AWBOOK- 
 
 H1NE & NICHOLS 
 
 1887
 
 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 GIFT OF 
 
 John Hogan 

 

 
 THE 
 
 AGENT'S 
 
 HAND BOOK 
 
 OF 
 
 INSURANCE LAW 
 
 (FIRE INSURANCE.) 
 
 
 
 HINE & NICHOLS. 
 
 NEW YORK: 
 THE INSURANCE MONITOR. 
 
 1887.
 
 .. 
 
 (0 
 
 Entered according to Act of Congress in the year 1887, by C. C. HINE, in the Office of the 
 Librarian of Congress, at Washington. 
 
 H
 
 THIS BOOK 
 
 Is intended simply as a legal guide to the agent. It aims to place clearly 
 before him those principles which apply to his every-day work, so as to 
 enable him intelligently to perform his duties as a representative of the com- 
 pany, and guard against those things which in the past have involved com- 
 pt 
 
 panics, agents, and policy-holders in loss and trouble. It does not assume 
 
 ^5* 
 
 to cover the whole field of insurance law. It is not written for the lawyer, 
 3 nor is it designed like the ordinary text-book to be cited as an authority in 
 
 'i the courts, or in determining the rights of parties when once a contro- 
 ("* 
 
 versy has arisen. The principle adopted in its preparation has been to treat 
 
 those matters which are likely to involve the agent or his company in diffi- 
 culty as things to be avoided, even though the weight of authority might in 
 some cases sustain their legality. It seeks to indicate the safe channel rather 
 than the edges of the shoals. 
 
 Special attention is given to those matters of practical importance which 
 constantly come up between agent and company, agent and policy-holder, 
 -etc., while things not relevant to the agent's immediate work are not elabo- 
 rated. It will fill a place not heretofore occupied, but a place which con- 
 fessedly needs to be filled in the interest of the companies and their agency 
 representatives. The authorities cited are, as a rule, the more recent decis- 
 ions of the courts. 
 
 CHARLES C. HIKE. 
 
 WALTER S. NICHOLS.
 
 THE AGENT; 
 
 HIS RELATIONS AND RESPONSIBILITIES. 
 
 His RELATIONS TO HIS PRINCIPAL. 
 
 The legal relations of principal and agent are the same in insurance as 
 in other branches of business, except as they are modified by the special 
 features of this particular occupation. 
 
 The commission given to the agent by his principal is the fountain 
 from whence he derives all his authority, this and such written or verbal 
 instructions as he may from time to time receive, fix the limits within 
 which he is at liberty to act. They are his charter and by-laws. The 
 moment he steps beyond them he ceases to act as agent or to represent 
 his principal except to such as might be deceived concerning the facts. 
 He becomes a mere wrong-doer and is liable to his principal for any injury 
 that may result. 
 
 Paley on Agency by Lloyd, 9, 10, 16, 17 ; Ewell's Evans on Agency, 223, and cases 
 there cited. 
 
 While insurance agents have not perhaps been prosecuted so often by 
 their companies for violations of duty as have those engaged in some 
 other branches of business, it is none the less true that the transgressing 
 agent can always be held responsible by his company, and has been com- 
 pelled in a number of cases to respond in damages. 
 
 In the case of Phcenix Ins. Co. vs. Pratt, decided by the Supreme Court 
 of Wisconsin, Feb. n, 1887, and reported in the i6th Ins. Law Journal, 
 the agents had issued a policy on a certain mill which was afterwards 
 found, on inspection by the special agent, to be a very undesirable risk. 
 The local agents were thereupon instructed in writing to relieve the com- 
 pany of the risk ' ' as soon as possible. " Instead of doing so, they wrote 
 requesting that it might run to expiration, which would occur a few days 
 later; that they disliked to cancel, and it would be a personal accommoda- 
 tion. Within four days, and before opportunity for a reply, the risk burned.
 
 The company sued the agents for damages, alleging neglect to cancel as 
 ordered. The Court ruled in favor of the company, using the following 
 language : "They (the agents) were bound to the exercise of good faith 
 and reasonable diligence in discharging the duties which they owed to 
 their principal, and to make good any loss or damages arising from any 
 negligent omission on their part in departing from the instructions of their 
 superiors in the management of the company's business intrusted to them. 
 * * * If the agents, from a mistaken view as to the safety of the risk and 
 the wisdom of canceling it, or for any cause personal to themselves as 
 agents of the company delayed acting, it was at their own peril." 
 
 The relation of the agent is what is legally termed fiduciary, that is, one 
 of trust or confidence resembling that of a trusteeship. For this reason 
 the law demands the utmost good faith, and jealously regards any conduct 
 on his part savoring of disloyalty or abuse of power. The liabilities of the 
 agent begin the moment he consents to act. He is presumed to be 
 capable of performing the work which he undertakes, and is not excused 
 for an injury resulting from incapacity or neglect. Where an agent under- 
 takes to procure an insurance or is instructed to cancel a risk, and acts so 
 negligently that loss results, he is liable for the consequences. 
 
 Wilkinson vs. Coverdale, I Esp., 74 ; Phoenix Ins. Co. vs. Frissell, 16 Ins. Law- 
 Jour., 75 ; also Phoenix Ins. Co. vs. Pratt, quoted above. 
 
 During the continuance of his agency he cannot represent any interest 
 adverse to that of his principal. The agent has no legal right to accept a 
 risk or a modification of the contract which he knows his principal would 
 not approve, and can be legally compelled to surrender any profit he may 
 gain from such a transaction. 
 
 7 Story's Eq. Jur., 218, 309 ; Evans on Agency, 256. 
 
 All profits made in connection with his employment beyond such as 
 are sanctioned by his principal belong to the principal. The agency can- 
 not be surreptitiously used for personal advantage. If the agent agrees 
 with the insured for a consideration to place the risk in a company which 
 he represents, at a named rate of premium, or to waive any policy 
 stipulation adverse to the applicant, the company may lawfully claim the 
 consideration which he receives. 
 
 Evans on Agency, 243, and cases there cited ; Great Western Ins. Co. vs. Cunliffe, 
 L. Rep., gCh., 525. 
 
 The agent cannot bind his principal by any contract with himself with- 
 out his principal's consent. Where, as a member of a firm, he has insured 
 the firm's property with the consent of the general agent, he cannot by 
 virtue of a mere understanding with the other members of the firm issue a
 
 renewal of the contract, which had expired, after a loss, on the ground of 
 a verbal agreement for such renewal before the loss occurred. 
 Glens Falls Ins. Co. vs. Hopkins, 14 Ins. Law Jour., 317. 
 
 Another feature of this fiduciary relation of the agent is his obligation 
 to account to his principal for the business of the agency. He cannot 
 interpose the claims of third parties as a justification for withholding 
 moneys in his hands, nor can he refuse or neglect to render an account- . 
 ing when required. Such a refusal or continued neglect would be good 
 ground for forfeiting his commissions. 
 
 Willard's Eq. Jur., 104. 
 
 The general rule is that in the absence of an understanding to the con- 
 trary the agent cannot delegate his authority to another in matters where 
 his personal skill or discretionary powers are involved, unless it be to do 
 a merely ministerial act. An agent who is authorized to contract insur- 
 ances may delegate to his sub-agent the mere ministerial duty of notifying 
 the applicant that the risk is accepted or upon what terms it is accepted, 
 but he has no right to vest a sub-agent with any discretionary power of 
 determining whether the risk will be accepted or upon what terms, unless 
 his principal has assented to such a delegation. 
 
 Continental Life Ins. Co. vs. Willetts, 24 Mich., 268 ; Evans on Agency, 38. 
 
 In insurance, as in many other branches of business, the peculiar 
 character of the work requires and contemplates the employment of sub- 
 agents and clerks by agents who are commissioned by the company, but the 
 powers granted to such subordinates must be kept strictly within the line 
 of their necessary duties. The agent is liable to his principal for any 
 abuse of power illegally granted to a sub-agent. 
 
 Cases frequently arise which were not contemplated or clearly provided 
 for in the commission and instructions given to the agent. In all such 
 cases the rule holds that the agent acts upon his own responsibility the 
 moment he goes beyond the plainly defined line of his authority, and in 
 case of damage resulting he can only be justified if it clearly appear that 
 his course was such as good faith to his principal demanded. Where his 
 authority is doubtful the same rule applies, he must act in good faith and 
 be justified by the circumstances in his construction of his power. Where 
 an agent is instructed generally to insure the cargo, and insures under a 
 policy limiting the liability in case of loss, he will not be held responsible 
 unless he violated his orders or was guilty of gross negligence or fraud. 
 
 Moore vs. Mourgue, 2 Cowp., 479 ; Boden vs. French, 10 C. B., 886. 
 
 Of course every specific grant of authority to an agent involves by impli- 
 cation whatever powers are usual or necessary for the purpose of executing
 
 8 
 
 that authority, and in the absence of specific instructions the general scope 
 of his duties must aid in determining what authority he may exercise. 
 An agent has an implied right to investigate concerning the origin of a 
 suspicious fire, but he has no right as an agent to institute criminal pro- 
 ceedings. If his business is to deliver and countersign policies he has no 
 right to waive proofs or adjust losses, and the insured is not justified in 
 believing him to have such power. 
 
 Norman vs. Ins. Co., 4 Ins. Law Jour., 827; Bush vs. Ins. Co., 5 Ins. Law Jour., 207. 
 In the absence of anything to the contrary in the contract, the principal 
 may at anytime revoke the authority granted to the agent. If the con- 
 tract between principal and agent gives a continued interest, which is 
 rarely the case in fire insurance, the revocation of authority may give 
 rise to proper claim for damages, but the authority to represent is ended 
 nevertheless, and strangers must deal with the agent at their peril if 
 notified. The principal is liable for labor and expense already properly 
 incurred by his agent, but not for future gains which might have resulted 
 had the agency been continued. 
 
 Shaw vs. Ins. Co., 49 N. Y., 681; Partridge vs. Ins. Co., 15 Wall., 458. 
 
 When the special work for which an agent has been delegated has been 
 accomplished, his agency ends as of course, and when the power has been 
 delegated to a firm it will terminate with the dissolution of the firm 
 (unless it be joint and several) or death of a member. 
 
 Marline vs. Ins. Co., 62 Barb., 181; Guthrie vs. Armstrong, 5 B. and Aid., 628. 
 
 Such is the general doctrine concerning the relations subsisting between 
 principals and agents, and this doctrine is rendered more emphatic by the 
 peculiar and delicate nature of the responsibilities which must necessarily 
 be delegated in insurance. It is indispensable to the success of the busi- 
 ness, which must mainly be carried on at a distance from the principal 
 office, that large discretionary powers must be granted to its representa- 
 tives, and it is equally impossible for the companies to rigidly define the 
 extent of those powers to the public with whom they deal. Hence it is 
 that the agent, by ignoring or violating the limitations imposed on his 
 authority, is in special danger of making his principal responsible for acts 
 in excess of his authority where the party with whom he deals has a right 
 to suppose that his acts are authorized. For, as between the company 
 and the insured, the law will not inquire simply what was the actual 
 authority possessed by the agent, but what was the authority which the 
 party dealing with him had good reason to suppose he possessed. A 
 large percentage of the disputes and litigations in which companies be- 
 come involved is due to the acts of their representatives, unintentional, per- 
 haps, but clearly in excess of their authority, while another large percentage
 
 is traceable to the ignorance of the agent concerning the legal effect of his 
 acts. Hence it becomes important to consider the different classes of 
 agency and the functions of each. 
 
 THE DIFFERENT KINDS OF INSURANCE AGENCY AND THEIR FUNCTIONS. 
 
 (a) THE BROKER. 
 
 In fire insurance two broad classes of agents exist those who act for 
 the insured and those who act for the company. Among the former is 
 usually classed the broker. Strictly speaking, however, the broker is not 
 exclusively the agent of either party. His functions are those of an in- 
 termediary to bring the two principals together. So long as he acts simply 
 in that capacity he is not responsible to either party for a violation of the 
 contract between them, but to whatever extent he acts in the interest of 
 either he becomes the agent of that party. 
 
 Lycoming Ins. Co. vs. Ward, 8 Ins. Law Jour., 603 ; Mann vs. Meyer, 8 Ins. Law 
 Jour., 905 ; Lycoming Ins. Co. vs. Rubin, 79 111., 402. 
 
 When, without any prior understanding on the part of a company or 
 its agent, a broker bargains for insurance for his customer, he is exclu- 
 sively the agent of the applicant in the work of securing the contract and 
 all that relates to it. If his representations are false, or the premium has 
 been paid into his hands, or he has been employed by the customer to 
 secure a modification or cancellation of the policy, the latter is alone 
 responsible. 
 
 Standard Oil Co. vs. Ins. Co., 5 Ins. Law Jour., 459 ; Story on Agency, 134-5, 
 45I- 2 5 35 Barb., 463. 
 
 But the moment he is intrusted by the company or its agents with the 
 performance of any duty towards the company he becomes to that extent 
 the agent of the company. If intrusted with a fully executed policy for 
 delivery and collection of the premium under circumstances which justify 
 the insured in believing that he is authorized to receive it in behalf of the 
 company, a payment to the broker is payment to the company. 
 
 Lycoming Ins. Co. vs. Ward, ante ; Empire Ins. Co. vs. Mach. Co., 9 Ins. Law 
 Jour., 399, 
 
 The mere payment of commissions according to a prevailing custom 
 for such business as may be brought, will not of itself make the broker 
 the company's representative. The delicate question of his relationship 
 in each case must be determined by the specific circumstances. A party 
 having desk-room in an agent's office and accustomed by a specific 
 arrangement between them to bring business and share commissions, was
 
 10 
 
 intrusted by the agent with the duty of obtaining additional information 
 regarding the risk, and it was held that the facts justified the doctrine that 
 he acted for the company in securing it. 
 Mullin vs. Ins. Co., 15 Ins. Law Jour., 561. 
 
 A broker received from an agent of the insured and forwarded a risk to 
 an agent in another State, who placed it and returned a fully executed 
 contract, upon which the broker collected but retained the premium. 
 The argument of the court was that the intrusting of such an instrument 
 to one who must have been known to have been a mere broker in another 
 State, was sufficient to justify the insured in regarding him as authorized 
 by the company to receive it, and payment to him became payment to the 
 company. But it was admitted that if the defalcation had been due to the 
 original agent of the insured the case would have been different. A dis- 
 tinction was made between the relations of the two. 
 
 Universal Ins. Co. vs. Block, 15 Ins. Law Jour,, 219 ; Pottsville Ins. Co. vs. Im- 
 provement Co., 4 Out., 139. 
 
 The agency of the broker is at an end when the specific purpose for 
 which he was employed has been accomplished. A broker employed 
 merely for procuring insurance is not the agent of the insured for receiv- 
 ing notice of cancellation, or as regards any subsequent matter pertaining 
 to the risk. 
 
 VonWein vs. Ins. Co., 15 Ins. Law Jour., 158. 
 
 The safe rule for agents in all dealings with brokers or middle men is 
 to regard them as vested with no authority by the insured beyond the 
 mere placing of the risk, unless the contrary plainly appears. 
 
 (6) THE GENERAL AGENT. 
 
 The term general agent in insurance law is used to denote those who 
 are commissioned with plenary power to act for the company in the trans- 
 action of certain departments of its business. But there is no magical 
 power in the name to clothe with an authority greater than that which is 
 formally conferred. Whatever be the title, the legitimate power of the 
 agent is confined to that which is actually granted, and which varies all 
 the way from a mere solicitor to one who has full authority to make and 
 modify contracts and settle losses. His powers are usually limited by the 
 equipments for his work. The possession of blank policies and renewal 
 receipts duly signed are the usual insignia of the general agent ; and his 
 authority, unless otherwise restricted, extends to the acceptance of risks, 
 settlement of rates, and written conditions of insurance, in fact, to all 
 matters pertaining to the making of insurance contracts which are consistent
 
 II 
 
 with the general character of the business. If not forbidden, he may waive 
 the premium, consent to other insurance, and even modify the terms of 
 the contract. He is frequently employed temporarily to adjust and settle 
 losses as well as to receive notice and proofs. 
 
 Pechner vs. Ins. Co., 4 Ins. Law Jour., 782 ; Pitney vs. Ins. Co., 4 Ins. Law Jour., 
 765 ; Gloucester Mfg. Co. vs. Ins. Co., 5 Gray 498. 
 
 But it does not follow that such plenary powers are vested in an agent 
 intrusted with blank contracts. The right to make a contract for another 
 does not necessarily involve any rights regarding that contract after it has 
 been made, and the power of the general agent is frequently more re- 
 stricted regarding the contract after it has been made than before, by 
 stipulations in the contract itself. The mere authority to make contracts 
 of insurance does not imply any authority to adjust losses or to do other 
 acts not connected with the granting of insurances. 
 
 Post vs. Ins. Co., 43 Barb., 351 ; Bush vs. Ins. Co., 63 N. Y., 531 ; Lohnes vs. Ins. 
 Co., 6 Ins. Law Jour., 472. 
 
 An agent who is not specially authorized so to do has no right to cancel 
 contracts already made, without the consent of his principal. 
 U. S. F. Ins. Co. vs. Tardy, 2 Ins. Law Jour. , 60. 
 
 And generally the courts distinguish between the plenary powers granted 
 to general agents in the making of contracts and their more restricted 
 powers regarding such as are already complete. The authority of the 
 agent, too, is restricted by the territorial limits of his jurisdiction. When 
 he assumes to represent the company or to exercise authority beyond these 
 limits, he is liable to the company as for any other unwarranted assump- 
 tion of power. 
 
 (c) THE SPECIAL AGENT AND SOLICITOR. 
 
 The special agent is one who is intrusted with a particular duty under 
 a limited authority. He can exercise no powers beyond those specifically 
 intrusted to him and such as naturally flow from them. The duties of 
 the solicitor are restricted to securing applications for insurance. Like 
 the broker, he is a sort of middle man for bringing together the company 
 and its customers ; but, unlike the broker, he is the representative of the 
 company for this purpose, and his obligations wholly lie in acting in its 
 interest. The delivery of the policy when executed and the collection of 
 the premium are also frequently added to his duties, and the possession 
 of application blanks and of executed policies and renewals for delivery 
 are the indices of his powers. It is his duty to see that the application is 
 correctly understood and filled, and he is entitled to make all needed 
 explanations for this purpose. He is bound to take note of any mis-
 
 12 
 
 statement in the application regarding facts of which he has a personal 
 knowledge, and he has no right to knowingly allow a misrepresentation 
 concerning the risk to be made to the company, for the latter will often 
 be held responsible for facts thus known to its agent. The neglect of 
 these simple precautions has caused the defeat of the companies in many 
 costly suits. 
 
 Planters' Ins. Co. vs. Myers, 7 Ins. Law Jour., and cases there cited ; Boetcher vs. 
 Hawkeye Ins. Co., 8 Ins. Law Jour., 705 ; Kingston vs. Ins. Co., 42 Iowa, 46. 
 
 NOTE. The language of the law and the language of the shop do not always agree. 
 A GENERAL agent or manager, as understood in the craft, is one clothed with mana- 
 gerial and executive powers second only to those of the officers of a company, one to 
 whom the local or resident agents of a State or of several States report, and from 
 whom they receive their instructions ; but the LOCAL agent may be t( General " in the 
 sense employed in legal phraseology. A SPECIAL agent, as understood in the craft, 
 is one who travels from the Head Office or General Agency clothed with supervisory 
 powers, an expert who approves or cancels contracts, selects local agents, and other- 
 wise represents the company officially or semi-officially ; but the solicitor or sub-agent 
 (frequently the clerk or employe of the local, and wholly unknown to the company), 
 is sometimes called "Special" in the language of the courts. If the legal and the 
 professional nomenclature are both kept in mind, no confusion need arise from the 
 terms herein used. 
 
 So in regard to the delivery of the policy and collection of the premium. 
 Unless specially authorized no delivery should be made until satisfactory 
 payment has been rendered, for the act of delivery will generally bind the 
 company, and the agent is personally responsible for any failure to collect 
 the premium. 
 
 Farmers' Ins. Co. vs. Mann, 9 Ins. Law Jour., 159 ; Critchett vs. Ins. Co., 9 Ins. 
 Law Jour., 594 ; Rundle vs. Moore, 3 Johns., 36. 
 
 With the forwarding of the application or delivery of the contract and 
 receipt of premium the work of the mere solicitor ends. He has no fur- 
 ther powers regarding the insurance. He has no right to waive or modify 
 any condition of the policy, consent to other insurance or increase of risk, 
 nor do any other thing in relation to the contract unless specially author- 
 ized by the company. His knowledge concerning subsequent matters is 
 not the knowledge of his principal, and the insured has no right to assume 
 that he has such powers. He has no right to make a preliminary contract 
 for insurance. 
 
 Bush vs.' Ins. Co., 5 Ins. Law Jour., 257 ; Morse vs. Ins. Co., 5 Ins. Law Jour., 
 409 ; Crilchett vs. Ins. Co., 9 Ins. Law Jour., 594. 
 
 There is one important exception, however, to this rule. Where a 
 renewal of the original contract is to be delivered, the agent should be 
 careful that the conditions of the risk have not been materially changed
 
 13 
 
 within his knowledge, and that the representations in the original applica- 
 tion are still true. For, by intrusting him with the delivery of a renewal 
 the company is liable to be held responsible for changes of which he has 
 received notice from the insured. 
 
 Whited vs. Ins. Co., 8 Ins. Law Jour., 368. 
 
 THE DOCTRINE OF WAIVER IN ITS RELATIONS TO THE AGENT. 
 
 No legal principle is fraught with more consequence to the companies 
 in the conduct of agencies than that involved in the doctrine of waiver. 
 If the express limitations to the agent's authority could always be brought 
 home to the insured, or the agent himself were always strict and careful 
 in the performance of his duty, waiver would be but little heard of in 
 insurance. It arises from acts or conduct which are inconsistent with the 
 strict terms of the contract itself. Whenever an agent, acting within the 
 apparent scope of his authority, does that which will justify the insured in 
 believing that some provision of the contract has been modified or ex- 
 punged, his company may be made liable for the results. When the 
 solicitor, in taking an application, knowingly consents to a false or incor- 
 rect statement of the facts regarding the title, character, exposure, or any 
 other feature inquired about concerning a risk, and the applicant in good 
 faith relies upon the agent, the responsibility for a misrepresentation which 
 induces its acceptance by the company is imposed on the solicitor him- 
 self. 
 
 Wright vs. Ins. Co., 4 Ins. Law Jour., 251 ; Hadley vs. Ins. Co., 4 Ins. Law Jour., 
 611 ; Stone vs. Ins. Co., 15 Ins. Law Jour., 490 ; Donnelly vs. Ins. Co., 15 Ins. Law 
 Jour., 698. 
 
 So if he delivers a fully executed policy and trusts for payment the con- 
 tract will generally be binding, but he will be himself liable for the 
 premium unless authorized to give credit. 
 
 Home Ins. Co. vs. Curtis, 5 Ins. Law Jour., 120 ; Washoe Co. vs. Ins. Co., 5 Ins. 
 Law Jour., 773 ; Von Wem vs. Ins. Co., 15 Ins. Law Jour., 158. 
 
 So an agent who has power to contract by consenting or seeming to 
 consent to a vacancy, alteration, increase of risk, other insurance, incum- 
 brance, or any modification of a subsisting contract may deprive his 
 company of its right to protection against such modifications, or by his 
 conduct after a loss may mislead the insured and prevent the company 
 from securing the evidence needed to determine its liability. 
 
 Home Ins. Co. vs. Warehouse Co., 6 Ins. Law Jour., 739 ; Lycoming Ins. Co. vs. 
 Dunmore, 5 Ins. Law Jour., 93 ; Akin vs. Ins. Co., 6 Ins. Law Jour., 341.
 
 But unless the insured has actually been misled or was justified in rely- 
 ing on the agent, he cannot escape the responsibility of his acts by charg- 
 ing the fault on the agent. He cannot justify an alienation because it 
 was known to a mere local agent. He cannot claim to be insured on the 
 strength of a verbal assurance to that effect by an agent who had no 
 power to contract. He cannot claim any advantage in the settlement of 
 his loss from the acts of an agent who had no authority to do more than 
 countersign or deliver policies. 
 
 Bush vs. Ins. Co., 5 Ins. Law Jour., 257 ; Morse vs. Ins. Co., 5 Ins. Law Jour., 
 409 ; Home Ins. Co. vs. Lindsey, 5 Ins. Law Jour., 549. 
 
 The safe rule for the agent is to avoid all acts or conduct which are 
 liable to mislead the applicant or the insured either as to his own author- 
 ity or the company's requirements. Especially is this necessary on the 
 occurrence of losses, where a peremptory denial of liability may release 
 the claimant from the necessity of furnishing evidences required by the 
 company, or a hasty assumption of liability and a corresponding course 
 of conduct may prevent the interposition of defenses against an un- 
 righteous claim. The application and the contract define in most cases 
 the true course of procedure, which should be deviated from only when 
 circumstances seem to demand it. In general an agent will best serve 
 his company in doubtful cases by inaction, except in acquiring facts and 
 insisting on the protection of property while awaiting instructions from 
 headquarters. See " what to do in case of fire." 
 
 THE PRELIMINARY NEGOTIATIONS AND THE PREMIUM. 
 
 However limited may be the agent's authority, the fact that the repre- 
 sentations in the application are the basis on which the contract is made 
 by the company, renders it important that he should be familiar with the 
 law of the contract itself. Justice to the applicant, who so often relies 
 upon his advice and assistance, as well as to his company, demands that 
 every element of information required for framing the contract should be 
 free from ambiguity. As no contract is said to be complete until the minds 
 of the parties are in accord on every essential point, so it may be added 
 of the negotiations for insurance. They can be regarded as satisfactorily 
 ended only when every pertinent question has been distinctly settled. 
 When the application is by the terms of the policy made a part of itself or 
 is distinctly referred to and relied on, an important error will either vitiate 
 the whole insurance or make the agent responsible for a liability on the 
 part of the company which is chargeable to his fault. 
 
 Rohrbach vs. Ins. Co., 4 Ins. Law Jour., 737 ; Continental Ins. Co. vs. Kasey, 4 
 Jns. Law Jour., 208.
 
 15 
 
 Even when the application is not thus incorporated its statements are 
 representations used to secure a contract, and if they are false in matters 
 that are material they will vitiate the insurance unless the agent was at 
 fault 
 
 Ryan vs. Ins. Co., 8 Ins. Law Jour., 659; Byers vs. Ins. Co., 9 Ins. Law Jour., 743. 
 
 All applications should, if possible, be reduced to writing and duly 
 signed by the applicant. Mere verbal understandings or policies procured 
 on the agent's personal representations are not only open to all the inac- 
 curacies, disputes, and misunderstandings which attend verbal arrange- 
 ments of any kind, but they impose on the agent a responsibility which 
 belongs entirely to the insured. The agent in such case is likely to find 
 himself in the attitude of a sponsor for those whose risks he has secured. 
 In case of a disputed loss his acts and conduct are the subject of conten- 
 tion between the parties and of criticism by the courts, while they may be 
 condemned by both parties to the dispute, and an unrighteous loss may 
 thereby be imposed upon his company. 
 
 City Ins. Co. vs. Bricker, 9 Ins. Law Jour., 784 ; Baile vs. Ins. Co., 10 Ins. Law 
 Jour., 657. 
 
 Special care should be taken in all negotiations, against the use of lan- 
 guage which is likely to convey an impression that the bargain is com- 
 pleted, especially when the agent has been intrusted with policy blanks. 
 As a rule no insurance contract should be made complete until actually 
 reduced to writing and the premium settled, and every negotiation should 
 be terminated, if successful, by a clear understanding on the part of the 
 applicant that the contract will begin with the delivery of the written in- 
 strument. In the case of Putnam vs. Ins. Co. (7 Ins. Law Jour., 550) 
 the agent had, on account of the hazardous character of the risk, refrained 
 from issuing the policy until the special agent should inspect the building; 
 but though no premium had been paid he had justified the applicant in 
 believing the contract was complete, and the company was compelled to 
 pay the loss. In the case of Mann vs. Meyer (8 Ins. Law Jour., 905) 
 and again in that of Revere Ins. Co. vs. Chamberlin (10 Ins. Law Jour., 
 397) the agents involved both themselves and their companies in trouble 
 by orally agreeing for insurance, and then undertaking to issue a written 
 contract after the fire had occurred, and where in one case the fact of the 
 loss was kept concealed from the agent until the policy had been secured. 
 It should be borne in mind that where an agent is authorized to contract 
 the mere omission of the policy will not prevent a contract from being 
 enforced if there has been a valid agreement ; a court of equity will com- 
 pel the issue of a policy. 
 
 Franklin Ins. Co. vs. Taylor, 5 Ins. Law Jour., 671.
 
 i6 
 
 No negotiations for insurance are complete until the parties have agreed 
 upon those things which are essential to enable a court to frame the con- 
 tract. These are the subject-matter of the risk, the amount of indemnity, 
 the commencement and duration of the risk, and the amount and terms 
 of payment of the premium. It is not necessary that all of these should 
 be specifically stated. Thus, the usual time of one year, the usual form 
 of policy, and the usual terms of payment may all be presumed if there is 
 no:hing to the contrary. But any uncertainty regarding what property was 
 to be covered, or for how much, or what premium would be charged, 
 obviously could not be supplied, and a negotiation in which these points 
 or any others of essential importance remained unsettled would be un- 
 finished. The same is true where something further remains to be done 
 or settled before contracting. 
 
 Eames vs. Ins. Co., 6 Ins. Law Jour., 689 ; Strohn vs. Ins. Co., 37 Wis., 625 ; 
 Millville Mut. Ins. Co. vs. Collerd, 38 N. J., 480; Walker vs. Ins. Co., 8 Ins. Law 
 Jour., 847. 
 
 Thus, in the case of Millville Mut. Ins. Co., just cited, the applicant held 
 the policy under advisement, without paying the premium, while he investi- 
 gated the standing of the company. This was held not to be a completed 
 contract. So in the case of Walker, a note was given for the premium 
 with the understanding that it was to be returned if the application was 
 not accepted, and the contract was decided to be incomplete. The agent 
 should be particularly guarded against allowing the insured to believe the 
 agreement is complete until the premium has actually been settled ; for, 
 if clothed with sufficient authority, he may otherwise by his conduct un- 
 intentionally waive its payment. All the terms of the insurance in like 
 manner should conform to what the agent has reason to believe that the 
 company will insist on, for a verbal contract if once completed becomes 
 the real contract between the parties, and the insured can compel the 
 company to comply with it in its written policy. But when the policy 
 has once been accepted by the insured this will supersede the oral agree- 
 ment unless the insured has in some way been misled or misrepresented 
 by the agent. 
 
 Southern Ins. Co. vs. Yates, and cases there cited, 6 Ins. Law Jour., 394. 
 
 Where the agent has power to bind temporarily until the company can 
 be consulted, as little as possible should be left to the memory. The 
 ad interim receipt should state with sufficient fullness all the essential con- 
 ditions of the insurance, and a recording agent should always bear in 
 mind that actual payment of premium is not essential to the completion 
 of an oral contract. 
 
 Davenport vs. Ins. Co., 17 Iowa, 276 ; Hamilton vs. Ins. Co., 5 Barr., Pa., 339.
 
 Nor is it always essential that a thorough understanding should have been 
 arrived at touching the conditions of insurance if these have been left to 
 the agent's discretion. In Ellis vs. Ins. Co. (50 N. Y., 502) the selection 
 of a company had been left to the agent, who unknown to the insured had 
 made a selection; this completed.the contract. In Ins. Co. vs. Taylor (5 
 Ins. Law Jour., 671 ) the agent rendered his company liable by leading the 
 applicant to believe that the insurance was complete, when in fact his au- 
 thority, in the class of risks involved, was limited to forwarding the applica- 
 tion. The evidence being conflicting as to knowledge by the applicant. All 
 applications should be promptly forwarded to the company and the result 
 communicated to the applicant ; for, when he has been led to believe that 
 this will be done, both the agent and his company may be liable for the 
 consequences of unreasonable delay. 
 
 Walker vs. Ins. Co., 8 Ins. Law Jour., 847. 
 
 Even though the applicant personally fills and signs the blank, the 
 agent is likely to be called on to explain the meaning of the terms, and 
 his tacit assent to the language employed when he has reason to doubt its 
 correctness may relieve the insured from responsibility for misstatements. 
 Inadvertance or suppression of knowledge on the part of the agent when 
 securing the application may deprive the company of its protection against 
 false representations. Thus in Westchester Fire Ins. Co. vs. Earle (5 Ins. 
 Law Jour., 61) the fact of an agent doing some act to mislead the insured, 
 or remaining silent when he ought to have spoken, was adjudged sufficient 
 to defeat a clause relating to other insurance ; and the same rule was 
 again enforced in Kitchen vs. Hartford Ins. Co. (14 Ins. Law Jour., 594) 
 where he was verbally informed of the facts at the time the application 
 was filled. So in Van Schaick vs. Ins. Co. (68 N. Y., 434) and in 
 Williams vs. Ins. Co. (12 Ins. Law Jour. 708) tacit knowledge concern- 
 ing defective title by the agent bound his company. It is of the first 
 importance, therefore, that the solicitor, as well as the recording agent, 
 should understand the laws governing the specified features of the contract 
 itself, which we shall shortly discuss from the agent's standpoint. 
 
 When the negotiations are conducted by correspondence it has been a 
 matter of no little debate in the courts as to when a perfect agreement 
 has been reached. By some it has been insisted that a proposition made 
 on behalf of the insured is complete the moment an unconditional answer 
 of acceptance has been mailed by the insurer. By others it has been 
 held that the contract is only complete when the insured has received 
 the notice of its acceptance. The former seems the better view, and is 
 certainly safer for the guidance of the agent. No policy nor acceptance 
 of any kind should be forwarded to a sub-agent for delivery unless the
 
 i8 
 
 latter is at the same time granted a discretionary power to withhold the 
 acceptance or the agent is prepared to close the contract on the spot. For 
 the sub-agent by such an act, in the absence of discretionary power, is 
 made a mere medium of communication, and the acceptance is beyond 
 recall the moment it first passes from the agent's control. 
 
 Halleck vs. Ins. Co. s 26 N. J., 268 ; Eames vs. Ins. Co., 6 Ins. Law Jour. 689 ; 
 City Ins. Co. vs. Zoller, 4 Ins. Law Jour., 478. 
 
 For the same reason completed policies should not be sent to a solicitor 
 without discretion as to their withholding ; for, even though they stipulate 
 that they are not binding until the receipt of premium, it has been held 
 that such a sending is practically a delivery to the insured, which will 
 waive the condition as to payment 
 
 Eames vs. Ins. Co., supra. 
 
 Again, in the delivery of the policy, the agent should never rely on 
 such a clause for protection in case the premium is not at once paid ; for, 
 as has been said, an unqualified delivery is a presumption that credit for 
 the premium is intended. 
 
 Von Wein vs. Ins. Co., 15 Ins. Law Jour., 158 ; Eagan vs. Ins. Co., 6 Ins. Law 
 Jour., 832 ; Bowman vs. Ins. Co., 5 Ins. Law Jour., 9. 
 
 Unless the agent is authorized and intends to give such credit, if the 
 circumstances require a delivery of the policy, it should be made with a 
 written stipulation that it shall only be in force upon actual payment 
 Unless the agent is authorized to give credit, he renders himself personally 
 liable to his company by absolutely surrendering the policy or absolutely 
 contracting in any way without first receiving the premium. 
 
 Paley on Agency by Lloyd, 9, 10, 16, 17 ; Ewell's Evans on Agency, 307. 
 
 So, if the agent charges himself with a premium that is not received, he 
 assumes personal responsibility for a completed contract, and must look 
 to the insured as to any other debtor for his re-imbursement. For the 
 same reason, too, no agreement should be made with a broker by which 
 the latter is charged with the premium, 'Unless it is intended that the 
 policy shall be binding and the broker alone responsible for the pay- 
 ment 
 
 Bang vs. Ins. Co., i Hughes, 290; Wheeler vs. Ins. Co., loins. Law Jour., 354 ; 
 Eagan vs. Ins. Co., 6 Ins. Law Jour., 832. 
 
 Caution should be used in accepting payment of premium where the 
 question of contracting is referred to the decision of a higher authority. 
 Such conditional acceptance will not make a binding contract, but in 
 case of dispute it will be claimed as evidence in favor of a completed
 
 19 
 
 contract, and the agent's receipt should always show that the premium is 
 to be returned unless the risk is accepted. 
 
 Walker vs. Ins. Co., 8 Ins. Law Jour., 847. 
 
 Adjustments of premium through personal accounts between the agent 
 and the applicant should, so far as possible, be avoided. While the 
 law permits an agent in good faith to agree with the applicant that pay- 
 ment may be made through the canceling of an obligation, or in some 
 other form than cash, so long as the applicant has no reason to believe 
 that a cash payment is essential, it does not look with favor on this 
 mode of dealing, and absolutely forbids the utilizing of the agency in 
 this way for the personal advantage of the agent against the interest of 
 his principal. If the insured has reason to believe that such a method 
 of settlement will not be acceptable to the company, much more if he 
 knows that it is a fraud on the rights of the principal, it will not be sus- 
 tained. In Hoffman vs. Ins. Co. (4 Ins. Law Jour., 398) an attempted 
 settlement of premium was made through the barter of a horse, and the 
 court declared that it was a fraud upon the company, that an agent can 
 only bind his company by acts done in the usual line of his business. 
 
 Upton vs. Mills, 1 1 Gush., 586 ; Story's Agency, Sec. 60 and note ; I Pars, on Cont., 
 41,42. 
 
 If an agent in the exercise of his discretion accepts a note for the 
 premium, he must bear in mind that the failure to'pay such a note when 
 due will not, unless specially stipulated, affect the validity of the policy. 
 Until the policy is canceled in the ordinary way the only remedy will 
 be a suit on the note, and if the insured is not responsible he will secure 
 Jiis insurance for nothing. 
 
 Wilson vs. Ins. Co., 8 Ins. Law Jour., 880 ; Shakey vs. Ins. Co., 7 Ins. Law Jour., 
 -223. 
 
 The acceptance of the application by an agent authorized to contract, 
 or the entry by him of a brief memorandum describing the risk, when 
 done with the intent to issue a policy, is sufficient, without some under- 
 standing to the contrary, to make a binding contract, and the agent in 
 thus concluding the negotiations should be careful that his intention 
 should be carefully understood, unless he regards the contract as actually 
 in force. 
 
 Thus, in Franklin Ins. Co. vs. Taylor (5 Ins. Law Jour., 671) the 
 agent who took the application did not inform the applicant that it 
 must be forwarded for approval, but led him to believe that the assur- 
 ance was complete, and his company was held to be liable. In Con- 
 tinental Ins. Co. vs. Jenkins (5 Ins. Law Jour., 514), on the other hand,
 
 20 
 
 there was a series of negotiations which resulted simply in an agree- 
 ment as to the terms on which the applicant might insure, if he chose, 
 and assurance by the agent that he would accept the terms when prof- 
 fered. No proffer, however, was made until after the loss, and it was 
 held that no valid contract had been made. 
 
 See also Patterson vs. Ins. Co., 5 Ins. Law Jour., 376 ; Taylor vs. Ins. Co., 8 Ins. 
 Law Jour., 851 ; Stron vs. Ins. Co., 4 Ins. Law Jour., 680 ; Weeks vs. Ins. Co. 7 Ins. 
 Law Jur., 552 ; Moody vs. Ins. Co., 9 Ins. Law Jour., 276. 
 
 FILLING IN THE POLICY OR APPLICATION. 
 
 Unless dictated or suggested by the agent, the language in the applica- 
 tion is presumed to be that of the applicant, for which the company is 
 not responsible. But with the policy the language used is, under all 
 circumstances, that of the insurer, who is assumed by the courts to be 
 .expert in its use. The consequence is that any vagueness in the terms 
 of the latter or anything indefinite in its language will be construed in a 
 sense that is most favorable to the insured. Misrepresentations and 
 palpable violations of policy conditions are likely to be excused by the 
 courts if it can be shown from the wording of the policy that the insured 
 might have had a reasonable doubt as to the misrepresentation or viola- 
 tion. 
 
 Miller vs. Ins. Co., 7 Ins. Law Jour., 378 ; West vs. Ins. Co., 5 Ins. Law Jour., 
 430; Rann vs. Ins. Co., 5 Ins. Law Jour., 515; Miller vs. Ins. Co., 7 Ins. Law Jour., 378. 
 
 This rule is particularly true of the written portions which are so often 
 filled in by the agent. These are properly regarded as expressing the 
 intentions of the insurer in each individual case, and any language used 
 in them which may be inconsistent with the printed portions will over- 
 ride the latter. 
 
 ./Etna Ins. Co. vs. Jackson, 13 B. Mon., 242 ; Benedict vs. Ins. Co., 31 N. Y., 389 ; 
 Reynolds vs. Ins. Co., 47 N. Y., 597. 
 
 The same principles, of course, control the language of the application 
 in so far as the agent is responsible for it. The selection of appropriate 
 language therefore becomes in both cases of the utmost importance. 
 No reliance should be placed on any previous understandings or verbal 
 agreements. These will be entirely disregarded by a court if the written 
 instrument can be interpreted without them. If, for instance, a policy 
 be written on ' ' tools, " a verbal understanding that certain classes of 
 tools were not included will have no effect. The only exception to this 
 rule is where it clearly appears that a fraud has been perpetrated or that 
 both parties intended something different. 
 
 Lovewell vs. Ins. Co., 7 Ins. Law Jour., 672 ; Southern Ins. Co. vs. Yates, 6 Ins. 
 Law Jour., 394.
 
 21 
 
 The first and most general rule regarding the choice of words in filling 
 a policy or application is that, -if possible, they should convey to the 
 popular mind just what is intended ; for the first question that will be 
 asked by a court is, not what the agent meant, but how would the in- 
 sured naturally understand the language. If the idea is one which is 
 naturally or necessarily embodied in technical terms, such terms should 
 be chosen, if possible, as have a well-understood meaning either in the 
 community or the particular branch of business in which the insured is 
 engaged ; and in no case' should technical words be employed which 
 mean one thing with the underwriter and are liable to mean another to 
 the insured. If words have more than one sense or meaning it should 
 be borne in mind that the meaning most favorable to the insured, or 
 which will give the largest indemnity, will usually be adopted by the 
 court. While the meaning may not be distorted or stretched to embrace 
 what was clearly not intended, whenever terms are employed which may 
 fairly indicate an aggregate or collection of risks they will so be con- 
 strued. Thus a factory may be interpreted as meaning a collection of 
 buildings ; a stock of dry-goods or groceries may include a great variety 
 of articles which do not strictly belong to either line of trade ; household 
 furniture may cover articles which, taken apart from the rest, are not 
 ordinarily spoken of as furniture. 
 
 Germania Ins. Co. vs. Francis, 6 Ins. Law Jour., 235 ; Hewitt vs. Ins. Co., 10 Ins. 
 Law Jour., 375 ; Houghton vs. Ins. Co., 10 Ins. Law Jour., 547 ; Harris vs. Ins. Co., 
 4 Ins. Law Jour., 799 ; Blake vs. Ins. Co., 12 Gray, 265 ; Peoria Ins. Co. vs. Lewis, 
 18 111., 562 ; Moadinger vs. Ins. Co., 2 Hall, 490. 
 
 In all cases of doubt the best practical guide for the agent is to regard 
 the question from the standpoint of the insured, and judge whether the 
 language is likely to be construed as including more than was intended. 
 Technical words that have a fixed and thoroughly understood meaning 
 in a particular business, and which are there universally used to express 
 the idea intended, are usually the safest and best to use in such business. 
 In Daniels vs. Ins. Co. (12 Cush. , 430) the Court said: "The general 
 rule is that if any person or any company, foreign or domestic, shall 
 engage in any department of business, they must be presumed to be 
 acquainted with the rules and usages of such business, to be conversant 
 with the language employed in it, whether strictly technical or not 
 
 See also Houghton vs. Ins. Co. , supra, and cases there cited. 
 
 But the agent should be on his guard not to confound this technical 
 use of words with a frequent practice of employing them by many parties 
 in a loose or modified sense. The courts never allow the claim of
 
 22 
 
 usage to override the ordinary meaning, unless the use is so general as to 
 fix a special meaning. 
 Myers vs. Carl, 30 L. J ., Q. B., 9 s. c., 7 Jur., N. S., 97. 
 
 Another danger to be specially guarded against in filling a policy is 
 that of overriding its express stipulations by impliedly assuming a risk 
 that is inconsistent with such stipulations. If the employment of a dan- 
 gerous oil or the keeping of a dangerous explosive is a well-understood 
 part and parcel of any trade or business, a risk taken on such a business 
 will be assumed to permit a continued use or keeeping of the dangerous 
 material in spite of a general prohibition to the contrary. Whenever it 
 is desired to restrict any practice or usage that is common in connec- 
 tion with a risk, that intention should be made clear in the written por- 
 tion of the policy. 
 
 Buchanan vs. Ins. Co. , 4 Ins. Law Jour., 458 ; Bayly vs. Ins. Co., 4 Ins. Law Jour., 
 503 ; Carrigan vs. Ins. Co., 10 Ins. Law Jour., 606. 
 
 Not only should the agent be fairly conversant with the character of 
 the particular trade or business, in order to intelligently write the policy, 
 but he should thoroughly understand the legal import of the various 
 terms commonly in use in the fire insurance contract, which we shall 
 consider further along. 
 
 From what has been said, not only the great importance of well- 
 chosen words will be seen, but also the importance of letting each party 
 to the contract speak for himself. Where it is possible to avoid it, the 
 agent should never fill up an application, that is the province of the 
 applicant ; and if he is sufficiently intelligent to do it correctly he should 
 do it alone. It is difficult for a man to serve two masters, and in the 
 case of an insurance agent he is in danger of being adjudged by the 
 court to occupy a position exactly opposite from the one he intended, if 
 he helps an applicant fill up an application. 
 
 Davenport vs. Teoria Ins. Co., 17 Iowa, 276 ; {Beebe vs. Hartford Ins. Co., 25 
 Conn., 51 ; Pierce vs. Nashua Ins. Co., 50 N. H., 297 ; Rowley vs. Empire Ins. Co., 
 36 N. Y., 550; 2 Parsons on Contracts, 535, 661, and notes ; Swan vs. Watertown 
 Ins. Co., Pa. S. C., loins. Law Jour., 392. 
 
 WHO MAY BE INSURED. 
 
 The law allows an insurance to be effected by any party who has 
 such an interest in the property that direct pecuniary injury is likely to 
 result from its damage through fire ; but that interest must be of an 
 essentially legal character, not a mere expectancy. A man may be the 
 expectant heir of a millionaire, but he has no right to insure the property 
 of the latter unless he has some legal claim. A son has no right on
 
 23 
 
 account of his mere relationship to insure his father's property. On the 
 other hand, a man living on mere sufferance on property, and caring for 
 it under an agreement that it shall eventually become his, has been al- 
 lowed to insure. 
 
 Baldwin vs. Ins. Co., 12 Ins. Law Jour., 371 ; Barracliffe vs. Ins. Co., 13 Ins. Law 
 Jour., 190, and cases there cited ; Agricultural Ins. Co. vs. Montague, 7 Ins. Law 
 Jour., 708. * 
 
 So parties in temporary possession or control of property, under cir- 
 cumstances where they would be liable in case of loss or where they 
 would be justified in acting for the owner, and those having liens of any 
 kind where there is danger of a moneyed loss through its destruction, 
 are allowed by the law to insure. , 
 
 Harvey vs. Cherry, 7 Ins. Law Jour., 315 ; Babson vs. Ins. Co., 4 Ins. Law Jour., 
 50 ; Rohrbach vs. Ins. Co., 4 Ins. Law Jour., 737 ; Franklin Ins. Co. vs. Martin, 8 
 Ins. Law Jour., 134. 
 
 More than this, such parties need not state the nature of their interest 
 at all, unless it is called for, and are often permitted to recover, not 
 simply what they are shown to have lost, but what it is possible they 
 may have been injured. Such being the laxity or liberality of the law, 
 the temptations to fraud are obviously strong, and the companies for 
 their own protection generally insist that the nature and extent of the 
 applicant's interest shall be clearly stated. Any failure to do this through 
 the remissness or blunder of the insured is likely to defeat his insurance, 
 and, if through the fault of the agent, may involve both himself and his 
 company in trouble. It by no means follows that an applicant should 
 be granted insurance because the law will support a policy issued to him. 
 On the contrary, policies should be restricted, as far as possible, to the 
 principal parties in interest, or those having the actual title to the prop- 
 erty; leaving the rights of others to be secured by proper indorsements 
 regarding payment of the loss, or else should include as many interests 
 as possible. Where it is necessary to separately insure subordinate in- 
 terests their character should be closely scrutinized, and, whatever their 
 title or interest, care should be taken that there shall be no temptation 
 to fraud. The nature of these various interests will now be examined 
 more in detail. 
 
 Martin vs. Ins. Co., 15 Ins. Law Jour., 371. 
 
 NOTE. These details are given, not to enable an agent to practice upon them, but to 
 warn him against them. A book of this character would be incomplete were these 
 points omitted ; but the agent is urgently recommended to limit his writings to parties 
 who are actual owners, and to decline all complicated cases until he has fully corre- 
 sponded with his company, advised it of the nature of the case in hand in every detail,
 
 24 
 
 and received special authority to entertain the proposed risk. In this connection the 
 agent is referred to other portions of this book wherein the limitations of his authority 
 and his legal liabilities for exceeding that authority are treated. It is always safe to 
 be on the safe side. 
 
 THE SUBJECT-MATTER OF INSURANCE. 
 
 BUILDINGS. 
 
 * 
 
 The term "building" signifies a single structure or edifice complete 
 in itself, regardless of the uses to which it may be put. So "house," 
 "barn," "shed," and the like are simply particular classes of buildings. 
 But such words as "factory," "mill, "and "store," having special refer- 
 ence to the business or occupation, have sometimes been allowed to 
 include a number of collective buildings used for one general purpose. 
 
 Hews vs. Ins. Co., 8 Ins. Law Jour., 291 ; Brugger vs. Ins. Co., 8 Ins. Law Jour., 
 293 ; Bigler vs. Ins. Co., 20 Barb., 635. 
 
 For this reason the words "building," "house," and the like should 
 be added when describing a risk which might otherwise be indefinite, 
 as "mill .building" or " building " used as a factory. A building in- 
 cludes whatever permanent attachments to the structure in the shape of 
 fixtures go with the realty in case of sale and which are an integral part 
 of the structure itself. Thus gas and water pipes, stationary tubs and 
 basins, and the like, are an integral part of the building. So in some 
 cases shafting and other fixed machinery, when manifestly necessary for 
 the use for which the building was designed, have been treated by the 
 courts as a part of the structure, the rule being, when the language is 
 not clear, to seek the intention of the parties. For this reason care 
 should be taken to except from a policy all such articles as are not in- 
 tended to be included, but which might naturally be regarded as belong- 
 ing to the structure. Church bells, clocks, and organs, shafting, belts, 
 stationary engines, mirrors, or other ornaments so fastened that their 
 removal would mar the appearance of the walls, when these are the 
 property of the insured, should generally be excepted or else specifically 
 included to avoid all controversy. 
 
 Brugger vs. Ins. Co., 8 Ins. Law Jour., 293 ; McKeage vs. Ins. Co., 9 Ins. Law 
 Jour., 598 ; Liebenstein vs. Ins. Co., 9 Ins. Law Jour., 588. 
 
 The word ' ' fixtures " in the sense in which it has just been used as 
 denoting component parts of the building itself should seldom, if ever, 
 be employed in the policy. Its use in insurance is restricted to such 
 fixtures as are personal property, trade-fixtures as they are called, which 
 a tenant is at liberty to remove from the building. When a building is
 
 25 
 
 fitied up for occupancy as a store or factory, for instance, certain perma- 
 nent fittings may be added by the owner or by the tenant to adapt it to 
 its purpose, these are part of the realty. There are others, such as 
 counters and chandeliers, which, though actually fastened to the build- 
 ing by the tenant, are simply for his own use in his business, and which 
 the law allows him to remove, and are the only proper subjects to be in. 
 sured as trade-fixtures. The others are included in a risk on the build- 
 ing. If intended to be excluded it is safer to say so. 
 
 Whitemarsh vs. Ins. Co., 16 Gray, 369 ; Brugger vs. Ins. Co., and McKeage vs. 
 Ins. Co., supra. 
 
 A building or house will usually include such wings or additions as 
 are naturally a part of it. 
 
 Blake vs. Ins. Co., 12 Gray, 265 ; Workman vs. Ins. Co., 2 La., 507. 
 
 . This fact should particularly be borne in mind where the insurance is 
 on goods or merchandise ; and if it be desired to restrict the risk, the 
 specific portion of the building should be designated. . In all cases 
 where the risk includes more than a main building it is better to add 
 "and extension" or "wing," if such is the intention of the agent at the 
 time. But such words should not be used to describe a detached adja- 
 cent structure, this is a separate building and should be so treated. 
 Peoria Co. vs. Ins. Co., 15 Ins. Law Jour., 52. 
 
 The term "dwelling" indicates that the principal use of the building 
 is for purposes of private residence, and should never be used exclusively 
 where it is in part used for other purposes, as for a store, a workshop, 
 or for any purpose which increases the risk ; for the law is that if the term 
 does not fairly indicate the real character of the premises or a part is 
 occupied for purposes which by the provisions of the policy increase the 
 risk the insurance will be forfeited, and the same rule applies to other 
 classes of hazards. 
 
 White vs. Assurance Co., 8 Gray, 556; Sarsfield vs. Ins. Co., 6l Barb., 479; Lap- 
 pin vs. Ins. Co., 58 Barb., 325 ; Franklin Ins. Co. vs. Martin, 8 Ins. Law 
 Jour., 134. 
 
 Again, the terms building, dwelling, etc., include only such materials 
 as are actually incorporated in them, not unfinished materials that may 
 be on the ground and intended to be incorporated. 
 
 Ellmaker vs. Ins. Co., 5 Penn. St., 183. 
 
 Store, mill, factory, etc., refer, as has been said, to the specific use of the 
 property, and unless properly qualified, may include adjacent premises 
 not intended to be covered, and will include not simply the buildings 
 themselves, but such adjuncts in the shape of fixed machinery and the
 
 26 
 
 like as are essential to make a complete factory or mill. Where ma- 
 chinery or adjuncts of any kind, which are not strictly a part of the build- 
 ing, are to be included in a policy on the building, they should be 
 separately mentioned, or specifically excluded if so intended. 
 
 Hews vs. Ins. Co., 8 Ins. Law Jour., 291; Harris vs. Ins. Co., 4 Ins. Law Jour., 799- 
 Claffey vs. Ins. Co., 15 Ins. Law Jour., 237 ; Fair vs. Ins. Co., 4 Ins, Law Jour., 114 ; 
 Liebenstein vs. Ins. Co., 45 111., 303. 
 
 The term "machinery" is a broad one, and has been sometimes ex- 
 tended by the courts to include tools and other appurtenances needed for a, 
 complete manufactory, as well as what is more strictly implied by the 
 word, where such appeared to be the intention of the parties. In 
 other cases it has been given a more restricted meaning, and tools have 
 been distinguished as simple instruments used by hand. So implements 
 used in connection with machinery have been held to constitute a 
 part of it. 
 
 Lovewell vs. Ins. Co., 7 Ins. Law Jour., 672 ; Seavey vs. Ins. Co., 3 Ins. Law 
 Jour., 576. 
 
 The term "tools" has also been given a very broad definition by the 
 courts. In Lovewell vs. Ins. Cos,., supra, the policy covered "their fixed 
 and movable machinery, engines, lathes and tools," and it was held that 
 the term "tools" included all patterns which from their size and shape 
 admitted of being applied and managed by the hands of one man ! 
 
 All such adjuncts of a manufacturing risk therefore should be sepa- 
 rately specified whether excluded or otherwise, as "on fixed and mova- 
 ble machinery " (the one referring to that which attaches to the realty, 
 the other to such as is of the nature of trade-fixtures) "except" or 
 ' ' including tools, patterns, engines, boilers, " etc. But where these sub- 
 jects are separately insured in the policy, this of itself will exclude them 
 from the general class. The essential feature to be aimed at in describ- 
 ing a risk of any kind is to make the intention so clear that there can be 
 no doubt what property is meant. The location of the property, by 
 street and number if possible, is of course always essential, and in case of 
 adjoining or adjacent structures on the same premises, all the distinctive 
 marks needed to discriminate the particular building from the others, such 
 as height, area, material, or use, should be added. 
 
 The temptation to describe a risk under some kindred name which 
 will make it appear more favorable to the company is sometimes a strong 
 one ; but is decidedly dangerous for the applicant. If the misrepresenta- 
 tion is material, or the apparent motive a fraudulent one, the insurance 
 will be defeated. A saloon is not a hotel, and such a misdescription of a 
 low rum-hole in Baker vs. Ins. Co. (15 Ins. Law Jour., 887) defeated the
 
 27 
 
 policy. In Loehner vs. Ins. Co. (19 Mo., 628) a house of ill fame was 
 described as a dwelling, and the court ruled that if its use enhanced the 
 risk the company was not liable. In Claffey vs. Ins. Co. (15 Ins. Law 
 Jour., 237) property was insured as the "Wolf houses," and the claim 
 was made that this description included a barn as part of the group. A 
 town insurance company in Wisconsin was allowed to insure certain 
 classes of risks only upon a vote of its members, one of such risks was a 
 schoolhouse which had been insured as a dwelling, but had been 
 altered for this purpose. The supreme court of that State declared in 
 Luthe vs. Ins. Co. (12 Ins. Law Jour., 30) that the insurance was void. 
 In Maher vs. Ins. Co. (6 Ins. Law Jour., 103) property which was in part 
 used for a grocery was described by the agent as a dwelling, and so 
 insured because he deemed the description sufficient. The doubts of 
 the applicant regarding its property were actually quieted by the assur- 
 ances of the agent ; but the court refused to consider these facts and de- 
 clared the contract forfeited. 
 
 These are a few of the many cases which might be cited, showing the 
 importance of correctly designating the character of the risk. 
 
 PERSONAL PROPERTY. 
 
 Personal property as a subject of insurance differs in several important 
 respects from buildings. The latter are fixed in one place, the former is 
 movable. Hence, the designation of the location of personal property is 
 generally the most important feature of the whole risk. Where insurance 
 is on specific property of this kind the policy will follow the property from 
 place to place unless the intention to insure only while in the place 
 named clearly appears.. Mere statements as to present location, such as 
 "stored in barn," have sometimes been held to be intended only to 
 designate more clearly the property covered and not to restrict its re* 
 moval. 
 
 Everett vs. Ins. Co., 4 Ins. Law Jour., 121 ; Smith vs. Ins. Co., 32 N. Y., 399; 
 Blood vs. Ins. Co., 12 Cush., 472. 
 
 The intention therefore to limit the policy to the place of storage or 
 deposit should be made plain. The words ordinarily used for this pur- 
 pose are ' ' contained in. " The courts are now agreed that these words 
 will thus restrict the policy in the case of such subjects as furniture on 
 storage or a stock-in-trade which could not reasonably be expected to be 
 temporarily elsewhere as an incident to its use. But with regard to 
 that large class of subjects whose use involves a frequent or even occa- 
 sional removal, the clause will only mean that they are to be in the place
 
 ?8 
 
 designated when such use does not require their absence. Thus horses 
 and wagons " contained in " a barn may be covered while in use on the 
 road, or temporarily located elsewhere for repairs or in the prosecution of 
 business. Wearing apparel may be covered while being worn on the 
 street. 
 
 McCluer vs. Ins. Co., 5 Ins. Law Jour., 743 ; Noyes vs. Ins. Co., 15 Ins. Law Jour., 
 57, and cases there cited ; Phoenix Ins. Co. vs. Voorhis, 15 Ins. Law Jour., 865. 
 
 Special care on this point should be taken in case of such shifting risks 
 as rolling-stock on steam and horse railroads which are likely to be 
 absent the greater part of the time, and the provision should be added 
 that "this policy applies only while contained in," etc., in all such 
 cases. Unless the particular part of the building in which it is contained 
 is also specified, the insured property can be removed to any other part. 
 Thus a manufacturer insured while occupying only a single story, may 
 afterwards extend his business to the whole building and be covered by a 
 policy simply on stock contained in the building, or the occupant of one of 
 three stores in one building may in the same way afterwards occupy them 
 all by tearing away the partitions and converting them into a single store. 
 
 Fair vs. Ins. Co., 4 Ins. Law Jour., 114 ; West vs. Ins. Co., 9 Allen, 316. 
 
 A second feature in which personal property differs from buildings is 
 that the latter are specific in their character, the former often is not. A 
 policy on a building may cover slight alterations and additions so long as 
 it remains substantially the same structure, but will not cover a new build- 
 ing .put in the place of the old, or a building so altered as to be a sub- 
 stantially different structure. 
 
 Maryland Ins. Co. vs. Gusdorf, 5 Ins. Law Jour., 384 ; Fair vs. Ins. Co., 4 Ins. 
 Law Jour., ;ii4 ; Lyman vs. Ins. Co., 14 Allen, 329 ; Imbrey vs. Ins. Co., 5 Gray, 
 541. 
 
 But in the case of personal property the policy generally covers whatever 
 property may be within the description at the time of loss, whether it be 
 the specific material included at the time of contracting or not. An in- 
 surance on a stock of groceries or dry-goods allows the insured to sell and 
 substitute other and different articles or to enlarge his stock. The articles 
 composing household goods may be exchanged for others ; the only lim- 
 itation being that the subject shall tally with the description. Hence it is 
 important that any limitations which it is desired to impose on the sub- 
 stitution or addition of other articles should be clearly indicated in the 
 policy. A policy on "the specific goods or furniture now contained in," 
 etc., or "consisting of," etc., would not allow others to be added or sub- 
 stituted. An insurance on the "stock of groceries, excepting gasoline,
 
 2 9 
 
 gunpowder," etc., may be necessary to prevent such dangerous articles 
 from being added to the stock ; for the written portion of a policy will 
 control provisions that are merely printed, and it has been frequently held 
 that an insurance on a class of goods among which certain articles are 
 generally kept, will be understood as a license to keep such articles, not- 
 withstanding a printed provision to the contrary. 
 
 Amer. Ins. Co. vs. Rothschild, 82 111., 116 ; Germania Ins. Co. vs. Francis, 6 Ins. 
 Law Jour., 235; Boynton vs. Ins. Co., 16 Barb., 254; Moadinger vs. Ins. Co., 2 
 Hall, 490. 
 
 The particular class of articles intended to be covered should be as 
 strictly defined as their nature will admit. Such words as "contents" 
 will include almost anything in the shape of personal property ; and, if 
 employed, should be further qualified by "consisting of," etc., which 
 limits the insurance to such as are enumerated, while the word "includ- 
 ing " imposes no restrictions whatever, but rather the reverse. 
 
 Moadinger vs. Ins. Co., supra; Rafael vs. Ins. Co., 7 La. An., 244. 
 
 The terms "household goods" and "furniture" refer to those articles 
 intended for the adornment or comfort of the house, which are remov- 
 able at will. They do not include clothing and jewelry ; articles for con- 
 sumption, such as food and coal ; nor goods that may be kept simply as 
 merchandise for sale, unless such appears to have been the intention. 
 "Clothing" and "wearing apparel" in like manner do not include 
 jewelry. 
 
 Longueville vs. Ins. Co., 8 Ins. Law Jour., 845 ; Holmes vs. Ins. Co., 10 Met., 
 211 ; Clarey vs. Ins. Co., I Ben., 432. 
 
 Stock of ' ' goods " and ' ' merchandise, " on the contrary, refer to chat- 
 tels of any kind kept for sale ; while ' ' stock-in-trade " may include even 
 implements used in case ot a manufacturing business. Like "contents," 
 they are very broad, and should be further qualified when used. 
 
 Planters' Ins. Co. vs. Engle, 9 Ins. Law Jour., 71 ; Moadinger vs. Ins. Co., supra; 
 Boynton vs. Ins. Co., 16 Barb., 254. 
 
 When properly qualified as "stock of hardware," or " dry-goods," or 
 "groceries," only such articles will be included as belong to the particular 
 class named. But if it is customary to include among such stock articles 
 which are not strictly dry-goods or groceries, the courts will hold that the 
 parties intended to cover them also in the policy. Thus, insurance on 
 "his stock as a country grocer," will cover all those articles which it is 
 usual for country grocers to keep. 
 
 Collins vs. Ins. Co., 8 Ins. Law Jour., 353 ; Medina vs. Ins. Co., 120 Mass., 225 ; 
 Franklin Ins. Co. vs. Updegraff, 43 Penn. St., 353.
 
 30 
 
 It frequently happens, too, that the class of goods thus insured includes 
 articles which are expressly forbidden by the policy to be kept, or which 
 are required to be specifically mentioned in order to be included. Now, 
 the prevailing disposition of the courts is to overrule all such printed 
 limitations and prohibitions, if the language used in describing the risk 
 indicates an intention on the part of the agent to waive the prohibition. 
 Thus, a policy as above on stock such as is "usually kept in a country 
 store " has been allowed to override a prohibitory clause, the courts argu- 
 ing that it was the intention to insure such prohibited articles as belong 
 to the stock. Therefore, the intention on this point should be made 
 plain in the description. ' ' Except such as are herein prohibited," or, if 
 the risks are classified in policy-schedules as ' ' hazardous, " etc. , on " mer- 
 chandise not hazardous," or language of similar import, will show that 
 the parties intended to exclude the prohibited risks. 
 
 Jones vs. Ins. Co., 2 Ins. Law Jour., 1 86 ; Pindar vs. Ins. Co., I Ins. Law Jour., 
 127 ; Franklin Ins. Co. vs. Updegraff, supra ; Steinbach vs. Ins. Co., 8 Ins. Law 
 Jour., 621. 
 
 It rarely happens that the subjects of insurance can be enumerated under 
 one specific name, as pianos or wheat or horses ; though this should be 
 done, if possible, but the name must generally be that of a class, as hard- 
 ware or wooden ware, etc. The rule, therefore, should be to describe the 
 risk under that class name which is the most restricted as well as most 
 expressive. Horned cattle should be insured as such, not simply as cattle 
 or as live-stock, which latter will include poultry, hogs, horses, etc. Hard- 
 ware should be insured as such, not simply as merchandise ; and where 
 articles prohibited in the policy are included in the stock, the intention 
 either to exclude or include them should be made plain in the description. 
 The effect of these various policy prohibitions will be considered more at ' 
 length further on. All live-stock should be specially insured under its 
 class name, as horses, oxen, etc. ; not as contents, merchandise, and the 
 like, for the latter are usually treated as referring simply to inanimate 
 objects. Such vague words as contents and appliances should never be 
 relied on as descriptive of property. In Washington Ins. Co. vs. Davison 
 (30 Md., 91) the intention of the term apparatus in a factory risk extended 
 the policy to virtually everything connected with the manufacture. 
 
 Not only is it to the interest of the company but also of the insured, 
 that the subject-matter should be described as specifically as possible. 
 Otherwise, property that was intended by the applicant to be included 
 may not be covered. In Raphael vs. Ins. Co. (7 La. An., 244) the 
 subject-matter was insured simply as "stock of jewelry and clothing," 
 while it consisted also of musical and surgical instruments, guns, and
 
 "books, all of which were thus excluded from the policy. In Burgess vs. 
 Ins. Co. (10 Allen, 221) the insurance was on "merchandise" in certain 
 buildings, and articles intended partly for use were excluded. A policy 
 on a " stock of hair wrought, raw, and in process as a retail store, " did 
 not include such articles as were not hair. This neglect to indicate the 
 specific character of the stock has led to repeated disputes in the courts. 
 Stock in case of a manufacturer of any kind may mean much more than 
 in case of a merchant. With the latter it is usually confined to goods for 
 sale, with the former it may include all the articles used in carrying on 
 his business. Thus in case of a furniture dealer it has included his varnish 
 and oils, and in the case of a baker, his sieves, pans, and troughs. 
 
 Medina vs. Ins. Co., 120 Mass., 225 ; Moadinger vs. Ins. Co., 2 Hall, 490 ; Haley 
 vs. Ins. Co., 12 Gray, 545. 
 
 So where the risk has simply been designated as a " starch factory " all 
 the machinery, tools, and fixtures needed for the factory have been held 
 to be included, and such terms as lumber-yard and ship-yard have some- 
 times been allowed to cover materials stored on the street, outside of the 
 yard proper. A policy on a " saw-mill " was in like manner held to in- 
 clude the machinery ; hence, the importance of insuring mills, factories, 
 churches, and the like as buildings. 
 
 Bigler vs. Ins. Co., 20 Barb., 635 ; Peoria Ins. Co. vs. Lewis, 18 111., 553 ; Webb 
 vs. Ins. Co., 2 Sandf., 447. 
 
 Just what should be included in " machinery, " too, has been repeatedly 
 questioned, and since it has sometimes been extended to all those articles 
 used in connection with the machinery proper, it should be further quali- 
 fied when necessary. Engines and boiler-houses should be separated in 
 the policy from factory buildings and machinery. 
 
 Leavey vs. Ins. Co., in Mass., 540 ; See also ante. 
 
 Every class of articles which can be appropriately separated from the 
 rest should not only be specifically mentioned, but where practicable 
 specifically insured, and in case of a subsequent increase of the amount 
 insured under a renewal, the specific insurances should be re-apportioned 
 in the renewal receipt, otherwise the renewal will be a general insurance 
 of the whole. 
 
 Driggs vs. Ins. Co., 10 Barb., 440. 
 
 MEMORANDUM ARTICLES. 
 
 Where large values are concentrated in small compass, as in the case of 
 money and jewelry, or where the articles are exceedingly fragile, as with 
 plate-glass and decoration, or the subjects have a high value to the owner,
 
 32 
 
 but are comparatively worthless to others, as deeds and account-books, it 
 is plain that without proper precautions a company may unwittingly be 
 involved in a heavy loss or be called on to respond for an excessive 
 claim. In regard to another large class like trade-fixtures, as has been 
 seen, its status is often indefinite and liable to Dispute. For these rea- 
 sons all policies contain a list of memorandum articles which will not 
 be covered unless specially mentioned. Articles thus specified will not 
 be included under any term which may be merely descriptive of their 
 general character. They will not form a part of insured "contents," 
 watches will not be included in "wearing apparel," manuscripts will not 
 be covered by a policy on "books," nor plate-glass windows by insur- 
 ance on the "building," where these are among the memorandum 
 articles. Where insurance is desired the subject must be mentioned 
 under its particular name, as watch, or jewelry, or plate-glass. 
 
 The uncertain value of many memorandum articles furnishes a strong 
 objection against their insurance at all "by the companies, and when prop- 
 erty of this character is insured, whether strictly speaking a memorandum 
 article or not, care should be exercised about its valuation. For insur- 
 ance purposes the value of an article is only what it would bring if sold, 
 not what it may be worth to the owner ; that is its legal value. A 
 manuscript may represent years of work, a deed or account-book if lost 
 would perhaps secure a handsome reward for its return, but none of 
 them would have any commercial value and are practically uninsurable. 
 All subjects having a very uncertain commercial value, such as pictures 
 and statuary, should be insured with great caution, and if covered at all, 
 should be by schedule naming a separate valuation on each. 
 
 SPECIFIC DESCRIPTION OF THE PROPERTY. 
 
 Not only is it important that the character of the risk as a dwelling, 
 planing-mill, stock of hardware, etc. , be correctly stated, but that all de- 
 tails that may be inquired about (and such as are not inquired about, if 
 they essentially modify the character of the risk) should also be fully and 
 correctly given. In Steinmetz vs. Ins. Co. (6 Phila., 21) the use of a 
 fifth story by nine or ten persons regularly employed in making shades, 
 converted the building in part into a factory, and the failure to state the 
 fact forfeited the policy. In Mathews vs. Ins. Co. (2 Cin. Sup. Ct, 
 109) the policy was on a "planing-mill and saw-mill ;" one story, how- 
 ever, was used as a carpenter's shop, and the failure to state this fact for- 
 feited the policy. In Dewees vs. Ins. Co. (35 N. J., 366) property was 
 insured as a "country store," but it turned out that a part of it was being 
 used as a stable, and the insurance was avoided. In Lapin vs. Ins. Co.
 
 33 
 
 (58 Barb., 325) property insured as a "dwelling" was used in part as a 
 saloon, and the policy was forfeited. 
 
 These cases illustrate the importance of furnishing full details regard- 
 ing such matters as may modify the character of the risk, even though 
 there may be nothing in the application or policy directing special atten- 
 tion to them. So in regard to personal property, as has been already 
 pointed out, property insured under any class name as hardware, dry- 
 goods, cattle, and the like will only cover such as the parties evidently 
 intended by the term used. Thus, in Allegre vs. Ins. Co. (8 G. & J. , 
 190), the court declared that an iusurance on live-stock must be specific, 
 they could not be covered simply by a policy on the cargo ; and in Wol- 
 cott vs. Ins. Co. (4 Pick., 449), neither the animals nor their food were 
 allowed to be included in such a policy, while, as will be shown far- 
 ther on, the presence of prohibited articles or employments may forfeit 
 the entire policy. In Appleby vs. Ins. Co. (54 N. Y., 253) a policy 
 covering cabinet ware, which is a finished article, was avoided by the 
 added work of putting together and finishing chairs as well. 
 
 When inquiry is made as to the height of the building, the cellar is 
 not in law one of the stories ; neither, perhaps, would an attic be in- 
 cluded in case of a peaked roof, but if there be a basement it should be 
 mentioned ; and the same is true of an attic if substantially a story. 
 
 Benedict vs. Ins. Co., i Daly, 8. 
 
 The dimensions of a building materially affect the risk, whether it be 
 height or ground area, "and whether in respect to the main building or 
 to wings ; concealment and misrepresentation regarding these matters 
 has been treated as just ground for forfeiture by the courts. In Casey 
 vs. Goldsmid (2 L. C. R., 200) the presence of an adjoining building 
 in the nature of an extension which was riot disclosed was deemed, if 
 fraudulent, sufficient to forfeit the insurance. In Chase vs. Ins. Co. (20 
 N. Y., 52) the failure to disclose a kitchen attached to the main build- 
 ing forfeited the policy; while in Perry Ins. Co. vs. Stewart (19 Penn. 
 St., 45) the conformity of such a kitchen to the description was the 
 subject of litigation. In Pim vs. Reed (6 M. & G., i) a building was 
 described as two-story, and the subsequent addition of a third story was 
 declared to be an increase of risk which worked a forfeiture. 
 
 In like manner the materials of which the building is composed, the 
 nature of the roof, partitions, parapet walls, and all the more important 
 features of the construction are even more material than mere size, and 
 misrepresentations regarding them have been repeated grounds of for- 
 feiture. In Chase vs. Ins. Co., supra, the building was described as a 
 "stone dwelling-house," while the attached kitchen was wood, and the
 
 34 
 
 court held that the proposition was to insure a stone house, there was 
 no contract regarding a building partly of wood. In Day vs. Ins. Co. 
 (52 Me. , 60) a mill was described as of certain dimensions, and declared 
 to be separated from other buildings, whereas it had an extension beyond 
 the main building, and this defeated the policy. In Gerhauser vs. Ins. 
 Co. (7 Nevada, 174) a "brick building " proved to have wood tempo- 
 rarily substituted in one of the walls, which resulted in litigation. So in 
 Woods vs. Ins. Co. (50 Mo., 112) a building partly of wood was de- 
 scribed as brick, and the question for the jury was whether the fault lay 
 with the insured or the agent. 
 
 DEFECTIVE DESCRIPTIONS IN POLICY WRITING ILLUSTRATED. 
 
 The great importance of accurately and correctly describing the in- 
 sured subject justifies its special emphasis. After what has just been 
 said there is, perhaps, no better way of illustrating what is, and what is 
 not, an adequate description than by citing a few of the cases which have 
 come before the courts. 
 
 In Mason vs. Ins. Co. (12 G. & J., 468) the policy was on a "bark 
 now being builr." It did not cover materials lying in the ship-yard ready 
 to be put in, these were not a component part of the bark, and should 
 have been specified if insurance was desired. In New York Gas Light 
 Co. vs. Ins. Co. the policies were on gasometers and fixtures to be 
 placed in buildings of the insured's subscribers. The stock of gasometers 
 and fixtures, which at the time of insuring only amounted to $7,000, was 
 afterwards increased to $120,000. The failure to limit the amount at 
 the time of insuring allowed the hazard to be increased to seventeen 
 times the original amount, and converted it into a huge blanket risk. In 
 Moadinger vs. Ins. Co. (2 Hall, 490) an insurance simply on "his stock- 
 in-trade as a baker," allowed recovery not only for all the tools and im- 
 plements, but for a horse and cart used in the business. It should have 
 been further described as "consisting of." In Crosby vs. Ins. Co. (5 
 Gray, 504) the policy was "on their stock of watches, watch trimmings, 
 etc. , " and was found to cover the entire stock of plate, silver ware, and 
 even tools. The "etc. "proved an omnibus addition to the risk. In 
 White vs. Ins. Co. (8 Gray, 566) the policy was on a dwelling and "wood- 
 house." The wood-house proved to be a joint wood-house and carriage- 
 house, all under one roof. In Burr vs. Ins. Co. (16 N. Y., 267) the 
 policy was on a "three and a half story, brick building, slate roof, coped, 
 occupied as a cordage factory, situated northwest corner of, " etc. The 
 insured owned two buildings nearly alike, one on the southwest, the other 
 on the northwest corner, but it was the former that was used as a cordage
 
 35 
 
 factory, the latter was a block factor)' ; hence, a dispute as to which was 
 covered when the fire came. In Liddle vs. Ins. Co. (43 Bosw. , 179) the 
 insurance was on goods in a "corner store," and the policy was indorsed : 
 "The communication in the adjoining stores does not prejudice this in- 
 surance. " The insured was occupying both of the communicating stores. 
 A statement of the ground area of the corner store would have obviated 
 dispute. 
 
 In Lycoming Ins. Co. vs. Updegraff (46 Pa., 311) the insurance was 
 on goods in ' ' new frame " wareroom, to which a brick extension was 
 afterwards added, but the qualification as to " frame " saved the company 
 from a loss in the extension. In Peoria Ins. Co. vs. Hall (12 Mich., 202) 
 the insurance by a partner, in his individual name, without any special 
 intention of benefiting the firm, prevented him from recovering more than 
 his own interest in the property. In Burgess vs. Ins. Co. (10 Allen, 221) 
 the court made this important distinction : A policy on "merchandise/' 
 contained, etc. , will not cover articles kept partly for use, but a policy on 
 ' ' property " will include both those for sale and for use. In Liebenstein 
 vs. Ins. Co. (45 111., 301) two policies were written, one on stock in a 
 "chair factory," the other on stock in a "two-story, frame building occu- 
 pied as a chair factory. " In the first the insurance was extended to the 
 stock in a second building, which was used in connection with the main 
 factor}' ; while in the other it was limited to the single building intended 
 by the company. % In N. A. Ins. Co. vs. Throop (22 Mich., 146) the 
 insurance was on stock, lumber, and goods "in said building." The 
 addition of the latter clause saved the company from a loss on lumber 
 lying outside the building. In Hewitt vs. Ins. Co. (10 Ins. Law Jour., 
 375) the insurance was "on grain in stacks," and was allowed to include 
 a quantity of flax which had been stacked and was unthreshed, though the 
 court admitted that it was doubtful whether flax would in all cases be con- 
 sidered grain. The failure to exclude a doubtful item resulted in its in- 
 clusion. The term grain should be applied only to those products pop- 
 ularly known as such ; while all others, such as flax, hay, and the like 
 should be excepted, if necessary, to avoid dispute. Joel vs. Harvey, 
 (5 W. R., 488) illustrates this : The policy was on "stock-in-trade, con- 
 sisting of corn, seed, hay, straw, fixtures, and utensils," and hops and 
 matting were excluded, though a part of the stock. 
 
 In Pitney vs. Ins. Co. (4 Ins. Law Jour., 765) the policy insured P. 
 only, whereas G. had a part interest ; to correct the mistake and cover the 
 interest of the latter, the agent indorsed "loss payable one-half to G. as 
 interest may appear." A more accurate statement setting forth that G. was 
 part owner, and that the policy was changed to insure the interest of
 
 36 
 
 both ; or, better still, a cancellation and a new policy correctly written, 
 might have saved a lawsuit. In Sawyer vs. Ins. Co. (37 Wis., 503) a part 
 of the insurance was specified to be on property in section 19, but there 
 was also insured "grain in stack "and "live-stock running at large." 
 The failure to specifically restrict these also allowed the policy to cover 
 grain and live-stock outside of the section. The words " held in trust" 
 have frequently proved an omnibus clause to the disadvantage of the in- 
 surer. In Stillwell vs. Staples they covered stock intrusted for manufac- 
 ture ; in Rafel vs. Ins. Co. they covered goods in pawn. The case of 
 Sherman vs. Ins. Co. (5 Ins. Law Jour., 285) illustrates the importance 
 of specific insurance. Three companies insured on live-stock, among 
 which was at least one very valuable animal. Three animals that were 
 lost were worth only $113 apiece, but the fourth was worth $2,000. 
 Two companies limited the amount of their liability on any one animal, 
 the other did not. The liability of the latter was in consequence double 
 that of the others. The case of Commonwealth vs. Ins. Co. (112 Mass., 
 136) conversely illustrates the most faulty kind of blanket insurance. 
 The policy was on ' ' all or either of their freight buildings, " of which there 
 were several, and it was held liable for its full amount on each, notwith- 
 standing they were elsewhere specifically insured. 
 
 In Jackson vs. Ins. Co. (14 Ins. Law Jour., 546) the description of a 
 building as "hard-finished," when this was true of only one story, caused 
 the reinsurer to dispute its liability. In Eggleston v$. Ins. Co. (14 Ins. 
 Law Jour., 365) the agent described the property as in a certain town, 
 whereas it was in an addition adjoining the town, and the loss was dis- 
 puted. In Mullville vs. Ins. Co. (13 Ins. Law Jour., 435) a diagram of 
 the ground-plan of certain buildings, furnished by the insured in connec- 
 tion with the application, was treated by the agent as if a complete dia- 
 gram of the property, and insurance was procured on a copy of it made 
 by him. In point of fact, it failed to indicate intervening structures, 
 which materially increased the risk, and the company was compelled to be 
 -esponsible for the error. 
 
 LOCATION AND SURROUNDINGS OF THE RISK. 
 
 The specific location of a building or of contents should be defined 
 as clearly as possible, both to avoid any doubt as to the subject-matter 
 and to prevent removal. Frame buildings are sometimes moved, and the 
 insurance would otherwise follow them unless the risk were increased. 
 
 Griswold vs. Ins. Co., 3 Ins. Law Jour., 254. 
 
 Personal property is essentially movable in its character. In Everett vs. 
 Ins. Co. (4 Ins. Law Jour. , 121) a threshing-machine was described as
 
 37 
 
 on a certain section and again as "stored in barn;" there was no such 
 section, and it required a lawsuit to determine whether it was covered. 
 In Bowman vs. Ins. Co. (5 Ins. Law Jour., 9) grain was described as in 
 "barns" and in "Barn No. 2 north from house ;" there was no barn 
 north from the house, and again a suit was needed to determine the lia- 
 bility. In Sawyer vs. Ins. Co. (37 Wis., 503) insurance was on grain in 
 stack. The insured afterwards purchased another farm and by reason of 
 failure to limit the location the policy was held to cover on the new farm 
 as well as the old. In Peterson vs. Ins. Co. (24 Iowa, 494) horses were 
 insured with other property "situated" on a described farm, and it was 
 held that the word was only descriptive, the horses were covered while 
 absent on business. So in Noyes vs. Ins. Co. (15 Ins. Law Jour., 57) 
 a sealskin dolman was insured as "contained in "a house, but was 
 covered while absent for repairs; it was held that the words only meant 
 that the house was the usual place of deposit. Both of these were cases 
 where the property might be expected to be temporarily absent and 
 should have been insured " only while contained in." In Broadwater vs. 
 Ins. Co. (15 Ins. Law Jour., 295) the property was described as "their 
 buildings adjoining and communicating situated detached. " They were 
 not in fact detached from each other at all, but as they were detached 
 from others, the company was held responsible for the faulty description 
 by its agent. The buildings, too, while themselves belonging to the insured 
 as a post-trader were on government land, but the fact that they were 
 stated to be used by a post-trader was allowed to override a stipulation 
 regarding the title. In Fair vs. Ins. Co. (4 Ins. Law Jour., 114) goods 
 were insured as "contained in the Hunt building, situate on Main 
 Street as per plan filed." The plan exhibited a building divided into 
 three stores. The particular store occupied by the insured was not 
 designated, and he was consequently able, by knocking down the parti- 
 tions, to cover goods in all three. In Blake vs. Ins. Co. (12 Gray, 265) 
 the property was described as in a building known as the car factory. A 
 hole less than three feet square opened into an ad joining building which was 
 used in connection with the factory, and was therefore held to be a wing. 
 The failure to limit the description to the main building extended the 
 policy to the wing. 
 
 These are a few of the numerous illustrations which can be cited of 
 the consequences of imperfect and faulty descriptions of location, and of 
 the importance of such a description as shall not be open to dispute. 
 
 EXPOSURES. 
 
 Adjacent buildings when inquired about, should be fully described, 
 and their distances noted. The proximity of such buildings is universally
 
 38 
 
 recognized as increasing the danger from fire, and is regarded by the 
 courts as a material matter in which concealment will vitiate the insur- 
 ance. All permanent structures within the specified distance should be 
 mentioned and their correct distance and direction given, no matter 
 whether they are large or small or their uses are important or otherwise. 
 A failure to observe this rule has repeatedly caused a forfeiture of the 
 policy. The distance should be that between the nearest parts. The 
 same holds true regarding a diagram, it must be an accurate as well as 
 complete map of the surroundings. 
 
 Burrett vs. Ins. Co., 5 Hill, 188 ; Wright vs. Ins. Co., 4 Ins. Law Jour., 251 ; 
 O'Neil vs. Ins. Co., Hine & Nichols' Dig., 82 ; Chaffee vs. Co., 18 N. Y., 376; Con- 
 tinental Ins. Co. vs. Ware, 9 Ins. Law Jour., 519. 
 
 The subsequent erection of adjacent buildings by other parties is a 
 matter on which the insurer should be informed, and if such information 
 is called for by the policy its neglect may be fatal. Where such buildings 
 are erected by the insured or within his control, the company should 
 always be notified whether required by the policy or not ; for, if the risk is 
 thereby materially increased, the insurance may be forfeited. 
 
 Pottsville Ins. Co. vs. Horah, 9 Ins. Law Jour., 201 ; Howard vs. Ins. Co., 13 B. 
 Mon., 289 ; Stebbins vs. Ins. Co., 2 Hall, 632 ; Calvert vs. Ins. Co., I Allen, 308. 
 
 The same doctrine applies to any essential modifications in the char- 
 acter or use of adjacent premises which are likely to increase the risk, a 
 matter which will be considered more at length further on. 
 
 INTERNAL APPURTENANCES AND ARRANGEMENTS OF .BUILDINGS. 
 
 In all special hazards great stress is laid by underwriters on such inte- 
 rior features and appurtenances as methods of heating and lighting, steam 
 power, character and location of machinery, force-pumps, water-supply, 
 watchmen, etc. Careful inquiries are usually made on these and other 
 like points, and representations made by the insured regarding them are 
 treated as warranties. The statements made, therefore, should be substan- 
 tially correct. If any of the inquiries pertain to matters which are sup- 
 posed to be of a permanent character the courts regard such inquiries as 
 continuing warranties, that is, that the conditions represented to exist shall 
 continue during the life of the policy. In that case any breach of the 
 representation, even if made after the insurance had been effected, would 
 result in forfeiture. Especially is this true of changes which are likely to 
 increase the risk. Sometimes, too, the application provides that such rep- 
 resentations shall continue to be true. 
 
 Aurora Ins. Co. vs. Eddy, 50 111., 106 ; Ripley vs. Ins. Co., 30 N. Y., 136 ; Farm- 
 ers' Ins. Co. vs. Snyder, 16 Wend., 481 ; Dale vs. Ins. Co., 15 W. C., 175.
 
 39 
 
 The applicant in case of a special hazard should understand that in 
 regard to nearly all representations of this character, they are looked on 
 by the companies as expressing not simply the existing condition of the 
 risk, but that which will continue during the life of the policy. As the 
 courts have well said, they are the inducements for taking the risk, and 
 payment has frequently been forfeited because the actual status at the 
 time of loss was different from that represented. The introduction of 
 steam power into a mill previously run by water ; the character of the 
 machinery; the method of connecting the heating apparatus ; the nature 
 of that apparatus or its presence at all ; the method and time of light- 
 ing, all have reference to the existence of fire or of conditions likely to 
 incite combustion within the building. They go far to determine the 
 character of the risk, and are properly regarded as material matters by 
 the courts. 
 
 In Daniels vs. Ins. Co. (10 Ins. Law Jour., 658) fires or lights were 
 prohibited in a business where naphtha was employed, and the court de- 
 clared that the use of a small stove for heating the naphtha was an 
 increase of risk which forfeited the insurance. In Murdock vs. Ins. Co. 
 (2 N. Y., 210) the applicant represented that a chimney would be built 
 for the stovepipe, which passed through a window. Instead of doing so, 
 the stove was moved and the pipe passed through a stone placed on the 
 roof, and the policy was avoided. In Glen vs. Lewis (8 W. H. & G. , 607) 
 the temporary introduction of a steam-engine merely for trial in the face 
 of a policy prohibition avoided the insurance, and in Robinson vs. Ins. 
 .Co. (3 Dutch, 134) the policy was defeated by subsequently locating a 
 steam-engine in a building adjoining, which increased the risk, though no 
 express prohibition was involved. Again, in Diehl vs. Ins. Co. (58 Pa. 
 St., 443), the insurance was on a " tannery without steam" in which this 
 was one of the clauses in the policy, and it was defeated by the subse- 
 quent addition of steam, regardless of any increase of risk. In Atkins 
 vs. Ins. Co. (8 Ins. Law Jour., 78) the risk was a saw-mill, but the fail- 
 ure of the applicant to state the presence of a planing-machine forfeited 
 the policy. So in 53 Texas, 61, the presence of a cotton-gin in a fac- 
 tory was adjudged fatal. 
 
 FORCE-PUMPS, WATER-SUPPLY, AND WATCHMEN. 
 
 Of equal importance with those last referred to are such inquiries as 
 relate to the means of extinguishing and preventing fires. Represen- 
 tations regarding the presence of watchmen, (o ce-pumps, stand-pipes, 
 tanks, and the like are looked on by the companies and generally by the 
 courts as continuing warranties. Payments have been refused because
 
 40 
 
 the representions made regarding them have been found to be untrue at 
 the time of loss. Inquiries about them should not be limited to their 
 existence, but should extend to their efficiency. The company expects 
 that a pump will be kept in order, that tanks will be filled, and that 
 watchmen will not consist simply of periodical visitors, but of men on 
 duty on the premises at the proper hours. Failure in these respects 
 has involved litigations. Not only the application but frequently the 
 policy contains stipulations regarding these precautionary measures, with 
 which the insured is bound to comply. A policy on a quartz-mill pro- 
 vided that a watchman should be employed to guard the premises when 
 idle. The so-called watchman proved to be a miner who was working 
 nearly half a mile away during the day, and slept in a house nine hundred 
 feet distant at night! The court held in Wenzel vs. Ins. Co. (14 Ins. 
 Law Jour., 809) that this was not a compliance. Trojan Company vs. 
 Ins. Co. (14 Ins. Law Jour., 625) was a similar case. The stipulation 
 was that the watchman should be upon the premises night and day. In 
 point of fact he slept in a house a hundred feet distant, and kept a rep- 
 resentative in the shape of a watch-dog in the building. The court held 
 that this was no compliance. So in Blumer vs. Ins. Co. (7 Ins. Law 
 Jour., 833, and 9 Ins. Law Jour., 444) the court declared in both cases 
 that a representation that one or two hands slept in the mill was a con- 
 tinuing warranty, and their absence forfeited the policy. In Miller vs. 
 Ins. Co. (6 Ins. Law Jour., 873) the insured, in response to a question 
 whether it was in charge of some person on the premises, replied, ' ' There 
 is a man on the premises ;" this was adjudged a continuing warranty. 
 The case of Albion Lead Works vs. Ins. Co. (9 Ins. Law Jour., 435) is 
 instructive. Instead of a written application, insurance was made on a 
 mill property on an old description which included a watchman and th$ 
 oral representation of a broker that there was a force-pump in working 
 order. There was* no watchman, and the pump was out of order. The 
 court held that if they had been written representations of an existing con- 
 dition they would have been continuing warranties. Because they were 
 not the company had to pay the loss. In Sayles vs. Ins. Co. (2 Curt., 
 612) a warranty regarding force-pumps ready for use was held to include 
 a warranty of power to work them, and in Gloucester Co. vs. Ins. Co. 
 (5 Gray, 497) a similar representation regarding water-tanks was held to 
 imply that they should be well filled from the time the building, which 
 was unfinished, was completed. 
 
 The conclusion from these cases is that statements regarding these 
 various appurtenances of building risks should embody no essentially 
 false or evasive representations ; they should show not simply what is the 
 subsisting, but what will be the continuing condition of the risk.
 
 USE OR OCCUPATION OF THE PREMISES. 
 
 Closely allied with those features of the risk just referred to, is the use 
 to which the insured premises may be put. A building is insured as 
 a dwelling, or store, or factory in the expectation that it will continue to 
 be used for that purpose. The use to which the premises are put is, as 
 we have seen, a material feature in the description of the property, and a 
 designation which is misleading, such as describing a building used in 
 part for a stable as a dwelling, or a saloon as a hotel, will frequently forfeit 
 the insurance. This is equally true whether the policy is on the building 
 itself or the contents. A subsequent change in the use of a building 
 will not always have this effect; but if it is forbidden by the policy, or 
 materially increases the risk, or so radically alters its character that it 
 becomes substantially an altogether different subject of insurance, the 
 policy will no longer apply. 
 
 Fire Ass'n vs. Williamson, 26 Penn. St., 196; Hobby vs. Dana, 17 Barb., in ; 
 Howell vs. Bait. Soc., 16 Md., 377 ; Appleby vs. Ins. Co., 45 Barb., 454. 
 
 Since nearly all policies contain provisions against increase of risk, and 
 frequently prohibit explicitly the existence of certain classes of hazards, 
 any material change in the occupation of the property, whether in whole 
 or in part, may be dangerous to the insured, and the company should 
 be informed. Where there is reason to apprehend that such a change 
 may be made the policy should be written "only to be used as," etc.; 
 for, unless there is a distinct prohibition or a manifest increase in the 
 risk, the courts are disposed to grant to the insured the largest license in 
 the use of the premises consistent with the contract, and it is difficult for 
 the company in many instances to satisfy a jury that the risk has been 
 altered to its detriment. Thus in Richards vs. Ins. Co. (15 Ins. Law 
 Jour., 598) premises improperly described as used for residence and 
 stores were in part used for a restaurant and bakery, to which a brick oven 
 was also attached. These facts, from an insurance standpoint, essentially 
 altered the character of the risk, but they were regarded by the court in 
 this instance rather as minor features in an imperfect general description, 
 for which the agent was at fault. In contrast with this case, however, 
 may be cited that of Fire Association vs. Williamson, ante, where three ad- 
 joining buildings were insured under one policy, one of which was at the 
 time occupied as a shoe store ; but it was afterwards, without the knowl- 
 edge of the company, changed to a grocery. The policy required grocery 
 stores to be specified,, and a higher rate was charged for them. The court 
 ruled that the change of occupation vitiated the insurance as to all of the 
 buildings.
 
 42 
 
 Particularly in the case of special hazards are minute inquiries addressed 
 to the insured in the application, not simply as to the general occupancy 
 of the premises, but in regard to such details as the presence of planers, 
 the disposition of shavings, the use of paints and varnishes ; in case of 
 saw-mills, whether custom or lumber work is done ; whether it is also a 
 lath and shingle mill ; in case of breweries, regarding malt-kilns and 
 stills ; or in case of pork-houses, regarding slaughtering, rendering, and 
 cutting ; and so of other classes of risks. All such detailed inquiries are 
 material in their character and must be truly answered ; and where, as is 
 often the case, the insured covenants against a subsequent increase of risk, 
 any serious change subsequently introduced may jeopardize his policy. 
 Thus, in People's Ins. Co. vs. Spencer (53 Penn. St., 353) the subject of 
 insurance was a brewery, to which the work of distilling was subsequently 
 added, and it was held to be a fatal increase of risk. So in Hervey vs. 
 Ins. Co. (n U. C. C. P., 394) a printing-office was subsequently added 
 to a store risk without notifying the company, and the insurance was de- 
 feated. In Mayor vs. Ins. Co. (9 Bosw., 424) the court declared, that if 
 buildings erected for exhibition purposes, and insured as such, were after- 
 wards used for other purposes, it would be fatal. In Washington Co. 
 Ins. Co. vs. Ins. 'Co. (5 Ohio St., 450) the court declared that the under- 
 writer insuring a mechanical establishment is presumed to insure only 
 against risks arising from the usual and appropriate mode of carrying on 
 such business ; the introduction of a new and unusual invention without 
 the company's consent may, by increasing the risk, avoid the policy. In 
 Cole vs. Ins. Co. (14 Ins. Law Jour., 453) the court declared that the 
 addition of a drying-house in close proximity to a planing-mill was a self- 
 evident increase of risk, which barred recovery. In German-American 
 Ins. Co. vs. Steiger(i3 Ins. Law Jour., 487) it was held that the substitu- 
 tion of a fire for a steam drier presented a question for the jury whether 
 the risk had thereby been increased. In nearly all cases of special haz- 
 ards the survey is made part of the policy, and the universal rule of the 
 courts in that case is that those matters regarding which questions are 
 asked are thereby made warranties, and a substantial breach will forfeit 
 the insurance. 
 
 Le Roy vs. Ins. Co., 39 N. Y., 90 ; Cox vs. Ins. Co., 29 Ind., 586 ; Le Roy vs. 
 Ins. Co., 6 Hand., 80. 
 
 The agent should see to it, not only that the answers are correctly given 
 by the insured, but that all the questions are answered as far as possible, 
 for the omission of answers may leave the insured at liberty to alter the 
 character of the risk in those respects to any extent which is not an obvi- 
 ous increase of hazard. 
 
 Lorillard Ins. Co. vs. McCulloch, 21 O. St., 176.
 
 43 
 
 SPECIFIC TITLES OR INTERESTS. 
 OWNERSHIP. 
 
 The principal interest in property, and that which should be insured 
 in preference to any other, is ownership, by which the companies usually 
 understand the strictly legal title, with the right to control and dis- 
 pose of the property. This interest is generally designated in the 
 application and policy by the word "his" or " owner." These words, 
 however, should never be used without proper qualification, unless the 
 insured has the legal title and right of disposal for his own benefit. For 
 in law they are frequently allowed to support any loose claim where the 
 insured might regard himself as the owner in a popular sense, and where 
 his interest is much less than that of an actual title in fee. Thus, a man 
 has been allowed to designate as "his," buildings on leased ground or 
 belonging to his wife, and to call himself the "owner" of property which 
 he had only contracted to purchase, or to which his title was at best but 
 an equitable one. In repeated instances the companies have thus been 
 led to believe that they were insuring an absolute and unqualified owner- 
 ship, whereas events proved that the interest was qualified in its character. 
 
 Hough vs. Ins. Co., 29 Conn., 10; Pierce vs. Ins. Co., 62 Barb., 636. 
 
 To guard against this, the policy usually stipulates that the precise 
 nature of the title, if qualified, shall be stated ; and then a failure to do 
 so, unless the agent is in fault, will vitiate the insurance. 
 
 Porter vs. Ins. Co., 6 Ins. Law Jour., 928 ; JEina. Ins. Co. vs. Resh, 8 Ins. Law 
 Jour., 271 ; Murphry vs. Ins. Co., 5 Ins. Law Jour., 297. 
 
 The ordinary provision is that if the interest be other than the ' ' entire 
 and unconditional ownership" or "absolute and sole ownership for the 
 use and benefit of the insured," it must be so stated. To meet such 
 requirements, the estate should be vested in fee-simple, with an absolute 
 power of disposal, not simply for a term of years, or for life, or under 
 certain circumstances; it should belong solely to the party and for his 
 own benefit. If no title-deed has passed, there should be at least an un- 
 disputed right to compel it. There may be mortgages and liens upon 
 the property, provided they are mere liens that do not affect the title or 
 right of possession. But these should be separately noted, for here again 
 the policy usually provides that failure in this respect will result in for- 
 feiture. 
 
 It occasionally happens that while the insured is the unqualified owner 
 of the building, his ownership of the land on which it stands is qualified 
 or the title is in another. Where the language of the contract clearly 
 includes both land and building, as it usually does, a failure to state the
 
 44 
 
 qualified interest will be fatal ; and in all cases such qualified interest in 
 the land should be stated, both to avoid dispute and because buildings 
 standing upon the land of another are actually less valuable to the 
 owner. They are liable to removal at the expiration of a lease, and are a 
 temptation to fraudulent insurance. 
 
 Washington Mills Co. vs. Ins. Co., 13 Ins. Law Jour., 225, and cases there cited. 
 
 In all other cases where the ownership is not of the absolute character 
 described above, it should be treated as qualified and its precise nature 
 stated. In no case should mortgages or mere incumbrances of any kind 
 be treated as ownership. Ordinary tenancies do not conflict with the 
 absolute ownership of the landlord, but life-tenancies and oth'er freehold 
 interests do conflict with the absolute title of the reversioner or remainder- 
 man. Possession and control by other parties than the insured should 
 always be noted. In Wenzel vs. Ins. Co. (14 Ins. Law Jour., 809) the 
 leasing and surrendering control to other parties was declared to be a 
 change of possession within the meaning of the policy. 
 
 See Woody vs. Ins. Co., 9 Ins. Law Jour., 276 ; Cheek vs. Ins. Co., supra ; Davis vs. 
 Ins. Co., 15 Ins. Law Jour., 533 ; Clay Ins. Co. vs. Mfg. Co., 4 Ins. Law Jour., 858; 
 Porter vs. Ins. Co., 6 Ins. Law Jour., 928 ; Lycoming Ins. Co. vs. Haven, 7 Ins. Law 
 Jour., 449. 
 
 Property belonging to the wife should be insured as hers, not as her 
 husband's. 
 
 Hunt vs. Ins. Co., 14 Ins. Law Jour., 298 ; Agricultural Ins. Co. vs. Montague, 7 
 Ins. Law Jour., 708. 
 
 Part-owners should be allowed to insure only to the extent of their 
 interest, unless authorized to insure for the remaining owners and in the 
 name of all. Partners are thus authorized if their intention to do so 
 clearly appears. 
 vPeoria Ins. Co. vs. Hall, 12 Mich., 202. 
 
 As a matter of good practice, an agent should decline all risks where 
 the ownership is doubtful, or mixed, or otherwise unsatisfactory. It is 
 a great deal better to avoid possible difficulty than to go in carelessly 
 and get out skillfully. The following points are given, however, so that 
 the agent may understand the legal conditions of each class of cases and 
 be intelligent in his declinations as well as in his acceptances. 
 
 In the case of buildings and real estate there is not often any question 
 as to what will constitute a legal ownership. But with personal prop- 
 erty it is different Here the actual possession of the goods or chattels 
 is likely to seriously affect the property rights, and the title to goods in 
 the possession or control of one party which are claimed by another
 
 45 
 
 should be closely scrutinized. In many of the States it is an established 
 rule that the legal title to personal property which has been mortgaged, 
 especially if placed within the control of the mortgagee, vests in the 
 latter. 
 
 Appleton Iron Co. vs. Ins. Co., 8 Ins. Law Jour., 177 ; Kronk vs. Ins. Co., 9 Ins. 
 iawjour., 26. 
 
 In case of ordinary sales of personal property where the purchaser has 
 not yet come into possession, if it be a specific article, as a horse, the 
 latter is the owner ; but if it be an undefined portion of a lot of goods, as 
 a hundred bushels of corn from a granary, or if anything remains to be 
 done to complete the sale, the title remains with the seller until the 
 specific amount has been set aside and accepted by the purchaser, or the 
 act omitted has been done. 
 
 Merchants' Bank vs. Bangs, 102 Mass., 295 ; Haley vs. Ins. Co., 120 Mass. 292 ; 
 Suffolk Ins. Co. vs. Boyden, 9 Allen, 123. 
 
 In the same way, articles that have been ordered and are in process of 
 construction remain the property of the maker until delivered or ac- 
 cepted ; and a building in process of erection under contract will remain 
 at the risk of the builder until accepted by the owner. 
 
 Filden vs. Besley, 9 Ins. Law Jour., 241 ; Commercial Ins. Co. vs. Ins. Co., 16 
 Ins. Law Jour., 8l. 
 
 The further fact that a party in possession of personal property under 
 circumstances which will justify a belief in his ownership can wrongfully 
 pass a title to innocent purchasers, again enhances the risk of insurance 
 in such cases. What are known as fixtures often give rise to embar- 
 rassing questions of ownership, which will be considered hereafter. The 
 questions of possession and control, therefore, become important matters 
 for consideration in all insurances on personal property. Where the 
 character of the interest cannot be satisfactorily determined, it is better 
 to insure the owner of the property, briefly stating the facts, with loss 
 payable to John Doe, the party wanting protection, "as interest shall 
 appear. " 
 
 To meet the delicate questions regarding ownership of goods which 
 have been bargained for but still remain in the hands of the seller, two 
 phrases are in common use among underwriters : ' ' Sold but not re- 
 moved," and ' ' sold but not delivered. " The first applies to goods the 
 title to which has actually passed to the purchaser. The second applies 
 to those where the title still remains with the seller, and is not really 
 needed at all in most cases, since the policy already covers all goods 
 while they remain his property. It is the policy of the companies to
 
 4 6 
 
 limit their protection as far as possible to the party or parties named in 
 the contract, and to discourage the insertion of either clause when not 
 actually required. 
 
 Waring vs. Ins. Co., I Ins. Law Jour., 672. 
 
 QUALIFIED AND LIMITED ESTATES. 
 
 Interests in property other than that of absolute and unqualified legal 
 ownership should generally be insured simply as "his interest," stating 
 its character ; or, if the applicant has no actual interest of his own which 
 will authorize him to receive the money, but is simply acting as the rep- 
 resentative or agent of those who would be entitled to receive it, the 
 insurance should be directly on the interest of the latter or for their 
 benefit. 
 
 Martin vs. Ins. Co., 15 Ins. Law Jour., 371. 
 
 Prominent among such interests are lite-estates, including the dower 
 rights of widows when limited to life, which are often erroneously de- 
 scribed as ownerships, but which are in reality mere tenancies lasting 
 during life. It is plain that the interest of such parties must generally 
 be less than the actual value of the property, depending upon the age 
 of the tenant, and is usually computed by multiplying the net rental 
 value by the expectency of life at the given age as shown by a mortality 
 table, but this will give an exaggerated value unless the tenant be of 
 advanced age. Life-tenants are often invested with the duty of caring for 
 and keeping the property insured. But in such case they are acting for 
 the reversioners as well as themselves, and the insurance should be for the 
 benefit of themselves and the reversioners. Whoever has the charge of 
 such property is the proper party to effect the insurance, which should be 
 for the benefit of all rather than a particular interest when this can be 
 done. Thus, if the property is that of an estate, it may be insured for 
 the benefit of the estate ; or, what is better, for the benefit of the life-tenant 
 and heirs or devisees. 
 
 Clinton vs. Ins. Co., I Ins. Law Jour., 436 ; Clinton vs. Ins. Co., 51 Barb., 647. 
 
 The great objection to all separate insurances of minor or partial 
 interests is that different parties may thus independently insure the prop- 
 erty for several times its value, and not only is a temptation furnished to 
 fraud, but the question of adjustment becomes an embarrassing one for 
 the companies. It is well, however, for the agent to understand that the 
 companies have a short-cut to justice through the replacement or rebuild- 
 ing clause, and when a case of multiplied overinsurances is up for dis- 
 cussion, and the question is asked, "What would the companies do in
 
 47 
 
 case of the burning of property so overinsured ?" the prompt and ready 
 answer would be, "They would replace the property." 
 
 But, of course, there are many instances where such limited insurance 
 is required, and the agent should be familiar with the rights of the parties. 
 The interest of the reversioner, like that of the life-tenant, may be the 
 subject of insurance, and the value of such an interest is the reverse of 
 the other. It is the present worth of the sum which the building or 
 other property, in view of its depreciation, would be valued at at the end 
 of the probable life of the tenant. Unless the latter is an elderly person, 
 such an interest is usually very small, and hardly a fit subject for separate 
 insurance. This class of risks is to be avoided unless special authority is 
 obtained from the company. So also in regard to all the partial interests 
 and other complicated or intangible insurable interests herein treated. 
 The mere fact that a man has a legal right to obtain insurance does not 
 by any means constitute him a desirable customer. 
 
 Ordinary tenancies for a term of years and all leasehold interests 
 create insurable interests ; but only where the tenant is liable to pay 
 rent after a destruction by fire, or the rent is paid in advance, or where the 
 actual value of the use through improvements made by himself is in 
 excess of the rental, and his insurable interest is only such liability or 
 excess. Except where buildings have been erected by the lessee, or he 
 is bound to replace, this interest is of such a vague character that it 
 should seldom be covered. In any case the specific character of the 
 interest covered should be carefully defined, otherwise injuries which 
 are merely consequential in their character are likely to be included. 
 
 Niblo vs. Ins. Co., I Sandf., 551 ; Mayor vs. Ins. Co., 10 Bos., 537 ; Cushman vs. 
 Ins. Co., 34 Me., 487 ; Imp. F. Ins. Co. vs. Murray, 73 Penn. St., 13. 
 
 In the same way, rentals might be insured by landlords, and such 
 intangible interests as expected incomes and profits, or consequential dam- 
 ages resulting from business injuries, or expenses on account of fire, are 
 allowed by the law to be insured. But such risks are not included 
 under ordinary policies on the property ; they must be specifically slated 
 if insured at all, and it is a well-established principle in fire underwriting 
 that the insurance of consequential injuries is in the highest degree 
 unsatisfactory in its workings and results, and except in rare cases should 
 be refused. 
 
 Niblo vs. Ins. Co., I Sandf., 551; Leonards vs. Ins. Co., 2 Rob., 131. 
 
 TRUSTEESHIPS. 
 
 Trustees of various kinds, who have been intrusted with tne control of 
 property belonging to others, constitute a numerous class, who are
 
 4 8 
 
 recognized in law as having qualified titles or interests which they may 
 insure. Such are warehousemen, commission merchants, executors and 
 administrators, and, in short, all parties having the custody of such prop- 
 erty. But the general doctrine is that, except in the case of common 
 carriers, trustees are not liable for losses by fire unless by some stipula- 
 tion or special responsibility imposed on them, or in cases of negligence, 
 and insurance by them may be said to be voluntary. 
 Rice vs. Nixon, 14 Ins. Law Jour., 329. 
 
 This is the ordinary rule regarding goods consigned to the possession 
 of others for various purposes. But there are cases, such as that of a 
 trustee having the care of an estate, where insurance may be obligatory. 
 This question of responsibility on the part of the trustee is an important 
 one for the agent to consider. In some policies the responsibility in 
 the case of goods held in trust has been expressly limited by the words 
 "for which he is responsible," and in such case no others will be in- 
 cluded. These or similar words should always be used where it is 
 desired to limit the insurance to the personal responsibility of a trustee, 
 
 N. Brit. & Mer. Ins. Co. vs. Moffat, L. R., 7 C. B., 25. 
 
 Sometimes, too, the trustee is interested by reason of liens or advances 
 made on consignments of goods, and this would be properly expressed 
 by ' ' his interest " in the goods. 
 Parks vs. Assurance Co., 5 Pick., 34. 
 
 Above all, it is important to know just what constitutes a trusteeship in 
 goods as distinguished from an ordinary ownership. About the best test 
 is the right of the consignor to compel a return to him of the specific 
 goods in the hands of another. If this right exists, they are held by the 
 latter in trust ; but if he is only obligated to account for their moneyed 
 value, the consignee is an owner, not a trustee. In the latter case all 
 such goods are covered by an insurance of the consignee as owner, in 
 the former they are only covered by such words as "in trust," or "on 
 commission." 
 
 Rice vs. Nixon, ante. 
 
 The most familiar illustration of this distinction, and one which has 
 occasioned the most litigation, is that of grain in warehouses. Sometimes 
 the grain is delivered purely for purposes of storage, but to avoid the 
 difficulty of keeping each specific lot separate it is understood that the 
 lots may be mingled, but that the consignor is to reclaim an equal 
 quantity of the same grade. This is a mere trusteeship, or bailment, as 
 it is called, on the part of the warehouseman ; the sender of the goods
 
 49 
 
 remains the owner and is liable in case of their destruction. Sometimes 
 the warehouseman takes the grain on his own responsibility, agreeing to 
 return a moneyed or some other equivalent This is a sale, and the 
 warehouseman is the owner. Often, too, it becomes difficult to deter- 
 mine whether the parties intended a sale or a bailment by their agreement ; 
 and then the courts will inquire into their intentions and the usages of 
 the business. 
 
 Rice vs. Nixon, ante, and cases there cited. 
 
 Where goods on storage are insured by the owner, they should be 
 insured as "on storage ;" otherwise the policy may not always attach, on 
 account of an exempting clause. 
 
 In all cases of alleged trusteeships the relation of the trustee to the 
 property should be such as will justify an insurance. Thus a party who 
 was simply renting separate rooms for storage purposes to various parties, 
 and surrendering control of the rooms to them, would have no trust that 
 would justify an insurance of goods stored, unless he had agreed to be 
 responsible for their loss. Executors and administrators should never be 
 allowed to insure in their own names the real estate of the deceased, 
 unless by the will or by the law they are intrusted with its care, and then 
 the insurance should be for the benefit of the heirs or devisees. Some- 
 times it is willed to them in trust, then they may properly insure as 
 "trustees" or "owners in trust ;" but the executor or administrator is in 
 law the owner of the personalty belonging to an unsettled estate, and is 
 the proper party to insure it as " executor. " 
 
 Common carriers, such as railroad and express companies, form a pe- 
 culiar class of trustees. The law holds them liable for any damage to 
 property in their care unless it occurs through an act of God. They 
 may limit this liability by a special agreement exempting losses that were 
 unavoidable, but they cannot escape the consequence of such as are due 
 to their own negligence. 
 
 Germania Ins. Co. vs. R. R. Co., 7 Ins, Law Jour., 547 ; Steinway vs. R. R. Co., 
 43 N. Y., 126; Prov. -Washington Ins. Co. vs. The Sidney, 14 Ins. Law Jour., 382. 
 
 Carriers, therefore, have an insurable interest in all property in their 
 charge. But since their liability may be restricted by special contract, 
 such risks should be limited to property "for which they may be liable 
 as carrier." Another reason why this limitation should be enforced, is 
 that goods in transit are frequently stored or warehoused with such car- 
 riers. If this warehousing is a mere incident in their transportation, it 
 is still a carrier's risk. But if done, for instance, at the end of the route 
 for the accommodation of the shipper when the carrier's duty is ended,
 
 So 
 
 it is a mere warehouse risk for which the carrier is not liable, but which 
 would be covered by a simple policy on property "in trust." For the 
 same reason precautions should be observed in warehouse risks that are 
 connected with any general transportation system. 
 
 The insurance of goods by owners or shippers while in the care of 
 such carriers, too, is fraught with a peculiar danger; for the carrier's bill 
 of lading frequently stipulates that it shall have the benefit of such insur- 
 ance, and this provision, it has been held, defeats the right of subrogation 
 on the part of the insurer. 
 
 Hine & Nichols' Dig., 595 s. c., 117 U. S., 312. 
 
 INSURANCE OF PROPERTY NOT THEIR OWN. 
 
 The extensive mercantile demand for insurance on personal property 
 belonging to other parties which may be temporarily in the custody of 
 the applicant, justifies a few special words on this subject. All such 
 property, whether it be goods consigned to a commission merchant, de- 
 posited in a warehouse in course of transportation on a railroad, or sim- 
 ply in the custody of another awaiting delivery to the owner, is included 
 in the legal term of bailments. But the obligations and responsibilities 
 of custodians may differ very widely, and are regulated by the specific 
 character of the relations of each. Hence, the bailee may in one case 
 have a large insurable interest, while in another, strictly speaking, he 
 may have none at all, and insurance by him may be a mere voluntary 
 act for the owner. But the liberality of the law in permitting a bailee to 
 act for the owner when the circumstances are such as to justify it, even 
 without the express authority of the owner, renders it in all cases im- 
 portant that the actual ownership of the insured property should be 
 stated. A policy simply on " merchandise contained in a store" might 
 cover the interests of a dozen people who were never contemplated by the 
 insurer; such phraseology should never be used; while if on " his mer- 
 chandise, " it would be restricted, as was intended, to the property of the 
 insured. 
 
 In general, it may be said that any language in such a mercantile pol- 
 icy which indicates an intention to cover other interests than those of 
 the insured, will generally receive the most liberal legal construction that 
 the words and facts will justify. The language will not always be re- 
 stricted to its rigid technical signification, and in case of ambiguity ex- 
 trinsic evidence may be admitted to show what was intended by the appli- 
 cant to be included. Hence, frequent disputes have arisen as to what 
 property was intended in such cases, and great care is needed both in
 
 the choice of appropriate language and in ascertaining what interests are 
 to be included when this class of policies is to be written. Reference to 
 a few of the disputed cases will serve best to illustrate this subject. The 
 broad, general principle of the law was thus laid down in Duncan vs. 
 Ins. Co., 12 La. An., 486. The policy insured a railroad on merchan- 
 dise in certain depots and in transit. Neither ownership nor interest 
 was stated. The policy provided that goods in trust or on commission 
 must be declared. It was held that if, upon a general survey of the poL 
 icy-conditions and the circumstances, the intention appeared to be to 
 cover an interest not named, such intention would not be defeated for the 
 want of technical or even customary phrases; but it would here seem that 
 only the interest of the railroad was intended, and it must at least show 
 liability for loss of goods belonging' to others. It was obvious that the 
 railroad could not have intended simply its own property, and the policy 
 was fatally defective in not stating whose interests were intended. 
 
 The case of Home Ins. Co. vs. Warehouse Company (6 Ins. Law 
 Jour., 39) is replete with instructive doctrines sustained by authorities. 
 The insurance was taken out by warehousemen on "merchandise their 
 own, or held by them in trust, or in which they have an interest or lia- 
 bility." It was contended, on the one hand, that only the interest of the 
 warehousemen in the property was intended, and on the other that the 
 policy covered the merchandise itself, regardless of interest. The court 
 declared that if the language of a policy is so ambiguous as to require 
 it, resort may be had to outside evidence to ascertain what was intended. 
 Where it is taken out " for or on account of the owner," or "on account 
 of whom it may concern, " outside evidence may thus be taken (a suffi- 
 cient proof of the faultiness of such language); but here there is nothing 
 ambiguous, the language is as broad as possible, it was the merchandise 
 itself that was covered. If otherwise, says the court, why was not the sub- 
 ject described as the interest of the insured in the merchandise, and not 
 that merchandise itself. The policy covered their own merchandise, to- 
 gether with that in which they had any interest or liability, and also 
 any merchandise which they held in trust. The last phrase in insur- 
 ance policies does not mean property held technically as trustees, but in 
 the mercantile sense of goods intrusted to them by their customers. As 
 warehousemen they had liens for charges, expenses, advances, and com- 
 missions, which could all be specifically insured under their interest. 
 They could also insure in their own names for their customers as well as 
 themselves, as in the present instance, and recover the full value of the 
 goods. It further appeared that the depositors had independently insured 
 their own property. This was held to be other insurance, and the com-
 
 52 
 
 pany was compelled to contribute. It would be difficult to find the ob- 
 jections to this omnibus style of writing more completely summed up 
 than in this single decision. 
 
 This right to insure the property of others in their possession, regard- 
 less of liability or authority from the owners, is liberally extended by the 
 law to other classes in the mercantile community. In Waring vs. Ins. 
 Co. it was extended in the case of a policy on goods " their own or sold 
 but not removed " to property which had been sold and paid for but 
 not taken away for the benefit not simply of the original purchasers, but 
 of successive owners, though not designated, and without previous au- 
 thority. The court distinguished the phrase from " sold but not deliv- 
 ered," which referred to goods where the ownership had not changed 
 for want of technical delivery. In Stillwell vs. Staples (19 N. Y. , 401) 
 insurance on property held in trust included cloth left with a manufac- 
 turer to be made into clothing without any previous orders to insure. 
 But where the policy was on goods "in trust," in which the nature of 
 such trust was explained before insuring, in Parks vs. Ass'e Co. (5 Pick., 
 34), the insurance was restricted to the interest as understood. So, where 
 the policy specifically requires that property so held shall be stated, as in 
 Rafael vs. Ins. Co. (7 La. An., 244), the provision must generally be 
 complied with. In Stillwell vs. Staples (19 N. Y., 401), a party insuring 
 his own and goods in trust was allowed to elect whether the insurance 
 should apply solely to his own or not. In JEtna. Ins. Co. vs. Jackson 
 (16 B. Mon., 250) the policy was on "all the articles making up the 
 stock of a pork-house, and all within the building and pertinent thereto." 
 This sweeping description of the contents of a risk like a pork-house 
 was held to override a special clause requiring goods on commission to 
 be insured as such, and to cover everything that could be included in the 
 description, regardless of ownership. " 
 
 It will be seen from these cases how completely the aim of the insurer 
 to restrict the policy to the interests of the party insured may be de- 
 feated in this class of policies by failing to clearly designate the interests 
 which were intended to be covered. Every additional interest which can 
 be loaded on such a policy in case of partial loss, is an added liability for 
 which there was no corresponding increase of premium. Agents will 
 take notice and avoid general and ambiguous terms, as well as blanket 
 forms, in policy-writing. 
 
 MORTGAGES, JUDGMENTS, AND OTHER LIENS. 
 
 A lien of any kind against property, to be insurable, should be specific 
 in its character. An ordinary creditor has no right to insm< the pi op.
 
 53 
 
 erty of a debtor unless he has some special claim upon that particular 
 property as security for the debt, though this claim need not necessarily 
 be a strictly legal lien. 
 
 Ross vs. Merch. Ins. Co., 27 La., 409 ; Rohrbach vs. Germania Ins. Co., 4 Ins. 
 Law Jour., 737. 
 
 But it is safer and better in almost all cases to restrict insurances of this 
 kind to such liens as will follow the property in any attempted transfer 
 of ownership. Such are the liens of factors and commission merchants 
 for advances or charges in connection with goods in their possession, of 
 judgment-creditors, and especially of mortgagees. In all cases of this 
 kind, where the legal title vests in another, the insurance for a creditor 
 should be on " his interest " as mortgagee, etc. The better rule, how- 
 ever, in the case of all liens where the property is not actually in the pos- 
 session of the mortgagee or other lien-holder, is to insure only the legal 
 owner and protect the mortgagee by making the loss payable to him as 
 his interest may appear. Not only is the danger of excessive insurance 
 on the property by two separate interests thus avoided, but another im- 
 portant object is gained. The party insured is the one who is responsible 
 for any violation of the policy-conditions, he is the party with whom the 
 contract is made, and should obviously, if possible, be the one who is in 
 control of the property. 
 
 Sias vs. Ins. Co., 9 Ins. Law Jour., 154, and cases there cited. 
 
 Most important among these liens, and those which have occasioned 
 most controversy in the courts, are mortgage-interests in real estate. The 
 law permits the mortgagor to insure the property to its full value, regardless 
 of incumbrance, and the mortgagee or other lien-holder to insure to the 
 extent of his interest. Indeed, the latter has sometimes been allowed, 
 without stating the nature of his interest, to also insure and recover the full 
 value of the property. It is important, therefore, that all separate insur- 
 ance of mortgagees should be limited to their interest as such. 
 
 Columbian Ins. Co. vs. Lawrence, 10 Pet., 507; Ins. Co. vs. Updegraff, 9 Harris, 513. 
 
 In nearly all the States, however, except Massachusetts, the compa- 
 nies are protected against the ultimate payment of more than the actual 
 amount of damages by the doctrine of subrogation, which allows them to 
 demand an assignment of the lien for their own benefit upon the payment 
 of its full amount to the lien-holder, if the latter is the party insured. 
 
 Kernochen vs. Ins. Co., 17 N. Y., 428 ; ^Etna Ins. Co. vs. Tyler, 16 Wend., 385. 
 
 Where the owner is insured solely for his own benefit without reference 
 to any claims of mortgagees, the latter have no rights in his policy. The 
 former may retain the whole insurance money, though the lien covers the
 
 54 
 
 whole moneyed value of the property. The opportunity thus given for 
 fraud will suggest the propriety of making such policies payable to mort- 
 gagees to the extent of their interest, unless the interest of the owner is 
 largely in excess of the insurance. 
 
 Stearns vs. Ins. Co., 7 Ins. Law Jour., 506, and cases there cited. 
 
 But mortgages usually provide that the mortgagor shall insure for the 
 benefit of the mortgagee, and where such appears to have been the inten- 
 tion of the parties the courts will enforce it. 
 
 Cromwell vs. Ins. Co., 44 N. Y., 42. 
 
 If a policy is simply made payable to a mortgagee or to any other party, 
 without limiting the amount of payment, the party named may be allowed 
 by the court to collect the whole sum, irrespective of interest, leaving the 
 insured to compel a repayment of the excess. Therefore, indorsements 
 of payments to lien-holders should be limited to their interests as such. 
 
 Goodall vs. Ins. Co., 25 N. H., 169. 
 
 The great advantage of policies which thus insure the owner directly, 
 with loss payable to other parties as their interest may appear, is that the 
 owner's interests as well as the others, are protected. Whatever the mort- 
 gagee receives will cancel by so much the mortgage-debt, while the bal- 
 ance goes to the owner. Such is not usually the case where the mort- 
 gagee or lien-holder is the insured party. The owner here has no inter- 
 est. The company, by paying its amount, is entitled to receive and en- 
 force the mortgage against him. 
 
 Parties to whom policies are thus made payable have no other rights 
 under the contract than that of receiving the money, if the company is 
 obligated to pay at all. The insured may surrender the policy, and to 
 prevent this the mortgagee usually keeps the instrument ; or he may 
 render it void by violating its conditions, or the company may elect to 
 replace or repair the property, in which case no moneyed damages are 
 payable. 
 
 Brunswick Savings Inst. vs. Ins. Co., 8 Ins. Law Jour., 120, and cases there cited ; 
 Heilman vs. Ins. Co., 8 Ins. Law Jour., 53; Stamps vs. Ins. Co., 7 Ins. Law Jour., 256. 
 
 To avoid the danger of having the policy avoided by acts of the 
 insured, many mortgagees, especially corporations, insist on what are 
 known as mortgage-clauses being attached to the policies, stipulating in 
 effect that, if thus forfeited as to the interest of the mortgagor, they shall 
 remain valid as to the mortgagee. The effect of such a clause in case of 
 violation by the mortgagor is to convert the policy into a direct insurance 
 of the mortgagee, under a contract wholly independent of the mortgagor. 
 
 Five Cents Savings Bank vs. Ins. Co., 6 Ins. Law Jour., 437 ; Meriden Savings Bank 
 vs. Ins. Co., 12 Ins. Law Jour., 620.
 
 55 
 
 The original insured is thus released from all obligations in respect to 
 the premises. In case of such independent insurance of the mortgagee, 
 the company, upon the payment of the mortgage, is usually subrogated 
 to his rights against the mortgagor. In case of other insurance by the 
 latter, no contribution can be compelled. Replacement can only be 
 effected with the consent of the mortgagor in possession. 
 
 Ulster Savings Inst. vs. Decker, 7 Ins. Law Jour., 859 ; Foster vs. Van Reed, 8 Ins. 
 Law Jour., 201 ; ./Etna Ins. Co. vs. Baker, 10 Ins. Law Jour., 253 ; Bank vs. Ins- 
 Co., 9 Ins. Law Jour., 928. 
 
 Though in practice, where other insurance by the mortgagor exists, 
 the companies are usually able by co-operation to effect a single settle- 
 ment of the loss, either by a single money payment or replacement, the 
 attachment of such mortgage-clauses is strongly objected to by many of 
 them, because they thus release all parties from responsibility for the care 
 of the property or the truthfulness of the representations on which the 
 insurance has been secured. The same objections, of course, attach to 
 insurance directly on the interest of the mortgagee, judgment-creditor, or 
 other lien-holder. In Conn. Fire Ins. Co. vs. Ins. Co. (15 Ins. Law Jour., 
 895) the property was independently insured by the owner, the mortgagee, 
 and the lessee; it was replaced by the insurer of the latter, and the court 
 ruled that no contribution could be collected from the other insurers, 
 since they were on different interests. 
 
 In regard to all clauses stipulating for a payment of the insurance 
 money to another than the party insured, it should be remembered that 
 insurance is in its nature a personal contract, that the question of moral 
 hazard largely enters, and the companies attach no less importance to the 
 parties interested than to the property. For these reasons everything that 
 gives it an impersonal character should be avoided. The law regards 
 such language as "payable to whom it may concern," or "as interest 
 may appear at time of loss, '' without naming a party, or to a party named 
 regardless of interest, somewhat as a check payable to bearer. Any per- 
 son answering the description would be entitled to the money. Where 
 it is possible to do so, therefore, both the particular party and his interest 
 should be stated. 
 
 Wood on Ins., Sec. 282, and cases there cited. 
 
 CAUTION TO AGENTS. 
 
 The caution to agents is repeated to keep within the limits of their 
 authority and the known or presumed usages or rules of their companies. 
 Several of the foregoing pages have been written as a warning against the
 
 56 
 
 classes of risks described rather than as instructions how to write them. 
 In all cases of this sort the safe plan is to correspond with the company, 
 and only act upon specific instructions in each particular case. 
 
 INCIDENTS CONNECTED WITH THE TITLE. 
 CHANGE OF TITLE OR INTEREST.* 
 
 As has been said, a permanent transfer of all his insurable interest by 
 the insured to another party will, of itself, forfeit the policy unless the 
 company also consents to transfer his rights under the policy. Such a 
 transfer by the insured is what is known as an alienation. If the aliena- 
 tion is only temporary, however, and the interest is re-transferred before 
 the loss occurs, the policy will again attach. 
 
 Young vs.- Ins. Co., 14 Gray, 150; Baldwin vs. Ins. Co., 10 Ins. Law Jour., 32; 
 Hitchcock vs. Ins. Co., 26 N. Y., 68. 
 
 But there are many changes in the nature and extent of the interest of 
 the insured which fall short of a complete alienation, which leave him with 
 perhaps only a very limited interest in the property, but yet which would be 
 sufficient in law to sustain an insurance. To protect against such changes, 
 special prohibitions are inserted in policies against any change of title or 
 possession. The thing prohibited by such clauses is the transfer to other 
 parties of the legal rights of the insured, whether in respect to the owner- 
 ship or control. An incumbrance is not a change of title, nor is a mere 
 agreement to sell, if the actual sale has not taken place. So it has been 
 held that involuntary transfers through the action of the law, such as 
 seizure and sale by the sheriff, are not what is intended by the language 
 of the policy, unless specifically included in the prohibition. 
 
 Baldwin vs. Ins. Co., 10 Ins. Law Jour., 32 ; Keeney vs. Ins. Co., 7 Ins. Law Jour., 
 loo ; Browning vs. Ins. Co., 7 Ins. Law Jour., 428 ; Appleton Iron Co. vs. Ins. Co., 
 46 Wis., 23 ; Jackson vs. Ins. Co., 23 Pick., 418 ; Byers vs. Ins. Co., 9 Ins. Law 
 Jour., 743 ; Sherwood vs. Ins. Co., 73 N. Y., 447. 
 
 * NOTE. As a matter of practice the agent should, as far as possible, keep himself 
 advised of all changes of title to or interest in property covered by his policies. When 
 he ascertains that a change has occurred he should do one of two things at once, 
 (l.) If the change brings in a man or men who would be acceptable, persons whom 
 he would insure as readily, and on the same terms, as the original parties, he should 
 promptly make the necessary indorsement on the policy and report the same to the 
 company. (2. ) If, however, the change brings in people whom he would not insure, 
 he should just as promptly cancel the policy and return it to the home office. Scrutiny 
 should also be exercised to ascertain whether such changes indicate adversity, embar- 
 rassment, removal, speculative experiment, or anything else which might result in 
 reduced value of property or increased' moral hazard, and, if these signs should be 
 observed, cancelment should promptly follow.
 
 57 
 
 The effect of a transfer of a part of the insured property has been held 
 by some of the courts to vitiate the whole policy, while by others a dis- 
 tinction has been made between those cases where the insurance is for a 
 single amount on the whole and those where it is apportioned among 
 different items, the policy being still held good as to such items as have 
 not been alienated. So it has been disputed whether a transfer from one 
 partner to another is within the prohibition, where the insurance is to 
 the firm, and the prevailing opinion is that it is not. But where the 
 transfer is made to a new partner, who was not a member of the original 
 firm, the prevailing opinion is that this constitutes a change of title. 
 
 Hinman vs. Ins. Co., 48 Wis., 36 ; Baldwin vs. Ins. Co., supra ; Card vs. Ins. Co., 
 Hine & Nichols' Dig., 74 ; Hoffman vs. Ins. Co., 33 N. Y., 405. 
 
 In all such questions, however, the answer will largely depend on the 
 precise wording of the policy, the court favoring such a construction as 
 will support the insurance if any insurable interest exists. For this reason 
 the prohibition is often extended in the policy to cover all changes which 
 reduce the insurable interest; whether by incumbrance, legal process, or 
 judicial decree, whether in whole or in part, voluntary or involuntary. 
 The safe rule, therefore, for the insured is to make no conveyance or 
 transfer and impose or suffer no lien upon the property, whether volun- 
 tary or involuntary, without duly notifying the company and securing its 
 consent. 
 
 All assignments of policies from one owner to another should be exe- 
 cuted on the regular assignment-blanks furnished for the purpose. The 
 signature should be that of the owner himself, the duty of the agent is 
 limited to indorsing consent. An agent has no more right to transfer 
 a policy from one owner to another by an ex parte indorsement, than to 
 transfer any other contract. His authority is restricted to giving consent 
 for the company. All indorsements, of whatever kind, which he may be 
 called on to make, the agent should sign personally in writing as agent. 
 Another important precaution to be noted in this connection is that pol- 
 icy-forms should never be signed in blank, for they might be surrepti- 
 tiously filled in by other parties and the company made liable. 
 
 INCUMBRANCE. 
 
 The effect of incumb ranees in reducing the interest of the owner is so 
 obvious that the question whether the property is incumbered is one of 
 the most important in the application, and the prohibition against incum- 
 brance one of the most important in the policy. False answers in the 
 one case, and violations in the other, are prominent among the grounds 
 on which loss-payments have been refused by the companies. Any valid
 
 58 
 
 lien which attaches especially against the property, that is, which would 
 follow the property if transferred to another party, should be regarded as 
 an incumbrance, whether it be in the shape of a mortgage, tax-lien, at- 
 tachment, judgment, dower right, mechanics' lien, or any specific legal 
 obligation whatever imposed on the property to respond to the demands 
 of another. This is the safe rule, for it is difficult to determine in some 
 cases just what will be deemed an incumbrance within the policy. The 
 mere rental of property, however, for a term of years, is not treated as an 
 incumbrance. 
 
 Fuller vs. Ins. Co., 4 Ins. Law Jour., 841 ; Baley vs. Ins. Co., 9 Ins. Law Jour., 
 187 ; Redmond vs. Ins. Co., 10 Ins. Law Jour., 287 ; Ohio Ins. Co. vs. Britton, 7 
 Ins. Law Jour., 632 ; Lockwood vs. Ins. Co., II Ins. Law Jour., 40. 
 
 In all cases, therefore, where insurance is applied for, inquiry should 
 be made, not simply whether the property is mortgaged or pledged, but 
 whether other parties are interested, or have claims or rights of any kind 
 in respect to it ; and if it appears doubtful whether a lien or claim would be 
 deemed an incumbrance, let the fact of its existence be stated in the ap- 
 plication and in the policy, if called for. The validity of the policy will 
 be governed, not by what the applicant may think to be an incumbrance, 
 but what the law so regards. If more than one incumbrance exists, all 
 should be stated, together with their character and the amount of each. 
 Let the company be the judge of their importance. Failures in this re- 
 spect have been the cause of repeated forfeitures. 
 
 Lowell vs. Ins. Co., 8 Cush., 127 ; Masters vs. Ins. Co., II Barb., 624 ; Wilbur vs. 
 Ins. Co., 10 Cush., 446. 
 
 If no stipulation is made regarding subsequent incumbrances, an in- 
 cumbrance imposed on the property after the insurance has been granted 
 will not affect the validity of the policy. But the policy generally provides 
 that it shall be void, also, in the case of subsequent incumbrance without 
 consent first obtained from the company. Such knowledge and consent, 
 therefore, are as important in this case as before. The courts uniformly 
 hold that in either case a concealment of the facts by the insured, when 
 thus called for by the application or policy, will vitiate the insurance. 
 
 Redmond vs. Ins. Co., 10 Ins. Law Jour., 287, and cases there cited ; Supple vs. 
 Ins. Co., II Ins. Law Jour., 782 ; Indiana Ins. Co. vs. Brehm, 12 Ins. Law Jour., 
 607, and cases there cited ; Ellis vs. Ins. Co., 12 Ins. Law Jour., 895. 
 
 While, as has been said, an incumbrance is not of itself a change of 
 title, it frequently results in such change, or even complete alienation, 
 through foreclosure. The company, therefore, should be promptly noti- 
 fied of foreclosure or any other legal proceedings, such as insolvency, 
 calculated to affect the ownership.
 
 59 
 
 Keeney vs. Ins. Co., 7 Ins. Law Jour., 100 ; Strong vs. Ins. Co., 10 Pick., 40; 
 Ayres vs. Ins. Co., 17 Iowa, 180. 
 
 The death of the insured has also in some cases been held to be a 
 change of title and a ground of forfeiture, though policies are usually 
 good to the heirs. So the dissolution of a partnership may terminate a 
 policy to partners. The company should consequently be notified in 
 either case, and proper indorsements secured if it should appear desirable 
 to continue the insurance. 
 
 Keeney vs. Ins. Co., 3 T. & C., 478 ; Dreher vs. Ins. Co., 18 Mo., 128 ; Burbank 
 vs. Ins. Co., 24 N. H., 550 ; Lappin vs. Ins. Co., 58 Barb., 325. 
 
 Another important point regarding changes in the interest of the in- 
 sured, whether affecting his title or in the shape of incumbrances, is that 
 unless the agent is on his guard a renewal of the insurance where such 
 changes are known by the agent may result in waiving the forfeiture of 
 the policy. 
 
 Hay vs. Ins. Co., 8 Ins. Law Jour., 633 ; Aurora Ins. Co. vs. Kranich, 6 Ins. Law 
 Jour., 676. 
 
 The law regards all incumbrances which seriously affect the moneyed 
 interest of the insured in the property as of vital importance, and any 
 failure to correctly state such facts as are called for is prima facie evi- 
 dence of bad faith. A man may be. ignorant of law and thus state inac- 
 curately the nature of his title, and the law will look leniently on such 
 cases ; but a failure to disclose a lien which seriously reduces the value of 
 the property to him is looked on as a plain breach of faith. 
 
 The practical point to the agent in all this detail is to show him how 
 easily a company may become involved in difficulty through his ignor- 
 ance or inadvertance, and to emphasize the well-known rules of the best 
 companies to keep off or to get off from property which is too heavily 
 mortgaged, to drop men who get into embarrassed and desperate cir- 
 cumstances, and to avoid complicated ownerships ; all these things tend 
 toward incendiarism and fraud, and are productive of loss to the com- 
 panies. 
 
 VALUATION OF INSURED PROPERTY. 
 
 Under the ordinary open policy the amount to be recovered in case 
 of loss is always limited in law to the measure of actual damages, no 
 matter how much may be insured, except in those States where the 
 valued-policy law is in force. But in spite of this legal limitation, and 
 in spite of the fact that the company may, by replacement, protect 
 itself against attempted extortion, the opportunities for concealment and
 
 6o 
 
 fraud are so numerous, and the difficulty of securing a fair estimate 
 of the damage after a loss has often proved so great, that overinsurance 
 has become the recognized bane of the business, and is a danger 
 against which the agent should ever be on his guard. Wherever the 
 valued-policy law exists, the sum insured in case of total loss becomes 
 the measure of liability, no matter what the actual value of the building 
 may be, nor what stipulations to the contrary may be made between the 
 parties. 
 
 Queen Ins. Co. vs. Ice Co., 15 Ins. Law Jour., 109 ; Reilly vs. Ins. Co., 7 Ins. Law 
 Jour., 391, and cases there cited. 
 
 Under this law a peculiar responsibility rests upon the agent Negli- 
 gence on his part in permitting excessive insurance may impose an 
 excessive loss upon his company, of which judicial cognizance could be 
 taken as it could not ordinarily be where the law limits recovery to the 
 actual amount lost, and there is no sound reason in such a case why 
 the agent could not be compelled to respond to his company in dam- 
 ages. In the absence of such a law, the injury which may be done is 
 not confined to the risk of assessing excessive damages, but may pre- 
 vent the company from taking advantage of a manifest attempt at fraud. 
 This was illustrated in the case of Dupree vs. Ins. Co. (14 Ins. Law 
 Jour., 57). It was claimed that the insured had forfeited all right of 
 recovery by fixing a knowingly false and fraudulent value in the applica- 
 tion ; the answer was, that the property had been examined and valued 
 by the agent, and the answer was justified by the court. 
 
 A fraudulent overvaluation of his property by the insured when apply- 
 ing for insurance will forfeit the policy if it can be conclusively proved, 
 and a grossly excessive valuation will be treated as evidence tending to 
 prove a fraud. But the mere fact of the valuation being thus excessive 
 will not, as a matter of law, be treated as conclusively fraudulent, though 
 under special stipulations in the contract, the simple fact of a gross excess 
 has been allowed to defeat the policy. While, therefore, dishonesty is 
 discouraged by the law, the latter must not be depended on to prevent it 
 
 Franklin Ins. Co. vs. Vaughan, 2 Otto, 516 ; Sidney vs. Ins. Co., 8 Ins. Law Jour., 
 461 ; Citizens' Ins. Co. vs. Short, 8 Ins. Law Jour., 126 ; Boutelle vs. Ins. Co., 7 Ins. 
 Law Jour., 781. 
 
 The agent's judgment as to values for insurance purposes should be 
 governed by the same commercial principles which the law applies in 
 case of loss. This is in all cases the cash value at the time and place ; 
 that is, the amount of cash down which would be the commercial 
 equivalent of the property. The meaning of this term will be more 
 clearly understood when it is contrasted with what is not a correct meas-
 
 6i 
 
 ure of value. It is not what the thing may be worth to the owner, but 
 what others would give for it. This was well illustrated in the case of 
 Niblo vs. Ins. Co. (i Sandf., 551), where the insurance was on a lease- 
 hold interest in which by reason of the circumstances the insured had a 
 special interest, but the court held that the true question was, ' ' How 
 much would a stranger, having no contracts pending, have given for the 
 unexpired lease ?" The cost of replacing the subject of insurance should 
 rarely be regarded as a correct measure 9f value. Ordinarily, this 
 involves the substitution of new for old, which would manifestly be 
 unjust. Frequently it involves the replacement of a subject whose com- 
 mercial value would not equal the cost of producing it. An antiquated 
 machine might be very complicated, and require a heavy outlay to 
 reproduce, whereas the introduction of a newer and cheaper substitute or 
 a change in the method of manufacturing may have rendered it of little 
 value. Manufactured articles may have been expensive to create, but 
 something newer has taken their place, their commercial value has gone. 
 For these reasons the cost of reproduction or replacement is seldom rec- 
 ognized by the courts as of itself a fair test of value. 
 
 Hoffman vs. Ins. Co., I La. An., 216 ; JEtn& Ins. Co. vs. Johnson, n Bush., 
 587 ; Commercial Ins. Co. vs. Sennett, 37 Penn. St., 205 ; Carson vs. Ins. Co., 
 2 Wash., 468. 
 
 When the subject of insurance is of a kind that has a ready market- 
 sale, as in the case of ordinary merchandise, the cash market-value is the 
 legal value. But here again the agent must be on his guard. The 
 retail price of merchandise in stock is by no means what insurers nor 
 even the courts in all cases regard as its value. That price includes the 
 profit of the seller, which is no part of the subject of insurance. The 
 question is, what are they worth as a whole, and in the place where they 
 are to parties wishing to purchase ? In the case of manufacturers and 
 others as well, the question should be narrowed down still farther; 
 they may be able to replace the stock at less than an outsider would be 
 willing to give for it, so that here the legal rule would allow an insur- 
 ance of profits. For insurance purposes, therefore, the value should 
 never be regarded as more than the actual cost to the insured of replace- 
 ment. And since the companies are rarely willing to insure the full 
 estimated value, and since the value, too, is likely to be depreciated, this 
 figure should be taken simply as a gauge from which a proper reduction 
 is to be made. In the case of property which may have a ready sale, but 
 is not of a merchantable character, such as household goods, the safe rule 
 is to treat it as worth no more than it would bring at auction. 
 
 Marchesseau vs, Ins. Co., I Rob., La., 438; Hercules Ins. Co. vs. Hunter, 14 C. C.
 
 62 
 
 S., 1,137 ; Fowler vs. Ins Co., 6 Ins. Law Jour., 432 ; Murphrey vs. Ins. Co., 5 Ins. 
 Law* Jour., 297. 
 
 Buildings having no ready sale, and being of little value apart from the 
 land on which they stand, are subject to a different rule. The law esti- 
 mates the value of a building on the same principle as does a purchaser 
 who first fixes on what the ground is worth, and then how much in addition 
 should be allowed for the building. Its age, utility, general condition, 
 and cost of construction or replacement, may all furnish aid towards 
 framing a judgment, but its cost or the cost of replacement is by no 
 means the correct measure of its worth. 
 
 Brinley vs. Ins. Co., II Met., 195 ; yEtna Ins. Co. vs. Johnson, ante. 
 
 In practice this legal rule has been found to be extremely favorable to 
 the insured, allowing damages to be assessed by a jury without any fixed 
 basis, and often in fact computed on the cost of restoring. The law has 
 refused, also, to recognize the fact that a building whose speedy removal 
 is compelled, or whose restoration, if damaged, the law will not permit, 
 is on that account any the less valuable, though it may be practically 
 worthless. , 
 
 Bayly vs. Ins. Co., 4 Ins. Law Jour., 503 ; Collingridge vs. Royal Exchange, 
 Q. B. L. R., 3 Q. B. D. ; Brady __ vs. Ins. Co., II Mich., 425 ; Brown vs. Ins. Co., 
 I E. & E., 853. 
 
 The legal rule as to buildings, therefore, is not always a safe guide for 
 the agent, even as a standard from which to estimate, since it sometimes 
 enables the insured to dispose of his property to the company at a 
 fictitious price, or rid himself of property otherwise unsalable. In addi- 
 tion to the actual worth as commonly estimated, the agent should closely 
 scan the rental value and treat with the utmost caution buildings that 
 are unprofitable, liable to removal, or which if seriously damaged 
 could not be repaired on account of building laws. All such should 
 be insured for much less than what would otherwise be their apparent 
 worth, or should be declined in toto. The safe rule, aside from all 
 legalties, is to insure only such property as is valuable to the owner, 
 and then never to insure it for such an amount or in such a manner 
 as to render the insurance of more value than the property. 
 
 OTHER INSURANCE. 
 
 The same reasons which lead the companies to restrict the amount of 
 insurance which they are willing to grant upon property, lead them also 
 to insist that additional insurance shall not be taken out in other com- 
 panies, without their consent The policy-prohibition against other in-
 
 63 
 
 surance is grounded upon the danger of overinsuramce and consequent 
 fraud. There is another important reason, too, for this requirement. In 
 case of loss the contributing liability of each insurer is affected by the 
 conditions as well as amounts of other policies, and since additional in- 
 surance to a limited amount may frequently be an advantage by reduc- 
 ing the liability, a stipulation that a certain amount of insurance shall 
 be maintained is also sometimes added. The force of these reasons is 
 fully recognized by the courts, and a violation of the stipulations regard- 
 ing other insurance, unless waived, will result in the penalty being en- 
 forced, which is generally forfeiture. 
 
 Kennedy vs. Ins. Co., 6 Ins. Law Jour., 359; Behler vs. Ins. Co., 9 Ins. Law Jour., 
 798; Phoenix Ins. Co. vs. Stevenson, 8 Ins. Law Jour., 922; Pitney vs. Ins. Co., 4 Ins. 
 Law Jour., 765. 
 
 Every insurance, however, on the same property is not recognized by 
 the courts as other insurance, and the object aimed at by the companies 
 is thus often defeated. Not only must the insurance cover the same sub- 
 ject-matter, but the same interest. In the case of City Savings Bank vs. 
 Ins. Co. (6 Ins. Law Jour., 437) the property was insured by the 
 owner, and afterwards a mortgagee obtained insurance independently on 
 his own interest. This was held not to be other insurance within the 
 meaning of the first policy, it was on a wholly different interest So, in 
 Wheeler vs. Ins. Co. (loins. Law Jour., 354), a policy for his benefit 
 was taken out by the owner of the property, and another policy was 
 secured independently by the mortgagee. This was declared not to be a 
 case of other insurance. The policies were on separate interests. 
 
 See also Jackson vs. Ins. Co., 23 Pick., 418; Thomas vs. Ins. Co., 119 Mass., 12 1 ; 
 Harris vs. Ins. Co., 5 Ohio, 467. Also what is said ante concerning mortgage in- 
 terests. 
 
 But the mere fact that one of the policies is payable to another party, 
 will not amount to separate interests if the interest and the party insured 
 are the same. In Pitney vs. Ins. Co. (4 Ins. Law Jour., 765) the owner, 
 who held a policy payable to himself, afterwards procured another, pay- 
 able as interest should appear to another. This was not insurance of a 
 separate interest, and was held to be a violation. 
 
 Again, it is not always easy to determine whether the double insurance 
 is strictly on the same subject-matter where the policies are not concur- 
 rent, and the courts are not agreed how far non-concurrency will affect 
 the question. In Sloat vs. Ins. Co. (49 Pa. St., 14) one policy covered 
 the building, while another covered the building, machinery, tools, etc., 
 and it was held not to be a case of fatal double insurance within the 
 policy. So, in Bait. Ins. Co. vs. Loney (20 Md., 20), a policy on mer-
 
 6 4 
 
 chants' goods and another on his own goods and those held on commis- 
 sion were held not to be double insurances. On the other hand, in 
 Walton vs. Ins. Co. (2 Rob., La., 563), goods which were insured in 
 one store were afterwards removed to another, in which was a stock of 
 goods whose insurance under another policy was by its terms extended 
 to the added stock ; this was held to be a double insurance. In Ramsay 
 Co. vs. Ins. Co. (n U. C., Q. B., 516) one policy insured on building 
 and machinery, and the other on these and the stock. This was held 
 to be a double insurance. In short, it may be said that strict concur- 
 rency is not always essential to constitute other insurance, a partial con- 
 currency may be enough to violate the condition. 
 
 Another and the principal legal difficulty in deciding whether there 
 has been other insurance, arises from the existence of similar or nearly 
 similar clauses in both policies, making them void in such case. Here, 
 again, the decisions have been conflicting. In some cases it has been 
 held that where the one policy is rendered void by the procurement of 
 another in violation of its terms, there is no other insurance within the 
 meaning of the second policy. In other cases, however, it has been held 
 that the first policy was not actually void, but only voidable; that other 
 insurance therefore existed ; and where the policy expressly forbids 
 other insurance even though void, such other insurance will work a for- 
 feiture. 
 
 Phoenix Ins. Co. vs. Lamar, 15 Ins. Law Jour., 686 ; Stevenson vs. Ins. Co., 14 
 Ins. Law Jour., 65; Behrens vs. Ins. Co., 13 Ins. Law Jour., 492; Gee vs. Ins. Co., 4 
 Ins. Law Jour., 489; Southerland vs. Ins. Co., 8 Ins. Law Jour., 181, and cases 
 there cited. 
 
 The clear intention of the underwriters has in these various ways re- 
 peatedly been defeated by the coiirts. Attention should be directed, there- 
 fore, not simply to the question whether there is other insurance beyond 
 a legal quibble, but whether the property is covered either in whole or 
 in part by another policy, no matter in whose interest it may be issued. 
 As has been already noted, one of the chief objections to the insurance 
 of merely equitable and limited interests, such as those of a mortgagee, 
 arises from the probability of other insurance, which cannot be com- 
 pelled to contribute in case of loss. Another precaution which should 
 be observed, is that in case of other insurance the policies should be 
 made as nearly as possible concurrent, that is, one policy should not be 
 made general or floating as to two or more items where the other insures 
 specific sums en each, a matter which is explained more fully under 
 "Concurrency in Writing." 
 
 But the misconduct, or alleged misconduct, of the agent, more than 
 any other cause, has been instrumental in defeating the prohibition
 
 65 
 
 against other insurance, through his waiver of the stipulation. The pol- 
 icy usually stipulates for notice and the indorsement of a written consent 
 in case of other insurance. But notice is generally received and the 
 indorsement made by an authorized agent. Unless there be some ex- 
 press provision in the policy to the contrary, the law regards the agent 
 who is authorized to write the policy as the proper party to give the 
 consent, and his verbal acquiescence, or even knowledge at the time of 
 contracting, has repeatedly been treated as a waiver of the written in- 
 dorsement. In New Orleans Ass'n vs. Griffen (15 Ins. Law Jour., 303) 
 verbal consent of such an agent, with knowledge that it would be acted 
 on, was held to be a waiver. In Kitchen vs. Ins. Co. (14 Ins. Law 
 Jour., 594) and in Security Ins. Co. vs. Fay (22 Mich., 467) it was 
 held that the acquiescence of the mere solicitor in the obtaining of other 
 insurance was sufficient under the circumstances to estop the company 
 from setting up the policy-violation ; and while the ordinary rule re- 
 quires the agent to be one authorized to grant insurances, these cases 
 serve to show the dangerous results which may flow from the conduct, 
 even of a solicitor, where the application itself contains no provision on 
 the subject. Ordinarily, notice of other insurance to a solicitor is not 
 notice to the company. 
 
 Heath vs. Ins. Co., 58 N. H. See also Collins vs. Ins. Co., 8 Ins.Law Jour., 453; 
 Roberts vs. Ins. Co., 6 Ins. Law Jour., 248; Westchester Ins. Co. vs. Earle, 5 Ins. 
 Law Jour. , 61 ; Pechner vs. Ins. Co., 4 Ins. Law Jour., 782, and cases there cited. 
 
 The agent, therefore, cannot be too careful when he has knowledge of 
 other insurance, either subsisting or intended. Mere silence or inaction 
 on his part may serve to defeat the policy-provision. The insured 
 should be promptly informed that consent must be indorsed, and until 
 the indorsement is made, the consent should be withheld. 
 
 Schenck vs. Ins. Co., 24 N. J., 447; Hayward vs. Ins. Co., 2 Ins. Law Jour., 503; 
 Viele vs. Ins. Co., 26 Iowa, 55. 
 
 One class of cases in this connection calls for a separate notice. The 
 agent frequently acts for more than one company, and distributes the 
 risk among them, or, when it is objected to by one, cancels the policy 
 and places it in another. Failure to act in accordance with strict busi- 
 ness principles under such circumstances has occasioned no little liti- 
 gation. From the very nature of the case, the agent has knowledge of 
 the other insurance in respect to each policy, and a failure to indorse it 
 will not defeat the contract, though the applicant neglects on his part to 
 mention the -fact in his application. 
 
 Brandup vs. Ins. Co., 10 Ins. Law Jour., 228, and cases there cited.
 
 66 
 
 So, in regard to cancellation and transfer of the risk, the agent should 
 remember that even though free to elect the company in the first place, 
 after having once elected and made a binding contract in one, he is not 
 thereafter free to shift the risk to another, except in the manner stipu- 
 lated in the contract by due notice to the insured and cancellation of 
 the first policy, and when so canceled and the consent of the insured ob- 
 tained, it should be promptly bound in the second company. 
 
 Poor vs. Ins. Co., 9 Ins. Law Jour., 428; yEtna Ins. Co. vs. Maguire, 51 111., 342. 
 
 VACANCY. 
 
 Few questions have occasioned more controversy in the courts than 
 vacancy. All policies expressly stipulate against it. In the case of special 
 hazards particular inquiries are usually made on this subject. The reason 
 is obvious. Vacant buildings have always furnished the strongest tempta- 
 tion for the malicious incendiary's torch. A violation of the policy-pro- 
 vision against vacancy is uniformly admitted to be a breach of contract 
 which will work a forfeiture ; the vital question has been as to what con- 
 stituted such vacancy. Often the premises are described as "occupied 
 as a residence" or " occupied by tenants." Such statements, while they 
 must be true as regards existing conditions, are not in themselves war- 
 ranties that the occupancy shall continue, and should never be relied'on 
 for that purpose. 
 
 Hartford Ins. Co. vs. Smith, 7 Ins. Law Jour., 140 ; Woodruff vs. Ins. Co., loins. 
 Law Jour., 125 ; Imperial Ins. Co. vs. Kiernan, 15 Ins. Law Jour., 352. 
 
 Every temporary non-occupancy of a building or of insured premises 
 is not regarded as a vacancy by the courts. The question depends upon 
 the language of the prohibition and the character of the risk, as well as 
 the extent and duration of the abandonment. Thus in Cummings vs. 
 Ins. Co. (6 Ins. Law Jour., 135) a distinction was made between an or- 
 dinary provision against vacancy and one that provided against a vacancy 
 by the removal of the occupant, which latter referred only to a permanent 
 abandonment. A dwelling is assumed to be continuously occupied as a 
 place of residence. When it fails to comply with this description, it is 
 vacant. Frequently the house is closed for a longer or shorter time, 
 through the temporary absence of the family for a brief sojourn else- 
 where ; the courts will not always regard such absences as a policy-viola- 
 tion, especially if a servant remains on the premises. But any prolonged 
 absence and closing of a dwelling is liable to be fatal to the insurance. 
 The mere fact of occasional visits or of a general supervision by some 
 person in the neighborhood is not sufficient. All cases where a residence 
 is thus vacated for any length of time should be treated as a case of va-
 
 6 7 
 
 cancy for which consent must be obtained. Thus in Ins. Co. vs. Race 
 (15 Ins. Law Jour., 633) it appeared that while the owner was tempo- 
 rarily absent his wife abandoned the dwelling and himself. It appeared 
 that the house was frequently visited by members of the family for the 
 purpose of looking after the furniture, and a servant generally slept there 
 at night, but there were no fires lighted nor any of the usual signs of oc- 
 cupancy. This was held by the court to be a violation of the policy. 
 So in Herman vs. Ins. Co. (10 Ins. Law Jour., 743) a summer residence, 
 which was annually occupied during the season, was looked after by a servant 
 and his family, who lived in an adjacent house on the same grounds, but it 
 was held to be vacant within the policy. In Ins. Co. vs. Padfield (78 111., 
 167) the court said with regard to this condition : "A fair and reasonable 
 construction of the language vacant and unoccupied is that it should be 
 without an occupant, without any person living in it ; not technical oc- 
 cupation, but as popularly understood and used." The mere presence 
 of furniture, therefore, coupled with a general oversight, should not be 
 regarded as an occupancy in case of a building used for dwelling pur- 
 poses. 
 
 The question of vacancy in this class of risks is most likely to arise 
 through an abandonment by the tenant or a change of tenancy, when an 
 interval longer or shorter is apt to occur during which the property is not 
 occupied. There is considerable disagreement between the courts as to 
 the effect of such changes and removals. Where the property is known 
 to be used for renting, and where the owner is ignorant of the abandon- 
 ment, they are disposed to be more lenient. The language of the policy, 
 too, will have much to do in deciding the question. A provision that it 
 shall not be and remain unoccupied would be looked on as excusing 
 such a brief vacancy as was incidental to a change of tenants. A pro- 
 vision, on the contrary, restricting the vacancy to five days would be re- 
 garded as absolute. The safe and proper rule is to regard the property 
 as vacant the moment it ceases to be occupied by parties living on the 
 premises, no matter how brief the non-occupancy. The fact that another 
 tenant is preparing to occupy, or that an effort is being made to secure 
 such a tenant, or even that a portion of the furniture has been placed in 
 the house, should not be regarded as an occupancy. Thus in American 
 Ins. Co. vs. Padfield (4 Ins. Law Jour., 893) the tenant had left, but a 
 few articles of furniture remained, and it was held that mere legal pos- 
 session was not occupancy. In ^Etna Ins. Co. vs. Meyer (8 Ins. Law 
 Jour., 249) the tenants had left four days previous, but others were to move 
 in as soon as repairs were completed. But it was held that even a tempo- 
 rary vacancy forfeited the policy. In Dennison vs. Ins. Co. (9 Ins. Law
 
 68 
 
 Jour., 65) a tenant, whose lease had not expired, moved out about two 
 weeks before the fire ; and in McClure vs. Ins. Co. the tenant had moved 
 without the knowledge of the insured, who, immediately upon learning 
 of the fact, sought to secure another tenant, but in neither case was the 
 vacancy held to be excused. In Bennett vs. Ins. Co. (12 Ins. Law Jour., 
 569) the tenant had moved out only two hours before the fire, but it was held 
 to be a case of vacancy. In other cases the courts have been more liberal. 
 
 See also Cook vs. Ins. Co., 9 Ins. Law Jour., 887 ; Kelley vs. Ins. Co., 5 Ins. Law 
 Jour., 134 ; Cummins vs. Ins. Co., 6 Ins. Law Jour., 135. 
 
 On the other hand, if the risk is of a character which involves only the 
 presence of persons at stated times or intervals, or only an occasional 
 employment for special purposes, the term occupancy has a very dif- 
 ferent meaning. Such a building is occupied while in a general sense 
 in use in the manner contemplated. A barn intended simply for stor- 
 ing grain in winter, or a smoke-house for curing at certain seasons, 
 is not vacant because it is not in active use at another season of 
 the year. But it is obvious that the mere term "barn" would not 
 suggest to the underwriter such an occasional use ; therefore, all risks 
 of this character, whose names do not import technical vacancies, should 
 be particularly described as occupied only in such a way. In Ashworth 
 vs. Ins. Co. (112 Mass., 423) the insurance was on a dwelling and a 
 barn on the premises, and the court said that occupancy as applied to 
 such buildings implies such use of the barn as is ordinarily incident 
 to a barn belonging to an occupied house, or at least something more 
 than for mere storage. In a recent case before the Supreme Ccrurt of 
 Iowa, the subject of insurance was a hog-house, which had not been 
 used for that purpose, however, for some time. The owner lived in 
 his house near by, and it did not appear that there had been any 
 actual abandonment of the use. The court held that there was 
 no vacancy, though the fact that it was temporarily unused probably 
 increased the risk. In Williams vs. Ins. Co. (14 Ins. Law Jour. , 708) 
 an elevator had been sold under foreclosure, the property was idle at 
 the time of fire, but for years it had only been used at irregular inter- 
 vals, but men were around there all the time, and there was no evi- 
 dence of an intention to abandon its use as an elevator. Under these 
 circumstances the court held that it was not vacant In both of these 
 latter c&ses dispute would have been obviated had the company been 
 informed concerning the real character of the occupancy. 
 
 Factories more than any other class of risks except dwellings, have 
 occasioned disputes as to what constitutes occupancy. During seasons 
 of dull times, strikes, or on account of financial embarrassments, active
 
 69 
 
 work is likely to be suspended for a longer or shorter time. Often 
 such suspensions are of a character that amounts to at least a tem- 
 porary abandonment of the care and oversight of the premises, pro- 
 ducing, so far as the underwriter is concerned, all the evils of a 
 permanent abandonment. Hence, stipulations are frequently incorpo- 
 rated in the policy, involving forfeiture if it ceases to be operated for 
 more than a specified number of days, and in such case, of course, a 
 violation will incur the penalty. But when no such express limitation is 
 made, if the temporary non-use of premises is such as might be regarded 
 as a natural incident of the business, the courts are apt to regard it 
 with leniency. Thus in Whitney vs. Ins. Co. (7 Ins. Law Jour., 477) 
 through, the breaking of machinery and other causes work in a saw- 
 mill had been interrupted at intervals for several months, and no 
 work had been done for sixteen days before the fire, but the lumber 
 was on hand to continue the business, and k was held to be no vacancy. 
 The court said : ' ' Occupation of a dwelling-house is living in it. 
 But people do not live in a saw-mill. In Keith vs. Ins. Co. (10 Allen, 
 531) the plaintiff closed up a trip-hammer shop, and it was held to 
 be vacant. A shop of that kind ordinarily has people working in it 
 on every working day. A saw-mill is different. If a custom mill, it 
 must depend on the logs brought to it for business. In any case 
 when driven by water-power it must rely on the supply of water, and 
 must be idle when that fails." In the case of Keith referred to, the 
 shop had not been actively used for more than thirty days, but the 
 tools were all there and it was visited every day to see that all was 
 right. Yet this was not occupancy. Again, in American Ins. Co. vs. 
 Foster (9 Ins. Law Jour., 268), property insured as a school-house was 
 afterwards abandoned for that purpose and used as a dwelling, and it 
 was held that the utmost which could be claimed under the policy 
 was a brief temporary vacancy, such as is usual in school-houses. 
 Neither as a dwelling nor school could a vacancy of several months 
 be allowed. 
 
 It will thus be seen that in case of those risks which are ^ised only 
 for business or manufacturing purposes, the safe rule requires that any 
 prolonged non-use, which is not an ordinary incident of the hazard, 
 should be treated as a vacancy for which consent must be obtained. 
 The ordinary stipulation regarding occupancy has been held to refer 
 simply to insurances on a building, but where personal property only 
 is the subject, it is obvious that vacancy may sometimes be equally im- 
 portant. Therefore, in such case, it is safer to stipulate against the 
 premises containing the insured property becoming vacant. 
 
 Carr vs. Ins. Cos., 13 Ins. Law Jour., 443.
 
 70 
 PROHIBITED RISKS. 
 
 All policies expressly prohibit the keeping or storing on the premises 
 of certain articles which experience has shown to be incendiary in 
 their character, like gunpowder and explosive oils, and a violation will 
 forfeit the insurance. But it frequently happens that the nature of the 
 risk, or the ordinary method of using the property, is such as to involve 
 to some extent the presence of the prohibited article. The sale of coal- 
 oils and gunpowder is often a part of the regular business of a store- 
 keeper, the use of naphtha or benzine may be an essential part of a 
 business, or the keeping of a limited amount of kerosene necessary for 
 lighting the dwelling. Hence, numerous disputes have arisen as to 
 how the prohibition must be interpreted in those cases where the written 
 description of the risk itself might seem to imply a consent to keep the 
 forbidden article ; hence, too, the importance of particular inquiries by 
 the agent in all cases where there is reason to suppose that a prohibited 
 article may be innocently used or kep 
 
 The mere presence in minute quantities of a forbidden article is not 
 necessarily a violation. The amount must be sufficient to violate the 
 spirit of the prohibition. Just what is such an amount is a difficult 
 question to determine. In Wheeler vs. Ins. Co. (8 Ins. Law Jour., 
 318) it was held, that keeping a burning-fluid in the limited quantity 
 needed for filling lamps was not a violation, where its use for light was 
 not expressly prohibited. In Hears vs. Ins. Co. (9 Ins. Law Jour., 
 139) the bringing of a small quantity of benzine on the premises on a 
 single occasion for cleaning machinery was not a violation. In Bayly vs. 
 Ins. Co. (4 Ins. Law Jour., 503) a small quantity of saltpetre kept to- 
 cure meat in a store was held not to be sufficient in amount to be a sub- 
 stantial violation. In Winans vs. Ins. Co. (5 Ins. Law Jour., 203) and 
 in Bennett vs. Ins. Co. (9 Ins. Law Jour., 585) the knowledge of the 
 agent that coal-oils were used for lighting excused the violation. On 
 the other hand, in Matson vs. Ins. Co. the use of kerosene for lighting 
 where expressly prohibited, and in Wheeler vs. Ins. Co. (12 Ins. Law 
 Jour., 8jfy) a barrel of naphtha brought to a mill for destroying moths, 
 were both held to be violations. It will thus be seen that the presence of 
 a prohibited article, even in limited quantities, is liable to be a ground of 
 dispute and may result in forfeiture. If known by the agent, he should 
 charge a rate commensurate with the hazard and give consent for its 
 use, or he should decline the risk, as the case might be. 
 
 It frequently happens that inflammables of the same general character 
 and equally dangerous are used, but which are somewhat different in 
 their composition from those forbidden, or they are kept on the premises
 
 a short distance away. Thus in Sperry vs. Ins. Co. (15 Ins. Law Jour., 
 270) dynamite was kept, this was held to be a violation of the provision 
 against nitro-glycerine. On the other hand, in Mosely vs. Ins. Co. (13 
 Ins. Law Jour., 97) it was left to a jury to say whether turpentine was an 
 explosive, and in Willis vs. Ins. Co. (8 Ins. Law Jour., 449) whether 
 alcohol was an explosive. In Carlin vs. Ins. Co. (12 Ins. Law Jour., 
 388) the petroleum was kept in an adjoining engine-room, and there- 
 fore was held not to be on the premises. In Hicks vs. Ins. Co. (8 Ins. 
 Law Jour., 320) it was left for a jury to say whether mineral sperm-oil 
 was included in a provision against kerosene. In all these cases the 
 spirit of the prohibition was violated, if not the letter. 
 
 See also Bennett vs. Ins. Co., 9 Ins. Law Jour., 585 ; Mears vs. Ins. Co., 8 Ins. Law 
 Jour., 139. 
 
 But the cases most frequently before the courts and requiring the most 
 careful inquiry by the agent, are those where a prohibited article is kept 
 as a part of a regular stock-in-trade. Country store-keepers are especially 
 apt to deal in dangerous combustibles and explosives. Sometimes the 
 language of the policy is so explicit that a forfeiture is the result, but in 
 many cases the description of the property as " his stock as a country 
 store-keeper," has been held to amount to a tacit consent to keep such 
 articles. In Wheeler vs. Ins. Co. (15 Ins. Law Jour., 184), it was held 
 that insurance on a woolen-mill implies a knowledge that naphtha was 
 necessarily used in the business. In Collins vs. Ins. Co. (8 Ins. Law 
 Jour., 453) the presence of saltpetre was excused because it was an 
 article usually kept in drug-stores. But in Portsmouth Ins. Co. vs. 
 Brinckley (2lns. Law Jour., 842), in Whitmarshvs. Ins. Co.(2 Allen, 581), 
 and in Steinbach vs. Ins. Co. (13 Wai., 183) the courts refused to recognize 
 this doctrine, and insisted that a distinct, printed prohibition could not 
 be overcome by insuring in general terms a line of goods which might 
 by custom contain the forbidden article. The last-named case was in the 
 United States Supreme Court, and it was there held that an insurance on 
 fire-crackers and "other articles in his line of business" would not cover 
 a forbidden article even so closely allied as fire-works. 
 
 In all cases, therefore, where prohibited articles are included among 
 the subjects of insurance, special consent should be obtained and paid 
 for, or the insured should be notified that their presence is likely to forfeit 
 the insurance. The use of gas-machines within or too near premises, con- 
 trary to provisions in the policy, has been a frequent source of litigation, 
 and should be carefully looked after. 
 
 Winans vs. Ins. Co., 5 Ins. Law Jour., 203 ; Arkell vs. Ins. Co., 6 Ins. Law Jour., 
 251; N. W. Mut. Life Ins. Co. vs. Ins. Co., 40 Wis., 446.
 
 72 
 
 ALTERATIONS AND REPAIRS. 
 
 Trifling repairs from time to time are essential to the preservation of 
 the property, they are incidental to the risk, and the courts regard the 
 insured as entitled to make them without the company's consent, so long 
 as they are only such ordinary repairs as are needed to every building. 
 Tinners may repair a leaky roof, plumbers may stop leaks or remove ob- 
 structions in pipes, and painters may renew the paint, though the tools 
 employed by each slightly increase the hazard for the time being. 
 
 Townsend vs. Ins. Co., 18 N. Y., 168; Ottawa Co. vs. Ins. Co., 28U.C. Q. B., 518; 
 Dom vs. Ins. Co., 5 Ins. Law Jour., 183; James vs. Ins. Co., 4 Ins. Law Jour., 9; 
 O'Neil vs. Ins. Co., 3 N. Y., 122. 
 
 But it is important to note that such repairing must be restricted to 
 that which is ordinary and of no great magnitude. The moment these 
 operations become extensive in their character, even though they are 
 necessary, the insurer has a right to object on account of the increase of 
 risk which the policy prohibits. Even in the absence of a distinct pro- 
 hibition against repairs, if it can be shown that the risk was materially in- 
 creased thereby, forfeiture may result, especially if a loss can be traced to 
 this cause, and the repairs were extensive in their character. 
 
 Curry vs. Ins. Co., 10 Pick., 535. 
 
 All substantial alterations of a building are looked on by the compa- 
 nies as an increase of risk. Where, as so often happens, such alterations 
 effect an increase in the size of the original structure, insurers properly 
 regard the risk as one which was not contemplated in the contract, and 
 a loss-claim is likely to be resisted whether resulting from this .cause or 
 not. Thus in Lyman vs. Ins. Co. (14 Allen, 329) it was held that a de- 
 liberate, considerable alteration not incidental to the ordinary use of the 
 building, and prolonged for three weeks, increasing the risk at the time 
 of the fire, although not permanently, nor causing the fire, avoids the 
 policy. The policy itself usually stipulates against material alterations or 
 repairs, or restricts them to such as can be done within a limited time, 
 and any excess of this limit will work a forfeiture. 
 
 To avoid controversy, therefore, consent should be obtained for all ma- 
 terial alterations or repairs beyond such as are expressly permitted by the 
 contract. 
 
 INCREASE OF RISK GENERALLY. 
 
 There are many other ways besides those heretofore referred to in 
 which a risk may be increased in violation of the policy. Any important 
 modification whatever of the hazard which makes it essentially different
 
 73 
 
 in character from that which was originally assumed and which materi- 
 ally increases the danger from fire, should be looked on as an increase of 
 risk. The courts ask two prominent questions on this subject has the 
 risk been modified or altered in a way not contemplated in the original 
 contract, and is the alteration one which, if known, would have been 
 likely to call for an increased premium or to have induced a cancella- 
 tion ? Whatever changes suggest an affirmative answer to these questions, 
 whether in the manner of use or occupancy, in the arrangements or 
 character of the subject, or in its surroundings, should be treated as an 
 increase of risk about which the insurer is entitled to information. In 
 Daniels vs. Ins. Co. (12 Ins. Law Jour., 379) the court pronounced the 
 presence of a stove in a finishing-room, where there was frequently a 
 large quantity of inflammable naphtha-gas, a manifest increase of risk. 
 So, in Osterloh vs. Ins. Co. (13 Ins. Law Jour., 475), a pipe had been 
 thrust through the ceiling and roof in contravention of the policy re- 
 quirements, which would have resulted in forfeiture had it not been 
 waived by the company. In Cole vs. Ins. Co. (14 Ins. Law Jour., 453) 
 the court declared that the erection of a wooden drying-house one story 
 high, fourteen feet from a brick planing-mill, and heated by steam from 
 a boiler in the main building, was a self-evident increase of risk. In 
 Long vs. Beeber (14 Ins. Law Jour., 622) a steam-thresher was tem- 
 porarily located in an adjacent barn, and it was held that, even though 
 done by a tenant without the knowledge of insured, if the risk was in- 
 creased the policy was avoided. The court used the following language : 
 " The company for a fixed price insured the building as it was at the 
 date of the policy. It took upon itself that hazard and none other ; and 
 to avoid all dispute as to what it did insure, the condition was introduced 
 that if the risk was increased by the erection or occupation of neigh- 
 boring buildings, or by any means whatever, without the assent of the 
 company, the policy should be void, and subject to this condition the 
 plaintiff accepted this policy. There is no doubt whatever about the 
 binding character of this contract, and if the insured did in fact, without 
 the assent of the insurer, either by himself or tenant, do anything to 
 increase the risk, the contract was violated, and he must suffer the con- 
 sequences." The principle here laid down should govern the agent in 
 judging whether there has been an increase of risk. In Francis vs. Ins. 
 Co. (25 N. J., 78) a somewhat similar provision was violated by erecting 
 a small addition to the insured store in which was placed a quantity of 
 hay for a cow. The hay took fire, and the court declared as a matter of 
 law that the policy was forfeited. 
 
 Another important phase of this question was well illustrated in the
 
 74 
 
 case of Washington Ins. Co vs.'Davison, 30 Md., 91. The insurance 
 was on a sulphuric-acid factory; in point of fact, nitric as well as sul- 
 phuric acid was manufactured. The premises had been inspected by the 
 agent, and the court declared that in writing such a risk the insurer 
 should have known that the manufacture of nitric acid was necessary as a 
 part of the process. The incapacity of the inspector would form no de- 
 fense. In other words, whatever obvious features of the business are 
 likely to involve an increase of risk beyond that which is apparently as- 
 sumed in the mere description, should be noted by the agent. 
 
 CONCURRENCY IN POLICY-WRITING. 
 
 The greatest difficulty encountered by the companies in adjusting loss- 
 claims, aside from agreeing with the claimant as to the actual amount of 
 damages, has arisen through non-concurrency, as it is termed, of the 
 various policies covering the property. One policy sometimes contains 
 stipulations, such as co-insurance, or three-quarter loss or value clauses, 
 limiting the liability, which are absent from another. Frequently one 
 policy covers one or more items not included in the other, without spe- 
 cifically limiting its liability on each ; or one may be a floating policy, as 
 in the case of railroad insurance, while another may insure a specific 
 sum on the property destroyed. One may cover only a single interest, 
 and another include several interests. One may be liable for any actual 
 damages, and another only for damages in excess of a certain amount. 
 
 In all such cases the great difficulty is to determine as between the 
 companies what proportion of the loss each one should bear. All policies 
 now contain the contribution-clause, which restricts each company to its 
 pro-rata share of the loss, and various rules have been adopted by under- 
 writers and laid down by the courts for determining in such cases how 
 the pro-rata is to be computed. But the companies are far from being 
 harmonious as to what rules are correct ; while the courts have generally 
 contented themselves with framing a doctrine which shall seem most 
 equitable in the particular case before them, regardless of its want of 
 equity under other conditions. In fact, neither law nor mathematics fur- 
 nishes any precise general rules of equitable apportionment which are ap- 
 plicable to all cases of non-concurrency. But the courts do insist that 
 the insured shall recover the largest amount to which he would be entitled 
 under any fair construction of the contracts, regardless of any want of 
 equity in its apportionment among the companies. 
 
 Royal Ins. Co. vs. Roedel, 4 Ins. Law Jour., 840 ; Robbins vs. Ins. Co., Hine & 
 Nichols' Dig., 170 ; Angelrodt vs. Ins. Co., 31 Mo., 593 ; Haley vs. Ins. Co., 12 
 Gray, 349 ; Blake vs. Ins. Co., 12 Gray, 265 ; Bardwell vs. Ins. Co., 6 Ins. Law 
 Jour., 413.
 
 75 
 
 The consequence is that where the policies are non-concurrent, not 
 only are the companies liable to be involved in disputes among themselves, 
 but those whose contracts, owing to the absence of limitations, can be 
 construed to afford the largest indemnity, are likely to be saddled with 
 the largest proportion of the loss. In Sherman vs. Ins. Co. , cited above, 
 one company insured on live-stock simply, while another limited its lia- 
 bility on any one animal to a specific sum; the consequence was that, 
 though both policies were for nearly the same amount, the second com- 
 pany escaped with less than half the liability of the first. In Carlwitz vs. 
 Ins. Co. (12 Ins. Law Jour., 127) the policy was written for specific 
 amounts on various items, on some of which the loss was heavy and on 
 others none : and the court instructed that the claimant could only look 
 in such a case for indemnity to the particular fund intended to indemnify 
 the property; an excess of loss on one item could not be made good'from 
 the surplus on another, thus showing the great advantage to the company 
 of specific insurances. In Angelrodt vs. Ins. Co., supra, one policy in- 
 cluded other interests besides those covered by the first policy ; a lower 
 court had made an apportionment of the loss between the two, which the 
 appellate court declared to be correct, if it had fully indemnified the 
 insured ; but failing in this another rule must be adopted which would 
 furnish the indemnity. The addition of another interest to the second 
 policy compelled a larger contribution from the first, notwithstanding it 
 tvas specific. 
 
 These cases, to which others might be added, show the importance, 
 first, of making the policy-writing as specific both in regard to the prop- 
 erty and interests as the circumstances will allow; second, of insisting 
 that where a certain amount of other insurance is a condition, such other 
 insurance shall be likewise specific ; third, of having other insurance 
 concurrent both as to the interests and property covered and as to lim- 
 itations of any kind on the liabilities. The company that insures, for in- 
 stance, without a co-insurance clause is at a disadvantage, if this clause 
 exists in other insurance on the same property. Not only, therefore, 
 should the agent carefully inquire regarding the amount of other insur- 
 ance on the property, but with regard to its apportionment and limita- 
 tions, and, if authorized to contract, should seek to so frame his own pol- 
 icy that his company will not suffer through non-concurrency. 
 
 Printed forms, if properly constructed, are desirable so far as resulting 
 concurrency is concerned. Printed forms, however, are liable to be got- 
 ten up too much in the interest of the insured, but whether printed or 
 written, all the policies on the same risk should read alike.
 
 7 6 
 INDORSEMENTS AND MODIFICATIONS BY THE AGENT. 
 
 Agents who are authorized to contract are usually permitted by law to 
 consent to such subsequent minor modifications of the contract as they 
 might have made in the first instance where the instrument itself does not 
 forbid their doing so, and where the modifications might reasonably be 
 supposed to be within the scope of their powers. 
 
 Pitney vs. Ins. Co., 4 Ins. Law Jour., 765; Pechner vs. Ins. Co., 4 Ins. Law 
 Jour., 782, and cases there cited. 
 
 But this power is never intended to be applied to the printed portion 
 of the policy, which frequently contains stipulations forbidding it ; and 
 in those States which have standard-policy laws, such a tampering with 
 the printed portion would be, as stated elsewhere, a penal offense against 
 the statute. Particularly should an agent avoid the dangerous assump- 
 tion of verbal agreements to modify the policy ; whatever changes in or 
 additions to the written portion may be asked for should be carefully 
 considered, reduced to writing, indorsed on the policy, and reported to 
 the company. It is a sound legal principle that verbal evidence cannot 
 be admitted to alter the terms of a written instrument, and in case of dis- 
 pute it is only by a legal subterfuge that the proof of a mere verbal 
 agreement to modify can be accepted. A written contract should con- 
 tain within itself all the stipulations between the parties. 
 
 Mercantile Ins. Co. vs. Jaynes, 7 Ins. Law Jour., 754; Hearne vs. Ins. Co., 4 
 Ins. Law Jour., 582; Aurora Ins. Co. vs. Eddy, 55 111., 213. 
 
 The company is entitled to know at all times the conditions attached 
 to its contracts, and the precise character of the risks it is assuming. By 
 just so much as the original policy is modified by subsequent consent of 
 the agent, the company is likely to be uninformed on these points. 
 Such modifications, too, are almost in variably in the interest of the insured 
 and usually contemplate an increase of risk without any increase of pre- 
 mium. It is as much the legal duty of the agent therefore to notify the 
 company of any modifications as of the terms of the original contract. 
 Waivers and modifications by the agent which were unauthorized by or 
 unknown to the companies have entailed more losses on the latter than 
 almost any other one cause outside of the fires themselves. 
 
 Where the policy expressly limits the agent's powers in this respect, or 
 requires all modifications of the contract to be indorsed in writing, a vi- 
 olation by the agent, besides rendering him legally liable for the conse- 
 quences, will generally prove ineffectual to accomplish the object sought. 
 Where the agent's power is thus limited, the insured is bound to take no- 
 tice of the fact at his own peril. In Walsh vs. Ins. Co. (7 Ins. Law
 
 77 
 
 Jour., 423) the policy required consent to be indorsed in writing, and 
 the agent, who had power to contract, verbally consented to a vacancy, of 
 which he made a memorandum, but made no indorsement as required 
 on the policy. The court said: "The plaintiff is presumed to have 
 known what the contract contained, and the proof tends to the conclu- 
 sion that this provision was brought to his notice. He saw fit, however, 
 to accept the assurance of the agent that an entry in the register was suf- 
 ficient. It is difficult to see how, upon the law of contracts and agency, 
 the plaintiff can recover. The entry in the register was not an in- 
 dorsement on the policy. The oral consent was an act in excess of the 
 known authority of the agent. The provision was designed to protect the 
 company against collusion and fraud, and the dangers and uncertainty of 
 oral testimony." 
 
 See, also, Crescent Ins. Co. vs. Griffin, 14 Ins. Law Jour., 278; Enos vs. Ins. Co., 
 15 Ins. Law Jour., 138. 
 
 Again, it is only the agent who is authorized to issue the policy in the 
 first place that can consent as a rule to its modification, whether by in- 
 dorsement or otherwise. A solicitor or agent whose power is limited to 
 receiving applications can sometimes render the company responsible for 
 information furnished to him at the time of receiving the application 
 regarding vacancy, other insurance, alterations, and the like, because he 
 is then the medium of communication between the applicant and the 
 company. But when once the contract has been completed, his rela- 
 tions to it are at an end. As he had no power to make it so, he has no 
 right to consent to its alteration. 
 
 Wilson vs. Ins. Co., 4 Kern., 418; Sykes vs. Ins. Co., 34Penn. St., 79; Robinson 
 vs. Ins. Co., 3 Dutch., 134; N. E. Ins. Co. vs. Schettler, 38 111., 166; Strickland vs. 
 Ins. Co., 14 Ins. Law Jour., 868. 
 
 In one respect, however, the relations of the soliciting agent are not 
 always ended. Where notice is required to be given for the mere pur- 
 pose of information to the company, where no acquiescence by the latter 
 is needed and no party is specified to whom it must be given, as in the 
 case of notice of loss, it has sometimes been held that notice to an agent 
 procuring the insurance is sufficient, that the medium through whom the 
 insurance was procured may be further relied on to convey additional 
 information. But this doctrine only applies to those cases where the in- 
 sured might reasonably assume that such notice was sufficient. 
 
 Hartford Ins. Co. vs. Smith, 7 Ins. Law Jour., 140; Union Ins. Co. vs. Wilkinson, 
 13 Wall., 222; Schenck vs. Ins. Co., 4 Zab., 447. 
 
 In general, therefore, a soliciting agent should regard himself as with- 
 out any authority to act in respect to any matters pertaining to a com-
 
 78 
 
 pleted contract, and should so state to the insured whenever asked to 
 make changes, or whenever questioned in regard to his authority to make 
 changes, but for greater safety should communicate to the company all 
 information he may receive regarding it. Especially should he be on 
 his guard against seeming by his conduct towards the insured to assume 
 any responsibility in relation to the contract. Even though a soliciting 
 agent should be regarded as a proper party to receive a notice of loss, 
 which usually he is not, he would have no right to accept notice of a 
 vacancy, increase of risk, change of title, incumbrance, or any of those 
 matters which affect the character of the contract, and which might in- 
 fluence the company to cancel or increase the rate. In short, the solic- 
 itor, outside of the special work for which he is employed, has properly 
 no relations with the company beyond the ordinary duty of an employe 
 to communicate to his employer such facts as the latter ought to know. 
 
 Harrison vs. Ins. Co., 9 Allen, 231; Miner vs. Ins. Co., 29 Wis., 693; Phoenix Ins. 
 Co. vs. Lawrence, 4 Met., 9. 
 
 Again, it does not necessarily follow that because an agent is author- 
 ized to issue policies, he is therefore authorized to make any subsequent 
 modifications of any kind in their conditions. As was said in Sohnes 
 vs. Ins. Co. (121 Mass., 438), something more than a special agency 
 must be shown to justify such a conclusion on the part of the insured. 
 Authority, or apparent authority, to thus act as a general agent must be 
 established. A person deals with the agent in matters in excess of his 
 apparent special authority at his peril. The printed conditions of a pol- 
 icy constitute the general form under which the company elects to issue 
 its contracts. Blanks are left in this form, presumably to be filled up at 
 his discretion by an authorized representative. These facts may be re- 
 garded as in a measure a notice both to the agent and the insured that 
 the former has usually no right to mutilate or nullify, or introduce any- 
 thing inconsistent with the printed conditions ; that in those respects, at 
 least, even the powers of an agent authorized to contract are limited. 
 He has no right to contract in a way inconsistent with the policy-blank. 
 Thus, in Reynolds vs. Ins. Co. (36 Mich., 181), an attempt was made to 
 show an oral contract for insurance with the agent on a risk belonging 
 to a class that the agent was not allowed to insure ; but the court held 
 that even proof of the fact that the agent solicited the risk and received 
 the premium was not proof of his power to bind the company in the face 
 of his commission and the policy to the contrary. As was said by the 
 court, the fact that he was local agent could only imply authority to in- 
 sure in the mode allowed by the charter, and to take such risks as the 
 policies in common use by the agents would warrant. In Barry vs. Ins.
 
 79 
 
 Co. (15 Ins. Law Jour., 789) an agent, who had no authority to insure 
 hulls, undertook to insure a yacht by filling in a cargo-blank whose 
 printed language was wholly inappropriate, and it was held that the in- 
 consistency was sufficient notice to the insured that the agent was exceed- 
 ing his authority. To this class also belong those numerous cases where 
 it has been held that the agent, unless vested with special authority for 
 that purpose, has no right to waive requirements regarding proofs of 
 loss. 
 
 Sohnes vs. Ins. Co., 6 Ins. Law Jour., 472, and cases there cited. 
 
 The safe rule for the agent is to limit all indorsements to those matters 
 where he is explicitly authorized by the company thus to modify, and, 
 above all, to avoid such as shall essentially alter the character of the 
 contract, the risk, or the parties. Where, as in Massachusetts and New 
 York, a standard policy-form is prescribed, any modification of the lan- 
 guage whatever beyond that which the law permits would be a penal of- 
 fense against statutory law. 
 
 CANCELLATION. 
 
 When the agent has been instructed to cancel a risk, he is legally 
 bound to carry out the instruction without any unnecessary delay. The 
 penalty to which he is exposed in case of negligence was illustrated in 
 the recent case of Phoenix Ins. Co. vs. Pratt, in the i6th Ins. Law Jour., 
 already cited, where the agent assumed the responsibility of delaying un- 
 til he could communicate further with the company. The risk burned 
 before an answer could be received, and he was held personally liable 
 to the company for the loss. 
 
 Two things are essential to a complete cancellation ; notification to 
 the insured or some party authorized to represent him, and a tender at the 
 same time of the unearned premium. 
 
 Continental Ins. Co. vs. Bunsby, 15 Ins. Law Jour., 736; Griffey vs. Ins. Co., 15 
 Ins. Law Jour., 198; JEtna. Ins. Co. vs. Weisinger, 14 Ins. Law Jour., 151; ^Etna 
 Ins. Co. vs. Maguire, 51 111., 342. 
 
 The notice should be given and the tender made to the insured him- 
 self if possible, or if not, then to some party authorized to act for him in 
 the matter, and the policy should be taken up and returned to the com- 
 pany. It by no means follows that the party who was authorized by the 
 insured to procure the insurance, is also authorized to accept a notice of 
 cancellation. This has often proved a fatal mistake on the part of the 
 agent. The true doctrine was laid down in Rothschild vs. Ins. Co. (7 
 Ins. Law Jour., 639), where it was held that an agency to procure in-
 
 8o 
 
 surance is ended when the insurance is procured and the policy deliv- 
 ered to the principal ; that the agent to procure the insurance (*'. e., the 
 broker) has no power after the delivery of the policy to his principal 
 to consent to a cancellation. In Von Wein vs. Ins. Co. (15 Ins. Law 
 Jour., 158), although the policy contained a stipulation that the party 
 procuring the policy should be deemed the agent of the insured in mat- 
 ters relating to the insurance, it was held that a broker employed by the 
 insured to procure the policy was not on that account to be deemed his 
 agent to receive notice of cancellation ; that the cancellation did not re- 
 late to the insurance. A broker or intermediary can only be safely 
 dealt with where it can be satisfactorily shown that the entire care of 
 managing and looking after his insurances has been placed in his hands 
 by the insured. Thus in Gatti vs. Ins. Co. (9 Ins. Law Jour., 158) 
 it appeared that the party who procured the policy and paid the pre- 
 mium was allowed entire control of the property, collecting and using 
 the rents in his own way, and it was held that authority to cancel, as well 
 as to insure, was within the apparent scope of his power. 
 
 Notice of an intention to cancel is not sufficient. It must be a notice 
 of actual cancellation, coupled with, a tender of the return premium, 
 and the amount of the unearned premium must be tendered in cash ; 
 but, if no cash is due, simple notice is sufficient. Where a note has 
 been given this should be returned, unless some payment on it is due or 
 owing, in which case the tender should still be cash. 
 
 Bergesson vs. Ins. Co., 38Cal., 541; Bunsby vs. Ins. Co., supra; Griffey vs. Ins. 
 Co., supra; Hawthorn vs. Ins. Co., 55 Barb., 28; ./Etna Ins. Co. vs. Webster, 6 
 Wall., 129; Emmott vs. Ins. Co., 7 R. I., 562; Southside Ins. Co. vs. Muller, 8 Ins- 
 Law Jour., 260; Home Ins. Co. vs. Curtis, 5 Ins. Law Jour., 120. 
 
 The risk should also be canceled on the agent's register, and the 
 return of the policy demanded and secured, if possible, but the actual 
 return of the policy is not essential to a cancellation. It is the duty 
 of the insured to return it, but his refusal to do so or to accept the 
 tender will not keep the contract in force. Where cancellation is de- 
 manded by the insured, however, he is usually bound to tender the policy 
 in order to make it effectual, if in his possession. 
 
 Grace vs. Ins. Co., 8 Ins. Law Jour., 95; Amer. Ins. Co. vs. Woodruff, 34 Mich., 6. 
 
 In Grace vs. Ins. Co., just cited, the attempt of the agent to cancel 
 was defeated by his simply notifying the insured that upon the return of 
 the policy he would cancel it and refund the premium. He should 
 have tendered the premium and demanded a return of the policy. The 
 insured, however, may waive the immediate repayment of the premium 
 if he chooses, but the understanding should be clear that the contract is
 
 8i 
 
 regarded as ended by both parties. Cancellation can only be enforced 
 by either party by virtue of the policy-stipulation to that effect, and 
 the courts insist that it can be exercised only in strict compliance with 
 the condition. 
 ./Etna Ins. Co. vs. Weisinger, 14 Ins. Law Jour., 86, and cases there cited. 
 
 A mere solicitor has no right to cancel of his own motion ; the agent 
 must be one authorized to contract In Jacobs vs. Ins. Co. (14 Ins. 
 Law Jour., 633) it was declared that a power to receive applications, 
 premium-notes, and cash premiums does not include a power to cancel 
 policies. Nor is the offer to prove such cancellation helped by show- 
 ing that the policy was sent by the agent to the company as a surrendered 
 policy, unless the company accepted it as such. But a solicitor or any 
 other party may, of course, cancel, if authorized to do so. The most 
 important point to be borne in mind in all cases is that no cancellation 
 will be regarded as effectual by the court until whatever may be due as 
 unearned premium has been actually paid or tendered, or its payment 
 distinctly waived by the insured himself or a party fully authorized to 
 represent him. 
 
 The natural disposition of an agent to regard the insured as a client, 
 whose interest he must protect by securing other insurance before can- 
 celing, has sometimes caused litigation. The agent's first duty is to 
 himself and his company, and he has no right to make the execution of 
 an order to cancel contingent upon his ability to place the risk else- 
 where, thereby rendering himself liable in case the risk should burn 
 while he is neglecting the instructions of his company. 
 
 JEtna. Ins. Go. vs. Maguire, 51 111., 342; Goit vs. Ins. Co., 25 Barb., 189; Train 
 vs. Ins. Co., 5 Ins. Law Jour., 177. See, also, Phoenix Ins. Co. vs. Pratt, already 
 cited. 
 
 The mere possession of the policy by another will not justify the con- 
 clusion that he is authorized to surrender it for cancellation. In Bennett 
 vs. Ins. Co. (115 Mass., 241) the surrender for cancellation of a policy 
 by the assignee who held it as security, without the knowledge of the 
 insured, was declared invalid. 
 
 RENEWALS. 
 
 Renewals have not unfrequently proved pitfalls for unwary agents. 
 The general doctrine is that a renewal is simply an extension of the 
 original contract. The effect is the same as if the date and duration of 
 the original policy were altered to correspond with those of the renewal- 
 receipt. All the conditions and stipulations remain as at first. A vio- 
 lation of any will have the same effect as before the renewal took place.
 
 82 
 
 Aurora Ins. Co. vs. Kranich, 6 Ins. Law Jour., 676 ; Sheppard vs. Ins. Co., 12 
 Ins. Law Jour., 817, and cases there cited. 
 
 But this is true only so far as the renewal contemplates no change in 
 the original contract, or the conditions, so far as known to the insurer or 
 agent, continue the same. A change in the law, such as the passage of 
 a valued-policy act, will be imported into a subsequent renewal. 
 
 Brady vs. Ins. Co., II Mich., 425. 
 
 A change in the apparent distribution of the risk, as where the orig- 
 inal policy was on specific items, while the renewals insured only a gross 
 sum, will convert the latter into a general insurance. 
 
 Driggs vs. Ins. Co., loBarb., 440. 
 
 Any changes contemplated in the original contract should be expressed 
 in the renewal-receipt, and unless such changes are contemplated, care 
 should be taken that the matter should not be left in doubt through the 
 use of ambiguous language. In Sheppard vs. Ins. Co. (12 Ins. Law 
 Jour., 817) the agent gave a renewal-receipt some weeks after the termi- 
 nation of the policy, bearing also such later date and continuing a 
 year, and a suit was required to determine its legal effect. A hasty 
 promise to renew may be unwise. Such promise, if an actual, com- 
 pleted agreement, amounts to an oral contract of insurance. In King 
 vs. Ins. Co. (13 Ins. Law Jour., 146) it was claimed that the agent had 
 thus promised to renew, and the court held, that if the evidence showed 
 not merely preliminary negotiations, but a verbal contract complete 
 in all its terms, it was binding, and non-payment of premium would 
 not defeat the insurance until demand had been made for it, or the 
 insured had been notified of the company's refusal to carry the risk. En- 
 tries made by the agent in his register were not admitted as evidence 
 to the contrary. 
 
 See, also, Roger Williams Ins. Co. vs. Carrington, 9 Ins. Law Jour., 577. 
 
 But in O'Reilly vs. Corporation (15 Ins. Law Jour. , 83 ) a mere casual 
 conversation with the agent requesting renewal at a subsequent date, 
 which contemplated further action and where no premium was paid, was 
 not recognized as a valid renewal where the policy stipulated that it 
 should not be liable unless the premium for the renewal was paid. The 
 agent should, therefore, confine himself to a distinct understanding that 
 the policy can only be renewed upon the payment of premium and 
 delivery of the renewal-receipt. After an agreement to renew has once 
 been made, no change whatever in the conditions of the original policy 
 can been made without the consent of the insured. In Hay vs. Ins. Co. 
 (8 Ins. Law Jour., 633) a second policy was issued in compliance with
 
 83 
 
 such an agreement, which, unknown to the insured, contained conditions 
 not in the first, and the court held that it must be reformed to correspond 
 with the first. The only proper course for the company would have 
 been to have notified the insured that it declined to continue under the 
 original contract, but would make a new one if desired. All modifica- 
 tions made by a renewal, therefore, should be distinctly brought to the 
 notice of the insured. 
 
 WHAT TO Do IN CASE OF Loss. 
 
 Any discussion of the delicate and complicated legal questions in- 
 volved in the adjustment of losses is foreign to the plan of this book. 
 The work of the adjuster is usually intrusted by the companies to ex- 
 perts in this branch. Familiarity with the subject by the ordinary agent 
 is rather discouraged than otherwise, from the danger that the agent may 
 be tempted to act on a limited and partial knowledge, and thus em- 
 barrass rather than facilitate a satisfactory settlement. Almost the only 
 things which the ordinary agent requires to know relating to adjustments 
 are what not to do. But he frequently has other and important duties to 
 perform in the interest of his company in case of loss. The first of 
 these, after notifying the company, is to care for the proper preservation 
 of the damaged property. The doctrine of abandonment, so familiar in 
 marine insurance, is not recognized in fire insurance. The owner can- 
 not compel the company to accept his damaged property and pay him its 
 full original value ; he retains his title after the loss as before it. But in 
 practice the companies sometimes agree to take the damaged stock and 
 are entitled to do so upon payment of a constructive total loss. 
 Whether they do or not, the agent, as the representative of their interests, 
 is entitled to take such steps as the owner may permit for the further 
 protection of the property. But in doing so the fact should be borne 
 in mind, that the damaged goods remain the property of the insured after 
 the fire as before it. It is at his risk, must be cared for at his expense, 
 and he has no right to claim against the insurer for any additional loss 
 or damage chargeable to his own negligence. The insured is bound to 
 do all in his power to save his property, and to care for the salvage. 
 
 Arnold on Mar. Ins., 875 ; Marshall on Mar. Ins., 497 ; Wood on Ins., 776. 
 
 This does not mean, however, that he must seek to restore it to its 
 condition before the fire, but simply to protect it against theft and 
 further deterioration. He is not bound to have shirts and collars 
 relaundried, that were damaged by water. 
 
 Hoffman vs. Ins. Co., 32 N. Y., 405.
 
 8 4 
 
 The agent, therefore, should be on his guard against relieving the 
 insured of these responsibilities. His aim should rather be to see that 
 they are assumed and properly acted on ; for, unless the insured can be 
 shown to have been guilty of culpable negligence; usually a difficult 
 thing to do; the loss through subsequent deterioration is likely to fall 
 on the company. Another duty devolving upon the agent is to quietly 
 acquire such information regarding the circumstances attending the loss 
 as will aid in discovering the cause, and whether any fraud has been 
 attempted; that class of facts, in short, which can best be secured by one 
 who is on the spot at the time and is familiar with the surroundings. 
 
 Naturally, the first move on the part of the insured will usually be to 
 consult the local agent about the recovery of his damages and the steps 
 to be taken, and here begins the chief danger to the company. As a 
 rule the agent should never seek the insured for this purpose. His 
 duty is simply to promptly notify the company of all the facts in his 
 possession. The contract requires the insured to seek the company, 
 and give it the stipulated notice with due diligence. When a particu- 
 lar method or party is designated in the policy, the notice should con- 
 form to the requirement. Otherwise the general rule is that a verbal 
 notice to the local agent is sufficient. It may be given either by the 
 insured or some party authorized to represent him, and must be sufficient 
 to apprise the company of the loss, and give an opportunity for 
 examination. It must be given as soon as possible. 
 
 Platte vs. Ass'n, 6 Ins. Law Jour., 595 ; Hartford Ins. Co. vs. Smith, 7 Ins. Law 
 Jour., 401 ; People's Ins. Co. vs. Spencer, 53 Penn. St., 353 ; Sleeper vs. Ins. Co., 
 5 Ins. Law Jour., 537 ; Riggs vs. Ins. Co., 20 N. H., 198 ; O'Brien vs. Ins. Co. f 8 Ins. 
 Law Jour., 517. 
 
 The agent, therefore, if consulted by the insured, should direct him to 
 conform to the policy-requirements, and should inform him that the com- 
 pany alone has authority in the premises. If the policy requires a 
 written notice, he should insist that it be given in this form by the insured, 
 and then immediately forward it to the company. If the stipulation is that 
 it be given to a particular party, as the secretary, he should direct the in- 
 sured to so send it By failing to observe these rules, the agent has repeat- 
 edly waived a proper compliance with the requirement of the policy. 
 
 Brink vs. Ins. Co., 6 Ins. Law Jour., 707 ; Bennett vs. Ins. Co., 6 Ins. Law Jour., 
 189 ; Home Ins. Co. vs. Ins. Co., 6 Ins. Law Jour., 739. 
 
 Above all, the agent should strictly refrain from expressing any opinion 
 regarding the company's liability. The hasty denial of liability, or con- 
 duct which justified the insured in believing that it would be useless to 
 attempt a compliance with the policy-requirement as to notice and
 
 85 
 
 proofs, has time and again justified him before the courts in failing to do 
 either. 
 
 Lycoming Ins. Co. vs. Dunmore, 5 Ins. Law Jour., 93 ; Aurora Ins. Co. vs. Kranich, 
 6 Ins. Law Jour., 676; Findeisen vs. Ins. Co., 15 Ins. Law Jour., 90; Karibo vs. 
 Ins. Co., 15 Ins. Law Jour., 478 ; Akin vs. Ins. Co., 6 Ins. Law Jour., 341. 
 
 Substantially the same remarks apply to proofs as to notice of loss 
 when the blanks have been forwarded to the agent, except that the proofs, 
 being intended as evidence to the company of the exact nature and 
 extent of its liabilities, should always be in writing, deliberately prepared, 
 and with a strict observance of every requirement. 
 
 Columbian Ins. Co. vs. Rogers, 2 Pet., 52 ; Savage vs. Ins. Co., 52 N. Y., 502 ; 
 Bumstead vs. Ins. Co., 12 N. Y., 81 ; Jennings vs. Ins. Co., 2 Den., 75 ; Hartford 
 Ins. Co. vs. Smith, 7 Ins. Law Jour., 108. 
 
 Proofs should always be made by the insured, if possible, or his 
 authorized representative. In his absence they may be made by a party 
 naturally authorized to represent him, or in such a case they may be made 
 by the party in interest to whom the loss is payable. 
 
 Kernochen vs. Ins. Co., 17 N. Y., 428 ; Pratt vs. Ins. Co., 55 N. Y., 505 ; Ayersvs. 
 Ins. Co., 17 Iowa, 176. 
 
 As in the case of the application, they should be filled by the insured, 
 if possible, but he is entitled to such information as is necessary to 
 make them satisfactory and complete in their form. It is the duty of 
 the insurer to point out defects which he desires to have remedied. 
 
 Blake vs. Ins. Co., 12 Gray, 265 ; Clarke vs. Ins. Co., 6 Cush., 324 ; Young vs. 
 Ins. Co., 6 Ins. Law Jour., 549 ; Mason vs. Ins. Co., 6 Ins. Law Jour., 842. 
 
 In fine, the chief duty of the agent after the loss may be summed up as 
 that of aiding the insured in complying with all the requirements of his 
 contract, and avoiding everything which may give him ground for claim- 
 ing that such compliance has been excused. The whole question of 
 subsequent liability belongs to the company and its adjuster. The 
 agent is under no obligation to discuss it, and should refer the insured 
 to them for any information on the subject. If by accident the policy is 
 lost or burned, the insured is not prejudiced in his rights thereby. He 
 is entitled to such facts in relation to it in making out his proofs as the 
 agent may possess. 
 
 MUTUAL INSURANCE. 
 
 In what has been said heretofore, special reference has been had to 
 the law governing in the case of ordinary stock companies, but the 
 same principles control in the case of mutual companies, except as
 
 86 
 
 they may be modified by the peculiarities of the latter form of insur- 
 ance. In some important respects, however, the legal relations of the 
 parties in mutual and in stock companies are essentially different, and 
 these differences impose their modifications on the law in the two- 
 cases. In the stock company the corporate members or proprietors 
 and the insured are two distinct classes, sustaining, in a mercantile 
 sense, antagonistic relations to each other. In the mutual company, on 
 the contrary, they constitute a single class ; the insured are also by 
 virtue of that relation the stockholders. The consequence of this dis- 
 tinction is that the insured member in a mutual company is assumed 
 to be possessed of a knowledge of its corporate powers and business 
 rules and methods, and to be vested with a responsibility for his own 
 acts which are not attributable to an ordinary policy-holder. In the 
 language of the court in Krug vs. Ins. Co. (5 Ins. Law Jour., 7), per- 
 sons insuring in mutual companies are associated in the nature of 
 limited or special partners, and they sustain towards the companies in 
 many respects the relations of partners rather than those of customers. 
 In a word, the member is ordinarily bound by the charter and by-laws 
 of the company, whether he has any actual knowledge of them or not. 
 
 Fuller vs. Ins. Co., 4 Ins. Law Jour., 841, and cases there cited ; Hackney vs. Ins. 
 Co., 4 Barr., 185 ; Hope Ins. Co. vs. Beekman, 47 Mo., 93. 
 
 The charter and by-laws of the company enter by implication into all 
 its contracts, whether they are expressed in the policy or not. The 
 insured is not usually allowed to plead ignorance concerning them, nor 
 to claim that he was misled in regard to them. Whatever is done by 
 the officers within the scope of their authority he is bound by. , 
 
 Diehl vs. Ins. Co., 58 Pa. St., 443 ; Coles vs. Ins. Co., 18 Iowa, 426 ; Hackney vs. 
 Ins. Co., supra. 
 
 One important consequence of this peculiar relationship is that the 
 agent of a mutual company is more restricted in his powers, and 
 assumes less responsibility in his dealings with the insured than in the 
 case of a stock company. Thus, in the case of Hackney vs. Ins. Co., 
 supra, representations of the agent regarding the limitations of the 
 company's business were set up by the insured in defense, but the court 
 declared that even false representations by the president would not 
 affect the case. So, in Hale vs. Ins. Co. (6 Gray, 169), the by-laws 
 required written consent of the president to subsequent insurance, and 
 it was held that his verbal consent was not sufficient to waive the re- 
 quirement. Again, in Brewer vs. Ins. Co. (14 Gray, 203), the by-laws 
 made payment of premium a prerequisite to insurance, and it held 
 that no officer of the company could waive the provision. In Smith
 
 vs. Ins. Co. (24 Pa. St., 320) the agent made statements m the applica- 
 tion with the consent of the insured which were untrue, with the under- 
 standing that the facts should be made to correspond with the state- 
 ment, and the court declared that in a mutual company the agent had 
 no power to enter into such an agreement. 
 
 But the most important feature of mutual insurance is the liability 
 which it imposes on the members. As in ordinary partnership, the 
 members are liable for the debts of the company, and the extent of 
 this liability is only limited by the provisions of the charter and their 
 several contracts. Even though a member has lost all rights under his 
 policy by a violation of its terms, this does not release him from lia- 
 bility for losses to others. In Commonwealth vs. Ins. Co. (5 Ins. Law 
 Jour., 864) the policies had expired, but were subsequently renewed, 
 the renewals being dated back, on the assurance of the secretary that the 
 company was sound and strong. On the contrary, heavy losses had 
 occurred in the interval before renewing, and the insured was held liable 
 to assessment for their payment. 
 
 Not only are the members thus liable for losses among themselves, but 
 where the company undertakes to do business also on the stock or non- 
 participating plan they are in the same position as ordinary stockholders, 
 and may be assessed for the payment of losses on such non-participating 
 policies. 
 
 Schimpf vs. Ins. Co., 7 Ins. Law Jour., 663; Hayes vs. Ins. Co., loins. Law Jour., 507. 
 
 The questions which excite the most controversy in connection with 
 mutual insurance are those respecting the rights and liabilities of the 
 members on account of their premium-notes. In the ordinary mutual" 
 company the premium-note fulfills the twofold function of premium 
 and capital. Sufficient cash only is required to meet current or expected 
 demands, while a note subject to assessments is given for such sum as the 
 charter or by-laws may prescribe. 
 
 Hayes vs. Ins. Co., 10 Ins. Law Jour., 507. 
 
 The general doctrine regarding such notes is that laid down in Com- 
 monwealth vs. Ins. Co. (3 Ins. Law Jour., 15), that a deposit-note given 
 to a mutual company, aside from special stipulations, is just as com- 
 pletely within the control of the corporation as a cash premium, and 
 may be assessed at the option of the company. 
 
 See, also, Nashua Ins. Co. vs. Moore, 4 Ins. Law Jour., 494, and cases there cited. 
 
 Assessments, however, must generally be equitable as between the 
 members, and where limitations are prescribed in the liability, as for cur- 
 rent losses, the fact of such losses must be shown. But the total destruc-
 
 88 
 
 tion of the insured property will not release from liability to assessment 
 until the insurance term is ended, nor will a forfeiture of his rights by 
 the insured have this effect. It has even been disputed how far the sur- 
 render and cancellation or the expiration of the policy will release from 
 liability in some cases. 
 
 Planters' Ins. Co. vs. Comfort, 4 Ins. Law Jour. , 847, and cases there cited ; N. H. 
 Ins. Co. vs. Rand, 4 Fost., 429 ; Sterling vs. Ins. Co., 32 Pa. St., 75 ; West Branch 
 Ins. Co. vs. Smith, 5 Ins. Law Jour., 319. 
 
 It will thus be seen that the relations and responsibilities of a mutual 
 policy-holder like those of an ordinary business partner essentially modify 
 in many respects the powers and obligations of an agent of the corpora- 
 tion in dealings between the two. The general doctrine is, that the 
 agent of a mutual company is more restricted in his powers than the 
 agent of a stock company, both as to the terms and conditions of the 
 contract itself, and the waiver of its provisions. In some States the 
 courts hold these powers to be absolutely limited by the charter and 
 by-laws. Any agreement in contravention of these, whether by officer 
 or agent, is held invalid. The agent is treated as a representative of the 
 applicant as well as of the company, and misstatements or omissions by 
 him in the application are regarded as if done by the insured. 
 
 Jenkins vs. Ins. Co., 7 Gray, 370 ; Barrett vs. Ins. Co., 7 Cush., 175 ; Holmes vs. 
 Ins. Co., 10 Met., 211 ; Smith vs. Ins. Co., 24 Penn. St., 320. 
 
 But in many of the States a more equitable view of the relations 
 of the parties is taken, and the rights of the applicant who has not 
 yet become a member, and may th'erefore be presumed ignorant of the 
 rules of the company, and even of a member, are guarded as in ordinary 
 stock insurance, in so far as a liberal construction of the charter and 
 by-laws will permit. Thus, in Peck vs. Ins. Co. (22 Conn., 575), the 
 consent of an agent to other insurance where the company knew he was 
 in the habit of giving such consent, was held to be equivalent to 
 the consent of the directors which was required by the charter. So, in 
 Bebee vs. Ins. Co. (25 Conn., 51), the failure of the agent to communi- 
 cate material facts stated to him by the applicant was held to be charge- 
 able to the company, and not to the applicant. 
 
 Columbian Ins. Co. vs. Cooper, 50 Penn. St., 331 ; Woodbury Savings Bank vs. 
 Ins. Co.. 31 Conn., 517 ; Eilenberger vs. Ins. Co., 8 Ins. Law Jour., 822 ; Knox vs. 
 Ins. Co., 10 Ins. Law Jour., 89. 
 
 INLAND UNDERWRITING. 
 
 Inland underwriting as practiced in this country combines many of the 
 elements of both fire and marine insurance, and the law regulating it
 
 89 
 
 largely depends upon whether the issue pertains to the one branch or the 
 other. Usage occupies a much more prominent place here than in 
 ordinary fire-underwriting. The construction of the contract and the 
 rights of the parties often depend upon the customs peculiar to our lake 
 and river navigation, and a thorough understanding of these is of the first 
 importance to the agent engaged in this branch, as well as a general 
 knowledge of the principles regulating marine insurance. The trans- 
 port policies usually employed in case of merchandise risks are of 
 three kinds. One is an open policy on which shipments reported by' 
 the insured from time to time are indorsed by the agent at such rates as 
 may in each case be agreed to, each indorsement being in effect a new 
 insurance subject to the terms of the contract which the agent is free to 
 make or not as he may elect. The second is a general contract between 
 the company and the insured, in which the former undertakes to cover 
 all transportation risks of a certain kind at prescribed rates of premium. 
 The risks are by agreement reported at stated times, to be indorsed on 
 the policy ; but, unless this agreement is violated, the liability does not 
 depend on the indorsement The third class embraces those contracts 
 which, as in ordinary fire insurance, are confined to specific risks agreed 
 upon at the outset. 
 
 CLASSES OF POLICIES. 
 
 The courts draw an important distinction between policies like the 
 ordinary fire-insurance contract, where the actual value of the subject or 
 of the insured's interest is not stated, and those where a definite value is 
 named in the contract itself. The former, popularly known as open 
 policies, require the loss claimant to prove the existence and amount of 
 his interest, while the latter fix the liability in case of loss by agreement, 
 ment, and, except in case of fraud, no proof of value is required. It is 
 manifest that a valued policy often furnishes strong temptation to fraud, 
 and the character of the parties as well as the facts should be closely scruti- 
 nized in those cases where this form of contract is employed. The 
 curse of what are known as valued-policy laws is that they thus convert 
 the open policy into this form of contract, and even fraud is not recog- 
 nized as a defense. 
 
 Sturm vs. Ins. Co., 5 Ins. Law Jour., 209 ; Bammessel vs. Ins. Co., 7 Ins. Law 
 Jour., 767. 
 
 The year is the natural unit according to which policies are divided 
 into long and short terms, and the rates are usually fixed on a commu- 
 tation-scale diminishing proportionably with the duration of the con- 
 tract. Hence arises the rule for cancellation according to which the pre-
 
 90 
 
 mium charged as earned is the same as would have been the short rate 
 charged for the same length of time. But the right to enforce this rule 
 depends wholly on the stipulation to that effect in the policy, and the 
 short rate is that which is customary in such cases. 
 
 CORRESPONDENCE BY MAIL. 
 
 Unless there is a special stipulation to that effect, the mere sending of 
 a communication by mail is not a legal notification to the party of the 
 contents of the communication until he receives it. The sender takes 
 the risk of its miscarriage or failure to reach him. This is an important 
 fact for agents to bear in mind in their correspondence with applicants 
 and with the insured. But, on the other hand, so far as the sender is 
 concerned, the communication is usually complete and beyond recall the 
 moment it has been mailed, whether the party to whom it is addressed 
 has actually received it or not. The moment an agent mails his accept- 
 ance of a proposition to insure, he closes the bargain. In Eames vs. 
 Ins. Co. (6 Ins. Law Jour., 689) the general agent insisted upon a cer- 
 tain rate as conditional to the acceptance of a risk. The applicant wrote 
 to the local agent agreeing to the rate, and the latter, in turn, wrote the 
 general agent to the sarrte effect, and requesting that a policy be sent, but 
 directly after countermanded the order by telegram on account of the 
 destruction of the building. It was held that the contract had been 
 completed. 
 
 APPENDIX. 
 
 Page 17, last paragraph : "The contract is only complete when the insured 
 has received the notice of its acceptance." In some States, as in the code of 
 Georgia, mailing an acceptance completes the contract. 
 
 Page 47, fourth paragraph : " They [common carriers] cannot escape 
 the consequence of such as are due to their own negligence." This is the 
 general doctrine as laid down by the Supreme Courts of the United States, 
 and most of the States. It has been held in New York, however, that a 
 carrier may limit against loss by negligence. 
 
 Blair vs. R. R., 66 N. Y., 313, and cases cited. 
 
 *r 
 
 Page 81, first paragraph: "It [cancellation] can be exercised only in 
 strict compliance with the conditions." In Hollingsworth vs. Germania Ins. 
 Co. (45 Geo., 294) the policy had been surrendered, and return premium 
 directed to be paid to an agent of the insured, payment was delayed, but 
 made and accepted after the loss, but before either party knew the fact. The 
 policy Was held to be in force.
 
 INDEX. 
 
 Abandonment in fire insurance 83 
 
 Adjacent buildings 3& 
 
 Adjustment Powers of general agent n 
 
 In case of non-concurrency 74> 75 
 
 Agents' relations to 83 
 
 Agent His legal relations to his principal 5-8 
 
 Commission of 5 
 
 Prosecution by principal 5 
 
 Representation of adverse interests 6 
 
 Contract with himself 6 
 
 Accounting by 7 
 
 Delegation of authority 7 
 
 Revocation of authority 8 
 
 Broker, status of. 9 
 
 General, powers of 10 
 
 Special, powers of 1 1 
 
 Doctrine of waiver in its relations to 13 
 
 Caution as to insuring 55 
 
 Waiver of other insurance by 65 
 
 Indorsement and modifications by 7^-79 
 
 Authority of soliciting as to notice 77, 78 
 
 Cancellations by 79~8i 
 
 Duties of in case of loss 83-85 
 
 Of mutual company, responsibilites of 86, 88 
 
 Alienation Effect of 56, 57 
 
 Alterations and repairs 7 2 
 
 Application Should be in writing 15 
 
 Should be promptly forwarded 17 ' 
 
 Duties of Agent I7 *9 
 
 Filling in 20-22
 
 9 2 
 
 Apportionment In case of non-concurrency 74, 75 
 
 As interest may appear 55 
 
 Assessments In case of mutual companies 87 
 
 Assignments Execution of , 57 
 
 Bailments 50 
 
 Broker Status of as an agent 9 
 
 Building What is included in 24, 25 
 
 Description of 32-34. 36-39 
 
 Internal Appurtenances of 38 
 
 Ownership of 43, 44 
 
 Value of 62 
 
 Alterations and repairs of 72 
 
 Cancellation and transfer of policy 66 
 
 What is essential to 79-81 
 
 Rule for 89 
 
 Carriers Insurance of 49 
 
 Cash value 61 
 
 Caution to agents as to insuring 55 
 
 Coal-oils 70, 71 
 
 Concurrency In case of other insurance 64 
 
 In policy-writing 74 
 
 Consequential damages 47 
 
 Consignees Insurance of 48 
 
 Contained in 27, 28, 37 
 
 Contents 29 
 
 Contract Powers of general agent 10 
 
 Powers of special agent n 
 
 By correspondence 90 
 
 Correspondence by mail *.... 90 
 
 Creditors' liens Insurance of 5 2 -55 
 
 Defective descriptions 34-36 
 
 Delivery Of policy, cautions regarding , , 18 
 
 Description Effect of erroneous 26 
 
 Of risk 30-40 
 
 Defective illustrated 34-36 
 
 Double insurance 62-66 
 
 Dwelling What is included in 25 
 
 Vacancy in case of. 66, 67 
 
 Estates Qualified and limited : 46 
 
 Explosives 7> 7 1 
 
 Exposures Description of 37
 
 93 
 
 Factory What is included in 25 
 
 Vacancy in case of. 68, 69 
 
 Fixtures Meaning of 23 
 
 Ownership of. 45 
 
 Force-pumps 39 
 
 Foreclosure Effect of 58 
 
 Fraud in valuation 60 
 
 Furniture Meaning of 29 
 
 Gas machines 71 
 
 Goods See merchandise. 
 
 On storage 49 
 
 Gram Meaning of 35 
 
 In warehouse 48 
 
 Gunpowder 70, 71 
 
 Heating and lighting 38 
 
 Held in trust 51 
 
 House What is included in 24, 25 
 
 Household goods Meaning of. 29 
 
 Incidents connected with the title 56-59 
 
 Increase of risk generally See risk 72 
 
 Incumbrance Effect of. See mortgages 56-59 
 
 Indorsements and modifications by agent 76-79 
 
 Inflammables 70, 71 
 
 Inland underwriting 88 
 
 Insolvency Effect of. 58 
 
 Insurable interest See interest 
 
 Insurance Who are entitled to 22, 23 
 
 Subject-matter of 24 32 
 
 Insured Who may be , 22, 23 
 
 Interest Insurable. 22, 23 
 
 Specific 43-56 
 
 Qualified and limited 46 
 
 Change of 56, 57 
 
 Internal appurtenances of buildings 38 
 
 Judgments 52 
 
 Language Choice of 21, 22 
 
 Liens Insurance of 5 2 -55 
 
 Life-estates 46, 47 
 
 Lighting and heating 38 
 
 Live-stock 33. 36 
 
 Location and surroundings of risk 36
 
 Loss What to do in case of 83-85 
 
 Machinery What is included in. 26 
 
 Market value j 61 
 
 Measure of damages 59 
 
 Memorandum articles 31 
 
 Merchandise Meaning of terms 29, 35 
 
 Mill What is included in 25 
 
 Mortgage -clause 54 
 
 Mortgagees Insurance of 5 2 -55 
 
 Mortgages See incumbrances. 
 
 Judgments, and other liens S 2 -5S 
 
 Mutual insurance Legal principles governing 85-88 
 
 Notice Authority of solicitor 77, 78 
 
 Duties of agent regarding 84 
 
 Occupancy 66-69 
 
 Occupation of premises 41 
 
 Other insurance 62-66 
 
 Precautions regarding 75 
 
 Ownership Nature of 43-46 
 
 Partners 44 
 
 Payable to whom it may concern 55 
 
 Personal property Insurance of 27, 31, 33 
 
 Ownership of 44, 45 
 
 Policy Caution as to delivery 12 
 
 Filling in 20-22 
 
 Transfer of 66 
 
 Writing Concurrency in 74, 75 
 
 Indorsements and modifications of 76-79 
 
 Accidental loss of 85 
 
 Long and short term 89 
 
 Open and valued 89 
 
 Inland ' 89 
 
 Preliminary negotiations and the premium 14 
 
 Premium And preliminary negotiations 14-20 
 
 Payment of , 18, 19 
 
 Notes In case of mutual companies 87 
 
 Printed policy-forms 75 
 
 Prohibited risks 30, 70, 71 
 
 Proofs of loss Preparation of 85 
 
 Property Not their own Insurance of 5-5 2 
 
 Qualified and limited estates 46
 
 95 
 
 Receipt Ad interim 16 
 
 Renewal Caution as to delivery 12 
 
 Effect on incumbrances 59 
 
 Legal principles governing 81-83 
 
 Rentals See tenancies. 
 
 Insurance of 47 
 
 Repairs and alterations 72 
 
 Replacement as a measure of value 61 
 
 Risk Description of 30-40 
 
 Location and surroundings of 36 
 
 Increase of from exposures 37 
 
 Transfer of 66 
 
 Prohibited 70, 71 
 
 Increase of generally 72 
 
 Salvage Treatment of 83 
 
 Sold but not removed 45, 52 
 
 Specific description of the property 3 2 "34 
 
 Insurance Importance of 75 
 
 Titles or interests : 43-56 
 
 Special hazards Details regarding 42 
 
 Storage risks See warehouse 49 
 
 Store What is included in 25 
 
 Survey In case of special hazards 42 
 
 Tenancies J 44, 46, 47. 5 8 
 
 Title Specific 43-56 
 
 Change of 56, 57 
 
 Tools What are included in 26 
 
 Trusteeships 47*5 
 
 Use or occupation of premises , 41 
 
 Vacancy 66-69 
 
 Valuation of insured property 59-62 
 
 Valued-policy law 59 
 
 Verbal contracts Should be avoided 15 
 
 When complete 16, 17 
 
 Waiver Doctrine of 13 
 
 Waiver of other insurance 65 
 
 Warehouse risks 48, 49, 5 1 
 
 Watchmen , 39 
 
 Water supply 39 
 
 What to do in case of loss 83-85
 
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