the loss. Before the trial the attorney for the defendant gave a written admission to the plaintiff's attorney, by which he agreed : " That no ol)jection should be taken at the trial to the want of a policy of insurance on the wheat, and that the question to bj tried should be confined to the cause and manner only of the loss, and that all proceedings should be had in the same manner, and to the same effect as if a iDolicy had been duly and properly issued, and were produced at the trial." Held that the defendants were precluded from objecting to the want of notice and proof of loss usually required by the conditions of their policies, and that such proof was waived by the agreement of the defendants' attorney (c). An insurance company cannot object to the preliminary (a) Shcrboneau v. Beaver M. Ins. Co., 30 U. C. Q. B., 472. (6) Lntnpkin v. Ontario M. it F. Ins. Co., 12 U. C. Q. B. 578 ; see, also, Pirn V. Rcid, 6 M. & (}. 1. (c) milker V. Western Jssce. Co., 18 U. C. Q. B. 19. 236 THE LAW OF INSURANCE. proofs when all are furnished which have been demanded, and no objection is made to their sufficiency before the commencement of the suit (a). If the underwriter intends to insist upon defects in the proof, he must notify the insured of that intention in time to afford him an opportunity to correct them. Conditions precedent are waived by such conduct on the part of the party entitled to insist upon them, as is inconsistent with the purpose to require the performance of them. And con- tracts of insurance constitute no exception to the rule (b). The payment by the insurers, to the insured, of a part of the sum agreed to be paid by the policy, is a waiver of the usual preliminary proofs (c). When the insurers make no objection to a deficiency in the preliminary proof, or to the notice given of the loss, but rest their denial of liability on other grounds, this amounts to a waiver of the objection of a defective notice (d). An offer of compromise of a claim on a policy for a loss, made by the insurers, after the preliminary proofs of loss had been received and examined without making any objec- tions to the proofs, is a waiver of any defects in such proofs (e). "While mere silence will not amount to a waiver of defects in proofs of loss, an objection to the proofs upon one specific ground, and silence as to another, in which was the real defect, operates as a waiver of such defect (/). Formal defects in the preliminary proofs may be regarded (a) Canada L. C. Co. v. Canada A. Ins. Co., 17 Grant 418. (b) Post V. .'Etna Ins. Co., 13 Barb. N. Y. 351. (c) Westlake v. St. Lawrence Coy. M. Ins. Co., 14 Barb. N. Y. 206. (d) Francis v. Ocean Ins. Co., 6 Cow. (N. Y.) 404 ; Bodle v. Chenango Co. M. Ins. Co., 2 Comst. (N.Y.) 53. (e) VanDemenv. Charter Oak M. <& F. Ins. Co., 1 Robert (N.Y.) 55. (/) Aijres V. Hartford F. Ins. Co., 17 Iowa, 176. - .- THE PROOFS OF LOSS, ETC. 28i7 as waived the insurers by placing their refusal to pay on other grounds (a). So if certificate is not that of the nearest magistrate, and the company refuse to pay on other grounds, they thereby waive the objection (t). The plaintiff's attorney testified that he met defendant's agent in the street, and said he had all the preliminary proofs ready except a certificate, which he feared he could not get in the time required by the policy ; that defendant's agent said it made no difference, but to get the proofs as soon as he could. This was held evidence of waiver to go to the jury (c). The pendency of negotiations for arbitration as to the value of the buildings destroyed between the assured and the secretary of the company is no waiver of a condition requiring the proof of loss to be furnished within thirty days, if no submission to arbitration in fact takes place and the secretary does not assent to waive the condition (d). The fact of the conditions of a policy of insurance re- quiring that any claim for a loss shall be sustained, if re- quired, by the books of account and other vouchers, of the insured, creates no implied warranty on the part of the latter to keep books of account, and to be ready to exhibit them when called on (e). ' In an action on a policy of fire insurance for $1000, de- fendants pleaded fraud and false statement, which, under a . condition of the policy, would avoid plaintiffs' claim ; and also, that the plaintiff did not forthwith give notice of his (a) St. Louis /hs. Co. v. Kyle, 11 Mo., 278; Tayloe v. Merchants Int. Co., 9 How., U. S.,.S90; Phillips v. Protection Ins. Co., 14 Mo., 220; Hartford P. Ins. Co. V. Harmer, 2 Ohio St., (22 Ohio) 452; Franklin F. Ins. Co. v. Coates, 14 Md., 285; Peoria M. lO F. Ins. Co. v. Whitehill, 25 111., 466; Blake v. Exchange M. Ins. Co., 12 Gray, Mass., 26ft ; Great Western Ins Co. c. Staaden, 26 111., 360 ; Lewis v. Monmouth M. F.Ins. Co. 52 Me., 492. (6) O'Neil V. Buffalo F. Ins. Co., 3 Comst., N. Y., 122. (c) Crozier v. Phcenix Im. Co., 2 Hauuay, 200. (d) Niagara Dis. M. Ins. Co. v. Lewis 12 U. C. C. P. 123. (c) WightmaH v. IVestcrn Marine d; Fire Ins. Co. 8 Rob. La. 442.* 238 THE LAW OF INSURANCE. loBS, and deliver in as particular an account of such loss as the nature of the case would admit of, and make proof of the same by declaration or affirmation, and by his books of account, or such other reasonable evidence as the defend- ants or their agent required. The jury found that there was no fraud or false statements, and fixed the plaintiffs' loss at $900 ; but in answer to the following question : Did plaintiff forthwith, and within the delay required by the said policy, to wit, the 12th day of December, 1866, at Mon- treal, give notice to defendants, and deliver in an account giving particulars of his loss under oath, and offer all infor- mation to defendants, and make claim to the payment of the sum of $1000 currency, of and from the defendants. They answered, " We consider the claim made, but not in due form.'' The condition of the policy contained no pro- vision as to the form of the claim, nor was the form objected to or enquired of. Held, that the words "but not in due form," were in no way pertinent to the issue submitted to the jury, and should therefore be considered as mere surplusage, and of no legal force or effect whatever, and that the plaintiff was entitled to judg- ment on the verdict for $900, with interest and costs (a). (a) Wiggins v. Queen Ins. Co., of L. <& 2^., 13 L. C. J. 141. CHAPTER IX. ADJUSTMENT, RE-BUILDING, ETC. The basis of an adjustment is the contract of insurance, with its representations and warranties together with all written and printed conditions of the policy as they may be modified or controlled by subsequent indorsements. In all cases the adjustment should be made up in accordance with the term* of the policy : as given in the written portion thereof, without reference to any alleged verbal or other agree- ment between the insured and the agent, not included in or endorsed upon the policy before the occurrence of the fire. The policy as written, and the policy only, must control the adjustment in every instance. The adjuster should not only be familiar with the terms and conditions of the policy, but also with the whole law of insurance. Reference may be made to other portions of this work for an elucida- tion of the rights and liabilities of the insurer and insured in all cases. The chapter on " The extent and nature of the risk" will be found to be of practical importance to the adjuster, and, indeed, many points are inserted in that chapter which might with equal propriety be inserted in this. The amount to be recovered under a policy of insurance is unliquidated, and dependent upon the amount of damage actually sustained. But the amount may become liquidated by an adjustment, which, though not in all cases conclu- sive, is so unless something the contrary can be shown (a). When the amount due is adjusted and paid and accepted in full without objection the claim is satisfied. A plea, therefore, alleging that the amount which the plaintiff was entitled to receive was settled and adjusted at $3,500 between plaintiff and defendant, and that the defendant (a) Luekie v. JBushby, 13 C. B., 871. 240 THE LAW OF INSURANCE. afterwards paid and satisfied in full to the plaintiff the said sum of $3,500 for the loss and damage, is good on motion for judgment iion abstante veredicto, although the plea does not allege that no more was due {a). In its strict sense, adjustment of fire losses, is ascertaining and fixing the amount of loss under the insurance, without reference to the companies interested. Apportionment is the act of determining, and apportioning the contributive liability of each co -insuring company upon the ascertained general loss. Contribution to fire losses is the payment of its rateable proportion of such ascertained general loss by each co-insuring company. These several subjects will be treated of in this chapter. In ascertaining the extent of the loss and damage, re- ference should be made to the circumstances as they existed at the date of the policy, for the indemnity to the insured must be adjusted on the principle of replacing him as near as may be in the situation he was in at the commencement of the risk {h). The first step of the adjuster is to ascertain, as accurately as possible, the amount of actual loss and damage sustained on the property insm*ed. In effect, the insurer is by the loss made the pm*chaser of the property destroyed, and he has a right to know that what he ib called upon to pay, is not in excess of the true value of the property. The adjuster has not only to guard against an over valuation of the amount of loss and damage, but also against claims for loss of profits on the business carried on in the insured prem- ises, loss of time, inconvenience, etc. Profits are not in any instance recoverable, unless insured as such, and claims for loss of time, inconvenience or annoyance, are of a purely sentimental character, and do not enter into the spirit or letter of the contract. Though claims which can- not be supported are often made by the insm'ed, even when (o) AfcZ/can V. P/tawiic /n«. Co., 2 Hannay, 179. ' (6) Marchesseau v. Merchants Ins. Co., 1 Rob. La. 438. ADJUSTMENT, RE-BUILDING, ETC. 241 there is no attempt at fraud, yet, on the other hand, it must be admitted, tliat adjusters are not always free from blame in endeavouring to cut down claims, and thereby arrive at what is termed a " good settlement for the com- pany." Simple justice to both parties to the contract requires that the adjustment should only be for what is actually lost not exceeding the sum insured ; any other result would inflict a wrong on either the insurer or insured, as the object and effect of the contract is merely to secure an indemnity against the consequences of a loss on the subject insured. "It is worthy of consideration how far the system of " jumping " the amount of loss after a fire with the view of publishing a card of thanks for prompt settlement, has contributed to the difficulties met with by the adjuster. The alleged evil resulting from this system is that the claimant as a rule makes up his claim for such sum as will give a margin, to be yielded to the adjuster, when the latter makes his offer of settlement. The adoption of a concise form of policy giving full pro- tection to the companies against fraud, avoiding impractica- ble and vexatious conditions, and adopting such only as can be clearly understood, would, it is believed, tend materially to destroy the evil complained of, and at the same time give a greater protection to both the insurer and the insured than at present exists. When the great protec- tion that insurance affords and the important interests it involves are considered, it is strange that it is dealt with in the majority of cases, by commercial men particularly, in such an indifferent and careless manner. There are few, if any, who make themselves conversant with the conditions or any of the terms of their policy, except, perhaps, the written portion thereof. The policy s simply a contract between the insm-ers and the insured, and^its terms are contained in its conditions, and in the body of the policy. In effect the insurer undertakes that if the insured complies Q 242 THE LAW OF INSURANCE. •with certain conditions he will be entitled to indemnity on the occurrence of a particular peril to the subject insured. The insured should therefore make himself thoroughly familiar with the conditions of his policy, otherwise, he may be at the mercy of the company if they elect, to take ad- vantage of a breach of the conditions in the event of a loss. The same neglect or lack of careful attention is evident in the choice of insurers. It is, of course, to the advantage of the insured that the company with which he insures should be perfectly solvent, and that the conditions of their policy should be reasonable, and such as in the ordinary course of business may be complied with. But irrespective of these considerations it is often found that the company effecting insurance at the cheapest rate, commands the most extensive patronage, and this from a class of men who would consider very carefully the expediency of investing in any other commodity merely because it was cheap. If greater care were exercised by the companies in the selection of risks, if the character of the party, and the value, nature, and situation of the property were made the basis of the contract, perhaps, many of the difficulties which arises in this connection would be avoided. The companies should remem- ber that by insuring honest men, they may as effectually prevent fraud os by imposing numerous and complicated conditions. • The unsatisfactory state of insurance law in Canada has lately been referred to by an eminent judge of the court of Queen's Bench for the Province of Ontario, and it has been suggested that the Legislature should interfere and restrict the companies to such conditions as the courts shall deter- mine to be reasonable. It is claimed that if this were done the companies would be more careful in the selection of their risks, and thereby fraud and false or exaggerated claims would be avoided. A policy insuring several different subjects of insurance at separate amounts, and containing a provision that "the ADJUSTMENT, RE-BUILDING, ETC. 243 company shall be liable to pay the assured two thirds of all such loss or damage by fire as shall happen to the property, amounting to no more in the whole than the aggregate of the amount insured, and to no more on any of the different properties than two -thirds of the actual cash value of each at the time of the loss, and not exceeding on each the sum it is insured for," is to be treated as a separate insurance upon each subject of insurance, and therefore the company is liable only for two-thirds of the loss on each subject, notwithstanding, that on some of the subjects the loss is less than the jvmount for which those subjects are insured, and, notwithstanding, that the whole loss is less than the aggre- gate amount insured {a). In this case by express stipulation the insured could not recover more than two-thirds on any of the subjects insured. Independent of such express stipulation when a separate insurance is effected on separate properties, and the two- thirds value applies, the insured can recover only two- thirds on the properties injured or destroyed, and not two- thirds of the total insurance. For instance, a house is insured for $1,000 and the furni- ture for $2,000, and the house is sworn to be worth $3,000, and it is totally destroyed by fire, but none of the furniture, which is worth $3,000, is injured. The plaintiff cannot recover the two-thirds of the value of the whole property covered by the policy up to the sum insured ; for that would give him the whole $3,000 upon his house which is its full and not its two-thirds value, and yet there is only an indemnity of $1,000 on it which the company was to make good in any event. The two-thirds clause is to make the insured interested in the property to some extent himself, and in order to give it full effect he should be interested in saving every part of the property when separate risks are taken on separate (a) King v. Prince Edward C. M. Int. Co., 19 U. C. C. P. 134. 241 THE LAW OF INSURANCE. parts of it. If the rule wore otherwise, frauds might l)e comniitted or negligence encouraged (a). Plaintiffs' insured with defendants if)!J,4()0, of which $1,000 waa on his tannery and .$500 on the machinery in it on an application valuing the tannery and fixtures jit .$1,000 which was said to l)e the two-thirds of the actual value, hut agreeing that in case of loss defendants should only he liahle as if they had insured two-thirds of the actual cash value anything in the policy or application notwithstanding. The application was referred to in the; policy as forming part of it, and stated the promise to ])e to pay all losses or damage not exceeding the said sum of !f);3,400, the said losses or damage to l)e estimated according to the true and actual valuo of the property at the time the same should hai)pen. The huilding an(' machinery having heen destroyed l)y fire, the jury found the total cash value of the former to he |5l,- O.OO and the latter .$750. Held, that the plaintiff was hound by the agre(!ment in his application to take two-thirds of the actual cash value and could therefore only recover this sum (/>). Though the rule is otherwise in marine insurance, yet in fire insurance where a person insures his house or goods for a part only of their value and suffers a loss e(jual to the full amount insured, this sum in the absence of a special provision in the policy to the contrary must Ix; paid by th(^ insurers and not merely such a pro).)ortion of the sum as would correspond with the proi)ortion ])etw(;en the sum in- sured and tlie whole valu). When; the insurance was for l'l,000 cm an "inn and oftices," and the premises being injured by lire, the insurer reinstated them pursuant to the policy, it was h(fld that the insured could not recover for rent i)aid in the mean- time, the hire of other houses while tlu; " inn " was being repaired, and the; loss or damage sustaine.l i)y reason of various persons declining to go to the inn whih; it was und(;rgoing repairs (r). Underwriters undertake to indemnify only f(U' damag<' arising from external accidents, not from that occasioned (a) j4 mould on hm., 8.30. {h) Nihio r. North Am. In». Co., 1 Hand. (N. Y.), 551 ; ?«• irri;iiit d Poole, 2. N. A M., Hl'.l, 1 A. A E.,(;21. (c) lie Wriyht d J'oole, Supra. 246 THE LAW OF INSURANCE. by the inherent qualities or natural defects of the thing insured, hence, as a general principle, insurers are not liable for the loss of a thing which is consumed by reason of its own qualities, such as spontaneous combustion with- out external causes, unless those qualities or tendencies are excited to action and made destructive by a peril insured against. In most policies an express clause is inserted protecting the insurers from such losses as the above. In estimating the amount of damage sustained, the in- trinsic value of the property is to be considered, without reference to any extraneous circumstances whereby its value may be increased or diminished. Thus, where the insured had ])uilt the house insured on land of which he was only lessee for years, and at the time of the fire the lease had only fifteen days to run, and it appeared that the building was worth $1,000, as it stood, but if removed at the end of the term it would only be worth $200. It was held that the value of the building as it stood was the criterion of the damage, although by removal at the end of the term it might be reduced to a much less sum (a). Where a policy provides that the loss or damage shall be estimated according to the true and actual cash value of the property at the time the loss shall happen, the money value in the existing market is the only rule and guide to carry out the stipulation of the contract (h). The actual value of the goods may be recovered without any reference to the cost price. Thus where a policy covered the stock-in-trade of a block-maker, it was held that he was entitled to recover the actual value of the stock at the time of the loss by fire, and that the insurers could not fulfil their contract by paying the cost price of the articles, or the sum which it cost to manufacture them, and this notwithstanding that the insurance was not upon the profits of the subject insured (c). (o) Lawrent v. Chatham F. Ins. Co., 1 Hall, (N. Y.) 41. ' ' (b) Grant v. Aitna Int. Co., 11 L. C. R. 128. (c) Equitable F. Int. Co. and Qtdnn, 11 L. C. K, 170. "^ ADJUSTMENT, RE-BUILDING, ETC. 247 When goods are so much damaged as not to be saleable in the ordinary mode a fair sale at auction may be made by the insured, after reasonable notice to the underwriters or with their knowledge, and the price at which it is sold is a proper criterion by which to estimate the damage to the insured. But if sold without the knowledge of or notice to the underwriters such price is not sufficient evidence of the value of the goods in their damaged condition. A survey of goods alleged to be damaged made without notice to the underwriter, followed by a sale (after adver- tisement in two newspapers,) at nine o'clock in the morning of the second day after the survey, at which sale the claim- ant bought in the goods, is irregular, and such proceedings afford no criterion of the extent of damage the goods have sustain -^d (a). When the owner is insufficiently insured upon an ordin- ary policy, and the insurance money, together with the value of the salvage, does not make up more than the value of the property immediately before the fire, the salvage or residue of the property remaining after the fire will always belong to the owner. But when the owner is insured up to the full value and the claim is admitted as a total loss, any salvage belongs to the insurers (/>). The assignee of a person upon whose life a policy of insurance has been effected is not entitled to claim interest upon the amount of the policy until he is in a position to give to the assurers a full legal discharge upon payment of the claim (c). After the cause of action accrues under a policy i.e. after the fire, and due proof of the loss and compliance with the conditions entitling the plaintiff to sue, if he accept a bill of exchange iu full satisfaction and discharge of the cai(,He of action, this will be a good bar to an action to recover (a) iiun M. Inn. Co. v. Maxxon, i L. 0. J., 23. (h) Da Costa v. Firth, 4 Burr, lOOO ; liitnijoii on F. Inn., 10'2. (c) Toronto S. li. v. Canada L. Asucc. Co., 11 Grant, .'jOO: I 248 THE LAW OF INSURANCE. the sum insured, although the bill of exchange is never paid (a). This proceeds on the ground that after the loss by fire the policy gives a claim for damages to the extent of the loss, and, not merely a right to recover the sum insured in the policy. And in the above case the bill was given and accepted in satisfaction of the cause of action in the de- claration mentioned. The acceptance of a bill by the plaintiif could not be legally pleaded as a satisfaction of the covenant he/orc breach, because that would be to set up a dispensation from the covenant in consideration of giving an undertaking by simple contract (b). An insurance company may be compelled to pay the entire loss on a policy, within the amount insured, unless limited by its conditions ; but will be entitled to sue for and recover proportionate amounts of other companies insuring against the same loss (c). The right to contribution between insurers is based upon the concurrence of the policies, and it is a necessary incident of its existence, that the several insurers should be bound with equal certainty, and in the same sense for the same loss {d). A condition is usually inserted in the policy, that in the event of several insurances, the company shall be liable only for such rateable proportion of the loss or damage happening to the subject insured, as the amount insured by the company shall boar to the whole amount insured thereon. Where several policies on the same subject each contain this clause, and in the event of loss, one of the compr^nies pays more than the others, the former is not entitled to any contribution from the latter. But, if only one contains the clause, the others, on paying more than their share, will be (a) Brown v. Erie .t Out. ivs. Co., 21 U. 0. Q. H. 426. {h) lb. (el Peoria Marine d F. Ins. Co. v. Lewis, 18 111 553. (d) Baltimore F. Ins. Co. V. Lomy, 20 Ind. 20. ADJUSTMENT, RE-BUILDING, ETC. 24& entitled to contribution from the company whose policy contains the clause {a). If, however, the other policies are void, the company whose policy is valid will, it seems, be liable for the whole loss (b). And, though the policy sued on contains this stipulation, yet, if a second policy effected on the property, has by sub- sequent events become avoided, and is void at the time of the loss, the full amount insured may be recovered under the policy sued on, without reference to the j^ro rata clause (c). But where property is insured in several companies, and each company contains the pro rata clause, the liability of any one of the companies to pay the insured its rateable share of the loss, is not affected by the fact that some of the other companies have paid more than their share, so that the amount already received by the insm'ed is equal to his whole loss (d). In all cases where the loss is equal to or greater than the amount insured by the several policies there can be no pro rata contribution, and the several underwriter^ are liable for the several sums insured. The clause in question is intended to prevent circuity of action and is only applicable where double insurance exceeds the loss of the insured. Where there is double insurance without this clause, the insured can proceed against any one of the underwriters if the insurance is sufficient, and recover the whole loss, and the defendant then would have his action against the others for contribution. To avoid this the clause in ques- tion is very generally introduced in policies, and in case of double insurance prevents a recovery of more than a pro rata share of the loss. It substitutes proportional abate- (a) Liuas v. Jefferson Ins. Co., 6 Cowen, (N.Y.) G35. (h) Hygtim v. ^Etna Ins. Co., 11 Iowa, 21. (c) Forbush i\ Western M. Ins. Co., 4 Gray, Mass. 337. (d) Fitzsimmons c. City F. Ins. Co., 18 Wis. 234. 250 THE LAW OF INSURANCE. merit for contribution in all cases in which the latter would otherwise have been required by the common law (a). Where there are several insurances on the same property, each subject to the pro rata clause if one company pays more than its just share, its remedy is not against the other companies for contribution, but against the insured (b). In case of a double insurance, the policies are considered as one ; and the insurers are liable jvo rata, and are entitled to contribution to equalize payments made on account of losses (c). Where property covered by several policies of insurance is destroyed, the proportion of its value to be paid by one underwriter is that which the amount of his policy bears to the amonnt of all the insurance thereon, although some of the policies cover other property in addition to that destroyed (d). The pro rata clause is generally expressed to apply with- out reference to the dates of the different policies. In marine insurance it was the practice that the first under- writer in point of time bore the whole loss to the extent of his liability. This custom was also extended to fire insurance, hence the proviso above referred to was inserted to dis- tribute the liability equally among the different co-insurers. The non-concurrency of policies is the greatest source of vexation to adjusters, and not unfrequently entails serious loss to the insured, as scarcely any two adjusters will agree on a rule, by which a specific and general policy covering the same subjects should be adjusted. The fol- lowing case will serve to illustrate the difference of opinion existirc; in the minds of eminent English experts on this point : (a) Richmondville Un. Sem. v. Hamilton Ins. Co., 14 Gray (Mass) 459 Lucas V. Jefferson Ins. Co., 6 Oowen (N. Y.) 635. ip) lb. (c) Sloat V. Royal Ins. Co., 49 Peun. St. 14. (d) Blake v. ExcJuinge Mut. Ins. Co., 12 Gray (Mass). 265. ADJUSTMENT, RE-BUILDING, ETC. 251 The example is as follows (reduced to currency for ease of calculation), viz. : — Office A, covers on dwelling $100 00 Office B, covers on warehouse 100 00 Office C, covers on dwelling and warehouse 200 00 Total $400 00 Loss on dwelling 250 00 Loss on warehouse 100 00 Total $350 00 The solution (and argument), of Mr. Bunyon, who styles it *' a very difficult case," is as follows : — Now if the assured claimed, in the first instance, for loss on the warehouse, which would be $100, and the $100 were divided in the proportions of two -thirds and one-third between offices B and C, he would have remaining $133.33 insured by office C, and $100 by office A, applicable to loss of $250 on the dwelling house, which would be insufficient to satisfy it. Hence, he would have a right to have his larger policy applied to the larger loss ; and, claiming two-thirds of $250, or $166.67 of office C, and $83.33 of office A, there would remain an insurance on the part of office C of $33.34, and of office B of $100, and the liabilities would be as follows : — Office A, on dwelling $83 32 Office B, on warehouse 75 00 Office C, on dwelling, $166.67, and warehouse $125 191 67 Total loss ^f.350 00 The late Mr. Eitcher, of the Phoenix Office, to whom the case was submitted, as quoted by Mr. Atkins, solved the problem under the rule of pro rata apportionment, requiring 252 THE LAW OF INSURANCE. contribution in the full amount upon each subject as fol- lows : DWELLING. W'ABEHOUSE. TOTAL. Office A ; $100 ... $100 Office B $50 50 Office C 150 50 200 Total $250 $100 $850 These results illustrate the operation of the Albany rule as between co-insuring companies; the specific making a, salvage at the expense of the general policy. Mr. Hore, who holds that the amount of loss upon a given subject is the amount of insurance thereon within the sum named, without reference to the amount of the policy, thus— policy for $1000, loss, $900 ; the insurance is $900, not $1000 — gives the following solution : Office A pays on dwelling $100 00 " B " warehouse 64 00 " C " " $36 00 " C " dwelling 143 00 179 00 The insured, deficiency 7 00 Total payment $350 00 Thus compelling the insured to contribute to his own loss,, with unexhausted insurance under a specific policy, which is in direct conflict with the English rule. Under the rule that insurance under compound policies become specific in the ratios of the loss upon the several items, Company C, in this instance, would become specific insurance in the proportions of $250 on dwelling, and $100 on warehouse, or as 5 is to 2, that is 5-7 of $200 $143 on dwelling, and 2-7 of $200- $57 on warehouse (in round numbers), and would pro-rate with its co-insurers in these sums respectively, which would give the following as the ADJUSTMENT, RE-BUILDING, ETC. 253 FIRST APPORTIONMENT OF INSURANCE. COMPANY. DWELLING. WAREHOUSE. TOTAL. A $100 00 $100 00 B $100 00 100 00 C* 148 00 57 00 200 00 Total insurance $243 00 $157 00 $400 00 Loss $250 00 100 00 350 00 From this apportionment it results, that the amount of insurance upon dwelling falls short just $7 of full indemnity — evidently the same $7 which Mr. Hore, in his adjust- ment, assessed to the insured. But, inasmuch as there remain $50 of unexhausted specific insurance, an J as " the claim must be so conducted as to give the insured the greatest benefit," this deficiency must be made good by the unexhausted policy B. But, as policy B, does not cover dwelling directbf, it can- not be assessed directly ; it can, however, be reached through its co-insurer C, which, fortunately, does cover dwelling, and ?/iid must contribute this delinquent $7 out of its contribu- tion to warehouse, leaving its amount thereon $7 less, or $50, and adding it to dwelling, now $143, will make its contribution then $150 ; which re-adjustment will present the following as the SECOND APPORTIONMENT OF INSURANCE. COMPANY. DWELLING. WAEEHOUSE. TOTAL. A $100 00 $100 00 B $100 00 100 00 C 150 00 50 00 200 00 Total insurance....... $250 00 $150 00 $400 00 To pay loss 250 00 100 00 350 00 from which we get the following : — , FINAL CONTRIBUTION. COMPANY. DWELLING. WAREHOUSE. TOTAL. SALVAGE. A $100 00 $100 00 B $66 67 66 67 $33 33 C 150 00 33 33 183 33 16 67 Total payment $250 00 $100 00 $350 00 $50 00 •Theexactfiguresof Co. C are $142. 86 on dwelling, and$57.14ou warehouse. 254 THE LAW OF INSURANCE. This operation fully illustrates the differance between pro rata and rateable proportions as applied to contributive liability. Under the policy, C's jpro rata of insurance was relatively $57 and $143, but its rateable proportion was $50 and $150 respectively ; thus changing the respective amounts, but not increasing the aggregate. Company A makes no salvage here, because, with the 'pro rata contribution liability of Company C, its co-insurer, the total insurance upon dwelling is short of indemnity ; hence there can be no salvage on this item. Company C makes its salvage on warehouse, where the insurance, even after C had contributed to the deficit on dweliuig, was in excess of the loss. The following ruling of our courts, if universally and rigidly applied, might be found in some cases to be oppres- sive : Plaintiffs insured with defendants $2,000 on a building- and $2,000 on the furniture, and with another company $2,000 on the building and furniture together, and a loss occurred of $1,050 on the building and $878 on the furni- ture. The defendant's policy provided that in case of loss the assured should recover from them only such portion thereof as the amount insured by them should bear to the whole amount insured on the property, and under this they contended that the other insurance must be treated as one for $2,000 on the building and $2,000 on the furniture, so that they would be liable only for one-half of the loss on each. Held, that as the whole amount insured was $6,000, of which defendants had taken $4,000, they were liable for two-thirds of the loss, although the other company would be liable for $2,000 on either the building or furniture («). The more equitable adjustment of this claim would be to treat the other company's general policy in the adjust- ment of the loss as a specific insurance on the first item of building, and this loss being $1,050, each company should therefore pay one-half. (a) Trustees, ete., v. Western Assce. Co., 26 U. C. Q. B., 175. " ^ ADJUSTMENT, RE-BUILDING, ETC. 255 "Western" paying $525 00 Other company 525 00 Total less on building |1050 00 The other comyany's general policy having paid $525, fihould now only be called on to pay its pro rr/ ^(tjproportion of the loss on furniture ($878) as the sum, it has been reduced to $1,475, bears to the total amount now covered, including the specific policy of the " Western " $2,000, in all $3,475 which would make, "Western" pay $505 Other company 373 Total loss on furniture $878 By this adjustment, the Western would be called on to pay only $1,030 instead of $1,284, as it was by the fore- going ruling. Suppose the loss on the furniture or building to have been $4,000, and the " other company " settles on the basis of the above ruling, and gets a discharge from the claimant, by paying one-third, $1,3 34, how is he to get the balance of his claim, $2,6C6, when the " Western" policy being specific, covers only $2,000 on either item. Such an adjustment would be : — " Western " exhausts its specific amount by paying $2,000 Other company having been discharged by paying 1,334 Claimant would lose 666 Amount of total loss $4,000 It might be held by the court, that inasmuch as this un- exhausted sum remains, the claimant would have recourse against the other company for this amount, $666, which would cover his loss. The case is suj^posed, merely, to show, how serious complications might arise out of such a general ruling. Similar adjustments to the above have been made, resulting in loss to claimants, and leaving un- exhausted policies. Now suppose the loss to have been $2,500 on building, 256 THE LAW OF INSURANCE. , and $2,500 on furniture, and the specific insurance to have the following condition copied from a policy, viz. : '* Any " general policy on different properties to be treated as a ^* specific policy on each property for the whole amount *' thereby insured." What would be the adjustment of the loss ? Western could only be called on to pay, on building $1,250 '' on furniture 1,250 Other company, total amount of its policy 2,000 Claimant would lose 500 Total amount of loss $5,000 And this loss of $500 he would have to bear, notwith- standing that there was still unexhausted of the specific policy $1,500, as by the above condition, the contract of indemnity he had accepted would be fully carried out. Numberless illustrations might be added to the above, but the object of this chapter va rather to pomt out the manner in which difficulties similar to the foregoing may be obviated in the event of a loss, than to give instructions and lay down rules relative to extrication from them when they occur. The adjuster must make the adjustment in accordance with the conditions of the policy, and the contract entered into, and as it is in the power of the assured alone, when effecting the insurance to have all details clearly defined, he alone, is also to blame for any complications that occur in the settlement after a loss. The following simple pre- cautions would avoid many of the difficulties of which the insured complains. 1. Exa'^ine your policy carefully, and decline all that have conditions which cannot be clearly, and under all circumstances, complied with. 2. See that all policies covering the same subjects are concurrent, each using precisely the same words in describ- ing the subjects insured. ADJUSTMENT, RE-BUILDING, ETC. 257 3. Pay an adequate rate of premium for the risk and apply the same rule to cheap indemnity against loss by fire that is applied to any other matter. 4. When a loss occurs make out an honest and clear statement of the amount thereof, and compromise for nothing less. If these simple precautions are taken claimants will have no reason to fear any adjuster, or that the latter will be able to apply the "Finn," "Alban}-," "Reading," or any other rule to his damage or loss. It may be that the practice of hawking about risks from ofiBce to office to beat down the rate to a non-remunerative figure, has begotten a desire on the part of the companies to apply the same [principle in the settling of claims. There can be no doubt, however, that both these courses are to be deprecated. The sworn returns made to Government, prove that the business of fire insurance in Canada has for several years past been unremunerative and has been done at a loss to the companies engaged in it, hence, the recent advance in rates which is by some very unjustly found fault with, for on an adequate receipt of premium by the companies for the hazards assumed, depends the very indemnity which it is claimed the policy gives, and that this fact may be fully reaUzed, it may be here stated that the nineteen companies which make returns of the amount they have at risk in the Dominion alone, adds up to the large sum of $251,725,940 36. Any reflective person must see how small in comparison to these figures must be the total capital of the companies. This capital should, therefore, be protected by remunerative rates to avoid disaster not only to the companies, but also to the insured. Legislation for a uniform policy may bo objected to, but there '.an be no sound objection raised to compelling all companies, licensed to do business in Canada, to use the same form of policy and conditions as are used at the parent office. The inviduous distinction drawn in framing B 268 THE LAW OP INSURANCE. " for this Dominion a policy with special conditioTis different, from what is in general use is certainly not very creditable to us as a people, if it is considered a necessity. The 14 Geo. 3 c. 78. passed with a view to deter ill- minded persons from wilfully setting their houses on fire with a view of gaining for themselves the insurance money is in force here (a). Section 83 provides that it shall be lawful for the directors of an insurance office, upon the request of any person interested in or entitled to any house or building which may be burnt or damaged, to cause the insurance money to be laid out and expended so far as the same will go in rebuilding, re-instating and repairing the premises, unless the insured shall within sixty days after the adjustment of his claim give sufficient security to them that the money shall be laid out in this manner, or unless it shall be at that time settled and disposed of amongst all the contending parties to the satisfaction of the insurers (b). Under this statute it is not absolutely necessary that the request should be in writing, but there must be a distinct request made by the persons interested, to have the insur- ance moneys laid out in rebuilding and repairing the premises, and if the party interested does not make the request before the insured is settled with he cannot make it afterwards. If a tenant from year to year has insured the premises demised to him, he has a right to have the money laid out in rebuilding pursuant to the statute ; so, also, has his landlord or the owner of the premises. But the party interested has not a right to rebuild himself, and then charge the insurers with the expense. The proper course is to api)ly for a mandamus to compel the insurers to lay out the insurance moneys according to the provisions of the statute (c). (o) Sti7ison V. Pennock, 14 Grant, 604. (b) Ah to an accidental firo within the meaning of this statute see Oatttn V. Wald IS) U. C. Q. B., 586. (c) Simpson v. Hcottish At. F. dj L. Ins. Co., 9 Jur. N. S. 711 ; 1. H. «fe M. 618. ADJUSTMENT, RE-BUILDING, ETC. 259 Where a mortgage contains no covenant on the part of the mortgagor to insure, but he does insure, and a loss by fire occurs, whereby the insurance money becomes payable, the mortgagee is entitled nnder the statute to have the in- surance money laid out in rebuilding, although the mort- gage is not then due (a). * The insurers have no right to reinstate or rebuild, except through an express stipulation in the policy to that effect, but the policy usually contains a condition, that it shall be optional with the company to replace the articles lost or damaged, with others of the same kind and equal goodness, and to rebuild or repair the buildings within a reasonable time, giving notice of their intention to do so within thirty days after the preliminary proofs shall have been received at the office of the company (i). J If the company, in pursuance of the condition, exercise the option to rebuild, the contract becomes substantially a building contract, and an action upon the policy to recover the loss cannot be sustained if the company properly carry out the election to rebuild (c). But where the insurers having the option to rebuild, elect to do so, they must proceed to reinstate the insured without unnecessary delay, in premises as good and substantially the same as those destroyed, and if the insurers do not faithfully carry out the election to rebuild, the insured is not barred of his action on the policy. If the insurers had proceeded with a part of the building, but had not for some reason completed it, they could not be forced either to finish the house or take it down and build another, and such partial restoration of the premises would be no bar to an action for the full amount insured (d). Where the insurers elect to rebuild and partially perform (a) Stinson v. Pennock, 14 Grant 604. (b) Wallact' v. Inmrance Co., 4 La. 289. (c) Seals V. Home Ins. Co., 36 N. Y. 522. (d) Home D. M. Ins. Co. v. Thomson, 1 E. ds A. Reps. 260. 260 THE LAW OF INSURANCE. the contract, but desist therefrom before fullv completing it, the rule of damage in an action brought by the insured for the non performance of the building contract, is the amount it would take to complete the building by making it sub- stantially like the one destroyed, independent of what had already been expended thereon (a). Where the condition of a policy of a mutual insurance company provides that it shall be optional with the company to pay the loss or damage either in money or by rebuilding such real property, or by repairing, the performance of the stipulation as to rebuilding is optional with the company, and cannot be enforced against them, for indemnifying the assured in this way is at variance with the principle and provisions of the act as to mutual insurance companies. Con. Stat. U. C. c. 52. It seems that independent of the statute the Court of Chancery would not in an ordinary case enforce specific performance of such a stipulation for the proper remedy for non payment of the loss is an action at law (b). When the by-laws of a company provide, that no insur- ance shall be effected for more than two-thirds of the value of the property, a condition as to rebuilding would be incon- sistent with this by-law, for how could the insurers rein- state the premises, and thereby restore them in their full value, when they could only by the terms of their contract be liable to the insured for two-thirds of the value. In case of a mutual company, the statutes regulating such corpo- rations provide means for ascertaining the amount of actual loss sustained in each case, and point out the mode in which it may be recovered ; and it is doubtful whether the premium notes of the insured can be made use of for pro- curing funds for satisfying a collateral contract, which the statutes give the company no power to enter into (c). {a) Morrell v. Irving F. Ins. Co., 33 N. Y. 429. (6) Home D, M. Ins, Co. v. Thompson, 1 E. & E. Reps, 247. (c) Home D. M. Ins. Co. v. Thompson, 1 E. & A. Reps. 255-6. ADJUSTMENT, RE-BUILDING, ETC. 261 Where a contract provides for an election, the party making the election is in the same position as if he had originally contracted to do the act which he has elected to do. Where, therefore, the policy j)rovides that the insurer instead of paying the amount of the loss may reinstate the premises and they elect to do so, they are bound to reinstate the premises according to their election, although reinstate- ment becomes impossible by reason of the act of a third party, provided the reinstatement is lawful at the time it is under- taken, and continues lawful to the time of action brought (a). In the above case, the erection of the building was pro- hibited by the municipal authorities. To meet such a case as the above, a condition is sometimes inserted, that the insurers, when prohibited from reinstating, may pay such sum as would be requisite to reinstate if no prohibition had intervened. When a fire occurs the insurers, it would seem, have a right to enter upon the premises for the purpose of ascer- taining the damage and when it is necessary to retain pos- session of them for a reasonable time ; but if they retain possession for an unreasonable time they will be liable in damages to the insured (b). In some cases the right to enter on the premises is given by an express condition of the policy, and when such is the case the condition will of course govern the rights and liabilities of the parties. The insurers, on paying the amount of the loss, have a right to an assignment from the insured of any right of action which the latter may have against a third person for his wrongful act in'causing the loss. The insurers in such case are entitled to be subrogated in the rights and actions of the insured, fl,nd the fact that the amount insured is less than the total damage will not disentitle the insurers to (o) Brown v. Royal Ins. Co., 1 E. & E. 853. ip) Bunyon on F. Ins., 46 ; Oldfield v. Price, 2 F. & F., 81. 262 THE LAW OF INSUBANOB. recover the amount they have paid in an action against the wrong doer (a). In some cases the right of subrogation is given by an express condition of the poHcy. But where the interest of a mortgagee in possession has been insured co nomine, at his own expense, the insurers, in case of a loss by fire before the mortgage debt is paid, can- not upon an offer to pay the loss and the amount due on the mortgage above the loss, maintain a bill in equity to have the mortgage assigned to them, and to be subrogated to the rights and remedies of the insured under the mort- gage {h). Where a mortgage interest is insured and on a loss occurring the insurers pay the amount to the mortgagee they will be entitled to an assignmert of the mortgage {c). If, after insurance, the insured sell the property to another party, he can only recover to the amount of the purchase money unpaid at the time of the fire, and upon payment of his claim by the underwriters, the latter will be entitled to all the securities held by the assured as against the vendee {d). Where explosions by gas are protected by the policy, and a loss occurs from the negligence of the gas company, the insurers will be responsible, but the primary liability is that of the gas company, and, if the insured enforces his claim against the insurers, they will be entitled to stand in his place and recover in his name compensation from the gas company (e). An insurance company having paid a loss on a dwelling house, caused by sparks from a locomotive, and for which loss a railroad company was liable. Held, that the assured might (a) Quebec F. Ins. Co. v. Molson, 1 L, C. R., 222. (6) Suffolk Jf. Ins. Co. v. Boy den, 9 Allen, Mass., 123. (c) Burton v. Gore D. M. F. Ins. Co., 12 Grant, 170 ; see also Craioford v. St. Lawrence Ins. Co., 8 U. C. Q. B., 135. (d) Aitna F. Ins. Co. v. Tyler, 16 Wend. (N. Y.) 385. («) Mose V. Hastings Gas Co., 4 F. & F. 324 ; Bunyon on P. Ins. 40. ADJUSTMENT, RE-BUILDING, ETC. 263 in the first place apply to either the railroad company or ■ the insurance company ; that if he first applied to the rail- road company, his claim on the insurance company would be diminished by the amount received from the former ; that if he first obtained indemnity for his loss from the insurance company, the latter was subrogated to his rights as against the railroad company, and might bring an action at law in his name against it, and he could not, by the execution of any release, discharge the railroad company from their liability {a) Where the owner of realty insures and then sells the pro- perty on condition, that the vendee insures the property for the benefit of the vendor, and to secure the unpaid purchase money ; if the vendee insures pursuant to the agreement, and the insurers, on a loss happening, pay the amount to the vendor, the unpaid purchase money will be reduced by the amount paid (b). ■ Reinsurance is a valid contract at the common law, and there is no difference in principle between reiuFurance against fire and reinsurance against loss by perils of the sea (c). Reinsurance was formerly prohibited in England, by the Statute 19 Geo. II., c. 37 (d). This statute is now repealed, and reinsurance is extensively practised there. In Canada, the charters of most mutual companies expressly allow re- insurance to be made (e) ; and in this country, reinsurance is practised ad libitum by proprietary as well as mutual companies. The clause as to double or other insurance is in opera- tive in a policy of re-insurance, unless the re-insured has made other re-insurances, for the clause is held to refer (a) Hart V. Wextern R. R., 13 Met. (MiiHs) d9. (b) Leclaire v. Crasper, 5 L. C. R. 487. (c) New York B. F. Ins. Co. v. New York F. Ins. Co., 17 Wend, (N.Y.) 359. {(l) See Andree v. Fletcher, 2 T. R. 161 ; 3 T. R. 266. (e) See 27 & 28 Vic. c. 38, s. 8 ; (Out.) 31 Vio. o. 32 s. 4 ; See also (Dora.) 34 Vic. c. 9 s. 4, as to life companies. 264 THE LAW OP INSURANCE. entirely to double re-insurances on the same interests, and if there be no other re-insurances the re-insurer is liable for the amount of loss within the policy. When the policy of the original insured contains pro- visions for contribution between the several insurers, and there is more than one policy on the subject of insurance the re-insured can nevertheless recover from the re-insurers any loss he has to pay within the amount of his policy. In the contract of re-insurance the condition of the policy requiring notice and preliminary proofs in case of loss is complied with when the first underwriter transmits to the re-insurer such notice, and the proofs made by the original insured. It has been held that a total loss under a reinsurance policy providing for the estimation of damage according ta the cash value of the property is the whole amount rein- sured, not exceeding the whole value of the reinsured, subject in the policy of reinsurance, and not the proportion, which the amount reinsured bears to that originally insured. The party reinsured can, therefore, recover the whole amount reinsured, unless a pro rata clause is inserted in the contract of reinsurance. The claim of the reinsured rests upon their liability ta pay the loss to the original insured, and not upon "leir greater or less ability to pay it in full, and, therefore, the re-insured can collect of the reinsurer before payment to the original insured ; and though the company reinsured becomes insolvent, the reinsurer is not released from pay- ment in full, by reason thereof {a). Keinsurers may make every defence the reinsured could, then make, when loss remains unadjusted between reinsured, and party originally insured, on the terms and conditions of the policy, and where the reinsured is not liable on the (a) Eagle Ins. Co. v. Lafayette, his. Co., 9 Ind. 443 ; Home v. Mut. Safety Jna. Co., 1 Sandf. (N. Y.) 137. ADJUSTMENT, RE-BUILDING, ETC. 265 original policy, a recovery cannot be add against the reinsured («). The plaintiffs premises were insured in the London & Liverpool Company, from the 2nd October 1865 to 2nd October 1866. Before the term expired, he received notice from W. the agent at Newcastle, that this company would renew the policy on the same terms, and accordingly he paid VV. the premium money, and got his receipt. A, the general agent at St. John, declined to renew the policy, and paid the premium to defendants, who issued a policy (taking the description of the premises from the London & Liver- pool's book), dated the 16th October, 1866, but in the body of it, insuring from the 2nd October, 1866, to the 2nd October, 1867. The premises were destroyed by fire on the 13th October, 1866, before the policy issued ; but the plain- tiff did not know that he was insured by defendants, until he received the policy from W, who also acted for them. It was held, that this amounted to a reinsurance and there being no fraud, the plaintiff was entitled to recover ; it was held also, that the policy related back to the 2nd, though dated on the 16th October, after the loss occurred {b). (a) Eagle Ins. Co. v. Lafayette Ins Co., 9 Ind. 443. (6) Giffardv. Queen Ins. Co., 1 Hannay 432. CHAPTER X. THE PROCEEDINGS AT LAW UPON POLICIES. The possession of an insurable interest will not alone give a right to recover ; there must also be a contract of insurance between the person having such interest, or his assignor or trustee, and the company. Thus, where a marine policy is made in this form : The . . . Insurance Co. of, etc., on account of A B, loss, if any, payable to C D, do make insurance, etc., it is held that the contract is made with A B, and that making the loss payable to C D does not constitute him the party insured, and therefore he cannot recover upon the policy in his own name. But the inser- tion, after the name of A B in the policy, of the words " for or in the name of all persons interested," etc., or ** for whom it may concern " would enable C D or any other per- son, whether named in the policy or not, to recover on shewing an insurable interest, and that he was the person on whose account the insurance was bona fide intended to be made. So, if the words *' as broker," or "as agent," were inserted after A B's name, parol evidence would be admissible to shew the right and interest of an undisclosed principal who could sue upon the policy. But if A B described himself as the agent of a particular person the policy, by its necessary construction would enure only to protect an interest of the party thus named as principal (a). The policy must shew in whose favor or for whose benefit and use it is made, either by expressly naming the parties, or by implication, as in policies, "for whom it may con- cern," as no one but the party thus specifically named or intended by the general words has any rights under the policy. (a) McCollum v, JStna Ins. Co. 20 U. C. C. P., 289 ; see also Richardson V. Home Ins. Co., 21 U. C. 0. P., 292. THE PROCEEDINGS AT LAW UPON POIICIES. 267 When there is an express contract of insurance with a particular person named in the policy, the action must be brought in the name of such person, although the loss is by the terms of the policy made payable to another (a). In this case the policy did not contain the words " for and in the name and names of all and every other person or persons to whom the same doth, may or shall appertain in part or in all." , • Without such a clause as the latter no one can take advantage of the policy except the party expressly named in it (b). Under the plea of non-assumpsit the plaintiff must establish a contract by the insurers with himself, and to do this he must show that he is the person named in and by the policy insured, or the person benefically interested in the insurance in a way that entitles him to sue upon the policy. Where the name of C D only is mentioned as the assured, though by the policy the loss is payable to A B ; that only means payable to A B as agent or on behalf of the party on whose account the policy is made (c). An endorsement in writing on a fire' policy, signed by the company, expressing their consent that the loss, if any, is to be payable to the order of A B who is no party to, nor is his name mentioned in the contract, does not entitle A B to recover on the policy in his own name, and he could maintain no action except as assignee, and in the absence of any order by A. B. the loss would under the contract be payable to the party named in the body of the policy as the assured. It would, therefore, be sufficient for a declaration on such a policy to allege that the loss was not paid to the insured, nor to A B, and as the endorsement gives A B no legal interest in the property, it does not prevent the (a) Every v. Prov. Ins. Co., 10 U. C. C. P. 20. (6) 76.23. (c) Orchard v. ^tna Ins. Co, 5 U. 0. C. P. 445 ; McCoullm v. ^tna Int. Co., 20 U. C. C. P. 289 ; Every v. Pro. Ins. Co., Supra. 268 • THE LAW OF INSURANCE. assured from maintaining an action in his own name, nor is it necessary to aver any order from A B in favor of the insuired (a) Where property was insured in the name of 0, but the poH«;y contained the following clause : " Loss, if any, pay- able to the order of B, if claimed within sixty days after proof, his interest therein being as mortgagee ;" it was held, that B must be treated as the party insured, and that he could maintain an action on the policy in his own name. It was held also, no objection to B's recovery, that the pre- liminary proofs were furnished by him, and not by (b). The ground of the decision in this case was, that B was mortgagee, and by the terms of the mortgage, insurance was to be made for his benefit, and that the premium was in fact paid by him. If a mortgagor procure insurance in his own name, but with a stipulation that the amount of loss, if any, shall be paid to the mortgagee, a suit on the policy may be main- tained in the name of the mortgagee. If the property is alienated by way of mortgage after the date of the policy, and the policy is ratified and confirmed to the mortgagee, under the Con. Stats. U. C. c. 52, s. 30, the latter may maintain an action thereon in his own name (c). Where, after the making of the policy, the insured mort- gages the property to one person, but the mortgage is not rati- fied and confirmed to the mortgagee, as required by the Con. Stats. U. C. c. 52 s. 30, so that the policy becomes void, a subsequent mortgage by the insured to another person not claiming under the first mortgagee, will not set up liie policy, though it is assigned to the second mortgagse and ratified and confirmed to him pursuant to the statute {d). (o) Ketchum v. Protection Ins. Co., 1 Allen 136. (6) Brush V. jEtna Ins. Co., 1 Oldright, 459 ; «ee also Manning v. Bowman, Sup. Ct. (N.S.) T. T. 1872. (c) Kreutz v. Niagara Dia. M. F. Ins. Co., 16 U. C. C. P. 573 ; Burton v. Oore Dis. M. Ins. Co., 14 U. C. Q. T^. 842. (d) Burton v. Oore D. M. F. Ins. Co., 14 U. C. Q. B. 342. THE PROCEEDINGS AT LAW UPON POLICIES. 269 Where a policy is issued to two persons jointly, both should join in bringing an action for a breach of the con- tract, and the omission to join them is a good defence. If the one partner has assigned all his interest in the policy to the other, still he must proceed in the name of the orig- inal parties, unless he can show notice of the assignment to the company, and of their assent thereto (a). If one partner insures the partnership property in his own name, for the benefit of the firm, he may sue alone in his own name on the joint account of himself and his co- partner {b). Where the plaintiff, acting as agent for a third party, procures an assurance on a vessel belonging to the latter, and by the terms of the policy the loss is to be paid to the plaintiff, he may maintain an action thereon in his own name for the benefit of his principal, the latter being inter- ested in the vessel (c). Where an insurance is made in the name of the agent for the benefit of the principal under a prior authority or sub- sequent adoption by the latter, the agent cannot recover in - his own name and for his own benefit on the policy (d). An assignee of a policy of insurance cannot sue on it in his own name, although the company agree thereby to indemnify the assured and his assigns (e). But when the policy is ratified and confirmed to the assignee under the Con. Stats. U. C. c. 52 s. 30, he may sue thereon in his own name (/). Where a renewal receipt has been issued to the assignee of a policy, and he has paid the premium, an action of assumpsit, will lie by him as on an express agreement and (a) Tat" V. Citizens M. F. Ins. Co., 13 Gray, Mass., 79. (6) Dunlop V. ^Etna Im. Co., 2 U. C. C. P. 252. (c) Dimock v. New Brunsxoick M. Assce. Co., 1 Allen, 398. (d) Cumck V. M. Ins. Co., 6 L. (J. J., 97. (e) Beemer v. Anchor Im. Co., 16 U. C. Q. B., 485. See ante p. 197. (/) Kreutz. v. Niagara Dis. M. F. Ins. Co., 16 U. C. C. P., 131 ; Stormt v. Canada F. M. Ins. Co., 22 U. C. C. P., 79. 270 THE LAW OF INSURANCE. promise of the insurance company to pay him for any loss which may occur (a). Where property insured has been maliciously and wilfully burnt by a third person ; no action can be sustained by the insurance company, which had paid the loss, against such third person, in its own name ; and the statute inflicting against the incendiary a penalty of three times the loss in favor of the party injured will not give such right of action (6). In such case as the foregoing the suit must be brought in the name of the owner of the property for the use of the insurer. The different rule applied in cases of marine insurance rests upon the doctrine of abandonment and sub- rogation of the insurer to the rights and title of the insured, a doctrine which has no existence in cases of fire insur- ance (c). The Statute of Canada 29 Vic, c. 28. s. 7., enacts that the person entitled to the benefit of a covenant on the part of a lessee or mortgagor to insure against loss or damage by fire, shall on loss or damage by fire happening, have the same advantage from any then subsisting insurance, re- lative to the building or other property covenanted to be insured, effected by the lessee or mortgagor, in respect of bis interest under the lease, or in the property, or by any person claiming under him, but not effected in conformity with the covenant as he would have from an insurance effected in conformity with the covenant. Although B has a covenant from A, the original insurer, to insure the pro- pe rty against loss or damage by fire, this section will not authorize A to sue for his own benefit, and the benefit of B. if neither A nor B had any interest in the insured pro- perty at the time of the fire (d). (a) Peoria M. (& F. Ins. Co. v. Hervey, 34 111., 46. (b) Rockingham M. F. Ins. Co. v. Boslier, 39 Me., 263. (c) Peoria Marine F. Ins. Co. v. Frost, 37 111., 333. (d) Smith V. Prov. Ins. Co., 18 U. C. C. P. 223. THE PROCEEDINGS AT LAW UPON POLICIES. 271 A contract of insurance being a mere personal contract^ in no way attached to, or running with the realty, does not pass either to the heir-at-law, or the grantee of the property insured. The executor or administrator is the only person who can take the contract, and enforce it. No other person except the insured can have any interest in or right to sue upon the policy without a valid assignment thereof to him (a). In general the contract is by its express terms limited to the personal representatives, the operative words of the contract in the body of the policy usually being "to make good unto the insured his executors, administrators or assigns" all such loss or damage by fire, etc. Where, l)y the terms of a life policy the insurance money is not payable until surrender by the executor of the assured, but the latter in his lifetime has pledged it with another person to secure certain claims, and the pledgee at the time of the death is the legal holder of the policy, and cannot be compelled to transfer it except on payment of his claim ; the executor cannot recover against the company, excei)t by a surrender to the company of the policy, in the usual way (6). A condition is inserted in all policies to the effect, that no suit or action against the company for the recovery of any claim under or by virtue of the policy, shall be sustain- able in any court of law or equity, unless such suit or action shall be commenced within the term of twelve months next after any loss or damage shall occur, and in case any suit or action shall be commenced against the company after the expiration of th3 said twelve months, the lapse of time shall be deemed and taken as conclusive evidence against the validity of the claim. A failure to comply with this condi- tion constitutes a complete bar to the action (c). (a) Wyman v. Prosser, 36 Barb. (N. Y.) 368 ; see, however, fVyman v, fVyman, 26 (N. Y.) 117. (b) Conway v. Britannia L. Assoc. Co., 8 L. C. J. 162. (c) Cornell v. Liverpool db L. Ins. Co., 14 L. C. J. 256. 272 THE LAW OF iriURANCE. Various cases have established that a condition of this character is reasonable and valid (a). When a policy contains such a condition, the general -statute law of the country as to limitations has no applica- tion, and the action must be commenced within the period limited by the condition (b). Generally the Act of the Legislature incorporating a mutual company contains a clause limiting the time within which all actions must be brought (c). It seems that where the limitation rests only on a con- dition of a policy it operates as a contract only, and that the limitation fixed by it must, upon the principles govern- ing contracts, be more flexible in its nature than one fixed by statute and liable to be defeated or extended by any act of the insurers, which prevents the action being brought within the prescribed period {d). And it seems the condi- tion will not be enforced wh^^n so necessarily inconsistent with the nature of the interest insured as to render a re- covery unattainable by the exercise of due diligence (e). This condition will not apply, if after payment of the pre- mium, the granting of an interim receipt and acceptance of the risk, the policy is wrongfully withheld by the company (/"). But, the fact that the policy is not in the possession of the plaintiff, is not in all cases an answer to the defence founded on the condition. To an equitable replication setting up, that when the loss occurred, the defendant had not issued a policy to the plain- tiff, although he had previously effected an insurance with them, and that, although requested, they refused to execute (a) See Ripley v. ^tna Im. Co., 30 N. Y., 136 ; Roach v. New York & Erie [ns. Co., 30 N. Y., 546 ; Woodbury, S. B. v. Charter Oak Ins. Co., 31 Conn., 518 ; Peoria M. d' F. Im. Co. v. WhiWhiU, 2ry III., 466. (6) See Brown v. Roger Williams Ins. Co., 7 R. I., 301. (c)lSee 29 Vic, c. 37. (d) Peoria M. Ins. Go. v. Hall, 12 Mich., 202. (e) Longhurst v. Star his. Co., 19 Iowa, 364. (/) Penley r '^eacon Assce. Co., 7 Grant, 130, 5 U. C. L. J. 213. THE PROCEEDINGS AT LAW UPON POLICIES. 273 the policy until after the commencement of the action, and that in consequence of such delay, he was prevented from suing within six months, as required by the conditions of the policy ; it is a good answer to shew, that prior to the plaintiff first effecting the insurance mentioned, he had held a large number of policies from defendant's office on the property, which policies all contained the condition as to actions being brought within six months from the time of the loss, that it was one of the usual conditions with defend- ants, as plaintiff well knew, that the insurance was effected on the same terms and conditions as all the others, that before the expiration of the six months the policy was exe- cuted and ready to be delivered to ^^daintiff, of which plaintiff had knowledge, and that the defendants never refused to execute the policy, and did not withhold it to prevent the plaintiff bringing his action (a). Where an action at law was brought on a policy within the period of limitation fixed by such policy, which it was found could not be sustained by reason of a mistake in the form of the policy, and a bill in equity was brought while that suit was pending, and after the period of limitation had expired, for the correction of the policy and for an injunction against the defence set up in the action at law. Held, that the suit in equity was not barred by the expi- ration of the time limited (b). If the insured regularly commences his action before the expiry of the time limited, and is non-suited, a subsequent action commenced after the expiry of the time, will be too late (c). The clause as to limitations is a condition subsequent, and the right of action having once fairly vested can only be deves- ted under this condition by subsequent lapse of time, and therefore becomes a matter of defence — the subject of a (o) Hickcy v. Anchor Assce. Co., 18 U. C. Q. B, 433. (b) Woodbury Savings Dk. v. Charter Oak Ins. Co., 31 Couu. 518. (c) Wilson V. ^Etna Ina. Co., 27 Vt., 99. 8 274 THE LAW OP INSUBANCE. plea ; and it need not it the first instance be shown in the declaration that the condition was complied with (a). Under such a condition time does not begin to run until the cause of action accrues and where the condition requires the action to be brought within twelve months "next after the cause of action shall accrue," this expression refers to the period at which the plaintiff is entitled to commence his action, and if, by the terms of the policy, the loss is not payable until the expiry of a specified number of days, or until compliance with certain conditions, the cause of action does not accrue until the loss is payable, although the loss has occurred before. Where, therefore, the policy provided that payment of losses should be made in sixty days after the loss should have been ascertained and proved, and the defendants pleaded that the Jire took place more than twelve months before the commencement of the suit ; the plea was held bad on demurrer (b). Where a condition provides that loss shall not be paid until sixty days after the loss has been ascertained and proved, the sixty days do not begin to run until all proofs, declarations, and certificates are given in, and no action can be maintained until the sixty days have expired, al- though the defendants have previously declared their inten- tion to resist payment (c). It is held in the United States when the policy provides that " payment will be made in sixty days after loss, proof, and adjustment thereof," that an action will lie within the sixty days if the insurers refuse to adjust the loss (d). In the case of re-insurance, if the policy by which the (a) Ketchum v. Protection Ins. Co., 1 Allen, 136 ; Brady v. Western Ins. Co., 17 U. C. C. P., 597. (6) Lampkin v. Western Assce. Co., 13 U. C, Q. B., 361. (c) Hatton v. Prov. Ins. Co., 7 U. C. C. P., 555; see Hochster v. De La To' T 2 E. & B., 678 ; Frost v. Knight, L. R. 5. Ex., 322. \^^f Phillips V. Protection Ins. Co., 14 Mo., 220; Indiana Ins. Co. v. Rut- ledge, 7 Ind., 25. THE PROCEEDINGS AT LAW UPON POLICIES. 275 re-insurance is effected provides that no action shall be brought unless commenced within twelve months after the loss or damage, this latter expression signifies the loss or damage to the subject insured and not the loss or damage to the party re-insuring, by reason of his having to pay the loss. The action must therefore be brought within twelve months after the loss of the subject insured, irre- spective of the time of payment by the party re-insured (a). The Statute of Canada, 29 Vic. c. 37, s. 3, provides, that no action shall be brought against a mutual insurance com- pany, except within one year after the happening of the loss or damage, in respect of which such suit is brought, saving in all cases the rights of parties under legal disability. An imprisonment for a misdemeanor will not create a " legal disability " within the statute, so that it will not run against the insured, as provided in this clause, for, notwith- standing the imprisonment, the party might maintain an action. It seems, however, an imprisonment for treason or felony would create such a disability, for in such cases the party could not sue (6). The clause as to limitation may, in some cases be waived by the acts of the company or their agent. Thus, where a fire policy not under seal contained a six months limitation, and within this time, and before breach of the condition, plaintiff presented his claim for loss, when it was agreed by parol between him and one D, acting for defendants, that if plaintiff would not prosecute his claim until S returned from England, defendants would pay the same and take no advantage of the limitation clause above referred to. The insurance had been effected by and through D, and the premiums paid to him or to S, who was associated with him in the management of the company, and the policy signed by D as " manager for the said Co. in Ontario," (a) Prov. Ins. Co. v. jEtnalns. Co., 16 U. C. Q. B., 135. (b) Tallman v. Mutual F. Ins. Co., 27 U. C. Q. B. 100; see Sullock v. Dodds, 2 B. & Aid., 258. 276 THE LAW OF INSURANCE. under an express authority from the directors, two of whom subscribed their names to the same, opposite a seal with the name of the company upon it. The secretary also signed his name to the authority. It also appeare i, that after the expiration of the six months there had been an actual tender of payment, though of a lesser sum than that claimed, by the agent of defendants to plaintiff. Held, that D had power to bind the company as their agent, and that what had taken place between him and plaintiff, amounted to a waiver in law of the six months condition, and that the plaintiff was, therefore, entitled to recover (a). The condition although assented to by the parties, operates as a forfeiture of the right of action. It should, therefore, be construed strictly and slight evidence of waiver will, as in other cases of forfeiture be sufficient to defeat its applica- tion (b). Where insurers, by holding out to assured hopes of an amicable adjustment, have themselves caused the delay, they cannot take advantage of a stipulation in the policy, that the suit shall be brought within twelve months next after a loss and damage, or claim shall be barred (c). . Where a company is incorporated by Statute of Ontario, and has its chief place of business in that Province, if an action is brought on a policy issued there, service of pro- cess on an agent of the defendants in Quebec, will not be sufficient if ouch agent is only an agent for specific purposes, and has not charge of an offtce belonging to the company for the transaction of its business generally, and without limitation {d). In this case the defendants act of incorporation prescribed a mode of service on foreign corporations which had not been followed. As to service on the company the 31 Vic. c. 48 s. 10, requires all companies to which the provisions of the act (a) Brady v. Western Ins. Co., 17 U. 0. C. P. 597. (6) Ripley v. Mtna Ins. Co., 29 Barb. (N. Y.) 552. (c) Grant v. Lexington Ins. Co., 5 Ind. 23. (d) Macpherson v. St. Lawrence I. M. Ins. Co., 6 L. C. R. 403. THE PROCEEDINGS AT LAW UPON POLICIES. 277 apply to file in the office of either of the Superior Courts of law or equity in that one of the Provinces in which it has its chief agency, a power of attorney from the company to its af]jent in Canada, authorizing him to receive service of process, and service as provided for by the act is declared to be sufficient. A suit on a fire policy may be tried by a jury (a). In declaring on a policy of insurance it is necessary to allege the interest of the party or parties on whose behalf the insurance is effected, at the time of the insurance and of the loss. When, therefore, an action was brought by A, and the declaration contained statements purporting that B was also a party insured, and that the action was brought on his behalf, the declaration was held bad for want of a distinct averment that B was interested in the property at the time of insurance and at the time of the loss. If A had been solely interested in the policy nothing should have been alleged as to B, and if B had been equally or jointly interested it should have been distinctly so stated and his interest should have been averred (b). . Though the existence of the interest at the time of the loss must be alleged, it need not be particularly specified (c). On this point the rules of court provide that in actions on policies of insurance the interest of the assured may be averred thus : That A, B, C, and D, or some or one of them, were or was interested," etc., and it may also be averred that the insurance was made for the use and benefit and on the account of the person or persons so interested. When the plaintiff, in his declaration, alleges that at the time of effecting the policy, and thence until and at the time of the loss, he was interested in the property to the amount insured, and the defendant, in his plea, alleges that he was (a) McGillivray v. Montreal Assce. Co., 5 L. C. R. 406, (6) Dunlop V. ^tna Ins. Co., 2 U. C. C. P., 262 ; see also Ogden v. Mont- real Ins. Co., 3 U. C. C. P., 515. (c) See Ogden v. Montreal Ins. Co., 3 U. C. C. P., 515; Bell v. Janson, 1 M. & S. 201 ; Routh v. Thompson, 11 Ea., 428. 278 THE LAW OF INSURANCE. not at the time of the loss interested as alleged, the plaintiflf must, nevertheless, prove his interest to the full extent insured at the date of the policy, for such interest is not admitted by the omission to traverse it ; and in the absence of any proof of the extent of his interest he would be entitled only to nominal damages. The test as to the ex- tent to which an admission of an averment by not traversing it, goes, is : assume that the averment was precisely tra- versed, what would the plaintiff have to prove to entitle him to succeed on the issue ? The admission goes to the extent of producing the same result as a failure of evidence on a precise traverse (a). In pleading non-compliance with a condition precedent in a policy of insurance the plaintiff must shew that the defendant either prevented the performance or rendered it impossible or unnecessary by his own act or neglect. Where, therefore, the policy sued on guaranteeing to the extent of $20,000 the honesty and care of one W while in the plaintiff's employment as cashier, contained a condition that it should be void on the neglect of the plaintiffs to make known to the directors of the society in Canada any act or omission of W discovered by them giving a claim under it. In declaring on this policy the plaintiffs alleged that while in their employment a sum exceeding $20,000 was entrusted to W to be safely kept in the safe at their head office, of which $10,000 was lost owing to his negli- gence in regard to its custody, and they alleged, as an excuse for not giving the notice, that defendants had ceased to have or to appoint directors in Canada. Defendants pleaded that before the alleged neglect of W they had ceased to carry on business or have directors in Canada, and had appointed one E to act for them for the purpose of paying policies already granted and receiving all notices required, of which the plaintiffs had notice, but that they gave no (a) Clark v. Western Assce. Co., 25 U. C. Q. B., 209 ; King v. Walker, 2 H. «fc C, 384. THE PROCEEDINGS AT LA .V UPON POLICIES. 279 notice to E or to the directors of the company in any way. Held, on demurrer, that the plea was bad, for the defendants had by their own act deprived themselves of the benefit of the condition, and rendered compliance with it impossible, and they could not insist upon notice to K. Held also, that the averment of W's neglect in the declaration was not too general, and that the excuse for non-compliance with the <;ondition was sufficiently stated (a). By the Common Law Procedure Act, the performance of conditions precedent may now be averred generally. Where, after the passing of this act, a policy of insurance was, in the old form, containing specific averments of the perform- ance of conditions precedent, it was referred to the master to strike out the superfluous matter (b). Where the plaintiff in his declaration avers, that he has performed a condition precedent, he is bound to prove it, though the performance has been dispensed with. If he means to insist on the latter fact, he should allege it specially (c. . ' ' . Although it is a general rule, that where the language of a pleading is ambiguous, it shall be taken most strongly against the pleader, yet, where the court sees from the whole allegations, that the pleader must have meant his language in a sense not against him, it shall not be taken in a sense against him, and the test of the sense in which it is intended by the pleader, is its making or not making the suit erroneous ; that, when taking it in one sense would make the suit erroneous, and taking it in another sense would make it not erroneous, it shall be taken in the latter sense. Thus, where there was no allegation in the bill of the performance of conditions precedent, but it did not appear from the scope and intent of the pleadings that there were any conditions precedent, it was held, that the (a) Royal C. Bank v. European Ins. Co., 29 U. C. Q. B.. 579. (6) Patterson v. Prov. Ins. Co., 2 U. C. P. R. 164. ;, : : v It will be a departure, fatal on general demurrer, for the plaintiff first to sue upon a specialty, and then in a subse- quent pleading to allege that there was no such specialty in existence when he sued. Thus, if the plaintiff declares upon a policy as duly sealed and executed by the defend- ants, a repliccition on equitable grounds, alleging, that when the loss occurred the defendants had not issued a policy to the plaintiff, although he had previously effected the insurance with them, and that the defendants refused to execute the policy until after the commencement of the action, although frequently requested by the plaintiff, is bad, as a departure from the declaration (c). Where the declaration alleged, that the plaintiff sued as {a) Noad v. Prov. Ins. Co., 18 U. C. Q. B., 586 ; Sim v. Edmonds, 15 C. B. 240. (6) Workman v. Royal Ins. Co., 16 Grant 185 ; see, also, Young v. AustiUy L. E. 4 C. P. 553. (c) Hiekey v. Anchor Assce. Co., 18 U. C. Q. B. 433. 282 THE LAW OF INSURANCB. well for the benefit and on behalf of A B (who, as mortgagee of the plaintiflF, was entitled to the benefit of a covenant from the latter, to insure the property), as on his, the plain- tiff's own behalf ; and the replication alleged, in answer to a plea setting up a sale and conveyance of the insured pro- perty, that the conveyance was only by way of mortgage, and that plaintiff was entitled to a reconveyance upon pay- ing the moneys secured by the mortgage. Held, that the replication did not shew that the plaintiff did not bring the action on his own behalf, and that the averment in the decla- ration connected with section 7 of the 29 Vic. c. 28, did not shew that the action was brought on behalf of the party entitled to the benefit of the covenant to insure, and that, therefore, the replication was no departure from the decla- ration {a). Where a plea framed under the Con. Stats. U. C. c. 52, s. 27, alleged that the property insured was incumbered by a mortgage, and the plaintiff did not truly state his title to the land in his application, whereby the policy became void and the plaintiff traversed only the allegation as to the incum- brance, leaving that as to the statement of title unanswered. It was held that the replication was an answer to the plea ; that the latter part of the plea might be read as qualifying the former, and not as a distinct statement that the plaintiff did not truly state his title, for by the statute the title need not be shewn when the plaintiff has a fee simple unincum- bered, and the declaration did not shew that he ever made any statement of title, nor did it disclose an estate in the plaintiff which made it obligatory upon him by the statute to state his title respecting it. The plea, therefore, read as above, was in effect an assertion that the plaintiff's title was incumbered by the mortgage, and being so incumbered he did not state this fact truly in his application according to the statute. The traverse of the incumbrance was, there- fore a sufficient answer to the plea {h). (a) Smith V. Prov. Ins. Co., 18 U. 0. C. P. 223. (b) Williamson v. Niagara Dis. M. F. Ins. Co., 14 U. C. 0. P., 15. THE PROCEEDINGS AT LAW UPON POLICIES. 283 Where the condition of a policy requires that the plaintiff ** shall declare on oath whether any and what other insur- ance or incumbrance has been made on the same property," the proper method of pleading the violation of this condi- tion is to traverse the making of the declaration on oath. Where, therefore, a plea alleged that the plaintiff neglected to inform the defendants as to whether there was any fur- ther or other insurance on the premises, the plea was held bad, for all the pliuntiff was required to do was to make the declaration on oath and not to inform the defend- ants of its contents or of its being made (a). To an action on a policy of insurance on a steamer against fire, defendants pleaded in their sixth plea that by the policy the plaintififs warranted that the total amount of said insurance on said steamer should not exceed three- fourths of her declared value, otherwise, the policy should be void, and that the insuince on her far exceeded three- fourths of said value. The plaintiffs replied that the war- ranty referred to was to the effect that the total amount of insurance against fire should not exceed three-fourths of the declared value, and that such insurance did not exceed said value. Held on demurrer a good replication, and that the defendants might have rejoined, reaffirming the condition to be as they had alleged, and denying that it was such as the plaintiffs asserted {h). If the defendant plead to one count of a declaration founded on a policy, and the plaintiffs demur to that plea, the defendants cannot except to a count in the declaration to which the plea demurred to does not apply, for such count is not in the line of pleadings affected by the demurrer (c). Where the declaration alleges that the vessel in conse- quence of injury by teripest was obliged to put into port to repair damage, and a plea in answer denies that she put (a) Williamson v. "Niagara Dis. M. F. Ins. Co., 14 U. C. 0. P., 16. (6) Noad V. Prov. Ins. Co., 18 U. C. Q. B. 584. (c) Date V. Gore Dis. M. F. Ins. Co., 14 U. C. C. P. 548. 284 THE LAW OP INSURANCE. into port for the purpose of repairing damage, but to seek another market for her cargo, and then states voyages to other ports in search of a market, the plea will be bad for duplicilj'. But if the plaintiff instead of demurring for duplicity answers the plea, he is bound to answer every material allegation, and a replication, alleging that the vessel put into port for repairs, and not for the purpose mentioned in the plea would be bad (a). So if the declaration is framed for a constructive total loss and abandonment of the cargo, and the plea alleges that after the vessel arrived at Barbadoes (where, according to the declaration she had put in to repair damage) she sailed again without any examination into the state of her cargo, in search of a market to Trinidad, and thence to St. Thomas, where the cargo was sold by the master, who as super cargo was the plaintiff's agent, a replication asserting that the master in the exercise of a wise discretion, abandoned the voyage at Barbadoes, and that the authority entrusted to him by the plaintiff was there ended, will be bad for it does not answer the allegations in the plea that after the arrival of the vessel at Barbadoes, the voyage and the authority over the cargo were resumed (6). An averment in a declaration that at the time of the loss a mortgagee of the plaintiff was entitled to the benefit of a covenant in a mortgage made by plaintiff before the making of the policy to insure the property, and that the plaintiff sued as well for the benefit and on behalf of the mortgagee as on the plaintiff's own behalf, will not vitiate the declara- tion (c). As both the mortgagor and mortgagee have an insurable interest it is no objection to a declaration that it shews on the face of it that the plaintiff, as mortgagor, is bringing (a) Fairbanks v. Union M. Ins, Co., 1 James 271. (6) lb. (c) Smith V. Prov. Ins. Co., 18 U. C. C. P., 223. THE PROCEEDINGS AT LAW UPON POLICIES. 286 the action on account of the mortgagee, to whom the policy has been assigned (a). In regard to pleading a double insurance, if the plea merely allege that the property is insured in another office it will be bad, as being to general and vague. The par- ticulars of the other insurance should be stated by shewing the date of the second insurance and with whom effected, and on what property and to what amoimt, and alleging the absence of notice and other cii-cumstances bringing the case within the condition. It would be no answer to the objection that the plea is a simple denial of the alleged ob- servance by the plaint iff of the particular condition (b). Where the declaration alleges a loss to the full amount insured, the defendants in pleading an additional insurance without notice, may assume the loss to be as alleged, although the plaintiff under the allegation might recover for a partial loss ; and, if it is in fact only partial, so that the notice may be given after it, the plaintiff should reply this (c). . Under a simple traverse of a plea setting up the violation of a condition on which the poKcy was to subsist, in this ; that the plaintiff insured in another company and gave no notice of it, and had not the other insurance noted on the policy, it is not competent for the plaintiff to shew that he had a reasonable time within which to give the notice (d). Under a plea alleging that sixty days had not elapsed between the notice and proof of loss and the commencement of the suit (as required by a condition of the policy), the defendant cannot object to the sufficiency of the proofs, but can only shew that sixty days have not elapsed after all the proofs are given (c). (a) Richards v. Liverpool dt L. F. Ins. Co., 25 U. 0. Q. B., 400. (6) Ramsay W. 0. Co. v. Mutual F. Ins. Co. 11 U. C. Q. B., 516. (c) Rutler v. Waterloo M. F. Ins. Co., 29 U. C. Q. B. 553. (d) Jacobs V. Equitable Ins. Co., 19 U. C. Q. B. 260. (c) Ricev. Prov, Int. Co., 7 U. C. C. P. 648. 286 THE LAW OF INSURANCE. The sufficiency of the proofs should be objected to by a special plea (a). If a plea allege an increase of the risk, by certain means avoiding the policy within the meaning of a condition, that any increase of risk unless notified, etc., shall avoid the policy, the means alleged must be proved as laid and cannot be rejected as surplusage (b). A replication is bad if on the whole matter being set out in the declaration, the latter would be bad (c). The test for allowing or disallowing a replication on equitable grounds is, would the statement in the plaintiff 's declaration of what he relies upon in answer to the defendant's plea, have shown that he was not entitled to recover in a court of law ? (d). It was held in Ontario, before the passing of the statute allowing the defendant to plead as many pleas as he might think proper, that in an action on a policy the defendants will not be allowed to plead together an equitable plea that the policy had been assigned by the plaintiff to secure a mortgage debt, and that the amount of it had been paid to to the mortgagee, and a legal plea that the plaintiff had effected a subsequent insurance without notice, contrary to a condition of the policy (e). The the court Will not favor an amendment of a plea for the purpose of enabling the company to set up an unjust defence (/). By the 23 Vic. c. 24, it is provided, that in any suit brought in Canada on a foreign judgment, any defence set up, or that might have been set up to the original suit, may (a) Rice v. Prov. Ins. Co., 7 U. C. C. P. 548. (&) Ottawa F. Ins. Co. v. Liverpool L. dk G. Int. Co., 28 U. C. Q. B. 518 ; Harris V. Mantle 3 T. R. 307 ; Martin v. Gilham,! A. &. E. 640. (c) Miall V. Western Assce. Co., 19 U. C. C. P. 274. (d) Jacobs V. Equitable Ins. Co., 18 U. C. Q. B. 17 ; S. C. 17 U. C. Q. B. 43 ; Ries v. Equitable Assce. Co., 2 H. AN. 19. («) Ott V. Liverpool, L. Man. Mut. Ins. Co. v. Washington Mut. Ins. Co., 1 Hand, Ohio, 408. (c) Jefferson Ins. Co. v. Cotheal, 7 Wend., N. Y., 72. (rf) Joyce V. Maine Ins. Co., 45 Me., 168. {e) Kern v. South St. Louis M. Ins. Co., 40 Mo., 19. (/) Perkins v. Equitable Ins. Co., 4 Allen, 562 ; Campbell v. Richards, 5 B. <& Ad. 840. T 290 THE LAW OF INSURANCE. • missible to shew that there is a mistake in the description of the premises, as contained in the policy, where it appears that the description was wholly prepared by the agent himself, and that no misrepresentation was made by the insured. And it is immaterial that the policy was for a year before the fire in the possession of the insured, unob- jected to, with a printed notice upon it, to examine it and see if it was correct, or that the diagrams to which refer- ence was made, both in the interim receipt and in the policy, corresponded with the description in the policy (a). The evidence of a director, as to the practice of the com- pany in giving consent to other insurance is immaterial. The practice of the company, so far as within the knowledge of such director, could not bind the assured ; to be binding the knowledge must be such, and so known to the parties as to lead to the belief that the contract was made with refer- ence to it {h). If the insured is charged with a fraudulent over valuation of the premises, he cannot give evidence of hie good character to rebut the proof of fraud, for such evidence for such purpose is inadmissible in a civil suit (c). In an action on a fire policy, it appeared that' among the questions asked by the agent of the company was one : — " Had the applicant ever had any property destroyed by fire and under what circumstances ? Was it insured and in what office ?" to which the agent answered that the plaintiff had never before had any property destroyed by fire that he had heard of. Held that the plaintiff as a witness on his own behalf might be asked in cross examination as to what passed between him and the agent on this subject, but that the plaintiff's answer would be conclusive (d). Particular circumstantial evidence as to the amount of a (a) Somer$ v. Athenceum Ins. Co., 3 L. C. J. 67. {b) Qoodall v. New England M. F. Ins. Co., 5 Fost. (N. H.) 169. (c) Fowler v. Mtna Ins. Co., 6 Cowen 675. (d) McCulloch V. Gore Dis. M. F. Ins Co., 22 U. C. C. P. 610. -' THE PROCEEDINGS AT LAW UPON POLICIES. 291 loss suffered by fire will outweigh the positive testimony of witnesses, where the evidence of these witnesses is not con- sistent, and where the inferences from the facts proved are against its truth (a). Upon an issue whether plaintiff was interested in goods destroyed by fire, if a witness called by the plaintiff state, that invoices of the goods, and letters of advice purporting to be written by him at Edinburgh, were fabricated in Lon- don, after the fire, by plaintiff's direction, it is competent for the plaintiff to call other witnesses to disprove the alleged fabrication, and show the genuineness of the docu- ments (b). In an action upon a policy of insurance for a loss of a vessel, the verbal declarations of the plaintiff, the sole registered owner, that another person a foreigner, was part owner, are not sufficient to disprove the allegation of in- terest in the plaintiff, if he has obtained the register on his own declaration, and acts as owner in procuring the insur- ance, and in the other affairs of the vessel (c). To prove the ownership of a vessel insured, it will be sufficient for the plaintiff to produce his certificate of owner- ship from the registry, and shew that he is in possession at the time the insurance was effected as well as at the time of the fire. In fact, it seems it would be sufficient to show possession merely without the aid of any documentary proof or title deeds, unless rendered necessary by the adduction of contrary evidence (d). An offer to sell, is evidence, at least, against the person offering, that the property is not worth more (e). Evidence that the agent of an insurance company frequently waived the conditions of its policies requiring (a) Orenier v. Monarch F. d- L. Assce. Co., 3 L. C. J., 100. (6) Friedlander v. London Assce. Co., 1 N. & M. 31 ; 4 B. & Ad. 198. (c) Watson v. Summers, 2 Kerr 62. (d) Grant v. ^tna Ins. Co., 11 L. C. R. 131-2,-330 ; see Taylor, Evid. 126. (e) Hersey v. Merrimack Coy. M. F. Ins. Co., 7 Fost. (N. H.) 149. 292 THE LAW OP INSURANCE. prepayment of premiums, is not admissible to raise an inference of waiver in a particular case in the absence of other proof tending to establish such waiver (a). An insurance company is not chargeable with notice of incumbrances on property, on which it issues a policy, because such incumbrances are matters of public record, so as to be estopped from setting up such incumbrances in avoidance of the policy (h). Defendant was indicted for setting fire to her house, and to prove that the house was insured the books of the in- surance ofl&ce were produced, in which was an entry to that effect. Held, that the policy was the best evidence, and no evidence from the books could be admitted unless notice had been given to produce the policy (c). Sworn entries in the custom house of the quantity and value of goods imported, by the party claiming under a policy of insurance for the loss of the goods by fire, a much larger amount of damages than the entries shew impor- tations for, are evidence to go to the jury on the measure of damages {d). Where there was only one plea on the record, setting up certain facts, which, being denied, it lay on the defendants to prove, and the defendants' counsel at the trial consented that the plaintiff should have a verdict for the whole amount of his insurance if the jury did not find against him on the plea ; it was held, that the affirmative of the issue lay on the defendant, and he was entitled to begin, that if the plaintiff had occasion to go to the jury on the question of what amount of damages he should be allowed to recover, he would have been entitled to begin (e). It does not necessarily follow that a new trial should be granted by reason of the disallowance of the right to begin, {a) Wood V. Poughkeepsie M. Ins. Co., 32 N. Y. 619. (6) Mut. Im. Co. V. Deale, 18 Ind. 26. (c) Bex V. Doran, 1 Esp. 127. (d) Lazare v. Phoenix Ins. Co., 8 U. C. C. P. 136. (e) Jacobs v. Equitable Im. Co., 19 U. C. Q. B. 250. THE PROCEEDINGS AT LAW UPON POLICIES. 293 but it is at least a circumstance which should have weight in disposing of an application for a new trial (a). ■' Where an insurance company effected an insurance on a vessel, and accepted a note for the premium, and afterwards a loss occurred, it was held, that the insured had a right in equity to set off the amount of his loss against the note, the policy providing that the amount of the note given for the premium, if unpaid, should be first deducted from the loss (b). If the property is wilfully and maliciously burnt by the assured, this will be a good defence to an action against the company, and, where after effecting the policy the plaintiff mortgaged the property, and the policy was afterwards assigned to the mortgagee, with the assent of the defendants, but the action was brought by plaintiff in Ms own rlfiht, and as trustee for the mortgagee ; a plea alleging arson by plaintiff was held a good answer to the action either at law or in equity (c). Where arson is alleged, the fraudulent intent must be shown, but it may be shown by presumptions as well as by direct evidence (d). But every legal pres^-mption will be made in favor of the innocence of the insured, and he should not be pronounced guilty, unless that guilt is clearly established by evidence excluding or overcoming every fair and reasonable hypothesis of his innocence (e). In an action against an insurance company on a fire policy, a defence that the insured or his assignee, wilfully, and maliciously set fire to the insured premises ought to be as satisfactorily established to the minds of the jury, as to (a) Jacobs v. Equitable Ins. Co., 19 U. C. Q. B. 250. (6) Berry v. Columbian Ins. Co., 12 Grant, 418. (c) Chishom v. Prov. Ins. Co., 20 U. C. C. P. 11. (d) Begnier v. Louisana L. M. <& F. Ins. Co., 12 La. 336. (e) McConnell v. Delaware, Ins. Co., 18 111. 228. 294 THE LAW OF INSURANCE. justify them in convicting him of a criminal charge for the same offence (a). The law is otherwise in the United States, and the rule of evidence applicable to civil actions applies (h). Under a plea alleging "that +,he said property by the defendants insured was not nor v/as any part thereof burnt, consumed, or destroyed by lire, es alleged, nor did the said fire or loss happen in manner and form as alleged," the defendants cannot give evidence that the building insured has been designedly and fraudulently set fire to by the plaintiffs, and an amendment for the purpose of putting such a plea on the record has been refused (/;)• If the jury find in favor of the insured on a charge of arson, the court will not grant a new trial, though subse- quently to the trial a grand jury have found a bill against the insured and others for a conspiracy to defraud the in- surers in the same matter. But on affidavits disclosing the conspiracy itself, and showing that the insurers did not obtain a knowledge of it till after the trial, so that they were taken by surprise, the cc art will grant a rule nisi for a new trial on payment of costs (d). In the absence of misdirection, where a jury find in favor of a party expressly charged with a criminal offence, the court will rarely subject him a second time to the verdict of a jury (e). In this case, in an action on a fire policy on a plea of arson, the defendants gave such evidence to shew that the house had been burned by one K, by the procurement of the plaintiff, as would have well warranted a finding for defen- (a) Richardson v. Canada W. F. M. Ins. Co., 17 U. C. C. P. 341 ; Thurtell V. Beaumont, I Bing. 339. (6) Washington Un. Ins. Co. v. Wilson, 7 Wis. 169 ; Schmidt v. New York Un. F. Ins. Co., 1 Gray (Mass.) 529 ; Hoffman v. Western Em. Ins. Co., 1 La. An. 216. (c) Mann v. Western Assce. Co., 17 U. C. Q. B., 190. (d) Thurtell v. Beaumont, 1 Bing., 339. (e) Qould V. British Am. Assce. Co., 27 U. C. Q. B. 473. THE PROCEEDINGS AT LAW UPON POLICIES. 295 'dants. K, however, had heen indicted for the arson, and acquitted, and the prohabilities were, that if plaintiff had been indicted he would also have been acquitted. The jury having found for the plaintiff, the court refused to inter- fere (a). But, the rule that a new trial will not be granted when the jury find in favor of a party charged with a criminal offence, is not inflexible. Where, in an action on a fire policy, the plaintiff' in his statement of loss swore, that his damage amounted to about twelve times the amount actually proved, and for which he obtained a verdict ; and the judge before whom the case was tried, was dissatisfied with the finding the court, notwithstanding the usual practice as to new trials, where the defence charges a criminal offence, granted a new trial costs to abide the event (b). Generally speaking, where there is ground of challenge, but no objection is taken to a juror who might be challenged, this will not, in the absence of fraud or collusion, be ground for a new trial ; for the plaintiff" should exercise his right of challenge if he objects to the juror's presence. Thus the fact that one of the jurors is an insurer in a mutual com- pany, and thereby by virtue of the Con. Stats. U. C. c. 52 a member thereof, is no ground for a new trial in case of an adverse verdict, though the counsel for the company at the trial presses upon the consideration of the jury the propriety of checking fraud in insurers, and that the safety of the whole depends on the good faith of every insurer (c). In the absence of some rule of law or some established practice adopted by the courts with a view to commercial dealings the jury are left to determine not only the facts, but to draw the conclusion whether, under the circum- (a) Gould V. British Am. Assce. Co., 27 U. C. Q. B. 473 ; see also Lavipkin V. Ontario M. & F. Ins. Co., 12 U. C. Q. B. 578 ; Mann v. Western Assce. Co., 19 U. C. Q. B. 319. (6) McMillan v. Gore Dis. M. F. Ins. Co., 21 U. C. C. P. 123. (c) Richardson v. Canada W. F. M. Ins. Co., 17 U.C. C. P., 341 ; Williams V. G. W. R. Co., 3 H. & N., 869. 296 THE LAW OF INSURANCE. stances, the act required was done in a reasonable time (a). The jury must decide the good faith of the applicant in answer to questions in the application (b). When the jury add to their finding of facts, a finding as to the construction and effect of the policy upon the rights of the parties, the latter finding may be treated as surplus- age. Thus, where the policy provided that " if more than 20 pounds weight of gunpowder shall be upon the premises at the time when any loss happens, such loss will not be made good," and the jury find that there was gunpowder on the premises in excess of the amount allowed, but add, " which the insured was not prohibited by his policy from carrying," the latter words may be rejected (c). A clause is usually inserted in fire policies, providing for a reference to arbitration in the event of differences arising as to the amount of loss or damage. This clause may be so framed as to make a prior reference a condition prece- dent, or it may merely give the company an option to refer, and in the latter case, the only manner in which the clause can be taken advantage of is, by applying to the court or judge to stay proceedings after the commencement of the action. The question whether the amount of loss and damage must be submitted to arbitration before the ( ommencement of any action on the policy, depends simply on the agree- ment of the parties. If the clause as to arbitration is so worded as to make a prior reference a condition precedent to the bringing of the action, it must be complied with, for the condition as to arbitration is incorporated into the (a) See Mann v. Western Assce. Co. 19 U. C. Q. B.> 332 ; Graham v. Van Dicmanx/an(} Co., 11 Ex., 112 ; Goodwyn v. Cheveley, 4 H. & N., 631. (b) Hopkins v. Prov. Ins. Co., 18 U. C. C. P., 74. (c) Deacon F. it L. Ins. Co. v. Gibh, 7 L. C. J. 67 ; 1 Moore P. C. oases» 78 ; 7 L. T. N. S. 574. THE PROCEEDINGS AT LAW UPON POLICIES. 297 contract to pay, and the insured has only a right to recover the amount awarded (a). If the clause as to arbitration expressly provided that the insured should not be entitled to commence or maintain any action at law, or suit in equity, until the amount of the loss should have been ascertained by arbitration, and should, then, only, have a right to sue for the amount awarded ; a prior reference would be a conditiuu pieueJent. If the contract is in such terms that a reference to a third person or a board of directors, is a condition precedent to the right of the party to maintain an action, then he is not entitled to maintain it until that condition is complied with ; but if on the other hand, the contract is to pay for the loss, with a subsequent contract to refer the question to arbitra- tion contained in a distinct clause, collateral to the other, then the contract for reference does not oust the jurisdic- tion of the courts or deprive the party of his action (h). Where in a policy of fire insurance entered into by the plaintiff with the defendants, the covenant for payment was made according to the exact tendor of certain articles ; one of which provided that on a loss occurring the as^^ured should, within fifteen days, send in particulars of his loss, '* which loss or damage after the same shall be adjusted, shall immediately be paid in money by the defendants with an option to them to reinstate, and a proviso that in case any difference shall arise touching any loss or damage, such difference shall be submitted ' to arbitrators,' whose award in writing shall be conclusive and binding on all parties." In an action brought on this policy, to which the defendants pleaded this article, and that the plaintiff had not submitted the matter to arbitration. Held, on demurrer, that the covenant was by its very terms qualified (o) See Elliott v. Royal Ex. Assce. Co., L. R. 2. Ex. 243 ; Scott v. Avery,. 6 H. L. C. 811 ; 25 L. J. (Ex.) 308 ; Braunstein v. Accidental Death Assce. Co., 1 B. & S. 782. (6) Elliott V. Royal Ex. Assce, Co., L. R. 2 (Ex.) MS ; Scott v. Avery, 6- H. L. C. 811 ; 25 L. J. (Ex.) 808. 298 THE LAW OF INSURANCE. and made conditional by the subsequent words, referring to the articles which following without any interval, formed an integral and substantial part of the covenant ; that the covenant, therefore, was only a covenant to pay the ad- justed loss, and that this loss could only be adjusted by a reference to arbitration as pointed out in the subsequent article, and that, therefore, the plaintiff had no cause of action, the reference and adjustment by that means being a condition precedent to the right to recover (a). If the agreement for a reference is collateral to the agree- ment to pay, and does not provide that no action shall be brought until the claim is referred to arbitration, the insured is not debarred from proceeding by action for the recovery of his loss without a reference, and the only method of enforcing the agreement would be by application to stay proceedingp under the Common Law Procedure Act {b). Proceedings, however, may be stayed in such case by application to a judge, as provided by the Act. Thus, where the condition of a policy of insurance provided " that in case differences arise touching any loss or damage the company reserves to itself the power of having the loss or damage submitted to the judgment of arbitrators," and the condition was accepted by the assured ; it was held that this constituted an agreement for reference to arbitration under the Act Con. Stats. U. C. c. 22 s. 167, and a judge, therefore, had power under this section to stay the action on defendant's application (c). Under a condition that in case any difference or dispute shall arise between the assured and the company touching any loss or damage, such difference may be submitted to arbitration," etc., the courts are not out.ted of their jurisdic- tion, nor can they compel the parties to submit to a refer- ence in the progress of the suit (d). (a) EUott V. Royal Ex. Asnce. Co., L. R. 2 (Ex.) 237. (b) Roper v. Lendon, 1 E. ). Therefore, in a policy in which there is no express war- ranty of seaworthiness defects in a vessel " before she should have started on her voyage," can have no effect whatever as unseaworthiness whilst she is lying at her home port, before her departure. So the incompetency of the officers in charge to navigate in salt water could only apply when the vessel reached salt water, and could have no effect whatever of unseaworthiness whilst she was in fresh water with competent officers in charge (c). But this implied warranty is construed in reference to the intended use and service of the vessel, and differs accordingly at different times, and under different circum- stances. What would satisfy the implied warranty for lying in port for temporary purposes, for short coasting voyages, for navigating a lake or river, vary from those (a) Burgess v. Wickham, 3 B. «& S. 669 ; Clapham v. Langton, 34 L. J. (Q. B.) N. S. 46 ; 10 L. T. Beps. N. S. 875. (&) Graham v. Barras, 5 B. & Aid. 1011. (c) Quebec Marine Ins. Co. v. Com. Bk, Can. 13 L. C. J. 270' MARINE INSURANCE. 305 demanded for navigating the open sea, on long voyages, as to and from Europe, or the Cape of Good Hope. Indeed, as in policies at and from, if the insm-ance risk attaches before sailing, and the ship while in port is in a state of seaworthiness commensurate with her then risk, her subse- quently sailing in a state of unseaworthiness for the voyage, will not avoid the policy ab initio {a) ; and in the same way if she be lost in the course of river navigation, the under- writers will be liable, provided her then state of equipment was adequate to her then risk, although it might not be such as to constitute a state of seaworthiness for a sea voy- age. The governing principle is, if the vessel, crew and equipments, be originally sufficient for her then state, the assured has done all he contracted to do, and if the voyage is such as to require a different complement of men or state of equipment, in different parts of it, as if it were a voyage down a river and thence across the open sea, it would be enough if the vessel were, at the commencement of each stage of the navigation, properly manned and equipped for it (6). Where, therefore, a vessel on a voyage from Montreal to Halifax, was seaworthy at Montreal, where she took in her cargo, and took on board a sea-going engineer, and whence she sailed on her voyage ; and was fit for river navigation to Quebec, where she took on board her sea-going master and crew, and was also fit for river navigation to Bic, where she first entered salt water, whence, after certain repairs were effected, she was fit for salt water navigation until her loss ; it was held, that the implied warranty of seaworthi- ness was not infringed (c). This system of successive gradations for fitness of naviga- (a) 3 Taun., 299. ' (6) Quebec Mar. Ins. Co. v. Com. Bk. Can., 13 L. C. J. 270 ; Dixon v. Sad- dler, 5 M. & W. 414 ; Biccard v. Sheppard, 14 Moore's P. C. cases, 471 ; Busk V. Royal Ins. Co., 2 B. & Aid. 72; Walker v. Maitland, 5 B. & Aid. 171 ; Uoldsworth v. Wise, 7 B. & C. 794 ; lb., 219; Thompson v. Hopper, 4 E. & B. 181. (c) Quebec Marine Ins. Co, v. Com. Bk. Can,, Supra. U 306 THE LAW OF INSURANCE. tion, also, necessarily implies that repairs may be made at each, and, therefore, the rule is plainly accompanied with the obligation upon the insured to keep the vessel seaworthy if it be possible, as far as depends upon him, that is, to procure the necessary and reasonable repairs in the suc- cessive stages of the voyage, according to the means that can be had for the purpose {a). It is an elementary principle that after the policy has once attached a compliance with the warranty ceases to be a condition precedent to the liability of the insurer. There- fore, a defect in the boiler of a vessel navigating from Montreal to Halifax, which was first discovered on the vessel reaching salt water, and immediately repaired, it being proved that the vessel was sound at Montreal, and thence all the way up to salt water, does not vitiate the policy {h). But if the vessel had been entirely unnavigable at the time of the iiisurance, or if th^ boiler had been irremediably defective, the insurers would not be liable. So, also, if there had been a neglect to repair the boiler after the damage sustained, because a necessity of repairs must be within the contemplation of the parties, and every unavoid- able delay, and deviation occasioned thereby, is therefore constructively permitted in a contract of marine insurance (c). The implied warranty of seaworthiness applies to the state of the vessel at the commencement of the voyage, and if seaworthy then the insurer is responsible for all the ordinary incidents arising in the course of the voyage. Thus, if a vessel, insured on a voyage from Montreal to Halifax, is fit for fresh-water navigation until she reaches the ocean, and is then fitted for salt water navigation the warranty will not be infringed by reason only that the state of the boiler was such as to render repairs to it necessary {a) Quebec Marine Ins. Co, v. Com. Bk. Can., 13L, C. J. 272 5 ; Burr. 280-2. (ft) Ih, Douglas 708-65 ; 1 Dow. P. C. 344. (c) lb, 276. MARINE INSURANCE. 307 on reaching the ocean to fit it for such navigation, the boiler being sound on starting and fitted for river navigation all the course of the voyage down the St. Lawrence. So the fact that the chief engineer in charge of the vessel from Montreal to the ocean had never been to sea, and was ignorant of the management of the vessel in salt water would not affect the warranty, 'f an engineer accustomed to salt water is taken on board when the vessel reaches the ocean (a). Where a policy in addition to expressly excepting losses arising from unseaworthiness, provides that the vessel shall at all times during the continuance of the policy be sound and seaworthy, and be well manned and found in all things and means necessary, and proper for the safe navigation thereof ; it seems the stipulations must be considered with reference to the navigation in which the vessel is at the moment of the loss engaged, and if she is seaworthy in regard to such navigation the insured may recover ; though as to another part of the navigation the stipulations, con- strued in the same manner, may have been violated. Thus, if a vessel insured between Toronto and Quebec were lost by stranding in the river St. Lawrence, the question for the jury would be not was she well found and seaworthy for the navigation of the open Lake Ontario but was she well found and seaworthy for the navigation of the river St. Lawrence, and if in the opinion of the jury she was at the time of the loss suitable for the river navigation, though clearly not so for the lake, the policy will not be vitiated unless so framed as to loave no doubt that the intention of the parties was to make the unseaworthiness of the vessel for either navigation, without re ference to the particular navigation in which the loss should occur an absolute cause of forfeiture {b). Even under the above form of policy it would be no (a) Quebec Marine Ins. Go. v. Com. Bk, Can., 13 L. C. J., 267. {h) Gillespie v. British Am. F. (& L. Ins. Co., 7 U. C. Q. B. 108 ; see, also, Ross V. Bradshaio, 1 B. & C. 312. 808 THE LAW OF INSURANCE. defence that the vessel was seaworthy at the commence- ment of the voyage if she was unseaworthy when the loss occurred {a). When there is no express stipulation as to seaworthiness, the implied warranty extends only to the commencement of the risk, but it is quite competent for the parties to stipulate expressly that the vessel shall be seaworthy during the whole voyage, and that the insured shall not be liable for losses arising from cortain specifisju causes [b). In such cases the covenant must be adhered to during the whole course of the voyage, although the vessel was sea- worthy at its commencement ; and a declaration alleging merely that she was seaworthy at the commencement of the voyage would be insufficient (c). In the absence of an express stipulation as to seaworthi- ness, there is no implied warranty on the part of the insured for the continuance of the seaworthiness of the vessel, or for the performance of their duty by the master and crew, during the whole course of the voyage (d). A vessel insured for a round voyage must be sufficiently seaworthy at its inception to make it without repairs, unless damaged by extraordinary perils of the sea. Where there is no evidence of such damage, and the vessel requires re- pairs before the compl etion of the voyage, a presumption arises that she was not seaworthy at its commencement , and the insured cannot recover (e). If a ship sail upon a voyage and in a day or two becomes leaky and founders, or is obliged to return to port without any storm, or visible or adequate cause to produce such an effect, the presumption is that she was not seaworthy when she sailed ; and the onus of proving that she was seaworthy (a) Gillespie v. British Am. F. (& L. Ins. Co., 7 U. C. Q. B. 108, (6) Mittleberger v British Am. F. d' L. Ins. Co., 2 U. C. Q. B. 439 ; Gilles- pie V. British Avi. F. d- L. Ins. Co., 7 U. C. Q. B. 108. (c) See, also, Coons v. JSt7ia, 18 U. C. C. P. 309. (d) Dixon v. Sadler, 8 M. & W. 895. , (e) Reed v. Philps, 2 Hannay 172. MARINE INSURANCE. 309 at the commencement of the risk, rests with the as- sured. , . This rule equally applies, whether the seaworthiness is expressly provided for by the terms of the policy, or rests merely on the implied warranty, and if the plaintiff fails to rebut this presumption, he will be non-suited. Thus, where a vessel after sailing all day on a summer sea with a light breeze in the evening, suddenly came up into the wind, or broached to, refused to answer ber bflm. and at once began settling down, when the crew abandoned her, and after they had rowed about 35 yards, sunk. The master could give no reason for this, nor was any evidence offered in explan- ation of it, while the evidence for the defence went to show, that she was old and rotten in parts ; that she in fact leaked before starting across the lake, in the canal, and at the port of lading, and that men would not go in her without being paid extra wages ; and the plaintiff himself stated that she was old, and had given instructions not to canal her by night, or leave port in a gale. A diver who examined her, also found one stave wholly out, and another partially so. Held, that plaintiff failing to give affirmative evidence of seaworthiness at the commencement of the voyage, must submit to a non-suit or verdict for defendants {a). But where, in an action on a time policy expressly ex- cepting losses from unseaworthiness, the evidence shewed that the vessel was in excellent condition and seaworthy, when she left port, and apparently up to the time of the loss ; that a squall struck her, and over three hours after it was found that she was leaking much, in consequence of which she filled and went down ; there being no charge or suggestion of fraud, mal-practice, over- value, or anything whatever, against plaintiff, the only remarkable circumstance being, that in the protest made by the master and mate, (o) Myles v. Montreal Ins. Co., 20 U. C. C. P. 283 ; Bee also Coons v. JEtna Ins. Co., 19 U. C. C. P. 239 ; Watson v. Clarke, 1 Dow., 344. 310 THE LAW OF INSURANCE. there was no mention of the squall, nor was any cause assigned for the leak or consequent loss ; it was held, that there was fair affirmativ.e proof of the general seaworthi- ness of the vessel, and that the judge was warranted in submitting the point to the jury, whether the loss arose from some of the perils insured against, and that the evi- dence fully warranted the finding for the plaintiff (a). Where there was no special contract with the underwriters for higher premium in consequence of the peculiar state of the vessel, nor any communication to them on the sub- ject, but it was merely proved that the risk was accepted by the defendant's agent on the vessel in question, that he had seen but did not examine her, and judged her wholly from the registry insuring her as B 1 ; that a B 1 vessel would be insm'ed as readily as an A 1, the charge on freight being the same, and the seaworthiness would be expected to be the same, though the A 1 would not be so likely to go to pieces if stranded, it was held that these facts did not bring the case within the principle above laid down, and that, therefore, in the absence of affirmative evidence of seaworthi- ness, the insured could not recover {h). In the above case there was no implied warranty of sea- worthiness but the contract was express, protecting the insurers against rottenness, inherent defects, etc. In a policy of insurance on a vessel belonging to plaintiff, insuring only against perils of the sea, one of the conditions was that the defendants were not to be liable for loss or damage arising from unseaworthinsss. The vessel in question some fifteen minutes after she had left port began to leak, and in about five hours went down. Both weather and water, it appeared, were at the time perfectly calm, and no actively adverse cause could be or was assigned for the accident, nor was any evidence given by the plaintiff to re- but the presumption which it was contended therefore arose (a) Dawson V. Home Ins. Co., 21 U. C. C. P. 20. (b) Coons V ^tna Ins. Co., 19 U. C. C. P. 235. MARINE INSURANCE. ^ 311 that the loss was not occasioned by perils of the sea. Held that the plaintiff was bound to give this evidence, and that the absence of it disentitled him to recover {a). In the ordinary form of a time policy in use in Canada, ■containing an express exception of losses arising from unseaworthiness, rottenness, inherent defects, or other enumerated causes, there is no warranty whatever that the ship insured is, at the time of the commencement of the risk, or, that it shall be seaworthy at all times, or at any time during the period named in the policy for the contin- uance of the risk. To an action on this policy, it would be no defence to shew, that even at the time of the loss the vessel was unse aw orthy (!>). The real contract between the parties is not that the vessel shall be seaworthy, or if unseaworthy that it shall not be exposed to risk, but, that no claim for a loss which is attributable to, or arises from, unseaworthiness or other excepted causes, shall be enforceable against the insurer^ (c), and the insurers may be liable though the vessel is unsea- worthy at the time of the loss, if it is shewn that the loss did not arise from the unseaworthiness or other excepted cause. The question whether the loss arises from unsea- worthiness within the meaning of the policy, is to be tried like any other question, according to the known rules of law, upon such evidence as may be suflicient to warrant a jury in drawing an inference in the affirmative or negative. Evidence of the seaworthiness of the vessel at the com- mencement of the voyage, is admissible, not for the purpose of establishing, as if it was the material fact in issue, that she was seaworthy then ; but, for the purpose of enabling the jury to draw the inference, whether if seaworthy then she continued to be so until the time of the loss {d). (a) Coom V. Mtna Ins. Co., 18 U. C. C. P. 305. (6) Dawson v. Home Ins. Co., 21 U. C. G. P. 27; Thompson v. Hopper, 6 E. & B. 937. (c) S. C. 2 Jur. N. S. 93, Ex. Chr. . _.^^__ (d) Dawtonv. Home Ins. Co., 21 U. C. C. P. 26, 312 THE LAW OP INSURANCE. The advantage to the insurers of specially excepting or enumerating the causes of loss or damage, for which they will not be responsible is; first, that all losses arising from the excepted causes will not be covered by the policy whether referable to the implied warranty of seaworthiness or not ; and second, under this warranty the underwriter would only be [protected if the vessel was unseaworthy at the commencement of the voyage, whereas, if the causes of loss are specially excepted, the time of the occurrence of the loss is immaterial, for the underwriter will be protected during the continuance of the policy, though the cause of the loss arises after the vessel sails (a). Even if the underwriter fail in securing protection by virtue of the excepted causes, he may still rely upon the implied warranty of seaworthiness at the commencement of the risk (/>). A policy of insurance was effected on a vessel " for four calendar months on a fishing voyage beginning the adven- ture from the 11th of June instant, and to continue until the expiration of four months." The policy did not state where the vessel was to sail from, where she was to fish, or whether she was to return. It was held that this was a time policy, continuing the insurance for four months absolutely, and not limiting it to one departure and return, while the vessel continued in the fishing business, and that the risk was not terminated by the vessel returning from a fishing voyage within the four months (c). The law implies a duty on the owner of a vessel which car- ries freight, to proceed tv'ithout unnecessary deviation in the usual coursv ; but it is the duty of ship masters to aid and assist ships in distress at sea, and for that purpose a vessel may go out of her regular course, and it will not be considered a deviation, but having succored those on board the ship (a) Quebec M. Ins. Co. v. Com. Bk. Can., L. R. 3 P. C, App. 234. - - .. {h) lb. . , r ,, ■ (c) Dimock V. New Brunswick M. Assce. Co., 8 Kerr 654. ^ ~. t- — ■ MARINE INSURANCE. 313 master has no right to risk his own freight to render salvage services. As, however, no wrongdoer can be allowed to apportion or qualify his own wrong when a loss has happen- ed, which is attributable to the wrongful act of deviation, the ship master cannot set up as an answer to the action the possibility of a loss if his wrongful act had never been done (a). To charge the insurer it is not enough that the loss shall have happened at sea ; it must appear to have happened in the course of the voyage described in the policy, and during the continuance of the risk insured against (/>). Unnecessary or unreasonable delay in the course of the voyage to the enhancement ^f the risk must in order to dis- charge the underwriters, amount to a deviation (c). When a marine policy protects the insured only while navigating certain waters it is necessary that the vessel should continue in those waters from the time of insurance to the time of the loss, even though the loss occurs in the waters covered by the policy, for a deviation during any part of tjie time, not caused by necessity, puts an end to the policy (d). When, in the declaration, the vessel is alleged to have sailed from a certain port which is not alleged in the decla- ration to be within the limits covered by the policy, even though the court could judicially notice the fact that there was a port of that name within such limits, they cannot, when the objection is taken infer that such port is the same as the one from which the vessel sailed (e). Not only is it necessary that the voyage be commenced during the existence of the policy, l)ut the loss must also occur during the same period, and if an action is brought on a marine policy it is necessary to aver these facts in the (a) Tarr v. Defjardinn, 13 L. C. R. 394. . > . < ' - • (6) Dimock v. Netv liruiisicick }f. Ins. Co., 3 Kerr 658. ^.=._^^ .. -, (c) Orchard v. Mtna Im. Co., 6 U. C. C. P. 449. (d) Mittleberger v. British Am. F. d- L. Ins. Co., 2 U. C. Q. B., 439. (e) lb. 314 THE LAW OF INSURANCE. declaration, though from the circumstances stated the court might reasonably infer these facts (a). There can be no deviation before the vessel arrives at the port, where, by the terms of the poUcy the voyage com- mences and the risk attaches (b). It is not necessary that the risk should be increased by the deviation. If the risk is in any degree varied, the un- derwriter will be discharged, for his undertaking to indem- nify is only upon the implied condition, that the risk shall remain precisely the same as it appears to be on the face of the policy, as interpreted by usage (c). A deviation is not only a departure from the course of the voyage, but it is any material departure from, or change in, the risk insured against, without just cause, and it is not necessary that the change in the risks should increase or diminish them. The reason is not the increase of risk, but the substitution of another voyage for that which was insured, and thereby varying the risk which the underwriter took upon himself. A ship was insured for a voyage from Dundee to St. John, N.B., thence to a port of discharge in the United Ringdom. She started on her voyage, and arrived at St. John, where she was put on the blocks, detained seventeen days, repaired and re-classed. Held, that this materially altered the risk, was equivalent to a deviation, and avoided the policy (d) Where an insurance was effected on a ship " at and from Saint John, New Brunswick, to a port of call and discharge and loading in the West Indies, and at and from thence to a port of call and discharge in the United Kndgdom," and the ship sailed from Saint John to Havanna and discharged her cargo, and then sailed to Mantanzas in the West Indies to load another cargo, and then sailed for Cork, but was (a) Mittleherger v. Britigh Am. F. d L. Fns. Co., 2 V. C. Q. B., 439. (6) Creighton v. Union M. Ins. Co., 1 James 195. (c) Creighton v. Union M. Ins. Co., 1 James, 217. (d) Reed v. Weldon, 1 Hanuay, 458. MARINE INSURANCE. 315 lost on the voyage : it was held that the going to Mantanzas was a deviation, for the expressions above mentioned re- ferred only to one port (a). Where a policy of insurance describes the voyage to be " from Saint John to a port of call and discharge and load- ing in the West Indies," there is no patent ambiguity in these expressions and the words of the policy mean one port both for discharge and loading, and not two ports, one for discharge and another for loading (6). , A vessel was insured for a voyage from Dundee, Scotland, to St. John, thence to a port of discharge in the United Kingdom. The intention of the plaintiff in bringing the vessel out to St. John, was that she should be reclassed. On her arrival at St. John she was placed on the blocks, repaired and reclassed, and thereby detained seventeen days longer than she otherwise would have been. Held that the insured undertook that the vessel should be seaworthy for the whole voyage, and in the absence of evidence shewing that it became necessary to repair the vessel in consequence of some damage which she sustained on the voyage from Dundee to St. John, such detention for rejmirs and reclass- ing was a deviation and avoided the policy (c). When the contract is for a voyage to several ports in one onward course, any retrograde movement over a part of the onward course will be a deviation. The plaintiff effected an insurance with defendants on certain wheat, to be carried in a schooner from Port Dar- lington to Kingston, and from thence to Montreal, by such boats, barges or vessels as might be deemed necessary and proper for the safe transport thereof. The schooner pro- ceeded to Port Sidney, about three miles below Kingston ; the wheat was there transferred to a barge, which returned to Kingston in order to complete her cargo, and while so (a) McGivern v. Prov. Ins. Co., 3 Allen 311. : (6) McOivern v. Ptov. Ins. Co., 4 Allen 64. (c) Ilced V. PhUps, 2 Hauuay 172 ; see, also, Reed v. Weldon, 1 Hanuay 465. 316 THE LAW OF INSURANCE. returning the barge was stranded and the wheat lost. The plaintifif endeavored to prove a custom in support of the course taken by the schooner, but the evidence only showed that certain forwarders having store houses at Port Sidney had been in the habit of doing as was done in this case, but the policy was entered into without any reference to this custom, and it did not, moreover, appear that the custom was so established that it must have been taken as forming an element in the contract of insurance. The contract was for the carriage in one onward course. Held that the policy was avoided by deviation {a). But it seems that if there had been such a common established usage thus to go from Port Sidney to Kingston, that the parties must be held to contract with reference to it, the policy would not be avoided (fc). A policy of insurance was effected on freight laden on board the Barque '' Daniel," on a voyage at and from Buenos Ayres, to Mantanzas, Cuba. There was an endorse- ment on the policy dated the 28th of April, 1869, to the following effect: "Permission granted under this policy for Barque ' Daniel,' to proceed from Monte Video to Cardenas, calling at Barbadoes for orders instead of Buenos Ayres to Mantanzas." It was held, that the original policy and the endorsement on it should be read together, and that so read, the voyage insured should be taken to have been "a voyage from Buenos Ayres to Cardenas, with liberty to go to Monte Video as an intermediate port," and, that, therefore, the insurers were liable for damage to the cargo sustained at Monte Video (c). A deviation puts an end to the policy from that time, but can have no effect upon any loss which may have previously taken place. Therefore, where the declaration shews a loss before deviation, a plea setting up a deviation, should (a) Fisher v. Western Assce. Co., 11 U. C. Q. B. 255. (6). lb. ((■) Wilson V. Merchants' M. Ina. Co., Sup. Ct. Nova Scotia, July 1872. MARINE INSURANCE. ^ 317 negative the fact that such loss had occurred hefore the deviation on which it relies (a). ,--..: A plea will be bad for duplicity if it sets up several dis- tinct acts of deviation. Thus, if the plea alleges three distinct acts of deviation, to Barbadoes, to Trinidad, and St. Thomas, it will be double. Where a vessel is insured on a voyage to several ports in a specified order, and there is an inception of the risk by the vessel starting on the voyage insured in due order to the places named in the policy, the insured may shorten the risk by the omission of one or more of the termini ad qiios. Where, therefore, a shij) was insured for ;i voyage '* at and from Liverpool to Cardiff, thence to Aden, and from thence to India, or Burmah." She was chartered for and set sail from Cardiff to Aden, with the intention of pro- ceeding from Aden to Chincha instead of India or Burmah, and was lost before reaching Aden ; this was held no deviation. In this case the loss happened after the com- mencement of the risk and before the vessel reached the dividing point. When a ship is insured on a voyage to several ports, she may visit all or any of them, with this reserve only, that if she goes to more places than one she must visit then in the order named in the policy (h). Where an insurance is effected on goods for a voyage at and from a specified terminus a quo, named in the policy, and the risk as to the goods is expressed to begin, " from the loading thereof on board the ship ;" in the common form, the policy will only attach on goods loaded on board the ship at the very place named therein as the terminm a quo of the voyage (<•). This rule, however, is not favored, and the court will (a) Fairbauks v. Union M. Ins. Co., 1 James, 271. (h) Reed v. Weldon, 1 Hannay 458 ; Marsden v. Reed, 3 Ea. 672 ; Ashley V. Pratt, IG M. & W. 471 ; 1 Ex. 257. (c) Creightonv. Union M. Ins. Co., 1 James, 215; Rickman v. Carstairs, 6 B. & Ad. 6G3 ; Roberts v. French, 4 Ea. 130 ; Spitta v. Wood7nan, 2 Tauii. 416. 318 THE LAW OF INSURANCE. gladly lay hold of any circumstances in order to relax its rigor. Thus, under a policy to cover a vessel from the " commencement of loading," and the goods from " the loading thereof on board," at a particular place, the risk will commence at the sailing from that place, although the vessel was loaded prior to her arrival at the terminus a quo, provided there is anything to indicate that a prior loading was contemplated by the parties {a). . A memorandum endorsed on a policy of insurance subse- quently to its execution, and prior to the commencement of the risk, permitting a vessel, for an additional premium, to use a port out of the course of the voyage previously in- sured, includes permission to take in cargo at that port, and shews that a loading prior to the arrival of the vessel at the terminus a quo was contemplated, so that the policy will attach on the goods on the arrival of the vessel at the latter place (h). Under such circumstances, the policy and memorandum will be taken together, and receive a reasonable construction according to the circumstances and course of the voyage (c). The risk on ship and goods generally speaking, only com- mences at the very port or place named in the policy, as that whence the ship is to sail, or where the goods are to be laden {d) A policy effected on goods at and from any port or place named as the terminus a quo of the voyage insured will not protect goods unless loaded on board at the very place or harbor town itself, and if they are shipped and the vessel sails from a port geographically distinct, the policy will never attach unless, indeed, evidence can be adduced to show that the word used in the policy to describe the (a) Bell V. Hobson, 16 Ea. 243. (6) Creighton v. Union M. Ins. Co., 1 James, 195. • {c)Ib. - - {d) Creighton v. Union M. Ins. Co., 1 James, 214. MARINE INSURANCE. 319 terminus a quo is generally understood by mercantile men to comprise the port from which the vessel sails (a). The usage necessary to prove this must be a genoral usage of the whole mercantile community, or a particular usage of universal notoriety in the trade upon which and of the place at which the insurance is effected, so that it may be presumed to be known to and acquiesced in by the under- writers. A cargo insured " at and from Arichat to Halifax," was shipped at Petit de Grat a port nearer to Halifax, and dis- tant nine miles from Arichat by water, and one and a half miles by land, and which by the usage of trade in Richmond, the county wherein both ports are situate, appeared to be generally considered and treated by merchants there, and by the masters of coasting vessels in Isle Madame, the large Island wherein said ports are situate, and also partly by merchants in Halifax, as one and the same port with Arichat, the custom house for both ports being Arichat. The vessel and cargo were lost shortly after leaving Petit de Grat ; it was held that this usage did not bind the under- writers, it not being shown that it was known by them, so that their contract could be presumed to be made with refer- ence to it. It is immaterial that Petit de Grat was nearer Halifax than Arichat (/>). ■'. ; -. , Though there is evidence of a deviation sufficient to avoid the policy, yet if the underwriter with full knowledge of the facts promise to pay the claim under the policy, the court will not set aside a verdict for the plaintiff for the amount of cuch claim. No new consideration would be necessary to support such a promise, because the promise does not constitute a new contract, but is merely an admission of the defendants liability on the original contract (c). (ft) Hennessey v. N. Y. Mutual M. Ins. Co., 1 OlJright 259 ; see, also. Constable v. Noble, 2 Taun 403. (h) Hennessey v. N. Y. Mutual Mar. Ins. Co., 1 Oldright 259. (c) Ileed V. McLaughlin, 2 Hannay 128 ; Gilbert v. Stockton, 1 Haunay 68. 320 THE LAW OF INSURANCE. Whether going to Saint Stephen on the river Saint Croix to get salt for fishing purposes was a deviation, or in pro- secution of the necessary purposes of a fishing voyage upon a time policy was considered a question proper for the jury on the evidence (a). Unreasonable delay is properly a question for the jury, and unjustifiable delay a question of law for the court (b). Whether in the event of shipwreck the master is bound to send the goods to an intermediate port for re-shipment, when there are no means of transport direct to destination of cargo, must depend upon the special circumstances of each case. Such as the certainty that the means of re-shipment will be found in such other port, the distance or contiguity of that port, the expense, the state of the cargo, and all the facilities or difficulties of such a proceeding (c). When the vessel is stranded the master is only justified in selling her under pressure of extreme necessity. It is for the jury to say whether such necessity exists in the particular case, and when there is evidence to go to them, their finding on this point will not be disturbed (d). The insurer cannot be understood as undertaking to in- demnify against losses, which in the nature of things must happen. The purpose of insurance is to afford protection against contingencies and damages which may or may not occur ; it cannot properly apply to a case where the loss or injury must take place in the ordinary course of things. The wear and tear of a ship, the decay of her sheathing, the action of worms on her bottom, are not included in an insurance against perils of the sea, as being the unavoidable consequence of the service to which the vessel is exposed (e). (a) Dimock v. New Brunswick M. Ins. Co., 1 Allen 398. (b) Reed V. fVeldon, 1 Hamiay 458. (c) Fairbanks V. Unio7i M. Ins. Co., 13 &mea 271. (d) Barteaux v. Cobequid M. Ins. Co., Sup. Ct., Nova Scotia. Feby. 1873 ; Axistralian S. N. Co. v. Morse, L. R., 4 P. C. App. 222. (e) Myles v. Montreal Ins. Co., 20 U. C. C. P. 287 ; Coons v. ^tna Ins. Co., 18 U. C. C. P. 309 ; Paterson v. Harris, 7 Jur. (N. S.) 1279. MARINE INSURANCE. 321 A loss happening by the starting of a plank from the shaft working would probably be a loss by perils of the sea (a). It is a rule, to look to the proximate cause of the loss in determining the liability of the insurers, and if such cause be not reducible to some one of the perils mentioned in the policy, the insurers will not be chargeable with it. Thus, the fact that the chief engineer has never been to sea, and is ignorant of the management of the boiler in salt water, will be of no consequence, where, in the opinion of the court, it is not proved that the loss was occasioned or in- fluenced thereby (h). Where a plea to an action on a marine policy alleges, that the plaintiff knowingly and wrongfully sent the vessel from port in an unseaworthy state, and permitted her to remain on the lake in such state, and without being properly equipped, and that by reason of the premises only the vessel was wrecked ; it is not sufficient to prove that the vessel was unseaworthy when she was wrecked, but it must be shewn that the unseaworthiness was the proximate and immediate cause of the loss. It will not be sufficient to shew that the unseaworthiness occasioned the loss, by lead- ing to a state of things out of which the loss arose, but if it is intended to rely on this, the facts must be specially pleaded {<;). If there is no exception in the policy in regard to losses occasioned by the want of ordinary care and skill, the genej.'al rule is that the proximate cause of the loss is to be looked at and not any want of care or skill as producing that cause. Thus in the case of loss occasioned by collision, it would be no defence for the defendant to show that the loss was occasioned by a want of ordinary care and skill on (a) Laurie v. Dowjlas, 15 M. & W. 14lQ) ; Coom v. jEtmi Dii. Co., 18 U.C. C.P. 311. (b) Quebec Mar. Ins. Co. v. Com. Bk. Can., 13 L. C. J. 267. (c) IVoodhouse v. Prov. Ins. Co., 31 U. C. Q. B. 176 ; see also, Thompson V. Hopper, E. B. & E. 1038. V 322 THE LAW OF INSURANCE. the part of the plaintiflf, unless he also averred in the plea that the policy did not cover losses produced by the want of ordinary care and skill (a)-. A marine policy may by express stipulation be so framed that the person whose cargo is insured may be dis- abled from recovery by reason of the want of care and skill in the captain and crew navigating the vessel (b). In framing the contract it is competent for the parties to except all losses arising from want of ordinary care and skill, but in the ordinary form of marine policy, it would be no answer to the claim of the person whose cargo has been lost or damaged, that the captain or crew had been careless or unskillful. Although by the law of the place where the loss occurs it is obligatory upon a vessel proi)elled by steam, to keep out of the way of a sailing vessel, and although in the case of damage or injury to the former, from collision with the latter, it is presumed that the fault lies with the steam vessel, yet, it is still necessary to shew that the loss could not have been avoided by the exercise of ordinary care and skill on the part of those navigating the steam vessel. At all events, such is the law where there is no exception in in the policy in regard to losses occasioned by the want of ordinary care and skill (c). In all cases, when the subject of insurance is not actually annihilated, the assured is entitled to claim, and claiming as a total loss, the very principle of the indemnity requires that he should give up to the underwriters all the remains of the property recovered, together with all benefit and ad- vantage belonging or incident to it (d). In these cases, however, it is supposed that the thing exists in specie, and where the thing so exists and there is (a) Patterson v. Continental Insuranca Co., 18 U. C. Q. B. 9. (b) Gillespie v. British A. F. db L. Asrcr- Co., 7 U, C. Q. B. 108. (c) Patterson v. Continental Ins. Co., 18 U. C. Q. B. 9. (d) Knight v. Faith, 15 Q. B. 649, 659. MAIUNE INSURANCE. 323 a chance of recovery, in order to make it a total loss, there must be an abandonment (a). The loss will be total if tjie vessel as injured is useless to the owner, unless at an expense that no prudent man if unin- sured would incur an expense exceeding the value of the ship when repaired (b). An abandonment must operate not only as a transfer of the whole interest of the assured in the subject of insurance but it must be such as to effect that transfer absolutely and unconditionally {<■). What would otherwise be a constructive total loss, will be held to be an actual total loss when the subject of loss has been sold, and no notice of abandonment will be required for the property by sale has passed, and there is nothing aban- doned to the insurers (d). Where the policy is on freight and the ship and cargo are justifiably {i.e. under extreme necessity) sold abroad, the assured may without notice of abandonment recover as for a total loss of freight. But if the sale is unjustifiably made when the ship might have been repaired or the cargo sent on so as to earn freight, mere notice of abandonment unaccepted cannot alter the rights of the parties. Where the original ship can be repaired in a reasonable time, or the cargo may be sent on in a substituted ship at a reason- able amount of cost and trouble, and with a fair hope of its ultimately arriving in specie, or in a merchantable state at its port of destination, the master is not justified in selling, and the shipowner will not be entitled on the ground of the master's negligence or improper conduct in selling the goods instead of forwarding them, to give notice of 8jbandonment and recover as for a total loss of freight. Where the cargo on board a vessel was partially damaged, and sold by the. (a) Tunno v. Edtvards, 12 Ea. 488. (b) Harkley v. Prov. Ins. Co., 18 U. C. C. P. 335 ; Irving v. Manning, 2 C. B. 784. * (c) Harkley v. Prov. Ins. Co., 18 U. C. C P. 346.-7. .^ (d) Famworth v. Hyde, 18 C. B. N. S. 835. : "^ ~ " ' . " Y 324 THE LAW OF INSURANCE. master, l)ut it was not shown that such a necessity for sale existed as to make the sale a legal one, and it further appeared that the vessel -could have l)een repaired at a reasonable cost and within a reasonable time, and could have put to sea and conveyed the cargo, which the mast sold, to the port of destination ; it was held that the in- surers on the freight policy were completely exonerated. Where there is no total loss of the vessel actual or con- structive, and the freight is sold as partially damaged, it is necessary for the plaintiff to show affirmatively that a prudent owner would not have rei)aired the vessel, and that she could not have been repaired so as to have carried the freight to its port of destination (a). If a ship becomes unnavigable, and cannot prudently be repaired, it seems tbe assured cannot recover for a total loss without an abandonment (/>). A vessel was driven into port where there was no dock to receive her. It appeared she had suffered so much by perils of the sea, that on survey it was judged expedient to break her up and sell her for tinil)er. Tlchl, that the assured was bound to abandon her before 'he could call on the under- writers for a total loss, the ship not Ijeing a wreck, but, however maimed and damaged, existed in specie as a ship (<•) If goods once damaged l)y the perils of the sea, and nec- essarily larded before the termination of the voyage, are by reason of that damage in such a state, though the species be not utterly destroyed, that they cannot with safety be re-shipped into the same or any other vessel, the loss is in its nature total to him, who has no means of recovering his goods, whether his inal)ility arises from their annihilation, or from any other obstacle (d). Where, therefore, a cargo of dried fish on board a vessel (a) Wilson v. Merchants M. Ins. Co., Sup. Ct., Nova Scotia, July, 1872. (6) Stewart v. Greenock Marine Ins. Co.. 2 H. L. 159. (c) Bell V. Nixon, Holts. N. P. 423. (d) Roux V. Salvador, 4 Eug. L. & E. RepH. 600. ■_ MARINE INSURANCE. 325 was insured, by a policy containing the ordinary memoran- dum clause, declaring the cargo to be free from average, unless general, or the ship be stranded, on a voyage from Hali- fax to Pernambuco and a market in the Brazils, and the vessel was so damaged by a sudden squall, as to be forced into the port of Barbadoes for repairs, where it was found that she could not be repaired in time to prosecute the voyage, and that there was no vessel in that port in which the -cargo could be re-shipped to its port of destination. No survey however, was made at Barbadoes, but, as the cargo could not be sold there, the master proceeded to Trin- idad, and thence to St. Thomas, where, on a survey it was found, that the cargo was so damaged by the salt water, occasioned by the disaster to the vessel before arriving at Barbadoes, that it would have become a total looS to the owners if the voyage had been prosecuted ; it was held, that the owners might abandon, and treat the case as one of total loss (ii). The fa^t that the master, who is consignee, sells at a port not the port of refuge, will not affect the owner's claim when he apprises the latter of the disaster on reaching the port of refuge ; and when the owners on receipt of his letter, give formal notice of the abandonment, for the owners can- not be held responsible for the conduct of the master after the voyage is abandoned. From that moment he becomes the agent of the underwriters, and whatever he does must be regarded as having been done for them, and not for the owners. In this case the master took refuge at the port of Barbadoes, whence he despatched the letter to the owners, but he afterwards sailed for Trinidad, and then to St. Thomas, where the cargo was sold for the benefit of all concerned. On the ground that from the moment of the abandonment the master becomes the agent of the uiulerwiters in all acts done by him from that time, if after a constructive to! *, (a) Fairbanks v. Union M. Im. Co., 2 Thompson, 67. 326 THE LAW OF INSURANCE. loss of the vessel, and notice of abandonment given by the owner, the master enter into a contract with certain parties to get the vessel off, and sign it on behalf of the owners and underwriters of the vessel, this will be no waiver of the abandonment as against the owner (a). Notice of abandonment is not necessary in the case of an absolute total loss, but where there is a constructive total loss the insured is not entitled to recover without a proper abandonment, ard if the policy contains any conditions as to the form and requisites of the abandonment, it will be a good defence to show that it is not made according to the conditions. The defence will be equally available though the insured has so framed his declaration as to be able to claim for an actual total loss or a constructive total loss (b). A vessel in midsummer in coming up the river St. Law- rence struck on a shoal or reef which runs out northward toward point Iroquois, on the Canadian side of the river in Ontario, where the river is probably from half a mile to a mile wide. The accident occurred about two o'clock in the day. A large boulder at the point of the reef came under the vessel about amidships : she hung upon this and sank at the bow and stern till the water became level within her. From the situation in which she was, she was not exposed to the action of any sea, and could easily be got otf and taken to a place of safety. She was, in fact, got off in about a week, at an expense of about $800. Held, that this was neither a total loss nor such a constructive total loss as entitled the insured to abandon (r). Where a vessel apparently through unskilful manage- ment struck on a rock in Lake Huron, and it appeared that on the ninth day after the vessel went upon the rocks, the captain on returning to her, found her in as good a state as on the second day, and that she remained !wo or three (o) King v. Western Asuce. Co., 7 U. C. C. P. 300. (&) Mi-aphcr v. Jlonw /hs. Co., 10 U. C. C. P. 318. (c) Meagher v. ^Etna Ins, Co., 20 U. C. Q. B. 607. MARINE INSURANCE. 327 weeks on the rocks, and then floated two or three miles below. The back of the vessel was strained, but not broken and she was not at al) shattered to pieces. It further appeared that there was not the slightest attempt made to get her oif or to recover her, or even to examine her ; while all the witnesses said they would have tried to get her off, and it seemed, beyond doubt, that there were eight days during which from the calm state of the weather an attempt could have been successfully made, for within three days after she first run on, she floated again without any assistance, and there was evidence that even one man could have hauled her off, but the captain declared he did not mean to do anything with the vessel. Held, that this evidence totally disproved a total loss, actual or construc- tive (a). The general principle is that the state of fchings at the time of action brought is to be regarded, and if the vessel is repaired and restored before action, in as good condi- tion as she was before, the case cannot be treated as one of total loss. But the insurers have no right to repair and tender back the ship so as to render ineffectual an abandon- ment by the insured when the cost of repairs is ;:veater than the value of the ship when repaired. In othei words the right of the underwriters to repair and restore the vessel is subject to the right of the insured to abandon in any case where a prudent owner uninsured would do so, on the ground of repairs exceeding the marketable value of the ship when repaired. Where, therefore, the plaintiff sues for a total loss, a plea setting up the repair and restoration of the ship, would be insufficient if it did not stat(.' the value of the repairs or show any means of determining such value (b). Even although the facts are such as tojustify the assured in giving notice of abandonment, yet the abandonment is not (a) Harklry v. Prov. Im. Co., 18 U. C. C. P. 335. (b) Mcaijhcr v. Home Ins. Co., 10 U. C. V. l\ 313. 328 THE LAW OF INSURANCE. absolute, but is liable to be controlled by subsequent events and if the loss has ceased to be total before action brought, the abandonment becomes inoperative. Thus, where a vessel was driven on shore, and being supposed to be a total loss, notice of abandonment was given to the underwriters. They refused to accept the abandonment, got the vessel off, brought her to St. John, her port of destination, a place safety, before action brought, and required the owner to take charge of her. The cost of repairing her after she was brought to St. John would be less than her value when repaired. Held, that the right of the assured to recover depended upon the state of facts existing at the time the action was brought, and that he could only recover for a partial loss {a). In fact it is well settled that it is not the state of the vessel at the time the notice of abandonment is given, but its condition at the time the action is brought, that determines whether the loss is a total or partial one. The con+inct of insurance being one of indemnity only, the insured cannot recover for a total loss if at any time up to the commencement of the suit, the vessel is in such a state as to be of value to the insured though at a prior period, or when the notice of abandonment was given, she was in such a state as to justify the assured in treating the case as one of total loss. Whenever the vessel is still in existence, and can be restored to the owner in the character of a ship, or the goods are undestroyed, the underwriters are not liable for a total loss unless the vessel was injured to an extent that renders her not worth repairing, or the goods cannot be transmitted, or have been rendered not worth transmitting to their destined port, and the underwriters are not liable for any loss occasioned by retardation of the voyage or change of market, against which they do not undertaken to indemnify the assured. Where, therefore, the vessel insured had struck on the rocks in an exposed situa- (a) Taylor V. Smith, 1 Haunay 120. MARINE INSURANCE. 829 tion on the 11th of November, 1839, and, notwithstanding, the exertions of the crew and persons from the shore, was abandoned by the crew on the 15th, being then as all supposed in a hopeless condition and not worth further expense or trouble. Notice of abandonment was given to the underwriters by the assured on the 19th, and on the 20th the underwriters accepted the abandonment. On the 21st a heavy gale lifted her off the rocks, and she was brought safely into port, whereupon the underwriters on the 27th gave notice that they would not accept the abandon- ment. It was held that though at the time the notice of abandonment was given, and accepted by the underwriters, the abandonment was well made, yet, that subsequent events having made that a partial, which was formerly a total loss, the assured were only entitled to recover as for a partial loss (). Notice of abandonment is indisputably necessary by law in all cases where the insured elects to abandon. Where the vessel insured ran upon the rocks on the 11 th of October, and the defendant's agent was informed of it by the insured on the 16tli of October, but he was not in- formed of his abandonment as for a total loss until he made the protest before the agent on the 17th of October, and no formal abandonment in writing under the terms of the policy was made until the 27tli of December following, when the vessel had been floated off and utterly lost by the careless- ness of the insured ; it was held that the notice was too late to be available, even if there had been such a loss as would have entitled the assured to abandon (c). A verbal abandonment of a vessel to the agent of an (a) Meaifhcr v. yEtua Ins. Co., 20 U. C. Q. B. 623 per Robiuson, C. J. ; see, also, Roiu i\ Salvador, 3Biag, (N. C.) 280-7 per Ld Abiuger. (b) Meagher v. .Etna Ins. Co., 20 U. C. Q. B. 607. (c) Harkley v. Prov. Ins. Co., 18 U. C. C. P., 335. • MARINE INSURANCE. 331 insurance company who is not authorized to receive it, and does not r ommunicate it to the company, is not a notice to the company and especially when the policy requires that the abandonment shall be in writing, signed by the insured, and delivered to the company or their authorized agent (a). The test whether the insured has a right to abandon so as to claim for a total loss is whether a prudent man would think it worth his while to attempt to save and repair the vessel, it being assumed that he would not do it unless he had the prospect of gaining something l\y the attempt ; in other words that he would not make the attempt unless it appeared probable that the vessel vhon got off, and restored to the state she was in before the accident, would be worth as much as the operation would cost him (6). Where a vessel is stranded, the mere restoration of her by the underwriters, if the insured is called upon to pay as much or more than she is worth when restored, will not prevent the insured from claiming for a total loss ; for if the voyage be not worth pursuing, or the ship bo reduced to such a state that she cannot proceed without refitting, the expense of which would greatly exceed her value, the insured may abandon and claim as for a total loss. Where, therefore, the jury found that a prudent owner uninsured would, in the state in which the vessel was, have abandoned her ; it was held that the insured had a right to give notice of abandonment and treat the case as one of constructive total loss, and this although after the notice was given the master had entered into an agreement for the recovery and repair of the vessel, and she was repaired and tendered to the owner (c). Acts of the underwriters in recovering and repairing the (a) Harkley v. Prov. Ins. Co. 18 U. C, C. P. 335; see, also, Hunt v. Royal Ex. Assce. Co., 5 M. & S. 47 ; King v. JValker, 2 K. & V. 384, 11 Jur. (N. S.) 43. (b) Meagher v. Mtna Ins. Co., 20 U. C. Q. B. 607. (f) King v. Western Assc.e. Co., 7 U. C. C. P. 300 ; see, also, Thompson ■<. Royal Ex. Assce. Co., 1 M. & S. 30. 332 THE LAW OF INSURANCE. vessel do not amount to an acceptance of the notice of abandonment when the policy contains a provision to that effect (a). The insurer of a ship who has accepted an abandonment made by the insured cannot afterwards resist the claim of the latter urider pretext of the violation of the clauses of the policy and a deviation from the route agreed upon (h) . Where by the provisions of the policy every $300 in the order of invoice was to be considered separately insured, and coffee was declared to be free from average under 10 per cent unless general, and it appeared that there were thirty bags of coffee, valued in the policy at $654, but only seven of these were damaged to an extent very slightly exceeding 10 per cent. Held, that the damage should have exceeded 10 per cent on the whole lot valued at $654, otherwise the insured could not recover (c). If a vessel is driven on a rock by perils of the sea and is injured, the insured is entitled to be indemnified against that loss, but he is not obliged to use exertions to get her off and he may let her go to pieces if he likes, and will still have his remedy for the loss sustained by her getting on the rocks by perils of the sea. He cannot, however, claim for more than this for the rest is his own voluntary loss (d). A policy of insurance on a vessel provided that no partial loss, or particular average should be paid unless amounting to five per cent. The vessel having sailed from Cardiff in perfect order and condition, grounded on a coral reef on entering the har])or of Mantanzas, and continued on it bump- ing for upwards of twelve hours. She did not leak, however, and on being examined by surveyors was pronounced sound. She took cargo and sailed for Queenstown, but on arriving there was very leaky, but it was thought she might safely continue the voyage on being supplied with new pump gear (a) Kenny v. Hallfaw Mar. Ins. Co., 1 Thomson, 113. (b) Lednc v. Pi-ov. Ins. Co., 14 L. C. J. 273. .. . . - (c) Sun M. Ins. Co. v. Mimon, 4 L. C. J. 23. (d) Harkley v. Prur. Itis. Co., 18 U. C. C. P. 885, 351, MARINE INSURANCE. 333 and three additional hands, and she thence sailed to Stock- holm with her cargo. She took in cargo again at Sunds- wall, a neighhoring port, and the thence sailed to Sunder- land, England, where she discharged her cargo. On being examined there she was fomid to have sustained damage exceeding five per cent by grinding on the rocks. The court being satislied that the injury was either wholly sustained at Mantanzas or was the immediate and necessary consequence of what occurred there ; held that the insured was entitled to recover (a). Where in an action on a marine policy the plaintiff re- covered as for a total loss, the facts only shov/ing a partial loss, which, however, was not distinctly left to the jury, the court granted a new trial without costs (h). There appears to be no necessity in i)leading to specify whether the plaintifif proceeds for an actual or a construc- tive loss, and it has long been settled that on a total loss alleged, a partial loss may be recovered, because total or partial is not the ground of action ; it is the estimate of damages merely (c). Under a declaration claiming as for a total loss the plaintiff may recover for a partial loss, and in such case when a policy provides that no partial loss shall be paid unless exceeding live per cent, the plaintiff may in the absence of any evidence by defendant of the extent of the injury, recover for a partial loss, on a certificate of a ship carpenter made upon a survey that the vessel is not worth repairing, and this though she is afterwards rejiaired and there is no direct evidence of the value of the repairs (d). Where the plaintiff sues for a total loss, a plea setting up facts which negative an actual total loss, but do not neces- sarily show that there was no constructive total loss, is no answer to the action, for the insured may in some cases (a) Berry v. Columbian In». Co., 12 Grant 418. [h) Davis v. St. Lawrence I. M. Assce. Co., 3 U. C. Q. B. 18. (c) Harklcy v. Prov. 7ns. Co., 18 U. C. C. P. .S45. (d) Dimock v. New Brunswick M. Assce. Co., 1 AUou, 398. 334 THE LAW OP INSURANCE. recover for a constructive total loss on such a declaration. So where a recovery and repair of the vessel in case of loss is permitted by the policy, without prejudice to the rights of either insured or insurer, a plea setting up a recovery and repair, but not stating the cost or affording any means of determining the cOit of such repair would be no answer to the action, for if the cost of repair exceeds the market- able value of the ship, the insured is not bound to repair and may treat the case as one of total loss (a). Where the declaration is framed so that the plaintiff can claim for an absolute total loss or a constructive total loss, and the declaration avers an abandonment of the vessel, and the defendants' acceptance thereof, which are both material allegations as respects constructive total loss ; a plea traversing these latter allegations would be good (/>). So where a declaration contains these allegations as to abandonment, and acceptance, etc., the defendants have a right to treat the declaration as founded on a constructive total loss, and a plea denying that the abandonment is sufficient according to the conditions of the policy will be good (c). The description of the voyage in a policy must be taken in its commercial acceptation and not in its strict geographi- cal meaning. Where therefore a policy is effected at and from a particular port, evidence may be given of an established usage of trade authorizing the vessel's sailing from another port geographically distinct (d). In the construction of a policy evidence may be adduced to ascertain the true meaning of a descriptive or other par- ticular word and the sense in which it has been used and the (a) Meagher v. Home Ins. Co., 10 U, C. C. P. 313. (b) Meagher v. Home Ins. Co., 10 U. C. C. P 313. (c) Ih. {d) Hennessy l\ N. Y. Mutual M. Ins. Co. 1 Oldi-ight 260 ; Robertson v. Clarke 1 Bing. 445 ; Hiygins v. Aquilar 2 Tauu. 406 ; Moxon v. Atkins, S Camp. 200. MARINE INSURANCE. 335 meaning being ascertained the construction of the instru- ment of course belongs to the court {(i). A warranty by the assured in relation to the existence of a particular fact must be strictly true, or the policy will not take effect. Where in a policy on a steamer the words of description were " on the hull and joiner work of the steamer Malakoff (now in Tate's dock, Montreal) navigating the river St. Lawrence between Quebec and Hamilton stopping at intermediate ports," it was held that these words imported an express condition and warranty that the steamer insured was navigating and should continue to navigate while the policy remained in force, and the engagement not having been performed the insurers were discharged {h). If the words used in a policy as descriptive of the vessel insured, import an agreement that she shall navigate, they must be considered as a warranty and if the engagement is not performed whether it is material or not material or whether it produces the loss or not the insurers are dis- charged. But where a vessel was described in the policy '"as now lying in Tate's dock, Montreal, and intended to navigate the St. Lawrence and lakes from Hamilton to Quebec princi- pally as a freight-boat and to be laid up for winter in a place approved of by the company who will not be liable for ex- plosion either by steam or gunpowder ;" it was held that these words contained no contract to navigate but merely indicated an intention to do so and therefore did not amount to a warranty and that therefore the insurers were liable though the vessel was destroyed in the dock before any re- moval (c). Any fraud, concealment or misrepresentation on effecting a policy or the suppression of a fact on which it may be im- portant to the insurer that he should be allowed to exercise (a) Hennessy v. N. Y. Mutual M. Ins. Co. 1 Oldright 260-1 ; 8 M. & W. 823, (6) Grant v. Equitable Ins. Co. 8 L. C. J. 13 ; affirmed on appeal lb. 141 • 14 L. C. B. 493. (c) Grant v. Mtnalm. Co. 6 L. C. J. 224; S. C. 5 L. C. J. 285 reversed; & L.T.N.S.735. , . - - 336 THE LAW OF INSURANCE. his judgment either as to taking or refusing the risk or in fixing the rate of premium invalidates the poHcy (a). It is even hekl necessary to communicate everything the party knows as to rumors which he may have heard, even though such rumors may turn out to l)e unfounded, and the reason is that the insurer may know everything which may affect his judgment in taking the risk {h). Where a vessel left Port Wellington on the 0th of Octo- ber for Kingston; was exposed to a violent gale which drove her above this port and compelled her to take refuge in Presque Isle. In this gale she received some damage, and the cargo was at least partially wet. She had been seen to leave Presque Isle on the 8tli, in the evening was known to have been caught in a sudden and violent squall, in which it was feared she had been lost. Other vessels then near her had arrived, and consequently at the time the risk was taken she was a missing vessel. The insurance was effected on the 8th October and it appeared that the insured then knew the above facts and had also attempted to effect an insurance at another ofitice but the risk had been declined. Held that the concealment of the above facts was such as to avoid the policy (c). If the insurers before taking the risk make the enquiry whether the vessel has sailed, and are misinformed, they cannot be compelled to make good the loss ; but if no en- quiry is made by them and they are merely allowed to take the risk without auj'thing being said on the subject, while the assured knows that the vessel has, in fact, sailed, but omits, whether intentionally or otherwise to state it ; such omission will not avoid the policy unless the ship was at the time what is called a missing ship, that is so long out (a) McFaulv. Montreal ]. Ins. Co. 2 U. C. Q. B. 59. (6) 14 Ea. 494. (c) McFaxil V. Montreal I. Ins. Co. supra. MARINE INSURANCE. 337 that according to the rule of computation for the voyage she ought to have arrived, but has not been heard of (a). But where the insured is only owner of the cargo and not master or owner of the vessel, and has therefore no control over the sailing of the ship, he cannot be held to make any positive statement on the subject, and when in such a case the insurance was effected by the plaintiff's agent and the evidence as to representations of the time of the ship's sailing was contradictory and inconclusive, the court refused to grant a new trial on a verdict being found for plaintiff (b). In effecting an insurance all facts material to the risk known to the one party and not known to the other must be fully and fairly declared (c). In effecting a time policy, however, it is not necessary to state the time of sailing on, or the terminus of the particular voyage the vessel was pursuing at the time of effecting the policy. But these facts may become material as where the policy is to have a retrospective operation, any circumstances connected with the probable whereabouts of the vessel may be important, as if the time of sailing be such as to make the ship a missing ship, or the fact of a hurricane occurring at the terminus renders it probable from her time of sailing, and port of destination that she was exposed to the storm. Plaintiffs applied to defendants on November 12th to in- sure their vessel on a time policy for six months, beginning on the 9th September previous, the day on which she left Swansea for St. Thomas, where she was then overdue. In the written application in reply to the queston " where bound," the plaintiffs reply was "a port in the West Indies." The news of a violent hurricane having occurred at St. Thomas had been published in the papers that morning, and was known to plaintiffs but not to defendants. The (a) Perry v. British Am. F. (& L. Ins. Co., 4 U. C. Q. B. 334 ; Fort v. Lite, 3 Taunton, 381 ; Foley v. Moline, 5 Taunton, 430 ; Elton v. Larkijis, 5 C. roceed8 from a wilful intention to deceive, or from mistake, or even ignor- ance, the contract will be void. Parol evidence of such representation is admissible, but the materiality of it as well as the truth of it is for the jury (c). The interests of commerce and various complicated rights which different persons may have in the same thing, require tnat not only those who have an absolute property in ships but those also who have a qualified property therein, may be at liberty to insure them. Possession of a ship with an authority to manage it, confers an interest entitling to in- Bure. There is no doubt that a trustee may insure and one of two trustees being part owners can insure a vessel (d). Where one of the conditions of an open policy provides that it shall not be held to cover any cargo endorsed on it (a) Mahoney v. Prov. Ins. Co., 1 Hannay 622. (b) Ih, 627-8. (c) McCuaig v. Unity F. Ins. Co., 9 U. C. C, P. 85. (d) Moore v. Home Ins. Co. 14 L. C. J. 77-82. MARINE INSURANCE. 339 until the name of the vessel carrying the cargo to be in- jured is communicated to the company or their agent, a compliance with the condition is necessary to complete the insurance, but the communication of the name will be a sufficient compliance, although the insurers neglect to in- dorse it on the policy. If, at the time of giving such notice the insured knew that the vessel insured had collided with another vessel, the suppression of this fact would avoid the policy, but if they had no knowledge of the collision the in- surance would be effectual {(i). To satisfy a condition as to preliminary proof of the loss of a vessel the plaintiff delivered the master's protest de- scribing the loss and a certificate of a ship carpenter, that the vessel was not worth repairing, also examined copies from the custom house of the declaration of ownership and the certificate of registry, it was held that this was suffi- cient preliminary proof to enable the plaintiff to recover for a partial loss, and that a certificate from the custom house that the register of the vessel had been deposited there as a condemned vessel was not necessary {b). When the value of a ship has been fixed by the policy, a joint owner who has insured the whole of the ship in his own name alone has a right to a moiety of the entire value and not simply to a moiety of the sum insured when this moiety of the value does not exceed the sum insured (c). Where by the conditions of a policy the insurance will only cover vessels of a particular class and there exists no regular classification of vessels or any register, which can be taken as of itself sufficient to settle the question, the class i^ which the vessel belongs must be decided by the general evidence of her being of that class as recognized by mariners and of her being seaworthy and perfectly ad- apted to the purposes for which she is used ((/). (a) Cusack v. Montreal Ins. Co. 6 L. C. J. 97. (6) Diihockv. Ni'w Bnimwick M. Assce. Co. 1 Allen 398. (c) Leduc V. Prov. Im. Co. 14 L. C. J. 273. (d) Cuiack V. Mutual Ins. Co. 6 L. C. J. 97. 340 THE LAW OF INBURANCE. The dnclaration on a marine policy sot out afl amon^ its proviHions, that a reguhir Hurvcy nhould bo hold as Hoon after the accident an poHHil)lo by competent pernonH mutually clioHon, etc., and when a vohhoI aft(;r Hurvey should be found capable of l)einf5 repaired and made aH good aH Hhe waw prior to the accident, no al)andonment would be allowed without the conH(!nt of th(! d(!f(!ndantH ; that Hhe Hhould b(! Hound and Heaworthy, and wciU manned and found, and if upon a regular Hurv(^y she Hhould be declared and found uuHeaworthy on account of being un- sound or rotten, or incapable of proHccuting her voyage, on the name account then the aHHurerH Hhould not be bound to pay anything. PlaintiffH th(;n alleged that the venHel waH Ktrand(!d, diHabhul and wholly lont. DefendantH pleaded that no Huch r(!gular Hurvey wan held an required by the provino Bet out in the declaration, although the v(!HHel waH at the time of the accident and at the commencement of the suit above water, and waH a proper Hubject of Hurvey, and th(!y wen; willing to choone a Hurveyor. Held, on demurnir that the plea wan good ; for the proviHion for a survey waH not confincid to the; caHe of a partial Iohh, and on the declaration the plaintiff could have recovered for that as well as for a total Iohh (a). Though th(! circumHtancofl of a Iohh are very Hunpicious, yet if there Ib prima facie evidence on th(! part of the plain- tiff that the Iobb waH accidental, and thin (evidence in not contradicted by tlus dcifendant the court will not dinturb a verdict for tins plaintiff if the quoHtion of fraud in fully and fairly left to the jury (/>). Where an innurance in made for, and on, behalf of A, but the Iohh Ih made payabh; to B an agent, A can recover in an action on th(! policy in his own name for by making (o) Hamilton v. Muiilreal Asscc. Co., 2a U. C. Q. B. i'Al ; «eo, uIho, King v. Walker, » .Jur. (N. 8.) 1157. (6) JJimock v. New llrunawick Atmcr. (Jo. 1 AUon 398. MARINE INSURANCE. 341 the loHH y)ayablc to B, the latter is only entitled to receive it aw agent (a). In a caHe of marine inHurance the policy a(loj)t(;(l wan a ren(!wahl(^ time policy of insurance against fire according to th(! form used for Iioushh and buildings and th(! conditions endorsed on the policy which were inapi)lical)le to the sub- ject matter insured were not struck out so that the insur- ance was subject to the ordinary conditions of a policy on houses and buildings. The policy was subject to a condi- tion that if more than '20 lbs. of gunpowder should be on the prenmc.H at the time; any loss happened, the; loss should not be made good. TIk; court held that tin; word premiseB should be constru(!d not as signifying buildings for there were none to be insured, but in its legal sense as the sub- ject or thing previously expn;ssed so as to apply to the in- surance on the steamer, and that there having becin a viola- tion of the condition tin; policy was void wh(!ther or no the loss arose from the violation {h). A barge on a voyag(! by riv(!r and canal, having wlien navigation was about to close; receiv(;d damage; by an acci- dent and partly sank ir' shallow water, by which the greatcfr portitm of her cargo was rcTuhinid nearly worthless, though a portion n^mained sound, and the shipper before the raising and repair of tin- v(!SS(;l having abandoned the cargo as a total loss to his insunsrs by (didorsement of bill of lading, and they having removed the cargo to shore, sold the damaged and stored th(! sound with tin; kiiowl(;dge of the master ; and the shipper, not accepting the master's off(!r afterwards made to (tomplet*; the voyage; when hi8 repairs were iinished, which might not have; be;(;n in time for that sease)n's open navigaiie)n. IfcUl, (1) that the cargo could not l)(; held to be wbe)lly pe;rishe'el under art. '2,451 C. C, so as te) found an actie)n te) recover fr(;ight advanced by the; shipper. ('2) '''" .vt this was such an acceptance by the (a) lUirteauj- o. Oohequid M, Inn. Co. Hup. ct. Nuvji S-JcoUa Foby 73. (b) lieacm L. d- F. Int. Co. v. iiihh V.\ L. C. R. 81. 842 THE LAW OF INSURANCE. shipper of the cargo short of the original destination as bound him to pay frciglit ^>;y) ntfa itineris pn-acti calculated by distance on the damaged portion of the cargo removed and sold by his assignees, tlio insurers. (3) That the master was entitled to full frciglit per bill of lading on the sound portion remaining stored in the possession of the shipper's assignees {a). When the vessel shortly after leaving j)ort becomes leaky or founders, the presumption that she was not seaworthy when she sailed, may be rebuttiul by positive proof of sea- worthiness, but it will not bo affected by proof of the strength of the shi]), or her age, or the completeness of her equipments. It seems, that if the vessel shortly after sail- ing be found, by springing a leak or otherwise, to be unsea- worthy, it is the duty of the master to make a port where repairs and supplies can be had, and when obtained the liability of the underwriter previously lost or .suspended would revive ih). Where it appeared that a schooner sailed from Hali- fax on a fishing voyage on the oth October, 1808; that being abreast of Cape Canso on the 7th, at 7 p.m., the wind blowing fresh at the time, when the pumps were tried as a usual thing, it was discovered thtit the vessel had sprung a leak. The crew manned the pumps and freed her of water. On the 8th tl.ey arrived at Port Hawkesbury, and put the vessel on the nuirinc railway and there had her examined and caulked where deemed necessary by the workmen. On the 9th they proceeded on the voyage and the vessel still leaked, when the mastti' concluded that if the leak increased he would touch at the port of Sydney, and put the vessel on the marine railway there. During all this time she could be freed by the pumps, and was so. After leaving the strait the leak increased to such an extent that (a) Tmrville v. Ruckle, 15 L. C. J. 29. (6) Seo Irvine v. Nova Scotia M. In«. Co., Bup. Ct. N. 8. 1872 ; Wier ». Anderton, 2 B. & Aid. 320 ; Paddock v. Franklin Tns. Co., 11 Piok. 227. MARINE INSURANCE. 343 the master deemed it prudent and advisable to run no risk in proceeding on, and put into little Canso. After undergoing repairs there, by putting in some new plank abreast the main chains, and further caulking, they again proceeded on the voyage on the 13th, and arrived at their destined port in the Bay of Islands on the 19th without further trouble or accident, and commenced their fishing and continued doing so without interruption until the 18th of November (that is, after an interval of 30 days), when they had caught 300 barrels of herrings, and were hindered from further prosecuting their vocation by the vessel settling down during the night to such a degree that the water in the hold cov- ered the cabin floor, and the pumps being unable to relieve her, the master was obliged to beach her, and sbe was afterwards condemned as unseaworthy, and sold, producing $49 net proceeds. The head carpenter at the railway slip deposed that he found the corners of two or three of the butts leaking from the working out of the oakum ; found a rotten knot or knot hole ; caulked the butts and stopped the knot-hole ; made all the examinations and all the repairs hv considered necessary to make it seaworthy ; considered her a fine, good vessel ; a good seaworthy, first-class vessel at that time. On his cross-examination, he said he did not try her plank- ing above the ballast water line ; found the planking sound below that line ; she had a thick coat of copper paint on ; found no worms, and could not account for her going down at an.^hor. It further appeared from the testimony of one of the witnesses, that in the month of Octo])er, wlien near the Bay of Islands, tln^re was a heavy gale of wind which lasted from Saturday night till Monday morning. The vessel strained heavily in that gale. It was after that she sprang a leak {^nd leaked worse than she did before. This witness had no doubt that the leak was caused by the straining in that gale ; the men liad to Ial)our more in pumping after that gale. The court considering the absolute 344 THE LAW OP INSURANCE. flilence of the officers of the ship as to this gale, which rendered it very problematical, and considering also that that there were a number of witnesses on board, several of whom could easily have been produced ; that the evidence of the single) seaman examined as to the fact of the gale should be confirmed, and as the jury appeared to have decided on this evidence that the defendants were entitled to a new trial (a). Where an insurance was effected in the Province of Nova Scotia by a time policy, covering a vessel on a voyage from Liverpool to New York, and a loss was sustained on this voyage, which was the subject of general average, and was adjusted according to the usage prevailing in New York ; it was held, that the insurers were bound to pay the general average on the adjustment made in New York, in conformity with the laws and usages in the United States, though a larger sum was allowed than would have been allowed if the adjustment had been made according to the law of Nova Scotia, the place where the policy was made {b). Although a sale of a vessel by the master is made bona fide and for the benefit of all concerned, this will not make it lawful ; it must also be justified by urgent necessity. Where, therefore, a vessel lay moored in the harbor of St. Georges, at Bermuda, and could have been there secured with safety to the interests of all concerned, so that if she was left in that liarbor a notice of abandonment could have been given to the insurers at Liverpool, so that they could had they thought proper so to do have accepted the abandonment and taken possr'^sion of the vessel, and repaired her, and the vessel was in fact in that situation at the moment that the master made sale of her ; it was held that the sale was not justified (c). (o) Irvin v. Nova Scotia M. Jns. Co., Sap. Ct. (N. S.) 1872. (b) Avon M. Int. Co. v. Barteaux, Sup. Ct. N. S. 1870, G TT. C. L. J. N.S. 85. (c) Morton v. Patillo, Sup. Ct., Nova Scotia. .- BOOK III. LIFE INSUEANCE. The various Canadian cases on this branch of insurance will be found in other parts of this work. In fact the principles governing the law of fire and life insurance are so very similar, that a learned English author has remarked that he " found it impossible to give separate chapters for life and fire insurance, the principles being generally applicable to both, and the cases fixing those principles being occasionally wanting in one or the other " (a). In the preparation of this work I have found that all the cases which have arisen in Canada on the subject of life insurance are equally applicable to fire insuaance. I have, therefore, dealt with the cases on life insurance while discussing the subject of fire insurance, in order that the chapter on life insurance might be compressed into the smallest possible compass. In the present chapter I have endeavored, in regard to life insurance, to supply what is wanting in other parts of this work, and also to treat of such matters as are peculiar to life insurance. For any thing which may be wanting in this chapter on the subject of life insurance, I beg to refer the reader to other parts of this work. In life insurance it is only necessary that an interest should exist at the date of the policy : as the contract is not one of indemnity (/>), the cesser of interest after the date of the policy is immaterial. But the interest must be pecuniary, and no ties of blood or affection are sufficient. (a) See Jieaum. on Ins. preface p. 4. (b) Ante p. 1 ; Jlebden v. West, a B. & S. 579. 346 THE LAW OF INSURANCE. The interest must ordinarily arise out of some subsisting right of property which may be prejudicially affected by the occurrence of the event insured against, and which, whether in possession in reversion or contingent, would give the insured a standing in a court of equity if the title were in question. There is at common law one exception to this rule ; thus, it has been considered, that a wife has an in- surable interest in the life of her husband (a). Now, by the Statute of the Province of Ontario, 35 Vic, c. 16, s. 3, a married woman, in her own name or that of a trustee for her, may insure for her sole benefit, or for the use or benefit of her children, her own life, or, with his con- sent, the life of her husband, for any definite period, or for the term of her or his natural life ; and the amount payable under said insurance shall be receivable for the sole and separate use of such married woman or her children, as the case may be, free from the claims of the representatives of her husband or of any of his creditors. Section 4 of the Statute enacts that " 9 policy of insur- ance effected by a married man on his own life, and express- ed upon the face of it to be for the benefit of his wife or of his wife and children or any of them, or upon which he may at any time after effecting such insurance, notwithstand- ing, a year may have elapsed, endorse thereon that the same shall be for the benefit of his wife or of his wife or children, or any of them, shall inure and be deemed a trust for the benefit of his wife for her separate use and of his children or any of them, according to the intent so expressed and shall not so long as any object of the trust remains be sub- ject to the control of the husband or his creditors or form part of his estate, save and sxcept for such amounts as the same may be pledged to any person or persons prior to any endorsement thereon for the benefit of his wife or children, or any of them. When the sum secured by the policy becomes payable : in the event of no executor or trustee having been (i) Reed v. Royal Kr. Assce. Co., Peake Add. Cases, 70. LIFE INSURANCE. 347 appointed by the husband by will, a trustee may be ap- pointed by the Court of Chancery upon the application of the wife, or in the event of her death by the children or their guardian, and the receipt of such executor or trustee shall be a good discharge to the office in which such insur- ance is effected ; provided always, if it shall be proved that the policy of insurance was effected and premiums paid by the husband with intent to defraud his creditors, they shall be entitled to receive out of the sum secured an amount equal to the premium so paid. The Statute of Canada, 29 Vic, c. 17, also provides, that it shall be lawful for any person to insure his life for the whole term thereof, or for any definite period, for the benefit of his wife, or of bis wife and children, or of his wife and some or one of his children, or of his children only, or some or one of them, and to apportion the amount of the insur- ance money as he may doem. proper, when the insurance is effected for the benefit of more than one. Section 2 provides, that the insurance may be effected either in the name of the person whose life is insured, or in the name of his wife, or of any other person, with the assent of such other person as tru8t(!e. The Statute of Ontario, 38 Vic. c. 21, recited, that in cases under the 29 Vic. c. 17, ^^here the insurance was effected for the benefit of the children, and they happened to be under age, the insurance companies were subjected to great difficulties in obtaining a sufficient discharge for the sum paid ; it then provided, that when the children entitled were under age, it should be competent to the insurance company granting the policy, to pay tho amount due to such of the children as should be minors, into the hands of the executor or executors of such insured persons, who shall hold the same as trustees for such children, and the receipt of such executor or executors shall be a sufficient discharge to the company. This statute further provided, that if the insured died intestate, without appointing any 348 THE LAW OF INSURANCE. one to receive the insurance money, it might be paid to the guardian for the minor. Section 4 of this Statute provides "that if a person who has effected, or shall hereafter effect, an insurance, in the terms of the Act 29 Vic. c. 17, already referred to, shall find hinself unable to continue to meet the premiums, it shall be lawful for him to surrender the policy to the com- pany granting the same, and to accept in lieu thereof, a paid up policy for such sum, as the premiums paid would represent payable at death, in the same manner as the original policy ; and the said company may accept such surrender and grant such paid up policy notwithstanding any such declaration or direction in favor of the wife and children or any or either of them of the assured." Section 5 of the Act provides " that the party insured may borrow on the security of the policy, such sums as may be necessary to keep it in force, and the sums so borrowed shall be a first lien on the policy notwithstanding any such direction in favor of the wife and children or any or either of them." By Section 6, "in the event of the death of any one of the persons entitled, the money is to be paid to the survivors or survivor, and if all die to the executors or administrators of the insured." Section 7, " provides that any person insuring with profits may apply the same either in payment of premiums or direct them to be added to the insurance money payable at death." A husband has not an insurable interest in the life of his wife, nor has a parent an insurable interest in the life of his child (a). Neither can a child who has attained his majority have any greater insurable interest in the life of his parent as such than the parent in the life of the child ; but, it seems a husband or father may insure the life of his wife or child, or a child that of his parent, when he is pos- sessed of any interest in property dependent upon the life (a) Halford v. Kymer, 10 B. & C. 724. LIFE INSURANCE. • 349 in question. As in the case of fire insurance, the mere chance or expectancy which a person may have as the lieir or next of kin of another will not give him an insurable in- terest in the life of his ancestor, although the premature death of the latter might deprive the former of property which might otherwise devolve upon him (a). An expectant devisee cannot insure the life of his testator 80 as to secure the value of a promised devise, but it has been thought that a purchaser from him of the value of the expected devise might do so (b). It is presumed that every man has an insurable interest in his own life (c). A creditor has an insurable interest in the life of his debtor (d), and the circumstance that the creditor has a real security, does not vary the rule. A debt contracted during the minority of the borrower, is sufficient for the purpose, as the plea of infancy cannot be made by third persons ; but, a debt for money illegally won at play, will not support the policy (e). The life of an alien enemy cannot, however, be insured by his creditor, though the latter be a British subject (/). A debtor does not possess an insurable interest in the life of his creditor, although the latter has promised not to enforce the debt in his own life time (g). Under the 14 Geo. 3, c. 48 s. 2 (/^), when a policy is effected by a trustee or executor in respect of any legal interest vested in him, it is sufficient that his name be mentioned in the policy, and it is not requisite that the name of the cestui que trust or person beneficially interested should be disclosed by it (i). (a) See Ante p. 73. (6) See Cooke v. Field, 15 Q. B. 460. (c) Waimoright v. Bland, 1 M. & R. 481. (rf) Anderson v. Edie, 2 Park on Ins., 914. (c) Dwyer v. Edie, 2 Park, 914. (/) Flenot V. Waters, 15 Ea. 260. {g) Hebden v. West, 3 B. & S. 579. (h) See ante p. 37 et scq. (i) Tidswell v. Ankerstein, Peake 151. 350 • THE LAW OF INSURANCE. Under this Statute the name of the person having th& present or primary interest must be inserted as well as that of the party ultimately interested (a). A person cannot evade the Statute by effecting an insur- ance on the life of a person in which he has no interest in the name of such person, and thus obtain the benefit of th& policy by assignment (6). It results from the principles already stated that in life insurance it is not necessary that the insurable interest and the beneficial ownership of the policy should subsist in the same person, and an assignee possessing no such interest will be entitled as the purchaser of the policy to bring an action upon it in the name of the insured (c). The statement or declaration of the assured in effecting the policy are the basis upon which the contract proceeds, and their truth as to all material points, is essential to its validity. Not only must the party proposing the insurance abstain from making any deceptive representation, but he must observe the utmost degree of good faith. The insured must not only state all matters which he believes to be material to the question of the insurance, but all which in point of fact are so. If he conceals anything which he knows to be material, it is a fraud ; but besides that, if he conceals anything which may influence the rate of premium, although he does not know that it would have that effect,. such concealment entirely vitiates the policy (d). All representations made by the insured must be sub- stantially correct, and when the representation amounts to a warranty, it must not only be substantially but literally true. When the declaration is either expressly or by refer- ence embodied in the policy, the terms of it, if unconditional and stated as facts, are in legal language warranties, and (o) Eoans v. Bignold, L. R. 4, Q. B. 622. (6) Wainwright v. Bland, 1 M. & R. 481. (c) Axhley v. Axhley, 3 Sim. 149. (d) Dalgluh v. Jarvie, 2 Mac. & Got., 243. LIFE INSURANCE. 361 must be strictly and literally true ; their correctness is a condition precedent to the liability of the insurers (a). This rule equally applies, although the mis-statement arises from an innocent mistake or false information afford- ed by others, or mere inadvertence. It seems, however, the insured may qualify his statement or declaration with some such words as **to the best of my belief," in which case it will be sufficient if the insured believes in the truth of his statement (b). It is not material whether a representation be in writing or made by word of mouth, and in conversation only. The personal appearance and examination of the insured life does not remove the obligation resting upon the proposer of communicating all material facts in his knowledge to the insurers {<;). A party employing an agent to effect an insurance for him will be bound by the acts or statements of the agent in the course of his duty, and, moreover, as the knowledge of the agent is the knowledge of the principal, the conceal- ment of a material fact known to the agent but not known to the principal will avoid the policy (d). Whether the case be that of a warranty, misrepresenta- tion or cOiicealment, the question of materiality is not in any degree determined by the event ; the contract is void in its inception. It is not rendered the less so by the cir- cumstance that death may have arisen from some cause totally unconnected with the fact warranted, misrepresent- ed or concealed. Where death is caused by the felonious act of the assured, as when he dies by the hands of justice, by duelling, etc., public policy avoids the contract and the representatives of the insured cannot recover (e) [a) Anderson v. Fitzgerald, 4 H. L. C. 484. (h) IVheelton v. Ifardisty, 8 E. & K 232, Parke 8tb Edn., 932. (c) Sweet V. Fairlie, 6 C. & P. 7. (d) Gladstone v. King, 1 M. & S. 35. («) Amicable Socy. v. Bolland, 4 Bligh, (N. S.) 194. 352 ^ THE LAW OF INSURANCE. A condition is usually inserted as to death by duelling, etc. Where a condition provides, that if the insured dies by his own hands, by the hands of justice, or by duel- ling, the policy shall be void, except to the extent of any bona fide interest therein, which at the time of such death should be vested in any other person or persons, for a suffi- cient pecuniary or other consideration, this condition is principally for the benefit of the insured, and if the com- pany advance money to the insured, and take the policy as collateral security, they will be in the same position as any third person, and the exception in the policy will extend to and protect them ; therefore, if the insured commit sui- cide, the policy will be valid in their hands (a). If there is no condition of this description in the policy, and the suicide takes place when the insured is insane and not accountable for his acts, the rule arising from the prin- ciples of public policy does not apply, and the representa- tives of the insured are entitled to the policy money (6). An accident within the terms of a policy against accidents means some violence, casualty, or vis major ; hence, disease or death generated by exposure to heat, cold, damp, the vicissitudes of climate or atmospheric influences cannot be termed accidental, and thus it was decided, that a sunstroke was not an accident (c). It seems, that death by drowning while bathing will be within a policy protecting the insured against any injury caused by accident or violence {d). So where an accident policy grants compensation to the insured " in case of bodily injury of so serious a nature as wholly to disable the assured from following his usual business occupation or pursuits," the insured will be entitled to compensation if disabled from carrying on his business in the usual way {e). (o) White V. British E. M. L. Assce. Co., L. R. 7 Eq. 394. (6) Horn v. Anglo- Australian, etc., L. J. Co., 7 Jur. N. S. 673. (c) Sinclair v. Maritime P. A. Co., 7 Jar. N. S. 367. (d) Trew v. Railway P. A. Co., 5 H. «& N. 211. (c) Accidental Death A. Co. v. Hooper, 5 H. d: N. 546. LIFE INSUEANCE. 353 So, " a railway accident means one happening in the course of travelling, and out of the circumstances of that fact of travelling ending in injury, and does not depend on any accident to the railway itself " (a). Companies are now formed for the purpose of guarantee- ing the honesty and proper conduct of persons in confidential positions. In this contra,ct as in that of life insurance, the company relies upon the representations of the parties; and the observance of perfect good faith on their part is a con- dition precedent to its validity. A misrepresentalion or un- fair concealment of any material fact, which, if known to a society might have prevented it from undertaking the risk, will render the suretyship contract invalid. But the rule of law which in the contract of insurance avoids the policy when there has been a non-communication of material facts, however innocent the conduct of the parties may be, is held inapplicable to the contract of guarantee (h). Hence, it is important that enquiry should be made on the points considered generally material, and this is done by putting various questions in the proposal. In all sub- sequent transactions, the relative positions of the parties must be preserved, and any act on the part of the employer which has the effect of altering the position of the surety, will discharge the latter (c). It is also to be observed, that the contract of guarantee is personal, and that when entered into with partners nom- inatim, the surety is released as to future transactions by the death or retirement of one of the partners (rl), or even by the introduction of a new partner into the firm (f). In order fully to complete the assignment of a policy, notice should be given to the insurers, and the policy de- livered to the assignee. Until notice given the assignor has (a) Theobald r. liaUwiuj P. A. Co,, 2 C, L. 11. lOil. \b) Lee v. Jones, 14 C. B. N. S. 386. (c) Bonar v. Macdonald, 3 H. L. C. 226. (d) Simson v. Cooke, 1 Bing 452. («) Pembcrton v. Oakes, 4 Russ. 154. X 354 THE LAW OF INSURANCE. it in his power to defeat the assignment by surrendering the policy or any bonuses which have accrued thereon, to the office (a). Where notice is given, the insurers become quasi trustees, for the assignee, having notice of the trust as between the insured and his assignee, and this, although there may have been no acknowledgement of the notice, or any other act equivalent to an acceptance of a trust by them {h). The assignee of a policy takes it subject to all the equities to which it was liable in the hands of the assignor. Thus if by reason of any breach of warranty or false statement made by the insurers, the policy is an invalid contract ; it « will be equally so after as before the assignment. And where it was one of the conditions of the policy that it should be void in the event of the suicide of the insured, it was held that the condition was equally operative after a transfer to purchasers for value (c). Where a policy has been the subject of sale, fraud on the part of the pur chaser will vitiate the contract, and such a fraud will be the concealment of or mere omission to mention the death of the person insured in the policy, if unknown to the vendor (d). The law would seem to be the same, if, instead of death a serious illness had occurred and was concealed by the purchaser {e). A policy may be effected for the benefit and in the name of an infant upon his own life or the life of another, but if be enters into a contract for a policy or a term of which is the issue of a policy as regards any liability that may arise thereon, it will be subject to the ordinary rule affecting the contracts of infants, namely, that they are void or voidable at their election on arriving at full age or according as the (a) Fortescue v. Bamett, 2 My. & K. 36. (6) Ex parte South, 3 Swanst. 394 ; Lett v. Morris, 4 Sim. 607. (c) Dormay v, Barrowdale, 10 Beav. 336. (d) Turner v. Harvey, Jac. 169. (e) Jones v. Keene, 2 M. «S R. 348. LIFE INSURANCE. 355 court may pronounce them to be to their prejudice or benefit. When the policy is upon the life of the infant, the person to receive the amount at his death will be his administrator. If the policy is upon the life of another, the amount insured as in the case of a simple legacy, cannot be paid during the minority of the infant, without the sanction of a court of equity (a). (a) Lee V. £rown, 4 Ves. 366. APPENDIX. The following cases were received too late for insertion in the body of the work : The performance of a condition of a policy not under seal, may be waived by a parol agreement. Thus, where a condition required notice of any alteration in the premises to be given to the insurers, and allowed by endorsement on the policy, and the declaration alleged that the insured gave notice in writing of every alteration, and requested the insurers to allow the same according to the conditions, and the latter accepted the notice, and waived the endorse- ment of the same on the policy, and discharged the insured from requiring to have it endorsed, and afterwards con- tinued and confirmed the policy ; it was held, that the waiver and discharge in the declaration alleged was suf- fficient (a). It will be a sufficient excuse for non-compliance with the condition of a policy requiring the delivery of a particular statement and account of loss and damage, that the insurers have, by some act of theirs, prevented compliance with the condition. Thus, it has been held, where the insurers took possession of the premises and of all the goods and property insured remaining after the fire, and deprived the insured of the possession and control thereof, and excluded him therefrom, and prevented him from examining the said goods in detail, and making up a full and detailed account of the loss ; that the insured was not bound to deliver the (a) Smith v. Coml. Vn. Im. Co., 33 U. C. Q. B. 69 ; Jacobs v. Equitable Jns. Co., 17 U. C. Q. B. 35, dissented from. 368 THE LAW OF INSURANCE. particular statement and account of the loss as required by the condition of the policy (a). If the words " for which the assured are responsible " are added to the words " goods in trust or on commission," it will be necessary at the time of the fire that the goods be at the risk of the assured. A policy of fire insurance ex- pressed the insurance to be on " merchandize, the assured's own in trust or on commission for which they are responsi- ble," in or on certain specified warehouses, vaults, wharves, etc. Whilst the policy was in force certain chests of tea on a wharf included in the policy were destroyed by fire. These teas had been deposited in bond by the importer with the wharfinger ; the assured had purchased them from the im- porter, and the warrants had been endorsed in blank by him to the assured. Before the fire occurred the assured had resold the teas in specified chests to customers and had been paid for them ; they held, however, the warrants on behalf of the customers, but merely for the convenience of paying, if required, the charges necessary for clearing the teas payable to such customers. It was held that the policy applied only to goods belonging to the assured, or for which they were responsible, and the property in the teas, having at the time of the fire passed to the purchasers, they were then at the purchaser's risk, and were consequent! v not covered by the policy (b). An insurance was for $1,800 on a building and $400 on the stock of lumber contained therein. At the time of the fire the assured testified that the value of the building had increased $600, and he claimed $450 for the lumber there- in, including under that name doors, sashes, benches and other articles not properly comprised within the term. In his proofs of loss the insured claimed for $600 for the build- ing and $450 on the lumber. The jury found the loss on the former to be $600, and on the latter $350. The court (o) Smith V. Coml. Un. Inc. Co., 33 U. C. Q. B. 69 ; see ante p. 141. (6) North B. db M. Ins. Co. v. Moffatt, L. R. 7 C. P. 26. APPENDIX. 359 considering that the insured had taken the word lumber in its largest sense, as including all his Woodstock ; held that there was no false swearing in the claim made (a). On the 19th of September, 1867, the insured obtained possession of certain premises, including a frame building which ho intended to convert into a double dwelling house. On the 23rd of the same month he entered into an agree- ment with the owners to become the purchaser of the premises for $1,600, payable in six years from the 5th of November then next, to which period the parties from whom he obtained possession had a right to retain it. Before the date of the policy the insured had improved the premises and increased their value about $400 ; he had also paid a small sum towards the purchase money. The in- sured continued in possession until the date of the policy ; it was held that he had an insurable interest (b). The conditions of a policy provided that " no receipts are to be taken for any premums of insurance, but such as are printed and issued from the office and witnessed by one of the clerks or agents of the office." Before the expiry of the policy, the agent of the insurers sent the usual printed notice to his sub-agent at Yarmouth, addressed to the in- sm'ed, requiring him to pay the renewal premium, and bring the notice when renewing, etc. The insured accord- ingly paid tii-^ premium to the sub-agent, and took his receipt with a note of the entry on the face of the notice. The payment was accidentally omitted by the sub-agent to be notified to or included in his remittances to the agent, and the payment was not known to the latter or the com- pany until the property was afterwards destroyed by fire. The court held, that the agent nad power to delegate to his sub-agent authority to receive the renewal premiums in the Absence of any notice to the contrary, and under the cir- .cumstances, the insurers were bound by the payment made (a) Humphrey v. London dk L. Ins. Co., Sup. Ct., (N. S.) 1870. (6) Humphrey v. London d- L. Ins. Co., Sup. Ct. (N. S.) 1870. 360 THE LAW OF INSURANCE to the sub-agent, notwithstanding the condition of theii policy (^0- STATUTES AFFECTING INSURANCE. By s. 14 of the 31 Vic. c. 48, every company licensed under the Act is required to transmit annually to the office of the Minister of Finance, a statement in duplicate, veri- fied by the oath of the president, manager, or agent of such company, or any person cognizant of the facts containing certain particulars set forth in the schedule to the Act, such statement to be made up to the first day of July next preceding, or to the usual balancing day of the company, TDrovided such balancing day be not more than twelve months in the case of life insurance companies, and six months in the case of other companies, before the filing of such statement, and a copy of such statement shall be pub- lished in the Canada Gazette. Any company failing to comply with the provisions of the Act, shall forfeit one thousand dollars. The Minister of Finance may vary the form of return as far as regards the business done by any company in Canada, or grant an extension of time for filing the same, according as experience or the special constitu- tion of any company may require. Section 16 of this Statute provides that in case of the insolvency of any company, the stock representing the deposit of such companv, shall be applied pi'o rata towards the payment of all claims authenticated against such company, upon or in respect of policies issued in Canada ; and any such company shall be deemed insolvent upon failure to pay any undisputed claim arising, or loss insured against in Canada for the space of thirty days after being due, or if disputed after final judgment and tender of a legal valid discharge, and (in either case) after notice there- of to the Minister of Finance, and the distribution of the (o) Gardner v. Home Ins. Co., Sup. Ct. N. S. 1871. APPENDIX. 361 proceeds of such stock may if applied for in the Province of Ontario, or of Nova Scotia or of New Brunswick, be made by order in Chancery or Equity, or if applied for in the Province of Quebec, may be made by judgment or order of distribution of the Superior Court, within the district where the chief agency is situated ; provided that in any case when a claim for loss is by the terms of the policy payable on proof of such loss, without any stipulated delay, the notice to the Minister of Finance under this section shall not be given until after the lapse of sixty days from the time when the claim becomes due. Section 17 provides that for the purposes of such distri- bution the court may order that the stock of the company so insolvent be transferred to and inscribed in the Govern- ment stock books at or nearest to the place of the chief agency, and within the jurisdiction of the Court, if such stock be not already inscribed there, and may order that no further interest on such stock be thereafter paid to the company, and that such stocli or any part thereof, be sold in such manner and after such notice and formalities as the court may appoint. The 34 Vic. c. 9 contains further provisions applicable to the case of the company becoming insolvent. An assignee is to be appointed by the court having jurisdiction in that Province in which the chief agency of the company is situate, and the assignee is required to call upon the company to furnish a state^ment of all its outstanding policies in Canada, and upon all policy-holders to file their claims. The claims are then adjusted in the manner provided by the Insolvent Act of 1869. In case of any fire insurance company becoming insolvent, the parties insured shall be entitled to claim for a part of the pre- mium paid proportionate to the unexpired period of their policies respectively, and such return premium shall rank with judgments obtained and claims accrued in the distribu- tion of assets. In the case of a life company the assignee 362 THE LAW OF INSURANCE, may insure all outstanding Canadian policies with some company licensed to transact business in Canada, advertis- ing for tenders to that effect. By section 5 of this act where any company ceases to transact business in Canada it must insure on behalf of its Canadian policyholders all outstand- ing risks in some company or companies licensed in Canada or obtain the surrender of the policies. Upon making ap- plication for its securities the company must file with the Minister of Finance a list of all Canadian policy holders who have not been so insured or have not surrendered their policies, and it must at the same time publish in the Canada Gazette a notice that it has applied to the Government for the release of its securities on a certain day not less than thirty days after the date of the notice and calling upon its Canadian policyholders opposing such release to file their opposition with the Minister of Finance on or before the day so named, and after that day if the Treasury Board is satisfied that the company has ample assets to meet its lia- bilities, all the securities may be released by an order of the Governor-in-Council, or a sufiicient amount of them may be retained to cover the value of all risks, respecting which, opposition has been filed, and the remainder may be released and thereafter from time to time as such opposing risks may lapse or proof may be adduced that they have been satisfied, further releases may be made on the autho- rity aforesaid, and after a company has ceased to transact business in Canada after the notice hereby required and its license has in consequence been withdrawn, such company may nevertheless continue to receive the premiums coming due on policies not reinsured or surrendered and may pay the losses arising thereon as if such license had not been withdrawn. The 31 Vic. c. 48 s. 19, provides, that after any company has ceased to transact business in Canada, and given the notice required by this Act to that effect, it shall be lawful for the Governor in Council, on the report of the Treasury APPENDIX. 363 Board, to authorise the whole or any portion of the stock or other securities so held in deposit for any company as afore- said, to be released and transferred to the company upon being satisfied that it has no liabilities upon policies issued in Canada, and that no suit or legal proceedings are pend- ing against the company therein, or on proper proof on oath of the state of its affairs being given that such com- pany has ample assets to meet all its liabilities, and upon such authority being given by the Governor in Council, the company shall be entitled to receive instead of anj^ Dominion stock so held, the amount thereof in money at par. Section 2 of this statute enacts, that no foreign stock company shall transact any business of insurance in Can- ada, unless such company is possessed of at least one hun- dred thousand dollars of paid up and unimpaired capital, or accumulated surplus funds invested in good and sufficient securities, nor shall any license be issued in favor of such company, until a statement under oath to that effect is filed with the Minister of Finance, sworn by some one whose duty it is to know and who is personally cognizant of the fact sworn to ; provided, that the unimpaired amount of the deposit of any company then in the hands of the Receiver General shall be reckoned as part of its capital. The 34 Vic. c. 9 s. 2, provides that the deposit required to be made by insurance companies doing business in Canada (a) may be made by any company in securities of the Dominion of Canada, or in securities issued by any of the Provinces in the Dominion of Canada, and by any company incorporated in Great Britain, in securities of the United Kingdom, and by any compamy incorporated in the United States, in securities of the United States, and the value of such securities shall be estimated at their market value at the time when they are so deposited, if any securities other than those above named are offered as a a deposit, they may be accepted at such valuation and on (a) See ante p. 21. 364 THE LAW OF INSURANCE. such conditions as the treasury board may direct, and if the market value of any of the securities which have been deposited by any company shall decline below that at which fchey were deposited, the treasury board may call upon the company to make a further deposit so that the market value of all the securities deposited by any company shall be equal to the amount which they are required to deposit by this act. The Con. Stats. Can. c. 69, is to the effect that if the managers, directors, or trustees of any fire, life, marine or other insurance company incorporated by the Legislature of Canada, knowingly and wilfully declare and pay any dividend or bonus out of the paid up capital of the company, or when the company is insolvent or which would render it. insolvent, or which would diminish the amount of its capital stock ; such managers, directors, or trustees, who are present when such dividend or bonus is declared, and which said dividend is afterwards paid shall be jointly and several- ly liable for all the debts of the company then existing, and for all thereafter contracted, while such managers, directors or trustees respectively continue in office. But if any of them object to the declaration of such dividend or bonus, or to the payment of the same, and at any time before the time fixed for the payment thereof, file a written statement of such objection in the office of the company, and also in the registry office of the city, town, or country where the company is situated, such managers, directors, or trustees shall be exempt from such liability. The Con. Stats, of Canada, e. 88 enacts, that the coroner within whose jurisdiction any city or incorporated town or village in this province lies whenever any fire has occurred whereby any house or other building in such city, town, or village has been wholly or in part consumed, shall institute an enquiry into the cause or origin of such fire, and whether it was kindled by design or was the result of negligence or accident, and act according to the result of such enquiry. APPENDIX. 365 By section 3, the enquiry is not to be had unless it has first been made to appear to such coroner that there is reason to believe that such fire was the result of culpable, or negligent conduct or design, or occurred under such cir- cumstances as in the interests of justice and for the due protection of property require an investigation. By other sectiors of the Act, the coroner is empowered to impanel a jury, and summon witnesses to attend before him, etc. FOKMS.— CLAIM FOB LOSS. To the Insurance Company of Canada. Province of | I County of -of the of To Wit : in the county of make oath and say as follows : The Insurance Company of Canada, through its agency at did, on the day of A. D. 18 , issue to its policy of insurance. No. the written body of which, with written indorsements and assignments, is as follows : No. . (Here insert copy of operative part of policy). Which said policy was subsequently continued in force, by renewal, until the day of 18 , at noon. Besides that insurance, there was $ additional insurance made thereon, as follows: that the whole cash value of the property so insured amounted to the sum of dollars at the time immediately preceding the disaster. interest therein being . The title to the realty was vested in the occupations and occupants of the premises in its several parts, being . That on the day of 18 , a fire occurred, v/hich originated from . The amount of pro- perty belonging to so insured which was totally de- stroyed by fire, was as follows: 366 THE LAW OF INSURANCE. VALUE OF PROPERTY TOTiL INCURANCE DESTROYED. THEREON. On . $ $ On $ $ ■ On $ $ The sum of damage on that saved, as per Appraise- ment hereunto annexed, is : AGGREGATE DAMAGE. TOTAL INSURANCE THEREON. On $ $ On $ $ On $ $ Total loss and damage $ Amount claimed of the Insurance Company, $ as particularly defined in the accompanying statement and schedule, which are made a part of this instrument. I fur- ther declare that the said fire did not originate by any act, design or procurement on part, or in consequence of any fraud or evil practice done or suffered by ; that nothing has been done by, or with privity or consent, to violate the conditions of the policy, or to render it void; that no articles are mentioned herein, but such as were in the building damaged or destroyed, and belonging to, and in possession at the time of said fire ; that no property saved has been in any manner concealed, and that no at- tempt to deceive the said company to the extent of said loss, has in any mimner been made. Sworn before me at the of in the county of this day of A. D. 18 Province of ] I, County of ^a . To Wit : ) in and for said county, residing most contiguous to the property of insured as set forth in the preceding affidavit, certify that I am not conf^^rned in that loss or claim, either directly or in- directly, c aer as a creditor or otherwise, or related to the in- APPENDIX. 367 sured or sufferers, and that I am acquainted with the character and circumstances of and having made dili- gent inquiry into the facts set forth in the foregoing state- ment, believe and know that really, by misfortune, with- out fraud or evil practice, sustained by the described fire, loss and damage to the amount of dollars, on the subject insured the sum stated in affidavit of loss. In Testimony Whereof, I have hereunto set my hand and official seal, this day of A. D. 18 . This Form not to be used when the Claim exceeds $100. To the Insurance Co. of Canada : Province of ) I, of in the County of J County of make oath and say as follows : That the Insurance Company, through its agency at did issue to its Policy of Insurance No. , renewed by renewal receipt. No. said policy expiring 18 , and covering as follows : $ on $ on $ on and that by a fire which occurred on and originated from the assured has sustained actual loss and damage, under the terms of said policy, according to statements attached hereto, as follows : $ on $ on $ on That the following is a list of the whole insurance on said property, and the amount of claim against each company : Insurance Company insures $ ; proportion is $ do. do. do. $ ; do. $ do. do. do. $ ; do. $ do. do. do. $ ; do. $ Claimant. Sworn before me at the of in the County of this day of A.D. 18 A Com'r, &c. 368 THE LAW OF INSURANCE. I hereby certify that the above claim is just and true. Agent. IS* Agent will retain the Original Receipt, sending Dup- licate Receipt and Statement to Head Office. [ORIGINAL] . Insurance Company of Canada. $ ,18 Received of the Insurance Company of Canada, through agent at the sum of dollars, it being in full of all claims and demands for partial loss or damage by fire under policy No. issued at the agency of the said company, and in consideration of said payment, the sum insured is reduced that amount, leaving dollars now in force on said policy. Having signed duplicate receipts. Date of fire 18 . [DUPLICATE] . Insurance Company of Canada. $ .18 Received of the Insurance Company of , through agent at , the sum of dollars, it being in full of all claims and demands for partial loss or damage by fire, under policy No. issued at the agency of the said com- pany, and in consideration of said payment, the sum insured is reduced that amount, leaving dollars now in force on said policy. Having signed duplicate receipts. Date of fire , 18 . FOR BUILDINGS. INSURANCE COMPANY OF CANADA. Agreement for Suhynission to Appraisers. ■^t is hereby agreed, by of the first part, and the Intiurance company, of , of the second part, that (together with a third person to be appointed by APPENDIX. 369 them, (if necessary,) shall appraise and estimate at the true cash value the damage by to the property belonging to as specified herein, which appraisement or estimate by them or any two of tbem,in writing, as to the amount of such loss or damage, shall be binding on both parties ; it being understood that this appointment is without reference to any other question or matters of difference within the terms and conditions of the insurance, and it is of binding effect only as far as regards the actual cash value of, or damage to such property, covered by Policy No. of said company, issued at the Agency. The property on which the damage is to be estimated and appraised is the story building, with roof, situate . And it is expressly understood and agreed, that said appraisers are to take into consideration the age, condition and location of said premises previous to the fire, and also the value of the walls, materials, or any portion of said building saved ; and after making an estimate of the cost of replacing said building, a proper deduction shall be made by them for the difference (if any) between the value of a new or replaced building and the one insured. Said appraisers are hereby directed to exclude from the amount of damage any sum for previous depreciation from age, location, ordinary use, or any cause whatever, and simply to arrive at the damage actually caused by said fire, return- ing said damage in the form of a detached itemized state- ment (in accordance with above agreement.) Witness our hands at ) this day of 187 . / Itemized statement of damage or loss 870 THE LAW OF INSURANCE. DECLARATION OF APPKAISEKS. Province of '] yss. County of ) We, the undersigned, do solemnly swear, that we will act with strict impartiality in making an appraisement and estimate of the actual damage to the property of insured by the Insm-ance Company of Canada, agreea- bly to the foregoing appointment, and that we will return to the said company, a true, and conscientious appraise- ment, and estimate of damage on the same, according to the best of our knowledge, and judgment, Witness our hands, this day of a. d. 187 . Appraisers. Sworn before me, at the of in the County of this day of a. d. 187 To the Insurance Company of Canada. Having carefully estimated and appraised the damage by fire to the property of agreeably to the foregoing appointment, we hereby report that, after having taken into consideration the age, condition and location of the pre- mises previous to the fire, and making proper deduction for the walls, materials and portions of building saved, we have appraised and determined the damage to be dollars ($ ), as shown by statement of items herewith. Witness our hands this day of 187 . Appraisers^' APPENDIX. 871 INSUKANCE COMPANY, OF CANADA. Agreement. 187 . It is Hereby Agreed, by of the one part, and the Insurance Company, of on the other part, that (together with a third person to be appointed by them, if necessary,) shall appraise and estimate at the true cash value the damage by to the property belonging to as specified in the accompany- ing schedule, which appraisement and estimate by them, or any two of them, shall be binding on both parties so far as regards such appraisement, it being understood that this appointment is without reference to any other questions within the terms and conditions of the insurance, being so far only as regards the value of or damage to such property as may be found to have been saved in a damaged condition which was insured by policy No. with the said Insurance Company. •Witness. Agent Insurance Company. Province of County of To Wit : Declaration of Appraisers. We, the undersigned, do solemnly swear that we will act with impartiality and fidelity in making an appraisement and estimate of the damage to the property of insured by the Insurance Company, and saved in a damaged condition, agreeably to the foregoing appointment, and that we will return to the Insurance Company, a true and perfect, and a just and conscientious appraisement, and esti- mate of damage on the same, according to the best of our knowledge, skill and judgment. Sworn before me, ) at the of in the county [ of this day of A. D. 18 .) 372 THE LAW OF INSURANCE. The damage on Inventory of Property of Damaged by on at which was fixed by on 18 . Memo. — The damaged property should first be placed in as good condition as possible, assorted and arranged, and this list made out of the quantity, the articles, and the actual Cash Value, that appraisers may with faci- lity perform their duties; they will fill the last two columns, avoiding general percentages, and place the damage at a definite sum per yard, lb., bushel, or gallon, &c., as the case admits of. Goods damaged byriurers not bound by incumbrances concealed from them 135-6 Examination of premises by, binds insurers, 138 Knowledge of, as to facts, binds insurers 138 Of insurer has not ordinarily authority to dispense with conditions 160 Parol waiver of conditions by 171 Notice of loss received by resident 213-14 Of insured may bring action on policy in his own name ... 269 Service of process on, in another province 276 Admissions of agent of company, evidence of 288 Burden of proof as to agency is on person dealing with 288 Opinion of insurance agen t inadmissible as evidence 289 Insuring in his own name, principal liable on policy... 302, 351 AGREEMENT TO INSURE— Effect of 36 When policy may have same date as 36 ALIEN ENEMY— Cannot insure in Canada 44 Creditor cannot insure life of 349 ALIENATION OF PROPERTY INSURED— In case of mutual companies 3, 194 After insurance prevents insured from recovering on policy 192 Effect of, under statute 192-3 Execution of mortgage not 193 Assignment in insolvency, condition as to 193 Of one partner, where several distinct subjects of insurance 194 Levy of an execution on premises not 194-6 INDEX. 381 Agreement to convey not 195-6 f: ; , . Lease of property insured, condition as to 195 Release by one partner to another not, condition as to. . . . 195 From one tenant in common to another will avoid policy : - under condition 195 Descent of title to heirs not 196 Nominal transfer not, under condition 196 Chattels, prohibition of, effect on policy 196 Remedy of alienee under 196 Interest in policies, not transferred merely by virtue of 201 By mortgagor, effect on policy 208 ALTERATION— Of policy, how effected 43 Of premises insured condition as to 143-5-9 Which in fact increases risk, is breach of condition as to ...146-7 And additions to buildings insured condition as to 147 In case of mntual companies under statute 172 AMBIGUITY— When allowed to be explained in policy 14 In i)leading how construed 279 APPLICATION— For insurance, is notice to insured 17-18 Effect of various for ms of 59-60 Decl.aration in, by insured, when a warranty 119 Reference to, in policy, effect of 119 Defect in, when known to agent of insurers, effect of 120 False statements in, avoids policy 120-181 Must state title accurately 126 Omission in, of incendiary attempts on property 132 Fire of adjoining buildings, must be stated in 132 Condition as to 144 What is usually stated in 181 For insurance, must be in writing 181 For time policy, not necessary to state time of sailing in.... 337 Representation of value of vessel in 338 For life insurance, requisites of 350 APPPLICANT- Assignee of policy not, under condition 180 APPOINTMENT— Definition of , . 240 t 382 THE LAW OF INSURANCE. PAOB ARBITRATION— Condition as to 183 Reference to, may be condition precedent 296-7 Where reference to is collateral to agreement to pay 298 Judge may stay action, policy under condition to refer to.. 298 ASSIGNEE— In insolvency has insurable interest 79 Of policy must have vested interest to sue on policy 43-197 Could not at common law maintain action in his own name. 197 Of policy may bring action on policy under 35 Vic. cap. 12. 197 Effect of assignment of policy on 198 Of policy may maintain action in case of new promise by company 199 Undertaking by to perform conditions of policy, eflfect of, 199-200 Defence good against assignor will be good against 202 Non-compliance with policy by assignor avoids it against. . . . 206 Taking assignment of policy without notice of forfeiture is protected 209-10 Need not state his interest to company on ratification of assignment 210 When notice of loss will be sufficient when given by 212 May in some cases recover without giving any proof of loss. 212 In insolvency, must comply with condition as to certificate of loss 228 Of life policy, when interest maybe claimed by 247 Of policy cannot sue thereon in his own name 269 Policy not void, where premium note, not paid by 300 Of life policy may bring action on policy 350 Of policy takes it with all equities 354 ASSIGNMENT— Of interest under interim receipt 34 Of policy by mortgagor to mortgagee, effect of 60 Of policy must be by consent of company 181, 198-9, 204 In insolvency, eflfect on policy under condition 193 Of policy, remedy of assignee in case of loss 196-7 Interest in property should be vested in assignee in case of. 197 Under 36 Vic. cap. 13 197 Of policy, condition as to 197-8 Notice of should be given to company before loss 199 After loss, condition as to 203 Of policy, must be of equal solemnity with policy 204-5 INDEX. 383 PAGE By insured to mortgagee not necessary in some cases 208 Of part of mortgage debt, eflfect on mortgage 208 Of policy, effect of consent to, where policy assigned to mortgagee 208 Assignee need not state his interest for ratification of 210 Of right of action to insurers on payment of loss 261 Insurers entitled to assignment of mortgage on payment of mortgage 263 Notice of should be given to insurers to complete 253 AVERAGE— Conditionasto 191 Adjustment of loss, where there is condition as to 245 BASIS— Of adjustment (.see adjustment.) BRITISH AMERICAN ASSCE. CO.— Peculiar conditions in policies of 187-188 BROKER— Notice of loss given to, effect of 214 BUILDINGS— Insurance on, what? , 95 Falling down, conditions as to in policy 95 Alterations and additions in, condition as to 147, 177-207 The erection of others by insured effect on policy under condition 149 Insured as, "dwelling houses" condition as to vacation of 176 BURDEN OF PROOF— Of showing an agency, is on person dealing with agent 288 In case of pleading alteration of premises lies on person pleading 288 CANCELLATION— Of policy 42 When and how effected 42-3 CARGO— Risk on, only commences at port named in policy 318 Must be loaded at place named in policy for policy to at- tach 318-19 Effect of sale of, upon claim for total loss of freight 323 884 THE LAW OF INSURANCE. PAGE CARRIERS— Insurances by 44 CERTIFICATE OF LOSS— Condition as to 228-230 Production of, condition precedent to paj'ment of loss 230 Production of, may in some cases be dispensed with 231-2 Fraud in, forfeits policy 232 CHARTER OF COMPANY— Must be conformed to by company in issuing policy. . .22, 23, 32 51 Requirements of, should be adhered to 24 CITIZENS' INS. CO.— Peculiar conditions in policies of 186 CIVIL COMMOTION— Losses arising from 104-5 Loss by, need not be negatived by insured in statement of loss 225 COLLISION— Between steam and sailing vessel, presumption as to 322 COMMERCIAL UNION INS. CO.— Peculiar conditions in policies of .,, 185-7 COMMISSION MERCHANT— May insure all goods in his hands by one policy 94 COMPANIES— Insurance, what only can do business in Canada 21 License must be obtained by 21 Must make deposit with Receiver General 21 Bound by fraud of their agents , 54 Must transmit to Minister of Finance certain returns 360 Ceasing to do business in Canada must insure their policy- holders 362 Directors of, paying dividends when company insolvent ... 364 COMPENSATION— Insured entitled to, in accident policy 352 INDEX. 385 tkQM CONCEALMENT— Of material facts by insured ur his agent, avoids policy 54, 135, 335-6 Of nature of interest insured, avoids policy 122 On part of insured may be waived by insurer 124 Of incumbrance on property insured 126, 130-1 Of true title to one parcel in policy which covers others . . . 128 On incumbrances on one of several parcels in policy 129 Unintentional omission of facts by insured not 129 Of fires, before application, fatal to policy 132 Of interest and extent of property insured 134 Nature of, that will avoid policy 134-5 By mistake or ignorance, of material facts, same as wilful. 133-5 Facts known to insurer, though not stated by insured, not. 137 Of material facts in life policy, vitiates it 350-1-3 Of death of insured on sale of policy, vitiates sale 354 CONDITION IN POLICY- How construed 13, 141-2 (See policy). Looked upon as part of the contract 139 Compliance with, condition precedent to right to recover... 139 In case of mutual company, void when unreasonable 139-40 Of three kinds, precedent, express and implied 140 No expresss provision as io non-complianfc with precedent necessary 140 Violation of by insured, no ground of action by insurer ... 141 Insured relieved from comj nance with in some cases 141 Effect of, where insurers are foreign corporation 141 Evidence of what occurred at time of insuring does not aflfect 142 Immaterial whether loss happens by violation of express... 142 As to alteration in premises 143, 145-49 Breach of, not ipso facto avoidance of policy 143 Waiver of breach of, by insurers 143 Printed on back of policy, effect on insurance 143-4 As to application for insurance 144 As to steam engines, etc., on premises 144 As to increasing risk of insurers 145-6-7-8 As to hazardous trade carried on, on premises 146 Relating to tenants increasing risk 143 Erection of other building by insured, effect on policy under 149 As to terminating risk, by notice to insured 152 That notice of all previous insurances shall be given to in- surers 152-3 Z 886 THE LAW OF INSURANCE. PAOK Ab to notice of subsequent insurances to be endorsed on policy: 154 Ab to notice of other insurances where condition violated by neglect of insurers 153-4 Acknowledgment of notice under 154 As to further insurance on the same property ...155,157,166-169 Verbal notice when sufl&cient under 156 Courts of law and equity equally bound to observe 158 Ignorance of requirements of, does not relieve insured 159 Agent of company has not ordinarily power to dispense with 160 Notice of additional insurance, to be given before fire, un- der 160-161 Reasonable diligence in giving notice under 162-163 If second policy acttially void, no violation of 164 As to subsequent insurance, to be construed strictly 168 Under seal, cannot be waived by parol 171-172 As to gunpowder on premises insured 172-174 As to goods on storage 173 Astochange in occupation in premises insured. . .175, 177, 178 179-184 Relating to payment of premium note 180 As to contribution between co-insuring companies 182 Relating to preservation of property insured 182 As to the removal of property 92-182 Relating to property burnt by lightning 1 82 Relating to theft of goods insured 1 82 As to "memorandum " articles insured 182 Relating to payment of loss 183 As to continuing insurance 184 As to survey and description of premises 184 Relating to chimneys 184 As to highly inflamable substances 184 Relating to average 191 As to release by one partner to another of property insured 195 Relating to assignment of policy 197 Prohibiting assignment of policy 203 As to immediate notice of loss, construction of 213, 216, 217 As lo written notice of loss 215 Compliance with, condition precedent to right to recover... 216 As to furnishing copy of written portion of policy in prov- ing loss 219 Ab to producing vouchers, &c. , in proof of loss 222 Asto certificate of loBB 228 INDEX. 387 PAGE As to insured undertaking acts of strangers 231 As to payment of proportion, where several insurances 248 As to action on policy being brought within twelve months from loss 271 As to care and skill in marine policy 322 Waiver of by parol in policy not under seal 357 Sufficiency of excuse for non • compliance with 357 CONSENT— Of company, as to further insurance should be endorsed on policy 155-102 As to additional insurance, by whom given 157 Of company as to additional insurance, when implied 157 Of company on assignment of policy should be obtained... 198 Effect of consent to assignment of policy 198 Of company to assignment given on separate paper and not endorsed 202 CONSEQUENTIAL DAMAGES.— (^'ee Damage.^). CONSTRUCTIVE TOTAL LOSS— How effected by abandonment 323 Notice of abandonment must be given to insurers 326 Action for, where insurers repair vessel 327 State of vessel at time action bi'ought determines whether. . . 328 Capture of vessel by enemies, when 329 Declaration of, in action for 333 CONTRACT OF INSURANCE. Parol, not binding on company 22 No general provision of law in Canada requiring written . . 24 Must be mutual between parties 37 Divisibility of 39, 40,41 To be construed literally 83 Is a contract «6enimfe_/if^ei 126 Is a personal contract with insured 200, 270 Does not run with the land 271 Of life insurance, not one of indemnity 345 CONTRIBUTION— Between co-insuring companies, condition as to 182 Definition of, in fire losses : 240 Proportional abatement substituted for in some cases... 249, 250 By insured, where several insurances on same property 250 By insurers where several insurances 250 In cases of re-insurance 264 ( 388 THE LAW OF INSURANCE. FAOa CORONER— May give certificate of loss 228 To institute enquiries as to fire 364 May empanel jury 365 COVENANT TO PAY LOSS— Satisfaction of, before and af cer breach of 247-8 CREDITOR - Has insurable interest in life of debtor 349 DAMAGES— Actual, only recoverable in fire policies 4, 107, 248 Consequential, not generally recoverable 106 How estimated 107, 108 Pleasure of, on failure of insurers to rebuild 260 Insurers may enter on premises after fire to ascertain 261 Measure of, in case of re-insurance 264 Evidence of measure of 292 In case of total loss 333 DEATH— Of insured, policy and interest vests in representatives . . . 198 DEBTOR- Has not insurable interest in life of creditor 349 DECLARATION— In case of action on policy 277-8 Averment of condition precedent, what proved under 279 Condition forming defence to action, should not be set out in 280 Need not allege that policy under seal 281 Exception to count in declaration by defendant whose plea is demurrable 283 Duplicity in .. 284 By mortgagor, in action on behalf of mortgage is good 284 Of constructive or actual total loss 333, 334 DEFENCE TO ACTION ON POLICY— Which is good against assignor ia good against assignee of policy 202 Assignment of policy without notice of forfeiture good 209 Assured wilfully and maliciously burning property good .., 293 INDEX. 389 PAOB DELAY— Amounting to deviation in voyage, discharges insurers.. 313, 320 DEMURRER— On ground of inconsistency between plea and policy 281 DEPARTURE- In pleading, effect of 281-2 DESCRIPTION OF PROPERTY IN POLICY— Must be accurate. . . . ., 83 Misdescription of property, effect of 84 Condition requiring accurate, refers to date of policy 86 Premises insured must not be raried from 87-8 Effect of insurers having notice of change in premises 88 In case of leasehold premises 89 Where error in, arises from act of insurers, effect of 89, 90 Sufficient, if substantially described 90 Not a warranty on part of insured 121 DEVIATION IN VOYAGE— Law implies that vessel will proceed without 312 Delay must amount to deviation to discharge insurers 313 Of vessel insured in certain waters. 313 Although risk not increased 314 Any material departure from voyage is 314-15 In case of vessel bound to several ports 315 Defeats policy from time of 316 Plea, of, when bad for duplicity 317 May.be agreed for by insured paying additional premium... 318 Goods insured must be loaded at place named in policy 318 Waiver of, by insurer 319 Shipwreck, effect on insured 320 DIRECTOR OF COMPANY— Evidence of, immaterial at trial 290 DOUBLE INSURANCE— Insured not entitled to two satisfactions 106 Requirements of statute as to 158 How established 161 Grant of interim receipt, effect on 164 Where effected with foreign company 166 390 THE LAW OF INSURANCE. PAGB What constitutes 166 Effected by mortgagor, effected on first policy 16T Inoperative in policies of re-insurance • 263 DUELLING— Condition in policy as to 350-61 DUPLICITY— (See Pleadhig). ELECTION— Of insurers to rebuild, effect of 261 ENCUMBRANCE- On property insured, bond for conveyance of property not, 123-4 In case of renewed policy 126 Misrepresentation of, effect on policy 126-7-8 Disclosure of subsequent, condition as to 128 Concealment of, on one parcel in policy which covers others 129 Existence of, fact material to be disclosed to insurer 129 Where none exist on property, application may be silent as to 130 Concealment of, avoids policy 130-1-5 Condition as to notice of, being giving to insurers 226 Plea of violation of condition as to 283 ENDORSEMENT— On policy of additional insurance, effect of 1 55 On policy of executor or administrator's interest 198 ENTRY— Of insurers on premises to ascertain damagt^s 261 Condition as to 261 ESTOPPEL— Evidence of, in cases of encumbrances 292 EVIDENCE— Satisfactory, condition as to, in proving loss 227 Of admissions made by agent of company 288 Opinions, when admissible as 289 Of underwriters, to what extent admisible 289 Of experts, inadmissible 289 Of agents of company inadmissible 289 Admissible to show mistake in description of premises 290 INDEX. 391 PA08 Of director of company immaterial 290 Of character inadmissible in civil suit 290 Answer to collateral question, conclusive 290 Circumstantial out weig lis positive testimony 291 Of ownership of vessel 291 Of offer to sell property 291 Of waiver of payment of premiums 291-2 Of estoppel, in case of incumbrances 292 Policy, best evidence that insurance is on foot 292 Of measure of damages 292 Right to begin, belongs to person asserting affirmative of issue 292 Presumption of innocence favored 293 Of seaworthiness at commencement of voyage adtaissible, 311, 342 Of usage in insurance on cargoes 319 Of usage in case of voyages 334 Of meaning of particular words in policy 334 Of seaworthiness admissible to rebut presumption of unsea- worthiness 342-3-4 EXAMINATION— Of premises by agent of insurers binds them 138 Of premises by experts, condition as to 180-1 Of insured as to loss, condition as to 226-7 EXECUTOR— Interest of, should be endorsed on policy 198 Can enforce contracts of insurance on death of insured 271 EXPERT— Condition as to examination of premises by 180-1 Evidence of, inadmissible on trial 289 EXPLOSION— Condition in pclicy as to 182 By gas, responsibility of insurers and liability of gaa com- pany 262 FACTORS— Insurances by • ^ Interest of, in property, insurable 74 May insure all property in their hands by one policy 94 392 THE LAW OP INSUBANGE. PAGE FALSE SWEARING— In proving loss, avoids policy 232 Must be intentional and of something material 233 FIRE— Definition of, as used in policy 95-& Concealment of fire having taken place, at time of appli- cation is fatal to policy 132 Coroner shall institute enquiries as to 364 FIRE INSURANCE COMPANIES— What losses they are liable for ... 96 FOREIGN INSURANCE COMPANIES— Must make deposit with Receiver-General 21-2, 363 Policies of, how interpreted in Canada 30-1 , 287 Cannot do business in Canada without having capital of $100,000 363 FORFEITURE OF POLICY— By breach of condition, must be proved strictly 166, 222 Receipt of assessment after fire, no waiver of 170 Assignee taking assignment of policy with out notice of, is protected 209-10 FREIGHT— Who has insurable interest in ,., 79^ FURNACES- Condition in policy as to 144 GOODS— Consigned, to be delivered to another may be insured. .80, 181 Position of, must be communicated to insurers 92 Removal of goods, covered by policy, condition as to (see risk). 92 Value of, at time of loss, rule as to payment of loss 108-9 On storage, condition as to, in policy 173-4 Adjustment of loss of, when assortment broken 245 Actual value of, may be recovered 246 Damaged, may be sold at auction by insured 247 Risk on goods in ehip, commences at port nameil in policy. 318 GUARANTEE— Insurances for purpose of 363 Contract of, personal 363^ INDEX, . ^^^ FAOB GUARDIAN INS. CO.— Peculiar conditions in policies of GUNPOWDERr- Conditi(in as to, in policy • 93, ^J^, 184 Premises insured blown up by »»» ^^'^^ HAZARDOUS ARTICLES— ■too 1^2 Insured, effect on policy ••;[^^' ^"^ Hazardous trade carried on, on premises insured condition 146 as to 1t70_A -IQA stored on premises insured, condition as to 173-4, 1»4- HUSBAND— See Insurance Policy. IMMEDIATE LOSS— 2 Meaning of, in policy -IQQ Peculiar conditions in policies of 80' Insurable Interest in IMPERIAL INS. CO Peculiar conditii INCHOATE RIGHTS Insurabl INDEMNITY— Insurance, contract of What is to be considered in actions for * Only given to persons interested in property insured 62 For damaged goods, rule as to Adjustment of Is only for loss arising from external causes. ^*o INFANT- Insurance may be effected for benefit of •354 On death of, during minority, policy paid by sanction of Court of Chancery INFLAMMABLE SUBSTANCES— Condition as to, in policies INSOLVENCY OF COMPANY— Distribution of deposit |>ro rata 36^' Appointment of Assignee 394 THE LAW OP INSURANCE. PAOB INSURANCE— Definition of 1 When valid where no policy actually issues 34 Cannot be eflFected in name of trustee only 38 On goods in trust or in commission 47, 358 Condition as to additional 154, 155 Consent of company necessary in additional 157 Requiroments of statute as to double 158 Double, how established 161 Effect of granting interim receipt in doublt; 164 Second insurance with foreign company, effect of . 165 Proof of second, lies on defendants 165, 167 Second insurance must be made on same property to avoid first policy 166, 167 Second must be made by same person to avoid first ...167, 207 Prior insurance against by-laws of company, effect of 168 Second insurance under statute on goods 180 Previous and subsequent insurances must be notified to company ...181, 226 Separate insurances upon several subj ects 243 Observations on the subject of 257, 258 On goods in ship, at and from a place 317 Effected by married women on husband's life 346 Husband may insure his life for benefit of wife 346-7 May be effected by husband in name of wife 347 For benefit of children 347, 354 Survivor of joint insureds entitled to benefit of policy 348 With profits 348 Effected by person having no interest void 350 On life, eftected by agent binds insured 351 Of guarantee 353 May be effected for benefit of infant 354 On goods on commission, must be at risk of insured 358-9 INSURABLE INTEREST— Necessary to have, in property insured 272 Definition of 65 Mortgagor and mortgage both have 67 Tenant by the courtesy has 69 Tenant from year to year has 69 Lessee in some cases has 70 Purchaser under verbal contract has not 73 Expectancy is not 72 INDEX. 396 * PAQB Distinguishable from ownership 73, 74 Of execution debtor in goods seized by sheriff , 74 Of shariff in goods seized 74 Of consignee, factor or ".gent 74 Assignee of bond, conditioned to convey real estate has 75 In a ship 75, 338 Of a bailee in subject of bailment 77 Of widow in property of husband 78 Grantee from Lunatic has 78 Person in possession of property as apparent owner has 78 Of assignee in insolvency 79 In freight 79 Various subjects of property, owners of which have 79 In ship hypothecated 79 In goods consigned by one person to another 80 In inchoate rights 80 In ships seized by officers of the crown 80 Need not be stated in notice of loss to company 215 Builder has, in buildings, &c 80 Of owner, cannot be defeated by title of stranger to the land 81 Possession of, by insured necessary to give right to recover 266 ; Possession of a ship confers an insurable interest to possessor 338 Of wife in life of her husband by statute 348 Husband at common law had not, in life of wife 348 Nor parent in life of child 348 Expectancy r.ot sufficient to give 349 Of creditor in life of debtor 349 INSURERS— Should contract to pay sum insured 33 INSURRECTION- Losses arising from 104 Condition in policy as to 182 Loss by, need not be negatived in statement of loss by in- sured 225 INTEREST— When assignee of life policy may claim 247 INTEREST IN PROPERTY INSURED— Effect of transfer of 2, 3, 192 Parted with and regained, effect of 3 896 THE LAW OP INSURANCE. « PAOB Must be vested in assignee of policy to allow him to sue 43, 197 Only of person named in policy is insured 48 Must be in insured at time of effecting insurance 58, 62 Not always insurable; 62 Necessary to entitle insured to maintain action on policy... 63 Want of, invalidates the policy 63 Cessation of, before loss happens eflFect of 64, 192 Must be possessed by insured at time of loss 64 Equitable interest sufficient 71, 72 Of purchaser in possession insurable 71 Lost to insured by alienation of property 92 In property and policy must concur in same person 197 In policy vests in representatives on death of insured 198 Of executor or administrator should be endorsed on policy 198 In property, condition as to setting forth in notice of loss,. 215 In life insurance, should exist at date of policy 345 Must be pecuniary in life insiirance 345 Name of person primarily interested to be inserted in policy 350 INTERIM RECEIPT— Rights of parties under 35, 57 Undertakes effect immediately on grant of 36 Court of Chancery will compel payment of policy under ... 36 Agent of Company may bind them by 57 Effect of granting, on second insurance 164 INVASION— Losses arising from 104 Condition as to, in policy 182 Loss by, need not be negatived by insured in preliminary proofs of loss 225 JUDGMENT— Defence to action brought on foreign 286-7 JUMPING— System of, in adjustment of losses 241 JURY— May draw conclusions of law from facts 295-6 Must decide on good faith of applicant in his answers 296 INDEX. 397 PAOB LANCASHIRE INS. CO.— Peculiar conditions in policies of 187, 189 LEASE OF PREMISES INSURED- Condition as to, in policy 196 LEGAL DISABILITY— Imprisonment for misdemeanor not 275 LESSEE — Covenant by, to insure results to lessor 270 LIEN— Of insurers on property insured abolished 301 Foreign legislation cannot create lien in Canada 302 LIMITATION OF ACTION ON POLICY— Condition as to, in policy .272-3 Suit to correct mistake in policy may be brought after time of 273 In case of second action brought where non-suit in first... 273 Plea of, in condition 274 ■ Time begins to run only when cause of action accrues 274 In case of action on policy of re-insurance 275 In action against mutual company 275 Imprisonment for misdemeanor not legal disability against 275 May be waived by company 275-6 LONDON, LIVERPOOL & GLOBE INS. CO.— Peculiar conditions in policies of 185,186,187, 188» LONDON ASSCE. CO.— Peculiar conditions in policies of 188 LOSS— Consequential, covered by policy 2 Over- valuation of amount of, effect on policy 19 Extent of, measured by interest of insured 64 By lightning 96-182 What loss fire in surance companies are liable for 96 Sustained by removal of goods not covered by policy 97 Occasioned by theft 98, 99, 182 By gunpowder explosion 99, 100 By concussion of the atmosphere 100 398 THE LAW OP INSURANCE. PAGK Proximate cause of, muat be considered 101 Extent of, covered by policy 102 Must arise from some of the causes insured against 102 Arising from invasian, riot, &c., usually provided for in policy 104 Of profits of business, not recoverable 106 Of rent of premises 106 How estimated 107, 108 Value of goods at time of, to be made good by insurance... 108 Market value of goods, when estimate of 108, 109 Insurer's liability for, reduced pro tanto by partial pay- ment of 109 Imma'^.erial whether violation of express condition occasions 142 Notice of, must be immediately given to company.. 182, 211, 213 Payment of, when made, condition as to 183 General notice of, in case of fire policy, snfticient 214 Condition precedent that amoxint of, must be stated in notice 215 Verbal notice of, when sufficient 21 6 Affidavits used in proving, must comply with condition of policy .,. 218 Manner of, need not be described by insured in proof of. . . 220 Certificate of, condition precedent to payment of • 230 False swearing in proving loss avoids policy 232-3-4 Notice of, may be waived by insurers 235 Proof of, may be waived by insurers 235 Adjuster to asct' I tain exact amount of 240 By spontaneous combustion not rec(} verable 246 Company may be compelled to pay entire loss on adjustment 248 Condition as to payment of rateable proportion of, where several insurances 248 Rules as to adjustment of 256-7 Arising from unseaworthiness, not enforceable 311 Which in nature of things must happen, not indemnified... 320 By perils of the sea, insured entitled to indemnity 332 Though suspicious, yet if accidental, insured entitled to recover 340 Payable to third person, not party to policy, how recover- able 340-1 MALICIOUS BURNING— Action for must be brought by owner of property 270 INDEX. 399 PAOB MARINE POLICY— Valuation of property insured in 19 Warranty of seaworthiness implied in, from act of insurance 303 Warranty diflfers under circumstances 304-5 Effect of fire policy being used to insure the subject of 341 MARINE INSURANCE- At and from a port, nsk attaches from date of policy 304 MARRIED WOMAN— May insure her husband's life 346 Husband may insure life of 347 MECHANIC— Has insurable interest in buildings erected by him 80 Effect of recent act of Ontario on 81 MEMORANDUM ARTICLES— Condition as to in policy 182 MINOR— Insurance for benefit of 347 MISREPRESENTATION— Distinguished from non-compliance with warranty 113 Of facts not material, does not avoid policy 113 Is either affirmative or promissory 114 Of incumbrances upon property insured, avoids policy . . 123-6-8 May be waived by insurer 124 Election of insurer to rebuild is waiver of 124 Renewal of policy, a waiver of 125 * By mistake, ignorance or negligence same as wilful 125 Of material facts avoids policy 135, 335-6, 350-1-3 MISTAKE IN POLICY— When allowed to be corrected 24 Must bo made out by clear evidence 25 Misrepresentation of material facts by 133 MONEY ADVANCED ON FREIGHT- Insurable interest in 79 MORTGAGE— Insurers entitled to assigttment of, on payment of 262 400 THE LAW OP raSURANOB. PAOI MORTGAGEE— Of vessel named in policy ^ 47 May insure to full value of the property 48 May insure jointly with mortgagor 49 May insure property to extent of his lien 49 On assignment of mortgagor's policy, may recover entire loss 50 Has an insurable interest 67 Of chattels has an insurable interest 68 EflFecting second insurance, effect on first policy 168, 207 Consent of Company necessary where policy is assigned to. 208 Is entitled to have insurance money expended in rebuilding 259 Subrogation of rights of, to insurers 262 Action on policy may be brought by, where insurance in name of mortgagor 268 MORTGAGOR— Of vessel, not to be deemed owner 47 May insure to the full value of property 49, 130 May insure jointly with mortgagee 49 Has an insurable interest 67 Of chattels has an insurable interest 68 Om 3sion of, to mention amount of mortgage, effect of 132 Effecting second insurance effect on first policy 107, 168 Assignment of policy by, only transfers his interest 206 Insuring before giving mortgage and subsequently without notice of first 206 Alienation of property insured by, effect on policy 208 Insurance effected by,, under covenant results to mortgagee 270 MUTUAL COMPANY— Policy invalid unless signed by president of 33 Condition as to rebuilding, in policies of 260 Actions on policy against 275 Every person insured in, becomes a member of 299 Two kinds of polices issued by 299, 300 NEW TRIAL— Will not be granted where verdict for insured, on criminal charge 294-5 Will be granted where verdict grossly excessive 295 Waiver of challenge of juror not ground for granting 295 NORTH BRITISH & MERCANTILE INS. CO. Peculiar conditions in policies of 187, 188 INDEX. 401 PAOE NORTHERN INS. CO.— Peculiar canditions in policies of 185, 8-9 NOTICE— Acknowledgement of, under ''cridition 154 Waiver of, in case of additional insurance 155 Of further insurance on same property to be endorsed on policy 155, 162 Required to be in writing, condition as to 155, 184 Verbal, when a compliance with condition 150, 316 Of further insurance should be given to the company them- selves 156, 165 Of previous or subsequent insurance must be given before fire happens 160,161, 181 May in some cases be given after fire 161 Time within which notice of double insurance must be given 161 Reasonable diligence to be used in giving, under conditionl62-5 Omission to give, notice of second insurance how cured 169 Of change of occupation of premises, condition as to ...175, 184 Of loss must be given to company immediately .... 182. 211, 212 Of assignment of policy, to be given to company before loss 199,203, 353 Assignment of policy withoiit notice of forfeiture 209, 210 Of loss can only properly be given by party insured 212 When it may be given by assignee of policy 212 One of several insured can give notice of loss 212 Immediate notice of loss, condition as to, how con- strued 213, 6-7 Of loss given to resident agent of company effect of 213, 214 General notice sufficient in case of fire policy 214 Of loss required to be in writing, condition as to 215 Of loss given by local agent to secretary of company suffi- cient 215 In proving loss, notice should contain all legal requisites... 221 Of loss may be waived by insurers 235 Of abandonment. (See abandonment.) Of name of ship, condition as to 339 OCCUPATION OF PREMISES— Condition as to change of 177-8, 184 Change of occupant, effect on condition 178 AA 402 THE LAW OF INSURANCE. PAGE OMISSION— Unintentional omission of facts by insured not concealment 129, 336 Of insured to inform iiisurer of nature of goods 132 Of mortgagor to mention amount of mortgage eflFect of 132 Of incendiary attempts to destroy property, in application 132 To give notice of second insurance when cured 1 69 OVERVALUATION OF PROPERTY— When fraudulent 19, 20 OWNER— Endorsee of a warehouse receipt is deemed 47 Mortgagee or mortgagor of vessel not 47 Property should be insured in name of 47 Of eqixity of redemption has insurable interest 67 OWNERSHIP OF SHIP— Evidence of 291 PAROL EVIDENCE— Not admissible in construing policy 14, 24 Admissible to explain policy in cases of trade 25, 26 Admissible to show what interest , is intended to be pro- tected 27, 287 Of agent of company admissible to show mistake in descrip- tion of premises 290 PARTIAL LOSS- Condition as to 332 May be recovered in action for total loss 333 PARTIES TO POLICY— Who may be generally 44, 49 Must have an interest in property insured 57 Benefit of policy may be adopted by person having an interest 58 Mortgagor and mortgage -^ maybe 67, 68 Tenant by the courtesy may be 69 Also a husband , 69 And a tenant from year to year 69 Widow in respect of property of deceased husband 78 PAWN— Insurable interest in goods in 80 INDEX. 403 PAGE PERILS OF THE SEA— Loss by starting of a plank in ship is loss by 321, 332 PLEA— Of limitations under condition in policy .273-4 Of non-compliance with condition precedent. . . 278-9 Demurrer to 281 Of violation of condition as to encumbrances 283 Of warranty in policy 283 Of breach of condition to give notice of other insurances. . . . 285 Insufficiency of proofs should be by special 286 Amendment of 280 To action on a foreign judgment 286-7 Of set-off against premium note 293 Of arson, what proved under 293-4 Of deviation in voyage .313, 317 To an action for total loss 333-4 PLEADING— Extent of admission of averment, when not traversed 278-9 Ambiguity in, how construed 279 Facts only must be set forth in 280 Of documents under Com. Law Pro. Act 281 Need not allege policy is under seal 281 bupliflity in 284 A double assurance, effect of 285 Surplusage in 285 Several pleas 286 PLEDGEE— May insure in his own name 44 POLICY— Either open or valued 3, 4 Valued, when binding 4 Need not be signed by both parties 5 Ccmmencement and termination of 8 When it may have retroactive operation 9, 10 Renewal of, effect of . , . 11 How construed 11, 16 Terms of cannot be varied 12 Ambiguous words in, how construed 14 Generally printed 16 Where part of written, effect of 16, 17 404 THE LAW OF INSURANCE. PAGE Construed most strictly against insurers 17 Overvaluation of proi^erty insured, effect on 19 Must be in conformity with charter and by-laws of company 22 Parol insu ranee not binding on com pan y 22 Corporate seal required on L3 Not required by any general rule of law in Canada to be in writing 24 When parol evidence admissible to vary terms of 24 Interpreted by lex loci 30 Of foreijjU company how interpreted in Canada 30, 31 Whea valid without seal 32 Voidable where insured has not fee simple of property in- sured 32 Sum insured should be contracted to be paid by insurers in 33 Deliver}' of, necessary to complete 33 Of mutual company invalid unless signed by president of company 33 In what cases valid altlxnigh not actually issued 34 Will have retroactive operation inider agreement to insure 36 Names of persons interested must be inserted in 37, 38 Divisibility of 39, 40, 41 Fraud as to part, vitiates Avhole 41 How cancellation of, may be effected 42 Alteration of, how effected 43 When benefit of policy may be adapted by person haviiig interest in property 58 Ratification of, by person insured 58, 59 When goods insured may be i-emoved from building 61 Gambling policy 63 Void where insured has no interest in ]n'operty insured ... 63 Construction of , in relation to things insured 64 To be construed liberally 83 Condition in, as to correct description of property insTu-ed.. 83, 84 Effect of misdescription in 84 Must be no change in premises insured 84 When change allowed 85 Effect on, of condition as to commencing dangerous trade on promises 86 Rendered void by breach of warranty in description 86 Vitiated by act of insured increasing risk 87, 88 Change in occupation of pronises vitiates, unless conununi- cated to insurers 91 INDEX. ■ 405 PAGE Essence of, that position of goods insured be known to all parties 91, 92 Condition for removal of goods covered by 92 Insurance on merchandize by open policy, >vhat covered by 94 On a building 95 Condition in, as to building insured, falling down 95 Definition of "fire" in 95, 96 Does not cover loss by removal of goods from house on fire, 97, 98 Action on, what damages recoverable 98, 99 Premises blown up by gunpowder, effect on 99, 100, 101 Extent of loss covered by 102 When insurers liable for sum insured 109 Fraudulent representation, eftect on ] 13 Non-compliance with warranty, eflTect on 112, 113 Avoided by insured withholding information increasing risk 120 Avoided by false statements m application 121 Hazardous articles, insured by, effect on 122, 132 Misrepresentation of incumbrances on property, effect on... 123 Deemed to be made on original representation 125 Representation as to renewal oi / 125 On several psircels, avoided by misrepresentation of title to one 128 Avoided by concealment of fires, having taken place before application 132 Omission in application as to incendiary attempts on pro- perty, effect on 132 Avoided by fraud, concealment, or misrepresentfition of material facts 135, 835 Effect on, of insured leasing building insured 148 Avoided by non-compliance with condition to give notice of previous insurance 152-3 When avoided by breach of condition under statute IGO Non-occupation of insured premises, in absence of condi- tion, does not avoid 175 Non-compliance with a by-law, effect on 177 Not in its nature assignable at common law 197 Interest in property and policy must concur in same person 197 Interest in, vests in representatives on death of insured . . . 198 Avoided by assignor not complying with terms of, against assignee 200 Avoided by insured swearing falsely in proving loss 232-3 Condition in, as to recovery of two-thirds value of pro- perty 243 406 THE LAW OF INSURANCE. PAGE Pro-rata clause in, as to payment of loss, effect of 24d Is best evidence that insurance is on foot - 292 Avoided by premium note in arrear in mutual companies... 300 Marine policy, condition in, as to care and skill 322 In construction of, evidence of meaning of particular words admissible 334 Fire policy used, for marine insurance, effect of 341 Insured may borrow money on security of 348 Avoided by public policy, as in duelling 351 Assignee of, takes it with all e(piities 354 May be effected for benefit of an infant 354 PREMIUM- Payment of, condition precedent 5,7, 81 When actual payment of, dispensed with fj Keceipt for binding, in absence of f laud ft Payment of, may be waived by insurers 6, 7 Not returnable, when risk cu^ire 27 When returnable to insured 27, 28, 29, 65 Note, condition as to payment of 180 Evidence of waiver of payment of 292 Note in arrmr for thirty days avoids policy in mutual com- pany 300 Note not payable by instalments in cash lu'emium principle 301 When paid, no further assessment on insured 301 PRESERVATION OF PROPERTY— Condition as to 182 PROFITS— Of cargo, insurable interest in 79 Of business, insurable interest in 79 Not recoverable unless insured as such 240, 245 PROOF OF LOSS— Condition as to 182, 183, 211 N itice of loss verified by oath must be given to company immediately 211, 212 Notice of loss must be given by party insured 212 When notice of loss nmy be given by assignee of policy 212 Assignee in some cases may recover without furnishing any 212 One of several insureds can give notice of loss 212 Condition as to giving immediate notice how con- strued 213, 21G 217 INDEX. 407 PAGE Should be presented to secretary or president of company... 213 Resident agent of company receiving notice of luss, effect of 213, 214 Broker receiving notice of loss effect of 214 General notice of loss sufficient in fire policy 214 Condition precedent that amount of loss must be stated. 215, 221-2 Condition as to written notice of loss 215 Notice of loss given to secretary by local agent sufficient.. 215-10 Verbal notice of loss, when sufficient 216