tituisi'iti'itiiin^iJiv 
 
 ''■'■'■"11 ill s 
 
 iiiiiiiiiiilliiii 
 
 iii 
 
 .Jiiliiilill 
 
 :ttifMii« 
 
 iiH 
 
 ii 
 
 
 
 |:l 
 
 li 1 5 ' h 
 
 l\ 
 
 
 
 i ii 
 
 
 
 
 i 
 
 : . 
 
 I 
 1 
 

 
 UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 
 LIBRARY 
 Gift of 
 Hohn Adams
 
 THE LAW OF INSURANCE. 
 
 Volume II.
 
 THE 
 
 LAW OF INSURANCE, 
 
 AS APPLIED TO 
 
 FIRE, LIFE, ACCIDENT. GUARANTEE 
 
 AND 
 
 OTHER NOX-MARITLME RISKS. 
 
 BY 
 
 JOHN WILDER xMAY. 
 
 THIRD EDITIOX, 
 revised, analyzed, and greatly enlarged. 
 
 By frank parsons. 
 
 IN TWO VOLUMES. 
 
 Vol. II. 
 
 BOSTON: 
 LITTLE, BROWN, AND COMPANY. 
 
 1891.
 
 ] 
 
 ml 
 
 Entered according to Act of Congress, in the year 1881, by 
 
 John Wilder Mat, 
 In the office of the Librarian of Congress, at Washington. 
 
 Copyright, 1S91, 
 By Little, Bisown, and Company. 
 
 I'NivFnsiTY Press : 
 Jonx Wilson and Son, Camukikge
 
 CONTENTS OF VOL. II. 
 
 Pags 
 
 CHAPTER XVII. 
 The rreinium 703 
 
 CHAPTER XVIII. 
 Other Insurance and Overvaluation 789 
 
 CHAPTER XIX. 
 
 Assignment of the Polic}' 831 
 
 CHAPTER XX. 
 Beneficiaries 885 
 
 CHAFPER XXI. 
 Of the Risk, its Duration and Extent 903 
 
 CHAPTER XXII. 
 
 Of the Loss and its Adjustment 963 
 
 CHAPTER XXIII. 
 Subrogation 1026 
 
 CHAPTER XXIV. 
 Creditors 1053
 
 VI CONTENTS. 
 
 CHAPTER XXV. 
 
 Of the Notice. Preliminary Proof, raiticular Account . . \0iV2 
 
 CHAPTER XXVI. 
 
 Limitation of Suit as to Time and Place HOT 
 
 CHAFIER XXVII. 
 Arbitration H25 
 
 CHAPTER XXVIII. 
 Of Waiver and Estoppel 1 1 U 
 
 CIIAPTKR XXIX. 
 Of Accident Insurance , . . . IISO 
 
 CHAPTER XXX. 
 Of Guarantee and other Kindred Insurances 1236 
 
 CHAPTER XXXI. 
 Of Mutual Insurance 1'^^" 
 
 CHAPTER XXXII. 
 Remedies, Evidence, Pleading, Insolvency 1291 
 
 Index • 1^^^
 
 CHAPTER XVII. 
 
 THE PREMIUM. 
 AXALYSIS, 
 
 PRKMRTM. 
 
 Payment of, usually made a condition of the completion of the con- 
 tract, § 340, 
 
 What is Payment ? 
 
 check, note, any mode agreed on, §§ 345, 345 B., 345 E. 
 if no mode is fixed the agent may use his discretion, § 345. 
 may be in depreciated funds if such is the usage, § 345. 
 may be in dividends, mutual accounts, &c., § 345 <t. 
 
 but pix)lits not yet dechired as dividends will not be 
 applied to ]Kiy premiums to save a forfeiture, § 345 a. 
 may be by advertising, board, &c., § 347. 
 
 may be by order on a third i)crson, § 345 B. 
 a marginal provision tiiat premium is payable, part in cash 
 
 and part by note, is good. § 345 B. 
 an otfer of payment by a banker, the agent saying lie will 
 leave it iii bank, is et^uivalent to a deposit o* tlie amount, 
 § 345 B. 
 a credit on the books of the company by a general agent is 
 
 payment, § 345 B. 
 payment to agent is good though he converts it to his own 
 
 iise, § 345 B. 
 an agreement to pay in groceries, good (N. J.), § 345 B. 
 
 in professional services, nut good, (N. Y.J, § 345 B. 
 evidence that agent had no authority to receive anything but 
 cash, § 345B. 
 wliere such is the case, setting off debts between 
 agent and insured does not bind tlie company, 
 § 345 B. 
 part paj'mcnt will not save the jiolicy, even pro (antn, § 345 C. 
 tender is sufficient if made every time a premium comes due, 
 §§345D., 345. 
 
 PREMIUM NOTES, §§ 345 A., 345E.— H. 
 
 are loans, 345 A. 
 
 may constitute payment, 345 E. 
 
 authority to a company to issue policies is authority to take 
 premium notes, § 345 E. 
 
 may be good thovigh the company was insolvent at their exe- 
 cution, § 345 E. 
 
 VOL. 11. — 1 703
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 noii-pa}TDent of, fatal if so agreed, § 345 E. 
 
 but a stipulation in the note alone is not sufficient, 
 
 § 345 E. 
 
 unless taken for a premium in default, § 344 D. 
 
 if the company claims forfeiture for non-payment of 
 
 note, it must surrender the note, § 345 E. 
 
 though invalid (married woman's), do not avoid policy ab 
 
 initio, § 345 E. 
 void if risk never attaches, § 345 E. 
 may be written to mature at loss, § 345 E. 
 no presentment, demand, or notice necessary, § 345 F. 
 the company cannot claim the note and repudiate the rest 
 
 of the transaction, § 345 G. 
 misrepresentation of agent, a defence to suit on, § 345 G. 
 but not informality in liliug copy of charter with State 
 auditor, § 345 G. 
 
 Recovery by the company. 
 
 on a note, though the policy is suspended by its non-pay- 
 ment, § 345 H. 
 even after loss in the period of suspension, § 345 H. 
 and the whole unpaid premium may become due and 
 be recovered on failure to pay one instalment, 
 §345H. 
 the company may deduct unpaid premium from the amount 
 due on the loss, § 345 H. 
 even though the statute of limitations has run on the 
 note, § 345 H. 
 
 By whom payment may be made, 
 
 any one may pay premiums, but there will be no lien on the 
 insurance money for them except by contract, trust, sub- 
 rogation, or right of a mortgagee to add charges, even to 
 preserve the property, § 349 A. 
 
 contract to pay, good as to minor beneficiary, 349 A. 
 
 To whom payment is to be made. 
 
 must be to authorized agent, § 349 B. 
 
 or actually come to company's hands, 
 correspondence admissible to show authority, § 349 B. 
 handing over a policy for delivery gives said authority, 
 
 § 349 B. 
 payment to apparent agent, good, § 349 B. 
 facts may hold companj' in spite of a provision in by-laws, 
 
 which are part of policy, that the agent must be appointed 
 
 by seal, § 349 B. 
 authority to receive first premium does not authorize receipt 
 
 of after dues, § 349 B. 
 if an agent I'eceives payment from himself after forfeiture of 
 
 his policy, it is a fraud, § 349 B. 
 
 Place. 
 
 payment at wrong, not good, § 348 A. 
 
 parol admissible to show understanding as to, § 348 A. 
 
 704
 
 CH. XVII,] THE PREMIUM. 
 
 Time of Payment. 
 
 the premium is paid when it is delivered to express, § 340. 
 
 must be at or before midnight on the day it is due, § 349. 
 
 if it falls on Sundaj', the following business day is sufficient, 
 §349. 
 
 daj's of grace, §§ 353-355, 357. 
 
 payment after death, §§ 353-355. 
 
 the time named in the notice may be waived by a previous 
 course of dealing, § 356 A. 
 Notice 
 
 of non-pajinent of an order on a third person taken as pay- 
 ment, must be given before the company can claim a for- 
 feiture, § 345 B. 
 
 the company need not give notice that a premium or note 
 wQl soon be due, §§ 356, 341, unless 
 
 (1) it is necessary to inform the insured of the amount 
 due, as where he shares the profits, §§ 345 A, 356, or 
 
 (2) a course of dealing leads the insured to rely on it, 
 §§ 356, 356 A., or 
 
 (3) usage has made it a part of the contract, §§ 356, 
 356 A. 
 
 and where there is such usage, if no notice is sent, payment 
 
 in a reasonable time is sufficient, § 356 A. 
 but it is held in some courts that a habit or usage of this 
 kind may be discontinued by the company at any time, 
 and no evidence of such usage will be received to save 
 forfeiture unless it is shown that in the particular case in 
 question it was withheld on purj)Ose to obtain a forfeiture, 
 §§ 356 A, 352 A. 
 in New York the notice must state that in default of pay- 
 ment the policy will be forfeit, § 356 A. 
 the law applies to policies issued before it was passed, 
 
 § 356 A. 
 and the burden of proving notice is on the company, 
 §356 A. 
 mailing the notice is sufficient, whether it ever arrives or 
 not, § 356 A. 
 Excuse for non-jmymcnt. 
 
 the act of God, or of obligee is, §§ 350, 350 A. 
 so an act of government, §§ 350, 350 A, 
 as war. 
 
 premiums may be paid at the agency m the enemy's 
 country, which agency should be continued by the 
 company, § 350. 
 it has, however, been held that war abrogates a con- 
 tract of insurance the moment the parties become 
 public enemies, § 350 A. 
 the insured, however, can recover the value of the 
 premiums paid, if the company chooses to declare the 
 policy at an end, § 350 A. 
 if the right to pay the premiums remains, so also does 
 the right in the company to recover them, § 351. 
 
 705
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 insolvency of insurer, § 358. 
 
 ceasing to do business, or selling out to another company, 
 
 § 358. 
 extension of time, § 358. 
 change of agency, § 358. 
 failure of the company to give the notice required by a course 
 
 of business or u.';age, § 358 ; see also §§ 35(5, 356 A. 
 
 No excuse. 
 
 failure to receive notice that a premium is due, is no excuse, 
 §§ 341, 352 A ; see §§ 356, 356 A. 
 
 nor paralysis, insanity, or other disease, §§ 352, 352 A. 
 
 nor a mere suspicion of insolvency, § 352 A. 
 
 nor failure to find the agent, by calling several times, § 352 A. 
 
 nor the agent's assurance that the dividends will be suffi- 
 cient, § 352 A. 
 
 nor a personal agreement with the agent that the latter 
 would pay, § 352 A. 
 
 nor does the death of the agent excuse payment of premi- 
 ums due at the home office, § 352 A. 
 Suspension of the policy, 
 
 during default is sometimes agreed upon, § 343. 
 
 it revives on payment, even on a judgment, § 343. 
 but a part payment is not sufficient, § 343. 
 
 in the period of suspension the company is not liable, and 
 earns no premiums, §§ 343, 358. 
 
 but if they accept premiums for that period they cannot es- 
 cape liability, § 358. 
 
 FORFEITURE for non-payment, § 341. 
 
 only occurs when the policy stipulates for it, §§ 343, 344. 
 condition construed strictly against company, §§ 342, 363 A. 
 non-payment of a note at maturity may not be fatal, § 342. 
 may be optional with the company, § 342. 
 occurs at once on non-payment without any entry on the 
 
 company's books, protest of bill, or other act, § 342 A. 
 beneficiaries cannot avoid effect of non-payment, § 342 A. 
 failure to pay interest mi a loan {i. e. a note), is not failure to 
 
 pay p7-cmiums, § 342 A. 
 non-payment of a note taken for a premium is not fatal un- 
 less expressly so agreed, 342 .\. 
 Sometimes the policy is conditioned to revive on payment of over- 
 due premiums, §§ 341 A, 343. 
 Non-forfeitable, endowment, and paid-up policies, § 344 a. 
 
 Massachusetts statutes, §§ 344 b, 344 c. 
 
 paid-up policy by agreement, § 344 D. 
 
 continuation of original policy, § 344 D. 
 
 not affected by repeal of laws under which the original policy 
 
 was made, § 344 D. 
 not liable to execution, § 344 D. 
 tontine company not a trustee of any particular fund for a 
 
 policy-holder, 344 D. 
 
 706
 
 CH. XVII.] THE PREMIUM. 
 
 after indoi-sement as a paid-up policy, going to tonid zone 
 
 not fatal, § 344 D. 
 when the original policy is to be void for non-payment of 
 premium or interest, and provides for issue of a paid-up 
 policy after two premiums have been paid, some courts 
 hold that a paid-up policy must be called for during the 
 life of the policy, and that non-payment of interest on pre- 
 mium notes (unless regarded by the company as a loan), 
 will be fatal, even after the indoi-sement as a paid-up pol- 
 icy, § 344 E. 
 
 contra, § 344 E. 
 if demand for a paid-up policy is expressly to be made with- 
 in thirty days after forfeiture, the time is not of the es- 
 sence, § 344 F. 
 
 coiUra, § 344 F. 
 nothing is due until death, § 344 F. 
 policy may be n on- forfeitable by estoppel, § 344 G. 
 as by representations of agent, § 344 G. 
 contra, § 344 G. 
 the amount of a paid-up policy, or damages for its refusal, is 
 estimated according to clear mathematical princi- 
 ples, subject to the wording of the contract, § 344 H. 
 insured not entitled to the whole sum he has paid un- 
 less so agreed, § 344 H. 
 alteration of original contract from non-forfeitable to forfeit- 
 able, by terms of a new policy or a note fciken for a pre- 
 mium in default, § 344 I. 
 Parol agreement subsequent to policy that it should not fail by non- 
 payment, is good, § 346. 
 but a mere personal promise of an agent that he wUl see the 
 premium paid, § 348. 
 
 Waiver and estoppel. 
 
 of prepayment. 
 
 by delivery of policy without payment, §§ 360 A, 360 B. 
 
 sending policy by mail, § 360 A. 
 by course of dealing between the parties, § 360 A. 
 by usage generally, § 360 A. 
 
 assurance by agent that it makes no difference, § 360. 
 any circumstances showing that the company does not 
 
 intend to insist on the condition, §§ 360, 360 A. 
 giving credit expressly or impliedly, § 360 B. 
 
 agents' autliority to waive the rule in regard 
 to cash payment, §§ 360 B, 360 D. 
 in general. 
 
 by agent's wrong information as to date premium 
 
 is due, § 360 C. 
 by circular issued by company, § 360 C. 
 agent may waive immediate pajTuent, §§ 360 A, B, C, D. 
 
 contra, § 360 F. 
 the method to waiver specified in the policy must be 
 pursued, § 360 C. 
 
 707
 
 § 340] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 waiver of breach by payment of a loss this month, will 
 * not compel the company to pay another loss next 
 
 month, § 360 C. 
 a course of dealing, usage, or custom, to accept 
 overdue premiums binds the comj>auy in spite 
 of a clause in the policy declaring such acts 
 to be mere courtesies, §§ 361, 363. 
 even a general usage is sulhcient without show- 
 ing that the company adopted it, § 361 u., 
 contra, § 360 F. 
 an honest and prudent belief induced by the 
 comiKiny that premiums will be taken after 
 date is sutUcieut, § 361 n. 
 but receiving overdue premiums always with an iu- 
 ijuiry as to health, does not estop the comjiany in 
 future, § 361 n. 
 acceptance of an overdue premium waives the forfeit- 
 ure for Us non-i«yment, unless the jwlicy 
 gives the company a right to it in spite of for- 
 feiture, § 3(52. 
 othei-wise with a men> olfer to receive or a de- 
 mand (even by suit) without actual payment, 
 § 362. 
 where it is providiii that jiost pa3'ment will be received 
 oil proof of continued health, receiving the premium 
 without such proof waives it, but does not waive 
 the fact of death unknown to l>oth parties, § 353. 
 no estoi>i)el unless the plaintiff is injured, § 360 E. 
 no waiver unless the facta are known, § 360 K. 
 decisions adverse to waiver, § 360 F. 
 
 failure of the comi>jiny to give accustomed notice 
 no cstopjH'l, § 360 F. 
 waiver of statute provisions, making policies non-for- 
 feitable, § 360 (J. 
 a prospectus may cpialify the policy, §§ 3j5-3j6. 
 cy fires performance, § 357. 
 evidence of |>aynient, § 351). 
 
 a receipt is not conclusive but may be contradicted by oral 
 
 evitlence, § 359. 
 the company cannot deny receipt of a premium acknowledgetl 
 in the policy in order to defeat the contract, but may deny 
 it in order to recover the money, § 359. 
 Wrongful nfuml to recdiv premiums. 
 
 insured may sue for amount necessary to get another policy 
 as good, § 363 B. 
 or for what he has paid in, § 863 B. 
 Recovery of premiums by insured, see § 567. 
 
 § 340. Payment of the premium ; Option of Insured. — The 
 premium paid is the considei'ation received by the insurers 
 for the risk which they undertake. Ordinarily, therefore, and 
 708
 
 CH. XVII.] THE PREMIUM. [§ 341 
 
 in the absence of special stipulation to the contrary, the de- 
 livery of the policy and consequent assumption of the ilsk, 
 and the payment of the premium, are coincident. Thev are 
 two acts on the part of the respective parties which perfect 
 the contract and give it validity. The recital in the policy 
 is, that the insured having paid the premium, and complied 
 with certain other conditions, the insurers arc under certaiu 
 obligations to him. Uut it is also almost universally })ro- 
 vided that the policy shall not take efl'ect until the premium 
 be paid. And in such case, until the payment of the pre- 
 mium, the contract will not take effect, although all the terms 
 may have been agreed upon, and the policy made out, if not 
 delivered;^ nor even if delivered, if such is the intent of the 
 parties.- So if a policy by its terms is not to cover the risk 
 while a premium is overdue, a loss after the time when the 
 premium is due, and before it is paid, must be borne by the 
 insured, though the policy is not absolutely void.^ If the 
 premium be not paid during the life of the insured, with his 
 knowledge and consent, there is no contract. The unauthor- 
 ized payment liy a third person will not be an acceptance of 
 the terms of the policy by the insured.* And if the policy is 
 not to be valid till the premium be paid, and, if not paid in 
 fifteen days, to be void, neither jiarty is bound till the pre- 
 mium is paid.^ The jiremium is paid when the money is de- 
 livered to the expressman designated by the insurers, to be 
 forwarded to their agent.*^ It is from that time at the risk of 
 the insurers.^ 
 
 § 341. Premium; Non-payment; Forfeiture. — An insurance 
 company whose charter provides that on non-payment of the 
 premium the directors may forfeit, may also contract that 
 
 1 Sc-hw.irtz 1-. Germania Life Ins. Co., 18 Minn. 448; Flint v. Ohio Ins. Co., 
 8 Oliio, 501. 
 
 2 Bodine v. Exch. Fire Ins. Co., 51 N. Y. 117. See post, § 346. 
 
 « Wall V. Home Ins. Co., 36 N. Y, 157. See also post, §§ -341 a, 345 et seq., 
 and § 857. 
 
 * Wliitinp V. Massachusetts, &c. Ins. Co., 129 Mass. 240. 
 6 Bradley i-. Potomac Fire Iiis. Co., .32 Md. 108. 
 
 6 Whitley V. Piedmont, &c. Life Ins. Co., 71 N. C. 480. 
 
 • Currier v. Continental Life Ins. Co., 53 N. H. 538. 
 
 709
 
 § 341] INSDEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 such non-payment shall work a forfeiture, in which case no 
 action of the directors will be essential.^ If the policy by 
 its terms is forfeitable for non-payment of premium, or any 
 note given for a premium, when due, a failure to pay at ma- 
 turity a note given for a part of the premium, or any instal- 
 ment or interest thereon, when due, works a like forfeiture. 
 Such a stipulation is neither unconscionable nor usurious. 
 And the fact that no notice is given by the insurers of the 
 time when the note becomes due will not avail the insured, 
 or an assignee ignorant of the existence of such a note, since 
 they are under no obligation to give such notice.^ In Pitt v. 
 Berkshire Life Insurance Company, the policy purported to be 
 in consideration of $86.40 to the defendants " in hand paid," 
 and of a like sum to be annually thereafter paid, and was 
 conditioned to be void in case the insured should fail to pay 
 wlien due any notes or other obligations given for premium. 
 In point of fact, only a part of the first premium was paid in 
 hand in cash, and for the balance a note was given which set 
 forth on its face that if not paid when due the policy should 
 be void, in accordance with the conditions of the policy. And 
 the note being payable in instalments, and being expressed to 
 be for the unpaid balance of the premium, it was held that the 
 giving the note was not a payment of balance due of the pre- 
 mium, and that the forfeiture inured on non-payment of the 
 instalment first due.^ An attempt was made in Windus v. 
 
 1 Equitable Ins. Co. v. McLennon (Tenn.), 6 Ins. L. J. 124. 
 
 2 Robert v. The New England Mat. Life Ins. Co., 1 Disney (Supr. Ct. of Cin- 
 cinnati), 355, Gholson, J. ; Pitt v. Berkshire Life Ins. Co., 100 Mass. 500; Shaw 
 V. Berksliire Life Ins. Co., 10:] id. 254 ; Attorney-General v. North American Ins. 
 Co., 80 N. Y. 152; How ;;. Union Miit. Life Ins. Co., id. 32; Nedrow c. Farmers' 
 Ins. Co., 43 Iowa, 24 ; Lewis v. Plirenix, &c. Ins. Co., 44 Conn. 72 ; Mason v. 
 Citizens', &c. Ins. Co., 10 W. Va. 572; Southern Mut. Life Ins. Co. r. Taylor 
 (Va.), 10 Ins. L. J. 208; Moses v. Phoeni.x, &c. Ins. Co., 2 St. Louis Ct. of App. 
 408; Patch i-. Phoenix Life Ins. Co., 44 Vt. 481 ; Williams v. Wash. Life Ins. 
 Co., 31 Iowa, 541 ; Security Life Ins. Co. v. Gober, 50 Ga. 404 ; Russum v. St. 
 Louis, &c. Ins. Co., 1 Ct. of App. (Mo.) 238 ; s. c. 5 Big. Life & Ace. Ins. Cas. 
 243 ; Catoir v. American Life Ins. & Tr. Co., 33 N. J. 487 ; Baker v. Union Life 
 Ins. Co., 43 N. Y. 283, reversing s. c. 6 Robt. (N. Y. City Sup. Ct.) 393. See 
 post, § 344 a. 
 
 3 Ubi supra. See also Bigelow v. State, &c. Ins. Co., 123 Mass. 11.3. But in 
 Kentucky, it has been held that, where the premium is paid partly in cash and 
 
 710
 
 CH. XYII.] THE PREMIUM. [§ 841 a 
 
 Lord Tredegar ^ to recover a lapsed policy, after omission to 
 pay the annual premium, and after the insured had taken out 
 a new policy in a new office. The original policy was issued 
 at a time which, if it was still in force, would entitle it to cer- 
 tain valuable bonuses ; and many years after the lapse of the 
 policy the executors of the insured brought their bill in equity 
 to recover the policy on the ground that it had lapsed by ac- 
 cident, the insured not having received the usual notice, by 
 reason of his change of residence. But the Master of the 
 Rolls, the Lord Justices, and the House of Lords on appeal 
 to them, scouted the bill. When the premiums ai-e payable 
 thrice yearly in advance, one-third to be indorsed as a loan, 
 this means that the second instalments are to be paid at the 
 expiration of four and eight months respectively, and the 
 policy is forfeited unless each payment is made in advance ; 
 and the reserved right of the insurers to deduct unpaid pre- 
 miums from losses refers to the indorsements, and does not 
 release the insured from the obligation to pay in advance.*'^ 
 
 § 341 a. Non-Payment of Vx^xaiviva. (continued^. — A policy 
 for five years, subject to the condition that if the annual 
 premium shall not be paid within thirty days after it falls 
 due, the policy shall be void during default, although a note be 
 given for the payment of the several premiums as they become 
 due, is an absolute insurance only for the year in which the 
 premium is actually paid. It becomes void on non-payment 
 of each successive premium within thirty days after the ex- 
 piration of the previous year, but is renewed for the balance 
 
 partly in a note, which is regarded as practically a loan to the insured secured 
 by the profits or dividends which may be earned, while a failure to pay the cash 
 premium, or any note which may be given for it, promptly works a forfeiture, 
 a failure to pay the interest on the note as it accrues will not, although the pol- 
 icy provides that failure to pay in advance annually the interest on unpaid 
 notes or loans on account of annual premiums shall terminate the policy. The 
 court makes a distinction between the prompt payment of premiums and the 
 prompt payment of interest, which is in no sense a premium, on premium 
 notes. St. Louis Mut. Life Ins. Co. v. Grigsby, 10 Bush (Kr.), olO. See also 
 p^.st, §,.'348. 
 
 1 15 L. T. N. 8. 108, H. L. 
 
 2 Howard v. Continental Life Ins. Co., 48 Cal. 229 ; Hesterberg v. Equitable 
 Life Ins. Co., 1 Cincinnati Supr. Ct. Reptr. 483. 
 
 711
 
 § 341 a] INSURANCE : fire, life, accident, etc. [CH. XVII. 
 
 of the year on payment after that f.me. The payment of the 
 premium is optional with the insured, and if he make default, 
 the insurer has no other remedy than the avoidance of the 
 policy. If the policy be voidable only at the option of tlie in- 
 surer, it may be different.^ The case is distinguishable, as 
 to the right of recovery on the premium note, from those 
 cases where the policy provides that on failure to pay an in- 
 stalment the whole note may be recovered.^ In another case, 
 the language of which is entirely inconsistent with the doctrine 
 of Yost's case, under a policy which provided that on pay- 
 ment of all overdue instalments the policy should again attach, 
 it was held that the insurers might recover, in an action on 
 the note after the expiration of the policy, all the overdue 
 instalments, and it was also said that this would revive the 
 policy .3 Wlicre the provision of the policy was that the com- 
 
 1 Yost V. American Ins. Co., 39 Mich. 631 ; American Ins. Co v Cougle, 39 
 Mich. 53t). See also New York Life Ins. Co. v. Statham, 5 Big. Life & Ace. 
 Ins. Cas. 607, Strong, J. 
 
 2 Williams v. Albany City Ins. Co., 19 Mich. 451 ; American Ins. Co. v. 
 Klink, 65 Mo. 78. 
 
 8 American Ins. Co. v. Henley, 60 Ind. 515. But the Superior Court of 
 Michigan adheres to the doctrine of Yost's case, in American Ins. Co. t'. Stoy, 
 41 Mich. 385, in an elaborate opinion, an abstract of which is as follows ; — 
 
 " The written application made was ' for insurance against loss for the terra 
 of five years from the 12th day of August, 1875.' By the policy the company, 
 in consideration of 66. 10 cash premium and an instalment note, insured against 
 such loss as should happen during the term of five years, commencing Aug. 12, 
 1875, and terminating Aug. 12, 1880. In the application the rate is fi.\ed at 
 sixty cents, and but for one year. The amount insured is $1,016, the first in- 
 stalment payable in cash is, tiierefore, $6.10. The instalment note is given for 
 $24.38, and makes the assureil promising therein to pay Aug. 1, 1876, $6 10, 
 and a similar sum Aug. 1, 1877, also on Aug. 1, 1878, .$().09, and a like sum 
 Aug. 1, 1879. In the application it is stated that ' if any instalment upon the 
 premium shall remain due and unpaid thirty daj-s, then the policy issued upon 
 the application in consideration of such instalment shall be null and void until the 
 same is paid.' The policy substantially repeats this, and further recites that 
 the company ' shall not be liable to pay any loss happening during the continu- 
 ance of such default in the payment of such instalment, but on payment by the 
 assured or his assigns of all instalments of premium due under this policy, or 
 upon the instalment note given therefor, the company's liability shall revive, 
 and this policy shall be in force as to all losses happening after such pajynent. 
 . . . When a promissory note is given by the assured for the cash premium, it 
 shall be considered a payment of such premium, provided such note is paid at 
 or before maturity, . . . and no attempt to collect such note or any instalment 
 
 712
 
 CH. XVII.] THE PREMIUM. [§ 341 a 
 
 pany should not be liable while a note given for a premium 
 should be past due or unpaid, it was held that the policy was 
 suspended, and did not cover a loss during that time.^ 
 
 of premium due . . . shall be deemed a waiver of any of the conditions of this 
 policy, or have the effect to revive it' 
 
 " Held, 1. That these provisions are inconsistent with the clause declaring 
 the policy to be for a term of five years, and taken together they mean that a 
 yearly policy has been issued upon the instalment plan, to run for a period not 
 exceeding five years. This is especially clear from the provision of the policy 
 whereby the company ' reserved the right of cancelling this policy at its elec- 
 tion, by paying to the assured ti\e unearned premium, if any there be.' The 
 company could not retain and collect the note or deduct tiie amount before due 
 from the amount of the loss. As to all subsequent instalments after tlie loss 
 there would be no risk on the company's part, which is absolutely essential to 
 the right to recover premium in such a case. 
 
 " 2. Tiie provision of tlie company's charter that in case of refusal or neglect 
 to pay any instalment for thirty days the whole note shall become due and pay- 
 able, is not binding on defendant. The relations existing between the parties 
 are not like those of persons insuring in a mutual company, where the assured 
 becomes a member of the company and bound by all its rules. The company 
 may have authority under its charter to carry on business on the mutual plan ; 
 but such is not the contract here The clause in the policy referring to the 
 charter only makes it a part of the policy to explain such rigiits and obligations 
 as are not otherwise provided for by the terms of the agreement. Here, how- 
 ever, the policy fully provides fi)r all the rights and obligations of both parties so 
 far as they are in issue, and tiie charter provisions cannot be admitted to change 
 in important matters tlie deliberate agreement entered into. The case in its 
 facts is therefore not like Williams r. Albany City Ins. Co., 19 Mich. 451 
 
 "3. The words ' null and void ' as used in the policy do not mean voidable. 
 A payment by the assured revives the policy from that date, but gives no life 
 to it covering the period it was suspended. Parties may agree that on the hap- 
 pening of a certain contingency their agreement shall become absolutely void, 
 but may again take effect from the happening of another event at either party's 
 option. 
 
 " 4. The argument is unsound that as the policy was suspended by the 
 mere wrongful act of the assured in not paying the instalment wiien due, and 
 as he could revive the policy by paying, lie should not be heard to complain 
 of any hardship resulting from his own wrong in not paying as he promised. 
 Parties often take advantage of some positive provision of law to aid them in 
 maintaining a defence to an action, where in so doing they take advantage of 
 something done by themselves which they ought not to have done. And here, 
 under our construction of the contract, the assured is at liberty to decline at 
 the end of the year to renew at all ; he is therefore guilty of no wrong 
 whatever." 
 
 In Klink's case the words of the policy were, "in part or whole consideration 
 of such note or notes." 
 
 1 Garlick v. Mississippi, &c. Ins. Co., 44 Iowa, 553. See also Schmidt v. 
 Insurance Co.. 41 III. 295. 
 
 713
 
 § 342] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 § 342. Non-payment of Premium (^continued'). — But when 
 the policy is forfeitable for non-payment of the premium, but 
 does not distinctly provide that the non-payment of a note 
 given therefor at maturity shall work a forfeiture, as this 
 clause is inserted for the benefit of the insurers it must be 
 taken most strongly against them, and the non-payment of 
 the note at maturity will not work a forfeiture.^ The courts 
 will not extend the operation of a condition, the breach of 
 which involves a forfeiture, to a case not clearly within it. 
 Thus, where two notes were taken, one subject to the condi- 
 tion and the other not, the failure to pay tlie latter was held 
 not to work a forfeiture.^ And thougli the note itself be made 
 payable in six months, and by the terms of the note the policy 
 is to be void if the note be not promptly paid at maturity, it 
 has been held that the non-])ayment of the note only renders 
 the policy voidable and not void, so that the policy continues 
 in force unless the insurers do some act to show that they 
 insist upon the forfeiture.^ The case referred to was this : — 
 
 A mutual life insurance company insured the life of a 
 member for a certain annual premium, to be paid at the 
 beginning of each year, and, if not so paid, the policy was to 
 cease and determine, the insured to forfeit all moneys {)aid 
 and all rights under such jiolicy. The insured paid three 
 annual premiums, but gave his promissory note for the next 
 year's premium, the taking of which the comj)any assented to, 
 payable six months after date, bearing interest at a higher 
 rate than the rules, <fec., of the company provided for. The 
 note on its face was " for premium on policy No. 25,187, and 
 if not paid at maturity, said policy is to be void." The note 
 was not paid at maturity, nor did the company demand pay- 
 ment of the maker, on the day it became due, but uigcd pay- 
 ment at other times. The maker was solvent. When the 
 next year's premium would have fallen due, by the terms of 
 
 1 McAllister v. New England Mut Life Ins. Co., 101 Mass. 558. 
 
 2 New England Mut. Life Ins. Co. v. Ilasbrook, 32 Ind. 4-17. 
 
 3 Mut. Ben. Life Ins. Co v. French, 2 Cincinnati Superior Court Reporter, 
 321; affirmed, .30 Ohio St. 240; La Compagnie D. Ass., &c. v. Gramnion (Q. B. 
 Montreal), 3 Legal News, 19. But see Thompson v. Knickerbocker, &c. Ins. Co., 
 C. Ct. (Ala.) 5 Big. Life & Ace. Ins. Cas. 8. 
 
 714
 
 CH. XVII.] THE PREMIUM. [§ 342 
 
 the policy upon a tender made of it to the agent of the com- 
 pany, tlie latter refused to receive it, claiming that the risk 
 had determined by reason of non-payment of the note, and 
 demanded back the receipt given for the previous year's pre- 
 mium, but continued to hold the note. In an action brought 
 after the death of the insured, to recover upon the policy, the 
 action was sustained by the court. In giving its opinion the 
 court said : — 
 
 " Now, what is the legal effect of the policy itself ? It is 
 an agreement to insure the life of French from year to year 
 during his life, on the payment to it each year of a certain 
 amount of money as a premium for the risk taken. His fail- 
 ure to pay such premium at the beginning of each year, unless 
 waived by the company ipso facto^ would cause the policy to 
 ' cease ' and determine. It was a contract that could only 
 continue from year to year, at the option of the insured, who 
 could let it drop at any time. If, on July 6, 1867, the insured 
 had said to the company, ' I will not pay ; I do not wish to 
 insure longer in the company,' it could not have compelled 
 him to do so ; it could not have sued and recovered from him 
 that or any subsequent year's premium. Its remedy was pro- 
 vided against the insured by the forfeiture of all his moneys 
 previously paid and rights under the policy. Hence the pay- 
 ment of each year's premium was a condition precedent to the 
 further existence of the contract.^ 
 
 " Had this note been taken in pursuance of any stipulation 
 of the policy, or rules or laws of the company authorizing it 
 as a method of paying the annual premium, it would then 
 have been a condition precedent to the continuance of the 
 policy, which would have ceased and determined, as of July 
 6, 1867 ; but if not so provided for, this would not necessarily 
 be S0.2 
 
 " Let us, then, inquire whether the note given in this case 
 could have been sued upon and recovered by the company 
 
 1 See Mut. Ben. Life Ins. Co. v. Jarvia, 22 Conn. 133. 
 
 2 McAllister v. New England Mut. Life Ins. Co., 101 Mass. 558 ; Robert v. 
 New England Mut. Life Ins. Co., 1 Disney, 355 ; s. c. 2 id. 106, 107; New Eng- 
 land Mut. Life Ins. Co. v. Hasbrook, 32 lud. 447, 449. 
 
 715
 
 § 342] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XYII, 
 
 after it became due, or whether the maker could have suc- 
 cessfulW defended against it, on the ground that he had 
 elected to insure no longer with the company. We think he 
 could not. The risk for the whole year would have com- 
 menced ; the policy for -that year would have attached, and 
 the company would have carried it six months and three 
 days, liable in case of the insurer's death during the whole 
 time. The payment of the note became a condition subse- 
 quent, which only the company could avail itself of. There 
 would have been an election on the part of the insured to 
 insure for another year, and not a refusal to do so, as if he 
 had not attem])tcd to pay the premium for the year, in which 
 case there would have been no liability on his part. Such 
 terms in the note made the policy merely voidable at the 
 option of the company. Forfeitures are not favored, espe- 
 cially wlicre delay can be compensated for in money.^ 
 
 " Still the company might have forfeited the policy on non- 
 payment of the note when it became due, but it should have 
 exercised the right promptly. It should have demanded pay- 
 ment on the last day of grace, during the business hours of 
 the day ; and if such payment was not tlien made, it should 
 have declared the policy forfeited or void. This is in ac- 
 cordance with well-settled rules for enforcing forfeitures for 
 breaches of condition subsequent. No such demand is re- 
 quired in the case of the non-performance of conditions pre- 
 cedent, as the stipulation in a policy for the payment of 
 annual premiums, though it is usual for companies to notify 
 parties a few days in advance of the time such annual pay- 
 ments are to be made ; but this is mere accommodation. 
 The company, tlien, did not determine or make void this 
 policy when the note fell due, and it became a mere debt, 
 like the check given for the other half of that year's cash 
 premium." ^ And even a parol agreement to pay may be so 
 far a payment as to prevent a torfeiture of the policy by the 
 
 i Boyd V. Talbert, 12 Ohio, 212, 214 , Smith v. Whitbeck, 13 Ohio St. 471. 
 2 Mut. Ben. Life Ins. Co v. Frencli, 2 Cincinnati Superior Court Reporter, 
 321 ; s. c 4 Big. Life & Ace Ins Cas. 369, affirmed, 30 Ohio St. 240. 
 716
 
 CH. XVII.] THE PREMIUM. • [§343 
 
 mere fact of non-payment.^ In such case, however, the in- 
 sured is not entitled to his paid-up policy till the notes given 
 in part payment of the premiums are themselves paid.^ 
 
 [§ 342 A. On failure of the assured to pay the premium 
 the policy, if so conditioned, at once becomes void, without 
 notice or other act.^ If the premium is paid by a foreign bill 
 drawn by the insured, and the policy is to be void if the bill 
 is not paid at maturity, forfeiture follows the non-payment of 
 the bill on proper presentment at maturity without protest^ 
 although protest might be necessary to fix the liability of the 
 drawer on the bill.* Those beneficially interested in the policy 
 cannot avoid the effects of the non-payment of a premium note. 
 It was their duty to have protected themselves by seeing that 
 it was paid.^ Failure to pay interest on a loan indorsed on 
 the policy will not be fatal under a provision for forfeiture by 
 non-payment of premiums.^ When a note is taken for the 
 premium, and the policy delivered, non-payment of the note 
 at maturity will not invalidate the insurance.'] 
 
 § 343. When no Provision for Forfeiture , Suspension of 
 Policy. — If, however, the policy contains no such proviso, 
 though the charter and by-laws require the payment of 
 annual premiums, the non-payment of the annual premium 
 when due does not work a forfeiture. Such a policy insures 
 for the number of years stipulated absolutely, leaving the 
 annual payment of the premium to be enforced, not as a con- 
 dition, but as a part of the consideration agreed to be paid.^ 
 So if the policy is merely suspended while a premium or 
 instalment remains unpaid, a payment, even though upon a 
 
 1 See pout, § 346. 
 
 2 Moses V. Brooklyn Life Ins. Co., 50 Ga. 196. But see Home Ins. Co. v. 
 Pierce, post, § 345 a. 
 
 3 [Roeliuer v. Knickerbocker Life Ins. Co., 63 N. Y. 100 at 163; Ashbrook 
 V Phoenix Mut. Life Ins. Co., 94 Mo. 72, even an entry on the company's books 
 is not necessary.] 
 
 * [Knickerbocker Life Ins. Co. v. Pendleton, 112 U. S. 696] 
 
 5 [Continental Ins. Co. v Daly, 33 Kans. 601.] 
 
 6 [Gardner v Union Cent Life Ins. Co., 5 Fed. Rep. 430, 6th Cir. (Ohio), 
 1880.] 
 
 1 [La Compagnie d'Ass. des Cultivateurs v Grammon, 24 L. C. Jur. 82.] 
 8 Woodfin V. The Asheville Mut. Ins. Co., 6 Jones (N. C ), 558. 
 
 717
 
 § 344] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 « 
 
 judgment recovered in a suit therefor, will revive the policy.^ 
 [But a part payment will not remove the suspension .2 Where 
 a policy is to be void by non-payment of a premium, yet 
 capable of revival by subsequent payment, the company is 
 not liable for loss occurring after default and before revivor, 
 nor does it earn premiums during the period of suspension.^] 
 
 § 344. Under the following special and peculiar facts a 
 policy was, after much fluctuation of judicial opinion, held 
 void. The policy was headed as follows : " Annual premium, 
 £33 ; whole term, payable by quarterly instalments of £8 5s. 
 each." The policy was dated Aug. 2, 1856, and recited that 
 " the assured liad paid £8 5s. as the premium till 2d of No- 
 vember." It also stipulated tliat if the insured should die 
 within twelve calendar months from the date thereof, or 
 should live beyond such period, and should on or before that 
 period, or before the expiration of every succeeding twelve 
 calendar months, pay the annual amount of i)rcmium, the 
 insurers should be liable; with a proviso, however, that if 
 the insured should die before the whole of the quarterly 
 payments shall become payable for the year, the directors 
 might deduct from the sum insured the whole of the premium 
 for that year, reckoning it to commence from the 2d of 
 August. The insured died after the third quarterly instal- 
 ment had become payable, but before it was paid, and it was 
 held in the Queen's Bench that the non-payment of the 
 third instalment rendered the policy void, on the ground 
 that this was a policy from quarter to quarter, leaving to 
 the assured liberty to drop it at the end of any quarter, and 
 not imposing any continuing liability on the insurer, unless 
 the quarterly payment is made at the end of the quarter ; and 
 further, that the condition as to the payment of all the quar- 
 terly premiums was a condition precedent.* This judgment, 
 however, was reversed in the Exchequer Chamber,^ on the 
 ground that the insurance was an annual insurance for a 
 
 1 American Ins. Co. v. Klink, 65 Mo. 78. 
 
 2 [Curtin v. Phoenix Ins. Co., 78 Cal. 619.] 
 
 8 [Mattliews v. Insurance Co., 40 Ohio St. 135, 1.38.] 
 4 Sheridan v. Phoenix Life Ass. Co., E., B. & E. 156. 5 ibid. 160. 
 718
 
 CH. XVII.] THE PREMIUM. [§ 344 a 
 
 year, and from year to year, time being given to pay the 
 annual premium by quarterly instalments ; and that the ab- 
 sence of any express promise to pay, and of any provision as 
 to the consequence of non-payment of the quarterly premium, 
 prevented their payment from being a condition precedent. 
 But this judgment was again reversed in the House of Lords, 
 on the ground that the " annual amount " of the premium 
 had not been paid, and the proviso was not meant to apply 
 to the case of a default of payment, but to the case where 
 the payments had been regularly made as they became due, 
 but when all the instalments had not become due.^ 
 
 The testimony of an experienced actuary is admissible on 
 such a question.^ 
 
 § 344 a. Non-forfeitable Policy ,• Proportionate Payments. — 
 Where, however, a policy indorsed "non-forfeiting life policy" 
 contains the provision that if, after the receipt of two or more 
 annual premiums, the policy should " cease " by reason of 
 non-payment of premiums, then, upon a surrender within 
 twelve months from the time of "such ceasing," a new policy 
 will be issued for "such sum as is proportionate with the 
 annual payments which have been made," and also a pro- 
 vision that, if the premiums shall not be paid the insurers 
 shall only be liable for so much of the loss "as is propor- 
 tionate with the annual payments made, as above specified," 
 the insured has an absolute claim for such proportionate 
 insurance, whether surrendering the policy Avithin twelve 
 months or not. Such, reading the two provisions together 
 in the light of the rule that language working forfeiture 
 will be strictly construed against a forfeiture, is their fair 
 import. They serve to enable the company, in certain con- 
 tingencies, to get rid of a bad risk, but not to convert a 
 policy declared to be non-forfeitable into a forfeitable one, 
 or to relieve them from a liability which they admit. Can- 
 cellation of the policy by the insurers is of no avail.^ And it 
 
 1 Pliocnix Life Ins. Co. v. Sheridan, 8 H. L. Cas. 745. 
 - Greenfield v. Massachusetts Life Ass. Co., 47 N. Y. 480. 
 3 Chase v. Phoenix, &c. Ins. Co., 67 Me. 85. See also Fitch's Case, ante, 
 p. 223, n 2. 
 
 VOL. II. — 2 719
 
 § 344 a] INSURANCE : fire, life, accident, etc. [ch. xvn. 
 
 was held in a later case in the same court that an adminis- 
 trator of the deceased insured might under a similar policy 
 not declared to be non-forfeitable, recover such proportion- 
 ate sum within twelve months after "the ceasing" of the 
 policy. Nor is it necessary in such cases to surrender the 
 old policy .1 And where two annual premiums were paid, 
 part in cash and part in notes on interest, and, though the 
 policy was not declared non-forfeitable, the notes provided 
 that it was to be forfeital)le if the interest on such notes was 
 not paid when due, it was held that a failure to pay such 
 interest did not work a forfeiture as to the "proportionate 
 part" of the amount insured, two annual premiums having 
 been paid in cash and notes.^ 
 
 1 Dorr V. Phoenix, &c. Ins. Co., 67 Me. 438. See also Coffey i^. Universal, 
 &c. Ins. Co , 10 Ins. L. J. 525. In Bussing i;. Union, &c. Ins. Co. (Ohio), 8 Ins. 
 L. J. 218, it was held, no time being fixed by tlie policy, that the new paid-up 
 policy must be demanded wliile tlie first policy was in force. In Dutcher v. 
 Brooklyn Life Ins. Co., it was held that, under the peculiar conditions of the 
 policy and tiie practical construction of them by the company, tiie insured was 
 entitled to a paid-up policy, without payment of his premium notes, which tiie 
 court held were only to be paid wlien the policy became payable, although tiie 
 policy was to be issued for as many tentiis " as there have been annual prem- 
 iums in cash." s. c. affirmed, 5 Reptr. 61. See post, § 363 a. 
 
 2 Ohde V. Northwestern, &c. Ins. Co., 40 Iowa, 357. " One of the conditions 
 of the policy is that if the premiums, or the interest upon any note given for 
 premiums, should not be paid on or before the days mentioned in tlie policy for 
 the payment thereof, then in every such case the company sliould not be liable 
 for the payment of the whole sura assured, and for such part only as is ex- 
 pressly stipulated in tiie policy. 
 
 " Tliis express stipulation is as follows : ' And the said company further prom- 
 ise and agree tiiat if default shall be made in tlie payment of any premium, they 
 will pay, as above agreed, as many tenth fxtrts of the original sum insured as there 
 shall have been complete annual premiums paid at the time of such drfault.' What 
 then is to be considered as the payment of complete annual premiums ? It is, 
 we think, quite clear from the whole contract that the entire premium for each 
 year was to be ninety-two dollars and ninety-three cents, pajable in two semi- 
 annual cash payments of twenty-four dollars and eighty-four cents each, on the 
 12th days of -July and January, and the execution of a note to the company for 
 the sum of forty-three dollars and twenty-five cents, with interest at seven per 
 centum ; that these cash payments were to be made, and such a note executed 
 each year for the first ten years of the policy ; that it is not contemplated that 
 these annual premium notes are to be paid each year as a condition to the con- 
 tinuance of the policy. On the contrary, the second condition in the policy 
 expressly provides for and requires only the interest upon these notes to be paid 
 together with the cash premiums. 
 
 720
 
 CH. XVII.] THE PREMIUM. [§ 344 b 
 
 § 344 b. Endowment Policy non-forfeitable under Massachu- 
 setts Statute. — In Carter v. John Hancock Life Insurance 
 
 " This condition exonerates the company from liabihty to pay the whole sum 
 in case the premiums or the interest upon any notes given for premiums shall 
 not be paid, &c. Tliis language is utterly inconsistent with the idea that a fail- 
 ure to pay the principal of these notes annually should work a forfeiture of the 
 policy to any extent. The agreement is to pay money and give notes bearing 
 interest each year, and to pay the interest accruing upon these notes. It is 
 beyond question that the assured would have no right to insist tiiat the company 
 sliould receive the entire premium in cash, for that they have not agreed to do ; 
 they have stipulated for interest-bearing notes instead. More than this, the 
 assured was under certain circumstances entitled to have liis share of dividends 
 applied on the notes, which also proves that these notes were to be made 
 annually, the interest to be paid annually by the assured, and the principal to 
 remain unpaid except as dividends were applied to that end, and to be liens on 
 tiie policy until they should become due by limitation, or death of the assured, 
 when they should be deducted from the policy. 
 
 " The doctrine is well settled in this State that the giving of a note does not 
 operate as payment of a precedent debt, unless it be so agreed by the parties ; 
 but that doctrine does not apply to this case. Here the agreement on the part 
 of the assured was to make certain semi-annual cash payments, and execute 
 annual notes, and to pay tiie interest falling due upon such notes, — the payment 
 of tiie principal of the notes being otherwise provided for, first by dividends due 
 the assured, and second, by deduction from the amount of the policy when that 
 became payable. It follows, therefore, that when the assured had made the 
 semi-annual cash payments in July and January, executed and delivered his 
 note for the balance of tiie premiums as stipulated in the policy, and paid the 
 interest due, if any, on the previously executed note or notes, then a complete 
 annual premium was paid. This the assured performed for two years, which 
 entitled his widow, upon his death, to two tenths part of the whole sum named 
 in the policy, deducting therefrom the amount of the two premium notes and 
 their accrued interest." Little v. Northwestern, &c. Ins. Co., Superior Ct. 
 (Indianapolis), o Ins. L. J. 149 ; s. c. affirmed, 56 Ind. 504 ; Hull r. Northwestern 
 &c. Ins. Co., 39 Wis. .397. In this case, however, the policy was indorsed, " This 
 policy is non-forfeitable. Each complete yearly payment secures its proportion 
 of the policy." Northwestern, &c. Ins. Co. v. Bonner (Ohio), 9 Ins. L. J. G84 ; 
 Kirkpatrick v. Knickerbocker Life Ins. Co. (Tenn.), 6 Ins. L. J. 368; Symonds 
 V. Northwestern, &c. Ins. Co., 23 Minn. 491 ; Mound City, &c. Ins. Co. i'. Twi- 
 ning, 12 Kans. 475; Nettleton v. St. Louis, &c. Ins. Co., C. Ct. (Ind.), 6 Ins. L.J. 
 420; Watts v. Atlantic, &c. Ins. Co. (Out. Q. B.), 16 Can. L. J. 215; Montgom- 
 ery V. Phcpnix, &c. Ins. Co. (Ky.), 8 Ins. L. J. 300. Where the annual premi- 
 ums are paid by notes of a third person, and renewal receipts are given, a 
 paid-up policy cannot be refused because the notes are unpaid. Michigan, &c. 
 Ins. Co. V. Bowes, 42 Mich. 19. But the note of the insured and a renewal re- 
 ceipt will not renew beyond the maturity of the notes. Wilmot v. Charter Oak 
 Ins. Co., 40 Conn. 483. On the other hand it was held in Smith v. Continental 
 Ins. Co. (Dist. Ct. of Phila.), 3 Ins. L. J. 63, that even where a policy was de- 
 clared non-forfeitable, it was nevertheless forfeited if the policy was not actually 
 
 721
 
 § 344 h] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 Company,^ the case, which cannot well be abridged, was this, 
 Soule, J., giving the opinion : — 
 
 " The plaintiff holds a policy on his own life, issued by the 
 defendant, dated in August, 1866, and payable to a person 
 named in it in case of the plaintiff's death within ten years, 
 but to the plaintiff if he should survive that period. It is 
 termed an endowment policy. It contains an express condi- 
 tion ' that if any premium due upon this policy shall not be 
 paid at the day when the same is payable, this policy shall 
 thereupon become forfeited and void ; this condition, how- 
 ever, being subject to the provisions of the 186th chapter of 
 the acts of the legislature of Massachusetts in the year 1861, 
 entitled " An act to regulate the forfeiture of policies of 
 life insurance." ' The plaintiff paid in cash or by his own 
 notes all the several annual premiums except the last one due 
 in August, 1875. This he did not pay. The company had 
 due notice that the plaintiff had survived the period of ten 
 years named in the policy. The question to be decided is, 
 whether, notwithstanding his failure to pay the last premium, 
 
 surrendered within the limited time. In Schumacher v. Manliattan Life Ins. 
 Co., C. Ct. (Mo.), 3 Ins. L. J. 455, to tlie same effect, the policy was not declared 
 nonforfeitable. See also Winchell v. John Hancock Life Ins. Co., C. Ct. (Mass.), 
 8 Ins. L. J. 652, wliere it was held that equity could not relieve against neglect 
 to comply with conditions upon which tiie statute maile a policy nonforfeitable, 
 but where, however, it was licld tliat under a policy wliich," at any time" after 
 the payment of one annual premium, pave tiie insured the option to surrender 
 and secure a paid-up policy for a proportionate amount, tliat the insured or Ins 
 administrator might, at any time before the next annual premium becomes due, 
 choose between a policy as provided by the statute, or a paid-up policj' as pro- 
 vided by the contract, and if he did not choose the former he forfeited only tliat, 
 but still retained his right to a paid-up policy. In Knapp v. Homoeopathic Life 
 Ins. Co., C. Ct. (Mass.), 10 Ins. L. J. 84, the policy was held forfeited because 
 the insured did not exercise a similar option, given by the contract within the 
 ninety days limited by the terms of the contract. The non-forfeiture law of 
 Massachusetts St. 1861, c. 186) is applicable to policies issued by foreign insur- 
 ance companies at their home offices to residents of Massachusetts, if the com- 
 panies consent to do business in the State, subject to its laws. Morris i'. Penn., 
 &c. Ins. Co., 120 Mass. 503; Holmes i^. Charter Oak, &c. Ins. Co. (Mass.), 10 
 Ins. L. J. 348. But by Stat. 1880, c. 202, such law is not to apply to policies 
 issued after Dec. 81, 1880. So it was held in Smith v. Mut. Life Ins. Co., U. S. 
 Dist. Ct. (Mass.) January, 1881. See a.lao post, § 863 a. 
 1 127 Mass. 153. 
 
 722
 
 CH. XVII.] THE PREMIUM. [§ 344 h 
 
 he is now entitled to recover the amount of the insurance. 
 This depends on the effect to be given to the reference in the 
 policy to the statute of 18G1. It is not necessary, in deciding 
 this case, to consider the question whether the statute of 
 1861 applies, by its own force, to endowment insurance poli- 
 cies, so called, because the forfeiture clause in the plaintiff's 
 policy is in terms made subject to the conditions of that stat- 
 ute. The only question, therefore, is as to the construction 
 to be given to the forfeiture clause thus qualified. 
 
 " The defendant contends that the effect of the statute when 
 incorporated into the policy is merely to keep it alive for a 
 certain period of temporary insurance after the failure of the 
 insured to pay the stipulated premium when due, and to make 
 the sum insured payable only in case of the death of the 
 insured before the expiration of that period. The plaintiff, 
 on the other hand, contends that the effect is to make the 
 sum insured payable if either the death of the insured or the 
 expiration of the ten years occurs during the period of tcm- 
 porarv insurance. The defendant relies on the language of 
 the second section of the statute, which provides that if the 
 death of the insured occurs within the term of temporary 
 insurance, the company shall be bound to pay the amount of 
 the policy ; and argues that as the statute specifies the death 
 as the contingency on which the liability to pay depends, 
 there can be no liability after the failure to pay the premium, 
 except in case of death. 
 
 "It is to be observed, however, that the purpose of the 
 statute is merely to establish a rule which shall enable the 
 insured to reap the full benefit of premiums paid before 
 default on his part, and at the same time to secure to the 
 insurance company, in case it is obliged to pay, the full 
 amount of the premiums which the terms of the policy call 
 for. It is not the purpose of the statute to make a new con- 
 tract between the parties, nor to make any change in the time 
 when the amount of the policy becomes payable. No diffi- 
 culty of construction arises when the statute is to be applied 
 to a policy for life without the endowment feature. Such 
 policy is payable on the death of the assured, and the lan- 
 
 723
 
 § 344 J] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 guage of the statute is equivalent to saying, ' If the event, 
 on the happening of which the policy becomes payable, oc- 
 curs during the term of temporary insurance, the company 
 shall be bound to pay.' As applied to a pure life policy, the 
 words of the statute cannot have any other meaning than 
 this ; and when the statute provisions are adopted in an 
 endowment policy, for the purpose of qualifying the forfeiture 
 clause, the clause thus qualified is to be so construed as to 
 give the insured its full benefit, without altering any other 
 provision of the policy, if this can be done without violating 
 any rule of law. In the endowment policy, the expiration of 
 ten years from its date is the occurrence of an event on the 
 happening of which the policy becomes payable. As regards 
 the right to receive, and the obligation to pay the amount of 
 the policy, it is equivalent to the death of the insured iu a 
 pure life policy. In construing tlie forfeiture clause, as quali- 
 fied Ijy the imi)ortation of the statute into it, we must, there- 
 fore, regard the expiration of ten years as equivalent to the 
 death of the insured, so far as regards the (luestion when the 
 policy becomes payable. There is no hardship to the defend- 
 ant in this construction, because it is permitted to deduct 
 from the amount of the policy all unpaid premium, with inter- 
 est from the day it became due to the day when the amount 
 of tlie policy becomes due, so that it is put in precisely the 
 same position in which it would have been if the premium 
 had been duly ))aid. The construction contended for by tiie 
 defendant might impose serious hardship on the insured. 
 The premium provided for by policies is fixed with reference 
 to the endowment feature, and is, of course, much larger than 
 is paid for a pure life policy when the age of the insured is 
 such that his expectation of life is largely in excess of the 
 period at the end of which the amount of tlic policy is made 
 payable. It would be altogether to the advantage of the 
 insurance company to hold that the policy should be payable 
 only in case of death within the term of temporary insurance, 
 though sucli term might run for years after the end of the 
 period named in the policy, and that the company in case the 
 life dropped might deduct from the amount of the policy 
 724
 
 CH. XVII.] THE PREMIUM. [§ 344 C 
 
 the large unpaid endowment premium with the accumulated 
 interest during those years. The more valuable the policy at 
 tlie time of the default, the greater might be the advantage 
 to the company in such case. 
 
 " The result is tliat, as the plaintiff survived the period of 
 ten years, and duly notified the defendant of the fact, and the 
 value of the policy when he failed to pay the premium was 
 sufficient to furnish a premium for a temporary insurance for 
 a term extending beyond the expiration of said ten years, he 
 is entitled to recover, and the defendant is bound to pay the 
 amount of the policy less the amount due from him to the 
 defendant." 
 
 § 344 c. Massachusetts Statute ; Indebtedness ; Amount 
 recoverable. — Under the Massachusetts statute a question of 
 considerable importance arose as to what constituted indebt- 
 edness to the company whicli might be deducted in determin- 
 ing the amount of premium for temporary insurance. 
 
 Miller, J. : " The policy upon which this action is founded 
 contained a provision, ' that in case any premium due upon tliis 
 policy, or any note given for part of the premium, shall not be 
 paid at the day when payable, the policy shall thereupon cease 
 and determine. The net value of the policy on that day shall 
 be ascertained according to the " Combined Experience " or 
 " Actuaries " rate of mortality, with interest at the rate of four 
 per cent per annum, from which value shall be deducted what- 
 ever is due to the company, including any unpaid premium 
 notes, with interest at six per cent per annum thereon ; four- 
 fifths of the remaining value shall be considered a premium 
 for temporary insurance, and the term for which it will insure 
 shall bo determined according to the age of the insured when 
 said unpaid premium became payable upon the aforesaid 
 assumption of mortality and rate of interest, and during said 
 term, and no longer, this policy shall continue in force, pro- 
 vided no other cause of forfeiture exists,' &c. The policy 
 was issued in Massachusetts, and the construction to be given 
 to the clause above cited is governed by a special statute of 
 that state. This law provides for the continuance and valid- 
 ity of the policy for a limited period after the failure to pay 
 
 725
 
 § 344 6'] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 the premium, and for ascertaining what that period is to be, 
 and then declares that ' after deducting from such net value 
 any indebtedness to the company, or notes hold bv the com- 
 pany against the insured, which notes if given for premium 
 shall then be cancelled, four-fifths of what remains shall be 
 considered as a net single premium of temporary insui-ance, 
 and the term for which it will insure shall be determined ac- 
 cording to the age of the party at the time of the lapse of pre- 
 mium, and the assumptions of mortality and interest aforesaid.' 
 
 " The question is, what amount is to be deducted ; and this 
 must be determined by the construction to be given to the 
 provisions of the policy of the non-forfeiture act, to which 
 reference has been had. One half year's premium had been 
 paid upon the policy when it was issued, and when Selye, the 
 insured, died, tliat period of time had elapsed, and the re- 
 maining half year was to be paid. 
 
 "The defendant claims that under the law cited the unpaid 
 half of the premium for tlie first year is to be considered as 
 an indebtedness, and is to be deducted from the net value of 
 the policy, and that upon this prlncijjle the policy lapsed after 
 the expiration of the first six months. 
 
 " Evidence was taken upon the trial of witnesses versed in 
 calculations of this kind, and tiie defendant's actuary, and 
 another person, who Avas an expert in such matters, upon the 
 assumption that the unpaid premium for the last half-year 
 was a debt, and as such should be deducted from the net 
 value of the policy at the close of the first six months, testify 
 that the policy would remain in force after this time expired, 
 which was on the thirtieth day of June, and until the seven- 
 teenth day of September, and as Selye died on the first day of 
 October, it had lapsed and was of no avail. 
 
 " On behalf of the plaintiff, it is proved by an expert of 
 large experience that, upon tlie theory that the unpaid pre- 
 mium is not a debt, the policy would be carried far beyond 
 the time of Mr. Selye's death. The question then recurs, 
 was the unpaid premium an indebtedness which was to be 
 deducted from the value of the policy under the non-forfeit- 
 ure act ? The statute in question provides that there shall be 
 726
 
 CH. XVII.] THE PREMIUM. [§ 344 
 
 deducted ' any indebtedness or notes ' held by the company. 
 No notes were heki by the defendant against the insured, and 
 there was no direct promise by him to pay any amount, or any 
 obligation to do so. There was therefore no indebtedness 
 within the meaning of the act. A debt means an obligation 
 to pay a sum of money which is due or to become due by con- 
 tract, as, for instance, a note, bond, or other legal obligation, 
 which the party to whom it is due may enforce by an action 
 brought for that purpose. No action could be maintained to 
 recover the amount of this premium, as it rested entirely with 
 the insured to pay or not, as he might determine. 
 
 " The policy expresses a consideration of the whole year's 
 premium, ' per margin,' and an entry upon the margin shows 
 that one half year's premium was paid, and the other half 
 payable semi-annually. This does not constitute a promise to 
 pay, either express or implied ; and in case of non-payment the 
 policy became void, except so far as it was saved by the stat- 
 ute. It merely indicates that if the other half is paid at the 
 close of the six months, the risk will be extended for another 
 six months. It is not a loan. But if it was, as the plaintiff 
 never received the money, it should be applied in payment of 
 the premium ; and this, with the money paid, would keep the 
 policy in force for a year, and of course at the time of the 
 death of Sclye. 
 
 " In Worthington v. Charter Oak Insurance Company ,i the 
 distinction between the premium on a policy of insurance and 
 a debt is pointed out, and it is said that ' the theory that the 
 premium as it becomes due is a debt, is a fallacious one, and 
 leads to an erroneous conclusion.' In the one case the pay- 
 ment is entirely optional, while in the other it may be enforced 
 at law. The position that it was a debt because it was agreed 
 to be paid, is not, we think, well founded. The policy shows 
 one half year's premium was paid ; and if the other half was 
 to be paid at the expiration of six months, the insurance would 
 be continued for a year. There clearly was no agreement 
 which obligated the insured unqualifiedly and absolutely to 
 pay any sum, at any time which was named. If the argument 
 
 1 41 Conn. 416. 
 
 727
 
 § 344 D] INSUEANCE : fire, life, accident, etc. [CH. XVII. 
 
 urged by the defendant's counsel is sound, then the same rule 
 would apply to yearly payments which are to be made on or 
 before December 30 in each and every year • and these are 
 debts which can be enforced at law without regard to the 
 wislies of the insured. According to the terms of the policy 
 there is no promise to pay, and it rests with the insured to 
 sav how long he will continue it. lie can stop it at the end 
 of the year and determine when the policy shall cease. When 
 he refuses to pay, the policy lapses, and the insured has no 
 further claim, except what is conferred by the uou-forfeiture 
 clause. 
 
 " We have been referred to some decisions in the State of 
 Massachusetts, which, it is claimed, sustain the theory of the 
 defendant's counsel ; but we think they are distinguishable 
 from the one at bar. In one of them, notes were given for 
 the premium, and in the other a memorandum witli a promise 
 to pay one half of the premium. It thus appears that there 
 was an obligation in each case acknowledging an indebtedness 
 and binding the insured to pay, which was a debt that could 
 be enforced ; while in the case at bar no such promise exists, 
 and none is shown by the policy. The difference referred 
 to is quite sufficient to take this case out of the rule laid 
 down in the decision cited. The result is that the unpaid 
 premium was not an indebtedness within the statute, and 
 that the policy remained in force at the time of Selye's 
 death." i 
 
 [§ 344 D. Paid-up Policies. — Sometimes the policy contains 
 a condition that default of premiums shall not work a for- 
 feiture, but shall convert the policy into a paid-up policy for 
 the amount of the premiums paid. In such case the conver- 
 sion may take place at any time, by notice to the insurer.^ 
 Sometimes a policy is so worded as to be void upon default of 
 a premium with a right to call for a paid-up policy of some 
 kind, but to be totally void by default of the interest due on 
 notes given for prior premiums.^ A paid-up policy is a coii- 
 
 1 Goodwin v. Mass. Mat., &c. Ins. Co., 73 N. Y. 480. 
 
 2 [Lovell V. St Louis Mut. Life Ins. Co., Ill U. S. 264.] 
 
 3 [Insurance Co. v. Robinson, 40 Ohio St. 270.] 
 
 728
 
 CH. XVII.] THE PREMIUM. [§ 344 E 
 
 tinuation of the original policy, and is not affected by the re- 
 peal of laws in force at the time the original was issued, but 
 which were repealed before the paid-up policy was issued. ^ 
 An endowment policy is a life insurance policy so far as not 
 to be liable on execution.^ A life company issuing policies on 
 the tontine or " ten years dividend " system is not a trustee of 
 any particular fund for a holder of such policy, but is simply 
 a debtor. The apportionment, however, is to be equitably 
 made, and a policy-holder may come into court to secure such 
 division. 3 If in j)ursuance of its provisions a policy is in- 
 dorsed as a paid-up policy valid for two-tenths of the sum 
 insured, it seems that it becomes executed, and a violation of 
 a condition as by going into the torrid zone does not invali- 
 date it.^] 
 
 [§ 344 E. Forfeiture of Paid-up Policy. — A policy, to be void 
 on non-payment of premium, and allowing the insured after 
 the payment of two premiums to call for a paid-up policy, 
 only permits such call during the life of the policy. If it is 
 forfeited by non-payment or otherwise the right ceases, and 
 the representations of the agent or the opinion of an cxj)ert as 
 to the interpretation usually put by insurance companies on 
 such clauses, is inadmissible.^ The insured cannot demand a 
 paid-up policy when he has allowed the original to lapse for 
 non-payment of a premium, if such is the agreement ^ A policy 
 on which a paid-up policy is to be issued on demand after two 
 premiums have been paid, but which is generally conditioned 
 to be void by non-payment of premiums or interest, will be 
 forfeited even after indorsement as a paid-up policy, " subject 
 to the conditions of the policy," if interest is not paid on the 
 notes given for portions of the first two premiums." An 
 
 1 [McDonnell v. Ala. Gold Life Ins. Co., 85 Ala. 401, 410.] 
 
 2 [Briggs v. McCullougli, 36 Cal. 542] 
 
 8 [Uhlman v. N. Y. Life Ins. Co., 100 X. Y. 421 ; Bogardus v. N. Y. Life Ins. 
 Co., 101 N. Y. 328 ; Marvin v. Brooks, 94 N. Y. 71 ; Pierce v. E. L. A. Soc, 12 
 N. E. Rep. 858, distinguished and the first limited.] 
 
 * [Cotton States Life Ins. Co. v. Edwards. 74 Ga. 220.] 
 
 5 [Smith V. Nat. Life Ins. Co., 103 Pa. St. 177, distinpuishins N. Y., Ohio, 
 and Maine cases.] 
 
 6 [Sheerer v. Manhattan Life Ins. Co., 20 Fed. Rep. (Ky.) 1884.] 
 
 7 [McQuitty r. Continental Life Ins. Co., 15 R. I. 573.] 
 
 729
 
 § 344 F] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 indorsement on a policy after default of premium by the com- 
 pany that it was to pay "8200 subject to the terms and 
 condition expressed in the policy," does not prevent total for- 
 feiture by subsequent failure to keep up the interest on prior 
 premium notes, as required by the policy.^ But in Kentucky 
 after paying premiums enough to entitle the holder to a paid- 
 up policy, a provision for forfeiture in case of non-]»aymcnt 
 of interest on premium notes, in cash at a precise time, the 
 company being secure of its ultimate payment, is oppressive, 
 against public policy, and void.^ And in Missouri after the 
 number of premiums necessary to entitle the insured to a paid- 
 up policy have been received by the company, failure to pay a 
 note given for a subsequent premium will not forfeit the policy, 
 although it provides in general terms that failure to pay any 
 premium note shall have that effect.^ But a ])aiJ-up jjolicy is 
 not forfeited by failui'e to pay interest on premium notes which 
 it appears were regarded by the company as a loan to the 
 assured.^] 
 
 [§ 344 F. Time; Within thirty days, etc. — Where a paid-up 
 policy is to be demanded within thirty days after forfeiture 
 the time is not of the essence of the contract. If demand is 
 made witliin a reasonable time under all the circumstances it is 
 suificient.^ And a surrender of the old i)olicy five years after 
 forfeiture has been held good.*^ But in New York where a pol- 
 icy provides that within thirty days after failure to ])ay a ])re- 
 mium due, the holder may surrender the policy and have a 
 new one issued " for the proportion of the amount of insurance 
 paid for," a failure to take advantage of this clause within the 
 thirty days is fatal, although the company's agent told the 
 applicant at the time of issuing the policy that it was non- 
 forfeitable and the insured had not read his policy.^ In a life 
 
 1 [Holman v. Continental Life Ins. Co., 54 Conn. 05] 
 
 2 [Nortliwestern Mutual Life Insurance Co. v. Fort's Adm., 82 Ky. 269, 
 278.] 
 
 3 [Tutt V. Covenant Mut. Life Ins. Co., 19 Mo. App. 677.] 
 
 4 [Bruce v. Life Ins. Co., 58 Vt. 253.] 
 
 6 [.Johnson v. Southern Mut. Life Ins. Co., 79 Ky. 403.] 
 
 e [Southern Mut. Life Ins. Co. v. Montague, 84 Ky. 653.] 
 
 7 [Attnrnoy-General v. Continental Life Ins. Co., 93 N. Y. 70.] 
 
 730
 
 CH. XVII.] THE PREMIUTVr. [§ 344 H 
 
 policy which declares that it will " be good at any time after 
 three payments, for its equitable value," nothing is due upon 
 this clause until death occurs. ^] 
 
 [§ 344 G. Non-forfeitable by Estoppel. — A company may be 
 estopped by the conduct of its agent from denying that the 
 insured possesses a " participation " policy or asserting that 
 the one actually held by the insured was void for non-payment 
 of premium.^ On the other hand, in Tennessee it is held that 
 the representation of the agent that the policy is non-forfeit- 
 able and that the insured could at any time have a paid-up 
 policy for the full amount paid by him in premiums, is not 
 admissible. Parol cannot be allowed to contradict a written 
 contract.^] 
 
 [§ 344 H. Amount of Paid-up Policy or of Damages for its 
 Refusal. — If a policy gives the insured the option of receiving 
 a " paid-up policy for the full amount of the premium paid," 
 the insured is not limited to the amount of the original insur- 
 ance, as where ten premiums of $389.16 each had been paid 
 on a $3,000 life policy the company was required to give a 
 paid-up policy for $3891.60.* Unless so agreed, however, the 
 plaintiff suing for a paid-up policy promised to be given 
 on an equitable basis, is not entitled to the amount of the 
 premiums he has paid. A portion of that sum has been 
 earned by the company in carrying the risk. The plaintiff 
 should recover only the present value of the policy.^ On suit 
 to recover damages for breach of a contract to give a paid-up 
 policy, tlie value of the policy can be calculated with great 
 precision. A part of every premium is absorbed in the ex- 
 penses of the business, a part is earned by the company in 
 carrying the risk, and a part accumulates on interest to re- 
 spond to the particular policy and constitutes its particular 
 value.^ The contract of life insurance is based on statistics, 
 
 1 [Andrews i'. ^tna Life Ins. To , 92 N. Y. 59G.] 
 
 2 [Piedmont, &c. Ins. Co. v. Young, 58 Ala. 476.] 
 
 3 [Nashville Ins. Co. v. Matthews, 8 Lea (Tenn.), 499 ] 
 
 * [Christy v Ilomoenpithic Mut. Ins. Co., 93 N. Y. 345.] 
 
 5 [Farley ;•. Union Mut. Life Ins. Co., 41 Hun, .^>03.] 
 
 « [Nashville Life Ins. Co. v. Mathews, 8 Lea (Tenn.), 499, 504-505.] 
 
 731
 
 § 345] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XYII. 
 
 and subject to rules that admit of mathematical accuracy in 
 the estimation of the damage resulting from breach of the 
 contract by the insurer.^] 
 
 [§ 344 I. Alteration of Original Contract from Non-forfeitable 
 to Forfeitable. — If an insurer has a right to impose on the 
 assured an obligation to pay interest annually on premium 
 notes outstanding at the issue of a new policy in place of a 
 " non forfeitable " policy upon which the premiums had not 
 been kept up, it may enforce such obligation by inserting a 
 provision of forfeiture.^ Where within thirty days after de- 
 fault in paying a premium the insured could demand a paid- 
 up policy for the amount of premiums paid, if on sucli default 
 the company accepts a note for the premium, in which note 
 there is a clause of absolute forfeiture of all benefits, under the 
 policy if the note is not paid at maturity, this is an alteration 
 of the original contract, and on failure to pay the note at 
 maturity there is a total forfeiture, and no right to demand a 
 paid-up policy within thirty days.^] 
 
 § 345. Premium ; What constitutes Payment. — When no spe- 
 cial mode of payment is stipulated for, any mode of payment 
 which is accepted without objection, on the part of the in- 
 surers or their agent, will suflice. Thus, the actual delivery 
 to the agent of a check payable to the order of the agent, or 
 mailing or sending by express such a check to his address, 
 at his request, made at the time of the completion of the con- 
 tract, is an actual payment of the premium, if the check be 
 at the time, and afterwards, till received, continue to be good. 
 Since no mode of payment is provided, the agent may exer- 
 cise his discretion and accept any usual mode which suits 
 the convenience of the parties.^ Even a payment of the pre- 
 mium in depreciated funds to the local agent of a foreign 
 insurance company, if received by him according to the usual 
 
 1 [Nashville Life Ins. Co. tv Mathews, 8 Lea (Tenn.), 499; Knickerbocker 
 Life Insurance Co. v. Heidel, Id. 488 , Mutual Life Insurance Co. i-. Bratt, 55 
 Md. 200.] 
 
 2 [People V. Knickerbocker Life Ins. Co., 103 N. Y. 480.] 
 
 3 [Holly V. Met. Life Ins. Co., 105 N. Y. 437, 444.] 
 
 * Tayloe v. Merchants' Fire Ins. Co., 9 How. (U. S.) 390; ante, § 134 ; Cur- 
 rier V. Continental, &c. Ins. Co., 53 N. H. 538. 
 
 732
 
 CH. XVII.] THE PREMIUM. [§ 345 a 
 
 course of his business known to his principals, is a valid pay- 
 ment. ^ And, of course, a tender of payment in a like cur- 
 rency would be equivalent to the actual payment in its effect 
 upon the obligations of the policy .^ So the payment may be 
 by note ; and if the note is given and accepted as payment, 
 it will be sufficient,^ even though the policy forbids it, if the 
 form of the note provided by the insurers leads to the infer- 
 ence that the agent is authorized to take it.^ 
 
 § 345 a. What amounts to Payment; Dividends; Mutual 
 Accounts. — An advance to a general agent by a sub-agent, 
 on account of premiums thereafter to be collected, will inure 
 as pavmeut of the premium on a policy, negotiations for which 
 are pending at the time of the advance, on the life of the 
 sub-agent, for the benefit of his wife.'' Funds in the hands 
 of the insurer belonging to the insured will inure as payment 
 of a receipt for a renewal premium delivered to the insured, 
 no demand of payment being made at the time, or called for 
 before loss.° And if a dispute arises as to what premiums 
 are paid, and the insured directs the a])propriation of money 
 forwarded on account of premiums, the insui'crs have no right 
 to make any different appropriation." So dividends ^ stand- 
 
 1 Robinson r. Int. Ass. Soc. of London, 42 N. Y. 54 ; Martine v. Int. Ass. 
 Soc. of London, 62 Barb. (N. Y.) 181 ; Sands i-. New York Life Ins. Co., 50 
 N. Y. G2G ; Polglass v. Oliver, 2 Cr. & Jer. 14. 
 
 2 New York Life Ins. Co. v. Clopton, 7 Bush (Ky.), 179. See also New York 
 Central Ins. Co. v. Nat. Prot. Ins. Co , 20 Barb (N. Y.) 4G9. 
 
 3 Mut. Ben. Life Ins. Co. v. French, 2 Cincinnati Superior Ct. Reptr. 321 ; 
 affirmed, 30 Ohio St. 240; Pitt v. Berkshire Life Ins. Co., 100 Mass. 500; 
 Mowry v. Home Ins. Co., 9 R. I. 346 ; Carey v. Nagle, 2 Abb. (U. S.) 156. In 
 point of fact, it is customary for mutual insurance companies to accept part pay- 
 ment of the first as well as of subsequently accruing premiums in the form of a 
 note. Of course such a note is, by tlie understanding of both parties, a pay- 
 ment j)ro tanto. 
 
 * Inman v. Globe Ins. Co , C. Ct. (Ky.), 4 Ins. L. J. 719. 
 
 5 Thompson v. American, &c Ins. Co., 46 N. Y. 674. So if the agent credits, 
 and is charged. Train v. Holland, &c. Ins. Co., 62 N. Y. 598 ; Union Ins. Co. v. 
 Grant, 68 Me. 229 ; Home Ins. Co. v. Curtis, 32 Mich. 402. 
 
 6 Staunton u. West. Ass. Co., 21 Upper Canada (Ch.), 578 ; s. c. affirmed, 
 23 id. 81. 
 
 ^ Butler V. American Pop. Ins. Co., 10 J. & Sp. (N. Y.) 343. 
 8 [But profits in the hands of a mutual company, which have not yet been 
 declared in dividends, will not be applied to the payment of premiums to pre- 
 
 733
 
 § 345 a] INSUEANCE : fire, life, accident, etc. fCH. XYII. 
 
 ing to the credit of a member of a mutual insurance company 
 will inure j)^o tanto as payment of premiums falling due,i 
 especially if such had been the custom of the company ,2 and 
 the course of business between the parties did not show that 
 such was not their contract.^ And where the insured shares 
 in the profits, and at the time when the annual ])remium be- 
 comes due cannot know what amount he will be required to pay 
 the company, the insurers cannot insist on a forfeiture until 
 they give the insured notice of the amount he is required to 
 payJ Indeed, it has been broadly held that such notes are 
 loans, and the failure to pay interest on them does not work a 
 forfeiture, but the insurers must apply the dividends or sue 
 on the note.-5 In some cases the policy specially provides how 
 the dividend shall be appropriated, not leaving the matter 
 open to doubt.^ 
 
 In Ancient Order of United Workmen v. Moore,' it was 
 
 vent a forfeiture. Mutual Life Ins. Co. v. Girard Life Ins. Co., 100 Pa. St. 172. 
 Unless expressly made applicable to such purpose, the company cannot apply 
 dividends to the payment of the interest on premium notes without the assent 
 of the assured, at least where not necessary to save a forfeiture. Mutual Fire 
 Ins. Co., 58 Md. 463 ] 
 
 1 Girard, &c. Ins. Co. v. Mutual, &c. Ins. Co. (Pa.), 10 Ins. L. J. 257. 
 
 2 Manhattan Life Ins. Co. v. Hoelzle (U. S.), 8 Ins. L. J. 226. 
 
 3 Anderson v. St. Louis, &c. Ins. Co., C. Ct. (Tenn), 5 Big. Life & Ace. Ins. 
 Cas. 527; Glide v. Northwestern, &c. Ins. Co., iO Iowa, 357; Russum v. St. 
 Louis, &c. Ins. Co., and note to same, 1 Ct. of App. (Mo.), 228^ 5 Big. Life & 
 Ace. Ins. Cas. 24-3; Patch v. Phoeni.x Ins. Co., 44 Vt. 481. 
 
 * Home Life Ins. Co. t\ Pierce, 75 111. 426. 
 
 5 St. Louis, &c. Ins. Co. v. Grigsby, 10 Bush (Ky.), 310; Dietz v. Knicker- 
 bocker Life Ins. Co., C. Ct. (Baltimore), 8 Ins. L. J. 80; Brooks v. Phoenix Ins. 
 Co., C. Ct. ( Vt), 8 Ins. L. J. 741. Tiiis doctrine, however, the court refused to 
 follow in both Anderson's and Russum's cases, supra. [Notes given in part 
 payment of premiums are really loans by the company to the policy-holder, and 
 are to be treated accordingly. Insurance Co. v. Bonner, 36 Ohio St. 51.] 
 
 6 Hull V. Northwestern Ins. Co., 39 "Wis. 397. In Wheeler v. Connecticut 
 Mut. Life Ins. Co. (N. Y.), 10 Ins. L. J. 116, the dividends were insufficient to 
 pay the premiums, and it was not necessary to decide whether, if they had been 
 sufficient, the insurers would have been bound to apply them. "Wliether equity 
 will relieve in such a case, the authorities differ. Pro: See Grigsby 's case and 
 note to Russum's case, supra. See also Bird v. Penn Mutual Insurance Co., 
 C. Ct. (Pa.), 5 Big. Life & Ace. Ins. Cas. 487; Nettleton r. St. Louis, &c. 
 Insurance Co., Ins. L J. 426. Contra : Anderson's case, supra, and cases therein 
 cited. 
 
 " Ky., 9 Ins. L. J. 539. 
 
 734
 
 CH. XVII.] THE PREMIUM. [§ 345 B 
 
 held that where a member of a subordinate lodge had money- 
 due him for "sick benefits," it was not the right of his lodge 
 to appropriate it in payment of an assessment ordered by the 
 grand lodge, without the member's direction, Pryor, C. J., 
 dissenting. The majority of the court based their opinion 
 on the distinction between the funds created by assessments 
 ordered by the grand lodge, which were for the benefit of the 
 families of members after their death, and the dues collected 
 by the subordinate lodges, which were for the payment of 
 " sick benefits " to sick members. 
 
 "Where a paid-up policy was substituted for a life policy, 
 and the outstanding notes were consolidated into one, upon 
 the prompt payment of the interest upon which the contin- 
 uance of the policy was conditioned, the policy was held for- 
 feited by failure to pay the interest as stipulated.^ 
 
 [§ 345 B. "What constitutes Payment (^continued^. — When 
 the company receives an order on a third person in lieu of cash 
 for a premium, it cannot avoid tbe policy without giving notice 
 of the non-payment of the order.^ Wbere an insured brake- 
 man gave the company an order on the railroad, which made 
 payments thereon but after a time neglected to pay an instal- 
 ment, and during the neglect the brakeman was killed, it was 
 held that without notice to the insured that payment had not 
 been made, the company could not take advantage of the con- 
 dition of the policy to be void by non-payment. The company 
 accepted and retained the order, and did not give any notice to 
 the insured, and this made the matter one between itself and 
 the railway .3 An order on a railroad company is not a pay- 
 ment of the premium until cashed, where tbe policy provides 
 that the premium must be actually paid before the risk at- 
 taches for each period.* Words and figures in the margin of the 
 policy to the effect that one half the annual premium is payable 
 in cash and the other half by note form part of the policy, and 
 if this method is followed " complete annual premiums " are 
 
 1 Knickerbocker, &c. Ins. Co. v. Harlan, 56 Miss. 512 ; Knickerbocker, &c. 
 Ins. Co. V. Dietz, 52 Md 16. 
 
 2 [Xational Ben. Ass. v. Jackson, 114 111. 533.] 
 <* [Lyon t'. Travelers' Ins. Co., 55 Mich. 141.] 
 
 * [McMahon v. Travelers' Ins. Co., 77 Iowa, 229 ] 
 
 VOL. II. — 3 735
 
 § 345 C] LNSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 paid.^ When the premium is tendered to the agent when the 
 apjilication is made, but he refuses it, and says he will con- 
 sider it as paid and will leave it with the plaintiff, who was 
 his banker, till the policy arrived, when he would call and get 
 it, the company is bound. In legal effect the money was paid 
 to the agent and by him deposited.^ A credit of the premium 
 on the books of the company by a general agent, and a charge 
 of the amount as received by himself in pursuance of a usage, 
 are, as between the company and the insured, a payment.^ 
 Receipt of the premium by the agent completes the contract 
 and binds the company, although the agent converts the pre- 
 mium to his own use and a policy is never issued.* The com- 
 pany cannot cancel a policy for non-payment of the balance 
 of a premium which the insured has agreed with the agent to 
 pay in groceries, and which he is ready to pay at all times.* 
 Where the general agents of an insurance company gave a 
 policy to a physician, with the agreement that the premium 
 should be paid in his professional services as examiner for 
 the company, and where this was contrary to usage and not 
 ratified by the company, it was held that the policy and the 
 premium note given thereon were both void.^ Evidence may 
 be given that the agent had no authority to receive anything 
 but money as payment of a premium.' In general an agent 
 has no more authority than that, ami where an agent wrong- 
 fully delivers a renewal receipt merely in (Consideration of a 
 setting off of debts between himself and the policy-holder, the 
 receipt does not bind the company, and the policy lapses.^] 
 
 [§ 345 C. Part-payment. - — Part prepayment of the premi- 
 um when the contract calls for full payment, will not make 
 the contract obligatory.^ Nor will payment of a 'part of the 
 
 1 [Pierce v. Cliarter Oak Ins. Co, 1.38 Mass. 151.] 
 
 2 fHallock V. Insurance Co., 26 N. J. L. 268 at 277.] 
 
 3 [Matter of Booth, 11 Abb. N. C. 145.] 
 
 4 [Lie V. Plioenix Ins. Co., 2 Biss. 333 ] 
 
 6 [Carlwitz v. Germania Fire Ins. Co., 12 Ins L. J. 127 (N. J.), 1883.] 
 6 [Anchor Life Ins. Co. v. Pease, 44 How. (N, Y.) 885.] 
 ■ [Life Ins.Co. v. Davidge, 51 Tex. 244.] 
 
 8 [Frazer v. Gore Dist. Mut. Fire Ins. Co., 2 Ont. R. 416.] 
 
 9 [Barnes v. Piedmont, &c. Ins. Co., 74 N. C. 22 at 23.] 
 
 736
 
 CH. XVII.] THE PREMIUM. [§ 345 E 
 
 premium entitle the insured to a proportionate amount of the 
 insurance-money.^] 
 
 [§ 345 D. Tender is, of course, sufficient to avoid forfeiture 
 if in proper time and form. But tender must be made every 
 time a premium is due. If the premium is tendered when it 
 comes due and is refused, and again tendered when next due, 
 but at the following due-times is not tendered, the policy is 
 forfeited.-] 
 
 [§ 345 E. Premium Notes. — A negotiable note may consti- 
 tute payment of a premium.^ A negotiable promissory note 
 given to a mutual company in payment of a premium may be 
 negotiated by it, and an authority to issue policies gives author- 
 ity to take such notes.* A policy may be voidable by non- 
 payment of premium notes at the time of loss.^ If there is 
 not stipulation to that effect, failure to pay a premium note 
 at maturity will not defeat the policy.^ And a stipulation in 
 the premium note itself that its non-payment shall avoid the 
 policy (no such provision being contained in the policy) is 
 nugatory J Where a company claims a forfeiture for non-pay- 
 ment of a premium note, it must offer to surrender the note. 
 It cannot forfeit the policy and keep the note.^ A policy is 
 not void ah initio because the premiums are paid by notes 
 which do not bind the maker, a married woman,^ But a 
 premium note executed on a policy of insurance which never 
 becomes operative is void.^^ A premium note may be so 
 written as to become due at the date of a loss under the 
 policy, if such should occur before its regular maturity." 
 Where an insolvent insurance company issued a policy and 
 
 1 [Willcuts V. Northwestern Mat. Life Ins. Co., 81 Ind. 300.] 
 
 2 [Life Ins. Co. t-. Le Pert, 52 Tex. 504.] 
 
 » [East Tex. Fire Ins. Co. t-. Miras, 1 Tex. Cir. Cas. § 1324; see 100 Mass. 
 500.] 
 
 * [Fnrmeis' Bank v. Maxwell, 32 N. Y. 579 at 582.] 
 6 [American Ins. Co. v. Leonard, 80 Ind. 272.] 
 
 6 [Trade Ins. Co. v. BarraclifE, 45 X. J. 543.] 
 
 7 [Insurance Co. v. Hardie, 37 Kans. 673] 
 
 8 [Johnson V. Southern Mut. Life Ins. Co., 79 Ky. 403.] 
 
 9 [McQuitty V. Continental Life Ins. Co., 15 R. I. 573.] 
 
 10 [Lynn v. Burgoyne, 13 B. Mon. (Ky.) 400 at 402] 
 
 11 [Schimp V. Cedar Rapids Ins. Co., 124 111. 354.] 
 
 737
 
 § 345 H] INSURANCE : fire, life, accident, etc. [ch. xtii 
 
 took a promissory note for the premium, the insolvency not 
 bein^ known to the officers or agents at the time. It was 
 held a valid contract on good consideration. i] 
 
 [§ 345 F. It is not incumbent on the company to present a 
 premium note at the residence of the maker before relying 
 on its non-payment as a forfeiture ; that provision of law re- 
 lates to indorsers and does not apply between maker and payee.^ 
 Demand on a promissory note given in payment of the premi- 
 um on a policy of insurance is unnecessary, and on failure to 
 pay the same on the stipulated day, if the policy expressly de- 
 clares that in such a case it shall be void, the forfeiture occurs 
 at once and without notice.^] 
 
 [§ 345 G. When the assured gave a promissory note to 
 a mutual company to secure the premium on an open policy, 
 he was held liable only to the extent of the subsequent insur- 
 ances indorsed upon it.* If an agent agrees to take a note 
 for the premium and to send the policy, on the understanding 
 that it may be returned and the note demanded if the policy 
 proves unsatisfactory, the transaction is all one contract, and 
 the company cannot maintain that the agent had no authority 
 to make such an agreement and still claim the right to sue on 
 the note.^ A misrepresentation by the agent as to the condi- 
 tion of the company is a defence to a suit for the premium,^ 
 but an informality in filing with the State auditor the required 
 copy of its charter by a foreign insurance company, will not 
 affect its suit upon a note given to it.^] 
 
 [§ 345 H. Recovery by Company. — A premium note is not 
 without consideration after its maturity, though the policy is 
 suspended until its payment.^ The company may recover on 
 a note though the policy is to lapse during default of its pay- 
 
 1 [Lester v. Webb, 5 Allen, 569 at 573.] 
 
 3 [Mclntyre v. Michigan State Ins. Co., 52 Mich. 188, 193.] 
 
 2 [Roeliner v. Knickerbocker, &e. Co., 4 Daly, 512.] 
 
 4 [Maine Mut. Fire Ins. Co. v. Stockwell, 67 Me. 382 at 384.] 
 
 5 [Jacoway v. Insurance Co., 49 Ark 320. 323.] 
 
 6 [Sunbury Fire Insurance Co. v. Humble, 100 Pa. St. 495, and following 
 case.] 
 
 7 [American Ins. Co. v. Pressell, 78 Ind. 442] 
 
 8 [Robinson v. Insurance Co., 51 Ark. 441.] 
 
 738
 
 CH. XVII.] THE PREMIUM. [§ 346 
 
 ment.i Where a premium note is given at long rates and it 
 is agreed that by faihire to pay any instalment the risk shall 
 cease during the default, and that the whole note shall imme- 
 diately become due upon such failure as to any instalment, the 
 fact that the risk ceases during non-payment does not prevent 
 the insured being bound to pay his note. Such is the clear 
 agreement of the parties.^ By express agreement the premi- 
 um instalment notes may remain binding after forfeiture for 
 non-payment of one instalment.^ When the premium note 
 stipulates that on default of any instalment the whole amount 
 unpaid shall become due, the company may, even after a loss 
 for which it is not liable, the loss occurring during default, 
 recover the whole unpaid premium.^ When credit is given 
 for a premium, an after-occurring breach of condition will not 
 affect the company's right to recover the premium, although 
 it cancels or avoids the policy for the breach.^ The company 
 may deduct the amount of an unpaid premium note from the 
 amount of the policy.^ If by the terms of the policy the com- 
 pany may in case of loss deduct any premium unpaid, this 
 right continues even though the statute of limitations has run 
 on the premium note.^] 
 
 § 346. Parol Agreement to pay; Days of Grace. A parol 
 agreement, made at the time of the annual payment of the 
 premium, subsequent to the issue of the policy, that if any- 
 thing should happen to the insured to prevent his punctual 
 payment of the premium, the policy should not become void, 
 but should continue in force for a reasonable time thereafter, 
 so that the premium could be paid, is valid, though Hunt, C.,^ 
 thought such an agreement could keep the policy alive upon 
 a living subject only, and that if the insured were dead before 
 
 1 [Limerick v. Gorham, 37 Kans. 739, 741.] 
 
 2 [Continental Ins. Co. v. Boykin, 25 S. C. 323 ; Id. v. Hoffman, Id. 327.] 
 
 3 [Blaciierby v. Continental Ins. Co., 83 Ky. 574.] 
 
 * [Palmer v. Continental Ins. Co., 31 Mo. App. 467.] 
 
 5 [Schimp V. Cedar Rapids Ins. Co., 124 111. 354.] 
 
 6 [Currier v. Continental Lite Ins. Co., 57 Vt 496.] 
 
 7 [Alexander v. Continental Ins. Co., 67 Wis. 422.] 
 
 " Howell V. Knickerbocker Life Insurance Co., 44 N. Y, 277. And see post, 
 § 353. 
 
 739
 
 § 346] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 the tender of the premium, although the tender were within 
 a reasonable time, it would l>e ineffectual to continue the 
 policy. And to the same effect were the observations of the 
 court in Baptist Church v. Brooklyn Fire Insurance Company,^ 
 a case of fire insurance. " A provision in a policy already 
 executed and delivered so as to bind the company, declara- 
 tory of a condition that premiums must be paid in advance, 
 manifestly has no effect, except to impart convenient informa- 
 tion to persons who may wisli to be insured. As such a pro- 
 vision in the policy in question could have no effect upon the 
 delivered and perfect contract in which it was contained, so 
 it could have none to prevent the same parties from making 
 such future contract as they please. In any subsequent 
 agreement for a renewal or continuation of the risk, it was 
 competent for the parties to contract by parol, and to waive 
 the payment in cash of the premium, substituting therefor a 
 promise to pay on demand, or at a future day. Proof of such 
 an agreement would have no tendency to contradict or to 
 change the written policy already in force between the parties, 
 and which would be wholly spent before the new agreement 
 could take its place." ^ But perhaps such an agreement made 
 at the time of issuing the policy would not be provable, as 
 tending to contradict the terms of the policy, nor a usage of 
 the company known to the insured of allowing such days of 
 grace, for the reason that it would be in plain conflict with 
 its provisions ; ^ though the contrary has been expressly held 
 as to the proof of a usage.^ Nor would a notice printed on 
 the policy, but not made part of it, and not proved to have 
 been seen by the insured, that acceptance of an overdue pre- 
 mium is but an act of grace, and cannot control the future 
 
 1 19 N. Y. 305. 
 
 - See also Bodine v. Exch. Fire Ins. Co., 51 N. Y. 117. 
 
 3 Ibid. ; Howell v. Knickerbocker Life Ins. Co., 44 N. Y. 279 ; Franklin Life 
 Ins. Co. V. Sefton, 53 Ind. 380; Lewis v. Plioenix, &c. Ins. Co., 44 Conn. 72; 
 Candee v. Citizens' Ins. Co., C. Ct. (Conn.), 4 Fed. Rep. 143; Busby v. North 
 America, &c. Ins. Co., 40 Md. 572. 
 
 * Helme v. Phila. Life Ins. Co., 61 Pa. St. 107 ; Garber e. Mut. Life Ins. Co., 
 C. Ct. (Mo.), 5 Big. Life & Ace. Ins. Cas. 221 ; New York Life Ins. Co. v. Eg- 
 gleston, 96 U. S. 572 ; post, § 356. See also Morey i'. New York Life Ins. Co., 
 C. Ct. (Miss.), 3 Ins. L. J. 493. See also ante, § 179 ; post, § 361. 
 740
 
 CH. XVIT.] THE PREMIUM. [§ 348 
 
 action of the company, avoid the effect of such proof. And 
 the same is true where there is notice that the agent has no 
 authority to recover overdue premiums or waive forfeiture, 
 if the conduct aud course of dealing of the company and its 
 agent has been such as to justify in the insured an opposite 
 conckision.' 
 
 § 347. Payment ; Advertising ; Board. — Where a policy 
 of life insurance was issued stipulating that the first year's 
 premium was to be paid in advertising in the newspaper 
 published by the insured, and the advertising matter was 
 furnished by the company and duly advertised, it was held 
 that it w^as incumbent upon the company to furnish suffi- 
 cient amount to meet the premium, and the insured was not 
 responsible for, and the insurance not vitiated by, a deficiency 
 in advertising matter. It was also held that in the absence 
 of any notice from the company to the insured that the 
 policy would not take effect until the termination of the 
 time of advertising, it took effect from its date.^ And it 
 seems that payment may be in board, or commercial paper, 
 or whatever other consideration, if agreed upon by properly 
 authorized parties.^ 
 
 § c48. Premium ; Payment. — But it has been held that a 
 promise by the treasurer of the insurers, where the policy has 
 been executed but not delivered, aud the by-laws make pre- 
 payment essential to the validity of the policy, that he would 
 see that the premium was paid, or that he would take it upon 
 himself to keep the policies good, is no payment. The act of 
 a treasurer, under such circumstances, is not that of the agent 
 of the company, but his own act in his private capacity.* But 
 the courts of Massachusetts give the greatest effect to the 
 by-laws of a mutual insurance company in restricting the 
 
 1 Mound City Ins. Co. v. Huth, 49 Ala. 529; Iiiman v. Globe, &c. Ins. Co., 
 C. Ct. (Ky.), 4 Ins. L. J. 719 ; Girard, &c. Ins. Co. i-. Mutual Life Ins. Co. (Pa.), 
 10 Ins. L. J. 257. 
 
 2 The Kentuckj' Mut. Ins. Co. v. Jenks, 5 Ind. 96. 
 
 3 Schwartz v. Germania Life Ins. Co., 18 Minn. 448 ; Pendleton v. Knicker- 
 bocker, &c. Ins. Co., 5 Fed. Rep. 238. 
 
 4 Buffuni V. Fayette Mut. Ins. Co., 3 Allen (Mass.), 360. 
 
 741
 
 § 349] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 powers of the officers and agents of the company.^ And it is 
 doubtful if the decision above cited would meet with approba- 
 tion in most of the States.^ 
 
 [§ 3-18 A. Place of Payment. — If a premium note is payable 
 at a place named to a general agent, a payment to a local 
 agent at another place is not a payment to the company .^ If 
 not fixed by the terms of the contract, parol is admissible to 
 show an understanding between the assured and the agent as 
 to the place of payment.^] 
 
 § 349. Premium ; Time of Payment ; Sunday. — A premium 
 due on a certain day must be paid on or before midnight of 
 that day, and if paid before that hour, even after a loss, it 
 will be sufficient.^ Where the premium falls due on Sunday 
 it may be paid on the following day, — even after a loss also, 
 — the rule appertaining to negotiable notes entitled to grace, 
 that the payment must be made on the day preceding the 
 last day of grace when that day happens on Sunday, not 
 obtaining in other contracts, for reasons thus stated by the 
 court in a case where the premium fell due on Sunday at 
 noon : — 
 
 " h\ reference to notes payable on a certain day but enti- 
 tled to three days' grace, it is said that in such case the note 
 by its terms would be due and payable two days earlier than 
 Saturday, and that what was originally a mere indulgence to 
 casualty or oversight should not be extended, and therefore 
 if the last of three days of grace falls on Sunday, the payment 
 must be made on Saturday, and that it was more reasonable 
 to take from than to add to a period of time thus originally 
 allowed as mere grace and favor. But as to other contracts, 
 which by the face of the instrument required a payment on 
 a day which proves to be Sunday to discharge literally the 
 promise or duty, the law seems to sanction the postponement 
 
 1 See ante, §§ 127-145. 
 
 2 See ante, § 134. See also Wheeler v. Watertown Fire Ins. Co. (Mass.), 10 
 Ins. L. J. 354, 355, where crediting the payment to the insured by tlie agent is 
 held to be evidence of the completion of the contract. 
 
 3 [Curtin v. Phoenix Ins. Co., 78 Cal. 619 ] 
 
 ♦ [Blackerby v. Continental Ins. Co., 83 Ky. 574.] 
 5 Och V. Homestead, &c. Ins. Co., 21 Pitts. Leg. Jour. 98. 
 742
 
 CH. XVII.] THE PREMIUM. [§ 349 A 
 
 of the time for doing the same till the Monday following. In 
 other words, Sunday is not a legal day for the performance 
 of contracts and doing secular business. The statute law 
 forbids all such acts. The party paying and the party receiv- 
 ing money on that day in discharge of a contract would sub- 
 ject themselves to a penalty for so doing. Sunday was not a 
 day contemplated by the parties as embraced in the stipula- 
 tion to pay a quarterly premium on the first day of October 
 on each and every year during the life of the party assured. 
 The defendants had no office open on that day, and were 
 under no obligation to receive the payment of the premium 
 on that day, if the same had been tendered by the assured. 
 Such being the case, the assured was under no obligation to 
 do what would have been not only an illegal act, but also one 
 which the other party was not bound to recognize. In this 
 view of the case there was no such default on the part of the 
 assured in not paying the premium fully due on the first of 
 October, as should be held to terminate the policy." ^ Pay- 
 ment within thirty days, on notice published five days con- 
 secutively in a newspaper, means payment within thirty days 
 after the expiration of the five days.^ 
 
 [§ 349 A. Payment by Whom ; Lien for the Money. — In 
 general premiums voluntarily paid on the life of another can- 
 not be recovered from the beneficiary, unless so agreed.^ 
 When one who is not the sole beneficial owner pays premiums 
 he is entitled to lien on the policy or its proceeds in the follow- 
 ing cases : (1) By contract with the beneficiary. (2) By the 
 right of trustees to indemnity out of trust property for money 
 spent in its preservation. (3) By subrogation to this right of 
 
 1 Hammond v. The American Mut. Life Ins. Co., 10 Gray (Mass.), 306; 
 Taylor v. Germania Ins. Co., 2 Dill. C. Ct. (U. S.) 282; Campbell v. The Inter- 
 national Life Ass. Soc, 4 Bosw. (N. Y. Sup. Ct.) 298; Howland v. Continental, 
 &c. Ins. Co., 121 Mass. 499. This case contains an elaborate resume of the his- 
 tory of the Sunday law, so called, well worthy of perusal. A note not entitled 
 to grace falling due on Sunday is not payable till Monday. Salter v. Bush, 20 
 Wend. (N. Y.) 205. A premium note is entitled to grace. Jarman v. St. Louis, 
 &c. Ins. Co. (Tenn.), 5 Ins. L. J. 572. 
 
 2 Wctmore r. Mutual, &c. Ins. Ass., 23 La. Ann. 770. 
 
 3 [Meier v. Meier, 88 Mo. 566.] 
 
 T43
 
 § 349 B] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 some person who by request of the trustees had advanced 
 money to preserve the property. (4) By the right of a mort- 
 gagee to add to his charge any money paid by him to preserve 
 the property. In no other case can a lien be acquired either 
 by a stranger or a part-owner.^ And a trustee has as such 
 no lien for premiums unless he is trustee of the very policy 
 on which he pays them.^ A contract to pay premiums 
 and receive the amount out of the insurance money is good 
 even as to a minor beneficiary, for though not binding on 
 him as a contract, equity will compel him to do justice.^ 
 Sometimes it is agreed that the mortgagee may insure and 
 that the premiums shall be a lien under the mortgage, and 
 such agreement is good.* If a mortgagor of a policy neg- 
 lects to pay the premiums the mortgagee may do so, and 
 recover the amount with interest.^] 
 
 [349 B. Payment to Whom. — The correspondence between 
 certain brokers and the company is admissible to show that 
 they were authorized to receive premiums for the company, 
 and that payment to them was payment to the company.^ 
 If a company delivers to one not already its agent a policy 
 containing an acknowledgment of the payment of the pre- 
 mium, it makes such person its agent to receive the premium 
 and deliver the policy.'' Where the insured paid the premium 
 to B., a broker whom he had requested to get insurance for 
 him, and B. obtained a policy through C, a correspondent of 
 B.'s, but retained the premium until the monthly settlement 
 between himself and C, it was held that the company was 
 bound, although the policy was not to take effect until the 
 actual cash payment of the premium. B. was regarded as the 
 agent of the company in respect to holding the premium.^ 
 
 1 [Leslie v. French, 23 Ch. D 552.] 
 
 2 [In re Earl of Winchelsea's Policy Trusts, 39 Ch. D. 169.] 
 
 3 [Hodge c. Elhs, 70 Ga 272.] 
 
 4 [Neale v. Albertson, 39 N. J. Eq 382.] 
 
 5 Hoflgson I'. Hodgson, 2 Keen, 704 at 713 ; Overby v. Fayetteville B. & L. 
 Life Ass., 81 N. C. 56.] 
 
 6 [Sun Mut. Ins. Co. v. Saginaw Barrel Co., 114 111. 99.] 
 ' [Lebanon Mut. Ins. Co. v. Erb, 112 Pa. St. 149.] 
 
 8 [liilev 'V Commonwealth Mut. Fire Ins. Co., 110 Pa. St. 144.] 
 744
 
 CH. XVII.] THE PREMIUM. [§ 350 
 
 Payment of a premium to a broker through whom the policy 
 is delivered, and who is apparently the agent of the company, 
 is good although the policy declares that payment to any but 
 the duly authorized agent of the company should be at the 
 risk of the assured.^ Where the policy provided that the 
 premium must be paid to a duly appointed agent, that the by- 
 laws should be part of the contract, and that no condition 
 could be waived except in writing, a by-law requiring all 
 agents to be appointed under seal is not one of those condi- 
 tions, and may be waived by the act of the company in au- 
 thorizing a person to act as its agent by a course of dealing 
 recognizing him as such.^ A clause in a policy making it ne- 
 cessary for it to be countersigned and delivered by the agent 
 and the advance premium paid, does not give the agent 
 authority to receive subsequent annual premiums after the 
 day on which it was provided by the policy that they should 
 be so paid in advance.^ Where the insured was postmaster 
 (unknown to the company) and the company sent the premium 
 note to the postmaster for collection, and he, ten days after 
 it was due, tore up the note in the presence of witnesses and 
 put the money in its place in the safe, and eight days after 
 loss, which occurred the day following his witnessed payment, 
 he enclosed the money to the company which did not know of 
 the loss, it was held that his act in taking payment from 
 himself after forfeiture was a fraud, and he could not re- 
 cover.*] 
 
 § 350. Non-payment of Premium ; Excuse ; Intervening War. 
 — But as the intervention of war cuts off all intercourse be- 
 tween the contracting parties, if they reside respectively with 
 the belligerents, and neither by themselves or by their agents 
 can lawfully have such intercourse, it has been generally 
 held by the State courts, and in the inferior courts of the 
 United States, that a failure to pay under such circumstances 
 does not avoid the policy. One may undertake as against his 
 
 1 [Greenwich Ins. Co. i'. Union Dredging Co., 14 Daly, 237.] 
 
 2 [Susquehanna Mut. Fire Ins. Co. v. Elkins, 124 Pa. St. 484.J 
 
 3 [Bouton V. American Mut. Life Ins. Co., 25 Conn. 542 at 555.J 
 * [Harle v. Council Bluffs Ins. Co., 71 Iowa, 401.] 
 
 745
 
 § 350] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 own acts and the acts of strangers, but not a.5 against the acts 
 of God,^ his own government, or of the obligee.^ And by the 
 
 1 [See however, School District v. Dauchy, 25 Conn. 530 at 535, where it 
 was held tliat the act of God will not excuse one from performing a contract he 
 has entered into absolutely.] 
 
 2 See the authorities cited, ante, §§ o6-42. And see also Sands v. New York 
 Life Ins. Co., 59 Barb. (N. Y.) 556, 557 ; s. c. affirmed in the Court of Appeals, 
 50 N. Y. 6"26, and Cohen v. New York Life Ins. Co., id. 610, reversing s. c. in the 
 Superior Court of the city of New York. The opinion was as follows ; — 
 
 " A decision of this appeal has been delayed at the request of parties to 
 other actions pending in this court, like in character in some respects to this, 
 that before the questions involved should be decided their appeals might be 
 heard. 
 
 " The importance of the questions at issue induced the court to listen to the 
 request, and this case was substantially re-argued with Sands v. Tlie New York 
 Life Insurance Company in December last. The legal status of citizens of 
 States of war, and the relation they mutually occupy, as well as the effect of a 
 state of war upon contracts and obligations of the subjects of litigant States, 
 and their right to contract or hold intercourse with each other, have recently 
 been so frequently the subject of judicial discussion and decision in the State 
 and Federal courts, that tlie leading principles by which the intercourse and 
 dealing between enemies — that is, between the inhabitants of States and 
 nations at war — are prohibited, or restricted and regulated, and the effect of 
 war upon their mutual contracts and obligations, are quite familiar. They have 
 been so often repeated in different forms, althougii in substance and effect the 
 same, that a review of them, or a reference at much length to them, would be 
 out of place. 
 
 " The general principles and doctrines as found in the treaties of nations 
 upon public law, and deducible from the judgments of courts, are firmly estab- 
 lished, and cannot be ignored or essentially modified by courts at this day. All 
 that courts have to do is to apply the principles thus recognized and settled to 
 cases as they are. It is said, in general terms, that in a state of war ' the in- 
 dividuals who compose the belligerent States exist, as to each other, in a state 
 of utter occlusion,' and all intercourse between them is forbidden. Per Johnson, 
 J., The Rapid, 8 Cranch (Supr. Ct), 155. This proposition has been repeated 
 with approval in several later cases. Judge Nelson, in the Prize Cases, 2 Black 
 (U. S.), 635, 681, adopting the language of approved writers on international 
 law, says that one of the legal consequences resulting from a state of war is 
 that ' the people of the two countries immediately became the enemies of each 
 other; all intercourse, commercial or otherwise, between them, unlawful; and 
 all contracts existing at the commencement of the war, suspended, and all made 
 during its existence, utterly void. The insurance of eneniies' property, the 
 drawing of bills of exchange or purchase on the enemies' country, the remis- 
 sion of bills or money to it, are illegal and void; all existing partner?hips be- 
 tween citizens or subjects of the two countries are dissolved ; and, in fine, 
 interdiction of trade and intercourse, direct or indirect, is absolute and com- 
 plete by the mere force and effect of the war itself.' See also Jecker v. Mont- 
 gomery, 18 How. 110; Hanger v. Abbott, 6 Wall, 532 ; The Ouachita Cotton, 
 746
 
 OH. XVII.] THE PREMIUM. [§ 350 
 
 same courts it has been held that the contract is not dis- 
 solved, nor an established agency discontinued, by the war ; 
 
 id. 521 ; Griswold v. Waddington, 16 Johns. 438. These propositions, general 
 and far-reacliing as they are, were, however, made in cases relating to commer- 
 cial intercourse, and involved the question as to the legality and effect of com- 
 mercial dealings and transactions ; and the general language used in legal etiects 
 extends only to intercourse and dealings of that character, although all other 
 intercourse clearly within the mischief intended to be avoided would be within 
 the principle, and therefore within the rule itself. 
 
 " I do not understand that it has been autlioritatively adjudged that all pri- 
 vate contracts, without exception, made between citizens or subjects of States 
 at war, are necessarily void, although the language of the court has been suffi- 
 ciently comprehensive to include the proposition in its largest extent. Tlie sub- 
 ject is elaborately and ably considered in Kershaw i'. Kelsey, 100 Mass. 561 
 [ante, § 42], and the authorities, with the reason and extent of the rule under 
 consideration, reviewed and discussed. The result of the examination was tiiat 
 the law of nations, as judicially declared, prohibits all intercourse between citi- 
 zens of the two belligerents which is inconsistent with the state of war between 
 these countries. This was regarded as including every act of voluntary submis- 
 sion to the enemy, or receiving his protection in any act or contract which tends 
 to increase his resources, and every kind of trading or commercial dealing, or 
 intercourse, direct or indirect. The action of Congress of July 13, 1861, 12 U. S. 
 Statutes at Large, 257, and the proclamation of the President pursuant to that 
 statute, only prohibited commercial intercourse between the citizens of the 
 States declared to be in insurrection and the citizens of the rest of the States. 
 For all the purposes of this action it may be assumed that the rule, thus re- 
 stricted, would prohibit tlie making of a contract during a state of war, for the 
 insurance of the life of an enemy. 
 
 "This was rather assumed by tlie counsel for both parties upon the argument. 
 It would certainly forbid the transmission of money for a premium from one of 
 the States at war to the other, and it is said that the life of an alien enemy can- 
 not be insured by his creditor, although the latter be a subject of the same 
 country with the insurer. Bnnyon's Life Assurance, 19. The auth.orities cited 
 to sustain this proposition were all, however, cases of insurance upon merchan- 
 dise. Harman r. Kingston, 3 Camp. 150; Potts y. Bell, 8 T. 11. 548; Flindt v. 
 Waters, 15 East, 260, 266. The insurance upon the life of the husband of the 
 plaintiff was a valid and lawful contract at the time it was made in 1849, and was 
 for the term of his natural life, in consideration of a sum paid at the date of the 
 policy, and further consideration of the annual payment of a like sum on or before 
 the second day of April in every year. This was not a policy from year to 
 year, but an insurance for life, subject to be defeated by the non-performance 
 of the condition prescribed, to wit, the payment of the annual premium. 
 
 " It is expressly declared in the contract of insurance that if the annual pay- 
 ments should not be made, 'that said policy should cease and determine,' and 
 ' that all previous payments made thereon should be forfeited to the company.' 
 It was a life policy. Hodsdon ?' Guardian Life Ins. Co., 97 Mass. 144; Ruse v. 
 Mutual P>en Life Ins. Co., 26 Barb. 556 ; New York Life Ins. Co. v. Clopton, 
 7 Busli (Ky.), 179. The contract was not as to all its stipulations, and as to 
 
 747
 
 § 350J INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH, XVII. 
 
 that the insurers were bound to receive premiums, if properly 
 tendered, and to maintain agencies at the places stipulated ; 
 
 both parties, executory. It was executed by the plaintiff by the payment of the 
 annual premiums from 1849 to and including 1861, while it was wholly executory 
 on the part of the defendant, its undertaking being to pay the amount specified 
 upon the death of the insured. It is no answer to say that the plaintiff had only 
 paid for the risk incurred from year to year. The annual premium paid during 
 tiie first years of a life policy is in excess of the actual risk, and this excess is 
 so much paid in advance for the greater risk during the later years in case of a 
 prolonged life. Tiie insurers would be greatly the gainers by avoiding all life 
 policies on young lives after tlie paj'ment of the annual premiums for ten or fif- 
 teen years, terminating the risk before the greater hazard of loss — the result 
 of advanced age — has been incurred. The contract was a continuing one in the 
 sense that it was to be performed in the future, but it was not a contract of con- 
 tinuance in its performance. The act to be performed by the defendant was a 
 single act, the payment of a specified sum upon the happening of a certain event, 
 and in this respect was like a covenant or promise to pay a sum of money at a 
 day certain, or upon any condition lawful in itself There is no pretence that a 
 contract of the latter kind would be dissolved by war. The contract would re- 
 main, the remedy would be suspended. The act to be performed by the plain- 
 tiff was a single act to be performed at stated periods, and was not like tlie 
 contract of partnership, and some otiier contracts which are continuous in their 
 performance. 
 
 "In the case of a marine insurance, or a contract of affreightment, a war 
 might act as a dissolution, and put an end to them. The first is upon enemies' 
 property, and an insurance is in support of their commerce, and entirely incon- 
 sistent with the allegiance due to the government of the underwriter. As to 
 sucii a contract, the authorities say the insurance terminates absolutely and at 
 once by the verj' act of war, and the parties are in the same condition as if no 
 contract was made; the one loses the premium, and the other his security 
 against loss. But the rule will hardly apply to a life policy when large sums 
 have been paid for premiums. 
 
 " There is nothing in the policy of the law, or the interest of the public, calling 
 for an enforcement of the law of confiscation incident to a state of war, after 
 tlie war has ceased, and the people of tiie two belligerent nations have again be- 
 come one, solely for the benefit of one of two contracting parties, by the forfeit- 
 ure of the rights of the other. This would be simply a confiscation of property 
 after war had ceased, at the instance and for the benefit of individuals. 
 
 " By the payment of the annual premiimi in April, 1861, the life was insured 
 until April, 1862 ; the engagement of the defendant was then lawful, and was to 
 the effect that the company would pay the plaintiff five thousand dollars upon 
 the death of her husband within the year. A promissory note in that form, 
 made upon a good consideration, would be obligatory, and if the death occurs 
 within the year, although after war had intervened, the right of action would be 
 suspended during the war, but revived with the return of peace. 
 
 " There is no reason apparent why the promise to pay money upon the ter- 
 mination of a specified life should necessarily be terminated by the happening 
 of war between the States of which the parties are respectively subjects, as unlaw- 
 
 748
 
 CH. XVII.] THE PREMIUM. [§ 350 
 
 that a tender by a citizen of one belligerent party to an agent 
 located within the territory of that belligerent, whose appoint- 
 
 f 111 and inconsistent witli the state of war, merely because it is called an insurance 
 upon lite. Tlie policy in this instance protects the insurers and umkes void tlie 
 policy if the insured enter any military or naval service, or dies in the known 
 violation of tlie laws of the United States, so that the risk was not increased by 
 the state of war, nor the ability of the enemy to fill up the ranks of the army 
 and navy affected by the insurance upon the life of its citizens. 
 
 " Those insured would rather be deterred from taking up arras against the 
 United States, lest their policies should be avoided. 
 
 " Had the insured died at any time before April, 1862, I think there can be 
 no doubt that the contract would have been regarded as one of those which, law- 
 ful when made and executed by the one party, are not dissolved, but merely 
 suspended by the existence of war, and that a recovery could have been had at 
 the close of the war. 
 
 " The contracts betveeen individuals of belligerent States are necessarily sus- 
 pended during the war of the States, but are not annulled. Phill. Int. Law, 666 ; 
 per Nelson, J., Prize Cases, supra. Mr. Wheaton says commercial partnerships 
 are dissolved by the mere force and act of war, though as to other contracts it 
 only suspends tlie remedy. Wheat. Int. Law (8th ed.),403, § 317. This is 
 upon the principle that the States, and not the individual, wage war. The ques- 
 tion then remains whether the non-payment of the annual premiums during the 
 years 1862, 1868, and 1864, involved a forfeiture of the policy and of all pay- 
 ments before then made. That such would be the effect of the non-performance 
 of the condition, unless waived or legally excused, is not disputed, and unless the 
 performance was waived by the defendant, or is legally excused by the exist- 
 ence of the war, the plaintiff must fail in her action and submit to the loss re- 
 sulting from the forfeiture. It must be borne in mind that the war was the act 
 of the States, and that individual citizens are not identified with their govern-, 
 ment so as to expose them to the rule of law, that he who by his own conduct 
 prevents the fulfilment of a contract, or renders its performance impossible, 
 shall not take advantage of a non-performance on the other side, or excuse the 
 non-performance on his part. Odlin v. Insurance Co. of Pennsylvania, 2 Wash. 
 C. C. R. 312 ; Francis v. The Ocean Ins. Co., 6 Cow. 404 ; s. c. in error, 2 W. R. 
 64. The condition of affairs which made the payment of the premiums by the 
 plaintiff during the years named unlawful, and therefore impossible, was not 
 created by the act or default of the plaintiff, but resulted from the acts of the 
 governments of which the respective parties were subjects. There is a manifest 
 distinction between mere impediments and difficulties in the way of the perform- 
 ance of a condition, and an impossibility created by law or the act of the govern- 
 ment. This is clearly recognized in Wood v. Edwards, 10 J. R. 205, and People 
 V. Bartlett, 3 Hill, 570. An individual by his covenant may undertake, as 
 against his own acts and the acts of strangers, but not against the acts of God or 
 of his government, or of the obligee. See per Nelson, C. J., People v. Bartlett, 
 supra. In Wolfe v. Howes, 20 N. Y. 197, the performance of the undertaking 
 became impossible by the act of God in the death of the party, and performance 
 was held excused upon the ground that the parties must be deemed to have made 
 this an exception by implication. So, too, a party is excused from the perform- 
 
 749
 
 § 350] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 ment had not been revoked, was lawful ; that the agent was 
 bound to receive it without conditions, and to hold it for his 
 
 ance of his covenant when the performance is made unlawful by act of Parlia- 
 ment. If made absolutely unlawful, it operates to repeal the covenant ; if only 
 temporarily unlawful, it suspends the operation. Brewster v. Kitchin, 1 Ld. 
 Kaym. 317. Lord Alvanley, C. J., in Touteng v. Hubbard, 3 B. & P. '291, says: 
 ' But when the policy of the State intervenes and prevents tlie performance of 
 the contract, the party will be excused.' That which will avoid a covenant will 
 nullify a condition, and vice versa. Piatt on Gov. 569 ; Doughty i-. Neal, 1 Saund. 
 211, 214, n. (2). The policy of the law is to mitigate the severity of wars, and 
 relieve citizens, so far as consistent with the interest of the government, from 
 the hardships incident to it, and, a fortiori, the stringent and severe rule invoked 
 by the defendant should not be applied in a doubtful case so as to produce ex- 
 treme hardship, when, by adopting a milder and more equitable rule, each of 
 the contracting parties will secure equal and exact justice, and all their legal and 
 equitable rights. The operation of the Statute of Limitations is held to be sus- 
 pended during the war by reason of the inabihty to enforce the claim, and this 
 is in harmony with the benign tendency of the age, the result of advanced civ- 
 ilization. Hanger i-. Abbott, 6 Wall. 532. Judge Clifford says : ' Neither laches 
 nor fraud can be imputed in such a case.' At the time of making the contract 
 in this case, the plaintiff had the legal right and ability to make the annual pay- 
 ments, but the effect of the war was to make the attempt unlawful, without any 
 fault on her part. The operation of a condition as express and absolute as in 
 this case, was held suspended during the war, in Semmes v. Hartford Ins. Com- 
 pany, 13 Wall. 158. The condition there, as here, was by the act and agree- 
 ment of the party, and yet, its performance being impossible, it was held to be 
 inoperative, and the time for bringing the action extended, notwithstanding tlie 
 agreement of the parties, by the mere act and effect of the war. It was held 
 that the disability to sue imposed on the plaintiff by the war relieved him from 
 the consequences of failing to make the annual payments by the day. She was 
 guilty of no laches, and why subject her to a forfeiture 1 No injustice is done 
 the defendant in this case by permitting the plaintiff to make now the payments 
 which she could not lawfully make between 1861 and 18G5. 
 
 "The interest will compensate for the non-payment at the time, and the de- 
 fendant in legal contemplation will be precisely in the situation it would have 
 been had the money been paid on the law-day. Manhattan Life Ins. Co. v. War- 
 wick, 20 Grat. 614; New York Life Ins. Co. v. Clopton, 7 Bush (Ky.), 179; 
 Hamilton v. The Mut. Life Ins. Co., 9 Blatch. 234; ante, § 39. 
 
 " The reasonings of the prevailing opinions in the.se cases abundantly sus- 
 tain the judgments. The case comes before us on demurrer to the complaint, 
 and if there are any equities, or any facts or circumstances whieli would deprive 
 the plaintiff of the rights to which the case made by the complaint entitled her, 
 the defendant may set them up by answer. 
 
 " It was also claimed that tlie defendant, being a mutual compiny, of which 
 all holders of policies were members, it was a partnership which was dissolved 
 by the war. Trading and commercial partnerships, and perhaps all pnrtnerships. 
 are dissolved by war between the States of the several partners. But wliatever 
 analogies there may be between mutual companies and ordinary partnerships, 
 750
 
 CH. XVII.] THE PREMIUM. [1 350 a 
 
 principals, who were domiciled within the territory of the 
 other belligerent. And where the agency was not during the 
 war continued by the insurers, the insured might, after the 
 war, without tender of overdue premiums, recover damages as 
 for a breach of the contract, if the insurers denied the validity 
 of the policy.^ 
 
 § 350 a. Intervening War. — On the other hand, it has been 
 held, in opposition to the general doctrine of the cases cited in 
 the preceding section, and in a very able, learned, and elabo- 
 rate opinion, in which many of these cases were considered 
 and criticised, that tlie war abrogated all such contracts of 
 insurance from the moment when the parties thereto became 
 
 and the relation of the members of the two organizations, an incorporated com- 
 pany, although organized upon the mutual principle, is in no proper or legal sense 
 a partnership. The defendant is a body politic and corporate, capable of con- 
 tracting, and of suing and being sued, and the relation between the plaintiff and 
 tlie corporation is that of insured and insurer, and the rights and duties aif the 
 contracting parties are to be governed and determined by the terms of the pol- 
 icy by which the insurance is effected as in other cases. Other and incidental 
 rights are secured to the plaintiff, as a member of the company and one of the 
 corporators; but this does not make the members partners as between tliem- 
 selves, or affect the express contract of the corporation. If it was a partnership, 
 as claimed, and dissolved by the war, the plaintiff has not forfeited her share in 
 the assets of the copartnership, but is entitled to an accounting as of the day of 
 the dissolution, and to her due proportion of the property and assets. This 
 would lead to a result not desired by the defendant." 
 
 1 Hancock v. New York Life Ins. Co., C. Ct. (Va.), 4 Big. Life & Ace. Ins. 
 Cas. 488. The amount received in this case seems to have been the amount of 
 premiums which had been paid with interest. See also New York Life Ins. Co. 
 ?•. White (Va.), 2 Ins. L. J. 917 ; New York Life Ins. Co. v. Hendren, 24 Grat. 
 536; Smith v. Charter Oak, &c. Ins. Co., C. Ct. St. Louis County (Mo.), 5 Big. 
 Life & Ace. Ins. Cas. 212 ; s. c. 1 Cent. L. J. 76, and note ; Martine v. Inter- 
 national Life Ins. Co., 53 N. Y. 339. In this case the premiums were payable by 
 a citizen of North Carolina through an agency at Fayettesville in that State, to 
 the New York general agency, controlled by a directory of a British insurance 
 company. The insured having died during the war, several premiunis being 
 actually unpaid, and no agency of the insurers being kept up in North Carolina 
 during the war, recovery was had for the amount of insurance less the amount 
 of unpaid premiums. [The civil war preventing the payment of premiums 
 excuses the failure, and the insured will be reinstated by equity on offer to pay 
 up the premiums after the war. Bird v. Insurance Co., 11 Phila. 485 and C. Ct. 
 U. S.j, 5 Big. Life & Ace. Ins. Cas. 487 ; Connecticut, &c. Ins. Co. v. Duerson 
 (Va.), 6 Ins. L. J. 670; Crawford v. JEtna Life Ins. Co. (Tenn.), 6 Ins. L. J. 
 685. 
 
 VOL. II. — 4 751
 
 § 350 a] INSURANCE : fire, life, accident, etc. [cH. XVII. 
 
 public enemies, so that neither could maintain any action 
 against the other.^ Following this case came also the very- 
 elaborate case of Worthington v. Charter Oak Insurance Com- 
 pany ,2 where the court came to the same conclusion. And, 
 finally, the Supreme Court of the United States, after affirm- 
 ing by an equally divided court the opposite decisions in 
 Hamilton and Tait's cases, and upon grounds not altogether 
 consistent with those upon which the court based its decision 
 in Worthington's case, has now so far adopted the doctrine of 
 the latter case as to hold that a policy of life insurance for- 
 feitable on non-payment of any annual premium is not an in- 
 surance from year to year, lilvc a common fire policy, but that 
 the premiums constitute an annuity, the whole of which is the 
 consideration for the entire insurance for life, and the condi- 
 tion is a condition subsequent making void the i)olicy by its 
 non-performance ; that the time of payment in such policies is 
 material, and of the essence of the contract, failure wherein 
 involves a forfeiture which equity cannot relieve against ; and 
 that if war intervenes, and makes intercourse between the 
 parties unlawful, the policy is nevertheless forfeited if the 
 insurers insist upon it, in which case, however, the insured is 
 entitled to recover the difference between the cost of a new 
 policy and the present value of the premiums yet to be paid 
 on the old policy at the time the forfeiture occurred, — being 
 the equitable value of ih(i policy arising out of the premiums 
 actually paid. It was also held that it would be inequitable to 
 compel a revival of the policies subverted by the war, as none 
 but the sick or wounded would probably elect to have them 
 revived.^ 
 
 1 Emmons, J., Tait v. N. York Life Ins. Co., C. Ct. (Tcnn.), 2 Ins. L. J. 863 ; 
 s. c. 4 Big. Life & Ace. Ins. Cas. 479. 
 
 2 41 Conn. 372. See also Dillard v. Manhattan, &c. Insurance Company, 
 44 Ga. 119. 
 
 3 New York Life Ins. Co. v. Statham, 93 U. S. 24. Tliis case holds that a 
 policy for life is a contract from year to year, terminable at tlie expiration of any 
 year at the option of the insured, contrary to the view taken hy the New York 
 Court of Appeals, which regard.s it as a continuous contract for life. Homer v. 
 Guardian, &c Ins. Co., 67 N. Y. 478. See also upon this last point, as well as 
 upon the whole subject, 11 Am. Law Rev. 221, article by Ex-Judge Foster, of 
 the Massachusetts Supreme Judicial Court. 
 
 752
 
 CH. XVII.] THE PREMIUM. [§ 852 A 
 
 § 351. And as the right, under such circumstances, to keep 
 alive the policy by the payment of overdue premiums remains 
 in the insured, so the insurers may demand and compel pa}-- 
 ment of the same.^ 
 
 § 352. Payment of Premium; Excuse; Intervening Death. — 
 The payment of the premium on or before the day specified in 
 a policy from year to year is a condition precedent, and its 
 non-payment from year to year as it becomes due works a for- 
 feiture of the policy ; and the fact that the insured is stricken 
 with paralysis or insanity before payment, even though he may 
 be on his way to the office to pay his annual premium, does 
 not excuse the non-payment or save the policy. This was 
 not the intervention of an act of God in such sense as to be 
 the foundation of an excuse.'^ The payment of the premium 
 is an act which can be performed by others than the insured, 
 and does not depend upon the continued capacity of the in- 
 sured. In point of fact, a man may be mentally and morally, 
 and even pjiysically, incapable for years of existence, yet the 
 premiums may be paid by his friends or relatives, or those 
 interested in his case. And so they often are. The act re- 
 quired is not necessarily a personal act,^ but may be performed 
 as well by others ; and the failure therefore of the insured to 
 perform it personally does not show that the act could not 
 have been performed.* The insurers are not liable unless the 
 death occur within the time covered by the policy.^ 
 
 [§ 352 A. Invalid Excuses. — Where a policy provides that 
 it shall be forfeit if the premium is not paid ad diem, or the 
 
 1 Lynchburg Hose Fire Ins. Co. v. Knox, Sup. Ct. City of Baltimore, ante, 
 §41. 
 
 2 [Delirious sickness rendering it impossible for the assured to attend to the 
 payment of premiums is not such an act of God as will excuse the default. 
 Carpenter v. Centennial Mut. Life Ass., 68 Iowa, 453.] 
 
 ^ As to the point that the act is a personal one, see Worden i'. Guardian, &c. 
 Ins. Co., 39 N. Y. Sup. Ct. 317. 
 
 * Howell V. Knickerbocker Life Ins. Co., 44 N. Y. (Ct. of App.) 277 ; Wheeler 
 V. Conn. Life Ins. Co. (N. Y.), 11 Rcptr. 613; Evans v. United States Life Ins. 
 Co., 64 N. Y. 304 ; ante, § 33-3. See also dissenting opinion of Runyon, Ch., in 
 Hillyard v. Mutual Ben. Life Ins. Co., 35 N. J. 415, and post, § 465; Broom's 
 Legal Maxims (6th Am. ed.), 176. 
 
 s Lockyer v. OflSey, 1 T. R. 252, 260. 
 
 753
 
 § 353] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 note given therefor is not paid at maturity, neither sickness 
 and incapacity of the insured, nor a faihire on the part of the 
 company to conform to its usage of giving notice of the day of 
 payment, will constitute a good excuse. The company usually 
 gives notice to designate the agent to whom payment shall be 
 made and to stimulate the memory of the insured, but it is 
 under no obligation to give such notice. Prompt payment is 
 the life and soul of the insurance business, and time is material 
 to the contract. A custom not to demand punctual payment of 
 premium notes is a mere matter of indulgence and begets no 
 legal right to its continuance.^ While the company continues 
 to do business in the ordinary way, a belief that it is insolvent 
 is no excuse for not paying premiums.^ Although the agent 
 of assured calls several times at the insurance office on the 
 day the premium is due, and fails to find the agent, the policy 
 is still void for non-payment.^ An assurance by the agent 
 that the dividends will pay the premiums, is not a ground of 
 relief against the obligation to pay premiums.* It is no an- 
 swer to a defence of non-payment that the assured agreed with 
 the agent that the latter should credit the premium on a debt 
 lie owed the assured, or that the agent agreed to give notice 
 to a voluntary assignee of tlie insured when the premium was 
 due. Such assignee is a stranger to the contract of the com- 
 pany.^ The death of the local agent is no excuse for not pay- 
 ing premiums that by the terms of the policy are payable at 
 the home office.^] 
 
 § 353. Days of Grace ; Payment of Premium after Death of 
 the Insured. — And upon tlie point suggested by Hunt, J.,'' 
 that such a payment can only inure to keep the policy alive 
 
 1 [Thompson v. Insurance Co., 104 U. S. 252, 258-259 (1881) ; New York 
 Life Ins. Co. v. Statham, 93 U. S. 24; Insurance Co. v. Eggleston, 96 U. S. 
 572.] 
 
 2 [Taylor v. Charter Oak Life Ins. Co., 9 Daly, 489; 8 Abb. U. C. 331.] 
 
 3 [Cronkhite v. Accident Ins. Co., 35 Fed. Rep. 26 (Col), 1888.] 
 
 4 [Hale V. Continental Life Ins. Co., 12 Fed. Rep. 359; 20 Blatch. 515.] 
 s [Lycoming Fire Ins. Co. v. Siorrs, 97 Pa. St. 354.] 
 
 6 [Bulger r. Washington Life Ins. Co., 63 Ga. 328.] 
 
 " Ante, § 346. [An overdue premium paid after death of the insured, both 
 parties being ignorant of the fact, has no effect. Miller v. Union Central Life 
 Ins. Co., 110 III. 102.] 
 
 754
 
 CH. XVII.] THE PREMIUM. [§ 353 
 
 when the subject of insurance is alive at the time of payment, 
 the case of Pritchard v. Merchants' and Tradesmen's Mutual 
 Life Assurance Society ^ has an important bearing. In that 
 case there was a condition that the policy should be void " if 
 the premiums were not paid within thirty days after they 
 should become due, but that the policy might be revived 
 within three calendar months, on satisfactory proof of the 
 health of the party on whose life the insurance was made." 
 The insured died before tlie expiration of the thirty days, and 
 the premium was forwarded and received the day after the 
 expiration of the thirty days, both parties being ignorant of 
 the fact of the death. Said Gray, for the insured, arguendo : 
 " The receipt of the premium after the expiration of the thirty 
 days does not operate the creation of a new policy, but is a 
 mere waiver of a forfeiture, and an adoption of the payment as 
 if made in due time. The distinction, therefore, of ' lost or 
 not lost,' has no bearing on this case." Willes, J. : " You say 
 that the payment on November 15 had retrospective effect. Is 
 not that contradictory to the terms of the receipt, which is stated 
 to be for a ' renewal ' of the policy, pointing to the future ? " 
 Gray : " It is the ordinary form of receipt in use ; the same 
 that would have been given if the payment had taken place 
 within the thirty days, and in the lifetime of the party." 
 Crowder, J. : " Would an original policy have been good, the 
 party being dead at the time the assurance was effected ? 
 Would not that be within the case of Coutourier v. Hastie ? ^ 
 Was not this a receipt of money in ignorance of facts, which, if 
 known, would have prevented the parties from accepting the 
 payment ? " ^ Gray : " This is not like the case of an action 
 to recover back money which has been paid under a mistake 
 of fact. If a man enters into a contract under a mistake, that 
 mistake will not absolve him from the performance of his con- 
 
 1 3 C. B. N. 8. 622. 
 
 2 5 House of Lords Cases, 673. 
 
 3 This was the case in Lefavour v. Insurance Co., 1 Phila. 558, where a pol- 
 icy was held void wliich was issued after, nlthough dated prior to, the deatli, tiie 
 insurers being ignorant of the fact, and the insured knowing it. But if both 
 parties were ignorant, it has been said the policy issued is valid. Forbes v. Ed. 
 Life Ass. Co., 10 Ct. of Sess. Cas., 1st ser., 451. 
 
 755
 
 § 353] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XYII. 
 
 tract. Here the payment was to cover the risk from October 
 13, 1855, to October 13, 1856." Crowder, J. : " But the man 
 was dead when the transaction took place." The counsel for 
 the plaintiff was stopped by the court. Williams, J., in giving 
 his opinion, said : — 
 
 " Taking the policy without the conditions, it is clear that 
 the plaintiff would have no claim whatever against the com- 
 pany thereon after the 13th of October, 1854, unless he duly 
 paid the premium for each ensuing year, on or before that day. 
 Then comes a condition (the second) which provides that the 
 policy shall become void if the (yearly) premiums be not paid 
 within thirty days after they become due respectively. Stop- 
 ping there, it might be a question, and it is one which persons 
 insured would be wise not to raise, whether this does not con- 
 template a payment by the assured himself, or whether, as has 
 been contended on the part of the plaintiff, the effect of this 
 condition is to absolutely extend the period for the payment 
 of the premium, so that, if the assured should die within the 
 thirty days, the company arc still bound to accept the money ; 
 such payment to all intents and purposes inuring as a pay- 
 ment within the time limited by the policy, so as to entitle the 
 representatives of the assured to recover upon the policy, even 
 though the assured should be dead at the time the premium 
 was paid. The inclination of my opinion, if it be necessary to 
 express one, and perhaps it is, for it has an important bearing 
 on the case, is, that the thirty days are given only with refer- 
 ence to insurance for future years, and that, notwithstanding 
 the life has become less valuable, the company are bound to go 
 on insuring future years, provided the future premiums are 
 paid within thirty days after the expiration of each period of 
 insurance.^ However that may be, the payment here was not 
 made within the thirty days. But then comes this further con- 
 dition : ' But this policy may be revived within three calendar 
 
 1 In Worden v. Guardian, &c. Ins. Co., .30 Superior Ct. (N. Y.), it was held, 
 under a policy providing tliat tlie " premium should be paid," that it might be 
 paid within the days of grace, after the death of the insured, by anotiier than 
 the insured; distinguishing the case from those where tlie policy provides that 
 the assured shall pay, and use language implying that he is siill alive. Sea 
 Want V. Blunt, post, § 357. 
 
 756
 
 CH. XVII.] THE PREMIUM. [§ 353 
 
 months, on satisfactory proof of the health of the party on whose 
 life the assurance is made, and the payment of a fine of 2s. 6c?. 
 per cent upon the sum assured,' &c. I am at a loss to see how 
 that provision aids the plaintiff's case. It assumes that the 
 subject upon which the insurance is to attach is a living per- 
 son, otherwise the stipulation for satisfactory proof of liealth 
 would be idle and absurd. The very foundation of a life pol- 
 icy is, that it is a contract for the payment of a certain sum 
 on the future death of a person in being, in consideration of 
 the present payment of a premium. The renewals, like the 
 original policy, clearly are only for the future assurance of a 
 living person. Then it is said, that, by accepting the pre- 
 mium after the expiration of the thirty days, the directors 
 must be taken to have waived the giving of proof of the health 
 of the party on whose life the assurance was made, and that 
 the payment inured as a payment made in due time, and that 
 the policy was thereby revived. Taking that literally, it is, 
 that the directors waived the production of proof of the state 
 of health of a man who was supposed to be alive, not the fact 
 of his being alive. They cannot be assumed to have waived 
 the condition that the person whose life was insured should 
 really be a living person at the time the renewal or revival of 
 the policy took place. Then it is said that the payment and 
 acceptance of the premium created a new contract. But in 
 truth it is no new contract at all ; it was intended as a pay- 
 ment under the original contract. The result is, that the 
 policy was not renewed, and our judgment must be for the 
 defendants." 
 
 Byles, J. : "I also think that the defendants are entitled to 
 judgment. An important question is glanced at here, namely, 
 as to the effect of a payment of the premium on a life policy 
 after the expiration of the period covered by the policy, and 
 within tlie number of days usually allowed by the conditions 
 for making the payment, or, as they have been called, the 
 days of grace. I am not aware of any authority upon that 
 subject except what fell from the court in the recent case of 
 Simpson v. The Accidental Death Company.^ It is unneces- 
 
 1 2 C. B. N. s. 257. 
 
 757
 
 § 354] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 sary on the present occasion to pronounce any opinion upon 
 that question. It may be observed that, whatever might have 
 been the construction of the policy if it had been utterly 
 silent in this respect, here it is in terms a contract or under- 
 taking against the happening of a future event. ' Dead or 
 alive ' — which would be equivalent to ' lost or not lost ' in a 
 marine policy — seems to be excluded by the terms of the 
 policy and the third condition. But the objection that the 
 payment did not take place within the thirty days, clearly 
 appears to me to be fatal to the plaintiff's claim. The pay- 
 ment and receipt were ultra the condition and under a mis- 
 take. The effect would 1)e that the plaintiff" might maintain 
 an action to recover back the premium so paid, on the ground 
 of its having been paid and received under a mistake of 
 facts." 
 
 § 354. Days of Grace ; Payment of Premium after Death. — 
 The case of Simpson v. Accidental Death Insurance Com- 
 pany, referred to in the last section, was this. The insured 
 took out a policy against death by accident, the premium upon 
 which was payable on the twenty-second day of January, 
 annually. One of the conditions provided that the premiums 
 should be paid " within twenty-one days from the day on 
 which the same should accrue or become due," and that, 
 " provided tlie same should be from time to time paid within 
 such space of twenty-one days, the policy should not be void, 
 notwithstanding the happening before the expiration of such 
 space of twenty-one days of the event, upon the happening 
 whereof the amount secured by the policy should, according 
 to the terms hereof, become payable." Another condition 
 provided that " if the premium should be unpaid for twenty- 
 one days next after it should become due, the policy should 
 be absolutely void." And it was also provided in another 
 condition that " in every case where a new premium should 
 become payable, the directors should be at liberty to terminate 
 the risk by refusing to accept the premium." The insured 
 was killed by accident on the 1st of February, the premium 
 due on the 22d of January preceding not having been paid 
 nor tendered, nor was it afterwards until after the expiration 
 758
 
 CH. XViI.] THE PREMIUM. [§ 355 
 
 of the twenty-one days. Upon these facts it was held that 
 the premium was to be paid by the insured and not by his 
 executor, and that if the latter had tendered it within the 
 twenty-one days, it would, if not accepted, have been of no 
 avail ; that the non-payment within the time limited rendered 
 the policy void ; and that under the terms of the last condi- 
 tion neither the executor nor the assured, had he been living, 
 would have had an absolute right to keep the policy alive by 
 the payment or tender of the premium within the twenty-one 
 days, as the insurers had reserved the option to continue or to 
 refuse to continue, at their discretion.^ 
 
 § 355. Days of Grace; Payment of Premium after Death; 
 Prospectus. — And to the same effect is Mutual Benefit Life 
 Insurance Company v. Ruse,^ where the policy was to be void 
 if the annual premiums were not paid on or before a specified 
 day of each year. But the company issued a prospectus, not 
 referred to in the policy, stating, among other things, that any 
 one neglecting to pay his premium for thirty days after the 
 same became due, forfeited his insurance. The premium was 
 not paid on the day specified, but was tendered before the 
 expiration of thirty days, though not till after the death of the 
 insured, and refused. The question was whether the pro- 
 spectus was admissible in evidence to control the provisions of 
 the policy and to extend the time of payment of the premium 
 for thirty days. And the court held the prospectus inadmis- 
 sible, and also if it were admissible, that it could not have the 
 effect of reviving a policy where the insured had died before 
 the payment of the premium within the thirty days. " If," 
 said the court, " a tender of the premium had been made in 
 this case after the day of payment named in the policy, and 
 before the expiration of thirty days, the insured being in life, I 
 should incline to the opinion that they would have been bound 
 by it ; but if made within the thirty days, the insured being 
 dead, and the fact of his death known to the parties, there 
 would be in that event no contract, no consideration for the 
 
 1 Robert v. New England, &c. Tns. Co. 1 Disney (Supr. Ct, Cincinnati), 355. 
 
 2 8 Ga. 534. See also Day v. Miit. Ben. Life Ins. Co., 1 McArtlmr (D. C), 
 41 ; 3 Ins. L. J. 253 ; s. c. 4 Big. Life & Ace. Ins. Cas. 15. 
 
 759
 
 § 356] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 insurance, no mutuality. It would be an act of mere futility, 
 out of which no liability could spring. . . . There can be no 
 valid contract for the insurance of the life of a dead man." 
 And upon the same facts the Court of Appeals of New York ^ 
 came to the same conclusion, reversing the decision in the 
 same case in the court below. ^ 
 
 § 356. Non-payment of Premium ; Excuse ; Prospectus ; Cus- 
 tom ; Notice. — Afterwards, however, upon a motion for a 
 rehearing, and upon the citation of three English cases,^ the 
 court observed that the cases referred to did certainly hold 
 that the prospectus might equitably be regarded as forming a 
 part of and controlling the terms of the contract, and that it 
 was not improbable that an examination of these cases would 
 have led to a different conclusion than the one arrived at 
 upon that point ; but as the judgment was right upon another 
 ground, it would not disturb it.* The first two of the Eng- 
 lish cases referred to held that a prospectus issued by the 
 company, contemporaneously with the policy, stating that 
 these policies are indisputable except upon the ground of 
 fraud, estop the companies from setting up the defence of a 
 misrepresentation, unless it be alleged that it was fraudulent 
 as well as false. The last case^ merely holds that equity will 
 reform a policy not made out according to the agreement of 
 the parties. But a still later English case than any of the 
 three before cited ^ holds that a party interested may avail 
 
 1 Ruse V. Mut. Ben. Life Ins. Co., 23 N. Y. 516. 
 
 2 26 Barb. (N. Y.) 556. There seems to be some confusion about the facts. 
 In the report of the case in tlie Supreme Court, it is stated by tiie judge who 
 gave the opinion that tiie tender of the premium was before the deatli, — a fact 
 which, if true, would doubtless justify that decision. But the opinion in the 
 Court of Appeals, as well as the same case in Georgia, shows tiiat the tender 
 was not till after the death of the insured. In neither case, however, do the 
 court seem to lay much stress on the fact of the time of payment. See also 
 Smith V. Continental, &c. Ins. Co., Dist. Ct. (Piiila.), 3 Ins. L. J. 6o, which, how- 
 ever, is contrary to the cases cited ante, § .344 a. 
 
 3 Wood V. Dwarris, 11 Exch. 493; Wheelton v. Hardisty, 8 E. & B. 282 ; 
 Collett V. Morrison, 9 Hare, 162, 173. 
 
 4 24 N. Y. 633. 
 
 5 Collett V. Morrison, the earliest in date. 
 
 6 Central Railway Co. v. Kisch, 2 H. L. Cas. 99. See also Walsh v. .^tna 
 
 760
 
 CH. XVII.] THE PREMIUM. [§ 356 
 
 himself of the statements contained in such a prospectus to 
 relieve himself from the obligations of a contract which he 
 has entered into, and to which the prospectus refers. In 
 Salvin V. James,^ it seems to have been taken for granted that 
 such a prospectus was to be deemed a part of the contract. 
 In the opinion of Lord Campbell,'-^ a statement in the pro- 
 spectus of a company that all policies will be indisputable 
 except for fraud, waives all forfeitures except for personal 
 fraud on the part of the insured. The fraud of third parties 
 does not avoid such a policy, and it is as if the statement 
 were broadly that all policies were indisputable ; since the law 
 would interpose to protect the insurers against the personal 
 fraud of the insured. Where the policy had lapsed for non- 
 payment of premium within the usual days of grace, and the 
 company wrote to the insured that they would reinstate if he 
 would pay the overdue premium and furnish a certificate, and 
 this was done within eight days, the court sustained a bill in 
 equity to declare the policy reinstated, no good reason being 
 shown why tlie certificate should not be accepted, and holding 
 that a certificate must be satisfactory which ought to be satis- 
 factory .^ It seems, also, that in cases of improper refusal to 
 accept premiums the insured may elect to treat the policy 
 as void, and sue for damages, or he may wait till the policy 
 becomes payable by its terms, and then avoid a forfeiture by 
 plea of tender of payment ; but he cannot recover the pre- 
 miums paid, and leave the question of liability on the policy 
 open.^ No notice is required from the insurer to the insured 
 that his premium, or note given for a premium, is about to 
 become due, unless the custom and course of dealing between 
 them has been such as to justify the insured in the belief that 
 
 Life Ins. Co., 30 Iowa, 133 ; Rohrsclineider v. Knickerbocker, &c. Ins. Co. (N.Y.), 
 8 Ins. L. J. -iWl. 
 
 1 6 East, 571. 
 
 2 Wlieelton v. Hardisty, 8 E. & B. 232, 282. And sucli waiver is as good 
 a plea at law as in equity. Robinson v. St. Louis, &c. Ins. Co., C. Ct. (Mo.), 8 
 Ins. L. J. 159. 
 
 3 Miesell v. Globe Mut. Ins. Co., 76 N. Y. 115. 
 
 * Day V. Conn. Gen. Life Ins. Co., 45 Conn. 480. See also jwst, § 568 ; Hight 
 V. Continental, &c. Ins. Co., C. Ct. (Ind.), 10 Ins. L. J. 223. 
 
 761
 
 § 356 A] INSURANCE : fire, life, accident, etc. [CH. XVII. 
 
 such notice would be given, and induce him to rely upon it to 
 his prejudice ; ^ or unless such notice is necessary to inform 
 the insured of the amount which is to become due, — that 
 amount being variable, and depending upon conditions known 
 only to the insurer.^ 
 
 [§ 356 A. Notice of the Time of Payment. — In regard to 
 the effect of a habit or usage of sending notice of the date 
 when each premium becomes due, opinions differ. On the one 
 hand it is held that where from the course of dealing between 
 the parties the insured has a right to believe that notice will 
 be given to him of the amount due and the time it is to be 
 paid, the company cannot in the absence of such notice set 
 up tlie failure to i)ay.3 Usage makes the giving of notice a 
 part of the contract.^ ^lf where there is a usage to give 
 notice none is sent, payment of the premium within a reasona- 
 ble time will save forfeiture.^ A notice that a premium will 
 fall due, which does not state that in default of payment the 
 policy will " become forfeited and void," is not sufficient 
 under the New York act of 1877, ch. 321, requiring notice of 
 a given form, although the notice states that " prompt pay- 
 ment is necessary to keep your policy in force." " This law 
 
 1 Robert v. New England, &c. Ins. Co., 1 Disney (Supr. Ct. Cincinnati), 355; 
 Thompson v. Knickerbocker, &c. Ins. Co., C. Ct. (Ala.), 5 Big. Life & Ace. Ins. 
 Cas. 8; post, § 3G1 ; Lewis v. Phoenix Mut. Life Ins. Co., 44 Conn. 72; Union, 
 &c. Ins. Co. V. Pottker, 33 Oliio St. 459 ; Welirlin v. Piienix Ins. Co., 1 So. L. 
 Rev. N. s. 837 ; Girard Life Ins. Co. v. Mutual, &c. Ins. Co. (Pa.), 10 Ins. L. J. 
 257; McLean v. Piedmont, &c. Ins. Co. (Va.), 7 Ins. L. J. 380. So in France, 
 where the custom is to send out agents to collect annual premiums from the 
 parties insured, tliey may rely upon this custom, and are not in default till de- 
 mand, though the policy provides that premiums shall be paid at the office of 
 the insurer. L'Aigle c. Aubry, Dalloz, Jur. Ge'n., 1870, 2, 163; Comp. de 
 rUnion c. Fouvre, id. 1850, 240; id. 5, 34. See also Mayer v. Mut. Life Ins. 
 Co , 38 Iowa, 304 ; ante, § 346. 
 
 2 Home Life Ins. Co. v. Pierce, 75 111. 426. 
 
 3 [Attorney-General v Continental Life Ins. Co , 33 Hun, 138; Manhattan 
 Life Ins. Co. v. Smith, 44 Ohio St. 156.] 
 
 4 [Grant v. Ala. Gold Life Ins. Co., 7G Ga. 575.] 
 
 5 [Grant v. Ala. Gold Life Ins. Co., 76 Ga. 583, disagreeing with the views 
 expressed in Thompson v. Insurance Co., 104 U S. 2-52, though not with the 
 decision, for in that case the premium was never paid or tendered.] 
 
 G [Phelan v. Northwestern Mut. Life Ins. Co., 113 N. Y. 147.] 
 762
 
 CH. XVII.] THE PREMIUM. [§ 357 
 
 applies to policies issued before it was passed.^ The burden 
 of proof is on the company to show that it has' served on the 
 insured the notice of forfeiture for non-payment of premium 
 required by the New York laws.^ A failure of notice to pay 
 a premium to reach the assured docs not prevent the avoid- 
 ance of the policy, if the notice was properly mailed and di- 
 rected.3 So under the Iowa statute, requiring notice to be 
 given to the makers of premium notes when they fall due, the 
 service is complete on mailing a registered letter, or at least 
 when it should be received in due course of mail.* In Penn- 
 sylvania it is held that a custom to notify when premiums be- 
 come due is inadmissible, unless it is also shown that the 
 notice was omitted in the particular case on purpose to avoid 
 the policy.^ A company in the habit of sending notice of 
 the dueness of premiums is not obliged to continue the practice.** 
 If there is nothing in the charter or by-laws requiring the 
 company to send notice of the time when the annual interest 
 becomes due, a mere usage to do so creates no right to receive 
 such notice.'^ A requirement in the notice that the premium 
 shall be paid by noon may be waived by a previous course of 
 dealing in regard to such notices.^] 
 
 § 357. Payment of Premium ; Days of Grace ; Cy pres Per- 
 formance. — In an early case, when policies of insurance were 
 usually under seal, an attempt was made to introduce the 
 doctrine of cy pres into the interpretation of these contracts, 
 in analogy to the rule as to the interpretation of conditions 
 respecting real estate, claiming that such conditions need not 
 be strictly performed according to the letter, but it is enough 
 if they be performed as near as may be and according to the 
 
 1 [Carter r. Brooklyn Life Ins. Co., HON. Y. 15] 
 
 2 [Baxter v. Brooklyn Life Ins. Co., 44 Hun, 184; Laws of 1876, c. 341, 
 Laws of 1877, c. 321 ; Wyman v. Phoenix Mut. Life Ins. Co., 45 Hun, 184.] 
 
 3 [Lothrop V. Greenfield Stock & Mut. Fire Ins. Co., 2 Allen, 82 at 85.] 
 * [McKenna v. State Ins. Co., 73 Iowa, 453.] 
 
 5 [Girartl Life Ins., &c. Co. v. Mutual Life Ins. Co., 97 Pa. St. 15.] 
 « [Smith V. National Life Ins. Co., 103 Pa. St. 177.] 
 
 ■J [Mutual Fire Ins. Co. v. Miller Lodge, 58 Md. 463 ; Webb v. Mut. Fire Ins. 
 Co . 63 Md. 213] 
 
 8 [Ala. Gold Life Ins. Co. v. Garmany, 74 Ga. 51 ] 
 
 7^3
 
 § 357] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 intent. The case was one where a party lor the benefit of 
 his wife, in consideration of quarterly jmyments to be made 
 by him during his Ufe, stipulated for the payment of an an- 
 nuity to his wife from and after his decease during her life. 
 The insurers covenanted to pay such annuity on condition 
 that the assured should pay, in addition to the quarterly pre- 
 mium, the proportion of contributions which the members of 
 the society should, during his life, be called on to make ; and 
 by the rules of tlie society, if any member should neglect to 
 pay the quarterly premiums for fifteen days after they re- 
 spectively become due, the policy should be void, unless the 
 niemher, continuing in as good health as when the policy expired^ 
 should pay up the arrears within six months. The member 
 died, leaving a quarterly payment due and unpaid at the time 
 of his death, and liis executor tendered the amount due 
 within fifteen days after it became due. But the court, after 
 referring to the autliorities in favor of such a construction of 
 conditions annexed to real estate, and to the argument of the 
 plaintiff that the payment of the premium in these cases was 
 analogous to a condition to create an estate, declared that the 
 analogy did not hold good, and that the rules applicable to 
 conditions with respect to real estate did not apply, and 
 that this being a contract of insurauce must be construed 
 according to the intent of the parties expressed in the deed 
 or policy. The executor's tender of the amount due within 
 fifteen days after it became due, the insured not being then a 
 member continuing in as good health as when the policy ex- 
 pired, did not revive the policy.^ And in Tarleton v. Stani- 
 forth,^ in a case of fire insurance where the premium was 
 tendered within the fifteen days' grace allowed, but not till 
 after the loss, it was upon the same principle held that the 
 tender would not revive the policy. In this case the insur^ 
 
 1 Want V. Blunt, 12 East, 183; Donnald v. Pied., &c. Life Ins, Co., Sup. Ct. 
 of South Carolina, 4 S. C. 321. In tliis case the condition was "that no 
 premium should be received after the day named in the policy, unless the in- 
 sured should be in perfect health, and that the risk should continue at the 
 entire option of the company." And see antp, § 3-54. 
 
 2 5 T. R 695 ; aflarmed in the E.xch. 1 B. & P. 470. 
 
 764
 
 CH. XVII.] THE PREMIUM. [§ 358 
 
 ance was from half-year to half-year, " as long as the insur- 
 ers should agree to accept the same " within fifteen days 
 after the expiration of the former half-year ; but there was 
 to be no insurance till the premium was actually paid.^ In 
 McDonnell v. Carr,^ however, where the policy was renewable 
 from year to year, at the discretion of the insurers, but 
 provided tliat " no policy will be considered valid for more 
 than fifteen days after the expiration of the period limited 
 therein," unless the premium be paid, it was held that the 
 insurers were liable for a loss occurring after the expiration 
 of the year, and before payment of the premium within fifteen 
 days, as the contract was in effect an insurance for a year and 
 fifteen days. 
 
 § 358. Non-payment of Premium ; Excuse ; Insolvency of 
 Insurers ; Policy declared forfeited ; Extension of Time ; Change 
 of Agency ; Course of Business ; Suspension of Policy. — The 
 non-payment of a premium falling due after an order issued, 
 upon the petition of the insurers, to wind up the affairs of the 
 insurance company, does not work a forfeiture of the rights 
 of the insured against the company.^ This is practically a 
 determination of the contract by them, and not by the policy- 
 holder. He therefore need take no further steps to keep iiis 
 policy alive, but may prove his claim for damages, as of the 
 day when the order to wind up took effect.* And the meas- 
 ure of damages in such case is the sum which an insurance 
 company charging the same rate of premium will require to 
 continue the policy.^ But it is no excuse for non-payment of 
 premium that the insurance company is under an injunction 
 
 1 See also Salvin v. James, 6 East, 571. 
 
 2 Hayes & Jones (Irish), 256. 
 
 3 [Non-payment of a premium coming due after the company has become 
 insolvent, does not avoid the policy. Jones v Life Ass., 83 Ky. 75. One who 
 relies upon the insolvency of the company as an excuse for not paying his pre- 
 miums, must show his readiness to perform had the company not been insol- 
 vent, and also tliat the company has been actually suspended either by some 
 act of its own, or by a proceeding instituted for the purpose. People v. Globe 
 Mut. Life Ins. Co.. 32 Hun. 147.] 
 
 * Re Albert Life Ins. Co., 22 Law Times, n. s. (James, V. C.) 92; s. c. Law 
 Rep. 9 Eq. 706 ; U. S. Fire & Mar. Ins. Co. v. Tardy (Ala.), 2 Ins L. J. 673 
 5 Re Albert Life Ins. Co., 22 Law Times, n. s. 697 ; Law Rep 9 Eq. 706. 
 
 765
 
 § 358] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 from doing business pending an inquiry into its solvency.^ 
 [When a foreign company has ceased to do busiuess in the 
 place specified for the payment, a failure to pay on the day 
 named will not be fatal. ^ Policy-holders are not obliged to 
 pay premiums after the company discontinues business. Nor 
 are they required to go over to a company to which their 
 own has sold out. One company cannot turn over its policy- 
 holders in such manner to another.^] 
 
 Payment or tender of payment of premiums is not necessary 
 where the insurers have already declared the policy forfeited, 
 or done any other act which is tantamount to a declaration 
 on their part that they will not receive it if tendered.^ So 
 non-payment of premium was held excused under the fol- 
 lowing circumstances : A tender of overdue premiums was 
 refused on the ground that the policy had lapsed. A decree 
 was obtained declaring the policy valid, and giving the plain- 
 tiff the election of paying the overdue premiums in forty 
 days, or [demanding a paid-up policy. The latter was de- 
 manded, and the policy returned to the company, with an 
 instrument cancelling the same. Both were retained by the 
 company, which made no response, but appealed. The 
 judgment was modified on appeal by striking out the ojition 
 to a paid-up policy. The insured subsequently died, and a 
 demand was made for the return of the policy and deed of 
 cancellation, to which no response was made ; but the com- 
 pany again appealed, when the last judgment was affirmed. 
 And the company was held to be estopped from insisting that 
 the premiums would have been accepted if offered. Nor 
 could the company claim compound interest on the overdue 
 premiums.^ 
 
 A policy containing a provision that the same should " cease 
 
 1 Universal Ins. Co. v. "Wliitehoad (Miss.), 10 Ins. L. J. 3"7. But see contra, 
 Coffey V. Universal Life Ins. Co., C. Ct. (Wis.), 10 Ins. L. J. 525. 
 
 2 [Dorion ;;. Positive Gov. Life Ass. Co., 23 L. C. Jur. 261 ; Bardon v. Mass. 
 Safety Fund Ass., 147 Mass. 3R0.] 
 
 3 [People I'. Empire Mut. Life Ins. Co., 92 N. Y. 103] 
 
 * Pilcher v. New York Life Ins. Co. (La.), 10 Ins. L. J. 312; [Manhattan Life 
 Ins. Co. V. Smith, 44 Ohio St. 156.] 
 
 * Hayner v. American, &c. Ins. Co., 69 N. Y. 435. 
 
 766
 
 CH. XVII.] THE PREMIUM. [§ 358 
 
 and determine " if the premium should not be paid when 
 due, is not forfeited by the failure to pay such premium on 
 the day it is due, where the company neglected to inform the 
 assured of a change in the agent authorized to receive the 
 same, after they had adopted a rule to give such notice in all 
 cases, and the assured tendered the premium in due season to 
 the former agent of the company, and was unable to find the 
 new agent after reasonable inquiry. In such a case the assured 
 is entitled to a reasonable time before :a forfeiture can be 
 declared. The failure to pay such premium for sixty days 
 after it was due is not, under such circumstances, an unreason- 
 able time, where the company had waived the time of payment 
 in the previous year, and it did not appear at what time, if 
 ever, the assured was informed of the place of payment.^ 
 
 So where a company has been in the habit of giving notice 
 of the time when, place where, or person to whom, a premium 
 may be paid, the failure to pay promptly will be excused by 
 failure to give such notice.^ So where it has been the course 
 of dealing between the parties that the insured should pay 
 the premium about the time it was due, sometimes before and 
 sometimes after.^ But an assurance before the policy is 
 signed, that the insured may have indulgence about his pay- 
 ments, is of no avail, all prior negotiations being merged in 
 the contract.* It was held in a case where the insured had 
 paid a loss, and waived the non-payment of a note, that this 
 fact was evidence for a jury of a waiver in a second case.^ 
 
 Where the policy provides for forfeiture, and also that the 
 
 1 Seamans v. Northwestern Mut. Life Ins. Co., C. Ct. (Minn ), 3 Fed. Rep. 
 325; s. c. 10 Ins. L J. 15.3; poxt, § 300; Southern Life Ins. Co. v. McCain, 96 
 U. S. 84; Brasweil v. American Life Ins. Co., 75 N. C. 8. [A failure of the com- 
 pany to give the assured notice of a ciiange of agency, by wliich he is prevented 
 from making punctual payments, estops the company. Briggs i'. National Life 
 Ins. Co., 11 Fed. Eep. 458 (Mass.), 1882; Selvage v. John Hancock Mut. Life 
 Ins. Co., 12 Fed. Rep. 603 (N. Y.), 1882.] 
 
 2 Insurance Co. v. Eggleston, 96 U. S. 572. 
 
 ^ Dilleber r. Knickerbocker Life Ins. Co., 7 Daly (N. Y.), 540. See also Cot- 
 ton States Ins. Co. v. Lester, 62 Ga. 247 ; post, §§ 361, 363. 
 
 * Union Mut. Life Ins. Co. v. Mowry, 96 U. S. 544 ; McCraw v. Old North, 
 &c. Ins. Co. (N. C), 8 Ins. L. J. 446. 
 
 5 Bowman v. Agricultural Ins. Co., 2 N. Y. S. C. 261. 
 
 VOL. 11.-5 767
 
 § 359] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. X^II. 
 
 insurers may cancel or maintain the policy on notice, the pol- 
 icy remains valid till notice of cancellation.^ 
 
 Where the risk is suspended while an overdue premium 
 remains unpaid, during the suspension no premium is earned ; 
 and if the company afterwards demand and receive the full 
 premium in cash, as if no suspension had taken place, and 
 after notice of a loss which happened during the suspension, 
 they will be liable for that loss, unless there is a stipulation 
 that in case of such default the whole premium shall be con- 
 sidered as earned.^ 
 
 § 359. Premium ; Payment ; Evidence. — The recital in the 
 policy of the receipt of the premium is prima facie evidence 
 of the payment, but only prima facie. Like all other receipts, 
 it is open to explanation.^ In Southern Life Insurance Com- 
 pany V. Booker,* it was held that if a policy acknowledging 
 payment of the premium be delivered unconditionally, and 
 without fraud, the insurers are estopped to deny the pay- 
 ment as a ground of forfeiture,^ but they may show the non- 
 
 1 Dalloz, Jiir. Gen., 1844, 4, 36, Comp. des Plioenix c. Doliis. 
 
 '^ Joliffe ('. Madison, &c. Ins. Co., 33 Wis. HI. See also ante, § 4 ; Gorton t7. 
 Dodge County, &c. Ins. Co., 39 Wis. 121 ; Kirk v. Dodge County, &c. Ins. Co., 
 39 id. 138; Sliultz v. Hawkeye Ins. Co., 42 Iowa, 239. 
 
 3 Pitt V. Berksliire Life Ins. Co., 100 Mass. 500; Sheldon v. Atlantic Fire & 
 Mar. Ins. Co., 26 N. Y 460; Baker i'. Union Life Ins. Co., 43 id. 283, overruling 
 8. c. 6 Abb. Pr. n. s. 144; New England Mut. Life Ins. Co. r. Hasbrook, .32 Ind. 
 447; Miller v. Brooklyn Life Ins. Co., U. S. C. Ct. (Md.), 2 Big. Life & Ace. 
 Ins. Cas. 34; s. c. 12 Wall. (U. S.) 288. [A receipt is not conclusive evidence, 
 but may be contradicted, varied, or explained by oral testimony. Kyan r. 
 Rand, 26 N. H. 12 at 15; Life Ins. Co. ". Davidge, 51 Tex. 244; Todd v. Pied- 
 mont, &c. Life Ins. Co., 34 La. An. 63 at 66 and 67.] In other courts the 
 acknowledgment, in the absence of fraud, is held to be conclusive. Provident 
 Life Ins. Co. v. Fennell, 40 111. 398 ; Michael v. Nashville Ins. Co., 10 La. An. 
 7.37; La Compagnie D. Ass., &c. v. Grammon (Q. B. Montreal), 3 Leg. News, 
 19; Consolidated, &c. Ins. Co. v. Cashow, 41 Md. 59; Trager v. Louisiana, &c. 
 Ins. Co. (La.), 9 Ins. L. J. 817. And see post, § 584. 
 
 * 9 Heisk. (Tenn ) 606. 
 
 ^ [A company cannot deny the payment of a premium acknowledged in the 
 policy, for the purpose nf denying the legal existence of the policy. Home Ins. 
 Co. I'. Gilman, 112 Ind. 7; Bosch v. Humboldt Mut. Fire & Mar. Ins. Co, 35 
 N. J. L. 429 at 431 ; Illinois Cent. Ins. Co. v. Wolf, 37 III. .354 at .356 ; Teu- 
 tonip. Ins. Co v. Mueller, 77 111. 22 at 24. If the policy is to be incontestable 
 except for fraud, and it states that the premium was paid, the company cannot 
 
 768
 
 en. XVII.] THE PREMIUM. [§ 360 
 
 payment in order to enforce the payment ; otherwise, if the 
 policy be conditionally delivered.^ In Norton v. Phoenix Life 
 Insurance Company,'-^ it appeared that the local agent of a 
 life insurance company took out a policy on his own life for 
 the benefit of his wife. He was supplied by his principal 
 with renewal receipts, all of which by their terms were to be 
 valid only upon their being countersigned by the agent. He 
 took a receipt for the premium paid by him one year, but did 
 not countersign it. It was not disputed that the premium 
 was paid for that year. But for the next year only a renewal 
 receipt, not countersigned by him, was found among his 
 papers after death, and payment of the loss was resisted on 
 the ground that the premium for the last year was not paid. 
 But an equally divided court held that there was no error in 
 the instruction to the jury that the last-named receipt was 
 prima facie evidence of the payment of the premium. And 
 in Myers v. Keystone Mutual Life Insurance Company,^ the 
 court were inclined to the same opinion. But in iMassachu- 
 setts, in a case ^ where the policy provided that it should not 
 be in force till countersigned by the agent, and as, in the Con- 
 necticut cases, the policy was upon the life of such agent, 
 and was found after his death amongst his papers, but not 
 countersigned, the court held that the policy never was in 
 force. 
 
 § 360. Payment of Premium ; Waiver. — The prepayment 
 of a premium may be waived by an assurance that the pay- 
 ment of the money on delivery of the policy " makes no dif- 
 ference." ° And if the agent be authorized to receive tlie 
 premium, an agreement between the applicant and the agent 
 that the latter will be responsible to the company for the 
 amount, and hold the applicant as his personal debtor there- 
 dispute this as against the beneficiary, altliough the orders given for a part of 
 the premium were not honored. Kline v. National Ben. Ass., Ill Ind. 462.J 
 
 1 Whiting V. Mass., &c. Ins. Co., 129 Mass. 240. 
 
 2 36 Conn. 503. 
 
 3 27 Pa. St. 268. 
 
 * Badger v. American Pop. Life Ins. Co., 103 Mass. 244. 
 5 Bragdon v. Appleton Mut. Ins. Co., 42 Me. 259; Bodine v. Exch. Fire Ins. 
 Co., 51 N. Y. 117. 
 
 769
 
 § 360] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XYII. 
 
 for, is a waiver of the stipulation in the policy that it shall 
 not be binding till the premium is received by the company 
 or its accredited agent.i The same is true if the language of 
 the policy is that the premium shall be paid before the 
 policy shall become valid;^ And if the policy requires actual 
 payment, and the assured offers to draw his check for the 
 amount of the premium upon the bank where the agent also 
 keeps his account, the cashier telling him at the time the 
 arrangement for insurance was made that he could have the 
 money, but the agent said, " Let the money lie, and I will 
 draw for it when I want it," and did actually draw it, but 
 not till after the loss, this is also a waiver of prepayment.^ 
 And in fact the delivery of the policy without exacting the 
 payment raises the presumption that a credit is intended, and 
 is a waiver of the condition of prepayment.* The waiver 
 may also be inferred from any circumstances fairly showing 
 that the insurers did not intend to insist upon the prepay- 
 ment of the premium as a condition precedent.^ And so the 
 non-payment of an annual premium due on a specified day 
 may be waived.^ So if a foreign insurance company with- 
 draw its agent, to whom by the contract payment may be 
 made, it cannot set up the non-payment as a forfeiture, it 
 being of the essence of every contract that if one party to it 
 prevents its performance by the other, the former cannot be 
 allowed to reap any benefit from the non-performance." 
 
 1 Sheldon v. Conn. Mut. Life Ins. Co., 25 Conn. 207 ; Behler v. German Mut. 
 Fire Ins. Co. (Intl.), 9 Ins. L. J. 778; Soutlicrn Life Ins. Co. v. Booker, 9 Heisk. 
 (Tenn.) (506. Contra, if the application states that the agent has not power to 
 waive payment. Greene v. Lycoming Fire Ins. Co., 91 Pa. St. 387. 
 
 ■^ Bouton V. American Mut. Life Ins. Co., 25 Conn. 542. 
 
 3 New York Central Ins. Co. v. Nat. Prot. Ins. Co., 20 Barb. (N. Y.) 469; 
 Hallock V. Com. Ins. Co., 2 Dutch. (N. J.) 268. 
 
 4 Wood V. Poughkeepsie Ins. Co., 32 N. Y. 619; Boehen v. Williamsburgh 
 Ins. Co., 35 N. Y. 131; Miller v. Brooklyn Life Ins. Co., 12 Wall. (U. S.) 285, 
 288 ; Sheldon v. Atlantic Fire & Mar. Ins. Co., 26 N. Y. 460. 
 
 8 Heaton v. Manhattan Fire Ins. Co , 7 R. I. 502 ; Goit v. Nat. Prot. Ins. Co., 
 25 Barb. (N. Y.) 189. 
 
 6 Bouton V. Am. Mut. Life Ins. Co., 25 Conn. 542 ; Mowry v. Home Ins. Co., 
 9 R. L 346 ; Rockwell v. Mut. Life Ins. Co , 20 Wis. 335 ; 1 Big. Life & Ace. Ins. 
 Cas. 699. 
 
 7 Ante, § 356; Hamilton v. Mutual, &c. Ins. Co. (C. Ct.), 9 Blatch. 234 ; 
 
 770
 
 CH. XVII.] THE PREMIUM. [§ 360 A 
 
 If a condition of the policy stipulate that acceptance of 
 an overdue premium shall be considered an act of grace or 
 courtesy, and not as a waiver of forfeiture if any future pay- 
 ment of premium be omitted on the day it falls due, such 
 acceptance will nevertheless be a waiver of forfeiture on ac- 
 count of neglect to pay the overdue premium accepted.^ 
 And such a stipulation will be regarded as a mere notice, 
 if printed on the back of the policy, and not referred to 
 in it.2 
 
 [§ 360 A. "Waiver of Prepayment. — A delivery of the 
 policy without payment of the premium waives its prepay- 
 ment as a requisite to the contract's taking effect, though 
 such a condition is contained in the policy.^ When a policy 
 contained a clause declaring that the company would not be 
 liable unless premiums should be actually paid ; and where 
 the policy was delivered by the company's agent, who waived 
 prepayment and fixed no time for the same ; and when pay- 
 ment was several times demanded but not made, but the 
 policy was not cancelled nor any notification of an intent to 
 cancel given ; it was held that payment was waived and the 
 company was liable.* A waiver of prepayment may be in- 
 ferred from any circumstance indicating that the company 
 did not intend to insist on it.^ Sending the policy by 
 mail to the agent of the plaintiffs to be delivered to them 
 is evidence to go to the jury.^ Where the company sent 
 the policy by mail, saying its agent would call for the 
 premium, and when he called the plaintiff was away, and 
 the agent left word for him to forward the premium, it was 
 held that he had a reasonable time in which to do so, and that 
 
 Manhattan Life Insurance Co. v. Warrick, 20 Grat. (Va.) 614; post, §§ 463, 
 488, 505. 
 
 ^ American Life Ins. Co. v. Green, 57 Ga. 469. See also post, § 511. 
 
 2 Girard Life Ann. & Tr. Co. v. Mut. Life Ins. Co. (Pa.), 9 Weekly Notes of 
 Cases, 425 (1881) ; post, § 368. 
 
 3 [Equitable Ins. Co. r. McCrea, Maury & Co., 8 Lea (Tenn.), 541 ; Hodge v. 
 Security Ins. Co., 33 Hun, 583; Little v. Insurance Co., 38 Ohio St. 110; Bodine 
 V. Exchange Fire Ins. Co., 57 N. Y. 117 at 123-124.] 
 
 * [Washoe Tool Manuf. Co. v. Hibernia Fire Ins. Co., 66 N. Y. 613 at 614.] 
 
 5 [Universal Fire Ins. Co. v. Block, 109 Pa. St. 535, and following case.] 
 
 6 [Equitable Ins. Co. v. McCrea, 6 Lea (Tenn.), 541 at 544.] 
 
 771
 
 "§ 360 B] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 the company was liable for a loss within that time, though 
 after notice of cancellation and before tender of premium and 
 in spite of the provision in the policy that it should be void if 
 the premium was unpaid. ^ The condition requiring payment 
 of the premium to the company befoi-e the policy goes into 
 effect may be waived in many ways, and facts tending to show 
 a waiver should go to the jury.^ A course of dealing between 
 the parties allowing credit on premiums governs the printed 
 condition as to payment of premiums.^ Usage of the agents 
 and company in their dealings generally may waive the pay- 
 ment of the premium as a condition precedent to the attaching 
 of the risk.* Evidence of a custom of the company not to 
 enforce the condition as to prepayment of premiums, and 
 to allow sub-agents to give credit and charge themselves 
 with the amount, is competent in showing a waiver of pre- 
 payment.^] 
 
 [§ 360 B. Credit for the Premium. — A distinct agreement of 
 the agent to give credit, or conduct indicating such intent, in 
 accordance with a usage will waive the prepayment of the 
 premium.^ Delivery of the policy without payment of the 
 premium makes a prima facie case of credit, and in any case 
 where credit is intended the policy is valid although the pre- 
 mium is never paid, and it continues in effect until cancelled 
 for non-payment.' An agent authorized to take and approve 
 risks and to insure may allow credit for the premium.^ A 
 general agent may waive the condition as to payment of the 
 first premium, and give credit, even though the policy declares 
 
 1 [Carson v. German Ins. Co., 62 Iowa, 4-33.] 
 
 2 [Elkins V. Susquehanna Mut. Fire Ins. Co., 113 Pa. St. 386] 
 
 3 [Lebanon Mut. Ins. Co. v. Hoover, 113 Pa. St. 591.] 
 
 4 [Frankle v. Pa. Fire Ins. Co., 12 Ins. L. J. 614 (Col.), 1883] 
 
 5 [Peppit V. North Brit. & Mer. Ins. Co., 1 Russ. & Geld. (Nov. Sco ) 219.] 
 
 6 [Yonge V. Equitable Life Ins. Co., 30 Fed. Rep. 902 (Tenn.), 1887 ; Ten- 
 nant v. Travellers' Ins. Co., 31 Fed. Rep. 322 (Col.), 1887.] 
 
 7 [East Tex. Fire Ins. Co. v. Mims, 1 Tex. Civ. Cas. § 1.323; Latoix v. Ger- 
 mania Ins. Co., 27 La. Ann. 113; Wilson v. Herkimer Ins. Co., 6 N. Y. 53 ; Mil- 
 ler V. Life Ins. Co., 12 Wall. 285.] 
 
 8 [Jones V. ^tna Ins. Co., 7 Rep. 644 (Mass.) 1879; Ball, &c., Wascon Co, v. 
 Aurora Fire, &c. Ins. Co., 20 Fed. Rep. 232 (lud.), 1884; Insurance Co. v. Colt, 
 20 Wall. 560, (1874).] 
 
 772
 
 CH. XVII.] THE PREMIUM. [§ 360 B 
 
 that the contract cannot be modified except by writing signed 
 by the president or secretary.^ An insurer does not lose his 
 right to recover on a policy, because he has not paid the 
 premium, if the agent did not exact payment at the time of 
 the contract, but in response to the request that a bill of the 
 same should be sent, said " That was all right," although the 
 secretary of the company had unsuccessfully tried to find 
 the assured and get payment, in the mean time, but had not 
 cancelled the policy or given notice of an intent to do so.^ 
 Where an insurance agent with no authority to give credit 
 had given to the assured a policy before payment of the pre- 
 mium, but had accounted to the company therefor, it was held 
 that the company could not then object to the credit.^ A sub- 
 agent employed to solicit applications, collect premiums, and 
 deliver policies has no authority to give credit or receive any- 
 thing but cash in payment ; and therefore a company is not 
 liable on a policy not delivered when the sub-agent has acted 
 contrary to the above rule, in the absence of any evidence 
 showing that he was allowed to substitute his own liability 
 to the company in place of the premium.* Agents of a stock 
 insurance company whose instructions were not to deliver 
 policies until the whole premiums were paid, did so deliver 
 before such payment, giving credit to the insured and waiving 
 a cash payment, and it was held that the company was liable 
 on the insured's death. There was evidence in this case to 
 show that it was the custom of the agents to give credit, and 
 that this was known to the company.^ Where the insured put 
 the premium in the hands of the broker who had effected the 
 insurance, and the agent gave credit to the broker and after- 
 wards reported and paid the amount thereof to the company, 
 the question of payment went to the jury.^] 
 
 1 [O'Brien v. Union Mut. Ins. Co., 22 Fed. Rep. 586 (Minn.) 1884.] 
 ^ [La Societe de Bienfaisance, &o. v. Morris, &c. Agts. of Home Mut. Ins. 
 Co., 24 La. Ann. 347 at 348.] 
 
 3 [Agricultural Ins. Co. v. Montague, 38 Mich. 548 at 549.] 
 
 4 [Continental, &c. Ins. Co. v. WiUets, 24 Mich. 268, 272, 273. See § 360 D.| 
 6 [Miller v. Insurance Co., 12 Wall. 285, 303 ] 
 
 •* [Pittsburg Boat- Yard Co. v. Insurance Co., 118 Pa. St. 415.] 
 
 773
 
 § 360 CJ INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 [§ 360 C. Waiver ; Agent ; Method prescribed in Policy. — 
 An agent maj waive the condition respecting forfeiture for 
 non-payment of an instalment, and agree to give notice when 
 each payment is due, failure of which notice shall excuse pay- 
 ment.i If an agent authorized to receive premiums wrongly 
 informs the insured as to the date his premium is due, the 
 company is estopped. The agent may not be bound to give 
 such information, but if he attempts to do so, he must be 
 correct.2 One who called the day after the premium was due 
 and was told by the agent that the " life " had attended to it 
 himself, may show these facts as evidence of waiver of the 
 forfeiture.^ A circular issued by the company stating that 
 it will not insist on the forfeiture of policies because of the 
 non-payment of interest, is available in a court of law, to save 
 forfeiture.* Where the policy specifies the only method in 
 which its conditions can be waived, evidence tending to prove 
 waiver of non-payment of an instalment by other means will 
 be excluded. Evidence of laxity in collection and a habit to 
 receive long after due, will not be received.^ If a policy de- 
 clares that only the president and secretary have power to 
 waive conditions, no other agent can waive the necessity of 
 prepayment of the premium.^ Voluntary payment by the 
 company in case of an accident, in spite of the fact that the 
 premiums had not been paid, does not raise a presumption 
 that the premiums had been paid so as to compel the company 
 to pay for a subsequent accident. The plaintiff cannot come 
 into court saying, " It is true the premiums were not paid, 
 but the company has acted as though they had been ; there- 
 fore as against it they are conclusively presumed to have been 
 paid." The generosity of the company cannot be made a 
 handle for injustice.^] 
 
 1 [Alexander v. Continental Ins. Co., 67 Wis. 422.] 
 
 2 [Selvage v. John Hancock Mut. Life Ins. Co., 11 Ins. L. J. 653 (N. Y.) 
 1882.] 
 
 3 [Robertson v. Metropolitan Life Ins. Co., 47 N. Y. Super. 377.] 
 
 4 [Robinson v. St. Louis Mut. Life Ins. Co., 7 Rep. 358 (Mo.) 1878.] 
 
 5 [Barnes v. Continental Ins. Co., 30 Mo. App. 539] 
 8 [Calhoun v. Union Mut. Ins. Co., 19 N. B. R. 13.] 
 ^ [Melin v. Accident Ins. Co., 70 Wis. 579, 584.] 
 
 774
 
 CH, XVII.] THE PREMIUM. [§ 360 F 
 
 [§ 360 D. Waiver of Payment in Cash.^ — An agent author- 
 ized to deliver policies and receive payment may waive the 
 payment of the premium in cash notwithstanding a stipulation 
 in the policy to the contrary .^ In another case it was said 
 that a general agent of a foreign insurance company may 
 waive such a condition, but a local agent cannot.^ The 
 president of an insurance company certainly may waive the 
 condition.*] 
 
 [§ 360 E. Where the premium was not paid when due nor 
 within thirty days thereafter, but on the 31st day the plain- 
 tiff's agent called on the secretary of the company, offered 
 to pay the premium, and was told that the husband of the 
 plaintiff had attended to the matter, and three or four days 
 later finding that this was a mistake plaintiff tendered the 
 premium, which was then refused, it was held that the com- 
 pany was not bound. The policy lapsed at the end of the 
 thirtieth day, and could be revived only by a new agreement 
 by the operation of an estoppel or of a waiver. There was no 
 new agreement nor any estoppel, because the plaintiff was in 
 no way prejudiced by the untrue answer of the secretary, nor 
 any waiver, because what was said by the secretary was 
 evidently said under a mistake, and not with knowledge of 
 the facts.^J 
 
 [§ 360 F. Decisions adverse to Waiver. — An agent's au- 
 thority to collect or receive payment does not include authority 
 to make an agreement to extend the time of payment.^ An in- 
 surance solicitor as such has no authority to waive the payment 
 of the premium.'' When the application states that the pay- 
 ment of the premium is a condition .precedent to the contract 
 or issuing of the policy, the policy is not in force until the pre- 
 mium is paid, and the agent cannot waive such a condition.^ 
 
 1 [See § 360 B.] 
 
 2 [Home Ins. Co. v. Oilman, 112 Ind. 7.] 
 
 3 [Willcuts V. Northwestern Mut. Life Ins. Co., 81 Ind. 300.] 
 * [Mo. Valley Life Ins. v. Dunklee, 16 Kan. 158 at 165.] 
 
 6 [Robertson v. Metropolitan Life Ins. Co., 88 N. Y. 541, 545.J 
 
 6 [Hutchings v. Munger, 41 N. Y. 155 at 158.] 
 
 7 [Hambleton ;•. Home Ins. Co., 6 Biss. (U. S.) 91 at 94.] 
 
 8 [Ormond v. Insurance Co., 96 N. C. 158.] 
 
 775
 
 § 361] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIx. 
 
 In the absence of express authority an agent of an insurance 
 company has no power to waive the payment even of a part 
 of the premium,! especially when the policy states that no 
 agent shall make any contract or waive any condition of the 
 policy. The company is not bound to continue giving notice 
 in respect to payment of annual dues, merely because it has 
 been accustomed to do so in the past, and its failure to do so 
 is no waiver of the non-payment.^ A usage among companies 
 to receive premiums when overdue is inadmissible to save a 
 forfeiture.^] 
 
 [§ 360 G. Waiver of Statute Provisions. — A statute mak- 
 ing policies binding for the full amount for two years after 
 the payment of the first premium, anything in the policy to 
 the contrary notwithstanding, may be so far waived that the 
 insured may agree to take only a sum in proportion to the 
 premium paid.* But such a law cannot be waived by agree- 
 ment, so as to make the policy entirely forfeitable.^] 
 
 § 361. Practice of Company to accept Overdue Premium. — 
 Forfeitures are so odious in law that they will be enforced 
 only where there is the clearest evidence that such was the 
 intention of the parties. If the practice of the company and 
 its course of dealings with the insured and others known to 
 the insured, have been such as to induce a belief that so 
 much of the contract as provides for a forfeiture in a certain 
 event will not be insisted on, the company will not be allowed 
 to set up such forfeiture, as against one in whom their 
 conduct has induced such belief.^ Accordingly, a custom 
 
 1 [Brown v. Mass. Mut. Life Ins. Co., 59 N. H. 298 at 308.] 
 
 2 [Mandego v. Centennial Miit. Life Ass., 64 Iowa, 1.3-4.] 
 
 3 [Girard Life Ins. &c. Co. v. Mut. Life Ins. Co., 07 Pa. St. 15.] 
 
 * [Caffrey v. John Hancock Mut. Life Ins. Co., 27 Fed. Rep. 25 (Mich), 1886.] 
 
 5 [Wall V. Equitable Life Ass. Co. 32 Fed. Rep. 273 (Mo.), 1887.] 
 
 6 [If the company has in any way induced an iionest and prudent belief that 
 premiums will be accepted after the day appointed, it cannot insist on a forfeit- 
 ure; mere indulgence will not be enough, but an established course of dealing be- 
 tween the parties will be. Sweetzer v. Odd Fellows Mut. Aid Ass., 117 Ind. 97 ; 
 Tripp & Bailey i\ Insurance Co., 55 Vt. 100. If the company by its habits of busi- 
 ness induces the insured to believe that payment may be delayed until demanded, 
 and no demand is made, the company is estopped to set up tlie forfeiture. 
 Home Protection Ins. Co. v. Avery, 85 Ala. 348. A habit of the company to 
 
 776
 
 CH. XVII.] THE PREMIUM. [§ 362 
 
 amongst insurance companies to receive premiums, if tendered 
 at any time witliin thirty days of the time they fall due, pro- 
 vided the insured is in usual health, and evidence that this is 
 the custom among companies issuing policies stipulating that 
 non-payment of premiums at the day specified shall work a 
 forfeiture, has been held to be admissible against a company 
 having a similar provision for forfeiture, which is shown to 
 have repeatedly received, within thirty days after due, of the 
 assured, against whom it insists upon the forfeiture, pre- 
 miums, which by the terms of the policy were payable on 
 a certain day on penalty of forfeiture.^ 
 
 § 362. Premium ; Acceptance of Post Payment , Waiver. — 
 And generally the acceptance of a premium after full knowl- 
 edge of the violation of the condition of a policy, respecting 
 the payment of the premium, or otherwise, is a waiver of any 
 forfeiture thereby. Tlius, where a policy inhibits the insured 
 from passing without the limits of the United States, but has 
 indorsed thereon a permit to go to California by a certain 
 route, and the insured goes by a different route, and the in- 
 surers after the arrival of the insured in California, and with 
 full knowledge of the fact of deviation, accept one or more 
 annual premiums (whether there is or is not a forfeiture by 
 reason of the deviation is a question which was not decided), 
 it is not open to the insurers to take the objection, for the 
 
 receive premiums from tlie insured after maturity may estop tlie company as to 
 a subsequent premium paid about the usual time after it was due, altliougli the 
 insured died between its maturity and its payment. Spoeri v. Mass. Mut. Life 
 Ins. Co., .39 Fed. Kep. 752 ( Mo.), 1880. And non-payment is waived by proof of a 
 general usage to receive premiums after date, and it is not necessary to show that 
 the defendant adopted the custom. BLakiston v. Insurance Co., 15 Phil. 315. But 
 receiving overdue premiums several times, always with an inquiry into the health 
 of the assured and a statement that the receipt was optional with the company, 
 will not constitute a course of dealing that will require the company to receive 
 overdue premiums. Mut. Life Ins. Co. v. Girard Life Ins. Co., 100 Pa. St. 172.] 
 1 Helme v. Philadelphia Life Ins. Co., 61 Pa. St. 107 ; Thompson v. St. Louis 
 Ins. Co., Sup. Ct. (Mo.), 2 Ins. L. J. 422; Buckbee v. U. S. Ins. & Tr. Co., 18 
 Barb. 541 ; Girard Life Ann. & Tr. Co. v. Mut. Life Ins. Co. (Pa), 9 Weekly 
 Notes of Cases, 425. The evidence is admissible, even though the policy be 
 forfeitable " for non-payment of premium on the day it is due." Ibid. ; Union 
 Central Life Ins. Co. v. Pottker, 33 Ohio St. 459 ; Mayer v. Mutual, &c. Ins. 
 Co., 38 Iowa, 344. See also a7ite, § 358. 
 
 777
 
 § 362] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVII. 
 
 acceptauce of a subsequently accruing premium with knowl- 
 edge is a waiver of the forfeiture, if any there be. And parol 
 evidence is admissible to show such knowledge, and thus 
 establish the waiver. ^ And such acceptance has been held to 
 be a waiver of forfeiture by reason of concealment in the 
 application.^ So a part payment of an overdue premium, if 
 accepted, is a waiver of the forfeiture for non-payment when 
 due.^ So is a prepayment to an apparently authorized, though 
 really unauthorized agent.* Consent of the insurers to an 
 extension of the time of payment of a premium is a waiver 
 of forfeiture for non-payment at maturity.^ But an agent 
 cannot revive a forfeited policy by giving an antedated re- 
 ceipt for an overdue premium : ^ and the failure to disclaim 
 an unauthorized act of an agent in receiving, after the death 
 of the insured, an overdue premium, and to return the pre- 
 mium, is not a waiver of the forfeiture, as it could not pre- 
 judice the rights of the insured.'^ [The receipt of overdue 
 premiums is a waiver of the forfeiture by their non-payment,^ 
 unless the policy stipulates that on default the overdue 
 premiums or instalments shall be considered as earned.^ 
 Where it is provided that a policy may be revived by a 
 'payment of the premium or assessment in default, a mere 
 offer to receive the money in default or a demand of it, even 
 by suit, will not amount to a waiver. There must be actual 
 payment to revive the policy.^*^] It has been said that the 
 
 1 Bevin v. Conn. Mut. Life Ins. Co., 23 Conn. 244; Wing v. Harvey, 5 De 
 G., M. & G. 265 ; Froelilich v. Atlas Life Ins. Co., 47 Mo. 406 ; Georgia, &c. 
 Life Ins. Co. v. Gibson, 52 Ga. 640. And see ante, § .360; post, § 554. Not, liow- 
 ever, if the back premiums are accepted under false impressions as to the 
 present condition of the life, induced by the untruthful statements of the life. 
 Harris v. Equitable, &c. Ins. Co., 6 T. & C. (N. Y.) 108. 
 
 2 Armstrong v. Turquand, 9 Ir. C. L. Rep. 32. 
 
 8 Hodsdon v. Guardian Life Ins. Co., 97 Mass. 144. 
 4 Eclectic, &c. Ins. Co. v. Fahrenkrug, 68 111. 463. 
 
 6 Homer v. Guardian, &c. Ins. Co., G7 N. Y. 478. 
 6 DiboU V. MU\3i Ins. Co. (La.), 9 Ins. L. J. 827. 
 ^ Busby V. North America, &c. Ins. Co., 40 Md. 572. 
 ^ [Wyman v. PhcEnix Mut. Life Ins. Co., 45 Hun, 184.] 
 
 9 [Cohen v. Insurance Co., 67 Tex. 325.] 
 
 10 [Id. ; Ware v. Millville Fire Ins. Co., 45 N. J. 177 ; Edge v. Duke, 18 L. J. 
 Ch. 183.] 
 
 778
 
 CH. XVII.] THE PREMIUM. [§ 363 
 
 acceptance of an overdue premium is no waiver unless the 
 assured show that when accepted he was in good health.^ 
 But this is doubtful, unless the acceptance be expressly sub- 
 ject to that condition.2 But where the receipt itself expressly 
 stated that the acceptance of an overdue premium should not 
 have the effect to continue the policy, unless the insured was 
 at the time of the payment in good health, and in point of 
 fact he was dangerously ill, it was held that there could be no 
 recovery .3 
 
 § 363. Premium ; Part Payment and Acceptance ; Waiver. 
 — In Thompson v. St. Louis Mutual Life Insurance Com- 
 pany,* an attempt seems to have been made to avoid the 
 effect which courts are inclined to give to the acceptance of 
 postpaid premiums, by a statement at the foot of the policy 
 that " if a premium is received by the company after the day 
 named in the policy for its payment, it is considered by the 
 company and by the assured as an act of grace or courtesy, 
 and forms no precedent as regards future payments." But 
 the court held, nevertheless, a known practice of receiving 
 payments of premiums after they were due to be a practical 
 construction of the force and effect of the provision for 
 prompt payment, and a waiver of a forfeiture by reason of a 
 failure strictly to conform thereto. "In contracts of insur- 
 ance, as in other contracts," said the court, by Adams, J., 
 " the parties may make the time of the performance of any 
 stipulation of the very essence of the contract. In such case 
 the contract becomes utterly at an end or void as soon as the 
 default is made. The stipulation in regard to the time of the 
 payment of the premiums in this policy I do not regard as of 
 the essence of the contract. It was not so regarded by the 
 parties themselves. By their acts and conduct the parties 
 have construed this contract for themselves. It was not 
 regarded by either party as of the essence of the policy that 
 
 1 Mowry v. Home Ins. Co., 9 R. I. 346. 
 
 2 Rockwell V. Mut. Life Ins. Co., 20 Wis. 335. 
 
 3 Bissell V. American, &c. Ins. Co. (Ct. of Com. Pleas, Lucas Co., Pa , 1871), 
 2 Big. Life & Ace. Ins. Cas. 150 ; post, § 502. 
 
 1 52 Mo. 469. 
 
 779
 
 § 363 a] INSURANCE : fire, life, accident, etc. [cH. XVII. 
 
 the premiums would be paid on the very day that they became 
 due. The memorandum at the foot of the policy did not give 
 any additional force to the stipulation in the policy, if we 
 may consider it as having any effect whatever. If it had any 
 force, it seemed to be looked upon by the parties as a license 
 or invitation to the plaintiff to disregard the exact day of 
 payment, and to rely upon the courtesy of the company. The 
 plaintiff pursued this course, and instead of making his pay- 
 ments on the very day when due, let them lie over for a 
 short time, and still they were received without objection. 
 The plaintiff was thus induced to believe that a failure of 
 strict payment on the day would not prejudice his rights." ^ 
 
 § 363 a. Non-forfeiture ; Paid-up Policy; Profits. — An inter- 
 esting and important case is thus stated by Treat, J. : — 
 
 " On the 29th day of February, 1808, the defendant issued 
 a non-forfeitable policy. The sum insured was $10,000 ; 
 annual premium, $615.40 ; number of premiums to be paid, 
 ten ; term, natural life of the insured, ' with participation in 
 the profits.' Payment of the $10,000 was to be made within 
 sixty days after death and proof thereof, — ' the balance of 
 the year's premium, if any, and all indebtedness due or to 
 become due to the company to be first deducted therefrom.' 
 This seems to contemplate that there would be, or might be, 
 a part of a year's premium and other indebtedness due at the 
 death of the insured. 
 
 " The policy further provides that ' in case ' ' the premium 
 as aforesaid' shall not be paid ' on or before the day herein 
 mentioned for the payment thereof, or any note or notes 
 which may be given to and received by said company in part 
 payment of any premium, on the day or days when the same 
 shall become due,' the policy shall become void. 
 
 " It further provides that ' the dividend of profits which 
 may become payable by virtue of this policy to the holder 
 thereof shall be applied toward the payment of the note, taken 
 for part premiums aforesaid,' and that if this policy ' shall be- 
 come void, said holder of the policy shall be liable to pay to 
 said company the amount of all notes taken for premiums 
 
 1 And see ante, § 360; post, §§ 473, 511. 
 
 780
 
 CH. XVII.] THE PREMIUM. [§ 363 a 
 
 which shall remain unpaid, except the balance remaining 
 unpaid on the note taken for part premiums and made pay- 
 able at twelve months from date, and that the said last- 
 mentioned note is to be cancelled by said company on the 
 surrender and cancellation of said policy.' 
 
 " There is also a clause absolving the company from liabil- 
 ity if the insured becomes an inebriate, ' on paying to the 
 holder thereof . . . the amount of all unearned premiums 
 actually received thereon up to the time of such payment.' 
 
 " The next and last provision is as follows : ' After two 
 annual payments, should the party wish to discontinue (notice 
 to the company being given before the next premium becomes 
 due), the company will issue a paid-up policy for as many 
 tenths of the amount originally assured as there have been 
 annual premiums paid in cash.' 
 
 " In this case the required notice was given after four pay- 
 ments had been made, and a paid-up policy was demanded for 
 the prescribed four-tenths of the amount insured. The de- 
 fendant refused the request, unless the plaintiffs would first 
 pay their notes for premiums held by the company ; contend- 
 ing that the last clause, cited above, contemplated a previous 
 payment of the annual premiums in cash. The plaintiffs, on 
 the other hand, insist that those notes are mere loans to them, 
 to be paid out of their share of dividends, should their share 
 equal the amount of said notes, at the death of the assured, 
 — said notes being a lien on the policy for tlie sum finally due 
 thereon, — or, if that be not the true construction of the pol- 
 icy, then the defendant should issue a paid-up policy for 
 84,000 less the amount of said notes. 
 
 " The terms of the policy, as to notes quoted above, are not 
 very clear ; for they seem to imply in one phrase that many 
 notes for premiums may be outstanding, and in another 
 phrase, that there can be only one outstanding note of the 
 kind, and that for a part of the last premium due. 
 
 "The course of dealing between the parties, however, has 
 put a practical construction on the contracts. The receipt 
 for each annual premium paid (as for the last in this case) is 
 as follows : — 
 
 781
 
 § 363 a] INSURANCE : fire, life, accident, etc. [cH. XVII. 
 
 " 'Received from Clinton O. Dutcher S615.40, which continues 
 in force polic}' No. 3718, issued b}- this company, until the 29th 
 daj^ of Februaiy, 1872, in accordance with the terms and condi- 
 tions of said polic}'. 
 
 " ' Old note returned herewith, the indebtedness being debited 
 
 against the policy $547.48. 
 
 Amount of premium loaned this year 246.16 — $793.64.' 
 
 " The original agreement, it is admitted, was that of the 
 $615.40 for the annual premium, 8369.24 should be paid in 
 cash, and -$246.16 in a note at twelve months at seven per 
 cent interest, whereupon a receipt for payment of the whole 
 premium should be given, the amount of said note to be a 
 permanent loan by the company until paid by dividends, and 
 that at the maturity of said note, a new note, at the same 
 rate of interest, should be given, including the -^246.16, and 
 the amount of the former note less the dividend applicable 
 to its payment. This was the mode pursued each year. 
 
 " It is further admitted in this case that defendant had 
 always, prior to January 20th, 1871, issued paid-up policies 
 on demand without deducting the loans on outstanding notes, 
 holding such notes as a lien against the paid-up policy ; and 
 that since that date the defendant has uniformly refused to 
 issue a paid-up policy unless the holder first paid the outstand- 
 ing loans or notes. 
 
 " As there are many like suits pending against this defend- 
 ant on somewhat similar policies, issued at different times, it 
 may be well to examine them with reference to any changes 
 made by the company in the terms of its subsequent con- 
 tracts. Thus, policy No. 6060, issued March, 1869, is the 
 same as that with reference to "which this suit is instituted, 
 except that on the back thereof, in print and writing, the 
 cash surrender value of the policy is stated for successive 
 years, — that value being ' exclusive of the value of any divi- 
 dend, deposits, or reversions, which the company will pay in 
 addition ; ' also that ' the above amounts, less any outstand- 
 ing loans or notes, will be paid on the surrender of this 
 policy, duly receipted, within two months after being for- 
 feited by non-payment of premiums.' 
 782
 
 CH. XVII.] THE PREMIUM. [§ 363 a 
 
 "The policies of the defendant were stated from the first 
 to be non-forfeitable ; yet they contained clauses of forfeiture. 
 Subsequently, as above, the non-forfeitable provisions were 
 attempted to be defined ; that is, a surrender cash value was 
 stated, if the policy was surrendered within two months after 
 forfeiture. Still, in the body of the policy, the forfeiture 
 clause for non-payment of premium and notes when due was 
 retained. 
 
 " Policy 5633, issued in January, 1869, omits the words 
 * non-forfeiture policy,' and substitutes for the provision 
 above quoted as the last in the policy No. 3718 (that in 
 question) these words : — 
 
 " ' On the surrender of this policy, while in force, after the 
 full amount of two or more annual premiums have been paid 
 m cash, including the payment of any note or notes given 
 on account of premiums, the company will issue a paid-up 
 policy for the amount of premiums paid, less any and all 
 dividends paid on said policy.' 
 
 " On the back of policy (No. 5633) was the same agree- 
 ment as to cash surrender value as that indorsed on policy 
 No. 6060. 
 
 " The company had thus added to the new policies, subse- 
 quent to plaintiffs', the requirement of previous payment of 
 notes given on account of premiums ; indicating on its part 
 that there was previous uncei'tainty on that point. 
 
 " It thus appears that the policies issued by this company 
 at the commencement were designed to induce the holders 
 to understand that they included several distinct provisions 
 favorable to the insured, viz. : — 
 
 " 1. They were non-forfeitable. Afterward they defined, 
 under the head of cash surrender value, the precise meaning 
 of their non-forfeitable qualities, and limited to two months 
 the condition of non-forfeiture ; still retaining on the face of 
 the policy their non-forfeiture designation, and among the 
 conditions a forfeiture clause. Such seemingly inconsistent 
 and conflicting provisions exact a construction against the 
 company most favorable to tlie insured. 
 
 " 2. They gave to the insured a participation in the profits. 
 
 VOL. II. — 6 783
 
 § 363a] insurance: fire, life, accident, etc. [ch. xvii. 
 
 For what period of time? When he was insured for his 
 natural life, would not his participation in the profits con- 
 tinue until his death ? It matters not that the annual pre- 
 miums were to cease at the expiration of ten years, if the 
 insurance was for life. The participation in profits may be iii 
 various ways, — either by corresponding reduction of pre- 
 miums, in annual cash dividends, or in additions, with or with- 
 out accumulations of interest, to the principal sum assured. 
 
 " 3. The defendant's policies determined the mode of par- 
 ticipation in profits when part-payment of annual premiums 
 was by note. At the time of the next annual premium, 
 which would be the same time the previous note fell due, 
 there would be credited on the note the dividend of profits to 
 which it was entitled. Then the balance, together with the 
 amount payable by note for the next premium, would be 
 included in the new note, and the former note would be can- 
 celled. In that way there would be only one note outstand- 
 ing. Such was the practical construction given and assented 
 to ; yet serious difficulties might have arisen if a forfeiture 
 had been claimed; for it is provided that the holder, when 
 forfeiture occurs, shall be liable to pay all unpaid notes taken 
 for premium, ' except the balance remaining unpaid on the 
 note taken for part premiums and made payable at twelve 
 months from date,' and said last note is to be surrendered 
 and cancelled on surrender and cancellation of the policy. If 
 that was the only note which could, in the routine of busi- 
 ness, be outstanding, and that was to be surrendered and can- 
 celled, for what would the holder be liable ? It would seem 
 he would lose only the cash paid on the premiums, and that 
 his notes would be surrendered. But under the clause con- 
 cerning inebriates, when the the company cancels a policy, it 
 must pay back the amount of all unearned premiums actually 
 • received. What is meant thereby? Actually received only 
 in cash, or both in cash and notes ? The main question in 
 dispute here is, whether the defendant is bound to issue a 
 paid-up policy except when the annual payments are actually 
 paid in cash, or the notes given are also first paid in cash. 
 Under the clause concerning inebriates, the company must 
 784
 
 CH. XVII.] THE PREMIUM. [§ 363 a 
 
 pay back the amount of unearned premiums actually received. 
 How received ? In cash merely ? Certainly, it cannot be 
 fairly contended tliat the company would absolve itself under 
 that clause by returning the cash payments and holding the 
 assured lialjle on his notes for premiums. The payment of 
 premiums includes both cash and notes given. Why, then, 
 should not the phrase in the last clause as to annual pre- 
 miums, ' paid in cash,' receive equally as broad and favorable 
 a construction ? 
 
 " 4. The policies contemplated part payment by note, and 
 indicated how the notes should be treated in connection with 
 the profits, and also how the sum due on said notes should be 
 met when the policy became payable ; viz., that the sum in- 
 sured should be paid, less the amount due on the notes. 
 
 "5. If the ten annual payments had been made, the origi- 
 nal policy would have stood as a paid-up policy, and the last 
 note would have been outstanding, payable in twelve months, 
 by its terms, less dividend accrued. Was it contemplated 
 that it should be paid at the end of twelve months, when it is 
 admitted that the sum named therein was to be a permanent 
 loan at seven per cent debited against the policy ? If so, 
 what was the inducement as to part payment by note, and as 
 to participation in profits to be applied to the payment of the 
 note ? How was the participation of profits to be thereafter 
 enjoyed ? 
 
 " The theory of the plan proposed and acted on was a re- 
 ceipt for the annual premiums as for cash, while actually cash 
 was to be paid for part, and a note was to be received as a cash 
 payment for the balance. Throughout the ten years no actual 
 payment, even of interest on the notes, was expected, but the 
 balance due thereon was carried into a new note. 
 
 " Practically, it seems, the plan offered to the insured was 
 found not to work satisfactorily to tlie company, and hence it 
 changed not only the phraseology of its later policies, but its 
 own interpretation of the earlier policies. It changed the last 
 clause concerning paid-up policies for tenths, as to ' annual 
 premiums paid in cash,' so that it should read, ' including the 
 payment of any note or notes given,' <tc. 
 
 785
 
 § 363 a] INSURANCE : fire, life, accident, etc. [CH. XVII. 
 
 " Through all the various provisions concerning the non- 
 forfeiture, cash surrender, issuing of paid-up policies for 
 tenths, the giving of notes, the way those notes should be 
 treated on cash surrenders, or cancellation in case of inebri- 
 ates ; in short, throughout the various contingencies attempted 
 to be provided for, the notes are treated as sums to be ac- 
 counted for on the final payment of the policies, and not 
 before. It is impossible to reconcile the various provisions 
 with each other, or with the manifest theory on which the 
 earlier policies were based, or with the practical construction 
 given, unless it is held that paid-up policies were to be issued 
 for the tenths named, without the previous payment of the 
 notes, or the deduction of them from the amount of said 
 tenths. If deducted, what was to become of the participa- 
 tion of profits, and what of the interest they bore ? The 
 conclusion is, that plaintiffs are entitled, on the facts agreed, 
 to their paid-up policy. The company will hold the notes 
 bearing seven per cent interest, and whatever balance due, 
 less dividends, there may be at the time of the death of the 
 assured will be deducted from the tenths assured. 
 
 " The defendant agreed that plaintiffs should participate in 
 the profits during the natural life of the assured ; that they 
 should give notes for part of annual premiums ; that at the 
 expiration of ten annual premiums the policy should be con- 
 sidered paid up ; that the dividend should be applied toward 
 payment of the notes ; that the amount payable at the death 
 of the assured should be ■'i!l 0,000, less the balance due on the 
 final note given as above stated. It could not be determined 
 until the death what would be due on that note, for while it 
 bore seven per cent interest annually, it was subject to reduc- 
 tion for dividends. It was uncertain whether the dividends 
 would exceed the interest, or amount to the whole note, prin- 
 cipal and interest. Hence, when the paid-up policies for 
 tenths were demanded, the plaintiffs were entitled thereto, 
 without previous payment of the notes." ^ 
 
 > Diitclier v. Brooklyn Ins. Co., C. Ct. (Mo.), 4 Ins. L. J. 812. As to return 
 p cmiums, see anff,^ 4; jio.st, §§ 567, 569. As to payment of assessments, see 
 
 786
 
 CH. XVII.] THE PREMIUM. [§ 363 B 
 
 [§ 363 B. "Wrong Refusal to receive Premiums. — If a com- 
 pany improperly refuses to receive a premium, the measure of 
 damages is the amount required to get other insurance as 
 good as the policy in question,^ or the insured may treat the 
 policy as at an end and recover all he has paid the company.''^ 
 
 In the West Virginia case the company did not insure per- 
 sons above sixty-five years of age, and the agents had no rates 
 for any age above that nor any authority to insure older 
 persons. McCall stated to the agent that he was sixty-five 
 years old, adding that he was born on the tenth of July, 1807 
 (which was the true date), and that the agents could from 
 that fact ascertain his age. At the end of the first year the 
 plaintiff desiring a renewal, paid to the agents the money 
 therefor, and left his policy with them. The company, how- 
 ever, refused to further carry the risk, retained the policy 
 from the plaintiff, lapsed it on its books, and refused to 
 refund the premiums, on the ground that the plaintiff was 
 really sixty-six years old at the time of application. The 
 jury gave a verdict for the plaintiff ; and the supreme court 
 refused to interfere with it, remarking that the company was 
 bound by the knowledge of its agents, and that even if it had 
 a right to cancel the policy, it went too far in refusing to 
 refund the premium. 
 
 In the Missouri case a wife insured the life of her husband 
 for the benefit of herself and children. Afterward she obtained 
 a divorce from him, but continued to pay premiums on the 
 policy. Finally the company declared the policy avoided by 
 the divorce, the wife no longer having an insurable interest in 
 the husband's life, and refused to refund even the premiums 
 paid after the procurement of the divorce. 
 
 The court held that in any event this refusal was unjust, 
 and expressed a strong feeling that the insurable interest of 
 the wife and children was not terminated by the divorce. 
 
 On the question of the measure of damages, the court re- 
 marked, " Certainly the mere return of the premiums with 
 
 1 [Piedmont, &c. Life Ins. Co. r. Fitzgerald, 1 Tex. Civ. Cas. § 1348 ] 
 
 2 [McCall 0. Phoenix Mut. Life Ins Co., 9 W. Va. 237 ; McKee v. Phoenix 
 Ins. Co., 28 Mo 383.] 
 
 787
 
 § 363 B] INSURANCE : fire, life, accident, etc. [cH. XVII. 
 
 interest would not be the standard in all cases. In many it 
 would be very unjust, especially after the policy had continued 
 for years and the period of existence had consequently been 
 shortened. If the person whose life is insured, though alive, 
 should be laboring under a disease that must speedily result 
 in his dissolution, the insurer would not be permitted to 
 escape the payment of the amount for which the life was 
 assured, by putting an end to the contract of insurance." ^] 
 
 (1 28 Mo. p. 387] 
 788
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. 
 
 CHAPTER XVIII. 
 
 OTHER INSURANCE AND OVERVALUATION. 
 
 Analysis. 
 
 §§ 364, 364 A. Insurers wish to know the amount of other insurance at any 
 time obtained, in order to determine the motive of the 
 insured to preserve or to destroy the subject-matter, 
 and to enable them to calculate their share of any loss, 
 §364. 
 
 Policies usually provide that other insurance without no- 
 tice is fatal. The condition is valid, § 364, and its 
 breach avoids the policy, even though the amount of 
 insurance may be reduced below that allowed by the 
 policy, § 364 A. A charter provision is sufficient if 
 attention is called to it in the policy, § 364 A. Some- 
 times the provision is simjdy that other insurance shall 
 not exceed a certain sum, § 364 A. 
 §§ 365 - 365 C. Other, over, or double insurance, is prior or subsequent insu- 
 rance of the same subject, risk, or interest, by the 
 same insured, or for his benefit, with his knowledge 
 and assent (365 et seq., definition and examples). A 
 substituted insurance, or a renewal of insurance, of 
 which the company was once notified, is not other in- 
 surance, § 365. 
 
 nor an existing policy known and cancelled the same day, 
 § 365. 
 
 nor a subsequent policy issued by mistake and not recog- 
 nized, § 365. 
 
 nor insurance by another without right, nor in general any 
 insurance without the knowledge of the assured, nor 
 by insurance of a distinct interest in the property, as 
 in case of mortgagor and mortgagee, §§ 365 n, 366. 
 In case of a warranty, of course the insured may be 
 bound even by insurance unknown to him, § 365 n. 
 
 Insurance "to be made" refers to subsequent contracts. 
 Siimdtaneous policies. The companies must have recip- 
 rocal notices. If the same agent makes all the ]ioli- 
 cies, his knowledge is that of all the companies. Parts 
 of a day are taken into account in deciding which of two 
 policies was the prior, § 365 a. 
 
 Where two policies are taken out, each containing a pro- 
 vision against other insurance, a question arises which 
 has given the judges full opportunity to display all varia- 
 tions of logic, not to say anything uncomplimentary. 
 
 789
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 It has been held, 
 
 (1) that the question is upon the validity of the other policy 
 
 on its face and the facts at the time of insurance, 
 not of loss, § 365 B. 
 
 (2) that if the second policy is not valid on the facts at the 
 
 time of loss, the first is good, § 365, unless the inva- 
 lidity has been waived, § 365. 
 
 (3) that if the second is void on its face, the first is good, 
 
 but that evidence of extrinsic facts cannot be re- 
 ceived, § 365 B. 
 
 (4) that if good on its face, it is fatal, though void by exter- 
 
 nal facts, § 365 B. 
 
 (5) that the first is good if the second is invalid, either void or 
 
 voidable for breach of condition, although the second 
 company has actually paid its policy, § 365 and notes. 
 
 (6) that the second is good because the first is avoided in- 
 
 stantly by the taking out of the second, § 365 B. 
 
 (7) that the first is good, for the second never came into ex- 
 
 istence, because the existence of the former broke 
 one of the conditions of its existence, § 365 B. 
 
 (8) that if the second com{)any pay their policy the first 
 
 is void ; if the second is treated as void the first is 
 good, 365 B. (Suppose the second company has not 
 acted at the time of suing the first, quaere. ) 
 
 (9) that if the policy is to be void by other insurance, "valid 
 
 or otherwise," subsecjuent insurance, although void, 
 is fatal, § 365 B, and contra, § 365 B. 
 (10) that the policy is rendered voidable (§ 365) by other 
 insurance, whether enforceable or not, unless it can 
 be shown, not only that the other policy was void, 
 but that the insured understood it to be so. If the 
 uisured thought he had double insurance, the spirit 
 and reason of the condition is broken. Such a state 
 of facts at the time tiie policy in (juestion was issued 
 is fatal, though tlie first insurance is removed before 
 loss, otherwise with subsequent insurance cleared 
 away before loss, unless the agreement is clearly to 
 the eff'ect that the takiiig of other insurance shall be 
 fatal, then the procurement will avoid, irrespective 
 of continuance, § 365 C. 
 Tills tenth view seems to me correct. A subsequent 
 policy issued under a mutual mistake as to the exist- 
 ence of the former will not be fatal, § 365 C. 
 § 366. If any part of the property or interest is covered by another pol- 
 
 icy, it is a case of double insurance. 
 § 367. This condition, like others working forfeiture, is strictly con- 
 
 strued. 
 §§ 368-372. Notice of other insurance is usually required, and often it is 
 
 provided that consent of the company must be indorsed 
 on the policy, or at least obtained in writing, §§ 368-372. 
 a condition requiring notice of other insurance applies to 
 prior as well as subsequent policies, § 368. 
 
 790
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. 
 
 § 372 E. 
 § 372 F. 
 
 §§ 373-5. 
 
 I 
 
 notice to one no longer agent is insufficient, § 368. 
 
 notice of intention to secure other insurance is sufficient, 
 
 § 368. 
 (- where notice in writing is required, mere knowledge of the 
 j agent is liot sufficient, § 369. 
 
 j so if written consent is required, parol will not do, § 369. 
 Und indorsement must be made if required, § 369. 
 C on the contrary, other courts hold that it is the duty of 
 the company, upon learning of other insurance, to 
 indorse consent, or disapprove within a reasonable 
 time, and if it does neither it is estopped, § 370. 
 the condition requiring indorsement can be waived as well 
 
 as any other, §§ 370, 365. 
 and written consent is sufficient, though not indorsed as 
 
 retjuired, § 370. 
 renewal does not require reconsent, § 370. 
 Waiver, §§ 370-372 D. 
 
 by notice to a general agent, with his assent or without 
 objection, within reasonable time, §§ 370, 372 A, 
 372 B, although the policy required written assent, 
 § 372 B (delay of three months fatal, § 372 B), other- 
 wise as to a mere soliciting agent, § 372 A. 
 the assured is protected in bona fide following the agent's 
 
 advice as to notice, § 372 A. 
 knowledge of the agent at the issue of the policy waives 
 a breach by prior insurance, § 372 C. 
 and a misstatement by the agent in filling oiit the 
 application will not avail the company, 372 C, 
 unless the insured knew of the misstatement, 
 §373B. 
 but mere constructive knowledge by the agent is not 
 
 enough, § 372 C. 
 nor incomplete knowledge, the amount not being 
 
 named, § 372 D. 
 nor mere knowledge, without comment, receipt of 
 premium, or other misleading act, §§ 372 D, 
 369. 
 nor is the insured protected by the agent's knowl- 
 edge of a policy which he promises not to renew, 
 but breaks his promise, § 372 D. 
 Misrepresentation as to other insurance is material and fatal if 
 such as the company is justified in relying upon. 
 
 Evidence. . . 
 
 proofs of loss showing other insurance are admissions, 
 
 § 372 F. 
 parol inadmissible where no ambiguity exists. 
 Overvaluation is frequently stipulated against for the same rea- 
 son as other insurance, namely, that it influences the 
 assured against the preservation of the property. Evi- 
 dence of value, § 373. 
 In some cases it is held that the overvaluation must be 
 intentional to be fatal, §§ 373, 373 A. 
 
 791
 
 § 364] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIU. 
 
 But others hold, with more reason, that a wilful neglect 
 of the means of infoiTnation wUl avoid the policy, 
 even though there is no intended fraud, §§ 373 n, 
 373 A. 
 
 And a mistake has been held fatal, §§ 373, 373 A. 
 
 It has been said that onlj' a gross and clear overvaluation 
 will be fatal, and that it will be so whether there is 
 any condition on the subject or not, § 373. 
 
 Others hold a siibstanlml excess sufficient, § 373 A. 
 
 Want of education is no excuse, § 373 A. 
 
 A claim more than double the truth \i prima facie fraud- 
 ulent, § 373 A, but not 20 per cent nor 75 per cent 
 excess, § 373 A. 
 
 A warranty, of course, shuts out the question of intent, 
 unless other parts of the policy qualify it, § 373 A. 
 
 Overvaluation of part of the property does not affect the 
 rest, § 373 B. 
 
 Overvaluation that is known to the company, or ought to 
 be known, is waived by rejecting the claim on other 
 grounds. § 373 B. 
 but not if it is a fraud and the fact is unknown, 
 
 § 373 B. 
 ror will knowledge of the agent be sufficient where 
 the assured knows that the company is being 
 deceived, § 373 B. 
 
 Under the Maine statute the question is whether the risk 
 is increased, § 373 B. 
 
 If the liability is not to exceed three-fourths of the value 
 at the time of loss, overvaluation at the time of in- 
 surance is immaterial, § 373 B. 
 
 The rule of this topic does not apply to a changing stock 
 of goods, nor in any case where the insurer is only 
 liable for a percentage of the actual loss, § 374. 
 
 In case of property on which the insurance is renewed, a 
 depreciation since the first insurance does not give 
 rise to a fraudulent overvaluation, § 375. 
 § 376. A violation of the charter, by insuring for too large a 
 
 percentage of the real value, does not avoid the policy 
 between the parties. 
 
 § 364. other Insurance. — The insurers may wish to know 
 the amount of insurance upon tlie particular subject-matter, 
 in order that they may duly estimate the risk, since the greater 
 the amount of the insurance the greater the temptation to 
 destroy the property or life or other subject-matter, or in 
 some other way to bring about the event upon which tlie loss 
 is made payable. And it is obvious that the interest to know 
 the fact of other insurance is the same, whether it exist at 
 the time of entering into the new contract or be procured 
 792
 
 CH. XVIIl.] OTHER INSURANCE AND OVERVALUATION. [§ 364 
 
 afterwards. Such insurance is sometimes called over-in- 
 surance or double insurance. It is also of importance to the 
 insurer to know of other insurance, that he may determine 
 his proportionate liability, in case of being called upon to con- 
 tribute towards the indemnity for a loss. Insurers may be 
 presumed to rely more upon the interest than upon the char- 
 acter of the insured for protection against the carelessness 
 and fraud of the owners, and therefore take care that the 
 property be so far uncovered by insurance that it is for the 
 interest of the owner that it should not be destroyed. To en- 
 able them to do this, it is necessary that they should be in- 
 formed whether the property on which insurance is applied 
 for is elsewhere insured, and to what extent ; and that this 
 interest of the insured may not afterwards be decreased by 
 his procurement of further insurance, the stipulation that the 
 policy shall be void if other insurance exist at the time and 
 be not disclosed, or subsequent insurance be obtained and be 
 not notified to the company, is resorted to.i The general 
 doctrine that a previous or subsequent insurance without no- 
 tice, under a policy requiring notice of such insurance, upon 
 pain of forfeiture, discharges the insurers from any obliga- 
 tion to pay for a loss happening under such circumstances, is 
 well settled and universally recognized. That this should be 
 the effect of the concealment or failure to give notice, as the 
 case may be, is not only a part of the contract, and obligatory 
 upon that ground, but the forfeiture is just and reasonable. 
 The insurer can never know the full extent of his risk, unless 
 he knows everything that bears upon the risk. He has a 
 riffht to take into account the fact that the insured has a 
 greater or less unprotected interest, whereby his vigilance 
 may be quickened in the preservation of the property ; but, 
 in order to estimate this interest truly, he must know to what 
 
 1 Hutchinson v. West. Ins. Co., 21 Mo. 97 ; Harris v. Oliio Ins. Co., 5 Oliio, 
 467. The mere failure to mention the fact that there is other existing insurance 
 on the subject-matter upon which further insurance is obtained, there being no 
 inquiry on that point, is not a concealment wliich will avoid the policy, — at 
 least, unless it be found by the jury material to the risk. Parsons v. Citizens' 
 Ins. Co., 43 U. C. (Q. B.) 261; McDonell v. Beacon Fire & Life Ins. Co., 7 C. 
 P. (U. C.) 308. 
 
 793
 
 § 364 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 extent insurance is actually had. It may be that the in- 
 surance is to such an amount as to stimulate to neglect in 
 the preservation, or even to the fraudulent destruction, of 
 the property insured. This prudent insurers should endeavor 
 to guard against ; and deception or failure to notify when re- 
 quired on this point operates as a fraud upon them. If they 
 have contracted for that protection, they have a right to its 
 advantages ; and the insured cannot be permitted to show 
 that there was no fraud in fact ; that the property was vigi- 
 lantly guarded ; that the insured could not have prevented 
 the loss ; or even that the insurer — as in case the loss is less 
 than the amount insured by all the policies — is benefited by 
 the over-insurance, since he will only be required to pay, by 
 way of contribution, his proportion of the loss instead of the 
 whole amount stipulated. This is one of those provisions not 
 regarded with the jealousy due to those ordinarily working 
 forfeitures, but will be upheld without reluctance as a fair 
 and just provision for a reasonable and proper purpose.^ 
 
 [§ 364 A. A breach of a condition in a policy as to taking 
 other insurance without notice avoids the policy. ^ Subse- 
 quent insurance avoids a prior policy conditioned against it, 
 although two other policies contemporaneous with the said 
 prior policy are avoided by the same act, so that the amount 
 of insurance is thereby reduced within the limit allowed 
 by said prior policy .^ Other insurance ijiso facto avoids the 
 policy without any action of the company looking toward 
 cancellation.^ When the charter provided that the policy 
 should be void for double insurance such insurance was held 
 to avoid it, although on the back of the policy only two 
 out of many sections of the company's charter were printed, 
 which two contained no such provision.^ They were, however, 
 
 1 Obermeyer v. Globe Mut. Ins. Co., 43 Mo. 573. See also ante, § 13. 
 
 2 [Battaiiie v. Merchants' Ins. Co., 3 Rob. (La.) 384 at 386; Duclos v. Citi- 
 zens' Mut. Ins. Co., 23 La. Ann. 332 at 3.33; Funks v. Minn. Mut. Ins. Co., 
 29 Minn. 347 at 354 ; Sanders v. Cooper, 115 N. Y. 279; Moulthrop v. Farmers' 
 Mut. Fire Ins. Co., 52 Vt. 123.] 
 
 3 (Hoyal Ins. Co. v. McCrea, Maury, & Co., 8 Lea (Tenn.), 531.] 
 
 * Jolmson V. Amer. Fire Ins. Co., 18 Ins. L. J. 724 (Minn.), August 12, 1889.J 
 5 [Fabyan v. Union Mut. Fire Ins. Co., 33 N. H. 203 at 208.] 
 
 794
 
 CH-. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 365 
 
 amply sufficient to call attention to the charter, and it was 
 manifest on the slightest attention that the whole act was not 
 there, and a prudent man M^ould have found out what the other 
 sections contained. When the policy provides that the ag- 
 gregate insurance shall not exceed a certain sum, insurance 
 to a greater extent than this avoids the policy. ^ If the policy 
 provides that the total insurance shall not exceed two-thirds 
 of the cash value of the property and the plaintiff's evidence 
 shows that it did exceed two-thirds, he will be nonsuited. ^j 
 
 § 365. What amounts to Other, Over, or Double Insurance. — 
 It is additional and valid insurance, prior or subsequent, upon 
 the same subject, risk, and interest, effected by the same in- 
 sured or for his benefit, and with his knowledge or con- 
 sent.3 Owners of different interests in the same property 
 and joint owners may respectively insure their interests, 
 without risk of violating a provision against other insurance.^ 
 
 1 [Insurance Co. v. Slockbower, 26 Pa. St. 199 at 202.] 
 
 2 [Baliner v. Insurance Co., 127 Pa. St. 464.] 
 
 3 Tyler v. JFAna Ins. Co., 12 Wend. (N. Y.) 507; s. c. affirmed, 16 Wend. 
 387 ; Sloat v. Royal Ins. Co., 49 Pa. St. 14 ; Forbush v. West Mass. Ins. Co., 4 
 Gray (Mass.), 337; Nichols v. Fayette Mut. Ins. Co., 1 Allen (Mass ), 63; Har- 
 ris V. Ohio Ins. Co., 5 Ohio, 467; Franklin Mar. & Fire Ins. Co v. Drake, 
 2 B. Mon. (Ky.) 47; Park v. Phoenix Ins. Co., 19 U. C. (Q. B.) 110; Roots v. 
 Cincinnati Ins. Co., 1 Disney (Ohio), 138; Kelly ik Liverpool, &c. Ins. Co., 2 
 Hannay (N. B.), 266. See also post, § 366. [Subsequent further insurance by 
 another without right is of no effect. Com. Union Ass. Co. v. Scammon, 126 
 111. 355. The condition pertaining to other insurance applies only to such as is 
 procured by the insured or with his assent, and not to such as may be thrust 
 upon him by officious persons, without his knowledge or assent, and which he 
 repudiates. London, &c. Fire Ins. Co. v. Turnbull, 86 Ky, 230. Where a con- 
 signor effected insurance, with the warranty " no other insurance," and un- 
 known to him the consignees also insured tlie same goods, the first policy was 
 held not avoided. Williams v. Crescent Ins. Co , 15 La. Ann. 051 at 652. The 
 question in a part of the policy (the application) was " What is your title to the 
 property?" — answer, ''Contract;" question, "How much insured in other 
 companies ? " — answer, " None ; " and it was held that the fair interpretation 
 of these questions and answers was that the insured held the property by a 
 contract for the purchase of it, and that he had no sum insured in other com- 
 panies. Hence, that it was no breach of the warranty that his vendor was 
 otherwise insured. Sprague v. Holland Purch. Ins. Co., 69 N. Y. 128 at 130. 
 Subsequent insurance by a mortgagee cannot affect a policy obtained by the 
 mortgagor. Guest v. Fire Ins. Co., 66 Mich. 98. Prior insurance without the 
 knowledge of the plaintiff is no breach of the other insurance clause. A 
 
 795
 
 § 365] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIIl. 
 
 [When both parties knew of another policy in existence which 
 was to be cancelled on the issuance of the second policy, and 
 which was in fact cancelled the day after, the second was held 
 not avoided.^ Where a policy was to be void " if any sub- 
 sequent insurance is effected in any other company," it is held 
 that subsequent insurance means further insurance, and that 
 a subsequent policy of the same amount as a prior policy 
 which lapsed is not a breach of the condition.-] Substituted 
 insurance, not increasing the amount, though changing it, is 
 not new insurance ; ^ but it may be " subsequent " insurance, 
 though less in amount.'* Nor is a renewal " other insurance," 
 
 mortgagee insured, and afterward the mortgagor not knowing of the former pol- 
 icy insured her interest, stating the mortgage and that the mortgagee had a 
 right to insure. It was huld that her polic}' was good. Carpenter v. Conti- 
 nental Ins. Co., 61 Mich. 6-35. A mortgagee insured his interest in the projierty 
 by a policy payable to himself, and containing a stipulation for apportionment 
 of loss in case of other insurance. Without his knowledge the mortgagor in- 
 sured his interest by a policy payable to the mortgagee as his interest might 
 appear. Upon loss he received payment from the latter policy, and then sued 
 on tiie former, and it was held that he could recover in full. Johnson v. North 
 Britisii & M. Ins. Co., 1 Holmes U. S. 117 at 119. Where a mortgagor assigned 
 his policy to a mortgagee as collateral security, and then got other insurance, 
 the mortgagee could recover on the policy. Williams v. Warbasse, 44 N. J. Eq. 
 89. In this case tlie mortgagee knew that the mortgagor was going to obtain 
 other insurance, and the mortgagee promised to notify the company, but failed 
 to do so, query could tlie mortgagor hold the mortgagee liable on his promise. 
 But a mortgagor who takes out a policy payable to the mortgagee, ami after- 
 wards insures his own interest, avoids the first policy. Parol to show tliat tlie in- 
 sured in the first policy was not the real party interested is inadmissible. Lias 
 V. Roger Williams Ins. Co., 8 Fed. Rep. 187 ; 1st. Cir. (N. H.) 1880, 9 Ins. L. J. 
 154 ; 10 Rep. 719. So where a mortgagee took out insurance, and the policy was 
 made to the mor^^d^ors payable to the mortgagee, and stipulated ngainst other 
 insurance, subsequent insurance by one of the mortgagors avoided the policy. 
 The mortgagee was bound by his agreement. Gillett v. Liverpool & L. & G. 
 Ins. Co., 73 Wis. 203. The element of knowledge is not always conclusive. 
 The existence of other insurance though unknown to the insured maj* avoid a 
 policy, as where his policy contains a warranty tliat no other insurance exists. 
 Phoenix Ins. Co. v. Copeland, 86 Ala. 551. A policy issued to the mortgagee 
 prohibited other insurance on a canal boat to exceed a certain sum. The 
 owner procured such insurance, and it was held that the first policy was 
 avoided. Van Alstyne v. Mina, Ins. Co., 14 Hun, 360 at .364.] 
 
 1 [Continental Ins. Co. v. Horton, 28 Mich. 173 at 177.] 
 
 2 [Parsons v. Standard Fire Ins. Co., 5 Can. Supr. Ct. 233.] 
 
 3 Pacaud v. Monarch Ins. Co., 1 L. C. Jur. 284. 
 
 * Burt V. People's, &c. Ins. Co., 2 Gray (Mass.), 397. 
 
 796
 
 CH. XYIII.] OTHER INSURANCE AND OVERVALUATION. [§ 365 
 
 SO as to require notice, if notice was given at the time of the 
 original insurance,^ unless, the interest meanwhile having 
 changed, the renewal is in a' new name.^ The additional in- 
 surance must be valid. Subsequent insurance, void by its 
 own terms, is no insurance within the meaning of the usual 
 condition against other insurance, although the subsequent 
 insurance be in fact paid.^ And a policy entered into by a 
 mutual mistake of the parties as to prior existing insurance is 
 not valid, and therefore not other insurance : ■* but a policy is- 
 sued by a company unauthorized to act in the State by reason 
 of non-compliance with certain statutory regulations, is not a 
 void policy.^ So if a prior insurance is void by reason of a 
 violation of some other condition, its non-disclosure will not 
 avoid a policy requiring notice of prior insurance.^ This doc- 
 trine is, however, denied by some most respectable authori- 
 ties." In Georgia, by the Code, a second insurance, without 
 
 1 Pitney v. Glen's Falls Ins. Co., 65 N. Y. 6. 
 
 2 Continental Ins. Co. v. Hcilman (111.), 9 Ins. L. J. 91. 
 
 ^ Hardy i'. Union Mut. Fire Ins. Co., 4 Allen (Mass.), 217 ; Stacey v. Frank- 
 lin Ins. Co., 2 W. & S. (Pa.) 506 ; Jackson v. Mass. Mut. Fire Ins. Co., 2.S I'ick. 
 (Mass.) 418 ; Gale v. Belknap County Ins. Co., 41 N. H. 170; Sdienck v. Mercer 
 County Mut. Ins. Co., 4 Zabr. (N. J.) 447 ; Pliilbrook r. New England Mut. Ins. 
 Co., 37 Me. 137 ; Rising Sun Ins. Co. v. Slaughter, 20 Ind. 520. [The condition 
 against subsequent insurance is not broken by subsequent policies whicli never 
 took effect because of breach of the condition as to absolute and sole ownership. 
 An attempt to insure is not an insurance, and it makes no difference that the in- 
 surers regarded these after-policies as valid, and paid money qn them to the 
 insured. The rights of the parties on the policy here sued on became fixed at 
 the time the loss occurred, and could not be affected by what was subsequently 
 done between tlie insured and third persons. Fireman's Ins. Co. v. Holt, 35 Ohio 
 St. 189, 195; Thomas v. Builders' Ins. Co., 119 Mass. 121 at 123. Such deci- 
 sions are outrageous violations of the spirit as well as the letter of the agree- 
 ment made hy the parties.] 
 
 * Wilson 0. Queen Ins. Co., C. Ct. (Pa.), 10 Ins. L.J. 302; Clark v. New 
 England Mut. Ins. Co., 6 Cush. (Mass.) 342. 
 
 5 Behler v. Germania Ins. Co. (Ind.), 9 Ins. L. J. 778. 
 
 6 Jackson v. Farmers' Mut. Ins. Co., 5 Gray (Mass.), 52; McLacklin u. JFAna 
 Ins. Co., 4 Allen (N. B.), 113. And see also Neve v. Columbia Ins. Co., 2 Mc- 
 Mullan (S. C), 437. In Upper Canada, subsequent invalid insurance, if actually 
 paid, has been held to work a forfeiture. Dafoe v. Johnstown, &c. Ins. Co., 7 
 U. C. (C. P.) 55; Gauthier v. Waterloo Ins. Co., U. C. (Q. B.), 16 Can. L. J. 29 
 (18S0). But the law is otherwise here. Fireman's Ins. Co. v. Holt (Ohio), 9 
 Ins. L. J. 212, and cases before cited in this note. 
 
 " Bigler v. New York Central Ins. Co., 22 N. Y. 402; Campbell v. ^tna Ins. 
 
 797
 
 § 365] INSURANCE ; FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 consent of the first insurers, avoids the policy ; and it is there- 
 also held that a second insurance, though invalid, avoids the 
 policy.^ A distinction has, however, been taken between a 
 policy apparently securing over-insurance which was void at 
 the time of the loss, in which case recovery may be had, and 
 a like policy which is voidable only by reason of some breach of 
 condition which works a forfeiture, but which forfeiture has 
 been waived, in which case the over-insurance is at the time 
 of the loss an existing fact, and a recovery cannot be had.^ 
 In Atlantic Insurance Company v. Goodall,^ it was held that, 
 where a policy was upon condition to be void if other insur- 
 ance should not be indorsed on it, the existence of prior in- 
 sui'ance did not make it absolutely void. l)ut voidable only, and 
 that it might be confirmed and made valid by acts of the com- 
 pany, showing a waiver of the defect ; and in New England 
 Fire Insurance Company v. Schettler,'* it was held that if the 
 other insurance had ceased by its own limitation, before the 
 loss claimed under a subsequent policy, the right of recovery 
 on the last policy would not be affected. In David v. Hartford 
 Insui-ance Company,-^ it was held that a policy securing sub- 
 sequent insurance, upon its face valid, and the amount of 
 which upon a loss happening had been paid, constituted addi- 
 tional insurance within the meaning of the condition, al- 
 though it might have been avoided by extrinsic evidence of a 
 forfeiture for condition broken ; and in Mitchell v. Lycoming 
 Mutual Insurance Company,^ the rule was stated thus: When 
 
 Co., Cochran, vol. 8, p. 1 (Nova Scotia), 21 ; Ramsay, &c. v. Mut. Fire Ins. Co., 
 11 U. C. (Q. B.) 510. 
 
 1 Lackey v. Georgia Home Ins. Co., 42 Ga. 450, 457. See also Mason v. Andes 
 Ins. Co., 28 U. C. (C. P.) 37 ; Gros c. Le Nord, Dalloz, Jar. Gen. 1870, 2, 70. 
 
 2 Mitchell V. Lycoming Mut. Ins. Co., 51 Pa. 402; Carpenter v. Prov. Ins. 
 Co., 16 Pet. (U. S.) 495 ; Jacobs v. Equitable Ins. Co., 19 U. C. (Q. B.) 250,257 ; 
 Obernieyer v. Globe Ins. Co., 43 Mo. 573. [If there is a prior policy the condi- 
 tions of which have been broken, but which has not been cancelled by the com- 
 pany, it is error to rule that such former policy is not a breach of the conditions 
 of the new policy against other insurance. The breach of tiie former policy ren- 
 dered it voidable only, not void. Landers v. Watertown Fire Ins. Co., 86 N. Y. 
 414.] 
 
 8 35 N. H. 328 ; Fishbeck v. Phoenix Ins. Co. (Cal.), 11 Reptr. 218. 
 
 * .38 111. 166. See also ante, § 101. 
 
 6 13 Iowa, 69. 6 61 Pa. St. 402, 408. 
 
 798
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 365 
 
 policies, alleged to be for other insurance, are void at the time 
 of the loss, they are no obstacle to a recovery on the policy 
 on which the" claim is made ; but if voidable only for some 
 breach of condition for which the insurers might have avoided 
 them, but which nevertheless they have waived, double in- 
 surance exists. In Kentucky, where the first policy was to 
 be void if there was further insurance, and there was further 
 insurance, to be void if prior insurance had been obtained, 
 the first policy is held to be void on the obtaining new insur- 
 ance, and the second policy only voidable at the option of the 
 insurer.^ This subject was also much discussed in a case in 
 Iowa,2 where there were two policies on the same property, 
 each having a condition against both prior and subsequent 
 insurance. The opinion of the majority of the court ^ upon 
 this point was given by Beck, J., who, after stating the con- 
 clusions of the court upon two preliminary questions, — first, 
 that the policy of the Hartford company was prior in date, 
 and second, that the receipt given by the agent of the Phoe- 
 nix company amounted to a contract of insurance upon the 
 usual terms and conditions as expressed in the policy, which 
 the agent was empowered to issue, — thus proceeds : — 
 
 " The policy which is the foundation of this action contains 
 a condition in the following words : ' If the assured shall 
 have, or shall hereafter make, any other insurance upon the 
 property hereby insured, without the consent of the company 
 written hereon, in such case this policy shall be void.' As a 
 defence the defendant alleges that, in violation of the condi- 
 tion, the insured, Howe, did cause the property to be insured 
 by a policy issued by the Phcenix Insurance Company, Jan. 
 21, 18G7. The policy sued on is dated Jan. 19, 1867. 
 
 " It appears from the evidence that Howe applied to the 
 
 ' Suggs V. Liverpool, &c. Ins. Co., 9 Ins. L. J. 657 ; Baer v. Phoenix Ins. Co., 
 4 Bush (Ky.), 242. 
 
 2 Hubbard v. Hartford Fire Ins. Co., 33 Iowa, 325, very similar to Gale v. 
 Belknap Ins. Co , 41 N. H. 170. 
 
 ^ Miller, J., dissented, on the ground that when the policy was taken from tlie 
 Plioenix office, there was no insurance in the other, and tlierefore it became void 
 when the policy was received from the Hartford office the next day, there being 
 then for the first time double insurance. 
 
 VOL. 11. — 7 799
 
 § 365] INSURANCE : FIRE, LIFE, ACCIDENT, ETC, [CH. XVIII. 
 
 agent of the defendant on the eighteenth day of December, 
 1867, for insurance, and it was arranged that the policy 
 should be issued and sent to him on that day. Howe not 
 having received the policy from defendant's agent, nor heard 
 from him in regard to the business, on the 21st of the 
 same month applied to the agent of the Phoenix Insurance 
 Company for a policy covering his property. The terms of 
 the insurance were agreed upon ; but the agent, having no 
 blank policies, executed a receipt to Howe for the amount of 
 the premium then paid him, specifying the property to be in- 
 sured, which was the same covered by the policy issued by 
 defendant, and stipulating that a policy would be issued as 
 soon as the blanks should be received. The agent of the 
 Phoenix company was not informed by Howe of his applica- 
 tion to defendant's agent for insurance ; and it appears that 
 Howe, at the time, did not expect to receive the policy of the 
 defendant, as it had not been sent to him, according to the 
 prior arrangement. On the 22d, the day subsequent to the 
 transaction with the agent of the Phoonix company, the agent 
 of the defendant delivered to Howe the policy sued on, dated 
 on the 18tli, and received payment of the premium. Howe 
 did not inform him of his transaction with the Phoenix com- 
 pany. The property covered by these policies was destroyed 
 by fire on the 26th. Under these facts defendant insists that 
 the transaction with the Phoenix Insurance Company is in 
 violation of the conditions of the policy against other insur- 
 ance quoted above, and that defendant's contract is avoided 
 thereby. The question here presented is of very great diffi- 
 culty ; and its solution, either upon principle or authority, is 
 not entirely free from doubt. ... We now have the case of 
 two policies, given at different dates, covering the same prop- 
 erty, each having a condition against other insurance, both 
 prior and subsequent, and providing that a breach thereof 
 shall avoid the respective instruments. The question for us 
 to determine is which, if either, of these instruments is valid, 
 and which is avoided by the operation of a breach of the 
 condition. 
 
 " It will be remembered that a breach of the condition does 
 800
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION, [§ 3G5 
 
 not absolutely render void and of no effect the policy ; it sim- 
 ])ly renders it voidable, — its binding force and effect being 
 subject to be defeated at the option of the company issuing 
 the instruments. If no objection be made by the company on 
 account of the breach of the condition, the policy may be 
 enforced as though no forfeiture had ever happened. The act 
 of the company, whereby it is shown that the instrument is 
 treated as avoided, must be shown in order to defeat recovery 
 thereon. If no such act or objection on the part of the com- 
 pany be shown, the contract will be considered binding.^ It 
 is not necessary here to state what will amount to an act 
 avoiding the contract, or when it must be done, further than 
 to observe that it must appear that the imderwriter relied 
 upon the breach of the condition to defeat the contract. 
 
 " Of course the company issuing the subsequent policy 
 could not rely upon the breach of the condition in order to 
 avoid the instrument until knowledge thereof was acquired ; 
 and its acts treating the policy as avoided would be sufficient, 
 if shown to have been done after such knowledge. The same 
 principles will apply to the prior policy. It was not abso- 
 lutely void on account of the subsequent insurance, but was 
 voidable only. It was a binding instrument when executed, 
 and would so continue until some act done by defendant in- 
 tended to avoid it, on account of the breach of the condition 
 against the subsequent insurance. But it could not bo avoided 
 on account of the Phoenix policy, unless that instrument it- 
 self was valid. If it so happened that when the action was 
 brought on defendant's policy, or even at the trial, it was 
 made to appear that the Phoenix policy couH not be en- 
 forced, being avoided on account of the breach of condition 
 therein, it is obvious that the existence of that instrument, 
 shown to be in operation, would not constitute a breach of the 
 condition in defendant's policy against subsequent insurance. 
 That condition is against actual insurance to be subsequently 
 
 ^ See also upon this point Pechner v. Phoenix Tns. Co., 65 N. Y. 195 ; Canada 
 Landed, &c. Co. c. Canada Agr. Ins. Co., 17 Grant's Cli. (U. C.) 418 ; Comp. du 
 PlicEnix c. Doliis, Dalloz, Jur. Gen. 1844, 4, 36; Anson v. Winnesiieik Ins. Co., 
 23 Iowa, 84 ; post, § 372. 
 
 801
 
 § oG5] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 made. The Phcenix policy created no insurance : it was 
 avoided by the act of tlie company, and therefore did not 
 constitute a breach of defendant's policy. The general prin- 
 ciple of law may be stated as follows : In order to avoid a 
 policy on account of a subsequent insurance against an ex- 
 press condition therein, it must appear that such subsequent 
 insurance is valid, and that the policy upon which it is made 
 is capable of being enforced. If it cannot be enforced, it is 
 no breach of the prior policy. . . . The doctrine which we 
 have assumed does not go to the full extent of some of the 
 cases just cited.^ It is held in Philbrook v. New England 
 Mutual Insurance Company that the prior policy is valid, 
 even though the subsequent policy is not avoided by the 
 underwriter issuing it, but the loss thereon is paid ; and in 
 others of these cases, the rule is not expressly based upon the 
 fact that the subsequent policy was treated by the underwriter 
 issuing it as avoided. 
 
 " The doctrine which we recognize here is based upon the 
 fact that the subsequent policy was treated and considered as 
 avoided by the company issuing it as soon as it had notice of 
 the prior insurance. In our view this is a most important 
 consideration ; for, if the underwriter in the second policy 
 does not treat it as avoided, it cannot be so considered by the 
 insured, or the company issuing the prior policy. The condi- 
 tion against prior insurance in the subsequent policy is for the 
 benefit of the insurer, who may, at his option, waive it or in- 
 sist upon enforcing its terms. If he seeks to enforce the con- 
 dition, and treats the policy as a void contract, it is indeed 
 difficult to see upon what grounds it may be regarded as valid, 
 as an insurance that will defeat the prior policy. In this 
 view, our conclusion is not in conflict with David v. Hartford 
 Insurance Company and Bigler v. New York Central Insurance 
 Company. In the first of these cases an action was brought 
 upon a policy containing a condition against subsequent in- 
 surance. Other insurance, taken after the date of the pol- 
 icy, was relied on to defeat it. The plaintiff claimed that the 
 
 1 The cases of Gale, Schenck, Stacey, Pliilbrook, Clark, and of the two Jack- 
 sons, cited supra. 
 800
 
 CH. XVIil.] OTHER INSURANCE AND OVERVALUATION. [§ 365 
 
 subsequent policies, on account of certain conditions therein 
 which were violated, were void. It was held that these pol 
 icies are not void, but, on account of the breach of these con- 
 ditions, might have been avoided. As they were treated as 
 valid contracts by both of the parties tliereto, the losses oc- 
 curring thereon having been paid by the companies executing 
 the subsequent policies, the breaches of the conditions were 
 regarded as waived, and the instruments held to be binding 
 upon the respective underwriters. The argument supporting 
 the conclusion reached by the court may not entirely accord 
 with the reasoning we have above adopted, but the result 
 reached, we believe, is not inconsistent with the views herein 
 expressed. Bigler v. New York Central Insurance Company 
 in its facts very nearly resembles that case, the underwriter 
 taking the subsequent risk liaving waived the forfeiture and 
 paid the loss under the policy. There are arguments and 
 positions taken in the opinions in this case which are not 
 consistent with the views we have adopted. They reach 
 further than the mere support of tlie conclusion arrived at 
 upon the facts involved in the case, the Court of Appeals 
 holding (two justices dissenting) that the- first policy would 
 be defeated even though the second was utterly void. This 
 point was not in the case. While we may not be inclined to 
 dispute the conclusion arrived at upon the facts presented, 
 which we think not at all in conflict with our views, we can- 
 not assent either to the reasoning adopted by the court, 
 or the conclusions reached upon facts not before it for 
 adjudication. 
 
 " Carpenter v. Providence Washington Insurance Company ^ 
 is cited in support of the rule that where there are two in- 
 surance policies, both containing conditions of avoidance on 
 account of other prior or subsequent insurance without notice, 
 the first may be avoided on account of the second insurance. 
 This case, we have observed, is often cited in support of this 
 rule, and was so in the two cases just referred to. If such a 
 rule be found in the case, — but it does not so appear to us, — ■ 
 its annunciation was not called for by the facts before the 
 
 1 16 Pet. (U. S.) 495. 
 
 803
 
 § 365] INSURANCE : FIRE, LIFE, ACCIDENT. ETC. [CH. XVIII. 
 
 court and made the basis of the decision. The policy upon 
 which the suit was brought is considered in the opinion the 
 second instrument, and the court holds that it was defective 
 by a condition therein against prior insurance which in fact 
 existed when it was issued.^ The conclusion arrived at, we 
 think, is not in conflict with the course of argument adopted 
 by us, and the result reached in this case. The argument, 
 however, adopted by the court in reaching the conclusion is 
 hardly consistent either with our reasoning or its results. 
 But inasmuch as the facts are dissimilar to those before us 
 and the point ruled not necessarily in conflict with our deci- 
 sion, the case cannot be regarded as an authority against the 
 principles we herein recognize."^ 
 
 Insurance effected by a valid interim receipt is also other 
 insurance.'^ "When other insurance was applied for and an 
 interim receipt given, binding the company till notice of repu- 
 diation, which was not given till after a fire had occurred 
 and in ignorance of it, the failure to give notice of this receipt 
 was held to avoid a prior policy conditioned to be void on 
 subsequent insurance without notice.* But a contract for a 
 " regular policy " means only that other insurance shall be in- 
 dorsed when the regular policy shall issue.^ Further insurance 
 by " said insured or assignees," means assignees of the policy, 
 and not of the property.^ [If A. and 0. jointly insure their 
 
 1 IGPet. (U. S.) 500. 
 
 2 See also Allison v. Phoenix Ins. Co., U. S. C. Ct. (Iowa), Dillon, J., 4 Ins. 
 L. J. 198, where the doctrine of Iluhbard's case is adopted, after a careful review 
 of all the cases. Sutherland v. Old Dominion, &c. Ins. Co., 31 Grat. 17tt ; Knight 
 V. Eureka, &c. Ins. Co., 26 Ohio St. 664 ; Gale v. Insurance Co.. 41 N. H. 170. 
 To avoid any question upon this point some policies provide that other insur- 
 ance, " whether valid or not," shall avoid the policy ; and this provision has 
 been frequently recognized by the courts as effectual. Lackey v. Georgia Ins. 
 Co., 42 Ga. 456 459; Liverpool, &c. Ins. Co. v. Verdier, 35 Mich. 3n5 ; Bigler v. 
 New York Central Ins. Co., 22 N. Y. 96; Continental Ins. Co. v. Heilman (111.), 
 9 Ins. L. J. 91. But in Gee v. Cheshire, &c. Ins. Co., 55 N. H. 65, the court held 
 that a nugatory contract was no contract at all, and that such a condition was 
 repugnant, and inconsistent with the scope and purpose of the contract. 
 
 3 Hatton V. Beacon Ins. Co., 16 U. C. (Q. B.) 816. 
 
 4 Bruce v. Gore. &c. Ins. Co , 20 U. C (C. P.) 207. 
 8 Dayton Ins. Co. i-. Kelly, 24 Ohio St. 345. 
 
 ^ Bates V. Commercial Ins. Co., Superior Ct. (Cincinnati), 4 Ins. L.J. 716; 
 
 804
 
 CH. XV]I1.] OTHER INSURANCE AND OVERVALUATION. [§ 365 a 
 
 mules, which are sometimes kept in a barn belonging to B. 
 alone, by the burning of which they were destroyed, and B. 
 liad a policy on this barn and contents, this is a breach of the 
 condition against other insurance.^] 
 
 § 365 a. Simultaneous Policies Insurance '' to be made ; 
 Assignee having Prior Insurance. — If the policy provides that 
 it shall be void if any other insurance be made, reference is 
 had only to subsequent insurance ; ^ and if two policies are 
 made out and delivered simultaneously by two companies, co- 
 operating together, the clause in either policy requiring notice 
 of prior or subsequent insurance can have no application.^ 
 One of two policies, however, issued at the same hour by 
 companies not co-operating, is not to be presumed prior or 
 subsequent, nor are they both to be presumed to have been 
 issued simultaneously. The safe course is to resort to recip- 
 rocal notices.'* And where the same agent negotiates several 
 policies, he should give notice to all the companies,^ unless 
 they may be presumed to be concurrent in point of time,^ or 
 unless, as- seems to be the reasonable rule, notice to the agent 
 is notice to all his principals, and a waiver of indorsement." 
 In France the rule is that where two policies are taken out 
 simultaneously by the same agent of different companies, each 
 is held to have notice of the other insurance, and the respec- 
 tive companies must contribute fro rata?' And it has been 
 held that when a party who already has insurance takes by 
 
 Holbrook v. American Ins. Co., 1 Curtis C. Ct. (Mass.) 193; Wilson v. Hill, ?> 
 Met. (Mass.) 06. Held however, to apply to the assignee of tlie property also, 
 in Dickson v. Provincial Ins. Co., 24 U. C. (C. V.) 157; Hendrickson v. Queen 
 Ins. Co., 31 U. C. (Q. B.) 547. 
 
 1 [Horridge v. Dweliing-House Ins. Co., 75 Iowa, 374.J 
 
 2 Mussey v. Atlas Mut. Ins. Co., 4 Ker. (N. Y.) 79. 
 
 3 Washington Fire Ins. Co. v. Davison e^ a/., 30 Md. 91. And see fost, § 370. 
 * Manhattan Ins. Co. v. Stein, 5 Bush (Ky.), 652. 
 
 6 Insurance Co. of North America i". McDowell, 50 111. 120. 
 
 6 Farmers' &c. Ins. Co. v. Taylor, 73 Pa. St. 342. 
 
 7 Kenton Ins. Co. v. Shea, 6 Bush (Ky.), 174; Pitney v. Glen's Falls Ins. Co., 
 65 N. Y. 6; Insurance Co. of North America i'. McDowell, supra ; Shurtleff v. 
 Phoenix Ins. Co., 57 Me. 137. See also post, § -370; Richmond v. Niagara, &c. 
 Ins Co. (N. Y.),9Ins. L.J. 117. 
 
 8 L'Agricole c. Chauuiiere. Jur. Gen., Ct. of Cass., Dalloz, 1867, 5 Ass. 
 28. 
 
 805
 
 § 365 B] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIIl. 
 
 assignment a policy requiring notice of prior insurance, a 
 failure to give notice of the prior insurance will avoid the 
 policy.^ [When two policies are executed concurrently, each 
 to be void by prior insurance, the assured may sue on either. 
 But parts of a day are taken into account in such a case, and 
 the companies may show the precise time of execution.^] 
 
 [§ 365 B. The Problem of Two Policies each containing a 
 Condition against Other Insurance, has worried the judges a 
 great deal, as is apparent on reading this, the following, and 
 the two preceding sections. Almost every conceivable solution 
 has been adopted in some jurisdiction or other, and tliere 
 hardly exists in the law a more variegated chapter than this. 
 The question whether a policy is void by other insurance de- 
 pends on the validity of the other insurance, and this must be 
 decided upon the face of the policies and the facts at the date 
 of issuance of over-insurance and not at the date of the loss. 
 It is error to tell the jury that the insurance which would 
 come within the condition of over-insurance, must be insur- 
 ance valid at the time of loss.^ If there is no valid other 
 insurance at the time of the loss the policy is not void. The 
 question is not whether the other policy is«void on its face, but 
 whether on all the facts it is really an existing valid insur- 
 ance.* If the subsequent policy is void on its face it does not 
 constitute other insurance, but if extrinsic facts such as the 
 existence of prior insurance must be shown to bring out its 
 invalidity, and it has been accepted by the insured as addi- 
 tional insurance, and held by him as a subsisting policy at 
 the time of loss, it constitutes a breach of the condition in the 
 
 1 Leavitt v. Western Mar. & Fire Ins. Co., 7 Rob. (La.) 351 ; "Walton i-. La. 
 St. Mar. & Fire Ins. Co., 2 id. 563. But see Vose v. Hamilton, &c. Ins. Co., 39 
 Barb. (N. Y.) 302. 
 
 2 [Potter V. Marine Ins. Co., 2 Mason, 475 at 477.] 
 
 3 [Equitable Ins. Co. r. MoCrea, Maury, & Co., 8 Lea (Tenn.), 541, 547.] 
 
 * [Dahlberg v. St. Louis Mut. Ins. Co., 6 Mo. App. 121, 12G, citing Jackson 
 V. Mass., &c. Ins. Co., 23 Pick. 423 ; Stacey v. Franklin, &c. Ins. Co., 2 Watts & 
 S., 544 ; Clark v. N. E., &c. Ins. Co., 6 Cash. 842 ; Hardy v. Union, &c. Ins. Co., 
 4 Allen, 217 ; Gale v. Belknap Ins. Co., 41 N. H. 170 ; Philbrook i-. Insurance 
 Co., 37 Me. 137 ; Obernieyer v. Globe Ins. Co., 43 Mo. 573; and opposing the 
 strong cases, Bigler v. Insurance Co., 22 N. Y. 402, and Carpenter v. Providence 
 Wash. Ins. Co , 16 Pet. 510.] 
 
 806
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 365 B 
 
 prior policy.^ A condition against other insurance is broken 
 by procuring another policy, good on its face, though void by 
 reason of false representations and by reason of the prior 
 insurance.^ When both policies declare that other insurance 
 shall avoid them, the second does not avoid the first, for it 
 never effected any insurance.^ So in New York, when a policy 
 provided that if the assured should have any other insurance on 
 the premises not consented to, &c., it should be void ; and 
 when the assured had at the time another policy on the same 
 premises which provided that if any other insurance should be 
 put on, &c., it should be void ; it was held (one judge dissenting) 
 that the first policy was void and the latter good.* A Michi- 
 gan case holds the second policy good, the first being void 
 instantly the second is taken.^ In this case, however, the 
 agent negotiating the second knew of the first policy. In a 
 subsequent case it was held that if the first policy is in effect at 
 the time of obtaining the second, the latter is avoided, for it is 
 obtained in direct violation of one of the conditions on which 
 its validity rests.^ The effect of subsequent insurance depends 
 upon its validity, and this upon the action of the company in 
 reference to it. If the second company waive the breach and 
 pay the loss, the first policy is void, but if the second com- 
 pany avoid their policy, the first is good.' If a policy is to be 
 void by' other insurance " valid or otherwise," the fact that 
 subsequent policies may be void will not prevent forfeiture.^ 
 It has been held that tlie clause against other insurance 
 " valid or not," is not violated by a prior policy which had 
 become absolutely void by its terms.^ It is difficult to see 
 why the words " valid or not " do not in all common sense 
 cover a void policy.] 
 
 1 [American Ins. Co. v. Replogle, 114 Ind. 1.] 
 
 2 [Funke v. Minn. Farmers' Mat. Fire Ins. Ass., 29 Minn. 347.1 
 
 3 [Jersey City Ins. Co. v. Nichol, 35 N. J. Eq. 291 at 299.] 
 
 * [Landers v. Watertown Fire Ins. Co., 19 Hun, 174 at 178, Learned, P. J., 
 dissenting.] 
 
 6 [Emery v. Mut. City, &c. Fire Ins. Co., 51 Mich. 469] 
 
 6 [Keyser v. Hartford Fire Ins. Co., 66 Mich. 664, 667, Sherwood, J.] 
 
 7 [Hubbard v. Hartford Fire Ins. Co., ?,?, Iowa, 325, 329, 331.] 
 
 8 [Sugg V. Insurance Co., 98 N. C. 143.] 
 
 9 [Stevens v. Citizens' Ins. Co., 69 Iowa, 658.] 
 
 807
 
 § 365 C] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XYIII. 
 
 [§ 365 C. The True View. — In spite of all the shortsighted- 
 ness and dreams of the courts in respect to this interesting 
 topic there is some good authority for what is beyond ques- 
 tion the view that accords with the fundamental purposes 
 and principles of insurance, viz., that the real test (warranty 
 aside) is the condition of the insured's motive for the preser- 
 vation of the property. If he thinks he has double insurance, 
 the very evil the company intended to avoid exists. If such 
 is the state of facts at the time of insurance his bad faitli 
 should avoid the policy though the other insurance be after- 
 ward removed befoi'e loss, but if the other insurance occurs 
 after the policy in question was taken out and was removed 
 from the field entirely, before loss, then the insured should 
 recover 'as in case of temporary breach of any other condi- 
 tion, unless the agreement of the parties is clearly to the effect 
 that the mere act of taking out other insurance shall be fatal. 
 The condition against other insurance is l)rokcn and the policy 
 avoided by a subsequent policy, although the latter contains a 
 similar condition. The clause was intended to prevent the 
 insured from taking out other insurance which he supposes is 
 good, and it makes no difference whether it is really valid or 
 not. Under the rule adopted by the current of authority that 
 this condition is only broken by other insurance valid at the 
 time of loss, if the ground of avoidance is waived and the 
 money paid by the second company, the courts are compelled 
 to allow the insured to collect the double insurance against 
 wdiich the condition was intended to guard.^ The taking out 
 of a subsequent policy whether voidable or not, and whether 
 actually resisted or not, is a breach of the condition against 
 other insurance, and fatal.^ So in a late case in Kentucky, it 
 
 1 [Somerfield r. Insurance Co., 8 Lea (Tenn.), 547, 550.] 
 
 2 [Turner v. Meriden Fire Ins. Co , 16 Ferl. Rep. 454; 22 Am L. Reg. U. S. 
 275, 1st Cir. (R. I.), 1883, citing, as cases that !ioid first policy good if second is 
 invalid at time of loss, even thougii tlie second company may waive the breach 
 and i)ay the loss, 119 Mass. 121 ; 23 Pick. 418 ; G Cash. 342 ; 4 Allen, 217 ; 65 
 Me. 3(58; 37 Me. 137; 55 N. H. 65; 41 N. H. 170; 4 Zabr. 447; 35 N. J. Eq. 
 291 ; 2 Watts & S., 506 ; 8 Ins. L. J. 181 ; 35 Ohio St. 189; 26 Id. 604; 20 Ind. 
 520; 3 Dill. 480; and as cases that a subsequent policy, whether enfurceable or 
 not, works a forfeiture, 8 Lea, 547 ; 15 Repr. 114; 9 Ins. L. J. 657 ; 30 La. An. 
 
 808
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. § 365 C 
 
 was held that the condition is broken although the subsequent 
 insurance is void.^ So in Tennessee ^ and in Indiana, where 
 at the issue of the policy in suit conditioned to be void by other 
 insurance, there was a prior policy containing a similar jjro- 
 vision, it was contended that the prior policy was avoided by 
 taking out the one in suit, and therefore did not break the con- 
 dition of the latter. The court remarked that the only reason 
 of such conditions was to take away the motive which the 
 insured might otherwise have for the destruction of his prop- 
 erty. " Such being confessed by the purpose of the contract, it 
 is not perceived how its object is in any degree promoted by 
 the conclusion that notwithstanding the insured may have 
 intended to secure over-insurance, and may have firmly be- 
 lieved he had succeeded in doing so, it is only where the at- 
 tempt is actually successful, that the prohibitory condition is 
 operative. It might be said with much reason that such a 
 construction defeats the purpose of the provision, and renders 
 it practically nugatory. Moreover, to hold that only such 
 other insurance as is not void, and cannot be avoided by 
 extraneous facts, is within the prohibition of the contract, 
 affords the opportunity for the anomalous spectacle of an in- 
 sured avoiding the effect of apparent over-insurance and com- 
 pelling payment of one policy by exhibiting his own turpitude 
 in obtaining another." ^ In this case the policy was to be void 
 by other insurance " whether valid or not," but the court does 
 not confine itself to that ground. If the prior policy has 
 been avoided by an alteration increasing the risk, and such 
 is understood to be the fact, the old company refusing the 
 new risk, the new policy is not void for other insurance.* 
 Subsequent insurance that is invalid, and is so treated by the 
 
 1.368 ; 42 Ga. 456 ; 2 N. Y. 402 ; 86 N. Y. 414 ; 16 Pet. 495 ; 19 U. C. (Q. B.) 250 ; 
 11 Id. 516 ; :37 U. C. (C. P.) 47 ; 8 Lea, 531 ; Id. 541 ; and the case in 33 Iowa, 
 825, to the effect that the question of recovery on tlie first poUcy turns on the 
 question wliether the second has been in fact avoided.] 
 
 1 [Stevenson v. Plicenix Ins. Co., 83 Ky. 7.] 
 
 2 [Somerfield v. State Ins. Co., 8 Lea (Tenn), 547 at 551.] 
 
 3 [Phoenix Ins. Co. v. Lamar, 106 Ind. 513, 515.] 
 
 * [Leibrandt, &c. Co. v. Fireman's Insurance Co., 35 Fed. Rep. 30 (Md.), 
 1888] 
 
 809
 
 § 366] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 company is no breach.^ But where there is a warranty that 
 there is no other insurance valid or invalid, and that such will 
 avoid the policy, evidence will not be received to show that 
 the plaintiff thought there was no other insurance.^ " War- 
 ranted no other insurance " means that there shall be none 
 during the continuance of the risk.^] 
 
 § 366. Identity of Interest. — When it is said that the insur- 
 ance, in order to come within the prohibition, must be the 
 same, it is not meant that it is the same in all respects ; i. e., 
 that the description of the sul^ject-matter of insurance be the 
 same in both. It is enough if the subsequent insurance cov- 
 ers a part of the interest embraced in the prior insurance, as 
 when an undivided half of a house, or a part of the goods 
 already insured, is covered by tlie new insurance;* or the 
 subject-matter of the subsequent insurance embraces the prop- 
 erty covered by the prior insurance and other property be- 
 sides.^ Thus, removing goods located in one store already 
 insured into another store, having its goods insured in an- 
 other policy which covers accruing goods, though both lots of 
 goods belong to the same person, is a case of double insur- 
 ance.^ If, however, after removal a policy is obtained upon 
 the removed goods, which by its terms might cover part of 
 the goods already there and insured, that this would not neces- 
 sarily be double insurance may be shown by facts and circum- 
 
 1 [Behrens v. Germania Fire Ins. Co., 64 Iowa, 19.] 
 
 2 [Zinck V. Pliocnix Ins. Co., 60 Iowa, 206.] 
 
 3 [Butler V. Mercli. M. Ins. Co., 5 Russ. & Geld. (Nova Scotia), 301, (xMcDon- 
 ald, C. J. dissenting.)] 
 
 * Columbus Ins. Co. v. Walsh, 18 Mo. 229 ; Liscom v. Boston Mut. Fire Ins. 
 Co.. 9 Met. (Mass.) 205 ; Mussey v. Atlas Mut. Ins. Co., 4 Ker (N. Y.), 79 ; As- 
 sociated Fire Ins. Co. v. Assum, 5 Md. 165; ante, § .365; Ogden v. East River 
 Ins. Co., 50 N. Y. 389, overruling Howard Ins. Co. v. Scribner, 5 Hill (N. Y.), 
 298 ; Pitney v. Glens Falls Ins. Co., 69 N. Y. 6 ; Phoenix Ins. Co. v. Michigan, 
 &c. R. R. Co., 28 Ohio St. 69. 
 
 5 Ramsay, &c. v. Mutual Fire Insurance Co., 11 U. C. (Q. B.) 516; Mc- 
 Mahon v. Portsmouth Fire Insurance Co., 2 Fost. (N. H.) 15; Sliannon v. Gore 
 Dist. Ins. Co., 2 Ont. App. Rep. 396. Contra, Sloat v. Royal Insurance Co., 
 49 Pa. St. 14. 
 
 « Walton i;. La. St. Mar. & Fire Ins. Co., 2 Rob. (La.) 563 ; Washington Ins. 
 Co. i\ Hayes, 17 Ohio St. 432. Contra, Vose v. Hamilton Mut. Ins. Co., 39 Barb. 
 (N. Y.) 302. 
 
 810
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 366 
 
 stances outside the policy, showing that such was not the 
 intention.! 
 
 The somewhat peculiar case of Hough et al., Appellants, v. 
 People's Insurance Company ^ was this : The Baltimore Ware- 
 house Company, which received goods on storage, and issued 
 receipts or certificates therefor to the depositors, effected an 
 insurance in the Associated Firemen's Company for -f 10,000 
 against loss by fire for one year, " on merchandise generally, 
 hazardous or extra-hazardous, held by them or in trust," con- 
 tained in a particular warehouse ; they also took out a policy 
 in the Home Insurance Company, to the amount of $20,000, 
 " on merchandise, hazardous or extra-hazardous, their own, 
 or held by them in trust, or in which they had an interest or 
 liability," contained in the same warehouse. The appellants, 
 on the 20th of June, 1870, deposited fifteen bales of cotton 
 in the same warehouse, and received a receipt or certificate 
 therefor from the warehouse company, and on the same day 
 procured a policy of insurance on the cotton so deposited 
 from the appellee. On the 27th of June they deposited thir- 
 teen bales, for which a like receipt was given, and on tlie same 
 day they effected an insurance for the cotton with the appel- 
 lee. Under the policies issued to the appellants, the loss, if 
 any, was payable to the Baltimore Warehouse Company. 
 The appellants had other cotton to a large amount stored 
 with the warehouse company. The warehouse company ad- 
 vanced to the appellants over 148,000 upon the cotton belong- 
 ing to them, and stored in the warehouse. In the policies to 
 the appellants, as well as in those to the warehouse company, 
 it was stipulated that in case of loss the assured should not 
 be entitled to recover on such policy any greater proportion 
 of the loss or damage sustained to the subject insured than 
 the amount thereby insured should bear to the whole amount 
 of the several insurances thereon. On the 18th of July, 
 1870, the warehouse was burned, and of the cotton stored 
 therein some of the bales were saved, some were partially 
 
 1 Mauger v. Holyoke Ins. Co., C. Ct. (Mass.), 1 Holmes, 287 ; s. c. 3 Ins. L. J. 
 5.5. See also Wliitwell v. Putnam, &c. Ins. Co., 6 Lans. (N. Y.) 166 ; post, § 367; 
 Pitney v. Glens Falls Ins. Co.. 69 N. Y. 6. 2 35 Md. 398. 
 
 811
 
 § 366] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 destroyed, and others totally destroyed. In an action by the 
 appellants, for the use of the warehouse company, on the 
 policies of insurance issued by the appellee, upon these facts 
 it was held that the policies sued on, having been made pay- 
 able to the warehouse company, inured to the benefit of the 
 company, and might be considered as in favor of the same 
 assured, on the same interest, the same subject, and against 
 the same risks as the policies which were issued directly to the 
 warehouse company, and with the latter policies constituted a 
 double insurance ; and the companies therefore issuing the 
 policies were bound to contribute their respective portions of 
 the loss.^ Where, however, a warehouseman insures goods, 
 " his own, in trust or on commission," with the understanding 
 that his policy covers " anything under his care," and after- 
 wards receives into his warehouse wheat already covered by 
 a floating policy, — which, however, expired before the fire, 
 — this was held to be no double insurance, and the ware- 
 houseman and the owner of the wheat were allowed to 
 maintain a joint action for the value of the wheat, the ware- 
 houseman having been previously paid for the loss on his 
 other go^ds.2 Nor is insurance of the whole of the property 
 by the owner who lias agreed to sell one-half, and to pay one- 
 half the proceeds in case of loss to the vendee, double insurance 
 " by any other person at the same time." ^ But where a ship 
 was insured " for account of owners, as interest may appear," 
 and two of the owners afterwards procured insurance, this 
 was held to be other insurance.'* And insurance upon the same 
 life, applied for by the same person, though payable to a differ- 
 ent person from the payee in a second policy, is other insur- 
 ance within the meaning of a proviso making a policy void 
 if there be other insurance undisclosed.^ The interests of 
 
 1 Hough et at. v. People's Ins. Co., 8G Md. 398. See also Home Ins. Co. v. 
 Baltimore Warehouse Co., 93 U. S. 527 ; Sturm v. Atlantic, &c. Ins. Co., 63 
 N. Y. 77. And see post, §§ 436-438. 
 
 2 Plioenix Ins. Co. v. Hamilton, 14 Wall. (U. S.) 504. 
 
 3 Bnrbank i'. Rockingham Ins. Co., 4 Fost. (N. H.) 550. 
 * Mussey v. Atlas Ins. Co., 4 Ker. (N. Y.) 79. 
 
 5 Sparrow v. Mut. Ben. Life Ins. Co., C. Ct. (Mass.), Shepley, J., tried in 
 April, 1873 
 
 812
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 367 
 
 mortgagor and mortgagee are distinct, and therefore insur- 
 ance by a mortgagee of his interest at his own expense is not 
 within the prohibitory clause of a prior policy in favor of the 
 mortgagor. If, however, such insurance is at the expense of 
 the mortgagor, and for his benefit, it is within the clause.* 
 But where the mortgagor was insured, loss payable to mort- 
 gagee, and the mortgage authorized insurance at the expense 
 of the mortgagor in case of default by mortgagor, further 
 insurance by the mortgagee before the mortgagor's default, 
 and without his knowledge or consent, is not other insurance 
 by the " assured." ^ [Where however, M. knows of prior insur- 
 ance obtained by D., the policy issued to M. is void.^] The 
 different interests of joint owners are likewise distinct.^ 
 
 § 367. Other Insurance ; Condition construed strictly. — 
 And this condition, like others working forfeitures, will be 
 construed strictly. Thus, under a policy insuring a building, 
 and prohibiting other insurance upon property " connected 
 with it," insurance upon goods in the building is not other in- 
 surance within the meaning of the prohibition.'' And though 
 the description of the property in the respective policies may 
 cover, and apparently does cover, the same interests, it is a 
 matter of evidence whether it does or not.^ So where the 
 same person had three several policies issued by separate 
 offices on " a stock of dry-goods contained in a four-story 
 brick store," and afterwards obtained another policy from a 
 different company on "a stock of merchandise contained in 
 the chambers of a four-story brick and slated building," being 
 the same building, it was claimed by the last company that 
 as the goods lost were in the same building, they were liable 
 only to their proportionate loss. But it being shown that 
 
 1 Holbrook v. American Ins. Co., 1 Curtis, C. Ct. (Mass.) 193. 
 
 2 Titus V. Glens Falls Ins. Co. (N. Y.), Ins. L. J. 664. 
 
 3 [Doran v. Franklin Fire Ins. Co., 86 N. Y. 635.] 
 
 * Franklin Mar. & Fire Ins. Co. v. Drake, 2 B. Mon. (Ky.) 47; Woodbury 
 Savings Bank v. Ciiartcr Oak Ins. Co., 31 Conn. 518. 
 
 5 Jones V. Maine Mut. Fire Ins. Co., 18 Me. 155 ; Illinois Mut. Ins. Co. v. 
 O'Neile, 13 111. 89. And see ante, § 243. 
 
 « Stacey v. Franklin Ins. Co., 2 W. & S. (Pa.) 506 ; Clark v. Hamilton Mnt. 
 Ins. Co., 9 Gray (Mass.), 148; Neve v. Columbia Ins. Co., 2 McMulian (S. C), 
 220 , ante, § 365. 
 
 813
 
 § 368] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 when the first three policies were issued the plaintiff did not 
 occupy the chambers, and had no goods there, — evidence 
 held admissible as explanatory of a doubt as to what goods 
 the several policies might apply, — the defendants were held 
 to be liable for the whole loss on the goods in the chambers. 
 This in fact was no additional insurance, but was as much 
 an independent risk as if the goods had been in a different 
 building.^ 
 
 § 368. Notice ; What sufficient ; "When and how to be given. 
 — Parol notice, and to a local agent, is sufficient, unless other 
 notice be required.*'^ Notice must be within reasonable time, 
 and need not be till a reasonable time has elapsed. What 
 would be a reasonable time is a question for the jury, if the 
 facts are in dispute ; otherwise it is a question of law for the 
 court.^ Notice given seven months after the destruction of 
 the property is not within reasonable time. An unexplained 
 delay of nineteen days is unreasonable.* Notice deficient or 
 erroneous in some particulars which are not necessary unless 
 inquired for, if the amount of the other insurance be correctly 
 given, is sufficient;^ or even if it be incorrectly given, if the 
 mistake does not prejudice the insurers who object, as where 
 subsequent insurance is stated at too large an amount.^ And 
 
 1 Storer v. Elliot Fire Ins. Co , 45 Me. 175. 
 
 2 McEwen v. Montgomery County Mut. Ins. Co., 5 Hill (N. Y.), 101 ; Sclienck 
 V. Mercer County Mut. Ins. Co., 4 Zabr. (N J.) 447; Hendrickson v. Queen Ins. 
 Co., 31 U. C. (Q. B.) 547 ; affirming s. c. 30 id. 108. Where further insurance 
 is proiiibited by law, the agent's consent is held to be no waiver in Indiana. 
 Behler v. German Ins. Co., 68 Ind. 347. 
 
 3 Jacobs V. Equitable Ins. Co., 19 U. C. 250, 257 ; Kimball v. Howard Fire 
 Ins. Co., 8 Gray (Mass.), 33. In Canada it is said that no question of reasona- 
 ble time arises ; and when notice is due it is at the risk of the insured if he do 
 not give it before a fire. Weinaugh v. Provincial Ins. Co., 20 U. C. (C. P.) 405; 
 post, § 370. The insured takes the risk if he adopt any other mode of notice 
 than that provided for, as by sending through the mail, when the policy pro- 
 vides that the notice shall be " given to the secretary." Plath v. Minnesota Ins. 
 Co., 23 Minn. 470. 
 
 * Mellen v. Hamilton Fire Ins. Co., 17 N. Y. 609, affirming s. c. 5 Duer 
 (N. Y. Sup. Ct.),101. 
 
 6 Benjamin v. Saratoga County Mut. Ins. Co., 17 N. Y. 415 ; McMahon v. 
 Portsmouth, &c. Ins. Co , 2 Fost. (N. H.) 15. 
 
 6 Osser V. Provincial Ins. Co., 12 U. C. (C. P.) 133. 
 
 814
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 369 
 
 it seems that notice should be given, where the subsequent 
 insurance is applied for a few days before the destruction of 
 the property insured in the prior policy, but the policy is not 
 delivered till after.^ Consent induced after the act for which 
 consent is to be had is sufficient.^ Notice after the fire is 
 sufficient, under a policy which specially authorizes subse- 
 quent insurance on notice in order that the subsequent insur- 
 ance may be indorsed on the policy, though the by-laws 
 printed on the back of the policy, and the charter, require 
 that such notice be given and such insurance be indorsed on 
 the policy on pain of forfeiture.^ It was held otherwise, 
 however, where the policy simply required notice, without 
 stating its object.* [A condition that the insured must give 
 notice of " any other insurance effected " applies to all other 
 policies before or after the one in question.^ Notice of further 
 insurance given to one formerly an agent of the company but 
 who had given proper notice of his withdrawal, is not suffi- 
 cient. It is the duty of the assured under such circumstances 
 to know who is the agent.^ A condition that notice of other 
 insurance must be given, is satisfied by notice of an intentio7i 
 to procure other insurance and the assent of the agent receiv- 
 ing the notice.^] 
 
 § 369. other Insurance ; Notice in Writing ; Indorsement 
 on Policy. — In many policies the notice of other insurance is 
 required to be in writing and indorsed on the policy. And it 
 has formerly ^ been frequently held to be essential that these 
 
 1 Inland Ins., &c. Co. v. Stauffer, 3:? Pa. St. 397 ; ante, §§ 365, 365 a. 
 
 2 Wlieeler v. VVatertown, &c. Ins. Co. (Mass.), 10 Ins. L. J. 354. 
 
 3 Soupras v. Mut. Fire Ins. Co. (Sup. Ct. Montreal), 1 L. C. Jurist, 197. 
 
 * Western Ass. Co. v. Atwell, 2 L. C. Jurist, 181. 
 
 & [Warwick v. Monmoutli, &c. Ins. Co., 44 N. J. 83.] 
 
 6 [Illinois Mut. Fire Insurance Co. v. Malloy, 50 111. 419 at-421.] 
 
 " [N. 0. Ins. Ass. (,'. Griffin, 66 Tex. 282 J 
 
 * [There is not lacking recent authority to the same effect. For example, it 
 is held that where notice in writing is to be given of other insurance, mere 
 knowledge of the agent is not sufficient. Commonwealth Mut. Fire Ins. Co. v. 
 Huntzinger, 98 Pa. St. 41. And again where the policy provides that other in- 
 surance shall not be obtained without written consent, the parol acquiescence of 
 the agent cannot avail the plaintiff. He is presumed to know the terms of his 
 agreement, which give him notice that the agent possesses no such power. 
 Cleaver v. Insurance Co., 65 Mich. 527. When a policy prohibited further insur- 
 
 VOL. II. — 8 815
 
 § 369] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 particulars should be literally complied with, and that verbal 
 notice, or anything short of the notice and the formalities 
 subsequent thereto required by the condition, would subject 
 the delinquent to forfeiture. Thus where the insured, after 
 procuring subsequent insurance, gave a memorandum of it to 
 the agent of the company which issued the prior policy, to be 
 entered on the records, the policy not being at hand, the 
 agent saying that such entry would answer every purpose, 
 and the agent afterwards told the assured that he had 
 made the entry, it was held that the condition was violated. ^ 
 The indorsement, it seems, is of the notice, and not of 
 consent.^ 
 
 ance except by consent of the company written on the policy, and the assured 
 procured other policies, afterwards writing totlie company's agent, asking about 
 the same and receiving a reply offering to place him in other companies, and 
 also saying, " We will of course allow other concurrent insurance, &c.," it was 
 held that the policy was avoided, as its provisions had not been complied with. 
 Allemania Fire Ins. Co. v. Kurd, 37 Mich. 11 at 13 ; N Y. Central Ins. Co. v. 
 Watson, 23 Mich. 486, 487, 488. Where the additional subsequent policy was 
 shown to the agent, and looked at by him without comment, it was held insuffi- 
 cient to establish a waiver of the condition requiring written consent, and the 
 former policy was held void. Robinson v. Fire Ass., Go Mich 90, 05, (many cases 
 cited during the argument to show that silence alone is not a waiver in such 
 case). Mere verbal notice to the agent witliout indorsement will not be sufficient. 
 Western Ass. Co. v. DouU, 12 Can. Supr. Ct. 446. Conversations between the 
 assured and insurer, prior to, or at the time of the issuing of the policy, are inad- 
 missible to prove waiver by an omission of the company to indorse on the pol- 
 icy prior insurance of which it had notice. Madison Ins. Co. v Fellowes, 1 Dis. 
 (Ont.) 217 at 223.] 
 
 1 Worcester Bank v. Hartford Fire Ins. Co., 11 Cush. (Mass.) 265. And see 
 also Conway Tool Co. v. Hudson R. Ins. Co., 12 id. 144; Pendar y. American 
 Mut. Ins. Co., id. 469; Forbes v. Agawam Ins. Co., 9 Cush. (Mass.) 470; Stark 
 County Mut. Ins. Co. v. Hurd, 19 Oliio, 140; Carpenter v. Prov. Wash. Ins. Co., 
 16 Pet. (U.S.) 495; Hale v. Mechanics' Mut. Ins. Co., 6 Gray (Mass.), 169; 
 Couch V. City Fire Ins. Co., 38 Conn. 181; Carpenter v. Providence Ins. Co., 4 
 How. (U.S.) 185. Notice of intention to insure is not notice of insurance. 
 McCrea v. Waterloo County Mut. Ins. Co., 26 U. C. (C. P.) 431, 437 ; Healey v. 
 Imperial Fire Insurance Co., 5 Nev. 268. A mortgagee protected against for- 
 feiture by a sale or transfer of the property, is also protected from its probable 
 consequence — as from a further insurance — by the grantee, and need give no 
 notice. City Five Cents Savings Bank v. Penn Ins. Co., 122 Mass. 165 ; Has- 
 tings V. Westchester Fire Ins. Co., 78 N. Y. 141. 
 
 2 Wakefield v. Orient Ins. Co. (Wis.), 10 Ins. L. J. 249. See also Westlake 
 V. St. Lawrence, &c. Ins. Co., 14 Barb. (N. Y.) 206. 
 
 816
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 370 
 
 § 370. Other Insurance ; Notice ; Consent in Writing. — But 
 the courts have become more liberal in favor of the assured 
 in their construction of this sort of provision, whether it be 
 contained in the charter or in the policy. While, as we have 
 seen, the old rule required the consent to be in writing and 
 indorsed on the policy, it is the decided tendency of the 
 modern cases to hold that if the notice of the additional 
 insurance be duly given to the company, or its agent, and no 
 objection is made, the company will be estopped from insist- 
 ing on a forfeiture of the policy, because their consent thereto 
 was not indorsed, as literally required by the stipulation. ^ 
 [When the company knew that its own agent was effecting 
 additional insurance in another company, on property they 
 had already insured, it was their duty to indorse consent, or 
 express disapproval, and without doing one of these they 
 could not set up the extra insurance as a defence.^ The re- 
 quirement that other insurance must be assented to in writing 
 is valid, but may be waived by verbal assent of the agent with 
 any facts that would make it unfair for the company to insist 
 on the condition.^ If an agent whose duty it is to indorse on 
 the policy subsequent insurance allowable under its terms, 
 has knowledge of such insurance, but delays making the in- 
 dorsement to suit his convenience, his conduct is a waiver of 
 the condition requiring indorsement, and if a loss occur before 
 indorsement the company is liable.^] An office which issues 
 
 1 Thompson v. St. Louis Mut. Life Ins. Co., 52 Mo. 469 ; Hayward i'. Na- 
 tional Ins. Co., 52 id. 181, overruling Hutchinson v. Western Ins. Co., 21 id. 
 97; Horwitz v. Equitable Mut. Ins. Co., 40 id. 557; Franklin v. Atlantic Fire 
 Ins. Co., 42 id. 456; Combs v. Ham. Sav. & Ins. Co., 43 id. 148 ; Northup v. 
 Miss. Val. Ins. Co., 47 id. 435 ; Viele v. Germania Ins. Co., 26 Iowa, 9, 55 ; 
 Walsh ;;. ^tna Life Ins. Co., 30 id. 133; Von Bories v. United Life, Fire & 
 Mar. Ins. Co., 8 Bush (Ky.), 133; Peck v. New London County Mut. Ins. Co., 
 22 Conn. 575; Hatton v. Beacon Ins. Co., 16 U. C. (Q. B.) 316; National Fire 
 Ins. Co. V. Crane (in equity), 16 Md. 260. See also post, §§ 376, 383, 387 ; Hunt 
 V. Hudson River, &c. Ins. Co., 2 Duer {N. Y. Superior Ct.), 481. 
 
 2 [Horwitz V. Equitable Mut. Ins. Co., 40 Mo. 557 at 560 ; Pelkington v. Nat. 
 In-s. Co., 55 Mo. 172 at 177 ; Planters' Mut. Ins. Co. v. Lyons, 38 Tex. 253 at 
 272.] 
 
 3 [New Orleans Ins. Ass. i'. Griffin, 66 Tex. 232 ; Morrison v. Insurance Co., 
 69 Tex. 353.] 
 
 4 [America Cent. Ins. Co. v. McCrea, Maury & Co., 8 Lea (Tenn.), 573.] 
 
 817
 
 § 371] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 a subsequent policy will be presumed to have notice of the 
 prior one.i And where both policies are negotiated through 
 the same person, who is agent for both companies, his knowl- 
 edge is the knowledge of each company.^ But the knowledge 
 of or notice to the broker through which both insurances are 
 effected, is not the knowledge of or notice to the insurers.^ 
 [A consent in writing to other insurance is sufficient though 
 not on the policy as its provisions require^ If the required 
 consent is obtained for another policy, this policy may be 
 renewed without reconsent.^] 
 
 § 371. Other Insurance ; Approval ; Consent. — Where the 
 approval of other insurance is required in writing, a letter 
 from the secretary of the insurers, in reply to a notice from 
 the insurer, and stating that he has received the notice of 
 additional insurance, is an approval in writing witiiin the 
 meaning of the condition. Thus where, in case of further in- 
 surance, the insured is to give notice thereof to the company, 
 and have the same indorsed on the policy, or otherwise ac- 
 knowledged or approved by them in writing, and such insur- 
 ance is obtained, notice whereof is immediately given to the 
 secretary of the company, who acknowledges by letter the 
 receipt of the notice, without more, it has been held that this 
 is an ajiproval in writing, or, at least, that after such notice 
 the policy remains in force till the insurers signify their option 
 to disapprove. Under a similar policy, which also provided 
 that after notice of such further insurance the insurers should 
 have the right to cancel upon payment of the pro rata por- 
 tion of the premium for the unexpired portion of the time, 
 
 1 Barnes ?>. Union Ins. Co., 45 N. H. 21 ; ITorwitz v. Equitable Ins. To., 40 
 Mo. 557 ; [Russell v. State Ins. Co., 55 Mo. 585 at 501 ; Ridiniond v. Niagara 
 Falls Ins. Co., 79 N. Y. 230, 239.] 
 
 2 Vop Bories v. United Life. &c. Ins. Co., 8 Bush (Ky.), 133. See also War- 
 ner V. Peoria, &c. Ins. Co.. 14 Wis. 318 ; ante, § 305 a. 
 
 3 Mellen i'. Hamilton Mut. Fire Ins. Co , 17 N. Y. 609, affirming s. c. 5 Duer 
 (N. Y. Superior Ct.), 101 ; McLaclilnn v. JEtna Ins. Co., 4 Allen (N. B ), 173. 
 But see Fishbeck v. Phenix Insurance Company, 54 Cal. 422. And see also 
 post, § 371. 
 
 * [Mattocks V. Des Moines Ins. Co., 74 Iowa, 2^3.] 
 6 [New Orleans Ins. Ass. v. Holberg, 61 Miss. 51.] 
 
 818
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ -371 
 
 the insurers must either indorse or cancel. They cannot re- 
 fuse to do both, and retain the whole consideration.^ And 
 where the consent of the directors is required, it need not be 
 signified by formal vote, or even in writing, but may be in- 
 ferred from the proof of other facts, as of their knowledge of 
 all the facts, where two directors in one company, being also 
 directors in another company, took the additional insurance. 
 So if it be required that prior insurance be indorsed on the 
 subsequent policy when it issues, leave to keep insured to an 
 amount greater than is stated in the policy thus issued, in- 
 dorsed on the policy, or by parol and by an agent even after 
 the delivery of the policy, is the equivalent of such indorse- 
 ment, as it may refer to prior as well as subsequent insurance.^ 
 So is the fact that the prior insurance is stated in the policy ; ^ 
 so if other insurance is permitted without notice in the subse- 
 quent policy, this is a waiver of notice of prior or subsequent 
 insurance.* Assent to subsequent insurance is also assent to 
 a renewal of the same, in the same or any other office.^ And 
 notice of prior insurance in the application for a subsequent 
 policy is notice of a renewal of the prior insurance.^ But in 
 Massachusetts.' in a case wliere the insurance was not a re- 
 newal strictly, but an insurance in another company, for a 
 less amount, to take the place of an insurance which had 
 been assented to, though for a less amount, it Avas held that 
 the assent did not apply to the substituted insurance. But 
 
 1 Demill v. Hartford Ins Co , 4 Allen (N. B ), 341. And see posf,% 372. 
 Failure to dissent for an unreasonable time raises the presumption of assent. 
 Shannon v. Hastings Mut. Ins. Co., 2 Ont. App. 81. 
 
 ^ Blake v. Excli. Ins. Co., 12 Gray (Mass.), 148; Pliilbrook v. New England 
 Mut. Ins. Co., 87 Me. 187 ; Kimball v. Howard Fire Ins. Co., 8 Gray (Mass.), 
 33; Benedict v. Ocean Ins. Co., 1 Daly (N. Y. Sup. Ct), 8; s. c. affirmed, 31 
 N. Y. 38.9; Warner v. Peoria Mar. & Fire Ins. Co., 14 Wis. 318; Carrugi i-. At- 
 lantic, &c. Ins. Co., 40 Ga. 135. 
 
 3 Baptist Soc. V. Hillsborough Mnt. Fire Ins. Co., 10 N. H. 580; Ames v 
 New York Union Ins. Co., 14 N. Y. 203, 258 ; Parsons v. Queen Ins. Co., 43 
 U. C. (Q. B.) 271. 
 
 * Frederick, &c. Ins. Co. v. Deford, 38 Md. 404. 
 
 5 Baptist Soc.?'. HiUsborougli Mut. Fire Ins. Co., 19 N. H. 580; Pechner v. 
 Phoenix Ins. Co., 6 Lans. (N. Y.) 411. 
 
 6 Brown r. Cattaraugus County Mnt. Fire Ins. Co., 18 N. Y. 385. 
 
 7 Burt V. People's Mut. Ins. Co., 2 Gray (Mass.), 397. But see an/e, § 365. 
 
 819
 
 § 372] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII, 
 
 notice of " changes in additional insurances " is sometimes 
 required by the terms of the policy, and this applies where 
 the aggregate insurance remains the same, but there is a 
 change in the distribution amongst the subject-matters insured.^ 
 In Sykes v. Perry County Mutual Fire Insurance Company ,2 
 the distinction is taken between notice and knowledge of an 
 alteration, at least so far as an agent is concerned, that 
 while knowledge of the agent is not knowledge of the 
 company, notice to the agent would be notice to the com- 
 pany. But knowledge of the agent of a fact existing at 
 the time insurance is effected, is knowledge of the insurers.^ 
 And this knowledge runs through all renewals of the same 
 insurance.* 
 
 § 372. Other Insurance ; Permission in Policy ; Previous Con- 
 sent ; Waiver of Forfeiture for Breach of Condition. — But, as 
 has already been seen,^ forfeiture by reason of a breach of the 
 condition may be waived by any act of the insurers recogniz- 
 ing the validity of the policy after knowledge of a breach of 
 the condition. A failure to give notice of such insurance, 
 when in fact it is already known to the insurers themselves, 
 or their agent, as where they have issued a prior but still 
 outstanding policy on the same property, will not avoid the 
 policy, the issue of the subsequent policy with knowledge 
 being a waiver of the condition.^ And the acceptance of a 
 renewal premium has the same effect.'^ And if the company 
 liave a right to avoid after notice of breach, and neglect so to 
 do for an unreasonable time, or by any act recognize the con- 
 tinued validity of the policy, it will be a waiver of the for- 
 
 1 Simpson v. Penn Fire Ins. Co., 38 Pa. St. 250. 
 
 2 34 Pa. St. 79. And see ante, § 370. 
 
 3 People's Ins. Co. v. Spencer, 53 Pa. St. 353 ; Roberts v. Continental Ins. 
 Co., 41 Wis. 321. 
 
 4 Ibid. ; LifWle v. Market Fire Ins. Co., 4 Bosw. (N. Y.) 179. 
 
 5 Ante, §§ 143, 365. See also Hay ward v. National Iiis. Co., 52 Mo. 181, 
 overruling Hutchinson v. Western Ins. Co., 21 id. 97 ; Elliott v. Lycoming Ins. 
 Co., 66 Pa. St. 22. 
 
 6 Rowley v. Empire Ins. Co., 36 N. Y. 550 ; Wash. Ins. Co. v. Davison, 30 
 Md. 91 ; Webster v. Phoenix Ins. Co., 36 Wis. 67. 
 
 ' Carroll v. Charter Oak Ins. Co., 1 Abb. Ct. of App. Dec. 316. 
 820
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 372 A 
 
 feiture.^ So will taking part in making the adjustment,^ un- 
 less some act be done in the course of the attempted adjust- 
 ment, inconsistent with an intention to recognize the existing 
 validity of the policy, as, for instance, returning the unearned 
 premium.^ If the policy on its face allows further insurance 
 to a limited amount, this will be equivalent to consent in 
 writing on the policy, and a renewal of a lapsed policy to the 
 same amount is no violation of the condition against other 
 insurance.'* Previous autliority given by the secretary of an 
 insurance company to effect further insurance without notice 
 is a waiver of the condition in the policy requiring subse- 
 quent notice and approval by the company.^ 
 
 [§ 372 A. Waiver. — Notice to a general agent of other in- 
 surance, and his assent, prevents forfeiture under the condition 
 against other assurance without consent of the company,*^ and if 
 notice comes to such an agent, and no objection is made within 
 a reasonable time, the breach of condition is waived. To al- 
 low the company to object after long silence would be to con- 
 summate a fraud.7 The agent of the company, with power to 
 make and break contracts, is the proper person to give such 
 consent, and in the absence of restriction known to the in- 
 sured it will bind the company. But notice to a soliciting 
 ao-ent of breach of the condition as to other insurance is not 
 
 1 Von Bories v. United Life, Fire, & Mar. Ins. Co., 8 Bush (Ky.), 133, 135; 
 Lafleur v. Citizens' Ass. Co., Q. B. 22 L. C. Jur. 247 ; Pechner v. Piioenix Ins. Co., 
 65 N. Y. 195, affirming s. c. 6Lans. 411 ; Pitney c. Glens Falls Ins. Co., 65 N. Y. 
 6, affirming s. c. 61 Barb. 335 ; Brandup v. St. Paul, &c. Ins. Co. (Minn.), 10 Ins. 
 L. J. 228 ; Hadley v. New Hampshire Ins. Co., 55 N. H. 110 ; Smith v. Commer- 
 cial Ins. Co., 33 U. C. (Q. B.) 69; City Fire Ins. Co. v. Carrugi, 41 Ga. 660; 
 Sparrow v. Mut. Benefit, &c. Ins. Co., C. Ct. (Mass.), Shepley, J., 1873; Kenton 
 Ins. Co. V. Sliea, 6 Bush (Ky.), 174; Fishbeck v. Phenix Lis. Co., 54 Cal. 422. 
 The case of Von Bories is sharply criticised in 19 Am. Law Reg. 680. See 
 also post, §§ 507, 508. 
 
 2 Levy V. Peabody Ins. Co., 10 W. Va. 560; Fishbeck v. Phenix Ins. Co., 54 
 Cal. 422. 
 
 s Baer v. Phoenix Ins. Co., 4 Bush (Ky.), 242. 
 
 * Parsons v. Standard Fire Ins. Co. (Sup. Ct. Can.), 3 Legal News, Montreal, 
 835. 
 
 5 Parsons v. Victoria Mut. Fire Ins. Co., 29 U. C. (C. P.) 22. 
 
 B [Goldwater v. Liverpool & L. & G. Ins. Co., 39 Hun, 176.] 
 
 ^ I Crescent Ins. Co. v. Griffin & Sliook. 59 Tex. 509. See § 370. Carrugi v. 
 Atlantic Fire Ins. Co., 40 Ga. 135 at 141.] 
 
 821
 
 § 372 C] insurance: fire, life, accident, etc. [ch. xviii. 
 
 notice to the company, and will not base a plea of waiver.^ A 
 declaration of the agent to the assured referring to subse- 
 quent other insurance that his policy is all right, estops the 
 company.^ If the applicant tells the agent to notify the 
 company that he intends to obtain other insurance, and 
 the agent says it will not be necessary until such insurance 
 is obtained, the company is estopped to deny liability on the 
 ground that its policies forbid other insurance without its 
 consent.^] 
 
 [§ 372 B. Knotvled(je and long Silence or other midcadlng 
 Action. — Knowledge of subsequent insurance and conduct 
 inducing the insured to believe the former policy is still re- 
 garded as binding is a waiver.* Silence for an unreasonable 
 time after knowledge of other insurance is a waiver.^ A delay 
 of three months has been held sufficient.^ Where knowledge 
 that other insurance has been effected comes to the agent, and 
 the company by its long silence induces the insured to believe 
 that the policy is still in force, it is estopped, although the 
 policy declared that it should be void by other insurance with- 
 out assent of the company written upon it.'] 
 
 [§ 372 C. Knowledge of Agent at Issue of Policy. — If at 
 the time of insurance the agent knew of other insurance, and 
 with this knowledge took the premium and issued the policy, 
 the condition is waived.^ The knowledge of the general agent 
 who had previously effected the other insurance is sufficient.^ 
 Wiien the assured stated to the agent that he had other in- 
 surance, and then signed an application made out by the 
 agent stating that there was no other insurance, on which a 
 
 1 [Queen Ins. Co. v. Touner, 80 Ala. 424.] 
 
 2 [Combs V. Shrewsbury Ins. Co., 34 N. J. F,q. 403.] 
 
 3 [Kitchen v. Hartford Ins. Co., 57 Midi. 135.] 
 
 4 [Martin v. Jersey City Ins. Co., 44 N. J. 273.] 
 
 5 [Phoenix Ins. Co. v. Spiers, 87 Ky. 285.] 
 
 6 [Planters' Mut. Ins. Co. i\ Lyons, 38 Te.x. 253 at 272.] 
 
 7 [Crescent Ins. Co. v. Griffin, 59 Tex. 509.] 
 
 3 [Lycoming Ins. Co. v. Barringer, 73 111. 230 at 235 ; North British, &c. Ins. 
 Co. V. Steiger, 124 111. 81 ; Putnam v. Commonwealth Ins. Co., 4 Fed. Rep. 
 753; 18 Blatch. 368 (N. Y.), 1880; Lockwood y. Middlesex Mut. Ass. Co., 
 47 Conn. 653. 
 
 » [Richmond v. Niagara Fire Ins. Co., 79 N. Y. 230 at 239.] 
 
 822
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 372 E 
 
 policy was issued, it was held that the company was estopped 
 from setting up the prior insurance as a defence. ^ But the 
 company is not estopped because the agent by due diligence 
 might iiave discovered the existence of other insurance at the 
 time of issue. It must be shown that, as a matter of fact, he 
 did actually know of its existence.^] 
 
 [§ 372 D. No Waiver. — Mere knowledge of the agent that 
 other insurance is effected, there being no premiums subse- 
 quently received, or other misleading action, is not a waiver,-^ 
 Taking additional assurance avoids a policy conditioned 
 against it, though the insured did not know of the condi- 
 tion, and although he told the agent he had taken other in- 
 surance but did not name the amount, and the agent had 
 previously offered further insurance to a less amount tlian the 
 additional policy, and although proofs of loss were demanded 
 after knowledge of other insurance, but without knowledge of 
 the amount.* When the application for insurance stated that 
 otlier insurance on the same property would expire in two 
 months, and would not be renewed, and the policy was issued 
 on this understanding, but the former insurance was renewed, 
 there could be no recovery on the second policy.-^] 
 
 [§ 372 E. Misrepresentation as to Other Insurance. — A 
 large overstating of the amount of other insurance on a build- 
 ing though made by mistake by the agent of the insured un- 
 known to the latter, avoids a policy issued upon the application 
 of the said agent, conditioned to be void by any misrepresen- 
 tation whatever, and providing for apportionment of the loss 
 among the various insurers. The misrepresentation was mate- 
 rial.^ But where the company is not justified iu relying on 
 the representation it will not be fatal. In a list of existing 
 insurance upon his property the applicant omitted by mistake 
 the name of the E. Company, and a policy was issued by this 
 E. Company, both parties believing that there was no prior 
 
 1 [American Ins. Co. v. Luttrell, 89 111. 314 at 317.] 
 
 2 [Sanders v. Cooper, 115 N. Y. 279.] 
 
 8 [Zimmerman v. Home Ins. Ca, 77 Iowa, 685.] 
 
 < [Bonneville v. Western Ass. Co., 68 Wis. 298.] 
 
 8 [Deitz V. Mound City Mut. F. & L. Ins. Co., 38 Mo. 85 at 94] 
 
 « [Armour i-. Transatlantic Fire Ins. Co., 90 N. Y. 450.] 
 
 823
 
 § 378 E] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 insurance in said company, the applicant did not positively 
 state his list to be correct, but said he believed it was. The 
 court held that if the company were satisfied to rely on a mere 
 statement of belief honestly made, it had no right to com- 
 plain that the facts were not fully represented. Especially 
 must this be so when the means of verification are so easily 
 within reach of the company as in this case.^] 
 
 [§ 372 F. Evidence. — Proofs of loss disclosing other insur- 
 ance operate as admissions of the assured, and make other 
 proof unnecessary .2 Parol proof is inadmissible to show that 
 double insurance was meant by the terms of a policy reading 
 " void if any prior insurance, (to." There is no ambiguity to 
 be explained.^] 
 
 § 373. Overvaluation. — Akin to the subject of double or 
 over insurance is the subject of overvaluation, which in fact 
 is more properly over-insurance. This is sometimes prohib- 
 ited in the policy on pain of forfeiture, sometimes stated as a 
 restriction upon the relative amount of the value Avhich the 
 insurers will assume the risk of, and sometimes not mentioned 
 at all in the policy. The same reasons exist on the part of 
 the insurers against overvaluation that we have already stated 
 exist against double insurance. In both cases the interest of 
 the insured in the preservation of the property is weakened, 
 and motives supplied to desire its destruction. And it is not 
 unusually stipulated against. But an overstatement of the 
 value of the property for insurance upon which application is 
 made may defeat the policy, whether there be any condition 
 or stipulation in the policy to that effect or not. It is a ma- 
 terial fact, in that it is of importance that the insured should 
 be interested in the protection of the property. The smaller 
 the amount of the insurance, therefore, the stronger his interest 
 in the protection. The probable loss, in case of the destruc- 
 tion of the property by fire, is the incentive to vigilance in 
 the protection of the whole, as well tliat which is covered by 
 the policy as that which is not ; for whatever threatens the 
 
 1 [Bridgewater Iron Co. v. Enterprise Ins. Co., 134 Mass. 433, 438.] 
 
 2 [N. Y. Central Ins. Co. v. Watson, 23 Mich. 486 at 488] 
 
 3 [N. Y. Ins. Co. I'. Thomas, 3 Jolms. Cas. (N. Y.) 1 at 4.] 
 
 824
 
 CH, XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 373 
 
 interest of the insurers threatens also the interest of the in- 
 sured. But the law will not here interest itself in trifling 
 discrepancies and insignificant differences, such as may be 
 readily accounted for by that natural tendency to overesti- 
 mate which self-interest always engenders. The overvalua- 
 tion, in order to work a forfeiture of the right of recovery, 
 must be a clear one ; so clear that it is obvious at a glance, 
 and cannot be accounted for upon the principle that every 
 man is naturally prone to put a favorable estimate upon his 
 own. It is not necessary that the overvaluation be inten- 
 tional and fraudulent to have the effect of vitiating the policy. 
 The effect is the same if it be done by mistake, and overvalu- 
 ation by the agent is imputable to the principal. ^ It is usual 
 to provide that fraudulent overvaluation shall avoid the 
 policy; and, in point of fact, whether the provision be 
 against fraudulent overvaluation or simply overvaluation, it 
 is of but little moment. For no overvaluation but a gross 
 and clear one, and such as is or must be presumed to be 
 known to be such by the insured, and not known to the in- 
 surer, and therefore false and fraudulent, will in either case 
 be held to vitiate the policy ; and such a one will avoid the 
 policy whether provided against or not.^ And in considering 
 
 1 Carpenter v. American Ins. Co., 1 Story (U. S. C. Ct.), 57; Bobbitt v. 
 Liverpool, &c. Ins. Co., 66 N. C. 70; Catron v. Tenn. Ins. Co., 6 Humph. (Tenn.) 
 176; Carpenter v. Prov. Wash. Ins. Co., 16 Pet. (U. S.) 4%; Shaw v. St Law- 
 rence County Mut. Ins. Co., 11 U. C. (Q. B.) 73; Gerliauser v. North British, 
 &c. Ins. Co., 7 Nev. 174; Franklin Life Ins. Co. v. Vaughan, 92 U. S. 516 ; Con- 
 tinental Ins. Co. V. Ware (Ky.), 9 Ins. L. J. 519 ; Riach v. Niagara, &c. Ins. Co., 
 21 U. C. (C. P.) 464 ; Williams v. Phoenix Ins. Co., 61 Me. 67 ; Newton v. Gore, 
 &c. Ins. Co., 33 U. C (C. P.) 92 ; Leach v. Insurance Co., 58 N. H. 245 ; Bon- 
 ham V. Iowa Central Ins. Co., 25 Iowa, 328; Citizens', &c. Ins. Co. v. Sliort, 62 
 Ind. 316. In this case the court express the opinion that the law as stated in 
 the text is too favorable to the insurers, and that no overvaluation but a 
 " knowingly false and fraudulent " one will vitiate a policy. See also Sturm v. 
 Atlantic Mut. Ins. Co., 63 N. Y. 77. See § 373 A. 
 
 ■^ Hersey v. Merrimack County Mut. Ins. Co., 7 Post. (N. H.) 149 ; Dickson 
 V. Equitable Fire Ins. Co., 18 U. C. (Q. B.) 246 ; Wilbur v. Bowditch Mut. Ins. 
 Co., 10 Cush. (Mass.) 446 ; Prot. Ins. Co. v. Hall, 15 B. Mon. (Ky.) 411 ; Frank- 
 lin Fire Ins. Co. v. Vaughan, 92 U. S. 516. In this case a difference of over one- 
 tliird was held immaterial. See also Lingley v. Queen Ins. Co., 1 Hannay 
 (N. B.), 280 ; Cann r. Imperinl Fire Ins. Co., 1 R. & C. (Nova Scotia) 240, where 
 the overvaluation was more than two-fold, yet was held immaterial, the jury 
 
 825
 
 § 373 A] INSURANCE : fire, life, accident, etc. [ch. xviti. 
 
 the question, evidence of the value of similar property in the 
 vicinity is competent, and in what degree of proximity vi- 
 cinity is included, depends upon whether the property is 
 situated in town or country.^ [But evidence of offers for 
 the property made after the execution of the policy, is not 
 admissible.^] 
 
 [§ 373 A. Overvaluation. — Where the policy declares that 
 an overvaluation will avoid it, any substantud overvaluation 
 such as would not ordinarily arise from mere difference of 
 opinion, will be fatal whether it be fraudulent or not.^ Want 
 of education cannot excuse a gross overvaluation.* A provis- 
 ion that the statements are warranties and that overvaluation 
 shall avoid the policy will be held to mean intentionally false 
 valuation, if other parts of the policy show that it was the 
 intent of the parties that only wilful misrepresentations should 
 avoid the agreement.^ When the policy provided that an 
 overvaluation should avoid it, but the overvaluation was in 
 the written application, which assumed to state the value only 
 so far as was knoum to the assured, it was held that, in the ab- 
 sence of fraud, the policy was good.° There was no breach 
 unless the false statement was knowingly made. Intentional 
 overvaluation always avoids the policy obtained upon it.^ But 
 it has been broadly held that an honest estimate of value 
 though excessive will not be fatal, although the policy pro- 
 vides that any overvaluation of the interest assured shall 
 
 having negatiVed fraud. See also Parsons v. Citizens' Ins. Co., 43 U. C. (Q. B.) 
 261 ; Mason v. Agr. Ins. Co., 18 U. C. (C. P.) 19. Gross overvaluation, result- 
 ing from a wilful neglect of the means of making a correct one, and having the 
 effect of misleading the insurer to his prejudice, though not intentionally fraud- 
 ulent, is not innocent, and vitiates tiie policy. Leach o. Repuhlic Fire Ins. Co., 
 58 N. H. 245. But see Sturm v. Atlantic Ins. Co., 63 N. Y. 77. See also ante, 
 § 30. As to overvaluation of loss, see pout, §§ 443, 477. 
 
 1 Haines v. Repuhlic Fire Ins. Co., 52 N. H. 407 ; Howard v. City Fire Ins. 
 Co., 4Denio (N. Y.), 502. 
 
 - [Wood V. Firemen's Fire Ins. Co., 126 Mass. 316 at 319.] 
 
 3 [Boutelle v. Westchester Fire Ins. Co., 51 Vt. 4.] 
 
 * [Nassauer v. Insurance Co., 109 Pa. St. 507.] 
 
 6 [Wheaton v. North Brit. & Mer. Ins. Co., 76 Cal. 415.] 
 « [Miller v. Alliance Ins. Co., 19 Blatch. 808 at 310.] 
 
 7 [Lycoming Fire Ins. Co. r. Kubin, 79 111. 402.] 
 
 826
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 373 B 
 
 avoid the policy issued on such description.^ An over-esti- 
 mate of the amount of loss sustained, made honestly and in 
 good faith, is neither fraud nor false swearing within the 
 meaning of a policy.^ It was at first held in Texas that only 
 an overvaluation in the application so gross and clear that it 
 must be presumed that tiie assured was not acting in good 
 faith, will avoid the policy ,2 and cases were referred to in which 
 an overvaluation of one-third had been held immaterial ;^ and 
 also one that was more than twofold ;^ but upon error the case 
 was remanded, the court remarking that it was not neces- 
 sary for the overvaluation to be fraudulent ; though made by 
 mistake it might be fatal, citing May, § 373, to that effect.^ 
 A claim more than double the amount found due will be held 
 fraudulent in the absence of clear evidence to the contrary.^ 
 But an apparent overvaluation of about twenty per cent is held 
 not fraudulent.^ Where a house was valued at i|1400, and 
 the evidence tended to show that it was only worth about 
 11000, it was held that the difference was not so great as to 
 make it matter of law that there was overvaluation within the 
 meaning of the warranty .^ And valuing goods worth $1200 
 at '12000 docs not as matter of law prove fraudulent intent.^*^ 
 It is error to refuse to instruct the jury on a question of breach 
 of covenant relating to the valuation of the property ; as 
 where the company claimed that the applicant had put the 
 two-thirds value too high to his knowledge.^^] 
 
 [§ 373 B. Overvaluation. — An Overvaluation of part of the 
 property insured will not avoid the policy as to the rest.^^ Over- 
 
 1 [Susquehanna Mat. Fire Ins. Co. v. Staats, 102 Pa. St. 529; Pickel v. 
 Plieiiix Ins. Co., 18 Ins. L. J. 598 (Ind.), June, 1889.] 
 
 - [PlicBnix Ins. Co. v. Munday, 5 Cold. (Tenn.) 547 at 552.] 
 
 3 [Kiikin f. Home Ins. Co., 1 Tex. App. Civ. Cas. § 368.] 
 
 4 [Franklin Ins. Co. r. Vanglian, 92 U. S. 516.] 
 
 5 [Cann v. Imperial Fire Ins. 1 R. & C. (Nova Scotia), 240.] 
 
 6 [Home Ins. Co. v. Eakin, 2 Tex. Civ. Cas. § 66-5.] 
 
 7 [La Rocque v. Royal Ins. Co., 2-3 L. C. Jur. 217 ] 
 
 8 [Xortliern Ass. Co. v. Provost, 25 L. C. Jur. 211.] 
 
 9 [Smith V. Home Ins. Co., 47 Hun, 30.] 
 
 ^"^ [Behrens v. Germania Fire Ins. Co., 64 Iowa, 19.] 
 11 [Insurance Co. v. McCluckin, 40 Ohio St. 42.] 
 1-2 [Smith V. Home Ins. Co., 47 Hun, 30, 34.] 
 
 827
 
 § 374] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XVIII. 
 
 valuation that is known or ought to be known to the agent is 
 waived when the company rejects the claim for loss on other 
 grounds.^ But where the general agent, knowing that there was 
 overvaluation but not knowing it to be fraudulent, asked for 
 proofs of loss, there was no waiver of the overvaluation. ^ And 
 the assured cannot escape responsibility for the statements 
 which he himself inserts in the application or permits the agent 
 to insert, in respect to facts about which he is just as well in- 
 formed as the agent, by showing that he was induced by the 
 ao-ent knowingly to state them falsely. This includes valua- 
 tion, and the applicant must be responsible for any substantial 
 excess when he warrants the value.^ In Maine by statute the 
 question is whether the erroneous statement of value mate- 
 rially increased the risk or contributed to the loss.^ Over- 
 valuation at the time of insurance is not material wlicn it is 
 provided that the insurance paid shall never exceed three- 
 fourths of the value at the time of loss.^] 
 
 § 374. Overvaluation. — But the rule as to overvaluation is 
 not applicable to the case of an open policy upon a stock of 
 goods which is constantly varying in amount, nor where the 
 insurer is to be liable only for a proportion of the loss. Thus, 
 where a merchant procures insurance upon his stock of goods, 
 and fixes the valuation neither upon the reduced stock which 
 he happens to have on hand at the end of the busy season 
 when the insurance is applied for, nor upon the unusually 
 large stock on hand at the commencement of the season, but 
 upon a fair average between the two, this is permissible, be- 
 cause it is within the intention of the parties, although the 
 incentives to vigilance, and the temptation to destroy on the 
 part of the insured, may vary with the varying amount of 
 the stock. So if the insurer is in no case to be responsible 
 beyond a certain fixed proportion, as, for instance, two-thirds 
 of the loss, the insured has always before him the same un- 
 
 1 [Walsh's Adm'r. v. Vermont Mut. Fire Ins. Co., 54 Vt. 351] 
 
 2 [Wheaton v. Brit. & Mer. Ins. Co., 76 Cal. 415.] 
 
 8 [American Ins. Co. v. Gilbert, 27 Mich. 42fl at 4:'.!) and 441.J 
 * [Thayer v. Providence, &c. Ins. Co., 70 Me. 531, 536.] 
 6 [Schmidt v. Mut. City, &c. Ins. Co., 55 Midi. 432.] 
 
 828
 
 CH. XVIII.] OTHER INSURANCE AND OVERVALUATION. [§ 376 
 
 varying proportion of tlie risk, and the usual objections to over- 
 valuation do not obtain.! jf j^o valuation is stated in the 
 contract, prior oral statements showing overvaluation are 
 inadmissible. The making of a contract, without requiring 
 any statement of the value, must be regarded as evidence 
 that the insurer regarded it as immaterial.^ If by the form of 
 the policy the statement of value is a warranty, and it appears 
 by the plaintiff's own showing that it is clearly overstated, 
 and knowingly so, the court will not submit the question to 
 a jury,^ even though the liability of the insurers is to be but 
 two-thirds of the real value. ^ 
 
 § 375. Overvaluation ; Renewals upon changing Stock. — It 
 may happen that under repeated renewals of insurance, with- 
 out any change in the application, upon the same property, a 
 depreciation in its value may take place, so that the represen- 
 tations as to its value at the time of the first insurance may 
 not be strictly true at the date of the last insurance. But 
 such a variance is no fraudulent overvaluation or misrepre- 
 sentation.^ 
 
 § 376. Restriction of Value by Charter or By-laws or Terms 
 of the Policy. — The charters of mutual insurance companies 
 usually restrict the amount of the risk which they are per- 
 mitted to assume to a certain proportion of the value of the 
 property insured. In such cases the restriction is to be re- 
 garded as directory merely, and not prohibitory. The viola- 
 tion of the charter is a matter for the insurers to settle with 
 tliose who gave them their charter, but they cannot set up 
 their own misconduct in defence against the claim of the in- 
 sured for indemnity, as by showing that in insuring to the 
 
 1 Lee V. Howard Fire Ins. Co., 11 Cush. (Mass.) 824; Aurora Fire Ins. Co. 
 I'. Johnson, 46 Ind. 315; Cox ?;. ^tna Ins. Co., 29 id. 586; Bonham v. Iowa 
 Central Ins. Co., 25 Iowa, 328. 
 
 2 Bardwell v. Conway Mut. Ins. Co., 118 Mass. 465; Insurance Co. of North 
 America v. McDowell, 50 111. 120. 
 
 8 American Ins. Co. v. Gilbert, 27 Mich. 429. 
 
 * Bobbitt V. Liverpool, &c. Ins. Co., 66 N. C. 70. But see Bonham v. Iowa 
 Central Ins. Co., 25 Iowa, 328. 
 
 5 Gerhauser v. North Brit & Mer. Ins. Co., 7 Nev. 174 ; Eddy St. Iron Foun- 
 dry V. Farmers' Mut. Ins. Co., 5 R. I. 426. 
 
 829
 
 § 376] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XYIII. 
 
 stipulated amount they have infringed one of their own by- 
 laws.i An estimate, whether by the agent of the insurers or 
 by him and the insured combined, in the absence of all fraud, 
 collusion, and misrepresentation, fixed by agreement, — an esti- 
 mate upon which premiums are paid and assessments laid, 
 and the amount to be paid by the company in case of loss 
 determined, — is the best evidence of the value of the premises 
 insured, and cannot be treated as a valuation not permitted 
 by the charter or by-laws.^ 
 
 1 Cumljerland Valley Mut. Prot. Ins. Co. v. Schell, 29 Pa. St. 31 ; Hoxsie v. 
 Prov. Mut. Fire Ins. Co., 6 R. I. 517 ; Fuller i;. Boston Fire Ins. Co., 4 Met. 
 (Mass.) 20G. And see ante, §§ 23, 63, 65. 
 
 2 Fuller V. Boston Fire Ins. Co., 4 Met. (Mass.) 206; Wilbur u. New England 
 Mut. Fire Ins. Co., 31 Me. 219. 
 
 830
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. 
 
 CHAPTER XIX. 
 
 ASSIGNMENT OF THE POLICY. 
 
 Analysis. 
 
 ASSIGNMENT BEFORE LOSS. 
 Insurance other than Lite. 
 
 The common law would not permit the assignment of a chose 
 in action; equity however upheld the transaction, and 
 the assignee could sue in the name of the assignor and 
 recover for his own benefit, subject to all defences, legal 
 or equitable, that could be made against the assignor 
 before notice of the transfer to the obligor. § 377. If 
 the debtor assents to the assignment, and agrees to pay 
 the assignee, a ncAV contract arises. The peculiar nature 
 of insurance brings an element into the problem of 
 transfer not existing in most cases. A jjolicy is a con- 
 tract of indemnihj for the loss of a valuable interest, and 
 subject to avoidance by the violation of any one of numerous 
 conditions. 
 (1) Now if the policy is assigned without a transfer of the 
 interest it protects, it is clear that, even though the com- 
 pany may assent, there is no comjdete transfer, as in 
 case of the assignment of a note. § 379. The assignor 
 is still the person assured, for he is the one who possesses 
 the insurable interest. The contract could not possibly 
 be made with the assignee. He is merely the person to 
 whom the money is to be paid, if, upon the contract 
 ■with the assignor it ever becomes due. § 378. The "as- 
 signment " so called is a mere designation of the payee. 
 He may have an interest in the property or not, but he 
 has not the interest that was insured. He can sue in 
 his own name if the company has agreed to pay him, 
 but if the assignor breaks a condition before or after as- 
 signment, and it is not waived, the assignee will receive 
 nothing. §§ 382, 378 A. As between the parties to the 
 assignment, however, it creates an equitable lien on the 
 funds, § 380, although the transfer is only as collateral, 
 before loss, and to one without interest. § 386. 
 (2) If the interest insured, as well as the policy, is trans- 
 ferred to the assignee, with assent of the company, a 
 new contract is formed with the assignee, §§ 378, 378 A, 
 and any subsequent breach of condition on the part of 
 the assignor will not affect the assignee, §§ 378, 378 A, 
 and he can sue in his own name. § 381. See also §§ 383- 
 384. But as to t\i& past, the assignee simply steps into 
 the shoes of the assignor. 
 
 VOL II. — 9 831
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 It has even been held that an assignment as collateral, with 
 assent, to one waiving a lien on the goods, will not be 
 affected by fraud of the assignor. § 378 A. 
 
 But this is clearly wrong on the above reasoning. 
 
 In marine insurance custom allows the transfer of a policy 
 with the subject-matter without special assent of the 
 company. § 377. 
 
 Life Insurance. 
 
 A man may take out a policy on his own life, and make it 
 payable to any person he chooses as beneficiary, § 112. It 
 would be useless to deny this privilege, as the same thing 
 could be accomplished by taking the policy to himself and 
 representatives, and willing the fund to the beneficiary. 
 Moreover no one can object if the beneficiary sujiplies 
 the insured with money to pay the premiums. Now if 
 
 A. takes out a policy on his own life and assigns it to B., 
 the case is in substance no different from one in which 
 
 B. is named as beneficiary. (If the interest insured is not 
 passed, as in this case it would not be, as the insured 
 could not give his life to B., a subsequent breach of con- 
 dition by the assignor would be fatal to the assignee. If 
 a creditor insures the life of a debtor, a transfer of debt 
 and policy, with assent, would undoubtedly create a 
 new contract.) 
 
 There is, however, a strong dispute on this question of 
 assignment to one without interest in the "life," some 
 authorities maintaining that assignment to one without 
 interest is "open to all the objections that can be raised 
 against the original taking out of insurance by one with 
 no interest." § 398, and note. This, however, is not 
 true. There is an immense difference between allowing 
 A. to choose for himself to secure to B. a benefit on his 
 decease, and allowing B. of his own motion to secure such 
 a benefit on the life of A. without A.'s action in the 
 matter. The activity of the " life " in obtaining the 
 insurance and selecting the beneficiary seems the true 
 line of distinction, and not tlie contingent benefiting of 
 one without interest. At any rate, to be consistent the 
 law must either allow free assignment or limit the choice 
 of beneficiaries. The life should he free to assign to any 
 one he could have chosen as his beneficiary. 
 
 Of course the intent of the parties must always be looked 
 to. If, for example, the transfer appears to be for the 
 security of a creditor, he should not be allowed to hold 
 more than compensation for his debt, premiums, ex- 
 penses, &c. See chap. 24. 
 
 If the transfer is to one with an interest, § 398, and is 
 free from fraud, § 397, it is good. § 388. 
 
 If the company waives the want of interest, the assignor 
 cannot object, § 398 A ; but an heir may object that 
 the assignment is invalid in form. § 399 B. 
 
 832
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. 
 
 What is an assignment ? §§ 379, 395. 
 
 a transfer that will be upheld and will carry rights to the 
 transferee is not always held to be a transfer that will 
 avoid the policy under the clause against assignment, 
 § 379. 
 an intent to transfer is not an assignment, § 379 n. 
 a part transfer as collateral not fatal, § 379 n. 
 a provision against assignment as collateral means without 
 
 transferring the property, § 379 n. 
 assignment of all property to creditors does not carry a 
 policy, §§ 379, 391 B, 386. 
 contra, § 379 n. 
 indorsement "pay to A. B." not a fatal assignment, § 379 n. 
 Consent, 382-385, 385 A., 387. 
 In writing. Indorsement. 
 
 attesting by agent sufficient, § 385 A. 
 
 paper attached by wafer sufficient indorsement, § 385 A. 
 
 assent to assignment of policy after transfer of property 
 
 sufficient, § 385 A. 
 oral promise to indorse not enforceable after loss, where 
 insured neglected to take policy for indorsement be- 
 fore loss, § 385 A. 
 receipt of assessments from assignee no waiver of condi- 
 tion as to written assent, § 385 A. 
 consent of no avail if facts are withheld that might have 
 
 prevented assent, § 385 A. 
 company cannot arbitrarily refuse, contrary to the spirit 
 of the policy, § 387. 
 General. 
 
 Assignment in whole or part, § 380. 
 
 assignment as collateral is fatal if policy provides against 
 
 assignment in whole or any interest tinder it, § 380. 
 The intent to transfer the lohole chose must be manifested 
 by action approj)riate to the circumstances, i. e., de- 
 livery of the document securing it, to the assignee 
 or to some one for him if it is possible, § 389. 
 assignment of part without assent invalid, § 399. 
 Disposition of proceeds, creditors, children, wife, heirs, ad- 
 ministrator, conflict of claims, § 390. 
 Assignment by mamed woman, rights of children, § 391. 
 
 See also § 392. 
 If the interest of the insured is transferred to C, and then 
 the policy to B., the latter cannot recover, even though 
 the company consented, and B. was a mortgagee ; his 
 own interest was not insured by the consent, and the 
 old interest back of the policy was divorced from it. 
 § 378 n. 
 So an assignment after the assignor's lease has expired will 
 
 not bind the company to pay the assignee, § 378 n. 
 A defective assignment may take effect as a designation to 
 
 pay, § 378 n. 
 Possession, delivery, &c., § 395. 
 
 833
 
 § 377] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 Delivery to another for the donee is sufficient. § 378 n. 
 
 When the " life " may assign, § 391. 
 
 Husband and wife, §§ 391 A, 390-394. 
 
 Creditors, §§ 391 B, 390-394. 
 
 Beneficiaries, §§ 390-394, and next chapter. 
 
 In whose name suit is to be brought, §§ 393, 381, 378. 
 
 one may have the right to sue, but not to use proceeds, 
 § 393. 
 A policy may be drawn payable to A. or his assignees, § 399 A. 
 Assignee causing death, § 399 A. 
 Notice of transfer, § 396 (life). 
 One may be held as a trustee in respect to a policy, §§ 393, 
 
 399 A. 
 Assignment as collateral gives equitable lien on proceeds 
 
 without regard to assent, §§ 380, 386. 
 Assignor of collateral must pay premiums, § 399 A. 
 
 they may be added to mortgage, § 399 A. 
 Assignee in bankruptcy can recover fiom the bankrupt only 
 the value of the policy, and not what the company may 
 have paid him, § 399 B. 
 Fraud, §§ 385, 397. 
 
 Violation of conditions by assignor, §§ 378 A., 379, 381, 386, 
 452 D. 
 measure of damages he must pay assignee, § 399 B. 
 Damages for breach of agreement to assign, § 399 B. 
 Bequest, devise, donatio causa mortis, &c., §§ 399 C, 392. 
 Transfer of assured's interest, §§ 381, 381 a. 
 ASSIGNMENT AFTER LOSS — 
 
 is only an assignment of a debt, and 
 
 is always good in equity, subject to claims in set-off, &c., against 
 the assignor before notice. § 386. The assignee stands in the 
 shoes of the assignor as to breach of condition also, § 386. 
 of the whole amount is good without acceptance, § 386. 
 is not a violation of the clause against transfer, although it reads 
 
 " before or after loss," § 386. 
 nor within condition requiring assent, § 386. 
 a prohibition of, is illegal, § 886. 
 specific performance of, § 386. 
 good without record or delivery against garnishment, § 386. 
 
 § 377. Assignment of Policy not permitted by the Com- 
 mon Law. — We have already considered, in the chapter on 
 alienation, the effects of a transfer of the property insured. 
 We are now to consider the effect of a transfer of the policy 
 of insurance, or, as it is usually termed, the assignment of the 
 policy. It is usual to provide that if the policy be assigned 
 without the consent of the insurers it shall be vo.id. At com- 
 mon law a policy of insurance against fire is not assignable in 
 any such sense as to give the assignee a right to sue in his 
 834
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 377 
 
 own name. By an assignment the assignee acquires merely a 
 chose in action^ gi^'ing to the holder at most an equitable 
 claim, which he can assert and enforce only in the name of 
 the assignor. With a very fevF exceptions, as in the case of 
 bills of exchange, bills of lading, and policies of marine insur- 
 ance, the common law has steadily denied the right of one 
 man to make over his right of action against another to a 
 third party, a stranger to the contract, as against public pol- 
 icy, and tending to the multiplication of suits. In the case of 
 marine policies, custom seems to have established a rule dif- 
 ferent from that of the common law, and to have made the 
 policies transferable witli the subject-matter of insurance. 
 In fact, in early times, in marine insurance, policies were 
 issued in blank as to the assured, and passed from hand to 
 hand without indorsement or assignment, but merely by de- 
 livery, like a promissory note payable to bearer, along with 
 the thing insured. And to this day, if there be an assignment 
 of the policy, coupled with the transfer of the subject-matter 
 of .insurance, although there be no consent of the insurers to 
 either the assignment or the transfer, the assignee thereby 
 acquires a claim against the insurers, which he can enforce in 
 a suit at law in his own name. This distinction is said to 
 rest upon the fact that there is less of mere personal consider- 
 ation, in regard to the risk, in marine insurance than in fire, 
 and that practically, if not theoretically, the insurance here is 
 rather of the thing than of the particular owner ; while in fire 
 insurance, on the contrary, it is rather of the owner than of 
 the thing, the character of the owner as a man of prudence, 
 integrity, and watchfulness entering much more largely as an 
 element into the estimate of the risk. Commercial conveni- 
 ence also doubtless has much to do with the distinction.^ But 
 whatever may be the grounds of the distinction, it is certain 
 that it exists ; and while marine policies have always been held 
 assignable without the consent of the insurers, the contrary has 
 always been and still is the law with reference to fire policies.^ 
 
 1 Crozier v. Phoenix Ins. Co., 2 Hannay (N. B), 200, Wildes, J. See also post, 
 §380. 
 
 2 ^tna Fire Ins. Co. v. Tyler, 16 Wend. (N. Y.) 385; Columbian Ins. Ca 
 
 835
 
 § 378] insueance: fire, life, accident, etc. [ch. xix. 
 
 § 378. Different Modes of Assignment, and their Effects. — 
 Though, strictly speaking, no assignment of the policy can bo 
 made, yet there are certain transfers of it which are often 
 made, which have a validity recognized by the courts, and 
 which, according as they are effected by mere delivery or in 
 writing, and with or without the transfer of the property 
 upon which they are issued, and with or without the consent 
 of the insurers to the transfer of the policy and the propertv, 
 are attended by different consequences. In the case of Fogg 
 V. Middlesex Mutual Fire Insurance Company some exceed- 
 ingly valuable observations were made upon the general sub- 
 ject, as well as upon the different modes of assignment and 
 their effect, which we give in the language of the court, per 
 Shaw, C. J. : — 
 
 " As a policy of insurance is not a negotiable instrument, 
 it cannot be legally transferred so as to enable the assignee 
 to maintain a suit in his own name without the consent of the 
 other party. But in general, at the common law, where one 
 party assigns all his right and interest in the contract, and the 
 assignee gives notice to the other party to the contract, and 
 he agrees to it, this constitutes a new contract between one 
 of the original parties and the assignee of the other, the terms 
 of which are regulated and fixed by those of the original con- 
 tract. This rule applies to policies as well as other con- 
 tracts, and it is often convenient and desirable to apply it ; 
 and there are two cases where this application frequently 
 hapj)cns. 
 
 " The first is, when the insured property is alienated or 
 sold by the assured. After such sale, if nothing more is 
 done, no surrender or change of the policy, and the goods 
 should be burnt, nobody could recover on the policy : not the 
 original assured, for he has sustained no loss, the property was 
 not his, and the loss of it was not his loss ; not the purchaser, 
 because he has no contract with the company. And although 
 
 V. Lawrence, 2 Pet. (U. S.) 25 ; Lynch v. Dalzell, 4 Brown, P. C. 431 ; Simeral 
 V. Pubuque Mut Fire Ins. Co., 18 Iowa, 319; London Ins. Co. v. Montefiore, 9 
 L T. N. s. 688. " I see no use or convenience in preserving the shadow when 
 the substance is gone." Buller, J., Master v. Miller, 4 T. R. 340. 
 
 836
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 378 
 
 in popular language the goods are said to be insured against 
 loss by fire, yet, in legal effect, the original assured obtains a 
 guaranty by the contract that he shall sustain no damage by 
 their destruction by fire. But in case of such sale or alien- 
 ation of the insured property, tlie original assured having no 
 longer any interests in the policy except to claim a return 
 of premium, if he will assign his policy or his contract of 
 insurance to such i)urchaser, and the company assent to it, 
 here is a new and original contract, embracing all the ele- 
 ments of a contract for insurance between the assignee and 
 the insurers. The property having become the purchaser's, 
 is at his risk, and, if burnt, it is his loss, and he has a good 
 original contract, upon a valid consideration, to guarantee 
 him against such loss. Accordingly, provision is made in the 
 charter and by-laws, and also by the terms of the policy, for 
 an assignment of the contract. The company returns no part 
 of the premium, but the assignee has the benefit of it upon 
 such terms as he and his assignor may determine ; the assign- 
 ment is indorsed on the policy and presented to the president 
 of the company, who ordinarily is authorized to give the assent 
 of the company to the assignment ; the old deposit note is sur- 
 rendered, and a new deposit note given by the assignee.^ 
 
 " In the regulations of this company in a circular of in- 
 struction to agents, a form is given for such transfer, notify- 
 ing the sale of the property, naming the purchaser, and 
 assigning to such purchaser, his executors, &c., the policy of 
 insurance, and, in case of loss, directing the amount to be 
 paid to the said purchaser, his heirs, &c. Upon such assign- 
 ment perfected there is an entire change in the contract, in 
 the party contracted with, in the insurable interest in the 
 property at risk ; and it becomes an insurance on the prop- 
 erty of the assignee, and ceases to be a contract of insurance 
 of the property of the assignor.^ 
 
 1 And this new deposit note is the sufficient new consideration for the new 
 promise to the assignee. Deraill v. Hartford Ins. Co., 4 Allen (N. B.), 341. A 
 mortgage and recorded assignment of the policy as security leaves the mort- 
 gagor, as the insured, liable to assessments. Cumraings i". Hildreth, 117 Mass. 
 309. 
 
 ^ 10 Cash (Mass.) 337; Mechanics', &c. Soc. v. Gore Dist. Ins. Co., 3 Ont 
 
 837
 
 § 378] INSUBANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 " But there is another species of assignment, or transfer, it 
 may be called, in the nature of an assignment of a chose in 
 action. It is this : ' In case of loss, pay the amount to A. B.' 
 It is a contingent order or assignment of the money, should 
 the event happen upon which money will become due on the 
 contract. If the insurer assents to it, and the event happens, 
 such assignee may maintain an action in his own name, be- 
 cause, upon notice of the assignment, the insurer has agreed 
 to pay the assignee instead of the assignor.^ But the original 
 
 App. 151. See also Foster v. Eq. Mut. Ins. Co., 2 Gray (Mass ), 216. So if the 
 policy is payable to the mortgagee, and by its terms he assumes to pay the pre- 
 miums or assessments if the mortgagor does not. Francis v. Butler Fire Ins. 
 Co., 7 R. I. 159. [A policy to a mortgagee conditioned to be void for any 
 change in the title or possession, was assigned to one to whom tiie assured with- 
 out the company's knowledge had conveyed the property, the mortgage being 
 thereby satisfied. The company's agent, iiaving power to make agreements 
 and issue policies, agreed witli the purciiaser and assignee that the assigned pol- 
 icy should have the effect of a new one, and the company was held bound. Am- 
 azon Ins. Co. V. Wall, 31 Ohio St. 628 at 633. A consent to an assignment by an 
 oflScer authorized to make it is not a waiver of a condition, but an agreement. 
 Imperial Fire Ins. Co. v. Dunham, 117 Pa. St. 460, 472. But where the in- 
 sured, a mortgagor, alienated the property, thereby avoiding the policy, and 
 afterward the mortgagees entered for condition broken, and the company made 
 an indorsement, to the effect that " this policy shall attach and cover tlieir [the 
 mortgagees'] interest as such," it was held that the mortgagees could not sue 
 the company, for if the interest referred to in the indorsement was the same or 
 a part of the same interest previously insured to the mortgagor, and now sup- 
 posed to be transferred from the mortgagor to the mortgagees, the plaintiff 's 
 case must fail, because the breach of condition and entry had no such effect, 
 and because the mortgagor had no interest at all at the time of entry, and if 
 on the other hand the indorsement is to be taken as promising to insure the 
 mortgagees' interest generally, which Iiad been outstanding but uninsured up to 
 that date, it equally fails to give any riglits to the plaintiffs because without 
 consideration. Davis v. German- American Ins. Co., 135 Mass. 251, 254-255. A 
 voluntary assignment of a policy after the lease of the insured property has 
 expired does not oblige the company to pay the proceeds to the assignees. One 
 must have an interest or property at the time of insuring and at the time the 
 fire happens. Sadlers' Ins. Co. v. Babcock, 2 Atk. 554 at 555.] 
 
 1 Mowry v. Todd, 12 Mass. 281. [An attempted assignment, though not prop- 
 erly made to take effect as an assignment, may nevertheless take effect as a di- 
 rection to pay the money to the assignee as a beneficiary, where the assignment 
 was simultaneous with the issuing of the policy, and it is apparent that the origi- 
 nal intention was to make the policy so payable. Scott v. Dickson, 108 Pa. St. 6. 
 An assignment of a life policy delivered to the company and accepted and filed 
 by it with the understanding that the money was to be paid by it to the donee 
 named in the assignment, is valid. It is not necessary that delivery be made 
 
 838
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 378 A 
 
 contract remains; the assignment and assent to it form a new 
 and derivative contract out of the original. But the contract 
 remains as a contract of guaranty to the original assured ; he 
 must have an insurable interest in the property, and the prop- 
 erty must be his at the time of the loss. The assignee has no 
 insurable interest prima facie in the property burnt, and does 
 not recover as the party insured, but as the assignee of a party 
 who has an insurable interest, and a right to recover, which 
 right he has transferred to the assignee, with the consent of 
 the insurers." ^ 
 
 [378 A. Violation of Conditions by Assignor. — By a Sale of 
 the property and an assignment of the policy with the com- 
 pany's consent, a new contract arises which may be enforced 
 without regard to what occurred before the transfer if the 
 assignee is innocent of fraud.^ A past breach of condition by 
 the original poHcy-holder in respect to incumbrances cannot 
 be set up, even though the breach was unknown to the com- 
 pany at the time of assent.^ If the insured conveys his in- 
 terest and assigns the policy, and afterward makes repairs 
 without the company's consent as required, his act does not 
 prejudice the assignee.* In South Carolina, where N. held 
 goods on which K. had a general lien, and to protect this N. 
 deposited his policy in the hands of K. with the consent of 
 the company, it was held that K. had by the transaction an 
 equitable interest in the policy that would be recognized at 
 law in a suit brought in the name of N., and that the company 
 could not defeat the recovery for the benefit of K. by showing 
 that N. had forfeited his right of recovery by acts of fraud. 
 The company could not deprive K. of the security acquired 
 
 directly to the donee. It is enough if it is made to another for the donee, in 
 sucli manner as to divest the possession and title of the donor. Hurlbut v. Hurl- 
 but, 49 Hun, 189.] 
 
 1 See also Wilson v. Hill, 3 Met. (Mass.) 66; Carpenter v. Prov. Wash. Ins. 
 Co., 16 Pet. (U. S.) 495; Pratt v. New York Central Ins. Co, 64 Barb. (N. Y.) 
 589: Martin v. Franklin Fire Ins. Co., 9 Vroom (N. J.), 140; Cummings v. 
 Clieshire Ins. Co., 55 N. H. 45. 
 
 - [Continental Ins. Co. v. Munns, 120 Ind. 30.] 
 
 « [Ellis V. Insurance Co., .32 Fed. Rep. 646 (Iowa), 1887 ; Continental Ins. " 
 Co. V. Munns, 19 Ins. L. J. 57 (Ind.), September, 1889 ; 120 Ind. 30.] 
 
 * [Breckinridge v. America Cent. Ins. Co., 87 Mo. 62.] 
 
 839
 
 § 378 AJ INSURANCE : fire, life, accident, etc. [cH. XIX. 
 
 with its consent except for fault of his own.^ This is mani- 
 festly wrong, as noted by Mr. May without stating the facts. 
 The assignor held the interest assured, and was therefore the 
 real -assured whose acts must affect the policy. The assignee 
 held the policy as security. If the policy was good his secur- 
 ity was good; if the policy was avoided in any way his security 
 was gone. The company did not guarantee that the policy 
 would remain valid. But an assignee of a policy with con- 
 sent of the company who is not interested in the property, 
 does not become the insured, and remains liable to be defeated 
 by acts of the assignor.^ And it has been held that even 
 where the assignee has an interest in the pi'operty the com- 
 pany does not always give up its right to have the conditions 
 of the policy fulfilled. After a mortgagor has assigned the 
 policy to the mortgagee with assent of the company, if the 
 mortgagor sells the estate, the policy may be avoided.^ The 
 cases holding the contrary are distinguished by the court on 
 the ground that they contained facts amounting to a new con- 
 sideration moving from the assignee to the company, — such 
 facts as that the assignee gave consideration to the assured and 
 promised to pay all assessments, and that the property should 
 remain subject to the same lien as before, — while in this case 
 and in 6 Gray the assignee gave no consideration, and was 
 therefore affected by all subsequent breaches of the policy by 
 the assignor. And the company can make any defences 
 against an assignee with consent that existed against the 
 assignor at the time of the assignment. The assignee takes 
 no new contract free of the j^asf, but simply steps into the 
 shoos of the assignor, and for the future is substituted for 
 him.* If in violation of the policy an incumbrance is put on 
 the property, and afterward the policy is assigned with assent 
 of the company but without hnowledge on its part of the 
 incumbrance, it is the assignment of a void policy and the 
 assignee cannot recover.^] 
 
 1 [Charleston Ins., &c. Co. v. Neve, 2 McMul. (S. C.) 237, 248.] 
 
 2 [Kanady v. Gore Dist. Mut. Fire Ins. Co., 44 U. C. R. 261.] 
 
 3 [S wenson v. Sun F. Office, 68 Tex. 461; Hale i-. Ins.Co., 6 Gray, 169, approved.] 
 * [Reed v. Windsor County Mut. Fire Ins. Co., 54 Vt. 413.] 
 
 5 [Ellis V. State Ins. Co., G8 Iowa, 578.] 
 840
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 379 
 
 § 379. What is and what is not an Assignment of a Policy. 
 — Having recognized that certain acts may amount to what 
 has come to be treated as an assignment of the policy, the 
 courts have been called upon to consider the question what 
 constitutes an assignment of the policy within the meaning 
 of the condition which prohibits it without the assent of the 
 insurers, and under such condition will work a forfeiture. 
 And hereupon the cases are numerous. Not every assign- 
 ment which gives such rights as a court of law or equity 
 would feel bound to recognize and protect would amount to 
 an assignment which works a forfeiture. The rule in the for- 
 mer case would doubtless be one of liberality in favor of the 
 assignee, while in the latter it would be one of strictness 
 against the insurers.^ An alienation or transfer of the prop- 
 erty is not of itself an assignment of the policy, does not 
 carry the policy with it, nor is it necessary to the validity of 
 an assignment of the policy.^ Nor is an alienation of the 
 property after the loss made in execution of a contract en- 
 tered into before the loss, coupled with an agreement to 
 assign the policy ,3 nor a mortgage of a stock of goods in- 
 sured, coupled with an agreement to hold the policy for the 
 benefit of the mortgagee, an assignment of the policy within 
 the meaning of a condition that the policy is to be void if 
 assigned witliout the consent of the insurers ; ^ [nor an iyiten- 
 tion to transfer a' policy, however strong, if the proper steps 
 be not taken to accomplish it ;^] nor an unexecuted agreement 
 to assign, whether by parol ^ or in writing ; ' nor is a pledge 
 
 i Lazarus v. Com. Ins. Co., 5 Pick. (Mass.) 76. 
 
 2 Phillips V. Merrimack Mut. Fire Ins. Co., 10 Cush. (Mass.) 350; Stout v. 
 City Fire Ins. Co., 12 Iowa, 371. 
 
 3 Wheeling Ins. Co. v. Morrison, 11 Leigh (Va.), 354; Pierce v. Nashua Mut. 
 Fire Ins. Co., 50 N. H. 297. 
 
 * Prows I'. Ohio Valley Ins. Co., 2 Cincinnati Superior Court Reporter, 14 ; 
 [Sovereign Fire Ins. Co. v. Peters, 12 Can. Supr. Ct. 33] 
 
 & [Bound Brook Mutual Fire Insurance Ass. v. Nelson, 41 N. J. Eq. 485, 
 488.] 
 
 « Cromwell v. Brooklyn Fire Ins. Co., 39 Barb. (N. Y.) 227. 
 
 ■^ Smith V. Monmouth Mut. Fire Ins. Co., 50 Me. 96. If the policy be in- 
 dorsed, it seems that the assignment should also be. Crozier v. Phoenix Ins. 
 Co., 2 Hannay (N. B.), 200. 
 
 841
 
 § 379] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 of the policy as collateral security ; ^ nor is a general assign- 
 ment of all personal property for the benefit of creditors ;2 
 nor is a designation in the policy of a certain person not in- 
 terested in the property — a stranger — as payee in case of 
 loss, an assignment within the meaning of such a condition ; ^ 
 nor is an indorsement on the back of the policy to that effect 
 assented to by the insurers.* And where the policy is merely 
 made payable in case of loss to the mortgagee, this is no 
 assignment of the policy. Nor does it convert the policy into 
 a contract of insurance with the mortgagee ; and he is liable 
 to all the defences against the policy to which the applicant 
 would be. He is subject to all the conditions of the policy, 
 and takes the risks growing out of the acts or conduct of the 
 
 1 Ellis V. Kreutzinger, 27 Mo. 311 ; [Mahr v. Bartlett, 53 Hun, 388 ; True v. 
 Manhattan Fire Ins. Co., 26 Fed. Rep. 83 (Col.), 1885, unless the policy is 
 specially conditioned against such assignment ; Lynde ;;. Newark Ins. Co., 
 139 Mass. 57. A policy containing the clause " if this policy shall be assigned 
 before a loss without consent of the company indorsed thereon" it shall be 
 void, is affected only by an absolute transfer of the whole interest in the policy, 
 and not by a transfer by way of pledge or security for a special and temporary 
 purpose. Griffey v. New York Central Ins. Co., 30 Hun, 299 ; 100 N. Y. 417. A 
 provision in the policy that it is not assignable for purposes of collateral secu- 
 rity, applies only to assignments of the policy, and not to cases in which the 
 property insured is also transferred as security. Hoyt v. Hartford Fire Ins. 
 Co., 26 Hun, 416. In this case it was specially provided that on transfer of title 
 to the property with consent, the policy might be assigned.] 
 
 2 People V. Beigler, Hill & Denio (N. Y.), 133; Lazarus v. Cora. Ins. Co., 5 
 Pick. (Mass.) 76 ; post, § 386. [But contra. An assignment by a debtor of all 
 his property for the benefit of creditors carries a policy of fire insurance, and 
 if it is conditioned to be void by assignment without assent, such action is fatal 
 to it. Dube v. Fire Ins. Co., 64 N. H. 527.] 
 
 3 Frink v. Hampden Ins. Co., 45 Barb. (N. Y.) 384; Birdsey v. City Fire Ins. 
 Co., 26 Conn. 165. [Tlie indorsement on a policy, "Pay under the witliin policy 
 to A.B. or order, " signed by the assured, is not an assignment by virtue of which 
 any new party to the insurance is added, Minturn v. Manufacturers' Ins. Co., 10 
 Gray, 501 at 506 ; but only an order to pay to A.B. the amount of any loss. 
 When the assured indorsed on the policy " in case of loss pay to A.," to whom 
 he was indebted, and the policy was left with A. for collection with the under- 
 standing that he should deduct the assured's debt, the transaction was held not 
 to constitute an assignment that would avoid the polic}', but only the creation 
 of an agency for the collection of the policy in the absence of the assured, the 
 funds to be applied for his benefit. Russ v. Waldo Mut.Ins. Co., 52 Me. 187 at 
 191.] 
 
 * Fogg V. Middlesex Mut. Fire Ins. Co., 10 Cush. (Mass.) 337. 
 
 842
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 379 
 
 insured, even though by the terms of the policy loss is to be 
 paid to the assignee, as his interest may appear; and the 
 assent of the insurers does not operate to produce a new con- 
 tract between them and the assignee, but merely to save the 
 policy from forfeiture. The insurers are only bound to pay 
 to the mortgagee what may be found due the insured in case 
 of loss ; and if he have a policy originally invalid, or by his 
 conduct, by alienation or otherwise, has forfeited the right 
 to recover, there is nothing to be paid the mortgagee, even 
 though the assignment be consented to by the insurers.^ In 
 such cases, whether the transfer be to a stranger or to the 
 mortgagee, the assignment is a mere equitable transfer of the 
 right to receive any sum that may be due in the event of a 
 loss. But while such mortgagee is not an assignee, the 
 promise to pay to him in case of loss, though not an assign- 
 ment to work a forfeiture, is so far an assignment, and gives 
 to the mortgagee such rights under the policy, that, in the 
 absence of any special provision in the policy with reference 
 to arbitration in case of loss, the mortgagor and insurer can- 
 not conclude the mortgagee by a reference of the claim for 
 loss to arbitration .2 And if the mortgagee has agreed to pay 
 assessments if the mortgagor does not, the failure of the 
 
 1 Loring i'. Manufacturers' Ins. Co., 8 Gray (Mass.), 28 ; Home Mut. Ins. Co. 
 V. Hauslein, Sup. Ct. (111.), 1 Ins. L. J. 818; Grosvenor v. Atlantic Fire Ins. Co., 
 17 N. Y. 391 ; overruling on tliis point s. c. 1 Bosw. (N. Y. Superior Ct.) 469, 
 and 5 Duer (N. Y. Superior Ct), 517 ; Traders' Ins. Co. v. Kobert, 9 Wend. 
 (N. Y.) 404; Tillou v. Kingston Mut. Fire Ins. Co., 1 Seld. (N. Y.) 405, s. c. 7 
 Barb. (N. Y.) 570, and Viall v. Genesee, &c. Ins. Co., 19 Barb. (N. Y.) 440; 
 McCluskey v. Providence Ins. Co., 126 Mass. 306; Baldwin v. Phoenix Ins. Co. 
 (N. H.), 10 Ins. L.J. 84: Fitchburg Savings Bank ?;. Amazon Ins. Co., 125 
 Mass. 431; Bates v. Equitable Ins. Co., 10 Wall. (U. S.) 33; Brunswick Sav. 
 Inst. V. Commercial, &c. Ins. Co., 68 Me. 313 ; Franklin Sav. Inst. v. Central 
 Ins. Co., 119 Mass. 240 ; post, § 447 ; Continental Ins. Co. v. Hulman, 92 111. 145 ; 
 Martin v. Franklin Fire Ins. Co., 9 Vroom (N. J.), 140; Griswold v. Am. Cen- 
 tral Ins. Co., 1 Mo. App. 97 ; s. c. affirmed, 9 Ins. L. J. 254 ; Illinois Ins. Co. v. 
 Fix, 53 111. 151; Humphrey v. Hartford Fire Ins. Co., U. S. Dist. Ct., North 
 Dist. N. Y., Blatchford, J., 9 Reptr. 106 ; Livingstone v. Western Ins. Co., 16 
 Gr. Ch. 9. reversing s. c. 14 id. 4-37 ; post, § 382; Sias v. Roger Williams Ins. Co., 
 C. Ct. (N. H.), 9 Ins. L.J. 154. 
 
 2 Brown v. Hartford Ins. Co., 5 R. I. 394 ; Brown i\ Roger Williams Ins. Co., 
 id.; otherwise, perhaps, if the assignee have no interest. Miall v. Western Ins. 
 Co., 19 U. C. (C. P.) 270. 
 
 843
 
 § 379] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 mortgagor to pay will not work a forfeiture.^ So where a 
 policy with the insurer's consent has been assigned to a 
 mortgagee.^ Though there are respectable authorities that 
 the assignee under such circumstances is no longer respon- 
 sible for the defaults of the assignor, and has greater rights 
 than he,^yet these cases rest upon the authority of The 
 Traders' Insurance Company v. Robert, and the other New 
 York cases following that, all of which, as we have just seen, 
 have been overruled.* And it has even been held that this 
 would be the case where the insurers were notified of the in- 
 tention of the insured to assign at the time when the policy 
 was issued, to which they assented, "but no assignment was 
 actually made till after a loss.^ But this case stands alone, 
 and rests upon the same overruled New York cases, and can- 
 not be law. Nor is a transfer of an undivided interest in the 
 property insured to a third party, as by taking in a partner, 
 coupled with the written consent of the insurers that the 
 policy shall remain good to the insured and to the alienee, 
 and an entry by the insurers in their books recognizing such 
 
 1 Francis v. Butler Mut. Fire Ins. Co., 7 R. I. 159. And see ante, § 276. 
 
 2 State Mut. Fire Ins. Co. v. Roberts, 31 Pa. St. 438; Edes v. Hamilton Mut. 
 Ins. Co., 3 Allen (Mass.), 302: Buffalo Steam-Engine Works v. Sun Mut. Ins. 
 Co., 17 N. Y. 401 ; Lawrence v. Holyoke Ins. Co., 11 Allen (Mass.), 387 ; Pupke 
 V. Resolute Fire Ins. Co., 17 Wis. 378; Hoxsie v. Prov. Mut. Ins. Co., 6 R. I. 
 517. And see post, § 382. 
 
 3 Pollard V. Somerset Mut. Fire Ins. Co., 42 Me. 221 ; New England Fire & 
 Mar. Ins. Co. v. Wetmore, 32 111. 221 ; City Fire Ins. Co. of Hartford v. Mark, 
 4-5 id. 482; Brush r. ^tna Ins. Co., 1 Oldright (Nova Scotia), 458 ; Black v. 
 National Ins. Co., 24 L. C. Jur. 65 (Q. B.), where the point is very elaborately 
 considered, and the doctrine, opposed to the view stated in the text, is main- 
 tained, that by making the loss payable to a third person, that person becomes 
 the party insured to the amount of his interest. Such, indeed, seems to be the 
 French law. The case is an instructive one. See also ante, § 294. 
 
 4 See also State Mut. Fire Ins. Co. v. Roberts, 31 Pa. St. 438. The case of 
 Traders' Ins. Co. v. Robert was twice afterwards before the court, 9 Wend. 474, 
 and 17 Wend. 631, involving the question of the right of the insured, the as- 
 signee and mortgagee having been paid by foreclosure, to proceed against the 
 insurers, and recover liis loss, which lie was finally permitted to do. All the 
 cases are bad law, though having once held tliat the mortgagee might recover, 
 it was right that, he having been paid by the mortgagor, the latter should be 
 allowed to recover of the company. Neither, however, should have been al- 
 lowed to recover. See 6 Bush (Ky.), 268. 
 
 5 Charleston Ins. & Trust Co. v. Neve, 2 McMuUan (S. C), 237. 
 
 844
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 380 
 
 alienee as a member of the company, an assignment of the 
 policy within the meaning of a provision that the alienee of 
 the property insured, having the policy assigned and ratified 
 to him by the company, should be entitled to all the rights 
 and privileges of the original insured, so as to enable the 
 alienee to sue in his own name.^ 
 
 § 380. Assignment in -whole or in part. — - An assignment of 
 a policy as collateral security avoids a policy which stipulates 
 against an assignment in whole, or of any interest in it, under 
 penalty of forfeiture. The suggestion sometimes made that 
 as such an assignment cannot injure the insurers, it cannot be 
 supposed that the insurers meant to prohibit under such a pro- 
 vision, is not sound. It may injure him in two ways. In the 
 first place, incumbrances are objectionable, and are usually 
 inquired after ; for, as they increase, the interest of the owner 
 of the property in its preservation diminishes. True, if hon- 
 est, he is interested in the payment of his debts. But this is 
 a different interest from that which a man feels in the preser- 
 vation of the property, — the interest in which insurers are 
 more particularly concerned, — which he can continue to 
 enjoy, and which belongs to him and not to his creditors. 
 Most men will look more vigilantly to the preservation of 
 property which, if saved, they can enjoy, than to the pres- 
 ervation of that which, if destroyed, will merely reduce their 
 ability to pay their debts. If the privilege of transferring 
 the policy as collateral security for goods purchased, or money 
 borrowed, tends to the increase of incumbrances, the com- 
 pany has a motive to prohibit it. That it does so tend is mat- 
 ter of common experience. A mortgage covering the value 
 of the property, accompanied by a transfer of the policy, is 
 worth just as much more in consequence of such transfer 
 as the value of the policy itself. But in another and more im- 
 portant manner does such a transfer injure the insurer. It 
 may create an interest directly hostile to him. If the assignee 
 be a second or third incumbrancer, his interest may be for the 
 destruction of the property. The owner cannot be insured to 
 the entire value, nor a stranger to it to any amount whatever ; 
 
 1 See ante, §§ 279-280. 
 
 845
 
 § 381] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 since in neither case would there be any interest to preserve, 
 and, in the last case, no interest but to destroy. But this 
 interest of a stranger to destroy may be the same as that of 
 such incumbrancer. If the buildings are preserved, the lien 
 before his will take their value ; if destroyed, he will get it ; 
 and the circumstances may be such that he will get nothing 
 else, as when the preceding liens cover the entire value of the 
 property. But suppose the property be on account of indebt- 
 edness without lien. Then the only way in which it can be 
 of any value is through the destruction of the property.^ 
 
 § 381. Assignment; Transfer of Interest. — No transfer of 
 interest will work a forfeiture under the clause contained in a 
 policy forbidding a transfer of " the interest of the assured in 
 the policy, or in the property insured " thereby, without the 
 written consent of the company, which does not so deprive 
 the assignor of all insurable interest as to prevent his recov- 
 ery on the policy for his benefit if that clause were not con- 
 tained in it. To take away the cause of action in one case, 
 and to render void the policy in the other, equally require a 
 transfer or termination of the entire insurable interest. So 
 long as the insured retains such an interest, that he may 
 suffer loss, the policy protects that interest.^ Where the 
 transfer of the entire interest of the insured in the policy, or 
 in the property insured, is forbidden, under penalty of for- 
 feiture, without the consent of the company, if there be a sale 
 of the property insured, but without assignment of the policy 
 to the purchaser, in that case the vitality, or rather activity, 
 of the policy as the means of securing an indemnity becomes 
 suspended ; not from any vice in the policy, but for want of 
 any subject-matter to which it may attach. If a fire occurs 
 during the period of suspension, no recovery can be had under 
 the policy ; not because it has become void, but because at the 
 time of the fire the insured has no property covered by it, 
 
 1 Ferree v. Oxford Fire Ins. Co., 8 Pliila. Eep. 512. 
 
 2 Shearman v. Niagara Fire Ins. Co., 2 Sweeny (N. Y. Superior Ct.), 470, 474; 
 Fernandez!.'. Great West. Ins. Co., 3 Rob. (N. Y. Superior Ct.) 458 ; Van Deuzen 
 V. Charter Oak Ins. Co., 1 id. 55; Phelps v. Gebhard Fire Ins. Co., 9 Bosw. (N.Y. 
 Superior Ct.) 405. 
 
 846
 
 CH. XIX.] ASSIGNMENT OP THE POLICY. [§ 381 a 
 
 and the purchaser has no policy to cover his interest. The 
 moment, however, the interests become united by the union 
 of the ownership of the property and the interest in the pol- 
 icy in the same person, the policy reattaches to tlic goods, 
 and becomes valid and effectual to protect the property to 
 which it so reattaches.^ And where the assignment of the 
 policy, with the consent of the insurers, is absolute to one 
 who has become the entire owner of the subject of insurance, 
 it becomes a new contract of insurance between the under- 
 writers and the assignee. If the assignment, taken in con- 
 nection with the policy, plainly transfers the assured's whole 
 interest, the underwriter's consent to it is evidently equiva- 
 lent to tlie agreement to become directly answerable to the 
 assignee. In such cases tlie proceedings to enforce payment 
 may be in the assignee's name ; and he becomes to all intents 
 and purposes the substituted party to the contract.''^ 
 
 § 381 a. Assignment ; "Interest of the Assured in the Pol- 
 icy." — In a case wliere it is provided that the " interest of the 
 assured in the policy " should not be assignable, without con- 
 sent, and in case of the transfer or termination of the interest 
 of the insured without consent the policy should be void, it was 
 held that the latter interest spoken of is the same as the first, 
 and that an assignment of the policy was an assignment of that 
 interest, was itself null and void, and avoided tlie policy also.^ 
 But about the same time, and doubtless without having seen 
 the case from New York, Mr. Justice Story, in giving the 
 opinion of the court in Carpenter v. Providence Washington 
 Insurance Company,* said that the interest last spoken of was 
 
 1 Hitchcock V. North Western Ins. Co., 26 N. Y. 68; anie, § 101. 
 
 2 Shearman v. Niagara, &c., supra. Tlie court rely upon Hooper v. Hudson 
 River Fire Ins. Co., 17 N. Y. 424 ; Wolfe v. Security Fire Ins. Co., 39 N. Y. 49, 
 51, both of which were cases of insurance upon stocks of goods kept for sale, 
 and constantly undergoing a change. But the court thought the same rule 
 ought to apply to the insurance of a house. City Fire Ins. Co. v. Mark, 45 111. 
 482, was another similar case, which is certainly shaken by Illinois Ins. Co. v. 
 Fix, 5.3 id. 151. 
 
 3 Smith V. Saratoga County Mut. Fire Ins. Co., 1 Hill, 497; s. c. affirmed, 
 3 Hill (N. Y.), 508. 
 
 * ]6 Pet. 495. This latter opinion is clearly the better law. " Transfer and 
 terminate " is language appropriate to a change in the status of property. At 
 
 VOL. II. — 10 847
 
 § 382] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 " manifestly the interest of the owner in the premises insured, 
 and not merely the interest in the policy." 
 
 § 382. Assignment by Consent ; Assignment with Assent ; 
 Legal Effect. — The purpose for which an assent to the as- 
 signment is required is, as we hare seen,^ that the insurers 
 may have an opportunity to know who is to become inter- 
 ested in the policy, and so more or less in the destruction or 
 preservation of the property insured, — the character of the 
 person so interested being oftentimes an important element 
 in the estimation of the risk. It is no part of its purpose to 
 enlarge the engagements of the insurers, nor to waive the 
 conditions on the performance of which their liability depends. 
 It is not to give new privileges to the insured, which with- 
 out it he would not have, but it is solely for their protection. 
 The assignment docs not change the contract. It simply 
 converts one of the parties into a trustee for a third person, 
 and every condition upon which the liability to pay is made 
 to depend remains as before. Were it not so it would not be 
 an assignment, but a new contract.^ The legal effect of an 
 assignment to a stranger with the consent of the insurers, 
 by a mortgage, to whom the policy, issued upon the prop- 
 erty of the mortgagor, is made payable in case of loss of all 
 his interest in the policy, is not to assign the policy, but 
 merely to hold the insurers to the payment to the assignee in 
 
 all events, the doubt should have saved the plaintiff in the New York case. 
 Ante, § 143. In Home Insurance Company v. Lindscy, 26 Oliio St. 348, where 
 the policy provided that " if any change take place in the title," ..." or in 
 case any incumbrance shall fall " on the property insured ; ..." or if this pol- 
 icy shall be assigned . . . without the consent "of the company no recovery 
 could be had, and it further provided that upon certain conditions consent to 
 the assignment would be given, it was held that this consent to the assignment, 
 although the conditions upon which it was to be consented to were complied 
 with, could only be required where consent had been given to the change of 
 title. But the punctuation, given correctly above, would seem to leave it at 
 least doubtful if "consent" in the third clause has any relation to " change of 
 title " in the first. 
 
 1 Ante §§ 377, 380. 
 
 2 State Mut. Fire Ins. Co. v. Roberts, 31 Pa. St. 4.38 ; Buckley r. Garratt etal, 
 47 id. 204; Chishom v. Prov. Ins. Co., 20 U, C. (C. P.) U. In Canada the law 
 upon the point is entirely unsettled. Black v. National Ins. Co. (Q. B. Mon- 
 treal), 3 Legal News, 29. 
 
 848
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 383 
 
 case of loss, whatever the person originally insured by the 
 policy may be entitled to receive. It is only a contingent 
 order or assignment of what may become due under the con- 
 tract, and not an absolute transfer by virtue of which the 
 assignee acquires the full rights of an assignee of a chose in 
 action. The original contract with the mortgagor still sub- 
 sists, and it is his interest which is insured. The assignee 
 must claim in his right, and not in his own. It is only what 
 the mortgagor may have a right to receive under the contract 
 that the assignee can in any event claim. If, therefore, the 
 mortgagee, before the loss happens, violates a provision of the 
 policy, whereby he forfeits the right to recover, his assignee is 
 equally barred of his remedy .^ 
 
 § 383. Assignment ; "What is an Assent; Notice, — The as- 
 sent to an assignment of the policy by the secretary of the 
 insurers is sufficient, unless prohibited by the charter or by- 
 laws. He will be presumed to be acting within the scope of 
 his authority in so doing; and this is true, although by the 
 charter policies must be signed by the president.^ So, where 
 the assent and approval of the directors is requisite to the 
 validity of the assignment of a policy, and it is brought to 
 their knowledge that the secretary has assented to such as- 
 signment, by an entry of the fact in the company's books and 
 an indorsement upon the policy, this will be a sufficient as- 
 sent and approval on the part of the directors, and a formal 
 vote is not necessary .^ The habit of the president or secre- 
 tary giving such assent, known to the directors, and not 
 objected to by them, is equivalent to an express vote.^ In- 
 deed, that any particular officer of the company has been in 
 the habit, known to the directors, of attending to any par- 
 ticular branch of the business, or of doing any particular class 
 or kind of acts in the management of the business, is enough 
 to give the acts validity, as done with the assent and approval 
 
 1 Hale V. Mechanics' Mut. Fire Ins. Co., 6 Gray (Mass.), 169 ; ante, § 379. 
 
 2 New England Mar. Ins. Co. v. De Wolf, 8 Pick. (Mass.) 56; Buchanan v. 
 Exchange Fire Ins. Co., 61 N. Y. 26. 
 
 3 Durar v. Hudson County Mut. Ins. Co., 4 Zabr. (N. J.) 171. 
 * Phillips V. Merrimack Mut. Fire Ins. Co., 10 Cush. 350. 
 
 849
 
 § 384] INSURANCE : FIRE, LIFE, ACCIDENT, ETC, [CH. XIX. 
 
 of the directors, there being no stipulation or rule known to 
 the party who sets np the validity of the act that such assent 
 must be in writing ; ^ and an agent of the insurers may bind 
 the company by a verbal assurance that the policy will re- 
 main good after transfer of title till a certificate of consent 
 to an assignment of the policy can be obtained from the com- 
 pany, though the transfer without consent in writing avoids 
 the policy.^ So, if the secretary informs the insured that he 
 need not forward his policy for indorsement.^ And consent 
 to an assignment to a vendee, after forfeiture for non-payment 
 of assessments of which he was ignorant, is a waiver of the 
 forfeiture.* 
 
 § 384. Assent ; Waiver. — A designation in the policy of 
 the payee has been held to be the equivalent of an assent, 
 required to be by indorsement on the policy, to an assign- 
 ment so as to prevent a forfeiture on account of a subsequent 
 assignment ; ^ and such a designation written across the face 
 of the policy is the equivalent of an assignment, or rather 
 renders an assignment and notice unnecessary in order to 
 keep alive the policy after forfeiture by alienation.*^ And 
 insurance of partnership property is an assent to all such 
 changes in the relation of the individuals of the firm to the 
 property, whether by death or dissolution, as by law follow 
 such events." And in some cases, it has been held that the 
 issuing a policy payable to a third person is tantamount to an 
 assent in advance to the assignment ; ^ and so, also, that the 
 indorsement of the same provision has the same effect.^ 
 "Where the insured held an intermediary receipt, and gave 
 
 1 Topping 7'. Eickford, 4 Allen (Mass.), 120. 
 
 2 Illinois Mut. Fire Ins. Co. v. Stanton, 57 111. 354 ; Parsons v. Standard Ins. 
 Co., 8up. Ct. 16 Can. L. J. 271. See also ante, §§ 369, 370. 
 
 3 StoUe V. Mtna. Ins. Co., 10 W. Va. 546. 
 
 4 Hale V. Union Mut. Fire Ins. Co., 32 N. H. 295. 
 
 5 National Fire Ins. Co. v. Crane, 16 Md. 260. 
 ® Keeler v. Niagara Fire Ins. Co., 16 Wis. 523. 
 
 ■? Wilson I'. Genesee County Mut. Ins. Co., 16 Barb. (N. Y.) 511. 
 
 8 Brown v. Roger Williams Ins. Co., 5 R. I. 394 ; Bidwell v. St. Louis Float- 
 ing Dock Ins. Co., 40 Mo. 42. 
 
 9 National Fire Ins. Co. v. Crane, 16 Md. 260 ; Franklin v. National Ins. Co., 
 43 Mo. 401. 
 
 850
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 385 
 
 verbal notice before he renewed his policy to the agent of 
 the company that he had assigned the property insured for 
 the benefit of his creditors, this was held sufficient, though the 
 policy afterwards issued made it requisite that such assign- 
 ment of property should be consented to in writing.^ If the 
 consent be required before the assignment, subsequent consent 
 waives the forfeiture.^ 
 
 But an assent to an assignment after forfeiture because of 
 alienation does not restore a policy originally void on other 
 grounds. The authority conferred by the by-laws of a mu- 
 tual insurance company upon the directors to ratify and con- 
 firm assignments in cases of the sale or alienation of the 
 property insured applies only to policies which are made void 
 by such alienation, and not to such as were originally void ; 
 and the assent, therefore, to the assignment of a policy origi- 
 nally void, after an alienation and for the purpose of ratify- 
 ing it, does not cure the original infirmity in the policy .^ It 
 has also been held that where the bj^-laws require that the 
 assignment of the policy shall be made within thirty days, an 
 assent afterwards by the agent, without any substantial new 
 consideration, is ineffectual to restore the policy.* 
 
 § 385. Assignment ; Consent in "Writing ; Fraud. — If the as- 
 sent to an assigument be procured by fraud, it is, like all other 
 contracts thus procured, voidable, and may be repudiated. 
 But if, after knowledge of the fraud, it is treated by the in- 
 surer as a valid assignment, as by demanding and receiving 
 assessments for losses and expenses subsequent to the fraud 
 from the assignee, this will waive the fraud ; but a failure to 
 state the interest of the assignee, certainly if not asked, is no 
 fraud.5 If the assent to the assignment is, by the terms of 
 the policy, to be in writing, it must be strictly complied with, 
 
 1 Parsons v. Standard Fire Ins. Co. (Can. Sup. Ct.), 16 Can. L. J. 271 (1880). 
 See also Hatton v. Beacon Ins. Co., 16 U. C. (Q B.) 316. 
 
 2 Shearman v. Niagara Ins. Co., 46 N. Y. 526. 
 
 3 Eastman v. Carrol County Mut. Fire Ins. Co., 45 Me. 307 ; ".Citizens' Fire 
 Ins. Co. V. Doll, 35 Md. 89. But see City Fire Ins. Co. v. Mark, 45 111. 482. 
 
 ■* American Ins. Co. d. Gallagher, 50 Ind. 209. 
 
 5 Cumberland Valley Mut. Prot. Ins. Co. v. Mitchell, 48 Pa. St. 374. And 
 see ])ost, cliapter on Waiver and EstoppeL 
 
 851
 
 § 385 A] INSURANCE : fire, life, accident, etc. [cH. XIX. 
 
 unless there be a waiver ; and knowledge that an assignment 
 is contemplated by the assured, the mortgagor, to the mort- 
 gagee, witliout objection, is no consent. The only fair infer- 
 ence from such facts is a tacit agreement that the company 
 would consent when the mortgagee had put himself in a posi- 
 tion to ask it.i If its validity be dependent upon depositing 
 a note with the secretary or agent, to be approved by the 
 directors, leaving the note with the agent, who neglects to 
 notify the company, is not a compliance with the conditions ; ^ 
 and if the charter requires that the assignment be recorded 
 and certified on the policy, it has been held to be essential to 
 its validity that these requirements be complied with.^ But 
 this is very strict law ; and it may be doubted if, when the 
 insured has done all in his power to comply with the condi- 
 tions, and the agent is negligent, the company is not liable.* 
 If the policy require notice of the assignment to the secretary 
 in writing, and the indorsement thereof on the policy or other 
 written acknowledgment by him, the assignment written on 
 the policy, and underneath it the name of the agent, " for 
 secretary," will suffice, if such has been the practice of the 
 agent, known to the company.^ And if the local agent of 
 the company draws up the assignment, and the general agent 
 assents to it in writing, it is an assent by the company, both 
 to the assignment, and to the accompanying transfer of 
 property.^ 
 
 [§ 385 A. Consent in "Writing ; Indorsement. — An assign- 
 ment by writing on the policy attested by the agent is a suffi- 
 cient compliance with the provision as to written consent of 
 the company.' An assent to an assignment by the president 
 
 1 Smith V. Saratoga County Mut. Ins. Co., 3 Hill (N. Y.), 508. 
 
 2 Foggi;. Middlesex Mut. Ins. Co., 10 Cusli. (Mass.) 337. 
 
 * Bayles v. Insurance Co., 3 Dutch. (N. J.) 16.3. 
 
 * See ante, § 370 ; post, § 387 ; Batclielor v. People's Ins. Co., 40 Conn. 50. 
 The insurer cannot set up its own negligence to do that which it alone can do, 
 and has no reasonable excuse for not doing, as a defence against liability. Far- 
 mers' Ins. Co. V. Wenger (Pa.), 8 Ins. L. J. 712. 
 
 6 Farmers' Mut. Fire Ins. Co. v. Taylor, 73 Pa. St. 342. 
 6 Hazzard v. Canada Agr. Ins. Co., 30 U. C. (Q. B.) 419. 
 ' [New Orleans Ins. Ass. v. Holberg, 64 Miss. 51.] 
 
 852
 
 CH. XIX.] ASSIGNMENT OP THE POLICY. [§ 385 A 
 
 of the company, on a piece of paper attached by a wafer to 
 the policy is sufficient for an " indorsement on the policy." ^ 
 Where the property was assigned March 4, the policy renewed 
 March 21, and, April 15, was transferred to the assignee of 
 the property with the company's consent, it was claimed that 
 the assignment of the property, hoing jjrior to the company's 
 consent, vitiated the policy, and the subsequent transactions 
 could not revive it, being once dead. The court held, however, 
 that the policy had not become void beyond revival, as it 
 would in case it were illegal or against public policy, and 
 that the recognition of it by the company gave it new life.^ 
 But where A. purchased some insured property of B., took 
 an assignment of the policy, and went to the agent to get it 
 indorsed as required. The agent promised to do so if the 
 grantee would bring the policy. This was not done until 
 after fire. It was held that the verbal promise could not be 
 enforced. There is no waiver, no lulling of the assignee into 
 security, and the condition of the policy against alienation 
 without indorsement applies.^ A condition in a policy issued 
 by a mutual company established for the protection of the 
 members, their families and heirs, that it shall not be as- 
 signed without written assent of the company, is valid ; and 
 even receipt of assessments from the assignee after death of 
 the insured will not constitute a waiver of the condition. 
 The assessments might properly be paid by any one as a vol- 
 unteer.* A policy issued to G. provided that it should be void 
 if assigned for collateral security. For that purpose it must 
 be made payable to the new party by indorsement on its face. 
 There was an assent by the agent of the company " that the 
 interest of G. in the within policy ... be assigned to A.," and 
 an assignment by G, of " all his title and interest in the policy " 
 to A. This assignment was in fact for collateral security ; 
 but the agent did not know this, or give A. any reason to sup- 
 pose he knew it, and he had no authority to assent to an assign- 
 
 1 [Penn Ins. Co. v. Bowman, 44 Pa. St. 80 at 91.] 
 
 2 [Shearman v. Niagara Fire Ins. Co., 46 N. Y. 526.] 
 
 3 [Equitable Ins. Co. v. Cooper, 60 111. 509 at 510.] 
 
 * [National Mut. Aid Soc. v. Lupoid, 101 Pa. St. 111.] 
 
 853
 
 § 386] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 ment of that kind. It was held that A. could not maintain 
 an action on the policy.^] 
 
 § 386. Assignment after Loss; Bankruptcy. — But this inhi- 
 bition of an assignment witliout consent applies only to an 
 assignment before the loss. An assignment after the loss is 
 not the assignment of the policy, but the assignment of a 
 claim or debt, a cliose in action, which is always assignable 
 in equity, — subject, of course, to all equities and claims in set- 
 off that would be enforceable against the assignor.^ [And an 
 assignee after loss stands in the shoes of the assignor as to 
 violations of the conditions of the policy by the assignor.^ 
 An order on the company after loss by the assured for the 
 whole amount 'of the policy is an assignment, and is valid 
 without an acceptance.^ An assignment after loss does not 
 violate the clause in the policy forbidding a transfer,^ 
 even if the clause reads " before or after loss." The 
 reason of the restriction is that the company might be 
 willing to write a risk for one person of known habits and 
 character, and not for another person of less integrity and 
 prudence, but after loss this reason no longer exists.*^ Nor is 
 such an assignment within the condition requiring consent 
 of the company.' Specific performance of an assignment 
 
 1 [Lynde r. Newark Ins. Co., \"'d Mass. 57.] 
 
 2 Brichta v. New York Lafayette Ins. Co., 2 Hall (N. Y. Superior Ct.), 372; 
 Perry v. Merchants' Ins. Co., 25 Ala. 355; Mellen v. Hamilton Fire Ins. Co., 5 
 Duer (N. Y. Superior Ct.), 101; s. c. 17 N. Y. 609; Hughes v. Mut. Fire Ins. 
 Co. of Newcastle, 9 U. C. (Q. B.) 387 ; Wilson v. Hill, 3 Met. (Mass ) GO; Sad- 
 ler's Co. V. Badcock, 2 Atk. 554 ; Courtney v. New York City Ins. Co., 28 Barb. 
 116 ; Carter r. Humboldt Fire Ins. Co., 12 Iowa, 278 ; Carroll v. Charter Oak Ins. 
 Co., 38 Barb. (N. Y.) 402; s. c 40 id. 202; Green v. Kepublic Ins. Co. (N. Y.), 
 10 Ins. L. J. 422 ; Archer v. Merchants' & Manufacturers' Ins. Co., 43 Mo. 434 ; 
 Docge V. Northwestern Ins. Co., 49 Wis. 501. So in case of reinsurance. Real 
 Estate Ins. Co. v. Cashow, 41 Md. 59; Combs v. Shrewsbury Ins. Co. (N. J.), 
 23 Alb. L. J. 98; [Rousset v. Insurance Co. of N. A., 1 Binn. 429 at 435; Gour- 
 don V. Insurance Co. of N. A., 3 Yeates, .327 at 334] 
 
 3 [Bonenfant v. Insurance Co., 76 Mich. 654.] 
 
 * [Hall V. Dorchester Ins. Co., Ill IMass. 53 at 54.] 
 
 6 [Mellen v. Hamilton Ins. Co., 17 N. Y. 609 at 615.] 
 
 <5 [Rc-nnebaker v. Tomlinson, 1 Tenn. Ch. 598 at 601 ; Nease v. iEtna Ins. 
 Co., 18 Ins. L. J. 541 (W. Va.). March, 1889.] 
 
 7 [Imperial Fire Ins. Co. v. Dunham, 117 Pa. St. 4G0, 473.] 
 
 854
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 387 
 
 after loss will be decreed in spite of a prohibition in the policy. 
 Such a prohibition is illegal.^ In Michigan the right of assign- 
 ment of a policy after loss is secured by statute,^ and no con- 
 dition in the policy providing for forfeiture by assignment 
 without consent can apply to prevent assignment after loss. 
 After loss an assignment of the right of action is good with- 
 out record or delivery of the policy as against a subsequent 
 garnishment.^] And a prohibition of an assignment after the 
 loss is invalid, and void as contrary to law.* An assign- 
 ment before loss, as collateral, will indeed give the assignee, 
 though he have no interest in the insured property, an equit- 
 able lien upon the proceeds as against the assignor, without 
 regard to the consent of the insured.^ Nor is a general as- 
 signment in bankruptcy a violation of the condition.^ 
 
 If the loss, however, be only partial, and the policy still 
 further protects, the prudent course will be to assign only the 
 claim for loss ; and perhaps out of abundant caution this 
 would be the better course in case of total loss." 
 
 § 387. Assignment ; Limitation as to Time ; Consent arbitra- 
 rily withheld. — Boynton v. Farmers' Mutual Insurance Com- 
 pany was a case where the policy provided that upon 
 alienation of the property the policy should be void, but that 
 the alienee having the policy assigned might have the same 
 ratified and confirmed to him upon application to the direc- 
 tors and with their consent, within thirty days next after the 
 
 1 [Spare v. Home Mut. Ins. Co., 17 Fed. Rep. 568, 9th Cir. (Or.) 1883, 12 
 Ins. L. J. 864.] 
 
 2 [Roger Williams Ins. Co. v. Carrington, 43 Mich. 252 at 254.] 
 
 3 [Aultman v. McConnell, 34 Fed. Rep. 724 (Iowa), 1888.] 
 
 4 Goit V. Nat. Prot. Ins. Co., 25 Barh. (N. Y.) 189; West Branch Ins. Co. v. 
 Helfenstein, 40 Pa. St. 289 ; Carroll i'. Charter Oak Ins. Co., 38 Barb. (N. Y.) 
 402. Contra, Dey v. Poughkeepsie Mut. Ins. Co., 23 Barb. (N. Y.) 623. 
 
 5 Bibend v. Liverpool, &c. Ins. Co., .>0 Cal. 78 ; Cromwell v. Brooklyn Fire 
 Ins. Co., 44 N. Y. 42; Prows v. Ohio, &c. Ins. Co. (Sup. Ct. Cincinnati), 4 Ins. 
 L. J. 6-39. [If tlie assured assigns his interest in insured goods before loss, he 
 cannot sue upon the policy except as trustee for the assignee, if the policy per- 
 mits. Powles V. Innes, 11 M. & W. 10 at 13.] 
 
 6 Fayette Co. Ins. Co. v. Neel (Pa. St.), 8 Ins. L. J. 265; ante, § 379; Apple- 
 ton Iron Co. V. British Am. Ass. Co., 46 Wis. 23 ; Starkweather v. Cleveland Ins. 
 Co., 2 Abb. (U. S.) 67. 
 
 ' Kerr v. Hastings Mut. Fire Ins. Co., 41 U. C. (Q. B.) 217. 
 
 855
 
 § 388] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 alienation, upon certain terms. After alienation and assign- 
 ment and loss, but within the thirty days, the assignee pre- 
 sented the assignment for ratification, and offered to comply 
 with the usual terms, and it was held on a bill in equity that 
 the company could not arbitrarily and without cause refuse, 
 and a decree was entered in favor of the assignee for the same 
 amount as the grantor could have recovered if there had been 
 no alienation.^ We have before seen that where a contract has 
 been made between the applicant for insurance and the agent 
 of the insurers, subject to the approval of his principal, that 
 approval cannot be withheld without reason.^ Application to 
 an insurance company for its consent to the assignment of the 
 policy is tantamount to notice by the applicant of the acqui- 
 sition, contemplated or actual, by him of an interest in the 
 property insured, as without that the assignment would be 
 valueless.^ 
 
 § 388. Life Policy ; Assignment. — The reasons which lead 
 to caution as to the assignment of policies in fire insurance^ 
 do not exist to the same extent in life insurance. There may 
 indeed be cases where they would apply, but they occur so 
 seldom that generally, almost universally, the claims arising 
 out of life policies are recognized as assignable either abso- 
 lutely or by way of security, without the assent of the insur- 
 ers. Even notice is not always required ; and, when required, 
 is only necessary to protect the company from the possibility 
 of being obliged to pay botli the assignee and the legal repre- 
 sentatives. Indeed, in the case of a policy for life, the pay- 
 ment cannot be made to the insured ; and in fire, also, the 
 policy runs to the legal representatives and assigns. Much of 
 the usefulness of life insurance depends upon the mobility of 
 
 1 43 Vt. 256. See also ante, §§ 57, 135; Durar v. Hudson Co., &c. Ins. Co., 4 
 Zab. (N. J.) 171 ; Wakefield v. Orient Ins. Co. (Wis.), 10 Ins. L. J. 250; West- 
 lake V. St. Lawrence, &c. Ins. Co., 14 Barb. (N. Y.) 206. But see Girard Fire 
 Ins. Co. I'. Hebard (Pa.), 10 Ins. L. J. 425, where it is said that the assignment 
 without consent works a forfeiture, and the policy is no longer of avail, whether 
 the insurers declared the forfeiture or not, unless they do some act to revive it. 
 
 2 Ante, §§ 57, 370. And see also Illinois Mut. Ins. Co. v. Stanton, 57 111. 354. 
 
 3 Hooper v. Hudson River Fire Ins. Co., 3 Smith (N. Y.), 424. 
 * Ante, §§ 377 et seq. 
 
 856
 
 CH. XIX.] ASSIGNMENT OP THE POLICY. [§ 389 
 
 policies, and the companies have for obvious reasons been 
 desirous to promote that end, — a desire which the courts 
 have been willing to encourage, so far as consistent with legal 
 principles.^ It has accordingly been held that where the 
 promise is to " the assured, his executors, administrators, and 
 assigns," to pay the "legal representatives" of the assured, 
 the policy is nevertheless assignable, and that the provision 
 to pay the legal representatives was designed to apply only 
 to a case where the insured died without having previously 
 assigned the policy, and was not to be construed in any 
 sense as limiting the power of the party insured to assign.^ 
 So an assignment by a husband to his creditor, out of the 
 proceeds to pay the debt, and the remainder to be paid to 
 the widow, was held to take the whole interest to the assignee 
 for himself and in trust, as against the administrator.-^ 
 
 § 389. Life Policy ; Requisites of a Valid Assignment. — The 
 requisites to a valid assignment of a life policy have been thus 
 well stated by Shaw, C. J. : * — 
 
 " According to the modern decisions, courts of law recog- 
 nize the assignment of a chose in action, so far as to vest an 
 equitable interest in the assignee, and authorize him to bring 
 an action in the name of the assignor, and recover a judgment 
 for his own benefit. But in order to constitute such an as- 
 signment, two things must concur : first, the party holding the 
 chose in action must, by some significant act, express his inten- 
 tion that the assignee shall have the debt or right in ques- 
 tion, and, according to the nature and circumstances of the 
 case, deliver to the assignee, or to some person for his use, 
 the security, if there be one, bond, deed, note, or written 
 agreement, upon which the debt or chose in action arises ; and, 
 
 1 New York Life Ins. Co. v. Flack, 3 Md. 341 ; Anthracite Coal Co. v. Sears, 
 109 Mass. 383. 
 
 2 Ibid. 
 
 8 McCord V. Noyes, 3 Bradf. 139 ; Harrison v. McConkey, 1 Md. Cli. 34. As 
 between the assignor and the insurers the contract remains unclianged, and the 
 assignee can claim no greater right than the assignor could. A breach of con- 
 dition by the assignor avoids the policy. British Eq. Ins. Co. v. Great West. Ins_ 
 Co., 38 L. J. Ch. 132 ; s. c. 3 Big. Life & Ace. Ins. Cas. 264. 
 
 * Palmer v. Merrill, 6 Cash. (Mass.) 282. And see post, § 395. 
 
 857
 
 § 390] INSUEANCE : FIEE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 secondly, the transfer shall be of the whole and entire debt o'' 
 obligation in which the cliose in action consists, and as far as 
 practicable place the assignee in the condition of the as- 
 signor, so as to enable the assignee to recover the full debt 
 due, and to give a good and valid discharge to the party 
 liable.i 
 
 " The transfer of a chose in action bears an analogy, in some 
 respect, to the transfer of personal property ; there can be no 
 actual manual tradition of a chose in action, as there must be 
 of personal property, to constitute a lien, but there must be 
 that which is similar, a delivery of the note, certificate, or 
 other document, if there is any, which constitutes the chose in 
 action, to the assignee, with full power to exercise every 
 species of dominion over it, and a renunciation of any power 
 over it on the part of the assignor. 
 
 " The intention is, as far as the nature of the case will 
 admit, to substitute the assignee in place of the assignor as 
 owner. A man cannot by his own act charge a personal 
 chattel, a carriage and horses, for instance, with a lien in 
 favor of a particular creditor, and yet retain the dominion 
 and possession of them till his death ; a fortiori, where he re- 
 tains the memorandum or instrument of transfer of such chat- 
 tel in his own possession and under his own control. It seems 
 to us equally impracticable to charge a debt due to him, by 
 an order or memorandum retained in his own possession, pur- 
 porting to give to a particular creditor an equitable lien to 
 the assignment of such chose in action, without a transfer or 
 delivery of the security by which it is manifested." 
 
 § 390. Disposition of Proceeds ; Conflicting Claims ; Creditor 
 and Administrator. — As a general rule, the proceeds of a life 
 insurance must go as agreed upon and directed in the policy ; 
 and no diversion or agreement for a diversion will be effectual 
 without the consent of him to whom the proceeds are by the 
 original policy directed or agreed to be paid. When the pol- 
 icy issues, the rights of the beneficiaries become vested, and 
 on their receipt alone can the loss safely be paid. [The com- 
 
 1 Getchell v. Maney, 69 Me. 442 ; Hartford Fire Ins. Co. v. Davenport, 37 
 Mich. 609. 
 
 858
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 390 
 
 pany cannot set up the breach of a statute made for the pro- 
 tection of creditors of the insured. In consequence of the 
 statute tlie plaintiff may hold the proceeds partly in trust for 
 such creditors, but the company cannot set up the equities of 
 others to defeat an action on the policy.]^ And none but those 
 having a right to the policy and its proceeds can surrender it,^ 
 or create any charge upon it.^ 
 
 An endowment policy payable in ten years to the insured, 
 his heirs or assigns, or in case of his decease before the ex- 
 piration of ten years to his wife, belongs to his estate if he 
 live till the endowment becomes payable,^ or if he become 
 bankrupt.^ The wife's rights do not attach till the decease of 
 the husband within the time limited.^ Having once attached, 
 however, she cannot be deprived of them." 
 
 In Canada, by statute 29 Vict. ch. 17, the loss must be 
 paid as directed in the policy, and cannot be subjected to the 
 claims of creditors, unless so directed.^ So in Louisiana.'* 
 And if without the consent of the wife the policy be suffered 
 to lapse, and a new one be taken out by the husband, payable 
 to his representatives, which he assigns to pay his debts, 
 the wife will be entitled to the proceeds of the original policy, 
 less the premiums and interest due from her on the same.^^ 
 So in Tennessee, if not otherwise directed by the code.^^ And 
 
 1 Smith V. Mo. Valley Ins. Co. (U. S.), 6 Ins. L. J. 394 ; 4 Dill. C. Ct. (Mo.) 
 353 ; Pullis i'. Robinson (Mo.), 12 Reptr. 144 ; Diedrich v. Northwestern Ass. 
 Co., 47 Wis. 662 ; post, § 391. 
 
 2 Stillwell V. Mat. Life Ins. Co., 72 N. Y. 385. 
 
 3 Brooks V. Plioenix Mut. Life Ins. Co., C. Ct. (Vt.), 8 Ins. L. J. 740. 
 * Tenness v. Northwestern, &c. Ins. Co. (Minn.), 9 Ins. L. J. 191. 
 
 5 Stevens v. Lane (C. Ct. Mass. 1878) ; Brigham v. Home Ins. Co. (Mass. 
 1881), 12 Reptr. 180. 
 
 6 Evers v. Life Ass., 59 Mo. 429 ; Fowler v. Butterly (N. Y.), 9 Ins. L. J. 329. 
 But see Herrick v. National Life Ins. Co., C. Ct. (Vt.) 5 Ins. L. J. 80. See also 
 Knickerbocker Life Ins. Co. v. Weitz, 99 Mass. 157. 
 
 7 Brockhaus v. Kemna (Wis.), 12 Reptr. 168. 
 
 ^ Brossard v. Massouin, Supr. Ct. (Montreal), 4 Ins. L. J. 395. 
 3 Succession of Hearing, 26 La. An. 326. 
 
 w Pilcher v. New York Life Ins. Co. (La.), 10 Ins. L. J. 312. See also Rlcker 
 V. Charter Oak Ins. Co. (Minn.), 10 Ins. L. J. 143 ; Herrick v. National Life Ins. 
 Co., C. Ct. (Vt.), 5Ins. L. J. 80. 
 '1 Harrington v. Traders' Bank (Tenn.), 9 Reptr. 358. 
 
 859
 
 § 390] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 as between creditors and an intended, though not named, 
 beneficiary, in possession of the policy, the latter will be per- 
 mitted to hold the funds, if the facts show that the policy 
 really was his, and the whole proceeding was for his benefit.^ 
 Where A. ordered a new policy on his own life to be made, 
 substituting one beneficiary for another, which was done, and 
 the delivery was made to him instead of the new beneficiary, it 
 was held that A. had no rights under the old policy, contrary 
 to his claim that there had been no delivery to the benefi- 
 ciary of the new.2 Where a wife insured the life of her hus- 
 band for the benefit of herself, or, in case of her decease, of 
 her children, and she died before her husband, and also one of 
 the children died before him, leaving a child, it was held that 
 a transmissible interest vested in the children on the issuing 
 of the policy, and that the grandchild took by descent the inter- 
 est of its parent.^ If the wife insures for herself alone, and 
 dies before her husband, the interest descends to her heirs.* 
 Where the policy permits disposition of the fund by will, 
 otherwise to go to the widow, and if no widow, "to the heirs 
 and legal representatives," this last means the next of kin, 
 and takes the fund out of the decedent's estate.^ If there be 
 a failure to direct how the funds are to be disposed of in case 
 of decease of the beneficiary, and it appears that the general 
 object is " to establish a widows' and orphans' fund," the 
 widow is " entitled to " the fund, and not the creditor, the 
 children having deceased before the insured.^ Where the char- 
 ter provided that the loss might be payable to a " person desig- 
 
 1 Worthington v. Curtis, 1 Ch. D. 419; s. c. 5 Big. Life & Ace. Ins. Cas.740; 
 s. c. 5 Ins. L. J. 470. By the Iowa Code, §§ 1182, 2372, tiie avails of policy of 
 life insurance are part of the estate of the beneficiary, and subject to his debts, 
 but not to those of the " deceased," — that is, the life insured. Murry r. Wells 
 (Iowa), 9 Ins. L. J. 649 ; Smedly v. Felt, 43 Iowa, 607. 
 
 2 Crittenden v. Phoenix, &c. Ins. Co., 41 Mich. 442. 
 
 3 Continental Life Ins. Co. v. Palmer, 42 Conn. 60 ; Robinson v. Duvall (Ky.), 
 9 Ins. L. J. 897. 
 
 4 Hutson V. Mcrrifield, 51 Ind. 24. 
 
 5 Hodges' Appeal (Pa.), 9 Ins. L. J. 709. Contra, in Georgia, Rawson s. 
 Jones, 25 Ga. 458. See also Wason v. Colburn, 99 Mass. 342. 
 
 6 Ballou V. Gile, 50 Wis. 614. See also Duvall v. Goodson (Ky.), 9 Ins. L. J. 
 901 ; Kentucky, &c. Ins. Co. v. Yates, id. 572. 
 
 860
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 390 
 
 nated," witli a proviso that the insured should have no power 
 to deprive wife and children of benefits, and the person desig- 
 nated was a niece, it was held good to the niece, and that the 
 proviso applied only to such funds as would by law descend to 
 legal representatives.^ A policy payable to the wife, or, in 
 case of her decease, to the children, there being no children, 
 becomes the absolute property of the wife, and she may even, 
 after a divorce, exchange it for a new paid-up policy.^ She 
 has, in Massachusetts, a life interest, which is absolute, if 
 the children are not mentioned, and which she may assign 
 to secure her husband's debts.^ In the case the learned 
 judge (Lowell) points out that the fact that the New York 
 statute does not protect creditors against fraud, while the 
 Massachusetts and most of the other statutes do, may account 
 for the discrepancies between the decisions in New York and 
 the other States.* 
 
 A case of some novelty occurred recently in Massachusetts, 
 where an insurance company in that State insured the life of 
 a citizen of another, and the insured assigned the policy to a 
 creditor resident in the first State. After death, the admin- 
 istrator at the domicile of the insured brought suit ; but sub- 
 sequent thereto the assignee of the policy was appointed 
 ancillary administrator at the domicile of the creditor, and 
 brought suit ; and it was held that the first suit was no bar 
 to the second, and that the right of the ancillary administra- 
 tor, representing as he did the equitable interest of the 
 assignee, and the legal capacity to sue, was superior to 
 that of the original administrator.^ In this case the court 
 say: — 
 
 " There was a right of possession in the assignee superior 
 to that of the intestate or his administrator, and which he 
 might pass over to the administrator in Massachusetts upon 
 
 1 Penn Mut. Relief Ass. v. Folmer, 87 Pa. 133. 
 
 2 Plioenix Mut. Ins. Co. v. Dunham, 46 Conn. 79. See also Keller v. Gaylor, 
 40 Conn. 843. 
 
 3 Newcomb v. Mutual Life Ins. Co., C. Ct. (Mass.), 9 Ins. L. J. 124. 
 
 < See also Emerick t-. Coakley, 35 Md. 188 ; Archibald v. Mut. Life Ins. Co., 
 38 Wis. 542. See also post, § 392. 
 
 5 Merrill v. New England Mut. Life Ins. Co., 103 Mass. 245. 
 
 861
 
 § 390] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH, XIX. 
 
 such terms as he saw fit, consistent with his limited rights. 
 His interest in the policy is not a mere order for a part of the 
 proceeds, but extends to the whole policy alike. With his 
 concurrence the auxiliary administrator may maintain a suit 
 and collect the proceeds of the policy. Without it, neither 
 he nor the principal administrator could control the posses- 
 sion or collect the proceeds. The pledge makes it no longer 
 a question of jurisdiction, as affected by priority of suit, com- 
 ity between the States, or otherwise, but one merely of the 
 right of the respective parties claiming an interest in the pol- 
 icy. The right of the plaintiff in this suit is superior to that 
 of the principal administrator in Illinois, because he repre- 
 sents the equitable interest and right of immediate possession 
 and control of the pledgee, as well as the legal capacity to 
 sue, which remains in the representatives of the estate of the 
 insured. That legal right to sue is held by the administra- 
 tors of the insured, wherever appointed, in trust for the 
 benefit of the equitable assignee of the claim. The assignee 
 is entitled to control any suit brought for its recovery. Ilis 
 right would be protected by the courts against any at- 
 tempt of the administrator to collect or release the demand 
 in disregard of his interests. Upon the same principle, it 
 would be equally protected against prejudice from any at- 
 tempt to anticipate him by means of a suit instituted by such 
 administrator in his own behalf, and without recognition of 
 the rights of the assignee. 
 
 " Within the same jurisdiction the respective rights of the 
 assignor and assignee may be readily adjusted, and suits con- 
 trolled. The difficulty arises from the existence of suits in 
 separate and independent jurisdictions. There is a class of 
 decisions, referred to by the defendant, particularly affecting 
 questions of jurisdiction between the federal and State courts, 
 to the effect that a subject-matter once brought within the 
 jurisdiction of a court of general jurisdiction, whether by suit 
 in personam or proceeding in rem, or even by process of at- 
 tachment, is in the custody of that court, and cannot be with- 
 drawn or controlled by any process or proceeding of any other 
 court; but that doctrine is explained and narrowly limited by 
 862
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 391 
 
 Mr. Justice Miller, in Buck v. Colbath.^ It does not apply 
 to this case, for reasons already indicated, because the policy, 
 having been pledged and delivered to another in the life- 
 time of the intestate, was never in the legal possession of his 
 administrator in Illinois, and therefore was never properly 
 brought within the jurisdiction of the courts in that State, 
 either as assets subject to administration, or as a cause of ac- 
 tion which the administrator there could maintain. He could 
 not, by commencing a suit there, transfer to those courts 
 the determination of the rights of the pledgee, so as to com- 
 pel him to seek them by intervening in such suit. The 
 pledgee has an independent title, accompanied by possession 
 of the policy, and by bill in equity in his own name, or b\^ 
 suit in the name of the administrator in Massachusetts, could 
 enforce his claim. Neither the administrator in Massachu- 
 setts nor the administrator in Illinois would be allowed to 
 defeat the prosecution of such a suit." 
 
 § 391. Life Policy; Assignment by Married Woman ; Rights 
 of Children. — The power of a married woman over a policy 
 on the life of her husband, payable to her, her executors, 
 administrators, or assigns, to her sole use, in case of his death 
 before the wife's, but payable to the children in case of her 
 decease before the husband, the premiums being paid by her, 
 has been frequently before the courts; and in Eadie v. SHm- 
 mon 2 it was held that such a policy was unassignable. This 
 was under the law of 1840,^ in which it was provided that if 
 the wife survived her husband, the amount payable should be 
 payable to her for her own use, free from all claims of her 
 husband's representatives or of his creditors, and giving 
 authority also to provide for the children in case of her 
 death. " The act," said the court, " looks to a special pro- 
 vision for a state of widowhood and for orphan children, 
 and it would be a violation of its spirit to hold that a wife 
 could sell or traffic with her policy as though it were real and 
 personal property, or an ordinary security for money." In 
 this case the wife survived her husband. And this case was 
 
 1 3 Wall. .334. 
 
 2 26 N. Y. 9. 
 
 » Of New York. 
 
 VOI-. 11.— 11 
 
 
 863
 
 § 891] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 followed in Secor v. Dalton,^ — a case where the wife died 
 before the husband. And in Connecticut, in a case similar to 
 the last, and under a similar statute, the same doctrine was 
 laid down.2 And in answer to the suggestion that the 
 clause in the policy making it payable to the children was 
 simply the indication of her purpose at that time to give the 
 sum specified in the policy to them in case she deceased be- 
 fore her husband, and that it must be regarded as her ex- 
 pressed but unexecuted intention to give this sum to the 
 children, which intention she could abandon at her pleasure, 
 the court say : " The argument is ingenious, but not sound. 
 The intention was not to give a sum of money to the children, 
 but to make a life policy in a certain event payable to them. 
 The intention was not only expressed but executed. The 
 contract was complete, and the money when due was payable 
 to the children without any further act on her part." By the 
 terms of the policy " it was payable to her only in case she 
 survived her husband; and in case her husband survived 
 her, ... to the children." Referring to Eadie v. Slimmon,^ 
 the court say : " The reasoning of the court goes so far as to 
 hold that a policy of this description, prior to the decease of 
 the husband, is absolutely and under all circumstances unas- 
 signable by the wife. That such should be the law under a 
 poHc}', the premiums on which were paid by the husband, 
 certainly seems reasonable and just ; while, on the other 
 
 1 Cited in Bliss, Life Insurance, 528. So it was followed in Barrv v. Equi- 
 table Life Ass. Soc, 59 N. Y. 587. But in Kobinson v. Mutual Benefit Ins. Co. 
 it was held that the wife might assign such a policy as collateral, to secure 
 funds with which to keep it alive, as this was in furtherance of the purposes of 
 the statute. C. Ct. (N. Y.), 9 Ins. L. J. 23. In Brumraer v. Cohen an endow- 
 ment policy was held to be within the statute. C. C. P. (N. Y.), 9 Ins. L. J. 160. 
 But see Anderson v. Butterly (N. Y. Sup. Ct.), 8 Ins. L. J. 80; s. c. affirmed, 
 9 Ins. L. J. 329, and note. The parties in Barry's case, supra, were in the State 
 courts of Maryland, where the law permits an assignment, and also in the Cir- 
 cuit Court of the United States for Maryland. See Barry v. Mut. Life Ins. Co., 
 3 Ins. L. J. 74 ; National Life Ins. Co. v. Barry, 4 Big. Life & Ace. Ins. Cas. 109; 
 s. c. affirmed, sub nom. Whitridge v. Barry, 42 Md. 140. It is now understood 
 to be the law in New York, the statute having been so amended that such apol- 
 i(;y may be assigned by the wife. 
 
 ■^ Conn. Mut. Life Ins. Co. v. Burroughs, 34 Conn. 305. 
 
 3 Supra. 
 
 864
 
 CH. XIX.] ASSIGNMENT OP THE POLICY. [§ 391 
 
 hand, if the wife paid the premiums out of her separate es- 
 tate, it is difficult to suggest a reason why she should not 
 have the same power to assign her interest in the policy that 
 she lias to assign any other cJiose in action belonging to her. 
 As, however, the death of the wife occurred in the case 
 under consideration before that of the husband, and was the 
 precise event upon which the policy was made payable to 
 the children, no decision was made upon either of those 
 points." And both courts thought the assignee ouglit to be 
 allowed out of the proceeds the amount of the premiums he 
 had paid ; as also in the case of Chapin v. Fellowes.^ And 
 in Massachusetts, also, under a substantially similar statute, 
 Avhcre the wife effected the insurance and paid the premiums, 
 and died before her husband, the same conclusion has been 
 reached,^ and for the same reasons.^ In Moehring v. Mit- 
 chell, just cited, the question was whether the wife could 
 dispose of such a policy by will, and it was held that she 
 could not, even with the consent of her husband. But in 
 Kerman v. Howard * it was held that a husband who effects a 
 polic}^, payable to his wife or her legal representatives, and 
 pays the premiums and survives his wife, may, after her de- 
 cease, dispose of the policy by will so as to dispose of the 
 proceeds of the policy among the children of his former wife 
 as against the children of his last wife by a former husband. 
 The report does not show that there was any provision in 
 the policy for the benefit of children in case of survivorship 
 of the husband, but the statute was similar to that of Massa- 
 chusetts, except in the last clause.^ And in the same State a 
 
 1 36 Conn. 1.32. 
 
 2 Knickerbocker Life Ins. Co. v. Weitz, 99 Mass. 157. And see also Bur- 
 roughs V. State Mut. Life Ass. Co. of Worcester, 97 Mass. 359. 
 
 ^ Tlie court cite Eadie v. Slimnion, Conn. Mut. Life Ins. Co. v. Burrouglis, 
 Moehrins v. Mitchell, 1 Barb. (N. Y.) Cli. 264, and Swan v. Snow, 11 Allen 
 (Mass.), 224. 
 
 4 28 Wis. 108. 
 
 ^ The statute of Wisconsin is as follows : " An}' policy of insurance made by 
 any insurance company on the life of any person expressed to be for the benefit 
 of a married woman, whether the same be effected bj' such married woman, or 
 by her husband, or by any other person on her behalf, shall inure to her sole 
 and separate use and benefit, and that of her children, if any, independently 
 
 865
 
 § 391] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 father may assign a policy procured upon his own life, at his 
 own expense, in favor of a minor. Such a case seems not to 
 be witliin the words of the statute.^ So may a wife assign a 
 policy on her husband's life for her benefit,^ And in a very 
 late case the same court reaffirms the doctrine that where one 
 procures a policy on his own life for the benefit of another, 
 and pays the premiums thereon, lie may dispose of it by will or 
 otherwise, to the exclusion of the beneficiary named in the 
 policy, suggesting, however, that the beneficiary may have 
 an interest subject to such rights of the insurer.^ Still the 
 doctrine stated heretofore,* that with the execution and 
 delivery of the contract the beneficiary's interest becomes 
 vested and passes beyond the control of the insured, must be 
 considered as supported by the great weight of authority.^ 
 In Illinois, though a policy applied for and issued to the 
 wife, payable to her and her assigns, is not assignable, yet as 
 it is under the statute of that State concerning the property 
 of married women her sole and separate property, she may, 
 by an assignment, pledge the whole or any part of the pro- 
 ceeds, and the assignment will be enforced against her in 
 equity.^ And in Missouri, if a husband takes out a policy 
 for the benefit of his wife and pays the premium, and both 
 afterwards join in an assignment of the policy to secure a 
 loan, the assignment will be upheld, especially if it also 
 
 of her husband, and of his creditors and representatives, and also indepen- 
 dently of any other person effecting the same in her behalf, iiis creditors and 
 representatives ; and in case of the death of the husband of such married woman, 
 xHch pnlici/ and the hcwjit thereof shall not go to his executors or administrators, 
 hut shall belong to such married ivoman, and shall be for her sole use and benefit 
 and that of her children," — the part in Italics being additional to that of Massa- 
 chusetts. 
 
 1 Clark r. Durand, 12 Wis. 223. 
 
 2 Archibald v. Mut. Life Ins. Co., 38 Wis. 542. 
 
 8 Foster v. Gile, 50 Wis. 603. See also Gambs v. Covenant Ins. Co., 50 Mo. 
 44; Landrum v. Knowles, 22 N.J. (Eq.) 594; PuUis v. Robinson (Mo.), 12 
 Reptr. 144. 
 
 * Ante, § 390. 
 
 5 Ricker V. Charter Oak Ins. Co. (Minn), 10 Ins. L. J. 143; Gosling v. Cold- 
 well (Tenn.), Wis. Leg. News, Feb. 17, 1879; Trager v. Louisiana, &c. Ins. Co., 
 9 Ins. L. J. 817 ; Goodrich v. Treat (Col.). 7 Ins. L. J. 269. 
 
 6 Pomerov r. Manhattan Life Ins. Co., 40 III. 398. 
 
 86G
 
 CII. XIX.] ASSIGNMENT OF THE POLICY. [§ 391 
 
 appear that the amount of annual premiums exceeds the 
 sum permitted by the statute, as in that case the policy is 
 not within the statute.^ In Baker v. Young ^ there was 
 no objection on account of excessive payment of premiums, 
 and the court held that such a policy was assignable 
 under the statute.^ They thought that the clause provid- 
 ing that the policy should inure to the benefit of the wife 
 and children referred simply to the manner of the descent 
 and distribution, to wit, that after the wife has received and 
 reduced the money to possession and dies, it shall go to 
 the children and not to tlie husband's representatives, — 
 an interpretation made the more apparent by the conclud- 
 ing paragraph of the section providing for the appointment 
 
 1 Charter Oak Life Ins. Co. i\ Brant, 47 Mo. 419. If in such case the hus- 
 band, being solvent when the policy issues, and afterwards becoming insolvent, 
 continues to pay the premiums, the proceeds will go to the widow and creditors 
 in proportion to the premiums paid while solvent and insolvent. PuUis v. Rob- 
 inson (Mo.), 12 Reptr. 144. It seems that the restriction in the statute does not 
 apply to solvent persons. Ibid. See also Pence o. Makepeace, 65 Ind. 347. 
 As to the distribution of the funds when the husband is insolvent the cases do 
 not agree, and it is difficult to extract any rule from them. In Mississippi, where 
 a debtor in insolvent circumstances voluntarily assigned a life policy payable to 
 himself, to his wife and children, the assignment was held to be void as against 
 then existing creditors. Catchings v. Manlove, 39 Miss. 655. But the title to a 
 policy payable to the wife is in her, though the assignee of a bankrupt might re- 
 cover from her the amount of payments of the insolvent husband. In re Bear, 
 11 Nat. Bankr. Reg. 46. But in another case in a United States court it was 
 held that where premiums have been paid by an insolvent husband, the addi- 
 tional value created by the premiums during insolvency will belong to the 
 estate in bankruptcy. In re Yaeger, Dist. Ct. (Mo.), 5 Ins. L.J. 238. In Illinois, 
 the assignment of a policy on his own life by an insolvent husband to his wife, 
 is good against the creditors except as to so much as has been paid for premiums 
 within the time limited by the statute. Cole v. Marple (111.), 23 Alb. L. J. 98. 
 In Missouri a still different rule prevails, namely, that the money shall be appor- 
 tioned so that the widow shall have so much of tlie fund as was produced by the 
 payment of the premiums by her husband while solvent, and the creditors so 
 much as was produced by the payment of premiums while insolvent. Puilis v. 
 Robinson, 12 Reptr. 144. And where there is no statute to control, the courts, 
 in the interest of a prudent and commendable provision for his family, have 
 gone a great way towards the protection of the families of insolvent husliands 
 as against their creditors. Goodrich v. Treat (Col.), 7 Ins. L. J. 269 ; Stokes v. 
 Coffey, 8 Bush (Ky.),533; Succession of Hearing, 26 La. An. 326 ; Winchestei 
 V. Stebbins, 16 Gray (Mass.), 52. 
 
 ^ 47 Mo. 453. 
 
 2 The statute differs in no material respect from that of Massachusetts. 
 
 867
 
 §391] insurance: fire, life, accident, etc. [ch. xjx. 
 
 of a trustee to manage the interests of the married woman 
 in the policy and its proceeds, while nothing is said concei-ning 
 the interests of the children. The object of the statute was 
 to protect the wife, but not to restrain lier, and to leave it 
 open to her choice to make a voluntary disposition of it ; 
 and, if she was mentioned in the policy as the beneficiary, 
 but not otherwise, she might assign it as a security for, or in 
 discharge of, the debt of her husband.^ 
 
 The assignment and assent forms a new and derivative 
 contract with the assignee ; but the original contract, never- 
 theless, remains for the protection of the original insured, 
 and also for the protection of the insurers, and both contracts 
 fail if the first fails, since the last is derived from and depen- 
 dent on the first.2 In Tennessee,^ the statute provides that 
 any husband may effect a life insurance on his own life, and 
 the same shall in all cases inure to the benefit of his Avidow 
 and heirs. But the court held that an ordinary policy, not 
 by its terms made payable to the widow and heirs, was not 
 within the meaning of the statute ; and that as the insured, 
 who had a policy on his life for seven years, had during its 
 currency and while he lived the right to dispose of his own 
 as he pleased, an assignment for the security of a creditor was 
 valid. The statute of Tennessee, it is to be observed, pro- 
 vided that the insurance should inure to the benefit of the 
 widow and heirs, and not be subject to the luisband's debts, 
 but did not add, as is substantially the case in the statutes of 
 most of the other States, " independently of the claims of the 
 husband or of any other person effecting the policy." And 
 the court intimated that, if the policy had been made payable 
 to the widow and heirs, the proceeds could not have been 
 diverted from that disposition.* A policy on the life of the 
 husband for the benefit of the wife does not go to a bank- 
 
 1 Conn. Mut. Ins. Co. v. Kyan (St. Louis Ct. of App.), 10 Ins. L. J. 72. 
 
 2 Baker v. Young, supm. See also Wilson /■. Hill, 3 Met. (Mass.) 66; Car- 
 penter V. Prov. Wash. Ins. Co., 16 Pet. (U. S.) 495; Cuniniings v. Cliesliire Ins. 
 Co., 55 N. H. 457. 
 
 3 Rison V. Wilkerson, 3 Sneed, 565. 
 
 * See also Williams r. Corson (Tenn ), 5 Big. Life & Ace. Ins. Cas. 524; 
 Gould V. Emerson, 99 Mass. 154. 
 
 868
 
 CH. XIX.] ASSIGNMENT OP THE POLICY. [§ 391 A 
 
 rupt's creditors, but is the property of the wife, and is not 
 assignable by the husband, at law or in equity .^ [Where the 
 life of S. is insured in favor of A., B.,C.,who pay the pre- 
 miums, S. cannot by assignment give any right under the 
 policy, the contract is not with him.^ But a life-subject to 
 whom the policy is payable if he survives a certain day has 
 an assignable interest in the policy.^] 
 
 [§ 391 A, Husband and Wife. — A parol assignment of a 
 policy by a husband to his wife, with delivery creates an equit- 
 able right, and is good against creditors unless intended to 
 defraud them.* A husband's handing a non-transferable ac- 
 cident ticket to his wife, saying she should " take care of it, 
 and if he got killed before he got back she would be 13,000 
 better off," docs not constitute a gift as against the husband's 
 creditors.''' In Nova Scotia an assignment by a man directly 
 to his wife is invalid.^ If to secure the husband's debts a wife 
 joins in assigning a policy taken out by her husband on his 
 life for her benefit, she at most becomes merely a surety, and 
 an extension of time without her consent discharges her.''' 
 The wife may indorse her name in blank on the policy to 
 enable her husband to use it as collateral security for a loan, 
 and equity will hold the assignment valid in favor of the 
 person making the loan, but if the husband not only fills up 
 the assignment for a loan as contemplated by his wife but 
 also for a pre-existing debt, the wife is not bound as to the 
 latter.^ In New York a wife may now by statute assign her 
 interest in a policy for her benefit on her husband's life with 
 his written consent ; ^ but before the passage of these laws such 
 
 1 In re Bear, 11 Nat. Bankr. Reg. 46; Galloway v. Craig, 23 C. C. S. 12, re- 
 versing 8. c. 22 id. 1211 ; Parkes v. Bott, 8 L. J. n. s. Ch. 14. 
 
 2 [Ferdon v. Canfield, 101 N. Y. 14.3.] 
 
 3 [Pierce v. Charter Oak Ins. Co., 138 Mass. 151.] 
 * [Chapman v. Mcllwrath, 77 Mo. 38.] 
 
 5 [Williams' Appl. 106 Pa. St. 116, 119.] 
 
 « [Bliss V. JFAna. Life Ins. Co., 19 N. S.-R. 36.3.] 
 
 7 [AUis V. Ware, 28 Minn. 166.] 
 
 8 [Conn. Milt. Life Ins. Co. v. Westervelt, 52 Conn. 586.] 
 
 9 [Laws of 1873, ch. 821 ; Laws of 1879, ch. 248. See Anderson v. Goldsmidt^ 
 103 N. Y. 617.] 
 
 869
 
 § 391 B] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 an assignment was voidable at her option.^ Where the wife 
 to whom a policy on her husband's life was payable, was by 
 fraud and coercion induced to assign it as collateral to B., a 
 subsequent creditor of her husband, who did not know of the 
 fraud and coercion and who paid premiums on the policy, it 
 was held that B. was not an innocent purchaser for value, and 
 as against the wife was only entitled to his premiums.^] 
 
 [§ 391 B. Creditors. — If the insurance company does not 
 object to an assignment of the policy, a creditor of the insured 
 cannot. The provision is only for the benefit of the insurer.^ 
 In Maryland under the Act of 1878, ch. 200, a father may 
 make a voluntary assignment of a life policy to his wife or 
 children or both, free and clear of his creditors.* An assign- 
 ment of a policy to a debtor, the surplus after liquidating his 
 debt to be used as a trust fund for C, is void as to creditors 
 at the time, who continued to be so up to his death.^ If a 
 trustee assigns a policy to a creditor and afterwards assigns 
 his trust to a third person without mentioning in his specific 
 detail of matters assigned this policy, it has been held that 
 the second trustee has no right to the policy as against the 
 creditor.^ When one who is insolvent at the time of insur- 
 ance assigns the policy in trust for his wife, the transfer is 
 fraudulent and void as to creditors.^ But the mere existence 
 of debts is not enough, the actual fact of insolvency must be 
 shown.^ A mutual policy in a company whose constitution 
 provides for the changing of the beneficiary, who may be any 
 " legatee or devisee," may be assigned to a creditor to cover 
 his debt.^ If a wife indorses her name in blank on a policy, 
 
 1 [Frank v. Mut. Life Ins. Co., 102 N. Y. 266. See further on tliis subject 
 under the laws of N. Y., Living v.. Domett, 26 Hun, 150; Leonard v. Clinton, 
 id. 288, 290; Bloomingdale v. Lisberger, 24 Hun, 355; Smillie y. Quinn, 25 
 Hun, 332.] 
 
 2 [McCutcheon's Appl, 99 Pa. St. 133.] 
 
 3 [Leinkauf v. Caiman, 110 N. Y. 50.] 
 * [Earnshaw v. Stewart, 64 Md. 513.] 
 
 6 [In re Magawley's Trust, 5 De G. & S. 1.] 
 
 6 [Johnson v. Swire, 3 Giff. 194.] 
 
 ' [Appeal of Elliott's Ex'rs, 50 Pa. St. 75.] 
 
 8 [Skarf V. Soulby, 1 Mac. & Gor. 364.] 
 
 9 [ Martin v. Stubbings, 126 111. 387.] 
 
 870
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 392 
 
 and the husband fills it out and gets a loan on it with which 
 he pays part of the premium, and the remainder not being 
 paid in time the policy is declared void, and a new one issued 
 to the wife, applying the sum paid on the old premium to the 
 new one, the creditor has a lien on the insurance money .^ An 
 assignment of a life policy is not affected by a prior general 
 assignment in favor of creditors, where it appears that the 
 policy remained in the hands of the assignor, and never came 
 to tlie possession of nor was ever claimed by the assignee for 
 creditors.^] 
 
 § 392. Life Policy ; Devise of Proceeds ; Rights of Children. 
 — So where the policy was for the sole benefit of children, it 
 was held that the father could not devise the proceeds to his 
 executors in trust for other purposes.^ The children in such 
 case became vested immediately upon the delivery of the 
 policy with the entire beneficial interest, and it is then beyond 
 the control of the insured. So where the policy is issued to 
 the wife, payable to her, or, in case of her death before her 
 husband, to her children. The husband cannot, after her 
 death, surrender the policy and take out a new one for his 
 own benefit.* So if at the suggestion of the wife, who pays 
 all the subsequent premiums, her husband applies for and 
 takes out a policy on his life for her benefit, herself paying 
 the first premium, the policy acknowledging the receipt of the 
 several premiums as from the wife, this is an insurance by 
 the wife, the husband acting as agent, and the creditors of 
 the husband have no claim to the proceeds.^ All the above- 
 
 1 [Norwood V. Guerdon, 60 111. 253.] 
 
 2 [Hurlbut V. Hurlbut, 49 Hun, 189.] 
 
 3 Ruppert V. Union Mut. Ins. Co., 7 Robt. (N. Y. Superior Ct.) 155. The 
 charter provided that policies might be issued for the benefit of a minor, and 
 should inure to his benefit independently of the one wliose life may be tlius 
 insured. If the statute authorizes a devise to wife or children, in the absence of 
 both, the proceeds go to the estate of the insured. Hathaway v. Sherman, 61 
 Me. 466. 
 
 * Chapin v. Fellowes, 36 Com. 132; Fraternal Mut. Life Ins. Co. v. Apple- 
 gate, 7 Ohio St. 292 ; Gould v. Emerson, 99 Mass. 154; Bailey v. New England, 
 &c. Ins. Co., 114 Mass. 177 ; Succession of Kugler, 23 La. An. 455. 
 
 * Jacob V. Continental Ins. Co., Superior Ct., Cleveland (Ohio), 2 Big. Life & 
 Ace. Ins. Cas. 155. See also ante, § 390. 
 
 871
 
 § 393] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 cited cases proceed upon the ground that when the policy is 
 issued the rights are vested, and cannot be devested without 
 the consent of those to whom they are secured. 
 
 § 393. Right to sue and Right to appropriate Proceeds not 
 identical. — The right to sue under a policy of insurance, 
 whether in the party who insures, or the representatives of 
 the life insured, or the beneficiary, is variously maintained 
 in the different States, according to the provisions of their 
 several statutes, and the greater or less strictness of adher- 
 ence, by the several courts, to the rules of the common law.^ 
 The general rule is that the action must be brought in the 
 name of the person or his legal representative to whom the 
 insurance is made. 
 
 The right to sue, however, under these statutes, enacted in 
 the interest of the family support, is not to be confounded 
 with the right to appropriate and use the proceeds. The as- 
 signee may well have the right to sue in his own name and 
 recover the amount payable by the policy, but he recovers to 
 hold in trust for the beneficiaries. " The rights of the child," 
 say the court, in Burroughs v. State Mutual Life Insurance 
 Company ,2 " cannot be set up to defeat this action. No trus- 
 tee has ever been appointed to hold and manage the interest 
 of the wife. The policies are in terms payable to the assured 
 and his assigns. The assignment to the plaintiff, assented to 
 by the insurers, transferred to him the legal title in the 
 policies, and the right to sue thereon. If the assured had 
 afterwards died, leaving no wife or child surviving, the assign- 
 
 1 [An action at common law on an assigned policy must be brought in the 
 name of the assignor. Hobbs v. Memphis Ins. Co., I Sneed (Tenn.), 444 at 
 452. The assignee cannot maintain an action tiiereon in his own name : Bayles 
 V. Insurance Co., 27 N. J. L. 103 at 165, except by statute permission. Gourdon 
 V. Ins. Co. of N. A., S Yeates, 327 at 334. In Te.xas a policy may be assigned 
 under articles 266 and 267 of the Rev. Stats, so as to give tlie assignee a right 
 of action in his own name, but subject to all claims against the previous owner 
 arising before notice of the assignment to the defendant. East Tex. Fire Ins. 
 Co. V. Coffee, 61 Tex. 287. This embodies the rule that obtains in equity. In 
 Missouri, a legal assignee of the policy showing that he is the equitable owner 
 of tlie interest of the assured in the premises may recover. Breckinridge v. 
 Amer. Cent. Ins. Co., 87 Mo. 62.] 
 
 2 97 Miiss. 359. 
 
 872
 
 CH. XIX.] ASSIGNMENT OP THE POLICY. [§ 395 
 
 ment would have entitled the assignee to receive the whole 
 amount of tiie policies to his own use. The plaintiff, having 
 the legal title, may maintain this action at law, and, if he 
 recovers judgment, will hold the proceeds, so far as they 
 inure to tlie benefit of the child of the assured, in trust for 
 him. The equitable rights of the child under the statute, 
 and the extent to which they may be subject to a claim of 
 the assignee for reimbursement of the sums paid by him for 
 premiums and assessments, or otherwise cannot now be de- 
 termined, but may be ascertained upon a bill of interpleader 
 filed by the insurance company, or in a suit by the child 
 against this plaintiff after he shall have recovered judgment 
 in this action." ^ 
 
 § 394. If a husband insures his life for the benefit of his 
 wife, without her authority, the policy being made payable to 
 her, her subsequent acceptance of the policy is such a rati- 
 fication of the act of her husband as to bring her within the 
 statute which authorizes a wife to cause her husband's life to 
 be insured, and to constitute a valid contract between her 
 and the insurance company .^ 
 
 § 395. Assignment, What constitutes ; Possession ; Deliv- 
 ery. — A mere declaration contained in a letter, that a life 
 insurance was made for the person addressed, without a 
 delivery of the policy, is no assignment.^ Possession of the 
 policy is only prima facie evidence of a right to claim the 
 proceeds, and is open to the objection that delivery was un- 
 authorized, that there is an assignment outstanding in the 
 hands of another, or to any other evidence explanatory of the 
 possession and showing its purpose.* 
 
 Mere possession, however, is evidence of title in the policy 
 and the right to its proceeds. In the absence of a formal 
 transfer in writing, which is not necessary, there are many 
 
 1 The general subject of the riglit to sue, and wlio may claim the loss, will 
 be considered hereafter, when we come to treat of the loss and its incidents, 
 post, § 445 et seq. 
 
 2 Thompson v. Am. Fire, Life, & Sav. Ins. Co., 46 N. Y. 675. 
 
 3 In tlie matter of Webb, 49 Oal. 541. 
 
 * Wood V. Plioenix Mut. Life Ins. Co. of Hartford, 22 La. An. 617 ; Pence v. 
 Makepeace, 65 Ind. 347. 
 
 873
 
 § 395] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 other facts and circumstances which courts will recognize as 
 equivalent to an assignment. Delivery is not essential. 
 
 While delivery of the instrument of assignment seems to 
 be necessary as against the assignee in bankruptcy,^ or at 
 least a delivery and deposit of the policy before the bank- 
 ruptcy, for that purpose, with notice to the company, which 
 may be after the act of bankruptcy if before the adjudication, 
 and if the depositary is not aware of the act of bankruptcy ,2 
 it does not seem to be necessary in a case where a person 
 insures his life and assigns his policy, and the assignee gives 
 notice to the insurers and subsequently pays all the pre- 
 miums. In one case, though the assignee had negligently 
 permitted the policy to remain in the hands of the assignor, 
 it was held he was entitled to it, in the absence of any 
 fraudulent purpose on his part, even against one who had 
 innocently advanced money to the assignor after the assign- 
 ment.^ So a letter written by the insured, giving notice of 
 a wish to transfer his interest to a third person, the letter 
 being shown to the company and its contents noted on their 
 books, was held to be a good assignment in equity against a 
 subsequent assignee who had got possession of the policies.* 
 Reputed ownership, and the fact that the policy is left within 
 " the order and disposition " of the bankrupt, seem to require 
 something more to perfect an assignment of a policy as 
 against an assignee in bankruptcy than as against an ordi- 
 nary assignee.^ But a mere direction from the solicitor of 
 the assignee, though entered by the company on its books, 
 to send letters touching the policy to that solicitor, is no no- 
 tice to take the policy out of the order and disposition of the 
 bankrupt as against his assignee.^ Yet wliere it was provided 
 
 1 Palmer v. Merrill, 6 Cusli. (Mass.) 282; atite, § 389. 
 
 2 In re Styan, 1 Phillips, Cli. 105. 
 
 3 Neale v. Molineux, 2 C. & K. 672. If negligence instead of fraud bad been 
 pleaded, the result might have been difTerent. See Dearie v. Hall, 3 Russ. Ch. 1. 
 
 * Chowne et al. v. Baylis, 31 Bcav. 3-51. 
 
 5 See Green v. Ingham, L. R. 2 C. P. 525 : s. c. 5 Big. Life & Ace. Ins. Cas. 
 662 ; Alletson v. Chichester, L. R. 10 C. P. 319 ; s. c. 5 Big. Life & Ace. Ins. 
 Cas. 688. 
 
 6 West ('. Reid, 2 Hare, Ch. 249. 
 
 874
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 395 
 
 that if the policy should be assigned bona fide, the assignee 
 should have the benefit of it so far as his interest extended, 
 although the insured should commit suicide, it was held that 
 a deposit of the policy as security for a debt, accompanied by 
 a letter promising to assign it upon request, though there 
 was no notice to the insurers, was a ho7ia fide assignment 
 within the meaning of the policy. ^ Indeed, in such case, a 
 mere deposit gives the depositary a " bona fide interest " in 
 the policy " as a security for money." ^ So a deposit with a 
 letter authorizing the depositary to hold as security for any 
 indebtedness that may exist between the insured and the as- 
 signee, is an " assignment" which a court of equity will recog- 
 nize and enforce.^ So when the policy, if " legally assigned," 
 is to be good to the assignee, a (deposit as security for any 
 balance of accounts which may be found due as between the 
 assured and the assignee is good. As in strictness a policy 
 cannot be legally assigned, the words here must be taken in 
 the popular sense as equivalent to " lawfully," that is, effec- 
 tually and properly assigned, so that the courts can recognize 
 and enforce the act.* A life policy may also be the subject 
 of a donatio mortis causa:' 
 
 Delivery by placing the policy in the safe of a firm, of 
 which the assignor is a member, or of any third person in 
 trust for the beneficiary, is sufficient.^ And the retention of 
 possession by the assignor, a husband, in behalf of the as- 
 signee, a wife, by agreement, after a bona fide equitable assign- 
 ment by delivery, will be regarded as the possession of the 
 assignor.'^ So is handing it to the agent of the insurers, 
 with a request to keep it for the designated assignor, a good 
 delivery.^ A policy payable, a given sura on suffering per- 
 
 1 Cook V. Black, 1 Hare. Ch. 390. 
 
 2 Moore v. Woolsey, 4 E. & B. 243. 
 
 ^ Jones V. Consolidated Ins. Co., 26 Beav. 256. 
 
 * Dufaur v. Prov. Life Ass. Co., 25 Beav. 599, 603. 
 
 5 Witt V. Amis, 1 B. & S. (Q. B.) 109. 
 
 6 Estate of Trough, 8 Phila. 214 ; Lemon v. Phoenix, &c. Ins. Co., 38 Conn. 294. 
 T Estate of Malone (Pa.), 9 Ins. L. J. 767 ; Fowler v. Butterly (N. Y.), 9 Ins. 
 
 L. J. 329. 
 
 * Marcus v. St. Louis, &c. Ins. Co., 68 N. Y. 625, overruling s. c. 7 Hun 
 (N. Y.). 5. 
 
 875
 
 § 396] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 sonal injury, and a certain other sum at tlie death of insured, 
 will be equitably assigned to the wife, as to the last sum, if 
 the husband in writing requests her to take the policy, and 
 " keep it up," saying that it shall be hers if she does so keep 
 it up by paying the dues.^ And whether the delivery is 
 with intention to give the assignor full power and control 
 is for the jury to determine, on all the circumstances.^ In 
 Scotland, it seems that the delivery of the policy, coupled 
 with a promise to assign, is no assignment.^ 
 
 § 396. Notice of Assignment , Life. — Notice of the assign- 
 ment is not necessary to its validity as between the assignees 
 and the insurers, unless required by the terms of the policy ; 
 and a notice at the bottom of the policy that, "if assigned, 
 notice must be given to the company," docs not affect the case 
 as between the insurers and the assignee, whatever might be 
 its effect as between him and his creditor. In this respect, 
 assignments of life policies bear a more near analogy to mar- 
 ine than to fire policies. AVhen the contract is to pay to per- 
 sonal representatives or assigns, the right of the assignee 
 becomes perfect by force of the assignment alone, and by the 
 transfer he becomes instantly invested with the legal interest 
 in the policy, of which by the same act the assignor becomes 
 devested. The insurer does not need notice for his protection. 
 He cannot be required to pay unless the policy is produced, or 
 its non-production satisfactorily accounted for ; nor can he be 
 required to pay without proof that the person demanding 
 payment is by law the rightful assignee of the policy, and 
 entitled to recover the money. He is sufficiently protected 
 against all risks, except such as may arise from his own care- 
 lessness, against which the law gives him no protection.* 
 But for his own protection, where it is not required, it may be 
 prudent for the assignee to give notice, in order to avoid the 
 
 1 Swift V. Railway, &c Ins. Co., 06 111. 309. 
 
 2 Marcus v. St. Louis, &c. Ins. Co., 68 N. Y. 625 , Pence v. Makepeace, 65 
 Ind. 347. 
 
 3 United Kingdom Ins. Co. v. Dixon, 16 Ct. of Sess. Cas., 1st Series, 1277 ; 
 s. c. 3 Big. Life & Ace. Ins. Cas. 424. 
 
 * Mut. Prot. Ins. Co. v. Hamilton, 5 Sneed (Tenn ), 269. 
 
 876
 
 CH. XIX.] ASSIGNMENT OP THE POLICY. [§ 396 
 
 claims of subsequent assignees, as also claims for set-off for 
 advances to the assignor before notice.^ When notice is re- 
 quired, notice after death is sufficient, and probably at any- 
 time before payment to the representatives of the assignee.^ 
 Still, in many cases, notice of the assignment is required, and 
 the assent of the company thereto, as a guard against the dan- 
 gers of speculative, not to say gambling, insurance. When 
 these are required, on penalty of forfeiture, the assignment is 
 ineffectual without them as against the insurers.^ And so it 
 was held in Stevens v. Warren,^ which was a case where the 
 assured in his lifetime assigned his policy to one who had no 
 insurable interest in the life of the assured, without the as- 
 sent of the insurers, which by the terms of the policy was re- 
 quisite. It is easy to see that unless this check were provided, 
 a dangerous species of gambling and speculation might be en- 
 couraged. Verbal notice will be sufficient, unless it be required 
 to be in writing,^ and to an agent,^ unless he be a trustee, or 
 in some way interested." No form of words is necessary. 
 Any expression in words appropriate to convey the fact, and 
 used for that purpose, will amount to notice. It is enough for 
 the assignee to say that he is the holder.^ But the words 
 should be used under such circumstances as to naturally call 
 the attention of the insurers to the fact that notice is intended. 
 A mere incidental mention, therefore, to a clerk, by the agent 
 of the holder, who had been sent to inquire if the premiums 
 had been paid, might not be enough ; ^ and information ac- 
 quired in casual conversation, sucli as would not be ordi- 
 narily treated as having any special purpose, would not be 
 
 1 Succession of Risley, 11 Rob. (La.) 298 ; Stocks v. Dobson, 4 De G., M. & 
 G. 11 ; In re Russell's Policy Trusts, L. R. 15 Eq. 26. 
 
 2 New York Life Ins. Co. v. Flack, 3 Md. .341. 
 
 ^ The policy does not, however, become void by such an assignment, unless 
 such is tiie agreed result. Marcus v. St. Louis, &c. Ins. Co., G8 N. Y. 625. 
 
 4 101 Mass. 5G5. 
 
 5 North Brit. Ins. Co. v. Hallett, 7 Jur. n. s. 1263 ; Gale v. Lewis, 9 Q.B. 730. 
 
 6 Ibid. See also ante, § 367. 
 
 ■J Browne v. Savage, 4 Drew. 635. 
 
 8 Ex parte Stright, 2 Dea. & Chit. 314. 
 
 8 Edwards v. Scott, 2 Scott (N. If.), 266. 
 
 877
 
 § 398] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX, 
 
 notice,^ at least, as against the claim of a subsequent 
 assignee.^ 
 
 § 397. Assignment ; Fraud. — If the assignment be procured 
 by undue influence, which amounts to moral duress, as bv ex- 
 citing the fears of a wife by threats that her husband shall be 
 incarcerated if she does not make the assignment,^ of course 
 it is void, as is also the case if it be procured by fraud ; ^ as 
 where, upon private information of the dangerous sickness of 
 the insured, the policy is purchased of the assignee of the in- 
 sured at what it would be worth if there was no such sickness, 
 the assignee being in ignorance of the fact ; ^ and so where 
 possession is obtained of a policy payable to a third person, by 
 false pretences on the part of the person who effected the in- 
 surance, which upon his request is cancelled, and thereupon 
 another policy is issued, payable to a different person from 
 the payee in the cancelled policy.^ This case was a bill in 
 equity by the payee of the first policy against the company 
 and the payee of the second policy (who, however, did not 
 appear, though notified of the suit), to compel the pay- 
 ment of the proceeds of the second to her. And an assent 
 to an assignment procured by misstatement will vitiate the 
 assent." 
 
 § 398. Assignment of Life Policy to a Party -without Interest 
 void. — All the objections tliat exist against issuing a policy 
 to one upon the life of another, in whose life the former has 
 no insurable interest, exist against his holding such policy by 
 mere purchase and assignment from another. In either case, 
 the holder of such policy is interested in the death, rather than 
 
 1 Edwards u. Martin, 1 L R. Eq. 121. 
 
 2 North Brit. Ins. Co. v. Hallett, 7 Jur. n. s. 126-3. 
 
 * Eadie v. Slimmon, 2G N. Y. 9. 
 
 * Ante, § 385. 
 
 5 Jones et al. v. Keene, 2 Mood. & Rob. 348 and note. 
 
 6 Lemon v. Phceni.x Mut. Life Ins. Co., 38 Conn. 204. In such case the origi- 
 nal insured may recover of the party procuring the cancellation tlie full amount 
 of the cancelled policy, less the premium paid by him on the first. Gray v. 
 Murray, 3 Johns. (N. Y.) 167. And see ante, § 385 ; Tabor r. Michigan, &c. Ins. 
 Co., 10 Ins. L. J. 97. 
 
 7 Johnstone v. Niagara, &c. Ins. Co., 13 U. C. (C. P.) 331 ; Merrill v. Farm- 
 ers' Ins. Co., 48 Me. 285. 
 
 878
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 398 
 
 in the life, of the insured. ^ The policy of the law forbids 
 such speculations based on the continuance of human life. It 
 will not uphold a practice which incites danger to life, and it 
 substantially declares that no one shall have any claim under 
 a policy upon the life of another, in whose life he had no in- 
 surable interest at the time he acquired the policy, whether 
 the policy be issued to him directly from the insurer, or 
 whether he acquires the policy by purchase and assignment 
 from another. If he may purchase a policy on the life of an- 
 other in whose life he has no interest, as a mere speculation, 
 the door is open to the same practice of gambling, and the 
 same temptation is held out to the purchaser of the policy to 
 bring about the event insured against, as if the policy had 
 
 1 [An assignee of a life policy is entitled to the proceeds only to the extent 
 of his insurable interest. Roller i\ Moore's Admr., 19 Ins. L. J. 39 (Va.), Nov. 
 1889. A life policy cannot be assigned during the " life " to one without insur- 
 able interest in it. Such an assignment is open to all the objections that exist 
 against an original insurance by such person of a life in tlie continuance of 
 which he is not interested. Ala. Gold Life Ins. Co. v. Mobile Mut. Ins. Co., 81 
 Ala. 329; Bayse v. Adams, 81 Ky. .368, 375. The assignee must have such ties 
 of blood, or marriage, or business relations with the insured as will justify a 
 reasonable expectation of advantage or benefit from the continuance of his life. 
 And if an assignee without insurable interest receives the insurance money from 
 the company, the administrator of the insured or the beneficiaries maj' recover 
 the funds from the assignee. Warnock v. Davis, 104 U. S. 775, 779, citing 
 Cammack i-. Lewis, 15 Wall. 643 ; Price v. Knights of Honor, 68 Tex. 361; 
 Sternes v. Warner, 101 Mass. 364, cited ; Ruth v. Katterman, 112 Pa. St. 257; 
 Downey v. Hoffer, 110 Pa. St. 109. The same is true in case of a policy made 
 in favor of one not a near relative nor a creditor. Roller v. Moore's Adm , 19 
 Ins. L. J. 39,41 (Va.), Nov., 1889 ; Armstrong v. Mut. Life Ins, Co., 20 Blatch. 
 493 ; 11 Fed. Rep. 573; 11 Ins. L. J. 441. In this case the assignee murdered 
 the assured, — a strong illustration of the force that lurks in the objection made 
 by the law to such assignments. It is against the policy of the law for one who 
 has no interest in the life of another to take out a policy on that life, and the 
 same reason will prevent a beneficiary during the continuance of the life from 
 selling or transferring the policy to one without interest in the " life." Such a 
 transaction is void, and althougli, after death of the insured, the assignee return 
 the policy to the beneficiary with the word " cancelled " written across the as- 
 signment, the policy is dead in the hands of the beneficiary or his assignee. Life 
 Ins. Co. V. McCrura, 36 Ivans. 146. If an assignment bj' the beneficiary is void, 
 still the representatives of the " life " have no claim on the funds and cannot 
 sue the assignee for them. They belong to the beneficiary. Hoffman v. Hoke, 
 122 Pa. St. 377. The burden is on the administrator to show that the assignee 
 wiio has received the insurance and from whom he claims it was not a near rela- 
 tive nor a creditor. Lenig v. Eisenhart, 127 Pa. St. 59.] 
 
 VOL. II. — 12 8T9
 
 § 398 A] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 been issued directly. It is, in fact, an attempt to do indirectly 
 what the law will not permit to be done directly .^ If the in- 
 terest be merely nominal, as when a policy for ^3,000 is taken 
 out, and assigned to secure a debt for $70, with an agreement 
 to pay the wife of the insured a portion of the proceeds, and 
 the assignee receives the proceeds of the policy, the adminis- 
 trator may recover the whole, less the debt and premiums 
 paid for the assignor.^ [An assignment of a life policy as 
 security for advances made and to be made by the assignee 
 is good to the extent of the advances.^] 
 
 [§ 898 A. If the company waives the want of insurable in- 
 terest in an assignee, an assignor or prior assignee cannot 
 claim any advantage from the want of such interest.* In- 
 deed, the doctrine that the assignment of a ])olicy to one with- 
 out interest in the life is as objectionable as the taking out of 
 a policy without insurable interest, docs not seem good sense. 
 If this is so, it is difficult to understand how the designation 
 
 1 Franklin Life Ins. Co. v. Ilazzard, 41 Ind. 116, citing and approving Stev- 
 ens V. Warren, 101 Mass. 554, ante, § 110, and doubting St. John v. Am. Mut. 
 Life Ins. Co., IB N. Y. 31 ; Valton v. Nat. Loan Fund Life Ass. Co., 20 N. Y. 32 ; 
 and Asliley i'. Ashley, 3 Sim. 149, apparently to the contrary. In this case, the 
 insured sold his policy to one who was not his creditor, and who had no insur- 
 able interest, and the company assented to the sale and assignment. See also 
 Franklin Ins. Co. v. Sefton, 53 Ind. 380, affirming Hazzard's case, and explaining 
 Hutson V. Merrifield, 51 Ind. 24 ; Guardian, &c. Ins. Co. v. Hogan, 80 111. 85 ; 
 Missouri, &c. Ins. Co. i\ Sturges, 18 Kans. 93; Ferguson v. Massachusetts, &c. 
 Ins. Co., Sup. Ct. (N. Y.), 11 Reptr. 752; Varina v. N. Y. Life Ins. Co. (Q. B. 
 Montreal), 3 Leg. News, 322 ; Swick v. Home Ins. Co., 2 Dill. C. Ct. 1G6 ; Lewis 
 t^. Phcenix Ins. Co., 39 Conn. 100 ; Singleton r. St. Louis, &c. Ins. Co., 66 Mo. 63; 
 Mutual Benevolent Ass. v. Hoyt (Mich.), 10 Ins. L. J. 627. Contra, Clark v. Al- 
 len, 11 R. I. 439. But the court will not look narrowly at the transaction to find 
 grounds for setting it aside. If, for instance, the insured assigns all his interest 
 in a policy absolutely to a creditor, the court will, if possible, uphold the trans- 
 action as a permissible one, by way of security, with a trusteeship in the as- 
 signee for any balance in favor of the assignor, rather than as an illegal one, 
 giving to the assignee an interest in the death of the assignor. Page v. Born- 
 stine. Sup. Ct. (U. S.) Wasli. L. R. March 2, 1881. See also Cunningham v. 
 Smith, 70 Pa. St. 450, which upholds an absolute assignment to a person inter- 
 ested contingently as to the amount. Provident Life Ins. Co. v. Baum, 29 Ind. 
 2.36. 
 
 - Cammack v. Lewis, 15 Wall. (U. S.) 643. 
 
 3 [Oilman v. Curtis, 66 Cal. 116.] 
 
 * [Conn. Mut. Life Ins. Co. v. Fisher, 30 Fed. Rep. 662 (Mo.), 1887.] 
 880
 
 CH. XIX. ] ASSIGNMENT OF THE POLICY. . [§ 398 A 
 
 of a beneficiary outside of those having an insurable interest 
 in the life, can be upheld. There seems to be a clear distinc- 
 tion between cases in which the policy is procured by the in- 
 sured bona fide of his own motion, and cases in which it is 
 procured by another. It is a very different thing to allow a 
 man to create voluntarily an interest in his termination, and 
 to allow some one else to do so at their will. The true line 
 is the activity and responsibility of the assured, and not the 
 interest of the person entitled to the funds. It is well estab- 
 lished that a man may take out a policy on his own life, pay- 
 able to any person he pleases ; and it is drawing a distinction 
 without a difference to hold that he cannot take out a policy 
 and afterward transfer its benefits. An assignment by the 
 beneficiary, or by an assignee, unless with the consent of the 
 " life," is, however, a very different matter, and involves what 
 seems to be the real evil that the law is blunderingly seeking 
 to exclude, viz., the obtaining hy B. of insurance on the life of 
 A., in contradistinction to its obtainmentby A. for B.'s benefit. 
 Authority is not lacking. In Ohio it is held that in the ab- 
 sence of statutory provision, or stipulation to the contrary, one 
 may assign a policy he has taken out on his own life to whom- 
 soever he will. The assignee or donee need not have an in- 
 surable interest in his life.^ A policy issued to a bona fide 
 beneficiary may be assigned to one having no interest in the 
 life, and a by-law providing that no policy shall issue unless 
 the beneficiary has an insurable interest, is not violated by 
 such assignment.2 An assignment of a life policy to a cred- 
 itor in consideration of a discharge of the debt and payment 
 of a sum of money by him is good. True, he has no interest 
 in the life insured, and could not make a contract of insurance 
 on that life directly with the insurers, but the policy is sup- 
 ported by the interest of the assignor, and is in form payable 
 to her. If the assignment is good between the parties, it is 
 payable to her in trust for the assignee ; if void, for her own 
 use. The assignment passed the equitable interest in the 
 
 1 [Eckel V. Renner, 41 Ohio St. 232 ; Bursinger v. Bank of Watertown, 67 
 Wis. 75.] 
 
 2 [McFarland v. Creath, 35 Mo. App. 112.] 
 
 881
 
 § 399 A] INSURANCE : fire, life, accident, etc. [CH. XIX. 
 
 policy.^ A life policy is assignable, like any other cliose in 
 action when the transaction is not a mere cover for a 
 wager contract.^] 
 
 § 399. Assignment of Part Tvithout Assent invalid. — So also 
 an assignment of part of the proceeds of a policy, as, for in- 
 stance, by the insured, a debtor, to secure his creditor, carries 
 with it no obligation on the part of the insurer to pay the 
 assignee that part unless the insurer expressly assent, — upon 
 the familiar principle that a debtor cannot be presumed to 
 consent that what he has agreed to pay in solido and at once 
 to one person, he may be obliged to pay in parts to different 
 individuals. He will not be presumed to give several parties 
 several rights of action against him when only one right ex- 
 isted, unless he plainly assent thereto. Mere notice will not 
 do. And at law the creditor cannot recover in an action 
 against the administrator of the insured.^ In a cause in 
 equity, however, in Illinois, where the policy was payable to 
 the wife, and she had assigned a part of it to secure a debt of 
 her husband, and after his death refused to recognize the as- 
 signment, and claimed the whole amount, — on a bill of inter- 
 pleader, filed by the insurers, it was held that the assignment 
 must be enforced in favor of the creditor, and the balance of 
 the proceeds paid to the widow.* 
 
 [§ 399 A. A policy payable to the assured or his assir/ns, at 
 a future day named, or to his representatives if he should die 
 before that, is assignable, and carries to the assignee the right 
 to the sum payable in case of death before the day named.^ 
 If the assignee causes the death of the life-subject by felonious 
 means his recovery on the policy is defeated.^ I presume the 
 word " felonious " is very necessary, for he might worry the life 
 out of the insured or use other unfelonious means of exter- 
 mination and still recover. An assignment of a policy to a 
 
 1 [Mutual Life Ins. Co. v. Allen, 138 Mass. 24, 27, 29.] 
 
 2 [Fitzpntrick r. Hartford Life & Ann. Ins. Co., 56 Conn. 116; Bushnell v. 
 Bushnell, 92 Infl. 503, 602.] 
 
 3 Palmer v. Merrill, 6 Cush. (Mass.) 282. 
 
 * Pomeroy i'. Manhattan Life Ins. Co., 40 111. 398. 
 
 * [N. Y. Mat. Life Ins. Co. v. Armstrong, 117 U. S. 591.] 
 6 [Ibid.] 
 
 882
 
 CH. XIX.] ASSIGNMENT OF THE POLICY. [§ 399 B 
 
 morto:a2:ee carries the whole interest if needed to reach the 
 amount of the mortgage.^ Where one covenanted to settle 
 after-acquired property, on part of which there was a policy 
 conditioned against assignment, the settler was held to be a 
 trustee as to the policy. It was non-assignable at law, but he 
 could deal with tiie beneficial interest in it according to his 
 covenant.^ When a policy is assigned as collateral security 
 the assured must pay the premiums.^] 
 
 [§ 399 B. When a bankrupt assigned a policy to ^,but the 
 company, considering it invalid, paid the bankrupt one half 
 the insurance as a gratuity, and the policy was cancelled, it 
 M-as held, in an action by the assignee of the bankrupt against 
 A for trover, that the value of the policy only and not the 
 gratuity could be recovered.^ If A agrees to assign a life policy 
 to B., he must assign it free from all incumbrances except the 
 annual premiums.^ When a person assigns a policy, agreeing 
 to pay the premiums, and that if he does not the assignees 
 may pay them and add them to the mortgage debt, no action 
 can be brought to recover such premiums from the assignor, 
 for the agreement is that they are to be added to the mortgage 
 debt.^ The real injury sustained, not the amount of the prem- 
 iums, is the measure of damages.' The assignor of a policy 
 that was conditioned against going out of Europe, covenanted 
 not to do anything to avoid the policy. He did violate the 
 said condition, however, and the measure of damages on the 
 covenant was held to be the present value of the policy plus 
 the premiums which the defendant was to pay, but which, on 
 his failure, had been paid by the assignee.^ The measure of 
 damages for breach of agreement to assign a policy to the 
 vendee of the subject-matter, whereby the policy becomes void, 
 is not the injury to the house by the fire, but the cost of pro- 
 
 1 [Mund V. Insurance Co., 15 Phil. 291.] 
 
 2 [In re Turcan, 40 Cli. D. 5.] 
 
 8 [Grant v. Ala. Gold Life Ins. Co., 76 Ga. 575.] 
 
 4 [Wills V. Wells, 8 Taunt. 264 at 2G7.] 
 
 6 [Gatayes v. Flatlier, 34 Beav. 387.] 
 
 6 [Browne v. Price, 4 C. B. k. s. 598 at 613.] 
 
 ^ [National Ass., &c. i'. Best, 2 H. & N. 605 at 615.] 
 
 8 [Hawkins v. Coulthurst, 2 B. & S. 343.] 
 
 883
 
 § 399 C] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XIX. 
 
 curing insurance for the unexpired term. The plaintiff can- 
 not hold the vendor as insurer ; his agreement was to assign 
 the policy, not to insure himself, and the damage is the value 
 of the thing he agreed to transfer and did not. The plaintiff 
 upon breach of the contract should procure other insurance. 
 She cannot elect to remain uninsured and hold the vendor as 
 a policy maker.^ If the company sets up an assignment and 
 payment to the assignee, the burden is on the assured to resist 
 this prima facie defence by evidence that the assignment was 
 fraudulently obtained, and that before payment the company 
 had notice, and a letter from a stranger to the company is not 
 sufficient.2 The heir-at-law of a member may raise the point 
 that an assignment by the member is invalid because not 
 approved by the secretary .^J 
 
 [§ 399 C. Bequest, &c. — Where policies are held by a wife 
 on her husband's life, slie surviving him, and willing, after some 
 special bequests, all the residue of her property of whatever 
 kind which she ounied or was possessed of prior to the death of 
 her husband, to four persons named, the policies pass to these 
 persons under this clause.* The bequest of the testator of 
 " any money that he might die possessed of, or which might be 
 due and owing to him at the time of his decease," include 
 moneys receivable under a policy of insurance on his own life.^ 
 A policy may pass as a donatio mortis causa.^] 
 
 1 [Dodd V. Jones, 137 Mass. 322.] 
 
 2 Insurance Co. v. Rotli, 118 Pa. St. 329.] 
 
 s [Harman v. Lewis, 24 Fed. Rep. 97 (Mo.), 1885.] 
 
 4 [Halsey v. Patterson, 37 N. J. Eq. 445.] 
 
 5 [Petty V. Willson, 4 L. R. Cli. Ap. 574.] 
 
 6 [Amis V. Witt, 33 Beav. 619.] 
 884
 
 CH, XX.j BENEFICIARIES. 
 
 CHAPTER XX. 
 
 BENEFICIARIES. 
 
 Analysis. 
 
 § 399 D, Beneficiaries. 
 
 endorsement "loss payable to B." is equivalent to an 
 
 assignment with assent. 
 if A. agrees to insure for B.'s benefit, equity will protect 
 B. to the extent of his interest, and after notice the 
 company will pay A. at its peril. 
 two or more named as beneficiaries take equally, 
 one of several may assign to extent of his interest, 
 right of action, 
 §§ 399 E-399 K. Designation. 
 
 in the absence of provision to the contrary, any person 
 may be named as beneficiary whether inter- 
 ested in the life or not, § 399 E. 
 although the charter describes the company to be 
 for the benelit of widows and orphans, § 399 E. 
 a policy for the benefit of one not a relative nor inter- 
 ested in the life is not ngsiinst public policy, § 399 E. 
 contra, § 399 E.; and see Mich, case, § 399 F. 
 and if it were, only the insurer could object, § 399 E. 
 sometimes express permission is given to designate any 
 
 person whatever, § 399 E. 
 if the charter and by-laws limit the right of designation, 
 or express the method of doing it, the provi- 
 sion must be conformed to, § 399 F. 
 in some cases, however, only the company can 
 object, § 399 F. 
 subsequent marriage revokes designation (?), § 399 H. 
 if the insured makes no successful designation, the fund 
 goes to fulfil the first purpose named in the 
 charter (widow), §§ 399 F, 390. 
 if no specific purpose is so named, the fund be- 
 longs to the company, § 399 F. 
 courts are liberal in upholding a designation, §§ 390, 
 
 399 I, 399 0. 
 administrators of assignee and of creditor, § 390. 
 child, §§ 399 F., 390, dying in life of father, § 399 N. 
 under the words "my wife Mary and chil- 
 dren," a child by a former wife takes, 
 § 399 G. 
 but not Mary's child by another, § 399 G. 
 " child " will not include grandchild, § 399 G. 
 co7itra, § 399 G. 
 
 885
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC, [CH. XX. 
 
 except to keep funds from escheating to company, 
 
 § 399 G. 
 may mean adopted child, § 399 G. 
 
 dependants, § 399 E. 
 
 family, § 399 N, may include housekeeper, § 399 F. 
 
 •'friends," invalid designation, § 399 H. 
 
 grandchild, §§ 399 E, 399 G. 
 
 heirs, § 399 H. 
 
 mother, § 399 H. 
 
 uncle, § 399 H. 
 
 widow, §§ 399 F, 399 H. 
 
 wife, §§ 399 M, 390, 391, dying in life of husband, § 399 N. 
 Form of designation. 
 
 by indorsement required bv charter, § 399 F. 
 
 by will, §§ 399 J, 399 F, 399 0. 
 
 by entry on records, §§ 399 F, 399 I. 
 
 the substance will be looked to, § 399 I. 
 
 and a parol designation may be sustained, § 399 I. 
 
 but not to show that the declarant meant to keep the 
 benefit for himself, § 399 I. 
 
 a transfer to the wife recorded is the same as an original 
 designation, 399 I. 
 
 direction on back of policy sufficient, § 399 I. 
 
 error in naming not material if not misleading, § 399 K. 
 Possession of policy and receipt of a relative may be a defence 
 
 to company against beneficiary if so provided, § 399 K. 
 §§ 399 L-399 M. The Interest of the beneficiary is a vested one the moment the 
 policy is issued, unless the agreement contains a pro- 
 vision inconsistent with such a construction, and 
 neither the person procuring the insurance nor the 
 company, nor both, can by deed, will, or other act 
 divest that interest (§§ 390, 391, 392, 399 L, 399 P, 
 399 Q ; contra, slight authority, § 391), except by 
 breach of condition without collusion, § 399 L, nor 
 change it without consent of the beneficiaiy, at least 
 so long as he lives, g 399 L ; and some cases hold the 
 interest is his not only irrevocably for his life, but 
 in such sense as to pass to his heirs or repi'esenta- 
 tives, though he die before the assured, § 390. 
 
 admissions of the assured are not those of the benefi- 
 ciary, § 399 L. 
 
 only the beneficiary can surrender the policy, or put a 
 charge on it, §§ 390, 399 P. 
 
 usually the beneficiary holds against creditors of the as- 
 sured, § 390. 
 
 the company cannot set up the rights of creditors, § 390. 
 
 where the contract expressly permits change of benefi- 
 ciary, there is no vested interest until the death of 
 the assured, § 399 M. 
 § 399 N. Death of beneficiary before the assured (see also § 391 ) — 
 
 revokes appointment, and a new one may be made, un- 
 less the contract gives the benefit to the heirs or 
 
 886
 
 CH. XX.] BENEFICIARIES. 
 
 § 399 N (continued). representatives of the first beneficiary, or otherwise 
 
 provides for the contingency. 
 
 often the share of the deceased goes to the other 
 beneficiaries. 
 
 the terms of the contract govern, and must be care- 
 fully considered. 
 
 if the beneficiary is dead at the issue of the policy, the 
 appointment is a nullity. 
 § 399 0. Change of beneficiary (see also § 390) — 
 
 may be made if there is an express provision for 
 it, or the original contract is of character not to be 
 irrevocable, or subset^uent permission is given by 
 the beneficiary, or he dies before the assured, 
 and there is no provision inconsistent with a new 
 designation, § 399 0, though sume cases hold the 
 interest passes to the beneficiaries' representatives 
 without any special provision to that eflfect when he 
 dies befoie the assured, § 390 ; but this does not 
 seem reasonable. If I give to A. to take efl"ect at 
 my death, and A. dies first, the terms of the gift 
 can never take effect ; one ceases before the other 
 arises. It may be well enough to hold me bound 
 by what I have done, but not beyond what I have 
 done. At the death of A. the reason of my gift, so 
 far as I have expressed it, ceases. The appointment 
 should be prima facie irrevocable while A. lives, 
 and prima facie VQwokad by his death before me. 
 
 retaining possession of the policy is evidence that the 
 trust was revocable, § 399 0, unless the assured 
 is one of the contingent beneficiaries ; then his 
 keeping it is natural, § 399 Q. 
 the method prescribed by the charter or the policy must 
 be followed, but the courts will not let third per- 
 sons take advantage of slight informalities (Iowa 
 contra), and equity will relieve where the assured 
 has done all lie could, and will even complete the 
 change after his death, § 399 0. 
 the company may waive defects, and their own neglect 
 
 to complete the formalities will not protect them. 
 if the reason for naming the first beneficiary has ceased, 
 as where a girl breaks her engagement, equity will 
 cany the fund where it was intended to go, and 
 natural affection and the law of inheritance would 
 place it, although the transfer was not made, the 
 certificate demanded by the company being lost. 
 the rule requiring surrender of the certificate does not 
 apply when it is lost. 
 § 399 P. Surrender of the policy without assent of the beneficiary, and 
 
 even non-payment of the premiums after such 
 surrender, cannot affect the beneficiary where he 
 has a vested interest, and he can follow a policy 
 substituted for the old one. 
 
 887
 
 § 399 D] insurance: fire, life, accident, etc. [ch, xx. 
 
 § 399 Q. Husband and Wife ; see also §§ 390, 391, 391 A, 394. 
 
 assignment of policy by wife ; see also §§ 390, 391. 
 N. Y. laws, § 399 Q. 
 
 receiving part of fund from assignee a ratification, § 399 Q. 
 ratification by wife of policy taken in lier name by hus- 
 band without authority, § 394. 
 Georgia, § 399 Q. 
 Tennessee, § 391. 
 
 [§ 399 D. Beneficiaries.^ — To comprehend the law of insur- 
 ance we must keep in mind not only the insurer, the insured, 
 and the holder of the policy, but also the beneficiary who may 
 be still a fourth person. In determining the rights of one in 
 whose favor another has caused insurance to be made as a 
 voluntary benefit, we must take into account the language of 
 the policy, the provisions of charter and statute, the relations 
 of the parties at the time of insurance and of loss, and transac- 
 tions between them regarding the matter, the rights of credi- 
 tors, and the place of the contract. An indorsement on a 
 policy that the loss if any should be paid to B. is an admission 
 by the company that B. has an interest in the contract, and 
 is to receive a benefit from it.^ It is an assignment at the 
 inception of the policy with consent of the com})any. If a 
 mortgagor or vendee agrees to insure for the benefit of the 
 mortgagee or vendor, the covenantee will in equity be entitled 
 to the money to the extent of his interest, and the insurance 
 company after notice will pay to the insured at their peril.^ If 
 a benefit is given to several, no proportion being specified, tliey 
 take equally, although named as heirs.* For example, a bene- 
 fit to " wife and children " goes to them equally, not one- 
 lialf to the wife.^ One of several beneficiaries or contingent 
 beneficiaries may assign the policy to the extent of his or her 
 interest.*^ The words " heirs or representatives " in a policy 
 give a right of action to a daughter suing as sole heir.'' An 
 
 1 [On tliis subject see 17 Abb. N. C. p. 21, note] 
 
 2 [Franklin v. National Ins. Co., 43 Mo. 491 at 496.] 
 
 3 [Grange Mill To. v. Western Ass. Co., 118 111. 396] 
 
 4 [Wilburn v. Wilburn, 83 Ind. 55.] 
 
 5 [Felix V. Grand Lodge, A. 0. U. W., 31 Kans. 81.] 
 
 6 [Conn. Mut. Life Ins. Co. v. Baldwin, 15 R. I. 106.] 
 
 7 [Loos V. John Hancock Mut. &c. Co., 41 Mo. 538, 542.]
 
 CH. XX.] BENEFICIARIES. [§ 399 E 
 
 action of debt lies by the beneficiaries named in the death 
 certificate of a mutual assurance.^ If one having an interest 
 in mortgaged property procure insurance in his own name, 
 loss payable to the mortgagee, the latter may sue in his own 
 name ; ^ on the general principle that B. may sue on a promise 
 made for his benefit to A. But in New Brunswick a benefi- 
 ciary to whom the company have agreed to pay the insurance 
 may not sue in her own name.^] 
 
 [§ 399 E. Designation of a Beneficiary. — Where a company is 
 organized to aid widows, orphans, and dependants of deceased 
 members, a member who pays the premiums himself may, in 
 the absence of any provision to the contrary in the charter or 
 by-laws, name any one he pleases as beneficiary, although the 
 person has no insurable interest in his life.^ A grandfather 
 may insure his life and appoint his grandson to receive the 
 money. No pecuniary interest is necessary in the beneficiary. 
 Such a case is distinguished from one in which a person with- 
 out iusurable interest in the life of another procures insurance 
 upon it and pays the premiums for his own speculative ben- 
 efit.^ So a policy may be taken out on one's own life, and de- 
 vised or otherwise made payable to a stranger not interested 
 in the life of the insured.^ A policy of life insurance for the. 
 benefit of one not a relative is not against public policy, and 
 if it were, no one but the insurer could raise the question. It 
 could not avail his heirs. '^ But in Ohio mutual companies 
 must not issue certificates providing for the payment of money 
 to any others than the family or heirs of the member ; a con- 
 tract to pay to assigns, or to one not a relation, is against 
 public policy. It leads to gambling in the lives of venerable 
 paupers.^ Sometimes a by-law gives each member a right to 
 
 1 [Abe Lincoln Mut. Life & A. Soc. v. Miller, 23 Brad. 341.] 
 
 2 [Bertliold v. Clay Fire & Mut. Ins. Co , 2 Mo. App. 311 at 316.] 
 8 [Abbinett v. Northwestern Mut. Life Ins. Co., 21 N. B. R. 21G.] 
 4 [Milner v. Bowman, 18 Ins. L. J. 708, Ind. June 22, 1889.] 
 
 6 [Elkhart Mut. Aid &c., Ass. v. Houghton, 103 Ind. 28G, 291-292 ] 
 
 6 [Bloomington Mut. Ben. Ass. v. Blue, 120 111. 121 ; Martin v. Stubbings, 
 12G 111. 387.] 
 
 •^ [Johnson v. Van Epps, 110 111. 551.] 
 
 * [State V. Standard Life Ass., 38 Ohio St. 281, 298; State v. People's Ass., 
 42 Ohio St. 579.] 
 
 889
 
 § 399 F] INSURANCE : fire, life, accident, etc. [CH. XX. 
 
 designate on the books of the lodge any' person he chooses as 
 beneficiary. And where there is no prohibitive or restrictive 
 language in the charter any designation is good, although 
 the charter describes the company as for the benefit of widows 
 and orphans.! ^ benefit to go to the member's " family or as 
 he may direct " passes to any beneficiary named, though not 
 an heir or relative or member of the insured's family .^J 
 
 [§ 399 F. Charter and By-laws. — A beneficiary can only 
 be appointed in accordance with the charter and by-laws.^ 
 No one can be named as beneficiary who is outside the classes 
 specified in the charter.* Neither a member nor the company 
 nor the two combined can divert the corporate funds from 
 these classes.^ If the charter of the association provides how 
 and to whom the money shall be paid, the insured cannot 
 change the beneficiary.^ Where a company was organized to 
 secure insurance " to the family or heirs of any member on 
 his death," a policy payable to one who was neither an heir 
 nor a relation, and whose interest was not promoted by the 
 continuance of the "life," was held void as against public 
 policy.^ The term " family," however, will include a young 
 woman keeping house for an old man many years, and treat- 
 ing each other as father and daughter.^ When the by-laws of 
 an insurance company provide that the insured shall not by 
 will or otherwise so dispose of the policy as to deprive his 
 widow or his dependent children of its benefits, and further 
 that the proceeds should be paid to the widow for the bene- 
 fit of herself and dependent children, with a permission to ap- 
 point an executor to disburse the proceeds, the bequest by 
 the insured of <flOOO out of a 84000 policy to the widow, 
 where she had $2000 worth of other property, and the re- 
 
 1 [Maneely v. Knights of B., 115 Pa. St. .305] 
 
 2 [Mitchell V. Grand Lodge K. of L., 70 Iowa, ,360] 
 
 3 [In re WiUiam Phillips' Insurance, 23 Ch. D. 235.] 
 
 4 [Mat. Ben. Ass. v. Rolfe, 76 Mich. 140.] 
 
 5 [American Legion of Honor v. Smith, 45 N. J. Eq. 466 ; Duvall v. Goodson, 
 79 Ky. 224.] 
 
 6 [Presbyterian Mat. Ass. Fund v. Allen, lOG Ind. 593.] 
 ■? [Mut. Ben. Ass. v. Hoyt, 4G Mich. 473.] 
 
 8 [Carmichael v. Northwestern Mut. Ben. Ass., 51 Mich. 494.] 
 
 890
 
 CH. XX.] BENEFICIARIES. [§ 399 F 
 
 mainder of the policy proceeds to an only child who had 
 no other property, was sustainable as a reasonable exercise 
 of his discretion within the limits of the by-law. ^ If tlie by- 
 laws provide for the naming of beneficiaries by indorsement 
 on the back of the policy signed and witnessed, the signing is 
 essential.^ Where the money was to be paid to such person 
 as the member might direct by will or entry on the records of 
 the lodge or on the face of the certificate, and the member did 
 designate his sister in the latter way, but without her knowl- 
 edge or possession of the certificate, and after his death there 
 was found in his pocket a writing without date addressed to 
 his wife, stating that he wanted her to have all his effects, it 
 was held that the sister must have the insurance.^ Where 
 the statute authorizes the naming of legatees or devisees, but 
 does not forbid the appointment of beneficiaries otherwise than 
 by will, although the company might object if the designation 
 were not made by will, the widow or other expectant could 
 not.* If a member of an association " to provide for the 
 widow, orphan, heir, assignee, or legatee of a deceased mem- 
 ber," designates his wife who dies, and he, after marrying 
 again dies without further designation, the widow takes the 
 insurance, because in that way the first purpose of the cliarter 
 is fulfilled.^ If the charter is to provide for the " family or 
 appointee " and a member dies without appointing a bene- 
 ficiary, the wife and children take the fund.^ Otherwise, if 
 the charter does not specify a definite purpose for tlie fund, 
 where the constitution of a mutual society provides that the 
 insured shall designate in writing a nominee to whom the 
 money shall be paid at his death ; if no nominee is designated 
 the company is not liable to any one. If, however, tlie com- 
 pany is willing to pay the money it should go as part of the 
 estate to the executor."] 
 
 1 [Roberts v. Roberts. 64 N. C. 695.] 
 
 2 [Elliott V. Whedbee, 94 N. C. 115.] 
 
 3 [Highland v. Highland, 109 111. 366.] 
 * [Martin v. Stubbings, 126 111. .387.] 
 
 5 [Relief Ass. v. McAuley, 2 Mackey (D. C), 70.] 
 
 6 [Fenn ;'. Lewis, 81 Mo. 259.] 
 
 ■? [Order of Mut. Companions v. Griest, 76 Cal. 494.] 
 
 891
 
 § 399 H] INSURANCE : fire, life, accident, etc. [CH. XX. 
 
 [§ 399 G. " Childy — In case of a policy to " ray wife Mary 
 and children," a child by a former wife is a beneficiary. ^ To 
 " be paid to his wife, M. K., and children," means to his chil- 
 dren by this wife or others, not M. K.'s children.^ Where 
 "children" are named, parol evidence is not admissible to 
 show that a grandchild was meant to be included.^ But 
 where the charter provides that upon the death of a member 
 intestate without widow or child, the fund shall vest in the 
 company, the word " child "embraces grandchild.'* And a child 
 of a deceased child-beneficiary, takes under the policy.^ 
 Where a child by adoption is the only child, and circum- 
 stances show that the parties intended him to have the bene- 
 fits of the policy, he will take as beneficiary under the term 
 " children." *^] 
 
 [§ 399 H. Mother, Uncle, Heirs, Friends ; Subsequent Mar- 
 riage. — Although the constitution of a beneficiary association 
 states that its object is to provide for " the widow and or- 
 phan," an application designating the mother of the assured 
 as the beneficiary, accepted by the company, is binding under 
 the statute of 1882, c. 195, § 2, which enlarged Public Stat- 
 utes c. 115, § 8, so as to permit benefit associations to assist 
 widows, orphans, " or other relatives of deceased members." 
 And although the member subsequently married, the designa- 
 tion was not revoked.^ But in New York it has been held 
 that wdiere by the constitution and by-laws of a mutual society 
 the insurance money is to go to the widow unless some other 
 written designation is made by the insured to his lodge, if a 
 member being unmarried designates his uncle and afterward 
 marries, the marriage annuls the designation and the widow 
 takes the funds.^ A life policy payable to heirs or assigns 
 and never assigned is payable to the heirs, and they may 
 
 1 [McDermott v. Centennial Mat. Life Ass., 24 Mo. App. 73.] 
 
 2 [Knelilery. Centennial Mut. Life Ins. Co., 66 Iowa, 325.] 
 
 3 [Russell V. Russell, 64 Ala. 500] 
 * [Duvall V. Goodson, 70 Ky. 224.] 
 
 5 [Hull V. Hull, 62 How. Pr. 100.] 
 
 6 [Martin v. JEtna Life Ins. Co., 73 Me. 25] 
 
 ' [Massachusetts Catliolic Order of Foresters v. Callahan, 146 Mass. 891.] 
 8 [Sanger y. Kothsdiild, 50 Hun, 157, 16ir] 
 892
 
 CH. XX.] BENEFICIARIES. [§ 399 J 
 
 claim the proceeds as against creditors.^ The designation of 
 " friends " as the beneficiaries is invalid ; but the contract will 
 be enforced in favor of the " heirs " to whom the money was 
 to go on failure of " friends." ^] 
 
 [§ 399 I. Form of Designation. — Where a husband took out 
 a policy on his life to himself and his representatives, but it 
 was shown that he intended it for the benefit of his wife, and 
 was given to her after marriage, and the husband frequently 
 declared his intention to assign it to her, but never did so for- 
 mally, it was held that the policy was the wife's and not an 
 asset of the estate. Form must be disregarded to give effect 
 to the intent of the parties.^ But J.., having an insurable in- 
 terest in -6.'s house, insured it in 5.'s name, and as B.'s, agent 
 received the money after a loss. It was held that A. could 
 not prove by parol that he intended to have the benefit of the 
 policy himself.'^ When at the time a policy was issued a 
 transfer of it to the assured's wife was also made and recorded 
 at the issuing office, it is the same as though her name had 
 been inserted as beneficiary in tlie policy.^ A direction to pay 
 to A., written on the back of a policy payable to the writer, is 
 sufficient.^] 
 
 [§ 399 J. Designation hy Will. — A general designation by 
 will is sufficient, at least by estoppel, if received and retained 
 by the proper officers of the lodge as such designation without 
 objection to its formJ When the policy does not designate a 
 particular beneficiary, but provides that it shall be paid sub- 
 ject to the will of the insured, and by will he gives his entire 
 estate to B., subject to testator's debts, the insurance goes to 
 the executor, and he may sue for it in his own name.^ Where 
 the insured has a mere power of appointment the benefit does 
 not pass under a will disposing of all his estate, unless it 
 
 1 [MuUins V. Thompson, 51 Tex. 7] 
 
 2 [Rinrlge v. N. E. Mut. Aid Soc, 146 Mass. 286.] 
 8 [Estate of Madeira, 16 Phil. 399.] 
 
 * [Looney v. Looney, 116 Mass. 283 at 286.] 
 ^ [Succession of Richardson, 14 La. Ann. 1.] 
 6 [Eppinger v. Canepa, 20 Fla. 262.] 
 
 '' [Kepler v. Supreme Lodge, 45 Hun, 274] 
 
 * [Winterhalter v. Workmen's Guarantee Fund Ass., 75 Cal. 245.] 
 
 893
 
 § 399 L] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XX. 
 
 specifically makes the appointment. ^ Whether a solvent 
 testator can by will dispose of the proceeds of a policy on his 
 life payable to his legal representatives, quaere?''\ 
 
 [§ 399 K. Error in Name ; Possession of Policy. — When 
 a policy provided that the loss, if any, should be payable to the 
 North Western Life Insurance Company, it is immaterial that 
 the company's name is the North Western Mutual, k-c? Where 
 it was provided in the policy that " the production by the com- 
 pany of this policy and a receipt for the sum assured, signed 
 by any person furnishing proof satisfactory to the company 
 
 that he or she is the beneficiary, or , or relative by blood 
 
 of the assured, shall be conclusive evidence that such sura 
 has been paid and received by the person or persons lawfully 
 entitled to the same, and that all claims and demands upon 
 said company under this policy have been fully satisfied," it 
 was held that payment to the daughter of the insured, who 
 produced the policy and premium book and her receipt, were 
 a complete defence to the company against the beneficiary.*] 
 
 [§ 399 L. The Beneficiary takes a Vested Interest the mo- 
 ment the Policy is issued, unless the agreement by charter or 
 otherwise contains a provision inconsistent with such a con- 
 struction.^ A life policy and the money that may become 
 due on it belong the moment it is issued to the beneficiary 
 named in it, and the person procuring the insurance has no 
 power by deed, assignment, or will, surrender of the policy and 
 issue of a new one, or by other act, to transfer the interest to 
 any one else.^ His right cannot be affected by any acts of 
 
 1 [Duvall V. Goodson, 79 Ky. 224.] 
 
 2 [Blonin r. Phaneuf, 81 Me. 176.] 
 
 3 [North Western Mut. Life Ins. Co. v. Germania Fire Ins. Co., 40 Wis. 446 at 
 451.] 
 
 * [Metropolitan Life Ins. Co. i-. Shaffer, 50 N. J. 72.] 
 
 5 [See §§ 390, 391.] 
 
 6 [Central Bank of Washington v. Hume, 128 U. S. 195 ; Pingrey v. National 
 Life Ins. Co., 144 Mass. 374; Bayse v. Adams, 81 Ky. 368 ; Weisert v. Muelil, 
 id. 336 ; Wilmaser v. Continental Life Ins. Co., 66 Iowa, 417 ; Allis v. Ware, 28 
 Minn. 166 ; City Savings Bank v. Whittle, 63 N. H. 587. So far as it concedes 
 a right of revocation in the party insuring; Conig Land v. Smith, 79 N. C. 303, 
 is overruled. Hooker v. Sugg, 102 N. C. 115, 120 ; Conn. Mut. Life Ins. Co. v. 
 Baldwin, 15 R. I. 106; Wilburn v. Wilburn, 83 Ind. 55.] 
 
 894
 
 CH. XX.] BENEFICIARIES. [§ 399 N 
 
 the assured subsequent to the execution of the policy ,i except 
 it be a breacb of condition ; unless by charter or otherwise it 
 is a part of the original agreement that the beneficiary may be 
 changed, or the beneficiary and the person procuring tlie in- 
 surance enter into an agi'eement as to what control each shall 
 exercise over the policy. Then the indefeasible interest other- 
 wise vesting in the beneficiary may not arise.^ If A. takes out 
 a policy for his children, the interest vests in them, and if A. 
 afterwards surrenders the policy on receiving the cash value 
 of it, he is liable to the cliildren for the amount.^ Xo ad- 
 missions of the assured subsequent to the policy are admissi- 
 ble against the beneficiary.'*] 
 
 [§ 399 M. When there is no Vested Interest until Death of 
 Assured.^ — In those companies, however, that expressly per- 
 mit a change of beneficiary without consent of the former 
 appointee, the person first designated acquires no vested inter- 
 est during the life of the insured, but only an expectancy.^ 
 As where the policy provides for change.'^ The wife has no 
 vested interest which she can assign or devise until the death 
 of her husband. If she dies first, her interest terminates and 
 does not go to her heirs or representatives.^] 
 
 [§ 399 N. Death of Beneficiary. — If the beneficiary die, 
 another may be named, ^ unless the charter or contract fixed 
 the benefit in the heirs or representatives of the first benefi- 
 ciary. The death of the beneficiary before the assured is a 
 revocation of the appointment. So where the insured named 
 his wife S.to receive the money, and S. dying, he married P., it 
 was held that P. was entitled to the money, under the general 
 
 1 [Kline v. National Ben. Ass., Ill Ind. 462.] 
 
 2 [Spla\Yn r. Cliew, 60 Tex. 532 ; Kicker r. Charter Oak Ins. Co., 27 Minn. 193.] 
 
 3 [Waldrom i-. Waldrom, 76 Ala. 285.] 
 
 * [Supreme Lodge &c. v. Schmidt, 98 Ind. 374.] 
 
 6 [See § 391.] 
 
 6 [Martin v. Stubbings, 126111. 387; Union Mnt. Life Ins. Co. v. Stevens, 19 
 Fed. Rep. 671 (111.), 1883; Supreme Conclave, Roy. Adelphia v. Cappella, 41 
 Fed. Rep. 1 (Mich.), 1890 ; Mut. Ass. v. Montgomery, 70 Mich. 587.] 
 
 ^ [Holland v. Taylor, 111 Ind. 121; Masonic Mut. Ben. Soc. v. Burkhart, 110 
 Ind. 189 ] 
 
 8 [Mutual Ben. Ass. v. Rolfe, 76 Mich. 146.] 
 
 9 [Van Bibber's Adra. v. Van Bibber, 82 Ky. 347.] 
 
 VOL. II. — 13 895
 
 § 399 N] INSURANCE : fire, life, accident, etc. [ch. XX. 
 
 provisions of the by-laws respecting cases of failure to desig- 
 nate a beneficiary.^ If the beneficiary dies in the lifetime of 
 the assured the policy may devolve on the latter.^ As where 
 a policy is for the benefit of the children of the insured and 
 some of them die during the " life," a share of their interest 
 passes to the insured, and at his death vests in his representa- 
 tives unless he made some other proper designation.^ Where 
 a policy is issued on the life of C. in favor of his wife and 
 children, share and share alike, or their legal representatives, 
 if one of the children die in the life of C, a portion of the child's 
 interest goes to the father C, and maybe verbally pledged by 
 him as security for a debt."^ A wife beneficiary died in the 
 lifetime of her husband A., the insured, leaving five children. 
 On the death of A. his administrator has a right to one-sixth 
 of the insurance money .^ When A. insured his life for the 
 sole and separate use of his wife, and in case of her death for 
 her children,^ and she and her children die in the life of A., the 
 beneficial interest is then in A., and a son of his by a former 
 wife may inherit the funds. Where S. insures his life in a 
 sum payable to himself and his assigns for the benefit of his 
 wife, and she dies leaving S. and two children, one-third of the 
 policy goes to S., and two-thirds to the children, as heirs of 
 the wife, subject to the right of her administrator to collect 
 the whole ; and H., to whom S. assigned the policy for debt, has 
 no claim upon it except to the extent of the one-third that 
 has come to S. and the premiums paid by H.'^ In North 
 Carolina, where A. insures his life for the benefit of his " wife 
 and children," if his wife dies before him her share will go to 
 her administrator, and the surplus above her debts to the ad- 
 ministrator of A., and be liable for his debts. If the wife is 
 dead at the issuing of the policy her name in the policy is a 
 
 1 [Given t-. Wisconsin O. F. M. L. Ins. Co., 71 Wis. 547, 551] 
 
 2 [Wicksteed v. Munro, 10 Ont. R. 283, R. S. 0. Ch. 129, § 14.] 
 
 3 [Shields v. Sharp, 35 Mo. App. 178 ; Conn. Mut. Life Ins. Co. v. Baldwin, 
 15 R. I. 106] 
 
 1 [Macaulay v. Central Nat. Bank, 27 S. C. 215.] 
 
 5 [U. B. Mut. Aid Soc. v. Miller, 107 Pa. St. 162.] 
 
 6 Libby V. Libby, 37 Me. 359.] , 
 
 7 [Harley v. Heist, 86 Ind. 196.] 
 
 896
 
 CH. XX.] BENEFICIARIES. [§ 399 N 
 
 nullity. If one of the two children die before A. the insur- 
 ance money will be divided between the survivin<^ child and 
 the administrator of the dead child. ^ If a father takes out a 
 policy on his life in favor of his daughter, the contract of the 
 company is with the latter, and upon her death the legal 
 title to the insurance passed to her legal representative who 
 is entitled to demand possession of the policy, and the father 
 must deliver it to him.^ The personal representatives of any 
 beneficiaries who die before or after the insured take their 
 share of the insurance.^ Where, if the wife dies before the 
 husband the fund is to go to their three children, the personal 
 representatives of a child dying after the mother but before 
 the father take its share, and not the grandchildren.^ Where 
 J. insures his life, payable to himself if he lives thirty years, 
 if not then to his father, W., and the latter dies first, his ad- 
 ministrator may recover the insurance on J.'s death within 
 thirty yeai'S.^ If payment is to be made to " wife or legal 
 representatives of the assured," the administrator or executor 
 of the assured takes in case the wife dies before him.^ Where 
 the beneficiary was named as Mrs. H. M. Case, or law-heirs, 
 and the lady manifestly intended was Mrs. A^ M. Case, who 
 died, and the insured afterward married Emma Case, the in- 
 surance lapsed as to the Mrs., and the heir Inez II. Case took 
 the fund.*" Where the beneficiary named is the " family " of 
 tlie insured, consisting at the time of insurance of wife and 
 daughter, and the daughter marries, and she and her husband 
 and children reside with her father until her death, on the 
 subsequent demise of the father the wife takes the whole in- 
 surance as being the whole " family." ^ If the money is to go 
 to the wife and five children equally and one child dies after 
 the insured, the whole goes to the widow and four remaining 
 
 1 [Hooker v. Sugg, 102 N. C. 115.] 
 
 2 [Glanz I'. Gloeckler, 104 III. 573. See also 10 Brad. 484.] 
 8 [Drake v. Stone, 58 Ala. 133.] 
 
 « [United States Trust Co. r. Mutual Ben. Life Ins. Co., 115 N. Y. 152.] 
 6 [Mumford v. Mumford, 19 N. S. B. 210.] 
 6 [Johnson V. Van Epps, 110 111. 551.] 
 
 • [Day V. Case. 43 Hun, 179.] 
 
 * [Brooklyn Masonic Relief Ass. v. Hanson, 53 Hun, 149.] 
 
 897
 
 § 399 0] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XX 
 
 children.^ Where a policy runs to the wife S. and " their 
 children," and she dies, and the insured marries again, a sur- 
 viving child of S. takes the whole fund, and not the children 
 of the second marriage.^] 
 
 [§ 399 0. Change of Beneficiary. — If there is express pro- 
 vision for change, or the original contract is of a character 
 that shows it was not irrevocable, or subsequent permission 
 is obtained from the beneficiarv, or the beneficiary dies before 
 the assured and there is no provision inconsistent with a new 
 appointment, a new designation may be made in the mode 
 prescribed if there is one, but the courts lean to upholding a 
 designation if clear though defective in form. Where the 
 policy stipulates that it is a contract with the insured and 
 not with beneficiaries, and provides for change of designation, 
 even this may be dojie after the certificate has been handed 
 to the beneficiary first named, with the remark by the insured 
 that he gave her (his wife) the insurance.^ 
 
 In New York the superior court reinarked that whatever 
 may be said of the case where the policy is handed over to 
 the beneficiary, one who insures his life in trust for his chil- 
 dren, but retains possession of the policy and pays the pre- 
 miums, shows that he does not intend to make the trust 
 irrevocable, and may surrender the policy and take out a new 
 one for some other beneficiary. It is a mere gratuity, and there 
 are many reasons why it sliould be regarded as revocable.* 
 The insured may change the beneficiary on the books of the 
 company, if the prior beneficiary paid nothing.^ If the benefi- 
 ciary dies before the assured he may change the designation.^ 
 If a policy is payable to the wife or legal representatives of 
 the assured and the wife dies, the insured will have the same 
 power over it as if originally payable to himself.''' Where the 
 
 1 [Covenant Mut. Ben. Ass. v. Hoffman, 110 111. 603.] 
 
 2 [Lockwood V. Bishop, 18 Ins. L. J. 491 (N. Y.), special term, 1876.] 
 
 3 [Catholic Knights of American. Morrison, 18 Ins. L. J. 479 (R. I.), Feb. 89.] 
 
 4 [Garner v. Germania Ins. Co., 13 Daly, 255, 261-262.] 
 
 5 [Lament v. Hotel Men's Mut. Ben. Ass., 30 Fed. Rep. 817 (III.), 1887.] 
 
 6 [Olmstead v. Keyes, 85 N. Y. 593 (wife) ; Bickerton v. Jaques, 12 Abb. N. 
 C. 25 (sister).] 
 
 7 [Johnson v. Van Epps, 110 III. 551.]
 
 CH. XX.] BENEFICIARIES. [§ 399 
 
 organic law or the by-laws provide a spccilic method for 
 changing the beneficiary, as by issue of a new certificate on a 
 written order to the secretary, it must be done in that way, 
 and cannot be accomplished by the will of the member.^ If 
 the policy is payable to A., unless a different payee is desig- 
 nated by an order acknowledged before a justice of the peace, 
 designation by an ordinary will is not sufficient to change the 
 payee.2 In a Kansas case, where a written request was sent 
 to the company by order of the insured while on his death- 
 bed, and the company thereupon issued a new certificate in 
 accordance with the request, the change was held good, al- 
 though some of the formalities required by the constitution 
 of the Lodge had not been complied with. The Olmstead 
 case was commented upon as differing, in the fact that the 
 company had issued no new certificate in that case ; and the 
 rule was laid down that a by-law merely directory and for 
 the benefit of the association could not be taken advantage of, 
 by outside parties claiming the insurance,^ — against the bene- 
 ficiary appointed by means recognized by the company, I 
 think, should be added. In Iowa, however, it is held that the 
 company or the beneficiary who would take if the informal 
 designation had not been made, may raise the objection.^ In 
 the Federal courts it is more sensibly held that the rule that 
 the method of designation laid down in the policy and by-laws 
 must be followed, is subject to three exceptions. (1) The 
 society may waive the rules. (2) If it is beyond the power 
 of the assured to comply with the rules equity will relieve ; 
 and (3) If the assured has pursued the rules and done all in 
 his power to change the beneficiary, but dies before the new 
 certificate is issued, equity will treat the certificate as issued.^ 
 If the policy is issued on the " express condition that the 
 assured may with the assent of the company assign or change 
 
 ' [Olmstead v. Benefit Society, 37 Kans. 93 ; Stephenson v. Stephenson, 6-t 
 Iowa, 534 ; Holland v. Tajlor, 111 Ind. 121 ; Americaa Legion of Honor v. Smith, 
 45 N. J. Eq. 46(J.] 
 
 2 [Mellows V. Mellows, 61 X. H. 137.] 
 
 ** [Titsworth v. Titsworth, 40 Kans. 571, 576.] 
 
 * [Wendt V. Iowa Legion of Honor, 72 Iowa, 682.] 
 
 * [Supreme Conclave, &c. v. Cappella, 41 Fed. Eep. 1 (Mich.), 1890.] 
 
 899
 
 § 399 P] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XX. 
 
 the beneficiary," or if the constitution of the company so pro- 
 vides, the designation is not irrevocable, and where the insured 
 has made a valid promise and an effort to change the desig- 
 nation but died before it is accompUshed, equity will con- 
 sider that to be done which ought to be done, and hold the 
 right transferred.! Where the charter of the company recog- 
 nizes the right of a member to designate the beneficiary by 
 will, a by-law providing that " no change of designation shall 
 be made or recognized until submitted to and approved by the 
 board of directors," will not be sustained to defeat a changed 
 designation by will not so approved.^ Where C. made D. (to 
 whom he was engaged) his beneficiary, and she afterward 
 broke the engagement and married another, and C. clearly in- 
 dicated his intent to pass the insurance to his son and a 
 stranger G., but did not succeed in getting a new certificate 
 because the old one was lost, and the insurer demanded its 
 surrender, equity, on the death of C, gave the fund to the son. 
 The reasons for making D. the beneficiary had ceased to ex- 
 ist, and the fund should go where natural affection and the 
 law of inheritance would place it.^ And the rule requiring 
 the surrender of the old certificate in order to change the 
 beneficiary cannot apply when the certificate is lost.*] 
 
 [§ 399 P. Surrender of Policy ; Non-Payment of Premiums. 
 — While the beneficiary lives no surrender of the policy 
 without his assent,^ or non-payment of premiums after such 
 surrender, will defeat his right. A surrender of the pol- 
 icy by the husband for the wife is ineffectual if without 
 her authority .<^ If a husband takes out a policy on his 
 life for the benefit of his wife and child, they acquire a 
 vested interest in it at the moment of its delivery to the in- 
 sured, although no knowledge of it comes to them until after 
 his death, and he cannot defeat their rights by a surrender 
 
 1 [Nally V. Nally, 74 Ga. 670 ; Martin v. Stubbings, 126 111. 387.] 
 
 2 [Raub V. Masonic Mut. l^elief Ass., 3 Mackey (D. C), 68.] 
 
 3 [Grand Lodge v. Child, 70 Mich. 163, 170, 171.] 
 * [Grand Lodge v. Child, 70 Mich. 163 ] 
 
 5 [Manhattan Life Ins. Co. v. Smith, 44 Ohio St. 156; Garner v. Germania 
 Life Ins. Co., 110 N. Y. 266.] 
 
 6 [Matter of Booth, 11 Abb. N. C. 145.] 
 
 900
 
 CH. XX.] BENEFICIARIES. [§ 399 Q 
 
 without their assent ; and although the policy may be forfeited 
 for non-payment of premiums, yet non-payment of premiums 
 after such an attempted wrongful surrender without notice to 
 the beneficiaries will not forfeit the policy .^ If husband, by 
 agreement with insurance agent, allows policy to lapse and 
 takes out a new one, the wife can hold the substituted policy .^ 
 If a husband exchanges the policy for a paid-up policy, and 
 afterwards surrenders this on receiving a certificate of its 
 value, the wife, knowing nothing of the whole matter until 
 after his death, may adopt his exchange and repudiate his 
 surrender, and compel the company to pay her, although the 
 certificate had been paid to an assignee.^ Failure to pay pre- 
 miums after surrender of a policy with a forged release of the 
 beneficiary is no defence against the beneficiary.* But if the 
 beneficiary dies in the lifetime of the insured, the latter may 
 surrender the policy and take out a different one without 
 consent of the representatives of the deceased beneficiary.^ 
 When a policy was payable to B's wife or her representatives, 
 and she paid the premiums, she died in B.'s life, and he 
 contrived with the company to let the policy lapse by non- 
 payment of premiums, and took out a new policy to himself 
 and his representatives, the old policy being really a part 
 consideration for the new one. On B.'s death, it was held that 
 the funds should be divided between the administrators of B. 
 and of the wife in proportion to the amount of premiums paid 
 by their respective intestates.^] 
 
 [§ 399 Q. Husband and Wife. — A policy on A.'s life payable 
 to his wife is her property and may be assigned by her if the 
 law of her domicil allows her to sell and convey her property.'^ 
 
 1 [Wliitehead v. N. York Life Ins. Co., 83 Hun, 425 ; 102 N. Y. 143, 156 ; 
 Whitehead v. N. Y. Life Ins. Co., 63 How. Pr. 394; People v. Globe Mut. Life 
 Ins. Co., 65 How. Pr. 239] 
 
 2 [Barry v. Brune, 71 N. Y. 261 ; Brockhaus v. Kemna, 7 Fed. Rep. 609 
 (Wis.), 1881 ; 10 Biss. 338 ; 10 Ins. L. J. 632.] 
 
 3 [People I'. Globe Mut. Life Ins. Co., 15 Abb. N. C. 75. Compare Newcomb 
 V. Alniy, 96 N. Y. 308.] 
 
 4 [Schneider v. United States Life Ins. Co., 52 Hun, 130.] 
 s [Bickerton v. Jaques, 28 Hun, 119] 
 
 8 [National Life Ins. Co. v. Haley, 78 Me. 268.] 
 
 ' [Damron v. Penn Mut. Life Ins. Co., 99 Ind. 478.] 
 
 901
 
 § 399 Q] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XX. 
 
 Where a man takes out a policy that will give him a fund if 
 he lives till a time stated, and if he dies will secure a fund to 
 his wife, she has a vested interest which she can transfer by 
 assignment,! although the husband retained possession of the 
 policy. He naturally would do this in case of such a policy 
 on account of his own interest in it. But if the whole bene- 
 iicial interest in the poHcy is in the wife, it has been held in 
 New York, that she could not assign it by reason of statute pro- 
 tection.2 j^j^^ by the New York Laws of 1879 a wife's in- 
 terest in a policy on her husband's life is assignable by her 
 with the written consent of her husband.^ And the assignee 
 need not have an insurable interest.* Since the act of 1873, 
 however, the wife may assign a policy in which the chil- 
 dren are not interested.^ Where a wife is to be the bene- 
 liciary if she survives her husband, but if not her children are 
 to have the money, her assignee stands in no better position 
 than she does, and if after assignment the wife dies in the 
 lifetime of her husband the children may recover the fund.^ 
 Where the wife after the death of her husband received from 
 the assignee a part of the proceeds, it was held a ratification.^ 
 If the wife transfers the policy during coverture to secure a 
 debt of her husband, the assignment is void, and if after his 
 death she ratifies the transfer with consideration, it is still 
 void.^] 
 
 1 [Fowler v. Butterly, 44 N. Y. Super. 148, 159.] 
 
 2 [De Jonge v. Goldsmith, 46 N. Y. Super. 131 ; Brumraer v. Colin, 58 How. 
 Pr. 239 ; 62 id. 171, Laws of 1840 Ch. 277 ; Mutual Life Ins. Co. v. Ferry, 62 id. 
 325 (assignment though made in another State is void) ; Eadie v. Slimmon, 26 
 N. Y. 9 ; Barry v. Brune, 71 N. Y. 261 ; Wilson v. Lawrence, 76 N. Y. 585.] 
 
 3 [Whitehead v. N. Y. Life Ins. Co., 63 How. Pr. 394.] 
 
 * [St. John V. American Mut. Life Ins. Co., 13 N. Y. 31.] 
 6 [Brick v. Campbell, 54 N. Y. Super. 305] 
 
 6 [Brown's App., 125 Pa. St. 303.] 
 
 7 [Robinson v. Mutual Ben. Ins. Co., 16 Blatch. 194 (N. Y.), 1879.] 
 
 8 [Smith t'. Head, 75 Ga. 755.] 
 
 902
 
 CH, XXI.] OP THE RISK, ITS DURATION AND EXTENT. 
 
 CHAPTER XXI. 
 
 OF THE RISK, ITS DURATION AND EXTENT. 
 
 Analysis. 
 
 § 400. When the Risk Begins. 
 
 Time is of the essence of the contract. The risk attaches 
 from the date of the policy if delivered, unless a 
 contrary intent appears. The consummation of the 
 contract may, however, be prior to the delivery of 
 the policy (see chap. iv.). All the circumstances and 
 provisions are to be taken into account to determine 
 the intent of the parties on principles of justice. 
 Day of date included. 
 A risk cannot attach before the organization of the com- 
 pany is completed so far as to authorize it to take 
 the risk. 
 § 401. When it terminates. 
 
 Time in remote part of the world must be reduced to 
 
 the time at place of contract. 
 Fire breaking out before expiration of policy but actual 
 
 loss afterward, recovery ? 
 Injury within time causing death after expiration of 
 the policy, or after ninety days from accident, no 
 recovery. 
 Last day named included. 
 
 If no duration is specified, a reasonable time is under- 
 stood. 
 While drying hops, suspension during burning of forests 
 "for ten days prior to shipment," terminates in ten 
 days or on shipment. 
 " Until landed." 
 §§ 401 a-401 C. Place is often material, § 401 a. It may always be made so 
 by explicit language, § 401 C, and the description of 
 goods as at a certain place is frequently held a con- 
 tinuing warranty, § 401 B; but the nature and use of 
 the property is to be considered, and the insurance 
 will not fail because goods are away for repairs, or a 
 team is in pasture or field instead of barn, § 401 C. 
 Insurance of goods on shipboard covers them while 
 on the steam launch, § 401 C. Property in ordinary 
 use away from place of deposit is protected. See also 
 §420. 
 
 903
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 § 402. The Risk and what it includes. 
 
 In the absence of specification, loss by fire, accident, 
 death, or any other cause insured against is within 
 tlie policy, ichaicvcr the manner of loss, e. g., igni- 
 tion is not necessary to claim under a fire policy. 
 The insurers are not liable, however, for loss by an 
 excessive use of heat purposely applied, as in over- 
 roasting coft'ee, § 402 and n. Insurance against stat- 
 ute liability does not cover common-law liability. 
 Ice included in river perils in spite of parol under- 
 standing to the contrary ('.). Wind. Hail. Cap- 
 ture. Insuring a ship for voyage A. does not cover 
 voyage B. 
 §403. " Usurped power." " Civil Commotion." 
 
 Mobs. Riots. Proximate cause. 
 " Resistance to authority " held not to include 
 action of a group of escaping convicts. 
 § 404. Injury by water and removal or theft in consetj^uence of 
 
 bona fide and prudent efforts to save from fire, are 
 within policy. Such efforts must be encouraged. In 
 many cases the property would burn if not for the 
 water or removal. 
 § 405. Smoking. Goods illegally kept for sale. 
 
 § 406. Lightning policy. Loss by tornado and lightning covered. 
 
 § 407. Misconduct. Fraud. Suicide. "Wilful destruction of 
 
 property fatal to claim under the policy unless loss 
 was certain any way. (See also § 411.) 
 § 407 A. If loss is caused by wrongful act of third person or by 
 
 assured while insane, the company is liable. 
 Company liable. 
 
 violation of orders by guests, 
 neglect of captain to register goods, 
 incendiarism, 
 by stranger. 
 by wife, 
 by assured while insane. 
 
 § 408. Negligence. 
 
 Mere negligence, however great, if short of fraud, 
 is covered by the jjolicy, § 408. See also § 410. 
 And if only the remote cause of loss is no de- 
 fence even when the policy expressly excepts 
 loss by negligence, § 408. 
 § 409. "Wilful exposure. General current of authority is tliat 
 
 even the utmost recklessness is no defence on a life 
 policy unless so expressed. 
 § 409 A. Exposure to obvious and unnecessary danger, 
 
 going along railroad track at night is. 
 crossing in daytime may be. 
 going to rescue of wrecked orew not. 
 § 410. "Design." Gross negligence not fraud, though it may 
 
 be evidence of it. 
 
 904
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. 
 
 § 411. Misconduct avoids a policy. 
 
 It differs from negligence. It is said that misconduct is 
 a violation of detinite law ; carelessness is an abuse of 
 discretion under an indefinite law. Misconduct is a 
 forbidden act, carelessness a forbidden quality of 
 an act. If the element of wilfulness conies in, we 
 have misconduct or fraud, not negligence. 
 § 411 A. Marine Insurance, Negligence, Barratry, Tlieft. 
 
 § 412. If after a fire is out the weakened walls fall and crush an adjoin- 
 
 ing building, this loss is within a policy against damage 
 by fire. Otherwise if seven days after the fire a gale blows 
 the walls down, or walls fall from inherent weakness before 
 there is any fire. 
 §§ 413-416. Spontaneous Combustion (§ 413) is within a fire policy (contra, 
 
 § 413 n. ), and an exi)losion would seem also within it, 
 § 413, but is frequently excepted, § 415. 
 Explosion incident to a fire not within the exception, § 416. 
 
 nor one resulting from the business insured, § 415. 
 Concussion not within a fire policy, § 414. (Distinction 
 
 rather fine.) 
 There are numerous cases, in some of which the insured 
 was injured by explosion following fire, and in others 
 by fire following an explosion, and conditions and 
 opinions are various. See also § 418. 
 Bursting of boilers, § 415. 
 § 417. Collision. If a vessel injured by collision and afterwards taking 
 
 fire would have gone to the bottom and been totally 
 lost without the fire, the loss is not by tire ; but if 
 the fire was an essential factor in the vessel's loss, 
 it comes within the policy, § 417. 
 It is sometimes difficult to tell how far to carry the rule 
 excluding a remote cause. See §§ 417, 417 A, 419. 
 § 419. Intemperance. Accident, &c. Proximate cause. 
 
 Intemperance causing acts of exposure which produce death, is 
 the cause of death. 
 § 419 A. Kules of company against intemperance must be obeyed. 
 
 " sober and temperate " does not imply total abstinence, 
 "seriously impair health" means his health; evidence 
 that he drank enough to impair ordinary health not 
 sufficient, 
 excessive drinking violates warranty against pernicious 
 habit obviously tending to shorten life. 
 , Evidence. Beneficiary not estopped by doctor's statements. 
 
 Agent's knowledge may prevent company from insisting on con- 
 dition against intemperance, 
 and yet death from intoxication may avoid the policy. 
 
 §§ 420-421. "What property is covered. 
 
 doubt resolved against company, § 420. 
 wearing apparel, § 420. 
 
 linen, stock, furniture, fixtures, jewelry, merchandise, 
 plate, refined oil, house, ship-yard, C9,rs, unfinished 
 
 905
 
 400] insueance: fire, life, accident, etc. [ch. xxi. 
 
 house or boat, lumber, mill, factory, machinery, tools, 
 grain, cattle, § 420. 
 
 stock of liair, iron, corn, rice, fur, freight, § 420 A. 
 
 additions, goods in outbuildings or on a hired vessel, 
 g 420 B. 
 
 what is covered, question for jury, § 420 A. 
 
 evidence admissible to show what was meant to be in- 
 cluded, §§ 420, 420 A. 
 
 misdescription disregarded if sufficient to identify, 
 § 420 A. 
 
 usage received in favor of assured, § 420 A. 
 
 after-acquired stock covered, § 420 B. 
 
 "lost or not lost," § 420 B. 
 
 goods included by mistake, company not liable, § 420 B. 
 
 other goods shipped m place of those described, not cov- 
 ered, § 420 B ; premium recovered. 
 
 indorsement of specific goods, secretary cannot waive the 
 condition, § 420 B. 
 
 New York mutual companies may insure foreign resi- 
 dents aud property, § 420 B. 
 
 goods in trust and bailments, § 420, 
 
 § 400. Duration of the Risk ; When it commences ; " Time of 
 Insurance ; " Time of Death. — Time is material in the con- 
 tract, and as a general rule the policy, if delivered, takes 
 effect from its date, unless it be otherwise stated, as that it 
 shall not be valid till the premium be paid, or some other con- 
 dition be complied with, and then upon the payment of the 
 premium or compliance with the required condition, or a 
 waiver of either, it covers the subject-matter of insurance 
 from the date of the policy, unless there is evidence of a con- 
 trary intent.! If the premium be paid, and the policy be not 
 delivered till afterwards, the policy takes effect by relation as 
 of its date, even though a loss intervenes.^ If it be delivered, 
 but upon the express stipulation that it is to take effect on a 
 certain day, that stipulation will control ; ^ or, upon the ex- 
 press understanding that it is not to take effect till another 
 
 1 Ruse V. Mut. Ben. Life Ins. Co., 23 N. Y. 516; Whitaker v. Farmers' Union 
 Ins. Co., 29 Barb. (N. Y.) 312; Hallock v. Com. Ins. Co., 2 Dutch. (N. J.) 268; 
 s. c. affirmed, 3 id. 645 ; arite, §§ 57, 58, 64, 65. 
 
 2 Lightbody v. N. A. Ins. Co., 23 Wend. (N, Y.) 18 ; City of Davenport t;. 
 Peoria Mar. & Fire Ins. Co., 17 Iowa, 276. 
 
 3 American Horse Ins. Co. v. Patterson, 28 Ind. 17 ; Western v. Genesee 
 Mut. Ins. Co., 2 Ker. (N. Y.) 258. 
 
 906
 
 OH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 400 
 
 policy has been surrendered, it will not relate back so as to 
 cover a loss which occurs prior to the required surrender.^ 
 
 In Isaacs v. Royal Insurance Company,^ it was queried 
 whether a policy from a certain day to a certain other day 
 would cover a loss on the first-mentioned day ; but in Massa- 
 chusetts it has been held that a lease from the " first day of 
 July " takes effect on the second day of July.^ " From the 
 day of the date," and " from the date," were formerly held to 
 be distinguished in that, in the computation of time, it was 
 reckoned from the day in the former case, and excludes it, 
 while in the latter it was reckoned from the act or thing; 
 done, and includes the day on which it is done.'* But it has 
 since been held in England that the two phrases mean the 
 same thing, and that the rule of inclusion or exclusion applies 
 according to the intent of the parties, to be derived from the 
 context. In this country, however, there is, in some courts, 
 an inclination to adhere to the distinction.^ It is impossible, 
 however, to reconcile the decisions either with the rule of 
 inclusion or exclusion. The circumstances and intent of the 
 parties are to control ; and such construction should be given 
 as will operate most to the ease of the party entitled to favor, 
 and by which rights will be secured and forfeitures avoided.^ 
 And where the policy was in fact a reinsurance, and was for 
 a year, but specifying no time when the year was to begin, it 
 was held that it began from the date of the prior policy, 
 though that was some months prior to the issue of the latter 
 policy." 
 
 The time of insurance, within the meaning of a policy 
 which provides that it is not to take effect if the subject of 
 insurance is deceased " at the time of insurance," is not ne- 
 cessarily identical with the date of the policy. By its special 
 
 1 Atlantic Ins. Co. v. Goodall, 35 N. H. 328. 
 
 2 39 L. J. Exch. 189. 
 
 3 Atkins V. Sleeper, 7 Allen (Mass.), 487. 
 « Sir II. Howard's Case, 2 Salk. 625. 
 
 5 Atkins V. Sleeper, 7 Allen (Mass.), 487; Blake v. Crowninshield, 9 N. H. 
 304 ; Cornell v. Moulton, 3 Denio (N. Y.), 12 ; Weeks v. Hull, 19 Conn. 376. 
 
 6 O'Connor v. Towns, 1 Texas, 107. 
 
 ■^ Phila. Life Ins. Co. v. Am. Life Ins. Co., 23 Pa. St. 65. 
 
 907
 
 § 400] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 terms the policy may provide that the insurance shall run 
 from a certain day prior to its date to a certain day subse- 
 quent thereto ; and if the death of the subject-matter of in- 
 surance intervene between the first date and the date of the 
 policy, it will be a loss covered by the policy. When the pol- 
 icy itself covers a period antecedent to its date, and does not 
 specify the contingency upon which it shall take effect, the 
 date of the policy or of its actual delivery becomes of little or no 
 importance in determining when the insurance takes effect.^ 
 
 [A mutual company is not liable for a loss occurring 
 after application, but before the company has received the 
 final certificate of the auditor. Up to that time it has no 
 power to contract. The insured seeks membership, and he 
 must be charged with knowledge of the charter. Even if 
 the agent represented to him that the insurance bound the 
 company from the date of application the company is not 
 estopped.''^ A provision that no benefits will be due or payable 
 if death occurs within three months from the date of the pol- 
 icy, is valid.*^ In general, insurance on goods from A. to £. 
 by a certain ship commences w^hen the goods are put on 
 board.^ When the underwriter stipulated verbally that if the 
 ship did not sail in five days he would not be liable, and 
 where because of danger of capture she did not sail for a 
 month, the policy was held good as the stipulation was not 
 contained therein.^] 
 
 " While lying in Victoria Dock, with liberty to go into dry 
 dock," covers the passage to and from the dry dock, but not a 
 period occupied on the way for repairs ; ^ and " while loading 
 at B." covers the period while tlie vessel is at B. for the pur- 
 pose of loading, whether she be actually engaged in loading 
 or not." A " port risk " protects only while the vessel is 
 
 1 American Horse Ins. Co. v. Patterson, 28 Ind. 17; Kentucky Mut. Ins. Co. 
 V. Jenks, 5 Ind. 96. 
 
 2 [Manuf. & Merchant's Mut. Ins. Co. v. Gent, 13 Brad. 308.] 
 
 3 [Bniton V. Met. Life Ins. Co., 48 Hun, 204.] 
 
 * [Mobile xMar. D. & Mut. Ins. Co. v. McMillan, 31 Ala. 711 at 723.] 
 
 s [Whitney v. Haven, 13 Mass. 172 at 173.] 
 
 •5 Pearson v. Commercial Union Ass. Co., 45 L. J. C. P. 761. 
 
 ^ Reed v. Merchauts' Mut. Ins. Co., 95 U. S. 23. 
 
 908
 
 CH, XXI.J OF THE RISK, ITS DURATION AND EXTENT. [§ 401 
 
 in port, and prior to the commencement of the voyage by 
 leaving the wharf.i 
 
 § 401. Duration of the Risk; When it terminates. — When 
 the fire breaks out before the expiration of the policy, but 
 the property is not consumed till after, the whole damage, 
 says Alauzet, would be considered as occurring at the time 
 the fire breaks out.^ It would hardly be contended, however, 
 that death after the expiration of the policy, the result of a 
 disease contracted however recently before, would be within 
 the protection of the policy. If the death or loss should 
 happen in a remote part of the world, the difference of time 
 might give rise to the question whether the death was before 
 the hour fixed as the termination of the policy. In order to 
 give the insured the benefit of the exact time, no more and 
 no less, the time of death, where it occurred, whether in east 
 or west longitude, and therefore earlier or later than the 
 actual time, must be reduced to the time of the place of the 
 contract." Insurance from a given day until a certain other 
 given day, and for so long after as the insured shall pay the 
 premium paid on the first day, extends to and includes the 
 latter day, it being the evident intention that the policy is to 
 be renewed, as any other construction would leave the insured 
 without protection on each day of renewal.* A comparatively 
 recent case in Massachusetts presented a question of some 
 complication as to the time covered by the policy. The pol- 
 icy was dated Oct. 5, 1866, and contained the following 
 clauses : " This policy of insurance is for the period of twelve 
 months, commencing at twelve o'clock (noon) on the fifth 
 day of October, 1866, and terminating at twelve o'clock 
 (noon) on the fifth day of October, 1867, " " against loss of 
 life ... to be paid within ninety days after sufficient proof 
 that the assured at any time after the date hereof, and be- 
 fore the expiration of this policy shall have sustained per- 
 
 ' Nelson v. Sun Ins. Co., 71 N. Y. 453. See also 2 Parsons, Mar. Ins. 53 etseq. 
 
 2 Des Ass., 2, §461. 
 
 3 Schofield V. Jones, 2 Ins. L J. (Eng.) 640 6. 
 
 * Isaacs et al. v. Royal Ins. Co., 22 L. T. 681. Tlie court take pains to say, in 
 this case, that they do not wish to give any opinion as to whether the first day 
 is also included. 
 
 909
 
 § 401] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 sonal injury caused by any accident within the meaning of 
 this policy, , . . and such injuries shall occasion death with- 
 in ninety days from the happening thereof." On the eleventh 
 day of December 1866, at nine o'clock in the forenoon, the 
 insured met with an accident, in consequence of which he 
 died on the 12th of March, 1867, about nine o'clock in the 
 forenoon. Upon these facts the court (Chapman, C. J.) 
 says : — 
 
 " No computation of time will bring the death within ninety 
 days from the happening of the accident. But the rule of 
 computation is stated in Atkins v. Sleeper.^ When time is 
 computed from an act done, the general rule is to include the 
 day. When it is computed from the day of the act done, the 
 day is excluded. The language of the instrument requires 
 that the computation be made from the time of the act done, 
 namely, the accident. 
 
 " But it is contended that as this is an insurance for twelve 
 months, the provision by which it is attempted to exempt the 
 company from liability for the death of the insured, happen- 
 ing from a cause within the meaning of the policy during said 
 term, is inconsistent with the general object and tenor of the 
 policy, and is void. No such inconsistency is apparent to the 
 court. On the contrary, the policy clearly describes the cases 
 in which the loss of life shall make the company responsible, 
 and limits the liability to such cases. It is further contended 
 that if the provision in the jjolicy that the injuries shall occa- 
 sion death within ninety days can have any legal force or effect, 
 it must be construed to mean such injuries as shall occasion 
 death within ninety days after the termination of the twelve- 
 month. But as the ninety days are expressed to be from the 
 happening of the accident, this construction cannot be ac- 
 cepted. It is said that unless the clause be void, or be con- 
 strued as above stated, an effectual life insurance for more 
 than ninety days was impossible. If this were so, it would be 
 the result of the terms of the contract upon which the action 
 is brought. But here is simply an insurance against certain 
 accidents which may happen within a given time, and result 
 
 1 7 Allen (Mass.), 487. 
 
 910
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 401 
 
 fatally within a given time after they happen." ^ Where the 
 risk is to continue till the voyage is stopped by ice or the 
 closing of navigation, it will be a question for the jury where 
 the voyage was stopped, if the circumstances and causes are 
 in dispute.^ Where the insurance was upon a certain build- 
 ing for a specified time, while drying hops, a loss during the 
 time specified, but after the insured had ceased drying hops, 
 was held not to be covered by the policy ; otherwise, the 
 words " while drying hops " would have no significance.^ If 
 the policy excludes liability for damage from " burning of 
 forests," and provides that tbe risk shall be suspended during 
 the existence of such contingency, proof that the fire hap- 
 pened while the neighboring forests were burning will release 
 the insurers from liability.* An agreement to cancel, if exe- 
 cuted, is effectual without an erasure of the insured's name 
 from the books, although by the policy the insurance can 
 only thus terminate.'' [A " risk of fire on shore for ten days 
 prior to shipment" means that if the goods burn while on 
 shore awaiting ship, and within ten days after the insurance 
 is effected, the loss is covered by the policy.^ In an action 
 against an insurance company on an open policy of insurance 
 against fire and other marine risks, on provisions on vessels 
 until landed, where it was in evidence that a part of the pro- 
 visions had been landed when a fire broke out on shore, des- 
 troying them, it was held that the company was not liable 
 for their loss." Where the policy did not state the period the 
 risk was to cover, and a loss occurred fourteen days after its 
 date, it was held to cover such loss, it being within a reason- 
 able time.^] 
 
 1 Perry v. Prov. Ins. & Inv. Co., 99 Mass. 162. 
 
 2 Sherwood v. Agricultural Ins. Co., 73 N. Y. 447 ; post, § 401 a. 
 
 3 Langwortliy i-. Oswego Ins. Co., Sup. Ct. (N. Y.) ; 11 Reptr. 744. 
 
 * Commercial Un. Ass. Co. v. Canada Iron, &c. Co., 18 L. C. Jur. (Q. B.) 80. 
 As to the effect of days of grace within whicli renewal premiums may be paid 
 upon the prolongation of the original contract beyond its stated limits, see ante, 
 § 354 et seq. ; Connell v. Scottish Commercial Ins. Co., 3 Ins. L. J. (Eng.) 536. 
 
 * Farmers' Mut. Ins. Co. v Wenger (Pa. ), 8 Ins. L. J. 712. 
 6 [Fire Ins. Co. v. Merchants, &c. Trans. Co., 66 Md. 339.] 
 
 ' [Mansur v. N. E. Mut. Mar. Ins. Co., 12 Gray, 520 at 527.] 
 
 8 [Schroeder v. Trade Ins. Co., 109 111. 157.] 
 
 VOL. II.— 14 911
 
 § 401 a] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 § 401 a. Place is also material in the contract ; and unless, 
 under special exceptions, the removal of the subject-matter — 
 as, for instance, a stock of goods — from the place where situ- 
 ated when insured leaves nothing to which the policy can 
 attach at the time of the loss, though no doubt a recognition 
 bj the insurers of the validity of the policy after notice of 
 removal will have the effect to protect the goods in their new 
 place of deposit.^ Sometimes, however, as we have seen, the 
 nature of the property is such that the description of place is 
 necessarily somewhat indefinite.^ When there is doubt as to 
 the place, as where the policy may apply to goods contained 
 in one or several rooms or buildings, evidence is admissible 
 to solve the doubt, aided by the principle that, if the descrip- 
 tion be by the insurer, the insured must have the benefit of 
 the doubt.^ Where permission was given to remove to a 
 new place, the policy was held to protect in the old place 
 till removal.* A policy on goods in a given story will cover 
 goods removed from one room to another in the same story .^ 
 
 Insurance on a stock of goods covers after-acquired and 
 substituted goods in the same place to the amount of the origi- 
 nal insurance, if the loss amounts to so much.^ So it covers 
 loss by fire by spontaneous combustion of coals, and coals 
 substituted, to the amount insured.'' So it covers stacks of 
 wheat on a part of the farm purchased since the policy was 
 
 1 Harris v. Royal Can. Ins. Co., 53 Iowa, 236 ; Williamsburg City Fire Ins. 
 Co. V. Cary, 8-3 111. 453 ; Boynton v. Clinton, &c. Ins. Co., 16 Barb. (N. Y.) 254 ; 
 Lycoming Ins. Co. v. Updegraff, 40 Pa. St. 311. 
 
 2 Ante, § 219 ; fost, § 420 ; Eddy St. Foundry v. Farmers' Mut. Ins. Co., 5 
 R. I. 426. 
 
 3 Beatty v. Lycoming Ins. Co., 52 Pa. St. 456; ipost, § 420; Lycoming Ins. 
 Co. V. Sailer, 67 Pa. St. 108 ; Bowman v. Agr. Ins. Co., 59 N. Y. 521 ; Fair v. 
 Manhattan Ins. Co., 112 Mass. 320; Meadowcroft v. Standard Ins. Co., 61 Pa. 
 St. 91 ; Hews v. Atlas Ins. Co., 126 Mass. 389 ; Bryce v. Lorillard Ins. Co., 55 
 N. Y. 240. 
 
 * Kunzze v. Am. Exchange Ins. Co., 41 N. Y. 412, affirming s. c. 2 Robt. 
 (N. Y.) 443. Contra, McClure v. Lancashire Ins. Co., 6 Ir. Jur. n. s. 63 ; s. c. 4 
 Ben. Fire Ins. Cas. 488. 
 
 5 Westi^. Old Colony Ins. Co., 9 Allen (Mass.), 316. 
 
 6 City Fire Ins. Co. v. Mark, 45 111. 482; Butler v. Standard Fire Ins. Co., 4 
 App. R. (U. C.) 391 ; ante, § 265 ; Planters' Ins. Co. v. Engle, 52 Md. 468. 
 
 7 British Am. Ins. Co. v. Joseph, 9 L. C. Rep. (Q. B.) 448. 
 
 912
 
 CH. XXI.] OF THE EISK, ITS DURATION AND EXTENT. [§ 401 B 
 
 issued, and even though the new purchase is not adjoining 
 the other land.^ 
 
 [§ 401 B. Place material. — Where furniture is described 
 
 as ^'contained in house number " of a certain street, the 
 
 description of locality is construed as a continuing warranty.^ 
 Goods described as being in a " store " are not covered by the 
 policy, if in reality they are in a tavern, for that is a more 
 hazardous location than the one described.^ Goods insured 
 as " contained in his two-story frame dwelling-house," are 
 not covered when removed to the barn.* Where the policy in- 
 sured " household furniture contained in a house and additions 
 occupied as a residence " and in another clause, " horse, bug- 
 gies, &c., in barn," the assured was not allowed to recover for 
 a loss of the former by the burning of the barn, into which they 
 had been removed on account of a previous fire in the house.-'^ 
 A policy on a building and " sleighs, hacks, &c., contained there- 
 in " does not cover damage to one of the hacks while off for 
 repairs in a shop one eighth of a mile away.^ Clothing, de- 
 scribed as in a certain building, is not covered while removed 
 during a long journey or protracted visit.^ Where a horse, har- 
 ness, &c., insured as " personal farm property in buildings and 
 on farm " were destroyed by fire while in the barn of a village 
 hotel, the company was not liable.^ There was in this case 
 another element, viz., that the hotel was within one hundred 
 feet of other buildings, and the by-laws of the company placed 
 such a risk beyond tlie limits of the policy .^J 
 
 1 Sawyer v. Dodge Co. Mut. Ins. Co., 37 Wis. 503, 508. See also Mills v. 
 Farmers' Ins. Co., 37 Iowa. 400, where the insurers were held liable for a horse 
 purchased after the policy was issued, and killed while off the premises on his 
 way to mill. But in Providence, &c. R. R. Co. v. Yonkers Ins. Co., 10 R. I. 74, 
 ])roperty situated on after-acquired property, thougii adjoining, was held not to 
 be within the risk. 
 
 2 [Lyons v. Prov. Wash. Ins. Co., 14 R. I. 100, reversing 13 R. I. 847.] 
 
 3 [Prudhomme v. Salamander Ins. Co., 27 La, An. 695 at 696.] 
 
 4 [English V. Franklin Ins. Co., 55 Mich. 273-274.] 
 
 5 [English V. Franklin Ins. Co., 21 N. W. Rep. 340 at 341.] 
 
 6 [Bradbury v. Insurance Cos., 80 Me. 396] 
 
 • [Towne v. Fire Ass. of Philadelphia, 27 Brad. 4.33.] 
 
 8 [Wildey v. Farm Mut. Fire Ins. Co., 52 Mich. 446, 449.] 
 
 9 [Ibid. 449.] 
 
 913
 
 § 402] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 I § 401 C. Company held though Property out of Place. — A 
 seal-skin dolman described as " contained in " a certain dwelling 
 was held covered by the policy, although burned while at a fur- 
 rier's and under a greater risk than at home.^ The nature and 
 use of the property insured must be taken into account. In the 
 case of furniture the designated location is an essential ele- 
 ment, but in respect to things naturally moved about in their 
 ordinary use it is otherwise. Many cases concerning animals, 
 garments, vehicles, and machines are quoted in the Wisconsin 
 case last cited. A policy on carriages <S:c., " contained in " 
 a livery stable covers them while temporarily absent for re- 
 pairs.2 An insurance of a horse and other property " contained 
 in a barn " is not a promissory warranty that the horse is to 
 be kept in the barn all the time waiting for a fire or a stroke 
 of lightning. A loss while in pasture on the farm is covered.^ 
 An insurance of goods on board a ship to a certain port ex- 
 tends to the boat by which they are landed.* A policy may 
 always be so written as not to cover any goods except they be 
 at a specified place, if sufficient care is taken to make the in- 
 tent perfectly clear. ^] 
 
 §402. Risk; "What it includes ; Fire. — Unless there be in 
 the policy specific limitations, the risk extends to all losses by 
 fire, death, or accident, or whatever cause of loss or injury be 
 insured against, however they may be occasioned.^ [When a 
 fire policy expressly excepts certain occasions of fire, all other 
 occasions or causes of fire are included in the risk.''] Of the 
 force and effect of some of the exceptions and limitations, we 
 have already treated.^ It has often been said that loss by fire 
 means by actual ignition ; and for this the early case of Austin 
 V. Drewe ^ is cited as an authority, which simply decides that 
 
 1 [Noyes r. N. W. Nat. Ins. Co., 64 Wis. 415.] 
 
 2 [Niagara Ins. Co. i-. Elliott, 18 Ins. L. J. 628 (Va.) June 89.] 
 
 3 [Haws V. Fire Ass., 114 Pa. St. 431 ; De Graff i-. Queen Ins. Co., 38 Minn. 
 501.] 
 
 * [Pelly V. Royal Exch. Ass. Co., 1 Burr. 341 at 348.] 
 
 5 [First Nat. Bk. v. Lancashire Ins. Co., 62 Tex. 461, 464 ; Home Ins. Co. v. 
 Baltimore Warehouse Co., 3 Otto, 527.] 
 
 6 Ante, §§ 174, 330, and post, § 420. 
 
 ■? [Insurance Co. v. Transportation Co., 12 Wall, 194 at 197.] 
 8 Ante, ch. ix. ^ 6 Taunt. 436. 
 
 914
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 402 
 
 an insurance company is not liable, on a policy insuring against 
 all damage by fire to the stock and utensils of a sugar-house, 
 for damage done to the sugar by the heat of the usual fires 
 employed for refining, the fires being unusually intense by rea- 
 son of negligence in their management. And it has been sug- 
 gested that the true ground of the decision was, that insurers 
 do not undertake to be responsible for the excessive use of 
 fire purposely used, whereby the article to which the fire is 
 purposely applied is damaged, whether by heat or ignition ; 
 and that they would be no more liable in this case than they 
 would where bread is overbaked or coffee is overroasted. At 
 all events, if the case of Austin v. Drewe decides anything 
 more than is above suggested, it has been denied to be good 
 law by very high authority.^ And it can scarcely be doubted 
 that in certain cases injury done to a building and its con- 
 tents by heat, as by scorching paint, cracking glass, and blis- 
 tering pictures and furniture, or heating and thus destroying 
 many articles of commerce, without actual ignition or visible 
 burning, is within the risk ; though it is no doubt true that 
 where a chemist, artisan, or manufacturer employs fire in the 
 processes of art and manufacture, and the article which is 
 thus purposely subjected to the action of fire is damaged in 
 
 1 Gushing, J., in Scripture v. Lowell, 10 Cush. (Mass.) 356. After a very 
 able criticism of the case of Austin v. Drewe, Gushing, J., adds : "It has been 
 thought proper thus to analyze the case of Austin v. Drewe, because, having 
 been variously reported by four different reporters, and presenting itself promi- 
 nently in several of the text-books, but in nearly all of them with more or less 
 of misconception, it lias become the starting-point, in legal construction, of con- 
 flicting lines of argument, leading to sundry false conclusions, and among others 
 that of a supposed application to the present case." See also note of Judge 
 Bennett, appended to the case in the first volume of his " Fire Insurance Cases," 
 p. 104. Trumbull, J., Gase v. Hartford Ins. Co., 13 111. 676. Pardessus, Gours 
 de Droit Com., § 590, 2, puts the case thus : " If A.'s house is burned by an 
 accidental fire, the heat whereof injures the goods of B., whose house, however, 
 the fire does not reach, B.'s insurer is responsible, for the injury is indirectly 
 caused by the peril insured against. But if A. kindles so great a fire in his fur- 
 nace that the heat penetrates the partition wall between him and B., injuring 
 B.'s goods, B.'s insurer is not liable, as the injury is not caused by the peril in- 
 sured against." [Ignition is not necessary ; all loss arising directly and imme- 
 diately from that peril is covered, Balestracci r. Firemen's Ins. Co , 34 La. Ann. 
 844; as the foil of buildings, scattering of acids, &c. Transatlantic fire Ins. 
 Co. V. Dorsey, 56 Md. 70] 
 
 915
 
 § 402] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 the process, — the fire not passing its ordinary Ihnits, — such 
 damage is not within the loss covered by the policy. ^ In So- 
 hier v. Norwich Fire Insurance Company ,2 which was a case 
 where the fire, originathig from without a theatre, heated its 
 walls to such a degree as to cause it to take fire within, the 
 insurers were held liable. The policy, however, provided that 
 they should be exempt from loss for fire originating in the 
 theatre, and the real question was, whether the fire in this case 
 originated in the theatre ; and it was held that it did not. In 
 Brown v. King's County Fire Insurance Company,^ a druggist 
 was warming upon his stove an inflammable ointment, as he 
 was wont to do, which took fire and communicated with the 
 building ; and it was held that this was a loss covered by the 
 policy. [A policy insuring an employer against loss by his 
 statute' liahWity for employees does not cover damages obtained 
 from him at common law.* Parol evidence of an agreement 
 at the time of insurance that a contract insuring generally 
 against river perils was not intended to cover ice, is not 
 admissible.^ Sometimes buildings are insured against whicl^ 
 or crops against hail.'' Where a policy on a ship excepted 
 liability for capture, and when a storm arose so that a portion 
 of the cargo was thrown overboard to save the crew, and later 
 the ship ran into a foreign port for safety, and there fell into 
 the hands of enemies, it was held that the company was liable 
 for the goods thrown overboard, but not for the rest. The 
 
 1 Ibid. ; Beaumont, Ins. 37. 
 
 2 11 Allen (Mass.), 336. 
 
 3 31 How. (N. Y.) 508. 
 
 * [Morrison v. Scot. Employees Life & Ace. Ass. Co. (Lim.), 2G Scot. L. . 
 R. 151.] 
 
 s [State Fire & Mar. Ins. Co. v. Porter, 3 Grant's Cas. 128 at 121. JJ. Wood- 
 ward and Strong dissented on the ground that the contract was not clear, and 
 parol evidence to explain its meaning should have been received, and this cer- 
 tainly seems the fairer, sounder view of the facts of the case. The plaintiff was 
 distinctly told at the time of insurance that the contract did not cover ice, and 
 evidence should be received to show the manner in which the parties understood 
 the words of the policy in such a case.] 
 
 ® [Sexton V. Hawkeye Ins. Co. 69 Iowa, 99. The effects of a storm on neigh- 
 boring property is competent to show that it was a " tornado." Poggensee v. 
 Mut. Fire, Lightning & Tornado Ins. Co., 69 Iowa, 157.] 
 
 7 [Mut. Hail Ins. Co. v. ^Yilde, 8 Neb. 427.] 
 
 916
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 403 
 
 proximate cause of loss in every case must be looked to.^ If a 
 policy is'made expressly to cover " all risks contained in regular 
 policies of insurance," loss by capture is covered, and no parol 
 evidence is admissible to show that the parties only intended 
 sea-risks.^ Insurance of a ship for a voyage, " Cochin, Alipee, 
 and New York," does not cover the vessel if she sails on 
 " Cochin, Colombo, Alipee, New York." That is a different 
 voyage.^] 
 
 § 403. Risk; "Usurped power;" "Civil Commotion;" "Mobs 
 or Riots." Proximate Cause. — Destruction by fire set by an 
 ordinary mob is not destruction by " usurped power." 
 " Usurped power " would seem to mean that of an armed 
 invasion or rebellion, when armies are on foot in their sup- 
 port. And perhaps there is a distinction between an or- 
 dinary mob or bread riot, and a rebellious mob or one having 
 political purposes. The one would be treasonable, and might 
 be properly said to usurp power, while the other would be 
 only criminal. A riot to reduce the price of bread is no 
 usurpation of power to do it, because government itself has 
 no such power. ^ Nor is a destruction of the property by 
 order of the municipal authorities to stay a conflagration a 
 destruction caused by " usurped power," even though it be 
 done illegally. It is only a destruction by those usurping the 
 power of government that is excluded by such a provision.^ 
 " Usurped power " is " rebellion conducted by authority " " got 
 to such a head as to be under some authority." ^ And 
 fire occasioned by the burning of a bridge, lawfully ordered 
 by the military authorities, to prevent the advance of a hos- 
 tile armed force, regularly organized, is not a loss " occa- 
 
 1 [Rice V. Homer, 12 Mass. 230 at 237.] 
 
 2 [Levy V. Merrill, 4 Me. 181 at 186.] 
 
 8 [Dickie v. Merchants' Mut. Ins. Co., 4 Russ. and Geld. (Nova Sco.) 244.] 
 
 * Wilmot, C. J., in Drinkwater v. Lon. Ass. Co., 2 Wilson, 363. 
 
 6 City Fire Ins. Co. v. Corlies, 21 Wend. 367 ; Pentz v. JEinn Ins. Co., 9 Paige, 
 Ch. (N. y.) 568 ; Field v. City of Des Moines, 39 Iowa, 575. The first fire is the 
 proximate cause. The exception from risk of losses occasioned by the explosion 
 of gunpowder applies only to cases of fire originating with the explosion. Green- 
 wald V. Insurance Co., 3 Phila. 323. 
 
 6 Per Lord Mansfield, Langdale v. Mason, 2 Marsh. Ins. 792. 
 
 917
 
 § 403] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 sioiied by mobs or riots." ^ In Barton v. Home Insurance 
 Company,^ during the late rebellion, the national soldiers 
 were overpowered and compelled to surrender to an armed 
 and organized force of rebels, by whom the property was 
 burned ; but there was no evidence that the destruction was 
 authorized by an order from the commanding officers. After 
 referring to the English cases, and to the fact that the case at 
 bar was one of novel impression in this country, the court, in 
 giving judgment for the defendant, proceeds : — 
 
 " It would be doing violence to the language which the 
 parties have seen fit to use, and would be also a strained and 
 unnatural interpretation of their meaning, to say that the 
 insurer would be liable in all cases, except when he could 
 show that the burning took place by order of the officer imme- 
 diately commanding the rebellious forces. The language of 
 the proviso is, that the company shall not be liable for any loss 
 or damage by fire which may happen by means of invasion, 
 military or usurped power, &c. If the military or usurped 
 power, or the invasion, was the means that occasioned, or the 
 proximate cause of, the loss, then the company cannot be held 
 liable within the terms of the contract. An army of invasion, 
 or engaged in rebellion, is liable to commit acts of spoliation 
 or burning without any direct commands from the superior 
 officers, and the insurer certainly never intended to incur a 
 risk by reason of such acts. To exonerate the defendant from 
 its liability, it is not material how, or in what way, the fire 
 originated, provided it was within the range of any one or 
 more of the excepted causes. The real question is, did the 
 fire happen or the loss occur by reason of, or in consequence 
 of, the military and usurped power of the rebels ? . . . and 
 were they the proximate cause of the burning and destruction 
 of the property ? " So where the property was ordered to be 
 burned by a Union officer to prevent its falling into the hands 
 of his Confederate assailants, the burning was held to be within 
 the exception.^ The doctrine of this case is, however, ques- 
 
 1 Harris v. York Mut. Ins. Co., 50 Pa. St. 341. 
 
 2 42 Mo 156. 
 
 3 ^tna Ins. Co. v. Boon, 95 U. S. 117, reversing s. c. 40 Conn. 575. 
 
 918
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 403 
 
 tioned on the propriety of the application of the rule proxima 
 causa, &c.,iu a later case in Virginia, where it is held that the 
 real and proximate cause of the fire was the unnecessary 
 action of the Union forces, and not the unlawful invasion of 
 the Confederate forces. The invasion had not rendered the 
 burning necessary, and therefore had not caused it, — a rule 
 which certainly opens up a field of inquiry bristling with 
 great if not insuperable difficulties.^ 
 
 Civil commotion seems to be something less than usurped 
 power, and something more than a mob or riot. It is an insur- 
 rection of the people, setting the authority of the government 
 at defiance, venting its fury upon all who are obnoxious, and 
 seeking general confusion and destruction, and, perhaps, with 
 a view to prevent the enforcing of certain particular laws. 
 The anti-Roman Catholic riots of London in 1780, which grew 
 out of hostility to the laws granting certain privileges to the 
 Catholics, and were long-continued and violent and tumul- 
 tuous, amounted to a " civil commotion " within the meaning 
 of a policy exempting the insurers from loss in case of " civil 
 commotion." This "is not an occasional riot," said Lord 
 Mansfield to the jury in that case; "that would be another 
 question. I do not give any opinion what that miglit be. 
 ... 1 think a civil commotion is this, — an insurrection of 
 the people for general purposes, though it may not amount to 
 a rebellion where there is a usurped power." ^ If the insurer 
 be liable for loss occasioned by a riot, the fact of the riot need 
 not first be established by a criminal prosecution, nor is it 
 material that the riotous assemblage was originally gathered 
 for a lawful purpose.^ In this case there seems to have been 
 an affray, succeeded by a riot ; that is, said the court, " a 
 tumultuous disturbance of the peace by three persons or 
 more ; " and the fact that it was preceded by an affray did not 
 make it the less a riot. In Spruil v. North Carolina Mutual 
 Life Insurance Company,* a runaway slave, whose life was 
 
 1 Portsmouth Ins. Co. v. Reynolds, .32 Grat. 613. 
 
 2 Langdale v. Mason, 2 Marsli Ins. 792. 
 
 3 Dupin V. Milt. Ins. Co., 5 La. Ann. 482. 
 * IJones (N. C), 126. 
 
 919
 
 § 404] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 insured, was shot while resisting the lawfully appointed patrol 
 who were pursuing him ; and upon the question whether his 
 death was " by means of any invasion, insurrection, riot, or 
 civil commotion, or of any military or usurped authority, or 
 by the hands of justice," the court defined an insurrection to 
 be " a seditious rising against the government ; a rebellion ; 
 a revolt ; " and a riot to be " where three or more persons 
 actually do an unlawful act, either with or without a common 
 cause, . . . the intention with which the parties assemble, or 
 at least act, being unlawful," — in the latter respect differing 
 from the judgment of the Supreme Court of Louisiana, as 
 stated above. In the same case a commotion was said to be 
 " a tumult ; and a tumult to be a promiscuous commotion in a 
 multitude, an irregular violence, a wild commotion. A civil 
 commotion, therefore, requires the wild or irregular action of 
 many persons assembled together." And to die by the hands 
 of justice was said to be " to die by some general sentence for 
 the commission of some felony." As the slave met his death 
 in resistance to lawful authority, the loss was held not to be 
 within any of the exceptions. [A loss caused by a party of men 
 firing shots, driving away the watchman, and setting fire to 
 the premises is a loss by " riot." ^ A clause exempting the com- 
 pany in case of fire resulting from riot or other " notorious 
 resistance to authority," construed in connection with the pre- 
 ceding clause relieving the company in case of fire caused by 
 invasion, foreign enemy, insurrection, civil commotion, lawful 
 military power, or usurped power, does not free the company 
 where the fire was caused by five convicts, who conspired to 
 escape from prison and who yielded immediately on coming in 
 contact with an officer.^] 
 
 § 404. Risk ; Injury by Water and Removal ; Theft. — Dam- 
 age resulting from bona fide efforts to save the property from 
 the fire, as by water,^ and breakage by removal, and by loss or 
 
 1 [Lycoming Fire Ins. Co. v. Schwenk, 95 Pa. St. 89, 90.] 
 
 2 [Strauss v. Imperial Fire Ins. Co., 94 Mo. 182.] 
 
 3 [Goods, in tlie lower story of a house which was on fire, were damaged by 
 water, and it was hehl that the insurers were liable on a policy against fire. 
 Geisek v. Crescent Mut. Ins Co., 19 La. Ann. 297. The goods would have burned 
 if the water had not put out the fire.] 
 
 920
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 404 
 
 theft consequent upon exposure occasioned by the fire, are 
 within the loss covered by a policy against damage by fire.^ 
 The theft must be one of the consequences of the fire or 
 removal, and if so, the time of the theft, whether at the time 
 of the fire or afterwards, is immaterial.''^ But if loss by theft 
 be expressly excluded, there can be no recovery, even though 
 by the terms of the policy the company is not to be liable at 
 all for loss unless the insured " use all due diligence in removal 
 and preservation of the property." ^ The exclusion must be 
 unequivocal. And doubt will be resolved against the insurer.^ 
 And the removal should be fairly and reasonably necessary, 
 and not as the result of an unreasonable and unfounded appre- 
 hension, as when fire is at a considerable distance. And in 
 one case it has been held that damages from removal, where 
 there was a reasonable apprehension of danger, and where 
 the fire was already burning the fourth building distant in the 
 same block, were not recoverable.^ But the better doctrine 
 no doubt is, that whether the removal be necessary or not 
 depends upon the circumstances of the case ;^ and that if the 
 removal be under such circumstances that had it not taken 
 place the insured would have been guilty of negligence, he 
 may recover, while he cannot recover if the goods are wan- 
 tonly or unnecessarily removed, or perhaps if prudence did 
 not require them to be removed.^ And this is true although 
 
 1 Whiteliurst v. Fayetteville Mut. Ins. Co., 6 Jones (N. C), 352: Wliite v. 
 Republic Fire Ins. Co., 57 Me. 91 ; Stanley v. Western Ins. Co., 3 L. R. (Exch. 
 Cases) 71, Thompson y. Montrejil Ins. Co., 6 U. C. (Q. B.)319; Lewis y Spring- 
 field Fire & Mar. Ins. Co., 10 Gray (Mass.), 159 ; Tilton v Hamilton Fire Ins. 
 Co., 1 Bosw. (Superior Ct. of N. Y.) 367 ; Independent Mut. Ins. Co. v. Agnevf, 
 34 Pa. St. 96 ; Witherell v. Maine Ins. Co., 49 Me 200; Talamon v. Home Ins. 
 Co., 16 La. Ann. 426 ; Agnew v. Insurance Co., 3 Phila. 193. 
 
 ■J Newmark v. Lon. & Liv. Fire & Life Ins. Co., 30 Mo. 160. 
 
 8 Fernandez v. Merchants' Mut. Ins. Co., 17 La. Ann. 131 ; Webb v. Prot. Ins. 
 Co , 14 Ma o 
 
 4 Lieber v. London, &c Ins. Co , 6 Bush (Ky.), 039. 
 
 6 Hillier v. Alleghany County Ins. Co., 3 Barr (Pa.), 470. 
 
 fi [Whether the removal of goods was necessary, must be judged not by the 
 result but by the circumstances as tliey appeared at the time of removal. Bales- 
 tracci v. Firemen's Ins Co , 34 La. Ann 844.] 
 
 " Case V. Hartford Ins. Co, 13 111 676, Brady v. N. W. Ins. Co., 11 Mich. 
 425. 
 
 921
 
 § 406] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH, XXI. 
 
 the policy insures while the property " shall be and remain " 
 in the building.^ [A policy excepted liability for a plate-glass 
 window if broken by fire or during removal. A fire occurred 
 next door ; the assured removed his stock in part, in anticipa- 
 tion of loss ; while so doing a mob broke the window for the 
 purpose of plunder, and it was held that the company was 
 liable.2j 
 
 § 405. Risk ; Smoking ; Illegal Practices. — If smoking be 
 prohibited, or declared to be not allowed, a prohibition by the 
 insured, with abstinence on his own part, and reasonable and 
 proper precautions against it on the part of others, is a com- 
 pliance with tlie requirement.^ And the policy covers goods 
 illegally kept for sale, the insurance not being upon the busi- 
 ness or mode of sale, but upon the property itself .* [Under a 
 warranty ajamst seizure on account of illicit trade, the under- 
 writers are liable for a loss by illicit trade, barratrously car- 
 ried on by the master.^] 
 
 § 406. Risk; Lightning. — Loss by ignition resulting from 
 lightning is covered by a policy insuring against danger by fire, 
 or by fire from lightning. But loss by being torn to pieces 
 by lightning without combustion, is not.^ Insurance against 
 loss by fire resulting from lightning is one thing, and insur- 
 ance against loss by lightning is quite another ; "* and a com- 
 pany authorized to insure against the former is not thereby 
 authorized to insure against the latter.^ [When a policy ex- 
 pressly provided that the insurer should be liable for all loss 
 or damage caused by lightning, it was held that this language 
 covers all the known effects of lightning, and not merely those 
 arising from combustion.^ The policy was held to cover a 
 
 1 Holtzman v. Franklin Ins. Co., 4 Crancli, C Ct. 295. 
 
 2 [Marsden v. City & County Ins. Co., I L. R. C. P. 232 at 239.] 
 
 3 Ins. Co. of North America v. McDowell, 50 111. 121; Aurora Fire Ins. Co. 
 V. Edrly, 55 id. 222. 
 
 4 Niagara Fire Ins. Co. v. De Graff, 12 Mich. 124. And see ante, § 246. 
 
 5 [Luckley v. Delafield, 2 Caines (N. Y.), 221 at 223.] 
 
 ^ Babcock v. Montgomery County Mut. Ins. Co., 6 Barb. (N. Y ) 637; s. c. 
 aflarmed, 4 Comst. (N. Y.) 326 ; Kenniston v. Merrimack County Mut. Ins Co., 
 14 N H. 341. 
 
 1 Ibid. 8 Andrews v. Union Mut. Ins. Co., 37 Me. 256. 
 
 9 [Spenseley v. Lancashire Ins. Co., 54 Wis. 433 at 441.] 
 
 922
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 407 A 
 
 loss by a tornado in which there was electrical disturbance 
 operating as an efficient cause in the destruction.] 
 
 § 407. Risk; Misconduct; Fraud; Wilful Destruction of 
 Property insured; Suicide. — LoSS hy misconduct is not covered 
 by the policy, as where one sets fire to a steamboat by throw- 
 ing on combustibles, brought to an improper place in contra- 
 vention of law, and for the purpose of getting up a great head 
 of steam while the steamboat is racing with another boat.^ 
 Nor is loss by fraud, wilful burning, voluntary suicide, or 
 other wilful destruction of the subject-matter of insurance, 
 whereby the event insured against is brought about. [If a 
 horse dies by reason of the cruel beating and abuse of his 
 master, the latter can recover no insurance.^] No one can lay 
 the foundation of a claim for insurance in his own reckless 
 or wilful wrong ; but fraud cannot be predicated upon acts 
 which may lawfully be done, or left undone, no matter what 
 may be the motive.^ [It is error to charge that the insured 
 must show that the loss was an honest one, and not traceable 
 to himself.^ If wilful destruction is justifiable, the property 
 being in certain peril of a worse kind, it is not fatal. When 
 a captain burns a vessel to prevent her falling into an enemy's 
 hands, the company is liable on a fire policy .°] 
 
 [§ 407 A. Wrongful Act of Third Person or Act of Assured 
 while Insane. — When the assured represented that a count- 
 ing-room was warmed with coal by one stove, and that the 
 funnel and stove were well secured, this does not make it 
 necessary that they should be so kept when not in use.^ And 
 when the assured admitted shipwrecked sailors into the insured 
 premises for one night, but ordered that no fire should be 
 built in the said stove, which was not then well secured, but 
 
 1 Citizens' Ins. Co. v. Marsh, 41 Pa. St. 387. See jwst, § 411, for distinction 
 between misconduct and negligence. 
 
 2 [Western Ins. Co. v. O'Neill, 21 Neb. 548. Good. The wretch in this par- 
 ticular case ought to have been put in States prison.] 
 
 3 Franklin Ins. Co. v. Humphrey, 65 Ind. 549. 
 
 4 [Dwyer v. Continental Ins. Co., 57 Tex. 181. The burden is on the com- 
 pany.] 
 
 5 [Gordon v. Rimmington, 1 Camp. 12.3 at 124.] 
 
 6 [Loud V. Citizens' Mut. Ins. Co., 2 Gray, 221 at 223.] 
 
 923
 
 § 408] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 fire was built witliout the assured's knowledge or consent, the 
 policy was held good, and covering the loss thereby resulting. 
 When insurance was effected by the owner of a vessel after 
 loss of the same but in entire good faith, and where it ap- 
 peared that the master of the vessel had fraudulently refrained 
 from communicating the loss for the avowed purpose of giv- 
 ing the owner time to insure without knowledge of the loss, 
 it was held that the owner could recover, and was not affected 
 by the conduct of the master.^ Neglect by a sea captain to 
 register goods before leaving the docks, as required by law, 
 does not avoid a policy thereon.^ If a policy excepts loss from 
 incendiarism, it will not cover a loss occasioned by the firing 
 of the adjoining house by a stranger for whose acts the insured 
 was in no way responsible. ^ It seems that a felonious burn- 
 ing by the wife of the assured is covered by the policy .* The 
 wife's insurance is not avoided by her husband's burning 
 the property without her knowledge or complicity.^ In 
 the absence of express agreement, the company is not 
 relieved because the fire was caused by the assured while 
 insane.*^] 
 
 § 408. Risk ; Negligence. — Mere carelessness and negli- 
 gence, however great in degree, of the insured, or his tenants 
 or servants, not amounting to fraud, though the direct cause 
 of the fire, are covered by the policy .^ Indeed, one of the 
 principal objects of insurance against fire is to guard against 
 
 1 [General Interest Ins. Co. v. Ruggles, 12 Wheat. (U. S.) 408 at 411.] 
 
 2 [Carruthers v. Gray, 3 Camp. 142 at 14;i.] 
 
 3 [Walker v. Lond. & Prov. Ins. Co., Ir. L. R. 22 Ex. 572.] 
 
 4 [Midland Ins. Co. v. Smith, G Q B. D. 561.] 
 
 5 [Perry v. Mechanics' Mat. Ins. Co., 11 Ins. L. J. 390. 1st Cir. (R. I.).] 
 
 6 [Karow v. Continental Ins. Co., 57 Wis. 56.] 
 
 ' [In the absence of express stipulation the fact that the loss might have 
 been avoided by care on the part of tlie insured or his agent will not relieve 
 the insurer. Enterprise Ins. Co. v. Parisot, 35 Ohio St. 35 ; Perrin v. Protec- 
 tion Ins. Co., 11 Ohio, 147 at 171. Unless it amounts to fraud or wilfulness. 
 Phenix Ins. Co. v. Sullivan, 39 Kans. 449 ; Columbia Ins. Co. v. Lawrence, 10 
 Pet. 507 at 517. And, of course, if the proximate cause of loss is one of the 
 perils insured against, negligence of the insured as a remote cause will not re- 
 lieve the company unless it amounts to fraud, Lebanon Mut. Ins. Co. v. Kepler, 
 100 Pa. St. 28 ; even though the policy excepts injuries caused by negligence. 
 Greenwich Ins. Co. v. Raab, 11 Brad. 636.] 
 924
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 408 
 
 the negligence of servants and others ; and, therefore, while 
 it may be said generally that no one can recover compensation 
 for an injury which is the result of his own negligence or 
 want of care, the contract of insurance is excepted out of the 
 o-eneral rule. Nor does it make any difference whether the 
 negligence is that of the insured himself or of others. The 
 law looks only at the proximate cause of the loss.i But neg- 
 ligence in a matter as to which the insurers expressly stipulate 
 that they will not assume the risk — as where ashes are placed 
 by a boy in wooden vessels, the insurers stipulating that they 
 will not assume the risk if ashes are allowed to remain in 
 wood, although the fact was unknown to the insured, and was 
 done without orders and contrary to the usual practice — will 
 work a forfeiture.^ Whether the fire is the result of negli- 
 gence is of course a question of fact for the jury, if the facts 
 from which it is to be inferred are in dispute, and is so much 
 a question of circumstances that so trifling a fact as dry 
 weather, and the direction and strength of the wind, ai"c to be 
 taken into account in determining whether a fire, occurring by 
 
 1 Cumberland Valley Mut. Prop. Co. v. Douglas, 58 Pa. St. 419 ; Shaw v. 
 Robberds et a!., 6 Ad. & El. 75; Catlin (;. Springfield Fire Ins. Co., 1 Sumner 
 (U. S. C. Ct ), 434 ; Sanford v. Mechanics' Mut. Fire Ins. Co., 12 Cash. (Mass.) 
 541 ; Daniels v. Hudson River Fire Ins. Co., id. 416 ; Mickey v. Burlington Ins. 
 Co., Sup. Ct. (Iowa), 2 Ins. L. J. 15; Austin v. Drewe, G Taunt. 4oiJ ; s. c. 4 
 Campbell (N. P.), 561 ; Maryland Fire Ins. Co. ('.Whitford, 2 Law Transcript, 
 284, (1869); Columbia Ins. Co. v. Lawrence, 10 Pet. (U. S.) 507; Gates v. 
 Madison County Mut. Ins. Co., 1 Seld. (N. Y.) 469; Williams v. New England 
 Mut. Fire Ins. Co., 31 Me. 219 ; Johnson v. Berkshire Mut. Fire Ins. Co., 4 Al- 
 len (Mass.), 388; St. Louis Ins. Co. v. Glasgow, 8 Mo. 713; Waters v. Mer- 
 chants' Louisville Ins. Co., 11 Pet. (U.S.) 213; Grove w. Farmers' Mut. Fire 
 Ins. Co., 48 N. H. 41 ; National Ins. Co. v. Webster, 83 111. 470; Germania Ins. 
 Co. V. Sherlock, 25 Ohio St. 33; Jameson v. Royal Ins. Co., Ir. Rep. 7 C. L. 
 126. [Tiie underwriter cannot set up the negligence of the servants of the as- 
 sured as a defence. Mueller v. Putnam, 45 Mo. 84 at 88 ; Insurance Co. v. Slier- 
 wood, 14 How. 351 at 364 ; Kansas Ins. Co. v. Berry, 8 Kans. 159 at 168 ; Dixon 
 V. Sadler, 5 M. & W. 405 at 414 ; Sperry v. Del. Ins. Co., 2 Wash. C. C. 243 at 
 252 ; Arctic Ins. Co. v. Austin, 6 T. & C. (N. Y.) 63 at 70; Phoenix Ins. Co. v. 
 Cochran, 51 Pa. St. 143 at 148. Unless it be wilful or so gross as to amount to 
 fraud. Lycoming Ins. Co. v. Barringer, 73 111. 230 at 235. Want of ordinary 
 care on the part of the assured prevents recovery. Young v. Wasliington Ins. 
 Co., 14 Barb. 545 at 547 (mere dictum).] 
 
 2 City of Worcester v. Worcester Mut. Fire Ins. Co., 9 Gray (Mass.), 27. 
 
 925
 
 § 409 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 the dropping of coals upon the track, and thence coinmimi- 
 cating- through the dry grass to the plaintiff's farm and land, 
 is due to the negligence of a railway company .^ And if the 
 policy requires the insured, upon the occurrence of a fire, to 
 use all reasonable means for the " protection " of the prop- 
 erty, this means that he shall take the requisite steps to pre- 
 vent its further deterioration ; but it does not require him to 
 repair or restore to the original condition.^ 
 
 § 409. Risk ; Negligence ; \?7ilful Exposure. — Where an 
 accident policy forbids " wilful exposure," negligence is no 
 defence.'^ So where the policy provides liability for " wilful 
 and wanton exposure." "* But in Morel v. Mississippi Valley 
 Life Insurance Company,^ where the policy said nothing about 
 negligence, it was held that the insured, having " inadvert- 
 ently" put his elbow out of the window of a railway car- 
 riage, whereby he contributed to the accident, could not 
 recover, — a decision whicli is not only unsupported by the 
 citation of any case, but is counter to the almost universal 
 current of the authorities,^ And no case in life insurance 
 has been found where negligence of usual precautions in the 
 preservation of health, or even the utmost carelessness and 
 recklessness relative thereto, have been made a ground of 
 defence. Yet no doubt many cases of death have occurred 
 attributable to such negligence as the cause.' 
 
 [§ 409 A. Exposure to Obvious and Unnecessary Danger. — 
 If one voluntarily and unnecessarily places himself in a posi- 
 tion of obvious danger, and the precise injury happens to him 
 which there is reason to fear, as if one runs along a railroad 
 track in the night to catch a train on a parallel track and is 
 run over, his act is within the clauses against exposure to 
 
 1 Webb V. R. W. & O. R. R. Co., 49 N. Y. 420. 
 
 2 Hoffman v. JEtna. Fire Ins. Co., 1 Robt. (Superior Ct. N. Y.) 501 ; s. c. af- 
 firmed, 32 N. Y. 405. 
 
 3 Prov. Life Ins. & Inv. Co. v. Martin, 32 Md. 310. 
 
 4 Shneider v'. Prov. Life Ins. Co., 24 Wis. 28. 
 
 5 4 Bush (Ky.), 585. 
 
 6 And see post, chapter on Accident Insurance. 
 
 '' As to what would be the rule where there are several apparent causes, of 
 which negligence may be one, see ante, § 301, and post, § 530. 
 
 926
 
 CH. XXI.] OP THE RISK, ITS DURATION AND EXTENT. [§ 410 
 
 " obvious and unnecessary danger," and requiring due dili- 
 gence for personal safet}^, and the policy is void.^ Crossing a 
 railroad track in broad daylight in front of an approaching 
 train, there being no obstruction to prevent sight, nor any evi- 
 dence of short sight or deafness, is within an exception against 
 exposure to obvious risk, and the company is not liable. If 
 the insured had been paying reasonable attention to what he 
 was doing the risk would have been obvious to him.^ But 
 one who voluntarily goes to the rescue of a ship's crew in a 
 strong sea, does not expose himself to " unnecessary " danger. 
 Although the insured was a farmer it was his duty as a man 
 to go to the rescue of the crew of a ship driven ashore near his 
 farm.^] 
 
 § 410. Risk ; Gross Negligence ; Design. — Gross negligence 
 of workmen in making repairs, it was said, in Jolly v. Balti- 
 more Equitable Society,^ will avoid the policy. But there 
 was nothing in the case that required any decision upon that 
 point, and it is not probable that anything short of such neg- 
 ligence as raises a presumption of bad faith, amounting to 
 fraud or design, was intended. This, by all the authorities, 
 avoids a policy, as no man can be allowed in a court of justice 
 to profit by his own wrong, or to avail himself of his own 
 turpitude as a ground of recovery in a suit.^ But losses by 
 " gross negligence " and " design " are sometimes expressly 
 excepted as grounds of liability. The first term, as used in a 
 condition exempting from loss on that account, it has been 
 said, " is the want of that diligence which even careless men 
 (dissoluti homines) are wont to exercise.^ ' For he who is 
 only less diligent than very careful men cannot be said to 
 be more than slightly inattentive ; he who omits ordinary care 
 
 1 [Tuttle V. Travelers' Ins. Co., 134 Mass. 175.] 
 
 2 (Cornish v. Ace. Ins. Co., C. A. 2-3 Q B. D. 453.] 
 » [Tucker v. Mut. Ben. L. Co., 50 Hun, 50.] 
 
 * 1 Harr. & Gill, 295. 
 
 5 Henderson i\ Western Mar. & Fire Ins. Co., 10 Rob. (La.) 164 ; Huekins v. 
 People's Mut. Ins. Co., 11 Fost. (N. H.) 238; Robinson v. Mercer County Mut. 
 Fire Ins. Co., 3 Dutch. (N. J.) 134; Western Farmers' Ins. Co. v. Miller, 1 Hnndy 
 (Cincinnati Superior Ct.), 325. And see also authorities cited in the preceding 
 section. 
 
 6 Hein. EI. Jur. lib. 3, tit. 14, § 787. 
 
 VOL. II.— ,15 927
 
 § 411] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 is a little more negligent than men ordinarily are ; and he who 
 omits even slight diligence fails in the lowest degree of pru- 
 dence, and is grossly negligent.' " ^ Loss by mere negligence 
 is not loss " by design," which imports plan, scheme, and 
 intention.2 [Gross negligence may be evidence of fraud, 
 but is not of itself mala Jides.^'] 
 
 § 411. Risk ; Negligence amounting to Misconduct. — But 
 negligence which amounts to misconduct is not insured 
 against. Misconduct is defined to be a transgression of some 
 established and definite rule of action, where no discretion is 
 left except what necessity may demand, as contradistinguished 
 from negligence, carelessness, and unskilfulness, which are 
 transgressions of some established but indefinite rule of ac- 
 tion, where some discretion is necessarily left to the actor. 
 Misconduct is a violation of definite law ; carelessness, an 
 abuse of discretion under an indefinite law. Misconduct is 
 a forbidden act ; carelessness, a forbidden quality of an act, 
 and is necessarily indefinite. Thus where the captain of a 
 steamer, in running a race with another steamer, and for the 
 purpose of making more steam, brings from the hold of the 
 vessel a barrel of turpentine, knocks the head out, and places 
 it so near the furnace that the fire is communicated to the 
 wood upon which the turpentine is thrown, and thence to the 
 barrel, such manner of use of turpentine being in contraven- 
 tion of an act of Congress, as matter of law, this is miscon- 
 duct, and avoids the policy.* In Chandler v. Worcester 
 Insurance Company,^ Shaw, C. J., puts the case of a party 
 insured standing by the fire, which was yet so trifling that by 
 throwing on a cup of water, which was at hand, the fire might 
 be extinguished, as a case of misconduct which would avoid a 
 
 1 Campbell v. Monmouth Mut. Fire Ins. Co., 59 Me. 430. There is a growing 
 tendency amongst the courts to deny that there is any legal distinction between 
 negligence and "gross" negligence. New York Cent. K. R. v. Lockwood, 17 
 Wall. (U. S.) 357.^ 
 
 •■2 Catlin i: Springfield Fire Ins. Co., 1 Sumner (U. S. C. Ct.), 434. 
 
 3 [Goodman v. Harvey, 4 Ad. & El. 870 at 876.] 
 
 4 Lowrie, C J., in Citizens' Ins. Co. v. Marsh, 41 Pa. St. 387, overruling s. c. 
 2 Pittsburgh Rep. (Crumrine) 273 ; Levi r. N. 0. Ins. Ass., 2 Wood (U. S. C. 
 Ct.) 63. 
 
 6 3 Cush. (Mass.) 328. 
 
 928
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 411 A 
 
 policy. The difference between this and designed destruc- 
 tion, by actually setting fire, is certainly hardly appreciable as 
 affecting the intent of the insured, though ostensibly in one 
 case there is a positive act, while in the other there is no 
 action at all. But it should appear that by proper effort 
 there is reasonable cause to believe the fire may be extin- 
 guished.^ [If the element of wilfulness comes in we have, 
 not mere negligence but misconduct. Irrespective of con- 
 ditions to that effect, the insured ought not to refrain from 
 using means within his power to prevent loss, or to hinder 
 others from saving the property .^J 
 
 [§ 411 A. In Marine Insurance if the damage might have 
 been avoided by the use of ordinary care, the insurers are not 
 liable.^ Negligence of seamen causing an accidental fire is a 
 good defence to an action on a policy. Insurers are not re- 
 sponsible for negligence of the master and crew not amount- 
 ing to barratry, i. e. knavery or fraud."^ When a ship was 
 negligently loaded at a foreign port, thereby injuring her, and 
 thereafter in a storm was lost, the insurers were held liable 
 although the negligent loading rendered her less seaworthy 
 than otherwise she would have been.^ Where the loss to a 
 vessel is immediately caused by a peril insured against, it is 
 immaterial that the peril was brought about by the crew, — 
 agents of the assured. In the absence of fraud only the 
 proximate cause is looked at.^ But where a vessel is injured 
 by a peril insured against, and further damages arise from 
 neglect of the master or his servants to repair or transship, 
 &c., the company is not liable for these further damages. 
 When a policy insures against loss by thieves or barratry of 
 
 1 Aurora Fire Ins. Co. v. Jolinson, 46 Ind. -315 ; Kellogg v. Cli. &N. W. R. R. 
 Co., 26 Wis. 223, 257. See also Toledo, Peoria, & Wabash R. R. Co. v. Pindar, 
 53 III. 447. 
 
 ^ [Devlin v. Queen Ins. Co., 46 U. C. R. Ill ] 
 
 3 [The Titania, 19 Fed. Rep. 101 S. Dist. of New York, 1883. If the insured 
 himself is negligent, he ought not to recover ; if only an agent, lie ought.] 
 
 * [Grim v. Phoenix Ins. Co., 13 Johns. 451 at 458 ; Fayerweather v. Phenix 
 Ins. Co., 54 N. Y. Super. 545 ; Pipon v. Cope, 1 Camp. 434 at 436 (marine 
 policy.)] 
 
 s [Redman v. Wilson, 14 M. & W. 476 at 483.] 
 
 6 [Mathews ;;. Howard Ins. Co., 11 N. Y. 9 at 16.] 
 
 929
 
 § 412] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXT. 
 
 master or crew, the insured makes a prima facie case for re- 
 covery on showing a theft without showing that it was com- 
 mitted by assailing thieves ; the theft may have been by the 
 crew. So with barratry, which covers all knavery, fraud, 
 cheating, or breach of trust of the master or crew ; the assured 
 is entitled to recover for a loss by theft, without showing due 
 care on the part of the master. It is said that if the negli- 
 gence of the master not amounting to fraud, gave opportunity 
 to the crew to steal, the company would not be responsible ; 
 but such facts must be shown by the company.^] 
 
 § 412. Risk ; Fire occasioned by falling of "Walls ; Proximate 
 Cause. — Where a fire had happened, and the day after it was 
 extinguished the walls of the burnt edifice, in consequence of 
 being weakened by the fire, fell upon another building, crush- 
 ing it in, the latter injury was held to be covered by a policy 
 against damage by fire. The fire is in such case the proxi- 
 mate cause, though not the actual instrument of the destruc- 
 tion, just as where furniture is injured by water used to 
 quench the fire, or a mirror is broken by the falling of mate- 
 rials loosened by the flames, in which cases it would hardly 
 be contended that the loss was not by fire. The Lord Presi- 
 dent thought that if the gable had fallen during the fire and 
 caused the destruction, it would not have been doubted that 
 the loss was covered by the policy, and he could not see that 
 the interval which actually elapsed could make any difference 
 in the princi]ile. The cause of the loss was in cither case the 
 same.^ But where seven days elapsed between the fall and 
 the fire, and the fall occurred during a gale of w^ind, it was 
 held the loss was not insured.^ Where, however, the walls 
 of a warehouse, from weakness or other cause not proceeding 
 from fire, and without its agency, fell in upon themselves, 
 becoming, with the goods contained therein, one mass of ruin, 
 out of which fire proceeded, it was held that this was not a 
 loss by fire. When the fire took place the subject insured 
 
 1 [American Insurance v. Bryan, 26 Wend. 563; a splendidly-reasoncrl 
 case.] 
 
 2 Johnston v. West of Scotland Ins. Co., 7 Ct. of Sess. Cas. (Scotch) 52. 
 8 Gaskarth v. Law Union Ins. Co. (Eng.), 6 Ins. L. J. 159. 
 
 930
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 413 
 
 had ceased to be, and had become a congeries of materials. 
 The cause of the loss was the fall, and not the fire. The fire 
 did not produce the fall, but the fall produced the fire, and 
 the destruction was by the former. That a fire sprung up 
 after the fall in the rubbish and consumed the fallen materials 
 was immaterial. The heap of rubbish was not insured. The 
 building alone was insured, and that at the time of the fire 
 had ceased to be, and that too by reason of a peril not insured 
 against. The fire in this case was not the efficient or proxi- 
 mate cause of the loss.^ A building still standing upon its 
 supporting posts, though out of plumb and practically aban- 
 doned as unfit for occupancy, cannot be said to have fallen.^ 
 Otherwise, if substantially all the floors and roof have fallen 
 in, leaving only the walls standing.^ And where one building 
 became undermined and fell, covering in its ruins certain 
 chemicals which took fire, which fire communicated with 
 anotlier building, a part of which, with the goods therein, 
 Ijad been involved in the crash, but a part also had remained 
 standing with the goods undisturbed, an action to recover for 
 damage by fire to the goods so remaining undisturbed was 
 sustained.* It was contended by the defendants in this case 
 that after the fall of part of the building the goods could no 
 longer be said to be " contained therein," within the meaning 
 of the policy. But the court thought they were certainly as 
 much contained in the building and covered by the policy as 
 if they had been moved out to avoid the fire, but nevertheless 
 had been consumed. 
 
 § 413. Risk ; Spontaneous Combustion ; Explosion ; Igni- 
 tion ; Proximate Cause. — There can be no doubt that fire 
 
 1 Nave V. Home Mut. Ins. Co., 37 Mo. 429. 
 
 2 Firemen's, &c. Ins. Co. v. Congregation, &c., 80 111. 658. 
 
 3 Huck V. Globe Ins. Co., 127 Mass. 306. See also Breuner v. Liverpool, &c. 
 Ins. Co., 51 Cal. 101. 
 
 4 Lewis V. Springfield Fire & Mar. Ins. Co., 10 Gray (Mass.), 159. In Dows 
 V. Insurance Co., 127 Mass. 346, it was held by a divided court that the provision, 
 " If a building shall fall, except as the result of a fire, all insurance shall cease," 
 applied rather to a case where the building falls by inherent defects, or by being 
 undermined, or prostrated by a storm, than to a case where, by a sudden com- 
 bustion of inflammable gas, ;in explosion takes place, by the force of wiiich the 
 building is made a heap of ruins. 
 
 931
 
 § 413] insurance: fire, life, accident, etc. [ch. xxi. 
 
 originating in spontaneous combustion is within the risk 
 against fire.^ The subject of loss by explosion has given rise 
 to much elaborate and learned discussion, and recently to 
 decided differences of opinion, presented on both sides with 
 marked ability, which we shall now proceed to state. The 
 burning of a steamboat by fire caused by the accidental ex- 
 plosion of gunpowder on board was early held to be " loss or 
 damage by fire," since the explosion was caused by fire.^ 
 And following this case it was held that, where a building 
 was purposely blown up by gunpowder to stay the ravages 
 of a conflagration, and crockery ware stored therein, the 
 crates themselves having been burned after the explosion, 
 was thus destroyed, fire was the proximate cause of the loss.^ 
 And this has been held to be so although the policy excepted 
 loss by the explosion of gunpowder, this exception being held 
 to apply only to fire originating in the explosion of gun- 
 powder.* Subsequently, in Scripture v. Lowell Mutual Fire 
 Insurance Company,^ where, upon the fact that a cask of gun- 
 
 1 Brit. Am. Ins. Co. v. Joseph, 9 L. C. (Q. B.) 448. [It is held, however, that 
 an ordinary marine policy does not cover spontaneous combustion, resulting 
 from the inherent infirmity of the goods insured. Providence W. Ins. Co. v. 
 Adler, 65 Md. 102.] 
 
 2 Waters v. Merchants' Louisville Ins. Co., 11 Pet. (U. S.) 213. 
 
 3 City Fire Ins. Co. v. Corlies, 21 Wend. (N. Y.) 367. 
 ^ Greenwald v. Insurance Co., 3 Phila. 323. 
 
 6 10 Cash. (Mass.) 3-56. "The question," says Cushing, J., who gave the 
 opinion, " is a nice one. Upon careful reflection, however, we have come to 
 the conclusion that the received opinions on the subject, and the adjudications 
 referred to, are in accordance with reason and principle. It seems not to be 
 denied that actual combustion, produced by the ignition of gunpowder, is within 
 the present policy. If, tlien,a combustible substance, in the process of combus- 
 tion, jiroduces explosion also, it is not easy to perceive why, of the diverse but 
 concurrent results of the combustion, the one sliould be ascribed to fire any 
 more tlian the other. The plain fact here is the application of fire to a sub- 
 stance susceptible of ignition, the consequent ignition of that substance, and 
 immediate damage to the premises tliereby. It is no sufficient answer to say 
 that some of the phenomena produced are in the form of explosion. All the 
 effects, whatever they may be in form, are the natural results of the combustion 
 of a combustible substance ; and as the combustion is the action of fire, this 
 must be held to be the proximate and legal cause of all the damage done to 
 the premises of the plaintiff.* . . . 
 
 * It would doubtless be otherwise if the policy excepted loss by explosiou. 
 See pes', § 416 a. 
 
 932
 
 CII. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 413 
 
 powder, being set on fire accidentally by a match, exploded, 
 set fire to a bed, charred and stained some of the woodwork, 
 
 " In the present case there is no room for question concerning a series of 
 causes, as wlietlier primary or secondary, proximate or remote ; for the agent is 
 one anil tlie same throughout, namely, fire. The causa was burning powder; 
 the causa causans was burning a match ; at each stage of causation it was the 
 action of fire. Nay, to be exact, the burning of the gunpowder, like the burning 
 of the match, was a succession of several complex acts of burning. Yet fire is the 
 agent at each of these distinct stages of causation. Suppose tliere was a barrel 
 of sulphur in the plaintiff's attic, instead of gunpowder ; and tiiis being ignited 
 with a match, afterwards the fire had passed from the burning sulplmr to the 
 substance of the liouse. This would be recognized at once as a case of fire. It 
 does not change the legal relation of causes to substitute a barrel of burning 
 gunpowder for a barrel of burning sulphur. The only difference in the ele- 
 ments of the question is, that the gunpowder, when ignited, consumes with more 
 of rapidity than sulphur, and the combustion is accompanied or followed by ex- 
 plosion. Still, the agent is fire, though it acts in different ways upon tlie differ- 
 ent successive subjects of its action, beginning with the match and terminating 
 with the plaintiff's house. 
 
 " On the other hand, cases are conceivable, other than by the use of gun- 
 powder, of explosion without any combustion, which, nevertheless, being the 
 result of tile action of fire, are still, it would seem, within the range of the gen- 
 eral principle. Various mineral substances exist, of value in commerce and the 
 arts, which explode by the action of fire, without either ignition or combustion. 
 In general, any close vessel, of whatever material composed, when filled with 
 an expansive fluid, is liable to explode by the action of heat, though it may be 
 that the vessel and its contents are alike incombustible. The same thing hap- 
 pens, under certain conditions, to some forms of wood, which, although com- 
 bustible, may by the action of fire explode without ignition ; or which, as in the 
 present case, of a house, by having compressed within it some burning sub- 
 stance, which is explosive as well as combustible, like gunpowder, may suffer 
 the double injury of combustion in part, and in part of explosion. ... In the 
 hypotliesis that fire is to be regarded as causa pro.riwa in the present case, we 
 can see but one supposable defect, namely, the suggestion that though it be con- 
 ceded that the explosion of burning gunpowder and its effects are the action of 
 fire, yet this particular effect on the building is not exhibited in the form of 
 igneous action. The cases above supposed, of the shrivelling of some master- 
 piece of pictorial art, the cracking or discoloring of some rich vase or gem, the 
 Ijursting of a cask of wine through the expansion of its contents, — these, it may 
 be said, are distinctly cases of damage, without ignition it is true, but by the 
 direct and specific action of heat as such ; wliile it is denied that such is the fact 
 in the present case of the blowing up of a dwelling-house by the ignition of gun- 
 powder. We do not think the premises of this argument are sustained by the 
 physical facts wiiich occurred. If tliey were so, then tlie nearest analogy would 
 be of damage by smoke ; that is, the moisture thrown off by burning wood, and 
 carrying with it ashes, empyreumatic oil, and other constituent parts of the 
 wood, either in their natural condition, or transformed by the process of com- 
 bustion. Now it is obvious that mere smoke, without any direct action of heat, 
 
 933
 
 § 413] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 and blew off the roof of the house, the question was thus 
 stated by the court : " By the ignition of gunpowder within a 
 dwelUng-house, damage is done to the house, that damage 
 consisting in part of combustion and part of explosion. Is 
 the wJiole damage covered by a policy insuring against ' loss ,• 
 or damage by fire ' ? " And after a very able and learned 
 examination of the question in all its bearings, the conclusion 
 arrived at was that, " when the effects produced are the im- 
 mediate results of the action of a burning substance in contact 
 with a building, it is immaterial whether these results mani- 
 fest themselves in the form of combustion or of explosion, or 
 of both combined. In either case the damage occurring is by 
 the action of fire, and covered by the ordinary terms of a 
 policy against fire." [In a Canada case it was held that 
 where the condition makes the company liable for loss caused 
 by the explosion of coal gas, and loss by fire caused by any 
 other explosion, the policy does not cover the damage result- 
 ing directly from an explosion of gunpowder, but only such 
 loss as results from fire caused by the explosion.^ In the 
 Dominion Supreme Court, however, this decision was re- 
 versed, and the doctrine of Massachusetts adopted, that all 
 damage caused by the explosion is caused by fire, since com- 
 bustion is inseparable from the explosion itself.^ A policy 
 insuring against damage " by fire originating in any cause " 
 covers the results of an explosion, since it is a scientific fact 
 that an explosion is preceded by ignition and accompanied by 
 intense heat.^j 
 
 may do great damage to many kind of merchandise, such as delicate textile- 
 fabrics, esculent vegetables, articles of taste, and other numerous objects ; and 
 if a dwelling or a magazine take fire, and some parts of it only be consumed, but 
 the contents of the apartments to which the actual fire does not extend are nev- 
 evtlieless damaged by the smoke penetrating into and filling them, can it be 
 ilnubted that the damage thus done is a loss within the ordinary conditions of a 
 fire policy ? Semble, per Gibbs, C. J., arguendo, in Austin v. Drewe, Holt, N. P. 
 127. Yet, incontestably, damage by smoke is an effect which is not in itself 
 igneous action, though it be the result thereof; while, as we conceive, the ex- 
 plosion of gunpowder is igneous action." 
 
 1 [Ilobbs V. Guardian Fire Ins. Co., 7 Ont. R. 631 ; Hobbs v. Northern Ass. 
 Co., 8 id 34.3, Armour, J., dissenting.] 
 
 2 [Hobbs r. Guardian Fire Ins. Co., 12 Can. Supr. Ct. 631.] 
 8 [Renshaw v. Fireman's Ins. Co., 33 Mo. App. 391.] 
 
 934
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 415 
 
 § 414. Risk ; Explosion ; Concussion. — The COUrt in 10 
 Cush. expressly avoided giving an opinion in cases wliere 
 there is no ignition or combustion, and where the damage is 
 caused merely by concussion. Tlie question of liability in 
 such a case arose in England,^ where the property was in- 
 jured by the concussion consequent on the explosion of a 
 powder magazine situated at some distance from the property 
 insured, and it was held that it could not be said that in that 
 instance the loss was " occasioned by fire." It was occasioned 
 by a concussion caused by fire. And to the same effect, upon 
 similar facts, was the case of Caballero v. Home Mutual In- 
 surance Company. 2 
 
 § 415. Risk ; Explosion ; Steam. — It was early held that 
 under an ordinary policy against loss by fire, loss by explo- 
 sion of a steam-boiler, the explosion not being caused by any 
 unusual fire, and no fire supervening, no recovery can be had. 
 Such an explosion could not be distinguished from the break- 
 ing or derangement of any other part of the machinery .^ It 
 has also been held by a divided opinion that if the fire is 
 caused by the explosion of a steam-boiler, and the policy pro- 
 vides against liability " for any loss occasioned by the explo- 
 sion of a steam-boiler," the loss thereby is not recoverable 
 under the terms of the policy.* So where the policy provided 
 
 1 Everett v. London Ass. Co., 19 C. B. n. s. 126. 
 
 2 15 La. Ann. 217. See also Brown v. St. Nicholas Ins. Co., 61 N. Y. 332. 
 8 Millaudon v. Orleans Ins. Co., 4 La. Ann. 15. 
 
 4 St. John V. Am. Mut. Mar. & Fire Ins. Co., 1 Duer (N. Y. Superior Ct.), 
 371 ; s. c. affirmed, 1 Ker. (N. Y.) 516. ["Not liable for the bursting of the 
 boilers " means not liable for any damages resulting from or on account of the 
 same. Strong v. Sun Mut. Co., 31 N. Y. 103 at 112. And no apportionment of 
 loss arising from such cause, or of that arising from fire following it and caused 
 by it, can be made, and the insurer is not liable. Montgomery v. Firemen's 
 Ins. Co., 16 B. Mon. (Ky.) 427 at 442; Roe v. Columbus Ins. Co., 17 Mo. 301 at 
 306; McAllister v. Tenn. Ins. Co., 17 Mo. 306 at 309. (In these cases the ex- 
 plosion was the cause of the fire, and was held to be the proximate cause of the 
 whole loss.) Where afire resulted from an explosion but was apparently ex- 
 tinguished, and afterward a second and a third time the flames broke forth, these 
 fires were presumed to result from the explosion in the absence of contrary 
 proof. Tanneret ik Mercliants' Mut. Ins. Co., 34 La. Ann. 249. When a run- 
 ning policy provided that it did not cover any loss or damage "accrued at the 
 time of the entry or indorsement, caused by any gale, disaster by exjilosion, 
 fire, or otlierwise, which occurrence might be known to the applicant, the pub- 
 
 935
 
 § 415] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. f CH, XXI. 
 
 that the company should not be liable for loss " by fire which 
 shall happen or arise by any explosion," nor for loss " by ex- 
 plosion of any kind," it was held that the insurers were not 
 liable for damage by fire which originated from, and was 
 caused by, the explosion of a steam-boiler used on the prem- 
 ises.^ [A condition that if the premises "be damaged by the 
 bursting of a boiler or explosion from any cause, the policy 
 shall be void the instant the casualty occurs," is valid and 
 imambiguous, and an explosion with damages annuls the policy 
 instantly.2 When a policy excepts all liability for loss or 
 damage caused by explosions the exception must be held to 
 include all loss and damage by fire of which an explosion was 
 the efficient cause.^ When a policy declared that the company 
 should not be liable " for damage to property by lightning 
 aside from fire, nor for damages occasioned by the explo- 
 sion of a steam-boiler, nor for damages by fire resulting 
 from such explosion, nor explosions caused by gunpowder, 
 gas, or other explosive substances " it was held that the com- 
 pany was liable for damage hy fire resulting from an explosion 
 of gas, but not for damage caused by the explosive force of the 
 gas without its communicating fire to the insured property.* 
 An exception in a policy of liability for loss " occasioned 
 by explosions of any kind, by means of invasion, riots, &c.," 
 was held not to he limited to explosions occasioned by inva- 
 sion, and that the parties did not intend by a special premi- 
 um to exempt from tbe printed exception the explosion risk.^ 
 
 lie, or tlie company, at the time of such application being made, whether such 
 property was known to be involved therein or not, &c.," and when it was known 
 as aforesaid that a certain ship had exploded her boiler at the time of applica- 
 tion, but not that goods to be covered by the policy were on board, it was held 
 that the policy did not cover the loss. Mark v. ^tna Ins. Co., 20 Ind. 390 at 394.] 
 
 1 Hayward r. Liv. & Lon. Fire & Life Ins. Co., 7 Bosw. (N. Y. Superior Ct.) 
 38.5 ; affirmed, 2 Abb. Ct. of App. Dec. 349, substantially overruling Hayward v. 
 Northwestern Ins. Co., 19 Abb. Pr. 116. And see post, § 418. 
 
 '•2 [Waldeck v. Springfield Fire & Mar. Ins. Co., 56 Wis. 96.] 
 
 3 [United L. F. & M. Ins. Co. v. Foote, 22 Ohio St. 340 at 349.] 
 
 4 [Boatmen's Fire & Mar. Ins. Co. v. Parker, 23 Ohio St. 85 at 95 The court 
 endeavored to distinguish United Life, &c. Ins. Co. v. Foote, on the ground that 
 the clause " resulting from such explosion " was placed before the mention of gas 
 explosion instead of after it.] 
 
 5 [Smiley v. Citizens' Fire, Mar., & Life Ins. Co., 14 W. Va. 33 at 52.] 
 
 936
 
 CII. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 415 
 
 But explosions resulting incidentally from the manufacture 
 which the parties contemplate will be carried on in the build- 
 ing, are not excepted by a general clause against liability for 
 explosions. For example, a policy on a fiour mill covers 
 damages by an explosion caused by the action of a fire on the 
 flour-dust in the mill.^] It has also been said, that the com- 
 pany would not be liable under an exemption from loss " by 
 fire which might occur by means of explosion," if the explo- 
 sion sets in operation the fire wliich burns the insured property, 
 though the fire may travel from the seat of explosion through 
 other buildings continuously to the building burned. In order 
 to render the company liable, a new force or power sufficient 
 to cause the fire must intervene ; and the incidental facts of 
 intervening buildings and favoring winds are not the equivalent 
 of this new force.^ But in a later case ^ the question came 
 again under discussion, where the provision of the policy was 
 that the insurers should not be liable " for any loss or damage 
 by fire caused by means of an invasion, ttc, . . . nor for any 
 loss caused by the explosion of gunpowder, camphcno, or any 
 explosive substance, or explosion of any kind," witli a differ- 
 ent result. The question was whether under this form of 
 policy the insurers were liable for loss by fire caused by explo- 
 sion.* After adverting to Hayward v. Liverpool and London 
 Insurance Company,^ as expressly in words excluding such 
 liability, and to St. John v. American Mutual Insurance 
 Company,^ as in the negative by a divided opinion, and 
 pointing out the fact that the opinions of the several judges, 
 constituting the majority, were based not merely upon differ- 
 ent, but inconsistent grounds, thus substantially depriving the 
 decision of its claim to be considered as an authority, and fur- 
 ther referring to Stanley v. Western Insurance Company " as 
 
 1 [Washburn v. Miami Valley Ins. Co., 2 Fed. Rep. 638 ; 2 Flip. 664 ; 9 Ins. 
 L. J. 761, 6tli Cir. Ohio, 1880 ] 
 
 2 Insurance Co. v. Tweed, 7 Wall. (U. S.) 44. 
 
 8 Commercial Ins. Co. v. Robinson, 64 111. 26-5. 
 
 * The report in the Journal does not state what exploded, nor does it seem 
 to be material. 
 
 5 7 Bosw. (N. Y. Superior Ct.) 385. 
 
 6 1 Ker. (N. Y.) 516. 7 3 l. R. E.xch. Cases, 71. 
 
 937
 
 § 415] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 in point for the insurers, the court, after remarking that 
 equivocal expressions must be construed most strongly contra 
 proferentes, proceeds : — 
 
 " It will be observed that in a clause of the policy preced- 
 ing the one under consideration, the company stipulated that 
 it should not be liable for any loss or damage by fire, caused 
 by means of an invasion, insurrection, &c. Here exemption 
 is specially secured against liability for losses by fire caused 
 by explosion. The difference in phraseology between the two 
 clauses is so marked that, when we consider their connection 
 with each other, we cannot resist the conclusion that the 
 difference was intended. 
 
 " Whether the difference was intentional or not cannot be 
 certainly ascertained, but it is reasonable to resolve the doubt 
 against the company. The object of the company's existence 
 is to insure against fire. That is what it holds itself out to 
 the public as able and willing to do. When a person takes 
 out a policy and pays his premium he takes it for granted, 
 without reading his policy, that he cannot make the risk more 
 hazardous to the company by storing highly inflammable ma- 
 terials upon his premises. He knows that would be acting 
 in bad faith with the company, and that the policy has prob- 
 ably provided against it ; but he would have no reason to sup- 
 pose that among the voluminous stipulations of the policy 
 there would be found one intended to deprive him of its ben- 
 efit, because a fire, which has destroyed his property, originated 
 in another house a half-mile distant, in the explosion of a cam- 
 phene lamp. Most fires originate in acts of carelessness, and 
 it is chiefly to guard themselves against the carelessness of 
 others that prudent persons insure. Yet the construction of 
 this policy contended for by the company, would make the 
 assured assume the liability for the carelessness of others. 
 He is thus deprived of the very protection he seeks by his 
 insurance, if, when his house burns up, he can be denied the 
 payment of his policy because the fire was caused by an explo- 
 sion upon the premises of others. The great fire at Chicago 
 is supposed to have originated in the overturning and ex- 
 plosion of a lamp ; but we are not aware that any of the insur- 
 938
 
 CH. XXI. J OP THE RISK, ITS DURATION AND EXTENT. [§ 415 
 
 ance companies that suffered by that fire have sought to 
 interpose this defence, although this clause is a very common 
 one in insurance policies, and was probably contained in many 
 that had been issued on the property there destroyed. Coun- 
 sel for the company, feeling the unreasonable character of 
 their interpretation of this condition in cases where the fire 
 comes from an explosion on other premises, speak of it as if it 
 referred only to explosion^ on the premises of the insured. 
 But the policy will bear no such construction or limitation. 
 We must eitlier hold that the clause refers to loss by explo- 
 sions simply, without reference to fire, or to losses by fire 
 occasioned by explosions anywhere, whether on or remote 
 from the premises. There is no middle term. It must 
 receive one of these constructions, or the other. One is con- 
 sistent with the context, reasonable in itself, and just to both 
 parties. The other requires the interpolation of two addi- 
 tional words in the policy, is inconsistent with the context, 
 and in a large degree would make fire insurance a mere mock- 
 ery. We cannot hesitate wliich construction to choose. But, 
 say the counsel for the appellant, this company does not pro- 
 fess to insure against losses by explosion, but only by fire, and 
 the clause construed as we construe it is unmeaning, or at 
 least useless. But not so. The clause was designed to ap- 
 ply to all cases where the explosion was the immediate cause 
 of the loss. 
 
 " Suppose fire is carelessly applied to powder or other explo- 
 sive substance ; an explosion follows, which rends furniture 
 and building. This explosion is the result of the ignition of 
 the explosive material, and it might be claimed that the loss 
 caused thereby was a loss by fire. The courts might not so 
 hold, independently of the clause of the policy ; but we can 
 well understand, when we examine these policies, that the 
 insurers may have introduced this clause for the purpose of 
 leaving no room for argument or doubt. Again, suppose a 
 case where a fire is speedily subdued, but before it is, it has 
 ignited powder, and an explosion has taken place which has 
 caused much damage, but has not extended the fire ; in such 
 a case the company would claim that they were protected by 
 
 939
 
 § 416] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 this clause from liability for the consequences of the explo- 
 sion. It is not necessary, however, for us to show how the 
 clause was designed to operate. It is sufficient to say that, 
 in our judgment, it cannot receive the construction claimed by 
 the company." ^ 
 
 § 416. Risk ; Explosion; Gas. — On the other hand, it has 
 been held in a very recent case in Ohio, that a policy insur- 
 ing against " loss or damage by fire," but providing that the 
 company shall not be responsible for any " loss or damage 
 occasioned by or resulting from any explosion whatever," is 
 to be construed as if the excepting clause read " loss or dam- 
 age by fire," and does not cover a loss happening from an 
 explosion which takes place by reason of a column of an ex- 
 plosive mixture coming in contact with the flame of a gas- 
 jet, whereby a fire was set in motion which destroyed the 
 property .2 
 
 1 The cases of Stanley v. "Western Ins. Co., 3 Law Rep. (Exch ) Cas. 71, usu- 
 ally regarded as opposed to the doctrine of the case just cited from Illinois, 
 and the case of Harper v. City Fire Ins. Co., 1 Bosw. (N. Y. Superior Ct ) 520. 
 are referred to in the next section. In Stanley's case, the policy exempted the 
 insurers from liability for loss arising from explosion, except explosion by gas. 
 The insured premises were used in the business of extracting oil, during which 
 process a vapor was evolved, which being mixed with a certam quantity of 
 atmospheric air, became explosive. This vapor escaping came in contact with 
 the flame of the lamps, and an explosion ensued, succeeded by a fire. The 
 court held that the gas intended by the policy was ordinary illummating gas, 
 and that the insurers were not liable for loss by concussion or from fire occa- 
 sioned by tiie explosion, but were liable for loss, if there was any, by reason of 
 the original fire, or any subsequent extension of that fire unconnected with the 
 explosion. 
 
 ^ United Life; Fire, & Marine Insurance Co. v. Foote, 22 Ohio St. 340. The 
 opinion is so able and instructive, that we give its more important parts 
 Mcllvaine, J. . — 
 
 " By the terms of the policy it appears that the plaintiffs were msured against 
 'loss or damage by fire, to the amount of five thousand dollars, on their stocks 
 of merchandise, consisting principally of liquors, fixtures, tools, and office furni- 
 ture, contained in their brick building, situate on the southwest corner of Con- 
 gress and Kilgour Streets, Cinciiuiati, Ohio, and occupied by them as a liquor 
 store, with privilege of rectifying and manufacturing fine spirits by steam not 
 generated in the building. The principal defence arose under one of the con- 
 ditions of the policy, which is in these words : — 
 
 " ' VIL This company is not liable for loss or damage by lightning or tor- 
 nado, unless expressly mentioned or insured against, but will be responsible for 
 loss or damage to property consumed by fire occasioned by lightning. Nor will 
 
 940
 
 CH. XXI.] OP THE EISK, ITS DURATION AND EXTENT. [§ 416 a 
 
 § 41o a. Fire causing Explosion. — So where the policy ex- 
 chided liability " for loss by lightning or explosion of any 
 
 tliis company be responsible for any loss or damage to property consumed by 
 fire happening by reason of or occasioned by any invasion, insurrection, riot, 
 or civil commotion, of any military or usurped power, nor where the loss is 
 occasioned or superinduced by fraud, dishonesty, or criminal conduct of the 
 insured, nor to any loss or damage occasioned bij or resulting from any explosion what- 
 ever, whether of steam, gunpowder, camphene, coal-oil, gas, nitro-glycerine, or any ex- 
 p'osive article or substance, unless expressly insured against, and special premium paid 
 therefor. ' 
 
 " The testimony shows that at the time of taking out the policy, and until 
 the time of tlie fire, the plaintiffs were engaged in the business of rectifying 
 whiskey and manufacturing fine spirits by the use of steam, in the building oc- 
 cupied by them as a liquor store, and in which the insured stock of merchan- 
 dise, consisting principally of liquors, &c., was kept. The size of the building 
 was sixty by one hundred and eighty feet, and was four stories high. There 
 was communication between the stories through open stairways and hatches. 
 Tlie business of rectifying was carried on in the basement story, where the 
 stills — large metallic vessels — were located. The upper stories were chiefly 
 used for storage of liquors and cooperage. The process of rectifying was con- 
 ducted as follows : The raw spirits of liquor was conveyed by means of pipes 
 called leaders, from the tubs situate in the upper stories to the stills below ; 
 when the stills were thus charged, the liquor therein was converted into vapor 
 by means of steam which passed through the stills !n copper pipes called 
 worms ; the vapor thus evolved was conducted by other pipes to a condenser, 
 where it was reduced to a liquid state. The vapor evolved in the process of 
 rectification is an inflammable substance. It readily mixes with the atmos- 
 phere, and when so mixed in certain proportions is explosive, and when such 
 mixture is brought into contact with flame it explodes. On the morning of the 
 fire a large still was being charged through a leader about two inches in diame- 
 ter, which passes into its still through a vacuum valve (an aperture in the still 
 near its top), tlie diameter of which was about four inches. At the same time 
 steam was passing through the worm, converting the liquor in the still into va- 
 por, whicli escaped through the vacuum valve into the still-room, and thence 
 no doubt into the other parts of the building. The process of thus dischar- 
 ging the still, accompanied with the discharge of vapor, had continued for some 
 time, — perliaps an hour preceding the fire. During the progress of this pro- 
 cess, two jets of gas were burning in the still-room, one at a distance of three 
 or four feet from the vacuum valve, and the other in another part of the room. 
 There was no other fire or flame in the room or in the building at the time. 
 
 " Such being the circumstances, an explosion took place in the still-room. A 
 sudden and violent combustion of the vapor, accompanied with a noise, described 
 by one witness as being like the crack of a gun ; by another, as if a bundle of 
 iron had been thrown on the pavement ; by another, as a crash, and by another, 
 as a gush of fire, and at the same instant the flame was driven through a door- 
 way into another building, whereby a witness was badly burned. Immediately 
 after the explosion a flame was discovered escaping from the still through the 
 vacuum valve, and at the same time the building was discovered to be on fire 
 
 941
 
 § 416 a] INSURANCE : fire, life, accident, etc. [CH. XXI. 
 
 kind unless fire ensues, and then for damage by fire only," 
 it was held, in case where it appeared that a vapor evolved 
 
 throughout the several stories. From these facts and circumstances, we think 
 it was clearly shown that the fire, by whicli tlie building and stock of merclian- 
 dise insured were consumed, was occasioned by and resulted from an explosion 
 of spirit vapor mixed with atmosphere, and that the explosion was caused by 
 the mixture coming in contact with the burning gas-jet. 
 
 " 1. The first question which we noticed particularly is this: Was the explo- 
 sion which in fact occurred such, in degree of violence, as was contemplated 
 by the parties to the policy ' 
 
 " The word 'explosion ' Is variously used in ordinary speech, and is not one 
 that admits of exact definition. Its general characteristics may be described, 
 but the exact facts which constitute what we call by that name are not suscep- 
 tible of such statement as will always distinguish the occurrences. It must be 
 conceded that every combustion of an explosive substance, whereby other prop- 
 erty is ignited and consumed, would not be an explosion within the ordinary 
 meaning of the term. It is not used as the synonym of combustion. And ex- 
 plosion may be described generally as a sudden and rapid combustion, causing 
 violent expansion of the air, and accompanied by a report. But the rapidity 
 of the combustion, the violence of the expansion, and the vehemence of the re- 
 port, vary in intensity as often as the occurrences multiply. Hence, an explo- 
 sion is an idea of degrees, and the true meaning of the word, in eac!\ particular 
 case, must be settled, not by any fixed standard or accurate measurement, but 
 by the common experience and notions of men in matters of tiiat sort. In this 
 case, although the building was not rent asunder, or the properly therein broken 
 to pieces, there was a sudden flash of flame, a rush of air, and a report like the 
 'crack of a gun,' which certainly brings the occurrence within the common 
 meaning of the word as used in many instances, 'Any explosion whatever' is 
 the phrase used in the condition to ttie policy, and it is qualified by the context 
 only to the extent that it must be an ' explosion ' of some ' explosive substance, 
 and of sufficient force as to result in loss or damage to the property insured.' 
 And these characteristics we have found to exist in the occurrence that resulted 
 in the loss of the insured property. 
 
 " 2. It is claimed that the fire which destroyed the property insured did not 
 result from the explosion, but, on the contrary, that the explosion was incident 
 to and caused by the fire, which, if there had been no explosion, would have 
 accomplished the whole loss and damage ; or, at least, that such inference 
 may be drawn from the facts in the case as fairly and legitimately as contrary 
 inferences. 
 
 "The proof unquestionably shows that the origin of the fire and the explo- 
 sion was simultaneous. It may be true, in a strictly scientific sense, that all 
 explosions caused by combustion are preceded by a fire. The scientist may 
 demonstrate, in a case where gunpowder is destroyed by fire, or in any case 
 where the explosion is caused by or accompanies combustion, that ignition and 
 combustion precede the explosion ; but the common mind has no conception of 
 such combustion, as a fact independent of the explosion, where they concur in 
 such rapid succession that no appreciable space of time intervenes. The terms 
 of this policv must be taken in their ordinary sense; and we are satisfied that 
 
 942
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 416 a 
 
 from the material in process of manufacture, coming in con- 
 tact with a burning lamp, exploded, tearing off the roof, 
 
 the proofs show, according to the ordinary sense and understanding of men in 
 reference to such matters, that the explosion occasioned the fire which destroj'ed 
 tlie property insured ; or, in otiier words, that the loss resulted from an explo- 
 sion, within the true intent and meaning of this policy. 
 
 " It is true that the explosion was caused by a burning gas-jet, but that was 
 not such fire, as contemplated by tlie parties, as the peril insured against. Tlie 
 gas- jet, though burning, was not a destructive force, against the immediate ef- 
 fects of wh'ich the policy was intended as a protection. Althougli it was a pos- 
 sible means of putting such destructive force in motion, it was no more tha 
 peril insured against than a friction-match in the pocket of an incendiary. The 
 conclusions of fact to whicli we tlius arrive are mere inferences from otlier facts, 
 — facts, however, about whicli tiiere was no conflict in the testimony, — yet 
 they are so manifestly true that we tliink it was an error of law, under our 
 statute, to reverse the judgment rendered tliereon at the special term of the 
 Superior Court, upon the strength of contrary inferences drawn from the same 
 facts by the reviewing court 
 
 " 3. The next question arises upon the terms of tlie policy, and is one of 
 construction purely. Was it intended by the provisions of the seventh condi- 
 tion to exempt from the risks assumed by the policy losses by fire occasioned by 
 an explosion ^ 
 
 " It is claimed that the clause exempting losses by explosion taken alone, or 
 construed in connection with other clauses in tlie condition, does not show sucli 
 intention. It is true that the words ' by fire,' or their equivalent, are omitted in 
 this clause, though expressed in some of the former clauses ; the foundation 
 point, however, in construing this condition, is found in the general undertaking 
 of the policy. It will be observed that the underwriter undertook to insure 
 against loss and damage by fire only, but, nevertheless, against loss and dam- 
 age by fire generally ; and the maxim causa proxma non remota spectatur applies. 
 Now we think, without doubting, that the purpose of inserting this condition 
 was to relax the rigor of this maxim, and exempt from the general risk of the 
 policy certain losses, whicli would otherwise fall within its scope and meaning. 
 The first clause of the condition provides that ' this company is not liable for 
 loss or damage by lightning or tornado, unless expressly mentioned and in- 
 sured against.' If tliis were the whole of the clause, and it were not under- 
 stood that the loss and damage referred to were such as miglit result from fire 
 occasioned by lightning or tornado, it would be utterly meaningless and nugatory, 
 for the reason that the underwriter had not undertaken to insure against liglit- 
 ning or tornado. So far the construction is plain enough ; but a ditficulty 
 arises from tlie conclusion of the clause, to wit, 'but will be responsible for 
 loss or damage to property consumed by fire occasioned by lightning.' The 
 exception to the rule of exemption from loss by lightning appears to be as 
 broad as the rule itself But I apprehend that a case might arise in which effect 
 and operation could be given to all the terms of this clause, including those 
 which are implied as well as those expressed. At all events, it is perfectly 
 clear that loss and damage by lightning and tornado are not within the ex- 
 VOL. n. _ 16 943
 
 § 416 a] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 shattering the walls, and damaging the machinery, upon 
 wliich a fire supervened, that the insurers were liable for 
 
 pressed risks of the policy, unless a fire supervenes ; nor is there anything in the 
 policy from which such risks can be implied. 
 
 " The condition continues : ' Nor will the company be responsible for any loss 
 or damage to property consumed by fire happening by reason of or occasioned 
 by any invasion, insurrection, riot, or civil commotion, or any military or usurped 
 power.' The exemptions here provided for are expressly limited to losses within 
 tlie terms of the general risk of the policy. But if such limitation had not been 
 expressed, it would have been implied. 
 
 " The next clause Is as follows : ' Nor where the loss is occasioned or super- 
 induced by the fraud, dishonesty, or criminal conduct of the insured.' There 13 
 no pretext for holding that the loss here contemplated is other than loss by fire, 
 although no such qualification is expressed. Then follows the clause in ques- 
 tion, which, to all intents and purposes, is framed like the preceding one: ' Nor 
 to any loss or damage occasioned by or resulting from any explosion whatever, 
 whether of steam, gunpowder, camphene, coal-oil, gas, nitro-glycerine, or any 
 explosive article or substance, unless expressly insured against and special pre- 
 mium paid therefor.' 
 
 " Unless there is something in the subject-matter of this clause that indicates 
 that the words 'by fire' were omitted for the purpose of showing a design and 
 intention to adhere to and continue the general risk in case an explosion should 
 result in a fire, we think that they or their equivalents should be supplied by 
 implication or construction. Is such purpose indicated by any fair use of the 
 terms employed ' That a loss, or any other combustion, results from an explo- 
 sion, where the explosion itself is caused by a destructive fire already in pro- 
 gress, comes within the general risk of a policy against fire only, is a doctrine 
 not only reasonable in itself, but is sustained by authority. Waters v. La. Mer. 
 Ins. Co., 11 Pet. 213 ; Scripture v. Low. Mut. Fire Ins. Co., 10 Cush. 357; Mil- 
 laudon v. N. O. Ins. Co., 4 La. Ann. 15. And it is quite clear that a loss by fire 
 which is occasioned by an explosion is within the like risk. Now, the express 
 terms of this clause are, ' any loss or damage occasioned by or resulting from any 
 explosion whatever.' These terms are certainly comprehensive enough to in- 
 clude both descriptions of loss, — whether loss by the explosive force, or loss by 
 superinduced combustion. And that such is their legal effect has been directly 
 decided in the case of Stanley v. Western Insurance Company, Law Reports, 
 1868, 3 Exch. Cas. 71. It is not necessary at this time to either approve or dis- 
 approve to the whole extent the doctrine in Stanley's case,* as in this case no 
 damage was sustained from the explosion without the intervention of a fire, nor, 
 indeed, was the explosion caused by a fire within the meaning of the policy. But 
 we can find no good reason for doubting that loss and damage by fire, resulting 
 from an explosion, was intended to be exempted by this condition from the 
 general risk of the policy, and are of opinion, therefore, that this clause, properly 
 construed, should read, ' nor any loss or damage by fire occasioned by or result- 
 ing from any explosion whatever.' 
 
 " 4. It is claimed by defendants in error that the peril by which the property 
 
 *Ante, § 415, n. 
 
 944
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 416 a 
 
 the damage done by the fire, but not for that done by the ex- 
 plosion.i If under such a policy the fire precedes the explo- 
 
 insured was destroyed was within the exception to the seventh condition ; that 
 is, it was ' expressly insured against, and special premium paid therefor ; ' or, in 
 other words, was excepted out of the exception. 
 
 " The reasoning by whicli tliis proposition is sought to be maintained is thus 
 stated : — 
 
 " The body of the policy covered loss by fire on liquors, &c., with the privi- 
 lege of rectifying and manufacturing fine spirits by steam not generated in the 
 building. The property insured was whiskey, as well in the process of rectifica- 
 tion and manufacture as manufactured whiskey in the still, as well as spirits in 
 the barrel, — the whiskey vapor itself, while passing through the columns to tlie 
 cooler, or wherever else it might make its way. 
 
 " If it was in tliis form an explosice substance or article, such as is intended by 
 tlie language of the condition, or if in tiie process of manufacture allowed by the 
 policy It was likely to become such by escape and mingling with the air in the 
 building, then the insurance was upon it, as an agent known to be explosive 
 under certain circumstances likely to happen, and with the express assent of the 
 company to the carrying on of that process, in the course of which its explosive 
 nature would naturally and probably be developed. 
 
 " The principle sought by this argument to be applied is announced in Har- 
 per V. New York City Insurance Company ; tlie condition exempted the com- 
 pany from liability for loss occasioned by camphene. The fire was occasioned by 
 a workman's throwing a lighted match into a pan upon the floor containing 
 camphene. The risk was upon a printing stock, privileged for a printing-office, 
 camphene not being expressly enumerated. But it was shown that tliat article 
 was a usual part of such a stock, and its use was therefore authorized. For this 
 reason alone, because it was implicitly insured, it was held that the exception 
 did not apply. 
 
 " The following extract from the opinion expresses its doctrine : — 
 
 "'A policy can be so framed as to allow the presence of a dangerous article, 
 and even so as to insure its value, while at the same time it might exempt the 
 insurer from loss if occasioned by the presence or use of the article. But I 
 think it would need very great precision of language to express such an inten- 
 tion. Where camphene or any hazardous fluid is insured, and its use is plainly 
 admitted, the dangers arising from that source are so obviously within the risk 
 undertaken, that effect should be given to the policy accordingly, unless a dif- 
 ferent intention is very plainly declared.' « 
 
 "In answer to this claim, we say : — 
 
 " 1. That the spirit vapor, having escaped from its confinement and passed 
 into the still-room, where it became mixed with atmosphere so as to form an ex- 
 plosive substance, under circumstances that precluded all possibility of reclaim- 
 ing and utilizing it, it was no longer a part of the stock of merchandise insured, 
 and was not under the protection of the policy. 
 
 " 2. If, from the nature of the property insured, the parties, at the time the 
 
 1 Briggs V. N. Am. Ins. Co., 53 N. Y. 446; Briggs j;. N. Br., &c. Ins. Co., 66 
 Barb. (N. Y.) 325. 
 
 945
 
 § 417] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 sion, the entire loss is to be attributed to the fire, though the 
 explosion be destructive.^ And. perhaps, if there be no fire 
 but the ignition of the explosive material, the whole loss must 
 be attributed to the explosion. ^ Where the insurers were 
 not to be liable for collision unless fire ensued, and then 
 only for the loss and damage by fire, and the policy fur- 
 ther stipulated that they were not to be liable for fire 
 arising from petroleum, it was held that they were not 
 liable for loss caused by fire after the collision arising from 
 petroleum.^ 
 
 § 417. Risk ; Collision ; Proximate Cause. — A case of Con- 
 siderable delicacy has recently been before the United States 
 Circuit Court of Connecticut, — the case of the Norwich and 
 New York Transportation Company v. The Western Massa- 
 chusetts Insurance Company,* — in which the question was, 
 whether where a steamer collided with a sailing-vessel, whereby 
 
 risk was taken, might reasonably have anticipated the peril by which it was 
 afterward destroyed, it is reasonable to suppose that such peril was in contem- 
 plation at the time, and that tiiey contracted in reference to it. Hence, if the 
 general risk of tlie policy was expressed in terms broad enough to include the 
 peril, it must be presumed that they intended to do so ; and, on the other hand, 
 if an exception to the risk was made in terras which fairly and plainly took such 
 particular peril out of the general risk, it must be presumed that they intended 
 to exempt such particular peril from the risk. Again, if it be claimed that 
 there was an exception to such exemption, whereby the particular peril was 
 saved from the exemption and left under the general risk, it is reasonable that 
 the terms of exception should be at least as explicit as the terras of exemp- 
 tion. How is it in this case ? The risk was against all loss by fire. 
 
 " The exception from the risk was ' any loss or damage occasioned by an ex- 
 plosion of steam, gunpowder, &c.' The exception to this exception was, ' unless 
 expressly insured against, and special premium paid therefor.' Therefore it 
 only remains to be said, that no loss or damage occasioned by an explosion of 
 any of these substances named was expressly insured against, nor was any spe- 
 cial premium paid for any such special risk." 
 
 1 [If a fire occurs by a cause within the policy, and an explosion takes place 
 as an incident to the fire so as to increase the loss, the wliole damage is within 
 the policy, although it contains an exemption from liability for explosion. Trans- 
 atlantic Fire Ins. Co. v. Dorsey, 56 Md. 70.] 
 
 '^ Washburn c. Artisans' Ins. Co., 9 Ins. L. J. 68 ; Washburn v. Insurance 
 Companies, C. Ct. (Ohio), id. 761, where Tweed's case, ante, § 415, is distin- 
 guished. See also atite, § 413. 
 
 3 Imperial Fire Ins Co. v. Express Co., 95 U. S. 227. 
 
 * 34 Conn. 561. See § 417 A. 
 
 946
 
 CH. XXI.] OP THE RISK, ITS DURATION AND EXTENT. [§ 417 
 
 the steamer was so much disabled that she sank till the 
 water rose to her furnaces and forced the fire out upon her 
 woodwork, which continued to burn till her upper works 
 were consumed, when she sank and became a total loss, — 
 wliether this was a loss by fire. And it was held that this 
 depended upon the fact, submitted to the jury, whether but 
 for the intervention of the fire she would have filled and gone 
 to the bottom. If she would, then it was not a loss by fire ; 
 but if, on the other hand, she would only have filled and par- 
 tially sunk, had not the fire intervened, but yet remained in 
 such a condition that she might have been towed to a place of 
 safety and repaired, then it was a loss by fire. The fire was 
 the proximate cause of the loss. 
 
 The same facts in another case ^ came before the court, and 
 went, on appeal, to the Supreme Court. The case was tried 
 without the intervention of a jury, and the court below found 
 as follows : — 
 
 " While on one of her regular trips from Norwich to New 
 York, on Long Island Sound, the steamer collided with a 
 schooner, the latter striking her on her port side, and cutting 
 into her hull below the water line, in consequence of which 
 she immediately and rapidly began to fill with water. Within 
 ten or fifteen minutes after the collision, the water reached 
 the floor of the furnace, and the steam thereby generated 
 blew out the fire, which communicated with the woodwork 
 of the boat. Her upper works and her combustible freight 
 were soon enveloped in flames, and they continued to burn 
 half or three quarters of an hour, when she gradually sank in 
 twenty fathoms of water, keeling over. The steamer was so 
 constructed that her main deck was completely housed in 
 from stem to stern, up to her promenade or hurricane deck 
 above. Her freight was stowed on the main deck, and her 
 cabin and staterooms were on the hurricane deck. From 
 the effects of the collision alone she would not have sunk 
 below her promenade deck, but would have remained there 
 suspended in the water, and would have been towed to a 
 place of safety, where she, her engines, tackle, and furniture 
 
 1 Howard Fire Ins. Co. v. Norwich & N Y. Transp. Co., 12 Wall (US.) 194. 
 
 947
 
 § 417] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 could have been repaired and restored to their condition 
 prior to the collision for the sum of fifteen thousand dollars, 
 the expense of towage included. The sinking of the steamer 
 below her promenade deck was the result of the action of the 
 fire in burning off her light upper works and housmg, thus 
 liberating her freight, allowing much of it to drift away, 
 whereby her floating capacity was greatly reduced, so that she 
 sunk to the bottom ; and all the damage which she suf- 
 fered beyond the fifteen thousand dollars above named as 
 chargeable to the collision (amounting to seventy-three thou- 
 sand dollars), including the cost of raising the boat, was the 
 natural and necessary result of the fire, and of the fire onlij. 
 
 " It is now urged in behalf of the plaintiffs in error that 
 these findings establish the sinking of the steamer, wherein 
 consisted principally the loss, or that part of it in excess of 
 fifteen thousand dollars chargeable to the collision, was the 
 result of two concurrent causes, one the fire, and the other 
 the water in the steamer's hold, let in by the breach made by 
 the collision. As the influx of the water was the direct and 
 necessary consequence of the collision, it is argued that the 
 collision was the predominating, and therefore the proximate, 
 cause of the loss. The argument overlooks the fact, distinctly 
 found, that the damage resulting from the sinking of the vessel 
 was the natural and necessary result of the fire only. If it be 
 said that this was but an inference from facts previously 
 found, it was not for that reason necessarily a mere legal 
 conclusion. 
 
 " But we need not rely upon this. Apart from that find- 
 ing, the other findings, unquestionably of facts, show that 
 neither the collision nor the presence of water in the steam- 
 er's hold was the predominating, efficient cause of her going 
 to the bottom. That result required tlie agency of the fire. 
 It is found that the water would not have caused the vessel 
 to sink below her promenade deck, had not some other cause 
 of sinking supervened. It would have expended its force at 
 that point. The effect of the fire was necessary to give it 
 additional efficiency. 
 
 "The fire was, therefore, the efficient, predominating 
 948
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 417 
 
 cause as well as nearest in time to the catastrophe, which 
 not only directly contributed to all the damage done, after 
 the steamer had sunk to her promenade deck, but enlarged 
 the destructive power of the water, and rendered certain the 
 submergence of the vessel. This plainly appears, if we sup- 
 pose that the fire had occurred on the day after the collision, 
 and had originated from some other cause than the collision 
 itself. The effects of the prior disaster would then have been 
 complete. 
 
 " The steamer would have been full of water, sunk to her 
 promenade deck, and, remaining thus suspended, would have 
 been towed to a place of safety and saved, in that condition, 
 to her owners, except for the new injury. But the fire occur- 
 ring on the next day, destroying the upper works and the 
 housing, thus liberating the light freight and greatly reducing 
 the floating capacity of the steamer, would have caused her 
 to sink to the bottom as she did. In the case supposed, the 
 water would have been as truly a concurrent and efficient 
 cause of the steamer's sinking, as it was in the case now in 
 hand. It would have operated in precisely the same man- 
 ner, remaining dormant until given new activity. But could 
 there have been any hesitation in that case, in determining 
 which was the proximate, the efficient, predominating cause 
 of the sinking of the vessel? And can it be doubted that 
 the underwriters against loss by fire would be held respon- 
 sible for such a loss ? 
 
 " Wherein does the case supposed differ in principle from 
 the present, when the facts found are considered ? True, the 
 fire in this case was caused by the collision, but the policy 
 insured against fire caused by collision. True, the fire imme- 
 diately followed the filling of the steamer with water, or com- 
 menced while she was filling, but the effects of the fire are 
 conclusively distinguished from the breach in the steamer's 
 hiill, and the filling of her hold with water. 
 
 "The damages caused by the several agencies have been 
 discriminated, and its proper share assigned to each. It is an 
 established fact that the damaging effect of the water, inde- 
 pendent of the fire, would not have reached beyond sinking 
 
 919
 
 § 417] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 of the steamer to its upper deck, when she would have been 
 saved from further injury. 
 
 " There is, undoubtedly, difficulty in many cases attending ' 
 the application of the maxim, '■proxima causa non remota spec- • 
 tatur^ but none when the causes succeed each other in order ' 
 of time. In such cases the rule is plain. When one of 
 several successive causes is sufficient to produce the effect, 
 for example, to cause a loss, the law will never regard an 
 antecedent cause of that cause, or the ' causa causans' ^ In 
 such a case there is no doubt which cause is the proximate 
 one within the meaning of the maxim. But when there is no 
 order of succession in time, when there are two concurrent 
 causes of a loss, the predominating, efficient one must be 
 regarded as the proximate, when the damage done by each 
 cannot be distinguished." ^ Loss by fire caused by collision 
 is covered by a fire policy, collision not being excepted.^ 
 [A loss by collision without fault on either side is a loss " by 
 the perils of the sea " within the policy.* The company does 
 not insure against the misconduct of the master and crew of 
 a vessel, P., insured by it, and if by such misconduct P. runs 
 
 1 Gen. Mut Ins Co. v. Sherwood, 14 How. 351, 366. 
 
 2 See also Brown v. St. Nicholas Ins. Co., 61 N. Y. 832; Allison v. Corn 
 Exch. Ins. Co., 57 N. Y. 87. These two cases well illustrate the perplexities 
 of the courts in the application of settled rules. In the former, a canal-boat, 
 while being towed down the Delaware, was separated by a heavy gale from the 
 tug, and forced ashore. Ice did not interfere with navigation at the time, but 
 during the same night ice formed about the boat, so that the tug could not reach 
 it. After the thaw, wind and ice forced the boat on another vessel, and she was 
 sunk by the collision. It was held that the gale, and not the ice, was the prox- 
 imate cause. In the latter case, a canal-boat was at her moorings. In IMarch, 
 a great accumulation of ice took place in the river, by which a dam was formed, 
 which caused the water to overflow into the canal basin, whereby the boat was 
 damaged. In this case it was held that the ice was the proximate cause. In 
 lonides v. Universal Ins. Co., 10 Jur. n. s. 18, tlie captain lost his reckoning by 
 reason of the extinguishment of the light at Cape Hatteras by the Confederates, 
 and tlie ship went ashore. The loss was held to be by reason of tlie perils of 
 the sea, and not by reason of hostilities. See also Taunton v. Royal Ins Co., 2 
 H. & M. 235, where it was unsuccessfully contended that where property is 
 destroyed by an explosion of gunpowder the proximate cause was the concus- 
 sion of the air, and that the fire was the remote cause. 
 
 3 Germania Ins. Co. v. Sherlock, 25 Ohio St. 33. 
 < [Peters v. Warren Ins. Co., 14 Pet. 99 at 108.] 
 
 950
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 417 A 
 
 iuto another vessel, B. and B. recovers a judgment against the 
 vessel P., the latter cannot hold the insurance company liable 
 to refund such money to it, although collision is one of the 
 perils insured against. The proximate cause of loss to P. in 
 the case is not collision but negligence. Without this feature 
 the collision would have given B. no cause of action against 
 P.i When a policy provided that the company should not be 
 responsible for loss arising from petroleum or other explo- 
 sive oils, and when by a collision of two trains a fire was 
 started by the petroleum in one of them, by which the goods 
 were destroyed, it was held that the company was not 
 liable.2] 
 
 [§ 417 A. Proximate Cause is a Question of Fact for the 
 Jury .3 — Where the company was not to be liable for " derange- 
 ment or breaking of machinery or any consequence thereof," 
 and it appeared that the mud valve was out of order, and 
 steam was blown off to make repairs, during which the mas- 
 ter, although he saw repairs going on, ordered the boat to be 
 let go without inquiring into the state of the steam, and 
 because there was not steam enough to work her, the ship 
 went over the falls of the river and was badly damaged, it 
 was held that the insurers were liable.* Goods on a steamboat 
 were insured against "immediate loss by fire." A collision 
 occurred which caused a fire to break out. The vessel after- 
 ward sank before the fire reached the insured goods. It was 
 held that if the goods would not have been lost but for the 
 fire, it was a case of loss by fire. It is not necessary that the 
 insured property should be injured or consumed by the fire. 
 The insurer is liable for all losses which result from the fire, 
 and can be fairly attributed to it. If the property is injured by 
 water used to put out the fire, or the vessel sink because the 
 fire renders it impossible to run the engine or stop the leak, 
 the loss is within the policy.^ When a ship was stranded and 
 
 1 [Mathews v. Howard Ins. Co., 11 N. Y. 9, 17-19.] 
 
 2 [Insurance Co. v. Express Co., 95 U. S. 227 at 232.] 
 
 3 [Penn. R R. v. Hope, 80 Pa. St. 372, engine sparks ; Penn. R. R. u. 
 Kerr, 62 Pa. St 353, distinguished. See Milwaukee v. Kellogg, 94 U. S. 469.] 
 
 » [Orient Ins. Co. v Adams, 123 U. S. 67 (1887.)] 
 
 6 [New York Exp. Co v. Traders' Ins. Co., 132 Mass. 377, 381.] 
 
 951
 
 § 419] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CII. XXL 
 
 lost practically, and while in that condition the goods on 
 board were captured by enemies, it was held a loss covered 
 by a policy " free from capture or seizure." ^ But where 
 barratry is insured against and capture excepted, a seizure in 
 consequence of the barratrous act of the master frees the 
 company. The barratry would not have caused loss but for 
 the capture.^] 
 
 § 418. Risk ; Explosion ; Proximate Cause. — An interesting 
 marme case was recently before the New York Commission 
 of Appeals,^ in which arose the question whether a steamship 
 which was insured under a policy which excepted loss by the 
 bursting of boilers, but covered all losses " occurring subse- 
 quent to and in consequence of such bursting," and the loss 
 of which was occasioned by such a violent explosion as to 
 sink her in five or ten minutes, was protected by the policy. 
 And it was held that she was not, on the ground that upon 
 the explosion the vessel became valueless, and the loss total 
 and immediate, and not subsequent to the cause that occa- 
 sioned it> We have already seen ^ that where a building 
 falls in ruins, and the ruins take fire from combustion of 
 chemicals which were amongst the stock, no recovery can be 
 had, the destruction being by the fall, and not by the fire. 
 
 § 419. Risk ; Intemperance ; Wound ; Proximate Cause. — 
 Intemperance, doubtless, in a general sense, shortens life ; but 
 it is not, therefore, a cause of death within the meaning of a 
 policy made void if the applicant should die by reason of 
 intemperance from the use of intoxicating liquor. The conse- 
 quences of such a construction would be that an insurance 
 company which had insured the life of one known to be 
 intemperate, and had charged a higher rate of premium on 
 that very account, could exonerate itself from liability by 
 showing that the life of the assured had been shortened by 
 
 1 [Hahn v. Corbett, 2 Bing. 205 at 210.] 
 
 •-' [Cory V. Burr, 8 Q. B D. 313; 9 Q. B. D. 463 ; 8 App. Cas. 393.] 
 
 3 Evans i'. Columbian Ins. Co., 44 N. Y. 146. 
 
 * Hunt, C, dissents in an opinion of g:reat force and acuteness, to which we 
 refer, as containing some excellent illustrations of the distinction between proxi- 
 mate, mediate, and remote causes. 
 
 5 Nave r. Home Ins. Co., 37 Mo. ; ante, § 412. 
 
 952
 
 CH. XXI.] OP THE RISK, ITS DURATION AND EXTENT. [§ 419 A 
 
 intemperance. A sound principle does not lead to conse- 
 quences so unjust and unreasonable. A proximate cause of 
 an effect is that which immediately precedes and produces it, 
 as distinguished from the remote, mediate, or predisposing 
 cause. When several causes contribute to death as a result, 
 it may be difficult to determine which was the remote and 
 whicli the immediate cause ; yet this difficulty does not re- 
 move the necessity of such determination.^ The same case 
 came before the court again,^ when it appeared that the in- 
 sured in a fit of delirium tremens escaped from those having 
 him in charge, ran out into the streets, and was exposed in 
 scanty clothing to the inclemency of the weather, which ex- 
 posure contributed, with intemperance, to bring on congestion 
 of the lungs, of which he died. And the court held that 
 these facts would support a defence on the ground of intem- 
 perance, under a clause exempting the insurers from liability 
 if the insured should die " by reason of intemperance from 
 the use of intoxicating liquor." Whether the congestion was 
 caused by the exposure or intemperance, they were both the 
 direct consequences of his intemperate use of intoxicating 
 liquor. And where the insured was wounded, and the wound, 
 not causing his death, caused him to fall into the water, 
 whereby he was drowned, it was held to be a death by acci- 
 dent. And on appeal the court say : — 
 
 " The part of the charge to the effect that if the wound led 
 to the cause of the death then it would be an accidental death, 
 could have been understood only in the sense of the wound 
 being produced by an accident, but that this, not causing 
 death, did cause him to fall into the water, where he died 
 from drowning, then the death was accidental; so understood, 
 it was entirely correct." ^ 
 
 [§ 419 A. Intemperance. — If a policy is to be forfeit if the 
 insured does not obey the rules of the association, it will be 
 avoided if he uses intoxicating liquors as a beverage in viola- 
 
 >■ Miller V. Mut Ben. Life Ins Co., 31 Iowa, 216. 
 
 2 34 Iowa, 222 ; New York Life Ins. Co. v Boiteaux, 5 Big. Life & Ace. Ins 
 Gas. 437. 
 
 8 Mallory v. Travelers' Ins. Co., 47 N. Y. 52. 
 
 953
 
 § 420] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 tion of one of the rules.^ Among the Royal Templars a vio- 
 lation of the total abstinence pledge will forfeit the insurance.''' 
 The words " sober and temperate " do not imply total absti- 
 nence, though frequent intoxication is a breach.^ Where a 
 policy is to be void if the insured becomes so intemperate 
 as to seriously impair his health, evidence that what he drank 
 was sufficient to seriously impair a man's health is inadmis- 
 sible ; there must be evidence that his health was impaired.* 
 A stipulation that if the assured shall become intemperate to 
 a certain degree the policy may be cancelled, will control a 
 general provision that such intemperance shall avoid the 
 policy.^ Excessive drinking of liquor is a violation of a war- 
 ranty that the insured " will not practise any pernicious habit 
 that obviously tends to shorten life." ^ When a habit of in- 
 temperance is in issue it is competent to ask a witness if he 
 has ever seen the insured under the influence of liquor, or has 
 seen him take more than one drink, and after drinking act 
 uproariously, abusing his family, &c.^ The beneficiary is not 
 estopped by the physician's statements of the cause of death.^ 
 Where all the time the agent knew the insured to be an habit- 
 ual drunkard, the condition against intemperance cannot be 
 insisted upon by the company, but this knowledge does not 
 prevent the avoidance of the policy under another clause if 
 the insured dies from the effects of intoxication.^] 
 
 § 420. Risk ; Property covered by the Policy. — If it be 
 doubtful what goods or buildings or places are covered by the 
 policy, the doubt will be resolved against the insurers, and 
 evidence will be admissible to resolve the doubt. ^^ A policy 
 
 1 [Hogins V. Supreme Council, &c., 76 Cal. 109.] 
 
 2 [Royal Templars of Temperance v Curd, 111 111. 281.] 
 
 3 [Brockway v. Mut. Ben. Life Ins. Co., 9 Fed. Hep. 249 (Pa ), 1881.] 
 
 4 [Odd Fellows Mut. Life Ins. Co. v. Rolikopp, 94 Pa. St 59] 
 
 5 [Nortliwestern Mut. Life Ins. Co v. Hazelett, 105 Ind. 212.) 
 
 6 [Schultz V. Mut. Life Ins. Co., 10 Ins. L J. 171, 2d Cir. (N. Y.), 1881; 6 
 Fed. Rep. 672 ; Brockway v. Mut. Ben. Life Ins Co , 10 Ins. L. J. 762 ^ 9 Fed. 
 Rep. 249.] 
 
 7 [United Brethren Mut Aid Soc. v. O'Hara, 120 Pa. St. 256.] 
 ^ [Bentz V. Northwestern Aid Ass., 40 Minn 202. J 
 
 " [Newman i; Covenant Mut. Ins. Ass , 76 Iowa, 56 ] 
 10 Franklin Fire Ins Co v Updegraff, 43 Pa St 350; Clark i-. Firemen's Ins. 
 
 954
 
 CH. XXT.J OF THE RISK, ITS DURATION AND EXTENT. [§ 420 
 
 on " wearing-apparel, furniture, and stock of a grocery," does 
 not cover " linen and sheets " smuggled and intended for 
 sale ; and a watch, being a memorandum article, is not in- 
 cluded in wearing-apparel ; ^ nor is a stock of linen-drapery 
 goods included in " household furniture, linen, wearing-ap- 
 parel, and plate," though the insured, who was not a linen- 
 draper, was also insured upon his stock in trade. By the 
 maxim noscitur a sociis " linen," in this case, was held to cover 
 only household linen.^ But household furniture covers fur- 
 niture stored in the garret for use.^ " Stock in trade," as 
 applicable to mechanical pursuits, is to have a more extended 
 application than as applied to a merchant's stock in trade. 
 It includes, in the former case, the fixtures and implements 
 of business.* Furniture and movables are not " fixtures." ^ 
 " Jewelry and clothing," being stock in trade, will not cover 
 musical instruments, surgical instruments, guns, pistols, and 
 books ; ^ but " stock of watches, watch trimmings, &c.," in- 
 cludes within its comprehension plate, silver-ware, and the 
 tools of trade, and such other articles as form part of similar 
 stocks in the locality where the insurance is effected.'^ " Mer- 
 chandise " will not cover articles kept for use, while " property " 
 will.^ [" Merchandise " in a policy will generally, at least, be 
 applied to goods for sale, and does not include a " beam-scale," 
 belting, &c., in a warehouse, the policy being on " grain and 
 
 Co., 18 La. Ann. 431 ; ante, § 367 ; Burr v. Broadway Ins. Co., 16 N Y. 267 ; 
 Beatty v. Lycoming Ins. Co., 52 Pa. St. 456 , Lycoming Ins. Co. v. Sailor, 67 id- 
 108; Neve v. Columbian Ins. Co., 2 McMullan (S. C), 220; Wiiitmarsh v. Con- 
 way Fire Ins. Co., 16 Gray (Mass.), 359; Planters' ins. Co. v. Engle, 52 Md. 
 468 ; Steele v. Franklin Fire Ins. Co., 17 Pa. St. 290 ; post, § 424. Even subse- 
 quently acquired or added property may be shown to have been within the in- 
 tention of the parties, the description being sufHcicnt to cover it. Perry County 
 Ins. Co. V. Stewart, 17 Pa. St. 45. 
 
 1 Clary v. Prot. Ins, Co., Wright (Oiiio), 227. 
 
 2 Watchorn v. Langford, 3 Camp (N. P ) 422. 
 8 Clark V. Firemen's Ins. Co., 18 La. 431. 
 
 < Moadinger v Mech. Fire Ins. Co., 2 Hall (N. Y. Superior Ct.), 490. 
 
 6 Hohnes v. Charlestown Mut. ins Co , 10 Met (Mass ) 211. 
 
 ^ Rafael v Nashville Mar. & Fire Ins Co , 7 La Ann 244. 
 
 ^ Crosliy V. Franklin Ins Co., 5 Gray (Mass ), 504. 
 
 « Burgess v. Alliance 1ns Co, 10 Allen (Mass ), 221 See § 239. 
 
 955
 
 §420] insurance: fire, life, accident, etc. [ch. xxi. 
 
 other merchandise." ^] Silver spoons and forks are not " plate," 
 as that word is commonly understood ;'^ nor does " refined 
 oil " cover lard oil.^ " House " or" building " embraces every- 
 thing appurtenant and necessary to the main building, and used 
 though not connected with it, or represented in tlie plan as 
 part of it.^ " Ship-yard " embraces sucli places as are ordi- 
 narily used as part of the yard, though within the street.^ " On 
 the line of the road " includes all branches used by the rail- 
 road ;^ and " on their premises " includes a boat lying at the 
 wharf of a railway company.'' " Cars owned or used by the 
 company " includes cars belonging to other railroads than 
 the insured.^ But an " unfinished house " does not include 
 materials prepared for its completion, and deposited in an 
 adjoining one, which was also insured.^ Nor does insurance 
 on a " bark now being built " include materials prepared to put 
 into her, lying about the yard ; ^^ and insurance on " lumber 
 manufactured, and in the process of manufacture in said build- 
 ing," will not cover lumber in tlie yard , ^' but " stock manu- 
 factured, or in process of manufacture," covers raw or unmanu- 
 factured stock. ^2 SlicIi materials are not covered by the policy 
 until they become a part of the vessel. ^^ But " stock of lum- 
 ber" will include pieces partly prepared to put into the vessel.^* 
 
 1 [Kent V. Liverpool & London Ins. Co., 26 Ind 294 at 298.] 
 
 2 Hanover Fire Ins. Co v. Mannasson, 29 Mich 316. 
 2 "Weisenberger v. Harmony Ins. Co., 56 Pa. St. 442. 
 
 * Workman r. Insurance Co , 2 La. 507 ; Blake o Exch. Mut. Ins. Co., 12 Gray 
 (Mass.), 265; White r. Mut. Fire Ins. Co , 8 id. 566. 
 
 5 Webb V. Nat. Fire Ins. Co , 2 Sandf. (Superior Ct N. Y.; 497. 
 
 6 Fitchburg R. R. Co v. Ch Mut Ins. Co., 7 Gray (Mass.), 64. 
 
 ■7 Farmers' &c. Ins. Co. v Harmony &c Ins Co., 51 Barb (N. Y.) 33; af- 
 firmed, 41 N. Y 619. 
 
 " Commonwealth v Hide, &c. Ins. Co , 112 Mass. 136. In Annapolis, &c. Ins. 
 Co. t'. Baltimore Ins. Co., 32 Md 37, tiie words "contained in" were held, un- 
 der the peculiar wording of the policy and tlie circumstances of the case, to 
 cover certain cars only wiiile they were in the car-houses. 
 
 ^ Ellmaker v. Franklin Fire Ins. Co., 5 Pa. St 18.3. 
 
 10 Mason v. Franklin Ins. Co , 12 G & .1 (Md ) 468. 
 
 11 North Am. Ins. Co v. Throop, 22 Mich. 146. 
 
 12 SpraUey v. Hartford Ins. Co., 1 Dill. C Ct 392. 
 
 13 Ibid.; Hood o. Manhattan Fire Ins. Co., 1 Ker. (N. Y.) 532, reversing 8 c 
 2 Duer (Superior Ct NY), 191. 
 
 " Webb V. Nat. Fire Ins. Co , 2 Sandf. (Superior Ct. N. Y.) 497. 
 
 956
 
 CH. XXI ] OP THE RISK, ITS DURATION AND EXTENT. [§ 420 
 
 " Steam sawmill " includes machinery necessary to its opera- 
 tion.' And so does " starch factory," 2 and " grist-mill." ^ 
 [The word " factory " does not necessarily mean a single 
 building, but may include several where they are used to- 
 gether for a common purpose in the same inclosure, unless 
 by the terms of the policy restricted to one.*] " Machinery " 
 includes all the essential parts, such as " dyes " necessary to 
 its successful and productive operation;^ and " mill building " 
 may include the machinery in the building.^ But insurance 
 on " logwood warehouse, in which chopping dyewood is per- 
 formed," was held so unequivocally not to cover machinery 
 therein as to make evidence inadmissible.^ Paper bags are 
 not tools of a flour-mill ^ But patterns used for making cast- 
 ings, when applied by hand, are " tools of trade." ^ Wearing 
 apparel is protected while in ordinary use, though away from 
 its usual place of deposit ;^*' so is a carriage out for repairs,^^ 
 and a thrashing-machine out for use ;'2 go are mules and horses 
 in actual use about the premises, or in the prosecution of its 
 busincss.^^ " Grain in stacks " may include flax.^^ " Cattle" 
 includes hogs,'^ and "grain" has been held to include pease,^^ 
 
 1 Bigler v. New York Cent. Ins. Co., 20 Barb. (N. Y.) 635. 
 
 2 Peoria Mar. & Fire Ins. Co. v. Lewis, 18111. 553. 
 
 8 Shannon v Gore, &c. Ins. Co., 2 Ont. App. Kep, 896. 
 
 * [Liebenstein v- Baltic Fire Ins. Co., 45 111. 301 ] 
 
 ^ Seavey r. Central Ins Co, 111 Mass. 540; Washington Ins Co. v. Dav- 
 ison, 30 Md 91 ; Buchanan v. Exch. Fire Ins. Co., 61 N. Y. 26. 
 
 « Brugger v. State, &c. Ins Co., C. Ct. (Or.), 8 Ins. L. J. 293: Excelsior 
 Ins. Co. V Royal Ins. Co., 55 N. Y. 343. 
 
 ' Hare v. Barstow, 8 Jur. 928 
 
 8 Hutchinson v. Niagara, &c. Ins. Co., 39 D. C (Q B.) 483- 
 
 9 Lovewell r. Westchester Ins Co., 124 Mass 418 
 
 "' Longueville v. Western Assurance Co , 51 Iowa. 553. 
 
 " McCluer v. Girard Fire Ins. Co., 43 Iowa, 349. 
 
 '- Everett v. Continental Ins Co., 21 Minn 76. 
 
 13 Holbrook v St. Paul Mar. & Fire Ins. Co , 25 Minn. 229 ; ante. § 219 ; Mills 
 V. Farmers Ins. Co., 37 Iowa, 400. But see Gorman v. Hand in Hand Ins. Co., 
 11 W. R. C. L 224, where, by a very strict construction, hay not specified and 
 horses and agricultural implements while awaj* from their specified places were 
 held not to be covered bj' tlie policy. 
 
 " Hewitt V. Watertown Fire Ins Co. flowa), 10 Ins L J 375. 
 
 15 Decatur Bank v. St Louis Bank, 21 Wall. (U. S.) 294. 
 
 ^ State V. Williams, 2 Strobh. (S C) 474. 
 
 957
 
 § 420 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 millet, and sugar-cane seed.^ And insurance on " all tlie 
 articles making up the stock of a pork-house, and all 
 within the building and pertinent thereto," covers everything 
 properly belonging to the stock of a pork-house, without re- 
 gard to individual ownership, although the policy states that 
 goods on commission are to be insured as such.^ " Articles 
 used for packing" and "in packing" include coal to carry on 
 the works.^ 
 
 [§ 420 A. Property Covered {continued). — What is covered 
 by the description is a question for the jury.* Although the 
 words of a policy may be broad enough to cover certain 
 goods, evidence of facts outside the policy is admissible to 
 show that those goods were not intended to be covered.^ If 
 enough of the description is true to identify the property, 
 other portions of it which are false will be disregarded, when 
 the question is merely what property was insured.^ Evidence 
 will be received as to the identity of the property destroyed and 
 that insured. Describing a story-aud-a-half house as a " one 
 story " house is not fatal. Until the misdescription affects 
 not merely the question of identity but the nature of the risk 
 it is not material.' A " three story granite building" men- 
 tioned in a policy may mean a building with a granite front 
 only, and three stories high in front and at the rear, though 
 only one story in the middle.^ Insurance on a " stock of hair, 
 wrought, raw, and in process " does not extend to fancy goods 
 made of other materials, although usually kept and sold in a 
 retail hair store.^ An insurance on a ship and " property on 
 board " covers bank bills, the property of the assured. ^'^ Also 
 when the insurance was for the benefit of the master, whose 
 
 1 Holland v. State, 34 Ga. 455. 
 
 2 ^tna Ins. Co v. Jackson, 16 B. Mon (Ky.) 242, 250. 
 
 3 Phoenix Ins. Co. v. Favorite, 49 111 259; Home Ins. Co. v. Favorite, 46 id 
 263. 
 
 * [Southwest Lead & Zinc Co. v. Phcenix Ins Co., 27 Mo App. 446.] 
 
 5 [Richardson v Home Ins Co., 47 N. Y. Super. 138.] 
 
 6 [Hatch V New Zealand Ins. Co , 67 Cal. 122] 
 
 7 [Eakin v. Home Ins. Co., 1 Tex. Civ. Cas. §§ 12-34, 1235] 
 
 8 [Medina v. Builders, Mut. Fire Ins. Co, 120 iMass. 225 at 226.] 
 
 9 [Ibid.] 
 
 "' [Whiton V. Old Colony Ins. Co., 2 Met 1 at 3.] 
 
 958
 
 CH. XXI.] OF THE RISK, ITS DURATION AND EXTENT. [§ 420 B 
 
 only interest was his commission, this was held covered.^ 
 " Iron " includes steel.^ Rice is not " corn " within the meaning 
 of a policy of insurance.^ Common repute among merchants 
 dealing in the article is admissible to show what is and what 
 is not included in the term " fur." * Evidence is admissible 
 to prove a usage among owners of whale-ships and under- 
 writers to treat a policy on outfits as covering one-fourth part 
 of the catchings.^ On a general policy of insurance on a ship, 
 evidence is inadmissible to show that the common custom 
 and usage of underwriters is not to pay for boats slung on the 
 outside of the ship.^ When a cargo of lumber, &g., was con- 
 signed to a master of a vessel and shipped thereon, and the 
 owner was to pay as freight three-fifths of the lumber and a 
 sum of money for the other articles, and a total loss occurred, 
 it was held that a policy made by the master on the property 
 on board covered the three-fifths of the lumber, but not the 
 money''' payable on the other articles. Freight cannot be 
 insured as property, but in this case as to lumber there was 
 an interest in the property.] 
 
 [§ 420 B. Property Covered {continued). — A policy for a 
 long period upon goods in a retail shop applies to the goods 
 successively in the shop from time to time.^ Where a policy 
 covered " a planing mill and addition " and " machinery, shaft- 
 ing, &c.," the engine room twenty-two feet away and con- 
 nected by a shaft and a spout was held to be designated as the 
 addition, there being no other.^ A policy on an " elevator 
 building and additions " covers adjacent buildings attached 
 to and used with the elevator.^^ An insurance on " chair 
 lumber and such other stock as is usually used in a chair 
 
 1 [Holbrook v. Brown, 2 Mass. 280 at 282. 
 
 2 [Hart V. Standard M. Ins. Co., 22 Q. B. D. 499.] 
 8 [Scott V. Bourdillon, 5 B. & P. 213 at 213.] 
 
 * [Astor !'. Union Ins. Co., 7 Cowen, 202 at 214.] 
 
 s [Macy V. Whaling Ins Co., 9 Met. 854 at .364.] 
 
 « [Blackett v. Royal Exch. Ass. Co , 2 C. & J. 244 at 249.] 
 
 ^ [Wiggin V. Mercantile Ins. Co , 7 Pick. 271 at 274.] 
 
 8 [Hooper v. Hudson R. F. Ins, Co., 17 N. Y. 424 at 426.] 
 
 5 [Home Mut. Ins. Co v. Roe, 71 Wis. ,33.] 
 
 10 [Cargill V. Millers', &c Mut Ins. Co., 33 Minn. 90,] 
 
 VOL. li. — 17 959
 
 § 420 B] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 manufactory, contained in their chair manufactory situated, 
 <fec.," was held to cover property of the same kind in an en- 
 gine house, ten feet from the main building, connected by a 
 platform and belting.^ An insurance of " goods shipped on 
 board the Great Western Steamship Company " covers a ship- 
 ment on a vessel chartered by the company though not owned 
 by it.2 Otherwise if the charter is only one of affreightment, 
 and the ship remains in the possession and control of others.^ 
 When the insurance was on goods on the hrig Aheona and the 
 vessel lost on which the goods were was the schooner Aheona, 
 no insurance was held to have attached, in the absence of 
 proof that the parties really contemplated the vessel on which 
 the goods were and not the vessel described,* An insurance 
 company may bind themselves in a policy on goods already 
 lost, if they express such an intention, as by the words " lost 
 or not lost." ^ The insurance company may avoid liability for 
 goods included in the policy by mistake ; but the evidence 
 must be very clear.^ Neither party has a right to change the 
 subject-matter of a policy.'' Where the insured took out a 
 policy on certain goods he expected to be shipped to him, and 
 instead other goods were shipped and lost, the insured could 
 recoveries premium, for the risk that never attached, but could 
 not apply his policy to the new goods. Where an open pol- 
 icy provides that the specific goods insured shall be indorsed 
 on its back, the secretary of the company has no authority to 
 waive this precedent condition, and a failure to comply with 
 it will render the policy invalid.^ A mutual company of New 
 York may insure residents of Canada, and property situated 
 there.^] 
 
 1 [Liebenstein v. Baltic Fire Ins. Co., 45 111. 301 at 302.] 
 
 2 [Croswell v Mercantile Mut. Ins. Co., 19 Fed. Rep. 24, 8th Cir. (Minn.) 1884. 
 
 3 [Red Wing Mills v. Mercantile Mut. Ins. Co., 19 Fed. Rep 115, S. Dist. of 
 N. Y. 1884.] 
 
 4 [Sea Ins. Co. v Fowler, 21 Wend. 600 at 603.] 
 
 6 [Arkansas Ins. Co. v. Bostiek, 27 Ark. 530 at 544] 
 
 6 [Woodruff f. Columbus Ins. Co., 5 La. Ann. 697 at 699 ] 
 
 "? [Toppan V. Atkinson, 2 Mass. 365 at 370.] 
 
 8 [Plahto V. Merchants, &c. Ins. Co., 38 Mo. 248 at 258 ; Schaeferr. Baltimore 
 Mar. Ins. Co., 33 Md. 109 at 117.] 
 
 9 [Western v. Genesee Mut. Ins. Co , 12 N. Y. 258 at 263.] 
 
 960
 
 CH. XXI.] OP THE RISK, ITS DURATION AND EXTENT, [§ 421 
 
 § 421. Risk: Property included; Goods in Trust; For whom 
 it may concern. — The words " held in trust " applied to goods 
 insured mean goods with which the assured is intrusted, 
 not goods held in trust in the strict technical sense, — so 
 held that there is only an equitable obligation in the assured, 
 enforceable by subpojiia in cliancery, but goods with which 
 they are intrusted in the ordinary sense of the word ; ^ and 
 the risk covers the merchandise itself, and not merely the 
 trustee's interest.^ Such insurance without restriction will 
 cover a consignor's interests.^ But where a general policy 
 upon goods in trust was taken out, and it was represented by 
 the applicant that he desired insurance upon such goods as he 
 should receive from time to time to secure him for advances, 
 it was held that the policy covered only such goods as at the 
 time of the loss he had made advances upon.^ 
 
 Whether the goods insured are held in trust is sometimes 
 a question of not a little difficulty. The following case is of 
 importance upon this point, and well illustrates the distinction 
 between a sale and a bailment : The respondents, who were 
 millers, received wheat from different farmers. The wheat, 
 on receipt, was, with the consent of the farmers, mixed with 
 other wheat, and became part of the millers' current stock. 
 The millers could at any time grind or sell the wheat so re- 
 ceived. The farmers could at any time claim the price of the 
 wheat delivered by each, according to the market price for 
 wheat of like quality, at the time of payment claimed. There 
 was also some evidence that the farmers had the option of 
 claiming an equal quantity of wheat of like quality, instead 
 of the value in money. The millers often made advances to 
 the farmers on the wheat received from them. The farmers, 
 after a certain time, paid a storage-charge to the millers. 
 
 The respondents insured the current stock of wheat in 
 their mill with the appellants. In the proposal for. insurance 
 
 1 Hough et al. v. People's Ins. Co., 36 Md. 398 ; Home Ins. Co. v. Favorite, 46 
 111. 263. 
 
 2 Home Ins. Co. v. Baltimore "Warehouse Co., 93 U. S, 527. 
 
 3 Johnson v. Campbell, 120 Mass. 449. 
 
 •* Parks V. Gen Interest Ass. Co , 5 Pick. (Mass.) 33. 
 
 961
 
 § 421] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI. 
 
 the respondents answered the question whether the insurance 
 was " lor self or in trust, and if in trust, on account of 
 wliom?" in these words, — "for selves." 
 
 A condition of the policy was, that goods held in trust 
 must be insured as such, otherwise tlie policy would not cover 
 them. The mill and stock were destroyed by lire. To an 
 action on the policy, the appellants pleaded that the state- 
 ment in the proposal was a misrepresentation, the stock hav- 
 ing been held by the respondents " in trust for other persons." 
 On these facts it was held (affirming the judgment of the 
 Supreme Court of South Australia) that the description of 
 the subject of insurance was correct, for that this was not a 
 case of possession given subject to a trust, but of property 
 transferred for value upon special terms of settlement. 
 
 A bailment on trust implies that there is reserved to the 
 bailor the riglit to claim a redelivery of the property deposited 
 in bailment ; but wherever there is a delivery of property on 
 a contract for an equivalent in monej", or some other valuable 
 commodity, and not for a return of the identical subject-mat- 
 ter in its original or an altered form, this is a transfer of prop- 
 erty for value, — a sale, not a bailment.^ 
 
 1 South Australian Ins. Co. v. Kandell, 22 L. T. n. s. 843. 
 
 962
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. 
 
 CHAPTER XXII. 
 
 OF THE LOSS AND ITS ADJUSTMENT. 
 
 Analysis. 
 
 1. 
 
 § 421 a. Total loss of a building is destruction not of the materials but of 
 
 their specific character as a building. If cost of removal of 
 ruins, preparatory to rebuilding, is more than their value, or 
 cost of repairs more than value when repaired, there is a total 
 loss. Broken leg necessitating destruction of horse, total loss. 
 Plaintiff may recover for partial loss proved, though he sued 
 for a total loss. Loss occurs at the time of the fire. Sub- 
 merging vessel to extinguish fire. 
 § 422. a life policy the estimate of the value of what is lost is made 
 
 by the parties beforehand. In case of a creditor the estimate 
 should coincide substantially with the debt. 
 § 422 A. Valued policies. If ouly part of property put at risk recovery is 
 
 only pro rata. 
 § 422 B. Statutes making conclusive as to real estate the value named in 
 
 the policy. 
 §§ 423-423 C. In a fire policy unvalued the object is indemnification, and the 
 measure of damages is the value of the property lost, not the 
 cost of replacement. (See also § 424. ) The latter must often 
 be referred to, however, in determining the true value lost. 
 Eemote damages from interruption of business, loss of prospec- 
 tive rent, «&c., cannot be recovered unless specifically insured. 
 § 423 A. Method of estimating value and loss. Cost, statements in ap- 
 
 plication, proofs, &c. 
 § 423 B. Evidence as to amount of loss. Witnesses, admissions, &c. 
 
 § 423 C. Evidence of fraud. 
 
 Burden of proof on amount of loss. 
 
 Temporary depression of value not to be taken into account, 
 § 424. 
 § 424. Amount recoverable, Lessee, Mortgagor and Mortgagee. 
 
 Impost and excise duties. 
 
 Creditor's recovery not limited to amount of debt. 
 Goods in trust. Bailment. Goods sold but not removed. 
 
 Partner. Part owner. 
 Person having several interests. Policy running with the 
 property. 
 § 424 A. Extent of damage, not extent of title, the test. Insured may re- 
 
 cover for all interests represented by him. Am- 
 biguity resolved against the company. 
 Rent, Usage. Plaintiff not estopped by proofs repudiated 
 by company. Insurance on one itein cannot be di- 
 verted to another. If the interest has diminished the 
 insured can in general only recover for the interest 
 he still has. 
 
 963
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 § 425. Limitation hj special provision. 
 
 Partial loss below the proportion necessary to bring the pol- 
 icy into action. That liability is incurred beyond char- 
 ter limit no defence to company. See, however, § 430. 
 Pro rating " without reference to liability of other 
 companies." Company only to be liable for what prior 
 insurance does not cover. 
 
 § 426. Repeated losses. Transfer of claim for damages. 
 
 § 427. Apportionment of loss and expenses. 
 
 § 428. Interest. Mode of Payment. Evidence. Set-off. 
 
 § 429. For improper refusal to receive premiums, or renew, or to pay a 
 
 loss, damages may be had. 
 
 2. 
 
 §§ 430-433 A, Rebuilding, or replacement. Sometimes there is a provision for 
 rebuilding in the option of the company, § 430, or for 
 paying a portion of the expense of rebuilding, §§ 423, 
 426. Ko right to replace exists unless expressly pro- 
 vided for, § 430. The election must be within a reason- 
 able time, § 430. Company cannot replace in part and 
 pay in part, § 430, Tlie additional value of the new 
 over the old is to be deducted, for the insurers are under 
 no obligation to give more than an indemnity, nor to 
 pay for repairs on the old building, § 431. Removal. 
 Equity. Refusal to permit, § 432, 433. Company 
 may have to replace more than once, § 426. Partial 
 rebuilding. If public authorities interfere so that 
 company cannot rebuild, it must pay the loss, § 433. 
 Measure of damages for failure to replace properly, §§ 432, 
 433, 433 A. Depreciation of property before fire, 
 §§ 433 A, 431. Right of reversioner or life tenant to 
 have insurance applied to repair, § 433 A. Order of 
 incumbrances not changed by using insurance to 
 repair, § 433 A. 
 Assent to an order to pay to assignee in case of loss does not 
 deprive the company of the option to rebuild, § 447. 
 
 3. 
 
 R 434, CONTRIBUTIOX. "Wliere several insurers protect the same interest 
 
 in the same property, as there is only one loss and can 
 be but one indemnity, they must share proportionally 
 up to the limit of liability, 434. If one company has 
 restricted its liability and another has not, the latter 
 may have to pay more than its proportional share ac- 
 cording to the rates specified for apportionment in the 
 policies, §§ 435, 438. 
 
 s 435. Double insurance. Identity of risk. See also §§ 436 a, 437. 
 
 §§ 436-436 a. Floating policy, specific insurance. 
 
 § 438. Average. 
 
 K 439. Reinsurance. Void policy. 
 
 R 440. Generally a life may be insured any number of times, but 
 
 where the interest in it has an ascertainable value the 
 above rules apply. 
 
 964
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. 
 
 § 441. Life and accident insurance combined. 
 
 § 442. Payment of life policy in mistaken belief of death may be recovered. 
 
 § 443. Fraudulent overvaluation of property is a complete defence. 
 
 § 414. Lost policy. No bond of indemnity can be required by the company. 
 
 4. 
 
 §§ 445-452. Who may sue. 
 
 Nominal and real claimants. A. insuring in his own name 
 the property of P>. for B.'s benefit. Extrinsic evidence 
 as to where proceeds should go, § 445. Heir, § 445. 
 Administrator, §§ 445, 448. Unless the heirs are 
 named, only the executor can sue, § 447 B. 
 
 Payable in case of loss to B, §§ 446-447. Beneficiary sue 
 in his own name, § 446. 
 
 In case of assignment, §§ 447, 448. 
 
 Agent. Policy on goods " in trust " or " for whom it may con- 
 cern." Real i^arty in interest must sue in Iowa, § 448. 
 
 Mortgagor and mortgagee. Claim on proceeds, and which 
 may sue, § 449. 
 
 Creditor cannot sue on policy payable to him " as his in- 
 terest may apjiear," § 447 A, unless his interest is 
 more than the insurance, § 449, for the action cannot 
 be split. 
 
 Too many plaintiffs. Policy to A. and B., real interest all 
 in A, § 447 A. 
 
 Only the person named in the policy can sue, unless it 
 imports the assurance of others, as by the phrase, 
 " whom it may concern," &c., § 447 B. 
 
 Only the covenantee can sue on a jiolicy under seal, § 447 B. 
 
 Dismissal of suit because in wrong name no bar to an- 
 other, § 447 B. 
 Suit against president and secretary suiBcient, § 447 B. 
 
 5. 
 
 §§ 449-452 B. To whom the proceeds belong. See chap. xx. 
 
 General Rule. Only nominal assured or assignee after loss 
 can claim any part of proceeds from company, or per- 
 .son receiving fund unless by agreement, or policy 
 covered property in which he had an interest, and 
 it was affected with his benefit in view, and at his 
 expense. See middle of § 456. 
 Creditor must account for proceeds beyond debt and ex- 
 penses, if premiums came out of debtor, § 449. See 
 § 456, near end. (He ought to account any way, and 
 on payment of debt and expenses of the jiolicy, the 
 debtor ought always to be able to demand its assign- 
 ment to himself. ) 
 Vendor and vendee, §§ 450, 456. 
 
 Mortgagor and mortgagee, §§ 449, 452 B-452 D, 456, 
 457 C. See chap, xxiii. and anal. A (4). 
 mortgagee no claim on mortgagor's insurance except 
 by agreement, or an instrumentality in procur- 
 ing it, § 449. 
 
 965
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 covenant to insure for mortgagee's benefit, § 452 C. 
 policy payable to mortgagee, how affected by acts of 
 mortgagor, § 452 D. See §§ 378 A, 379, 381, 386. 
 insurance by mortgagee is for indevmity, and after 
 debt is satisfied the excess goes to the mort- 
 gagor, § 452 B. 
 
 Contra, § 449. 
 unless there is an agreement to that effect, 
 or the mortgagor was concerned in the 
 insuring, 
 the doctrine of § 452 B is just, but the fact that pre- 
 miums have been paid must be taken into ac- 
 count in determining what is an indemnity. 
 Landlord and tenant, § 450. 
 Lessor and lessee, § 456. 
 Carrier's right to claim proceeds, § 457 A, 457 B. See ch. 
 
 xxiii. and anal. A (4). 
 "Wife insuring her life for husband, or children, § 451. 
 Endowment policy payable in alternative, § 452. 
 Payment of premiums gives no right to proceeds, § 452 A. 
 Insured is to retain no more of the fund than covers his 
 
 interest, § 452 A. 
 Loss after succession goes to heir or devisee. 
 
 Administrator recovers as trustee, § 452 A. 
 Wife's life estate by man-iage contract not a " succession," 
 
 § 452 A. 
 Equitable owner against garnishment of legal owner, 
 
 § 452 A. 
 One interested may recover from another who has received 
 the whole fund, unless it is primarily for the latter's 
 benefit and no more than covers his own interest, 
 § 452 A. 
 Holder of mechanic's lien, § 456, n. 
 Builder no claim on buildee's insurance before house is 
 
 complete, § 452 A. 
 Equity will secure vendor the purchase-money out of 
 
 vendee's insurance, § 452 A. 
 Vendee's claim, on completing purchase after fire, § 450. 
 Tenant in common, § 452 A. 
 Legatee no claim, where testator and goods perish at sea, 
 
 it being unknown which went first, § 452 A. 
 " For owners," or 
 
 " Whom it may concern," lets in all really interested at 
 the time of insurance and of loss, who were intended 
 to be insured by the person procuring the policy, and 
 who gave authority for the insurance or ratified it, 
 and parol is admissible to show who are the owners, 
 § 452 E. 
 § 452 F. Adjusting Claim., Compromise, d-c. 
 
 adjustment fairly made conclusive, if the facts were actu- 
 ally known (English case contra), though the parties 
 mistook their legal rights. 
 
 966
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 421 a 
 
 facts not considered may afterward avail, unless merely 
 cumulative in an unimportant degree. 
 
 if the assured knowing his rights is frightened into an un- 
 just settlement, there is no help for him. 
 
 yielding part of claim is sufficient consideration for promise 
 to pay the rest, but is not binding on the assured un- 
 less the claim is doubtful, or tliere is some considera- 
 tion for reducing his claim. 
 
 performing conditions prescribed is a good consideration for 
 the promise attached to them. 
 
 fraud vitiates the adjustment. 
 
 § 421 a. Total Loss; When it occurs. — " Total loss," as ap- 
 plicable to a building:, means not that the materials of which 
 it is composed were annihilated, but that the building, though 
 some part of it may remain standing, has lost its identity and 
 specific character as a building, and instead thereof has be- 
 come a disintegrated mass, or so far disintegrated that it can- 
 not be properly designated as a building.^ [A total loss does 
 not mean an absolute extinction, but only a destruction of a 
 thing in the character in which it is insured. If a building 
 ceases by fire to be such, losing its identity and character as a 
 building, the whole sum insured is due although the materials 
 may not have been absolutely destroyed.^ When no portion 
 of the brick walls of a house could be used in rebuilding after 
 a fire, when the foundations were not sufficient to support a 
 building of the weight and dimensions of the one burned, 
 when the expense of removing the fragments of the old build- 
 ing would at least equal the value of all the materials left 
 after the fire, — it was held a " total loss " within the meaning 
 of such a policy .3 So where the insurers were to pay only the 
 absolute damages, and the cost of repairing, the ship was 
 proved to be more than it would be worth when repaired, the 
 company was liable as for a total loss.* Annihilation of the 
 
 1 Williams v. Hartford Fire Ins. Co. (Cal.), 9 Ins. L. J. 447 ; Nave v. Home 
 Mut Ins. Co , 37 Mo. 430. See also Walker v. Queen Ins. Co , 127 Mass. 306; 
 Judah V. Randall, 2 Caines, Cases, 324 ; Insurance Co. v. Fogarty, 19 Wall. 
 (U. S) 640, 644 ; Globe Ins. Co. v. Sherlock, 25 Ohio St. 50. 
 
 ■^ LH. & B. Ins. Co. V. Garlington, 66 Tex. 103 J 
 
 3 [Harriman i. Queen Ins. Co.. 49 Wis. 71 at 85; Seyk v. Millers' Nat. Ins. 
 Co., 74 Wis. 67 (walls useless as such and most of the bricks spoiled).] 
 
 * [Forwood V. North Wales Ins. Co., 9 Q. B. D- 732; Troop v. Jones, 5 Russ. 
 & Geld. (Nova Sco.) 230 J 
 
 967
 
 § 422] insurance: fiee, life, accident, etc. [ch. xxii. 
 
 vessel is not necessary to constitute a total loss ; it is sufficient 
 if the owner lose his rights in the vessel by sale under a de- 
 cree of a court of competent jurisdiction in consequence of a 
 peril insured against, and in such a case no notice of abandon- 
 ment is necessary.^ If a competent veterinary surgeon or- 
 ders the destruction of a horse that has broken his leg, the 
 company is liable for a total loss.^] 
 
 The doctrines, which have obtained in marine insurance of 
 constructive total loss and abandonment,^ salvage, and general 
 average, are not applicable in fire insurance. Though a vessel 
 insured against fire be submerged to extinguish the fire, the 
 insurer is not liable for any portion of the expense of sub- 
 merging, raising, discharging, and reloading cargo, and dam- 
 ages to property not insured, but only to such damages as 
 result from the fire to the subject-matter insured.^ [When a 
 total loss is claimed on a marine policy, extinction either 
 physical or of value must be proved.^ In another case it was 
 said that to constitute a total loss there must be a destruction 
 of the article in specie, not merely in value.^ Insurance against 
 a " total loss only " does not cover a case where the ship was 
 repaired and a part of the cargo saved.'] 
 
 Loss occurs at the time of the fire, and not when an award 
 is made, or when the time has expired within which payment 
 is to be made.^ [In an action for a total loss the plaintiff 
 may nevertheless recover for a partial loss.^] 
 
 § 422. Amount of Loss recoverable ; Life. — Under the usual 
 contract of life insurance, the loss being total and the policy 
 
 1 [Cossman v. West, 13 App. Cas. 160-] 
 
 - [Shiells V. Scot. Ass. Corp., 26 Scot. L. R. 702.] 
 
 3 [A contract of insurance is only one of indemnity for actual loss, and the 
 consignee of goods in transit has no right to abandon them to the insurance com- 
 pany, and claim the whole insurance e.xcept in case of total loss. Hicks, Lightle 
 & Co. V. Me Gehee, 39 Ark. 264.] 
 
 4 Merchants', &c. Transportation Co. v. Associated Firemen's Ins. Co. (Md.), 
 9 Ins. L. J. 461. See also post, §§ 423, 428, 431, 435. 
 
 6 [Young V. Pacific Mut. Ins. Co., 2 Jones & Sp. 321 at 331.] 
 
 6 (Huggy. Augusta Ins. &o. Co., 7 How (TlOj 695 at 606, Marine Ins, (U.S.)] 
 
 ^ [Murray i'. Hatch, 6 i\Iass. 465 at 477.] 
 
 8 Johnson v. Humboldt Ins. Co., 91 111. 92. 
 
 9 [Gardiner v. Croasdale, 2 Burr. 904 at 907 ; King v. Walker, 2 H. & C 364, 
 399] 
 
 968
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 422 B 
 
 valued, the question of the amount payable is not open to 
 debate, the amount being fixed by the contract. And the 
 amount -to be paid in case of loss may be any sum which the 
 ])arties may agree upon, as the value of a life may be fixed at 
 any sum, unless, perhaps, it be so large and so disproportional 
 to any possible interest as to raise the presumption that the 
 transaction is not in good faith, but in reality is a gambling 
 speculation. When the insurance is upon one's own life, as 
 the future earnings may be indefinitely large, the insurance 
 may be to an unlin;iited amount, except as above stated. 
 Though where the insurance is by a creditor on the life of a 
 debtor, the amount should doubtless coincide substantially 
 with the amount of the indebtedness.^ 
 
 [§ 422 A. Valued Policy. — In a valued policy the stip- 
 ulated value must always be the amount of recovery in case 
 of total loss,2 though it exceed their market value at the place 
 of destination.^ But if by mistake or design the assured 
 should put on board a ship only a part of the goods to which 
 he intended the valuation to apply, he cannot recover as if the 
 whole subject-matter of the valuation had been put on board, 
 but only such a proportion of the valuation as the goods which 
 were on board, and at risk, should bear to the whole valua- 
 tion.* And wherever a part of the property covered by the 
 valuation is not put at risk and covered by the policy, the re- 
 covery will be proportional, not entire.^] 
 
 [§ 422 B. statutes making Value named in Policy conclusive. 
 — In Wisconsin the law makes the value of real estate writ- 
 ten in the policy conclusive as to the amount of loss, and no 
 evidence that the figures were knowingly too high is admis- 
 sible as a defence to an action on the policy.^ In the case of 
 
 1 See Mitchell v. Union Life Ins. Co., 45 Me. 104. 
 
 2 [Lovering v. Mercantile Mar. Ins. Co., 12 Pick. 348 at 3fi7 ; Whitney v. 
 Amer. Ins Co., 3 Cowen, 210 at 219 ; Davy v. Hallett, 3 Caines (N. Y.), 16 at 
 20.] 
 
 3 [Forbes v. Manufacturers' Ins. Co., 1 Gray, 371 at 375.] 
 
 * [Wolcott V. Eagle Ins. Co., 4 Pick. 429 at 436.] 
 
 * [Patrick v. Eames, 3 Camp. 441 at 442; Le Pyre v. Farr, 2 Vernon, 716 at 
 716 , Tobin v. Hartford. 17 C. B. n. s. 527 at 532.] 
 
 •* [§ 1943 11. S.; Cayon v. Dwelling-House Ins. Co., 68 Wis. 510; Seyk v. 
 Miller's Nat. Ins. Co , 74 Wis. 67.] 
 
 969
 
 § 423] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 several policies in different companies the aggregate of the 
 insurance is the value.^ This provision of the law cannot be 
 changed by stipulations in the policy,''^ nor by an award of 
 arbitrators for a less amount.^ By statute in Texas also 
 a stipulation that only a proportion of the amount insured 
 shall be paid by each company is of no effect as to real estate. 
 The whole sum insured must be paid by each company.*] 
 
 § 423. Amount of Loss recoverable ; Fire ; Salvage. — The 
 general rule of damages in fire insurance, the policy not being 
 a vahied one, is indemnification of the insured if the loss be 
 less than, or only equal to, the amount of insurance specified 
 in the policy, without reference to the relation of the amount 
 insured to the whole value of the property insured ; and in 
 this loss is included all the loss immediately caused by the 
 fire, and notwithstanding the insurance is in excess of the 
 proportion allowed by the by-laws of the company,^ so that 
 the insured may be paid for whatever he had before the fire 
 and was destroyed thereby. If there be successive losses, 
 the payment on a prior loss is to be deducted from the 
 amount insured, and the balance, or so much as will indem- 
 nify, is to be paid on the subsequent loss.*^ The rule of dam- 
 ages is the value of the property lost, and not the cost of 
 replacement." A stipulation that after the fire the insured 
 shall put the partially damaged goods in as good condition 
 as the case will allow, has no application where the value of 
 goods totally destroyed amounts to the sum insured.^ Re- 
 mote and consequential damages, however, such as are caused 
 by an interruption of business, — as the loss of custom to an 
 
 1 [Oshkosh G. L. Co. v. Germania Firo Ins. Co., 71 Wis. 454.] 
 
 2 [Keilly v. Franklin Ins. Co., 43 Wis. 449 at 456.] 
 
 3 [Thompson v. Citizens' Ins. Co., 45 Wis. 388 at 389.] 
 * [Queen Ins. Co. v. Jefferson Ice Co., 64 Tex. 578.] 
 
 5 Underliill v. Agawam Mut. Ins. Co., 6 Cush. (Mass.) 440 ; Cumberland, &c. 
 Ins. Co. V. Scheli, 29 Pa. St. 31 ; Peddie v. Quebec Fire Ins. Co., 1 Stuart (L. C), 
 174; New York Gas Light Co. v. Mechanics' Mut. Fire Ins. Co., 2 Hall (N. Y. 
 Superior Ct.), 108. 
 
 6 Curry v. Com. Ins. Co., 10 Pick. (Mass ) 535 , post, § 426. 
 
 7 Steward v. PlicEnix Ins. Co., Sup. Ct. (N. Y ), 8 Alb. L. J 285 , s. c. 5 Hun, 
 261. 
 
 8 Williamson v. Hand-in-Hand Mut. Fire Ins Co., 26 U. C. (C. P.) 266. 
 
 970
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 423 
 
 inn,i or the loss of use of a grist-mill, or the profits of its 
 business, or the expenses of keeping his employees while re- 
 building, though in consequence of the fire no retui-n can be 
 had for the wages, — are not recoverable as damages.^ And 
 this was held upon general principles, following the authority 
 of Wright and Pole. But in both cases there was a clause 
 which permitted the insurers to make good the loss by re- 
 pairing if tliey should so choose, which in the opinion of the 
 court conclusively showed that nothing more than the ex- 
 pense of repairing could be recovered. Neither is the loss 
 of prospective rent recoverable as damages by fire."^ But all 
 these several subjects may be specifically insured when, of 
 course, their loss becomes an element of damage.* The ex- 
 pense of repairing or rebuilding, it has been said, however, 
 is not the measure of damages, since that would give the 
 insured more than he would be entitled to, as having new in- 
 stead of old. And as there is not in fire insurance, as in ma- 
 rine, a rule of allowing one-third for the difference between 
 new and old, it is for the jury to determine how much money 
 will make good to the insured his loss.*^ And this is recover- 
 able if within the amount insured, although the value of the 
 property insured is much greater than the loss. The propor- 
 tion of the loss to the whole amount insured is not in fire, as 
 in marine, insurance an element in the calculation of the 
 amount to be paid.^ If the insured is " to contribute a cer- 
 tain proportion of the expense of rebuilding," the proportion 
 is of the value to the estate, not the cost of rebuilding.' The 
 fact that the article to be replaced is patented is not to en- 
 hance its value above the cost of replacing.*^ In Morrell v. 
 
 1 Wright & Pole, 1 AJ. & El. 021 ; s. c. 3 Nev. & Man. 819, under the nnme 
 of Sun Fire Office v. Wriglit. 
 
 ^ Menzies c Nortli Bnt. Ins. Co., 9 Ct. Sess. Cas. 2(1 series (Scotch), 694; 
 Niblo V. N. A. Fire Ins. Co.. 1 Sandf. (Superior Ct. N. Y.) 551. 
 
 ^ Leonarda o. Fiioenix Ass. Co., 2 Rob. (La.) 131. 
 
 * See all the above authorities. 
 
 * Brinley u. Nat. Ins. Co , 11 Met. (Mass.) 195; post, § 431. 
 
 •^ Miss. Mut. Ins Co. v. Ingram, 34 Miss. 215 ; Liscom v. Boston Mut. Ins. Co., 
 9 Met. (Mass ) 205. 
 
 ^ Commonwealth Ins. Co. v- Sennett, 37 Pa. St. 205. 
 8 Ibid. 
 
 971
 
 § 423 A] INSURANCE : fire, life, accident, etc. [cH. XXII. 
 
 Irving Fire Insurance Company ,i it is said that the exercise 
 of the option to rebuild converts the insurance contract into 
 a contract to rebuild, and in a suit for damages for the im- 
 perfect performance of the new contract, the amount of in- 
 surance is no criterion of damages. And in such case an 
 action on the policy cannot be maintained to recover the loss.^ 
 A stipulation that " in case of the removal of property to 
 escape conflagration the company will contribute ratably with 
 the insured and other companies interested to the loss and 
 expense of such act of salvage," does not affect the question 
 of loss by fire. The insured is still to recover his whole loss 
 if the insurance amounts to so much, and this provision ap- 
 plies only to the loss and expense of removal. ^ But if such 
 loss is to be borne by insurers and insured in such proportion 
 as the whole sum insured bears to the whole value ot the 
 property insured, then each bears the same proportion of the 
 loss that his interest bears to the whole value of the property 
 insured.'^ 
 
 [§ 423 A. Estimating Value. — The valuation in the policy 
 does not control, nor the cost of rebuilding, but the money 
 value at the time of the fire." The value assigned by the 
 plaintiff and another person for the purposes of insurance is 
 not evidence of the cash value of the pictures insured.*^ Nor 
 is the assured limited by the valuation j)ut upon the i:)roperty 
 by the magistrate's certificate. He may prove by witnesses 
 the true value. Even the sworn statement of the assured 
 himself has been held not to estop him.'' Preliminary proofs 
 are not competent evidence of value, but mere ex parte state- 
 ments.^ The " actual cash value " of goods is the fair and 
 
 1 33 N. Y. 420. 
 
 2 Beals V. Home Ins. Co., 36 N. Y. 522, affirming s. c. 30 Barb. (N. Y.) 614. 
 But see poM, § 432. 
 
 3 Tliompson v. Montreal Ins. Co., 6 U. C. (Q. B.) 319. 
 * Peoria, &c. Ins. Co. v. Wilson, 5 Minn. 53. 
 
 s [Waynesboro Fire Ins. Co. v. Creaton, 98 Pa. St. 451 ; Standard Fire Ins. 
 Co. V. Wren. 11 Brad. 243 ; Scliroeder v. Trade Ins. Co., 12 Brad. G51.] 
 e [Linde v. Republic Fire Ins. Co., 50 N. Y. Super. 362.] 
 ' [Birmingham Fire Ins. Co. c Pulver, 126 111. 329-] 
 8 [Farrell v. .(Etna Fire Ins. Co , 7 Baxt, (Tenn.), 542 at 544.] 
 972
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT, [§ 423 B 
 
 reasonable price for which they can be sold in the market.^ 
 One of the facts the jury may consider in estimating the 
 value of articles that have no market value is the cost of 
 them to the party claiming the valuc.^ Such a price is in the 
 nature of an admission by the plaintiff. Where the plaintiff 
 testified that she paid $3500 for certain property, and its 
 value was so stated in the application, the jury are warranted, 
 in the absence of other evidence, in finding its value at that 
 figure."^ When the insured property (as a horse, sold first 
 for $500, and then for $1200) has no distinctly recognized 
 market value, the jury will be instructed to find the fair 
 value.* The prime cost of a vessel is not conclusive of her 
 real value against the assured.^ The measure of damages on 
 grain lost while in charge of a common carrier is to be deter- 
 mined according to its price at the place of disaster, when the 
 policy provided that damage was to be estimated according 
 to the value of the property at the time of loss.^ The assured 
 should receive for a lost building " the value of it as it stood 
 on the day it was destroyed, as compared with a new building 
 of the same kind and dimensions." It is not proper to ask 
 witnesses what the whole property was worth, and what the 
 land without the buildings is worth, for the circumstances 
 may be such that the land is worth as much without any 
 building as with the old oneJ Although the insured has sold 
 the land under the buildings, retaining the right of removal, 
 he is entitled to recover their full value at the time of loss, 
 and not merely their value for purposes of removal.^] 
 
 [§ 423 B. Evidence of Value; Wit}iesses; Admission, ^c. 
 — Upon a question of value the opinion of a witness, who has 
 seen the thing in question and is acquainted with the value of 
 
 ' [Birmingham Fire Ins. Co. v. Pulver, 126 111. 320.] 
 
 2 [Sturm V. Williams, 6 J. & S. (N. Y. Super.) 325 at 344.] 
 
 ^ [Siltz V. Hawkeye Ins. Co., 71 Iowa. 710.] 
 
 * [Gere v. Council Bluffs Ins. Co., 67 Iowa, 272 ] 
 
 * [Snell V. Delaware Ins. Co., 4 Dallas (U. S ), 4.30 at 4.32.] 
 « [Savage v. Corn Exchange Ins. Co., 86 N. Y. 6.5.5 at 659.] 
 ^ [^tna Ins. Co. v. Johnson, 11 Bush, 587 at 591.] 
 
 ^ [Washington Mills E Manuf . Co. v. Commercial Fire Ins. Co., 13 Fed. Rep. 
 646, 1st Cir. (Mass.), 12 Ins. L. J. 181 ] 
 
 973
 
 § 424] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIT. 
 
 similar things, is not incompetent to be submitted to a jury.^ 
 But opinions of witnesses not experts, as to the probable 
 amount of damages are not admissible.^ A farmer who has 
 been in the insured store several times and was there the 
 day before the fire, cannot be asked " what amount of goods 
 were in the store at the time of the fire according to his es- 
 timate." He had had no experience in the business, and a 
 witness can only testify to a question of value when he is 
 shown to be competent to form an opinion.^ Manufacturers 
 familiar with the plaintiff's factory before the fire may testify 
 to its value.* The testimony of persons experienced in selling 
 and estimating the value of such goods as the plaintiff sold, 
 will be received on the question of loss, in corroboration of 
 the plaintiff whose books and papers have all been burnt.^ 
 A daughter of the assured who bought many of the articles 
 destroyed and who was present when the rest were bought, 
 is a good witness to prove their value.^ The admission of the 
 insured and the testimony of a drayman familiar with the 
 stock are competent."] 
 
 [§ 423 C. Evidence of Fraud ; Burden of Proof as to 
 amount of Loss. — The facts that the property was bought at 
 a bankrupt sale, for $3600, and that various witnesses esti- 
 mate its value at from -112,000 to $20,000, do not show 
 fraud in a claim for $15,000.^ An instruction putting the 
 burden of proof on the defendant to show that the loss is less 
 than the full amount of the policy is wrong. It is incumbent 
 on the plaintiff to aver and prove his loss.^] 
 
 § 424. Loss ; Amount recoverable ; Lessee , Mortgagor , Im- 
 post and Excise Duties , Mortgagee .• Goods in Trust ; Partner. 
 
 — Where a building which stood on leased land was de- 
 
 1 [Clark V. Bainl, 9 N. Y. 183 at 106.] 
 
 2 [Norman v. Wells, 17 Wend. 136 at 164.] 
 
 3 [Teerpenning v. Corn Exch. Ins. Co., 43 N Y. 279 at 283.] 
 
 4 [Reed ;■ Washington Ins. Co., 138 Mass. 572] 
 
 6 [Insurance Co. v. Braden, 96 Pa. St. 81] 
 
 G [ContHicntal Ins. Co. v- Horton, 28 Mich, 173 at 175.] 
 
 7 I Livings r Home Mut Fire Ins. Co., 50 Mich 207.] 
 
 8 (McGibbon i; Imperial Fire Ins. Co.. 2 Rnss & Geld. (Nova Scotia) 6 ] 
 
 ® [German Fire Ins. Co. v. Gunten. 13 Brad. 593 ; Carlwitz v. Germania Fire 
 Ins. Co., 12 Ins. L. J. 127, 3d Cir. (N. J.). 1883 ] 
 974
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 424 
 
 stroyed, and the lease expired within a few days, so tliat the 
 building must be removed or forfeited, or a new lease entered 
 into, it was held that the intrinsic value of the building was 
 the amount recoverable, without reference to the special cir- 
 cumstances.^ So where lessees held machinery, <fec., which 
 they were to return in good order and condition at the end 
 of the lease, and their " working interest " therein was in- 
 sured, their interest is not the value of the use from the time 
 of the fire to the expiration of the lease, bat the value of the 
 property they were bound to replace.^ Where a mortgagee 
 insured had agreed to sell and assign certain mortgages, 
 and had received certain payments from the assignee, before 
 the loss by fire, he was held, nevertheless, to be entitled to 
 recover from the insurers the actual loss without deduction 
 on account of these payments.^ So where property has been 
 taken for public use by the public authorities, or sold under 
 a binding contract for a conveyance, no actual conveyance 
 having been made.* So where one who holds a power 
 of attorney to sell for advances made, though the legal title 
 be in another.^ So a mortgagor whose equity has been 
 seized on execution recovers according to the value of the 
 property lost, without reference to this circumstance.^ But 
 where a leasehold mterest is insured, the value of the unex- 
 pired lease is the measure of damages.' Goods in store or in 
 the custom-house are to be estimated at their market value, 
 without reference to the cost, or to the fact that the duties 
 may not have been paid.^ The measure of damages is neither 
 the value of convenience nor of affection nor the cost price, 
 but its fair cash value in the market, to be determined by what 
 
 1 Laurent v. Chatham Fire Ins. Co., 1 Hall (N. Y. Superior Ct), 41. 
 
 2 Imperial Fire Ins. Co. (■. Murray, 7-3 Pa. St. L3. 
 
 3 Haley v. Manuf. Fire Ins. Co., 120 Mass. 292 
 
 * Collingridge v. Royal, &c. Ins. Co., L. H. 3 Q. B. D. 173; Clinton v. Hope 
 Ins. Co., 45 N. Y. 454. 
 
 5 Brugger v. State, &c. Ins. Co., C Ct. (Oregon), 8 Ins. L. J. 293. 
 
 8 Strong V. Manufacturers 'Ins. Co., 10 Pick. (Mass.) 40. 
 
 ' Niblo V. N. A. Ins. Co., 1 Sandf. (N. Y. Superior Ct.) 551. 
 
 8 Wolfe V. Howard Ins. Co., 1 Sandf. (N. Y. Superior Ct.) 124; s. c affirmed, 
 3Seld. (N. Y.) 58.3. 
 
 VOL. II. — 18 975
 
 § 424] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII, 
 
 similar property at the same time, and in the same or similar 
 places and under the like circumstances, would ordinarily 
 bring in the general market, without regard to an extraordi- 
 naiy price, whether higher or lower, which might be obtained 
 in special cases or under special circumstances.^ It is a sum 
 equal to the value of the property which has been lost, not 
 what it would cost the insured to replace, repair, or rebuild, 
 as that might be more or less than the actual loss, from the 
 peculiar facilities or disadvantages of the insured.^ And it 
 has been held that a depression in value caused by special 
 circumstances, which may be temporary only, is not to be 
 taken into account.^ Where distilled liquors ready for mar- 
 ket, but upon which the internal revenue tax was not paid, 
 were destroyed, it was held that as the duty had not been ))aid, 
 and the destruction left the owner without any personal lia- 
 bility to the government for the tax, though while the prop- 
 erty was in existence there was a lien upon it in favor of the 
 government, the insured could only recover the value of the 
 property destroyed, less the tax.* A moi'tgagee insuring his 
 own interest, at his own expense and on his own indem- 
 nity, recovers according to his interest at the time when he 
 commences his suit,^ or perhaps more accurately at the time 
 of the loss. That after the loss the mortgagor replaces the 
 property in as good condition as it was before, or the mortga- 
 gee, by selling other securities which he holds, reduces his 
 debt, however it may affect the equities between him and 
 the mortgagor, does not affect the terms of the contract be- 
 tween the mortgagee and the insurers. The contingency hav- 
 ing arrived upon which the loss was payable, it must be paid 
 
 1 Mack V. Lancashire Ins, Co., C. Ct. (Mo), 9 Ins. L. J. G8I ; Equitable Fire 
 Ins. Co. V. Quinn, 11 L. C. 170 ; post, § 428 ; Fowler v. Old North State Ins. Co., 
 74 N. C. 89; Wynne v. Liverpool, &c. Ins Co., 71 N. C. 121. 
 
 ^ Rousseau c. La Confiance, Dalloz, Jur. Gen., 1870, 1, 280. 
 
 3 McCraig r. Quaker City Ins. Co., 18 U. C. (Q. 13.) 130. But a later case 
 in Lower Canada would seem to be to the contrary. Grant v. yEtna Ins. Co., 
 11 L. C. 128. 
 
 * Security Ins. Co. v. Farrell, Sup. Ct. (Ill), 2 Ins. L.J. 302; Bobbitt y. Liv., 
 &c. Ins. Co., 66 N. C. 70. 
 
 ^ Sussex County Mut. Ins. Co. v. Woodruff, 2 Dutch. (N. J.) 541. 
 976
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 424 
 
 according to the status of the interest at the time when the 
 contingency happened ; nor can the insurers require the mort- 
 gaoee first to exhaust his remedy against the mortgagor before 
 calling upon them for indemnity.^ To indemnify the mort- 
 o-a<'ee for all loss to property means to the amount of his 
 interest ; '^ but to make good to the assured all loss to proj)- 
 erty gives the right to recover the full amount of loss.^ But 
 a morfo-agee can only recover on an insurance of his own in- 
 terest the amount due on the mortgage when the insurance 
 was effected. He cannot include subsequent advances, al- 
 though the insurance before such loss as may happen not ex- 
 ceeding a certain sum, and the amount of advances, be within 
 that sum.^ So where an insured vendor has received part of 
 his purchase-money before the loss,^ the insurers have no claim 
 either against the vendee, or rights against the property sold.^ 
 And that the property still held by the mortgagee is ample 
 security for the debt is of no avail to the insurers.^ Nor, 
 where the policy is assigned for the benefit of creditors, is 
 the amount recoverable limited to the amount of the dcbts.^ 
 And a commission-merchant or bailee insuring goods, his own 
 as well as in trust or on commission, the insurers agreeing to 
 pay the " actual value " or " all damage," may recover the full 
 
 1 Foster v. Eq. Mut. Fire Ins. Co., 2 Gray (Mass ), 216; Carpenter v. "Wash- 
 ington Ins. Co., 1(3 Pet. (U. S.) 405; PLxcelsior Ins. Co. v. Royal Ins. Co., 55 
 N. Y. 343, criticising and denying Flanders on Insurance, p. 360, Angell on In- 
 surance, § 59, and Smith v. Columbia Ins. Co., 17 Pa. St. 258; .^tna Ins. Co. v. 
 Tyler, 16 Wend. (N. Y.) 385, and dictum in Carpenter v. Providence Ins Co., 16 
 Peters (U. S.), 495, per Story, J., apparently to tlie contrary; Bank of New 
 South Wales v. Royal Ins. Co., 9 Ins. L. J. 930. Contra, Mathewson v. Western 
 Ass. Co., 10 L. C. 8. See also Honore v. Lamar Ins. Co., 51 111. 409. 
 
 2 Sliarswood, J., in Thornton v. Enterprise Ins. Co., Sup. Ct. (Pa.), Legal 
 Int., p 170, June 14, 1872. The soundness of this distinction is doubtful. 
 
 3 Insurance Co. v. Updegraff, 21 Pa. St. 51.1 
 
 4 Ogden r. Montreal Ins Co , 3 U. C. (C P.) 497. 
 
 & Insurance Co. v. Updegraff, 21 Pa. St. 513 ; Boston & Salem Ice Co. v. Royal 
 Ins. Co., 12 Allen (Mass ), 381. 
 
 6 Ibid. 
 
 ' Kernochan v. New York Bowery Ins. Co., 5 Duer (N. Y. Superior Ct.), 1 ; 
 s. c. affirmed, 17 N Y. 428 ; Rex v. Insurance Co , 2 Phila. Rep. (Pa.) 357 ; post, 
 §§ 456, 457 
 
 >» Eureka Ins. Co. v Robinson, .56 Pa. St 256, 266. 
 
 977
 
 § 424] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXI I. 
 
 amount of loss,i but not unless they are so insured, if the 
 policy require it.^ So may a warehouseman insuring goods 
 "• in trust " recover the whole amount of loss on goods on 
 storage.^ A person having goods in his possession as con- 
 signee, or on commission, may insure them in his own name, 
 and in the event of loss recover the full amount of the insur- 
 ance, and, after satisfying his own claim, hold the balance as 
 trustee for the owner.* [But where one obtained a policy on 
 goods in his store and " by him held in trust," he representing 
 that he was in the habit of receiving goods for sale and mak- 
 ing advances upon them, the insurance being intended to 
 secure his advances, it was held that it only covered his and 
 not the consignor's interest in the goods.^ A part ownar 
 insuring in his own name only, not mentioning any other 
 interested persons, can recover only the amount of his 
 own interest.^ A person having two interests in tlie same 
 property may recover according to both or either, when the 
 
 1 De Forest v. Fulton Fire Ins. Co., 1 Hall (N. Y. Superior Ct.), 84; Lee v. 
 Howard Fire Ins. Co., 11 Cusli. (Mass.) 324; Millaudon v. Atlantic Ins. Co., 8 
 La. 557. 
 
 ■2 Brichta v. New York Lafayette Ins. Co , 2 Hall (N. Y. Superior Ct.), 374; 
 Keely v. Insurance Co., 1 Pliila (Pa.) 175; Getcliell v. JFAna. Ins. Co., 14 Allen 
 (Mass.), 325, In Franklin Fire Ins. Co. v. Hewitt, 3 B. Mon. (Ky. ) 231, it was 
 held that a description of the property insured by commission-merchants as 
 " theirs," if known by the insured to bo held by them on commission, was suffi- 
 cient within the condition that goods on commission must be insured as such. 
 
 3 Waters v. Monarch Fire & Life Ins. Co., 5 E. & B. 870 ; Hough v. People's 
 Ins. Co., 36 Md. 398; London, &c. Railway Co. v. Glyn, 1 E. & E. 652; Siter v. 
 Morrs, 13 Pa. St. 218. 
 
 * Hough et al. v. People's Ins. Co., .36 Md 398. [In case of a policy cover- 
 ing pianos, &c., owned or " held in trust," a piano stored with the insured may 
 be recovered for to its full value, and the bailee after satisfying ins own charges 
 would hold the remainder for the true owner of the instrument. Lucas v. Insur- 
 ance Co., 23 W. Va. 258.] Property held "in trust," witiiin tlie meaning of a 
 policy of insurance, unless specially defined, as was the case in Ay res v. Hart- 
 ford Ins Co., 17 Iowa, 176, includes everything in which the insured has only 
 a qualified interest with the possession, while the ownership is in another. 
 Turner v. Stetts, 28 Ala. 420; StiUwell v. Staples, 19 N. Y, 401; ante. § 78, 
 note, sub finem, and § 421 
 
 5 I Parks V. Gen. Interest Ins. Co., 5 Pick 34 at 35, .38 ] 
 
 c [Finney v. Warren Ins Co., 1 Met. 16 at 18 Dumas v. Jones, 4 Mass 647 
 at 651. 1 
 
 978
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 424 A 
 
 interest insured is not indicated in the contract.^ Where the 
 interest of the insured has diminished he can recover only in- 
 demnity for the loss of the interest he still has.-] 
 
 Under a policy which insures goods "sold but not re- 
 moved," the insurer may recover for the benefit of the real 
 owners, although the goods after the p(jlicy is issued are sold 
 and delivered, and the title and right of possession have 
 passed, if the location of the property has not been changed. 
 Such a policy must intend that the risk taken should cover 
 and adhere to the same property, after it had left the owner- 
 ship of the insured named therein, and follow it while in the 
 ownership of the vendee of the original owner, so long as it is 
 not removed. The law does not forbid that a policy should 
 be so framed as that the insurance shall be inseparably at- 
 tached to the property covered thereby, so that successive 
 owners, if it appear that such successive owners were within 
 the intentions of the contracting parties during the continuance 
 of the risk, shall become in turn the parties really insured.^ 
 The survivor of a partnership dissolved by the death of one of the 
 firm, can recover only the balance of the goods that belonged to 
 the firm at the time of dissolution, and were in his hands as 
 survivor at the time of the loss. Goods bought after the disso- 
 lution are not covered by the policy, unless by special agreement.* 
 
 [§ 424 A. The amount recovered may be more than the dam- 
 age to the interest of the insured. If, for example, a policy to 
 a husband on property owned by his wife covers the entire 
 ownership, the whole loss up to the amount of the policy may 
 be recovered. The assured may recover for damage to all in- 
 terests, so far as insured, represented by him, whether by pre- 
 cedent authority or subsequent ratification of others.^ In the 
 absence of fraud, mistake, or agreement to the contrary, if the as- 
 sured has an insurable interest at the time the policy is obtained, 
 
 1 [White V. Hudson River Ins. Co., 7 How. Pr. 350] 
 
 2 IMonroe v Southern Mut. Ins. Co., 63 G.a. 669] 
 8 Wanng v Indemnity Fire Ins Co., 45 N. Y. 606. 
 
 < Wood L' Rutland Ins Co , 31 Vt. (2 Shaw) 552. In Macarty v. Com Ins. 
 Co , 17 La. 365, it was said that a donor niter vicos, reserving rents and profits 
 during life, could not recover anything, having no interest But see ante, § 85. 
 
 '" [Trade Ins Co v Barracliff. 45 N. J. 543 ] 
 
 979
 
 § 424 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII, 
 
 and also at the time of the loss, he may recover, (whether 
 that interest is a title in fee for life or merely equitable) 
 the whole amount of damage done to the property not exceed- 
 ing the amount for which he is insured.' The construction 
 most favorable to indemnity will be adopted.^ In this case the 
 mortgagee was to be paid '' such proportion of the sum in- 
 sured as the damages by fire to the premises mortgaged shall 
 bear to their value immediately before the fire," and it was 
 held that " premises mortgaged " referred to so much of the 
 mortgaged premises as was insured, that is, the main building, 
 and did not refer to the entire lot mortgaged and other build- 
 ings thereon. Wherefore as the main building was totally de- 
 stroyed, and was equal in value to the whole sum insured, this 
 should be paid to the mortgagee. A policy stipulated to pay 
 $150 on proof of death, " one-third only of the above sum paya- 
 ble if death occur after three months and within six months 
 from date, two-thirds only if death occur after six months 
 and within a year ; and the full amount only if death occur 
 after one year." The insured died within three months, and 
 the company was held liable for the full amount, on the prin- 
 ciple that an ambiguous policy is to be construed against the 
 company.'^ Three judges dissented without stating reasons, 
 which indeed it was hardly necessary to do, they are so clear. 
 The ])olicy states as clearly as words can be put together that 
 the company is to be liable for the full amount only if death 
 occur after a year has passed. The company should not have 
 been held for more than one-third of the amount, at any rate. 
 A lessee who has insured his interest may recover the amount 
 of rents which would have come to him on sub-leases but 
 for a fire.* Insurance on specific items not absorbed cannot 
 be diverted to other items where the loss is not fully covered.^ 
 
 1 [Andes Ins. Co. v. Fish, 71 III. 620 at 625, and cases cited; Caldwell v. 
 Stadacona Fire & Life Ins. Co., 11 Can. Supr Ct. 212 (life tenant, full value so 
 far as insurance will cover it).] 
 
 2 [Teutonia Ins. Co. v. Mund, 102 Pa St. 80] 
 
 3 [Metropolitan Life Ins. Co v. Drach, 101 Pa. St. 278 ] 
 
 * [Carey v. London Provincial Fire Ins. Co., 33 Hun, 315.] 
 5 [Carlwitz v. Germania Fire Ins. Co, 12 Ins. L J. 127, .3rd Cir (N J.) 
 1883.] 
 
 980
 
 CH. XXII.] OP THE LOSS AND ITS ADJUSTMENT. [§ 425 
 
 The plaintiff is not estopped by the proofs of hjss from reeover- 
 ing a larger amount, if the company has repudiated the 
 liability and refused to act on the proofs.^ The general law 
 regulating the assessment of damages under a policy must 
 give way to a special custom of the city shown to have been 
 in the minds of the contracting parties.^] 
 
 [§ 425. Loss; Limitation by special Provision; Partial Loss. — 
 By special provision of the policy or charter,the amount of loss 
 for which the insurers are to be responsible may be, and often 
 is, limited to a certain percentage or proportion of the value 
 of the property insured. But in such case, if the policy be a 
 valued one, that is, if the value of the property insured be 
 fixed in the policy, that value will be conclusive.^ Restriction 
 is also sometimes made to a certain proportion of the value of 
 the property at the time of the loss.* In such a case the 
 value at the time of loss is open to inquiry though the policy 
 be a valued one. The value at the time of insurance may be 
 more or less than at the fire.^ And where the insurers were 
 to pay " all loss or damage," not exceeding the sum insured, 
 " the said loss 'or damage to be estimated according to the 
 true and actual value of the property at the time the same 
 shall happen, and to be paid at the rate of two-thirds of its 
 actual cash value," it was held that the two clauses, con- 
 strued together, meant that the insurers should pay two- 
 thirds of the actual value of the property on hand at the time 
 of the fire, not exceeding the sum insured.*' But when total 
 losses were to be paid to the amount of two-thirds, and par- 
 tial losses in full, and out of a stock of $3929 only about 170 
 
 1 [Sibley v. Prescott Ins. Co., 57 Mich. 14] 
 
 2 [Fulton Ins. Co. v. Milner, 23 Ala. 420 at 427.] 
 
 3 Borden v. Ilingliam Mut. Fire Ins. Co., 18 Pick. (Mass.) 523; Fuller v. 
 Boston Mut. Fire Ins. Co., 4 Met. (Mass.) 206; Holmes y. Cliarlestown Mut. 
 Ins. Co., 10 id. 211 ; Phillips v. Merrimack Mut. Ins. Co., 10 Cush. (Mass.) 350; 
 Brown v. Quincy Ins. Co., 105 Mass. 396. 
 
 * Brinley t'. National Ins. Co., 11 Met. (Mass.) 195; Iluckins v. People's 
 Mut. Fire Ins. Co., 11 Fost. (N. H.) 238; ante, § 31. 
 
 5 Ibid. ; Post V. Hampshire Mut. Fire Ins. Co., 12 Met. (Mass.) 555; Epan v. 
 Mut. Ins. Co., 5 Denio (N. Y.), 326; Atwood v. Union Mut. Ins. Co., 8 Fost. 
 (N. H.) 234. 
 
 6 Ashland Mut. Fire Ins. Co. v. Housinger, 10 Ohio St. 10. 
 
 981
 
 § 425] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIT. 
 
 was saved, the court held that this insignificant salvage could 
 not be considered as making the case one of partial loss, 
 whereby the insured would be entitled to recover much more 
 on partial than on total loss. Literally construed, the court 
 said such must be the result. But such could not have been 
 the intent of the parties.^ When several properties are in- 
 sured, subject to the restriction as to amount of loss payable 
 on each, it is tantamount to a separate insurance on each.^ 
 And where grain was insured, the insurers not to be liable for 
 partial loss unless it amounted to twenty per cent, and was 
 shipped in three barges, one of which was damaged, but not 
 to the amount of twenty per cent of the whole shipment, it 
 was held that no recovery could be had.^ And under a re- 
 striction of recovery to two-thirds the value of the property a 
 mortgagee may recover the full value of his interest, if it does 
 not exceed two-thirds of the value of the property insured.* 
 The fact that the property is overvalued, so that the insurers 
 become liable for more than is permissible by their by-laws, 
 will not excuse the company. The violation of the charter 
 is no defence against the insured, there being no fraud.^ [If a 
 policy provides for pro-rating " without reference to the sol- 
 vency or liahility of the other msurers,''^ the company will be 
 liable only for its pro-rata share of the loss notwithstanding 
 another company repudiates its policy.^ If a policy states 
 that in case there is prior insurance the company will only be 
 liable to the extent that the plaintiff is not indemnified by the 
 prior policies, and it appears that he is thus fully indemnified, 
 the company is not liable at all, and a verdict against it will be 
 set aside.'^ And when a marine policy declared that if prior 
 insurance had been made the new policy should only attach 
 
 1 Singleton v. Boone County Ins. Co., 45 'Mo. 250. 
 
 2 Kinpr V. Prince Edward Ins. Co., 19 U. C. (C.P.) 134; McCulloch v. Gore, 
 &c. Ins. Co., 32 U. C. (Q. B.) 61 
 
 2 Haenschen v. Franklin Ins. Co., 67 Mo. 156. 
 * Sanders v. Hillsborough Ins. Co., 44 N. H. 238. 
 
 5 Williams v. N. E. Mut. Ins. Co., 31 Me. 219; Cumb. Val. Mut. Prot. Co. v 
 Schell, 29 Pa. St. 31. See, however, § 430. 
 
 6 [Cassity v. New Orleans Ins. Ass., 65 Miss. 49.] 
 
 "> [Kenny r. Union Mar. Ins. Co., 1 Russ. & Geld. (Nova Sco.) 313.] 
 
 982
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 426 
 
 SO far as the prior one was insufficient to cover the loss 
 and when the same property was fully insured previously, 
 the policy never attached and the premium must be retui-ned, 
 notwithstanding the fact that a part of the prior insurance 
 was in companies which since making it had become insolvent 
 and dissolved.^ But when the policy provides that " in case 
 there be any insurance in any other office extending to the 
 l)roperty hereby insured, then this company, in case of a loss, 
 will only be liable to pay its ratable proportion of the dam- 
 age," the clause has reference to other insurance existing at 
 the time of loss, and does not bind the insured to keep alive 
 an insurance existing when the said policy was issued.^ Nor 
 does it refer to other insurance invalid in its inception.^] 
 
 § 426. Loss; Rebuilding ; Repeated Losses ; Transfer of Claim 
 for Damages. — As this rebuilding is but one mode of payment 
 of the loss, the acceptance of an order to pay the loss to a per- 
 son other than the assured does not deprive the insurers of 
 their right to make the election. The acceptance is but an 
 assignment of the claim of the insured, without in any way 
 affecting the mode of payment. It is but a substitution of 
 the assignee for the assured, and giving him the right to de- 
 mand what the assured might have demanded.* And if the 
 insurance be for a specific amount for a given period, and the 
 cost of once repairing be less than the amount insured, the pol- 
 icy will remain good for the miexpended balance during the 
 period covered by the policy.^ And it seems that but for the 
 express limitation of the amount for which the insurers might 
 become liable, they would have to replace as often as the 
 ])roperty should be destroyed during the period of insurance.^ 
 If goods are replaced, the insured is to be made good for his 
 loss, and only that, and any arrangement between the parties 
 
 1 [Ryder v. Phoenix Ins. Co., 98 Mass. 185 at 193.] 
 
 2 ILattan v. Royal Ins. Co.. 45 N. J. 453.1 
 
 3 [.Jersey City Ins. Co. v. Nichol,35 N. J. Eq. 291.] 
 
 * [Tolman c. Manufacturers' Ins. Co , 1 Cusli. (Mass ) 73.] 
 6 Curry v. Commonwealth Ins. Co., 10 Pick. (Mass. ) 535, Crombie v. Ports- 
 mouth Mat. Ins Co, 6 Fost. (N. H.) 389; Trull v. Roxbury Mut Ins. Co., 3 
 Cush. (Mass.) 263. 
 
 6 Ibid. ; New Hampshire Ins. Co v. Rand, 4 Fost. (N. H.) 428. 
 
 983
 
 § 428] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 for an extension of the time within which to replace or reuair 
 would control the original contract in this particular.^ 
 
 § 427. Loss; Apportionment, Several Parcels. — An agree- 
 ment is sometimes inserted in the policy,'^ and will sometimes 
 be inferred from the circumstances of the case, for an ajipor- 
 tionment of the loss and expenses of removal and protection 
 of the goods during a fire ; and in the absence of an express 
 agreement, the proportion to be borne by each will be accord- 
 ing to his interest. If, for example, the property is insured 
 for one-half its value, each will bear one-half of such expense ; 
 if for three-quarters, then the insurer pays three-fourths and 
 the insured one-fourth .^ But insurance in a gross sum on 
 property situated in different and distinct buildings covers all 
 that may be destroyed in either building, to the amount of 
 the insurance.^ Where A. had deposited a large amount of 
 cotton on storage with a warehouse company, and had effected, 
 among others, an insurance against fire on two particular 
 lots, — at one time on fifteen bales, and at another on thir- 
 teen bales, — and the warehouse containing the cotton of A., 
 with that of others, was destroyed by fire, and a portion of the 
 cotton was saved and sold at auction, by instruction of a com- 
 mittee of the insurance companies interested, the net proceeds 
 of which sale were distributed, under the direction of the 
 committee, among the assured ; in an action by A. to recover 
 on his two policies, it was held that, in ascertaining the 
 amount of loss or damage which the plaintiff should recover, 
 the jury ought to deduct such sum as they might find from the 
 evidence was the proportion due to twenty-eight bales in the 
 distribution of the i)roceeds of sale of the cotton saved. '^ 
 
 § 428. Loss; Interest ; Mode of Payment; Evidence ; Set-off. — 
 If there be no provision in the policy regulating the payment of 
 the loss, it will be due on notice and proof, and interest will be 
 reckoned from that date.^ But if a time is lixed for the pay- 
 
 1 Franklin Fire Ins. Co. v. Hamill, 5 Md. 170. See also jwst, § 430 el seq. 
 
 2 Peoria Fire & Mar. Ins. Co. v. Wilson, 5 Minn 53. 
 
 3 Wells V. Boston Ins. Co , 6 Pick (Mass ) 182. 
 
 4 Nicolet i). Insurance Co , 3 La 371 ; Rix v. Mut Ins Co., 20 N. H. 198. 
 & Hough V. Peojile's Ins Co., 36 Md. 398. 
 
 ^ [Interest cannot be recovered in an action to recover the amount of an iu 
 
 984
 
 CH. XXII.] OF the: loss and its adjustment. [§ 428 
 
 ment, then interest will run from the time so fixed,' unless the 
 defective nature of the i)roof leaves the amount fairly ojM-n 
 to dispute,^ it being then in the nature of unliijuidated dam- 
 ages, on which as a rule no interest is recoverable, or unless 
 by trustee process, want of authoi'ity to receipt for it, or 
 otherwise, the insurers be prevented or excused from paying 
 at that time.3 Payment of loss in gold, if agreed upon, is 
 compulsory ; but this does not carry with it an obligation to 
 pay dividends of profits also in gold.* Where the insurance 
 was on corn shipped from Chicago to Montreal, and the loss 
 was payable to the bank of Montreal, in funds current in the 
 city of New York, it was held that, in estimating the amoimt 
 of the liability of the insurers, the premium in gold should not 
 be allowed in favor of the insurers.^ The fact that the loss is 
 in a foreign country does not add the expense of transmission 
 of the amount due to the amount of the loss.^ The market 
 value at the time of the loss, and when the property is but 
 partially destroyed and only damaged, the difference between 
 the value of the property as it is and as it was, ascertained by 
 a sale at auction, with notice to the parties interested, are 
 
 surance policy. Higgins i\ Sargent, 2 B, & C. 348 at 350. But contra, if a dis- 
 tinct demand on the insurer iias been made and notification of tlie ground of 
 such demand. Bain v. Case, 3 C. & P. 490 at 498.] 
 
 ^ [When a policy provided for a paj-ment of the loss within sixty daj's after 
 satisfactory proofs of the same, and when proofs were furnished and the com- 
 pany within that time offered a part payment only, it was held tliat interest 
 began to run from the demand, the time limit being waived. Baltimore Fire 
 Ins. Co. V. Loney, 20 Md. 20 at 40. On the other hand, if the company makes 
 reasonable efforts for an adjustment, interest is not chargeable frotn tiie expira- 
 tion of the sixty days, but only from judicial demand. Gettwerth v. Teutonia 
 Ins. Co., 29 La. Ann. .':'.0 at 32.] 
 
 2 McLaugldin v. Wash. County Mut. Ins. Co., 23 Wend. (N. Y.) 52.5; Bridge 
 V. Niagara Ins Co., 1 Hall (N. Y. Superior Ct.), 247, 2(il. 
 
 3 Ncvins V. Rockingliam Fire Ins. Co., 5 Fost. (N. II.) 22 ; Oriental Bank v. 
 Tremnnt Ins. Co., 4 Met. (Mass.) 1 ; Webster v. British, &c. In.s. Co. (Eng.), Ct. 
 of App. 15 Ch. D. 109. See also post, § 479 ; Howell v. Hartford Ins Co., C. 
 Ct, 3 Ins. L. J. 049 ; Tooley v. Railway, &c, Ins. Co., C. Ct. (III.), 2 Ins. L. J. 
 275; Delonguemere v. Traders' Ins. Co., 2 Hall (N. Y. Superior Ct.), 589; Brown 
 V. Railway Pass. Ass. Co , 45 Mo. 221. 
 
 * Luling V. Atlantic Mut. Ins. Co., 50 Barb. 520. 
 
 5 Lamar Ins. Co. v. McGIashen, 54 111. 513. 
 
 6 Burgess v. Alliance Ins. Co , 10 Allen (Mass.), 221. 
 
 985
 
 § 429] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 data upon which to find the value.^ And there is no right of 
 abandonment, as in marine insurance.^ And it seems that the 
 difference between a wholesale and a retail market value may 
 be taken into account.^ An insurance company cannot pay 
 a loss by a set-off of outstanding claims against the insured, 
 purchased for that purpose. The act of purchase is ultra 
 vires^ 
 
 § 429. Damages for Improper Refusal to renew. — If a life 
 insurance company improperly refuse to accept the premiums, 
 under a plea that the policy is void, an action may be main- 
 tained against them for damages ; and it seems that the rule 
 of damages would not be confined to the amount of the pre- 
 miums paid with interest. If the person whose life is insured, 
 though alive, should be laboring under a disease that must 
 speedily result in death, the insurers ought not to be per- 
 mitted to escape the payment of the amount for which the 
 life was insured by putting an end to the contract.^ So in 
 Missouri the insured may, by statute, recover damages for a 
 vexatious refusal to pay a loss.^ [If the company refuse to pay 
 what is due, and endeavor by fraudulent accusations to in- 
 timidate the plaintiff and drive him to settle for a small 
 amount, the jury may give the plaintiff damages and attorney's 
 fees for refusal to pay in bad faith." If the policy provides for 
 payment of loss on surrender of the policy, and the insurer 
 refuses positively to pay, the insured may sue without show- 
 ing tender of the policy.^] 
 
 1 Hoffman v. West. Mar. & Fire Ins. Co., 1 La. Ann. 216 ; Henderson v. West 
 Mar. & Fire Ins. Co., 10 Kob. (La.) 164. These cases must be considered as in- 
 consistent with Marchesseau v. Mercliants' Ins. Co , 1 Hob. (La.) 436, which 
 holds tliat the market value at the time of the risk is the " best, thougli not con- 
 clusive" criterion of value. 
 
 2 Ibid. ; ante, § 421 a. 
 
 3 Hoffman v. JEtna. Ins. Co., 1 Robt. (N Y Superior Ct.) 501. 
 * Kansas Ins. Co. v. Craft, 18 Kans. 283. But see post, § 592. 
 
 5 McKce V. PhcEnix Ins. Co., 28 Mo. (7 Jones) 383; Union Central Ins. Co. v. 
 Poettker (Superior Ct. Cincinnati), 5 Big. Life & Ace. Ins. Cas. 449; 8. c. 4 
 Am. Law Record, 109. 
 
 6 Brown v. Railway Pass Ass. Co., 45 Mo. 221 ; post, § 568. 
 '' [Watertown Fire Ins. Co. v. Grehan, 74 Ga. 642.] 
 
 8 [Schwarzbach v. Protective Union, 25 W. Va. 622, 648.] 
 
 986
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 430 
 
 § 430. Loss ; Payment ; Rebuilding. — As one means of pro- 
 tecting themselves against extravagant claims for losses, in- 
 surance companies frequently reserve the right to rebuild a 
 building, or to replace the property destroyed, as one mode 
 of arriving at the amount of loss which shall be \yd\d. This 
 right, however, is not one which inhei-es in the nature of the 
 contract, and can only exist where there is a special stipula- 
 tion therefor, and then is optional.^ If no time be fixed be- 
 fore which an election shall be made, it must be made within 
 a reasonable time.^ And if it be provided that the company 
 shall have a right to rebuild or replace within a reasonable 
 time, and where they elect so to do, the insured shall give 
 security to pay one-third of the cost, and that "the insured 
 shall have no right of action unless the insurers neglect for 
 thirty days after the giving such security to proceed to re- 
 build," &c., the right of action is only suspended during the 
 time within which the company has a right to rebuild ; and 
 if the rebuilding duly commenced has not been finished in a 
 "reasonable time," an action may be brought, — the ques- 
 tion of reasonable time being for the jury.^ And if the in- 
 surers give notice of an election to repair, and subsequently 
 refuse, they will be liable for damages intervening between 
 the fire and the refusal, by reason of exposure to the weather.* 
 An election to repair, after fruitless negotiations to settle, 
 and a month after the proofs of loss had been furnished, was 
 held to have been within reasonable time.^ And in the re- 
 pairing, if the company be a mutual one, and restricted by its 
 charter to a certain amount of expenditure, this becomes part 
 
 1 Wallace v. Insurance Co., 4 La. 289 ; Commonwealth Ins. Co. v. Sennett, 
 37 Pa. St. 205 ; Home Mut. Fire Ins. Co. v. Garfield, 60 111. VIl. 
 
 2 [The condition allowing the company to rebuild cannot be invoked against 
 a suit for pecuniary indemnity unless the company liave within a reasonable 
 time distinctly elected to rebuild, and put the plaintiff in fault for refusing to 
 permit such rebuilding. Daul v. Firemen's Ins. Co., 35 La. Ann. 98.] 
 
 8 Haskins v. Hamilton Mut. Ins. Co., 5 Gray (Mass.), 432. But see a»te, 
 §423. 
 
 * Am. Central Ins. Co v. McLanathan, 11 Kans. 533. 
 
 s Sutherland v. Soc. of Sun Fire Office, 14 Ct. of Sess. Cas. n. s. (Scotch) 
 775. 
 
 987
 
 § 431] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CII. XXII. 
 
 of the contract, and the amount cannot be exceeded. ^ And 
 a consent after loss to pay it to a third person does not de- 
 prive the insui-ers of the right to pay by rebuilding.^ When 
 the option is to pay or repair, it must doubtless be exercised 
 as to the whole loss. It would not be permissible to pay in 
 part and repair in part. 
 
 § 431. Loss; Rebuilding; Damages; New for old. — In Brin- 
 ley V. National Insurance Company ,3 the insurance company, 
 under the right to rebuild, had erected a new building upon 
 a somewhat different plan from the old one, which had been 
 totally destroyed. And the question arose, on a suit to re- 
 cover for the loss, What was the rule of damages ? whether 
 the insurers, as the plaintiff contended, should pay the actual 
 cost of restoration, or whether, as the defendant contended, 
 they should be allowed a deduction on account of the addi- 
 tional value of the new building. And hereupon the court 
 (Wilde, J.) observed : — 
 
 " At the trial, the defendants contended that, as a new store 
 of similar dimension and plan as the old one had been built, a 
 deduction ought to be made from the estimated cost of a new 
 store, for the difference in value between the old store and 
 the new one ; analogous to the deduction of new for old in the 
 adjustment of losses on marine policies. This claim of deduc- 
 tion was not sustained by the judge at the trial ; and we are 
 not aware of any authority or principle by which it can be 
 supported. The rule in adjusting marine losses is arbitrary, 
 and operates in some cases unjustly, giving to the insured 
 more or less than a full indemnity, to which he is entitled by 
 the policy, and to no more. The rule originated from the 
 usages among merchants and underwriters, probably from the 
 great difficulty of ascertaining the actual loss, without first 
 repairing the damage done, or estimating the cost of repairs. 
 The rule is applicable only to cases of a partial or a con- 
 structive total loss. It depends on usage, sanctioned by judi- 
 cial decisions ; and in some cases this rule of estimating the 
 
 1 Home Mut. Ins. Co. v. Garfield, 60 111. 121. 124 But see § 425. 
 
 2 Tolman v Manufacturers' Ins. Co , 1 Cush. (Mass ) 73. 
 
 3 11 Met. (Mass.) 195. 
 
 988
 
 CH. XXII.] OP THE LOSS AND ITS ADJUSTMENT. [§431 
 
 loss is expressly provided for by the terms of the policy. 
 Such has been the stipulation in the marine policies in IJos- 
 ton for many years. But the rule has never been adajited to 
 policies of insurance and other property against fire. The 
 question then is, What is the rule of damages, if any there 
 be, in cases like the present? Tlie plaintiff's counsel con- 
 tends that the actual loss is to be ascertained by the expense 
 of restoring the property without any deduction for the differ- 
 ence of value between the new and old materials ; and so the 
 rule is laid down by Professor Greenleaf.^ But the only adju- 
 dicated case he cites which has any distinct bearing on the 
 question, is that of Vance v. Forster,^ in which Mr. Baron 
 Pennefather laid down a very different rule. He says, as is 
 reported in 3 Stevens,^ that ' the jury arc to say what state 
 of repair the machinery was in, what it would cost to replace 
 it by new machinery, and how much better (if at all) the 
 mill,' in which the machinery was placed, ' would be with 
 the new machinery than it was at the time of the fire ; and 
 the difference is to be deducted from the entire expense of 
 placing there such new machinery.' This rule, in all cases 
 where the cost of repairs is one of the elements by which the 
 jury are to estimate the actual loss, seems to be founded on 
 the principles of justice, as it will give to the assured a full 
 indemnity, and no more, to which he is entitled by the con- 
 tract. But by the rule contended for by the plaintiff's coun- 
 sel, the assured in most cases would recover more than an 
 indemnity ; and much more when the building insured is di- 
 lapidated and much out of repair. Such rule is not supported 
 by any principle of justice, nor by the authority of any ad- 
 judged case. It is founded on an erroneous construction of 
 the contract. It supposes that the insurers are bound to re- 
 pair the building, or to pay the expenses of the repairs. But 
 no such obligation is imposed on them by the policy. They 
 have the privilege to make the requisite repairs, if they see fit 
 to protect themselves against the recovery of excessive dam- 
 ages, or for any other reason. But if they elect not to make 
 
 1 2 Greenl. on Ev § 407. 2 i Irish Circuit Cases, 47, 61. 
 
 8 N. P. 2084. 
 
 989
 
 §432] insurance: fire, life, accident, etc. [ch. xxii. 
 
 the repairs, tliej are liable only to pay a fair indemnity for the 
 loss. But whatever may be the rule when the building in- 
 sured is partially injured by the peril insured against, it has 
 no application to cases like the present, where the building is 
 totally destroyed and is to be replaced by a new one. The 
 rule of damages in cases on marine policies would not apply 
 to a case where the ship had been totally destroyed. In the 
 present case, the building was destroyed by fire, and a new 
 building was erected upon a different plan ; so that the cost 
 of a new building could not be certainly ascertained. If the 
 rule laid down in Vance v. Forster were applied, the jury must 
 ascertain, by the estimates and opinions of witnesses, the 
 amount of the expense of a new building, and they must 
 estimate the value of the old building, in order to ascertain 
 the difference, if any there be, between the new and the old. 
 We can perceive no use in requiring this douljle estimate ; 
 for where the plaintiff is only entitled to recover the amount 
 of the value of the building destroyed, the estimate of the 
 cost of a new building is useless." It seems to have been 
 held, in Franklin Fire Insurance Company v. Hamil, that 
 where partial repairs had been made, but only partial, these 
 could not be taken into account in the estimation of the 
 loss.^ 
 
 § 432. Loss ; Rebuilding ; Refusal to permit. — If before the 
 time expires within which the insurers may elect to rebuild 
 or replace, the insured proceeds to remove the goods, so that 
 the insured cannot determine the amount to be replaced, or to 
 rebuild the building so that the insurers cannot rebuild with- 
 out undoing what has been done, or availing themselves of 
 what has been done, a court of equity will not interfere to 
 restrain the insured. The fact of removal might be an impor- 
 tant question in determining the question of damages, and 
 might authorize them to find bad faith on the part of the in- 
 sured as to the amount of his claim. And as in the other 
 
 1 Ante, § 426. In Woodruff v. Imperial Ins Co (N. Y.), 10 Ins L. J 125, 
 where the pohcy requirerl a particular award, showing the actual cash value, 
 which was not to exceed the cost of replacement, evidence was held admissible 
 as to the cost of replacement. 
 
 990
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 433 
 
 case the contract of insurance having been substantially con- 
 verted into a building contract, the rule of damages under, 
 such contract will obtain.^ If the election be not made, in- 
 demnity for the loss, and not the cost to replace, is the test of 
 damages.^ If, on the other hand, the insurance company elect 
 to rebuild, and are proceeding to do it m an im])roper manner, 
 a court of equity will not interfere to compel them to do it as 
 they ought, but will leave the insured to his suit at law for 
 damages, as if he had contracted with any third person ;^ and 
 he may refuse to accept, unless the rebuilding is according to 
 the conditions of the contract.* If the insurer neglect to 
 exercise his option to rebuild within the specified time, the 
 insured, and he alone, may waive the right, and allow the 
 insurers to rebuild ; nor can the mortgagor or creditor inter- 
 vene to prevent.^'' 
 
 § 433. Loss ; Partial Rebuilding: Interference of Public Au- 
 thorities. — If the insurers intending to perform their duty in 
 good faith make repairs of substantial benefit, though not to the 
 amount of the loss, in the estimate of damages they are to be 
 charged with the difference between the value of the building 
 
 1 New York Fire Ins. Co. v. Delavan, 8 Paige (N. Y ), 419; Beals v. Home 
 Ins. Co., 36 N. Y. 522. That the contract by an election to rebuild becomes a 
 new contract is accepted as law, only in a very qualified sense, ;;os<, § 433 ; 
 though the doctrine is adhered to in New York : Heilmann v. Westchester Fire 
 Ins. Co. (N, Y.), 19 Alb. L. J. 131, where it was also iield that the insurers hav 
 ing given notice of tlieir intention to rebuild, and subsequently refused so to do, 
 action must be brought in the name ot the mortgagor, he being the insured, 
 loss payable to the mortgagee; that neither the amount of loss nor the amount 
 of insurance would be controlling on the question of damages; that the mort- 
 gagee's right was limited to the receipt of payment in case the option to rebuild 
 was not exercised, with perhaps an equitable remedy to prevent the misappro- 
 priation of the money. But it is elsewhere held, with great force of reason, 
 that the election to rebuild does not convert a contract of insurance into a new 
 contract to rebuild, but is only a mode of performance of the old one. Bank 
 of New South Wales v. Royal Ins. Co., 9 Ins. L. J. 930, citing and explain- 
 ing Brown v. Royal Ins. Co., 1 E. & B. (Q. B. Eng.) 853; Home Ins. Co. v. 
 Garfield, 60 111. 124. 
 
 2 Com. Ins. Co. v. Sennett, 37 Pa. St. 205. 
 
 3 Home Ins. Co. v. Thompson, 1 U C (Err. & App.) 247. 
 
 < Alleyn v. Quebec Ins. Co., 11 L. C. 394 , Ryder v. Commonwealth Ins. Co., 
 52 Barb. (N. Y ) 447. 
 
 5 Stamps V. Commercial Ins. Co., 77 N. C- 209. 
 VOL. 11. — 19 991
 
 § 433 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 as repaired and what it would liave been if it had been fully- 
 repaired.^ And such, it has been held in New York, would 
 be the rule of damages where the insurers, having com- 
 menced to rebuild, desisted before the work was complete.^ 
 If after reinstatement the work proves to have been imper- 
 fectly done, the insured will have his action against the in- 
 surers for not having duly reinstated the property.^ And if 
 after he has commenced to rebuild he is interfered with by the 
 public authorities, and prevented from completing his work, 
 or the building is ordered to be taken down as dangerous, even 
 though its dangerous character was not attributable to the 
 fire, the loss will be his. Nor will he be excused from paying 
 the insured the entire amount of his loss, according to the 
 agreement to rebuild or pay.* So, if the consent of the pub- 
 lic authorities to the rebuilding be required, and refused.^ 
 But if the insured refuse permission to rebuild, he loses his 
 right of action.^ 
 
 [§ 433 A. Repairing. — If the company elects to repair in- 
 stead of paying the loss, all provisions of the policy relating 
 to payment, estimate of loss, &c., become thenceforth inopera- 
 tive, and the only question is that of repairing in a proper 
 manner.' But the option to repair does not release from all 
 liability on the policy. When the policy provides for deduc- 
 tion from the cost of repairing on account of depreciation, the 
 measure of damages is the cost of repairs if the property is 
 made as valuable as before the fire ; if less valuable than be- 
 fore, the difference must be added to the cost to find the total 
 for which the company is liable ; if more valuable, the differ- 
 
 1 Parker v. Eagle Ins. Co., 9 Gray (Mass ), 152; St. Paul Ins Co i- Johnson, 
 77 111. 598. 
 
 - Morrell v. Irving Fire Ins. Co., 33 N Y. 429. In this case there were two 
 policies by different companies, both containing the provision about the right to 
 rebuild. It was held that both might be sued jointly or severally. And if one 
 only was sued and compelled to pay, this one would have an action over against 
 the other for contribution. But 'see ante, § 423. 
 
 3 Times Fire Ins. Co. v. Hawke, 5 H. & N. (Exch.) 935. 
 
 * Brown v. Royal Ins. Co., 1 E. & E. (Q. B.) 853. 
 
 5 Brady v. Northwestern Ins. Co., 11 Mich. 425. 
 
 6 Beals V. Home Ins. Co., 36 Barb. (N. Y.) 611. 
 
 ^ [Wynkoop v. Niagara Fire Ins. Co., 91 N. Y. 478 ] 
 
 992
 
 en. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ -1.^4 
 
 ence is to be subtracted from the cost.^ In deciding the de- 
 duction from the cost of replacing the property, to be made 
 on account of its depreciation before the lire, the proper ques- 
 tion to a witness is not to inquire his opinion of the amount 
 of depreciation, but what was the condition and value of the 
 building at the time of the fire.^ The election to rebuild or 
 repair once made is irrevocable, and is deemed to be made 
 with knowledge of existing ordinances. A law preventing 
 the erection of a frame building is no excuse for failure to 
 rebuild, since the company might have used brick, and if the 
 insured builds of brick after failure of the company to do so, 
 he may recover the cost and damages for delay .^ Where the 
 company has an option, within fifteen days after statement 
 of loss, to notify the insured of its intention to repair, the 
 insured does not lose his right to recover by making within 
 the fifteen days repairs necessary to preserve the property from 
 further damage.* When a building in which one of the heirs 
 of the deceased owner who insured it has a life estate and 
 another a reversion, is injured by fire, it is the right of each or 
 either of them to have the indemnity resulting from the insur- 
 ance applied to repairing the building.^ If a policy is given to 
 a first mortgagee as collateral, and the insurance money used 
 to make repairs, the order of the incumbrancers is not changed 
 thereby. The funds so used do not operate to pay the first 
 mortgage.^] 
 
 § 434. Loss : Contribution. — We have already seen tliat in 
 cases of double insurance, that is, where several policies in 
 different ofhces insure the same party upon the same subject- 
 matter against the same risk, as there can be but one loss and 
 one indemnity, the several offices, as between themselves, 
 must contribute proportionably to the loss, though each is lia- 
 ble to the insured for the entire loss, unless there is a special 
 agreement that each shall be liable only for its proportional 
 
 1 [Commercial Fire Ins. Co. v. Allen, 80 Ala. 571] 
 
 2 IHegard v. Cal. Ins. Co., 72 Cal. 535.] 
 
 3 [Fire Assurance o. Rosentlial, 108 Pa. St. 474.] 
 
 * [Eliot Five Cents' Savings Bank r. Commercial Ass. Co., 142 Mass. 142.] 
 
 s [Brough 0. Higgins, 2 Grat. 408 at 4i:].] 
 
 6 [Seybold i', Garceau, 31 L. C. Jur. 159, 32 id. olC] 
 
 993
 
 §434] insurance: fire, life, accident, etc. [ch. xxii. 
 
 part.^ The several insurers are regarded as if they were one,^ 
 each standing as co-surety with the other, according to the 
 amount which he undertakes, just as if all had underwritten 
 the same pohcy. To avoid circuity of action, the jjro rata 
 limitation was introduced.-^ And if an office having in its 
 l)olicy the provision for the proportional liability pay more 
 than its share, it can have no remedy for contribution against 
 the other offices, since its own negligence can give it no right 
 of action against others.'* It may, however, have a remedy 
 agamst the assured.^ [When the loss was greater than the 
 whole amount insured, it was held that the various underwriters 
 must pay their whole insurance respectively.^ A policy pro- 
 vided for apportionment, and also that " the company shall only 
 be obliged to pay as it they had insured two-thirds of the actual 
 cash value of the property," which was $6000. There was 
 double insurance, one policy for $4000, and one for $1998. 
 It was held that the two-thirds provision simply defined the 
 maximum liability, and did not entitle the company to pro-rate 
 on a two-thirds basis, and that as the loss was total and 
 
 1 [If there are several insurances on the same property, tlie companies must 
 contribute pro rata. Tliurston v. Koch, 4 Dall. 348, 3d Cir. (Pa.) 1880. Persons 
 insuring pohcies on the same property are co insurers, and are not jointly lia- 
 ble, but only in proportion to the amoimt which each insures. Chesbrou^h v. 
 Home Ins. Co , 61 Mich. 333. The plaintiff is entitled only to one indemnity. 
 Add, therefore, the amounts insured in the various companies to find a total 
 amount. Find what percentage of this total the amount of the A. policy is, and 
 you have the percentage of the loss that the A. company is to bear. Barnes v. 
 kartford Fire Ins Co., 9 Fed. Rep. 813; 3 McCrary, 22G, 8tli Cir. (Minn.) 1882. 
 Where the insurance exceeds the loss, the adjustment among the companies 
 should be; as the total insurance is to the total loss, so is the first company's pol- 
 icy to the first company's liability. Robbins v. People's Ins. Co., 2 N. J. L. J. 
 213, 3d Cir. (N. Y.) 1879. In a case of double insurance, the assured may elect 
 to sue one company, and that may then liave contribution against the other. 
 Wiggin V. Suffolk Ins. Co., 18 Pick. 145 at 153] 
 
 - Ante, § 13. See also, in addition to the authorities therein cited, Harris v. 
 Prot. Ins. Co., Wright (Ohio), 548 ; Hough i'. People's Ins. Co , 36 Md. 398; Me- 
 chanics' Fire Ins. Co. v. Nichols. 1 Ilarr. (N. J.) 410; Liverpool, &c. Ins. Co. v. 
 Verdier, 33 ^Mich. 138; Baltimore Fire Ins Co. i-. Loney, 20 Md. 20' Tuck v. 
 Hartford Fire Ins Co , 56 N. H. 320. 
 
 3 Howard Ins. Co. i-. Scribner, 5 Hill (N. Y.), 298. 
 
 4 Lucas f. JeflTerson Ins. Co.. 6 Cowen (N Y.), G35. 
 6 Fitzsimmons v. City Fire Ins. Co , 18 Wis. 234. 
 
 6 [Phillips c. Perry Co. Ins. Co., 7 Phda. G73 at 675.] 
 
 994
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 434 
 
 exceeded the total insurance, each company must pay the whole 
 amount of its policy without any apportionment.^ Where 
 several agents of different companies joined to insure for 
 1)12,000, specifying the company, and it was not shown that 
 the companies did business together, or that the agents were 
 agents for them jointly, it was held that the agreement bound 
 each company for its proportion of loss, and not all jointly for 
 the whole.2 Where several companies concerned agree jointly 
 to resist a claim, and one of them, A., is afterward sued by X., 
 for services in that defence, and is compelled to pay the whole 
 amount, it may sue B. for contribution, and B. cannot defend 
 on the ground that A. did not plead non-joinder against X., B. 
 having knowledge of the suit by X., and not requesting such 
 plea. Other companies in the agreement, but non-insolvent, 
 are to be laid out of the account. As B. was the only com- 
 pany within the jurisdiction of the court, and as its policy was 
 of the same amount as A.'s, B. was made to pay one-half the 
 amount recovered from A. by X.^ Where several companies 
 interested in a loss give notice of intent to rebuild, thus turn- 
 ing the policies into building contracts, the insured may settle 
 with some of the companies, and sue others severally for their 
 proportion of the loss, which is to be calculated without regard 
 to tlie facts that some of the companies were released for less 
 than they were liable for or were insolvent.* Contribution 
 will take effect only among policies upon the same interest 
 in the same property. Even though it is agreed that " any 
 policy attaching to the property covered by this policy " shall 
 be considered as contributing insurance, yet a policy on that 
 property running to another person to secure his interest, or 
 running to the plaintiff to secure, not his own interest, but 
 that of another for whom he is trustee, will not contribute, 
 and is not within the fair contemplation of the contributing 
 clause.^] 
 
 1 [Lebanon Mut. Ins. Co. v. Kepler, 106 Pa. St. 28] 
 
 2 [Fitton V. Phoenix Ass. Co., 25 Fetl. Rep. 880 ( Vt ), 1885; 23 id. 3.] 
 
 3 [Security Ins. Co. v. St. Paul Ins. Co., 50 Conn. 233.1 
 
 * [Good V. Buckeye Mut Fire Ins. Co , 43 Ohio St. 394.] 
 
 ^ [Lowell Manuf. Co. v. Safeguard Fire Ins. Co., 88 N. Y. 591.] 
 
 995
 
 § 435] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 § 435. Loss ; Contribution ; Double Insurance ; Identity of 
 Risk. — In the case of Howard Insurance Company v. Scrib- 
 ner,^ it was held that double insurance occurred only when the 
 subsequent insurance was upon the same precise property as 
 that covered by the first ; and that insurance in one policy on 
 fixtures for -11 000, and on stock for S^oOOO, and in another 
 policy for $5000 on stock and fixtures as one parcel, was not 
 a double insurance. As a consequence, the rule of appoi'tion- 
 ment in case of other insurance did not apply, and recovery 
 might be had on the first policy, without regard to the second. 
 But this doctrine has been repudiated in a ver}' recent case.^ 
 In considering the case, the court said : — 
 
 " The clause now usual in policies of insurance which pro- 
 vides for an apportionment of the loss, in case of other insur- 
 ance on the property, is a part of the contract, and must 
 receive a reasonable construction. We have no right to en- 
 graft upon it the rules governing suits for contribution among 
 insurers, or to restrict its operation to cases where such suits 
 could be maintained, but must look at the language of the 
 clause itself, and construe it as we would any other stipula- 
 tion between the insurer and the insured. 
 
 " We cannot adopt the view taken of this clause in the case 
 of Howard Insurance Company v. Scribner, where it was held, 
 in analogy to the rule in actions for contribution, that where 
 a specific parcel of property is insured by one policy, and the 
 same property is covered by another policy, which also in- 
 cludes other property, the latter policy is to be thrown wholly 
 out of view, and does not constitute other insurance within 
 the meaning of the clause ; in either case, the whole sum 
 insured by the more comprehensive policy is to be considered 
 as so much additional insurance upon the parcel separately 
 insured. 
 
 " Where several parcels of property are insured together 
 for an entire sum, it is impossible to say, as to either of the 
 parcels, that there is no insurance upon it, neither is it reason- 
 able to assume that any of the parcels is insured for more than 
 
 1 5 Hill (N. Y.), 298. 
 
 2 Ogden V East Eivcr Ins. Co., 50 N. Y. 388. 
 
 996
 
 CIJ. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 435 
 
 its value, when the whole sum insured is less than the aggre- 
 gate value of all the parcels covered by the policy. The diffi- 
 culty lies in determining what part of the whole sum insured 
 is to be deemed a})plicable to either parcel, when the policy 
 itself makes no separation. 
 
 ••' If the entire j)roperty is destroyed, as in this case, the rule 
 laid down in 2 Phillips on Insurance,^ and in 131ake v. Ex- 
 change Mutual Insurance Company,^ carries out the intent of 
 the clause, and works entire equity between the insurers and 
 the insured as well as between the several insurers. That 
 rule is, in sul)stance, that for the purpose of apportioning the 
 loss, in case of over-insurance, where several parcels are insured 
 together by one policy for an entii-e sum, and one of the parcels 
 is insured separately by another policy, the sum insured by the 
 first-mentioned policy is to be distributed among the several 
 parcels in the proportion which the sura insured by the policy 
 bears to the total value of all the parcels. Thus, in round 
 numbers, the sum insured in this case l)y the' policies other 
 than the defendants' on the property as an entirety, was 
 $47,000. Tlie total value of the property covered by these 
 policies was ;t*88,000. In case of a total loss, each parcel 
 should be deemed insured thereby for y of its value. The 
 parcel separately insured by the defendant was worth $16,000, 
 and was insured by the defendant for $3000, which was equal 
 to A of its value. It is manifest that there was no over- 
 Insurance, and that consequently there is no occasion for any 
 apportionment." 
 
 And substantially this rule has been followed in Kentucky ^ 
 and in Missouri. ^ In another case in Massachusetts, a policy 
 was taken for $3000, " additional to $9000 insured in other 
 offices, and -$8000 to be insured in other offices." There was 
 in fact at the time of loss but $11,000 additional insurance. 
 
 1 Page 36, No. 1263 a. 
 
 2 12 Gray, 205. 
 
 '' Cromie /;. Ken. & Lou. Mut. Ins. Co,, 15 B. Mon. (Ky.) 432. 
 
 * Angelrodt v. Delaware Ins. Co., 31 Mo. 593. 15ul Scribner's case has been 
 followeJ in Tennsylvania. Sloat r. Royal Ins Co., 49 Pa. St. 14 , see also Royal 
 Ins. Co. I' Roedel, 78 I'a. St. 19, — cases, however, hardly reconcilable with 
 Merrick's case, cited ui § 4']G, post. 
 
 997
 
 § 436] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH XXII. 
 
 It was held that the insurers must pay in proportion to the 
 amount of actual, and not of contemj)lated, insurance. ^ Nor 
 is the insured bound towards one company to keep up the 
 amount of his insurance in other companies.^ 
 
 When two policies coexist, each providing that the com- 
 pany shall be liable only for its proportionate amount of the 
 whole insurance, and the former becomes invalid by reason 
 of the subsequent valid insurance, the latter, not requiring 
 notice of prior insurance, is good for the whole amount 
 payable, in case of loss.^ 
 
 The insured is entitled to his indemnity, and no more.* 
 But the adjustment must be so made as to give full indem- 
 nity , and if one company has restricted its liability, and the 
 other has not, it may happen that the latter will have to 
 pay more than its proportion of the whole loss. Thus, where 
 A. insured on live-stock *1500, B. on live-stock 1^1667, "not 
 to exceed $500 on any one animal," and C. on live-stock 
 $1667, no one "animal to be valued at more than $500 ; and 
 steers valued at $336, and a bull valued at $2000, were lost, 
 the rate 'was held to be limited in favor of B. and C, while 
 A. was held to make up the balance, being more than its pro- 
 portion but for the restriction of the liability in the other 
 policies, sufficient to give the insured his full indemnity.^ 
 Otherwise if the liability be restricted by charter.^ 
 
 § 436. Loss ; Contribution ; Floating Policy ; Specific Insur- 
 ance. — But under a general or floating policy, intended to 
 cover property which cannot well be covered by specific 
 insurance, from the circumstance that it is changing in quan- 
 tity or location, as where the policy, as a " condition of aver- 
 age," provides that if the merchandise should at the time of 
 
 1 Richmond ville f. Hamilton Mut. Ins. Co., 14 Gray (Mass ), 459. See also 
 Haley i-. Dorchester Mut. Ins. Co., 1 Allen (Mass.), 536; Tuck y. Hartford Fire 
 Ins. Co., 56 N. H. 326. 
 
 - Quarrier v. Insurance Companies, 10 W. Va. 507. 
 
 3 Hand v. Williamsburgh, &c. Ins. Co., 57 N. Y. 41. 
 
 1 Croraie v. Kentucky, &c. Ins. Co., supra. 
 
 ^ Sherman v. Madison Ins. Co.,. 39 Wis. 101. See also Royal Ins. Co- v. 
 Roedel, 78 Pa. St 19. 
 
 6 Bardwell v. Conway Mut. Ins. Co , 122 Mass. 90. 
 
 998
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 436 
 
 any fire be insured by any specific insurance, then the policy 
 should not extend to cover such merchandise, excepting only 
 so far as relates to any excess of value beyond the amount of 
 the specific insurance, which excess, however, the policy will 
 protect, no claim can be made under the floating policy, if the 
 specific insurance exceeds the amount of the value of the 
 goods insured by it and destroyed.^ 
 
 Where, however, four policies provided that " if at the hap- 
 pening of any fire the assured shall have insurance under a 
 floating policy or policies not specific, but covering goods 
 generally in various places not designated, and yet within 
 limits which include the premises or property herein in- 
 sured, such policy, as between the insured and this company, 
 shall be considered as covering any excess of sound value of 
 the subject insured beyond the amount covered by the spe- 
 cific insurances thereon ; and to determine the amount for 
 which this company is liable in case of loss such floating pol- 
 icy shall be considered an insurance on the property to the 
 extent of such excess," and other companies insured on spe- 
 cific property in the same enclosure, it was held that the lia- 
 bility on the four policies was not confined to the excess 
 of loss above that covered by the specific insurance, but 
 they must contribute ratably on the property insured iu 
 the specific policies which was covered by their general 
 policies.^ 
 
 In the following case certain policies were held to be spe- 
 cific : Between the 5th of February, 1870, and the loth of 
 July, 1870, both days inclusive, the appellants deposited on 
 storage in a certain warehouse, occupied by the Baltimore 
 Warehouse Company, sundry lots of cotton in bales. For 
 each lot deposited the appellants received from the warehouse 
 company a receipt, warrant, or certificate, which si)Ccifiod the 
 number of bales, and the date of the deposit, and also the 
 mark on the bales, — the letters X. Q. being marked on each 
 bale so deposited. These receipts or certificates were all 
 numbered. On the 20th of June, 1870, the appellants de- 
 
 1 Fairchild v. Liv. & Lon. Fire & Life Ins. Co., 51 N. Y. 05. 
 
 2 Merrick v. Germania Ins. Co., 54 Fa. St. 277, Woodward, J., dissenting. 
 
 999
 
 § 436 a] INSURANCE : fire, life, accident, etc. [CII. XXII. 
 
 posited fifteen bales and took a receipt therefor, numbered 
 1221, and on the following day a policy of insurance was 
 taken out to cover the particular number of bales thus de- 
 posited. On the 27th of June the appellants deposited thir- 
 teen bales, and took a like receipt therefor, numbered 1238, 
 and on the same day effected an insurance for the parti- 
 cular number of bales thus dejjosited. On the face of each 
 policy the loss, if any, was made payable to the warehouse 
 comj)any ; and the policies and receipts were delivered to the 
 warehouse company to secure advances made by it. On the 
 policy on the fifteen bales there was indorsed in pencil in fig- 
 ures the number 1221, corresponding with the number of the 
 warehouse receipt given therefor ; and on the policy on the thir- 
 teen bales there was indorsed, also in pencil, 1238, correspond- 
 ing with the number of the receipt for the cotton. At the time 
 of each deposit the depositor reserved a sample of the particu- 
 lar lot deposited. The warehouse company held at the same 
 time a general policy on goods held by them in trust. On 
 these facts it was held that the policies were specific and not 
 general : that each covered, and was intended to cover, the 
 specific number of bales in each deposit, and the insurance on 
 which was effected at the time of the deposit, — the policy of 
 the 21st of June, 1870, covering only the fifteen bales depos- 
 ited on the day previous, and the policy of the 27th of June 
 the thirteen bales deposited on that day.^ Under a floating 
 policy, where the title to the property has actually passed, 
 and the seller only holds the written title for the convenience 
 of delivery to the purchaser, it is not covered by a policy 
 which insures property for which the insured may be respon- 
 sible ;2 nor will the insured, in a policy which may cover 
 both his goods and the purchaser's, in such case be obliged to 
 account for any insurance collected not in excess of the loss 
 on his own goods.^ 
 
 § 436 a. Contribution ; Identity of Interest ; Floating Policy. 
 — Contribution has no more place, however, under a floating 
 
 • 1 Houprh r. People's Ins. Co., 36 Md 398. 
 
 2 North British, &c. Ins. Co. v. Moffatt, 7 L. R. C. P. 25. 
 
 3 Martineau v. Kitching, 7 L. R. Q. B. 436. 
 1000
 
 CH. XXII.] OF THE LOSS ^ND ITS ADJUSTiMENT. [§ 437 
 
 policy than any other, unless all the insurance called upon 
 to contribute is for the benefit of the same person, on the same 
 subject or interest, and aganist the same risks. Thus float- 
 ing policies were issued to B., a wharfinger, on goods, his 
 own and such for which he was responsible, subject to the 
 condition that " if at the time of any loss or damage happening 
 to the insured property there be any other subsisting insur- 
 ance effected by insured or another person on same i)roperty, 
 the insurer shall be liable only for its ratable proportion of 
 loss." While these policies were in force, a quantity of grain 
 stored with B. was destroyed, part of which belonged to D., 
 who had also other policies, called merchants' policies, on the 
 grain destroyed, including also other grain, which contained 
 the same condition as the wharfinger's policy. B. was paid 
 in full. In a suit between the companies, it was held that 
 the grantors of the merchants' policies were not liable to con- 
 tribute to the loss, and that the grantors of the wharfinger's 
 policy were ultimately liable for the whole, though B. was 
 primarily liable.^ 
 
 § 437. Loss ; Contribution ; Double Insurance ; Identity of 
 Risk. — A warehouse company which received goods on stor- 
 age, and gave receipts therefor, effected insurance in one 
 company for $10,000, against loss by fire for a year, " on mer- 
 chandise generally held by them or in trust," contained in a 
 particular warehouse. They also took out a policy from another 
 company for 820,000, " on merchandise, their own, or held by 
 them in trust, or in which they held an interest or liability." 
 The plaintiff, on the 20th and 27th days of June respectively 
 of the year covered by the above policies deposited cotton 
 with the warehouse company, and took receipts ; and in 
 each case took out policies from the defendants upon the 
 respective lots of cotton deposited. Under these policies 
 issued to the j)laintiff, the loss, if any, was made payable to 
 the warehouse company, with whom the plaintiff had other 
 large amounts of cotton stored. In the policies to the plain- 
 tiff, as well as in those to the warehouse company, it was 
 
 1 North British, &c. Ins. Co. v. Liverpool, &e. Ins. Co., 5 Ch. D. 569. See 
 also Royal Ins. Co. v. Roedel, 78 Pa. St. 19 ; Sloat v. Royal Ins. Co., 49 id. 14. 
 
 1001
 
 § 438] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 stipulated that in case of loss the assured should not be enti- 
 tled to recover on such policy any greater proportion of the 
 loss or damage sustained to the subject insured than the 
 amount thereby insured. July 18, 1870, and during the cur- 
 rency of all the policies, the warehouse was burned, and 
 some of the bales of cotton destroyed, and others only dam- 
 aged. Upon these facts it was held that the plaintiff's policies 
 being made payable to the warehouse company inured to the 
 benefit of the company, and were to be considered as in favor 
 of the same assured on the same interest, in the same subject, 
 and against the same risks as the jjolicies which were issued 
 directly to the company ; that with the latter policies they 
 constituted a double insurance, and the companies therefore 
 issuing the policies were bound to contribute their respective 
 proportions of the loss.^ But a mortgagee who insures his 
 interest subject to the usual provision for an apportionment 
 of the amount to be paid in case of loss, is not to have the 
 amount recoverable by him reduced by the fact that a subse- 
 quent mortgagee has insured his interest in another company. 
 The interests are separate and distinct.^ 
 
 § 438. Loss ; Contribution : Restricted Liability ; Av^erage. — 
 Insurers who restrict their liability to a certain proportion of 
 the loss, will liave the benefit of the restriction in case they 
 are called upon for contribution. Thus, where the restriction 
 is to two-thirds of the value of the property, and there is 
 other insurance, and the whole loss is more than the two- 
 thirds, the first insurers will be liable only for such a propor- 
 tion of the loss, within the two-thirds, as the amount of their 
 insurance bears to the amount of the second insurance.^ If 
 the first insurance be three-fourths on 82000, and other in- 
 surance exist to the amount of $3000, in case of loss the first 
 insurers will be liable only for two-fifths of three-fourths of 
 the value of the property at the time of the loss.* The pro- 
 visions of the policy in the case just cited were, that " when 
 
 2 Ibid. ; Home Ins. Co. v. Baltimore Warehouse Co., 93 U. S. 527. 
 
 2 Fox V. Plioenix Ins. Co., 52 Me. 333. 
 
 8 Goodall V. N. E. Mut. Fire Ins. Co., 5 Fost. (N. H.) 169. 
 
 * Haley v. Dorchester Mut. Fire Ins. Co., 12 Gray (Mass.), 545. 
 
 1002
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 438 
 
 property is insured by this company solely, three-fourths only 
 of the value will be taken, and in case of loss the company 
 will be liable to pay only three-fourths of the value at the 
 time of the loss," and that " in case of loss or damage of 
 property upon which double insurance exists, the company 
 shall be liable to pay only such proportion thereof as the 
 sum insured by this company bears to the whole amount in- 
 sured thereon,— such amount not to exceed three-fourths of 
 the actual value at the time of the loss ; " and their effect was 
 thus stated by Bigelow, J. : — 
 
 " The defendants did not assume a liability in case of the 
 existence of other insurance on the property, to be ascertained 
 solely by calculating the proportion which the sum insured 
 by them bore to the whole amount insured on the property. 
 The basis of calculation was in all cases to be the value of 
 the property insured, after deducting one-fourth of such 
 value. Of this sum the defendants were to pay such pro- 
 portion as the sum insured by the policy issued by them 
 should bear to the whole sum insured by all the policies 
 existing on the property at the time of the loss. In other 
 words, the defendants were to be liable only for their propor- 
 tion of three-fourths of the value of the property insured; 
 and this proportion was to be ascertained by calculating the 
 ratio which the sum insured in the policy declared on bore to 
 the whole sum insured by all the policies existing on the 
 property. Thus, if the whole property at the time of the loss 
 amounted to ten thousand dollars, the sum on which the 
 liability of the defendants must be reckoned would be three- 
 fourths of ten thousand, or seven thousand five hundred dol- 
 lars ; and of this last sum the defendants would be held to 
 pay only the proportion which the amount insured by them, 
 viz. two thousand dollars, bore to the whole sum insured, viz. 
 five thousand ; or two-fifths of seven thousand five hundred dol- 
 lars, which would be three thousand dollars. But as this last 
 sum exceeds the whole amount insured by the defendants, it 
 would be cut down to that amount, and the plaintiff could 
 recover only two thousand dollars." A stipulation that the 
 insured shall " recover three-fourths of the actual loss, pro- 
 
 1003
 
 § 441] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 vided three-fourths of the amount as aforesaid does not amount 
 to more than three-fourths of the sum insured," is inapplicable 
 in case of total loss, and in such case the insured is entitled 
 to recover three-fourths of the actual value of the property 
 insured.^ 
 
 § 439. Loss ; Contribution ; Reinsurance ; Void Policy. — If 
 a policy of reinsurance provide that " lu case there were 
 other insurance, prior or subsequent, the reiusured should be 
 entitled to recover only a proportionate part ; " the other in- 
 surance spoken of refers to other reinsurance, and unless this 
 exist the reinsurer can claim no proportionate reduction.^ And 
 so, if for any cause the other policies be invalid, there can 
 be no contribution, as there is no other insurance.^ But 
 the policy may provide for a pro rata liability, notwithstand- 
 ing the invalidity of other policies,'* or the insolvency of other 
 companies.^ 
 
 § 440. Loss ; Life Insurance ; Contribution ; Double Insurance. 
 • — Generally, in life insurance, the questions of double insur- 
 ance do not arise, as there is no fixed value to the life, and 
 the person in each case is to pay a fixed sum, without regard 
 to other insurance. But where the insurable interest has an 
 ascertainable value the question may arise, as where two pol- 
 icies are taken out in different offices, by a creditor, on the 
 life of a debtor, and for the same debt. Then only the value 
 of the interest can be recovered, and the amount recovered 
 on the first policy i^ to be deducted from the amount payable 
 on the second.^ 
 
 § 441. Loss ; Alternative Damages. — Under a policy of in- 
 surance in the sum of two thousand dollars against loss of 
 life from accidental injuries, occasioning death within ninety 
 
 1 Farmers' Mut. Ins. Co. i-. Greybill, 74 Pa. St. 17. 
 
 2 Mutual Safety Ins. Co. i'. Hone, 2 Corast. (N. Y.) 235. 
 
 3 Hyguin V. M\.r\^ Ins. Co., 11 Iowa, 21. 
 
 * Liverpool, &c. Ins. Co. v. Verdier, 35 Mich. 395. 
 
 5 Tuck V. Hartford Ins Co., 56 N. H. 326. 
 
 6 Hebdon v. West, 3 Best & Smith, 113 E. C. L. 580. A joint jndpment for 
 tlie wliole loss cannot be given against parties severally liable each for a por- 
 tion, though jointly sued by consent. Insurance Cos. v. Boykin, 12 Wall. 
 (U. S.) 433. 
 
 1004
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 442 
 
 days from the accident, and in the sum of ten dollars a week, 
 for a period not exceedinti; twenty-six weeks, against personal 
 injury " for any single accident by which the insured shall 
 sustain any personal mjury which shall not be fatal," the 
 weekly sum is due for injury by an accident which does 
 not occasion death within ninety days, although it ulti- 
 mately proves fatal. The two provisions are to be con- 
 strued together, and the intent is that if an injury hap[)ens, 
 within the meaning of the policy, it is insured against, as 
 coming under one class or the other. If it were otherwise 
 construed, an injury which should not prove fatal within 
 ninety days would furnish no ground of action till it should 
 be made to appear that it would never prove fatal, — a con- 
 struction which would render the insurance nugatory in such 
 cases.^ 
 
 § 442. Loss ; Payment by Mistake ; Recovery back. — The 
 holder of a life policy, on proof of the death of the insured, 
 recovered the amount payable in such an event. It was sub- 
 sequently ascertained, however, that the insured was not 
 dead ; and thereupon the insurers brought suit to recover 
 back the money so paid, as obtained by misrepresentation : 
 and it was held that it appearing there was no want of good 
 faith on the part of the holder of the policy, the insurers 
 might recover upon condition, and only upon condition, of 
 redelivery of the policy as a subsisting and valid contract.^ 
 A payment of the loss, or even an adjustment agreed upon, 
 is, as a rule, a waiver of all questions as to liability which 
 might have arisen on a trial. That such adjustment is made 
 without knowledge of facts, which might if known have been 
 effectual to defeat any claim, is of no avail, if the insurer 
 might have known them upon inquiry, and Avas not fraudu- 
 lently prevented from coming to their knowledge by the in- 
 sured. Payment under such circumstances is not payment 
 under a mistake of facts, since the facts might have been 
 known if the insurer had thought it worth while to inquire 
 
 ^ Perry v Prov Ins. Co.. 103 Mass. 242. 
 
 2 North Brit. & Mer. Ins. Co. v. Stewart, 9 Ct. of Sess. Cas., 3d series, 534. 
 And see post, § 575. 
 
 1005
 
 § 445] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 for them.^ If either party to the adjustment has been led 
 into it by fraud, it may be set aside by the party wronged, 
 he first having restored, or offered to restore, any payment or 
 advantage he may have received,^ An adjustment, however, 
 " subject to the terms and conditions of several policies," 
 settles nothing but the amount to be paid bearing upon the 
 question of liability.^ 
 
 §443. Loss; Fraudulent Overvaluation. — Fraudulent over- 
 valuation of goods destroyed is a complete defence to the 
 claim for indemnity, but a mistaken or exaggerated over- 
 valuation, not fraudulent, does not deprive the insured of the 
 right to recover an amount equal to the actual loss.* 
 
 § 444. Loss ; Evidence of Payment. — Where the policy has 
 been lost, and the court decrees the payment of the loss, tlie 
 insurance company has no right to demand a bond of indem- 
 nity before payment. The decree of the court is the com- 
 pany's sufficient protection.^ 
 
 § 445. Loss ; Nominal and Real Claimants. — The nominal 
 and real claimants are frequently not the same. Owing to 
 the form of the contract it often happens that one party is to 
 bring suit to recover the loss, while after recovery it is to be 
 paid over to others. The questions often therefore arise, 
 Who is to sue ? and who is to receive ultimately the amount 
 recovered ? The name of the insured may not be stated in 
 the policy, as it need not be. And if the person for whose 
 
 1 Smith V. Glen's Falls Ins. Co , 62 N. Y. 85; National Life Ins Co. v. Mincli, 
 53 id. 144 ; Beisecker ;;. ^tna Ins. Co., C. C. P. (Pa.), 4 Ins L. J. 477. See also 
 post, § 575; Untersinger v. Niagara Ins. Co., Hamilton Co. Dist. Ct. (Ohio), 10 
 Ins. L. J. 237 ; Northwestern Ins. Co. v Roth, 87 Pa. St. 40'J ; Dunn v Com- 
 monwealth Ins. Co.,C. Ct. (Ohio), 3 Ins. L.J. 631 ; Stache v. St. Paul, &c. Ins. 
 Co., 49 Wis. 89; Hanna v. Andes Ins. Co., Superior Ct. (Cincmnati), 4 Ins. L. J. 
 396. In this case a director who had bought up several claims for fifty cents 
 on a dollar, attempted, but without success, to collect the full amount of the 
 company. 
 
 ^ Potter V. Monmouth, &c. Ins. Co , 63 Me. 440. 
 
 3 Whipple V. North British, &c. Ins. Co., 11 R. I. 139. 
 
 * Chapman v. Pote, 22 L. T. 306, at Nisi Prius, Cockburn, C. J. And see 
 post, §§ 477, 584 ; ante, § 373 ; Sibley v. St. Paul, &c. Ins. Co., C. Ct. (111.), 8 Ins. 
 L. J. 461 ; Gerhauser i-. North British, &c. Ins. Co., 6 Nev. 15 ; Williams v. 
 Phoenix Ins. Co., 61 Me. 67. 
 
 ^ England v. Tredegar, 1 Law Reports, Eq. Cases, 344. 
 
 1006
 
 CH. XXII.] OF THE LO.-;ri AND ITS AD.IUSTMIONT. [§ 44o 
 
 benefit tlie policy is made docs not therein appear, or if tlic 
 designation is applicable to several persons, or if the descrip- 
 tion of the insured is imperfect or ambiguous, so that it can- 
 not be understood without explanation, — extrinsic evidence 
 may be resorted to, to show for whom the insurance was in- 
 tended ; and those will be included within the benefits of the 
 policy who shall appear to have been within the intention of 
 the parties.^ Where loss was payable to " heirs and repre- 
 sentatives," it was held that extrinsic evidence was admis- 
 sible to show that the next of kin was intended. ^ A person 
 may in his own name insure the property of another for the 
 benefit of the latter, or in the name of the owner, without 
 the knowledge of the latter, and the insurance will inure to 
 the benefit of such owner if the proceeding be ratified and 
 adopted by him even after loss.^ Insurance for the benefit of 
 others than the party effecting the insurance is not equivalent 
 to " for whom it may concern," because it does not neces- 
 sarily include all interests, but only such as may be shown to 
 have been intended.* An insurance, for example, is effected 
 upon " the estate of Daniel Ross," and it not being apparent 
 who were intended to be included within that designation, 
 evidence is admissible to show that both parties understood 
 that the insurance was for the benefit of the widow and heirs 
 of Ross. That the personal estate is represented by the ad- 
 ministrator, and therefore the administrator was the person 
 designated, is too strict a construction. The expression is 
 rather used to designate the whole estate left by the deceased 
 and held by those who have the legal title.^ [If the agreement 
 
 1 Waring v. Indemnity Ins. Co., 45 N. Y. 606 ; Duncan v. Sun Mut. Fire Ins. 
 Co , 12 La Ann. 486 ; Herkimer v. Rice, 27 N. Y. 163. 
 
 2 Myers v. John Hancock Mut. Life Ins. Co., 41 Mo. 598. But tins case was 
 disapproved of in Wason v. Colburn, 19 Mass. 35, where it was held to the 
 contrary. 
 
 3 Giffard v. Queen Ins. Co., 1 Ilannay (N. B.), 4.32; ante, § 191. See also 
 Shawmut Sugar Co. v. Hampden Ins. Co., 12 Gray (Mass.), 540, which shows 
 that where tlio parties interested in the contract are not designated therein, ex- 
 cept indefinitely, it is for the jury to determine who they are. 
 
 * Lee V. Adsit, 37 N. Y. 78. 
 
 ^ Clinton v. Hope Ins. Co., 45 N. Y. 454; Matthews v. Queen City Ins. Co., 
 2 Cincinnati Superior Court Reporter, 109; Wash. Mut. Fire Ins. Co. v. St. 
 VOL. 11. — 20 1007
 
 § 446] INSUEANCE ; FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 is with the insured and his representatives and assigns, his 
 administrator can sue in his own name.^] So where the pol- 
 icy was issued to the " heirs and representatives of A.," the 
 deceased, his executor, with power to sell and convey, was 
 entitled to claim the proceeds, as holding the title in trust.^ 
 
 § 446. The general rule applicable to personal contracts is 
 that, if assigned, the action for a breach must be brought in 
 the name of the assignor, though the promise be to him and 
 his assigns,^ except where the defendant has promised the 
 assignee to respond to him. But a consent to the assign- 
 ment is held to be the equivalent of this promise.* And so, 
 if the policy is made " payable, in case of loss," to a third 
 party ,^ or to bearer.^ So on life policies not under seal, the 
 
 Mary's Seminary, 52 Mo. 480; Leavitt v. West. Mar. & Fire Ins. Co., 7 Rob. 
 (La.) 351 ; Globe Ins. Co. v. Boyle, 31 Ohio St. 119; ante, § 390. 
 
 1 [Tripp & Bailey v. Insurance Co., 55 Vt. 100.] 
 
 2 Savage v. Howard Ins. Co., 52 N. Y. 502. See also Portsmouth Ins. Co. v. 
 Reynolds ( Va.), 9 Ins. L. J. 606 ; Georgia Home Ins. Co. v. Kinnier, 28 Grat. 88. 
 
 3 Beemer v. Anchor Ins. Co., 16 U. C. (Q. B.) 485. 
 
 * Kingsley v. New England Mat. Ins. Co., 8 Cush. (Mass.) 393; Phillips v. 
 Merrimack Mut. Fire Ins. Co., 10 id. 350. Contra, Jessel v. Williamsburgh Ins. 
 Co., S.Hill (N. Y.),88. 
 
 5 Motley V. Manufacturers' Ins. Co., 29 Me. 337; Westchester Ins. Co. v. 
 Foster, 90 111. 121; Ripley v. ^tna Fire Ins. Co., 29 Barb. (N. Y., 552 ; Frink v. 
 Hampden Ins. Co., 1 Abb. (N. Y.) Pr. Rep. n. s. 343; Ennis i'. Harmony Fire 
 Ins. Co., 3 Bosw. (N. Y. Superior Ct.) 516 ; Newman i-. Springfield Fire & Mar- 
 Ins. Co., 17 Minn 123 ; Pitney v. Glen's Falls Ins. Co., 65 N. Y. 6. If the loss, 
 however, be payable in part only to a third person, the suit must be in the name 
 of the one who has the right to enforce the whole contract, flartford Fire Ins 
 Co. V. Davenport, 37 Mich. 609 ; Savings Institution v. Commercial Ins. Co , 68 
 Me. 313; s. c. and note, 8 Ins. L. J. 120; Hammel v. Queen Ins. Co., 50 Wis. 240. 
 But in Guernsey v. American Ins. Co., 17 Minn. 104, the payee, whose claim 
 was more than the whole insurance, was allowed to maintain the action So 
 where A. sued on a policy for $2500, payable '• to the extent of .$1000 to B. 
 and .$400 to C, as their interests may appear," and recovered a verdict for 
 $1530, it was suffered to stand, B. and C. executing releases to the defendants. 
 Dear v. Western Ass. Co., 41 U. C. (Q. B ) 553. Where a lessee without author- 
 ity obtains insurance, loss payable to the lessor, no suit can be maintained by the 
 lessor, nor, it seems, bj' the lessee. Hidden v. Slater Ins. Co., 2 Cliff (C Ct.) 
 266. [The clause " Loss payable to A. B," enables the company to pay A. B., 
 but an action for breach of the contract must be brought in the name of the 
 person with whom the contract was made. McQueen v. Phoenix Mut. Fire Ins. 
 Co., 4 Can. Supr. Ct. R. fi60 ] 
 
 « Ellicott V. U. S. Ins. Co , 8 G, & J. (Md J 166. 
 1008
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT; [§ 447 
 
 suit may be brought in the name of the beneficiary who is 
 the insured ; ^ and this is so notwithstanding the party who 
 effects the insurance is styled a trustee, it appearing that he 
 is merely an agent.''^ 
 
 § 447. Loss, Who may claim. — And Upon an order, in- 
 dorsed on the policy, to pay in case of loss to a third party, 
 accepted by the company, or assented to by them, the payee 
 may maintain an action in his own name, on setting out the 
 facts in his declaration.^ And an assignee of a life policy 
 may recover not only his own interest, but also that of a 
 third person, for whom he will be held a trustee, in his 
 own name, without joining the cestui que trusts Such an 
 assent, however, means only that the insurers will discharge 
 the obligations of the contract to the assignee instead of 
 the assignor ; and if they, by the terms of the contract, 
 had a right to replace the property, an assent to an order 
 to " pay the loss " means only that they shall discharge 
 the contract as agreed, and does not operate to change the 
 terms of the contract so as to cut them off from the 
 right to replace, and compel them to pay the money to 
 the assignee. To pay is to discharge an obligation by a per- 
 formance according to its terras or requirements. If the 
 obligation be for money, the payment is made in money ; if 
 for merchandise or labor, a delivery of merchandise or per- 
 formance of the labor is payment; or if for the erection of a 
 building, performance according to the terms of the contract.^ 
 In New Hampshire, however, in mutual companies, the action 
 
 1 Hogle V. Guardian Life Ins. Co., 6 Robt. (Superior Ct. N. Y.) 567. 
 
 2 Hiliyard v. Mut. Ben. Life Ins. Co., 6 Vroom (N. J.), 415; Flynu w. North 
 Am. Ins. Co., 115 Mass. 449. 
 
 3 Barrett v. Union Mut. Fire Ins. Co., 7 Cusli. (Mass.) 175 ; Lowell v. Middle- 
 sex Mut. Fire Ins. Co., 8 id. 127 ; Luring r. Manufacturers' Ins. Co., 8 Gray 
 (Mass.), 28; ante, § 379. Tlie action may also be brought in the name of tlie 
 insured. Martin y. Franklin Ins. Co., 38 N. J. (Law) 140; Hand v. Williams- 
 burgh Ins. Co., 57 N. Y. 41. 
 
 * St. John V. Am. Mut. Life Ins. Co., 2 Duer (N. Y. Superior Ct.), 419; s. c. 
 affirmed, 13 N. Y. 31 ; McCord v. Noyes, 3 Brad. (N. Y. Surrogate Ct.) 139. 
 
 ^ Tolman v. Manufacturer.s' Ins. Co., 1 Cusli. (Mass.) 73. And such a per- 
 son has no right to cancel the policy. Marrin v. Stadacona Ins. Co., U. C. (Ct. 
 of App.), 15 Can. L. J. 191. 
 
 1009
 
 § 447 A] INSURANCE : fire, life, accident, etc. [cH. XXII. 
 
 must be brought in the name of the assignor, although the 
 assignment is assented to, and the policy is made payable in 
 case of loss to a third party, unless by giving a new premium 
 note the assignee becomes substituted for the insured, and a 
 member of the company, when the action must be brought in. 
 the name of the latter ; ^ and in New York.^ And he may 
 sue, in New Jersey, even on a parol agreement to pay the 
 premium, the assignee being the mortgagee ; ^ and in Maine ; * 
 and perhaps in Pennsylvania.^ But as such consent gives to 
 the assignee no legal interest in the property, which remains 
 still in the assignor, the latter may bring an action in his own 
 name, without alleging any authority from the assignee.^ The 
 assent, after action brought, will bo sufficient, though in that 
 case the plaintiff will be entitled to no costs.'^ 
 
 [§ 447 A. Who may sue. — Making a policy payable to a 
 creditor " as his interest may appear " does not authorize him 
 to sue, for the action cannot be split at the option of the as- 
 sured.^ Where 0. being indebted to T. gave him a trust deed, 
 and then insured payable to T. as his interest might appear, 
 the policy including other property not mortgaged to T., it was 
 held that T. could not sue on the policy. He could not sue for 
 the whole loss, there could be no splitting of the action, and 
 he could not sue as trustee for 0. 0. was the owner of the 
 policy, and she alone must sue.^ Where the owner of a build- 
 ing insures payable to the mortgagee as his interest may 
 appear, if the amount of insurance in case of loss exceeds the 
 
 1 Nevins v. Rockingham Mut. Fire Ins. Co., 5 Fost. (N. H.) 22 ; Folsom v. 
 Belknap County Mut. Fire Ins. Co., 10 id. 231 ; Rollins i'. Columbian Fire Ins. 
 Co., 5 id. 200 ; Blanchard?'. Atlantic Mut. Fire Ins. Co., 33 N. H. 9 ; Cham- 
 berlain V. N. H. Fire Ins. Co., 55 id. 249; Baldwin v. Phoenix Ins. Co., 10 Ins. 
 L. J. 32. 
 
 2 Mann v. Herkimer County Mut. Ins. Co., 4 Hill (N. Y.), 187. 
 
 3 Flanagan v. Camden Mut. Ins. Co., 1 Dutch. (N. J.) 506. 
 * Stimpson v. Monmouth Mut. Fire Ins. Co., 47 Me. 379. 
 
 5 Lycoming County Mut. Ins. Co. v. Schreflfler, 44 Pa. St. 269. 
 
 6 Ketchuni r. Prot. Ins. Co., 1 Allen (New Brunswick), 136. 
 "! Jackson v. Farmers' Mut. Fire Ins. Co., 5 Gray (Mass.), 52. 
 
 8 [Thatch V. Metropole Ins. Co., 11 Fed. Rep. 29; 8th Cir. (Col.) 1882,3 
 McCrary, 387 ; 11 Ins. L. .T. 199 ; Hatch r. Metropole Ins. Co., 13 Rep. 293.J 
 
 9 [Thatch V. Metropole Ins. Co., 3 McCrary, 387.] 
 
 1010
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 447 B 
 
 amount of the mortgage, the owner and mortgagee may sue 
 jointly and get a judgment fixing their respective shares.^ 
 On a policy to C. payable to P., mortgagee, C. may, with the 
 express consent of P., sue in his own (C.'s) name.^ A contract 
 made by one person for the benefit of another may be sued on 
 by the latter.^ Both the assured and. he to whom the proceeds 
 of the policy are payable may be joined as plaintiffs in an 
 action thereon.^ When A. and B. join as plaintiffs in an ac- 
 tion against an insurance company on a policy issued to one 
 alone, there being no words " whom it may concern," or the 
 like, it is a fatal variance.^ When the policy is in the names 
 of A. and B., but the action only in the name of A., an aver- 
 ment in the declaration of sole interest in A. admits evidence 
 of such sole interest.^] 
 
 [§ 447 B. Who may sue. — If a policy taken out by a part- 
 owner is issued for whom it may concern, or for owners, the 
 other proprietors may sue, but where the policy does not 
 import insurance of other interests, only the person named 
 can sue on itJ When an action on a policy of goods was 
 brought in the name of A. as owner, and it appeared that A., 
 who had bought the goods, had consigned them to B., it was 
 left to the jury to find who was owner.s In a policy on behalf 
 of owners no one but the owners can sue, while the phrase for 
 whom it may concern permits suit by any one having an 
 interest even though only a lien. In every case it must 
 appear that the policy was made and intended to be in behalf 
 of the one seeking to recover.^ A. may insure for himself and 
 " all who may be interested," and may sue in behalf of B.^ 
 at the time interested, who subsequently becomes privy by 
 adoption.^0 ^he executors are the only ones who can enforce 
 
 1 [Home Ins. Co. v. Oilman, 112 Ind. 7.] 
 
 2 [Coates V. Penn Fire Ins. Co., 58 Md. 172, 178.] 
 2 [Chrisman v. State Ins. Co., 16 Or. 289.] 
 
 4 [Lasher v. N. W. Nat. Ins. Co., 18 Hun, 98 at 101.] 
 
 5 [Burgher v. Columbian Ins. Co., 17 Barb. 274 at 274.J 
 
 6 [Marsh v. Robinson, 4 Esp. 98 at 98.] 
 * [Turner v. Burrows, 5 Wend. 541.] 
 
 8 [Fleming v. Insurance Co., 12 Pa. St. .391 at 396.] 
 ^ [Pacific Ins. Co. v. Catlett, 4 Wend. 7G.] 
 1° [Hagedorn v. Oliverson, 2 Maule & Selw. 485 at 490.] 
 
 1011
 
 § 448] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 a policy unless the heirs arc named. The property passes to 
 the heirs, but the policy is not attached to and does not run 
 with the estate, and only the representatives of the assured 
 can recover.^ A suit on a sealed policy must be brought in 
 the name of the covenantee, whoever may be the interested 
 person.^ Dismissal or failure of suit because brought in the 
 wrong name is no bar to another suit in the proper name.^ 
 The president and secretary of a mutual company cannot re- 
 quire that all other members be made parties to a bill for the 
 payment of insurance. They are competent to defend the 
 interests of the company, and no injustice will be done them 
 by ordering them to pay the amount out of association 
 funds.4] 
 
 I 448. Loss ; Nominal and Real Claimants ; Agent ; Broker. — 
 If the policy be issued in the name of an agent of several 
 parties, the suit may be in the name of the ageiit.^ So, 
 if issued to a broker, " for whom it may concern ; " ^ or to a 
 merchant, upon goods " in trust or on commission. " "^ But if 
 issued to a tenant in common, it does not cover the inter- 
 est of another, unless specifically so stated.^ If the policy 
 be issued and made payable to an agent for the benefit of 
 the principal, and without his knowledge, the latter may 
 ratify even after the loss, and sue in his own name.^ Where 
 an agent insured for a named principal, payable in case of 
 loss to the agent by name, the principal was allowed to sue in 
 Louisiana, and a debt due from the agent to the insurers was 
 
 1 [Wyman v. Prosser, 36 Barb. 368 at 3G9.] 
 
 2 [American Ins. Co. v. Insley, 7 Pa. St. 223 at 231 ; De BoUa v. Penn Ins. 
 Co., 4 Whart. 68 at 72.] 
 
 8 [Fleming v. Insurance Co., 12 Pa. St. 391 ] 
 
 4 [Van Houten v. Pine, 36 N. J. Eq. 1-33; 38 N. J. Eq. 72, 78] 
 
 5 Barnes v. Mut. Fire Ins. Co., 45 N. H 21 ; Goodall v. New England Mut. 
 Fire Ins. Co., 5 Fost. (N. H.) 22 ; Waring v. Indemnity Ins. Co., 45 N. Y. 606 ; 
 Graham v. Firemen's Ins. Co., 2 Disney (Oliio), 255. And see a?tte, § 446. 
 
 6 Prot. Ins. Co. v. Wilson, 6 Ohio St. 553 ; Strohn v. Hartford Ins. Co., 37 
 Wis. 625. 
 
 7 De Forest v. Fulton Fire Ins. Co., 1 Hall (N. Y. Superior Ct), 84. 
 
 8 Work I". Merchants' & Farmers' Mut. Fire Ins. Co., 11 Cush. (Mas.=!.) 271. 
 
 9 Herkimer v. Rice, 27 N. Y. 163 ; Bobbitt v. Liverpool, &c. Ins. Co., 66 N. C 
 70 ; Hooper v. Robinson, 98 U. S. 528. 
 
 1012
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 449 
 
 not allowed to be set off.^ [When A. effects a policy as 
 agent for B., B. cannot maintain an action thereon to recover 
 a loss for the use of C, declaring C. to be alone interested in 
 the property .2 A wife cannot sue on a contract running to 
 her husband though the property was hers, unless the policy 
 show a trust or agency.^] Where the policy is assigned as 
 collateral security, with the consent of the company, but the 
 assignee has no interest in the property, both cannot join, 
 and the assignee must sue.^ But a parol agreement by the 
 company to recognize the rights of another under the policy, 
 and to affirm its validity as to any particular property or 
 interest, will give to that party a right of action on the policy 
 in his own name.^ And there are many cases where a resort 
 to equity will be necessary. As where A., the insured, sells 
 to B., who takes in a partner, C, the insurers consenting that 
 the policy shall remain in part to C. and in part to B. and C, 
 the policy never having been assigned, nor any interest therein, 
 to C^ An administrator has no interest in real estate insured, 
 and, it has been held, cannot sue to recover for a loss occur- 
 ring after his appointment, though the contract is to make 
 good to the administrators.^ But it has been frequently held 
 otherwise.^ In Iowa, the real party in interest must bring 
 the action ; and although an assignment be prohibited, by 
 special provision of the Code, the assignee may sue, subject 
 to all rights of set-off and defence, legal or equitable, which 
 might have been made against the assignor.^ 
 
 § 449. Loss ; Mortgagor and Mortgagee ; Debtor and Cred- 
 itor. — If a mortgagor insures for himself, the mortgagee 
 
 1 Braden v. La. St. Ins. Co., 1 La. 220. 
 
 2 [Russell V. N. E. M. Ins. Co., 4 Mass. 82 at 84.] 
 
 3 [Ziiiimernian v. Farmers' Ins. Co., 76 Iowa, 352.] 
 
 * Peabody v. Wash. County Mut. Ins. Co., 20 Barb. (N. Y.) 339; Frink y. 
 Hampden Ins. Co., 31 How. (N. Y.) 30. 
 
 6 Wood V. Rutland Mut. Fire Ins. Co., 31 Vt. 552. 
 
 6 Bodle V. Chenango County Mut. Ins. Co., 2 Comst. (N. Y.) 53. 
 
 7 Beach v. Bowery Fire Ins. Co., 8 Abb. Pr. (N. Y.) 261. 
 
 8 Lappin v. Charter Oak Ins. Co., 58 Barb. (N. Y.) 325; Farmers' Mut. Ins. 
 Co. V. Graybill, 74 Pa. St. 17 ; Germania Ins. Co. v. Curran, 8 Kans. 9 ; 1 Ins. L. J. 
 171. See also ante, § 445. 
 
 * Mershon v. National Ins. Co., 34 Iowa, 87. 
 
 1013
 
 § 449] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII, 
 
 has no claim to the proceeds of the insurance witliout an 
 assignment ; ^ and where a mortgagee insures his own interest, 
 without any agreement between him and the mortgagor, the 
 latter has no claim to have any portion of the loss recovered 
 applied to the discharge of his debt.^ Otherwise if the mort- 
 gagee effects the insurance at the request and ^ cost, and for 
 the benefit of, the mortgagor.^ Where the mortgagor insures, 
 payable to the mortgagee in case of loss, the mortgagor can- 
 not sue alone unless the mortgagee has been paid, which he 
 must allege. If not paid, both may join.^ Where the insur- 
 ance is by the mortgagor payable to the mortgagee, as his 
 interest may appear, and the mortgagee's interest is greater 
 than the amount insured, he may sue in his own name.^ 
 [Otherwise if his interest is less, then the clause in question 
 is a mere appointment of a part of the money .'^] If the death 
 of a mortgagor and disposition by will before the loss work 
 such a change of title or possession by legal process, judicial 
 degree, or voluntary conveyances, or transfer, as would other- 
 wise annul the policy, — which was not decided, — it will not 
 deprive a mortgagee so protected of his right to recover.^ 
 [Cancellation of the mortgage by payment of the debt after 
 the fire, does not prevent the mortgagee from suing on a 
 policy taken out by the mortgagor payable to the mortgagee.^] 
 Where a creditor, with the knowledge and consent of the 
 debtor, in account with the latter, charges him with the pre- 
 miums paid for insurance on the debtor's life or his property, 
 
 1 Columbian Ins. Co. v. Lawrence, 10 Pet. (U. S.) 507 ; Carter v. Rockett, 8 
 Paige (N. Y.), 437. Contra, Garden v. Ingram, 23 L. J. (Ch.) 478. 
 
 •^ [Mclntire v. Plaisted, 68 Me. 363 at 305.] 
 
 3 [Insurance procured by a mortgagee upon the request or at the expense of 
 the mortgagor is held by tlie mortgagee for the protection of both interests, and 
 the implied obligation arising, is that the insurance money when paid to the for- 
 mer shall apply upon the mortgage debt. Waring v. Loder, 53 N. Y. 581 at 
 585.] 
 
 * Concord Mut. Fire Ins. Co. v. Woodbury, 45 Me. 447. 
 
 5 Ennis v. Harmony Fire Ins. Co., 3 Bosw. (N. Y. Superior Ct.) 516. 
 
 6 Hammel v. Queen's Ins. Co., 50 Wis. 240. 
 " [Fire Ins. Co. v. Felrath, 77 Ala. 194.] 
 
 8 Westchester Fire Ins. Co. v. Dodge (Mich.), 1880, 9 Am. Law Record, 297. 
 
 9 [Bartlett v. Iowa State Ins. Co., 77 Iowa, 86.] 
 
 1014
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 450 
 
 he will be held to account for any surplus, over an amount 
 necessary to pay the debt, received from the insurers, and on 
 payment of the charges the debtor will be entitled to the pol- 
 icy ,i if the facts show an agreement that the creditor is to 
 insure, and the debtor pay the premium.^ And yet if the 
 debtor pays off the debt during his life, he will not be enti- 
 tled to demand from his creditor a policy purchased and to 
 be kept up at his expense as a security for his creditor,'^ — a 
 conclusion to which the Vicc-Chanccllor (Stuart) said, in the 
 later case, he came with reluctance, because he found himself 
 bound by the earlier case. But if the debtor insures to secure 
 a debt part of which is usurious, the creditor must account 
 for so much of the proceeds of the insurance as exceeds the 
 debt less the usury.'* So, where a debtor took out a policy on 
 his own life for the benefit of his creditor, paying the pre- 
 miums thereon till he became bankrupt. The cash surrender 
 value of the policy was then credited on the debt, and a divi- 
 dend of twenty per cent also paid. From the bankruptcy and 
 surrender the creditor kept the policy alive by paying the pre- 
 miums liimsclf, and upon the death of the debtor claimed the 
 whole amount of the policy, which was considerably in excess 
 of the value of debt due him. But it was held that from the 
 time when the creditor began to pay the premiums the policy 
 became a new security for so much as still subsisted of the 
 debt ; and when that was paid out of the proceeds, she ceased 
 to be a creditor.^ 
 
 § 450. Loss ; Vendor and Vendee ; Lessor and Lessee. — 
 Where the vendor, in a contract of sale of a house which is 
 destroyed by fire before the completion of the purchase, re- 
 
 1 Holland v. Smith, 6 Esp. 11. 
 
 2 Bruce v. Garden, 22 Law Times, n. s. 595, per Lord Chancellor Hatherly, 
 overruling Vice Chancellor James, in same case, 20 L. T. n. s. 1002 ; Wheeler v. 
 Factors & Traders' Ins. Co. (U. S.), 9 Ins. L. J. 876; Moreland v. Isaac, 20 Beav. 
 388. 
 
 3 Gottleib V. Cranch, 4 De G., M. & G. 440 ; Knox v. Turner, 21 Law Times, 
 N. 8. 701. 
 
 * Coon, Adm'r, v. Swan, 30 Vt. 6. 
 
 s In the Matter of Newland, Dist. Ct. U. S., South Dist. N. Y., 2 Ins. L. J. 
 860. 
 
 1015
 
 § 452j iNsuiiANCE : fire, life, accident, etc. [ch. xxii. 
 
 ceives payment for the loss under a polic}^ which existed at 
 the date of the contract, no reference being made in the con- 
 tract to the insurance, the vendee has no claim upon the 
 f unds.^ But the assignee of a vendor's interest in a contract 
 for the sale of real estate, which contract provides for an in- 
 surance by the vendee for the benefit of the vendor, is equitably 
 entitled to the moneys due upon an insurance effected by such 
 vendee in his own name ; and where the insurer has notice 
 of such assignment he is liable to such assignee, to the extent 
 of his interest, although he has, after such notice, actually 
 paid the loss to tlie vendee. And the fact that tlie policy is 
 by its terms unassignable without the consent of the office, is 
 immaterial, since the liability is not founded upon an assign- 
 ment of the policy, but upon the equitable lien of the vendor's 
 assignee, the insurer being, after notice, a trustee of the fund 
 for the assignor's benefit.^ Where a tenant agrees to insure 
 for the benefit of his landlord, the latter deducting one-half of 
 the premium from the rent as it accrued, it was held that the 
 landlord was entitled to the whole of the insurance money .^ 
 
 § 451. Loss ; Insurance by "Wife on her own Life for Benefit 
 of Husband ; Children. — The proceeds of policies taken out by 
 a wife, on which the premiums were paid by her out of her 
 funds, on her own life, and for his benefit, before his bank- 
 ruptcy, do not, on her decease, inure to the benefit of the 
 bankrupt's estate.* If the loss be payable to " children," this 
 does not include grandchildren.^ 
 
 § 452. Loss ; Endowment Policy payable in the alternative. — 
 When the policy is on the loss of the husband, " for the sole 
 use " of the wife, and payable to the husband or his assigns, 
 
 1 Rayner v. Preston, Sup. Ct. Ch. D., 10 Ins. L. J. 76 ; Poole v. Adams, 12 W. 
 R. 683 ; Paine v. Meller, 6 Ves. 349. 
 
 2 Cromwell v. Brooklyn Fire Ins. Co., 44 N. Y. (Ct. of App.) 42. 
 
 3 Duke of Hamilton's Trs. v. Fleming, 9 Ct. of Sess. Cas., 8d series (Scotch), 
 329. And see also post, § 456. 
 
 * Murrin v. Owen, Petr., C. Ct. (Mo.), coram Treat, J., 2 Ins. L. J. 524. So 
 in Canada, under stat. 29 Vict, c 17, wliicii provides that the loss shall be paid 
 as directed in the policy. Brossard v. Massouin, Supr. Ct. (Montreal), 4 Ins. 
 L. J. 305. 
 
 * Winsor r. Odd Fellows Association (R. I.), 10 lus. L. J. 390. 
 
 lOlG
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 452 A 
 
 or ill case of his death within the time limited to the bene- 
 ficiary, the loss goes to the wife only in case the husband dies 
 within the limited timc.^ 
 
 [§ 452 A. Who has the Ultimate Right to the Proceeds? — 
 Payment of the premium on a policy, if without contract with 
 the assured, gives no right in its proceeds.^ Where one, neither 
 a near relative nor a creditor, insures a life for his own benefit, 
 although for the honest purpose of protecting himself under 
 an agreement to support the assured life, still public policy 
 will not allow him to retain more of the funds than is neces- 
 sary to reimburse him ; the rest belongs to the estate of the 
 " life." ^ The principle that insurance is for indemnity, and 
 that loss is payable only so far as the insured had an insur- 
 able interest, prevents the administrator from recovering, or 
 holds him as a trustee for the heir, or devisee, when the loss 
 occurs after the succession of the property.* Where a policy is 
 made payable to the assured, his executors, or administrators, 
 and assigns, the personal representative may, on the death of 
 the assured, maintain an action thereon as trustee of the heirs 
 on whom the interest devolves, and the damages stand in the 
 hands of the administrator as really subject to dower and to 
 the lien of creditors.^ Where a policy is payable " to the as- 
 sured, his executors, or administrators," and any change of 
 title except by " succession " is prohibited, the widow, occupying 
 and having a life estate in the house by virtue of her marriage 
 contract with the assured, has no interest in funds due on loss 
 occurring after the assured's death ; she takes by purchase. If 
 she had taken as dowress or under the homestead laws she 
 would have come within the principle which gives the funds to 
 the " succession." ^ Where C. insured his homestead by a policy 
 running to himself and his representatives, and the house was 
 
 1 Tennes v. Northwestern Mut. Life Ins. Co., 26 Minn. 271 ; ante, § 390 
 et seg. 
 
 2 [Burridge r. Raw, 1 T. & C. C. C. 183.] 
 
 3 ISeigrist v. Schmoltz, 113 Pa. St. 326.] 
 
 * [Quarles v. Clayton, 87 Tenn. 308, a dictum, quoting 316 N. Y. & IVIinn. 
 cases.] 
 
 6 [Wyman v. Wyman, 26 N. Y. 2-53.] 
 
 6 [Quarles v. Clayton, 87 Tenn. 308, 314, 316.] 
 
 1017
 
 § 452 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 burned after his death and while the widow, who was entitled 
 to hold the premises for her life, was occupying the same, it 
 was held that the policy devolved on those beneficially inter- 
 ested in the estate, and that if the administrator collected 
 the insurance money he would hold it in trust for the widow 
 during: her life.^ Insurance effected for the benefit of an equit- 
 able owner, and in pursuance of an agreement with him, is 
 sufficient to hold the avails as against a trustee process in- 
 stituted for the benefit of an attaching creditor of him who 
 holds the legal title.^ If A. and B. insure for a certain sum 
 in a policy which declares that A.'s interest is an undivided 
 two-thirds, and B/s an undivided one-third, the contract will be 
 joint, and if A. collects a loss, B. will be entitled to receive 
 one-third of the money from him.^ When one having an in- 
 terest insures generally, and he receives the amount of the loss, 
 another part-owner may recover from him a share on proof of 
 his interest therein, without showing a previous request to 
 make the insurance.* When one having goods sold but not 
 removed in his possession, which he is under no obligation 
 to insure, insures all his goods " sold but not removed, con- 
 signed, &c.," and recovers after loss, the owner of the first 
 named goods cannot recover a proportional share when it 
 appears that the insured received no more on account of includ- 
 ing those goods in his statement of loss than he would other- 
 wise.^ When A. effected insurance on his own goods and 
 goods held by him, as bailor, without the knowledge of the 
 bailee, and a loss occurred, his own being greater than the 
 total insurance, the bailor can have no part in the proceeds.^ 
 But where A. bailed goods with B., who assured A. that the 
 goods were covered by policies that he, B., held, and they were so 
 covered, B. was held bound to pay A. his fair proportion of the 
 msurance received on the policies.^ A builder who contracts 
 
 1 [Culbertson v. Cox, 20 Minn. 309.] 
 
 2 [Providence County Bii. ;;. Benson, 24 Pick. 204 at 210.] 
 
 3 [Nortlirup v. Phillips, 99 111. 455 ] 
 
 4 [Miltenberger v. Beacom, 9 Pa. St. 198 at 201.] 
 6 [Rcitenbach >: Johnson, 129 Mass. 316 at 317.] 
 6 [Stillwell V. Staples, 19 N. Y. 401 at 407.], 
 
 ' [Thomas v. Cummiskey, 108 Pa. St. 354 ] 
 
 1018
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 452 B 
 
 to construct a house cannot recover on the contract, or on a 
 quantum meruit, unless lie proves a complete performance, 
 and if the structure burn just before completion the builder 
 has no claim on insurance secured bj the contractee on the 
 work. The builder should have assured his own interest.^ 
 As between the vendee and vendor the insurance money rep- 
 resents the property itself, and equity will give it to the 
 vendor to the extent of the purchase-money unpaid, in case 
 of the insolvency of the vendee.^ A testator bequeathed chat- 
 tels to B., and later insured them against loss by sea. He 
 and the chattels were subsequently lost in a shipwreck, and it 
 was held that B. had no interest in the insurance money .-^ If 
 it could have been shown that the testator perished first it 
 would have been otherwise as to the insurance.] 
 
 [§ 452 B. Extent of Mortgagee's Claim on the Proceeds. — If 
 the proceeds of a policy, in the name of a mortgagor, and 
 payable to a mortgagee, are equal to or greater than the mort- 
 gage debt, the latter is paid when the mortgagees receive the 
 insurance, and if there is a balance it belongs to the mort- 
 gagor.* A mortgagee cannot claim to keep more than a com- 
 pensation, and hold the balance for the owner, even where he 
 insured his own interest only.^ In this case the mortgagee 
 only needed |128 to make him whole, after what he had re- 
 ceived from other companies. The verdict, however, was for 
 $1,325, and it was held that there must be a new trial unless 
 the parties consented to reduce the verdict to $128. A mort- 
 gagee insuring is entitled to receive from the company no 
 more than his debt minus what he receives from sale of the 
 remnant of the insured property.^ But if the mortgagee in- 
 sured to protect the owners as well as himself, or his action 
 has been ratified by the owners, the fact that his own loss has 
 
 * [Lawing v. Rintles, 97 N. C. 350.] 
 
 2 [Grange Mill Co. i-. The People, 118 111. 306.] 
 
 3 [Durrant v. Friend, 11 Eng. Law & Eq. 2 at 4.] 
 
 * [Kleio V. Union Fire Ins. Co., 3 Ont. 234 ; Bull v. North Brit. Can. Invest. 
 Co. & Imp. Fire Ins. Co., 14 Ont. R. 322 ; Schofield v. New B. Pat. Tanning 
 Co,22N. B. 599.] 
 
 6 [Archbold r. Merchants' Mar. Ins. Co., 4 Russ. & Geld. (Nova Scotia) 98.] 
 6 [Harris v. Gasper Fire & Mar. Ins. Co., 9 R. I. 207 at 216 ] 
 
 1019
 
 § 452 CI INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [Cfl. XXII. 
 
 been satisfied by prior insurance will not prevent recovery .^ 
 The amount received by the mortgagee goes to the credit of the 
 mortgage.^ The clause, " Loss payable to the mortgagee," 
 gives him the same rights as if the policy were assigned to hira 
 as collateral security for the mortgage debt.^ A mortgagee of 
 the property has no claim on money paid for its loss, unless 
 there is an assignment or agreement to that effect.* By no 
 principle of law or equity can a mortgagee claim the benefit of 
 a policy underwritten for the mortgagor on the mortgaged prem- 
 ises.^ It is strictly a personal contract with which the mort- 
 gagee has no more to do than any other creditor.^ When the 
 insured premises were twice mortgaged, and on a partial loss 
 the money was paid, according to agreement, to the first 
 mortgagee, and he in turn pays it to the mortgagor to repair 
 the buildings damaged, the second mortgagee has no equity to 
 compel a portion to be applied to the reduction of his debt.'' 
 When a mortgagor assigns a policy of insurance to a mort- 
 gagee, the latter cannot apply the proceeds in case of loss to 
 the debt before it is due, unless by consent of the former.^ 
 An oral agreement between a mortgagor and mortgagee that 
 any insurance received by the latter shall operate as a pay- 
 ment of the debt pro tanto is valid, and will affect the proceeds 
 of any policy secured by the mortgagee.^] 
 
 [§ 452 C. Covenant to Insure for the Benefit of the Mort- 
 gagee. — If by covenant, or otherwise, a mortgagor is bound 
 to insure the mortgaged premises for the better security of 
 the mortgagee, the latter has an equitable lien, to the extent of 
 his interest in the property destroyed, upon the money due on 
 a policy taken out by the mortgagor upon it.^^ But such a 
 
 1 [Seaman v. West, 5 Russ. & Geld. (Nova Sco.) 207.] 
 
 2 [Troop V. Mosier, U. S. Eq. 189.] 
 
 3 [Conn. Mut. Life Ins. Co. v. Scamnion, 4 Fed. liep. 263.] 
 
 4 [Ridley V. Ennis, 70 Ala. 463.] 
 
 5 [Columbia Ins. Co. v. Lawrence, 10 Pet. 507 at 512 ; McDonald v. Black, 20 
 Ohio, 185 at 193.] 
 
 6 [Ryan v. Adamson, 57 Iowa, 30.] 
 
 7 [Gordon v. Ware Savings Bk., 115 Mass. 588 at 591.] » [Ibid.] 
 s [Baker v. Fireman's Fund Ins. Co., 79 Cal. 34.] 
 
 1'' [Wheeler v. Insurance Co., 101 U. S. 439, 442 (1879), citing Thomas' 
 Adm'rs V. Vankapff's Ex'rs, 6 Gill & J. (Md.) 372, note to 3 Kent. Com. 376, 
 1020
 
 CH. XXII. ] OF THE LOSS AND ITS ADJUSTMENT. [§ 452 D 
 
 covenant does not run with the land, and the mortgagee cannot 
 hold the vendee of the equity of redemption. If, however, 
 the latter insures making the loss payable to the mortgagee, 
 this provision cannot be revoked or cancelled without con- 
 sent of the mortgagee.^ Where A., after executing two 
 mortgages, each of them covenanting to keep the premises 
 insured for the benefit of the mortgagee, obtained insur- 
 ance payable to the junior mortgagee to whom the policy 
 was delivered, and who had no actual notice of the cov- 
 enant in the senior mortgage, it was held that as the legal 
 title to the insurance money was in the junior mortgagee, 
 and the equities were equal, the legal title must prevail. 
 The rule that in case of such a covenant any insurance ob- 
 tained will be presumed a fulfilment, does not apply when 
 the policy is in terms payable to another incumbrancer.^ 
 Where a mortgagor covenanted to insure for the benefit of the 
 mortgagee, but in fact insured for himself and kept the pol- 
 icy, which covered not only the mortgaged property but much 
 besides, and the loss was paid to the mortgagor, the company 
 having no knowledge of the terms of the mortgage, it was held 
 that the mortgagee could not sue the company on the policy.'^] 
 [§ 452 D. Acts of the Mortgagor. — If a policy, taken out 
 by the owner, is made payable to mortgagees as their interest 
 may appear, their rights cannot be destroyed by any act of 
 the owner.* A provision, however, that the mortgagee's in- 
 terest in the policy shall not be affected by any act or neglect 
 of the mortgagor and applicant, refers to future acts, and does 
 not shut out proof that the policy was obtained by fraud.^ An 
 indorsement on a policy that loss should be payable to A. 
 B., mortgagee, to the extent of his interest, is not an assign- 
 
 and Nichols v. Baxter, 5 R. I. 491. the last to the effect that the lien exists al- 
 though tlie agreement between the mortgagor and mortgagee provides that in 
 case the former does not procure and assign the policy as agreed, the mortgagee 
 may insure at the mortgagor's expense.] 
 
 1 [Reid V. McCrum, 91 N. Y. 412.] 
 
 2 [Dunlop V. Avery, 89 N. Y. 592.] 
 
 3 [Stearns v. Quincy Mut. Fire Ins. Co., 124 Mass. Gl.] 
 * [Black V. Nat. Ins. Co., 24 L. C. Jur. 65 ] 
 
 6 [Omnium Securities Co. v. Can. Fire & Mar. Ins. Co., 1 Ont. R. 494.] 
 
 1021
 
 § 4i>2 E] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 merit of a chose in action, nor a contract to pay A. B., and 
 where there has been a breach of condition A. B. cannot 
 recover, either in his own name or that of the assured.^ If a 
 policy is payable to a mortgagee, an adjustment by the mort- 
 gagor without assent of the mortgagee does not bind the lat- 
 ter.2 Qj^Q ^Q vvhom a loss is payable as his interest may appear 
 has no greater rights than the insured. He is merely an ap- 
 pointee to receive a part of the money .^J 
 
 [§ 452 E. For whom it may concern. — A policy " for whom 
 it may concern " insures all having an insurable interest 
 whether known to the insurer or not;^ and though issued 
 to one having no interest therein may be sued on by the actual 
 owners in case of loss.^ The policy covers the interest of any 
 one who has given authority for such insurance, or ratifies it, 
 and the ratification may be by bringing suit.^ Subject to the 
 question of authority or ratification, such a policy covers 
 the interests of all it was intended to protect by the person 
 procuring it." A policy is not, however, a negotiable secu- 
 rity,^ and the general clause " for whom it concerns " only 
 relates to the person for whose benefit the policy was intended 
 at the time of issue, and what person that was is a question 
 for the jury. Parol evidence is admissible to show who is in- 
 cluded in a policy written " for whom it may concern," or 
 " for the owners." ^ But it is held that there must be some- 
 thing in the policy to show that " others " are meant to be in- 
 cluded. When one part-owner insured a vessel and its outfit 
 in his own name only, with nothing in the policy to show that 
 
 1 [Cormier v. Ottawa Agri. Ins. Co., 20 N. B. R. 526.] 
 
 2 [Hall V. Association, 64 N. H. 405.] 
 
 3 [Hine v. Homestead Fire Ins. Co., 29 Hun, 84 ; Harrington v. Fitchburg 
 Ins. Co., 124 Mass. 126 at 132.] 
 
 * [The Sidney, 23 Fed. Rep 88 (N. Y.), 1885] 
 
 5 [Cobb V. N. E. Mut. Mar. Ins. Co., 6 Gray, 192 at 197-198.] 
 
 6 [Finney v. Fairhaven Ins. Co., 5 Met. 192 at 197; Seanaans v. Loring, 4 
 Mason, 127 at 136.] 
 
 ^ [Forgay v. Atlantic Mut. Ins. Co., 2 Rob. (N. Y.) 79 at 91.] 
 
 8 [Augusta Ins., &c. Co. v. Abbott, 12 Md. 348 at 373.] 
 
 9 [Bell u. Western Mar. & Fire Ins. Co., 5 Rob. (La.) 423 at 442 ; Catlett v. 
 Pacific Ins. Co., 1 Wend. 561 at 575; Newson v. Douglas, 7 H. & J. (Md.) 417 
 «t 451.] 
 
 1022
 
 CH. X.iLII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 452 F 
 
 it was for any one else, an action cannot be maintained by other 
 co-owners with him, showing by parol testimony that the 
 underwriters agreed to insure them all, and that it was so un- 
 derstood by all.^ Where A. insured his own share in the firm 
 of A. B., the policy still retaining the printed form "for 
 whomsoever else it may concern," the insurance will be held 
 to be joint if such appears to have been vl.'s intent.^ Neither 
 a mortgagor nor mortgagee can take advantage, as a rule, of 
 a policy effected by the other, even though it contain the 
 words " for whom it may concern," unless the mortgage has 
 become absolute by failure to pay.^ But when the agent of 
 the owners of a vessel effected an insurance for the benefit 
 and on account of whom it may concern at the time of loss, 
 it was held that a mortgagee of one of tlie owners had a right 
 to the owner's share of the proceeds to the extent of his debt.* 
 Agents who have procured an open policy to " themselves, or 
 whom it might concern," may sue thereon in their own names 
 for the benefit of the owners.^] 
 
 [§ 452 F. Adjustment ; Compromise, &c. — An adjustment 
 fairly made is conclusive on the company.^ It is a new and 
 independent agreement, — and in a suit upon it the company 
 cannot set up any breach of warranty or condition in the pol- 
 icy.''' But an adjustment is never binding unless with full 
 knowledge of the facts. Having the means of information 
 is not sufficient.^ And it has been held in England that the 
 signing of an adjustment by an underwriter, even with full 
 knowledge of all facts, is not conclusive, but he may there- 
 after avail himself of any defence which the facts or the law of 
 the case will furnish. Money paid cannot be recovered unless 
 there is fraud or mistake, but a promise to pay is not binding 
 
 » [Finney v. Bedford Com. Ins. Co., 8 Met. 348 at 352.] 
 
 2 [Lawrence v. Sebor, 2 Caiiies, 203 at 206.] 
 
 3 [McDonald v. Adm'r of Black, 20 Oliio, 185 at 194.] 
 * [Rogers v. Traders' Ins. Co., 6 Paige Cli. 583 at 587.] 
 6 [Protection Ins. Co. v. Nilson, 6 Oliio St. 553 at 559.] 
 6 [Royal Ins. Co. v. Roodhouse, 25 Brad. 61, 66.] 
 
 ' [Godchaux v. Merchants' Mut. Ins. Co., 34 La. Ann. 235.] 
 « [Shepherd r. Chewter, 1 Camp. 274 at 275; Remington v. Westchester Fire 
 Ins. Co., 14 R. I. 245.] 
 
 VOL. U.-21 1023
 
 § 452 F] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXII. 
 
 unless there was a consideration or previous liability.^ After an 
 adjustment either the insured or the company may, upon clear 
 proof, assert any right arising from facts not considered in 
 the adjustment.2 An adjustment and promise to pay may be 
 avoided by the company on afterward discovering that there 
 was a misrepresentation of title in the application.^ But 
 where a loss of a vessel insured occurred, and when the com- 
 pany charged fraud and wilful negligence on the part of the 
 master, the assured compromised for three-fourths of the 
 claim, this was not set aside, because of the subsequent 
 discovery by the company of further proof that the master 
 scuttled the vessel.* Mere ignorance of the rights the law 
 attaches to the facts is not, however, sufficient to invalidate 
 an adjustment. The compromise of a doubtful title when 
 procured without such deceit as would vitiate any other con- 
 tract concludes the parties, though ignorant of the extent of 
 their rights, but if any undue advantage was taken it is void.^ 
 When the assured, knowing the facts and his legal rights, 
 yields to the arrogant claims and threats of the company and 
 submits to an unjust settlement, there can be no relief for 
 him^ When a policy did not cover the loss, but the company 
 promised the owner that " if he would find the property 
 damaged, have it inspected and sold at auction," they would 
 pay the deficiency, it was held that the performance of these 
 conditions by the owner entitled him to the payment of the 
 deficiency.'^ A promise becomes binding on the performance 
 by the promisee of that in consideration of which the promise 
 was made. In an adjustment of claims with an insurance com- 
 pany the yielding of the claim of either party, or of a part 
 thereof, is sufficient consideration for the other's promise to pay.® 
 
 1 [Herbert v. Champion, 1 Camp. 134 at 137.] 
 
 2 [Fire Ass. v. Blum, 63 Tex. 282.] 
 
 3 [Amer. Ins. Co. v. Barnett, 73 Mo. 364.] 
 
 4 [Barlow v. Ocean Ins. Co., 4 Met. 270 at 275.] 
 
 5 [Hoge I'. Hoge, 1 Watts 163 at 217 ; Haigh v. Brooks, 10 Ad. & El. 309 at 
 318; Union Bk. i-. Gray, 5 Pet. 99 at 114.] 
 
 6 [Mayhew v. Phoenix Ins. Co., 23 Mich. 105 at 108.] 
 
 7 [Willetts r. Sun Mut. Co., 45 N. Y. 45.] 
 
 8 [Fire & Mar. Ins. Co. v. Chesnut, 50 111. 111.] 
 
 1024
 
 CH. XXII.] OF THE LOSS AND ITS ADJUSTMENT. [§ 452 F 
 
 If the amount of liability is ascertained and not in dispute, 
 an agreement to take less will not be enforced, unless 
 additional security is given, or there is some new consider- 
 ation.i An adjustment in which the loss is ascertained and 
 stated, but there is no signature or promise of payment, will 
 not estop the company from showing that the promise imjylied 
 from such adjustment is without consideration. Such an ad- 
 justment is only prima facie evidence of the assured's right 
 to' recover the amount stated.^ An adjustment fraudulently 
 made may be set aside.^] 
 
 1 [Amer. Cent. Ins. Co. v. Sweetser, 116 Ind. 370; Douglass v. White, 3 Barb. 
 Ch. 621 at 624] 
 
 2 [Fame Ins. Co. v. Norris, 18 Brad. 570.] 
 
 3 [Matthews v. Gen. Mut. Ins. Co. of N. Y., 9 La. Ann. 590 at 591 (by the 
 company for fraud of the insured).] 
 
 1025
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII, 
 
 CHAPTER XXIII. 
 
 SUBROGATION. 
 
 Analysis. 
 
 Subrogation — 
 
 A. Of insurer to remedies of assured. 
 
 1. None at common law as against one whose negligence or 
 wrongful act caused the loss, especially in case of felony, 
 § 453 ; the doctrine of this section, and of the case cited 
 at length in the note, does not, however, commend it- 
 self as reasonable or just. If A. beats C, the latter 
 may sue him and recover, and the fund goes into his 
 estate, perhaps to his heirs and creditors. If A. beats C. a 
 little harder, so that he dies, no recovery can be had, says 
 the common law, therefore there is no right of action 
 for the insurer to be subrogated to; moreover, the injury 
 to the insurer depends on contract with C, and is too 
 remote a conse(|uence of A.'s action to make it proper 
 to hold him. The latter objection is easily reduced to 
 the absurd, for it applies equally to the mass of cases in 
 which subrogation is allowed by common consent to be 
 proper, and the doctrine that in case of a small injury 
 restitution or compensation must be made to the estate, 
 funds, and purposes of the injured person which have 
 suffered by the wrong, but in case of a great injury, no 
 such compensation is to be made by the wrongdoer car- 
 ries in its very statement its own refutation. 
 To hold that if A. knocks a dead prop of wood from under C. 
 so that he is injured, A. must make compensation, but 
 if he takes away the living prop of a father's life from C, 
 he owes him no compensation, is not justice. 
 the true doctrine is that a wTongdoer ought to make good the 
 direct loss caused by his act, great or small, and it 
 
 ' W'ould have been more sensible in the common law to 
 
 com|)el the murderer to make good to the estate of the 
 deceased the fair value of his life on the principles of in- 
 surance, or reimburse the. insurer, § 454. 
 the injured person may sue the wrongdoer first, and if he 
 recovers, the insurer is released ; or he may sue the 
 company first, and then the company may pursue 
 the wrongdoer, in the name of the assured or his 
 representatives. The guilty party must be made to bear 
 the loss, § 454. 
 
 1026
 
 CH. XXIII.] SUBROGATION. 
 
 equity will restrain the assured from releasiug the wrong- 
 doer, § 454. 
 the company is treated as a surety, § 454. 
 the right of subrogation exists, altliough the company was 
 
 not legally bound to pay the loss, § 454. 
 but does not arise until full payment has been made by the 
 company, except in case of abandonment or express 
 agreement to assign remedies to the insurer, § 454. 
 payment by a mere stranger, or volunteer, however, gives him 
 no right of subrogation, § 456. 
 nor does such a payment release the insurer, § 456. 
 liability of town for acts of mob, § 454. 
 
 or defect of highway, § 455. 
 railroad liable to company for loss by sparks, § 454. 
 carrier's negligence, § 454. 
 
 the party liable for the wrong cannot take advantage of the 
 payment of the loss by the company to reduce damages, 
 §455. 
 2. Creditor, § 456. 
 
 though company pays the creditor, he may still sue the 
 debtor for his debt ( ?) § 456. See, however, §§ 456 a, 449, 
 452 A. 
 Company may recover insurance from lessee if lessor repairs 
 under the lease, § 456 a. 
 so the insurer will be subrogated to the right of a 
 vendor against a vendee who has paid only part of 
 the price, §§ 456 a, 457; and may use any lien that 
 the insured possesses, to the extent of the insurance 
 paid by them, §§ 456 a, 457. If the sale is not 
 complete at the time of loss, so that the loss is 
 the vendor's, of course there is no room for subro- 
 gation, § 457. These doctrines carry out the prin- 
 ciple that insurance is an indemnity. The defendant 
 is no worse off than if there were no insurance, and 
 he is not entitled to be a gainer by it unless he had 
 forethought enough to have a part in securing it. 
 Still it may-be urged with some apparent force that 
 the company has received premiums to take the risk 
 of loss by fire, and it seems a little hard that an inno- 
 cent vendee should have to bear the loss instead of 
 the company that has been paid for that very purpose. 
 A moment's consideration, however, shows that the 
 vendee is not innocent in the very important respect 
 that he neglected to insure himself. 
 The company cannot recover if the assured cannot, § 457. 
 
 except in some cases of special agreement, see § 457 C. 
 nor can it recover more than it has paid, § 457. 
 and the suit must be in the name of the assured, 
 §§ 454, 457. 
 3. Carrier, §§ 457 A, 457 R. 
 
 insurer of goods lost by carrier is subrogated at common law 
 to insured's remedies against carrier, § 457 A. 
 
 1027
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 and may recover the full value of the goods and 6 per 
 cent interest, § 457 A. 
 
 although the insurer may have waived a valid defence against 
 the assured, § 457 A. 
 
 the insurer is not entitled to commissions on sales of aban- 
 doned goods, § 457 B. 
 
 where the policy says " This insurance shall not inure to the 
 benefit of the carrier," if the insured agrees with the 
 carrier to give him the benefit of the insurance, neither 
 of them can sue the insurer, § 457 A. 
 
 in the absence of fraud or of such a stipulation in the policy, 
 the assured may release the earner, or agree that he 
 shall have the benefit of the insurance, and this defeats 
 the subrogation of the insurer, § 457 B. 
 
 the carrier has no claim on the insurance except by express 
 agreement, § 457 B. 
 
 4. Mortgagor and Mortgagee, §§ 456, 457 C, 458. 
 
 insurer paying mortgagee is subrogated to his rights at com- 
 mon law, § 457 C. (X. Y. ). Contra, § 456, unless there 
 is an express agreement. The mortgagee may recover 
 from insurer and debtor both, § 456. 
 
 if the mortgagor procured the insurance, though making it 
 payable to the mortgagee, or if he ultimately pays 
 the premiums, the insurance is for his benefit and the 
 insurer cannot rely on the mortgage, §§ 457 C, 456. 
 
 there is often a "mortgagee clause," stipulating that acts of 
 the mortgagor shall not vitiate the policy, and that the 
 company may on payment of the loss require an assign- 
 ment of the mortgage to that extent, or entirely on pay- 
 ment of the mortgage debt, § 457 C. 
 
 the election in the latter case must be made within a reason- 
 able time, § 457 C. 
 B. Of one person to rights of another against the insurer, or the insur- 
 ance funds, see Carrier, above in this analysis, and 
 chap. xxii. analysis (5.) 
 
 ultimate title to proceeds, as between mortgagor and mort- 
 gagee, § 456. 
 
 vendor and vendee, § 456. 
 
 lessor and lessee, § 456. 
 
 debtor and creditor, § 456. 
 
 5. Proximate Cause. If a spark flying from a locomotive sets fire to 
 
 a shed, and this burning spieads the fire to other build- 
 ings, the spark is the proximate cause of the loss of the 
 latter buildings. The contrary has been held, but rea- 
 son is clearly with the rule just stated. The spark 
 is the proximate cause of the whole line of combustion 
 it sets up, as much as a wound is the cause of the pains 
 that follow from it in successive years, § 459. 
 
 car running over fire hose and severing it so that building 
 burns, railroad responsilde, § 459. 
 
 fire running from A.'s land to B.'s, § 459. 
 
 town tearing down building to stop fire, § 459. 
 
 1028
 
 CH. XXIII.] SUBROGATION. [§ 453 
 
 § 453. Insurers ; Subrogation ; Remedy over of Insurer. — 
 The insurer docs not, at common law, acquire by the j)ay- 
 jnent of a loss a right in his own name to recover damages 
 against the party by whose negligence and fraud the loss is 
 caused.^ One who wilfully sets fire to a building, or negli- 
 gently destroys a life, and thus gives rise to claims against the 
 insurers for losses which they have been obliged to pay, is not 
 liable over to the insurers for the loss thus occasioned, unless 
 there be in some way privity of contract between him and the 
 insurers, or there is due from him towards them some sj)ecial 
 duty. If no special right of theirs as against him and no 
 duty towards them is violated, they have no claim. The injury 
 is too remote and indirect to constitute an injury in a legal 
 sense. The man who kills another violates the rights of the 
 deceased and his general duty to society ; but his misconduct 
 affords to the creditor of the deceased no legal ground of 
 action.^ In the case just cited from Connecticut, where an 
 insurance company had paid a loss for a death caused by the 
 negligence of the railroad company, the court dismissed the 
 action on two grounds : first, on the ground that at common 
 law a party is not liable civiliter for the destruction of human 
 life;^ and, secondly, on the special ground that there is no 
 such relationship between the parties as to lay a foundation for 
 such an action.* (See analysis at the head of this chapter.) 
 
 1 London Ass. Co. y. Sainsbury, 3 Doug. 245. 
 
 2 Rockingham Mut. Fire Ins. Co. t-. Boslier, 39 Me. 253; Conn. Mut. Life 
 Ins. Co. V. New York & New Haven R. R. Co., 25 Conn. 265; Anthony v. Slaid, 
 11 Met. (Mass.) 290. 
 
 ' Mobile Ins. Co. v. Brame, 95 U. S. 754. See also a very able criticism upon 
 this rule by Dillon, J., in Sullivan v. Union Pacific Railroad Co., 3 Dill. C. Ct. 
 334. See also 2 Cen. L. J. pp. 47, 128. 
 
 * The whole opinion is very able and interesting, and well worthy of perusal. 
 So much of it as is devoted to the latter ground we give entire, in the words of 
 Storrs, J. 
 
 "The defendants, a railroad compan}', are charged with having negligently 
 occasioned the death of one Dr. Beach, by wliich event the plaintiffs, a life in- 
 surance company, have bean compelled to pay to his representatives the amount 
 of an insurance effected upon his life, of which amount a recovery is sought in 
 this action. A plea in bar sets forth a payment to the administratrix of the de- 
 ceased of the damages for which the defendant's negligence had rendered them 
 legally liable, and also a discharge by her. This plea and the demurrer thereto 
 
 1029
 
 § 454] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 § 454. Loss ; Right of Subrogation ; Wrong-doer. — But in 
 all those cases where the insured have a primary right against 
 
 require no examination, as they are immaterial in tlie view which we take of 
 the declaration. 
 
 " It is clear, from the declaration, that a pecuniary injury has been sustained 
 by the plaintiffs in consequence of the unlawful conduct of the defendants. If 
 the injury thus set forth be actionable, or an injury in a legal sense, there must 
 be a recovery. But we are of the opinion that tlie wrong complained of is not 
 tlie proper subject of a suit at law, both for reasons appertaining to the pecu- 
 liar nature of the injury and to the manner in wiiich its consequences are 
 brought home to the party claiming redress. 
 
 " Tiie other branch of our inquiry, relating to the manner in which tlie in- 
 jury complained of was brought home to the party claiming to liave suffered 
 by it, concerns principles of great practical interest, and novel in their present 
 application. The plaintiflfs sustain no relation to the authors of the wrong 
 other than that of mere contractors witii the party injured, and their contract lia- 
 bility is the medium through which tiie injurj' is brouglit home to them. They 
 justly say that their loss is in fact distinctly traceable and solely due to ihe mis- 
 conduct of tiie defendants; that the deatii of Dr. Beach, caused by tlie defend- 
 ants, in a legal sense determined the only contingency out of which their 
 liability grew, and brought upon them the consequences of that liability which, 
 through the defendants' unlawful acts, had now become fixed. Still the ques- 
 tion remains, notwithstanding this precise exiiibition of cause and effect, whe- 
 ther these consequences, of which the deceased was primarily the subject, and 
 which affected the plaintiffs only because they had put themselves into the po- 
 sition of contractors with him, were in a legal view brought home to the plain- 
 tiffs, directly or indirectly. The completeness of the proof of connection be- 
 tween the acts of the defendants and the loss of the plaintiffs does not vary, 
 although it may tend to confuse the aspects of the case. The single question 
 is whether a plaintiff can successfully claim a legal injury to himself from 
 another, because the latter has injured a third person in such a manner that 
 the plaintiffs' contract liabilities are thereby affected. An individual slan- 
 ders a merchant and ruins his business ; is tiie wrong-doer liable to all the per- 
 sons who, in consequence of their relations by contract to the bankrupt, can be 
 dearly shown to have been damnified by the bankruptcy ? Can a fire insurance 
 companj', who have been subjected to loss by the burning of a building, resort 
 to the responsible author of the injury, who had no design of affecting their 
 interest, in their own name and right? Such are the complications of human 
 affairs, so endless and far-reaching the mutual promises of man to man, in busi- 
 ness and in matters of money and property, that rarely is a death produced 
 by human agency which does not affect the pecuniary interest of those to whom 
 the deceased was bound by contract. To open the door of legal redress to 
 wrongs received through the mere voluntary and factitious relation of a con- 
 tractor with the immediate subject of the injury, would be to encourage collu- 
 sion and extravagant contracts between men, by which the deatii of either, 
 through the involuntary default of others, might be made a source of splendid 
 profits to the other, and would also invite a system of litigation more portentous 
 than our jurisprudence has yet known. So self evident Is the principle that an 
 
 1030
 
 CH. XXIII.] SUBROGATION. [§ 454 
 
 third parties, who have been the authors of the injury either 
 through negligence or culpable misconduct not amounting to 
 
 injury tlius suffered is indirectly brought liome to the party seeking couipensa- 
 tion for it, tliat courts liave rarely been called upon to promulgate such a doc- 
 trine. The case, however, of Anthony v. Slaid, 11 Met. 290, referred to at the 
 bar, is in point. A contractor for the support of paupers had been subjected to 
 extra expense, by means of a beating which one of those paupers had received, 
 and he sought from the assailant a recovery of the expenditure. But the court 
 held that the damage was remote and indirect, having been sustained not by 
 means of any natural or legal relation between the plaintiff and the party in- 
 jured, but by means of the special contract by which he had undertaken to 
 support the town paupers. 
 
 " The case, however, would present a different aspect, if by virtue of the 
 contract between the railroad company and the deceased, a direct relation was 
 established between the former and the insurers. If the contract for the trans- 
 portation of Dr. Beach safely, either in Us terms or through its necessary legal 
 incidents, or by fair inference as to the intent of the parties, devolved upon the 
 railroad company a duty towards the present plaintiffs, the latter might sue for 
 a violation of that duty. An obligation thus imposed will not always require a 
 suit for its breach to be brought by a party to the contract; an independent 
 right of action resides in the party to whom the duty was to be performed. In 
 this respect there is no difference between an obligation imposed bj' law and by 
 contract. Where the duty of keeping a highway is lodged in a certain quarter 
 by statute, the way is to be kept in repair for the public, for everybody ; and 
 when any person is injured by its defects, the breach of duty is to him, and he 
 has an action for the violation of his right. If a stage-coach proprietor agrees 
 with a master to carry his servant, and injures the latter on the road, he is lia- 
 ble directly to the servant; for although undertaken at tlie request of and by 
 agreement with another, the duty was directly to the party injured. Longmeid 
 et ux. V. Holliday, G Eng. L. & Eq. 562. But it is evident that the present case 
 cannot be brought within the principle of such decisions. It would be unfair 
 to argue that when two parties make a contract, they design to provide for an 
 obligation to any other persons than themselves and those named expressly 
 therein, or to such as are naturally within the direct scope of the duties and 
 obligations prescribed by the agreement. On this point it is enough to sa}' that 
 when an agreement is entered into, neither party contemplates the requirement 
 from the other of a duty towards all the persons to whom he may have a rela- 
 tion by numberless private contracts, and who may therefore be affected by the 
 breach of the other's undertakings. We cannot find that any public law charged 
 the present defendants with any duty to the plaintiffs, regarding Dr. Beach's 
 life, nor can we see that Dr. Beach exacted, either expressly or by reasonable 
 intendment, any obligation from the defendants towards the insurers of his life, 
 when he contracted for his transportation to New York. Had the life of Dr. 
 Beach been taken with intent to injure the plaintiffs, through their contract lia- 
 bility, a different question would arise, inasmuch as every man owes a duty to 
 every other not intentionally to injure him. 
 
 " We decide that in the absence of any privity of contract between the plain- 
 tiff and defendants, and of any direct obligation of the latter to the former 
 
 1031
 
 § 454] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 felony, the insurers on making good the loss are entitled to 
 enforce the remedy of the assured, and in their name to re- 
 coup themselves for their expenditure. This right is recog- 
 nized by the courts as the right of subrogation. The contract 
 of insurance is treated as an indemnity, and the insurer as a 
 
 growing out of the contract or relation between the insured and the defendants, 
 the loss of the plaintiffs, altliough due to the acts of the railroad company, being 
 brought home to tlie insurers only through their artificial relation of contractors 
 witli the party who was the immediate subject of tlie wrong done by the rail- 
 road company, was a remote and indirect consequence of the misconduct of tlie 
 defendants, and not actionable. 
 
 " Since tlie determination of this case, we have observed a decision, recently 
 made in Maine, Rockingham Mut. Fire Ins. Co. i-. Bosher, 39 Me. 253, fully con- 
 firming the legal theory which we have advanced. The suit was broiiglit 
 against a party who iiad wilfully fired a store, by tlie insurance company, who 
 had paid the consequent loss, and in their own name. The court dismissed the 
 action on demurrer, taking the same view of the common-law doctrine whicii we 
 have expressed relative to the indirect and remote manner in whicli the inter- 
 ests of the insurer were prejudiced by the misconduct of the wrong-doer. Tiie 
 cases in which insurers have been permitted to recover against the authors of 
 those losses are not in contravention of these principles. They have recovered 
 not by color of their own legal right, but under a general doctrine of equity jur- 
 isprudence, commonly known as the doctrine of subrogation, applicable to all 
 cases wherein a party who has indemnified another in pursuance of his obliga- 
 tion so to do, succeeds to and is entitled to a cession of all the means of redress 
 held by the party indemnified against the party who has occasioned the loss. In 
 some instances the doctrine has been carried so far that an insurer has been per- 
 mitted to recover from the insured such compensation as the latter has subse- 
 quently obtained from the wrong-doer, as if the money paid by the tortfeasor 
 under such circumstances was really paid for the use of the insurer By virtue 
 of this doctrine there is no doubt of the right of an insurer, who has paid a loss, 
 to use the name of the insured in order to obtain redress from the author of the 
 wrong, — a right to be exercised for the benefit of the party equitably entitled 
 to its benefits, not to be enforced by its possessor in his own name, but by liim 
 as the successor to the remedies of the person whom he has indemnified. Hav- 
 ing no independent claim on the wrong-doer, he might be successfully met by 
 the superior equities of the wrong-doer, such, for instance, as a payment to tlie 
 party directly injured, without notice of the insurer's claim to be subrogated. 
 Nothing can be plainer than that an indirect liability of this kind is an argument 
 rather against the claim of a direct responsibility of the wrong-doer than a sug- 
 gestion in its favor. The views taken by courts in recognizing the insurer's 
 right of subrogation tend to sustain the principle which we now maintain" See 
 also Propeller Monticello, 17 How 152,154; Mason v Sainsbury, 26 E. C. L. 
 36 ; 3 Doug. 61 ; Yates v. Whyte, 4 Bing New Cas. 272 ; Quebec Fire Ins. Co. 
 V. St. Louis, 22 Eng. L. & Eq. 73 ; Quebec Fire Ins. Co. ?' Molson ef al, 1 L. C. 
 Rep 222; Hart v. W. R. Co., 13 Met. 99 , Bean v At. & St. Law. R. R Co., 58 
 Me. 82. 
 
 1032
 
 CH. XXIII.] SUBROGATION. [§ 454 
 
 surety who is entitled to all the remedies and securities of the 
 assured, and to stand in his place. If the insurers were first 
 liable, payment by them would be a satisfaction and relieve 
 the wrong-doer ; but this is not so, for the latter is first liable. 
 The assured have, indeed, a double remedy ; ^ if they pursue 
 that against the wrong-doer and recover compensation, the 
 insurers escape, but if they choose to enforce the claim against 
 the insurers in the first instance, the latter are entitled to use 
 the name of the assured in an action to recover the money 
 which they have paid.^ And the right is based upon the 
 equitable doctrine that where one has been obliged to pay 
 money to another by the non-feasance or misfeasance of a 
 third, who, being at fault, ought to bear the loss, the party so 
 paying, as by his direct obligation towards the party suffering 
 the loss he may be compelled to do, shall be allowed, indi- 
 rectly and through the riglit which the injured party had, to 
 compel the wrong-doer to bear the burden which was imposed 
 by his fault ; although between him and the wrong-doer there 
 is no direct relation upon which to found a cause of action- 
 In other words, the party injured being so situated that he 
 may call, by his right at law, upon the party who is responsi- 
 ble for the injury, or, by his contract, upon one who is not at 
 fault, for his indemnity ; if he elect the latter, then the latter 
 shall be allowed to do, in his name, what in the first instance 
 the injured party might have done, and justice, as between all 
 the parties, decrees ought to be done. And this result is 
 accomplished by the courts when suit is brought by the insur- 
 ers in the name of the insured, by holding that the payment 
 of the money to the latter is no satisfaction of the latter's 
 claim against the wrong-doer. The liability of the wrong- 
 doer is in legal effect first and principal, and that of the 
 insurer secondary, not in order of time, but in order of ulti- 
 mate liability. And where the insured insists upon his rem- 
 edy against the party secondarily liable, he is conscientiously 
 bound to make an assignment, in equity, to the person enti- 
 tled to the benefit, and the acceptance of the indemnity from 
 
 1 Burrows v. March Ins. Co., L. R. 5 Exch. Cas. 68, 7 Exch. 96. 
 
 2 Bunyon Fire Ins. 165. 
 
 1033
 
 § 454] INSURANCE : FIRE, LIFE, ACCIDENT, ETC [CH. XXIII. 
 
 the insurers is in the nature of an equitable assignment, which 
 authorizes the assignor to sue, in the name of the assignee, 
 for his own benefit. And this is a right which a court of 
 equity will support, by restraining and prohibiting the assignee 
 from defeating it by a release. Thus where a house was de- 
 stroyed by a mob, and the insurers paid the loss, a suit against 
 the hundred wliicli were primarily responsible was maintained 
 in the name of the insured, but for the benefit of the insur- 
 ers.^ So where the underwriters have paid a loss occasioned 
 by sparks from a locomotive, they may recover from the rail- 
 road company the amount thus paid, in a suit in the name of 
 the owner of the property destroyed, which action the owner 
 cannot control.^ [Or if the insured has recovered from 
 the railroad company as well as from the insurer, the latter 
 may claim the excess above indemnity to the assured.^] So 
 where the loss is entailed by the negligence * of a common 
 carrier, whereby the goods intrusted to his care are destroyed 
 by fire. As between a common carrier of goods and the 
 insurer the liability for their loss is primarily upon the 
 carrier, while the liability of the insurer is only secondary. 
 In respect to the ownership of the goods and the risk inci- 
 dent thereto, the owner and the insurer are considered but 
 one person, having together tlie beneficial right to the in- 
 demnity due from the carrier for a breach of his contract, 
 or for a non-performance of his legal duty. The insurer 
 stands practically in the position of a surety, and whenever he 
 has indemnified the owner for the loss, he is entitled to all the 
 
 1 Mason v. Sainsbury, 3 Doug. 61 ; Conn. Mut. Life Ins. Co. v. R. R. Co., 
 supra, § 453. As to tlie liability for negligence at common law, see also Yates v. 
 Whyte, 4 Bing. N. C. 272 ; Quebec Fire Ins. Co. v. St. Louis, 22 Eng. L. & Eq. 73 ; 
 Clark V. Inhabitants of Bly thing, 2 B. & C. 254 ; Ryan v. N. Y. Central R. R. Co., 
 352 ; Webb v. Rome, &c. R. R. Co., 49 N. Y. 421. As to when notice before suit 
 is necessary, see Hough v. ^tna Life Ins. Co., 52 111. 318. 
 
 2 Hart V. Western R. R. Co., 13 Met. (Mass.) 99; Monmouth Insurance 
 Co. V. Hutchinson, 21 N. J. Eq. 107 ; Conn. Fire Insurance Co. v. Railway Co., 
 73 N. Y. 399. 
 
 3 [Hartford Ins. Co. v. Pennell, 2 111. Ap. 609 at 614.] 
 
 * [A company paying the loss caused by the negligence of a railroad, is sub- 
 rogated to the rights of the owner against the road. Holcombe v. Richmond, 
 &c. R. Co., 78 Ga. 776.] 
 
 1034
 
 CH. XXIII.] SUBROGATION. [§ 454 
 
 means of indemnity which the satisfied owner held against 
 the carrier. This right depends not upon privity of contract, 
 but is worked out through the right of the creditor or owner, 
 and in his name ; ^ and exists although the insurer was not 
 legally bound to indemnify the insured for the loss he sus- 
 tained.2 So, where a house is wilfully burned by a third 
 person, or a life is lost by the negligence of a steamboat or 
 railroad company. But in all such cases the action must be 
 brought in the name of the party directly injured, or his legal 
 representatives, and an action in the name of the third party 
 will not be sustained.^ And several parties injured may join 
 in the same action.* This right of subrogation does not, 
 however, accrue until full payment of the liability which gives 
 rise to such right on the part of the insurance company claim- 
 ing to be subrogated.^ [It is true that in marine insurance 
 an abandonment passes to the insurers all claims and rights 
 of the insured, and they can sue the person whose negligence 
 
 1 Hall V. Nash. & Chat. R. R. Co., 13 Wall. (U. S.) 367; Gales v. Hailman. 
 11 Pa. St. 515; Georgia Ins. Co. v. Dawson, 2 Gill (Md.), 365. 
 
 2 Insurance Co, v. The " C. D., Jr.," 1 Wood (U. S. C. Ct.), 72: Monticello v. 
 Mollison, 17 How. (U. S.) 152. 
 
 3 Rockingliam Miit. Fire Ins. Co. v. Bosher, 39 Me. 253 ; Peoria Mar. & Fire 
 Ins. Co. V. Frost, 87 III. 333 ; Conn. Mut. Life Ins. Co. v. N. Y. & N. H. R. R. Co.. 
 25 Conn. 265; ^tna Ins. Co. v. Han. & St. Joseph R. R., 3 Dill. C. Ct. I. In 
 Lower Canada, Iiowever, where a churcli was set on fire and burned by the 
 sparks from a passing steamboat, which had no grille on its chimney, the insur- 
 ance company were allowed, after liaving paid the loss, after a transfer of the 
 claim against the company, but without any legal assignment thereof by the 
 church proprietors, to maintain in their own name an action against the steam- 
 boat company to recover the amount they had been compelled to pay under the 
 policy. Quebec Fire Ass. Co. v. St. Louis, 1 L. C. 222. This case turned upon 
 the peculiarities of the French law, and was affirmed in the Privy Council, 22 
 Eng. L. & Eq. 73. So in admiralty, Amazon Ins. Co. v. Steamboat, 6 Ins. L.J. 
 155. See also Kentucky Ins. Co. v. Railway Co. (Tenn.), 6 Ins. L. J.328; Mon- 
 ticello V. Mollison, 17 How. (U. S.) 152; St. Paul's Ins. Co. v. Steamboat, U. S. 
 Dist. Ct. (Mich.), 5 Ins. L. J. 73. 
 
 * Swarthout et ol. v. Chicago R, R. Co., 49 Wis. 629. 
 
 ^ People's Ins. Co. v. Straehle, 2 Cincinnati Sup. Ct. Reporter, 186 ; Neptune 
 Ins. Co. f. Dorsey, 3 Md. Ch. 334, 338; Kyner v. Kyner, 6 Watts (Pa.), 221. 
 It has been held, however, that after an abandonment in marine insurance the 
 insurer supervenes to all the rights of the insured, and may maintain a libel, 
 although he has not, before bringing it, paid the loss. Traders' Ins. Co. v. Pro- 
 peller Manistee, 5 Biss. C. Ct. 381. 
 
 1035
 
 § 454] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 caused the loss, before they have paid the policy ; ^ and that 
 in fire insurance a special agreeing to assign to the insurer 
 an interest in the mortgage or deed of trust, equal to the loss 
 paid, is a condition precedent to recovery by the insured.*^ 
 When the insured covenants that on receiving payment he 
 will assign to the company any claims he may have against 
 any one whose negligence or fault may have caused the loss, 
 refusal of the insured to make the assignment before or con- 
 current with the payment is a good defence to a suit.^ But 
 where there is no express covenant, no subrogation can be de- 
 manded until the company has paid the loss, and the insured 
 may settle with and release the negligent party as to damage 
 other than that insured without affecting his remedy against 
 the insurer. If, however, the insured recovers from the negli- 
 gent person for the whole loss, he cannot afterward sue the 
 insurer.*] This liability for negligence existed at common 
 law ; ^ and in some of the States is imposed by statute, with- 
 out regard to the question of negligence. [A town insurance 
 company, paying a loss arising from the negligence of a rail- 
 road, may take an assignment of the claim for damages against 
 the railway and recover from it in full.^ Freight to be earned 
 is no incident to the ownership of the vessel, and the company 
 is not entitled to the benefit of any damages recovered from 
 the owners of the wrong-doing ship on account of loss of 
 freight. 7 An insurer paying the loss by collision may sue the 
 colliding vessel for damages.^ When both the master and the 
 insurers are liable to the assured, and there is an abandon- 
 ment for a total loss and the insurers pay, they may be subro- 
 gated to the rights of the assured against the master.^ The 
 
 1 [Tlie Manistee, 5 Biss. 381 at 384.] 
 
 2 [Dick V. Franklin Fire Ins. Co., 81 Mo. 103.] 
 
 3 [Niagara Fire Ins. Co. v. Fidelity, &c. Co., 123 Pa. St. 516.] 
 * [Insurance Co. i\ Fidelity, &c. Co., id. 523 ] 
 
 6 Canterbury v. Attorney-General, 1 Phil. 30G ; Pigot v. Eastern Counties 
 Railway Co., 3 C. B. 229 ; Aldridge v. Great West. Railway Co., 3 M. & G. 515; 
 Longman v. Grand Junction Canal Co., 3 F. & F. 7.36, 738. 
 
 6 [Hustisford F. M. Ins. Co. v. C. M. & St. P. R. Co., 66 Wis. 58.] 
 
 •? [Sea Ins. Co. v. Hadden, 13 Q. B. D. 706.] 
 
 8 [Tlie Frank G. Fowler, 8 Fed. Rep. 360, S. Dist. of N. Y. 1881.] 
 
 9 [Atlantic Ins. Co. v. Storrow, 5 Paige, 285 at 294.] 
 
 1036
 
 CII. XXIII.] SUBROGATION. [§ 455 
 
 company is entitled to have the amount recovered by the 
 insured from the wrong-doer brought into account witli 
 the insurance, and if the two more than cover the loss and 
 all expenses of the insured in the matter, so that he is 
 better off than if no accident had happened, the company 
 is entitled to the benefit of the excess, to the extent of their 
 liability.i] 
 
 § 455. Loss ; Subrogation ; Wrong-doer can have no benefit 
 from Payment by the Insurer. — The principles stated in the 
 last section were further illustrated in a recent case in Ver- 
 mont,2 where a town which was sued for injuries resulting 
 from a defect in a highway undertook to claim in its behalf, 
 by way of reduction of damages, the amount which had been 
 paid the plaintiff by an insurance company. But the court 
 said there was no technical ground which necessarily leads to 
 the conclusion that the money received by the plaintiff of the 
 accident insurance company should operate as a defence pro 
 tanto, or inure to the benefit of the town. The insurer and 
 the defendant are not joint tortfeasors or joint debtors, so as 
 to make a payment or satisfaction by the former operate to 
 the benefit of the latter. Nor is there any legal privity be- 
 tween the defendant and the insurer, so as to give the former 
 a right to avail itself of a payment by the latter. The policy 
 of insurance is collateral to the remedy against the defendant, 
 and was procured solely by the plaintiff and at his expense, 
 and to the procurement of which the defendant was in no 
 way contributory, and there is no legal principle which seems 
 to require that he should have any benefit therefrom. To 
 the suggestion that the plaintiff was entitled to but one satis- 
 faction for the injury, the reply was, that if this was to be 
 regarded as a correct proposition, the question would arise 
 whether the defendant stands in a position which entitles 
 him to make the objection. And this depends upon another 
 question. Who, as between the insurer and the defendant, 
 ought to pay the damage ? which of the two ought neces- 
 sarily to make compensation to the plaintiff, and ultimately 
 
 1 [National Fire Ins. Co. v. McLaren, 12 Ont. R. 682] 
 
 2 Harding v. Townshend, 43 Vt. 536. 
 
 1037
 
 § 45G] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 to bear the loss ? If the insurer ought ultimately to bear the 
 loss, the defendant is entitled in this action to have the bene- 
 fit of that payment ; but if the defendant ought ultimately to 
 bear the loss, then the payment by the insurer, and the col- 
 lection of the entire damage of the defendant, only creates an 
 equity between the plaintiff and the insurer, to be ultimately 
 adjusted between them, in which the defendant has no in- 
 terest, and with which he has no concern.^ [When a sheriff 
 wrongfully took goods of A. which were insured, and A. 
 recovered on the policy (the goods being destroyed while in 
 the sheriff's possession), it was held that he could recover 
 also in trespass for the full value of the goods, the wrong-doer 
 having nothing to do with the other payment.^ The insur- 
 ance ou the property and transactions between the insurer and 
 assured as to payment of loss have nothing to do with the 
 extent of the liability of one who has maliciously burned 
 insured's property.^ Nor can they be given in evidence in 
 mitigation of damages when the negligence of the third party 
 is in question.*] 
 
 § 456. Loss ; Subrogation ; Intervention of Strangers to the 
 Contract ; Debtor and Creditor ; Mortgagor and Mortgagee : Ven- 
 dor and Vendee ; Lessor and Lessee. — But this right of sub- 
 rogation is based upon the fact that the person who pays the 
 debt stands in the position of a surety, or is compelled to pay 
 to protect his own interest, as where one is surety for another 
 that he will account for moneys. A mere stranger or volun- 
 teer having no interested relationship to the parties, who pays 
 the debt of another, cannot be subrogated to the creditor's 
 
 1 See also Mason v. Sainsbury, 3 Doug. 61 ; Clark v. Inhabitants of Bly- 
 thing, 2 B & C. 254; Yates v. White et al , i Bing. N. C. 272 ; Monticello v. 
 MoUison, 17 How. (U. S.) 152, which were cited by tlie court as authorities up- 
 on the first point ; Anonymous, 4 Ins. L J. 158 ; Merrick v. Brainard, 34 N. Y. 
 208 ; Weber v. Morris & Essex R. R, 35 N. J. 409. The case of Pym v. Great 
 Northern Railway Co., 4 B. & S. 396, if not distinguishable, is opposed by Al- 
 thorf V. Wolf, 22 N. Y. 355. And the same may be said of Hicks v. Newport 
 Railway Co., an unreported case at Nisi Prius, referred to in a note to Aithorf 
 V. Wolf, decided under Lord Campbell's Act, 4 Ins. L. J. 158. 
 
 2 [Perrott v. Shearer, 17 Mich. 48 at 56.] 
 
 3 [Hayward v. Cain, 105 Mass 213 at 214] 
 
 4 [Collins V. N, Y. Central, &c. R. R., 5 Hun, 503 at 506.] 
 
 1038
 
 CH. XXIII.] SUBROGATION. [§ 456 
 
 rights.^ On the other hand, if a stranger to the contract sees 
 fit to donate to the insured the amount of any loss he may 
 have suffered, this will not relieve the insurers from their 
 obligation to perform their contract.^ Not even the insurers 
 can intervene and intercept, or lay successful claim to a debt 
 or its securities, when they are neither directly nor indirectly 
 affected by the conduct of the creditor, or authorized by his 
 consent. The insurers of the prompt payment of a note are 
 not entitled to the note itself on payment, unless by special 
 agreement. The note is still the property of the insured 
 valeat quantum.^ Nor can they require the insured to enforce 
 a prior claim, — the mechanic his lien, for instance, — before 
 calling on them for indemnity.* A creditor to whom a policy 
 is made payable, and who has promised the insured, his debt- 
 or, to pay off certain other debts of the insured, may recover 
 and hold the proceeds of the insurance in trust for his debtor 
 against any claims of the insurer to subrogation against the 
 insured, notwithstanding the creditor may have been fully 
 paid.^ A mortgagee who insures generally, and at the time 
 declares his purpose, but not otherwise, to cover the mortga- 
 gor's interest, may recover the full amount of the loss.^ So 
 the assignee of a mortgage for a consideration, only part of 
 which he has paid, may recover the whole amount of the sum 
 agreed to be paid, though the mortgaged property was sold 
 for more than he had actually paid ; nor can he be first 
 required by the insurers to exhaust his remedy on the mort- 
 gage before he can call upon the insurers." The facts that the 
 
 J Hough V. iEtna Life Ins. Co., 57 111. 318. 
 
 2 People's Ins. Co. v. Straehle, 2 Cincinnati Sup. Ct. Reporter, 186 ; ante, 
 §116. 
 
 3 Mayer v. Legrand, Dalloz, Jur. Gen., 1870, 218. 
 
 * Royal Ins. Co. v. Stinson, Sup. Ct. U. S., 11 Reptr. 689. 
 
 6 Cone V. Niagara Fire Ins. Co., 60 N. Y. 619. 
 
 6 Richardson r. Home Ins. Co., 21 U. C. (C. P.) 291 ; Hazard v. Canada Agr. 
 Ins. Co., 39U. C. (Q. B.) 419. 
 
 ' Excelsior Fire Ins. Co. v. Royal Ins. Co., 55 N. Y. 343,359. In this case the 
 ground is taken that the insurance of a mortgagee's interest is an insurance of 
 the property and not of the debt, controverting the dicta in ^tna Ins. Co. i'. 
 Tyler, 16 Wend. 38-5. Carpenter r. Prov. Ins. Co., 16 Pet. (U. S ) 495 ; Smith 
 V. Columbian Ins. Co., 17 Pa. St. 283, and Kernochan v. Barry Ins. Co., 17 N. Y. 
 428, apparently to the contrary. 
 
 VOL. II. — 22 1039
 
 § 456] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 property after the fire is sufficient security for the debt, and 
 that it has been restored by the mortgagor, constitute no 
 defence in behalf of the insurers, nor are they entitled to be 
 subrogated to the mortgagor's rights.^ Indeed it may be 
 stated, as a general rule, that no one, except the nominal 
 assured, or his assignee after loss, can claim either from the 
 insurers, or from the party to whom the loss has been paid, 
 any part of the proceeds of a policy, unless by express agree- 
 ment, or unless the policy covered property in which the 
 claimant had an interest, and was intended and was effected 
 in part or in whole for his benefit and at his expense.^ Thus 
 a mortgagor cannot recover from a mortgagee except under 
 such circumstances ; ^ nor a mortgagee from a mortgagor ; * 
 nor a consignor from a consignee ; ^ nor a vendee from a ven- 
 dor, who, not having assigned the policy, had, after loss of the 
 property sold, collected the insurance ; ^ nor a vendor from 
 a vendee ; '' nor a lessor from a lessee ; ^ nor a lessee from a 
 lessor ; ^ nor a debtor from a creditor.!*^ In order to give the 
 right to intervene between the insurer and the insured, the 
 party intervening must have some relation to, or concern 
 
 1 ^tna Ins. Co. v. Baker (111.), 10 Ins. L. J. 275 ; a7Ue, § 424. 
 
 2 Steele v. Franklin Fire Ins. Co., 17 Pa. St. 290; Turner v. Stetts, 28 Ala. 
 420. And see ante, § 424. [The text was quoted and approved in Galyon & 
 Co. for use, &c. v. Ketehen, 85 Tenn. 55, 59, where it was decided tliat the holder 
 of a mechanics' lien has no claim on insurance effected by the owner and assigned 
 to a mortgagee of the property after loss, but before the lienor's bill was filed.] 
 
 3 White V. Brown, 2 Cush. (Mass.) 412; Cushing v. Thompson, 34 Me. 496; 
 Concord Mut. Fire Ins. Co. v. Woodbury, 45 id. 447 ; McPherson v. Proudfoot, 
 2 U. C. (C. P.) 57 ; Bunyon Fire Ins., 150, b, c, and d. [Where a mortgagee ob- 
 tains a policy on his own account, and the premiums are not paid by or charged 
 to the mortgagor, the latter cannot claim the benefit of it. Pendleton v. Elliott, 
 67 Mich. 496, citing Stinchfield v. Milliken, 71 Me. 567; Insurance Co. f . Wood- 
 bury, 45 Me. 447 ; White v. Brown, 2 Cush. 412.] 
 
 * Kansas Ins. Co. v. Berry, 8 Kans. 159. 
 
 5 Stillwell V. Staples, 19 N. Y. 401, reversing same case in 6 Duer (N. Y.), 63, 
 
 6 King ?'. Preston, 11 La. Ann. 95 ; Rayner v. Preston, 28 W. R. 808 ; s. c. 10 
 Ins. L. J. 556; Poole v. Adams, 12 W. R. 683. 
 
 " Hammer v. Johnson, 44 111. 192 ; Wood v. Northwestern Ins. Co., 46 N. Y. 
 421. 
 
 8 Merchants' Ins. Co. v. Mazange, 22 Ala. 168 ; Ely v. Ely, 80 111. 532. 
 
 9 Miltenberger v- Beacora, 9 Pa. St. 198; Tongue v. Nutwell, 31 Md 302. 
 
 1'^ Bruce v. Garden, 22 L. T n. s 595; Henson v Blackwell, 4 Hare, Ch. 434. 
 1040
 
 CH. XXIII.] SUBROGATION. [§ 456 
 
 with, the contract of insurance, as where the mortgagee in- 
 sures in his own name, but at the request and at the expense 
 of the mortgagor. In such case, u])on payment of the debt 
 the mortgagor may recover the insui-ance in the name of the 
 mortgagee.^ [If a mortgagor covenants to insure for the 
 benefit of the mortgagee, the latter may equitably claim the 
 proceeds of a prior policy taken out by the mortgagor.^ 
 Where parties having a demand against the owner of a vessel 
 for money disbursed on it, take out a policy to cover the sum, 
 loss payable to them or whom it may concern, and the follow- 
 ing day receive a letter from the owner requesting them to 
 have their advances insured so as not to call on the owner in 
 case of loss, and they replied that they had covcx'ed the 
 amount, the letters amount to a declaration of trust, or an 
 agreement that the insurance should be for the benefit of the 
 owner.^] Where the vendee, before title obtained, insures, 
 and suffers loss, whereby the contract is rescinded, he holds 
 the insurance money, without obligation to account to the 
 vendor.* A creditor who acquires title to an estate under a 
 levy of execution, the time for redemption having expired, 
 has no relation to, or concern with, a contract of insurance 
 between the former owner of the estate and the insurers, upon 
 which to found a claim upon the latter for the amount of the 
 loss, or any part of it.'^ But a purchaser under a decree of 
 sale will be entitled to the proceeds of the policy, if the loss 
 happen after the sale, but before its confirmation.^ Payment 
 to a creditor by an insurance company of the amount of a 
 policy taken out and paid for by him on the life of the debtor, 
 is not pro tanto a satisfaction of the debt, but tlie debt still 
 remains a valid security for its full amount against the 
 debtor." [An insurance by a mortgagee is probably not an 
 insurance of the debt in any such sense that payment of 
 
 1 Norwich Fire Ins. Co. v. Boomer, 52 III. 442; ante, § 450. 
 
 2 [Ames V. Richardson, *29 Minn. ooO.] 
 
 3 [Phenix Ins. Co. v. Parsons, 56 N. Y. Super. 423.] 
 * Bartlett v. Looney, 3 Vict. Law Rep. E. 15. 
 
 5 Plimpton 0. Farmers' Mut. Fire Ins. Co., 43 Vt. 497. 
 
 6 Gates V. Smith, 4 Ed. (N. Y.) Ch. 702; Ex parte Minor, 11 Ves. 559. 
 '' Humphrey v. Arabin, Lloyd & Goold, Ch. 318. 
 
 1041
 
 § 456 a] INSURANCE : fire, life, accident, etc. [CH. XXIII. 
 
 the policy would satisfy the mortgage.^] And the mortgagee 
 may recover, notwithstanding, since the loss he has foreclosed 
 under the mortgage.^ Nor can a mortgagee under such cir- 
 cumstances, paid by the insurers, be compelled to assign his 
 mortgage debt to the insurers.^ [An insurer cannot claim to 
 be subrogated to a mortgage on paying a loss less than the 
 whole mortgage debt.*] But it has been held in New York ^ 
 that where the mortgagor insures, and with assent of the com- 
 pany assigns to the mortgagee, the latter could only recover 
 for a loss on condition of assigning to the insurers an interest 
 in the mortgage equal to the amount paid by them.*^ 
 
 § 456 a. Insurer ; Insured ; Lessee. — In a very recent case 
 in England, by a strict, not to say new, application of the 
 principle that a contract of fire insurance is a contract of in- 
 demnity, the insured, who had obtained his indemnity, and 
 afterwards had the damaged property restored, was obliged 
 to surrender the indemnity. The facts were that one P. 
 leased his house to B., under a lease which bound B. to re- 
 pair, F. insured the house, which was destroyed by an ex- 
 plosion insured against, and obtained his indemnity from the 
 insurers. B. afterwards repaired, as he was bound to do by 
 his lease, with money he obtained from the town for injury 
 to his leasehold estate ; whereupon the insurers brought suit 
 against the assignee of the insured, to whom the indemnity 
 had been paid, and were held entitled to recover, upon the 
 general principle that a policy of fire insurance is a contract 
 of indemnity, and that upon payment of the amount of loss 
 the insurer is entitled to be put into the place of the insured ; 
 and if at a subsequent time the insured receives compensa- 
 tion from other sources for the loss sustained by him, the in- 
 surer is entitled to recover from the insured any sum wliich 
 
 1 [Louden r. Waddle, 08 Pa. St. 242.] 
 
 2 Hadley v. New Ilanipsliire Ins. Co., 55 N. H. 110. 
 
 3 King V. State Mut. Fire Ins. Co., 7 Cusli. (Mass.) 1 ; Suffolk Fire Ins. Co. 
 V. Boyden, 9 Allen (Mass.), 12:]. Contra, Honore v. Lamar Ins. Co., 51 111. 409. 
 
 * [Phenix Ins. Co. v. First Nat. Bank, 18 Ins. L. J. 302 (Va.) Feb. 1889. J 
 5 Kip i: Mat. Fire Ins. Co., 4 Edw. Cli. (N. Y.) 86. 
 
 ^ See also ante, § .379. In Canada the law upon this point is unsettled. Black 
 V. National Ins. Co., (Q. B., Montreal), 3 Legal News, 29. 
 
 1042
 
 CH. XXIII.] SUBROGATION. [§ 456 a 
 
 he may have received from the former in excess of the loss 
 actually sustained.^ [In a later English case the doctrine was 
 very clearly stated. Where the owner has made a contract 
 for sale of the property and it is damaged by fire, for which he 
 receives the insurance, and afterward obtains the full price 
 agreed on from the vendee, with no reduction on account of 
 the insurance, the company can recover the insurance money. 
 As between the insurer and the insured, the former is entitled 
 to the advantage of every right of the assured, whether such 
 right exists in contract fulfilled or not, or in remedy for tort 
 capable of being insisted on or already insisted on, or in any 
 other right, whether by way of condition or otherwise, legal or 
 equitable, which can be or has been exercised, or has accrued 
 (whether such right could or could not be enforced by the 
 
 1 Darrell v. Tibbitts, 5 Q. B. D. 560 (1880), referring to and following North 
 British, &c. Ins. Co. v. London, &c. Ins. Co., 5 Ch. D. 569 (ante, § 436 a), which 
 was a controversy about contribution between two companies, and in which, it 
 is said, it was settled that the contract of fire insurance is a contract of indem- 
 nity. Tiiat tlie contract is one of indemnity has been heretofore conceded else- 
 where than in England as elementary. Nor are we aware that it lias ever been 
 seriously controverted. But it has been supposed that the insurer contracts that 
 he will indemnify. Whether, however, this application of the doctrine will re- 
 ceive the approval of our courts remains to be seen. It certainly deals rather 
 summarily with rights acquired under lawful contracts lawfully executed, where 
 tiie considerations are equivalents {ante, § 107, sub Jinein), which cannot be re- 
 scinded or modified except by the parties thereto. It should be added, that when 
 the insurers paid over the indemnity they did not know that the lessee was 
 bound to repair. But why is not the lessee's contract also a contract of indem- 
 nity ? If both are to indemnify, why should the latter suffer the whole loss? 
 See ante, §§ 116, 424. Lush, J., gave judgment for the defendant in the court 
 below. In the Court of Appeal, judgment reversed by Brett, Cotton, and Thes- 
 iger, JJ. See also Burnand v. Bodocanachi, 5 C. P. D. 424, before Coleridge, 
 C. J., and a jury. In Freedmansdorf v. Watertowu Ins. Co., C. Ct. (111.), Blod- 
 gett, J., held that where the policy was insured to the mortgagor, payable in case 
 of loss to the mortgagee, both in the courts of Illinois and in the courts of the 
 United States the suit must be in the name of the mortgagor, and intimated 
 that, if it were otherwise, the mortgagee would have no right of action if the 
 premises had been repaired, as the contract with him was only that the property 
 should remain unimpaired as security. See also Excelsior Ins. Co. v. Royal Ins. 
 Co., .55 N. Y. 343. In Newcomb v. Cincinnati Ins. Co., 22 Ohio St. 382, where 
 the plaintiff, not fully insured, after recovering his insurance money, sued the 
 wrong-doer for the balance of his loss, it was said that if the insured was bound 
 to account to the insurers for anything, it could only be for the surplus after de- 
 ducting his full loss and expenses. 
 
 1043
 
 § 457] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 insurer in the name of the assured), by the exercise or requir- 
 ing of which right or condition the loss against which the 
 assured is protected can be or has been diminished.^] 
 
 §457. Subrogation. — Some of our own earlier cases, in- 
 deed, seem to have gone further in favor of the insured than 
 is conceded to be permissible according to the doctrine of the 
 cases heretofore cited.- Thus, in ^Etna Insurance Company 
 V. Tyler,^ it was said that where the property insured is held 
 by a vendee under a contract of sale, and a portion of the 
 purchase-money remains unpaid at the time of the loss, and 
 the vendor receives the amount of the loss from the under- 
 writer, the latter will be entitled to be substituted in the place 
 of the vendor in respect to his rights and remedies against the 
 purchaser. And upon the doctrine of the last case the Court 
 of Errors and Appeals of New Jersey ^ broadly laid down the 
 rule, that where a party holding a lien upon real estate to 
 secure a debt effects an insurance upon such property, in case 
 of a loss the insurance company, upon payment of the insur- 
 ance, will be entitled to the benefit of the security held by 
 the insured to the amount of the money paid ; and if they 
 pay the insured the whole amount of the claim for which he 
 holds such security, they will have a right to the whole of 
 the security held by him. And if the insured holds other 
 securities for the same debt, the insurers will have a right 
 to them also, and if after effecting the insurance the in- 
 sured parts with a portion of his securities, he will forfeit the 
 right fro tanto to recover of the insurers. But these cases 
 seem hardly consistent^ with Benjamin v. Saratoga County 
 Mutual Insurance Company,^ where a vendor, under a con- 
 tract of sale, agreed with the vendee to sell him the property, 
 
 1 [Castellain v. Preston, 8 Q. B. D. 613; 11 Q. B. D. 380.] 
 
 2 Ante, § 456. 
 
 8 16 Wend. (N. Y.) 385. 
 
 * Sussex County Mut. Ins. Co. v. Woodruff, 2 Dutch. (N. J.) 541. See also 
 to the same point, Dick v. Franklin Ins. Co., St. Louis Ct. of App., 10 Ins. L. J. 
 468; Honore v. Lamar Ins. Co., 51 III. 400. 
 
 5 [The cases seem consistent to me on the prmciples set out in the analysis 
 at the head of this chap'er.] 
 
 6 17 N. Y. 415. See also Clinton v. Hope Ins. Co., 45 N. Y. 454. 
 
 1044
 
 CH. XXIII.] SUBROGATION. [§ 457 A 
 
 the vendee to pay him the premiums he might pay under an 
 insurance which he ah'cady had for continuing the same, of 
 which facts the insurers had notice and to which they gave 
 their consent, and it was held that, upon payment of the loss 
 to the vendor, the insurers were not entitled to be subrogated 
 to his rights against the vendee ; and Kernochan v. New York 
 Bowery Fire Insurance Company ,i where a policy was taken 
 out in the name of the mortgagee, under an agreement be- 
 tween him and the mortgagor that the mortgagee should pay 
 the premiums, the insurers knowing nothing of the agreement, 
 and the insurers were held not entitled to subrogation.^ 
 [Where a vendor has made a complete sale, and taken a mort- 
 gage for a part of the purchase-money, a company on offering 
 the amount of her mortgage may be subrogated to her rights 
 under it. But if the sale is not yet complete at the time of 
 loss, the vendor is still the owner, the loss is hers, and the 
 company is liable on its contract of absolute indemnity, and 
 cannot demand an assignment of the mortgage.^ Except as 
 varied by express agreements among the parties * the insurer 
 has no rights against a wrong-doer other than those of the 
 assured, and it can enforce those only in his name and after 
 admitting the claim on the policy.^ The insurer can recover 
 what he has paid and no more.^] 
 
 [§ 457 A. Subrogation ; Carrier. — An insurer of gOods lost 
 while in course of transportation by a carrier is entitled after 
 payment of the loss to recover what he has paid from the car- 
 rier" except where the shipper has agreed that the carrier shall 
 have the benefit of insurance on the goods. In Louisiana, 
 however, it has been held that when cotton was lost while on 
 
 1 17 N. Y. 428. See also Royal Ins. Co. r. Stinson, Sup. Ct. (U. S.), H Reptr. 
 68'J ; Bradford v. Greenwich Ins. Co., 8 Abb. (N. Y.) 261. 
 
 - See also Excelsior Ins. Co. v. Royal Ins. Co., 55 N. Y. 343. 
 
 3 [Nelson v. Bound Brook Mut. Fire Ins. Co., 43 N. J. Eq. 256, 259, reversing 
 Bound Brook Mut. Fire Ins. Ass. v. Nelson, 41 N. J. Eq. 485.] 
 
 * [§§ 457 A., 457 B.] 
 
 s [Midland Ins. Co. v. Smith, 6 Q.B.D. 561 ; Alliance Mar. Ins. Co. v. Louis. 
 State Ins. Co., 8 La. 1 ; Plioenix Ins. Co. i-. Erie, &c. Trans. Co., 117 U. S. 312, 
 and 118 U. S. 210, and cases cited.] 
 
 6 [Holbrook v. United States, 21 Ct. CI. 434 (1886).] 
 
 7 [Phoenix Ins. Co. i-. E. & W. Trans. Co., 10 Biss. 18 at 29.] 
 
 1045
 
 I 457 A] INSURANCE : fire, UFE, accident, etc. [cH. XXIII. 
 
 board A.'s train, and the insurance company paid the assured 
 the loss, it was held that it could not sue in the name of the 
 insured and recover of the common carriers, although they 
 would have been liable to the insured, the ground of the decis- 
 ion being that there was no privity of contract between the 
 insurers and the railroad company. ^ The dissent of J J. Talia- 
 ferro and Wyly is, however, a complete refutation of the maj- 
 ority opinion, showing that the railroad company ought to stand 
 the loss, and it made no difference whether it paid the insured 
 or the insurer, who had reimbursed the insured. The car- 
 rier's liability is the ultimate liability, for it arises from failure 
 of duty. If the insured wishes to place the ultimate liability 
 on the insurer, he must make his contract in that way and 
 pay his additional premium ; then he will be in a condition to 
 stipulate that the carrier shall have the benefit of insurance 
 and get lower freight-rates in consequence. If a policy says, 
 " this insurance shall not inure to the benefit of any carrier," 
 the carrier cannot avail himself of it ; and if this clause is vio- 
 lated by an agreement between the carrier and the assured 
 that the former shall be subrogated to the insurance, neither 
 of them can sue the insurer, the policy is void, and this al- 
 though the carrier did not know of the provision.^ An insurer 
 suing the common carrier by right of subrogation may recover 
 the full value of the goods without regard to the amount of 
 the policy ^ and six per cent interest from the time they would 
 probably have been delivered in the ordinary course of affairs.* 
 A defence which might have been set up by the company 
 against the insured, but was waived by it, and which would 
 not be good in a suit by the owner against the carrier, is no 
 bar to an action by the company against the carrier, by sub- 
 rogation.^ An insurer on paying the loss becomes the real 
 
 1 [Carroll v. New Orleans, &c. R. R., 26 La. Ann. 447.] 
 
 2 [Insurance Co. v. Easton, 73 Te.x. 167 ; Carstairs v. Mechanics', &c. Ins. 
 Co., 18 Fed, Rep. 47.3, 4th Cir. (Md.) 1883.] 
 
 3 [Mobile, &c. R. R. v. Jurey, 111 U. S. 584 (1884).] 
 
 ^ [Insurance Co. of New York v. St. Louis, &c. Ry. Co., 9 Fed. Rep. 811, 
 8th Cir. (Mo.), 11 Ins. L. J. 182, 1882.] 
 
 5 [Sun Mut. Ins. Co. v. Miss. Val. Trans. Co., 17 Fed. Rep. 919, 8th Cir., 
 1883.] 
 
 1046
 
 CH. XXIII.] SUBROGATION. [§ 457 B 
 
 party in interest, and to the extent of his disbursement subro- 
 gated to the right of the insured against a carrier, without 
 any formal assignment or express stipulation, and when the 
 circumstances give jurisdiction to the admiralty courts may 
 bring suit in his own name.^] 
 
 [§ 457 B. Subrogation; Carrier {continued). A common 
 carrier may by agreement with the owners secure to himself 
 the benefit of any insurance effected by the owner on the goods, 
 and in the absence of fraud, such an agreement defeats the 
 right of subrogation the insurance company would otherwise 
 have.2 If there is a stipulation in the bill of lading that the 
 carrier, if incurring liability, shall have the benefit of the in- 
 surance on the goods, the insurer has no right of suit by sub- 
 rogation.3 The right that an insurer has, on paying the loss, 
 to pursue third persons is only the right that the insured has, 
 and if the latter contracts with a carrier that he, the carrier, 
 shall have the benefit of any insurance on the goods in case 
 the carrier incurs liability by the loss or damage of the goods, 
 in the absence of fraud or express stipulation for subrogation 
 in the policy this contract with the carrier is good, and limits 
 the right of the insurer by way of subrogation.* " As the car- 
 rier might lawfully himself obtain insurance against loss of 
 the goods by the usual perils, though occasioned by his own 
 negligence, he may lawfully stipulate with the owner to be 
 allowed the benefit of insurance voluntarily obtained by the 
 latter. This stipulation does not, in terms or effect, prevent 
 the owner from being reimbursed the full value of the goods ; 
 but being valid as between the owner and the carrier, it does 
 j)revent either the owner himself, or the insurer, who can only 
 sue in his right, from maintaining an action against the carrier 
 upon any terms inconsistent with this stipulation." ^ An 
 
 1 [Liverpool & Great Western Steam Co. v. Plienix Ins. Co., 129 U. S. 397 ; 
 The Sidney, 27 Fed. Rep. 119 (N. Y.), 1886, reversing, 23 id. 38.] 
 
 2 [Mercantile Mut. Ins. Co. v. Calebs, 20 N. Y. 173 at 178; Rentoul v. N. Y. 
 Central, &c. R. R., 20 Fed. Rep. 313; '2d Cir. (N. Y.), 1884.] 
 
 3 [Piatt V. Richmond, &c. R. Co., 108 N. Y. 358; British, &c. M. Ins. Co. v. 
 The Gulf, &c. R. Co , 63 Tex. 475] 
 
 < [Phoenix Ins. Co. v. Erie, &c. Trans. Co., 117 U. S. 312, 325-326. See also 
 Jackson Co. v. Boylston Ins. Co., 139 Mass. 508, 510, 511.] 
 s [J. Gray, 17 U. S. 325.] 
 
 1047
 
 § 457 C] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 agreement in a contract of carriage that the carrier, if he 
 incurs liability by loss or damage to the goods, shall have the 
 benefit of any insurance on them, is not within a clause against 
 selling, transferring, or pledging the interest of the insured in 
 the policy.^ But in the absence of express agreement the car- 
 rier has no claim on the insurance, and in a suit by the owner 
 of goods against a railway for their loss by its negligence, it 
 is no defence that the owner has received their value from an 
 insurance company.^ When a consignor receipts a bill of 
 lading to a common carrier which stipulates against the lat- 
 ter's liability for loss by fire, the former cannot show that he 
 did not read the bill, and the latter is not liable unless the fire 
 was caused by his negligence.^ A by-law requiring the insured 
 to release the railroad before applying to the railroad relief 
 association for damages is valid, as it simply puts the assured 
 to his election.* Underwriters who sell abandoned property 
 are not entitled to any commissions on the sales, in a suit 
 against the carrier.^] 
 
 [§ 457 C. Mortgagor and Mortgagee. — If an insurance com- 
 pany pay a mortgagee the loss, it is subrogated to the rights 
 of the mortgagee, and may proceed against the mortgagor on 
 the mortgage. The right docs not rest on contract but on 
 principles of justice. If the mortgagee has made a settle- 
 ment that prevents this subrogation he cannot recover from 
 the insurance company, but he may bind himself not to pro- 
 ceed against the mortgagor, reserving the right to sue the in- 
 surance company, and in such case his receipt and covenant 
 would not prevent the company from proceeding against the 
 mortgagor.^ But where a mortgagor takes out a policy and 
 pays the premiums making the insurance payable to the mort- 
 
 1 [Jackson Co. v. Boylston Ins. Co., 139 Mass. 508] 
 
 2 [Tex. & Pac. R. Co. v. Levi, 59 Tex. 674, following Webber v. Morris, &c. 
 E. Co., 35 N. J. 413 ; Clark r. Wilson, 103 Mass. 221, &o.] 
 
 3 [Grace v. Adams, 100 Mass. 505 at 507.] 
 
 4 [Owens V. Bait. & Ohio R. Co., 35 Fed. Rep. 715; State v. Same, 36 Fed. 
 Rep. ()55 (Md.), 1888] 
 
 5 [Sun Mut. Ins. Co. v. Miss. Val. Trans. Co., 10 Fed. Rep. 800, East Dist. of 
 Missouri, 1883.] 
 
 ^ [Thomas v. Montauk Fire Ins. Co., 43 Hun, 218 ] 
 
 1048
 
 CH. XXIII.] SUBROGATION. [§ 458 
 
 gagees, the company cannot claim to be subrogated to the 
 first mortgagee on paying the amount of his mortgage. The 
 insurance is for the benefit of the mortgagor, and the money 
 paid to the mortgagee goes in satisfaction of his debt. Only 
 where the mortgagee himself insures his interest, or other pecu- 
 liar circumstances exist making the company a surety, will 
 subrogation to the mortgage be decreed. ^ An agreement in 
 the policy that the insurance as to the interest of a mortgagee 
 shall not be avoided by any act of the mortgagor, but that in 
 case a loss occurs after action of the mortgagor which causes 
 forfeiture as to himself, the company shall on paying the loss 
 to the mortgagee be subrogated to his rights under the mort- 
 gage, to the extent of such payment, and may pay the whole 
 debt and require an assignment of the mortgage, is valid and 
 will be sustained by the courts.^ If the parties by their action 
 destroy the right of the company to the subrogation named, 
 the company is at the same time released from liability under 
 the mortgagee clause.^ The election of the company to pay 
 the mortgage debt and have the mortgage assigned must be 
 exercised within a reasonable time, and a tender seven months 
 after suit was begun, by the mortgagee on the policy, is not 
 within a reasonable time.'*] 
 
 § 458. Loss ; Right of Insurers to intervene by Contract ; 
 Mortgagor and Mortgagee. — Under such a provision as that 
 named in the last section, if the mortgagee enters into any con- 
 tract which by its terms would be inconsistent with his riglit 
 of assignment of the mortgage debt, such contract would con- 
 stitute a valid bar to his recovery. But a contract whereby 
 the mortgagee in possession lets a third party into that pos- 
 session, and agrees, for a consideration to be paid at a future 
 time, that he will upon such payment assign the mortgage, 
 the contract being still unexecuted, is not such a contract.^ 
 The Springfield Fire and Marine Insurance Company v. Allen ^ 
 
 1 [Pearman v. Gould, 42 N. J. Eq. 49.] 
 
 2 [Allen V. Watertown Ins. Co., 132 Mass. 482.] 
 
 3 [Lett V. Guardian Fire Ins. Co., 52 Hun, 570.] 
 
 * [Eliot Five Cents' Savings Bank v. Commercial Ass. Co., 142 Mass. 142.] 
 6 Davis V. Quincy Mut. Fire Ins. Co., 10 Allen (Mass.), 113. 
 « 43 N. Y. 389. 
 
 1049
 
 § 459] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIII. 
 
 presented a case where a policy was issued to the owner of 
 mortgaged premises in which the loss was made payable to 
 the mortgagee, and which provided also that in case of any 
 change of title the policy should be void (except as to the in- 
 terest of the mortgagee), and further that in case of payment 
 of loss to the mortgagee, for which the insurers would not 
 have been liable to the mortgagor, the insurers should be sub- 
 rogated to the rights of the mortgagee ; and it was held, on a 
 bill to foreclose, that the property having been sold contrary to 
 the conditions of the policy, and the insurers having paid the 
 mortgagee his loss and taken an assignment of his mortgage, 
 the mortgagor could not require the amount paid the mort- 
 gagee by the insurer to be appropriated towards the liquida- 
 tion of the mortgage. And though the mortgage authorizes 
 the mortgagee to insure at the expense of the mortgagor, the 
 mortgagee may nevertheless directly insure his own interest, 
 and may agree to assign to the insurer an interest in the 
 mortgage equal to the amount of loss paid, in which case the 
 insurer will be subrogated to that amount. ^ 
 
 § 459. Loss ; Negligence ; Proximate Cause. — Much discus- 
 sion has been had on the subject of the liability of railroads 
 for negligence, largely turning upon the distinction between 
 remote and proximate causes. In Ryan v. New York Cen- 
 tral Railroad,^ where fire was first communicated by sparks 
 from the engine to a wood-shed of the company, and thence 
 by sparks from the shed to the property of the plaintiff, it 
 was held that the cause was remote, and the plaintiff could 
 not recover. And this case seems to have been followed in 
 Pennsylvania 3 and in Illinois.* But in Massachusetts,-^ it 
 was held that such a circumstance did not affect the question 
 of immediateness or remoteness; and in Perley v. Eastern 
 Railroad Company ,6 referring to the case in New York, the 
 court say : — 
 
 1 Foster v. Van Reed, 70 N. Y. 19. 
 
 2 35 N. Y. 210. 
 
 3 Penn. R. R. Co. v. Kerr, 62 Pa. 353, 363. 
 * Flint V. Railway Co., 59 111. 349. 
 
 6 Hart r. Western R. R. Co., 13 Met. (Mass.) 99. 
 6 98 Mass. 418. 
 
 1050
 
 CH. XXIII.] SUBROGATION. [§ 459 
 
 " The defendant's counsel have referred us to the case of 
 Ryan v. New York Central Railroad Company. We under- 
 stand the liability in that State is ])y the common law, and 
 not under the provisions of any statute. In that case, a dis- 
 tinction is made between proximate and remote damages. 
 The fire was communicated from the defendants' locomotive 
 to their wood-shed, and thence by sparks, one hundred and 
 thirty feet, to the plaintiff's house ; and it was held that the 
 plaintiff could not recover, because the injury was a remote 
 and not a proximate consequence of the carelessness of the 
 defendants in permitting their fire to escape. Our own cases, 
 above referred to, are not noticed in the opinion. Nor does 
 the opinion draw any line of distinction between what is 
 proximate and what is remote ; and such a line is not obvious 
 in that case. If, when the cinder escapes through the air, the 
 effect which it produces upon the first combustible substance 
 against which it strikes is proximate, the effect must continue 
 to be proximate as to everything which the fire consumes in 
 its direct course. This is so, whether we regard the fire as a 
 combination of the burning substance with the oxygen of the 
 air, or look merely at its visible action and effect. As matter 
 of fact, the injury to the plaintiff was as immediate and di- 
 rect as an injury would have been which was caused by a bul- 
 let, fired from the train, passing over the intermediate lots, and 
 wounding the plaintiff as he stood upon his own lot. It is as 
 much so as pain and disability are proximate effects of an in- 
 jury, though they occur at intervals through successive years 
 after the injury was received. Yet these are called proximate 
 effects, though the actual effects of the injury may be greatly 
 modified in every case by bodily constitution, habits of life, 
 and accidental circumstances.^ 
 
 " The instructions given in respect of the back fires, which 
 were kindled with a view to check the fire which had pro- 
 ceeded from the locomotive, were correct ; for they required 
 the jury to find, in substance, that these fires did not in fact 
 contribute to the loss of the plaintiff, but that they were 
 
 1 See also ante, § 302 ; post, § 518, note. 
 
 1051
 
 § 459] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CII. XXIII. 
 
 swallowed up by the advancing flame, which went on and de- 
 stroyed the plaintiff's property." ^ 
 
 [A railroad company having notice that a hose was laid 
 across its track as the only available way of lighting a fire, 
 which nevertheless ran a train over the same, tlms rendering 
 it impossible to save the buildings on fire, is liable for the loss,^ 
 the severing of the hose being the proximate cause of the de- 
 struction of the building. One who negligently sets a fire on 
 his own land and keeps it negligently is liable for loss done 
 by its spreading directly to the land or property of another, in 
 whatever way and whether or not he might reasonably have 
 anticipated the particular manner in which it spread.^ When 
 a city tears down a building under lawful authority during a 
 fire it is liable to the owner for damages, unless the building 
 would have been inevitably destroyed by the flames, when 
 nothing can be recovered.*] 
 
 1 By the statute of Massachusetts, the railway company is liable for fires 
 caused by lire communicated by the engine, witliout reference to tlie question of 
 negligence on their part. By the common law the liabiHty is based upon negli- 
 gence ; but it is not easy to see how the distinction at all enters into the question 
 whether a cause is proximate or remote. The opinions must be regarded as di- 
 rectly opposed to each other. Ryan v. N. Y. Central R. R. Co. has been said to 
 be inconsistent with the prior case of Field v. N. Y. Central R. R. Co , 32 N. Y. 
 339, in Webb v. Rome, &c. R. R Co., 3 Lansing (N. Y.), 45.3. This, however, 
 was not admitted by the Court of Appeals ; nevertheless, they affirmed the judg- 
 ment in Webb v. Rome, &c. R. R. Co., 49 N. Y. 421, although that was founded 
 upon the case of Field v. N. Y. Central R. R. Co., assuming that case to be totally 
 inconsistent with Ryan v. N. Y. Central R. R. Co. 
 
 2 [Metallic, &c. Co. v. Fitchburg R. R. Co., 109 Mass. 277 at 283.] 
 
 3 [Higgins V. Dewey, 107 Mass. 494 at 490.] 
 
 4 [Mayor v. Lord, 17 Wend. 285 at 296 (decision on 2 R. Laws, 368.)] 
 
 1052
 
 CH. XXIV.] CREDITORS. [§ 459 A 
 
 CHAPTER XXIV. 
 
 CREDITORS. 
 
 Analysis. 
 
 § 459 A. Extent of a creditor's claim on the proceeds of insurance made to secure 
 
 the debt. 
 § 459 B. Creditors v. beneficiaries. 
 § 459 C. Statutes. 
 § 459 D. Creditor may recover though the debt is paid. 
 
 Creditor to whom policy payable as his interest may appear has no right 
 
 of action on the policy. 
 Creditor not a "dependant." 
 Homestead exempt, and so are proceeds. 
 Proceeds of other exempt property not so. 
 
 Ordinary life policy vests in heirs, not subject to debts. Endowment 
 policy otherwise. 
 § 459 E. Insolvency. 
 § 459 F. . Garnishment. 
 § 459 G. Proofs if not waived must be furnished by insured or by creditor, 
 
 before the latter can trustee the company. 
 § 459. When creditor cannot garnishee. 
 
 [§ 459 A. A Creditor's Claim upon the Proceeds of Insur- 
 ance Intended to Secure the Debt should go 110 further than 
 indemnity, and all beyond the debt, premiums, and ex- 
 penses should go to the debtor and his representative, or re- 
 main with tlie company, according as the insurance is upon 
 life or on property. The authorities, however, are agreed. 
 Some refuse to give the debtor or his representatives the ex- 
 cess unless the insurance was at his motion, request, or 
 expense. 
 
 Where the relation of debtor and creditor exists, and it is 
 apparent that the instrument in question was effected by the 
 creditor as a security or indemnity for the debt, and if the 
 debtor directly or indirectly provides money to defray the ex- 
 pense of that security, he is entitled to the policy when tlie 
 debt is paid, and this applies to a life annuity. ^ On the debt- 
 
 1 [Courtenay v. Wright, 2 Giff. 337.] 
 
 1053
 
 § 459 A] insurance: fire, life, accident, etc. [ch. xxiv. 
 
 or's death, his representatives may claim the proceeds of the 
 policy after payment of the debt and the premiums.^ When 
 a policy of insurance is effected by a creditor to secure 
 payment of a debt, it does not belong absolutely to the 
 creditor, nor is he entitled to it and also to the payment 
 of the debt.2 Where a husband and wife assign to the hus- 
 band's creditors (his brothers) a contingent interest of the 
 wife's, and the creditors insure the wife's life, and she dies 
 before contingent interest falls in, the creditors receiving the 
 insurance money, upon the husband's becoming a bankrupt 
 later, the brothers may only prove the amount due them less 
 the insurance received minus expenses. They were trustees, 
 and cannot take to themselves benefits due to the cestui que 
 trust.^ A judgment creditor of a corporation insured its real 
 estate in his and the corporation's names, and afterwards bid 
 the same in at a sale under his judgment. Later, fire par- 
 tially destroyed it, and he was held able to recover and hold 
 the insurance money. If, however, the corporation had re- 
 deemed before the loss, or the loss had happened before the 
 sale, the insurance money would have belonged to the corpora- 
 tion.* Where, however, a creditor insured the life of his debtor 
 for $6500, the debt being about |1000, and the creditor collect- 
 ed $2124,82 on the policies, which after deducting debt, inter- 
 est, premiums, and expenses, left a balance of $474.53, it was 
 held that the creditor was entitled to this balance.^ And in 
 Amick V. Butler,^ it was held that a policy for $2000 taken 
 out by F. on his own life, naming A. as beneficiary, a creditor 
 of F.'s for $600, A. paying the expenses and premiums, was a 
 good contract, and that F.'s representatives could not recover 
 from A. the $1250 excess over the debt and premiums re- 
 ceived by him on the death of F, The lower court gave judg- 
 ment for the administrator, but the Supreme Court reversed 
 
 1 [Moreland v. Isaac, 20 Beav. 389; Holland v. Smith, 6 Esp. 11. In both 
 these cases the creditor liad cliarged up the premiums to the debtor.] 
 
 2 [Lea V. Hinton, 5 De G. M. & G. 823.] 
 
 3 [Ex parte Andrews, 1 Madd. 573.] 
 
 * [Mickles v. Rochester City Bank, 11 Paige Ch. 118 at 128.] 
 6 [Rittler V. Smith, 70 Md. 261.] 
 6 [111 Ind. 578.] 
 
 1054
 
 CH. XXIV.] CREDITORS. [§ 459 B 
 
 the decision upon reasoning not altogether satisfactory. Where 
 the " life " is the real contracting party and pays the premiums, 
 any one may be named as beneficiary. But where the " life " 
 is only nominally the contractor, the real party being the benefi- 
 ciary, the case in substance does not differ from a jjolicy direct 
 to the beneficiary, and if a policy of $1000 taken out by A. on 
 the life of F. without any interest in the life of F. is objection- 
 able, then why is not a policy taken by A. for $2000 on the 
 life of one who owes him only $600 just exactly as objection- 
 able, if A. is allowed to keep a profit ? The court felt sure 
 that in this case there was no intent to speculate. We think 
 the law should go further and prevent the fact of speculative 
 profit. Motives are hard to prove, and if such contracts are 
 to be sustained wagers become an easy thing. A debt is 
 easily created and a policy obtained in the name of the 
 debtor. 
 
 In the case under discussion the policy was to be turned 
 over to the debtor on payment of the debt and premiums. So 
 far as this is of effect, it goes to show that in substance the 
 agreement was one of security merely, and that the creditor 
 was entitled to no more than indemnity for what he lost by 
 the death of F. That is the result pointed to whether we look 
 at the nature of insurance, or to the broader ground of perfect 
 justice.] 
 
 [§ 459 B. Beneficiary v. Creditors. — In Alabama a husband 
 may insure his life in favor of his wife, and to the extent of 
 $500 annual premiums it will be good against creditors. But 
 if the wife die before the husband his creditors take prece- 
 dence of her " heirs and representatives," to whom the policy 
 is made payable.^ Policies taken out by a husband for the 
 benefit of his wife and children are not subject to the claims 
 of creditors of the wife.^ The wife takes free of husband's 
 creditors, though the insured gave the policy to her by his 
 will.3 It is not fraudulent as against creditors for a hus- 
 band to pay reasonable premiums to insure his life for his 
 
 1 [Tompkins v. Levy, 87 Ala. 203] 
 
 2 [Leonard r. Clinton, 2G Hun, 288, 291]. 
 8 [Pinneo v. Goodspeed, 120 111. 536.] 
 
 VOL. 11. _ 23 1055
 
 § 459 C] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIV. 
 
 wife.^ Even though he is really insolvent, in order to recover 
 the premiums so paid it must be shown that there was a 
 fraudulent intent in which the company participated.^ But 
 after the money has been paid to the wife and deposited by 
 her in bank in her own name, it may be reached by her cred- 
 itors.^ If A. insures his life for the benefit of B., but with a 
 private understanding that the avails shall be used not alone 
 for B. but for A. as well, if he had any 'outstanding accounts, 
 and if A. just prior to his death directs B. to pay a certain 
 debt from said avails, B. is under legal obligation to do so.'* 
 In Pennsylvania, where a person takes out a policy on his own 
 life in the name and for the benefit of his family or dependent 
 relatives, their title is not subject to his debts, and even the 
 question of fraud cannot be raised, but if he takes out a pol- 
 icy in his own name, and then assigns it to his wife or other 
 dependent relative, his creditors may raise the question of 
 fraud.°] 
 
 [§ 459 C. Creditors and Beneficiaries ; Statutes.^ — The 
 rights of creditors as against beneficiaries are largely deter- 
 mined by the statutes of the several States. In New York a 
 policy on a husband's life in favor of the wife is not assign- 
 able except in cases authorized by statute. The court cannot 
 compel an assignment, nor can the avails thereof be appro- 
 priated in advance by operation of law, or subjected to the 
 liens of creditors of herself or husband.''' Premiums in excess 
 of $500 paid by the husband inure to the benefit of creditors, 
 and a receiver may institute proceedings to ascertain the 
 amount of such excess, secure a lien on the policy, and re- 
 strain the beneficiaries from assigning the policy.^ Under the 
 code of Alabama a policy on the husband's life for the benefit 
 of wife and children is not subject to the claims of creditors. 
 
 1 [Brick V. Campbell, 54 N. Y. Super. 305] 
 
 2 [Central Bank of Washington v. Hume, 128 U. S. 195.] 
 8 [Crosby v. Stephan, 32 Hun, 478.] 
 
 * [Hutchings v. Miner, 46 N. Y. 456.] 
 
 6 [McCutchcon's Appl., 99 Pa. St. 133.] 
 « [See §§ 391-392.] 
 
 7 [Baron v. Brummer, 100 N. Y .372.] 
 
 8 [Masten v. A merman, 20 Abb. N. C. 443.] 
 1056
 
 CH. XXIV.] CREDITORS. [§ 459 D 
 
 The solvency or insolvency of the husband when the premiums 
 are paid does not affect the policy, but the policy would be 
 subject to debts existing before the law was passed,^ and if the 
 annual premiums exceed $500 on a policy taken out by a hus- 
 band in favor of his wife, the excess may be taken by creditors,^ 
 and they may reach the premiums paid on or the proceeds of a 
 life policy obtained by the debtor for one of his children, unless 
 the policy was intended to secure a debt due the child. Such 
 a policy is not within the protection of the code § 2733, which 
 was designed for the benefit of loife and children, while this 
 policy was for one child only.^ Under the Florida statute if 
 the premiums are reasonable, and no intent to divert funds 
 from creditors or other fraudulent purpose is shown, the pro- 
 ceeds of the insurance must go to the beneficiary free of the 
 debts of the insured.* In the District of Columbia the claims 
 of creditors upon a policy on the life of an insolvent debtor in 
 favor of his wife and children, extend to the premiums paid 
 since insolvency, but no further.^] 
 
 [§ 459 D. A creditor may recover though the debt has 
 ceased between the issue of the policy and the death of the 
 debtor.^ A creditor to whom a policy is payable " as his in- 
 terest may appear " has no right of action on the instrument.'^ 
 A creditor of a member of a beneficiary association is not a 
 '' dependant," and a promise by the association to pay him a 
 sum due at the member's death is void.^ A policy on a home- 
 stead is exempt the same as the proceeds of a sale of the 
 homestead ; the policy is not even subject to a lien on the 
 homestead itself.^ Even one who held a mechanic's lien on 
 the building cannot garnishee.^^ In general, however, if prop- 
 
 [Fearn v. Ward, 65 Ala. 33.] 
 
 [Felrath v. Schonfield, 76 Ala. 199, under a statrte like that of New York.] 
 
 [Fearn v. Ward, 80 Ala. 555, 559.] 
 
 [Eppinger v. Canepa, 20 Fla. 2G2.] 
 
 [Central National Bank v. Hume, 3 Mackey, 360.] 
 
 [Rittler v. Smith, 70 Md. 261] 
 
 [Hatch V. Metropole Ins. Co., 13 Rop'r. 298. 8th Cir. (Col.) 1882.] 
 
 [Skillings r. Mass. Ben. Ass., 146 Mass. 217.] 
 
 [Porter v. Porter, 2 Tex. Civ. Cas. 434 ; Cameron v. Fay, 55 Tex. 58.] 
 
 [Cameron v. Fay, 55 Tex. 58.J 
 
 1057
 
 § 459 F] INSURANCE : fire, life, accident, etc. [CH. XXIV. 
 
 erty exempt from execution is destroyed, the insurance money 
 does not partake of the exemption.^ The amount of insurance 
 due on a mutual contract is not chargeable with the pay- 
 ment of the debts of the deceased.^ An ordinary life policy 
 is not part of the estate of the deceased, for the payment 
 of debts, but vests absolutely in his heirs. An endowment 
 policy, however, is a part of his estate, and subject to his 
 debts.^] 
 
 [§ 459 E. Insolvency. — But a policy taken out by A, for the 
 benefit of himself and his representatives becomes a part of his 
 estate and subject to all the rules of law applicable thereto, 
 and an assignment of such a policy by A. to his daughters, he 
 being then insolvent, will not prevent the creditors from fol- 
 lowing the fund in equity, though an executor is estopped 
 by the act of his intestate to deny the title of his as- 
 signee.* The rights of creditors become fixed by a decree of 
 insolvency. And where a decree of dissolution was made, 
 and a receiver appointed, who notified A. to forward his policy 
 for cancellation, a loss hj fire subsequent to this notice gave 
 A. no right to any more than the ratable proportion of his 
 unearned premium under the cancellation.^ A composition with 
 creditors rests on the principle that each creditor acts on the 
 belief that the others accept and receive tlie same proportion 
 he takes, and no more, and any agreement favoring one that 
 is not consented to by the others is void.^] 
 
 [§ 459 F. Garnishment. — A policy is a mere chose in ac- 
 tion., and not subject to attachment or garnishment.'^ But 
 after a loss the insurance company may be garnished, where 
 the payment of the loss is not conditional on anything remain- 
 
 1 [Mouniea r. German Ins. Co., 12 Brad. 240.] 
 
 2 [Mellows V. Mellows, 61 N. H. 137 ; Smith v. Bullard, id. 381.] 
 
 3 [White V. Smith, 2 Tex. Civ. Cas. 400, 401] 
 < [Burton i-. Farinliolt, 86 N. C. 260 ] 
 
 6 [Dean & Son's Appl., 98 Pa. St. 101.] 
 
 6 [Pfleger v. Browne, 28 Beav. .391.] 
 
 7 [Grace ;;. Koch, 1 Tex. Civ. Cas. § 1065 ; Price y. Brad.v, 21 Tex. 614; Tay- 
 lor V. Gillean, 23 Tex. 508 ; Ellison v. Tuttle, 26 Tex. 283 ; Handy v. Dobbin, 12 
 ?ohns. 220: Drake on Attachment, 481.] 
 
 1058
 
 CH. XXIV.] CREDITORS. [§ 459 F 
 
 ing to be done.^ If a creditor garnishecing an insurance com- 
 panj shows the policy and that proofs of loss were furnished 
 or waived, it \^ prima facie evidence of liability.- When a policy 
 is written " for whom it concerns," the proceeds in the insur- 
 er's hands are subject to the trustee process by a creditor of one 
 part-owner, to the extent of his share, although he be not 
 mentioned in the policy .^ A. died, leaving insured personal 
 property, i?., a creditor, recovered a judgment against the 
 executors, and levied on the property in their hands, which 
 was afterwards destroyed under the policy, and it was held 
 that B. had a right to priority of payment out of the proceeds 
 thereof, over subsequently recovered judgments of other credi- 
 tors.* An assignment to a creditor of a policy on goods before 
 loss, without notice to the underwriters, vests an equitable 
 right in the assignee, which holds against a trustee attachment 
 after loss by another creditor of the assignor. The creditor thus 
 attaching can stand in no better position than the assignor.^ 
 The dissolution of a company does not abate a prior attach- 
 ment of a creditor on the debt of a mutual member to the 
 company.^ If the company adjust a loss with an assignee, a 
 creditor of the assignor cannot take advantage of the fact that 
 the assignment was without consent of the company. Only 
 the insurer can set up that fact.' But where A. assigns a 
 policy to B. as collateral, and after loss B. receives on the 
 policy an amount in excess of the debt secured, the creditors 
 of A. may garnishee the excess in ^.'s hands.^ Where A. in- 
 sures, payable to B., a mortgagee, as his interest may appear 
 in the goods, (7., a creditor of A., may garnish, and if B. comes 
 into the proceedings as a claimant, C. may attack his mortgage 
 as fraudulent.^ If, however, the mortgage is valid on its face 
 
 1 [Hanover Fire Ins. Co. v. Connor, 20 Brad. 297.] 
 
 2 [Crescent Ins. Co. v. Moore, 63 Miss. 419 ; Lovejoy v. Hartford Fire lus. 
 Co., 11 Fed. Rep. 63, 65 (111.), 1882] 
 
 3 [City Bank v. Adams, 45 Me. 455.] 
 
 •» [Mapes V. Coffin, 5 Paige Ch. 296 at 298.] 
 
 5 [Wakefield v. Martin, 3 Mass. 558 at 559.] 
 
 6 [Hays V. Lycoming Fire Ins. Co., 99 Pa. St. 621.] 
 '' [Insurance Co. v. Trask, 8 Pliila. (Pa.) 32 at 34.] 
 
 8 [Warder v. Baker, 67 Wis. 409.] 
 
 9 [North Star Boot & Shoe Co. v. Ladd, 32 Minn. 381.] 
 
 1059
 
 § 459 H] INSURANCE : fire, life, accident, etc. [CH. XXIV. 
 
 and given in good faith, though never filed for record, it will 
 be sufficient against the creditor.^] 
 
 [§ 459 G. Insured or Creditor must furnish Proofs or they 
 must be Waived. — A trustee process in favor of a creditor 
 will not lie until the proofs of loss as required by the statute 
 have been furnished or waived.^ When after a loss by fire 
 covered by a policy the insured had not made the required 
 preliminary proof to the company, and when at that time the 
 company was summoned as trustee for the insured it was 
 discharged, although after the service of the trustee writ and 
 within the necessary time to recover the insurance, the pre- 
 liminary proof was made. The claim was contingent until 
 the proofs were furnished, as the policy declared that the 
 company should have sixty days after proofs in conformity 
 with the conditions of the policy in which to pay.^ But when 
 the assured neglects to make preliminary proofs, his claim 
 may, nevertheless, be attached and the proofs made by the 
 creditor,^ The assured was out of the State. In Texas it is 
 held that although a policy provides that suit shall not be 
 begun until proof of loss, yet a creditor may garnishee the 
 company before such proof.^] 
 
 [§ 459 H. When the Creditor cannot Garnishee. — A life 
 policy payable to the legal representatives of the assured is 
 not subject to attachment by his creditors during his life, and 
 on his death the funds vest in the representatives for the 
 benefit of all who are interested in the decedent's estate.^ 
 A creditor of the insured cannot take by garnishment funds 
 payable by the policy to a mortgagee of the insured.'' If 
 a trustee holding land in trust for A. for life with a rever- 
 sion to himself, insures the same in his own name, it will 
 be held to be trust money and not attachable by private 
 creditors, unless it be shown to be for more than the life 
 
 1 [Coykendall v. Ladd, 32 Minn. 529.] 
 
 2 [Nickerson r. Nickerson, 80 Me. 100.] 
 
 3 [Davis V. Niagara, 49 Me. 282, 284.] 
 
 * [Northwestern Ins. Co. v. Atkins, 3 Bush (Ky.), 328 at 333.] 
 6 [Insurance Co. v. Willis, 70 Tex. 12.] 
 • 6 [Day V. N. E. L. Ins. Co., Ill Pa. St. 507.] 
 ' [Mansfield v. Stevens, 31 Minn. 40.] 
 
 1060
 
 CH. XXIV.] CREDITORS. [§ 459 H 
 
 interest.^ Where a policy is payable to the representatives 
 of the insured for the sole use of his children, the adminis- 
 trator is the only one who can collect from the company, and 
 it will not be liable to trustee process brought by a creditor 
 of one of the children.^ When an action is pending in one 
 State against an insurance company it cannot be summoned 
 in this State as trustee for the plaintiff in that suit.^] 
 
 1 [Lerow v. Wilmarth, 9 Allen, 382 at 384.] 
 
 2 [Stowe V. Phinney, 78 Me. 244.] 
 
 » [American Bk. v. Rollins, 99 Mass. 313 at 315.] 
 
 1061
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 CHAPTER XXV. 
 
 OF THE NOTICE. PRELIMINARY PROOF, PARTICULAR ACCOUNT. 
 
 Analysis. 
 
 § 460. Notice and proofs necessary. Proofs may be notice, but notice can- 
 
 not dispense with proofs. A second proof is to be taken 
 with the first. Assured not bound to apportion loss in 
 his proofs. 
 § 461. Time, place, and mode of notice. Mail. Mere silence no 
 
 waiver of time limit. 
 §462. "Forthwith," "soon as possible," "immediately," 
 
 mean within a reasonable time under all the 
 circumstances. 
 § 463. By whom and to whom notice is to be given. 
 
 § 464. Waiver of notice (see also § 461). Even defects in violation of 
 
 statute may be waived, for the provision is for the 
 company's benefit. 
 Receiving and acting on an oral notice waive a 
 
 written one. 
 Silence when notice is not given in time is no waiver, 
 for speaking could not aid the insured to cure 
 the defect. 
 § 465. Preliminary proofs. See also § 460. 
 
 Who may furnish and receive. Time and waiver of it. Mail. 
 Form (see also § 466). Due notice and proof of 
 death, § 465. Waiver of it. Presumption of death in 
 case of absence. In what part of the seven years death 
 is to be supposed to have taken place. Two persons 
 perishing, which first, § 465. 
 Excuse. Loss of policy is not, nor instantaneous death (?); 
 but insanity, or absence, or act of company may be, and 
 notice of total loss may make further proof unnecessary 
 except to show value. Liberal construction to save for- 
 feiture, § 465. Books, invoices, and vouchers, excuses 
 for not furnishing, § 465. 
 Sworn appraisement as part of proof, § 465. 
 Proofs as evidence, § 465, also § 460. 
 Honest mistakes not fatal, § 465. 
 
 Insured may recover more than the value named in proofs, 
 § 465. 
 § 466. Certificate of magistrate, examination on oath. 
 
 § 467. Proof of death (see also § 465). Family physician, § 466. 
 
 §§ 468—471. Waiver of preliminary proof. 
 
 Refusal to pay on other grounds, or general denial of liability 
 without giving reasons waives the furnisliing of proofs, 
 or defects in them if they have been furnished, § 469. 
 
 1062
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 460 
 
 Defects are waived by omission to notify the assured of them 
 promjdlij and specifically, so as to give him opportunity 
 for correction. A mere general statement that the proofs 
 are imperfect is not sufficient. It has been hekl, how- 
 ever, that rejecting the proofs and demanding otliers " in 
 exact accordance with the conditions of the policy " is a 
 sufficient specification, § 469 B. 
 Especially will any act recognizing the policy without men- 
 tioning defects be a waiver, §§ 469 B, 473. 
 Payment of money into court admits cause of action. 
 Proceeding to investigate loss, make adjustment, &c., any 
 act leading insured to suppose proofs would be useless, 
 waives them, §§ 469 C, 469 B, 469, even though re- 
 quired by statute, § 469 C. 
 Who may waive, § 469 D. 
 
 Provision in the policy or in by-law that no condition shall 
 be waived except in writing or by indorsement on policy, 
 will not prevent waiver by voice or act, §§ 473, 473 A. 
 Particular defects pointed out waives others, § 470. 
 What is not a waiver, § 471. 
 
 Mere silence not enough to waive furnishing proofs, 
 
 &c., § 471. 
 Waiver of notice is not waiver of proofs, § 471. 
 § 472. Evidence of preliminary proof. 
 
 False swearing in, see § 477. 
 §§ 474, 475. Particular account, § 474 (see § 465), and what is required in it, § 475. 
 Loss of books excuses except so far as memory or other means 
 serve, § 476. 
 Waiver of it, § 475 (see also § 465). Time of ren- 
 dering it, § 475. 
 § 476. When suit may be brought. Personal examination, &c. 
 
 § 477. Fraud and false swearing in preliminary proof. 
 
 Payment by mistake may be recovered. 
 
 § 460. Notice ; Preliminary Proof ; Particular Amount. — 
 Where a loss has occurred, it devolves upon the assured to 
 give notice thereof, and also to furnish some proof thereof 
 and of the amount claimed. These duties are usually re- 
 quired in substantially the same phraseology, and with greater 
 or less exactness and particularity, as conditions precedent 
 to the right to demand payment, and in order that the in- 
 surers may investigate for themselves the validity of the 
 claim. They are also usually required within a certain speci- 
 fied time, though not always. The preliminary proofs are 
 only evidence of the fact that the required proofs have been 
 furnished, not of the facts stated in them ; ^ and they are dis- 
 
 1 Newton v. Mut. Benefit Life Ins. Co., 2 Dill. C. Ct. 154; Planters' Ins. Co. 
 V. Comfort, 50 Miss. 662; post, § 465. 
 
 1063
 
 § 461] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 tinct from and supplementary to the notice, so that notice is 
 not proof, though proof may be notice.^ [It is error to refuse 
 to instruct that if proper notice and proofs were not given the 
 plaintiff cannot recover.^ A second proof of loss does not 
 nullify a prior proof returned by the company ; the proofs are 
 to be taken together as supplying each other's defects, and if 
 combined they answer the requirements, the law is satisfied.^ 
 The insured is not bound in his proofs to apportion the loss 
 among the several companies, although the policy requires the 
 proofs to state the amount claimed. Equity will apportion 
 the loss.*] 
 
 § 461. Notice of Loss ; Time and Mode. — When the time of 
 notice is specified, it must be given within the time required 
 by the conditions of the contract.^ [A delay of fifty days 
 without excuse is unreasonable.^ If a policy provides that 
 notice shall be given within twenty-four hours after loss, but 
 does not expressly make failure a cause of forfeiture, it will not 
 be so held.''' If notice is not rendered in time, mere silence of 
 the company does not prevent its afterwards defending on that 
 ground.^] It need not be in writing, unless expressly so stip- 
 ulated ; ^ nor need the insured go to the office or to the agent of 
 the insurers for the purpose of giving the notice. If the persons 
 authorized to receive notice on behalf of the insurers go to and 
 inspect the premises, they thereby obtain all the information 
 which it is the object of the notice to bring to their knowledge, 
 and further notice will be useless and unnecessary. Thus, 
 where the president and one of the directors of the company 
 visit the scene of the fire for the purpose of examining into the 
 matter, no further notice on the part of the insured will be 
 
 1 O'Reilly v. Guardian, &c. Ins. Co., 60 N. Y. 169 ; [Central City Ins. Co. v. 
 Gates, 86 Ala. 558.] 
 
 2 [Sun Mut. Ins. Co. ;;. Holland, 2 Tex. Civ. Cas. 446.] 
 
 3 [Brown v. Hartford Fire Ins. Co., 52 Hun, 260.] 
 
 4 [Fuller V. Detroit Fire & Mar. Ins. Co., 36 Fed. Rep. 469 (III.) 1888.] 
 
 5 Davis v. Davis, 49 Me. 282. 
 
 6 [Pickel V. Phenix Ins. Co., 18 Ins. L. J. 598 (Ind.), June, 89.] 
 ■7 [Coventry, &c. Ins. Co. v. Evans, 102 Pa. St. 281.] 
 
 8 [Knickerbocker Ins. Co v. Gould, 80 111. 388, -395.] 
 
 ^ Kiliips V. Putnam Fire Ins. Co., 28 Wis. 472 ; [State Ins. Co. v. Manckeos, 
 38 N. J. L. 564 at 568.] 
 1064
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 462 
 
 required.^ The form is immaterial, if it includes the fact to 
 be made known, however much it is overloaded with sur- 
 plusage.^ Where the notice of loss and affidavit was re- 
 quired to state " the value of such parts as remain," and the 
 notice stated that the building was destroyed on a certain 
 day, and was a total loss, it appearing that the building de- 
 stroyed was insured for $1500, and was valued at !$2400, and 
 that the brick and stone work uninsured was worth about 
 $100, it was held that the notice of the loss was sufficient, in 
 the absence of any evidence that it was objected to, or a more 
 particular statement required.^ [Sending notice of loss by 
 mail properly addressed is prhna facie evidence of service, and 
 in the absence of denial the jury may find that it was received.* 
 A provision for notice to be sent " to the company at Hartford " 
 and proofs to be furnished, &c,, does not require that the proofs 
 shall be sent to Hartford.^ When notice and proof of loss 
 are to be given the insurer in the city of his residence or princi- 
 pal place of business, deposit of such notice or proof in the mail 
 at the place of loss properly addressed is not a compliance.^] 
 
 §462. Notice; "Forthwith;" "Soon as possible," &c. — If 
 the notice be required to be " forthwith," "* or " as soon as pos- 
 
 1 Roumage v. Mechanics' Fire Ins. Co., 1 Green (N. J.), 110; post, § 473. 
 
 2 Rix V. Mut. Ins. Co., 20 N. H. 198. 
 
 2 Wyman v. People's Equity Ins. Co., 1 Allen (Mass.), 301. 
 
 * [Susquehanna Mut. Fire Ins. Co. v. Tunkhannock Toy Co., 97 Pa. St. 424.] 
 
 6 [Scheiderer v. Travelers' Ins. Co., 58 Wis. 13, 17] 
 
 6 [Central City Ins. Co. v. Gates, 86 Ala. 558.] 
 
 ' [" Forthwith " means within a reasonable time. Central City Ins. Co. v. 
 Gates, 86 Ala. 558. Central City Ins. Co. v. Gates, 18 Ins. L. J. 761 (Ala.), May 2, 
 1889 ; Erwin v. Springfield Fire & Mar. Ins. Co., 24 Mo. App. 145. A statement 
 sent in two days after the loss is sent forthwith. Beatty v. Lycoming Co. Mut. Ins. 
 Co., 66 Pa. St. 9. Notice to the local agent in a few days after loss, and by him 
 sent at once to the company, satisfies the requirement of notice "forthwith." 
 Argall V. Insurance Co., 84 N. C. .355. Nine months' delay is unreasonable. Scam- 
 mon V. Germania Ins. Co. 101 111. G21. Where notice was given twenty-two days 
 after the fire, it was held to be question for the jury if it was within a reasona- 
 ble time. Donahue v. Windsor Co. M. Fire Ins. Co., 56 Vt. .374. If there is a 
 delay of forty-eight days without excuse, the plaintiff should be non-suited. 
 Brown v. London Ass. Corp., 40 Hun, 101. A condition to give notice forfhivith 
 to the secretary of the company, is not fulfilled by notice to the agent, who de- 
 laj'ed sending it to the company, so that it was eiehteen days before the com- 
 pany was notified. Sparrow v. Universal Fire Ins. Co., 17 Phil. 329.] 
 
 1065
 
 § 462] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 sible," ^ or " immediately," ^ it will meet the requirement, if 
 given with due diligence under the circumstances of the case, 
 and without unnecessary and unreasonable delay, of which 
 the jury are ordinarily to be the judges. To give the word a 
 literal interpretation would in most cases strip the insured of 
 all hope of indemnity, and policies of insurance would become 
 practically engines of fraud.^ Thus notice within eight days 
 after the fire and within five days after it came to the knowl- 
 edge of the insured, has been held to be reasonable.^ So, 
 where the fire happened on the tenth, and notice of loss, dated 
 the eleventh, reached the insurers on the fifteenth of the same 
 month.^ But a delay of four months in one case,^ of thirty- 
 eight days in another," of twenty days in another,^ and of 
 
 1 [" As soon as possible " means within a reasonable time. What is a 
 reasonable time is a question for the court if the facts are ascertained, 
 otherwise for the jury und^r instructions. Amer. Fire Ins. Co. v. Hazen, 
 110 Pa. ft. 530. Thirty days' delay will not prevent the submission of the ques- 
 tion to the jury. Ben Franklin Ins. Co. v. Flynn, 98 Pa. St. 628. Where there 
 was a delay of three months on account of a criminal suit brought against 
 the insured on the charge of having set fire to his house, the jury found that 
 the proofs were sent as soon as possible. Home Ins. Co. v. Davis, 98 Pa. St. 
 280. There was also a waiver in the case by receipt of proofs witliout objec- 
 tion. Eight months' delay with no excuse except " inconvenience " is not " as 
 soon as possible." Cameron v. Can. Fire and Mar. Ins. Co., 6 Ont. R. 892.] 
 
 2 [A condition requiring immediate notice merely imposes the duty of reason- 
 able diligence, under the circumstances. Insurance Co. v. Brim, 111 Ind. 281, 
 3770 R. S. 1881; People's Ace. Ass. v. Smith, 126 Pa. St. 317 ; Rokes v. Ama- 
 zon Ins. Co., 51 Md. 512 at 519. Notice in four days has been held " immedi- 
 ate." Hoffecker v. N. C. C. M. Ins. Co., 5 Hous. (Del.) 101. The policy required 
 " immediate proof and notice " of loss. The fire occurred October 8, or Octo- 
 ber 9, and an inventory of loss sent to the company November 13, was held 
 sufficient, in view of the great derangement of business caused by the great fire 
 in Chicago. Same v. Mc Ginnis, 87 111. 70 at 71 ; Knickerbocker Ins. Co. v. 
 Gould, 80 111. 388, 391, quoting May.] 
 
 3 Kingsley v. New England Mut. Fire Ins. Co., 8 Cush. (Mass.) .393; Peoria 
 Ins. Co. V. Lewis, 18 111. 553; Edwards v. Baltimore Ins. Co., 3 Gill (Md.), 176; 
 Prov. Life Ins. Co. v. Baum, 29 Ind. 236 ; St. Louis Ins. Co. v. Kyle, 11 Mo. 278; 
 Phillips V. Prot. Ins. Co., 14 Mo. 220. 
 
 4 New York Central Ins. Co. v. Nat. Prot. Ins. Co., 20 Barb.(N. Y. Sup. Ct.) 468. 
 
 5 Schenck v. Mercer County Mut. Ins. Co., 4 Zabr. (N.J.) 447 ; West Branch 
 Ins. Co. V. Helfenstein', 40 Pa. St. 289. 
 
 6 McEvers r. Lawrence, 1 Hoff. Ch. (N. Y.) 171. 
 
 7 Inman v. Western Fire Ins. Co., 12 Wend. (N. Y.) 4-52. 
 
 8 Whitehurst v. North Carolina Mut. Ins. Co., 7 Jones, Law (N. C), 433. 
 
 1066
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 463 
 
 eleven days in another,^ there being no sufficient excuse 
 therefor, has been held to be unreasonable. Yet where tlie 
 insurers had, contrary to their agreement, refused to issue 
 a policy, they were held to have waived their right to object 
 to a notice sent even eleven months after the loss.''^ Whether 
 due diligence has been used in giving the notice is a question 
 which is ordinarily left to the jury, to be found from all the 
 circumstances in the case.^ But where the facts and circum- 
 stances bearing upon the question of due diligence are not in 
 dispute, it becomes a question of law for the court.* 
 
 § 463. Notice by whom and to whom given. — The assured, 
 no other party being interested, is the proper person to give 
 the notice. But although the notice is required from the 
 insured, a notice signed by a third person at the request of 
 the insured, though not on its face appearing to have been by 
 his request, is a sufficient compliance with the requirement.^ 
 If the policy has been assigned by the assured with the assent 
 of the insurers, the notice of loss properly comes from the 
 assignee.^ Notice from the real party in interest, though not 
 insured, will doubtless be sufficient in any case.^ And a 
 notice from the local agent of the company, upon information 
 communicated to him by the assured, is sufficient.^ In many 
 cases the policy designates the person to be notified as the 
 president, secretary, or agent of the company. It is essential 
 that in such cases the notice should be given to the person 
 designated.^ Where it was provided in a policy which had 
 been negotiated through a local agent of the defendant's that 
 
 1 Trask v. State Fire & Mar. Ins. Co., 29 Pa. St. 198. 
 
 2 Tayloe v. Merchants' Fire Ins. Co., 9 How. (U. S.) 390. 
 
 3 Edwards v. Baltimore Ins. Co., 3 Gill (Md.), 176; O'Brien v. Phoenix Ins. 
 Co., 76 N. Y. 459 ; Continental Ins. Co. v. Lippold, 3 Neb. 391. 
 
 * Kimball et als. v. Howard Fire Ins. Co., 8 Gray (Mass.), 33; Bennett r. 
 Lycoming Ins. Co., 67 N. Y. 274, 
 
 5 Stimpson v. Monmouth Mat. Fire Ins. Co., 47 Me. 349. 
 
 6 Cornell v. Le Roy, 9 Wend. (N. Y.) 16.3. 
 
 7 Graham v. Firemen's Ins. Co., C. Ct. (N. Y.), 9 Reptr. 285 ; Watertown Ins. 
 Co. V. Grover, 41 Mich. 131. 
 
 8 West Branch Ins. Co. v. Helfenstein, 40 Pa. St. 289. 
 
 9 Patrick v. Farmers' Ins. Co., 43 N. H. 621 ; Inland Ins. & Dep. Co. v. Stauf- 
 fer, 33 Pa. St. 397. 
 
 106T
 
 § 464] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 notice of loss must be given to the manager, " or to some 
 known agent of the company ; " before the loss the defend- 
 ants had transferred their business to another company, and 
 it was held that a notice of loss given to the local agent was 
 sufficient, the plaintiff having had no notice of the change in 
 business, or termination of the agency.^ But a director is not 
 an " authorized " officer to receive such a notice.^ [Notice of 
 loss to one held out to be an agent, and through whom the 
 policy is issued, who receives the notice without demurring, 
 is good notice to the company.^ A notice of loss addressed to 
 one of two companies concerned, and served on the agent of 
 both companies, who countersigned the policy, is sufficient to 
 hold both companies.'*] 
 
 § 464. Notice ; Waiver. — Although the notice of loss must 
 be given, if required, and as required, yet as it is a stipulation 
 for the advantage of the insurers, it is in their option to waive 
 any delinquency on the part of the insured in this respect. 
 And such a waiver will be inferred from any conduct on the 
 part of the insurers clearly inconsistent with an intention to 
 insist upon the failure to give due notice ; as for instance, the 
 payment of so much as they estimate the loss to be, though 
 not so much as is claimed by the insured, or, in other words, 
 a payment of a part of the amount claimed to be due under 
 the policy ; ^ or the special examination, known to the insured, 
 by the agent of the insurers, and the making a schedule of the 
 property burned;^ or a direction to go on and furnish the 
 proofs.'' [Receiving and acting on an oral notice waives a 
 written one.^ A policy provided for written notice of death. 
 Oral notice was given to 0., the agent. He gave the company 
 notice, and they gave him blank affidavits, which were after- 
 
 1 Marsden v. City & County Ass. Co., 1 Law Rep. (C. P.) 232, 
 
 •■i Inland Ins. & Dep. Co. v. Stauffer, 33 Pa. St. 397. 
 
 8 [Kendall v. Holland Purchase Ins. Co., 2 T. & C. 375 at 876.] 
 
 < [Bernero v. South British, &c. Ins. Co., 65 Cal. 386] 
 
 * Westlake v. St. Lawrence Mut. Ins. Co., 14 Barb. (N. Y.) 206, 207. 
 
 6 Badsrer v. Glens Falls Ins. Co., 49 Wis. 389 ; ante, §461 ; Beatty v. Lycom- 
 ing Ins. Co., 66 Pa. St. 9. 
 
 7 Cann v. Imp. Fire Ins. Co., 1 R. & C. (Nova Scotia) 240. 
 
 8 [Edwards v. Travelers' Life Ins. Co., 20 Fed. Rep. 661 (N. Y.), 1884.] 
 
 1068
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 464 
 
 ward filled up and received by the company without objection. 
 This was held a waiver of written notice of death. ^ When a 
 company sends its agent to adjust a loss it is estopped from 
 denying proper notice of loss.^] There seems to be no reason 
 to doubt that a waiver is equally effectual whether the notice 
 be a general statute requirement, or is provided for in the act 
 of incorporation, or be a condition of the contract. Being all 
 alike provisions for the benefit of the insured, they may be 
 waived, even though the waiver apply to defects which are in 
 violation of express statute provisions.^ A vote, however, to 
 indefinitely postpone the question of the payment of a loss is 
 no waiver of a condition in the policy requiring notice of a 
 loss within thirty days. It is rather a refusal to allow any- 
 thing on account of it. A failure to give notice within the time 
 required stands upon a different ground from a failure to give 
 the notice in due form. The latter defect may be remedied by 
 a new and more accurate form, but the former, if insisted 
 upon by the insurers, is irremediable. It may, indeed, be 
 waived, but it would be reasonable to require a different kind 
 of evidence from that which ought to be satisfactory in cases 
 of a mere defect in form. The silence of the insurers upon a 
 mere defect of form might be very injurious to the assured, 
 since, if the defect were pointed out to him, he might at once 
 supply the deficiency and save himself from loss. A failure 
 to give the notice in due time, on the contrary, leaves the in- 
 sured entirely at the mercy of the insurers, and to point out 
 to him the fact will not in the least aid him to remedy the 
 defect. The omission to point it out to him is therefore no 
 wrong or prejudice or want of good faith towards him, nor is 
 the insurer under any legal obligation so to do.^ [A letter 
 
 1 [Travellers' Ins. Co. v. Edwards, 122 U. S. 457.] 
 
 2 [Home Ins. Co. v. Myer, 93 111. 271 at 275.] 
 
 8 Lewis V. Monmouth Mut. Fire Ins. Co., 52 Me. 492. 
 
 * Patrick t;. Farmers' Ins. Co., 43 N. H. 621 ; St. Louis Ins. Co. v. Kyle, 11 
 Mo. 278; Edwards v. Bait. Fire Ins. Co., 3 Gill (Md.), 176; post, ^ 471. In 
 American Express Co. v. Triumph Ins. Co., 5 Ins. L. J. 466, Dist. Ct. Hamil- 
 ton Co., Ohio, it is said that the acceptance of proofs without objection had 
 never been held a waiver of neglect in point of time, when the policy provided 
 that the proofs should be presented as soon as possible. But see contra, Palmer 
 V. St. Paul, &c. Ins. Co., 44 Wis. 201. 
 
 1069
 
 § 465] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 ■written to the assured by the company's agent (no authority 
 appearing), stating that he would advise him of the loss and 
 that an adjuster would probably be sent, is no waiver by the 
 insurers of proper notice of loss.^ In the absence of proof 
 to that effect the soliciting agent or the adjusters are not to 
 be presumed to have power to waive immediate notice.^ An 
 agent for adjustment may waive notice of loss, although the 
 policy provides that acts or declarations of agents not contained 
 in the policy shall not bind it.^] 
 
 § 465. Preliminary Proofs; Who may furnish; Time and form ; 
 "Due Notice." — Required preliminary proofs when furnished 
 are only evidence that the insured has complied witli the re- 
 quisitions of the policy, and are inadmissible as evidence for 
 the plaintiff to prove the issue on trial ; * and although the 
 statements in them will be taken against the insured as admis- 
 sions against interest,^ he may show that the statements them- 
 selves are without foundation, and were inadvertently made. 
 Such inadvertent mistakes are without effect to estop the in- 
 sured from showing the truth.^ [An honest error in stating the 
 
 1 [Forest City Ins. Co. v. School Directors, 4 111. App. 145 at 148.] 
 
 2 [Barre v. Council Bluffs Ins. Co., 76 Iowa, 609, 611.] 
 
 3 [Stevens v. Citizens' Ins. Co., 69 Iowa, 668] 
 
 4 Citizens' Fire Ins. Co. v. Doll, 35 Md. 89, Newmark v. Lon. & Liv. Life «Sc 
 Fire Ins. Co., 30 Mo. 160; Newton v. Mut. Benefit Ins. Co., 2 Dillon, C. Ct. 154; 
 Planters' Ins. Co. v. Comfort, 50 Miss. 662; iEtna Ins. Co. v. Farrell (Tenn.), 
 3 Ins. L. J. 852 ; Browne v. Clay Ins. Co., 68 Mo. 133 ; ante, § 460 ; [Common- 
 wealth Ins. Co. V. Sennett, 41 Pa. St. 161 at 165. Knickerbocker Ins. Co. v. 
 Gould, 80 111. 388 at 392-393 (no evidence of value). Proofs of loss made by tlie 
 insured and admitted to siiow that he has complied with the requirements of liis 
 policy are for the judge. They are not to go to the jury, nor to be taken out 
 with them. Kittanning Ins. Co. v. O'Neill, 110 Pa. St. 548. Indor.sements on 
 back of proofs of loss may be read to the jury to show when they were received 
 by the company. Schwarzbach v. Protective Union, 27 W. Va. 622.] 
 
 5 [The proofs of loss introduced in evidence by the assured may be appealed 
 to by the company to prove the vacancy of the house, or other fact admitted 
 therein by the assured. N. A. F. Ins. Co. v. Zaenger, 63 111. 462 at 467 ; Insur- 
 ance Co. V. Newton, 22 Wall. 32 at 35.] 
 
 6 McMaster v. Insurance Co. of North America, 55 N. Y. 222 ; Hayes v. 
 Union, &c. Ins. Co., 44 U. C. (Q. B.) 360; Mutual Ben. Ins. Co. v. Newton, 22 
 Wall. (U. S.) 32; Connecticut Ins. Co. v. Schwenk, 94 U. S. 593; Maher v. Hi- 
 bernia Ins. Co., 67 N. Y. 283 ; American, &c. Ins. Co. r. Day, 39 N. J. 89. [Mos- 
 ley V. Vt. Mut. Fire Ins. Co., 55 Vt. 142; ^tna Ins. Co. v. Stevens, 48 111. 31 
 at 35 (inadvertent omission of some articles). When one stated in the proofs 
 
 1070
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 465 
 
 value of the property lost is not fatal. The amount recovered 
 may be more than that named in the proofs of loss.^ What 
 the goods brought at auction and the cost of manufacture of 
 such goods are proper subjects of inquiry in estimating the 
 value of the goods lost.^ And in regard to the auction if an 
 attempt is made to show that such a sale is not the mode 
 which a prudent man desiring to make the most of his goods 
 would pursue, the plaintiff may ask an expert in such matters 
 if there is any better mode of disposing of such goods.^ If the 
 policy provides, that a claim for more than is legally due shall 
 avoid the policy, it must be shown that the excessive claim 
 was made with fraudulent intent.* An overestimate of value 
 in the proof of loss not fraudulent will not avoid the policy or 
 render the proof insufficient, but a statement claiming for all 
 the goods lost, and yet referring to only one of two buildings 
 in which they were, is insufficient, under a policy making de- 
 scription of the buildings necessary .°] The same persons who 
 may give and receive notice may doubtless furnish proofs and 
 receive tliem ; ^ and where there are several policies with the 
 
 of loss that he was tlie " legal heir of his wife," the statement, though errone- 
 ous, was not held to be fatal, being made bonajide, and being not a matter of fact, 
 but rather a conclusion of law which could not mislead. Rohrbach v. Germania 
 Ins. Co., 62 N. Y. 613 at 614. But when the policy provided that the interest of 
 the assured should be stated in the proofs of loss, an omission to so state is fa- 
 tal, unless waived by the company. Shawmut Sug. Ref. Co. v. People's Mut. Fire 
 Ins. Co., 12 Gray, 535 at 540.] 
 
 1 [Miaghan v. Hartford Fire Ins. Co., 24 Hun, 58. The proofs said $800, and 
 the complaint was amended to $2000. Lebanon Mut. Ins. Co. v. Kepler, 106 
 Pa. St. 28.] 
 
 2 [Clement v. British Amer. Ins. Co., 141 Mass. 298.] 3 [ibid ] 
 * [Stone V. Hawkeye Ins. Co., 68 Iowa, 7-37.] 
 
 5 [Towne v. Springfield Fire & Mar. Ins. Co., 145 Mass. 582.] 
 5 Ante, § 40.3. [Proofs are sufficient though executed by the husband as 
 agent of the wife whose property was insured, he having transacted the whole 
 business, she having no personal knowledge of the property. Findeisen v. Me- 
 tropole Fire Ins. Co., 57 Vt. 520. When the company had recognized A. as 
 the assured's agent by delivering the policy to and receiving the premium from 
 him, it cannot after loss object to his right to furnish proofs. Swan v. Liv. 
 Lond. & Gl. Ins. Co., 52 Miss. 704 at 709. A mortgagee may supply proofs if 
 the mortgagor neglects to do it, and may take advantage of any waiver of them 
 by the company. Nickerson v. Nickerson, 80 Me. 100. Proof of loss to the gen- 
 eral adjuster of the company wlio is attending to tlie claim in question is suffi- 
 cient. Merchants' &c. Ins. Co. v. Vining, 67 Ga. 661.] 
 
 VOL. II. — 24 1071
 
 § 465] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 same subject-matter, issued by the same company, one set of 
 preliminary proofs will be suflficient.^ 
 
 As to the time within which the preliminary proofs must 
 be furnished, as in the case of notice, if it is specified defi- 
 nitely it must be complied witli,^ unless the condition is quali- 
 fied, as by adding " and till furnished no action shall be 
 brought." ^ Mailing the proofs within the time seems to be 
 sufficient* And if no definite time is fixed, they are to 
 be furnished within a reasonable time.° Looking at the cir- 
 cumstances and the object, even five years' delay has been 
 held to be excusable, where the insured was not at fault, and 
 the delay was chargeable to the conduct of the insurers.^ 
 (^Excuses) A failure to forward any proofs at all within the 
 required time will be fatal, although the circumstances were 
 such — as where the insured in an accident policy met with 
 an instantaneous death, and no survivor knew of the exist- 
 ence of the policy — that it was impossible that notice could be 
 given. The court said that this was not a case where the 
 notice was rendered impossible by the act of God, for the in- 
 sured might have provided for the contingency by informing 
 some one of the existence of the policy.''' This certainly is 
 applying the rule with great strictness, and seems hardly con- 
 sistent with the recent decision in the Supreme Court of the 
 United States, where it is held that if the insured be insane 
 at the time when it becomes necessary to furnish his prelimi- 
 nary proof, this will excuse the non-performance of that re- 
 
 1 Girard Life Ann. & Tr. Co. v. Mut. Life Ins. Co. (Pa.), 9 Weekly Notes of 
 Cases, 425, 1881. 
 
 2 Smith V. Haverhill Mut. Fire Ins. Co., 1 Allen (Mass.), 297. 
 
 3 Lafarge v. Liverpool, Lon. & Globe Ins. Co., 17 L. C. Jur. 237. 
 * Badger v. Glens Falls Ins. Co., 49 Wis. 389; post, § 476. 
 
 5 [Miller v. Hartford Fire Ins. Co., 70 Iowa, 704.] 
 
 6 Columbia Ins. Co. v. Lawrence, 10 Pet. (U. S.) 507; Cammell v. Beaver, 
 &c. Ins. Co., 39U. C. (Q. B.) 1. 
 
 ^ Gamble v. Accident Ass. Co., 4 Ir. R. C. L 204. [And in another case where 
 the policy is on condition that the assured or his representatives should in case of 
 any accident give notice within a certain time, failure to do so is an answer to 
 a suit on the policy, although death was caused instantaneously by the injury. 
 Patton V. Employer's Liability Ass. Corp. Ir. L. R. 20 C. P. 93, (aff.) ; Gamble 
 V. Ace. Ass. Co., Ir. R. 4 C L. 204.] Ante, § 362. 
 
 1072
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 465 
 
 quirement.^ But inability by reason of loss of the policy is 
 no excuse.2 [When the insured is out of the country and 
 cannot make the proofs required to be made by Jiim, it is pos- 
 sible equity might grant relief.^ If immediate notice of total 
 loss is given, no further notice or proof is necessary.^ But 
 the rule that notice of the total destruction of a building 
 dispenses with further proofs of loss though required by 
 the contract in general terms, does not apply to the total loss 
 of the contents of a building comprising a variety of articles.^ 
 When the assured had been examined under oath after loss, 
 by the insurers, and his books had been in tlieir hands, it was 
 held that he must still furnish proofs of loss.^ Failure of the 
 company to furnish the usual blanks is no excuse. Returns 
 required to be made to the company would be sufficient in or- 
 dinary writing or print, without any blank form, and as the 
 furnishing of these is a mere convenience and courtesy, a 
 custom to do so cannot give such a right to them that failure 
 to furnish them will excuse the returns.^ Where the fire oc- 
 curred January 17th, and the proofs were prepared January 22d, 
 and received by the agent " early in February " (he could not 
 state the exact date), it was held proper for the jury to pre- 
 sume that they were received within the prescribed time of 
 fifteen days.^ If the policy says the insured " shall " furnish 
 proofs of loss within a certain time, but does not make it a con- 
 dition of the contract, delay in sending the proofs will not work 
 a forfeiture.^ (^Waiver.) If the company proceed to adjust 
 
 1 Germania Fire Ins. Co. et ah. v. Boykin, 12 Wall. (U. S ) 433. And see 
 also Insurance Companies v. Weides, 14 id. 375 ; Wheeler v. Conn. Mut. Life Ins. 
 Co., 5 Ins. L. J. 399 ; Baldwin's Case, ante, § 335. The last two cases are, how- 
 ever, overruled in Wheeler v. Conn. Ins. Co., 10 Ins. L. J. 116, where the whole 
 subject is very elaborately discussed. See further as to act of God, Am, Law 
 Rev., Oct., 187G, p. 186. 
 
 2 Blakeley v. Phoenix Ins. Co., 20 Wis. 205. And see post, § 475. 
 8 [Walsh's Admr. v. Vt. Mut. Fire Ins. Co., 54 Vt. 351.] 
 
 < [Penn Fire Ins. Co. v. Dougherty, 102 Pa. St. 568.] 
 
 6 [Universal Ins. Co. v. Weiss, 106 Pa. St. 20.] 
 
 6 [Gauche v. London & Lancashire Ins. Co., 4 Woods (U. S), 102 at 106.] 
 
 • [Palmer, &c. v. Factors', &c. Ins. Co., 33 La. Ann. 1336, 1338.] 
 
 8 [Peppit V. North Brit. & Mer. Ins. Co., 1 Puss. & Gold. (Nova Scotia), 219.] 
 
 ^ [Carpenter v. German- Amer. Ins. Co., 52 Hun, 249.) 
 
 1073
 
 § 465] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 the loss, or otherwise so act as to induce the plaintiff as a 
 reasonable man to think no proof will be required, and so he 
 allows the time limited for filing proofs to pass, the company 
 cannot insist on the time limit.^ So is sending proofs back 
 with objections for correction, but without objecting that they 
 were not filed in time.^ So if they refuse to pay on other 
 grounds, not mentioning this,^ If without objection the com- 
 pany receive and retain proofs furnished five months after the 
 loss, it waives the requirement that proofs should be ren- 
 dered in sixty days.* Acts of officers in receiving informal 
 verbal proofs and recognizing liability may go to the jury on 
 the question of a waiver of the time of forwarding proofs.^ 
 When the secretary of the company interfered with the agent 
 of the assured, prevented him from making proofs within the 
 required time, the company was held estopped from setting 
 this up as a defence.^ But a conversation in which the agent 
 tells the assured that his claim is all right, and the adjuster 
 will be around in a few days and fix the thing up and pay him, 
 does not excuse the furnishing of proofs within the ten days 
 limited therefor. " And when the assured sent notice of loss, 
 a letter from the secretary of the company acknowledging its 
 receipt and the request for proof blanks, and adding, " We 
 have no proof blanks at hand. It will probably be two weeks 
 before our adjuster can reach this case " was held not to be a 
 waiver of the service of proofs of loss within the required 
 time.^ That the agent acknowledges the receipt of delayed 
 proofs of loss, and calls attention to other breaches of condi- 
 tion, does not waive the breach by delay in proving loss.^ A 
 local agent simply authorized to fix rates and countersign 
 
 1 [Gale i'. State Ins. Co., 33 Mo. App. 664; Creighton v. Agri. Ins. Co., 39 
 Hun, 319.] 
 
 2 [German Fire Ins. Co. v. Grunert, 112 111. 74.] 
 
 3 [State Ins. Co. v. Maackens, 38 N. J. L. 564] 
 
 * [Commercial Union Ass. Co. v. Hocking, 115 Pa. St. 407.] 
 6 [Thierolf r. Universal Fire Ins. Co., 110 Pa. St. 37.] 
 
 6 [State Ins. Co. v. Todd, 83 Pa. St. 272 at 278.] 
 
 7 [Engebretson v. Hekla Fire Ins. Co., 58 Wis. 301.] 
 
 8 [Birmingham i-. Farmers' Joint Stock Ins. Co., 67 Barb. 595 at 597.] 
 
 9 [Brown V. London Ass. Corp., 40 Hun, 101.] 
 
 1074
 
 CH. XXV,] OP THE NOTICE, ETC. [§ 465 
 
 and deliver policies cannot waive a provision requiring proofs 
 within thirty days after loss.^] 
 
 If any particular facts are required to be proved, or any 
 particular mode of proof is required, the facts must be proved, 
 and in substantially the mode specified, or excuse shown. If 
 hooks of account and vouchers are required, they must be ]3ro- 
 duced,2 unless excused, as where they were destroyed by the 
 fire which occasioned the loss,^ or where without fault they 
 were not within the control of the assured,* or if it should ap- 
 pear that he kept no books.^ [Where the plaintiff cannot get 
 some of the proofs required he will be excused from a literal 
 compliance.^ The law will not require an impossible thing, 
 and where, owing to the destruction of books and papers, the 
 insured cannot make a specific statement or inventory of the 
 property destroyed, the policy will be sufficiently complied 
 with by furnishing such proofs as are within the power of the 
 assured.'' Where the policy stipulates that the insured shall 
 in case of loss submit invoices and vouchers, and also dupli- 
 cates, and the former are burned, and the duplicates cannot be 
 obtained after diligent effort, recovery is not defeated thereby.^ 
 The violation of such a stipulation will not necessarily avoid the 
 policy, but will be a matter for the consideration of the jury.^ If 
 the policy stipulates for an appraisement of the loss on demand 
 of either party, and a report of such appraisement under oath 
 as part of the proofs, as a condition precedent to action the 
 agreement will be sustained. ^^j ]^q doubt the usual stipula- 
 
 - [Bowlin V. Hekla Fire Ins. Co., 36 Minn. 433.] 
 
 2 Cinqu Mars v. Eq. Ins. Co., 15 U. C. (Q. B.) 143, 246; Jube v. Brooklyn 
 Fire Ins. Co., 28 Barb. (N. Y.) 412; Farmers' Ins. Co. v. Mispelhorn, 50 Md. 
 180; [O'Brien v. Commercial Fire Ins. Co., 63 N. Y. 108 at 112.] 
 
 3 Mechanics' Fire Ins. Co. v. Nichols, 1 Harr. (N. J.) 410. And see ante, 
 § 335 ; post, § 474. 
 
 * Huckberger v. Prov. Wash. Ins. Co., U. S. C. Ct., North Dist. III., Davis. J., 
 1 Chicago Legal News, 353. And see post, § 475. 
 
 5 Wightman v. West. Mar. & Fire Ins. Co., 8 Rob. (La.) 442. 
 
 6 [Eggleston v. Council Bluffs Ins. Co., 65 Iowa, 308.] 
 T [People's Fire Ins. Co. v. Pulver, 127 111. 246.] 
 
 8 [Miller v. Hartford Fire Ins. Co., 70 Iowa, 704.J 
 ^ [Insurance Co. v. Starr, 71 Tex. 733.] 
 "» [Life Ass. V. Goode, 71 Tex. 90.] 
 
 1075
 
 § 465] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH, XXV. 
 
 tions that the insured shall furnish certain preliminary proofs 
 of loss, when loss has been sustained, are conditions prece- 
 dent, without compliance with which no recovery for a loss 
 can be had. But in conformity to the general rule applica- 
 ble to conditions precedent, a failure to comply with which 
 works a forfeiture, they will be construed strictly against the 
 insurers, for whose benefit they are imposed, and liberally in 
 favor of the insured, upon whom they impose burdens more or 
 less onerous ; so that the latter will be held to nothing in 
 this behalf not expressly required by the terms of the condi- 
 tion.i And if loss from certain enumerated causes is excepted 
 out of the risks assumed by the policy, it is enough to state 
 that the loss was by a cause not excepted, without negativing 
 the fact that the loss was within the excepted risks.^ So if 
 it be required to state whether any and what insurance has 
 been made on the property, the statement that the property 
 " was not, nor has been insured since the policy was taken 
 out," will suffice.^ 
 
 " Due notice and proof of death " is such notice and proof 
 as shall appear to the court according to the rules of evidence 
 to be due, and not such as in the opinion of the insurers, or 
 other insurance companies, may be due. And a pamphlet 
 given to the assured at the time he gives notice of the loss, 
 setting forth the proof required, has no binding force on the 
 assured, unless it be shown that he has agreed to it in some 
 way, or was so well aware of these requirements that he may 
 be presumed to have contracted with reference to them as 
 
 1 Gelatly v. Minnesota, &c. Soc. (Minn.), Weekly Jurist, 1880; Catlin v. 
 Springfield Fire Ins. Co., 1 Sumner (U. S.), 434; Wellcome v. People's Equita- 
 ble Mut. Fire Ins. Co., 2 Gray (Mass.), 480; Mason v. Harvey, 8 Wei., Hurl. 
 & Gor. (Excli.) 819; Spring Garden Mut. Ins. Co. v. Evans, 9 Md. 1; Roper v. 
 Lendon, 1 Ell. & Ell. (Q. B.) 825; Commonwealth Ins. Co. v. Sennett, 41 Pa. 
 St. 161 ; Blakeley v. Plicenix Ins. Co., 20 Wis. 205 ; Bumstead v. Dividend Mut. 
 Ins. Co., 2 Ker. (N. Y.) 81 ; Gilbert v. North American Ins. Co., 23 Wend, (N. Y.) 
 43; Battaille v. Merchants' Ins. Co., 3 Rob. (La.) 384; Great Western Ins. Co. 
 V. Staaden, 26 111. 360; antp, § 460. 
 
 2 Catlin V. Springfield Fire Ins. Co., 1 Sumner (U. S.),434; Lounsbury v. 
 Prot. Ins. Co., 8 Conn. 459. 
 
 3 Lounsbury v. Prot. Ins. Co., 8 Conn. 459. 
 
 1076
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 465 
 
 customary .1 And a bare notice, not objected to before trial, 
 will be sufficient.^ The proviso will be liberally construed to 
 save a forfeiture ; and unless the policy expressly calls for 
 specific information, and sets forth what the proof shall be, 
 no particular kind of proof can be insisted on, provided it fur- 
 nish such evidence, within the reasonable efforts of the in- 
 sured to obtain, as ought to be satisfactory.^ And if the 
 policy provides for satisfactory proof of the death, and such 
 further evidence as the directors may think necessary to es- 
 tablish their claim, this can only be understood to mean such 
 evidence as the directors might reasonably, and not such as 
 they might unreasonably and capriciously, require.'' But 
 this, if reasonable and required, must be produced as a condi- 
 tion precedent to suit.^ [Where prior to the death the com- 
 pany has declared the policy forfeit it is not necessary to 
 show that proof of death was made before suit.^ Where the 
 by-law of a mutual society requires the secretary on notice of 
 death to send blanks and instructions to the representatives 
 of the deceased, a failure to do so waives the preliminary 
 proofs of death.7 There is a presumptioyi of death after seven 
 years' absence during which time the person is not heard of or 
 known to be living.^ But however long a person may be ab- 
 sent or wherever he may be, if he has had a known and fixed 
 residence during that time he ought not to be presumed dead 
 
 1 Taylor v. Mtnh Life Ins, Co., 13 Gray (Mass.), 434. But see Woodfin v. 
 Asheville Ins. Co., 6 Jones (N. C), 558. 
 
 2 Heath v. Franklin Ins. Co., 1 Cush. (Mass.) 257. But see contra, O'Reilly 
 V. Guardian Ins. Co., 60 N. Y. 169. Probate records and inquests are only 
 prima facie evidence of death. They are no evidence of the causes of death. 
 Mutual Ben. Ins. Co. v. Tisdale, 91 U. S. 2.38; Mutual Life Ins. Co. v. Schmidt 
 (Oliio), 8 Am. L. Record, 629. How far absence is proof, see Hancock v. Ameri- 
 can Life Ins. Co., 62 Mo. 26; Tisdale v. Conn. Mut. Life Ins. Co., 26 Iowa, 170. 
 
 3 Mason v. Harvey, 8 Exch. 819 ; Walsh v. Wash. Mar. Ins. Co., 32 N. Y. 
 427. And see also the two cases last cited. 
 
 * Braunstein v. Accidental Death Ins. Co., 1 B. & S. 782 ; Nortli American 
 Ins. Co. V. Burroughs, 69 Pa. St. 43; Moore v. Woolsey, 4 El. & B. 243. 
 
 5 Fawcett v. Liv., Lon., & Globe Ins. Co , 27 U. C (Q. B.) 225. 
 
 6 [Girard Life Ins, &c. Co. v. Mut. Life Ins. Co., 97 Pa. St. 15.] 
 
 7 [Covenant Mut. Ben. Ass. v. Spies, 114 111. 463.] 
 
 8 [Tilly V. Tilly, 2 Bl. Ch. Md. 4.36; Cofer v. Flanagan, 1 Ga. 538 ; Loring v. 
 Steineman, 1 Met. 204 ; White v. Mann, 26 Me. 361.] 
 
 1077
 
 § 466] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 until inquiries have been made at that place.^ "Where a man 
 is proved to have been living within seven years the burden of 
 proving his death is on him who asserts it.^ When a presump- 
 tion of death arises after a seven years' absence, death must 
 generally be supposed to have taken place on the last day of 
 that time, in the absence of any evidence on the point.^ On 
 the contrary, however, it is held that when the presumption 
 arises after a seven years' absence the law makes no further 
 presumption as to the particular point in the seven years at 
 which the death occurred.^ In a disaster by which two per- 
 sons are killed any means of ascertaining which perished 
 first, though but a shadow, must be relied on. Therefore 
 where in a ship's boiler explosion A. is known to have sur- 
 vived the explosion, and was seen a few minutes later alive, 
 but B. was not seen after the explosion, and where, further, B.'s 
 berth was in the part of the vessel which was nearer the ex- 
 plosion, the conclusion is that A. was the survivor.^ But 
 mere knowledge of age and sex of two persons who perished 
 in the same disaster does not raise any presumption, nor are 
 they sufficient of themselves to warrant a finding that one 
 perished before the other.^ In the first case the persons were 
 a father of seventy years and a daughter of thirty-three.] 
 
 § 466. Preliminary Proof ; Form and Mode ; Certificate of 
 Magistrate ; Examination on Oath. — We have just said that the 
 preliminary proof must be substantially in the mode required. 
 It has been, indeed, very generally held that the production 
 of the certificate of " the minister, &c., of the parish," that he 
 knew and verily believed that the loss really happened by 
 misfortune and not by fraud, if required, was a condition 
 precedent to recovery, although he had refused, without rea- 
 
 1 [McCartee v. Camel, 1 Barb. Ch. 455.] 
 
 2 [Gilleland v. Martin, 8 McLean, 490; Rex v. Harborne,2 Ad. & El. 543] 
 
 3 [Burr V. Sim, 4 Wharton (Pa.), 150, 170, " always " ; Smith v. Knowlton, 
 11 N. H. 191, 196, " generally so."] 
 
 * [Doe V. Nepean, 5 Barn. & Adolph. 86, 94 ; Nepean v. Doe, 2 Mees. & Wels. 
 894, 912 ; McCartee v. Camel, 1 Barb. Ch. 455 : In re Benham's Trust, 4 L. R. 
 Eq 416, 419.] 
 
 5 [Pell V. Ball Cheves Ch. (S. C.) 99.] 
 
 6 [Coye V. Leach, 8 Met. 371 ; Mason v. Mason, 1 Meriv. Ch. 308 (father and 
 son).] 
 
 1078
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 466 
 
 sonable cause, to give such a certificate.^ So, if a similar 
 certificate from the " nearest magistrate," ^ or from a " magis- 
 trate of the city," s or an affidavit of persons present at the fire, 
 be required.* But in such cases the court will not go into a 
 
 1 Worsley v. Wood, 6 T. R. 716 ; Johnson v. Phoenix Ins. Co., 112 Mass. 49 ; 
 Edgerly v. Farmers' Ins. Co., 48 Iowa, 644 ; Racine v. Equitable Ins. Co., 6 
 L. C. Jour. 89; O'Connor v. Com. Un. Ins. Co., 3 R. & C. (Nova Scotia) 119. 
 In this case an acknowledgment of the receipt of a magistrate's certificate, 
 stated, with an excuse, to be other than the magistrate required, no objection 
 being made to the irregularity, was held somewhat strictly to be no waiver. See 
 post, § 608. In a subsequent case m the same court, tlie learned Judge James, re- 
 ferring to O'Connor's case, supra, says : " I thmis it still open to discussion 
 whether tliere may not be circumstances in which a party insured might be per- 
 mitted to pass by the most contiguous justice of the peace, provided tliat course 
 were adopted in good faith, for good and reasonable cause. Tlie nearest justice 
 might be a lunatic, . . . or he might be unable to attend to the duty, or he might 
 be under suspicion himself as the incendiary, ... or on terms of intense hos- 
 tility to the insured, or ... a very ignorant person, or of intemperate habits." 
 Herkins v. Prov. Ins. Co., 3 R. & C. (Nova Scotia) 176. 
 
 2 Cornell v. Hope Ins. Co., 3 Martin (La.) n. s. 223; 7 Martin (La.), 476; 
 Roumage v. Mechanics' Ins. Co., 1 Green (N. J.), 110; Noonan v. Hartford Fire 
 Ins. Co., 21 Mo. 81 ; Leadbetter v. JEtna Ins. Co., 13 Me. 265 ; Columbian Ins. 
 Co. V. Lawrence, 10 Pet. (U. S.) 507 ; Moody v. iEtna Ins. Co., Thomson (N. S. 
 Law), 173. [Where the insured applied to the nearest magistrates and tiiey 
 refused, and he sent a certificate from tiie next nearest, it was held that the 
 condition was broken and the policy void. Logan v. Commercial Union Ins. 
 Co., 13 Can. Supr. Ct. 270. On the other hand, a stipulation that the nearest 
 magistrate or justice shall certify to the loss, &c., has been held void, as the com- 
 pany has no right to require a public ofl[icer to act in adjusting its risks. Uni- 
 versal Fire Ins. Co, v. Block, 109 Pa. St. 535. Where the policy required a 
 certificate from the magistrate livi7ig nearest the place of fire, and a certificate 
 was obtained from the magistrate whose place o/busmcss was nearest, the court 
 would not allow the company to escape on such a technicality. Agricultural 
 Ins. Co. V. Bemiller, 70 Md. 400. If a certificate of the " nearest magistrate or 
 notary " is required, it will not do to send a certificate from the nearest justice, 
 wiien there are notarie* materially nearer. Williams v. Queen's Ins. Co., 39 
 Fed. Rep. 167 (Conn.) 1889. Where a statement is to be sworn before a justice 
 of the peace, and instead is sworn before a notary, it seems that tiie policy is 
 substantially complied with. Ben Franklin Fire Ins. Co. v. Flynn, 98 Pa. St. 
 628. But Wisconsin holds that a notary public is not a magistrate within the 
 meaning of a policy, requiring the proofs to be accompanied by a magistrate's 
 certificate, but if the company receive a notarial certificate and retain it without 
 objection, the condition is waived. Cayon v. Dwelling-House Ins. Co., 68 Wis. 
 570.] 
 
 3 Prot. Ins. Co. v. Pherson, 5 Ind. 417 ; Scott v. Phojnix Ass. Co., Stuart 
 (L. C.),354. 
 
 * Alderman v. West of Scotland Ins. Co., 5 U. C. (Q. B. o. s.) 37. 
 
 1079
 
 § 406] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 nice calculation to ascertain whether some other magistrate 
 than the one whose certificate is presented does not live, or, 
 if he does not live, have his office nearer than the certifying 
 one. This is a case for the application of the maxim de 
 minimis ?ion curat lex. The spirit of the condition requires 
 no such mathematical precision.^ Its object is completely- 
 secured by the proximity of the certifying magistrate. If 
 such a rigid rule were to be applied, the condition would 
 become impossible of execution if two magistrates should be 
 found to be living equidistant.^ And where two magistrates 
 were nearer than the one whose certificate was procured, but 
 they were creditors of the insured, it was held that the magis- 
 trate whose certificate was obtained was the proper officer to 
 certify.^ Indeed, in this latter case, the court were inclined 
 to deny to the provision the validity and effect of a condition 
 precedent, but rather to treat it as directory only. In Canada 
 the courts, under the authority of a statute (Ottawa, 36 Vict. 
 c. 44, § 33), have declared the condition unreasonable.* And 
 in some of the States it has been substantially abrogated by 
 legislation.^ So where several magistrates had their places of 
 business nearer to the fire than the place of business of the 
 magistrate who certified, though there was no evidence that 
 their places of residence were nearer, the certificate was held 
 sufficient.^ And in Cornell v. Le Roy " the testimony of a wit- 
 ness that he thought the certifying magistrate lived nearer the 
 insured premises than another magistrate named, but was not 
 
 1 [When the policy provides that an affidavit of loss shall be made before the 
 nearest officer, and there are several in the immediate neighboriiood, tlie differ- 
 ence of a few feet as to nearness will not be consideretl. American Cent. Ins. 
 Co. V. Kothchild, 82 111. 16tj at 167.] 
 
 2 Turley v. North American Fire Ins. Co., 2 Wend. (N. Y.) 379; Williams 
 V. Niagara Ins. Co., 50 Iowa, 561 ; Dolliver v. St. Josepli's Ins. Co., 128 Mass. 
 315. 
 
 3 ^tna Ins. Co. v. Miers, 5 Sneed (Tenn.), l-OO. And see post, § 473. 
 
 4 Shannon v. Hastings Ins. Co., 2 Ont. App. Rep. 81. 
 ^ Aurora Fire Ins. Co. v. Johnson, 46 Ind. 315. 
 
 6 Longhurst v. Conway Fire Ins. Co., Dist. Ct. (U. S.) Iowa, Northern Dlst , 
 1861, cited in Digest of Fire Insurance Cases. See also Peoria Mar. & Fire Ins. 
 Co. v. Whitehill, 25 111. 4G6. 
 
 " 9 Wend. (N. Y.) 163. 
 
 1080
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 466 
 
 certain, and did not know but other magistrates resided nearer 
 than the certifying one, was held sufficient jorma/acie proof of 
 the allegation that the certificate was that of the nearest magis- 
 trate. In ^Etna Fire Insurance Company v. Tylcr,^ a certificate 
 which omitted such important facts, though required, as that 
 the person certifying was acquainted with the character and 
 circumstances of the insured, and also the amount of damage 
 sustained by him, was held to be sufficient ; the magistrate 
 having stated that " he was acquainted with him," and that 
 he " had sustained loss or damage to the amount of the build- 
 ings therein mentioned," — that is, in the affidavit of the 
 insured, — the whole being in the opinion of the court a sub- 
 stantial equivalent. And in Bilbrough v. Metropolis Insur- 
 ance Company ,2 it was held too late to make the objection 
 that the certificate was defective for the first time at the 
 trial.^ So in Ketchum v. Protection Insurance Company,* it 
 was held unnecessary to prove that the magistrate certify- 
 ing was not related to the deceased. And the statement in 
 the certificate by the magistrate, that he is not interested, 
 is prima facie evidence of the fact of disinterestedness.^ 
 Where the requirement was of a " magistrate most contiguous 
 to the place of the fire, and not concerned in the loss, as a 
 creditor or otherwise, or related to the insured or sufferers," 
 it was held if the " most contiguous " magistrate was a loser 
 
 1 16 Wend. (N. Y.) 385. 
 
 2 5 Duer (N. Y. Superior Ct.), 587; Heath v. Franklin Ins. Co., 1 Cash. 
 (Mass.) 357. 
 
 •^ [If objection is not made within reasonable time after proofs are made, the 
 condition as to the nearest magistrate, &c. is waived. Nease v. ^tna Ins. Co., 18 
 Ins. L. J. 541, W. Va. March, 1889. But a delay of tliirty-seven days before re- 
 quiring tlie insured to send a certificate of the proper magistrate or notary, is 
 not a waiver where no injury is sustained thereby. Williams v. Queen's Ins. 
 Co., 39 Fed. Rep. 167 (Conn.), 1889. And the receipt of proofs without objection 
 to the absence of this certificate, by an agent whose only duty was to transmit 
 the papers to the company, is no waiver of the reqviirernent, nor is it a waiver 
 that the company objected to payment on other grounds, nor that they held the 
 proofs two years without calling attention to the defect. Daniels v. Equitable 
 Fire Ins. Co., 50 Conn, 551. The plaintiff knew perfectly well that the certifi- 
 cate was a condition precedent and that he had not furnished it.] 
 
 < 1 Allen (N. B.), 136. 
 
 6 Cornell v. Le Roy, 9 Wend. (N. Y.) 163. 
 
 1081
 
 § 466] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 by the same fire he was disqualified. Whether the mere fact 
 of his being a creditor would have disqualified him, was said 
 to be a " matter of considerable doubt." ^ Where the certifi- 
 cate was to be of the nearest magistrate not " concerned in 
 the loss," and the nearest magistrate had suffered by the 
 fire supposed to have been set by the insured, he was held 
 to be concerned in the loss so as to be incapacitated to 
 certify.^ If the magistrate's certificate required him to state 
 that he is acquainted with, or has inquired into, the circum- 
 stances, and without stating either of these facts he states 
 merely his belief that there is no fraud, it is insufficient.^ Nor 
 can such a certificate or any other matter of proof be exacted 
 by a mere notice that it will be required, or anything short 
 of an express stipulation in the contract.* And even the sub- 
 stitution of the certificate of another person not a magistrate, 
 for that of the nearest magistrate, which is required by the 
 policy, will be waived if received and assented to by the 
 agent as sufficient.^ By statute in Maine ^ the insured is to 
 make oath to his statement of loss " before some disinter- 
 ested magistrate ; " and this obviates the objection under con- 
 tracts made in that State that the certificate of the nearest 
 magistrate, as is frequently required, should be obtained. 
 And no informality in the certificate furnished under the 
 statute, not objected to at the time when the certificate is 
 furnished, can afterwards be objected to the claim of the 
 plaintiff.^ 
 
 If the insured absent himself so that he cannot, witli due 
 diligence, be found, it is tantamount to a refusal to be ex- 
 
 ,1 Ganoiig V. JEtnn Ins. Co., 6 Allen (N. B.), 75. 
 
 2 Wright V. Hartford Ins. Co., 3G Wis. 522. But see DoUiver v. St. Joseph's 
 Ins. Co., 128 Mass. 315. 
 
 3 Mason v. Andes Ins. Co., 23 U. C. (C. P.) 37 ; Kern-. British Am. Ass. Co., 
 32 U. C. (Q. B.) 509. 
 
 * Taylor v. JEtna. Life Ins. Co., 13 Gray (Mass.), 434; Miller v. Eagle L. & 
 H. Ins. Co., 2 E. I). Smith (N. Y. C. C. P.) 268 ; Peacock v. N. Y. Life Ins. Co., 
 1 Bosw. (N. Y. Superior Ct.) 338; Mercantile Ins. Co. v. Holthaus, 43 Mich. 
 423. 
 
 6 Taylor v. Roger Williams Ins. Co., 51 N. H. 50. 
 
 6 1861, c. 34, § 5. 
 
 7 Bailey v. Hope Ins. Co., 56 Me. 474 ; post, § 474. 
 
 1082
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 467 
 
 amined on oath. And a refusal, after a partial examination, 
 to submit to further proper examination, will have the same 
 effect.^ But where the examination has been once completed, 
 no new examination can be required.^ Whetlier the conduct 
 of the insured amounts to a refusal may become a question of 
 fact for a jury.^ The demand itself for an examination must 
 be made within reasonable time, and it is not reasonable to 
 Avait till after action brought, or till, proofs having l)cen filed, 
 payment has become due.^ Where the insurers exercise their 
 right to make an examination of the insured on oath, and say 
 nothing of other proofs, this will be taken as and for the 
 furnishing of the proofs required.^ In such an examina- 
 tion the insured is only bound to answer such questions as 
 have a material bearing upon the insurance and the loss.^ If 
 the assured is bound to produce such evidence as the insurers 
 should reasonably require, it will perhaps be for the jury to 
 say if the requirement has been complied with.^ What is 
 "sufficient proof" would be for the court.^ 
 
 And it may be said, generally, that the tendency of the 
 courts in the matter of preliminary proofs is to hold, as in the 
 case of immaterial statements and such as do not concern 
 the risk made warranties by express stipulation, that a sub- 
 stantial compliance is all that is necessary ; and in some cases 
 the substitution of equivalents has been allowed.^ 
 
 § 467. Life Insurance ; Preliminary Proof ; Family Physician. 
 — That the insurers may have an opportunity the better to 
 investigate the causes of death for their own satisfaction, if 
 they so desire, it is usually provided that the preliminary 
 proofs shall give the name or names of the attending physician 
 
 1 Bonner v. Home Ins. Co., 13 Wis. 677 ; Harris v. Phoenix Ins. Co., 35 Conn. 
 310. 
 
 2 Moore v. Protection Ins. Co., 29 Me. 97. 
 
 8 Piiillips v. Protection Ins. Co., 14 Mo. 220. 
 * Aurora Ins. Co. v. Johnson, 46 Ind. 315. 
 6 Badger v. Piioenix Ins. Co., 49 Wis. 389. 
 
 6 Titus V. Glens Falls Ins. Co., 81 N. Y. 410 ; Insurance v. Weides, 14 Wall. 
 (U. S.) 375. 
 
 ' Fawcett v. Liverpool, &c. Ins. Co., 27 U. C. (Q. B.) 225. 
 8 North American Life Ins. Co. v. Burroughs, 69 Pa. St. 43. 
 
 3 See ante, § 163. 
 
 1083
 
 § 468] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 or physicians ; and where a friend and neiglibor of tiie de- 
 ceased, Avho was a regular physician, but vvlio had abandoned 
 the practice of his profession, was called in because it was 
 deemed advisable to have the advice of a physician at once, 
 and before the possible arrival of the regular family physi- 
 cian, who had been summoned and in due time attended, it 
 was held that by the attending physician was meant the usual 
 family physician, and his name only need be given in the pre- 
 liminary proof.^ [An unverified surgeon's certificate, not giv- 
 ing the extent of damage, is insufficient proof of loss.^J 
 
 § 468. Preliminary Proof ; Waiver. — But the incomplete- 
 ness and even non-production of all preliminary proof may 
 be waived, and will be excused on the ground of waiver, by 
 the insurers, if their conduct is such as to induce delay, ^ or to 
 render the production or correction useless or unavailing, or 
 as to induce in the mind of the insured a belief that no proofs 
 will be required, as where an agent of the insurers has col- 
 lected the proofs himself,* or that those already furnished, 
 though in fact defective, are satisfactory, and therefore suf- 
 ficient. If the insurers intend to insist upon defects in the 
 preliminary proof, they should indicate their intention in 
 such a way that the insurer may not be deceived into a false 
 security, and at such time that he shall have opportunity to 
 supply the defects. If they wish further information they 
 should point out in what respect, or they will be presumed to 
 be content with what has been furnished.^ And the burden 
 of proof of notice of the defect is on the insurers. " It is to be 
 observed," say the court in another case,^ " that it is the duty 
 of the insurers, pending the consideration of the proofs of loss, 
 to bear themselves with all good faith towards the claimant, 
 
 1 Gibson i;. American Mut. Life Ins. Co., 37 N. Y. (10 Tiff.) 580. 
 
 2 [Welsh V. Des Moines Ins. Co., 71 Iowa, 337, Cli. 211, Laws of 1880, § 3.] 
 
 3 Hutchinson v. Niagara Ins. Co., 39 U. C. (Q. B.) 483; Georgia Ins. Co. v. 
 Kinnier, 28 Grat. (Va.) 88. 
 
 4 Kennedy v. Home Ins. Co. (Tenn.), 6 Ins. L. J. 359. 
 
 5 Charleston Ins. Co. v. Neve, 2 McMuUan (S. C), 237 ; Lewis v Monmouth 
 Mut. Fire Ins. Co., 52 Me. 492; Winneslieik Ins. Co. v. Schueller, 60 111. 465; 
 Post V. iEtna Ins. Co., 43 Barb. (N. Y.) 351 ; Killips v. Putnam Fire Ins. Co., 28 
 Wis. 472; O'Conner v. Hartford Fire Ins. Co, 31 Wis. 160. 
 
 6 Harris v. Phoenix Ins. Co., 35 Conn 310. 
 
 1084
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 468 
 
 and if they are dissatisfied with the proof furnished, and 
 have, or have not, the right to demand further proof before 
 their liability becomes fixed, they ought to make l^nown to 
 the assured the fact and the nature of these demands without 
 unnecessary delay. Otherwise they will be held to have 
 waived their rights in this regard." As deficiencies in the 
 preliminary proof may be supplied whenever objection to pay 
 the loss is put upon that ground, good faith on the part of 
 the insurers requires that, if they mean to insist upon formal 
 defects, they should apprise the insured of the deficiencies, or 
 put their refusal upon that ground, as well as others, so as 
 to give him an opportunity to supply the defect before it is 
 too late.i Thus, where the insurers refuse to pay on special 
 grounds, as that the contract was never completed,^ or that 
 the insured had no interest,^ or any other grounds having no 
 reference to the sufficiency or insufficiency of the preliminary 
 proof, it is a waiver of their right to object to any deficiency 
 in this particular.* So upon the ground of inconsistency with 
 an intention to require further or better proofs, part payment 
 of a loss, or a promise to pay it, or an adjustment, without 
 objection to the absence or sufficiency of preliminary proof, 
 is a waiver.^ Where the reinsurers stipulate that the re- 
 
 1 ^tna Fire Ins. Co. v. Tyler, 16 Wend. (N. Y.) 85; Bodle v. Chenango 
 County Mut. Ins. Co., 2 Comst. (N. Y.) 53; St. Louis Ins. Co. v. Kyle, 11 Mo. 
 278; O'Niel v. Buffalo Fire Ins. Co., 3 Comst. (N. Y.) 122; Clark v. New Eng- 
 land Ins. Co., 6 Cush. (Mass.) 342; Insurance Co. v. Connor, 5 Harris (Pa.), 
 136; McMasters v. West Chester County xMut. Ins. Co., 25 Wend. (N. Y.) 379 ; 
 post,% 488; Hibernia Ins. Co. y. Meyer, 39 N.J. 482; Mercantile Ins. Co. v. 
 Holthaus, 43 Mich. 423 ; Planters' Ins. Co. v. Deford, 38 Md. .382 ; Tisdale v. 
 Mut. Benefit Ins. Co., 91 U. S. 2-38 ; Mason v. Citizens' Ins. Co., 10 W. Va. 
 572 ; Madsden v. Plioenix Ins. Co., 1 S. C. n. s. 24. 
 
 2 Tayloe v. Merchants' Ins. Co., 9 How. (U. S.) 390. 
 
 3 Coursin v. Penn Ins. Co., 46 Pa. St. 323. 
 
 * Heath v. Franklin Ins. Co., 1 Cush. (Mass.) 257. The New Brunswick 
 Supreme Court holds mere silence on or after production of preliminary proof 
 to be no waiver. But if objection be made to payment of loss on other 
 grounds, it is evidence of a waiver, on the ground of defective proof. Mc- 
 Manus v. Minn. Ins. Co., 6 Allen (N. B.), 315. 
 
 5 Westlake v. St. Lawrence County Mut. Ins. Co., 14 Barb. (N. Y.) 206 ; 
 Hibernia Ins. Co. v. O'Connor, 29 Mich. 241 ; Eastern R. R. Co. c. Relief Ins. 
 Co., 105 Mass. 570 ; Owen v. Farmers', &c. Ins. Co., 57 Barb. (N. Y.) 518 ; State 
 Ins. Co. V. Todd, 83 Pa. St. 272. 
 
 1085
 
 § 469] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 insured policy is subject to the conditions of settlement as set 
 forth in the latter, no preliminary proof need be furnished by 
 the latter to the former.^ 
 
 § 469. Preliminary Proof; Waiver ; General Denial of Lia- 
 bility. — A distinct denial of liability and refusal to pay, on 
 the ground that there is no contract, or that there is no lia- 
 bility, is a waiver of the condition requiring proof of the loss.^ 
 It is equivalent to a declaration that they will not pay, thougli 
 the proof be furnished ; and to require the presentation of 
 proof in such a case, when it can be of no importance to 
 either party, and the conduct of the party in favor of whom 
 the stipulation is made has rendered it practically superflu- 
 ous, is but an idle formality, tlie observance of whicli the law 
 will not require. So if the insurers decline to pay without 
 giving any reason upon which to rest their refusal, such a 
 
 1 Consolidated, &c. Fire Ins. Co. v. Cashow, 41 Md. 59. 
 
 2 [A refusal to pay on other grounds or a denial of liability without giving 
 reasons, waives the furnishing of proofs, or defects in them if tliey have been 
 furnished. Phoenix Ins. Co. v. Spiers, 87 Ky. 285 ; Continental Ins. Co. v. Ruck- 
 man, 127 111. 364; Com. Union Ass. Co. v. Scammon, 126 111. 355; Protective 
 Union v. Wiiitt, 36 Kans. 760 ; Daul v. Firemen's Ins. Co., 35 La. Ann. 98 ; Fire- 
 men's Ins. Co. V. Floss & Co., 67 Md. 403 ; O'Brien v. Ohio Ins. Co., 52 Mich. 
 131 ; Farmers' Mut. Ins. Co. v. Moyer, 97 Pa. St. 441 ; Penn Fire Ins. Co. v. 
 Dougherty, 102 Pa. St. 5G8 ; Bennett v. Maryland Ins. Co., 14 Blatch. 422 at 
 425; Vos v. Robinson, 9 Johns. 192 at 196 ; Bascli v. Humbohlt Ins. Co., 35 N. 
 J. L. 429 at 432 ; Martin v. Fishing Ins. Co., 20 Pick. 389 at 398 ; Lebanon Mut. 
 Ins. Co. V. Erb, 112 Pa. St. 149; Walsh's Admr. v. Vermont Mut. Fire Ins. Co., 
 54 Vt. 351 ; Mosley v. Vermont Mut. Fire Ins. Co., 55 Vt. 142 ; King v. Helda 
 Fire Ins. Co., 58 Wis. 508; Scammon v. Commercial Union Ins. Co., 20 Brad. 
 500; Suppiger v. Covenant Mut. Ben. Ass., 20 Brad. 595; New Home Life Ins. 
 Ass. V. Hagler, 23 Brad. 457 ; Commercial Union Ass. Co. v. State, 113 Ind. 331 ; 
 Carson v. German Ins. Co., 62 Iowa, 433 ; Pendleton v. Knickerbocker Life Ins. 
 Co., 5 Fed. Rep. 238 (Tenn.), 1881 ; Millard v. Supr. Coimcil of American Le- 
 gion of Honor, 81 Cal. 340 ; McComas v. Covenant Mut. Life Ins. Co., 56 Mo. 
 573 at 570 ; Mensing v. American Ins. Co., 36 Mo. A pp. 602 ; Insurance Co. v. 
 Lee, 73 Tex. 641. Preliminary proof of death is not required if the insurer on 
 being notified denies his liability wholly. Knickerbocker Life Ins. Co. v. Pen- 
 dleton, 112 U. S. 696. Refusal to pay waives proof of loss permanently if for 
 a permanent cause. German-American Ins. Co. v. Davidson, 67 Ga. 11. Tem- 
 porarily if for a temporary cause. Merchants', &e. Ins. Co. v. Vining, 67 Ga. 
 661 ; 68 Ga. 197. Proof of loss is waived when the company places its refusal 
 to pay on the sole ground that the insured had no insurable interest. Grange 
 Mill Co. V. Western Ass. Co., 118 111. 396.] 
 
 1086
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 469 
 
 refusal, by necessary implication, gives the assured to under- 
 stand that the production of preliminary proof will be use- 
 less, — an idle ceremony, which the law will not require him 
 to perform.! So, if the refusal to pay is upon the ground that 
 the property lost was not included in the risk,^ or that the 
 insured has forfeited his right to recover by fraud.^ Even 
 where there has been no refusal to pay the loss, the prelim- 
 inary proof being insufficient, if without objection on that 
 account the insurers proceed to investigate the loss for them- 
 selves, it has been held that the evidence so obtained shall 
 inure to the benefit of the insured as part of his preliminary 
 proof.^ So, if the insurers throw any obstacles in the way of 
 the insured in his efforts to bring the proofs within the re- 
 quirements of the condition. Thus, where imperfect proofs 
 have been filed within the required time, and the insured 
 afterwards, upon being so informed, requests copies, which, 
 after repeated evasions, are finally refused, corrected proofs 
 filed after the expiration of the limited time will be suffi- 
 
 1 Allegre v. Maryland Ins. Co., 6 H. & J. (Md.) 408 ; Harriman v. Queen Ins. 
 Co., 49 Wis. 71 ; Tayloe v. Merchants' Ins. Co., 9 How. (U. S.) 390 ; Graves v. 
 Wash. Mar. Ins. Co., 12 Allen (Mass ), 391 ; Roberts, Adm., v. Cocke, 28 Grat. 
 (Va.) 207; Girard Agr., &c. Co. v. Merchants' Life, &c. Co. (Pa.), 9 W. N. C. 
 425; Goodwin v. Lancashire, &c. Ins. Co., 18 L. C. Jur. (Q. B.) 1 ; West Rock- 
 ingham Ins. Co. V. Sheets, 26 Grat. (Va.) 854; post, § 471; Aurora, &c. Ins. 
 Co. V. Kranich, .36 Mich. 289; Bank of Oil City v. Guardian, &c. Ins. Co., C. C. 
 P. (Pa.), 4 Ins. L. J. 473; Portsmouth Ins. Co. v. Reynolds (Va.), 9 Ins. L. J. 
 60fi; Akin v. Liverpool, &c. Ins. Co., C. Ct. (Ark.), 6 Ins. L. J. 341 ; Williams- 
 burg Ins. Co. V. Gary, 83 111. 453; Continental Ins. Co. v. Randolph (Ky.), 10 
 Ins. L. J. 387. Whether the facts and circumstances amount to a denial or re- 
 fusal is for the jury. Farmers' Ins. Co. v. Moyer (Pa.), 10 Ins. L. J. 514. In 
 Phoenix Ins. Co. v. Stevenson (Ky.), 8 Ins. L. J. 922, it was held that where, 
 upon presentation of defective proofs, plaintiff was notified that if he had a 
 claim the proofs must be made in accordance with the conditions of the con- 
 tract, and also that he had forfeited his right to recover on another ground upon 
 whicii tlie insurers could rely, there was no waiver. But their notice tliat they 
 sliall insist upon strict proof does not seem to meet the objection that the other 
 notice shows that the proofs will be nugatory. Perhaps the assertion of the 
 secretary, that they have no risk, made on the erroneous impression that the 
 policy had been properly cancelled, is no waiver: Bennett i;. Lycoming Ins. 
 Co., 67 N. Y. 274 ; though, if it mislead or hinder, why is it not an estoppel ? 
 
 2 Franklin Fire Ins. Co. v. Coates, 14 Md. 285. 
 
 3 Peoria Mar. & Fire Ins. Co. v. Whitehill, 25 111. 466. 
 
 ^ Sexton V. Montgomery County Mut. Ins. Co., 9 Barb. (N. Y.) 191. 
 VOL. II. - 25 1087
 
 § 469] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 cient. In other words, the insurers will not be allowed to 
 insist upon a deficiency which they have contributed to pro- 
 duce.^ [When the agent admitted the proofs of loss and the 
 money was paid into court, the company cannot afterwards 
 object to the sufficiency of the proofs. Payment of the money 
 into court admits the cause of action as stated in the declara- 
 tion.2] And the waiver of the proof is a waiver of the condi- 
 tion that payment is not to be made till a limited time after 
 the proof ; so that, in such case, suit may be brought at once 
 upon the denial of liability, although the time within which, 
 after proof of loss, the payment would be demandable may 
 not have expired.^ 
 
 [If proofs have been furnished at the time of refusal to pay 
 on other grounds than such as may relate to the proofs, or 
 without stating grounds, defects in the proofs are waived 
 thereby.* " We do not consider ourselves answerable for the 
 claim" is a waiver of defects in proofs of loss furnished.^ By 
 asserting a cancellation of the policy, the company waives the 
 right to insist on better proofs of loss.^ Where the claim is 
 disputed by the company on other grounds, and no notice is 
 given of the insufficiency of the proofs of loss, it is error to 
 dismiss the complaint on the ground that the proofs are de- 
 fective. The company should have given notice of the defects, 
 
 1 Cornell i'. Le Roy, 9 Wend. (X. Y.) 163. And see ante, § 361. 
 
 2 [.Johnston v. Columbian Ins. Co., 7 Johns. 315 at 318.] 
 
 3 Nor. & N. Y. Trans. Co. v. Western Mass. Ins. Co., 34 Conn. 561 ; Williams- 
 burg Ins. Co. V. Cary, 83 111. 453. The case of Columbia Ins. Co. v. Lawrence, 
 2 Pet. (U. S.) 25, to the contrary, has not been followed in the State courts, 
 except in Roumage v. Mechanics' Ins. Co., 1 Green (N. J.), where it was held, by 
 a divided court, that a refusal to pay on the general ground that the claim was 
 believed to be fraudulent was no waiver. But in Columbia Ins. Co. v. Law- 
 rence, 10 Pet. (U. S.) 507, tlie insured was held to have complied Avitli the 
 condition to furnish proof within reasonable time, though five years after tlie 
 fire, because the company, by not objecting before the first trial, had misled the 
 insured into a belief of the sufficiency. 
 
 * [Whittle t'. Farmville Ins. &c. Co., 3 Hughes, 421 at 422; Continental Life 
 Ins. Co. y. Rogers, 119 111. 474; Lycoming Insurance Co. i'. Dunmore, 75 111. 
 14 at 16.] 
 
 5 [Maryland Ins. Co. v. Bathurst, 5 G. & J. 159 at 238 ; La Socie'te', &c.,y. 
 Morris, 34 La. Ann. 347 at 348.] 
 
 6 [Ball, &c., w. Aurora Ins. Co., 20 Fed. Rep. 232 at 2.36.] 
 
 1088
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 469 a 
 
 SO that they could have been corrected. ^ Entire repudiation of 
 a policy without objection to the proofs implies a waiver of 
 defects in them.^ So, receiving proofs without objection and 
 defending in other grounds,^ and failure to designate the error 
 on wliich the company bases its refusal to pay."*] 
 
 § 469 a. A single case in New York has recently led to 
 much discussion, and, as it appears by the case itself, to 
 much broader apparent decisions than were called for by the 
 facts, and surprisingly contradictory, considering tliat the 
 facts appeared to be substantially the same. In the first, 
 where preliminary proofs, which were to be given " as soon as 
 possible " after notice, were not furnished for more than two 
 months and a half, during which the insurers repeatedly inti- 
 mated there was fraud, it was held that upon the undisputed 
 facts the question of reasonable time was for the court ; that, 
 there being no hindrances or delays, the proofs were not 
 offered within a reasonable time ; that, till they were offered, 
 the msurers had a right to keep silent ; and that their refusal 
 after they were offered to pay solely on the ground of fraud 
 was no estoppel to such a defence, since at the time of the 
 refusal the insured had lost all rights without fault of the 
 insurers, and were in no way prejudiced or misled, and that 
 no liability can be reimposed by a mere waiver, but only 
 by a new agreement upon a new consideration, or by acts 
 which operate as an estoppel against the insurer.^ Brink's 
 case ^ was again before the court, where it was said that it 
 was formerly sent back for trial, on the sole ground that 
 it was thought by a majority of the court that the charge 
 of the trial judge, to the effect that " if at any time the de- 
 fendant objected to paying the loss upon the ground of fraud, 
 no proofs of loss need be served," was too broad, and might 
 include mere incidental declarations not indicating a fixed 
 
 1 [Karelsen v. Run Fire Office, 45 Hun, 144, 147 ] 
 
 2 [Rumsey v. Phoenix Ins. Co., 1 Fed Rep. 396 (N. Y.) 1880.] 
 
 3 [Donahue v. Windsor Co. Mut. Fire Ins. Co., 56 Vt. 374.] 
 * [Araer. Cent. Ins. Co. v. Brown, 29 111. App. 602.] 
 
 5 Brink v. Hanover Fire Ins. Co., 70 N. Y. 593, citing Beatty v. Lycoming 
 Ins. Co., 66 Pa St. 9. 
 
 6 80 N. Y. 108. 
 
 1089
 
 § 469 B] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 purpose on the part of the company, or rehed on by the in- 
 sured ; that the facts were such that a jury would be justified 
 in finding that proof was made " as soon as reasonably pos- 
 sible under the circumstances," and that the defendants of- 
 fered hindrances and delays whereon they could be estopped ; 
 and that it is now the established doctrine of the court that 
 no new consideration is necessary to support a waiver which 
 may exist when there is no technical estoppel, if the facts 
 show an intention to waive. ^ 
 
 [§ 4(39 B. Defects -waived by Omission of the Insurer to call 
 attention to them promptly and specifically, and give Oppor- 
 tunity for Correction.^ — The company must object to the proofs 
 within a reasonable time, and what is a reasonable time, being 
 a mixed question of law and fact, should be given to the jury 
 under proper instructions.'^ An objection to the proofs comes 
 too late at the trial.* When the preliminary proofs contained 
 " James," etc. instead of " Joshua," but no objection thereto was 
 then made, it was held waived. Good faith and honest deal- 
 ing required that the company should call the attention of 
 the assured to defects if it intended to rely upon them.^ 
 When the agent of the insurers on receiving the proofs of 
 loss made only a general objection thereto pointing out no 
 specific defect, the company cannot thereafter set up a defect 
 therein.^ An objection by the company that the proofs are 
 *' deficient both in form and substance " is too general." A 
 
 1 Citing Goodwin v. Mass. &c. Ins. Co., 73 N. Y. 480, and Prentice v. Knick- 
 erbocker Ins. Co. (N. y.), 8 Ins. L. J. 708. 
 
 2 [Ligon's Adra'rs v. Insurance Co., 87 Tenn. 341 ; Basch v. Humboldt Mut. 
 Fire & Mar. Ins. Co., 35 N. J. L. 429; Bartlett v. Union Mut. Fire Ins. Co., 46 
 Me. 500, 502 ; Firemen's Ins. Co. v. Crandall, 33 Ala. 9 at 15 ; Lycoming v. 
 Dunmore, 75 III. 14 at 16; Rogers v. Traders' Ins. Co., 6 Paige, 583 at 585; 
 Thierolf v. Universal Fire Ins. Co., 110 Pa. St. 37. Company must, on finding 
 proofs objectionable, return them with information of defects. Universal 
 Fire Ins. Co. v. Block, 109 Pa. St. 535 ; Insurance Co. v. Cusick, id. 157 ; Ben 
 Franklin Fire Ins. Co. v. Flynn, 98 Pa. St. 628 ; Girard Life Ins. &c. Co. v. Mut. 
 Life Ins. Co., 97 Pa. St. 15 ; Travis v. Continental Ins. Co., 32 Mo. App. 198.] 
 
 s [Fire Ins. Cos. r. Felratli, 77 Ala. 194.] 
 
 4 [Breckinridge v. Amer. Cent. Ins. Co., 87 Mo. 62.] 
 
 5 [Works V. Farmers' Mut. Fire Ins. Co., 67 Me. 281 at 282-283.] 
 * [Insurance Co. of N. A. v. Hope, 58 111. 75 at 78]. 
 
 ■^ [Myers i\ Council Bluffs Ins. Co., 72 Iowa, 170.] 
 
 1090
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 469 B 
 
 delay of several weeks in pointing out objections waives 
 them.i Even three or four days may be too long for silence. 
 Immediate notice of defective notice or proofs must be given.^ 
 If the company refuse to point out defects and afford proper 
 facilities for the correction of proofs, the imperfections are 
 waived, and the correspondence between the company and 
 the attorney of the assured is competent evidence.^ If proofs 
 designating the policy by a wrong number are received by the 
 company, and it neglects to reply to an inquiry whether 
 the proofs are sufificient, the defect is waived.* If the com- 
 pany knowing all material facts makes no objection to the 
 form or sufficiency of the proofs or to the source whence they 
 came, until after a satisfactory adjustment is reached, all such 
 objections are waived.^ A loss occurred February 4. Proofs 
 were sent to the insurers February 18. They were received by 
 the companies, and no objection was made to their sufficiency. 
 During the same month the plaintiffs and the agents of the 
 several companies met and adjusted the loss. Afterward the 
 companies repudiated the adjustment on the ground that 
 the agents had no authority to make it, still making no objec- 
 tion to the proofs. At the trial, however, it was put forth in 
 defence that the proofs w^ere informal and insufficient, but it 
 was held that the above facts warranted the jury in finding 
 a waiver of the imperfection.^ Negotiations for adjustment 
 without mentioning defects of proofs, are a strong waiver.'' So 
 is subjecting the insured to a private examination.^ So, where 
 a company receives proofs of loss without objection, and 
 though twice asked in writing if anything more were required 
 
 1 [People's Fire Ins. Co. v. Pulver, 127 111. 246.] 
 
 2 [Jones V. Mechanics' Ins. Co., -'36 N. J. L. 29 at 37 ; Patterson v. Triumph Ins. 
 Co., 64 Me. 500 at 504; Works v. Farmers' Mut. Fire Ins. Co., 57 Me. 281 at 
 283; Swan v. Liv., Lond., & G. Ins. Co., 52 Miss. 704; Savage v. Corn Exch. &c. 
 Ins. Co., 4 Bosw. 1 at 13.] 
 
 3 [Birmingham Fire Ins. Co. v. Pulver, 126 111. 329.] 
 * [Parks V. Conn. Ins. Co., 26 Mo. Apn. 511.] 
 
 6 [Biddeford Sav. Bank v. Dwelling-House Ins. Co., 81 Me. 566.] 
 ^ [Butterworth v. Western Ass. Co., 1.32 Mass. 402.] 
 ^ [Little V. Phoeni.x Ins Co., 123 Mass. 380 at 387.] 
 8 [Zielke v. London Ass. Co , 64 Wis. 442.] 
 
 1091
 
 § 469 C] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH, XXV. 
 
 made no reply .^ So refusal to return proofs for correction 
 when requested, waives their defects.^ As to the definiteness 
 of specification necessary, it has been held that an insurer 
 who rejects the proofs, referring the plaintiff to the condition 
 of the policy which defines what they must contain, and say- 
 ing that he insists on an exact compliance with that condi- 
 tion, sufficiently specifies the defects in the proofs, and there 
 is no waiver."^] 
 
 [469 C. Waiver by Proceeding to investigate Loss and Ad- 
 just it, &c. — Any action of the company based on facts 
 known to them, inducing the insured to believe that the ren- 
 dition of proofs would be a vain act, is equal to an ex])ress 
 waiver, even though the duty to furnish proofs is imposed by 
 statute as well as agreement.* Where on notice of total loss, 
 the secretary went to the place, got a carpenter's estimate for 
 rebuilding, made the insured an offer, and agreed witli the 
 agent of another company as to their proportions of the loss, 
 the facts properly went to the jury on the question of waiver 
 of formal proofs.^ When an adjuster visits the scene soon 
 after the loss and makes an offer of compromise, and blank 
 proofs are filled uj) by the assured in presence of the com- 
 pany's officers, the facts properly go to the jury on the ques- 
 tion of a waiver of strict proof of loss.^ If tlie company takes 
 notice of a loss and prepares such proofs as it deems necessary 
 to an adjustment, the assured, until notice to the contrary, 
 may assume that further notice and proof are not required.'' 
 Refusal to supply blanks for proof of loss on application within 
 the proper time is evidence of waiver to goto the jui-y.^ If 
 the agent, though objecting to the proofs of loss as insuffi- 
 cient, proceeds with an investigation and made a full report, 
 
 1 [Eliot Five Cent Savings Bk. v. Commercial Ass. Co., 142 Mass. 142. J 
 ~ [Findersen v. Metropole Fire Ins. Co., 57 Vt. 620.] 
 3 [Gauclie v. Lond. &c. Ins. Co., 10 Fed. Rep. 847 ; 4 Woods, 102.] 
 * [Boyd V. Cedar Rapids Ins. Co., 70 Iowa, 325 ] 
 
 5 [Susqnelianna Mut. Fire Ins. Co. v. Staats, 102 Pa. St. 529; New Orleans 
 Ins. Ass. V. Matthews, 65 Miss. 301.] 
 
 6 [Argall V. Insurance Co., 84 N. C. 355.] 
 
 1 [Amer. Cent. Ins. Co. v. Sweetser, 116 Ind. .370.] 
 8 [Dial V. Valley Mut. Life Ass., 29 S. C. 560.] 
 
 1092
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 470 
 
 the question of waiver of the defect in the proofs is for the 
 jury.^ If an authorized agent waives further proofs and 
 promises to settle, the company is estopped from setting up 
 faihire of proofs. ^ Acts relied on as a waiver of proofs nmst 
 take place before suit.^ Waiver of proofs rests on the doc- 
 trine of estoppel.*] 
 
 [469 D, Who may Waive. — An express waiver by an au- 
 thorized agent is conclusive.^ An adjusting agent may waive 
 proofs of loss by refusing to pay solely on other grounds^ or 
 by stating that nothing further will be required.'^ A general 
 agent, unless his power is restricted to the knowledge of the 
 plaintiff, has power to waive proofs of loss, but he cannot 
 give an oral waiver when the policy requires a written one. 
 And a local agent who has never been held out as possessing 
 any authority except to receive proposals, fix rates, and 
 issue policies, cannot waive the condition as to proofs.^ 
 When it appears that the agent had authority to receive 
 applications, take risks, settle rates of premium, and issue 
 policies, this will not tend to show that he was a general 
 agent who could waive preliminary proofs of loss.^] 
 
 § 470. Preliminary Proof; Particular Defects pointed out; 
 Waiver of others. — So where the insurers place their refusal 
 to pay the loss expressly upon some particular defect in the 
 preliminary proofs, they cannot afterwards object to other 
 defects not then specified ;^° or upon grounds entirely distinct 
 from such defects, making no objection to these, as where the 
 insured gives notice of his loss, and, having lost his policy, 
 
 1 [Enterprise Ins. Co. v. Parisot, 3-5 Ohio St. 3-5.1 
 
 2 [East Tex. Fire Ins. Co. v. Dyches, 56 Tex. 565.] 
 
 3 [Smith V. State Ins. Co., 64 Iowa, 716.] 
 
 * [Hanna v. Amer. Ins. Co., 36 Mo. App. 538.] 
 
 5 [Perry v. Mechanics' Mut. Ins. Co., 11 Fed. Rep. 478 (R. I.) 1882.] 
 
 6 [A^tim Ins. Co. v. Shryer, 85 Ind. 362.] 
 
 7 [Ind. Ins. Co. v. Capehart, 108 Ind. 270.-] 
 
 8 [Smith );. Niagara Fire Ins. Co., 60 Vt. 682.] 
 
 9 [Lohnes v. Insurance Co. of N. A., 1'21 Mass. 4-30 at 441 ] 
 
 10 Pliillips V. Prot. Ins. Co., 14 Mo. 220; Rippstein v. St. Louis Ins. Co., 57 
 Mo. 86 ; [Fire Ins. Cos. v. Felrath, 77 Ala. 194. An objection only to tlie cer- 
 tificate of the magistrate before wliom the prehminary proofs were made, is a 
 waiver of any defect in their form. Bailey v. Hope Ins. Co., 56 Me. 474 at 482.] 
 
 1093
 
 § 471] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 requests a copy, for which he expresses his willingness to 
 pay, in order that he may furnish the necessary proofs, but 
 receives a reply stating that his claim is rejected for the 
 reason that the policy had been cancelled for non-payment of 
 assessments. Such action on the part of the insurers relieves 
 the insured from the necessity of furnishing any preliminary 
 proof.i 
 
 § 471. Preliminary Proof; "What is not a Waiver. — But a 
 general statement of a travelling agent, to the insured, that 
 " the matter would be all right with the company," will not 
 amount to a waiver of " notice specifying the amount of loss, 
 the manner of it, and other particulars." ^ Nor will a reply 
 by the president of the company to the question. What fur- 
 ther proof is required ? that the policy will show, be a waiver 
 of proof or of defects therein.^ Nor is a reply of the presi- 
 dent to an explanation of the reason of failure to give notice, 
 that the company would be disposed to do what is right, 
 amount to such waiver ; * nor a mere proposal to arbitrate, 
 the proposition being accompanied by a statement that the 
 party proposing has no power to waive ; ° nor a letter from the 
 secretary, denying responsibility, stating that the proofs are 
 unsatisfactory, and reserving all objections to a recovery.^ 
 And a waiver of notice is not a waiver of the preliminary proof, 
 or of the particular account, when they are treated by the 
 policy as distinct and separate acts.'^ Where proofs are not 
 forwarded until after the expiration of the time limited, and 
 then liability is denied explicitly on the ground of the neg- 
 lect to forward proofs in due time, as well as upon other 
 grounds, this is no waiver of the first ground.^ Nor is an 
 
 1 Blake v. Exchange Mut. Ins. Co., 12 Gray (Mass.), 265; Hartford Prot. Ins. 
 Co. V. Harmer, 22 Ohio, 452 ; Noyes v. Washintjton County Mut. Ins. Co., 30 Vt. 
 659; Turley v. North Am. Fire Ins. Co., 25 Wend. (N. Y.J 374; Unthank y. 
 Travellers' Ins. Co., C. Ct. (Ind.), 4 Bissell, 357. 
 
 2 Boyle V. North Carolina Mut. Ins. Co., 7 Jones, Law (N. C), 373. 
 
 3 Spring Garden Mut. Ins. Co. v. Evans, 9 Md. 1. 
 
 * Smith V. Haverhill Mut. Fire Ins. Co., 1 Allen (Mass.), 297. 
 6 Niagara Dist. Mut. Fire Ins. Co v. Lewis, 12 U. C. (C. P.) 15. 
 
 6 Citizens' Ins. Co. v. Doll, 35 Md. 89. 
 
 7 Desilver v. State Mut. Ins. Co., 38 Pa. St. 130. 
 
 8 Blossom V. Lycoming Ins. Co., 64 N. Y. 162 ; a7ite, § 464. 
 
 1094
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 472 
 
 examination of the premises, accompanied by notice to pro- 
 duce the proofs.^ 
 
 [Where no word or act has been said or done by the 
 assurer to mislead the assured or throw him off his guard, 
 mere silence is not enough to infer waiver of certificate 
 of loss.2 Where the assured claimed payment for the loss 
 of a horse insured against lightning, although he died of 
 disease, a refusal to pay if the horse died from any other cause 
 than lightning is not a waiver, but rather a demand of proofs 
 of loss by the cause insured against.^ That the agent has esti- 
 mated the damage, and the estimate is accepted by the assured, 
 is no waiver of the proofs.^ Nor acceptance of an inventory or 
 other such act by the agent, if at the same time lie tells the in- 
 sured that the stipulated proofs must be furnished.^ Evidence 
 of a submission, by the assured and the insurers, of the 
 amount of the loss to arbitrators, is not a waiver of proofs of 
 loss by the latter, so as to let in a trustee process, if the company 
 states in its answer that it has never waived the conditions of 
 the policy.^] 
 
 § 472. Preliminary Proof ; Evidence. — In Hincken v. Mutual 
 Benefit Life Insurance Company,'' a question arose as to the 
 amount of evidence necessary to sustain a verdict in favor of 
 the insured upon the allegation of having furnished the re- 
 quired preliminary proof. And it was held that, when at the 
 trial a witness testified that he had delivered the preliminary 
 proofs within the required time, but nothing further appears 
 as to what they were, except that they then were in the pos- 
 session of the insurers, and that no objection had been made 
 known, this was evidence that the preliminary proofs were in 
 accordance with the requirements of the policy, and sufficient 
 to sustain the verdict.^ 
 
 1 Brush V. Insurance Co., 6 Phila. 252. 
 
 2 [Muellers. South Side Fire Ins. Co., 87 Pa. St. 399 at 405; Cent. City 
 Ins. Co. V. Gates, 18 Ins. L. J. 761 (Ala.), May 2, 1889.] 
 
 3 [Cornett i\ Phenix Ins. Co., 67 Iowa, .388.] 
 
 * [McKean v. Commercial Union Ins. Co., 21 N. B. R. 583.] 
 
 5 [Life Ass. V. Goode, 71 Tex. 90.] 
 
 6 [Pettingill v. Hinks, 9 Gray, 169 at 170.] 
 ^ 50 N. Y. 657 ; affirming s. c. 6 Lans. 21. 
 
 8 See also Warner v. Peoria Mar. & Fire Ins. Co., 14 "Wis. 318. 
 
 1095
 
 § 473] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 § 473. Preliminary Proof ; Stipulation as to Waiver. — And 
 the insurers have been held to have waived their right to in- 
 sist upon defects in preliminary proof, even though in one of 
 the by-laws it is expressly agreed and declared by the parties 
 that no condition, stipulation, or clause contained in the policy 
 shall be waived, except by writing indorsed on the policy, and 
 all the by-laws are printed as conditions of insurance, and 
 payment of loss is made subject to proof thereof in con- 
 formity to the conditions, it appearing that after informal and 
 defective preliminary proofs had been delivered in, the presi- 
 dent and secretary of the company examined the premises, 
 and had interviews with the insured before the expiration of 
 the time within which said proofs were to be given, and 
 neither they then, nor the insurers afterwards, made any 
 objection to the form or sufficiency of the preliminary proofs, 
 while there was yet time to remedy defects, but put their re- 
 fusal to pay on other and distinct grounds. Regarding the 
 case as one of some difficulty, the court say : " How far the 
 provisions, the form of the notice and proofs of loss, after a 
 valid contract has been made and a loss taken place under it, 
 can be regarded as conditions of the contract itself, it is not 
 necessary to determine, nor whether their being classed under 
 the designation of conditions of insurance could change the 
 nature and purpose of the stipulations themselves ; for it 
 seems to us that the question is not as to the provisions of the 
 contract, but as to the performance of the provisions. The 
 plaintiff is not seeking to set up a contract from which a 
 material provision has been omitted by the oral consent of 
 the officers of the company. The policy contained the usual 
 provisions as to notice and proofs of loss. Upon the happen- 
 ing of the loss the plaintiff sent to the defendants certain 
 notices and proofs, in pursuance of the requisition of the by- 
 laws upon the subject. If the notices were defective, good 
 faitli on the ])art of the underwriters required them to give 
 notice to the insured. If they failed to do so ; if they pro- 
 ceeded to negotiate with the plaintiff without adverting to 
 the defects ; if, still further, they put their refusal to pay on 
 other and distinct grounds, — they are, upon familiar princi- 
 1096
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 473 A 
 
 pies of law, estopped to set up and rely upon the defective 
 notices. The law assumes that the notices were correct, and 
 will not listen to the defendant when he seeks to show the 
 contrary.! If the defendant relied upon any exemption from 
 the obligations of the policy, or any modification of them by 
 the agents or officers of the company, or any addition, lie 
 must show such exemption, modification, or addition by in- 
 dorsement upon the policy. But the question whether a 
 stipulation as to notice and proofs of loss has been fulfilled, 
 or whether the defendant is in a condition to be heard upon 
 that question, must be tested by the ordinary rules of law. 
 There is a time when objections in matters of form must be 
 taken. If they are not then made, they never can be made. 
 The law does not say the procedure was perfect, but that the 
 question is not open. The adherence to, and liberal applica- 
 tion of this principle, are necessary to the maintenance of 
 good faith and fair dealing in judicial proceedings."^ It is 
 worthy of observation that this is the language of a court 
 which has resolutely resisted what appears to be the general 
 tendency to apply the doctrines of waiver and estoppel in 
 favor of the insured, where there has been a clear failure to 
 comply with the express and essential conditions of the con- 
 tract, but where, nevertheless, it would be inequitable to 
 permit the insurers to avail themselves of such a failure in 
 defence of a claim for damages. 
 
 [§ 473 A. Provision in Policy against Waiver except by 
 Writing, inoperative as to Notice and Proofs. — A clause to the 
 effect that no act of the company, except an express written 
 declaration, shall waive the requirements in regard to proofs, 
 will not prevent the company from estopping itself, by act in 
 pais. So far as the clause is intended to have such effect it is 
 void, for a man cannot contract not to make an agreement 
 that the law allows him to make with the covenantee.^ A 
 
 1 Vos V. Robinson, 9 Johns. (N. Y.) 192; ^tna Fire Ins. Co. v. Tyler, IG 
 Wend. (N. Y.) 401; Heath v. Franklin Ins. Co., 1 Cusli. (Mass.) 257; Clark v. 
 New England Mut. Fire Ins. Co., 6 id. 342. See also Farmers', &c. Ins. Co. v. 
 Meckes (Pa.), 12 Reptr. 314 (1881). And see ante, §§ 140, 363; post, § 611. 
 
 ■•^ Blake v. Exchange Mnt. Ins. Co., 12 Gray (Mass.), 2G5. 
 
 3 [Bowes V. Nat. Life Ins. Co., 20 N. B. R. 438.] 
 
 1097
 
 § 474] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 provision in the policy that no condition shall be waived or 
 annulled except by indorsement upon it, will not prevent the 
 waiver of proofs of loss if the insurer without objecting to 
 their absence joins in proceedings for adjustment.^ In spite of 
 such a condition the agent may have authority to orally waive 
 proof of loss, and the question should go to the jury.^ Such 
 a provision is held not to refer to stipulations to be performed 
 after loss, such as giving notice and proof.-^] 
 
 § 474. Particular Account. — The particular account of the 
 loss or damage, usually required as a part of the preliminary 
 proof, demands some attention. What and how particular 
 this must be will depend upon the nature of the property in- 
 sured. If, for instance, it be a dwelling-house, a statement 
 that it was totally destroyed on a given day will be sufficient, 
 if there was in fact a total loss. If, however, there is a par- 
 tial loss, the extent of the damage should be stated. So in 
 cases of insurance upon merchandise and personal effects 
 generally, where the loss is only partial, the particulars of the 
 nature, quality, and quantity of the effects and of the dam- 
 age sustained should be given, in order to aid the insurers to 
 form a judgment as to the amount of the loss. It is an 
 account, in its technical sense, of the amount that is re- 
 quired, and not a statement, conjectural or otherwise, of the 
 real or supposed causes of the loss or damage. In other 
 words, the particular account is to be an account, and not an 
 accounting for the loss or damage. If this were not clear 
 upon the words themselves, the usual subsidiary clause making 
 it compulsory upon the insured to produce, in addition to his 
 account, if required, his books of account and other vouch- 
 ers, would seem to leave no doubt^upon the true construction 
 of the provision. Of course it should be stated what was the 
 cause of the loss or damage, so far as to bring it within the 
 risk insured against, as that it was by fire, or by death, or by 
 flood, or by storm, or by some particular accident, as the case 
 
 1 [Carroll v. Girard Fire Ins. Co., 72 Cal 297 ] 
 
 2 [Lowry v. Lancashire Ins. Co., 32 Hun, 329.] 
 
 3 [Wheaton v. North Brit. & Mer. Ins. Co., 76 Cal. 415; Ind. Ins. Co. v. Cape- 
 hart, 108 Ind. 270.] 
 
 1098
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 475 
 
 may be, but not to tlie extent of stating how it happened or 
 was occasioned.^ It is also to be borne in mind that, with refer- 
 ence to notice, particular accounts, and preliminary proofs gen- 
 erally, courts will not require the insured to do more than is 
 clearly required by the terms of the contract ; and, whether 
 these be general or particular, will treat them as condi- 
 tions imposing burdens, to be for that reason construed 
 liberally in favor of those upon whom the burdens are im- 
 posed.2 And they will give due weight to the fact whether, 
 in the particular case, the insurers have greater or less facili- 
 ties for obtaining the required information irrespective of the 
 communications of the insured. Thus, in fire insurance, 
 where the insurers or their agents may make personal in- 
 spection, they will not require so great particularity as in 
 marine insurance, where not unfrequently the inspection is 
 wholly impracticable.^ 
 
 § 475. Particular Account ; What is required. — The " particu- 
 lar account of loss or damage " is always liberally construed in 
 favor of the insured, as he must often render it under the 
 disadvantage of the loss of the means for rendering it, nor 
 does it require a statement of the manner in which the loss 
 happened, or of the cause or the occasion of it ; nor need it 
 negative excepted causes of loss. The fact of loss within the 
 risk, the subject-matter, and the amount of injury sustained are 
 all that are necessary.* Nor need it state the interest of the in- 
 sured, unless specially required.* [The particular account of 
 
 1 Catlin V. Springfield Fire Ins. Co., 1 Suraner (U. S. C. Ct.), 434. In Wood- 
 fin I'. Asheville Mut. Ins. Co., the failure to give tlie particular account was 
 held to be fatal, although no penalty was by the policy attached to the failure. 
 But this cannot be good law. It is favoring forfeitures. See Taylor v. JEtnn 
 Life Ins. Co., and Heath t: Franklin Ins. Co., ante, § 465, and Bilbrough v. 
 Metropolis Ins. Co., ante, § 466. 
 
 2 Heath v. Franklin Ins. Co., 1 Cush. (Mass.) 257; Catlin v. Springfield Fire 
 Ins. Co., 1 Sumner (U. S. C. Ct.), 4-34; Lawrence v. Ocean Ins. Co., 11 Johns. 
 (N. Y ) 241, 260; Norton v. Rensselaer & Saratoga Ins. Co., 7 Cow. (N. Y.) 645; 
 Harkins v. Quincy Mut. Fire Ins. Co., 16 Gray (Mass.), 591. 
 
 3 Haff V. Mar. Ins. Co., 4 Johns. (N. Y.) 132. 
 
 * Catlin V. Springfield Ins. Co., 1 Sumner (U. S. C. Ct.),434. 
 5 Gilbert v. North American Ins. Co., 28 Wend. (N. Y.) 43; Miller v. Eagle 
 Life Ins. Co., 2 E. D. Smith, 268. 
 
 1099
 
 § 475] INSURANCE : FTRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 loss sliould be reasonahly specific under all the circumstances 
 of the case.^ When the assured claimed a total loss and stated 
 value of property lost, and the nature of his interest therein, 
 not knowing that any part of the same was saved, a by-law 
 calling for a particular account, stating amount lost and 
 amount saved, is complied with. The account is as particular 
 as he can make on the facts known to him.^ A mere refer- 
 ence to the books and invoices is not enough, although they 
 have been in the possession of the company since the loss, for 
 it is the duty of the insured to make out the particular state- 
 ment, enumerating the articles lost and stating their value.^] 
 A general statement of the aggregate value of the property 
 lost, wdiich consisted of divers articles, has been held to be an 
 excuse for an insufficient " particular account," where from 
 the loss of books and accounts, or for other causes, no better 
 or more detailed statement could be made.* Even under such 
 circumstances, this must be more than a mere repetition of 
 the description in the policy, as more or less particulars may 
 always be remembered ; and where books and vouchers are 
 lost, a statement that the account is as particular as it is pos- 
 sible to give is liable to impeachment by showing to the con- 
 trary.^ If there is some particularity, the jury may say if 
 there is enough. If there is none, the court will not allow it 
 to go to the jury .6 [" Household furniture, -$3671 ; groceries, 
 $233," is not sufficient as a particular statement."] Whether 
 proof is furnished is for the court ; whether it is sufficient is 
 
 1 [Erwin ?•. Springfield Fire & Mar. Ins. Co., 24 Mo. App. 145.] 
 
 2 [Harkins v. Quincy Mut. Fire Ins. Co., 16 Gray, 591 at 592.] 
 
 3 [Gauche v. Lond. &c. Ins. Co., 1 Fed. Rep. 347,5tli Cir. (La.) 1881.] 
 
 * McLauglilin r. Washington County Ins. Co., 23 "Wend. (N. Y.) 525 ; Norton 
 r. Rensselaer & Saratoga Ins. Co., 7 Cow. (N. Y.) G4o; Bumstead v. Dividend 
 Mut. Ins. Co., 2 Ker. (N. Y.) 81 ; Hoffman v. ^tnaFire Ins. Co., 1 Robt. (N. Y.) 
 501 ; s. c. 32 N. Y. 405; Home Ins. Co. v. Cohen, 20 Grat. (Va.) 312; Aurora 
 Fire Ins. Co. v. Johnson, 46 Ind. 315. 
 
 6 Banting v. Niagara Ins. Co., 25 U. C. (Q. B.) 431 ; Beatty v. Lycoming Ins. 
 Co., 66 Pa. St. 9. 
 
 6 Beatty v. Lycoming County Mut. Ins. Co., 66 Pa. St. 9 ; Banting v. Niag- 
 ara, &c. Ins. Co., 25 U. C. (C. B.) 431. 
 
 ^ [Beattv y. Lycoming Co. Mut. Ins. Co.. 66 Pa. St. 9 at 17.] 
 
 lioo
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 476 
 
 for the jury.i And the burden of proof is on the insured to 
 show that he has complied with the requirement.^ The ac- 
 count should not fail to give the amount of loss, and to state 
 the fact that it was upon the property insured."^ Every partic 
 ular fact required should be stated, or an excuse given for not 
 stating it* If by the terms of the policy it is to be signed, 
 verified, or supported in any particular way, these require- 
 ments must be complied with.^ A builder's estimate of the 
 cost of rebuilding is not proof of the actual cash value of the 
 property lost ; ^ and a statement that the loss is total is not a 
 certificate of the amount of loss.''' But only such particulars 
 of loss and only such books, vouchers, &c., as are reasonably 
 in the power of the insured to furnish can be demanded. If 
 goods, counters, shelving, &c., are paid for in cash, without 
 taking vouchers, he is not bound, at the demand of the in- 
 surer, to procure from the persons furnishing them certified 
 statements of their account.^ [The condition requiring a par- 
 ticular account of loss, as soon as possible, is waived by the 
 insurer's proceeding at once with the co-operation of the 
 insured to ascertain for himself the full details of the loss.^ 
 It is held in Ireland that the furnishing of the particular ac- 
 count within the exact time prescribed is not an essential con- 
 dition precedent to recovery.^''] 
 
 § 476. Loss ; Personal Examination ; When Suit may be 
 brought ; When Proof made. — If the loss be made payable 
 at a certain specified time after the rendition of the requisite 
 preliminary proof, no action brought before the lapse of that 
 
 1 Citizens' Fire Ins. Co. v. Doll, 35 Md. 89. 
 
 2 Mispelliorn v. Farmers' Ins. Co. (Md.), 9 Ins. L. J. 411. 
 
 3 Lycoming County Mut. Ins. Co. v. Updegraff, 40 Pa. St. 311. 
 
 4 Markle v. Niagara Ins. Co., 28 U. C. (Q. B.) 525; Battaille i'. Merchants' 
 Ins. Co., 3 Rob. (La.) 384 ; ante, § 465. 
 
 5 Greaves r. Niagara Dist. Mut. Fire Ass. Co., 25 U. C. (Q. B.) 127; Carter 
 V. Niagara Dist. Mut. Fire Ass. Co., 19 U. C. (C. P.) 143 ; Mulvey i;. Gore Dist. 
 Mut. Fire Ins. Co., 25 U. C. (Q. B.) 424. 
 
 6 Citizens' Ins. Co. v. Doll, 35 Md. 89. 
 
 7 Borden v. Provincial Ins. Co., 2 P. & B. (N. B.) 381, 382. 
 
 8 Goldsmith v. Gore Dist. Ins. Co., 27 U. C. (C. P.) 435. 
 
 9 [Ligon's Adm'rs v. Insurance Co., 87 Tenn. 341.] 
 
 10 [Weir v. Northern Counties' &c. Ins. Co. Ir. L. R., 4 C. P. 689.] 
 
 1101
 
 § 477] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 time can be maintained ; ^ and the time is to be reckoned from 
 the delivery of the proof. As the "personal examination" 
 which it is sometimes required the assured shall submit to, is 
 at the option of the insurer, it constitutes no part of the 
 proof, and is without effect in determining the time wlien suit 
 may be brought. If this were not so, the defendants, by re- 
 fusing to make any examination, might avoid payment entirely. 
 And the personal examination must be confined to matters 
 pertinent to the loss ; nor will a refusal to answer or to pro- 
 duce papers prevent recovery, unless strictly within the stipu- 
 lations of the policy. And a statement under oath that the 
 property was sold before the loss is open to explanation at 
 the trial.2 If new proofs are furnished in the place of defec- 
 tive ones, the time within which the action may be brought 
 is to be reckoned from the presentation of the new proofs ; ^ 
 but if the policy requires notice of loss, making no mention 
 of the proof or time of payment, the loss will be payable 
 in a reasonable time after notice.* If the policy require 
 that the particular account shall be delivered in, the insured 
 may send it by mail, if there be a general request of the com- 
 pany that all communications and notices be addressed to 
 them, post-paid.^ [A stipulation in a fire policy that the insured 
 shall submit to a private examination in case of loss, if re- 
 quired by the company, is so far against public policy that a 
 notice that the company desired such examination will not 
 be received in evidence.*^] 
 
 § 477. Preliminary Proof ; Fraud and False Swearing ; Pay- 
 ment by Mistake. — The fraud and false swearing in the i»re- 
 liminary proof, which it is sometimes provided shall prevent 
 
 1 Harris v. Prot. Ins. Co., 1 Wright (Ohio), 548; Winnesheik Ins. Co. ?'. 
 Sehueller, 60 111.465; Insurance Companies v. Weides, 14 Wall. (U. S.) 375. 
 Miller v. Eagle Life & Health Ins. Co., 2 E. D. Smith (N. Y. C. Ct.), apparently 
 to the contrary, is not so upon its facts. 
 
 2 Germania Fire Ins. Co. v. Curran, 8 Kans. 9 ; post, § 477. 
 
 3 Kimball v. Hamilton Ins. Co., 8 Bosw. (N. Y. Superior Ct.) 495. 
 
 * Hartford Passenger Assurance Co. (U. S. C. Ct., Southern Dist. 111.), 2 
 Ins. L. J. 276. 
 
 5 Hodgkins v. Mont. County Mut. Ins. Co., 41 N. Y. 620, reversing s. c. 34 
 Barb. 213. 
 
 6 [McGraw r. Germania Fire Ins. Co., 54 Mich. 146.] 
 
 1102
 
 CH. XXV.] OF THE NOTICE, ETC. [§ 477 
 
 a recovery, is intentional, and with the purpose of defrauding, 
 and may be with reference to any material matter, — by over- 
 valuing the loss,i by undervaluing what is saved, by swearing 
 to the loss of property wliich was not in existence, and in 
 divers other ways, all open, however, to explanation.^ [Where 
 a policy provides for an examination under oath after loss, 
 and that false swearing in this examination shall forfeit the 
 policy, such false swearing as to material facts (the owner- 
 ship and value of the goods) will avoid the policy, although 
 the motive of the insured was not to deceive the insurers, 
 but to cover up false statements previously made to 
 
 1 [A statement of the value of a house burned, in proving the loss, without 
 actual fraud appearing, is but an opinion vviiich, if excessive, is not false swear- 
 ing. Jersey City Ins. Co. v. Nichol, ^5 N. J. Eq. 291 at 302. Tlie fact that 
 the assured swore in his proofs and on the trial that his loss was some $3000 
 more than the referees found is not even presumptive evidence of fraud or false 
 swearing. Unger v. People's Fire Ins. Co., 4 Daly, 96 at 98. An innocent mis- 
 take in swearing to tiie proofs of loss, made out by the company's agent, and 
 inaccurately stating the names of the owners, but supposed by the insured to 
 be correct, does not prevent a recovery. Parker v. Amazon Ins. Co., 34 Wis. 363 
 at 371. But if the insured allows his wife to make an inventory of household 
 goods, and signs and swears to it without scrutiny and it contains false state- 
 ments, he makes the fraud his own. Mullin v. Vt. Mut. Fire Ins. Co., 58 Vt. 
 113. Where there is a large discrepancy between the statements in the proofs 
 of loss and the findings, tlie former making the loss three times as much as the 
 latter, and there is no ground to suppose the misstatements arose from mistake, 
 there is fraud as a matter of law, and the jury should not find for the plaintiff 
 in any sum, but should render a verdict for the defendant. Sternfield v. Park 
 Fire Ins. Co, 50 Hun, 262. If the pohcy is to be void for "wilful misstate- 
 ment with intent to deceive the company as to the amount of the loss," and the 
 insured in his statement of loss claims $2000 whereas the property proves to 
 have been worth only $500, a verdict in his favor will be set aside. McLeod v. 
 Citizens' Ins. Co., 1 Russ. & Geld. (Nova Scotia) 21.] 
 
 2 Moadinger v. Meciianics' Mut. Ins. Co., 2 Hall (Superior Ct. N. Y.), 490; 
 Marion v. Great Rep. Ins. Co., 35 Mo. 148; Franklin Fire Ins. Co. v. Updegraff, 
 43 Pa. St. 350; Maher v. Hibernia Ins. Co., 67 N. Y. 283, Commercial Ins. Co! 
 V. Huckberger, 52 111. 464 ; Beck v. Germania Ins. Co., 23 La. Ann. 510; McMas. 
 ters V. Ins. Co. of North America, 55 N. Y. 222 ; Hubbard v. Hartford Fire Ins. 
 Co., 33 Iowa, 325 ; Insurance Companies v. Weides, 14 Wall. (U. S.) 375; St. 
 Louis Ins. Co. v. Kyle, 11 Mo. 278; Clark v. Phoenix Ins. Co. 36 Cal. 168; Ma- 
 son V. Agr. Ins. Co., 18 U. C. (C. P.) 19 ; Howell v. Hartford Fire Ins. Co., C. Ct. 
 (111.) 3 Ins. L. J. 649; Park v. Phcenix Ins. Co., 19 U. C. (Q. B.) 110; ante, § 116. 
 And fraud as to the value of personal property will avoid the policy as to realty, 
 especially if tlie provision be that " all fraud shall cause a forfeiture." Moore 
 i^. Virginia, &c. Ins. Co., 28 Grat. (Va.) 608. 
 
 VOL. II. — 26 1103
 
 § 477] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH, XXV. 
 
 others.^] Untrue statements as to matters about which no state- 
 ment is I'equired are no farther material than as they may be 
 used adversely as evidence, and will require explanation at the 
 trial.2 [The defence of false swearing in the proofs requires 
 that it be knowingly and wilfully false, with intent to deceive 
 and damage the company.^ The clause in the proofs against 
 misrepresentation or false swearing does not include an hon- 
 est mistake in omitting an incumbrance which the insured 
 did not believe was a lien on the property.* In spite of the 
 absence of the oath and signature of one of the assured, and a 
 question of unreasonable delay, the jury may declare the proofs 
 substantially a sufficient compliance with the conditions of the 
 policy.^] A claim honestly made is not, under the condition 
 against fraud, invalidated on account of error, or even some 
 degree of exaggeration or overestimate ; but if the insured, 
 with reference to the quantity or the value of the goods in- 
 sured, makes a claim which he knows to be false and unjust, 
 and which may defraud, then he cannot recover anything.^ 
 But a mere wilful false statement which cannot defraud will 
 not prevent recovery,'^ The failure, however, to mention cir- 
 cumstances known to the plaintiff, tending to show that the 
 fire was purposely set, may be fraudulent.^ So is a known 
 over-valuation, made with a purpose to induce a speedy settle- 
 ment and to prevent controversy, about the claim for the full 
 amount insured.^ The mere fact that the amount of loss, as 
 found by the jury, is less than that stated by the insured in 
 
 1 [Claflin V. Commonwealth Ins. Co., 110 U. S. 81, 9G.] 
 
 2 Koss V. Com. Un. Ass. Co., 20 U. C. (Q. B.) 552 ; Rice v. Prov. Ins. Co., 7 
 U. C. (C. P.) 548; Day v. Mut. Benefit Ins. Co., 5 Big. Life & Ace. Ins Cas. 
 53 ; Crowley v. Agr. Ins. Co., 21 U. C. (C. P.) 567; Connecticut Mut. Ins. Co. 
 V. Siegel, 9 Bush (Ky.), 157. 
 
 3 [Erman v. Sun Mut. Ins. Co., 35 La. Ann. 1095 ; Dual v. Firemen's Ins. 
 Co., 35 La. Ann. 98.] 
 
 * [Thierolf u. Universal Fire Ins. Co., 110 Pa. St. 37.] 
 
 5 [Martliinson v. North Brit. & Mer. Ins. Co., 64 Mich. 872.] 
 
 6 Per Cockburn, C. J., Nisi Prius, Chapman v. Pole, 22 L. T. n. s. 307; Sib- 
 ley V. St. Paul, &c. Ins. Co., C Ct. (111.), 8 Ins. L. J. 461 ; Dogge v. N. W. Ins. 
 Co., 49 Wis. 501. 
 
 7 Shaw V. Scottish Ins. Co., C. Ct. (Me.), 1 Fed. Rep. 761. 
 ^ Smith V. Queen Ins Co., 1 Hannay (N. B), 311. 
 
 ^ Sleeper v. New Hampshire Ins. Co. (N. H.), 5 Ins. L. J. 539. 
 
 1104
 
 CH, XXV.] OP THE NOTICE, ETC. [§ 477 
 
 his preliminary proof, is not sufficient to sustain the defence 
 of false swearing,^ even though the discrepancy be so con- 
 siderable as to amount to two-fifths ; ^ though such a dis- 
 crepancy would be evidence bearing upon such issue, which 
 the insured would be called upon to explain.^ But in Levy v. 
 Baillie,* a rule nisi for a new trial was made absolute where 
 the claim sworn to was .£1085, and the amount found by the 
 jury was £500, on the ground that tliat was in effect a ver- 
 dict for the defendant under the condition. And if the sworn 
 statement discloses a ground of defence for the insurer, he 
 may avail himself of it, and the insurer will be bound by his 
 statement at the trial, unless an amended statement is fur- 
 nished to the insurers before that time,^ — in which case, the 
 fact constituting a defence may be shown to have been so 
 stated by mistake.^ In fact, in this case the explanation was 
 admitted without a previously amended statement, the mis- 
 statement having been voluntary. And if payment of the 
 loss be obtained by means of fraudulent proofs, the money 
 may be recovered back in an action for the deceit. In such 
 an action it was ruled that the defendants might be held lia- 
 ble, even though the plaintiffs did not rely exclusively upon 
 their statements, but were partly induced by other statements 
 ' or proofs to make the payment. It is sufficient, upon this 
 point, " if the plaintiffs so far relied on these statements (of 
 the defendants) that they would not have paid the money, had 
 it not been for these statements." If the representations of the 
 
 1 Franklin Ins. Co. v. Culver, 6 Ind. 137. 
 
 2 Moore v. Prot. Ins. Co., 29 Me. 97 ; Cann v. Imperial, &c. Ins. Co., 1 R. & 
 C. (Nova Scotia) 240, 244. 
 
 ^ Hoffman v. West. Mar. Fire Ins. Co., 1 La. Ann. 216; Marchesseau v. Mer- 
 chants' Ins. Co., 1 Rob. (La.) 438. See also post, § 584. 
 
 * 7 Bing. 349. The doctrine of tliis case, however, is extreme, and has been 
 denied to be sound in a recent well-considered case. Gerhauser v. North Brit. 
 &. Mer. Ins. Co., 6 Nev. 15. And see ante, § 443. But where the claim for loss 
 was .$2000, and the verdict for -$500, the verdict was set aside in McLeod v. 
 Citizens' Ins. Co., 3 R. & C. (Nova Scotia) 156. As to over-valuation of insur- 
 able interest, see ante §§ 373-376. 
 
 5 Campbell v. Charter Oak Fire Ins. Co., 10 Allen (Mass ), 213; Irving v. 
 Excelsior Fire Ins. Co., 1 Bosw. (N. Y. Superior Ct.) 507. 
 
 6 Hayes v. Union Ins. Co., U. C. (Q. B.), 9 Ins. L. J. 80. 
 
 1105
 
 § 477] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXV. 
 
 defendants were calculated and intended to induce the plain- 
 tiffs to alter their condition by parting with their money, and 
 had that effect, it would be immaterial that other representa- 
 tions and influences were also brought to bear, which may 
 have had a tendency towards the same general results.^ So if 
 a purchaser of a policy is induced by representations that the 
 loss will be paid, the insurers will be estopped from setting 
 up against the purchaser a defence which might have been 
 made to the note in the hands of the beneficiary named in the 
 policy.2 
 
 1 Hartford Live Stock Ins. Co. v. Mathews and Another, 102 Mass. 221 ; 
 Northwestern Life Ins. Co. v. Elliott, C. Ct. (Or.), 10 Ins. L. J. 333. 
 
 2 France v. Miua. Life Ins. Co. (C. C. U. S., East. Dist. Pa.), 2 Ins. L. J. 
 657. 
 
 1106
 
 CH. XXVI.] LIMITATION OF SUIT AS TO TIME AND PLACE. 
 
 CHAPTER XXVL 
 
 LIMITATION OF SUIT AS TO TIME AND PLACE. 
 
 Analysis. 
 
 § 478 A. Time. 
 
 A condition that suit must be brought within a certain time 
 is valid even against minor beneficiaries (unless un- 
 reasonable, § 482). 
 It controls the general statute of limitations. 
 Limitation in by-law. 
 Such conditions do not apply to a suit to recover 
 
 premiums. 
 A condition that no suit shall be brought until de- 
 fendant does some act is void (also § 479). 
 § 479. The period begins to run from the time the loss becomes due 
 
 and payable, and the right of action accrues. There 
 is no right of action until the sixty days or ninety days 
 after proof allowed the company for payment; wherefore 
 the limitation does not begin to run until that time has 
 expired, although the language of the policy is em- 
 phatic that it shall run from the time of the fire, § 479. 
 Contra, § 479, and note. 
 Canada statutes, § 479. 
 If sixty days are given for payment they run from the 
 
 time of proof, § 479. 
 If the last day is Sunday, suit on following day sufficient. 
 § 480. Limitation of the issuing of execution against the company 
 
 is valid. 
 § 481. Reinsurance under a policy containing time limitations. 
 
 § 482. A new promise will not revive a cause of action once dead 
 
 under a clause of limitation. 
 § 483. Non-suit or arrest of judgment in suit brought within time will 
 
 not permit a new suit after time, nor will a suit in a couit 
 without jurisdiction stop the running of the period. But 
 an amendment in the name of the defendant may be made 
 after the time has expired, or a new party may be added. 
 §§ 484-488. Excuse for failing to sue within the time. 
 
 Faiilt of insurer is an excuse, §§ 484, 488. 
 Negotiations in bad faith or other action lulling the insured 
 into security, and leading him to suppose as a prudent 
 man that suit is unnecessary, § 488. 
 Otherwise if the negotiations are in good faith, or cease be- 
 fore the limitation expires, § 485. 
 Refusal to pay does not waive the outer limitation of suit, l)nt 
 does waive the sixty or ninety days allowed the company 
 for payment, and suit may be brought at once, § 488. 
 
 1107
 
 § 478] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVI. 
 
 Demanding proofs, or otherwise recognizing the policy after 
 the period lias expired, is a waiver, § 488. 
 
 Clause requiring writing for a waiver, § 488. 
 
 Payment to mortgagee does not waive the limit as to the 
 mortgagor, § 488. 
 
 Arrest for arson not at instance of company no excuse, § 4S8. 
 
 Intervening war may excuse, § 486. 
 
 Other conditions inconsistent with the time limit, § 487. 
 §§ 490, 491. Place. Limitation as to venue. 
 
 § 478. Limitation as to Time; From Loss. — A condition in 
 a policy of fire insurance, that no action against the insurers 
 for the recovery of any claim upon the policy shall be sus- 
 tained, unless commenced within a certain period after the 
 loss shall have occurred, and that the lapse of this period 
 shall be conclusive evidence against the validity of any claim 
 asserted, if an action for its enforcement be subsequently 
 commenced, is valid,^ and is generally held not to be in con- 
 travention of the policy of statutes of limitation. It stands 
 upon the same grounds as other conditions precedent. 
 
 There is no principle of common law foi'bidding such a 
 condition. Originally there was no limitation to actions. 
 The first statute of limitations, which has been substantially 
 followed, provided that suits in certain cases should be 
 brought within six years, and not afterwards. But there is 
 nothing in the act which forbids a limitation short of this 
 period, by agreement of parties. It only prohibits the suit 
 after six years. There can be no doubt that, prior to the 
 statute, it would have been competent for the parties, by a 
 clause in their contract, to limit the time within which suit 
 might be brought. There is nothing in the act, necessarily 
 
 1 [Moore v. State Ins. Co., 72 Iowa, 414 ; Plioenix Ins. Co. v. Lebcher, 20 
 Brad. 450; Ohio y. Western Ass. Co., 65 Miss. 532; Universal Ins. Co. v. 
 Weiss, 106 Pa. St. 20; Farmers' Mutual Fire Ins. Co. v. Barr, 94 Pa. St. 345; 
 Tasker v. Kenton Ins. Co., 58 N. II. 4(39 at 469; Davidson v. Phoenix Ins. Co , 4 
 Sawyer (U. S.), 594 at 596; Merchants' Ins. Co. v. La Croix, 35 Texas, 249 at 
 261 ; Higgins /;. Windsor Co. Mut. Fire Ins. Co., 54 Vt. 270. The clause " all 
 claims are barred unless prosecuted within one year, &c ," is not doubtful nor 
 ambiguous, and means precisely its literal interpretation. Carraway v. Mer- 
 chants' Mut. Ins. Co., 26 La. Ann. 298 at 209. A limitation of suit in the policy 
 to one year after loss controls the general statute of limitation, and is good even 
 against minor beneficiaries. Suggs v. Insurance Co., 71 Tex. 579 ; O'Laughlin 
 V. Union Cent. Life Ins. Co., 11 Fed. Rep. 280; 3 McCrary, 543 (Mo.) 1882.] 
 1108
 
 CH. XXVI.] LIMITATION OP SUIT AS TO TIME AND PLACE. [§ 478 
 
 or by fair construction, taking away the right. And the 
 adoption of such a condition is based upon grounds of pru- 
 dence and policy which must challenge the general approval. 
 Insurance comj)anics are always liable to be imposed upon 
 by fraud. It is often very difficult to detect the fraud, and 
 to obtain evidence to substantiate it in a court of justice ; 
 and the greater the lapse of time the greater the difficulty. 
 It is therefore a wise and provident precaution to take, — 
 one which the law ought, if possible, to uphold, — to limit, 
 by the terms of their policies, the time within which actions 
 shall be brought, as a necessary protection to themselves 
 against fraud ; and they have the same right to introduce 
 such a stipulation as to introduce any other.i Even language 
 less explicit, as that the insured may bring his action within 
 a limited time, has been held to bar an action brought after 
 that time ; ^ and so has a condition that suit should be brought 
 at the next term of court after refusal to i)ay on penalty of 
 
 1 Ketehum v. Prot. Ins. Co., 1 Allen (New Brunswick), 136; Amesbury et al. 
 V. Bowditch Mut. Fire Ins. Co., 6 Gray (JIass.), 596; Glass v. Walker, 66 Mo. 
 32 ; 6 Reptr. 148 ; Riddlesbarger r. Hartford Ins. Co., 7 Wall. (U. S.) 386 ; Cray 
 V. Hartford Ins. Co., 1 Blatch. (U. S. C Ct.) 280 ; Brown v. Roger Williams Ins. 
 Co., 7 R. I. 301; s. c 5 id. 304; Wilson v. .^tna Ins Co , 27 Vt. 99, Williams 
 et al. V. Vermont Mut. Ins. Co., 20 id. 222 ; Peoria Ins. Co. v. Whitehill, 25 111. 
 466 ; North Western Ins. Co. v. Piioenix Oil & Candle Co., 31 Pa. St. 449 ; 
 Brown et nx. v. Savannah Mut. Ins. Co., 24 Ga. 97 ; Portage County Mut. Ins. 
 Co. y. West, 6 Ohio St. 599; Carter v. Hu.-nbolt Fire Ins. Co., 12 Iowa, 287; 
 Stout r. City Fire Ins. Co., id. 371 ; Ripley v. JEtna Ins. Co., 29 Barb. (N. Y.) 
 552; Fullam v. New York Union Ins. Co., 7 Gray (Mass ), 61. Tlie case in the 
 Supreme Court of Indiana, Eagle Ins. Co. v. Lafayette Ins. Co., 9 Ind. 44:3, 
 rested upon French v. Lafayette Ins. Co., 5 McLean, 461, which has been over- 
 ruled by the case cited above from 7 Wallace (U. S. Sup. Ct.), 386. See also 
 Ripley v. iEtna Ins. Co., 30 N. Y. 136 ; Brown v. Hartford Ins. Co., 5 R. I. 
 394; Hickey v. Anchor Ass. Co., 18 U. C. (Q. B.) 438; Patrick v. Farmers' 
 Ins. Co., 43 N. H. 021 ; Roach v. New York & Erie Ins. Co., 30 N. Y. 546; 
 Woodbury Sav. Bank v. Charter Oak Ins. Co., 31 Conn. 518. The French 
 law and that of Lower Canada hold such a limitation in derogation of the gen- 
 eral statute of limitations, and such is the language of some of our courts. 
 Comp. de I'Unioh c. Foure, Dallnz, Jur. Gen , 1850, 2, 40; Wilson v. State Fire 
 Ins. Co., 7 L. C. Jur. 223; INIayor v. Hamilton Ins. Co., 39 N Y. 46 ; Westches- 
 ter Fire Ins. Co. v. Dodge (Mich.), 9 Ins. L. J. 909. [The creditor may stipulate 
 to shorten the time of prescription limited by law, but an agreement to extend 
 that time is not valid. Allen r. Merch. Mut. Ins. Co., 33 L C. Jur, 314, 316.] 
 
 2 Portage County Mut. Fire Ins. Co. v. West et al., 6 Ohio, n. s. 599. 
 
 1109
 
 §479] insurance: fire, life, accident, etc. [CH. XXVI. 
 
 forfeiture.^ And the limitation, being part of the contract, 
 applies whatever may be the form of the suit.^ [Where a fire 
 broke out in the evening of August 23, 1884, and extended in- 
 to the 24th, a suit begun on Feb. 24, 1885, was held barred, by 
 the six months' limitation.^ When a section of an act incor- 
 porating insurance companies provides that stockholders may 
 bring suits if their loss claims are not paid within two months 
 thereafter, and a clause of a policy issued to one not a stock- 
 holder states that " payment of losses shall be made in sixty 
 days after proof," the latter waives the former even if it might 
 otherwise apply.* If a by4aw is relied on as establishing 
 a period of limitation for suit, it must be shown that it was 
 adopted before the contract of insurance in issue was made.^ 
 A limit of a year in which to bring action " for the recovery 
 of any claim by virtue of this policy " does not apply to a suit 
 to recover back premiums paid on a policy void ah initio^ such 
 action is not based on the policy but on the absence of any 
 legal policy.^ A condition that no action should be brought 
 until the defendant did something dependent on his own will, 
 is void as against public policy.' Where a corporation is char- 
 tered to insure the lives of members for beneficiaries named, 
 the liability of the company is a statutory one, and the period 
 of limitation applicable to it is twenty years.^] 
 
 § 479. Limitation ; From Time when Loss becomes due ; 
 From Proof. — In some cases it is provided that a suit is not 
 to be brought until the expiration of a certain time after the 
 loss becomes due ; and it has been held that where a loss, 
 subject to such provision, was allowed, payable in sixty days, 
 suit brought therefor two months after the allowance was 
 properly brought. The demand is due from and after the 
 determination of the amount or allowance. It is payable at 
 
 1 Keim v. Home Ins. Co., 42 Mo. 38. 
 
 2 Fullam V. New York Union Ins. Co., 7 Gray (Mass.), 61. And see post, § 480. 
 
 3 [Allemania Ins. Co. r. Little, 20 Brad. 431.] 
 
 4 [Howard v. Franklin Mar. & Fire Ins. Co., 9 How. Pr. 45 at 47.1 
 
 5 [Cox V. Fire Assurance Ass., 48 N. J. 53.] 
 
 6 [Waller v. Nortliern Ass. Co., 64 Iowa, 101.] 
 T IBowes I'. Natl. Ins. Co., 20 N. B. R. 438.] 
 
 8 [Ga. Masonic Ins. Co. v. Davis, 03 Ga. 471.] 
 
 1110
 
 CH. XXVI.] LIMITATION OF SUIT AS TO TIME AND PLACE. [§ 479 
 
 the expiration of the time limited. That it is not due till the 
 expiration of the time limited for the payment is not the 
 correct interpretation ; after the allowance it is dehitum in 
 prcesenti, solvendum in futuro} If the policy provides that 
 suit shall be brought within a certain time after the " loss or 
 damage shall occur and become due," and further provides 
 that the payment of losses shall be made in ninety days after 
 proofs shall be received at the office of the company, the 
 proofs having been furnished with due diligence, the time 
 limited for bringing suit will begin to run at the expiration 
 of the ninety days,^ and that notwithstanding the policy con- 
 tains a general limitation of suits to one year from the time 
 of the loss. The time when a " claim shall occur " under 
 such policy is when proper proofs have been made, and may 
 be widely different from the "time of loss." ^ Though the 
 policy provide that suit shall be brought within a certain 
 time after the loss shall occur, this is held to mean after the 
 cause of action accrues, if by the same policy it is provided 
 that no suit shall be brought until after an award has been 
 entertained. And generally the limitation will be construed 
 to run from the time when the loss becomes due and payable, 
 rather than from the time when the loss actually occurs.^ If 
 
 1 Utica Ins. Co. v. American Mut. Ins. Co., 16 Barb. 171 ; Chandler v. St. 
 Paul Fire & Mar. Ins. Co., 21 Minn. 85. 
 
 2 Longhurst v. Conway Fire Ins. Co., U. S. D. Ct. (Iowa), 1861, cited in 
 Clarke's Digest of Fire Insurance Cases. 
 
 3 Chandler v. St. Paul Fire &Mar. Ins. Co., 21 Minn. 85. 
 
 * Levy V. Virginia Fire Ins. Co., C. Ct. (La.), 9 Ins. L. J. 113; Hay v. Star 
 Fire Ins. Co., 13 Ilun (N. Y.), 49G ; post, § 487; Barber v. Fire, &c. Ins. Co., 16 
 W. Va. 658. [Although a policy provides tliat action must be brought within 
 twelve months from the time the loss" occurs," yet it will be construed to mean 
 twelve months from the time the loss is due and payable, sixty days after proof in 
 this case. Steen v. Niagara Fire Ins. Co., 89 N. Y. 315 ; disapproving Johnson 
 r. H. Ins. Co., 91 111.93; 33 Am. Rep. 47 ; FuUam v. N. Y. U. Ins. Co. 7 Gray, 
 61. A limitation of a year or six months, &c., after loss does not begin to run 
 until the sixty days after proof allowed for payment. Ellis v. Council BUiffs 
 Ins. Co., 64 Iowa, 507 ; Miller v. Hartford Fire Ins. Co., 70 Iowa, 704; Mix v. 
 Andes Ins. Co., 9 Hun (N. Y.), 397 at 400; German Amer. Ins. Co. v. Hocking, 
 115 Pa. St. 398 ; Commercial Union Ass. Co. v. Hocking, 115 Pa. St. 407 ; Mayor 
 of N. Y. V. Hamilton Ins. Co., 39 N. Y. 45 at 48. There are however authori- 
 ties to the contrary. It being held that if the action is to be brouglit within six 
 months after the loss, it will not be sufficient to bring it within six months after 
 
 1111
 
 § 479] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CII. XXVI. 
 
 no time is specified when loss shall become payable, it will 
 be payable within a reasonable time.^ [Where the loss is not 
 payable until sixty days after proof of loss, and no action can 
 be begun until an award has fixed the amount of damages, 
 nor after six months from the loss, the limitation of suit does 
 not begin to run from loss, but from the time the right of 
 action accrues ; as otherwise it might run out and the right 
 of action be barred before it accrued.^ A suit witliin tlie time 
 which the contract gives the company to settle, is premature 
 unless the company has repudiated its liability.^ In Iowa, by 
 statute an action cannot be begun until ninety days after notice 
 of loss.* The thirty days allowed the company for payment 
 by the Canada statute cannot be extended by the contract to 
 sixty days.^ The policies of a mutual company, however, are not 
 subject to the Uniform Conditions Act, R. S. 0., c. 162, and the 
 agreement may give the company three months after proofs 
 in which to pay the claim.^] And where sixty days' delay 
 in payment of loss is given, it will, unless otherwise specified, 
 run from the time when proofs are furnished.'^ Where the 
 loss was not to be payable till an inventory was sent and an 
 appraisal permitted by the insured, and nothing was done 
 about an appraisal by either party, it was lield that a recovery 
 might be had without an appraisal, as that was a matter in 
 wliich the insurers were to move, and he only to permit. It 
 
 the expiration of the sixty days allowefl the company for payment of the claim. 
 Blair v. Sovereign Fire Ins. Co., 19 N. S. R. 372 ; McDonald, C. J., dis. If the 
 policy provides that suit must be commenced witliin twelve months after the fire, 
 the time begins to run at the fire, and not from the expiration of the sixty 
 days given the company in which to make payment after proofs of loss. King 
 ?•. Watertown Fire Ins. Co., 47 Hun, 1 ; Chambers v. Atlas Ins. Co., 61 Conn. 
 17; Bradley v. Phoenix Ins. Co., 28 Mo. App. 7] 
 
 1 Tooley v. Railway Passenger Ass. Co., C. Ct. (Ill), 2 Ins. L. J. 275. 
 
 2 [Friezen v. Allemania Fire Ins. Co., 30 Fed. Rep. 352 (Wis.), 1887 ; Vette 
 V. Clinton Fire Ins. Co., id. 668 (Mo.).] 
 
 3 [Donahue v. Windsor Co. Mut. Fire Ins. Co., 56 Vt. 374.] 
 
 * [Quinn v. Capitol Ins. Co., 71 Iowa, 615; Vore v. Hawkeye Ins. Co., 76 
 Iowa, 548 , Laws of 1880, c. 211, § 3.] 
 
 6 [City of Lond. Fire Ins. Co. v. Smith, 15 Can. S. C. R. 69] 
 « [Mut. Fire Ins. Co. v. Frey, 5 Can. Supr. Ct. 82.] 
 
 7 Hatton V. Provincial Ins. Co., 7 U. C. (C. P.) 555; Insurance Co of North 
 America v. McDowell, 50 111. 120. 
 
 1112
 
 CH. XXVI.] LIMITATION OF SUIT AS TO TIME AND PLACE. [§ 481 
 
 was their neglect, and not his.^ But where insurers against 
 damage by hail to crops were not to be liable for any injury 
 less than one twenty-fifth of the value of the crops, and it was 
 also provided that appraisers should be appointed to ascertain 
 the damage at the expense of the insured, if the loss was less 
 than one twenty-fifth, he to deposit, on demand of the agent, 
 " the amount of costs arising from the assessment," before the 
 accomplishment of the assessment, it was held that the insurers 
 were entitled to demand the deposit before making the ap- 
 praisement, without reference to the actual damage done.^ [It 
 is no defence to a plea of the agreed limitation to reply that 
 the suit was brought within twelve months after the ad- 
 justment.^ If the last day of the period comes on Sunday the 
 insured may sue on the following day.*] 
 
 § 480. Limitation ; Execution. — And a like provision, with 
 reference to the levy of an execution for similar reasons, is 
 also valid. And the provision of the charter of a mutual fire 
 insurance company, that no execution shall issue upon any 
 judgment obtained against them until three months after the 
 rendition thereof, will be enforced, though the judgment 
 upon which the execution is sought to be enforced be founded 
 upon a foreign judgment rendered long before. The pro- 
 vision of the charter becomes a constituent part of the 
 contract between the parties, and the analogy between a 
 stipulation not to bring suit within or after the expiration of 
 a certain period, and a stipulation not to levy execution, is 
 sufficient to warrant the court in ordering a stay of execution.^ 
 
 § 481. Limitation; Reinsurance. — Reinsurance, under a 
 policy which stipulates that suit shall be brought within a 
 limited time after any loss or damage shall occur, expires at 
 the expiration of the time limited after the loss of the prop- 
 erty by the peril insured against, and not after the payment 
 by the reinsured of the loss. The payment by him, though 
 
 1 Commercial Ins. Co. v. Robinson, 64 111. 265. 
 
 2 Mutual Hail Ins. Co. v. Wilde, 8 Neb. 427 ; 8 Ins. L. J. 765. 
 
 3 [Dickie v. Western Ass. Co., 21 N. B. K. 544.] 
 * [Owen V. Howard Ins. Co., 87 Ky. 571.] 
 
 6 Judkins v. Union Mat. Fire Ins. Co., 39 N. H. 172. 
 
 1113
 
 § 483] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVI. 
 
 in one sense a loss to him, is not the loss or damage referred 
 to in the policy of reinsurance.^ 
 
 § 482. Limitation ; Avoidance ; New Promise. — And a new 
 promise or acknowledgment will not revive such a cause of 
 action.2 jf ^\^q prescribed time be suffered to elapse without 
 suit, there remains no longer a legal liability in any form. 
 There is no indebtedness which, though by the operation of 
 the statute incapable of being enforced by suit, may never- 
 theless be reanimated and invested with that quality by an 
 acknowledgment or new promise. The contract is of a pe- 
 culiar description, resembling a wagering contract, in which 
 the insurers, for a small premium, undertake to indemnify the 
 party who suffers the loss. The amount for which they may 
 become responsible greatly exceeds the premium paid ; and 
 the liability depends upon a contingency over which neither 
 party has any control. For whatever the insurers may event- 
 ually have to pay, they become liable by positive stipulation 
 rather than upon any principle of natural justice growing out 
 of an adequate consideration received. So far as this liabil- 
 ity exceeds the premium paid, it more nearly resembles a 
 penalty than a simple debt, and thus would more naturally 
 fall into the class of cases in which statutes, prescribing a 
 time within which suits shall be brought, are construed as 
 limitations upon the liability rather than mere denials of a 
 remedy.^ It was intimated in Brown et ux. v. Savannah Mu- 
 tual Insurance Company ^ that such a limitation might not 
 be upheld if the period within which suit must be brought be 
 so unreasonable as to raise a presumption of imposition or un- 
 due advantage in some way. 
 
 § 483. Failure of Suit Brought within Time. — Nor can such 
 suit, brought after the expiration of the time limited, although a 
 prior suit commenced within the limited period may have been 
 nonsuited, or judgment thereon arrested, be maintained. The 
 condition is without exception, and the exceptions of statutes of 
 
 1 Prov. Ins. Co. v. JEtna Ins. Co., 16 U. C. (Q. B.) 135. 
 
 2 [But see Fire & Mar. Ins. Co. v. Chestnut, 50 111. Ill] 
 » Williams et al. v. Vermont Mat. Ins. Co., 20 Vt. 222. 
 
 * 24 Ga. 97. And see Angell on Limitations {5th ed.), p. 16, note. 
 
 1114
 
 CH. XXVI.] LIMITATION OF SUIT AS TO TIME AND PLACE, [§ 484 
 
 limitations cannot be imported into it by the court.^ But 
 where a suit was commenced within the time limited, but by 
 mistake the name of the wrong company was inserted in the 
 body of the summons, the defendant having voluntarily ap- 
 peared to move to dismiss, the plaintiff was allowed to amend 
 by inserting the name of the defendant, and proceed with his 
 suit.^ (Yet if in such a case the plaintiff discontinues a suit 
 in equity afterwards, and after the time when he might have 
 brought a new suit, the real object of which is to obviate the 
 delay, will not be sustained.^) [So an amendment adding 
 a plaintiff may be made after the period for action has 
 expired.* If suit is begun within the period a mortgagee 
 or other person entitled to part of the proceeds may inter- 
 vene in the suit after the period.^ When suits on a policy 
 must be prosecuted within one year after loss, the bringing 
 of an action within that time, the transfer of it to another 
 court and finally, while it is still pending, the change of suit 
 because of wrong parties, is sufficient, provided good faith 
 exists, although the last act was. done after the year was up 
 and the other suit discontinued.^ But beginning a suit in a 
 court without jurisdiction within the period will not stop the 
 running of the limitation.''] 
 
 § 484. Limitation ; Excuse ; Absence of Defendant. — Per- 
 haps, however, the doctrine of the last case should be taken 
 with the qualification that the failure of the first suit is not 
 imputable to the fault of the insurers. Such seems to have 
 been the view taken in a case in Michigan, where suit was 
 brought thirteen days before the expiration of the time limited. 
 The writ was immediately placed in the hands of the officer, 
 who made return that he could not find the defendant. 
 Thereupon the next day, which was two days after the ex- 
 
 1 Riddlesbarger v. Hartford Ins. Co., 7 Wall. (U. S.) 386; Brown v. Roger 
 Williams Ins. Co., 7 R. I. 301 ; Wilson v. JEtna Ins. Co. of New York, 27 Vt. 99. 
 
 2 Burton v. Buckeye Ins. Co., 26 Ohio St. 467. 
 
 3 Arthur v. Homestead Ins. Co., 78 N. Y. 462. 
 
 < [DoulliJ. Western Ass. Co , 6 Russ. & Geld. (Nova Scotia) 478.] 
 * [Stevens v. Citizens' Ins. Co., 69 Iowa, 658.] 
 s [Madison Ins. Co. v. Fellowes, 1 Disnej' (Ohio), 217 at 221.] 
 ' [Keystone Mut. Ben. Ass. v. Norris, 115 Pa. St. 446] 
 
 1115
 
 § 484] insut?ance: fire, life, accident, etc. [ch. xxvi. 
 
 piration of the time limited, another summons was issued, 
 with which the defendant was served. The limitation in this 
 case was in the contract, and not in the charter of the com- 
 pany. The court, without stopping to consider wliether the 
 issue of the second summons was, or was not, a continuation 
 of the suit, sustained the action. It appeared to them to 
 have been the fault of the defendant — the absence of their 
 agent — that the first summons was not served, and the ac- 
 tion commenced within the limited period ; and this was suf- 
 ficient to defeat the limitation, or extend it till the service 
 was made under the second summons, which was issued im- 
 mediately on the return of the first. While a limitation by 
 statute is arbitrary and peremptory, admitting of no excuse 
 beyond the period fixed, a limitation by contract must, upon 
 the principles governing contracts, be more flexible in its 
 nature, and liable to be defeated or extended by any act of 
 the defendant which prevents the plaintiff from bringing his 
 action within the prescribed period. And the fundamental 
 idea, the tacit condition upon which such a limitation must 
 rest, and without which it could not be tolerated for a mo- 
 ment, is, that the defendant shall be accessible to the service 
 of process by which suit may be commenced against him, if 
 not for the whole period, at least for a sufficient time imme- 
 diately preceding its close to enable the plaintiff to commence 
 suit by the service of process in the ordinary legal mode. 
 If this be not so, then it follows that the defendant could 
 take advantage of his own wrong, and, by absenting himself 
 entirely, defeat the plaintiff's right of action. ^ But this im- 
 portation into the contract of the exception of absence, after 
 the analogy of statutes of limitations, has not elsewhere met 
 with approbation.^ In the last-cited case, however, no at- 
 tempt had been made to bring the action within the limited 
 period, for the alleged reason that the action could not have 
 been maintained unless the defendant had voluntarily ap- 
 peared, and there was no means of compelling an appearance ; 
 and perhaps the observation of tiie court, that nevertheless 
 
 1 Peoria Mar. & Fire Ins. Co. v. Hall, 12 Mich. 202. 
 
 '■' Ketchum v. Prot. Ins. Co., 1 Allen (New Brunswick), 136. 
 
 1116
 
 CH. XX\a.] LIMITATION OF SUIT AS TO TIME AND PLACE. [§ 487 
 
 the plaintiff might have sued out process within the limited 
 period, is indicative that, had this been done, the result would 
 have been different. 
 
 § 485. Limitation ; Excuse; Pending Negotiations. — Nor will 
 the operation of such a limitation be suspended or prevented 
 by negotiations for a settlement, as by a reference pending 
 between the parties, if there be no agreement for delay, 
 and the defendant has done nothing to mislead the plaintiff. ^ 
 [Negotiations which terminate two months before the period 
 of limitation is up do not excuse delay beyond such period.^] 
 
 § 486. Limitation ; Excuse ; Effect of War. — Where by the 
 terms of the policy suit is to be brought within twelve months 
 after loss, and to a suit brought after that time the lapse of 
 tuTie shall be deemed conclusive evidence against the validity 
 of the claim, and insured was prevented by the intervention 
 of war from bringing his suit within twelve months after the 
 loss, tiie court held that war having rendered compliance with 
 this condition impossible, the presumption from the lapse of 
 time was destroyed, and did not revive, and that the insured 
 might bring his suit at any period within the statute of limit- 
 ations, without regard to the fact whether twelve months 
 of peace within which he might have brought his suit had 
 elapsed.^ 
 
 § 487. Limitation; Excuse; Inconsistent Conditions. — And 
 where the other conditions are such that a reasonaljle compli- 
 ance with them is inconsistent with a compliance with the 
 condition requiring suit to be brought within a specified time, 
 the latter will not be allowed to defeat a recovery. Thus, 
 where suit is to be brought within six months from the time 
 of the loss, and the loss is not payable until sixty days after 
 the adjustment, and the parties, in good faith and without 
 objection, are occupied so long in adjusting the loss that sixty 
 
 1 Gooden v. Amoskeag Fire Ins. Co., 20 N. H. 73. 
 
 2 [Blanks v. Insurance Co., 3G La. Ann. 599.] 
 
 3 Semmes v. City Fire Ins. Co. of Hartford, 13 Wall. (U. S.) 158, 159, re- 
 versing s. c. 6 Blatehf. (C. Ct. U. S ) 445; Lynchbiirgh Hose Fire Ins. Co. v. 
 Knox, ante, § 39, note ; Hillyard v. Mut. Ben. Life Ins. Co., 6 Vroom (N. J.), 
 415; [Phoenix Ins. Co. v. Underwood, 12 Heisk. (Tenn.), 424 at 427.] And see 
 ante, § 350. 
 
 1117
 
 § 488] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVI. 
 
 days from the date of the adjustment docs not expire within 
 the six months, a suit brought at the expiration of sixty days 
 will be sustained.! So where the insurable interest was a 
 mechanic's lien, the value of which could only be determined 
 by a judgment of court upon suit, which was brought imme- 
 diately upon the occurrence of the loss, but did not come to 
 judgment till after the expiration of the time limited for 
 bringing suit for the loss, it being also stipulated that proof of 
 the value of the loss must be made before it could be de- 
 manded, it was held that the limitation of the suit was inop- 
 erative, ^ The insurers, in issuing a policy upon a mechanic's 
 lien, must be presumed to issue it subject to the unavoidable 
 delay in the judicial ascertainment of the value of the inter- 
 est if a loss should occur. If, with reasonable diligence, that 
 value cannot be legally ascertained in time to bring an action 
 on the policy within the limited period, it follows either that 
 there is a dishonest purpose on the part of the company in 
 inserting such a condition, or else they intend in such case to 
 waive it, or treat it as wholly inapplicable and nugatory.^ 
 Nor will a collateral suit brought after the expiration of the 
 limited time in aid of a suit at law brought within the limited 
 time, be barred ; as where a bill in equity is brought to reform 
 a policy. Had there been no suit at law pending, a bill in 
 equity for relief would have been barred.* And if the insur- 
 ers refuse to issue a policy, and a bill in equity to enforce 
 the agreement to issue it be filed, they cannot a\ail themselves 
 of such a limitation as applicable to the bill in equity.^ 
 
 § 488. Limitation ; Waiver ; Refusal to Pay ; Adjustment. — 
 But this condition, like all others intended for the benefit of 
 the insurers, may be waived by them ; and as the condition is 
 a harsh one in its bearing on the insured, and works a for- 
 
 1 Mayor, &c. of New York v. Hamilton Fire Ins. Co., 10 Bosvv. (N. Y.) 537; 
 ante, § 470; Badger v. Phoenix Ins. Co. (Oliio), 9 Ins. L. J. 627; Chandler v. 
 St. Paul, &c. Ins. Co., 21 Minn. 85. But see Pennell v. Lamar Fire Ins. Co., 73 
 111. 303. 
 
 2 Stout V. City Fire Ins. Co. of New Haven, 12 Iowa, 871. 
 
 3 Longhurst v. Star Ins. Co., 19 Iowa, 364. And see post, § 50.3. 
 
 * Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 518. 
 s Penlev v. Beacon Ass. Co., 7 Grant (Canada), 130. 
 
 1118
 
 CH. XXVI.] LIMITATION OP SUIT AS TO TIME AND PLACE. [§ 488 
 
 feiture when upheld, the courts will not require very strin- 
 gent evidence in order to defeat its application. A positive 
 act of the company intended to induce postponement is not 
 necessary. And where the evidence upon this point is con- 
 flicting, waiver is a question of fact for the jury.^ Merc 
 silence, however, is no waiver,^ though it may be evidence 
 thereof to go to a jury ;3 especially if it has a tendency to 
 mislead ; ^ nor are loose conversations about a settlement ; ^ 
 nor is a peremptory refusal to pay, though on the ground that 
 actions have been brought by other parties, and nothing will 
 be done towards payment while such actions are pending, a 
 waiver of the right to insist upon the limitation. The insured 
 is not misled thereby, nor is he expressly or impliedly re- 
 quested to delay by the insurer.*^ [A communication from 
 the company five months before the limitation is over, that it 
 will not pay, is not waiver of the right to insist on the limita- 
 tion.'^] Nor, as we have just seen,^ is the mere pendency of 
 negotiations in good faith. If, however, they are not pros- 
 ecuted in good faith, or are made the occasion of delay, — 
 a result to which the insurers mainly contribute by holding out 
 hopes of an amicable adjustment whereby the insured is led to 
 feel a false security, this is a waiver.^ So, if the delay for any 
 cause be attributable to the insurers and the insured be not in 
 
 1 Ripley v. ^tna Ins. Co., 29 Barb. (N. Y.) 552 ; Coursin v. Penn Ins. Co., 
 46 Pa. St. 323; Ketchum v. Prot. Ins. Co., 1 Allen (N. B.), 136; Columbian 
 Ins. Co. V. Lawrence, 2 Pet. (U. S.) 25; Graves u. Washington Mar. Ins. Co., 
 12 Allen (Mass.), 891. 
 
 2 Ante, § 464 ; Schroeder v. Keystone Ins. Co., 2 Phila. 286 ; s. c. 14 Leg. 
 Int. 164. 
 
 3 Ripley V. iEtna Ins. Co., 29 Barb. (N. Y.) 552 ; post, § 508. 
 
 * Westchester Fire Ins. Co. v. Dodge (Mich.), 9 Ins. L. J. 909. 
 5 Ripley V. JEtna. Ins, Co., 30 N. Y. 136 , Lampkin v. Western Ass. Co., 13 
 U. C. (Q. B.) 237. 
 
 fi Ripley v. JEtnn Ins. Co., 30 N. Y, 136. See end of this section. 
 ^ [Garretson v. Hawkeye Ins. Co., 65 Iowa, 468.] 
 
 8 Ante, § 485. [Phoenix Ins. Co. v. Lebcher, 20 Brad. 450 ; Allemania Ins. 
 Co. V. Little, id. 431.] 
 
 9 Mickey v. Burlington Ins. Co., Sup. Ct. (Iowa), 2 Ins. L. J. 15; Grant v. 
 Lexington Fire, Life & Mar. Ins. Co., 5 Ind. 23,26 ; Fullam y New York Union 
 Ins. Co., 7 Gray (Mass.), 61 ; Black v. Winnesheik Ins. Co., 31 Wis. 74; Der- 
 rick V. Lamar Ins. Co., 74 111. 404. 
 
 VOL. ir. — 27 1119
 
 § 488] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVI. 
 
 fault.i Thus, in Ames v. New York Union Insurance Company ,2 
 where the policy provided tliat suit must be brought within six 
 months from the day of the loss, and that the insurers should 
 have ninety days after proofs were furnished within which to 
 pay, the proofs of loss were delivered to the defendants some 
 nine days after the fire. They were then retained, without 
 objection, for eighty-five days, when suggestion was made by 
 the insurers that further proof was necessary, which further 
 proof was furnished in seven days more. No further objections 
 were made. By the delay, however, the time within which 
 the plaintiff had a right to demand payment did not arrive till 
 after the time limited for bringing suit. The defendants had 
 thereby secured an extension of time within which to pay the 
 loss, and put it out of the power of the plaintiff to success- 
 fully maintain a suit commenced within six months after the 
 loss occurred. To the same effect is Curtis v. Home Insur- 
 ance Company,^ where it is said that if the conduct of the 
 insurers during the negotiations is such that the insured may 
 
 1 [If by holding out hopes of amicable adjustment the company induce the 
 insured to delay suit, the company is estopped to take advantage of the limita- 
 tion in the policy. Martin v. Slate Ins. Co., 44 N. J. 485. So if the company 
 induces the insured to believe that the sum admitted to be due on an adjustment 
 will be paid without suit, wherefore he delays beyond the period of limitation 
 named in the policy, the company is estopped to set up this limitation. Paul 
 Fire & Mar. Ins. Co. v. McGregor, 63 Tex. 399. Any conduct of the company 
 that induces the assured acting as a prudent man to suppose that there is no 
 necessity of bringing suit, or causes him to delay beyond the period of limita- 
 tion, waives it. Bish v. Hawkeye Ins. Co., 69 Iowa, 184. Letters from the 
 company may be introduced to show that the promises of the company in- 
 duced the plaintiff to delay action beyond the time limited. Eggleston v. 
 Council Bluffs Ins. Co., 65 Iowa, 308. Delay in bringing a suit on a policy be- 
 yond the prescribed time, if induced by the company in bad faith, is no defence 
 by them in an action. Little v. Phoenix Ins. Co., 123 Mass. 380 at 389. Prom 
 ises to pay made during the pendency of a suit waive such a limit, and excuse" 
 the non-prosecution of tlie said suit. Home Ins. Co. v. Myer, 93 111. 272 at 
 276.] 
 
 2 14 N. Y. 254 ; Killips v. Putnam Fire Ins. Co., 28 Wis. 472 ; Akin v. Liver- 
 pool, &c. Ins. Co., C. Ct. (Ark.), 6 Ins. L. J. 341 ; Coffee v. Universal Life Ins. 
 Co., C. Ct. (Wis.), 10 Ins. L. J. 525 ; Brady v. Western Ins. Co., 17 U. C. (C. P.) 
 597 
 
 3 1 Bissell (C. Ct. U. S.), 485. See also ante, § .360; Davis v. Canada, &c. 
 Ins. Co., 39 U. C. (Q. B.) 452; Westchester Fire Ins. Co. r. Dodge (Mich.), 9 
 Am. Law Record, 297. 
 
 1120
 
 CH. XXVI.] LIMITATION OF SUIT AS TO TIME AND PLACE. [§ 489 
 
 reasonably believe that they Intend to pay them, delay' is ex- 
 cusable ; otherwise not. Upon a peremptory refusal to pay 
 suit may be brought at once.^ [Demanding and receiving 
 proofs after the time has expired waives the limitation of 
 suit.'-^ So does a recognition of liability by the agent after 
 expiration of the period.^ Where a policy provided against 
 waiver of any condition unless by writing, the limitation of 
 suit to six months cannot be waived by verbal representations 
 of the agent that it is needless to sue, as the company will pay 
 without it.* But the president is not within the contemplation 
 of the parties in using the word " agent " in the condition " no 
 agent is empowered to waive any condition of the policy with- 
 out special authority," and the president may waive the lim- 
 itation of suit to six months.^ Payment to the mortgagee of 
 his interest in the policy is not a waiver of the limitation as 
 to the mortgagor.^ That the insured was arrested for arson, 
 not at the instance of the defendant, is no excuse for not 
 bringing suit within a year from the loss as provided in the 
 policy."] 
 
 §489. Limitation; Suit. — "Suit" to recover a claim by 
 
 1 .yEtna Ins. Co. v. Maguire, 51 111. 342 ; Penley v. Beacon Ass. Co., 7 Gr. 
 Ch. (U. C.) 130; Frey v. Wellington Ins. Co., U. C. (Ct. of App.) 15 Can. L. J. 
 190. Contra, Hatton v. Provincial Ins. Co., 7 U. C. (C. P.) 555. So upon an 
 adjustment of the loss. Illinois Ins. Co. v. Archdeacon, 82 111. 236 ; Williams- 
 burg Fire Ins. Co. v. Cary, 83 111. 453. [Although a company may have sixty 
 days in which to pay the loss, yet if before that time an authorized agent de- 
 clares that it will not pay, suit may be commenced at once. Georgia Home Ins. 
 Co. V. Jacobs, 56 Tex. 366; State Ins. Co. v. Maackens, 38 N. J. L. 564; Hof- 
 fecker v. N. C. C. M. Ins. Co., 5 Hous. (Del.) 101. When a company offers a 
 specific sum, denying liability for some articles as not being covered by the pol- 
 icy, this is a waiver of the preliminary proofs of loss and of the time allowed 
 for decision and payment, and suit may be brought without waiting for the 
 lapse of the sixty days provided for by the policy. Commercial Fire Ins. Co. 
 V. Allen, 80 Ala. 571. Proof of waiver of the " sixty days " or otlier time 
 clause in a policy must be positive, as it is otherwise binding. Schroeder v. 
 Keystone Ins. Co., 2 Pliila. 206 at 286.] 
 
 2 [Cousineau v. City of Lond. Fire Ins. Co., 15 Ont. R. 329.] 
 8 [Horst V. Insurance Co., 73 Tex. 67] 
 
 * [Waynesboro Mut. Fire Ins. Co. v. Conover, 98 Pa. St. 384.] 
 
 5 [Universal Fire Ins. Co. v. Stewart, 3 Pennypacker (Pa.), 536.] 
 
 8 [King V. Watertown Fire Ins. Co., 47 Hun, 1 ] 
 
 ^ [Edson V. Merchants' Mut. Ins. Co., 35 La. Ann. 353.] 
 
 1121
 
 § 490] INSURANCE : FIRE, LIFE, ACCIDENT, ETC, [CH. XXVI. 
 
 virtue of the policy, means any proceeding in a court for the 
 purpose of reaching and getting possession of the loss which 
 may be found to be payable, under whatever mode the law 
 permits. A creditor, for instance, of the person who suffers 
 the loss may proceed by trustee process or foreign attachment, 
 and under this try the question of the liability of the insurers 
 to the insured. And such suit, if brought within the time 
 limited, is a compliance with the condition.^ Of course the 
 creditor would, in such case, have no greater rights than his 
 debtor ; and if the debtor has failed to comply with a condition 
 precedent to his right, as, for instance, to submit to ex- 
 amination on oath, when so required, his creditor cannot re- 
 cover. That the debtor received no actual notice of the 
 requirement will not help the creditor, if the insurers make 
 reasonable efforts to notify him. If the want of notice were 
 attributable to the negligence of the insurers, it might be 
 otherwise. A failure, on their part, to notify within reason- 
 able time might be deemed a waiver of the condition .^ [When a 
 clause in a policy declares that all actions against it for claims 
 must be " prosecuted within a certain time," a mere presenta- 
 tion of proofs is not sufficient. There must be a lis mota?'\ 
 
 § 490, Limitation as to Place. — A provision in the charter 
 defining the court in which suit may be brought, on certain 
 conditions, is valid, if the conditions are strictly complied 
 with. If not, suit may be brought in any court having juris- 
 diction.* A condition in the contract limiting the venue or 
 place where the action shall be brought, is invalid. There is 
 an obvious distinction between a stipulation by contract as to 
 the time when a right of action shall accrue or be lost, on the 
 one hand, and a stipulation as to the forum before which, and 
 the proceedings by which, an action shall be commenced and 
 prosecuted, on the other. The one is a condition annexed to 
 the acquisition and continuance of a legal right, and depends 
 on contract and the acts of the parties ; the other is a stipula- 
 tion concerning the remedy, which is created and regulated 
 
 1 Harris i-. Plioenix Ins. Co., 35 Conn. 310. 2 ibid. 
 
 3 [Merchants' Mut. &c. Co. v. La Croix, 35 Texas, 249 at 262.] 
 * Arnet v. Milwaukee, &c. Ins. Co., 22 Wis. 516. 
 
 1122
 
 CH. XXVI.] LIMITATION OP SUIT AS TO TIME AND PLACE. [§ 491 
 
 by law. The time within which money shall be paid is matter 
 of contract, depending on the will and acts of the parties ; but 
 in case of breach, the tribunal before which a remedy is to be 
 sought, the means and processes by which it is to be con- 
 ducted, affect the remedy, and are created and regulated by 
 law. The remedy does not depend on contract, but upon law, 
 generally the lex fori, regardless of the lex loci contractus, 
 which regulates the construction and legal effect of the con- 
 tract. It is, moreover, a well-settled maxim that parties can- 
 not, by their consent, give jurisdiction to courts, and it would 
 seem to follow that parties cannot take away jurisdiction 
 where the law has given it. And mutual and stock companies 
 are equally under the disability .1 Upon the same general 
 grounds an agreement not to sue, except in a particular State, 
 will not defeat an action on the policy in a different State. 
 Such an agreement is against public policy .2 It is also against 
 the statute of Missouri.^ If the venue be fixed by the terms 
 of the charter, a subsequent act of the legislature changing 
 the venue and extending the right to sue in counties where 
 there is an agency of the insurers is valid, as affecting only 
 the remedy.* 
 
 § 491. Limitation ; Strictly Construed. — But the limitation 
 as to venue and as to time will be strictly construed and con- 
 fined to the exact case stated in the charter or contract. Thus 
 where the charter provides that after a loss the directors shall 
 proceed and determine the amount, and if the party suffering 
 is not satisfied with the determination, he may bring his ac- 
 tion at a particular court ; if the directors repudiate the claim 
 altogether, the party suffering may sue in any court open to 
 him by the general provisions of law. The limitation can only 
 be supported in the special case provided for.° The reasons 
 
 1 Nute V. Hamilton Mut. Ins. Co., 6 Gray (Mass.), 174; Hall v. People's Mut. 
 Fire Ins. Co., id. 185; Ainesbury et. al. v. Bowditch Mut. Fire Ins. Co., id. 596. 
 
 2 Reichard v. Manhattan Life Ins. Co., 31 Mo. 518. 
 
 3 Rev. Code, 884. 
 
 4 Howard w. Kentucky & Louisville Mut. Ins. Co., 13 B. Mon. (Ky.) 282; 
 Sanders v. Hillsborough Ins. Co., 44 N. H. 238. 
 
 * Williams v. Columbian Mut. Ins. Co., 29 Me. 465 ; Boynton et al. v. Mid- 
 1123
 
 § 491] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVI. 
 
 for the distinction are obvious. So far as the claim for insur- 
 ance is disputed, and ma}^ be a subject of litigation between 
 the parties, the insurers may well provide in their by-laws 
 that an action shall be speedily brought, so that the extent of 
 their liability may be settled while the facts are recent, and 
 the witnesses by whom they are to be proved are readily ac- 
 cessible. But there is no such reason for the limitation of 
 the time within which a suit shall be brought, when it is sought 
 to recover only the amount under the policy, which has been 
 ascertained and admitted to be justly due by the insurers.^ 
 And a limitation subject to a condition which may be defeated 
 by either party, as that no suit shall be brought until the case 
 has been submitted to arbitration, since either party may re- 
 fuse to arbitrate, is invalid.^ 
 
 dlesex Mut. Fire Ins. Co., 4 Met. (Mass.) 212; Martin v. Penobscot Mut. Fire 
 Ins. Co., 53 Me. 419 ; Arnet v. Milwaukee Mech. Mut. Ins. Co., 22 Wis. 516. 
 
 1 Amesbury et al. v. Bowditch Mut. Fire Ins. Co., 6 Gray (Mass.), 608 ; Bart- 
 lett V. Union Mut. Fire Ins. Co., 46 Me. 500 ; Nevins v. Rockingham Fire Ins. 
 Co., 5 Fost. (N. H.) 22 ; Indiana Mut. Fire Ins. Co. v. Routledge, 7 Ind. 25; Phil- 
 lips V. Prot. Ins. Co., 14 Mo. 220. In Phillips's case just cited, the distinction 
 adverted to in St. Louis Insurance Company v. Kyle, 11 Mo. 278, that there could 
 be no waiver of notice, while there might be of preliminary proof, is declared 
 not to be well founded. It has been held, however, in Ohio, that, although the 
 insurers neglect to ascertain and determine the loss, under a policy that provides 
 that an action shall be brought in a certain county if the insured shall not be 
 satisfied, the action must be brought in the county named ; the statute of that 
 State, providing that suits on policies of insurance may be brought in any 
 county where the contract is made, except in cases whore the policies are is- 
 sued by companies whose charters specify the county in which suit shall be 
 brought. Portage County Mut. Ins. Co. v. Stukey, 18 Ohio, 455. This deci- 
 sion seems to rest upon the peculiarity of the general statute. And in Dutton 
 V. Vermont Mut. Fire Insurance Company, 17 Vt. 360, it is held, contrary to 
 the almost uniform current of authorities, that a refusal to pay a claim is a de- 
 termination and ascertainment, within the meaning of such a condition, and 
 consequently no action can be maintained except as provided in the policy. 
 No reference by court or counsel is made to any of the decisions to the 
 contrary. 
 
 2 Leach v. Eepublic Fire Ins. Co., 58 N. H. 245; post, § 495. 
 
 1124
 
 CH. XXVII.] ARBITRATION. [§ 492 
 
 CHAPTER XXYII. 
 
 ARBITRATION. 
 
 Analysis. 
 
 § 492. A general agreement to refer will not be specifically enforced, though 
 encouraged by the courts, which will enforce an award fairly made. 
 A provision for adjustment by directors in case the policy is forfeited 
 puts the matter in their hands, and the courts have uo voice in 
 the matter. 
 § 493. A special agreement for reference which does not go to the root of the 
 action, but merely provides for the adjustment of some 
 special matter, as the amount of loss, or that some particu- 
 lar person or court shall settle all disputes, is valid (see also 
 § 495). 
 But unless it is distinctly agreed that arbitration shall be a con- 
 dition precedent, it will be treated as a collateral matter, 
 and suit may go on upon the question of liability (unless the 
 company admits it), while arbitration is being had on the 
 amount of loss, or before it is had, § 493, and n. The action 
 is to be brought on the policy, not the award, § 493. 
 § 493 A. If arbitration is to be had upon the ivrittcn request of either party, the 
 company must j'jroye a request in writing on its behalf, in order to 
 set up the condition (see § 295, end). 
 § 494. If by a charter provision it seems the intent of the legislature to com- 
 pel resort to arbitration before going to the courts, the latter will 
 require the parties to arbitrate first. 
 § 496. Equitable adjustment after forfeiture. Discretion of directors. 
 § 496 a. Fraud. Company may sometimes deny liability after award. 
 § 496 B. Waiver or estoppel by refusal to pay any sum, or proceeding to repair, 
 or bad faith. 
 Award void if arbitrators exceed their powers, or do not confoim to 
 
 conditions. 
 Arbitration upheld as an appraisement. 
 If arbitrators tir.st selected fail, a new selection should be made. 
 
 § 492. Agreement to refer generally invalid; Waiver. — Not 
 unfrequently policies contain a stipulation, that in case of loss, 
 and the parties cannot agree upon the terms of adjustment, 
 all matters in dispute shall be submitted to arbitration, — a 
 practice which may be traced almost to the infancy of insur- 
 ance, and originated no doubt in a laudable desire to avoid the 
 
 1125
 
 § 492] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVII. 
 
 vexation, delay, and expense of litigation. It has not, how- 
 ever, proved so effectual for that purpose as was anticipated, 
 since the courts have very uniformly deemed the stipulation to 
 have no binding force. It plainly tends to oust them of their 
 jurisdiction, and they will not specifically enforce the agree- 
 ment.i An agreement not to bring an action after one year, 
 and not to bring any action till arbitration has been had, is 
 void. 2 If, however, the parties consent or prefer to adjust 
 their disputes in this way, the courts will not only not inter- 
 fere to prevent, but will rather encourage, such a course ; and 
 if arbitration be resorted to, and proceed to an award, the 
 award will be recognized as a good plea in bar to an action on 
 the policy.^ So where there has been an actual submission, 
 and the reference is still pending.^ And the courts will en- 
 force the award.^ [Where the question of insurable interest 
 is submitted to arbitration (resulting in favor of the plaintiff) 
 the court cannot go behind the award.^] But neither a pro- 
 vision enabling the parties to submit matters in controversy 
 to arbitration, nor a covenant so to do, will prevent the 
 courts from taking their rightful jurisdiction in the premises. 
 All such agreements have for their purpose the substitution of 
 a tribunal, erected by the parties, for the tribunal which public 
 policy and the general laws have established and clothed with 
 the requisite powers to make them the efficient and, upon the 
 whole, the best means of hearing and determining controver- 
 
 1 Thompson v. Charnock, 8 T. R. 139 ; Goldstone v. Osborne, 2 C. & P. 550 : 
 [German-Amer. Ins. Co. v. Etherton, 25 Neb. 505, 508 ; Hurst v. Litchfield, 39 
 N. Y. 377 at 379; Mark v. Nat. Fire Ins. Co., 24 Hun, 565. A condition in the 
 policy to refer to arbitration does not prevent bringing a suit at law or in equity. 
 Reed v. Washington Ins. Co., 138 Mass. 575. A general agreement not to 
 bring suit until after an award shall be made, is revocable by either party, 
 and the bringing of suit is in itself a revocation. Commercial Union Ass. Co. 
 V. Hocking, 115 Pa. St. 407.] 
 
 2 Leach v. Republic Ins. Co. (N. H.), 9 Reptr. 181 ; s. c. 58 N. H. 245. 
 
 3 Roper t'. Lendon, 1 El. & El. (Q. B.) 825; 102 E. C. L. 825; Burchell v. 
 Marsh, 17 How. (U. S.) 344 ; Johnson v. Humboldt Ins. Co., 91 111. 92. But see 
 Barber v. Fire, &c. Ins. Co., 16 W. Va. 658. 
 
 * Kill V. Hollister, 1 Wilson, 129. 
 
 5 Richardson v. Suffolk Ins. Co., 3 Met. (Mass.) 573 ; Hughes v. Mut. Fire 
 Ins. Co. of New Castle, 9 U. C. (Q. B.) 387. 
 
 6 [Troop V. Anchor M. Ins. Co., 8 Russ. & Geld. (Nova Scotia) 234.] 
 
 1126
 
 CH. XXVII.] ARBITRATION. [§ 493 
 
 sies between individuals. If the stipulation were to be held 
 valid, the courts might be called upon to enforce it. The dis- 
 pute would thus come to them at last, and they have preferred 
 to ignore the validity of the stipulation and to refuse to enforce 
 it, rather than permit themselves to be occupied with the 
 somewhat ludicrous question whether parties may come into 
 court for the purpose of compelling each other to keep out.^ 
 In Louisiana, it has been intimated that the agreement to re- 
 fer would be upheld if insisted upon ; but the point was not 
 directly in issue, the court holding that the insurers, having 
 refused to pay, without invoking this article, had waived the 
 right to set it up in bar of the action.^ 
 
 § 493. Arbitration ; Agreement to refer Special Matter valid. 
 — While, however, it is perfectly well settled that any agree- 
 ment that contemplates the exclusion of an aggrieved party 
 from a suit of law is invalid, there seems to be no doubt that 
 any agreement as to the mode of adjustment or of settling the 
 amount of loss, or the time for paying it, or any particulars of 
 that nature which do not go to the root of the action, but are 
 preliminary thereto or in aid thereof, — as, for instance, an 
 agreement that at the trial of an action it shall not be lawful 
 for either party to enter into the question of the amount of 
 the loss, but that it shall always be settled by reference, and 
 that the only question to be tried at law shall be the right to 
 recover, — is valid.^ A distinction is made between an agree- 
 
 1 Kill V. Hollister, 1 "Wilson, 129 ; Scott v. Avery, 20 Eng. L. & Eq. 327 ; s. c. 
 5 H. L. C. 811 ; Scott v. The Phoenix Ass. Co., 1 Stuart (L. C), 152 ; Stephen- 
 son V. P. F. & M. Ins. Co., 54 Me. 55, 70. 
 
 2 Millaudon v. Atlantic Ins. Co., 8 La. 557. See also Robinson i'. Georges 
 Ins. Co., 17 Me. 131. And if the policy provides one mode of appraisal, and 
 tlie insurers provide a diflf'erent mode, it may amount to a waiver. Davis v. 
 Western Mass. Ins. Co., 8 R. I. 277. 
 
 ^ [Wlien it is agreed that no suit shall be maintained until an award has been 
 had, fixing the amount of the claim, the agreement will be respected by the 
 courts. Adams v. Insurance Cos., 70 Cal. 198 ; Carroll v. Girard Fire Ins. Co., 72 
 Cal. 297 ; Gauche v. Lond., &c. Ins. Co., 10 Fed. Rep. 347 ; 4 Woods, 102. Where 
 an award upon " matters in dispute " is a condition precedent to action, delay 
 of the arbitrators in coming to a decision will not justify suit, even though the 
 company denies all liability. Lantalum v. Anchor Mar. Ins. Co., 22 N. B. R. 
 14. But an agreement to fix the amount of loss by arbitration does not make 
 it a condition precedent to suit unless clearly so stipulated. Canfield v. Water- 
 
 1127
 
 § 493] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVII. 
 
 ment to refer every matter in dispute to arbitration, ajid one 
 to pay such a sum as the damage shall be found by a third 
 party to amount to, which latter operates to reduce the policy 
 from a contract to pay the amount of damage absolutely, and 
 to substitute the arbitrator for the jury to ascertain its 
 amount.^ The following condition is common in English pol- 
 icies, and is believed to be valid : — 
 
 " If any difference shall arise in the adjustment of a loss, 
 the amount (if any) to be paid by the company shall, whether 
 the right to recover on the policy be disputed or not, and 
 independently of all other questions, be submitted to the 
 arbitration of some person, to be chosen by both parties, or of 
 two indifferent persons, one to be chosen by the party in- 
 sured, and the other by the directors. And in case either 
 party shall refuse or neglect to appoint an arbitrator within 
 
 town Fire Ins. Co., 55 Wis. 419; Birmingham Fire Ins. Co. i'. Pulver, 126 111. 
 329; Liverpool, &c. Ins. Co. v. Creighton, 51 Ga. 95 at 110. A mere stipulation 
 that in case of a difference of opinion as to the amount of loss, it shall be sub- 
 mitted to arbitration is not a condition precedent to action on the policy, but a 
 collateral agreement. Crossley v. Conn. Fire Ins. Co., 27 Fed. Rep. 30 (Mass.) 
 1886 (reviewing Eng. & Amer. cases). Suit may be brought before the arbitra- 
 tion. And a stay of proceedings at law will not be granted in such a case un- 
 less the company will admit its liability. If it will not, then the suit may go on 
 to establish liability for the loss, and the arbitration will go on to fix the amount. 
 Hughes V. Lond. Ass. Co., 4 Ont. R. 293. If there is a stipulation that if a 
 dispute shall arise as to the amount of loss, it shall on request of either party 
 be referred to arbitrators. It is not a condition precedent to action, but whether 
 at the trial the amount of loss can be proved against the defendant's objection 
 by any other evidence than an award, where one has been requested, is a ques- 
 tion suggested by the judge, but not decided, because it did not arise on the 
 record. Gere v. Council Bluffs Ins. Co., 67 Iowa, 272. The answer would seem 
 clearly no, if the request was made within proper time. Otherwise the agree- 
 ment for arbitration of loss could be annulled by one party to it, which is di- 
 rectly contrary to both reason and authority, wherever the provision for arbitra- 
 tion refers to amount of loss and does not prevent suit. A clause providing for 
 arbitration in respect to the " amount of sound value and of damage to the 
 property," has no reference to property absolutely destroyed. Rosenwald v. 
 Phoenix Ins. Co., 50 Hun, 172. A stipulation for an appraisal as a pre-requisite 
 to suit is legal. "Wolff v. Insurance Co., 50 N. J. 4.53.] 
 
 1 Scott V. Avery, 20 Eng. L. & Eq. 327; s. c. 5 H. L. C 811 ; Braunstein v. 
 Accidental Death Ass. Co., 1 B. & S. 782; Tredwen v. Holman, 1 H. & C. 72 ; 
 Lowndes r. Stamford, 18 Q. B. 425 ; Trott v. City Ins. Co., 1 Cliff. (C. Ct. U. S.) 
 439; London, &c. Ins. Co. v. Honey, 2 Vict. L. Rep. L. 9; Wright i-. Ward, 24 
 L. T. N. s. 439. 
 
 1128
 
 CH. XXYII.] ARBITRATION. [§ 493 
 
 twenty-eight da^^s after notice, the other party shall appoint 
 both arbitrators ; and in case of the arbitrators differing 
 therein, the amount shall be submitted to the arbitration of 
 an umpire, to be chosen by the arbitrators before they proceed 
 to act, and the award of the arbitrators or umpire (as the 
 case may be) shall be conclusive evidence of the amount of 
 the loss, and the party insured shall not be entitled to com- 
 mence or maintain any action at law or suit in equity upon 
 his policy, until the amount of the loss shall have been referred 
 and determined as hereinbefore provided, and then only for 
 the amount so awarded. Each party to pay his or their own 
 costs of the reference, and a moiety of the costs of the award, 
 and of the arbitrators and umpire ; and the reference, in all 
 other respects, to be subject to such rules and conditions as 
 are usually inserted in orders of reference at Msi Frius, if 
 the parties differ about the same." ^ In Goldstone v. Os- 
 borne,2 ^j^g agreement was, that if any difference should arise 
 on any claim, it should be submitted to arbitration, and that 
 no compensation shall be payable until after an award deter- 
 mining its amount. But, it appearing that the insurers dis- 
 puted the right of the plaintiff to recover any thing, Best, 
 C. J., allowed the action to go on, although there had been 
 no reference as to the amount of loss.^ [Where it is agreed 
 that an award shall have no reference to any other question 
 than the estimate of damage done, the assured properly brings 
 an action on the policy and not on the award.* When parties 
 stipulate that disputes, whether actual or prospective, shall be 
 submitted to the arbitrament of a particular person or tri- 
 bunal, they cannot seek redress elsewhere.^ When the con- 
 tract provided that " the chief engineer of the railroad " 
 should settle all disputes, it was held that it must refer to the 
 
 1 Law of Fire Insurance, Bunyon, 108. 
 
 2 2 C. & P. 550. 
 
 8 See also Millaudon v. Atlantic Ins. Co., 8 La. 557. 
 
 4 [Soars V. Home Ins. Co., 140 Mass. 343.] 
 
 6 [Snodgrass v. Gavit, 28 Pa. St. 221 at 224, dictum. The decision there is 
 final. O'Reilly v. Kerns, 52 Pa. St. 214 at 217 ; Condon v. South Side R. R., 14 
 Grat. 302 at 309.] 
 
 1129
 
 § 494] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVII. 
 
 person holding that office when the dispute arose, not when, 
 the contract was made.^] 
 
 [§ 493 A. Arbitration to be had upon Written Request. — ■ 
 When the policy provides for arbitration upon the written re- 
 quest of either party, a request in writing is a condition pre- 
 cedent to appraisal and award, and if there is no such request 
 arbitration is not necessary before suit.^ When it was in the 
 power of the company to have an arbitration by written re- 
 quest, and they did not avail themselves of the right, they 
 are estopped from setting up " no award " as a defence to an 
 action by the assured.^ The company must prove a written 
 request in order to set up the condition. A verbal request 
 is not sufficient.^ If written request is not made, the condi- 
 tion for arbitration is waived.^ And although the parties do 
 actually attempt to arbitrate without written request, it is a 
 common-law arbitration subject to revocation, and the bring- 
 ing of suit is such a revocation. Where in case of any dif- 
 ference touching any loss the matter is, at the written request 
 of either party, to be submitted to arbitrators, and no action 
 is to be brought until the amount of loss is fixed by an 
 award, and it appears that the plaintiff made a written re- 
 quest for arbitration, but the company refused, the plaintiff 
 may proceed with his suit.^] 
 
 §494. Arbitration; Provision for in Charter. — If, by the 
 terms of the charter, arbitration be provided for in such a 
 manner as to indicate that it is the intention of the legislature 
 to erect such a tribunal for the benefit of the parties, and to 
 compel a resort to arbitration in the first instance, before ap- 
 pealing to the courts, then the courts will not entertain a suit 
 until such arbitration has been had.^ The question underwent 
 
 1 [North Lebanon R. R. v. McGrann, .33 Pa. St. 5.30 at 534.] 
 
 2 [Wright V. Susquehanna Mut. Fire Ins. Co., 40 Pa. St. 29.] 
 
 3 [Plioenix Ins. Co. v. Badger, 53 Wis. 283 at 288.] 
 
 4 [Wallace v. Ger.-Am. Ins. Co., 2 Fed. Rep. 658 (Iowa), 1880 ; 1 McCrary, 335.] 
 
 5 [Nurney v. Fireman's Fund Ins. Co., G3 Mich. 6.33.] 
 
 6 [Adams v. National Ins. Co., 20 N. B. R. 569 ; Bowes v. National Ins. Co., 
 id. 438. (In the first case one judge held that the refusal of the company to 
 appoint an arbitrator would not relieve the insured from the condition).] 
 
 7 Reeves i^. White, 10 Eng. L. & Eq. 332; Crisp v. Bunbury, 8 Bing. 394; 
 Ex parte Payne, 5 Dowl. & L. P. C. 079. 
 
 1130
 
 CH. XXVII.] ARBITRATION. [§ 494 
 
 further elaborate consideration in the case of Elliott v. Royal 
 Exchange Insurance Company ,i where the discussion turned 
 upon the point whether the form of the provision in question 
 was such as to amount to a condition precedent, or only to a 
 collateral stipulation. If the former, then it was valid ; if the 
 latter, then it was of no avail. The facts were, so far as they do 
 not appear in the opinion of the court, that the })olicy, which 
 was under seal, in one of its articles provided that " the loss or 
 damages, after the same shall be adjusted, shall immediately 
 be paid," and that " in case any difference shall arise touch- 
 ing any loss or damage, such difference shall be submitted " 
 to arbitrators, whose award in writing shall be conclusive and 
 binding on the parties. The covenant was to pay according 
 to the exact tenor of the articles subjoined to the policy. 
 Upon this policy an action was brought, and the defendants 
 replied that a difference arose between them and the plaintiff, 
 which the plaintiff refused to submit to arbitration. The ma- 
 jority of the court concurred with Kelly, C. B., who said : — 
 " The question in this case is, whether the plaintiff is enti- 
 tled to recover the amount of a loss by fire, which he has suf- 
 fered, and for which he claims to be compensated under a 
 policy effected by the defendants, such loss not having been 
 adjusted as pointed out in the articles, subject to which the 
 policy was made. The form of the policy is a covenant by 
 the defendants that their capital, stock, <fec., shall be subject 
 to make good the plaintiff's loss, £2200, ' according to the 
 exact tenor of the articles thereunto subjoined.' If the sen- 
 tence had stopped at the figures X2200, and in a subse- 
 quent part of the instrument there had been independent 
 provisions, which might be supposed to have qualified these 
 words, it might have been a question of greater doubt whether 
 these provisions were to be held a condition precedent or a 
 collateral stipulation, which could not avail to oust the juris- 
 diction of the court. But the covenant is itself, in its very 
 terms, qualified and made conditional by the subsequent 
 words referring to the articles, which, following without any 
 interval, form an integral and substantial part of the cove- 
 I 2 L. Rep. (Exch. Cas.) 237. 
 
 1131
 
 § 494] insurance: fire, life, accident, etc. [ch. xxvii. 
 
 nant. Therefore, in order to ascertain whether, when a loss 
 has been sustained by the insured, a right of action has ac 
 crued to him, we must look at the articles, ' according to the 
 exact tenor ' of which the insurance is to be paid. Now the 
 10th article provides that upon the occurrence of any loss or 
 damage by fire, the party is forthwith to give notice to the 
 officers, and within fifteen days to deliver in a particular 
 account of his damage, evidenced and verified as may be 
 required, ' which loss or damage, after the same shall be ad- 
 justed, shall immediately be paid in money,' with an option to 
 the company to reinstate. Collecting the meaning of the par- 
 ties from the language used by them in this sentence, and 
 putting on it the ordinary and usual construction, the effect 
 is, not that the plaintiff is, in the event of loss, entitled imme- 
 diately to recover the amount of his loss, but what he is en- 
 titled to recover is the amount of the loss after it has been 
 adjusted, which means adjusted in the manner pointed out by 
 the subsequent articles. It appears to me that to decide to 
 the contrary would be to disregard entirely the obvious inten- 
 tions of the parties, expressed in words which state em- 
 phatically that before the loss is paid its amount shall be 
 adjusted. 
 
 " We were pressed with the weight of authority, and it was 
 ably argued that it is impossible to decide i-n favor of the 
 defendants, consistently with prior decisions, and with the 
 well-recognized principle, that no contract shall oust the juris- 
 diction of the courts of law ; and it was urged that the con- 
 tract was neither more nor less than a contract on the part 
 of the company to make good the loss, with a separate and 
 collateral stipulation that the amount shall be referred to 
 arbitration. It is no doubt difficult to reconcile and give 
 effect to two propositions so nearly in direct opposition, as 
 that no contract of the parties shall oust the jurisdiction of 
 the courts, and that on any difference arising between two 
 parties, it shall be referred to arbitration. But the fair result 
 of the authorities is that, if the contract is in such terms that 
 a reference to a third person, or to a board of directors, is a 
 condition precedent to the right of the party to maintain an 
 1132
 
 CH. XXVII.] ARBITRATION. [§ 494 
 
 action, then he is not entitled to maintain it until that condi- 
 tion is complied with ; but if, on the other hand, the contract 
 is to pay for the loss (or other matter in question), with a 
 subsequent contract to refer the matter to arbitration, con- 
 tained in a distinct clause, collateral to the other, then that 
 contract for reference shall not oust the jurisdiction of the 
 courts, or deprive the party of his action. Now it seems to 
 me impossible, without directly overruling or disregarding 
 the decision of the House of Lords, in iScott v. Avery ,i to say 
 that the stipulation here is not a condition precedent. There 
 the words were that ' the sum to be paid by this association 
 to any suffering member for any loss or damage shall, in the 
 first instance, be ascertained by the committee.' Here they 
 are ' that the loss, after the same shall he adjusted, shall imme- 
 diately be paid.' In both cases a stipulation follows that any 
 difference arising between the parties shall be referred to arbi- 
 tration. The House of Lords, in that case, having held that 
 the ascertainment of the loss by the committee or by arbitra- 
 tion was a condition precedent, and that without such ascer- 
 tainment the plaintiff had no cause of action, I cannot see any 
 distinction which would justify us in holding here that the 
 adjustment of the loss, as provided in the articles, was not a 
 condition precedent. All the cases cited were in favor of the 
 defendants' contention, with the exception of Horton v. 
 Sayer^ and Roper v. Lendon,^ which were both decided on 
 the ground that the agreement to refer was only a collateral 
 stipulation. In the latter case, the court came to that deci- 
 sion on a contract very much resembling the present one. I 
 do not enter into the question whether the true construction 
 was put on the instrument in that case ; the point seems to have 
 been given up early in the argument, and the matter was 
 hardly discussed. But on another part of the same contract, 
 words contained in one of several conditions, subject to which 
 the policy was made, were held to constitute a condition pre- 
 cedent; and that part of the decision rather supports our 
 present judgment. This contract, I think, speaks plainly to 
 
 15H.L. C. 511. 2 4H. &N. 643. 3 1 E. & E. 825. 
 
 1183
 
 § 494] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVII. 
 
 the effect I have stated, and my judgment therefore is for the 
 defendants." ^ 
 
 Bramwell, J., dissented, not because he differed with his 
 brethren as to the law, but because he thought the provision 
 in question a collateral stipulation and not a condition pre- 
 cedent.2 
 
 1 Elliott V. Royal Exchange Ass. Co., Law Rep. (2 Exch. Cas.) 237. 
 
 2 The opinion, though a dissenting one, is worth the space we shall be obliged 
 to give it in this note. Bramwell, J. : "I think the plaintiff is entitled to judg- 
 ment. I agree that there is no doubt as to the law, nor did I ever think there 
 was, even before the decision in Scott v. Avery. In the argument of that case 
 (the arbitration clause in which was framed by Mr. Justice Cresswell) Mr. Man- 
 isty and myself were counsel for the defendants. We scarcely cited a case, but 
 laid down a proposition wliich was almost immediately adopted by the judges 
 below and by the House of Lords. That proposition was, that if two persons, 
 whether in the same or in a different deed from that which creates the liability, 
 agree to refer the matter upon which the liability arises to arbitration, that 
 agreement does not take away the right of action. But if the original agreement 
 is not simply to pay a sum of money, but that a sum of money shall be paid if 
 something else happens, and that something else is thatatliird person shall settle 
 the amount, then no cause of action arises until the third person has so assessed 
 the sum. For to say to the contrary would be to give the party a different measure 
 or rate of compensation from that for which he has bargained. Tiiis is plain 
 common sense, and Is what I understand the House of Lords to have decided in 
 Scott V. Avery. Now the construction of this policy appears to me far from 
 clear, upon the point whether tlie defendants agree to pay tlie adjusted amount, 
 or whether they agree to pay the actual loss, with a provision for adjusting the 
 loss. If the latter is the true construction, then the principle of Scott v. Avery 
 does not apply, or rather it applies to exclude them from their defence. The 
 words of the policy are that the defendants will pay to the plaintiff 'any loss or 
 damage by fire,' according to the tenor of the articles. The articles, whicii are 
 thus part of the covenant, then say, ' which loss or damage, after the same shall 
 be adjusted, shall immediately be paid.' To my mind, these words refer not to 
 an essential term of the covenant (which I prefer to the phrase ' condition pre- 
 cedent'), but to the time when the payment is to be made, that is, immediately 
 after the adjustment. This verbal examination may seem critical, but it is called 
 for; for if the adjusted loss only is stipulated to be paid, the consequence will be 
 that if the assured, after the adjustment, discovers that something has been burned 
 which has been boim Jide omitted from his claim, he will be precluded by this 
 clause from recovering it. But I do not think that it was in the contemplation of 
 the parties to be so irrevocably bound. If not, then the agreement is to pay not 
 the adjusted, but the actual amount, with a proviso for settling the matter in case 
 of dispute. The clause goes on to say that the defendants may, at their option, 
 restore; so that it is not merely their intention to pay the adjusted loss. It is 
 then provided that in case 'any difference shall arise, touching any loss or dam- 
 age,' it shall be settled by arbitration. Now it is impossible to say that this is 
 
 1134
 
 CH. XXVII.] ARBITRATION. [§ 495 
 
 § 495. Arbitration ; Condition. — 111 Campbell v. American 
 Popular Life Insurance Company,^ where it was provided 
 that payment of the loss was to be on condition that, in the 
 opinion of the surgeon-general of the company, the insured 
 did not die from " intemperance," while if such was his opin- 
 ion then the company were to repay all the premiums, with 
 compound interest, the subject came again under considera- 
 tion, with a result favorable to the validity of the provision 
 as a condition precedent. The court thus stated its views as 
 to the present state of the law : " It is not denied," say the 
 court, " that any mere agreement between the parties that 
 any future differences growing out of their contract shall be 
 decided by arbitrators or referees, thereafter to be cliosen, 
 will not be allowed by the court to oust their jurisdiction. 
 But in this branch of the law there exist distinctions which, 
 if carefully observed and followed, will, in our judgment, 
 reconcile the authorities, and produce a beautiful correspond- 
 ence, where at first view there may appear nothing but a 
 conflict of authorities. The leading case on this question was 
 that of Kill V. Hollister,^ decided in the Court of King's 
 Bench. The following is the condensed and careful opinion 
 in this case : ' This is an action upon a policy of insurance, 
 wherein a clause was inserted that, in case of any loss or dis- 
 pute about the policy, it should be referred to arbitration ; 
 and the plaintiff avers, in his declaration, that there has been 
 no reference. Upon the trial at Guildhall the point was re- 
 served for the consideration of the court, whether this action 
 was well laid before reference was had. And by tlie whole 
 court : If there had been a reference depending, or made and 
 determined, it might have been a bar ; but the agreement of 
 
 merely a substitute for adjustment between the parties, for, under these words, 
 the arbitrator would have power, not merely to adjust the amount that shall be 
 paid, but to determine whether the plaintiff shall have any payment at all, or 
 whether, by reason of non-payment of premiums or of fraud, he has forfeited his 
 right to recover. I think, therefore, that this is a collateral agreement to refer 
 to arbitration, and not an agreement tliat only tlie adjusted loss shall be paid." 
 
 1 Supreme Court, Dist. of Columbia, 5 L. Times (U. S. Reports), 6; s. c. 2 
 Big. Life & Ace. Ins. Cas. 16; 1 Mc Arthur (D. C), 246, 471. 
 
 ■^ 1 Wilson, 129. 
 
 VOL. II. — 28 1135
 
 § 495] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVII. 
 
 the parties cannot oust the court. And as no reference has 
 been nor any is depending, the action is well brought, and 
 the plaintiff must have judgment.' To the same effect arc 
 Thompson v. Charnock,i Goldstone v. Osborne,^ and Street 
 V. Rigby,^ following a prior decision made by Lord Thurlow, 
 to w^hich may be added Scott v. Avery.* These decisions, 
 however, do not apply to an agreement where the parties have 
 actually chosen and named the referee ; for in such a case the 
 court say, in Kill v. Hollister, the reference might have been 
 pleaded in bar. It is only the imperfect and executory agree- 
 ment to have a reference entered into hereafter which the 
 court say will not oust its jurisdiction. It is because no ref- 
 erence has been agreed upon and settled between the parties, 
 that the agreement is not a bar.^ An imperfect and execu- 
 tory agreement, such as that referred to, cannot be enforced 
 in equity, for the reason that a court of equity will not and 
 cannot compel the parties to come to an agreement in the 
 choice of referees. ... If the controversy, therefore, be not 
 in effect actually referred by such an agreement, as it cer- 
 tainly is not, it must remain under the jurisdiction of the 
 court. . . . The effect of these decisions, therefore, is this, 
 and nothing more, that an agreement to refer, which is so 
 imperfect as not to be specifically enforced in equity, and for 
 breach of which nothing but nominal damages can be recov- 
 ered at law, will not be allowed to oust the courts of jurisdic- 
 tion, else there will be a failure of justice. . . . But if the 
 contract be drawn in the ' prudential way,' recommended by 
 Lord Eldon,6 by inserting a stipulation for liquidated dam- 
 ages, or there be a separate bond to bind the parties by 
 
 1 8 T. R. 136. 2 2 C. & P. 550. 
 
 8 6 Ves. 815. * 8 Exch. 487. 
 
 5 With due deference to the learned court, it is suggested tliat the effect of 
 the decision in Kill v. Hollister is not accurately stated. They do not say that 
 an agreement to refer to a particular person would be good. They say only that 
 an agreement to refer will not oust them of their jurisdiction, but mtimate that if 
 the agreement had been acted on, then it might have been a good plea in bar. 
 
 6 " There miglit have been an agreement for liquidated damages to enforce a 
 specific performance, if an action could not produce sufficient damages, or equity 
 would not entertain a bill for specific performance." Per Lord Eldon, Street v. 
 Rigby, uhi supra. 
 
 1136
 
 CH. XXVII.1 ARBITRATION. [§ 496 
 
 penalty to its performance, the contract must be fulfilled, or 
 the penalty will be enforced." And nowhere, adds the court, 
 " have we been able to find a decision or even a dictum to 
 sustain the doctrine of the court below, . . . that a contract, 
 binding the parties to a reference, was contrary to public 
 policy." This case doubtless w^ell stands on the doctrine 
 upon which the cases of an agreement to procure the certifi- 
 cates of certain persons to certain facts, before action can be 
 brought, are uplield, to wit, on the ground that they are by 
 contract made conditions precedent to the bringing of an 
 action, and are subject to no such objection as is an agree- 
 ment to refer, which, if held to be valid, cuts off all right of 
 action. Any stipulation, therefore, which merely looks to 
 the requirement of certain acts to be done or omitted before 
 bringing an action, seems to be valid, since such a stipulation 
 not only does not oust the courts, but obviously contemplates 
 and makes preparation for an appeal to the courts. The dis- 
 tinction between an agreement to do certain things before 
 bringing an action, and an agreement to refer to arbitration, 
 which is tantamount to an agreement not to bring an action, 
 is too obvious to need remark. Any agreement which does not 
 prevent the parties from coming into court will doubtless be 
 sustained ; as, for instance, an agreement to submit to arbitra- 
 tion what amount will be due, if any, reserving the question 
 of liability.^ If, however, the agreement to arbitrate as to the 
 amount be subject to the qualification tliat it be " at the 
 written request of either party," an action will be sustained if 
 neither has so requested before action brought.^ 
 
 § 496. Arbitration ; Equitable Adjustment after Forfeiture. — 
 In Nightingale v. State Life Insurance Company of Wor- 
 cester,^ there was a provision in the policy that in case of 
 
 1 Yeomans v. Girard Fire Ins. Co., C. Ct. (N. J.), 5 Ins. L. J. 853; Trott v. 
 City Ins. Co., 1 Cliff (C. Ct. U. S.) 439 ; ante, §§ 484, 485, 491. But see Mentz 
 V. Armenia Fire Ins. Co., 79 Pa. St. 478. See also, upon the general subject, tiie 
 learned note by Judge Bennett, appended to the case of Scott v. Phoenix Assur- 
 ance Company, in the first volume of his Fire Insurance Cases, page 122. ^ 
 
 '^ Wallace v. German-American, &c. Ins. Co., 2 Fed. Rep. 658; Mentz's 
 Case, supra. 
 
 3 5 R. I. 38. 
 
 1137
 
 § 496] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVII. 
 
 foi'feiture from any cause the party interested should have 
 the benefit of such equitable adjustment as may, from time to 
 time, be provided by the board of directors ; and it was held 
 that, whether any such adjustment could be made was en- 
 tirely in the discretion of the directors, not in any way subject 
 to the control of the court. " It is true," said Ames, C, J., 
 in giving the opinion of tlie court, " that by the qualifying 
 clause of the condition of forfeiture the executors of the 
 assured would have been entitled to the benefit of any equi- 
 table adjustment provided for by existing rules established by 
 the directors, or accorded by their special act. Whether such 
 rules should be established, or such special dispensation from 
 the forfeiture should be granted, was, as it seems to us, left 
 by this qualifying clause wholly to the discretion of the direc- 
 tors, who ' from time to time ' might act in the matter ; except, 
 indeed, that they should not be permitted to change, to the 
 injury of the assured, an established rule of adjustment, exist- 
 ing at the time of the act or omission, of the forfeiture. The 
 construction which supposes that such discretion was designed 
 by both parties to the contract to be reposed in the directors, 
 as fair arbiters for all interested, borrows support from the 
 fact that, under the charter of this company, the directors are 
 elected by the joint votes of the assured and holders of the 
 guaranty stock, and are to be chosen, in moieties, out of these 
 two classes of the members of the corporation. No rule of 
 equitable adjustment applicable to the case at bar appears to 
 have been established by the directors of this company, and 
 the request made to them by the claimants for special action 
 in their favor was, upon full consideration, rejected. We 
 cannot interfere with their discretion in this matter without 
 doing violence to the contract upon which we are called to 
 adjudicate." In Manby v. Gresham Life Assurance Company ^ 
 there was an agreement, if the insured's health should improve, 
 to remit an extra premium charged on account of the infirm 
 state of his health, upon the " society being satisfied " of the 
 fact. Having entirely recovered, and become sound and well, 
 the insured brought his bill in equity to compel them to remit 
 
 1 29 Beav. 439. 
 
 1138
 
 CH. XXVII.] ARBITRATION. [§ 496 B 
 
 the premium. But the court said they could not interfere 
 with the judgment of the directors, if ho7ia fide exercised. 
 It could not undertake to say in whicli way their judgment 
 should be given. 
 
 § 496 a. Arbitration ; Fraud. — But fraud in the negotiation 
 of the contract taints the agreement for arbitration, as also 
 every other provision. If, therefore, the arbitration be entered 
 upon and concluded by a decree, and subsequent thereto it 
 comes to the knowledge of the insurers that the policy was 
 procured by fraud, or for a fraudulent purpose, the court 
 will set aside the decree, although by the terms of submis- 
 sion it is to be final, and although one of the grounds upon 
 which it is sought to be set aside was in issue before the 
 arbitrator.! 
 
 [§ 496 B. Waiver; Void Awards, &c. — Refusal of the com- 
 pany to pay any sum is a waiver of the arbitration clause, and 
 suit may be maintained at once.^ And when the company 
 took possession of the injured vessel and proceeded to repair 
 her with a view to making good their loss, this was deemed a 
 waiver of arbitration.^ If either party acts in bad faith to de- 
 feat the real object of the arbitration clause the other is ab- 
 solved from duty in regard to it.* When arbitrators exceed 
 their powers the whole award is void.^ When the policy pro- 
 vided that arbitrators, if needed, should be chosen by the par- 
 ties and be disinterested proof that neither of these conditions 
 were carried out, avoids the award. ^ An appraisement is valid 
 though the appraisers be not sworn, and the mere fact that 
 the submission was in writing and in the nature of a sub- 
 mission to arbitrators will not operate to make the matter 
 an arbitration and so void under the statutes for want of 
 
 1 Hercules Ins. Co. v. Hunter, 14 Ct. of Sess. Cas. (Scotch), 147, 1137 ; 
 15 id. 800. [Arbitration and award as to the amount of loss does not prevent 
 the company from afterward denying liability on a ground known at the time of 
 submitting to the arbitration. Johnson v. Amer. Fire Ins. Co., 18 Ins. L. J. 724 
 (Minn.), Aug. 12, 1889.] 
 
 2 [Western Ins. Co. v. Putnam, 20 Neb. 331.] 
 
 3 [Cobb V. N. E. Mut. Ins. Co , 6 Gray, 192 at 204.] 
 
 4 [Uhrig V. Williamsburgh City Fire Ins. Co., 101 N. Y. 362.] 
 6 [Skipper v. Grant, 10 C. B. n. s. 237 at 250.] 
 
 6 [.^tna Ins. Co. v. Stevens, 48 111. 31 at 33.] 
 
 1139
 
 § 496 B] INSURANCE : fire, life, accident, etc. [ch. xxyii. 
 
 formalities.! If the contract provides for arbitration, and the 
 appraisers severally appointed by the company and the insured 
 fail to agree on a third, this does not justify suit. The insured 
 should propose a new selection of appraisers.^ When several 
 underwriters have referred to an arbitrator, before trial, a case 
 against them for consolidated damages and he has rendered a 
 sum due from all to which they consent the cause cannot be 
 remanded to him to apportion the sum among them, unless all 
 consent.^] 
 
 1 [Zallee v. Laclede Mut. Fire & Mar. Ins. Co., 44 Mo. 530 at 533.] 
 
 2 [Davenport i'. Long Island Ins. Co., 10 Daly, 535.] 
 8 [Kynaston v. Liddell, 8 Moore, 223 at 224.] 
 
 1140
 
 CH. XXVIII.] OF WAIVER AND ESTOPPEL. 
 
 CHAPTER XXVIII. 
 
 OF WAIVER AND ESTOPPEL. 
 
 Analysis. 
 
 A § 497. General Kules. Any conduct recognizing the policy as valid after 
 
 breach of condition, or any act that puts the insured to 
 expense and trouble on the justifiable belief that the 
 company still regard the policy as good, will be sufficient. 
 "Waiver must be pleaded. It is a question for the court if 
 facts are admitted, otherwise for jury. 
 
 B § 498. Waiver or estoppel may be by the act of an agent within his 
 
 authority. 
 Where the agent makes the survey which is signed by the ap- 
 plicant relying on the agent's assurance that it is all right, 
 misstatements in it of the distances of surrounding build- 
 ings, &c., cannot avail the company, § 498. 
 So where an applicant signed a blank application stating to 
 the agent that there was a mortgage, and the agent after- 
 ward filling in the answers stated that there was no in- 
 cumbrance, § 498. 
 
 § 499. A company cannot through its agent write representations of 
 
 which the assured knows nothing, and then hold him to 
 them. 
 
 § 500. It is always a question of fact whether the agent in any given 
 
 matter acted for the insurer or for the insured. An agent 
 filling in wrong number and amount of prior policy after 
 the insured has signed the application is acting as the 
 company's agent. If the insured answers fully, and the 
 agent deems part of the answer immaterial, and omits to 
 write it down, the company cannot avail themselves of 
 the condition that the answer must be full. 
 
 C § 501. Estoppel by facts arising during negotiations. 
 
 Issue of policy upon appliiation containing an ambiguous 
 answer, or no answer to certain questions, waives them, 
 unless the omission signifies the affirmance of a certain 
 state of facts. 
 Prepayment, change of location, &c., waived. 
 Issue or renewal with knowledge of facts is a waiver generally, 
 but not as to want of insurable interest. 
 
 § 503. Where insurer knows the undertaking of the assured is impos- 
 
 sible, he cannot insist upon it. 
 
 D § 502. Estoppel by facts arising during currency of the policy. 
 
 After knowledge of the facts, any recognition of the validity 
 of the policy or conduct that misleads the assured to his 
 prejudice amounts to a waiver. 
 
 1141
 
 § 497] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 Agent's knowledge of a cause of forfeiture and receipt of 
 after-maturing premium or assessment is a waiver unless 
 there is an understanding to the contrary. 
 Courts will find a waiver on slight evidence. 
 § 502a. Notice. Option (see also § 512). Notice from stranger. 
 
 E §§ 504-505. Estoppel by facts arising after loss. 
 Same principles as above. 
 Any overlooking of known forfeiture properly relied on by 
 
 thQ assured to his prejudice is a waiver or estop]iel. 
 Entering negotiations for settlement, adjusting loss, prom- 
 ising to pay, payment, &c. 
 § 504 A. Eefusal to pay on one ground waives others. Demanding proofs 
 
 (or even allowing assured to go to the expense of making 
 them (?) ) waives a known cause of forfeiture, contra. 
 There is no estoppel 
 § 506. Where the facts are not known. 
 
 § 507. Nor where the insured has not been prejudiced. 
 
 § 508, Silence usually no estoppel. 
 
 The act constituting a waiver must be intentional, and not a 
 mere mistake. 
 § 509. Agent acting under undisclosed instructions. 
 
 § 511. Stipulation against waiver. Limitation of agent's authority. 
 
 Opinions vary as to the effect of conditions against waiver 
 by agent, or requiring all waivers to be iu writing, 
 or indorsed on the policy. It is held — 
 that such provisions are valid ; 
 that they are null and void ; 
 that they do not apply to matters connected with the 
 
 creation of the contract ; 
 and that they apply only to such matters. 
 The courts in many instances show a tendency to repudiate 
 the condition as unreasonable. On the facts most of 
 the cases are fair, and the consideration that these condi- 
 tions may themselves he luaivcd as well as any others goes 
 far to harmonize the decisions. 
 § 513. Collusion between agent and insured. 
 
 § 497. General Rules- — Insurers may, and often do, find 
 themselves in such a position that they cannot avail themselves 
 either of a breach of warranty, or of a misrepresentation or 
 concealment. And when in this position they are said to be 
 estopped from availing themselves, or to have waived the 
 right to avail themselves, of such a defence. And the rule 
 here is, with reference to the negotiations had at the time of 
 taking out the policy, that where the application is reduced to 
 writing by the insurer or his agent upon the oral statement 
 of the applicant, whether the application is, or is not, made 
 tantamount to a warranty, by being made part of the contract, 
 1142
 
 CH. XXVIII.] OF WAIVER AND ESTOPPEL. [§ 497 
 
 the insurer being under a strong moral obligation to secure to 
 the applicant the protection for which he pays, if a controversy- 
 arises upon the truthfulness of the application, and statements 
 alleged by the insurer to be essential were omitted, and others 
 falsely made, and he seeks to avoid the contract on that 
 ground, parol evidence is admissible to show that, at the time 
 the negotiations were pending, the facts alleged to have been 
 omitted or falsely stated were in fact truly stated, or were 
 accepted, as they were stated, as and for the truth, by the 
 insurer, or that the conduct of the insurer led the applicant 
 to believe that such as were omitted were immaterial, and 
 such as were alleged to be false were truly made. 
 
 To deliver a policy with full knowledge of facts upon which 
 its validity may be disputed, and then to insist upon these 
 facts as ground of avoidance, is to attempt a fraud. This 
 the courts will neither aid nor presume ; and when the alter- 
 native is to find this, or to find that, in accordance with hon- 
 esty and fair dealing, there was an intent to waive the known 
 ground of avoidance, they will choose the latter.^ 
 
 Such an issue is tantamount to an assertion that the policy 
 is valid at the time of the delivery, and is a waiver of the 
 known ground of invalidity .^ So is the issue of a policy upon 
 an application to a question in which no answer is given.^ 
 
 And any acts, declarations, or course of dealing after de- 
 livery by the insurers, with a knowledge of the facts con- 
 stituting a breach of a condition of the policy, recognizing the 
 policy as still valid, and from which the insured might fairly 
 infer that he was protected, will amount to a waiver of such 
 breach, and estop the insurers from setting it up in defence ; * 
 
 1 Mahony v. National, &c. Life Ass. L. R. 6 C. P. 252. 
 
 '^ Commercial Ins. Co. v. Ives, 56 111. 402 ; Morrison v. Universal, &c. Ins. Co., 
 8 L. R. (Ex.) 40; Geib v. Enterprise Ins. Co., 1 Dill. C. Ct. 443, 440; Lorillard 
 Fire Ins. Co. v. McCuUoch, 21 Oliio St. 176 ; Richnionrl v. Niagara Fire Ins. Co., 
 79 N. Y. 230; Peoria Mar. & Fire Ins. Co. (;. Perkins, 16 Mich. 380 ; Van Schoick 
 V. Niagara Ins. Co.. 68 N. Y. 434; Bennett v. North British, &c. Ins. Co., 81 id. 
 273; Shaw v. Scottish Provincial Ins. Co., 1 Fed. Rep. 761 ; Micliigan, &c. Ins. 
 Co. V. Lewis, 30 Mich. 41 ; Germania Fire Ins. Co. v. McKee, 94 111.494; Smith 
 V. Commonwealth Ins. Co., 49 Wis. 322. 
 
 3 Dayton Ins. Co. v. Kelly, 24 Ohio St. 345. 
 
 * Georgia Home Ins. Co. v. Kinnier, 28 Grat. (Va.) 88. See also post, § 502. 
 
 1143
 
 § 497] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 and generally any act which puts the insured to expense or 
 trouble, and justifies him in the belief that the insurers regard 
 the policy as still a valid contract.^ So, if the insurers lead 
 the insured into an infraction of some condition.^ 
 
 And vice versa, if the insured accepts a policy, and pays 
 the premium, with knowledge that false representations have 
 been made to him to induce him to accept, he cannot after- 
 wards set up those false representations in defence to an 
 action on the premium note.^ 
 
 1 Titus V. Glens Falls Ins. Co., 81 N. Y. 410 ; Penn Fire Ins. Co. v. Kittle, 39 
 Mich. 51. In Plicenix Ins. Co. v. Stevenson (Ky.), 8 Ins. L. J. 922, it is said that 
 unreasonable delay in notifying a purpose to claim a forfeiture, as it may lull the 
 insured into a false security, and prevent his obtaining new insurance, will 
 amount to a waiver. 
 
 2 Leslie v. Knickerbocker Ins. Co., 5 T. & C. (N. Y.) 193. A warranty does 
 not cover patent and obvious defects, which are plainly visible to the warrantee, 
 — such, for instance, as the loss of an eye in a horse. This doctrine is based 
 upon the reasonable presumption that the parties could not have intended to 
 affirm that to be true which they both knew to be false. Brown v. Bigelow, 
 10 Allen (Mass.), 242 ; American Ins. Co. v. Mahone, 21 Wall. (U. S.) 152. 
 
 3 Lycoming Ins. Co. v. Woodworth, 83 Pa. St. 223. In Carr v. London & 
 North Western Railway Company, L. R. 10 C. P. 307, the following were laid 
 down as recognized propositions, with respect to an estoppel in pais, by Lord 
 Justice Brett : — 
 
 1. If a man by his words or conduct wilfully endeavors to cause another to 
 believe in a certain state of things which the first knows to be false, and if the 
 second believes in such a state of things, and acts upon his belief, he who know- 
 ingly made the false statement is estopped from averring afterwards that such a 
 state of things did not in fact exist. 
 
 2. If a man, either in express terms or by conduct, makes a representation to 
 another of the existence of a certain state of facts which he intends to be acted 
 upon in a certain way, and it is acted upon in that way, in the belief of the 
 existence of such a state of facts, to the damage of him who so believes and 
 acts, the first is estopped from denying the existence of such a state of facts. 
 
 3. If a man, whatever his real meaning may be, so conducts himself that a 
 reasonable man would take his conduct to mean a certain representation of facts, 
 and that it was a true representation, and that the latter was intended to act 
 upon it in a particular way, and he with such belief does act that way to his 
 damage, the first is estopped from denying that the facts were as represented. 
 
 4. If in the transaction itself which is in dispute one has led another in the 
 belief of a certain state of facts by conduct or culpable negligence calculated to 
 have that result, and such culpable negligence has been the cause of leading, 
 and has led, the other to act by mistake on such belief to his prejudice, the 
 second cannot be heard afterwards, as against the first, to show that the state 
 of facts referred to did not exist. 
 
 1144
 
 CH. XXVIII.] OF WAIVER AND ESTOPPEL. [§ 498 
 
 [Waiver may be a question for the court, if the facts are 
 not in dispute.^ Otherwise it is for the jury .2 Facts relied 
 on as constituting a waiver must be pleaded. If waiver is not 
 pleaded it is error to instruct the jury as though such an issue 
 were in the case.^J 
 
 § 498. Estoppel by Act of Agent. — Prior to the case of 
 Plumb V. Cattaraugus County Mutual Insurance Company,* 
 the rule in that State had been that statements in the applica- 
 tion which were referred to and made part of the policy were 
 warranties, a breach of which worked a forfeiture, whether 
 the application was made and signed by the applicant, or, at 
 his request, filled up by an agent of the company authorized 
 to receive and forward applications, and then signed by the 
 applicant. But in that case the rule was changed upon the 
 following facts : The agent and surveyor of the company pre- 
 sented to the plaintiff a blank application, and solicited him 
 to effect an insurance in the company for which he acted. 
 After some hesitation the plaintiff told the agent that if he 
 insisted upon taking the application that day, he must get 
 along alone, and act on his own responsibility. Whereupon 
 the agent proceeded to make the survey alone ; and having 
 filled up the application, presented it to the plaintiff with the 
 assurance that it was all right, and just as it should be, who 
 thereupon, stating that he relied upon this assurance, signed 
 it. It appeared, however, that there were material misstate- 
 ments in the survey as to the relative distances and positions 
 of surrounding buildings. Under these circumstances the 
 court held that it was a case for the application of the doc- 
 trine of estoppel, and that, since the agent acted within the 
 
 A fifth rule was added to these, in Ex parte Adamson, by Lord Justice James, 
 8 Ch. D. 807, 817. 
 
 5. Nobody ought to be estopped from averring the truth or asserting a just 
 demand, unless by his acts or words or neglect his now averring the truth or 
 asserting the demand would work some wrong to some other person who has 
 been induced to do something, or to abstain from doing something, by reason of 
 what he had said or done, or omitted to say or do. 
 
 1 [New Orleans Ins. Ass. v. Matthews, 65 Miss. 301.] 
 
 •2 [Drake v. Farmers' Union Ins. Co., 3 Grant's Cas. 325 at 326.] 
 
 2 [Eiseman v. Hawkeye Ins. Co., 74 Iowa, 11.] 
 4 18 N. Y. 392. 
 
 1146
 
 §498] insurance: fire, life, accident, etc. [ch. xxviii. 
 
 scope of his authority, what he had, with a full knowledge of 
 the facts, asserted to be true, the company could not be al- 
 lowed to prove to be false, for the purpose of showing a breach 
 of the warranty. And the doctrine of this case was subse- 
 quently affirmed in the case of Rowley v. Empire Insurance 
 Company,^ where the agent was empowered, among other 
 things, " to take applications." The plaintiff stated verbally 
 to the agent the facts necessary to meet the requirements of 
 the company, and among other things that the property was 
 incumbered by mortgage, and then signed the application, 
 which the agent proceeded to fill up on his return to his resi- 
 dence. In it, however, he stated that there was no incum- 
 brance on the property ; and the falsity of this statement the 
 insurers sought to show in order to defeat a recovery. But 
 the court held that they were estopped from so doing. A 
 party who deals with an agent, through whom he applies for 
 and obtains a policy, has a right to presume that such material 
 facts as are made known to him are known to his principal, 
 and when policies are issued with a full knowledge of such 
 facts, the insured is to suffer no prejudice, nor are the insurers 
 to gain any advantage by insisting upon conditions which it 
 would be dishonest to enforce.^ The doctrine of these cases 
 has been made the subject of statutory enactment in Maine, 
 whereby such statements are made conclusive upon the com- 
 pany when the application is drawn up by the agent who 
 knows the facts.^ 
 
 1 36 N. Y. (9 TifE.) 550. See also Owens v. Holland, &c. Ins. Co., 56 N. Y. 
 565. 
 
 2 Security Ins. Co. v. Fay, 22 Mich. (4 Clarke) 467, 473 ; ./Etna Live Stock & 
 Fire Ins. Co. v. Olmstead, 21 Midi. (3 Clarke) 246 ; North Am. Fire Ins. Co. f. 
 Throop, id. 146 ; Aurora Fire Ins. Co. y. Eddy, 55 111. 213; Knox v. Lycoming 
 Ins. Co. (Wis.), 10 Ins. L. J. 89. 
 
 3 Stat. 1861, c. .34, § 2. By that statute it is enacted that " no insurance com- 
 pany shall avoid payment of a loss by reason of incorrect statements of value, 
 or title, or erroneous description by the insured in the contract of insurance, if 
 the jury shall find that the difference between the property as described and as 
 really existing did not contribute to the loss, or materially increase the risk ; any 
 change in the property insured, its use or occupation, or breach of any of the 
 terms or conditions of the contract by the insured, shall not affect the contract, 
 unless the risk was thereby materially increased." 
 
 1146
 
 CH. XXVIII.] OF WAIVER AND ESTOPPEL. [§ 499 
 
 § 499. And the Supreme Court of the United States has at 
 last thrown the great weight of its authority into the scale in 
 favor of this doctrine of equitable estoppel/ the elasticity of 
 which it must be admitted has been put to the test of the 
 severest tension. But to this the courts seem to have been 
 driven by the constantly increasing tendency of insurance 
 companies to seek profit at the expense of the unwary, and 
 protection against sharp, not to say dishonest, practices, by 
 invoking another rule of law, — that parol evidence is inad- 
 missible to contradict or vary the terms of a written contract,^ 
 — which was intended to prevent fraud and not to work in- 
 justice. In that case the court say : — 
 
 " In the case before us, a paper is offered in evidence 
 against the plaintiff, containing a representation concerning a 
 matter material to the contract on which the suit is brought, 
 and it is not denied that he signed the instrument, and that 
 the representation is untrue. But the parol testimony makes 
 it clear, beyond a doubt, that this party did not intend to 
 make that representation when he signed the paper, and did 
 not know he was doing so ; and, in fact, had refused to make 
 any statement on that subject. If the writing containing this 
 representation had been prepared and signed by the plaintiff 
 in his application for a policy of insurance on the life of 
 his wife, and if the representation complained of had been 
 inserted by himself, or by some one who was his agent alone 
 in the matter, and forwarded to the principal office of the 
 defendant corporation, and acted upon as true by the officers 
 of the company, it is easy to see that justice would authorize 
 them to hold him to the truth of the statement ; and that as 
 they had no part in the mistake which he made, or in the 
 making of the instrument which did not truly represent what 
 he intended, he should not, after the event, be permitted to 
 
 1 Union Mut. Ins. Co. v. Wilkinson, 13 Wall. (U. S.) 222. 
 
 2 Tliis rule is not applicable at all unless tlie application is made part of the 
 contract. Cheever v. Union Central Ins. Co. (Superior Ct. Cincinnati), 5 Big. 
 Life & Ace. Ins. Cas. 458. That the rule is not infringed, see ante, § 144 ; Insur- 
 ance Co. V. Mahone, 21 Wall. (U. S.) 152; McLean v. Piedmont, &c. Ins. Co 
 .29Grat. (Va.) 361. 
 
 1147
 
 § 499] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 show his own mistake or carelessness to the prejudice of the 
 corporation. 
 
 " If, however, we suppose the party making the insurance 
 an individual, and to have been present when the application 
 was signed, and soliciting the assured to make the contract 
 of insurance, and that the insurer liimself wrote out all these 
 representations, and was told by the plaintiif and his wife that 
 they knew nothing at all of this particular subject of inquiry, 
 and that they refused to make any statement about it ; and 
 yet, knowing all this, wrote the representation to suit himself, 
 it is equally clear that for the insurer to insist that the policy 
 is void because it contains this statement, would be an act 
 of bad faith and of the grossest injustice and dishonesty. 
 And the reason for this is, that the representation was not 
 the statement of the plaintiff, and that the defendant knew 
 it was not when he made the contract ; and that it was made 
 by the defendant, who procured the plaintiff's signature 
 thereto. 
 
 " It is in precisely such cases as this that courts of law 
 in modern times have introduced the doctrine of equitable es- 
 toppels ; or, as it is sometimes called, estoppels in j^ais. The 
 principle is, that where one party has, by his representations 
 or his conduct, induced the other party to a transaction to 
 give him an advantage which it would be against equity and 
 conscience for him to assert, he would not in a court of justice 
 be permitted to avail himself of that advantage. And although 
 the cases to which this principle is to be applied are not as 
 well defined as could be wished, the general doctrine is well 
 understood, and is applied by courts of law as well as equity 
 where the technical advantage thus obtained is set up and 
 relied on to defeat the ends of justice or establish a disiionest 
 claim. It has been applied to the precise class of cases of the 
 one before us in numerous well-considered judgments by the 
 courts of this country." ^ 
 
 1 Plumb V. Cattaraugus Ins. Co., 18 N. Y. 392 ; Rowley v. Empire Ins. Co., 
 36 id. 550 ; Woodburj' Savings Bank v. Charter Oak Ins. Co., 31 Conn. 526 ; 
 Combs V. Hannibal Savings & Ins. Co., 43 Mo. 148 ; Nortli American Fire Ins. 
 Co. V. Tliroop, 22 Mich. 146; Michigan St. Ins. Co. v. Lewis, 30 id. 40; ante, 
 
 1148
 
 CH. XXVIII.] OF WAIVER AND ESTOPPEL. [§ 500 
 
 § 500. Estoppel ; Misrepresentation ; Agency. — In Spar- 
 row V. Mutual Benefit Life Insurance Company ,i the validity 
 of the policy was made dc})endcnt ujjon the truth of the an- 
 swers to the inquiries contained in the aj)plication ; and the 
 insured was inquired of in the same interrogatory as to prior 
 insurance, other insurance, and also if he had insurance upon 
 his life in other companies, in what companies, and to what 
 amount. The answer was, " Yes ; 5000, under policy 17,990." 
 It appeared in evidence that the insurers, a New Jersey 
 corporation, had a general agent in Boston for Massachu- 
 setts, who had supervision over the other agencies within the 
 State, and appointed sub-agents, whose duty it was to submit 
 to applicants for insurance certain questions, and to see that 
 they were answered. This sub-agent solicited the insured, 
 at the place of business of the latter, to make application 
 for insurance, and took down from the dictation of the 
 insured all of the answer except the number of the policy, 
 which was inserted by the clerk of the sub-agent at the lat- 
 ter's direction, the information having been obtained from 
 the records in the office, and all having been done after the 
 signature of the insured was made to the application. The 
 answer was untrue as to the amount of other insurance, and 
 incomplete as to the offices in which it was placed. It was 
 held to be a question of fact for the jury as to each particular 
 act in the negotiation, whether the agent, who might be act- 
 ing now for the company and now for the insured, was in fact 
 acting for the one or the other ; and the responsibility of each 
 particular act or declaration would rest with that party for 
 whom the agent acted in the matter and under whose direc- 
 tion and control, as to that particular matter, he might be, 
 adopting and applying the doctrine as laid down in Union 
 Mutual Insurance Company v. Wilkinson.^ Such an agent 
 
 §§ 143, 144; ^.tna Live Stock & Tornado Ins. Co. v. Olmstead, 21 Mich. 246; 
 Miller v. Mut. Ben. Life Ins. Co., 31 Iowa, 216; McBrlile v. Republic Fire Ins. 
 Co., 30 Wis. 562; Miner v. Phoenix Ins. Co., 27 id. 6'J3; Continental Ins. Co. v. 
 Kasey, 25 Grat. (Va.) 268. 
 
 1 Tried before Shepley, J., in the Circuit Court of the United States, First 
 Judicial District (Massachusetts), April, 1873, and not yet reported. 
 
 2 13 Wall. (U. S.) 222; ante, § 144. 
 
 1149
 
 § 500] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 is not necessarily the agent of the insurers in every act, be- 
 cause he may be controlled and directed in the particular 
 matter by the insured, when of course he is the agent, pro 
 hac vice, for the insured. But where such an agent by his 
 advice, opinion, or otherwise, acting within the general sphere 
 of his duties, leads, directs, or controls the assured, he is the 
 company's agent, and they are bound by his acts and their 
 results. And in the same case where the answer, in the 
 making of which the agent of the company intervened, was 
 untrue and incomplete, the defendant requested the court to 
 instruct the jury that if the insured accepted the policy, with 
 the knowledge that the answers to the several questions were 
 as they appeared at the trial, he was bound by them, what- 
 ever knowledge the agent of the company might have had 
 from him, or from any other person, relating to the subject- 
 matter inquired about. But the court declined to so instruct, 
 without qualification, but did instruct that if the insured ac- 
 cepted the policy with the knowledge that the answers were 
 in the words as they appeared at the trial, that those words 
 could not be altered or changed, or their meaning altered or 
 changed by the introduction of parol evidence, and that al- 
 though the agent of the company was aware from other 
 sources that the answers were untrue, yet if they were know- 
 ingly made by the insured and adopted by him, and their 
 truth made the test of the validity of the policy, he was 
 bound by them. But there was a clear distinction between 
 words used in the request as to matters which would conclude 
 the insured, and as to matters which would estop the office. 
 If the insured adopts the particular answer, he is concluded 
 from saying that the words used mean anything different 
 from what they purport to. But the question as to what con- 
 cludes the insured is not to be confused with the question as 
 to what estops the office. These are entirely distinct and 
 separate. The office, for instance, presents a question hav- 
 ing two clauses. Both are answered with equal truth and 
 fulness. With regard to one clause, the answer is put down 
 and adopted and signed by the assured. With regard to the 
 other, the office puts down but a part of the answer. While 
 1150
 
 CH. XXVIII.] OF WAIVER AND ESTOPPEL. [§ 501 
 
 the insured is concluded as to the first, yet when the com- 
 pany defends upon the ground that the answer to the second 
 is not true and full, the insured may be allowed to reply that 
 he did say something in reply to the interrogatory which the 
 insurers did not put down, because they regarded it then as 
 immaterial. And although in the light of subsequent events 
 it proves to have been material, yet as the insurers determined 
 to omit it, it was their act and not his, and so they shall not 
 be allowed to set it up against him. The questions, whether 
 a party insured is concluded by an answer which he has 
 adopted, and whether the insurers are estopped from setting 
 up some imperfection in an answer, for which they are di- 
 rectly responsible, are entirely distinct. And this distinction 
 is the foundation of the doctrine laid down in the Union 
 Mutual Life Insurance Company v. Wilkinson,^ under which 
 parol evidence is allowed, not to vary or change the language 
 as it is, but to show that the party claiming to set up an 
 omission or modification is in such a condition that he 
 cannot set it up by reason of his own knowledge of his 
 own acts. 
 
 § 501. Estoppel where Facts arise pending Negotiations, — 
 This estoppel is oftenest based on matter arising pending the 
 negotiation, as where the amount of the risk taken is beyond 
 the limit prescribed by the charter ; 2 or a special risk pro- 
 hibited by the by-laws is taken ; ^ or prepayment of premium, 
 though by the terms of the policy made essential to its valid- 
 ity, is not insisted on;* or an incomplete answer, or no an- 
 
 1 13 Wall. (U. S.) 222. 
 
 2 Hoxsie V. Prov. Mut. Fire Ins. Co., 6 R. I. 517 ; Fuller v. Boston Fire Ins. 
 Co., 4 Met. (Mass.) 206; Cumberland Valley Mut. Prot. Ins. Co. v. Schell, 29 
 Pa. St. 31 ; ante, §§ 1-30, 131. But see post, § 510. 
 
 3 Merch. & Manuf. Ins. Co. v. Curran, 45 Mo. 142. 
 
 * Sheldon v. Atlantic Fire & Mar. Ins. Co., 26 N. Y. 460; Heaton v. Man- 
 hattan Fire Ins. Co., 7 R. I. 502 ; Kibbe et al. v. Travellers' Ins. Co., N. Y. 
 Supreme Ct., 1872, not yet reported ; (tnte, §§ 134, 135. [When the policy con- 
 tained a clause stating that the company would not be liable until premiums 
 should be actually paid, but the agent had delivered the policy to the assured 
 waiving prepayment and fixing no time for payment and further had demanded 
 payment several times at the last of which, the assured promised to pay in a few 
 days and when the policy was not cancelled nor was the assured notified that it 
 
 VOL II. — 29 1151
 
 § 501] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 swer at all, to a question in the application ; ^ or the insurers 
 issue or renew a policy after notice that the statements in 
 the application are untrue ; ^ or that the original policy was 
 forfeited by other insurance without notice ; ^ or that the loca- 
 tion of the property has been changed ; * or that the insured 
 resided in a prohibited district.^ Notice which is sufficient 
 to excite attention, and put a party on his guard, and call for 
 inquiry, is notice of everything to which such inquiry might 
 
 would be, it was held that a waiver of payment had been made and that the 
 company was liable. Washoe Tool Manuf. Co. v. Hibernia Fire Ins. Co., 66 
 N. Y. 613 at 614.] 
 
 1 Hall V. People's Mut. Ins. Co., 6 Gray (Mass.), 185; Blake v. Exchange 
 Mut. Ins. Co., 12 id. 265; Liberty Hall Ass. o. Housatonio Mut. Fire Ins. Co., 
 7 id. 261; Nichols v. Fayette Mut. Fire Ins. Co., 1 Allen (Mass.), 63; Geib v. 
 Enterprise Ins. Co , 1 Dillon (U. S. C. Ct.), 443, 449; Lorillard Fire Ins. Co. v. 
 McCuUoch, 21 Ohio St. 176. [If the company issues a policy on an application 
 containing an ambiguous answer, it waives a breach arising from a possible con- 
 struction of the answer. Lebanon Mut. Ins. Co. v. Kepler, 100 Pa. St. 28. If 
 a question in the application is not answered at all, or on its face is imperfectly 
 answered, the issue of a policy without further inquiry is a waiver of the want 
 or imperfection of the answer. Phoenix Life Ins. Co. v. Raddin, 120 U. S. 183. 
 In this case one of the questions was, " Has any application been made to this or 
 any other company for assurance on the life of the party ? If so, with what re- 
 sult 1 What amounts are now insured on the life of the party and in what com- 
 panies ? " Answer, " §10,000, Equitable Life Assurance Society." A policy in 
 tliat company was in fact the only other existing insurance, but no mention was 
 made of unsuccessful applications which the question called for and which the 
 answer manifestly did not touch. An omission to answer a question will not be 
 imputed to fraud, a subsequent issue of a policy amounts to omitting the question 
 from the application altogether. Conn. Mut. Life Ins. Co. v. Luchs, 108 U. S. 
 498 ; Armenia Ins. Co. v. Paul, 91 Pa. St. 520 at 522 ; Dunbar v. Phenix Ins. 
 Co., 72 Wis. 492 ; Carson v. Jersey City Ins. Co., 43 N. J. 300 ; Jersey City Ins. 
 Co. V. Carson, 44 N. J. 210. But where a policy requires a statement of the true 
 interest of the insured, if the same is not absolute, the acceptance of the policy 
 without any declaration of title amounts to a representation that it is abso- 
 lute. Lasher v. St. Joseph Fire & Mar. Ins. Co , 86 N. Y. 423. Where the as- 
 sured forgets to fully state the status of surrounding buildings in his application, 
 but afterwards informs the agent of the company of tlie same and is told that it 
 is all right, the breach is waived and cannot be set up as a defence. Farmers' & 
 Mer. Ins. Co. v. Chesnut, 50 111. 111.] 
 
 2 Witherell v. Maine Ins. Co., 49 Me. 200; Home Mut. Fire Ins. Co. v. Gar- 
 field, 60 111. 124. 
 
 3 Carroll v. Charter Oak Ins. Co., 38 Barb. (N. Y.) 402. 
 * Ludwig V. Jersey City Ins. Co., 48 N. Y. 379. 
 
 s Garber v. Globe Ins. Co., C. Ct. (Mo.) 4 Ins. L. J. 307. 
 
 1152
 
 CH. XXVIII.] OP WAIVER AND ESTOPPEL. [§ 502 
 
 have led, as of a change of business on an application for a 
 renewal of a policy where the agent of the applicant states his 
 belief of the fact of a change, and refers to a certain person 
 for information,! or misleads the insured in the very matter 
 of supplying the information upon which the application is 
 filled up.2 [If the company knows certain facts at the time' 
 of insurance it cannot forfeit the policy on the ground of the 
 existence of such facts although the insured stated that they 
 did not exist.3 If the general agent knows at the time of in- 
 surance that petroleum is kept or used on the premises, the 
 condition against it is waived.* But the issue of a policy with 
 knowledge of the facts as to the interest of the assured does 
 not estop the company from setting up the defence of no in- 
 surable interest.^ If the company is estopped to take ad- 
 vantage of a mistake in the cuje of the insured, the verdict 
 should be for the amount which the premium would insure at 
 the actual age.^] 
 
 § 502. Estoppel where Facts arise during the Currency of the 
 Policy. — It nevertheless not unf requently takes place where 
 the facts upon which it is based arise after the negotiations 
 have been completed, and during the currency of the contract ; 
 as where an assignment is assented to, or premiums received,^ 
 
 1 Reynolds v. Commercial Fire Ins. Co., 47 N. Y. (Com. of App.) 559. 
 
 2 Sweeney v. Promoter Life Ass. Co., 11 Irish Com. L. 476. 
 
 3 [Sehwarzbach v. Protective Union, 25 W. Va. 024, 665.] 
 * [Kruger v. Western Fire & Mar. Ins. Co., 72 Cal. 91.] 
 
 5 [Spare v. Home Mut. Ins. Co., 12 Ins. L. J. 365 , 22 Am. L. Reg. N. S. 409, 
 (Or.) 1883.] 
 
 6 [Epes V. Arlington Ins. Co. (Va.), 8 Ins. L. J. 342] 
 
 ^ [After full knowledge of facts receipt of an after-maturing premium or 
 assessment or other act recognizing the policy is a waiver. Schimp i\ Cedar 
 Rapids Ins Co., 124 111. 354; Masonic Mut. Ben. Ass. v. Beck, 77 Ind. 203; Jor- 
 dan V. State Ins. Co., 64 Iowa, 216; Gerniania Ins. Co. v. Rudwig, 80 Ky. 223 
 (removal) ; Story v. Hope Insurance Co., 37 La. Ann. 254; Carpenter ?•. Conti- 
 nental Ins. Co., 61 Mich. 635; King v. Council Bluffs Ins. Co., 72 Iowa, 310 
 (policy renewed after general agent knew that buildings had been erected near 
 the one insured); Harl v. Pottawattamie County Mut. Fire Ins. Co., 74 Iowa, 39 
 (a company demanding and receiving an assessment from the administrator 
 cannot afterwards claim that the fire policy ceased with the life of the insured); 
 Phoenix Ins. Co. v. Lansing, 15 Neb. 494 (acceptance of over-due premium); 
 Schoneman v. Insurance Co., 16 Neb. 404 (same). See also Western Ins. Co. v. 
 Scheidle, 18 Neb. 495; McCluer v. Home Ins. Co., 31 Mo. App. 62 (error not to 
 
 1153
 
 § 502] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 or assessments ^ are made and collected on a premium note, or 
 dividends paid, or a renewal premium is received, or a change 
 
 submit to the jury the question of waiver by adjustment after loss during de- 
 fault of premium); Penn Fire Ins. Co. v. Dougherty, 102 Pa. St. 568; Liver- 
 pool, &c. Ins. Co. V. Ende, 65 Tex. 118 (agent received premiums after knowing 
 that insured was not sole owner); Morrison v. Wis. O. F. Mut. Life Ins. Co., 59 
 Wis. 162 ; Osterloh i'. New Denmark M. H. Fire Ins. Co., 60 Wis. 126 ; Schwarz- 
 bach y. Protective Union, 25 W. Va. 624, 666; Millard v. Supreme Council of 
 Am. L. of Honor, 81 Cal. 340. Where the company has by its conduct induced 
 a belief that an existing cause of forfeiture will not be acted on, and acting on 
 this belief has paid subsequent premiums, the company is estopped. Mobile 
 Life Ins. Co. v. Pruett, 74 Ala. 487. If after knowledge of the facts constituting 
 a breach of condition the company's agent says there will be no more trouble and 
 that the money will be paid in case of loss, and relying on this the plaintiff pays 
 the premiums as they come due, the company is estopped. Ferguson v. Mass. 
 Mut. Life Ins. Co., 32 Hun, 306. An agent to procure applications, deliver pol- 
 icies, and collect premiums in a certain territory, may waive a cause of forfeit- 
 ure by the receipt ofjremiums after he knows of it. Smith v. St. P. Fire & Mar. 
 Ins. Co., 3 Dak. 80, although the policy declares that agents are not authorized 
 to waive forfeitures. His knowledge is that of the company. So where the 
 agent saw liquors sold in a grocery insured, drank some himself and afterward 
 delivered the policy, and received premiums, the policy could not be avoided for 
 breach of the condition against sale of liquor, McGurk v. Metropolitan Life Ins. 
 Co., 56 Conn. 528. But although the receipt with knowledge of a premium ma- 
 turing after the breach of condition is a waiver, it is otherwise, in regard to a 
 premium due before breach and for which credit was given. For example, wliere 
 a premium note was given pa3'able one year from date or at the date of any loss 
 under the policy, that might sooner occur, and a loss occurred against which 
 the company had a complete defence for conditions broken, it was held that re- 
 ceiving payment of the note was no waiver. Schimp v. Cedar Rapids Ins. Co., 
 124 III. 354. So if the assured pays it with full knowledge that the company 
 does not intend to waive the breach and only in order to keep the policy alive, 
 so that it will revive when the breach ceases, there is no waiver. Northwestern 
 Mut. Life Ins. Co. v. Amerman, 119 III. 329. Receiving premiums through an 
 agent, with knowledge of the facts, estops the company from denying the agent's 
 authority. Northwestern Iron Co. v ^Etna Ins. Co., 26 Wis. 78, or that the pol- 
 icy did not cover the special property in question, Block v. Columbian Ins. Co., 
 42 N. Y. 393.] 
 
 ^ [Collection of an assessment after knowledge of a breach of condition is a 
 waiver. Lycoming Mut. Ins. Co. v. Stocklomn, 3 Grant's Cas. 207 at 208 (in- 
 surance beyond two-thirds value); Insurance Co. ;•. Slockbower, 26 Pa. St. 199, 
 202. A certificate cannot be treated as valid for the purpose of assessment and 
 invalid for the purpose of avoiding payment to the beneficiaries. Malt v. Rom. 
 Cath. Mut. Prot. Soc, 70 Iowa, 455. Receipt of an assessment overdue has been 
 considered a waiver though it was by mistake, and the company did not intend 
 to waive. Bailey v. Mut. Ben. Ass., 71 Iowa, 689, 690; Tobin v. Western Mut. 
 Aid Soc, 72 Iowa, 261. Where G. a married woman separated from her bus- 
 
 1154
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 502 
 
 in the risk is permitted, or the last of several conveyances has 
 been assented to, or the insured is misled by the agent into 
 neglect to give notice of a change of risk, or consent to a ri;- 
 newal,! ^nd continuance is given, after knowledge, actual or 
 constructive, of a breach of a condition of the policy .^ " The de- 
 fendants," said the court, in Frost v. Saratoga County Mutual 
 Insurance Company ,3 " with full knowledge of the facts inval- 
 idating the policy, have chosen to act upon the premium note 
 of the plaintiff, as an available security in their favor, and 
 which he was bound to pay. Several sums have accordingly 
 been assessed by the directors of the company, and payment 
 thereof required on said note. These payments have been 
 made by the plaintiff, and the question is presented. Can the 
 
 band, representing that she was a widow and obtained a policy which she 
 assigned to F., and F. not knowing of G.'s misrepresentation went to the secre- 
 tary to ask if G.'s husband could prevent the operation of the assignment, and 
 the secretary referred F. to a clerk, who told her that the husband could not in- 
 terfere, it was held that this was notice to the company that G. had a husband, 
 and that by receiving assessments afterward, the right to avoid the policy was 
 waived. Fitzpatrick v. Hartford Life & Ann. Ins. Co., 56 Conn. 116.] 
 
 i [A renewal of a policy by the agent, with knowledge of a change in the 
 title which would be a breach of a condition in the policy, is a waiver of the 
 same. Mechler v. Phoenix Ins. Co., 38 Wis. 665 at 671 ; Shafer v. Phoenix Ins. 
 Co , 53 Wis. 361 at 367 (incumbrance).] 
 
 2 Insurance Co. i-. Slockbower, 26 Pa. St. 199 ; Buckley v. Garrett, 47 id. 204 ; 
 Keenan v. Dubuque Mut. Fire Ins. Co., 13 Iowa, 375; North Berwick Co. c. New 
 England Fire & Mar. Ins. Co., 52 Me. 336 ; Tuttle v. Robinson, 33 N. H. 104; 
 Frost ?•. Saratoga Mut. Ins. Co., 5 Denio, 154; Cumberland Valley Mut. Prot. 
 Ins. Co. V. Mitchell, 48 Pa. St. 384 ; Hodsdon v. Guardian Life Ins. Co., 97 Mass. 
 144 ; Bevin v. Conn. Mut. Life Ins. Co., 23 Conn. 244 ; Supple v. Cann, 9 Irish 
 Law, N. s. 1265; Wing v. Harvey, 2 DeG., M. & G. 265; s. c. 27 Eng. L. & Eq. 
 140; Hale v. Union Mut. Fire Ins. Co., 32 N. H. 295; Keeler v. Niagara Fire 
 Ins. Co., 16 Wis. 523; Williams i-. Canada, &c. Ins. Co., 27 U. C. (C. P.) 119; 
 Smith y. Mutual Ins. Co., id. 441 ; Dickson v. Provincial Ins. Co., 24 id. 157; 
 Witherell y. Maine Ins. Co., 49 Me. 200; Carroll v. Charter Oak Ins. Co., 38 
 Barb. (N. Y.) 402; s. c. 10 Abb. Ct. of App. Dec. 316; New England, '&c. 
 Ins. Co. V. Wetmore, 32 111. 221 ; Rathbone v. City Fire Ins. Co., 31 Conn. 193 ; 
 Southern Life Ins. Co. v. McCain, P6 U. S. 84 ; Anson v. Winnesheik Ins. Co., 
 23 Iowa, 84. See also ante, § 339 ; post, § 502 ; Maryland Fire Ins. Co. i'. 
 Gusdorf, 43 Md. 506; Law v. Hand-in-Hand Ins. Co., 29 U. C. (C. P.) 1; 
 Gilliat V. Pawtucket, &c. Ins. Co., 8 R. I. 282 ; Kreutz v. Niagara Ins. Co., 16 
 U. C. (C. P.) 131 ; Armstrong v. Turquand, 9 Irish L. (C. P.) 32; Coombs v. 
 Shrewsbury Mut. Fire Ins. Co., N. J. (Ch.), 23 Alb. L. J. 98. 
 
 3 5 Denio (NY.), 154. 
 
 1155
 
 § 502] INSURANCE ; FIllE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 defendants, who have thus affirmed the original and continu- 
 ing validity of the premium note, in which the plaintiff has 
 fully acquiesced, be allowed to set up that this policy, which 
 formed the only consideration Ox the note, was never valid, 
 and that on the sole ground of a breach of warranty on the 
 part of the plaintiff, the facts constituting such breach of 
 warranty being as well known to the defendants when they 
 exacted and received payments on the note as they are at 
 the present time ? This is the point to be determined, and I 
 should certainly with great reluctance come to the conclusion 
 that the defendants can be allowed to occupy the position 
 they now assume. It is wholly inconsistent with the ground 
 taken by them when they called for payments on the pre- 
 mium note, and I think common justice forbids any change 
 of position in this respect. ' It is a question of ethics,' as was 
 said in Dezell v. Odell,^ and morality requires that these 
 defendants shall be held strictly to the ground that they have 
 chosen to assume for themselves. An estoppel, according to 
 Lord Coke, is where ' a man's own act or acceptance stop- 
 peth or closeth up his mouth to allege or plead the truth.' ^ 
 Estoppels are of three kinds : by matter of record, by deed, 
 and in pais ; but our present concern is with the latter class 
 only. Such an estoppel arises when one person is induced 
 by the assertion of another to do that which would be preju- 
 dicial to his own interest, if the person by whom he had been 
 induced to act in this manner was allowed to contradict and 
 disprove what he had before affirmed. In the case of Pick- 
 ard V. Sears,^ the principle is thus stated by Lord Denman : 
 ' The rule of law is clear, that when one by his words or 
 conduct wilfully causes another to believe the existence of a 
 certain state of things, and induces him to act on that be- 
 lief, so as to alter his own previous position, the former is 
 concluded from averring against the latter a different state of 
 things as existing at the same time.' In the case of Dezell v. 
 Odell,^ Cowen, J., said: 'We then have a clear case of an 
 admission by the defendant intended to influence the con- 
 
 1 3 Hill, 215, 225. 2 Co. Lit. 352 a. 
 
 8 6 A. & E. 409. * Supra. 
 
 1156
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 502 
 
 duct of the man with whom he was dealing, and actually 
 leading him into a line of conduct which must be prejudicial 
 to his interest, unless the defendant be cut off from the 
 power of retraction. This I understand to be the very defi- 
 nition of an estoppel in pais.'' The estoppel is allowed to 
 prevent fraud and injustice, and exists whenever a party can- 
 not in good conscience gainsay his own acts or assertions. 
 The authorities upon this point are numerous, and all speak 
 the same language.^ ' It makes no difference, in the opera- 
 tion of this rule, whether the thing admitted was true or 
 false, it being the fact that it has been acted upon that ren- 
 ders it conclusive.' ^ Here the defendants, in affirming the 
 validity of the premium note, necessarily affirmed that the 
 policy was also originally valid. This affirmation was acted 
 upon by the plaintiff, for he advanced money in consequence 
 of its being made, and the defendants shall not now be al- 
 lowed to set up any fact dehors the policy in order to im- 
 peach the original validity of the contract of insurance. Qui 
 sentlt commodum, sentire debet et onus.''^ So if after know- 
 ledge of other insurance the insurers say it will make no dif- 
 ference, and so lead the insured to still rely upon his policy 
 as a valid policy.-^ But a demand for an assessment not com- 
 plied with, and not pressed, as having been made by mistake, 
 is no waiver^ [Any agreement, declaration, or action by the 
 company which induces the assured honestly to believe that a 
 deviation from the strict letter of the policy will not incur a 
 forfeiture estops the company ; for example, a course of deal- 
 ing authorizing the assured to believe that premiums will be 
 received within a reasonable time after they come due.^ If 
 
 1 Gregg V. Wells, 10 A. & E. 90; Coles v. Bank of England, id. 437 ; Sandys v. 
 Hodgson, id. 472; Stephens v. Baird, 9 Cowen (N. Y.), 274; Wclland Canal v. 
 Hathaway, 8 Wend. (N. Y.) 480; 2 Smith, Lead. Cases, 458, 467, notes; 1 
 Greenl. Ev. §§ 22, 27, 204, 207. 
 
 •^ lb. §§ 208, 209. 
 
 3 Westchester Fire Ins. Co. v. Earle, 33 Mich. 143. See also St. Paul, &c. 
 Ins. Co. V. Wells, 89 111. 82. 
 
 * Elliott V. Lycoming County Mut. Ins. Co., 66 Pa. St. 22. 
 
 5 [Piedmont, &c. Life Ins. Co. v. Fitzgerald, 1 Tex. Civ. Cas. §1347 ; Insur- 
 ance Co. V. Eggleston, 6 Otto, 572 : Insurance Co. v. Wolff, 5 Otto, 330 ; Berg- 
 mann v. St. Louis Life Ins. Co., 2 Mo. App. 262 at 204.] 
 
 1157
 
 § 502 a] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 the company knowing the facts that constitute a forfeiture 
 continue to treat the contract as binding, thereby inducing 
 the insured to act and incur expense, the forfeiture is waived.^ 
 Where a policy was written on a " frame dwelling-house," and 
 the insured afterward applied for and obtained from the sec- 
 retary permission to remove the floor, raise the ceiling, etc., 
 of the " saloon," it was held that the company had waived the 
 provisions in regard to saloon risks. Any negotiation or rec- 
 ognition of the policy, after knowledge of forfeiture, waives it.^ 
 A subsequent promise of an insurance company to pay a 
 loss removes their defence that a building near plaintiff's 
 liouse was not mentioned in the policy, which would otherwise 
 have vitiated it, when the said plaintiff stated such omission to 
 the company's duly authorized agent immediately after the 
 issuance of the policy, and was told in reply that it was all 
 right and also removes their defence that plaintiff's suit was 
 not brought within a year from loss as required.^ The courts 
 will find a waiver on slight evidence for they lean to defeat 
 forfeitures.'*] 
 
 § 502 a. Waiver ; Notice ; Option. — Where notice is re- 
 quired and given, or though not required is actually given, of 
 an act or omission, which may work a forfeiture, in order that 
 the insurer may take some action or exercise some option in 
 his own interest relative thereto, the forfeiture will be waived 
 if that action be not taken or that option be not exercised, and 
 made known to the holder of the policy, or done in such man- 
 ner that it may be known to him on proper inquiry, within 
 reasonable time and before any other act recognizing the con- 
 tinued validity of the policy.^ This was held to be the rule 
 where the policy provided for a forfeiture, and immediately 
 following provided that the policy might be terminated at any 
 
 1 [Hollis V. State Ins. Co., 65 Iowa, 454.] 
 
 2 [Haas V. Montauk Fire Ins. Co., 49 Hun, 272 ; Ring v. Windsor Co. Mut. 
 Fire Ins. Co., 54 Vt. 434.] 
 
 3 [Fire & Mar. Ins. Co. v. Chesnut, 50 III. 111.] 
 * [Bonenfaut v. Insurance Co., 76 Mich. 053.] 
 
 5 Potter V. Ontario, &c. Ins. Co., 5 Hill (N. Y.), 147; Allen v. Massasoit Mut. 
 Ins. Co., 99 Mass. 160, 161 ; Anson v. Winneskeik Ins. Co , 23 Iowa, 84; Guern- 
 sey V. Am. Ins. Co., 17 Minn. 104. 
 
 1158
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 503 
 
 time, at the option of the company, on notice.^ The fact that 
 the insurers do not avail themselves of the right to cancel a 
 policy, which for any cause known to them they have a right 
 to treat as forfeited, is evidence of a waiver of forfeitui-e by 
 reason of that cause.^ So where a practice, as of the time, 
 place, or manner of receiving premiums, has been changed, 
 notice should be given of the change before the option can be 
 exercised.^ 
 
 § 503. Estoppel if what is undertaken by the Insured is known 
 by the Insurer to be impossible. — So if a policy be issued, or 
 a contract of insurance made, under such circumstances that 
 it is known to the insurers that the conditions of the policy, 
 as to the payment of the premiums, will not, because they can- 
 not, be complied with, this will be deemed a waiver of such 
 conditions, and an estoppel against setting up a non-compli- 
 ance therewith as a defence, as appears by a very recent case 
 in the Circuit Court of the United States for the District of 
 California.* The San Francisco agent of a New York com- 
 pany forwarded an application, dated June 5, 1867, reciting 
 that if the application was accepted the policy was to be in 
 force from that date. The application was accepted, and a 
 policy, dated April 5, 1867, was issued, reciting that the quar- 
 terly premiums were due on or before the sixth days of April, 
 July, October, and January, and providing that if not paid on 
 or before said days, " at the office in New York (unless other- 
 wise expressly agreed in writing), or to agents, when they 
 produce receipts signed by the president or secretary," it was 
 to be void. The time of passage between San Francisco and 
 New York was then from twenty-three to thirty days, and the 
 
 1 Wakefield v. Orient Ins. Co. (Wis.), 11 Reptr. 655. 
 
 2 Teutonia Life Ins. Co. v. Anderson, 77 111. 384; Mutual Benefit Life Ins. Co. 
 V. French, 30 Oliio St. 240; Georgia Mut. Life Ins. Co. v. Gibson, 52 Ga. 640; 
 Joiiffe V. Madison Ins. Co., 39 Wis. Ill ; Comp. du Phoenix c. Dohis, Dallos, 
 Jur, Gen., 1844, 4, 3G. 
 
 3 Mutual Benefit Life Ins. Co. v. Frencli, 80 Ohio St. 240 ; Seamans v. Nortli 
 Western Ins. Co., C. Ct. (Minn.), 10 id. 15.3. 
 
 * Young V. Mut. Life Ins. Co. of New York, C. Ct. (Cal), 2 Ins. L. J. 289. 
 See also Andes Ins. Co. v. Shipman, 77 111. 189. 
 
 1159
 
 § 503] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 policy arrived at San Francisco August 2, 1867. And here- 
 upon the court observes : — 
 
 " The policy bears date April 5th, and the receipts prepared 
 by the company correspond with this date. The company, 
 therefore, regarded the second quarter's premium as due July 
 6th, and acted upon that idea, although the application was 
 made, and the first memorandum receipt and contract given, 
 on June 5th. The promissory note given for the first quar- 
 ter's premium being payable without grace, fell due August 
 4th. It will be seen that the condition of the policy imposing 
 a forfeiture required payment to be made ' at the office of the 
 company in the city of New Fork, or to agents, when they pro- 
 duce receipts signed hy the president or secretary, unless other- 
 wise expressly agreed in writing.' There is no evidence in 
 this case of its having been otherwise agreed in writing. It 
 does not appear that the policy was received at the San Fran- 
 cisco office before the 2d of August. At or about the 6th of 
 July the policy must have been in the defendant's office in 
 New York, which would have given twenty-seven days to 
 August 2d, to make the passage to San Francisco. The de- 
 fendant knew at the time of despatching the policy that the 
 second instalment of premium had not been paid at the office 
 in Netv York. It also knew that it coidcl not be paid to its 
 agents here, in accordance with the terms of the contract, so 
 as to be obligatory upon defendant, for the reason that the 
 only receipt duly signed as specified in the policy authorizing 
 payment to its agents was attached to the policy, and would 
 not reach San Francisco till the month of August, a month 
 after it was due. The defendant did not expect payment at 
 its office in New York City, or it would not have sent its re- 
 ceipt to its agent to enable him to receive payment. The 
 defendant, then, by its officers in New York, transmitted the 
 policy and receipts, with knowledge that payments had not and 
 would not be made at the office in New York, and that it could 
 not be made elsewhere in the mode required by the terms of 
 the contract for a month after due. Yet the policy was sent 
 with an intent that it should be delivered, and payment re- 
 ceived by its agent in San Francisco, although it knew that 
 1160
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 503 
 
 there must necessarily be a forfeiture upon the strict letter of 
 the conti-act. Also, after the receipt of the policy at San 
 Francisco, on the 2d of August, nearly a month after the inl 
 stalment fell due, according to the terms of the policy, the 
 defendant's agent, necessarily knowing that payment had not 
 been made, stamped and countersigned the receipt, ready for 
 delivery upon payment, thereby treating the agreement as still 
 in force. Again on the 8th of August, four days after the 
 note given for the first quarter's premium fell due, and after 
 default in payment, and necessarily with the knowledge of 
 non-payment of both the note and second instalment, the 
 agent of the defendant addressed to Young the note before set 
 out in this opinion. ^ 
 
 " This act, after the forfeiture, if any there was, had at- 
 tached, recognizes the agreement as being still in force. The 
 letter does not even demand payment, or refer to the fact of 
 non-payment, or fix any time when the insured should call for 
 the policy or make payment. It simply notifies him that his 
 policy has arrived, and asks whether it should be sent to him 
 at Vallejo, or whether he would call and get it when in the 
 city, implying that it would be at his option to have it sent to 
 him at once, or wait his convenience till he should come to 
 the city and be able to call for it. The defendant manifested 
 no haste or anxiety upon the subject, for the policy was on 
 hand from the second to the eighth of August at least, before 
 the notice to Young was even written, and it does not appear 
 when it was sent. It does not appear that this or any other 
 notice reached him. No other act of the company is shown 
 inconsistent with this action, or tending in the slightest degree 
 to show an intention to insist upon a forfeiture till after the 
 death of Young, when the policy was cancelled, October 31st, 
 payment of the loss having before been refused. It could 
 
 1 San Francisco, Aug. 8, 1867. 
 M. P. YocNG, Esq., Vallejo, Cal. 
 
 Dear Sir, — Your policy of insurance with the Mutual Life Insurance Com- 
 pany has arrived. Please inform me whether I shall send it to you at Vallejo, 
 or if you will call and get it wlien you are in the city. 
 Respectfully yours, 
 
 H. D. HoMANS, GenernJ Agent. 
 
 Per K. W. Heath, Jr. 
 
 11(51
 
 § 503] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIIl. 
 
 hardly have been expected that Young would call to make the 
 second payment until notified whether the risk had been ac- 
 fcepted, especially as there was ample time between June 5th, 
 when the apj)lication was made, and the 5th of September, the 
 time when the next payment would have fallen due, had the 
 date of the policy agreed with the date of the application, and 
 the preliminary memorandum of agreement given to him by 
 defendant's agent in San Francisco. It was doubtless sup- 
 posed that notice of acceptance or rejection would be given 
 before the note for the first quarter's premium would fall due. 
 But however this may be, the several acts of the defendant, 
 and all its acts and the acts of its officers in relation to the 
 matter shown to the court, which were performed subsequent 
 to the accruing of the forfeiture, if any accrued, treat the 
 agreement for insurance as still in force. They affirmatively 
 indicate an intention not to insist upon a forfeiture, and had 
 the accident and death not occurred, there can be no doubt, 
 from the facts shown, that even as late as the death of Young 
 the premium would have been received and the policy delivered. 
 In the case cited by counsel of Chipman against the same de- 
 fendant, tried in this court a year ago, there was no act of any 
 kind shown on the part of the company indicating an inten- 
 tion to waive the forfeiture, or in auy way recognizing a sub- 
 sisting contract. Whereas in this case, all the acts of the 
 company after the forfeiture accrued, and prior to Young's 
 death, shown to the court, recognize the contract as still sub- 
 sisting, and manifest an intention not to claim a forfeiture. 
 
 " I think, upon the facts, the court must find a waiver of 
 any forfeitures which had accrued, and that, under the cir- 
 cumstances, after the death of the assured, it was too late, for 
 the first time, to insist upon the forfeiture." ^ 
 
 So where it is stipulated that a record shall be kept of the 
 watchman's performance, and it was known to the insurer 
 that such a record could not be kept, the failure to keep it 
 works no forfeiture.^ 
 
 1 And see also Longhurst v. Star Ins. Co., ante, § 487. 
 
 2 Andes Ins. Co. v. Shipman, 77 111. 189. See also Com. Ins. Co. v. Spank- 
 neble, 52 id. 53. 
 
 1162
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 504 
 
 §504. Estoppel where Facts arise after Loss. — So also an 
 estoppel arises where the facts arise after a loss, as wliere an 
 offer of settlement ^ after personal examination by an agent i,% 
 made, and no compliance has been had with the condition that 
 notice of a loss shall be given forthwith, or a particular state- 
 ment of loss furnished ; ^ or notice of an election to rebuild 
 after full knowledge that misrepresentations were made at the 
 time of taking out the policy ;3 or defective notices, accounts, 
 certificates, or proofs of loss are received without objection, or 
 objections founded on other grounds.'* [Where the company 
 knows every fact of avoidance immediately after loss and yet 
 for a year misleads the insured into believing that it means to 
 settle, it cannot complain if it is held estopped.^ Statements 
 by a local insurance agent that the plaintiff's loss was " all 
 right " and that the company would pay the amount, consti- 
 tutes a waiver by the company of the clause in the policy re- 
 quiring formal proof of loss, and also the one barring suits not 
 
 ^ [A known cause of forfeiture is waived even by the agents entering into 
 negotiations for settlement. Oslikosh G. L. Co. v. Germania Fire Ins. Co., 71 
 Wis. 454. Proceeding to adjust the loss and deal with the insured concerning 
 proofs of loss after knowledge of a breach of warranty, waives it as matter 
 of law. Marthinson v. North Brit. & Mer. Ins. Co., 64 Mich. 372. An adjust- 
 ment of loss and a promise to pay waive the breach of a condition of the pol- 
 icy if made with full knowledge. Farmers' & Merchants' Ins. Co. v. Chesnut, 
 50111. Ill at 116.] 
 
 2 Lycoming County Mut. Ins. Co. v. Schreffler, 42 Pa. St. 188; Franklin Fire 
 Ins. Co. V. Updegraff, 43 id. .350. 
 
 3 Bersche t>. Globe Mut. Ins. Co., 31 Mo. 546. 
 
 * Bumstead v. Dividend Mut. Ins. Co., 2 Ker. (N. Y.) 81 ; Francis v. Somer- 
 ville Mut. Ins. Co., 1 Dutch. (N.J.) 78; Underbill v. Agawam Mut. Ins. Co., 6 
 Cush. (Mass.) 440; Kernochan v. New York Bowery Fire Ins. Co., 17 N. Y. 428 ; 
 Priest V. Citizens' Mut. Fire Ins. Co., 3 Allen (Mass.), 002 ; Lewis v. Monmouth 
 Mut. Fire Ins. Co., 52 Me. 492 ; Baxter v. Chelsea Mut. Ins. Co., 1 Allen (Mass.), 
 294; Bartlett v. Union Mar. & Fire Ins. Co., 40 Me. 500; Noyes v. Washington 
 County Mut. Ins. Co., .30 Vt. 659 ; Connell v. Milwaukie Mut. Fire Ins. Co., 18 
 Wis. 387 ; Byrne v. Rising Sun Ins. Co., 20 Ind. 103 ; Miller v. Eagle Life & 
 Health Ins. Co., 2 E. D. Smith (N. Y. Superior Ct.), 268; Works v. Farmers' 
 Mut. Fire Ins. Co., 57 Me. 281 ; Turley v. N. A. Fire Ins. Co., 25 Wend. (N. Y.) 
 347 ; Rathbone v. City Fire Ins. Co., 31 Conn. 193. 
 
 5 [Niagara Fire Ins. Co. v. Miller, 120 Pa. St. 504 ; Cans v. St. Paul, &c. Ins. 
 Co., 43 Wis. 108 at 114: McFarland v. Peabody Ins. Co., 6 W. Va. 425 at 434; 
 Insurance Co. v. Slockbower, 20 Pa. St. 199 at 202.] 
 
 1163
 
 § 504 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 brought within one year.^ Payment of the loss waives a 
 breach of warranty .2] 
 
 [§ 504 A. Refusal to Pay on one Ground waives others ; De- 
 manding Proofs with Knowledge of Forfeiture waives it, Contra. 
 — The proofs and the limitation that a loss shall not be pay- 
 able until a certain time after the proofs, are waived, if the 
 company object solely to the amount claimed, and agree to an 
 appraisal and immediate payment.^ An absolute refusal by 
 the insurers to pay the loss waives all irregular preliminaries ; * 
 so a refusal on some other specified grounds will waive others.^ 
 Demanding proofs waives a misrepresentation or other cause 
 of forfeiture known to the company.^ A request for proofs, 
 a statement that they are satisfactory, and a promise to pay 
 the insurance, constitute a waiver of a known cause of for- 
 feiture.'^ Even though the minds of the parties did not meet 
 at the time of insurance, the building being of wood, but the 
 company believing it to be of brick through mistake caused 
 by the bad penmanship of the insured, the company estopped 
 itself from raising the defence by demanding proofs and sub- 
 mitting to arbitration after knowledge of the facts, obtained 
 three days after the fire.^ Promising payment and expressing 
 satisfaction with proofs of loss after knowing of a cause of 
 forfeiture is a waiver.^ And without any demand if the com- 
 pany alloivs the plaintiff without objection to incur the expense 
 of proofs of loss after it knows of a cause of forfeiture, it is 
 a waiver.i*^ But in one case it has been said that although the 
 
 1 [Ide V. Plioenix Ins. Co., 2 Biss. 333, 335.] 
 
 '^ [Nat. Life Ins. Co. v. Minch, 53 N. Y. 144 at 151.] 
 
 3 [Snowden v. Kittanning Ins. Co., 122 Pa. St. 502.] 
 
 4 [^.tna Ins. Co. v. Sparks, 62 Ga. 187 at 195, Code § 2813; Portsmouth Ins. 
 Co. V. Reynolds, 32 Grat. 613 at 629] 
 
 5 [German Ins. Co. v. Ward, 90 111. 550 at 551 ; Marston v. Mass. Life Ins. 
 Co., 59 N. H. 92 at 94 ; Ben Franklin Fire Ins. Co. v. Flynn, 98 Pa. St. 628.] 
 
 « [Rockford Ins. Co. v. Travelstead, 29 111. App. 654 ; German Fire Ins. Co. 
 r. Grunert, 112 111. 68 ; La Fonderie v. La Com. d'Ass., 27 L. C. Jur. 194 Q. B. ; 
 Cannon v. Home Ins. Co., 53 Wis. 585 at 594.] 
 
 ' [Silverberg v. Phenix Ins. Co., 67 Cal. 36.] 
 
 8 [Smith V. City of Lond. Ins. Co., 11 Ont. R. 38 (affirming 15 Can. I. C. R. 
 69).] 
 
 9 [Cotton States Life Ins. Co. v. Edwards, 74 Ga. 220.] 
 w [Smith I'. St. P. Fire & Mar. Ins. Co., 3 Dak. 80.] 
 
 1164
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 505 
 
 company was orally informed that, in violation of the policy, 
 the insured building was unoccupied at the time of loss, and 
 then demanded proofs of loss as required by the policy, they 
 were held not to have waived the breach ; thereby it was the 
 duty of the insured to furnish proofs anyway in pursuance of 
 the conditions of the policy without any request. ^ Asking for 
 proofs of loss and receiving the same, is not a waiver of for- 
 feiture for non-payment of dues. If the mere demand for for- 
 mal proofs, were such a waiver, the company would have to 
 surrender its right to demand proof if it wished to take advan- 
 tage of the breach, or at least it would have to inform the in- 
 sured of its future line of defence. The plaintiff has been put 
 to no burdensome expense, and there is no estoppel.^] 
 
 § 505. What Acts or Omissions amount to an Estoppel or 
 Waiver after Loss. — The terms " estoppel " and " waiver," 
 though not technically identical, are so nearly allied, and, as 
 applied in the law of insurance, so like in the consequences 
 which follow their successful application, that they are used 
 indiscriminately by the courts. To constitute a waiver, as of 
 a particular account of loss, or an estoppel against setting up 
 the want of such an account as a defence to an action by the 
 insured to recover a loss, there should be shown some act or 
 declaration by the company during the currency of the time 
 within which the account is required dispensing with it, or 
 some delay or omission to act, from which the insured might 
 reasonably infer that the underwriters did not mean to insist 
 upon it. There is a time when objections in matters of form 
 must be taken. If they are not then made, they never can be 
 made. The law does not say that the procedure is perfect, 
 but that the question is not open. The adherence to, and 
 liberal application of, this principle are necessary to the 
 maintenance of good faith and fair dealing in judicial pro- 
 ceedings.^ Thus the insured is estopped to object to a failure 
 
 1 [Fitchpatrick v. Hawkeye Ins. Co., 53 Iowa, 335 at 340.] 
 
 2 [Ronald v. Mut. Reserve Fund Life Ass., 23 Abb. N. C. 271. See Phoenix 
 Ins. Co. V. Stevenson, 8 Ins. L. J. 922, and compare Titus v. Glens Falls Ins. Co., 
 81 N. Y. 410.J 
 
 3 Blake v. Exchange Mut. Ins. Co , 12 Gray (Mass.), 265, per Thomas, J. 
 
 1165
 
 § 505] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 to brino; suit within the time limited, by an offer to pay the 
 loss afterwards,^ or when such failure is induced by the con- 
 duct of the insurers ; ^ or to bringing suit within the time 
 before the expiration of which the loss is not payable, when 
 the insurers deny all liability ; ^ though it is otherwise if the 
 refusal to pay is conditional, as upon the ground that other 
 suits have been brought against them, and that they will do 
 nothing while these suits are pending.* So parties are es- 
 topped from objecting to defective notices, accounts of loss, 
 certificates, and preliminary proofs by an absolute denial of 
 liability ; or refusal to pay on the merits of the case ; ^ and by 
 a part payment of the loss,^ or a promise to pay it ; ' or by re- 
 ceiving late proofs without objecting to them as late.^ And 
 if the agent of the company, after an examination of the cir- 
 cumstances attending the loss, informs the insured that he 
 cannot recommend the company to pay the loss because it 
 appears by his statements that he had sold more goods than 
 he had purchased, this is a denial of all liability on the part 
 of the company, and a waiver of its right to demand the 
 usual proofs of loss.^ And when one defect alone in the 
 proofs is objected to, others are waived.^^ But if the proofs 
 are declared to be defective, the insurers need not go further 
 and specify wherein they are defective, although requested so 
 to do. A reference to the policy for information upon that 
 point will be sufficient to avoid an estoppel or waiver." And 
 
 1 Brady v. West. Ins. Co., 17 U. C. (C. P.) 597. 
 
 2 Ames V. New York Ins. Co , 14 N. Y. 254 ; Grant v. Lexington Ins. Co., 
 5 Ind. 23. And see ante, §§ 360, 488. 
 
 3 Norwich & N. Y. Transp. Co. v. Western Mass. Fire Ins. Co., 6 Blatchf. 
 (U. S. C. Ct.) 241. And see ante, § 469, suhfnem. 
 
 * Ripley v. ^tna Fire Ins. Co., 30 N. Y. 136. 
 
 5 Norwich & N. Y. Transp. Co. v. Western Mass. Fire Ins. Co. 6 Blatchf. 
 (U. S. C. Ct.) 241 ; Manhattan Fire Ins. Co. v. Stein, 5 Bush (Ky.), 652 ; Fran- 
 cis V. Ocean Ins. Co., 6 Cow. (N. Y.) 404. 
 
 6 Westlake v. St. Lawrence County Mut. Fire Ins. Co., 14 Barb. (N. Y.) 206. 
 
 7 Aurora Fire Ins. Co. v. Eddy, 55 111. 222. 
 
 8 Palmer v. St. Paul, &c. Ins. Co., 44 Wis. 201. 
 
 9 McBride v. Republic Fire Ins. Co., Sup. Ct. Wis., 2 Ins. L. J. 271. 
 i'5 Ayres v. Hartford Fire Ins. Co., 17 Iowa, 176. 
 
 11 Kimball v. Hamilton Fire Ins. Co , 8 Bosw. (N. Y. Superior Ct.) 495; Spring 
 Garden Mut. Fire Ins. Co. v. Evans, 9 Md. 1. But see ante, § 468. 
 
 1166
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 506 
 
 waiver of notice is not a waiver of a particular account of loss 
 where both are required.^ The insurers will also be estopi)ed 
 to take at the trial any technical advantage of a mistake into 
 which they have led the insured. Thus where the original 
 policy, which was under seal, was burned with the property 
 insured, and the insured applied for and obtained a copy of 
 the policy, by which it did not appear that the original was' 
 under seal, upon which an action of assumpsit was brought, 
 upon objection by the insurers that the original policy was 
 under seal, and that therefore the action should have been 
 covenant, the court refused to allow them to deny that the 
 copy which they themselves had furnished was a true copy.^ 
 So receiving a premium or assessment with knowledge estops 
 the insurers from denying that the property covers the policy, 
 or setting up a prior forfeiture ; ^ and if it be a second pre- 
 mium, they will be estopped to set up the collusion and fraud 
 of their agent with the insured, if known to them before the 
 receipt of the second premium.^ 
 
 § 506. No Estoppel where the Facts are not known. — We 
 have already seen that this estoppel takes place as well upon 
 the acts and omissions of agents as upon those of the prin- 
 cipals.^ And it need not be said that if there is no knowl- 
 edge, or if the state of facts be not such that knowledge 
 ought to be inferred of the breach of condition or neglect of 
 duty, there can be no waiver of matter of estoppel, as no one 
 can be presumed to have waived that the existence of which 
 he has not known.^ Thus, a failure after knowledge of for- 
 feiture to return premiums received before knowledge is not a 
 
 1 Desilver v. State Mut. Fire Ins. Co., 38 Pa. St. 1,30. 
 
 2 Rockford Ins. Co. v. Nelson, 65 111. 415. Strictly there can be no waiver 
 by parol of the conditions of an instrument under seal. Scott v. Niagara, &c. 
 Ins. Co., 25 U. C. (Q. B.) 424 ; Viele v. Germania Ins. Co., 26 Iowa, 9. 
 
 3 Block V. Columbian Ins. Co., 42 N. Y. 39.3 ; Ryder v. Missouri St. Mut. Ins. 
 Co., 12 Iowa, 126. And see post, § 55-3 ; Elliot v. Lycoming, &c. Ins. Co., 66 
 Pa. St. 22; Lyons v. Globe Mut. Fire Ins. Co., '27 U. C. (C. P.) 567. 
 
 * Armstrong v. Turquand, 9 Irish Law, n. s. 32. 
 
 6 Ante, § 498 et seq. 
 
 ^ Finley v. Lycoming County Mut. Ins. Co., .30 Pa. St. 311; Forbes v. Ag,i- 
 wam Mut. Fire Ins. Co., 9 Cusli. (Mass.) 470; Allen v. Vermont Mut. Fire Ins. 
 Co.. 12 Vt, 366. 
 
 VOL. II. — .30 1167
 
 § 507] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 waiver of the forfeiture.^ And this rule was held to apply 
 in a case where proofs were received after the time limited 
 had expired, in the mistaken supposition that they were fur- 
 nished so soon as they reasonably could be.^ [To establish a 
 waiver of a forfeiture the proof must show a distinct recog- 
 nition of the validity of the policy after a knowledge of the 
 forfeiture.^] 
 
 § 507. No Estoppel •where Insured has not been prejudiced. 
 — An estoppel arises where the insurer, having knowledge of 
 the facts to which he has a right to take exceptions, or which 
 would constitute a defence against any claim under the policy? 
 if he chose to avail himself of them, so bears himself there- 
 after in relation to the contract as fairly to lead the assured 
 to believe that the insurer still recognizes the policy to be in 
 force, and to constitute for him a valid protection. Under 
 such circumstances the courts refuse to allow the insurer to 
 take an unfair advantage of the acts, declarations, or omis- 
 sions of the insured to his prejudice.* It is not the intention 
 of the insurer alone, but the effect upon the insured as well, 
 which gives vitality to the estoppel, and therefore if the cir- 
 cumstances are such that the insured could by no possibility 
 be prejudiced, it is doubtful whether the insurer can be fairly 
 brought within the scope of an estoppel. The insured must 
 be misled to his prejudice. The waiver that is spoken of in 
 these cases is another term for estoppel. It does not arise by 
 implication alone, nor except from some conduct by one party 
 which leads, or justly may lead, in reliance upon it, another 
 party to believe a certain course of action or non-action on 
 his part will fulfil all his obligations to tlie first party, so 
 that to allow the first party to disappoint the expectation or 
 belief founded upon and induced by his conduct would be a 
 fraud. To constitute an estoppel there must be such conduct 
 
 1 Harris v. Equitable Life Ass. Soc, 6 T. & C. (N. Y.) 108. 
 
 2 American Express Co. v. Triumph Ins. Co., Ohio (Dist. Ct.), 5 Ins. L. J. 
 466. 
 
 ■i [Weed V. L & L. Fire Ins. Co., 116 N. Y. 106.] 
 
 * Viele r. Germania Fire Ins. Co., 26 Iowa, 9; Benson t>. Ottawa Agr. Ins. 
 Co., 42 U. C. (Q. B.) 282; McMaster v. Insurance Co. of North America, 65 
 N. Y. 222. 
 
 1168
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 507 
 
 on the part of tlio insurers as would if they were not es- 
 topped, operate as a fraud on the party who has taken, or 
 neglected to take, some action to his own prejudice in reliance 
 upon it. Where nothing has been done or neglected by their 
 authority, and where no act has been done or loft undone by 
 the insured, in reliance upon the act or non-action of the in- 
 sured, there can be no estoppel. Thus, where the assured 
 notified the company after the loss that further insurance had 
 been obtained, whereupon the company appointed an ap- 
 praiser, and did not refund the unearned premium, it was 
 held that the insurers had a right to appraise before electing 
 what to do, and the insured was not prejudiced.^ While a 
 refusal to pay is a waiver of preliminary proof, and such other 
 formalities as may be required in order to enable the insured 
 to bring his action, it is not a waiver of breach of conditions 
 already made. The doctrine of waiver is not to be so ex- 
 tended as to deprive the insurer of his defence merely because 
 he negligently or incautiously, when a claim is first presented, 
 while denying his liability, omits to disclose the ground of his 
 defence, or states another ground than that upon which he 
 finally relies, unless there is evidence from which the jury 
 may infer that, with full knowledge of the facts, there was an 
 intention to abandon, or not to insist upon, the particular 
 defence not specified, or that it was purposely concealed 
 under circumstances calculated to, and which actually did, 
 mislead the insured, to his injury .2 [Where the officers of a 
 company knowing of a breach of condition met with the ad- 
 justers of other companies, involved and discussed the loss, 
 and a reduction was made by the insured on the supposition 
 that the company in question were going to pay, it was 
 held that there was no waiver.^ When a policy contained the 
 condition that " if the interest of the assured in the property 
 
 1 Jewett V. Home Ins. Co., 29 Iowa, 562 ; Security Ins. Co. v. Fay, 22 Mich. 
 407; Garber v. Globe, &c. Ins. Co., C. Ct. (Mo.), 5 Big. Life & Ace. Ins. Cas. 
 221 ; ante, § 465 ; Phoenix Ins. Co. v. Stevenson (Ky.), 8 Ins. L. J. 722. 
 
 2 Devens v. Merchants', &c. Ins. Co. (N. Y.),10 Ins. L. J. i;]3 : 83 N. Y. 168, 
 172, referring to and explaining Brink v. Hanover Ins. Co., 80 N. Y. 108. See 
 also Galveston Ins. Co. v. Heidenheimer (Tex.), 9 Ins. L. J. 592. 
 
 8 [Putnam Tool Co. v. Fitchburg Mut. Fire Ins. Co., 145 Mass. 265.] 
 
 1169
 
 § 508] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 be not truly stated it shall be void," and also " if the interest 
 be other than the entire, unconditional, and sole ownership 
 &c., it must be so stated in the policy," otherwise it is void — 
 and where a warehouse-man under these provisions insured 
 the goods of his principal in Ms oivn name^ it was held that 
 there could be no recovery for them ^ although the agent of 
 the insurance company knew at the time the real relations of 
 the parties to the subject-matter. A parol waiver of the con- 
 ditions in respect to proofs of loss, increase of risk, time of 
 paying premiums, keeping hazardous goods, &c., has been 
 held good, but the conditions as to the subject of insurance 
 and the ownership thereof cannot be waived by parol. We 
 cannot allow the plaintiffs to maintain an action on a policy 
 in which they are not named and which, by its very terms, 
 excludes all property except such as is owned by Ashem in 
 his own name. When a policy provided that in case of loss 
 of the ship insured the master and crew should make a for- 
 mal protest at once before a notary, such a condition is not 
 waived by the simple direction of an agent of the company 
 to 07ie of the crew to go before an officer and make a pro- 
 test.2 Mere knowledge by the company of a breach of con- 
 dition is not a waiver if the assured is not misled.^ The 
 doctrine of estoppel only applies where the party claiming 
 the benefit of it was induced to alter his condition for the 
 worse.*] 
 
 § 508. Evidence ; Silence and Intent. — Mere silence, it has 
 been sometimes said, is never a waiver ; ^ but it is conceived 
 
 1 [Fuller V. Phoenix Ins. Co., 61 Iowa, 350 at 352.] 
 
 2 [Peoria Mar. & Fire Ins. Co. v. Walser, 22 Ind. 73 at 85.] 
 
 3 [N. Y. Cent. Ins. Co. v. Watson, 23 Mich. 486. 
 * [Smith V. Ferris, 1 Daly, 18 at 20.] 
 
 5 Ayres v. Hartford Fire Ins. Co., 17 Iowa, 176. [Where it came to the notice 
 of the secretary through conversation, while walking on the street, tliat a fac- 
 tory covered by one of the company's policies was running gins contrary to con- 
 ditions, it was error to charge that tlie secretary's knowledge was that of the 
 company, and tliat if the compam/ did not promptli/ noti/i/ the insured that his policy 
 was cancelled, the matter was waived. Silence alone will not estop the company. 
 Texas Banking Co. v. Hutchins, 53 Tex. 61, 69; Donahue v. Windsor Co. Mut. 
 Fire Ins. Co., 56 Vt. 374. Mere inaction of the company for thirty days or so 
 after hearing that the habits of the assured are not as they were represented. 
 
 1170
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 508 
 
 that the true doctrine on this point is, that while mere silence 
 in some cases, where that silence has no effect upon the in- 
 sured, may not operate as a waiver, yet in others, where it has 
 the effect to mislead the insured, it will so operate. Thus, 
 where in an application the insured by mistake falsely states 
 that there is no incumbrance, but subsequently and before the 
 issue of the policy gives notice of the mistake, this would be 
 a rectiftcation of the mistake. And if the notice be not given 
 till after the issue of the policy, if the company do not elect 
 to cancel the policy, it is questionable if they would not be 
 estopped to set up the misrepresentation. ^ And so it is also 
 sometimes said that a waiver never occurs unless intended, 
 or where the act relied on as a waiver is such that it ought in 
 equity to estop the party from denying it. Thus an assess- 
 ment, by mistake of the treasurer of a mutual insurance com- 
 pany, on a premium note, upon a vote to assess " all policies 
 in force " after the policy has been declared forfeited for 
 breach of condition, though the assessment be paid, is no 
 waiver. The assessment, not being by the authority of the 
 company, is not their act and of course they can intend noth- 
 ing by it. They have no knowledge of the act and to con- 
 stitute waiver there must be not only knowledge of the thing 
 waived, but the act of waiver must be knowingly done.^ But 
 this also, it will be observed, limits the knowledge or inten- 
 tion to the act that constitutes the waiver, and with this limi- 
 
 is no waiver. Adreveno v. Mut. Reserve Fund Life Ass., 38 Fed. Rep. 806 
 (Mo.), 1889.] 
 
 1 Anson v. Winnesheik Ins. Co., 23 Iowa, 84; Guernsey v. Am. Ins. Co., 17 
 Minn. 104 ; Williamsburg Ins. Co. v. Cary, 83 111. 453 ; Westchester Fire Ins. 
 Co. V. Earle, 33 Mich. 143. 
 
 2 Diehl V. Adams County Mut. Ins. Co., 58 Pa. St. 443 ; Beatty v. Lycoming 
 County Mutual Ins. Co., 66 Pa. St. 9. [A waiver is an intentional relinquish- 
 ment of a known right, or such conduct as warrants an inference of such 
 intent, and where it appears that there was no such intent in fact, and no 
 understanding on the part of the insured that the proofs were waived, so 
 tliat he was not misled, it will be held that there has been no waiver. 
 Findeisen v. Metropole Fire Ins. Co., 57 Vt. 620. Both the assured and the 
 underwriter must understand that there is a waiver of a condition, in order 
 to make it operative. The understanding of one party without sufficient cause 
 given by the other, is not enough. Hambleton v. Home Insurance Co., 6 Biss. 
 91 at 95.] 
 
 1171
 
 § 509] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 tation is no doubt the law. The waiver may be actually 
 unintentional, though if the act out of which it comes be 
 intentional, the waiver is constructively so. 
 
 § 509. Agent acting under Undisclosed Instructions. — The 
 energetic language of the court in a very recent case in Illi- 
 nois ^ not only leaves no doubt as to the position of that court, 
 but well expresses the spirit of the modern decisions toucliing 
 the responsibility of insurance companies for the acts of their 
 agents in violation of instructions. " We desire it to be under- 
 stood," is the language of the court, " in this jurisdiction, at 
 least, when an insurance company has appointed an agent, 
 known and recognized as such, and he, by his acts, known 
 and acquiesced in by them, induces the public to believe that 
 he is vested with authority to do the act, and nothing to the 
 contrary is shown or pretended at the time of doing the act, 
 public policy and the safety of the people demand that the 
 company should be liable for such acts as appear on their face 
 to be usual and proper in and about the business in which the 
 agent is engaged. It is the fault of the companies in sending 
 out agents among the people, gaining public confidence by the 
 seeming acquiescence of their constituents in the conduct of 
 their business. When a loss happens, they should not be per- 
 mitted to say in any case tliat their agent acted beyond the 
 scope of his authority, unless it shall be made to appear that 
 the insured was informed of and knew the precise extent of 
 the authority conferred. Any other principle in its operation 
 would be turning loose upon an unsuspecting, honest, and 
 confiding people a horde of plunderers, against which no ordi- 
 nary vigilance could guard," — language which, if it savors 
 somewhat more of the fervor of the advocate than is accus- 
 tomed to be heard from the bench, it must be confessed, 
 ought to find its full justification in the indignation which 
 must at times be felt at the pertinacity with which insurers 
 seek to shelter themselves behind instructions, the existence 
 of which is not only not known to otliers, but in point of fact 
 is practically denied by the daily conduct both of themselves 
 and their agents. 
 
 1 iEtna Ins. Co. v. Maguire, 51 111. 342. 
 
 1172
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 510 
 
 § 510. Estoppel where the Act is prohibited by the Charter. — 
 We have already seen that by the general current of the 
 authorities insurance companies may waive a compliance with 
 the provisions of their charters and by-laws,^ though in Massa- 
 chusetts and in some other States this doctrine is not admitted 
 as applicable in mutual insurance to the essentials of the con- 
 tract, but only as to such matters as pertain to its enforce- 
 ment after a loss.2 [Where by the very terms of the certi- 
 ficate other certificate holders are to receive the benefits 
 accruing from forfeitures, the company cannot waive a forfei- 
 ture without the consent of the other policy-holders.^ The 
 company cannot waive a compliance with the mode of con- 
 tract prescribed by its charter, as, for example, where the char- 
 ter requires the policy to express the true title of the insured 
 and the incumbrances.*] A case in Connecticut, upon full 
 consideration, adopts and approves the doctrine of the Massa- 
 chusetts cases, in an opinion, which, as it presents some novel 
 views, we give at length : — 
 
 " The twelfth section of the charter of the defendants pro- 
 vides that, ' If there shall be any other insurance upon the 
 whole or any part of the property insured, by any policy 
 issued by said company, during the whole or any part of the 
 time specified in such policy, then every such policy shall be 
 void, unless such double insurance shall exist by consent of 
 said company, indorsed upon the policy, under the hand of 
 the secretary.' There was such double insurance in this 
 case, at the time this policy was issued, and the consent of the 
 company thereto was not indorsed upon the policy. The 
 charter, therefore, declares the policy void, and it is void, 
 unless the twelfth section is of such a character that its pro- 
 visions can be waived by the defendants. 
 
 " If this provision was made solely for the benefit of the 
 defendants, there might be force in the claim of the plaintiffs 
 
 1 Ante, §§ 62, 143, 501. 
 
 2 Ante, § 147. [Directors cannot waive charter provisions. Gibbs v. Rich- 
 mond Co. Mut. Ins. Co., 9 Daly, 203.] 
 
 3 [Milligan v. Goddard, 1 How. Pr. U. S. 377.] 
 * [Leonard v. American Ins. Co., 97 Ind. 299. J 
 
 1173
 
 § 510] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. rXVUI. 
 
 that it could be waived, on the ground that what is exclu- 
 sively for the benefit of a person, either natural or artificial, 
 is for him to enjoy or not, as he pleases ; and if he chooses to 
 forego the benefit, he has a right to do so, as no one but him 
 is interested in the matter. But we think that the defend- 
 ants are not solely interested in this provision of the charter. 
 It was made to guard against the danger of over insurance. 
 It is well known that over insurance encourages incendiary 
 fires, and insurers are therefore extremely careful not to 
 insure property to the full amount of its value, but leave the 
 assured to be himself the insurer of a part thereof, that he 
 may have a common interest with them in the preservation of 
 the property. 
 
 " The eleventh section of the defendants' charter, as well as 
 the one under consideration, shows what solicitude the legis- 
 lature entertained upon this subject, and the great care they 
 exercised to prevent this evil. 
 
 " Such being the tendency of over insurance, it is manifest 
 that it endangers not only the welfare of insurers, but the 
 welfare of all their policy-holders, who have a deep interest 
 in their solvency in case of loss by fire. Insurance companies 
 insure property to an amount many times their capital, and it 
 may easily happen that a few fraudulent incendiary fires, scat- 
 tered over the country, should involve them and their policy- 
 holders in heavy and perhaps ruinous losses. But the evil of 
 over insurance does not stop here. Everywhere insured prop- 
 erty is mingled indiscriminately with property not insured. 
 The burning of the insured property burns the other also, and 
 every year vast amounts of property not insured go to destruc- 
 tion in consequence of the over insurance of property in its 
 neighborhood. Surely the welfare of such owners should be 
 considered by legislatures, and provision should be made for 
 them when corporations like these are created. It is to be 
 considered, also, that the welfare of the State, which has an 
 interest in all the property of the State, requires that this 
 should be done. 
 
 " One great source of this evil is the insurance of the same 
 property by different companies, when each company is not 
 1174
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 510 
 
 aware of the act of the other. To prevent this evil as far as 
 may be, in the present case, we think, the legislature inserted 
 the twelfth section in the defendants' charter, intendino- 
 thereby to put it out of the power of the defendants to insure 
 property otherwise than is provided therein. 
 
 " The evil could not be successfully reached by merely re- 
 quiring the consent of the company to such further insurance. 
 There would be no security from misunderstanding, misre- 
 membrance, and fraud. The difference is great between leav- 
 ing tlie consent of the company to be proved by the vagueness 
 and uncertainty of parol evidence, and requiring it to be 
 shown by a formal indorsement upon the policy by the hand 
 of their secretary, which could not be made without consid- 
 eration and deliberation on the one hand, and certainty of 
 the fact on the other.i This difference is all-important in a 
 case like this, and indeed, if mere consent was all that the 
 legislature intended by the twelfth section of this charter, 
 then no object was accomplished, or could be accomplished, 
 by inserting it in the charter; for if the defendants should 
 make an absolute contract of insurance, without any condition 
 that it should become void if there was or should be further 
 insurance on the property by any other company, during the 
 whole or any part of the time covered by the policy, they 
 would be taken by jurors as having given consent in advance 
 to such further insurance ; or the mere fact of such absolute 
 contract would be sufficient evidence with them of a waiver 
 of the condition. It would be urged that the plaintiff was 
 ignorant of the provisions of the charter, and if the defend- 
 ants intended to make it a part of the contract, they would 
 have informed the plaintiff by inserting it in the policy. 
 
 " Thus, in order to make it a part of the contract, it would 
 have to be inserted in the policy of insurance, whether it was 
 embodied in the charter, or not ; and if inserted in the policy 
 it would have all the effect that the charter could give it, if 
 the legislature intended no more by this provision than mere 
 consent. We think, therefore, that the legislature had more 
 than this in view, and intended to limit the power of the 
 1 Hale V. Mechanics' Mut. Fire Ins. Co., 6 Gray, 169. 
 
 1175
 
 § 511] INSURANCE : FIRE, LIFE, ACCIDENT, ETC [CH. XXVIII. 
 
 company in the matter, and that it was not competent for the 
 plaintiffs to prove the consent of the defendants to the double 
 insurance on the plaintiffs' property by any other evidence 
 than an indorsement of such consent on the policy, under the 
 hand of the secretary of the company, and that the jury should 
 have been so instructed." ^ 
 
 §511. Waiver; Stipulation against; Limitation of Agent's 
 Authority. — A clause in a policy of insurance that " notliin;^ 
 but a distinct specific agreement, clearly expressed and indorsed 
 on the policy, shall operate as a waiver of any printed or 
 written condition, warranty, or restriction thereon," refers to 
 those conditions and provisions of the policy which enter into 
 and form a part of the contract of insurance, and are essential 
 to make it a binding contract between the parties, and which 
 are properly designated as conditions^ and not to those stipu- 
 lations which are to be performed after a loss has occurred, 
 such as giving notice and furnishing preliminary proof of the 
 loss.2 [On the other hand it has been held that before a blank 
 policy is filled and signed a general agent may change its 
 conditions, although the policy provides that the agent has no 
 authority to waive or modify any of its conditions. This is 
 only a limitation of the agent's power to waive or modify the 
 contract when once made. There can be no waiver of rights 
 under a contract until the contract is consummated.^ This is 
 clearly not the plain common-sense meaning of the clause. 
 The decisions are by no means uniform under this head. It 
 has been held that a provision that there shall be no waiver 
 
 A Couch V. City Fire Ins. Co., 38 Conn. 181. 
 
 2 Franklin Fire Ins. Co. v. Chicago Ice Co., 36 Md. 102. [Bowes v. Nat. Ins. 
 Co., 20 N. B. R. 4.38; New Orleans Ins. Ass. c. Matthews, 65 Miss. 301 ; O'Key 
 V. State Ins. Co., 29 Mo. App. 105 ; Carson v. Jersey City Ins. Co., 43 N. J. 300. 
 A provision in the policy that agents have no autliority to make, alter, or dis- 
 charge contracts, does not make it impossible for an agent to bind the company 
 by making representations, lulling the insured ifito security until the six months' 
 limitation of suit is past. Jennings v. Metropolitan Life Ins. Co., 148 Mass. 
 61. In this case the agent told the insured's attorney that the company was in- 
 vestigating the loss, and that if there was no fraud the claim would be paid. 
 Relying on this the attorney failed to sue within the limit, and the company 
 was held to be estopped.] Ante, §§ 363, 473. 
 
 3 [Continental Ins. Co. v. Rucknian, 127 111. 364, 373] 
 
 1176
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 511 
 
 without a distinct agreement indorsed on the policy, no officer 
 can authorize a breach of condition in any other manner.^ 
 And the policy is avoided by an assignment of the property 
 and the policy without consent of the company, although the 
 agent promises to have the proper indorsements made on the 
 policy, and receives subsequent premiums.^ A condition that 
 waiver must be indorsed on the policy is valid, unless the 
 insured has been induced by the company to act to his damage, 
 on the understanding that the provision would not be insisted 
 on.^ Again we find that a provision in a policy that no act of 
 any agent other than the president or secretary shall be held 
 to be a waiver of a full compliance with all provisions of the 
 policy is null and void.* And that an agent may waive con- 
 ditions in the policy, though it is contrary to its express terms 
 for him to do so.^J Notwithstanding such a condition, parol 
 consent of the president of the company to the removal of goods 
 from one place to another is good. It is a waiver of the stip- 
 ulation itself.^ And though notice to the insured that an agent 
 has no power to waive conditions must have its effect, and, 
 prima facie, must bind the insured ; yet, if it appear that 
 the insurers have customarily permitted the agent to waive, 
 and have ratified his conduct, there seems to be no reason to 
 
 1 [Gladding v. Cal. Farmers' Mut. Fire Ins. Ass., G6 Cal. 6; Enos v. Sun Ins. 
 Co., 67 Cal. 021.] 
 
 2 fShuggart v. Lycoming Fire Ins. Co., 55 Cal. 408.] 
 
 3 [Universal Ins. Co. v. Weiss, 106 Pa. St. 20.] 
 
 * [Day V. Dvvelling-House Ins. Co., 81 Me. 244.] 
 
 ^ [Whited V. Germania Fire Ins. Co., 76 N. Y. 415 at 421 (condition against 
 transfer of property); Swartz v. Insurance Co., 15 Phil. 206 (waiver by ad- 
 justment and official announcement of it).] 
 
 •^ Maryland Fire Ins. Co. v. Gusdorf, 4.3 Md. 506. See also Carroll v. Charter 
 Oak Ins. Co., 1 Abb. Ct. of App. Dec. (N. Y.) 31G, affirming s. c 38 Barb. 
 (N. Y.) 402 ; Micliigan State Ins. Co. v. Lewis, 30 Midi. 41. See also Guernsey 
 ?'. American Ins. Co., 17 Minn. 104. [The condition as to writing may be 
 waived as well as any other, and when written notice is required, verbal notice 
 is sufficient, unless prompt objection is made thereto. Piedmont, &c. L. Ins. Co. 
 V. Young, 58 Ala. 476. And altiiough by the terms of the policy its conditions 
 cannot be waived except by indorsement upon it, yet if an agent does waive 
 a condition and the company afterward adopts his act, it cannot set up that 
 provision of the policy against the insured. Carroll v. Girard Fire Ins. Co., 72 
 Cal. 297.] 
 
 1177
 
 § 512] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXVIII. 
 
 doubt that this also will amount to a waiver of the limitation 
 upon the power of the agent.^ But the insurers will not be 
 estopped from setting up a forfeiture for non-payment of 
 premium, by proof that the agent had agreed that notice 
 should be given when the premium should fall due, when it 
 appears that a policy was afterwards accepted containing a 
 distinct notice that the agent could not waive a forfeiture, 
 or alter that or any other condition of the policy .^ And if 
 the policy provides that alteration or waiver of its conditions 
 cannot be done " unless made at the head office, and signed 
 by an officer of the company," a general agent is without 
 authority to act in the matter.^ [If there is no provision in 
 the policy to the contrary the agent may modify or waive any 
 of its conditions.* An agent having power to attach a certain 
 condition to a policy or not as he may deem proper, may 
 waive it afterwards." A secretary of an insurance company 
 as such has no power to waive any part of the written con- 
 tract without the knowledge and assent of the corporation or 
 of the board of directors or other officers having power to make 
 contracts of insurance in the name of the company. In this 
 case the secretary attempted to waive the stipulation in an open 
 policy, that the subject insured should " be specified by appli- 
 cation and mutually agreed on and written on the policy y^~\ 
 
 § 512. Estoppel; Notice from Stranger. — If the object of 
 requiring notice of increased risk, or of a change of circum- 
 stances calculated to produce such increase, be stated to be 
 that the insurer may exercise or not an option reserved to him 
 to cancel the policy, which he reserves the right to do at 
 pleasure, and without assigning any reason therefor, and he 
 obtains notice from other sources of such facts, since this 
 
 1 Globe Mut. Life Ins. Co. v. Wolff, 95 U. S. 326. But see Caton v. Ameri- 
 can Life Ins. Co., 33 N. J. 487; Mersereau v. Phoenix Life Ins. Co., 66 N. Y. 
 74; o«te, § 3.39. 
 
 2 Union Mut. Ins. Co. v. Mowrey, 96 U. S. 544. 
 
 a Marion v Universal Life Ins. Co. (N. Y.), 11 Reptr. 780. 
 * [ Silverberg v. Plienix Ins. Co., 67 Cal 36 ; Kruger v. Western Fire & Mar. 
 Ins. Co., 72 Cal. 91.] 
 
 5 [Niagara Fire Ins. Co. v. Brown, 123 III. 356.] 
 
 6 [Plahto V. Mer. & M. Ins. Co., 38 Mo. 248 at 255.] 
 
 1178
 
 CH. XXVIII.] WAIVER AND ESTOPPEL. [§ 513 
 
 accomplishes the purpose for wliich the condition is made,, 
 and to all intents and purposes places the insurers in as good 
 a position as if the facts had been notified to them by the 
 insured himself, this knowledge, so obtained by the insurers 
 from other sources, will inure to the benefit of tlie insured, 
 and excuse his default, if any, in failing to give notice. Or, 
 at all events, if the insurer, when these facts come to his 
 knowledge, does not thereupon elect to cancel his policy, but 
 allows it to remain, he will not be permitted afterwards to set 
 up such default in defence.^ 
 
 § 513. Collusion between Agent and Insured. — Insurers, how- 
 ever, will not be estopped to set up a misrepresentation or con- 
 cealment or a breach of warranty in defence to an action, if it 
 shall appear that there was a want of good faith on the part 
 of the insured, as wOiere it is known to the insured that the 
 agent is violating his instructions in taking the insurance, and 
 especially, if there be collusion between them, to falsely de- 
 scribe the property in order to bring it into the category of 
 insurable subjects, upon which the agent is permitted to take 
 risks. If, for instance, it is known to both that the company 
 will not insure hotels, and for the purpose of evading this 
 restriction it is agreed between them to describe the insured 
 property as a boarding-house, under such circumstances the 
 insurers would not be estopped to set up the fraud. If they 
 were, then the insured would derive advantage from his own 
 fraud. And this would be counter to the whole purpose and 
 object of an estoppel, which is to discountenance and circum- 
 vent fraud. And it is only when its enforcement will oper- 
 ate to this end that it can properly be invoked. Besides, the 
 knowledge of the agent is imputable to the principal, on the 
 presumption that the agent, in the honest discharge of his 
 duty, communicates to his principal all the material facts, 
 touching the negotiation, which come to his knowledge, — a 
 presumption which can hardly have place, when the facts 
 to be communicated would convict him of a dereliction of 
 duty.2 
 
 1 Eclipse Ins. Co. v. Schoemer, 2 Cincinnati Superior Court Reporter, 474. 
 
 2 Rockford Ins. Co. v. Nelson, 75 111. 548. 
 
 1179
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 CHAPTER XXIX. 
 
 OF ACCIDENT INSURANCE. 
 
 Analysis. 
 
 § 514. Definition of accident. (See also §§519, 520, and notes. The idea 
 
 of the first case in § 515 is not sustainable.) Pitchfork slipping 
 
 out of worker's hand and injuring his bowels is an accident, so 
 
 sprain by lifting heavy weights. 
 
 § 515. Rupture caused by voluntarily jumping from cars held not an accident. 
 
 § 515 a. Rupture of blood-vessel by striking Indian clubs against a stove, is 
 
 accident. 
 § 516. Death by drowning may or may not be accidental, according to cir- 
 
 cumstances, § 516 ; see also §§ 517, 518, 518 A. 
 "outward and visible means," §§ 516, 517. 
 § 517. If a wound causing a fall into water and consequent drowning, there 
 
 is an accidental death. Drowning. 
 § 517 A. *' External, Violent, and Accidental" means. 
 
 Exertion of holding a runaway horse. Charbon poison. 
 § 518. " Cause of death arising within the system." 
 
 § 518 A. Disease, epileptic fit, and drowning, company liable. 
 
 § 518 B. Death by poison. 
 
 § 519. Sunstroke not accident (?). Some violence, casualty, or vis major 
 
 must be involved (?); see § 529. 
 § 520. Death by robbers probably accidental. 
 
 § 520 A. " Intentional injuries inflicted by assured or others." 
 
 § 521. A railway accident is one occurring in the course of, and arising out 
 
 of, the fact of a railway journey. 
 §§ 522-523. Total disability for usual occupation. 
 
 § 523 A. Act not incident to the occupation described in the policy. Death 
 
 from fits plus accident, accident plus a cold ; " inhaling gas " 
 held to mean only voluntary inhaling. Condition that death 
 must occur within ninety days after the accident. 
 §§524-531 A. Travelling, § 524. 
 
 On foot, §§ 524, 528, 529. 
 Conveyance, §§ 524, 525, 526, 528, 529. 
 Engineer, §§ 526, 527. 
 Alighting, §§ 524, 525. 
 Getting on a moving train, §§ 524 A, 629. 
 Standing on car platform, § 524 A. 
 Limit of journey, § 525. 
 Negligence, §§ 524 A, 525, 530. 
 Condition to be careful, § 531. 
 Wilful exposure, § 530. 
 
 1180
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 514 
 
 Voluntary exposure to unnecessary danger, § 531 A. 
 
 Obvious risk, § 530. 
 
 Violation of law, § 530. 
 
 Intoxication, § 531. 
 §§ 532, 533. Increase of risk. Change of occupation. Classification of risk, 
 
 § 533. 
 § 534. Extent of risk. 
 
 § 535. Insurable interest. Amount of loss. 
 
 § 536. Notice of death or injury. Preliminary proof (see also § 539). 
 
 § 537. Form and completion of the contract. 
 
 §538. ■ Accidents to carriages. 
 
 § 514. Definition of Accident ; Injury causing Death ; Strain. 
 — What is an accident ? This question arises at the very 
 threshold in the consideration of this branch of insurance, and 
 has been, and is likely to continue to be, a fruitful source of 
 discussion. 1 No satisfactory definition seems yet to have been 
 given by the courts, though numerous cases have occurred 
 where they have been called upon to decide whether death or 
 injury from particular causes was, or was not, accidental. In 
 a recent case in the Supreme Court of Pennsylvania,^ it ap- 
 peared that while the insured was pitching hay the handle of 
 the pitchfork slipped through his hands and struck him on 
 the bowels, inflicting an injury which produced peritoneal 
 inflammation, in consequence of which he died, and this was 
 held to be an accidental death. And the same would have 
 been the case, say the court, if a strain had been the cause of 
 the inflammation which produced death. Death by accident 
 was defined to be " death from any unexpected event which 
 happens as by chance, or which does not take place according 
 to the usual course of things." So a sprain of the muscles 
 of the back, caused by lifting heavy weights in the course of 
 business, is injury by accident or violence " occasioned by 
 external or material causes operating on the person of the 
 insured." ^ 
 
 1 [The word " accident " means an event that takes place without one's fore- 
 sight or expectation, and includes an injury in an affray without fault on the 
 part of the plaintiff. Supreme Council, &c. v. Garrigus, 104 Ind. 133, see 
 § 520.] 
 
 2 North American Ins. Co. v. Burroughs, 69 Pa. St. 43. 
 
 3 Martin v. Travelers' Ins. Co., 1 F. & F. 505. 
 
 1181
 
 § 515] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 § 515. Accident ; Rupture from Jumping. — On the other 
 hand, it has been said by a learned judge, sitting as arbitrator, 
 that " rupture caused by jumping from the cars while in 
 motion, and afterwards running to accomplish certain busi- 
 ness purposes, done voluntarily and in the ordinary way, and 
 without any necessity therefor, and with no unforeseen or 
 involuntary movement of the body, such as stumbling or slip- 
 ping or falling, is not by violent and accidental means. It 
 might be otherwise if, in jumping, the insured should lose 
 his balance and fall, or strike against some unforeseen object, 
 or in running should stumble or slip." ^ The learned arbi- 
 trator based his award upon the following, amongst other 
 reasons : — 
 
 " The policy is one of indemnity against ' bodily injuries, 
 effected through violent and accidental means, within the 
 meaning of this contract and the conditions hereto annexed.' 
 Had the terms of the contract stopped at the words ' violent 
 and accidental means,' there would be no difficulty, in my 
 judgment, in disposing of the questions ; for there was no 
 accident, strictly speaking, in the means through which the 
 bodily injury was effected. It would not help the matter to 
 call the injury itself, that is, the rupture, an accident. That 
 was the result, and not the means, through which it was 
 effected. The jumping off the cars, or the running, was the 
 means by which the injury was caused. Both were done by 
 the claimant voluntarily, in the ordinary way, with no unfore- 
 seen, accidental, or involuntary movement of the body what- 
 ever. There was no stumbling or slipping or falling. Tlicre 
 was nothing accidental in his movements, any more than there 
 was in his passing down the steps of his hotel, or in his walk- 
 ing on the street, during each of which he might have had a 
 stroke of apoplexy, or a hemorrhage, a rupture of a blood- 
 vessel in the head or the lungs. True, in jumping from the 
 cars and running there was more violence, or, properly speak- 
 ing, more force ; but there was no more accident than in any 
 ordinary movements of the human body. How, then, admit- 
 
 1 Southard v. Tlie Railway Passengers' Ass. Co., 34 Conn. 574, per Ship- 
 man, Judge of the District Court of the United States, acting as arbitrator. 
 
 1182
 
 CH. XXIX.] OP ACCIDENT INSURANCE. [§ 515 
 
 ting the rupture to have been effected by jumping from the 
 cars, or by running to see if they were coming, can it be said 
 that it was caused by accidental as well as violent means ? 
 All the accident there was, was the result of ordinary means, 
 voluntarily employed, in a not unusual way. 
 
 " But the words ' violent and accidental means ' are fol- 
 lowed in the policy by the words ' within the intent and mean- 
 ing of this contract and the conditions liercunto annexed.' 
 Now we are to consider how far tlie former words are quali- 
 fied by the other parts of the contract, or by the conditions 
 thereto annexed. I have cited from the policy all that can 
 have any bearing on the question. The provision ;\'hich I 
 have cited from the policy excludes from indemnity death or 
 injury when caused by ' duelling, concealed weapons, when 
 carried by the insured, fighting, wrestling, over-exertion, and 
 lifting (except in case of perilous necessity), suicide, sun- 
 stroke ; ' and also ' death or injury happening in consequence 
 of war, riot, invasion, riding or driving races, unnecessary 
 exposure to danger or peril, or violation of the rules of any com- 
 pany or corporation.' It also excludes ' death or injury hap- 
 pening while the insured is, or in consequence of his having 
 been, under the influence of intoxicating drinks, or engaged 
 in any unlawful act.' Now it may be said that this specific 
 exclusion from the scope of indemnity of death or injury hap- 
 pening from causes and under circumstances expressly set 
 forth, leaves, by fair implication, death or injury from all 
 other causes, and under all other circumstances, included in 
 the contract of indemnity ; thus logically inverting or com- 
 plementing the maxim, expressio imius est exclusio alterius. 
 But in applying this well-known rule of construction, refer- 
 ence must be had to the main body of the contract and to its 
 subject-matter. It is not, nor does it purport to be, a contract 
 of indemnity against death or injury effected by all means. 
 The cause of the death or injury must in all cases be 'violent 
 and accidental,' or the event is without the scope of the con- 
 tract. The instrument by its terms embraces only cases 
 where the elements of force and accident concur in effecting 
 the injury. The cases excluded are only those which belong 
 
 VOL. II. — 31 1183
 
 § 515] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 to the same class. The contract declares to the insured that 
 though he may be killed or injured through violent and acci- 
 dental means, yet if the calamity occurs under certain circum- 
 stances, the insurers will not be liable. Violent and accidental 
 death or injury might occur, and often does occur, under the 
 circumstances enumerated in the excluding clause. 
 
 " The contract, as I have already intimated, in its broadest 
 scope only embraces within its indemnity personal injuries 
 effected through forcible and accidental means ; and the pro- 
 viso simply excludes from this class of injuries all that occur 
 under the circumstances enamerated. All others of this class 
 are included. The degree of violence or force is not material, 
 and had the insured in this case in jumi)ing from the car lost 
 his balance and fell, or struck upon some unseen object and 
 wounded himself, or in running had stumbled or slipped on 
 the ice, his injury might be attributed to accidental as well as 
 violent means, and assuming that there was no want of due 
 diligence on his part, his misfortune would have been covered 
 by the policy. But, as I have already stated, the injury which 
 he received was in no sense the result of accident. He jumped 
 from the car with his eyes open, for his own convenience, and 
 not from any perilous necessity. He encountered no obstacle 
 in doing so. He alighted erect on the ground just as he in- 
 tended to do. So in running he ran from no peril or necessity, 
 but for his own convenience, voluntarily, and, from all that 
 appears, without stumbling, slipping, or falling. In both 
 cases he accomplished just what he intended to, in the way he 
 intended to, and in the free exercise of his choice. No acci- 
 dent of any kind interfered with his movements, or for an in- 
 stant relaxed his self-control. All that he claims is, that, some 
 hours after, it was discovered that a muscle in the walls of 
 the abdomen had given way under the strain to which he had 
 voluntarily put it, under circumstances free from all peril or 
 necessity. Assuming that this rupture was caused either by 
 his jumping or running, or both, does not help the matter, 
 unless we call running and jumping accidents. I therefore 
 am of opinion that tlie alleged injury did not result from an 
 accident, within the meaning of the contract." 
 1184
 
 CH, 
 
 XXIX.] OF ACCIDENT INSURANCE. [§ 515 a 
 
 [In what seems a far more sensible case it was held that 
 the jury are at liberty to find death by accident where B. 
 jumps from a platform four or five feet high wliich produced 
 a disorder, probably stricture of the duodenum, so that he 
 could retain nothing on his stomach, vomited, and passed 
 nothing but decomposed blood and mucus, and died in nine 
 days. Two others jumping at the same time were uninjured. 
 The injury was not such a result as ordinarily and naturally 
 proceeds from the conduct of the insured. Something unusual, 
 unforeseen, unexpected, that is, accidental occurred, to which 
 the death is attributable.^] 
 
 § 515 a. Accidental Means; Rupture; Gymnastic Ezercise; 
 Overdose of Opium. — In a case where the injury was received 
 while exercising with Indian clubs, one of them striking 
 against a stove, the instruction to the jury was as follows: 
 " If the deceased voluntarily took into his hands the clubs for 
 exercise, and used them for such exercise in the way and pre- 
 cisely as he intended to do, and without anything occurring 
 to interfere with his intended and usual movements in such 
 exercise, — that is, if he voluntarily used these clubs in the 
 ordinary way for taking such exercise, without the occurrence 
 of any unusual circumstance interrupting or interfering with 
 such use, or causing any unforeseen, accidental, or involun- 
 tary movement of the body, and in such use of clubs there 
 occurred the rupture of a blood-vessel, and consequent injury, 
 as claimed, — I do not tliink it could be said, in such case, that 
 the means through which the injury occurred v>^as accidental. 
 But if while engaged in such exercise there occurred any un- 
 foreseen accident or involuntary movement of the body of the 
 deceased, which brought about, in connection with the use of 
 the clubs, the injury, or if there occurred any unforeseen or 
 unexpected circumstance which interfered with or obstructed 
 the usual course of such exercise, and there was thereby pro- 
 duced an involuntary movement, strain, or wrenching of the 
 body, by means of which the alleged injury was occasioned, 
 that would be an accident within the policy ; that is, the 
 
 1 [U. S. Mut. Ace. Ass. V. Barrv, 131 U. S. 100.] 
 
 1185
 
 § 516] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 means by wliich the injury was effected would in such case be 
 accidental." ^ 
 
 Death by inadvertently taking an overdose of opium pre- 
 scribed by a physician is caused by " medical treatment for 
 disease," and is not a case of bodily injury effected through 
 " external, violent, and accidental means," occasioning death.^ 
 
 § 516. Accident ; Dro'wning ; Secondary Cause ; External 
 Sign ; Outward and Visible Means. — In Trew V. Railway Pas- 
 sengers' Assurance Company,^ the question arose whether a 
 man who was drowned while bathing, nothing being known of 
 the particular circumstances under which the drowning hai> 
 pened, came to his death by " accident or violence," and the 
 conclusion of the court seemed to be that whether such death 
 was accidental or not would depend upon the circumstances. 
 These the plaintiff could not show, and as the burden of proof 
 was upon him he must fail, as there was nothing by which the 
 jury or the court could determine one way or the other. All 
 the evidence there was, was as consistent with the theory that 
 he died of natural causes as from accident. " If a person," 
 said Martin, B., by way of illustration, " mistook the depth of 
 the water, and in plunging into it struck his head against a 
 rock and was killed, that would be a death from injury caused 
 by accident ; but death from apoplexy would not." " This 
 case," said Watson, B., " ranges within that class where, if the 
 state of facts is consistent with one view or the other, there is 
 no evidence for the jury. Here there is no evidence how the 
 assured died (except that there was some evidence that he 
 was drowned while bathing); he may have died from apoplexy, 
 or he may liave been struck by a boat. If a man was found 
 dead in a railway carriage, we could not assume that he died 
 from an accident ; but if he was found with marks of violence 
 upon his person, the case would be different. There is noth- 
 ing to lead to the supposition that the assured died in tlie one 
 way rather than the other." But this decision was reversed 
 in the Exchequer Chamber,^ Cockburn, C. J., delivering the 
 
 1 Dyer J., McCarthy v. Travelers' Ins. Co., C. Ct. (Wis ), 8 Ins. L.J. 208. 
 
 2 Bayliss v. Travelers' Ins. Co., C. Ct. (N. Y.), 6 Ins. L. J. 109. 
 
 3 5 H. & N. (Exch.) 211. * 6 H. & N. 839. 
 
 1186
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 516 
 
 opinion of the court. " We are all of the opinion," said the 
 learned Chief Justice, " that this nonsuit was wrong, and that 
 the judgment of the Court of Exchequer in refusing to set it 
 aside was erroneous. It is said that, assuming the deceased 
 died by drowning, drowning is not one of the cases compre- 
 hended in this policy of assurance. Mr. Lush ingeniously 
 argued that the policy only applies to cases where, from acci- 
 dent or violence, some injury occurs, from which death may, 
 or may not, ensue ; and if it ensues within three months, the 
 sum assured is payable. But he contended, in effect, that 
 where the cause of death produces immediate death without 
 the intervention of any external injury, the policy does not 
 apply ; and whereas from the action of the water there is no 
 external injury, death by the action of the water is not within 
 the meaning of this policy. That argument, if carried to its 
 extreme length, would apply to every case where death was 
 immediate. If a man fell from the top of a house, or over- 
 board from a ship, and was killed, or if a man was suffocated 
 by the smoke of a house on fire, such cases would be excluded 
 from the policy, and the effect would be that policies of this 
 kind, in many cases where death resulted from accident, would 
 afford no protection whatever to the assured. We ought not 
 to give to those policies a construction which will defeat the 
 protection of the assured in a large class of cases. We are, 
 therefore, of opinion that, if there was evidence for the jury 
 that the deceased died by drowning, that was a death by acci- 
 dent within the terms of this policy. The next question is, 
 whether there was evidence for the jury that the assured met 
 with his death by drowning. It appears that he went to 
 Brighton for recreation, and there is no reason to suppose that 
 he intended to commit suicide. He left his lodgings for the 
 purpose of bathing, and his clothes were found by the water- 
 side, but he himself was not afterwards seen. A body was 
 found in the water at a distance from the place where he went 
 to bathe, but not at such a distance that it might not have 
 been carried there by the waves. There was some evidence 
 that this was the body of the assured, and assuming that it 
 was, the question ought to have been submitted to the jury 
 
 1187
 
 § 517] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 whether he met with his death hj drowning. If they found 
 that he died in the water, they might reasonably presume that 
 he died from drowning. It is true tliat death occurs in the 
 water in some instances from natural causes, as apoplexy, or 
 cramp in the heart ; but such cases are rare, and bear a small 
 proportion to the number of deaths which take place from the 
 action of the water. We think it ought to be submitted to 
 the jury to say whether the deceased died from the action of 
 the water, or natural causes. If they are of opinion that he 
 died from the action of the water, causing asphyxia, that is a 
 death from external violence within the meaning of this policy, 
 w^hether he swam to a distance and had not strength enough to 
 regain the shore, or on going into the water got out of his 
 depth." 
 
 Apparently to meet such a case as the one last cited a pro- 
 vision has been inserted saving the insurers from liability un- 
 less the injury be marked by some " external and visible 
 sign," and tlie accident is the sole cause of the death. ^ And 
 mider this it was held that a complaint of soreness and stiff- 
 ness was not an external or visible sign, while a discharge of 
 blood from the nostrils, if caused by the injury, would be. It 
 was also recently held, in England, that where a man falls into 
 the w^ater while in an epileptic fit and is drowned, the death is 
 accidental, and by an injury caused by some " outward and 
 visible sign." ^ 
 
 A condition that the insurance shall not cover a " case of 
 death or disability, the nature, cause, or manner of which is 
 unknown or incapable of direct and positive proof," does not 
 apply to a case where the death is obviously by violence, as 
 where a man is found dead in a river or on a railroad track, 
 bruised and torn, yet nothing is known of the precise manner 
 in which it happened.^ 
 
 § 517. Accident ; Drowning. — In Mallory v. Travelers' In- 
 surance Company, it was shown that the insured disappeared 
 
 1 Whiteliouse v. Travelers' Ins. Co., U. S. C. Ct. (N. H.), 7 Ins. L. J. 23. 
 - Winspear?;. Accident Ins. Co., 43 L. T. Rep. n. s. (Ct. of App.) 459; s. c. 
 11 Reptr. 519; post, § 518, at tlie end. 
 
 8 Wright V. Sun Mut. Life Ins. Co., 29 U. C. (C. P.) 221. 
 
 1188
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 517 A 
 
 on Sunday evening, when he was seen walking on a raih-oad 
 track, and his body, with a cut on the back of the head, was 
 found in a creek which passed under the raih-oad through a 
 culvert. A motion was made for a nonsuit, on the ground 
 that there was no evidence to go to the jury of death by acci- 
 dent. But tliis motion the court refused to allow, and left it 
 to the jury to find whether the death was by accident or not, 
 charging them that the injury on the head need not be the cause 
 of the death, but that if it lead to other results, accidental, 
 from which death ensued, the company would be liable. On 
 appeal it was held tliat the circumstances attending the finding 
 of the body were sufficient to require the submission to the 
 jury of the question whether the death of the insured was the 
 result of accident or of disease, or some other cause not in- 
 sured against. The actual cause of death was not certainly 
 proved by the evidence in the case ; but when considered in 
 connection with the presumption that sane persons do not 
 ordinarily commit acts the probable consequence of which 
 will be self-destruction, it was sufficient to justify the infer- 
 ence that the deceased fell off, or was hurled off by a violent 
 blow, from the culvert into the stream below, and was 
 drowned. The policy provided for the payment of a gross 
 sum in case of death from accident, and also for the payment 
 of a fixed rate per week in case of injury not fatal but dis- 
 abling. It also provided that no claim should be made under 
 the policy, in respect of any injury, unless the same shall be 
 caused by some " outward and visible means." And it was 
 hekl that this last provision applied only to non-fatal injuries.^ 
 [§ 517 A. External, Violent, and Accidental. — A death in a 
 plunge bath was held not to be from " external, violent, and 
 accidental means," ^ But death by drowning, the boat being 
 overturned by fierce waves seven or eight feet high, is death by 
 external, violent, and accidental means.^ A frightened horse 
 ran away, and though the carriage was not upset, the insured 
 
 1 Mallory v. Travelers' Ins. Co., 47 N. Y. 52. 
 
 2 [Tennant v. Travelers' Ins. Co., 31 Fed. Rep. 322 (Cal.), 1887.] 
 
 3 [Tucker v. Mut. Ben. Life Co., 50 Hun, 50. See Searles v. Manhattan Ele- 
 vated R. Co., 101 N. Y. 661] 
 
 1189
 
 § 517 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 was SO wrought upon by fright or exertion in restraining the 
 horse that he died within an hour. This was held a death 
 through external, violent, and accidental means, and it was 
 decided that the clause providing that insurance shall not ex- 
 tend to cases in which there were no external and visible 
 signs upon the body did not relate to fatal injuries, but only 
 to those not resulting in death. ^ 
 
 Death caused by charbon poison, that is, the absorption of a 
 putrid animal substance through some portion of the skin, 
 causing malignant pustule, is death by extei'nal, accidental, and 
 violent means. The putrid substance reached the body, not 
 through the stomach or lungs, but through the skin, the exter- 
 nal covering. The means were accidental. It is too improbable 
 to suppose that the deceased intentionally put his hand, in- 
 fected with putrid meat, upon his lip in order to produce death. 
 If he had intended suicide this would not have been the mode 
 selected. The probability is that he knew nothing of the dan- 
 ger whatever. Lastly, the means were violent. The degree 
 of violence is of no moment. The bite of a fly or sting of a 
 bee or a rattlesnake, sunstroke, freezing, drowning, are all vio- 
 lent in the sense of an insurance policy. In this case whether 
 a fly that had been feeding on the putrid substance lit upon 
 an abraded spot on the lip of the deceased, or he put his hand 
 to his lip with the poison upon it, the contact however deli- 
 cate was violent, within the meaning of the policy .^ That is 
 to say, in plain English, the word violent, so far as it refers 
 to the movement of masses, is of no effect in the policy. If 
 the injury is external and accidental, the plaintiff may recover. 
 Violent is ambiguous. It is impossible to tell what degree of 
 force is intended, therefore, since it is to be taken against the 
 company, all degrees of force are included. The sense of the 
 word " violent" may be looked at in another way. Force is 
 not merely in the movement of masses. There is such a thing 
 as molecular and atomic violence. Heat, electricity, and 
 
 1 [McGlincliey v. Fidelity & Casualty Co., 80 Me. 251 (another illustration 
 of the tendency of the courts to go back of the worded contract, to what they 
 deem the fair purpose of it, even at the risk of making a new agreement).] 
 
 - [Bacon v. U. S. Mut. Ace. Ass., 44 Hun, 599.] 
 
 1190
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§51 7 A 
 
 sound may cause damage that would surely be violent. If a 
 tremendous sound should disrupt the drum of the ear, or 
 mighty heat scorch the flesh, no one would claim that the 
 damage was not by violence. So the atomic force of a poison 
 that from simple contact is able to pierce to the farthest parts 
 of the body, displays a violence greater than that of an arrow 
 that can only overcome the stop of six or eight inclies of tissue. 
 But however kindly we look at the decision, and however we 
 strive to entangle the contract in a net of scientific thought 
 that refuses to disclose any breaks in nature corresponding to 
 the words we use, yet the fact remains that the word " vio- 
 lent " has a well-understood meaning, that it is in the contract, 
 has a right to be there, and effect should be given to it. The 
 line between violent and non-violent accidents is hard to draw 
 if we get a microscope and try and draw a hair line that will be 
 scientifically justifiable considering every attribute connoted 
 by the words, but if we stand off and look at the matter in the 
 clear light of every-day common sense, a death by drowning or 
 by suffocation or by the encroachments of poison is not violent. 
 If a runaway knocks a man off a bridge into the water, or a 
 strong wave upsets his boat and he drowns, there is violence 
 in the compound proximate cause. But if he is asleep and the 
 water rises about him or the gas floods his room, there is no 
 violence. If such a death is violent, if a man passing a pest 
 house and getting a taint or a breath that brings him down 
 with small-pox or scarlet-fever, dies by violence, then there is 
 no death that is not violent and the word is nullified in the 
 contract. If the courts think such a term in the policy is 
 unreasonable, let them say so and give their reasons ; but, for 
 the sake of sane law, do not make decisions that wipe sections 
 of the English language out of existence. 
 
 A clause in an accident policy requiring direct and positive 
 proof that the injury was caused by external and violent 
 means, cannot alter the rules of evidence in the courts.^ In 
 some cases the very nature of the injury and the presumption 
 that it was not voluntary may be sufficient to satisfy the re- 
 quirement, as where the arm of the deceased was broken, 
 
 1 [Utter V. Insurance Co., 65 Mich. 546 ] 
 
 1191
 
 § 518] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 causing disease of which he died, and the manner and circum- 
 stances of the breaking did not a]:)pear.^] 
 
 § 518. Accident; " Cause of Death arising -writhin the System ;" 
 " Secondary Cause ;" External and Material Cause. — In the case 
 of Fitton V. The Accidental Death Insurance Company ,2 the 
 deceased met with a violent fall, by which he immediately 
 became ruptured in the bowels, and afflicted with strangu- 
 lated hernia in the abdomen, for which a surgical opera- 
 tion was necessarily performed, in consequence of which, 
 and the hernia, he died. The question was whether this 
 was a death within the exception of a policy which pro- 
 vided that the company did not insure against death or 
 disability arising from rheumatism, gout, hernia, erysipelas, 
 or any other disease or cause arising within the system of the 
 insured, before, or at the time, or following such accidental 
 injury, whether causing such death or disability directly or 
 jointly with such accidental injury. And it was held that 
 such a death did not arise from a cause within the system, and 
 so was not within the exception. In Smith v. The Accident 
 Insurance Company,^ where the facts were that death fol- 
 lowed from erysipelas, caused by and expressly found to be 
 the result of an accidental incised wound, and supervening 
 four days after the wound was received, and the provisions of 
 the policy were identical with those in the case last cited, ex- 
 cept that the word " cause " was qualified by the word " second- 
 ary," three of the judges held this to be within the exception, 
 and distinguished it from Fitton v. The Accidental Death Insur- 
 ance Company,^ on the ground that there the accident caused 
 the hernia at the very moment the accident happened, and Avas 
 part and parcel of it, while here the erysipelas supervened only 
 after a lapse of four days, and so was a " secondary " cause 
 within the meaning of the policy.^ In other words, hernia 
 
 1 [Peck V. Equit. Ace. Ass., 52 Hun, 255.] 
 
 2 17 C. B. N. s. 122 ; s. c. 34 L. J. 28 (C. P.). 
 
 3 22 L. T. 861. 4 Ubi supra. 
 
 ^ In Harris v. Travelers' Ins. Co., Superior Ct. Chicago, 1808. cited in Ameri- 
 can Law Review, July, 1878, p. 589, it was held that death hy suicide, three 
 months after an accident, hy an insane person, whose insanity was caused by an 
 
 1192
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 518 
 
 supervening immediatel}^ to the accidental violence would not 
 be within the exception of the policy, wliile erysipelas super- 
 vening to the same accidental violence four days afterwards 
 would, — a distinction which seems to rest not on the ques- 
 tion whether the disease was caused by the violence, but on 
 the lapse of time intervening between the violence and the 
 appearance of the disease caused thereby, and would there- 
 fore seem to be unsatisfactory, if for no other reason, because 
 it is impracticable.^ The contract might make a limitation as 
 to time, but as it does not, it is difficult to see how the courts 
 can say violence producing fatal disease at one time is within 
 the exception, while producing it at another time it is not. 
 What is the limited time which takes the case out of or brings 
 it within the exception ? ^ 
 
 accident, was not covered by the policy, as the accident was not the proximate 
 cause. 
 
 1 Wliether a cause is proximate or remote does not depend alone upon tiie 
 nearness in point of time in whicii certain events occur. The question is not 
 controlled by time or distance, nor by the succession of events. An efficient 
 adequate cause being found must be deemed the true cause, unless some other 
 cause not incidental to it, but independent of it, is shown to have intervened 
 between it and the result. Kellogg v. Railway Co., 26 Wis. 223; McCarthy v. 
 Travelers' Ins. Co., 8 Ins. L. J. 208; ante, §§ 302, 459. See also Insurance Co. 
 V. Tweed, 7 Wall. (U. S.) 44 ; Travelers' Ins. Co. v. Seaver, 19 id. 531, 539. 
 
 2 Kelly, C. B., dissented, and thought that the defendants were liable on the 
 policy; the effect of the condition being to exempt the company from liability 
 only in respect of a death from erysipelas, where the erysipelas "arose within 
 the system," and was, as it were, collateral to, and not caused by, the accident 
 to the insured ; and that where an insurance company think fit to introduce an 
 exception to the liability for which they have contracted under the policy of 
 insurance, they are bound to express that exception in clear and unambiguous 
 language, so as to leave no reasonable doubt upon the subject ; and if there is 
 any ambiguity, that is enough to take the case out of the exception, and the 
 construction should be against the company. As death under similar circum- 
 stances is very likely to happen, presenting a like case for the decision of other 
 courts, the views of the learned Chief Baron, so clearly and ably presented, 
 are here given in full : — 
 
 " This is unquestionably a doubtful and difficult case, and after listening to 
 the opinions of my learned brethren, I cannot but in some measure mistrust my 
 own judgment ; but I am of opinion that the plaintiff is entitled to recover. 
 The facts, as found by the arbitrator, are clear. The deceased, who was in- 
 sured by the defendants against accidents generally, whilst washing his feet in 
 an earthenware bath sustained an injury, by cutting one of them near the ankle 
 on the ragged edge of the bath. For that wound a surgeon attended him, and 
 
 1193
 
 § 518] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 In a still later case, in England, where the insured went in 
 to bathe, and while in a shallow pool was seized with a fit 
 
 he was taken to a hospital. Five days after the accident erysipelas super- 
 vened, and in two days more he died of that disease. It is expressly found 
 that the erysipelas, which was the immediate cause of death, resulted from 
 the wound, and that unless he had been wounded he would not have had 
 erysipelas. 
 
 " The question is whether this death, thus occasioned, is within the mean- 
 ing of the defendants' policy. Now, I entirely agree with the observations of 
 Willes, J., in Fitton's case, that it is extremel}- important, with reference to in- 
 surances, that there should be a tendency ratlier to hold for the assured than 
 for the company, where any ambiguity arises on the face of the policy ; and I will 
 add that it appears to me to be equally important that where an insurance com- 
 pany think fit to introduce an exception to a liability which they have con- 
 tracted to bear, they should express that exception in clear, unambiguous terms. 
 But when I read this condition, I cannot, especially having regard to the princi- 
 ples of construction laid down, and the decision arrived at in Fitton's case, see 
 that the exception as to erysipelas is so worded as to protect the defendants 
 here. The Court of Conmion Pleas, in the case referred to, put a judicial con- 
 struction on this very clause, save that the words ' secondary cause ' have been 
 introduced since their decision. There, Williams, J., in his judgment, says: 
 'Looking at the language of the policy, and taking the first condition alto- 
 gether, upon the best interpretation I can put upon it, I am of opinion that it 
 means to exempt the company from liability only where the hernia arises 
 within the system ; ' and I am of opinion, In conformity with the opinion there 
 delivered by Williams, J., that it is the effect of the condition to exempt the 
 company from liability only in respect of death from erysipelas, where the ery- 
 sipelas arises within the system and is collateral to the accident. 
 
 " But let us proceed to look a little more closely at the words of the condi- 
 tion. After stating the accidents or causes of death that are insured against, 
 it goes on to specify those causes which are not, including ' rheumatism, gout, 
 hernia, erysipelas,' and then come the words which have been so fully discussed 
 ' or other disease or secondary cause or causes arising within the system of the 
 assured before, or at the time, or following such accidental injury.' Now, ac- 
 cording to the view taken by the rest of the court, erysipelas is for all purposes 
 expressly excepted from the series of events which create a liability in the de- 
 fendants. But if this be the true view, why not have stopped at the word 'ery- 
 sipelas,' and have added ' however caused, whether by an accident or otherwise ? ' 
 Moreover, it should be remarked that this unqualified and unlimited construc- 
 tion is inconsistent with the decision In Fitton's case, where the death of the 
 insured was from hernia caused by the accident. It is clear to me, therefore, 
 that we must construe these words with reference to those which follow, and 
 place some limitation upon them. 
 
 " To revert once more to the language actually used, let us contrast for a 
 moment what the defendants have said with what they might have said. In- 
 stead of excepting rheumatism, hernia, &c., whether causing death 'directly or 
 jointly ' with the injury, they might have excepted them in unambiguous terms, 
 ' whether produced by the accident or otherwise ; ' and In the same manner they 
 
 1194
 
 OH. XXIX.] OF ACCIDENT INSURANCE. [§ 518 
 
 whereby he became insensible, and fell with his face down- 
 wards, so that his face was partially submerged, and he was 
 
 niiglit have gone through a whole catalogue of consequences likely to super- 
 vene on a cut or a bruise, — such, for instance, as mortification or hemorrhage, 
 — and, by excepting them expressly, have really rendered the policy almost 
 nugatory. Indeed, they might effect this purpose under the present words, if 
 my learned brethren are right, by merely increasing the diseases specified by 
 name. But could it be contended that by an express mention, say of hemor- 
 rhage or mortification, the defendants could exonerate themselves where death 
 had ensued from mortification or hemorrhage supervening on a cut ? The 
 death would still be from the cut, and the policy, in my judgment, would be 
 available ; for the general effect and true construction of such a document seems 
 to me to be, that it covers not only the actual injury itself, but any disease, 
 like lockjaw, mortification, or erysipelas, which is caused by and may be re- 
 garded as the natural and probable consequence of the injury. 
 
 " It remains to be considered whether the words of the condition, which have 
 been introduced since the decision in Fitton's case, make any difference in the 
 extent of the defendants' liability. Without these words, I think that decision 
 is a clear authority for the plaintiff here. But it is by them provided that the 
 policy does not insure against death from the enumerated disorders, or ' any 
 other disease or secondary cause arising within the system of the insured.' 
 Now I pause upon the word ' secondary,' because it certainly does introduce 
 doubt as to the true construction of the sentence. If it means that whenever the 
 hernia or erysipelas, causing death, is the secondary consequence of the acci- 
 dent, the defendants are not to be liable, then the present case would be within 
 the exception. But I do not think it can be taken in this unqualified sense. 
 It api)ears to me to be no more than a general word, descriptive of the charac- 
 ter of the previously enumerated maladies, and that it must be read with refer- 
 ence to the words immediately following. 
 
 " The whole sentence thus read hears to my mind a plain and intelligible, 
 and but for the opinion of my learned brethren I should have said an obvious, 
 meaning. It enumerates a certain class of maladies which are of a secondary 
 character, and which may all of tliem arise within the system, and continue 
 collaterally to and parallel with the injury sustained ; and it provides that where 
 death is caused by any of these secondary diseases arising within the system, 
 then the policj'^ shall not attach, even though the disease, unless aggravated by 
 or conjointly with the injurj'^, would not have been fatal. I do not see how it 
 is possible to reject these words, ' arising within the system,' from our considera- 
 tion ; and I find no words in the condition capable of being construed to except 
 the secondary disease of erysipelas altogether, in such a case as this, wiiere it 
 did not 'arise 'at all within the system, — where (as the arbitrator finds) it 
 never would have arisen but for the accident, and where it was the direct con- 
 sequence of that accident. My conclusion as to this construction of the condi- 
 tion is strengthened by the remaining words of the condition. The company 
 are not to be liable for a secondary cause arising within the system 'before, or 
 at the time of, or following such accidental injury, whether causing such death 
 directly or jointly with such accidental injury.' The very use of this word 
 ' before ' is an additional reason for construing the whole condition as I do. It 
 
 1105
 
 § 518 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 suffocated by the access of water, to his lungs, this was held 
 to be a death by accident, and occasioned by an " external 
 and material cause operating upon the person of the insured." 
 Death here was the result of the action of the water on the 
 lungs, and the consequent interference with respiration, and 
 the fact of falling into the water from sudden insensibility was 
 an accident.! 
 
 [§ 518 A. Disease as distinguished from external and acci- 
 dental injury means a disorder originating internally. An exter- 
 nal accident may often produce death through the disorganiza- 
 tion of internal organs, as in cases of snake-bites, bullet-wounds, 
 malignant pustule, <fec. ; still the accident is the cause. But if 
 impurities taken into the stomach or lungs produce fever or 
 other disease and death results, the disease is the proximate 
 cause.2 Where the policy excepts death arising from natural 
 disease although accelerated by accident, and it appears that 
 the insured died of kidney disease (with which he had been 
 long afflicted) accelerated by a fall, there can be no recovery .^ 
 
 sliows that the real intention was to provide against secondary diseases arising 
 witliin tiie system, and whicli might and probably would, therefore, be before 
 the accident, in point of time, and wholly independent of and collateral to it, 
 and not against tliose which, like the erysipelas here, were the direct conse- 
 quence of the accident, and but for tliat would never have existed at all. And 
 the last material words of the condition, ' wliether causing such death directly 
 or jointly with such injury,' also seem to me applicable to a class of diseases 
 causing death either directly or jointly with the injury, but being in their na- 
 ture wholly collateral to it. Taking, then, the condition as a whole, I am of 
 opinion that it points to a particular class of diseases which arises within the 
 system eitlier before, at, or after the injury, and exempts the defendants from 
 liability wlien death is caused by any of them, either directly or jointly with 
 the injury, but that it does not apply to any of these diseases when they super- 
 vene on the injury, are caused solely by it, and are its natural consequence. In 
 my judgment, this construction is the one which is the more reasonable and 
 natural of the two contended for; but even if I were in doubt, I should still 
 think that the ambiguity of the language used is such as to warrant me in act- 
 ing on the well-known principle of construction applicable to policies of insur- 
 ance, and in giving the benefit of that ambiguity to the assured. As, however, 
 my learned brethren are of a contrary' opinion, the judgment of the court must 
 be for the defendants." 
 
 1 Reynolds i'. The Accidental Ins. Co., 22 L. T. n. s. 820. See also ante, 
 §517. 
 
 2 [Bacon v. U. S. Mut. Ace. Ass., 44 Hun, 599, 605.] 
 
 3 [Anderson v. Scottish Ace. Ins. Co. (Lim.), 27 Scot. L. R. 20, Oct., 1889.] 
 
 1196
 
 CH. XXIX.] OP ACCIDENT INSURANCE. [§ 519 
 
 A policy insuring against injury by " accidental, external, and 
 visible means," but not an injury resulting from " natural 
 disease, or weakness or exhaustion consequent upon disease," 
 covers death by drowning, the insured having fallen in an 
 epileptic fit into a stream he was fording.^] 
 
 [§ 518 B. Death by Poison. — A policy excepting " death by 
 poison in any manner or form " does not thereby except death 
 from malignant pustule, caused by the infliction of animal 
 poison upon the surface of the body. " Death by poison " is 
 well understood to refer to a substance taken internally, and 
 does not include a rattlesnake bite, or blood-poisoning result- 
 ing from a bullet-wound, or charbon poison resulting from the 
 contact of putrid animal substance with an abraded portion of 
 the body, or the thin parts of the lips wliich absorb the 
 poison.2 Whether a bite from a venomous insect is within a 
 policy that excepts injury " by poison in any form or manner" 
 is for the jury.^] 
 
 § 519. Accident ; Sunstroke. — In a case involving the ques- 
 tion whether death by sunstroke was a death by " accident " 
 within the meaning of the policy, it was said that in the term 
 " accident " some violence, casualty, or vis major is necessa- 
 rily involved, and that disease produced by a known natural 
 cause, as in the case of sunstroke, cannot be considered as 
 accidental, any more than disease or death engendered by 
 exposure to heat, cold, damp, the vicissitudes of climate, or 
 atmospheric influences ; unless, perhaps, in cases where the 
 exposure is actually brought about by circumstances which 
 may give it the character of accident. Thus, by way of illus- 
 tration, if, from the effects of ordinary exposure to the ele- 
 ments, sucli as is common in the course of navigation, a 
 mariner should catch cold and die, such death would not be 
 accidental ; although if, being obliged by shipwreck or other 
 disaster to quit the ship and take to the sea in an open boat, 
 he remained exposed to wet and cold for some time and death 
 ensued therefrom, the death might properly be held to be 
 
 1 [Winspear v. Accident Ins. Co., 6 Q. B. D. 42.] 
 
 ^ [Bacon v. U. S. Mut. Ace. Ass., 44 Hun, 699, 602.] 
 
 ^ [Preferred Mut. Ace. Ass. v. Beidelman, 1 Monaglian (Pa.*), 481.1 
 
 1197
 
 § 520] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 the result of accident. It is true that in one sense disease or 
 death through the direct effect of a known natural cause, such 
 as we have referred to, may be said to be accidental, inasmuch 
 as it is uncertain beforehand whether the effect will ensue in 
 any particular case. Exposed to the same malaria or infec- 
 tion, one man escapes, another succumbs. Yet diseases thus 
 arising have always been considered not as accidental, but as 
 proceeding from natural causes.^ 
 
 " In the present instance, the disease called sunstroke, al- 
 though the name would at first seem to imply something of 
 external violence, is an inflammatory disease of the brain, 
 brought on by exposure to the too intense heat of the sun's 
 rays. It is a disease to w^hich persons exposing themselves 
 to the sun in a tropical climate are more or less liable, just 
 as persons exposed to the other natural causes above referred 
 to are liable to disastrous consequences therefrom." ^ 
 
 § 520. Accident ; Death by Robbers. — In Rii)ley, Adminis- 
 trator V. The Railway Passengers' Insurance Company, where 
 it appeared that a man was waylaid and killed by robbers, 
 the question arose, and was discussed, but without result, 
 whether this was death by violent and accidental means, the 
 court inclining, however, to the opinion that it was ; and to de- 
 fine an accident as " any event which takes place without the 
 foresight or expectation of the person acted upon or affected by 
 the event," ^ in accordance with the common acceptation of 
 its meaning amongst those who seek insurance, rather than 
 with the more restricted limits of lexicographical definition.* 
 
 1 [There is a total misconception here of the nature of accident. The pro- 
 ceeding from natural causes has nothing to do with the matter. All events 
 accidental or not so proceed. It is upon the element of foresight that the dis- 
 tinction really rests. Accidental is opposed to foreseen or foreseeable by one of 
 ordinary prudence and understanding under the circumstances, §§ 514, 520.] 
 
 2 Sinclair v. The Maritime Passengers' Ass. Co., 7 Jur. n. s. 367, 369. 
 
 3 [Actual foresight does not seem necessary to take the case out of the realm 
 of accident. It is enough if the person ought to have foreseen. A result nat- 
 urally and ordinarily follovvmg from the conduct of the assured is not accidental, 
 although he might not have foreseen the consequence. See U. S Mut. Ace Ass. 
 V. Barry, 131 U. S. 100.] 
 
 4 District Court of the United States for the Western District of Michigan, 
 1870, 2 Big. Life*& Ace. Ins. Cas. 738 ; s. c. 16 Wall. (U. S.) 336. 
 
 1198
 
 CH. XXIX.] OP ACCIDENT INSURANCE. [§ 521 
 
 [§ 520 A. Intentional Injuries inflicted by the Insured or 
 Others. — A construction of the clause exempting the company 
 from liability in case of " intentional injuries inflicted by the 
 insured or by another" which limits its application to injuries 
 intended hy the ifisured and holds the company for an injury 
 inflicted by a robber, cannot be sustained.^ One who is assas- 
 sinated comes to his death by accideyital means. The intent of 
 the wrong-doer does not prevent the event from being un- 
 foreseen by the insured.^ But a policy excepting intentional 
 injuries inflicted by the assured or any other person, does not 
 cover an assassination.^] 
 
 § 521. Railway Accident. — A railway accident is one oc- 
 curring in the course of travelling, and arising out of the fact 
 of the journey. It does not necessarily depend on any acci- 
 dent to the railway or machinery connected with it.* It is an 
 accident which is attributable to the fact that the injured party 
 is a passenger on the railway, and arises out of an act im- 
 mediately connected with his being such passenger.^ It is 
 difficult to lay down any more specific rule, because of the 
 multiplicity of circumstances under which these accidents 
 may occur. Much is to depend upon the circumstances of 
 each particular case. The case last above cited was one 
 where a passenger, in alighting at his journey's end, slipped 
 from the carriage-step, without negligence on his part, and 
 was injured. This was held to be an accident covered by the 
 policy. After taking time to consider, the court, by Pollock, 
 C. B., say : — 
 
 " The plaintiff, who was about to take a journey by means 
 of two distinct railways, had insured himself with the de- 
 fendants against death or personal injury arising from rail- 
 way accident whilst travelling, the contract fixing the 
 damage in the former event at one thousand pounds. In 
 
 ^ [De Graw v. Nat. Accident Soc, 51 Hun, 142 ; Fischer v. Travelers' Ins. 
 Co., 77 Cal. 246.] 
 
 2 [Hutchcraft's ^, <'r v. Travelers' In- '^o., 87 Ky. 300.] 
 
 3 [Id.] 
 
 * Per Alderson, B., Theobald v. The Railway Passengers' Ass. Co., £6 Eng. 
 L. & Eq. 432 ; s. c. 10 Exch. 44. 
 6 Per Pollock, C. B., id. 
 VOL. ir. __ 32 1199
 
 § 521] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 getting out from one of the carriages on a rainy morning, 
 his foot slipped, whereby he was severely injured. It was 
 conceded by the defendant's counsel that there was no negli- 
 gence on the part of the plaintiff in reference to the accident. 
 And the first question is, whether this is a railway accident 
 within the meaning of the policy. We are of opinion that it 
 is. However much the company may desire that we should 
 lay down a general rule as to what is a railway accident, I do 
 not know that we are called on, or should be doing our duty, 
 were we to lay down any rule beyond what is necessary to 
 decide the actual case before us. Considering the great 
 number of particulars that may enter into the decision of 
 questions of this nature, and the very complicated character 
 they may assume under circumstances that at present we may 
 not anticipate, I think (and I believe the rest of the court 
 concur with me in thinking) that in the single instance 
 brought before us, under certain circumstances, some of which 
 are not of a general nature, it would be assuming too much to 
 lay down a rule to govern all cases. On the present occasion, 
 it is quite plain that the plaintiff was a traveller on the rail- 
 way ; it is quite plain that though, at the time of the accident 
 his journey had in one sense terminated, by the carriage hav- 
 ing stopped, he had not ceased to be connected with the 
 carriage, for he was still on it. The accident also happened 
 without negligence on his part, and while doing on act which 
 as a passenger, he must necessarily have done ; for a passen- 
 ger must get into the carriage, and get out of it when the 
 journey is at an end, and cannot be considered as discon- 
 nected with the carriage and railway, and with the machinery 
 of motion, until the time he has, as it were safely landed 
 from the carriage and got upon the platform. The accident 
 is attributable to his being a passenger on the railway, and it 
 arises out of an act immediately connected with his being 
 such a passenger. Under these circumstances, we think this 
 was a railway accident within the meaning of the policy ; and, 
 consequently, the action is in our judgment maintainable, 
 and so much of this rule as prays for a nonsuit must be 
 discharged." 
 1200
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 522 
 
 And, by way of illustration at the argument, said Pollock, 
 C. B. : " Suppose a person suddenly rose from his seat and 
 struck his head with great violence against the top of tlie car- 
 riage, so as to cause a contusion of the brain ; would that be 
 a railway accident?" " Or suppose," said Parke, B., " a per- 
 son on getting out, not observing tliat the window was closed, 
 jHished his head through the glass ? " " As to railway acci- 
 dents," said Alderson, B., " my notion of a railway accident 
 is an accident occurring in the course of travelling by a rail- 
 way, and arising out of the fact of the journey. It does not 
 necessarily depend on any action to the railway or machin- 
 ery connected with it." 
 
 § 522. Accident ; Total Disability. — Total disability from 
 the prosecution of one's usual employment means inability to 
 follow his usual occupation, business, or pursuits in the usual 
 way Though he may do certain parts of his accustomed 
 work, and engage in some of his usual employments, he may 
 yet recover, so long as he cannot to some extent do all parts, 
 and engage in all such employments. Thus, a farmer who 
 cannot attend to his other ordinary duties, though he may 
 milk his cows, and a merchant who cannot get about to look 
 after his business as he ordinai-ily does, though he may be 
 able to keep his books, are totally disabled within the mean- 
 ing of such a provision.^ And in another case,^ a substan- 
 tially similar conclusion was reached as to the meaning 
 of the words " wholly disabled." In that case, said Pol- 
 lock, C. B, : — 
 
 " The action is upon a policy of insurance against injury 
 by accident or violence, effected with the defendants, the 
 Accidental Death Insurance Company, and the question 
 turns upon the meaning of tlie conditions in this policy, 
 ' that in case such accident or violence shall not cause the 
 death of the insured immediately, but shall cause any bodily 
 injury to the insured of so serious a nature as wholly to dis- 
 
 1 Sawyer v. The United States Casualty Co. (Superior Court of Mass., per 
 Reed, J.), 8 Law Reg. n. s. 2.3.3; s. c. 1 Big. Life & Ace. Ins. Cas. 289. 
 
 ■2 Hooper v Accidental Death Ins. Co., 5 H. & N. (E.xch.) 545; s. c. affirmed 
 in Exch. Ch. 6 H. & N. 839. 
 
 1201
 
 § 522] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 able him from following his usual business, occupation, or 
 pursuits, a compensation shall be paid.' The plaintiff met 
 with a serious sprain of the ankle, in consequence of which 
 he was unable to leave his room for some weeks, and was 
 confined to the house for some time longer. During that 
 time it was clear that he Tvas 'disabled from following his 
 usual business, occupation, or pursuits.' Was he 'wholly' 
 disabled ? In the course of the argument, Mr. Chambers 
 admitted that if the plaintiff had been a dancing-master he 
 would have been within the meaning of this policy. There 
 is no sound distinction between the case of a dancing-master 
 and that of the plaintiff, w^ho is an attorney. For though a 
 dancing-master with a sprained ankle cannot dance, he may 
 play upon an instrum.cnt and instruct other people how to 
 use their limbs in dancing. In the case of an attorney, even 
 if he were prostrate on his bed, deprived of sense and mo- 
 tion, if he had lost all consciousness and power of interfer- 
 ence, in one sense, and to some extent he might carry on his 
 usual business and occupation, for even if he were without a 
 partner, the business would not necessarily be stopped, but 
 might be carried on by his clerks. It cannot have been con- 
 templated that in such a case no compensation should be 
 paid. We must, therefore, endeavor to find out what is 
 the true meaning of the language used in the policy. It 
 may well be that the sense intended to be conveyed was, that 
 if the person insured should be wholly disabled from carrying 
 on his business as he usually carried it on, the company 
 would be liable. That is the case here ; the plaintiff might 
 and could have done something which he was in the habit of 
 doing before, but he was wlioUy incapable of doing that 
 which he usually did before. If a man is so incapacitated 
 from following his usual business, occupation, or pursuits as 
 to be unable to do so, he is ' wholly disabled ' from following 
 them. His 'usual business and occupation' embrace the 
 whole scope and compass of his mode of getting his liveli- 
 hood. If it be objected that this construction would lead to 
 the result that a person slightly incapacitated would get the 
 same compensation as one entirely incapacitated from doing 
 1202
 
 CH. XXIX.] OP ACCIDENT INSURANCE. [§ 523 
 
 anything whatever, that is the fault of the defendants in 
 using language of a vague and perplexing character. It ap- 
 pears to us they intended that, when the insured was wholly 
 incapable of performing a very considerable part of his usual 
 business, he should receive a compensation in respect of that 
 disablement. If it were necessary to resort to such a rule of 
 construction (which 1 think it is not) in construing this 
 policy, that construction must be adopted which is most ad- 
 vantageous to the insui'cd. I think, however, that putting 
 a reasonable construction on the language used, the parties 
 must have meant that if the insured was so disabled as to be 
 incapable of following his usual business, occupation, or pur- 
 suits, he would be ' wholly disabled from following his usual 
 business, occupation, or pursuits,' and entitled to the stipu- 
 lated compensation. Our judgment must therefore be for 
 the plaintiff." 
 
 " Wholly disabled " is equivalent to quite disabled, and a 
 man is so unless he can do what he is called upon to do in 
 the ordinary course of his business. It is not the same thing 
 as " unable to do any part of his business." ^ Where the 
 policy provided against liability unless for injuries which 
 totally disabled the insured, and prevented him from the 
 transaction of all kinds of business, it was held that the lan- 
 guage was clear and explicit, and that an instruction that the 
 plaintiff might recover, though able to do some part of his 
 accustomed work, so long as he could not to some extent do 
 all parts, and that the ability of the insured to engage in 
 some business would not prevent recovery unless it was one 
 which he was qualified to engage in as an occupation, and 
 transact in the ordinary way, was erroneous. Under such a 
 policy there can be no liability for partial disability .^ 
 
 § 523. Accident ; Total Disability. — A case was recently 
 ])resented in New York where there was a succession of acci- 
 dents. The insured sprained his knee, not, however, so se- 
 verely that it compelled him to suspend his usual w^ork, which 
 he continued for some two weeks, when a wrenching of the 
 
 1 Per Wilde, B., in Hooper v. Accidental Death Ins. Co., 5 H. & N. 546. 
 
 2 Lyon V. Railway Pass. Ass. Co., 46 Iowa, 631. 
 
 1203
 
 § 523 A] INSURANCE : fire, life, accident, etc. [CH. XXIX. 
 
 same knee compelled liim to quit labor, and totally disabled 
 him for some time ; and it was held that though if it had 
 appeared from the nature of the first injury that the insured 
 would at some time become incapable of labor from it, he 
 might perhaps have recovered, notwithstanding the superven- 
 tion of the second injury. Yet, as he actually continued his 
 work after the first injury for sixteen days, and until the hap- 
 pening of the second injury, it could not be said that he 
 became totally disabled by the first.^ [Where the policy 
 allows recovery only in case of " total disability " for " the 
 prosecution of anij and every kind of business pertaining to 
 his occupation," it is error to charge that the plaintiff may 
 recover if he was rendered unable " to do his accustomed 
 labor, that is, all kinds of his accustomed labor to some extent." ^ 
 But the clause " immediately and wholly disable and prevent 
 him from the prosecution of any and every kind of business 
 pertaining to the occupation under which he is insured," is 
 satisfied, if the insured is, by the injury, rendered unable to 
 do all the suhstantial acts necessary in his business. It is not 
 necessary for him to show that he was disabled to such an 
 extent that he had no physical ability to do anything in the 
 prosecution of his business.^ Where tlie insured is described 
 as a " leather cutter and merchant " and is to receive in- 
 demnity if disabled by accident from pursuing his " occupa- 
 tion," he must show disability both as a leather cutter and as 
 a merchant.*] 
 
 [§ 523 A. Act aside from Occupation ; Fits plus Accident ; 
 Accident plus Cold ; " Inhaling Gas ; " " Death within ninety 
 days." — Operating a buzz-saw not beiug incident to the occu- 
 pation, named in the policy, that of a retired gentleman, and 
 being dangerous, the insured cannot recover for an injury 
 received while so employed.^ A policy excepting death " aris- 
 ing from fits," acting directly or jointly with accidental 
 
 1 Rhodes v. Railway Passengers' Ass Co., 5 Lans. (N. Y.) 71. 
 
 2 [Saveland v. Fidelity & Casualty Co., 67 VVis. 174, 177, and cases cited.] 
 
 3 [Young V. Travelers' Ins. Co., 80 Me 244,] 
 
 4 [Ford V. U. S. Mut. Accident Relief Co., 148 Mass. 153.] 
 6 [Knat)p V. Preferred Mut. Ace. Ass., 53 Hun, 84.] 
 
 1204
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 524 
 
 injury, was held to cover a case where the insured was seized 
 with a fit and fell under the wheels of an engine.^ Where 
 after an accident, death was caused by pneumonia caused by 
 a cold which would not have been fatal but for the weakness 
 produced by the accident, it was held within an accident 
 policy .2 An accident policy provided that it did not extend 
 to death by " inhaling gas." The insured was found dead in 
 his bed, the gas having been in some way turned on. The court 
 held that the inhaling of gas excepted in the policy was a vol- 
 untary inhaling only, and that the present case was not with- 
 in the exception, another curious case of twisting language 
 out of shape to favor the individual at the expense of the 
 corporate life.^ If the policy limits the liability of the com- 
 pany to deaths, occurring within ninety days after the accident, 
 it is a perfect defence for the company that a longer period 
 than ninety days intervened between injury and death. And 
 this is true even though the company had no right under its 
 constitution to insert such a clause. The plaintiff must stand 
 on the contract as made or he has no contract to rest upon. 
 He cannot reject one portion of the contract as made and 
 claim the benefit of the rest of it.*] 
 
 § 524, Accident ; Travelling ; Alighting ; On Foot ; Convey- 
 ance. — A person may be said to be travelling in a carriage 
 while alighting therefrom, until he has completely discon- 
 nected himself and landed. And an accident happening to 
 the insured after the train has stopped at the station by slip- 
 ping off the step of the car, is a railway accident " in a car- 
 riage on a line of railway."^ And so one is " travelling in a 
 conveyance" provided for the transportation of passengers, 
 if, while in the prosecution of the journey had in view when 
 the insurance was procured, he elects to go on foot, this being 
 
 1 [Lawrence v. Accidental Ins. Co., 7 Q. B. D. 216. What is this but making 
 a new contract for tlie parties ■*] 
 
 2 [Isitt V. R. R. Pass. Ass. Co., 22 Q. B. D. 504.] 
 
 3 [Paulv. Travelers' Ins Co., 112 N. Y. 472] 
 
 * [Palmer v. Commercial Ass. Co., 53 Hun, 601 ; see § 535.] 
 6 Theobald v. Railway Passengers' Ass. Co., 26 Eng. L. & Eq. 432 ; s. C. 10 
 Exch. 44. 
 
 1205
 
 § 524] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 a usual mode of making the transit from the steamboat wharf 
 to the raihoad station, although a conveyance by means of 
 public hack may be had for hire by travellers so desiring to 
 make the transit, which he might have taken.^ In this case 
 the plaintiff was in the prosecution of his journey, and while 
 proceeding on foot in tlie evening slipped and fell. The 
 court below held that the plaintiff could not recover, but 
 seemed to be of the opinion that if he had taken a hack, and 
 the accident had happened during the transit, he could have 
 recovered. The case was distinguished from that of Theo- 
 bald V. The Railway Passengers' Assurance Company ,2 by 
 the fact that in that case the passenger was in the carriage, 
 while in this case he was not. But the Appellate Court did 
 not recognize the distinction, and held that the distance 
 walked, if in the prosecution of the journey, and a usual 
 mode of such prosecution, was immaterial. It may be added, 
 that, if accident in such a transit is not covered by the policy 
 on the ground of the distinction attempted between the Eng- 
 lish and American cases, and on the ground that in the latter 
 case there was no actual connection with the carriage at the 
 time of the accident, it would seem that the plaintiff could 
 not recover, even had he taken a hack ; if the accident had 
 happened during the transit on foot from the deck of the 
 steamer to the hack, such a rule would exclude all accidents 
 while the passenger is on foot, though these perhaps are of 
 most frequent occurrence, and even though they might happen 
 in changing cars, or in passing to or from the cars at a sta- 
 tion where a passenger may have alighted to obtain refresh- 
 ment. Construing the policy so as to carry into effect the 
 intention of the parties, inferrible from the language used as 
 interpreted by the light of extrinsic facts presumably well 
 known to, and taken into consideration by, both the parties, 
 these incidental and necessary parts of the journey must be 
 considered as covered by the policy.^ 
 
 1 Northrup v. Tlie Railway Passengers' Ass. Co., 43 N. Y. 516 ; reversing s. c. 
 2 Lans. (N. Y.) 166. 
 
 2 Ubi supra. 
 
 3 Northrup r. The Railway Passengers' Ass. Co., 43 N. Y. 516. 
 
 1206
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 525 
 
 [§524 A. Getting on a Moving Train; Standing on Platform. — 
 A condition against liability, if the insured (except a railroad 
 employee) is injured while getting on a moving steam vehicle, 
 is valid, and a breach of it by a banker insured as such avoids 
 the policy,! A petition alleging that the plaintiff fell into a 
 doze and unconsciously walked on the platform of the car, 
 and so was injured, sufficiently shows that the injury was not 
 "self-inflicted" or the result of " voluntary exposure to un- 
 necessary danger." ^ One who stands on the platform of a 
 railway car in violation of a known rule of the company is 
 negligent and cannot recover for injury from being thrown 
 from the steps under an accident policy requiring care.^ A 
 passenger who goes on to the platform of a railway car be- 
 cause he is overcome with heat or nausea, does not voluntarily 
 expose himself to unnecessary danger within the meaning of 
 an accident policy, nor can it be said that such conduct is a 
 violation of " a rule of a corporation " where the rule is con- 
 tinually disregarded by both passengers and trainmen.* If, 
 however, the policy specifically excepts injuries resulting from 
 being on the platform of a moving car, the exception is 
 good.^] 
 
 § 525. Accident ; Travelling in Public ; Conveyance Alight- 
 ing ; Limit of Journey ; Negligence. — Upon the questions 
 whether the insured is actually a traveller, and in a convey- 
 ance, the very recent and interesting case of Tooley v. Rail- 
 way Passengers' Assurance Company^ is also precisely in 
 point. In that case the policy provided that the insurers 
 should be liable for injuries " when accidentally received by 
 the assured while actually travelling in a public conveyance, 
 provided by common carriers for the transportation of passen- 
 gers." The assured took passage from Chicago, having pur- 
 chased a ticket for Kankakee. The train stopped at that 
 l)lace, and he alighted, standing in the door of the depot 
 
 1 [Miller v. Travelers' Ins. Co., 39 Minn. 548.] 
 - [Scheiderer v. Travelers' Ins. Co., 58 Wis. 13.] 
 
 3 [Bon V. Railway Pass. Ass. Co., 50 Iowa, 064.] 
 
 4 [Marx V. Travelers' Ins. Co., 39 Fed. Rep. 321 (Col), 1889.] 
 
 5 [Hull V. Equitable Ace. Ass., 18 Ins. L. J. 778 (Minn.), July 15, 1889.] 
 
 6 U. S. C. Ct., Southern Dist. 111., 2 Ins. L. J. 275. 
 
 1207
 
 § 525] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 while the engine took water, until the train started, moving 
 slowly to the coal-house for the purpose of taking fuel, when 
 he walked rapidly or ran to the train, and reaching the for- 
 ward platform of the rear car, threw out his hand as if at- 
 tempting to get on board, when he fell between the cars and 
 was run over, receiving injuries from which he soon after 
 died. It was claimed that this was not an accident witliin 
 the view of the policy, because it was not in a conveyance. 
 But the court instructed the jury that " travelling in a public 
 conveyance " could not be literally construed, and that, if the 
 accident happened while the insured was either getting on or 
 off the train, or attempting to do so for any reasonable pur- 
 pose incident to railway travel, it came witliin the terms of 
 the policy.^ As the point is one now undergoing discussion, 
 we give the most important parts of the charge, which was 
 by Drummond, J. : — 
 
 " There are some general facts which cannot be contro- 
 verted. John Tooley, on the 24th day of January, 1871, 
 took from the agent of the defendant, at Quiucy, Illinois, 
 two policies of insurance at three thousand dollars each ; that 
 amount was to be paid on each policy in case of the death of 
 Tooley within two days. It was provided that the liability 
 should not exist unless while he was actually travelling in a 
 pul)lic conveyance of common carriers, and in compliance with 
 the rules and regulations ; and besides, he was not to neglect 
 the use of due diligence for self-protection. 
 
 " Tooley, on the afternoon of the 25th of January, took the 
 Champaign accommodation train at Chicago, and proceeded 
 to Kankakee, where the train arrived shortly after seven 
 o'clock. It seems the practice was for the train to stop at 
 the station, and then pass on to the coal-bin, provided they 
 took the entire train beyond Kankakee. Accordingly, on this 
 evening the train stopped at the station, and several persons 
 left the cars, Tooley among others. The train remained at 
 the station several minutes and took in water. The bell was 
 then rung, the conductor signalled with his light, and the 
 train went on to take in coal. There was a platform extend- 
 1 See also Champlin v. Railway Pass. Ass. Co., 6 Lans. (N. Y.) 71. 
 
 1208
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 525 
 
 iiig from the station-house, alongside of the railroad track, 
 toward the water-tank and coal-bin. When the train moved 
 on, Tooley, who was standing by a door of the station-house, 
 started forward on this platform to overtake the train. When 
 he reached tlie train, he extended his hands to grasjD the car- 
 rails, and fell between the two passenger cars, — the train 
 consisting of an engine, tender, baggage car, and two passen- 
 ger cars. A car passed over- him, and he was killed. The 
 first question is, What was the measure of responsibility of 
 the defendant under these policies of insurance ? The lan- 
 guage of the policies is, ' Provided always that this insurance 
 shall only extend to bodily injuries, fatal or non-fatal, as 
 aforesaid, when accidentally received by the insured while 
 actually travelling in a public conveyance, provided by com- 
 mon carriers for the transporting of passengers in the United 
 States or the Dominion of Canada, and in compliance with all 
 rules and regulations of such carriers ; and not neglecting to 
 use due diligence for self-protection.' 
 
 " These are the only conditions material to be considered 
 in the examination of this case. Tooley must have been ac- 
 tually a traveller in or upon the train ; but it cannot be said 
 that the responsibility ceased whenever he stepped out of the 
 car to alight at a station, and that it never became operative 
 again until his foot entered the car to resume his journey. 
 That would be giving too narrow a measuring to the clause 
 of the policy. We think that the fair construction of the 
 liability assumed by the defendant in this respect was, that it 
 included injuries received by Tooley while necessarily get- 
 ting on or off the train as a traveller upon it. 
 
 " Secondly, and it is a question of fact to be determined 
 by the jury, Was Tooley, at the very time that the injury was 
 received by him, a traveller on the train ? And this will 
 depend upon the fact whether his journey terminated at Kan- 
 kakee. It is claimed on the part of the defence that that was 
 the termination of his journey ; and if so, then he was not a 
 traveller on this train at the time of the accident. 
 
 " I will call your attention to some of the facts having a 
 bearing on this question. The conductor states, in his evi- 
 
 1209
 
 § 525] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 dence, that when he took up the tickets of the passengers, 
 Tooley's ticket was only for Kankakee. That is a fact 
 proper to be considered by tlie jury, in order to determine 
 whether or not his journey extended beyond Kankakee, — 
 not conclusive, of course, because, as a matter of experience, 
 we know that where men commence a journey, they do not 
 always buy their ticket to the termination of the journey, 
 and various circumstances may happen during the progress 
 of a journey which change the purpose of the traveller. He 
 may start with the intention of only proceeding to a certain 
 point. During the journey he may change his mind and pro- 
 ceed further on. There are many reasons, to which it is 
 unnecessary to call your attention, which indicate that this is 
 only one incident having a bearing upon the main fact of 
 this part of the case, whether or not his journey terminated 
 at Kankakee. 
 
 " Mr. Merwin states in his evidence — the truth of which is 
 a question for the jury — that, in a conversation he had with 
 Tooley, he said that he intended or expected to go to Mat- 
 toon, which was south of Champaign where the train stopped. 
 The way that arose was this : it was in relation to the seats ; 
 he wanted two seats, as he said, so that he could sleep, as he 
 ' thought or expected to go to Mattoon.' 
 
 " Now as qualifying this, perhaps, and to some extent in- 
 consistent with the statement of Merwin, is that of the con- 
 ductor. The conductor says that twice, just before they 
 arrived at Kankakee, he woke up Tooley, and told him that 
 the next station was Kankakee ; and there was no remark 
 made by him intimating in any way that he intended to go 
 further than Kankakee, and therefore it was not necessary 
 for him to be disturbed. It is for you to say how much 
 bearing this may have upon the question whether his journey 
 terminated at Kankakee, and how far it may affect the state- 
 ment of Merwin. Tliere is this other fact, that when the 
 train started at Kankakee, Tooley attempted to get on it. 
 That is claimed to be conclusive evidence of his purpose 
 to proceed further. It is for you to say what bearing that 
 may have upon this particular question that we are now 
 1210
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 525 
 
 considering. Then, again, in relation to whether or not he 
 had any baggage with him. It is said that there was a 
 satchel or valise there, and that it was not found after his 
 death. How far this may have any bearing upon the ques- 
 tion is a matter to be determined by the jury. The only 
 light in which it is material this question should be consid- 
 ered is, how far it may affect the conduct of Toolcy on the 
 general question of negligence. If his journey ceased at 
 Kankakee, then it cannot be claimed, under the undisputed 
 facts of this case, that the defendant would be liable, because, 
 on the assumption that he was going no further than Kanka- 
 kee, in attempting to get on the train as he did, it was at his 
 own risk. 
 
 " If he was going beyond Kankakee on the train, then 
 there are other considerations which may affect the question 
 of negligence. According to the view which we take of the 
 contract between the parties, if he were a passenger pro- 
 ceeding beyond Kankakee on the train, he had the right to 
 leave the car at Kankakee and return to it ; that is to say, he 
 had the right to get off of the train, — he was not bound, in 
 other words, to remain inside of the car all the time. There 
 is, perhaps, one circumstance which I ought to refer to in 
 connection with the question of the termination of the journey 
 at Kankakee, and it is this : that he did not purchase a ticket 
 at Kankakee, and it is in evidence that the train stopped 
 there several minutes ; and if you believe the testimony on 
 this point, he certainly had ample time to purchase a ticket 
 before the train started onto obtain coal. Still that, of course, 
 is not conclusive. He had the right, I suppose, under the 
 practice and management of the train, to pay his fare on the 
 cars. It is onl}^ a circumstance to be taken into consideration 
 by the jury. One of the conditions of these policies, is, as 
 has been stated, that Tooley sliould comply with all the rules 
 and regulations of common carriers. We are not prepared to 
 say that it was incumbent on him, under the circumstances 
 of the case, to make himself acquainted with all the rules 
 which might be contained upon the time-card. We must 
 give this clause of the policy a reasonable construction. A 
 
 1211
 
 § 525] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 policy was issued, we suppose, to any applicant. It is what 
 is called an accident policy, and we are to infer that the 
 meaning of this clause was that the traveller should only 
 make himself acquainted with those general rules, as to the 
 management of the trains, and the conduct of railroads, 
 which are presumed to be known to travellers, under these 
 circumstances. For instance, Tooley, as far as we know, 
 was a stranger on this road. We cannot say that when he 
 went on the train he was obliged, because of this clause iu 
 the polic}^, to examine the time-card and ascertain all the 
 minutisB connected with the management of trains, but only 
 such rules as a general traveller might be presumed to know 
 and ought to know. Any other construction than this would 
 operate as a snare upon travellers. To hold that the traveller 
 must become acquainted with every minute rule which may 
 be prescribed on the back of a time-card, we think caimot 
 be said to be the true meaning of this clause of the policy. 
 But perhaps if he did not know the time the train stopped at 
 a particular place, there might be a question whether it was 
 not his duty to make some inquiry of the employees of the 
 train, the conductor, or others. 
 
 " It is to be observed, in deciding this question of the 
 negligence of Tooley, which is the last question to be con- 
 sidered, and to which I call the attention of the jury, that 
 tliis is not an action between the representative of Tooley 
 and the railroad, but between the representative of Tooley 
 and the underwriters upon this clause in the policy, ' not 
 neglecting to use due diligence for self-protection.' ^ And per- 
 haps there can be no better rule stated than that which was 
 agreed upon by the counsel, namely, that it was his duty to 
 use that degree of caution and diligence which a prudent 
 man would use under the circumstances in which he was 
 placed ; we think, also, in order to determine this question of 
 diligence on the part of Tooley, it is proper to take into con- 
 sideration whether or not, when he alighted at Kankakee, 
 which he had a right to do, any notice was given of the move- 
 ment of the train. That may be an element which may have 
 
 1 Post, § 531. 
 
 1212
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 525 
 
 a bearing upon the question whether he was negligent or not. 
 Was there any notice given, either by the ringing of a bell, 
 or by word of mouth from the conductor or any of the 
 employees of the company ? If a person, having a right to 
 leave a train at a station, is informed or notified in any way 
 that the train is going to start, and an opportunity given to 
 him to take his place again upon the train, and he chooses to 
 remain until the train is put in motion, and then is injured in 
 getting on the train, it may be said that he is negligent, — in 
 other words, that he takes the risk of getting on the train 
 while thus in motion. But if, having alighted at a station, 
 he has no notice given to him of the movement of the train, 
 or he has not the opportunity, after notice is given, to get on 
 the train, and intending to go further he attempts to get on 
 the train and is injured, we think there is not the same 
 measure of responsibility upon him, — in other words, that 
 the question of negligence is not to be tried by the same tests 
 precisely, because we must make some allowance under some 
 circumstances. It would be natural for a man, — for even a 
 prudent man, — intending to go farther on the train, to make 
 an effort, even when the train is in motion, to regain his place 
 on the train. 
 
 " But while that is so, it is to be understood he must use 
 due diligence in trying to get on the train, and to that ques- 
 tion I will now direct your attention for a few moments, on 
 the supposition that he intended to go farther, and he had 
 not an opportunity to get on the train, or he was not notified 
 that the train was about to move. It was after seven o'clock 
 in the evening. Tooley proceeded along the platform. There 
 has some question been made whether the bell was rung. We 
 think it perliaps ought to be assumed in this case that that 
 fact has been established. It is proved that that was the 
 practice of the engineer just before the train started ; that it 
 was a signal to the conductor that the engineer was ready to 
 proceed. It is also distinctly sworn to by the conductor that 
 the bell was rung, and it is a fact stated by one or two of the 
 witnesses that the remark was made, 'the bell is ringing,' 
 which, under the circumstances, of course is a very material 
 
 1213
 
 § 525] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 fact. This is not otherwise contradicted than by the state- 
 ments of several witnesses that they did not hear, or do not 
 recollect that they heard, the bell. However, we leave this 
 question to be determined by the jury. Of course, negative tes- 
 timony is not so material or important as positive testimony, 
 if you believe that these witnesses stated the truth. There 
 is some controversy as to the character of the night. Several 
 of the witnesses say that it was a clear night ; some that it 
 was moonlight ; and some state that it had been snowing or 
 storming. There is no doubt of this fact, or I think we may 
 assume it, that the intent of Tooley was, when he heard the 
 bell, or an intimation was given in that way, or by the move- 
 ment of the cars, to get on the train. He proceeded rapidly 
 along the platform. He tried to get on the train. Now, did 
 he act prudently, as a prudent man, in getting on the train ? 
 Mr. Lawrence says, when he came around the corner of the 
 station-house and he saw a man running or walking fast, that 
 he called out to him that the train was only going to coal up, 
 or something to that effect. Now it is true that Mr. Tooley 
 was not bound to take any declaration made by an outsider 
 or an indifferent person as true, in relation to the train or its 
 motions. The only effect of that is this : that it changes the 
 measure of his responsibility, and gives color to his conduct, 
 to his action. And you are to treat it in a different manner 
 from what you would, provided he had no intimation whatever 
 given to him ; because, if a man, after being notified of a par- 
 ticular fact which should govern or rule his conduct, chooses 
 to act in such a way as to encounter risk or danger, you will 
 see that the rule of diligence is different. It is material for 
 the jury to consider this in that light alone. And then it will 
 be a question, as far as it bears upon the conduct of Tooley, 
 whether or not he heard what was said by Mr. Lawrence, and 
 of course it is simply a matter of inference whether or not he 
 did hear ; positively we cannot know. This seems to be cer- 
 tain, that words or the sound attracted his attention as he 
 turned round ; and it is for you to say whether he heard, in 
 such a way as to give him warning, that the train was not 
 to go farther than the coal-bins, — whether or not he heard 
 1214
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 526 
 
 the language, or whether he heard a sound merely, without 
 distinguishing or understanding what was said. All these are 
 to some extent matters of conjecture, and it is for the jury to 
 determine how far they may affect this question. He passed 
 by the rear platform of the rear car ; we think that is a fact 
 to be taken into consideration by the jury in determining 
 whether he did or did not act as a prudent man, if he believed 
 that the train was going on, and wanted to get on the train 
 to resume his journey. Of course you will understand that 
 the danger was much less in getting on the rear platform 
 than on the forward platform of the car. The fact is, that he 
 did not attempt to get on the rear platform of the car. The 
 train was moving slowly. It does not appear that he was 
 actually running, although walking very fast. He attempted 
 to get on to the cars, either on to the forward platform of the 
 rear car, or between the two cars. If, in point of fact, when 
 he slipped and fell, he was attempting to get on between the 
 cars, it is difficult to reconcile it with our ideas of prudence on 
 the part of any man under such circumstances. That may be 
 an important fact for you to inquire into, — whether that is 
 so or not, as I believe it is stated by one of the witnesses. It 
 is very much a question for the jury, under these rules which 
 the court has laid down, whether this man, under the circum- 
 stances, conceding that he was going further, acted prudently ; 
 whether or not he was guilty of negligence." 
 
 § 526. Accident ; Travelling ; Conveyance ; Engineer. — A 
 railway passenger's insurance company which insures against 
 " any accident while travelling by public or private convey- 
 ance," is liable for the death of an engineer actually engaged 
 in running trains, by an accident occurring on the railroad 
 upon which he is employed. So it was held in Brown v. The 
 Railway Passengers' Assurance Company.^ " The main point," 
 say the court, in giving the opinion," is whether the intestate, 
 Brown, was killed by an accident which is covered by the 
 policy. The clause insuring him provides that the death 
 must be ' caused by an accident while travelling by public or 
 private conveyance provided for the transportation of pas- 
 
 1 45 Mo. 221. 
 VOL. II. — 33 1215
 
 § 527] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 sengers.' It is strongly contended that a locomotive or engine 
 is not a conveyance provided for the transportation of pas- 
 sengers. This is certainly true ; and if the ticket applies 
 solely and exclusively to passengers or travellers, the position 
 that the company is not liable cannot be controverted. A 
 passenger would have no right to go upon an engine, and if 
 he was so indiscreet as to venture on such a place, and injury 
 ensued, he would not be protected. But this ticket was de- 
 signed to include and serve something more than the ordinary 
 risk incurred by the passenger or traveller. The locomotive 
 is a necessary part of the conveyance. The ticket was a gen- 
 eral ticket, as contradistinguished from a mere passenger or 
 travelling ticket. The premium on one is double what it is 
 on the other. When the ticket was sold it was known that 
 Brown was an engineer, and the conclusion is unquestionable 
 that he believed that he was insured while pursuing his em- 
 ployment or occupation. The company so thought ; for it 
 gave no instructions against insuring railroad employees till 
 after the disastrous accident happened. ... As Brown was 
 not insured as a passenger or traveller, but against all acci- 
 dents without regard to the capacity in which he was acting, 
 the reasonable inference is, that the ticket was intended to 
 cover the risk and accident by which he met his death. If it 
 be conceded that the meaning of the ticket is doubtful or 
 ambiguous, still the question must be decided for the plaintiff, 
 as the promisor could not fail to apprehend that the promisee 
 labored under the impression that he was indemnified, and 
 where such is the case, the construction must be most favor- 
 able to the insured." 
 
 § 527. The case cited in the last section has been criticised,^ 
 as founded upon an obvious misapprehension, the court hav- 
 ing mistaken a " traveller's risk," which this was, for a " gen- 
 eral accident " risk, which it was not. However this may be, 
 it seems well decided upon the contract itself. The insured 
 was clearly travelling by a conveyance provided for the trans- 
 portation of passengers, unless it be said that a person whose 
 business requires him to travel all the time is less a traveller 
 
 1 See American Law Review, July, 1873, art. Accident Insurance. 
 
 1216
 
 CH. XXIX.] OP ACCIDENT INSURANCE. [§ 527 
 
 than one whose business requires him to travel only occasion- 
 ally. He may not have been a passenger, but he clearly was 
 a traveller, liable to all accidents which threaten travellers, 
 and presumably purchasing under the same contract the same 
 protection. Would it be pretended that a stage-driver pur- 
 chasing a like ticket at the same time with the passengers is 
 not entitled to the same protection ? The suggestion of the 
 court, that the engineer had greater rights under such a con- 
 tract than a passenger would have, seems more open to criti- 
 cism. Though the court seems to have conceded, inadver- 
 tently, perhaps, that a locomotive is not a conveyance, it 
 almost immediately adds, what is obviously true, that a loco- 
 motive is a necessary part of the conveyance. Certainly cars 
 without a locomotive could not be said to be a conveyance 
 ])rovided for the transportation of passengers, any more than 
 a carriage without a horse, or a steamboat without an engine. 
 No doubt all the parts of a train of cars constitute the convey- 
 ance, and unless the insured is restricted by the terms of the 
 contract to some particular part, it would seem that whoever 
 holds a ticket may recover without reference to the pai'ticular 
 part of the conveyance he may have been on at the time of 
 the accident. If he be anywhere on the conveyance — even 
 tliough negligently, yet without misconduct or fraud ^ — at 
 the time of the accident, he is within the terms of the con- 
 tract ; so that whether the passenger be on the engine, or the 
 engineer on some other part of the train for the time being, 
 their rights and obligations under the contract being the same, 
 would be questions of no moment. There seems, therefore, 
 to be no ground for the distinction suggested between the 
 rights of a passenger and those of the engineer, unless there 
 is something in the contract to require it. Even under the 
 very doubtful ^ doctrine of contributory negligence, though, 
 perhaps, the passenger might fail to recover, so also might the 
 engineer, if the accident happen by reason of his being some- 
 where else than upon the engine. Certainly an insurance 
 company ought not to be allowed to issue such a ticket to an 
 
 1 See ante, §§ 408-411, and post, § 529. 
 
 2 See post, § 529. 
 
 1217
 
 § 528] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 engineer, known to be such, and then to say if he stays upon 
 the engine and attends to his duties he is not within the 
 terms of the policy, but if he does not stay upon the engine, 
 then the accident happens through his neglect, and therefore 
 he cannot recover, unless the policy which they have issued 
 gives them such advantages in terms so clear and unequivocal 
 as to admit of no other possible construction. 
 
 § 528. Accident ; Travelling on Foot ; Conveyance. — On the 
 other hand, it has been held that travelling on foot is not 
 travelling by private conveyance within the meaning of a 
 policy insuring against accidents while " travelling by public 
 or private conveyance." In this case, the plaintiff had com- 
 pleted the greater part of his journey by steamer, and there 
 being no public conveyance, was proceeding on foot to his 
 home some few miles distant from the port where he left the 
 steamer.i Conveyance, as a mode of travelling, in its ordinary 
 and popular acceptation, it was said in that case means a 
 vehicle or instrument of conveyance other and different from 
 the person or thing to be conveyed ; and it cannot properly 
 be said that a man walking on foot is a private conveyance to 
 liimself. And this case was affirmed in the Supreme Court 
 of the United States,^ Chase, C. J., giving the opinion, which, 
 after stating the case, concluded as follows : — 
 
 " The question is whether, when he (tlie plaintiff) received 
 the injuries, he was travelling by public or private conveyance. 
 That he was travelling is clear enough ; but was travelling on 
 foot travelling by public or private conveyance? The con- 
 tract must receive the construction which the language used 
 fairly warrants. What was the understanding of the parties ? 
 or, rather, what understanding must naturally have been de- 
 rived from the language used ? It seems to us that walking 
 would not naturally be presented to the mind as a means of 
 public or private conveyance. Public conveyance naturally 
 suggests a vessel or vehicle employed in the general convey- 
 ance of passengers. Private conveyance suggests a vehicle 
 
 1 Ripley et al. Adm. v. Railway Passengers' Ass. Co , 2 Big. Life & Ace. Ins. 
 Cas. 738; Ripley v. Insurance Co.. 16 Wall. 336. 
 
 2 16 Wall. (U. S.) 336 ; s. c. 3 Big. Life & Ace. Ins. Cas. 832 and note. 
 
 1218
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 529 
 
 belonging to a private individual. If this was the sense in 
 which the language was understood by the parties, the de- 
 ceased was not, when injured, travelling within the terms of 
 the policy. There is nothing to show that it was not." 
 
 § 529. Same Subject. — Such, undoubtedly, is the logical 
 consequence of a strict interpretation of the letter of the con- 
 tract, and the exact point made was doubtless well decided. 
 But we venture to suggest the inquiry whether the construc- 
 tion is not too literal and narrow. Upon the principle of the 
 cases cited in the last two sections, the plaintiff being engaged 
 in the actual prosecution of his journey, and by the appro- 
 priate and usual means, might have been held to be travelling 
 by public conveyance, for it was by public conveyance tliat 
 the journey was accomplished. And tliis is strictly in accord- 
 ance with the ordinary use of language. A man who goes on 
 a journey is said to be travelling. If he goes by rail or 
 steamer, he is travelling by public conveyance. More or less 
 travel on foot is necessary to this mode of travel in changing 
 cars, or passing from steamer to railway, or in getting to and 
 from the stations. But, in a general sense, all this is travel- 
 ling by public conveyance. It would seem to be immaterial 
 whether the walking be done in the middle or at one of the 
 termini of the journey, provided it be incidental to, and part 
 of, the journey ; nor can the distance walked make any differ- 
 ence, provided it also is a part of the journey. By the same 
 literalness of construction a passenger sitting still in a train 
 stopping at a station, and not under motion, might be injured 
 by a train in motion, and yet have no claim, because he was 
 not actually travelling, — for sitting still is not literally trav- 
 elling. So a passenger required to leave one car and to get 
 into another, or to go from one train to another at the same 
 station, or going to, or returning from, the refreshment room, 
 being on foot during the process, is certainly not literally " in 
 a conveyance." But is he not travelling all the while, in a 
 general and substantial sense, in the prosecution of his jour- 
 ney, in and by a public conveyance ? Is not one who stands 
 upon the platform at a way station, having left the car for 
 refreshments, and is knocked down and injured by the rushing 
 
 1219
 
 § 530] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 throng, within the protection of such a policy, although at the 
 moment, in a literal sense, he is neither travelling by a con- 
 veyance, nor in any other way ? May not a man be said to 
 be 'travelling by public conveyance who is actually engaged 
 in and about doing certain acts which are fairly incidental to, 
 and necessary for, the prosecution or completion of the jour- 
 ney ? The bare question whether a man going on foot is 
 going by conveyance must undoubtedly be answered in the 
 negative. But the broader question, whether a man who is 
 prosecuting a journey by railway and steamboat, while engaged 
 in what is incidental to the journey, whether he is sitting still 
 in a motionless car, or standing still on the station platform, 
 or walking to and fro thereon, waiting for a start, or going 
 into the station for refreshments, or returning tlierefrom after 
 having obtained them, is not in a reasonable and substantially 
 accurate sense " travelling by public conveyance," may, per- 
 haps, require an affirmative answer.^ 
 
 § 530. Accident ; Negligence ; Wilful Exposure ; Violation of 
 Law; Obvious Risk. — It has been held that if the injury is 
 attributable to the insured's own negligence, it is not acci- 
 dental, as when a passenger inadvertently, but needlessly, puts 
 his arm out of the car-window while the train is running with 
 its usual velocity, whereby his hand is injured by contact with 
 a post standing near the track.- And the case of Theobald v. 
 Railway Passengers' Assurance Company ^ has been supposed 
 
 1 Since this chapter was printed, tlie case of Chaniplin v. Travelers' Pas- 
 senger Ins. Co., 6 Lans. (N. Y.) 71, has come to hand, in which it is expressly 
 decided that the doctrine of contributory negligence on tlie part of the plaintiff 
 does not apply as a defence in actions on policies of insurance. In the same case, 
 it appearing that the msured attempted to jump on to an omnibus — a public 
 conveyance used for carrying passengers — while it was in motion, that he suc- 
 ceeded in getting on to tiie steps, which were at the rear of the omnibus, but was 
 unable, by reason of the jar of the vehicle, to maintain his footing, and received 
 injuries of a serious nature, from hitting his knee against the wheel, it was also 
 held that the insured was travelling. " It would be a very strained construction," 
 say the court, " of a contract like this to hold that he was not travelling. If he 
 was not travelling, it is difficult to say what he was doing. We think that as 
 lie was actually going from one place to another, he was travelling." See also 
 Gallin v. Lon. &c. Ry. Co., L. R. 10 Q. B. 212. 
 
 2 Morel V. The Mississippi Valley Life Ins. Co., 4 Bush (Ky.), 535. 
 8 10 Exch. 44 ; s. c. 26 Eng. L. & Eq. 432. 
 
 1220
 
 CH. XXIX.] OP ACCIDENT INSURANCE. [§ 530 
 
 to support the sume doctrine. But the point was not decided, 
 the court merely adverting to the fact that the plaintiff was 
 without negligence. In Brown v. Railway Passengers' Insur- 
 ance Company/ it was also suggested that the negligence .of a 
 passenger having a " traveller's ticket " might defeat his re- 
 covery. But that was not a point in the case ; and the case 
 from Kentucky stands alone, without the support of any 
 authority, and is based, it is conceived, upon a mistaken ap- 
 plication, in an action upon contract, of the doctrine of con- 
 tributory negligence as it is applied in actions upon tort. 
 Indeed, there is no reason for supposing that protection from 
 loss or injury from negligence is not one of the motives which 
 operate in accident, as well as in fire and life insurance. And 
 unless there are stipulations to the contrary in the policy, in 
 accident insurance, as in life and fire insurances, injury by ne- 
 gligence is covered by the contract ;2 nor will ordinary negli- 
 gence vitiate a policy which stipulates that the company 
 will not be liable for wilful and wanton exposure to un- 
 necessary danger, as this stipulation affords a reasonable in- 
 ference that ordinary negligence is not excepted.^ In this 
 case the plaintiff attempted to get upon a train of cars while 
 they were in slow motion, and fell under them and was killed. 
 The opinion of the court we give at some length, as involving 
 an interesting discussion of the relation of negligence to insur- 
 ance against accidental injury and death, the scope and mean- 
 ing of the word " accident," and the grounds upon which the 
 doctrine of contributory negligence, as applied in actions of 
 tort, is not applicable in cases of insurance. The opinion was 
 by Paine, J. : — • 
 
 " The position most strongly urged by the respondent's 
 counsel in tliis court was, that inasmuch as the negligence of 
 the deceased contributed to produce the injury, therefore the 
 death was not occasioned by an accident at all, within the 
 meaning of the policy. I cannot assent to this proposition. 
 It would establish a limitation to the meaning of the word 
 
 1 45 Mo. 221. 
 
 2 See cuite, § 408 ef serj. 
 
 3 Schneider v. The Provident Life Ins. Co., 24 Wis. 28. 
 
 1221
 
 § 530] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 ' accident,' which has never been established either in law or 
 common understanding. A very large proportion of those 
 events which are universally called accidents, happen through 
 some carelessness of the party injured, which contributes to 
 produce them. Thus men are injured by the careless use of 
 firearms, of explosive substances, of machinery, the careless 
 management of horses, and in a thousand ways where it can 
 readily be seen afterward that a little greater care on their 
 part w^ould have prevented it. Yet such injuries having -been 
 unexpected, and not caused intentionally or by design, are 
 always called accidents, and properly so. Nothing is more 
 common than items in the newspapers under the heading 
 ' accidents through carelessness.' 
 
 " There is nothing in the definition of the word that ex- 
 cludes the negligence of the injured party as one of the ele- 
 ments contributing to produce the result. An accident is 
 defined as ' an event that takes place without one's foresight 
 or expectation ; an event which proceeds from an unknown 
 cause, or is an unusual effect of a known cause, and therefore 
 not expected.' 
 
 " An accident may happen from an unknown cause. But 
 it is not essential that the cause should be unknown. It may 
 be an unusual result of a known cause, and therefore unex- 
 pected to the party. And such was the case here, conceding 
 that the negligence of the deceased was the cause of the 
 accident. 
 
 " It is true that accidents often happen from such kinds of 
 negligence. But still it is equally true that they are not the 
 usual result. If they were, people would cease to be guilty of 
 sucli negligence. But cases in which accidents occur are very 
 rare in comparison with the number in which there is the 
 same negligence without any accident. A man draws his 
 loaded gun toward him by the muzzle, the servant fills the 
 lighted lamp with kerosene a hundred times without injury. 
 The next time the gun is discharged, and the lamp explodes. 
 The result was unusual, and therefore as unexpected as it had 
 been in all the previous instances. So there are, undoubtedly, 
 thousands of persons who get on and off from cars in motion 
 1222
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 530 
 
 without accident, where one is injured. And, therefore, when 
 an injury occurs, it is an unusual result, and unexpected, and 
 strictly an accident. There are not many authorities on the 
 point. The respondent's counsel cites Theobald v. The Rail- 
 way Passengers' Assurance Company ,i not as a direct author- 
 ity, but as containing an implication that the negligence of the 
 injured party would prevent a recovery. I do not think it can 
 be construed as conveying any such intimation. The insur- 
 ance there was against a particular kind of accident, - — that 
 was a railway accident ; and the only question was, whether 
 the injury was occasioned by an injury of that kind. The 
 court held that it was, and although it mentions the fact that 
 there was no negligence on the part of the assured, that can- 
 not be considered as any intimation who,t would have been the 
 effect of negligence, if it had existed. 
 
 " The general question as to what constitutes an accident 
 was considered in two subsequent cases in England. The first 
 was Sinclair v. The Maritime Passengers' Assurance Com- 
 pany,^ in which the question was, whether a sunstroke was an 
 accident within the meaning of the policy. The court held 
 that it was not, but was rather to be classed among diseases 
 occasioned by natural causes, like exposure to malaria, <fec. ; 
 and while admitting the difficulty of giving a definition to 
 the term ' accident ' which would be of universal application, 
 they say they may safely assume ' that some violence, casualty, 
 or vi8 major is necessarily involved.' There could be no ques- 
 tion in this case, of course, but that all these were involved. 
 
 " In the subsequent case of Trcw v. Railway Passengers' 
 Assurance Company,^ the question was whether a death by 
 drowning was accidental. The counsel relied on the language 
 of the former case, and urged that there was no external force 
 or violence. But the court held that if the death was oc- 
 casioned by drowning, it was accidental, within the meaning 
 of the policy. And in answer to the argument of counsel, they 
 said : ' If a man fell from a house-top, or overboard from a 
 ship, and was killed ; or if a man was suffocated by the smoke 
 
 1 26 Eng. L. & Eq. 432. 2 3 gl. & El. 478. 
 
 3 6 H. & N. 839. 
 
 1223
 
 § 530] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 of a house on fire, — such cases would be excluded from the 
 ])olicy, and the effect would be, that policies of this kind, in 
 many cases where death resulted from accident, would afford 
 no protection whatever to the assured. We ought not to give 
 to these policies a construction which will defeat the protec- 
 tion of the assured in a large class of cases.' 
 
 " There was no suggestion that there was any question to 
 be made as to the negligence of the deceased ; and yet the 
 court said : ' We think it ought to be submitted to the jury to 
 say whether the deceased died from the action of the water, or 
 natural causes. If they are of the opinion that he died from 
 the action of the water, causing asphyxia, that is a death from 
 external violence, within the meaning of this policy, ivhether 
 he stvavi to a distance and had not strength enough to regain the 
 shore, or, on going into the water, got out of his dejjthJ 
 
 " Now, either of these facts would seem to raise as strong 
 an inference of negligence, as an attempt to get upon cars in 
 slow motion. Yet the court said that although the drowning 
 was occasioned by either one of them, it would have been an 
 accidental death, within the meaning of the policy, and the 
 plaintiffs entitled to recover. I cannot conceive that it would 
 liave made such a remark, except upon the assumption that 
 the question, whether the injured party was guilty of negli- 
 gence contributing to the accident, does not arise at all in this 
 class of cases. I think that is the true conclusion, both upon 
 principle and authority, so far as there is any upon the sub- 
 ject ; and the only questions are, first, whether the death or 
 injury was occasioned by an accident within the general mean- 
 ing of the policy, and, if so, whether it was within any of the 
 exceptions. 
 
 " This conclusion is also very strongly supported by that 
 provision of the policy under which the plaintiff was non- 
 suited. That necessarily implies that any degree of negli- 
 gence, falling short of ' wilful and wanton exposure to 
 unnecessary danger,' would not prevent a recovery. Such a 
 provision would be entirely superfluous and unmeaning in 
 such a contract, if the observance of due care and skill on 
 the part of the assured constituted an element to his right of 
 1224
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 530 
 
 action, as it does in actions for injuries occasioned by the neg- 
 ligence of the defendant. 
 
 " The question therefore remains, whether the attempt of 
 the deceased to get upon the train was within this j)rovision, 
 and constituted a ' wilful and wanton exposure of himself 
 to unnecessary danger.' I cannot think so. The evidence 
 showed that the train, having once been to the platform, had 
 backed so that the cars stood at some little distance from it. 
 Wliilc it was waiting there, the deceased was walking back 
 and forth on the platform. It is very probable that he ex- 
 pected the train to stop there again before finally leaving. 
 But it did not. It came along, and while moving at a slow 
 rate, not so fast as a man would walk, he attempted to get on, 
 and by some means fell either under or by the side of the cars, 
 and was crushed to death. The act may have been impru- 
 dent. It may have been such negligence as would have pre- 
 vented a recovery in an action based upon the negligence of 
 the company, if there had been any. But it does not seem to 
 have contained those elements which could be justly char- 
 acterized as wilful or wanton. The deceased was in the reg- 
 ular prosecution of his business. He desired and expected to 
 leave on that train. Finding that he would be left unless he 
 got on the train while it was in motion, it was natural enough 
 for him to make the attempt. The strong disinclination 
 which people have to being left would impel him to do so. 
 The railroad employees were getting on at about the same 
 time. Imprudent though it is, it is a common practice for 
 othei-s to get on and off in the same manner. He had un- 
 doubtedly seen it done, if he had not done it himself, many 
 times, without injury. I cannot regard it, therefore, as a wil- 
 ful and wanton exposure of himself to unnecessary danger, 
 within the meaning of the policy." 
 
 And this case was cited and approved in the Providence 
 Life Insurance and Investment Company v. Martin,^ where 
 the policy provided that the company should not be liable in 
 case the insured received injury "by his wilfully exposing 
 himself to any unnecessary danger or peril," and where the 
 
 1 32 Md. .310. 
 
 1225
 
 § 530] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 facts were that the assured was a locomotive engineer, in the 
 employ of a railroad company, whose principal business was 
 the transportation of coal, and whilst backing liis engine upon 
 a down grade, with a car in front as a precaution to check the 
 speed, he directed the fireman to run it, and went upon and 
 over the tender to get into this car to draw the brakes, and in 
 doing so slipped and fell between the car and the tender, and 
 was instantly killed by the tender passing over his body. The 
 speed at the time was about eight miles per hour, on a de- 
 scending grade. It was also distinctly asserted, in this case, 
 that contributory negligence was no defence, as the liability 
 rests upon contract, one of the chief objects of which is to 
 protect the insured against his own mere carelessness or neg- 
 ligence.^ 
 
 So where two persons were trotting horses for money — 
 illegal by statute — and came in collision, whereupon one of 
 
 1 And see also ante, §§ 301, 327-330, 408 et seq., 525. To tlie same point is 
 Champlln v. Travelers' Passenger Ins. Co., 6 Lans. (N. Y.) 71 ; ante, § 529. In 
 Pratt V. Travellers' Ins. Co., a nisi prius case tried in the Supreme Court in New 
 York, in October, 1871, cited by a very careful writer in the American Law Re- 
 view, for July, 1873, under a policy which exempted the insurers from liability 
 if the insured was guilty of a violation of any rule of any company, or in case of 
 wilful exposure or want of due care, the jury were charged that if the insured 
 was standing on the platform in violation of the rules of the railway company, he 
 could not recover ; if he was passing from one car to another, it was for them, 
 upon all the circumstances, to say whether he used due care or not. And in 
 another case cited by the same writer, Hoffman v. Travelers' Ins. Co., in the 
 same court, but on a different circuit, the court held, as matter of law, that 
 attempting to cross a railroad track, when an approaching train was within fifty 
 to one hundred feet, was a violation of a condition to use all due diligence for 
 personal safety. It was " as gross negligence," the court is reported to have 
 said, " as if the man had hanged himself." The facts were no doubt such as to 
 have justified a jury in finding a verdict for the defendant ; though upon the last 
 proposition there might be a difference of opinion. The doctrine of the case 
 cited in the next section seems the better. In Lowell r. Accident Insurance Co., 
 3 Ins. L. J. 877, the jury found tliat walking on a railroad track on a dark and 
 rainy night, at a time when the deceased knew that trains were frequently pass- 
 ing both ways, was not an " obvious risk ; " but the Lord Chief Justice said, 
 " Very well, that is a verdict for the plaintiff, but I shall stay the execution, and 
 if the question is one of law for the judge, I should decide it quite tlie other way, 
 for I sliould say the deceased was running a risk which was very 'obvious' in- 
 deed." The verdict was afterwards set aside. 5 Ins. L. J. 559. See also 
 Wright V. Sun Mut. Ins. Co., 29 U. C. (C P.) 221. 
 
 1226
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 531 A 
 
 the parties leaped to the ground, and while trying to stop his 
 horse was injured, it was held that he could not recover under a 
 policy which exempted the insurers from liability for accidents 
 caused by " duelling, fighting, or other breach of the law." ^ 
 
 § 531. Accident ; Condition to be careful ; Interpretation. — 
 But policies sometimes contain provisions which look to a 
 protection from liability for injury by negligence, as, for in- 
 stance, the stipulation that the insured shall be careful for his 
 safety. What amounts to the violation of a stipulation in an 
 accident policy that the insured shall " use all due diligence 
 for his personal safety and protection," is to be deduced from 
 all the facts and circumstances accompanying the accident, 
 and, like questions of negligence and due care generally, is to 
 be determined by the jury. The court will not undertake to 
 say, as matter of law, whether a particular act, or series of 
 acts, constitutes a want of such due diligence.^ [The burden 
 of proof is on the defendant to show that the insured did not 
 use the " due care " required by the policy .^J If the policy ex- 
 cludes liability "while the insured is, or in consequence of 
 his having been, under the influence of intoxicating liquor," it 
 is immaterial that the accident was not the consequence of 
 intoxication, if the insured was at the time of the accident 
 under the influence of intoxicating liquor ; ^ that is, under such 
 influence as to disturb the quiet, equable exercise of his intel- 
 lectual functions. The purpose of such a provision is to guard 
 against liability in both contingencies.^ 
 
 [§ 531 A. Voluntary Exposure to Unnecessary Danger. — 
 Driving alone at night across a network of railway tracks, 
 where there is no road for carriages, is " voluntary exposure 
 to unnecessary danger." ^ Where at night the insured stepped 
 off a railway train that had stopped on a drawbridge, and fell 
 
 1 Travelers' Ins. Co. v. Seaver, 19 Wall. (U. S.) 531. 
 
 2 Adm'rs of Stone v. United States Casualty Co, 34 N. J. (5 Vroom) 371; 
 antp, § 525. 
 
 '•> [Freeman v. Travelers' Ins. Co., 144 Mass. 572] 
 ^ [Mac Robbie v. Accident Ins. Co., 23 Scot. L. R. 391.] 
 5 Sliader i-. Railway Passengers' Ins. Co., 66 N. Y. 441 ; Mair v. Railway Pas- 
 sengers' Ins. Co., 37 L. T. 356, C. P. D. 
 
 « [Neill V. Travelers' Ins. Co., 12 Can. Supr. Ct. 55.] 
 
 1227
 
 § 532] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 through a concealed hole, it was held that this was not a " vol- 
 untary exposure to unnecessary danger," as lie had no notice 
 of the danger, nor a violation of the provision against " walk- 
 ing or being on the road-bed or bridge of any railway," which 
 Avas obviously intended to exclude injuries from passing 
 trains.^ A recovery cannot be defeated on the ground of 
 voluntary exposure to a danger contemplated by the parties 
 because pertaining to the business of the insured.^] 
 
 § 532. Accident Insurance ; Increase of Risk ; Change of Oc- 
 cupation. — A change of occupation on the part of a person 
 insured against injury by accident, does not mean a casual 
 change, such as most men do, or may resort to, during the 
 intervals of time when their usual employment does not en- 
 gage them, but rather " engaging in another employment as 
 a usual business " An unemployed teacher, therefore, does 
 not forfeit his right to recover because he meets with an acci- 
 dent while superintending the erection of a building for him- 
 self.^ Nor does a person who, while on a visit to a friend who 
 was a farmer, meets with an accident while casually assisting 
 him in getting in hay, though farming is not his usual occupa- 
 tion.* A statement by the insured in his application as to his 
 occupation is a representation of the then existing fact, and 
 not a covenant or warranty that there shall be no change in 
 the occupation affecting the risk during the currency of the 
 policy. And a change in the occupation, as, for instance, 
 from the occupation of a switchman to that of a brakeman, 
 wliether affecting the risk or not, does not avoid the policy, 
 unless expressly so stipulated, or unless liability is restricted 
 to accidents occurring in the course of the occupation speci- 
 fied in the application.^ And for the same reasons an engi- 
 neer on a railway train may temporarily perform the duty of 
 an absent brakeman without forfeiting his right to recover.^ 
 
 1 [Burkhard v. Travelers' Ins. Co., 102 Pa. St. 262.J 
 - [National Ben. Ass. i\ Jackson, 114 111. 533.] 
 
 3 Aflmr's of Stone v. United States Casualty Co , 34 N. J. (5 Vroom) 371. 
 * North American Ins. Co. v. Burroughs, 69 Pa. St. 43. 
 6 The Provident Life Ins. Co. v. Fennel), 40 111. 180. 
 6 Prov. Life Ins. & Inv. Co. v. Martin, 32 Md. 310. 
 1228
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 533 
 
 § 533. Accident ; Increase of Risk ; Classification of Risk. — ■ 
 In Stone v. United States Casualty Company,^ where the pol- 
 icy required notice of change of occupation " to a more haz- 
 ardous exposure under the company's classification than is 
 named in the application," the form and effect of the follow- 
 ing indorsement upon the policy, — " Policy-holders insured 
 under the preferred class will not be entitled to recover for 
 injuries received in any employment, or by any exposure, 
 either more hazardous in itself, or classified by the company as 
 more hazardous, than the occupations named in the preferred 
 class," — came under consideration, and the conclusion was, 
 first, that the language has respect to hazardous employments, 
 and not to hazardous individual acts ; and, secondly, that be- 
 ing so indorsed on the policy, it constitutes no part of the con- 
 tract. " The injuries excluded from the compensation of the 
 policy," say the court, by Beasley, C. J., " are described as those 
 that are 'received in any employment, or by any exposure 
 either more hazardous in itself, or classified by the company as 
 more hazardous.' These terms, literally rendered, require that 
 the assured, to come within their effect, must, at the time of 
 the injury, be in an employment more dangerous than his own. 
 The language has respect to employments, and not to individ- 
 ual acts. It is true that a certain degree of ambiguity is 
 introduced by the expression ' other exposure,' but, looking at 
 the body of the policy, we find these terms used in the sense 
 of the risks arising from a business or occupation. By ad- 
 hering to the literal signification of the terms employed, these 
 indorsements prefixed to the several classes of employments 
 lose all force as independent stipulations, and serve the simple 
 purpose of graduating such employments for the service of 
 that provision of the policy which prohibits the assured from 
 passing, at his own option, from one business to another. 
 Understood in this view, they are properly a part of the clas- 
 sification, but if they are to be received as containing new 
 terms of the contract, they are entirely out of place. If the 
 company intended to say to the assured that if he did any act 
 which did not strictly belong to his own occupation, but was 
 
 1 34 N. J. 371. 
 
 1229
 
 § 533] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 embraced more properly in some other business, and if there- 
 by any harm to him accidentally resulted, that in such event 
 he could claim nothing under his policy, it was easy for them 
 to do so in plain language. Such a stipulation would obvi- 
 ously be one of a very important character, and we would 
 expect to find it in the body of the instrument. A qualifica- 
 tion of the agreement so restrictive of the rights of the party 
 insured ought not to be admitted, unless the terms of this 
 indorsement will bear no other rational interpretation. If the 
 terms used are imperfect or ambiguous, it is the fault of the 
 defendants; it is their contract, and the construction of it 
 must be strongly against them, contra j^referentes. Nor do I 
 think the liberal interpretation of this clause, which the de- 
 fence contends for, a practical one. It would be difficult to 
 put it in practice ; for who can say, in many cases, what acts 
 are properly incident to one occupation, and which are not so 
 to any other ? The subdivisions of employments are so numer- 
 ous and minute, that in actual life it is impossible to separate 
 them by any visible and exact line ; for instance, in the first 
 of these classifications the shopkeeper is placed, and in the 
 second, the laborer. The employments of these are distinct ; 
 but with respect to particular acts it would be extremely diffi- 
 cult, if not impossible, to classify them into those which are 
 common to both occupations, and into those which are peculiar 
 to each. It does not seem to me proper to bring into this 
 agreement this confusion and uncertainty by construction. It 
 certainly is not necessary for the reasonable protection of the 
 company, for there are other restrictions in this instrument 
 which are, apparently, sufficient to debar a party insured from 
 doing acts appertaining to other occupations, which are of a 
 particularly hazardous nature. I refer to the clauses referring 
 to undue exposure. Even the case put of an attorney driving 
 a steam-engine would probably come within this prohibition. 
 
 " But there is still another, and, as it seems to me, a decided 
 objection against the admission of this indorsement, as consti- 
 tuting in itself a substantive agreement. That objection is 
 this : that considered in this light it cannot be received as any 
 part of the contract between these parties. As I have stated, 
 1230
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 535 
 
 this clause is a prefix to the classification on the back of the 
 policy, and such prefix is not referred to in the body of the 
 instrument. The policy itself is very explicit as to what shall 
 be comprised in the contract. Its language is, that this pol- 
 icy ' is issued and accepted subject to all the provisions, condi- 
 tions, limitations, and exceptions herein contained or referred 
 to, and upon the express agreement that the statements and 
 declarations of the insured in his application for this insur- 
 ance are warranted to be true in all respects, and that said 
 application, together with the company's classification of haz- 
 ards indorsed hereon, are referred to, and made a part of this 
 contract.' This specification of the parts going to make up 
 the agreement is clear, and it does not embrace this prefix in 
 question, if such prefix is to be taken as a modification of the 
 body of the policy in a most material respect. On these 
 various grounds I incline to the view that the indorsement in 
 question does not constitute a substantive stipulation, but is 
 merely explanatory of the stipulations to the extent already 
 indicated." 
 
 § 534. Accident ; Extent of Risk. — Insurance against in- 
 jury by accident includes all accidents not excepted by the 
 terms of the policy.^ A general insurance, however, against 
 death by " violent and accidental means," followed by a pro- 
 viso that the insurers will not be responsible for death caused 
 by certain specified means, or happening in certain specified 
 modes, must be construed as covering injuries happening by 
 violent and accidental means, and not by the causes and modes 
 specified in the excluding proviso. The exclusion of responsi- 
 bility for death or injury in certain specified ways does not 
 enlarge the scope of the general clause so as to include cases 
 happening otherwise than by violent and accidental means.^ 
 
 § 535. Accident Insurance; Insurable Interest; Amount of 
 Loss. — Every person is presumed to have an insurable inter- 
 est in his own life, and in his personal safety and security 
 
 1 Prov. Life Ins. Co. v. Fennell, 49 III. 180 ; Prov. Life Ins. Co. v. Martin, 32 
 Md. 310. 
 
 2 Southard v. The Railway Passengers' Ass. Co., 34 Conn. 574, per Shipman, 
 Judge of the District Court of the United States, acting as arbitrator, ante, 
 §515. 
 
 VOL. II. — 34 1231
 
 § 535] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 from injury .1 And as the contract is not strictly one of in- 
 demnity, here as in life insurance the amount recoverable 
 may be agreed upon by the parties, within such reason- 
 able limits as will save the contract from being objection- 
 able as a wager.2 Where a policy insures for a stated period 
 against two classes of accidental injuries, namely, those which 
 occasion loss of life within ninety days, in a gross sum, and 
 those which shall not prove fatal, in a certain sum per week 
 for a fixed number of weeks, the two provisions are to be con- 
 strued together. If an injury happens, it is insured against 
 under one class or the other ; and if a recovery cannot be 
 had under the first class for the gross sura, then it may be had 
 under the second class for the weekly allowance. If it were 
 otherwise, an injury which should not prove fatal in ninety 
 days would furnish no ground of action till it should be made 
 to appear that it would never prove fatal, — a construction 
 which would render the insurance nugatory in such cases.^ 
 In such a case the lapse of the ninety days is to be determined 
 by including the day when the accident happened as one of 
 the ninety days, in accordance with the rule that when time 
 is reckoned from an act done, it includes the day when the 
 act is done, but when it is reckoned from the day when the 
 act is done, the day is excluded. And a death happening 
 within ninety days from the time of the accident, though 
 after the expiration of the period covered by the insurance, if 
 the accidental cause be within tliat period, affords ground for 
 recovery.* If the policy stipulated for the payment of a fixed 
 sum in the case of death by accident, and for a proportionate 
 sum in the case of merely personal injury, not fatal, the 
 amount to be recovered is not to be estimated by the propor- 
 tion which the injury bears to the amount payable in case of 
 death. The insured may recover for the expense and suffer- 
 ing occasioned, but not for loss of time or profits. If re- 
 covery could be had for a consequential loss of profits, a person 
 
 1 Prov. Life Ins. & Inv. Co. v. Baum, 29 Ind. 236. 
 
 2 Ante, § 7. 
 
 8 Perry v. Prov. Life Ins. & Inv. Co., 103 Mass. 242; Same v. Same, 99 Mass. 
 162. 
 * Ibid. 
 
 1232
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 536 
 
 whose time or business is more valuable than another's might, 
 for the same injury, receive a greater remuneration. The 
 insurers indemnify against the expense and pain and loss 
 immediately connected with the accident, and not against re- 
 mote consequences that may follow, according to the business 
 or profession of the insured.^ 
 
 § 536. Accident ; Notice of Death ; Preliminary Proof. — 
 The general rules heretofore stated as to preliminary proof in 
 other branches of insurance are also applicable liere.^ " Suffi- 
 cient proof of the injury " does not include the mode and 
 manner of the injury or its cause. Nor will a statement in the 
 preliminary proofs of two inconsistent causes of the injury, 
 the injury itself being correctly stated, prejudice the right of 
 the insured to recover.^ In Gamble v. Accident Assurance 
 Company,* a stipulation that particulars of the accident 
 should be furnished within a specified time, was a condition 
 precedent to the recovery, and a non-compliance therewith 
 was not excused by the intervention of a death so sudden that 
 the condition could not be complied with.^ Notice of the 
 death, required " as soon thereafter as possible," must be 
 within a reasonable time ; and what is a reasonable time is for 
 the jury, if any facts from which the reasonableness of the 
 time is to be inferred are in dispute, otherwise for the court.^ 
 In Insurance Company v. Morely " no claim was to be made 
 in respect of an injury unless the same shall be caused by out- 
 ward and visible means, of which proof satisfactory to the 
 company can be furnished." It was alleged that the insured 
 accidentally fell down stairs, was severely injured, and died 
 from the effects of the fall. No witness saw him fall ; but 
 
 1 TlieobalJ v. Railway Passengers' Ass. Co., 10 Exch. 45 ; 8. 0. 26 Eng. L. & 
 Eq. 432. 
 
 2 Ante, ch. xx. 
 
 3 North American Ins. Co. v. Burroughs, 69 Pa. St. 43. 
 
 4 Irisli Rep. 4 C. L. 204. 
 ^ But see ante, § 405. 
 
 6 Prov. Life Ins. & Inv. Co. v. Baum, 29 Ind. 236. And see also ante, § 462, 
 and post, § 539. A delay of six days, when the accident happened in tlie place 
 where the insurers had a resident agent, was held unreasonable. Railway Pass. 
 Ass. Co. V. Burwell, 44 Ind. 460. 
 
 1233
 
 § 538] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXIX. 
 
 some days prior to his death he told his wife and son that he 
 had fallen down the back stairs, and hurt himself very bad by 
 hitting the back of his head. This evidence was held admis- 
 sible, and sufficient to render the insurers liable.^ A condi- 
 tion that no claims shall be made unless " satisfactory proof be 
 furnished," that the death was caused by outward and visible 
 means, does not require such proof before bringing the action.^ 
 
 § 537. Accident ; Form and Completion of Contract. — From 
 their very nature, such contracts are made with the ordinary 
 despatch of a purchase and sale. A passenger about to take 
 the cars buys his ticket of insurance as he buys his ticket for 
 fare, and oftentimes of the same person. In each case the 
 ticket is evidence of a contract, completed and binding on 
 botli parties. And as in other cases a parol contract to insure 
 or to issue a policy is enforceable, the former at law and the 
 latter in equity, so here a promise to make out a policy or to 
 forward the requisite ticket may be enforced by the appro- 
 priate remedy, — as where a party on his way to the cars 
 meets the agent of the company, pays for an insurance for one 
 day, and without waiting for his policy or ticket, which the 
 agent promises to send him, proceeds to the cars, and thence 
 on his journey without having received either. The contract 
 is, nevertheless, complete and valid.^ 
 
 § 538. Accidents to Carriages. — In France there has been 
 for many years an insurance company, L'Automedon, which 
 takes risks on carriages, indemnifying their owners against 
 civil liability and loss by reason of the negligence of their 
 drivers. In L'Automedon c. Isot,* it appeared that one of the 
 defendant's drivers had wilfully driven against and upset an- 
 other carriage, whereby the owner was thrown out and injured. 
 The injured party sued the defendant and recovered damages, 
 for the reimbursement of which Isot, the defendant, brought 
 suit against the insurers. The main ground of defence was, 
 that as it would be against public policy to insure against the 
 
 1 8 Wall. (U. S.) 397, Clifford and Nelson, JJ., dissenting. 
 
 2 Railway Pass. Ass. Co. v. Burwell, 44 Ind. 460. 
 
 3 Rhodes v. Railway Passengers' Ass. Co., 5 Lans. (N. Y.) 71. 
 * Dalloz, Jur. du Royaume, 1844, pt. 2, p. 128. 
 
 1234
 
 CH. XXIX.] OF ACCIDENT INSURANCE. [§ 539 
 
 consequences of an act which amounts to a crime, such an 
 accident could not be considered as within the scope of the 
 policy ; and such was the view taken by the departmental 
 court ; but on appeal to the Court of Cassation it was held that 
 such accidents, whether delicta or quasi delicta, were properly 
 subjects-matter of insurance. The temptation to perpetrate 
 a public wrong, said the court, is counteracted by the fact that 
 nothing can be recovered by the insured beyond the damages 
 Avhich he is compelled to pay. 
 
 § 539. Accident ; Notice of Injury ; Satisfactory Proof. — 
 "Where the policy stipulates that immediately upon the hap- 
 pening of the accident which may result in death a surgeon 
 shall be called, and notice of the accident shall be given 
 within a limited time, a failure to do either will not affect the 
 right to recover, unless it amounts to negligence ; as where a 
 laborer receives a fall, the serious nature of the consequences 
 of which is not at first revealed, and which is of such an 
 apparently trivial character as not then to interrupt his 
 work.i 
 
 1 Decheance et aut. c. Comp. d'Ass. La. Security Generale, Dalloz, Jur. du 
 Royaume, 1870, pt. 3, p. 63 ; ante, §§ 296, 465, 536. 
 
 1235
 
 540] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXX. 
 
 CHAPTER XXX. 
 
 OF GUARANTEE AND OTHER KINDRED INSURANCES. 
 
 Analysis. 
 
 § 540. Guarantee insurance against carelessness, dishonesty, &c., is a contract 
 of suretyship, and the insurers will be subrogated to the 
 rights of the insured against the person in fault. Services 
 of insured to this end. Warranties, Representations, Form. 
 Only a percentage of loss paid. 
 
 § 541. Advantages of such insurance. Its union with life insurance. 
 
 § 541 a. Diligence of clerk. Condition that employer shall prosecute. 
 
 § 542. Statement in application that clerk's accounts would be exam- 
 
 ined by finance committee every fortnight not a guarantee, 
 see § 543. 
 
 § 543. Misrepresentation as to the amount of money to be in employee's 
 
 hands fatal. Kepresentation of a third person not a war- 
 ranty. 
 
 § 544. Insurance against loss in trade by bankruptcy of purchasers. 
 
 § 545. " of the prom])t payment of a note. 
 
 § 546. " against the birth of issue. 
 
 § 547. " of rents, titles, and lives of cattle, and insurance against 
 
 theft, § 547. 
 " against hail, §§547, 547 a. 
 
 § 547 B. " due at marriage. 
 
 § 540. Guarantee Insurance. — What is termed guarantee 
 insurance, which seems to be merely a mode of compensated 
 suretyship, has not, as a distinct business of incorporated com- 
 panies, had much vogue in this country, although companies 
 have been incorporated with a view to the acceptance of such 
 risks. Nor, indeed, in England, where efforts have been made 
 to establish it as a branch of insurance business, has it made 
 much progress. And there it has been made applicable, for 
 the most part, to the indemnification of parties against the 
 risk from wilful and culpable negligence, infidelity, fraud, 
 and all forms of dishonesty. Strictly speaking, the term 
 "guarantee insurance" is tautological, insurance itself hav- 
 ing for its purpose, as we have seen,^ to guarantee against all 
 forms of loss or pecuniary injury. Of the principles which 
 
 1 Ante, § 2. 
 
 1236
 
 CH. XXX.] OF GUARANTEE AND OTHER INSURANCES. [§^'^40 
 
 underlie the contract of suretyship frcnerally, we do not pro- 
 ])Ose to speak. But as special forms of suretyship have been 
 undertaken, under the general title of insurance, we shall 
 state such points in the history and development of these 
 special forms as have come under the cognizance of the 
 courts. The statements made in the application or proposal 
 may be warranties or representations, as in other kinds of 
 insurance, and, unless specially controlled by the terms of 
 the contract, are subject to the same construction, and have 
 the like force and effect ; though, in a mere contract of guar- 
 anty, the concealment or non-communication of material 
 facts, unless fraudulent, is no defence to an action upon the 
 contract of guaranty .^ And where the contract is substan- 
 tially one of suretyship, the insurers will doubtless, after 
 payment of loss, in accordance with the rule which obtains 
 under the relation of suretyship, be subrogated to all the 
 rights of the insured against the party in default, and en- 
 titled to all the securities which he may hold against hira.^ 
 The foj-m of the contract is a policy describing the subject- 
 matter of the risk, setting forth the consideration, and pledg- 
 ing the funds of the company to pay in case the event 
 insured against happens, subject to the conditions of the con- 
 tract. It is in these special conditions that the policy differs 
 from an ordinary bond of indemnity with sureties, given by a 
 clerk, servant, or agent to secure his employers. These con- 
 ditions refer, as in other kinds of insurance, to the various 
 circumstances which attend the contract, as the payment of 
 the premiums originally and in case of renewal, the truth of 
 the statements in the proposal or application, the limitation 
 of the risk assumed by the insurer, the notice of loss, 
 mode of proof, times of payment, mode of adjustment, limi- 
 tation of suit, &c., according to the special views and expe- 
 
 1 Tlie cases upon this subject seem to have been carefuhy collected by Run- 
 yon, Life Insurance, p. 98 et seq., and are reproduced in this country by Bliss, 
 in the chapter on Guarantee Insurance, contained in his valuable work on 
 Life Insurance, p. 722 et seq., to which the reader interested in the matter is 
 referred. 
 
 2 North Brit Ins. Co. v. Lloyd, 10 Exch. 52.S. 
 
 8 Mountague v. Tidcombe, 2 Vern. (Eng.) 518. 
 
 1237
 
 § 541] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXX. 
 
 riences of the insurers, and with snch modifications as the 
 peculiarity of the risk assumed demands. And the proposal 
 contains such inquiries and answers as are calculated to ena- 
 ble the insurers to determine the value of the risk. — As in 
 marine and fire insurance, the interest of the insured in the 
 preservation of the property is secured by limiting the in- 
 demnification to a portion of the property lost, so in guaran- 
 tee insurance the interest of the insured in preventing the 
 occurrence of the event insured against is secured by provid- 
 ing that in case of loss only a percentage of the loss will be 
 paid.^ And a not unusual provision, peculiar to this form of 
 insurance, is the requirement that in case of loss the insurers 
 shall be entitled to the services of the insured, in whatever 
 form they may be made available, in bringing the delinquent 
 to justice. 
 
 § 541. Guarantee Insurance. — The advantages of public Or 
 incorporated guarantee insurance over private suretyship are 
 held out to be that it affords to the exertions of all classes in- 
 creased facilities for obtaining occupations of responsibility and 
 trust; that it encourages good character, by causing that alone 
 to be the basis of suretyship, apart from the influence of family 
 connections, private interest, or pecuniary resources ; that it 
 relieves private individuals from the necessity of becoming 
 sureties, and from the consequent liability to which they or 
 their estates may be exposed ; and that it offers the best secur- 
 ity to employers, because free from the uncertainty and anxiety 
 which unavoidably attach to private suretyship, by reason of 
 unknown death, insolvency, and the many casualties to which 
 such sureties are liable. The union of guarantee with life 
 insurance has also been attempted, upon the principle that 
 two risks rendered dependent on each other can be insured 
 at a lower rate than the same two risks separately. The life 
 insurance becomes, as it were, a contingent collateral security 
 against the risk undertaken for the guarantee, inasmuch as, if 
 a claim be substantiated by the employer under the guarantee 
 policy, the life policy is forfeited. While such a system ap- 
 pears to be equitable, it is also effective in the protection of 
 
 1 Solvency Mut. Guar. Co. v. York, 3 H. & N. 588. 
 1238
 
 CH. XXX.] OF GUARANTEE AND OTHER INSURANCES. [§ 542 
 
 employers, since the self-interest of the employed is involved 
 in any act of delinquency. It is understood that the public 
 authorities in England have to a considerable extent resorted 
 to this form of guaranty in lieu of private bondsmen.^ 
 
 § 541 a. Guarantee Insurance ; Fidelity of Clerk ; Condition 
 that Employer shall prosecute ; Hiring of Servant. — On a guar- 
 antee policy of a clerk's faithful and diligent performance of 
 his duty, who left a large sum of money in open bags in 
 his room while he went to lunch, which money disappeared 
 while he was gone, it was held that the insurers were liable.^ 
 
 In Fearnley v. London Guarantee Society,^ where the policy 
 insuring against embezzlement required the employer to use 
 all due diligence in prosecuting to conviction the employee 
 as a condition precedent to the right to recover, it was held, 
 by an equally divided court, that the fact that a criminal 
 prosecution would subject the employer to an action for dam- 
 ages did not excuse him. The condition precedent was still 
 a valid one. 
 
 The allowance of over-drafts without security, in collusion 
 with the parties overdrawing, is a loss " by the want of in- 
 tegrity, honesty, and fidelity, or by the negligence, default, or 
 irregularities of the manager" of a bank.* 
 
 § 542. Guarantee Insurance ; Representation. — In Benham 
 V. United Guarantee and Life Insurance Company,^ the de- 
 fendants granted to the plaintiff, the treasurer of a literary 
 institution, a policy of guarantee against loss occasioned by 
 the want of " integrity, honesty, or fidelity " of the secretary 
 of such institution, •' arising out of his employment as such 
 secretary." The policy set forth that, as the basis for the 
 contract of such guarantee, the plaintiff had lodged at the 
 office of the defendants a certain statement containing a dec- 
 laration, signed by the plaintiff, of the truth of the answers 
 
 1 Bunyon, Life Insurance, p. 119. 
 
 2 Re Citizens' Ins. Co. &c., Q. B. (Quebec), 16 Can. L. J. .034 (Dec. 1880). 
 
 3 Sup. Ct. of Judicature (Ireland), 9 Ins. L. J. 100. 
 
 * Bank of Toronto v. European Ins. Co., 14 L. C. Jur. 186, Superior Court in 
 review (1870). Appealed to Jud. Com. of P. C. 
 
 6 7 Exch. 744. - 
 
 1239
 
 § 543] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXX. 
 
 thereby given to the questions therein contained. This state- 
 ment contained, amongst others, the following questions and 
 answers : " First, Is the applicant at present in your employ- 
 ment, and if so in what capacity, and has he hitherto per- 
 formed the duties of the situation faithfully, and to your 
 satisfaction? — He is secretary. . . . Secondly, Is the appli- 
 cant personally known to you, or any of your firm, or by whom 
 has he been introduced or recommended to you ? — Only as 
 above. Thirdly, In what capacity do you intend to employ 
 the applicant ? and with reference to this question state, as far 
 as circumstances will permit : (a) The nature of his intended 
 duties and responsibilities. — He is secretary of the Maryle- 
 bone Literary Institution, of which I am treasurer. (^>) The 
 checks which will be used to secure accuracy in liis accounts, 
 and when and how often they will be balanced and closed. 
 • — Examined by finance committee every fortnight, (c) The 
 salary or emolument, and when it will be paid to him, and 
 how. — Thirty })Ounds a year at present." Upon these facts 
 it was held that the statement that the accounts would be ex- 
 amined by the finance committee every fortnight did not 
 amount to a warranty, but was a mere representation of the 
 intention of the plaintiff ; and that the insured might, there- 
 fore, recover for a loss arising from a want of integrity of the 
 secretary, although such loss was occasioned by neglect to ex- 
 amine the accounts in the manner stated. The application in 
 this case was by the secretary, and the questions proposed 
 were to his employer. The proposal contained a declaration 
 of the truth of the statement thci-ein contained, and that it 
 constituted the basis of the contract. All of the judges agreed 
 that the answer as to the examination of accounts was noth- 
 ing more than a declaration of the course intended to be pur- 
 sued, and, if bona fide, was not otherwise to be objected to. 
 Martin, B., also adverted to the fact that the questions were 
 put to the employer as of some significance. 
 
 § 543. Guarantee Insurance ; Misrepresentation. — The Na- 
 tional Guardian Life Insurance Society, as a branch of their 
 business, issued policies called guarantee policies, having for 
 their object the insurance of employers against loss by reason 
 1240
 
 CH. XXX.] OF GUARANTEE AND OTHER INSURANCES. [§ 543 
 
 of the want of honesty or fidelity, or on account of the wilful 
 or culpable default or negligence of their employees. Upon 
 one of these policies, insuring the honesty of a collector of 
 taxes, defence was made on the ground of misrepresentation ; 
 and it appeared that prior to issuing the policy certain ques- 
 tions were put to the insured and to his employers, and 
 amongst others inquiry was made as to the largest amount of 
 money which would come into his hands at any one time and 
 be retained by him, and what checks were used to secure ac- 
 curacy in his accounts. It was replied that he was to collect 
 and account for the sums collected by him ; that the amount 
 of money which he was to receive and retain in his hands, not 
 longer than a week, was from one hundred to two hundred 
 pounds sterling ; that his accounts would be checked weekly 
 by the surveyor of taxes ; that the balance each week would 
 be paid over ; and that such balances would be occasionally 
 tested by his employers. It also appeared that his annual col- 
 lections amounted to nine thousand pounds sterling, and he 
 arrived at his answer by dividing that sum by fifty-two, the 
 number of weeks in the year, whereas in point of fact in some 
 weeks nothing was collected, and in other weeks as high as 
 one-quarter part of the whole sum of nine thousand pounds 
 was collected. And it also appeared that this want of uni- 
 formity in the weekly collection was well known to the insured, 
 who was familiar with the course of business. And this sum, 
 in the ordinary course of business, came into his possession 
 during the first week of his service. The insurance was for 
 the benefit of, and payable in case of loss to, the employer, 
 and the employee became a defaulter. Stuart, V. C.,^ seems to 
 have entirely disregarded the misrepresentation as to the 
 largest amount of money to be had in hand at any one time, 
 but to have given judgment for the plaintiff on the ground 
 that the answer about the check had upon the employer was 
 made by the overseer of taxes, a servant of the commissioners, 
 to the latter of whom the inquiry was addressed, and as the 
 
 1 Towle V. National Guardian Life Ins. Co., 7 Jur. n. s. 618. In this report 
 may be found the form of the policy, with the accompanying conditions, which 
 this society adopted. 
 
 1241
 
 § 5-14] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXX. 
 
 insurers accepted this answer, it could not be fairly considered 
 a warranty by the commissioners, but was rather the repre- 
 sentation of a third person of what was intended. On appeal 
 however,! before Lords Justices Knight Bruce and Turner, 
 while the latter seemed to agree with the Vice-Chancellor on 
 the point upon which he made the case to turn, both the 
 learned judges held the statement about the amount of money 
 received a misrepresentation, and as by the terms of the policy 
 it was made void by misrepresentation, gave judgment for the 
 defendant. 
 
 § 543 a. Representation. — A representation that the per- 
 son whose fidelity, &c., is insured " has never been in arrears 
 or default in his accounts," covers arrears and defaults prior 
 to the time when he entered the service of the person insured.^ 
 
 So a promissory representation that a town treasurer's ac- 
 counts shall be from time to time audited, and that money 
 shall only be drawn in a certain way, must be substantially 
 complied with, or no recovery can be had.^ 
 
 § 544. Insurance against Loss in Trade by Bankruptcy of Pur- 
 chasers. — In Solvency Mutual Guarantee Company v. Froane,* 
 the insurance was against loss on the gross annual returns of 
 their business for two years, by the bankruptcy of purchasers 
 of goods, and unless two months' notice, prior to the expira- 
 tion of the original contract, be given by one of the parties of 
 an intention not to renew, the contract was to be regarded 
 as a renewed contract of the like nature and conditions. This 
 was held to be an agreement for a single renewal, if there 
 was no notice to the contrary ; but beyond this single re- 
 newal the contract did not extend. And to the same effect 
 was the case of the same company against York.^ And in 
 Towle V. National Guardian Insurance Company,^ Sir G. J. 
 Turner, L. J., was of the opinion that a policy had lapsed 
 where the policy provided that it should be good for a year, 
 
 ^ Towle V. National Guardian Life Ins. Co., 7 Jur. n. s. 1109. 
 
 2 Ottawa Agr. Ins. Co. v. Canada Guarantee Ins. Co., 30 U. C. (C. P.) 360. 
 
 8 Board of Education v. Citizens' Ins. Co., 30 U. C. (C. P.) 132. 
 
 * 7 H. & N. 5. 5 3 H. & N. 688. 
 
 6 7 Jur. N. s. 1109. 
 
 1242
 
 CH. XXX.] OF GUARANTEE AND OTHER INSURANCES. [§ 545 
 
 " and for every subsequent year that the society shall agree 
 to renew, and the insured to pay " a specified sum, and the 
 society had given no notice nor taken any action whatever 
 touching the subsequent year. In the case of the same com- 
 pany V. Freeman,! the insurance was of a firm against loss in 
 respect of their gross annual returns, subject to the following 
 condition : " If a member of the company shall die, or if any 
 member, guaranteed with respect to his gross or particular 
 trade debts, shall cease to be such a trader, his guarantee or 
 contract shall become void on such death, or (if such trader) 
 on his retiring from such trade ; " and it was held that the 
 retirement of one of two partners in trade was an event by 
 which the condition was violated, and the guarantee became 
 void. And here, as in other forms of insurance, if a party 
 has taken out a policy which is not in accordance with the 
 terms of the agreement, the court will reform the policy, 
 upon a proper bill, so as to make it conform to the original 
 agreement, but will not allow the non-conformity to be 
 pleaded in bar to an action.^ 
 
 § 545. Insurance of the Prompt Payment of a Promissory Note. 
 — In the Supreme Court of Maryland,^ a case arose upon a 
 policy of insurance upon a promissory note, guaranteeing its 
 prompt payment at maturity. By the statute, the insurance 
 company was authorized to make insurances " against all loss 
 or damage from any cause, hazard, or liability whatsoever on 
 and relating to factories, &c., cJioses in action, and personal 
 property of every description. " The form of this policy was 
 an agreement under seal, in consideration of the premium 
 paid and securities deposited, to guarantee to the bearer the 
 payment of the amount of the note on the day it should fall 
 due, on presentation of the policy at the oilice of the com- 
 pany. It was held, upon the peculiar facts of the case, that 
 the policy was valid and was negotiable, and therefore avail- 
 able in the hands of a third person. It appears that the note 
 was surrendered to the insurance company at the time the 
 
 1 7 H. & N. 17. 
 
 2 Solvency Ins. Co. v. Freeman, 7 H. & N. 17. See post, § 566 et seq. 
 
 3 Ellicott V. United States Ins. Co., 8 Gill & Johns. (Md.) 166. 
 
 1243
 
 § 547] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXX. 
 
 policy was taken out. The form of the contract was declared 
 to be immaterial. The purpose of the obligors being to protect 
 the holder of the notes against the hazard of loss, any form of 
 words effecting that purpose the law will adopt and enforce. 
 
 § 546. Insurance against the Birth of Issue. — Insurance 
 against the birth of issue has also been practised to some ex- 
 tent in England. But it has not, so far as we are aware, 
 been introduced into this country ; and indeed in England 
 but few companies have the authority to embark therein. 
 " The risk," says Bunyon,^ " may be either coupled or not 
 with some contingency dependent upon the duration of 
 human life, such as the attainment of a particular age by 
 the issue. The more common case is that in which a tenant 
 for life, under a settlement, is entitled to the reversion in fee- 
 simple, subject to an estate tail in " his own issue (if any) by 
 the particular marriage, and is desirous of mortgaging the 
 estate without burdening his life-interest with the premiums 
 on insurances of his life. . . . The chances of having issue, 
 as depending upon age, health, and other circumstances of 
 more or less importance, are the elements upon which the 
 value of the risk is bascd.^ 
 
 § 547. Insurance of Rents, Titles, against Theft, Hailstones, and 
 upon the Lives of Cattle. — Other forms of guarantee insurance 
 are, insurance of rents, wdiich has for its object the prompt 
 payment of rent to landlords or others interested in the prof- 
 its outcoming from real estate, or to insure to them a regular 
 income by undertaking the management of the property, — 
 to the mortgagee his interest, and to the mortgagor his sur- 
 plus rent ; insurance of what are termed holding titles to real 
 property, or interests thereon, in contradistinction to market- 
 able titles, whereby the former are rendered salable, and 
 property otherwise immovable for lack of a good legal title 
 becomes marketable ; insurance against theft, which needs no 
 explanation ; insurance against the ravages of hailstones ; 
 cattle insurance, or insurance against the loss of cattle by 
 
 1 Life Insurance, 98. 
 
 ■^ See Bunyon, uhi supra, for some speculations and discussions bearing upon 
 this point. 
 
 1244
 
 CH. XXX.] OP GUARANTEE AND OTHER INSURANCES. [§ 547 a 
 
 disease, — all of which have been practised to some extent 
 in England, and the last two especially to a very considerable 
 extent on the continent, particularly in Germany, France, 
 and Switzerland. But no adjudications by the courts of 
 England of contested points arising under these several 
 forms, have yet, so far as we are aware, been published, 
 though on the continent, especially in France, there has been 
 considerable litigation. These are not, however, deemed of 
 such pi-esent interest in this country as to w^arrant their in- 
 troduction here. In this country the lives of horses are in- 
 sured to some extent. In Hartford Live Stock Insurance 
 Company v. Mathews, a question arose as to the truth of the 
 representation that the horse whose life was insured was 
 sound, and of a certain value, when in fact he was not sound, 
 and was of much less value. The insurers had paid the loss, 
 and successfully sued to recover back the money paid, as ob- 
 tained through deceit and false swearing as to value at the 
 time of the loss.^ In American Horse Insurance Company v. 
 Patterson,^ wiiich was also an insurance upon the life of a 
 horse, the only question in dispute was whether the horse 
 was alive when the policy took effect. 
 
 § 547 a. Guarantee Insurance ; Hail. — Where the policy 
 insuring against damage by hail provided that the damage 
 should be determined by appraisers appointed by the com- 
 pany, and in case the appraisement was less than a twenty- 
 fifth of the value no claim should be made on the company, 
 — the insured to bear the expense of the appraisement, — 
 and also that on demand of the agent the costs of the 
 assessment should be deposited by the insured before the 
 assessment is accomplished, it was held that the deposit 
 might be demanded before making the appraisement, without 
 regard to the amount of the damage which might prove to be 
 actually done, and no recovery could be had if the demand 
 for such deposit had not been complied with, and that the loss 
 amounting to one twenty-fifth, and other conditions not pre- 
 venting, a recovery could be had.'^ 
 
 1 Ante, § 477. ^ ^nte, § 44. 
 
 3 Mutual Hail Ins. Co. v. Wilde, 8 Neb. 427. 
 
 1245
 
 § 547 B] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. CH. XXX. 
 
 [§ 547 B, Marriage Insiurance. — A contract of marriage 
 insurance which agrees to pay more on the event of marriage 
 in proportion to the term of membership before marriage is 
 void as having a tendency to induce the indefinite postpone- 
 ment of marriage.^] 
 
 1 [White V. Equitable Mut. Ben. Union, 76 Ala. 251.] 
 
 1246
 
 CH. XXXI.] OF MUTUAL INSURANCE. 
 
 CHAPTER XXXI. 
 
 OF MUTUAL INSURANCE. 
 
 Analysis. 
 
 § 548. Each person insured becomes a stockholder, and is at once insured 
 
 and insurer. 
 The whole premium may be paid in advance, and no after 
 
 liability attach. 
 Charter lien. 
 § 549. The capital consists of cash, premium and deposit notes, §§ 549 a, 
 
 549 6. 
 and the liability of members to a fixed amount beyond these. 
 § 550. Mutual and stock business done by same company. 
 
 § 550 a. Benevolent associations treated as life insurance companies. 
 
 § 551. Mutual life insurance guarantee fund. 
 
 § 552. Membership. How far members bound by the by-laws. Appli- 
 
 cants not bound by them until the contract is com- 
 plete, and contra. 
 Acts of officers. Safety fund. Diversion of funds from 
 
 purpose of charter. 
 False representations in procuring membership. Estoppel 
 to deny membership. A minor may be a member. 
 §§ 553, 554. Forfeiture of policy as a defence on note. 
 § 555. Surrender and cancellation of policy. See also § 556. Insolvency 
 
 of maker of premium note. 
 § 557. Assessments. 
 
 Right to assess strictly construed. The assessment must 
 conform to the charter, and the agreement must be 
 by the proper officers. 
 § 558. Slight errors do not invalidate assessments. 
 
 § 559. What they may include. Insolvency. Set-off. 
 
 How the amount for which the assessment is to be 
 made is estimated, and must not be larger than 
 necessary to meet existing charges, or intention- 
 ally omit stockholders. But an assessment may 
 be made to cover losses by bad investments, or 
 prior assessment illegal in form, and mere ex- 
 cessiveness if not gross will not be fatal. 
 § 560. Classification of risks and funds. 
 
 § 560 A. Extent of liability to pay. See also § 561. 
 
 Fraud inducing member to join is a defence, § 560 A. 
 
 But neglect to read the policy, which turns out to 
 
 be different from what the insured wanted, is 
 
 no defence. The holder is presumed to know 
 
 the contents of the policy he accepts. 
 
 VOL. n. — S5 1247
 
 § 548] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 Assessments, continued. • 
 
 § 560 B. Forfeiture or suspension by non-payment. (Liability in spite of ; 
 
 see § 560 A.) 
 Not if assessment is invalid; 
 
 or assured's share of company profits will satisfy the assess- 
 ment on him; 
 or the policy is revived, or there is an excuse for non- 
 payment which the compan}^ ought to recognize. 
 Evidence of forfeiture. Company's books the best. 
 § 561. Sometimes the whole amount of the deposit note becomes 
 
 due upon a single default. 
 § 561 A. "Waiver. 
 
 by course of dealing. 
 
 any subsequent recognition of policy as valid. 
 
 sending a second notice after the expiration of the time for 
 
 payment, 
 subsequent levy or collection of an assessment, unless 
 qualified. 
 § 562. Notice of assessment. Mail. By-law. 
 
 Charter provision. Publication. Date. 
 Time allowed for payment after. 
 § 563. Contract with parties out of the State. 
 
 Lien. See also § 560 A. 
 § 563 A. It is the duty of the company to make an assessment within a 
 
 reasonable time, and [)ay a loss, and if it does not, suit may 
 be brought, Qit\\ev Jot mandamus to compel an assessment, 
 or for the amount of an assessment levied, or, where none 
 has been levied, for the maximum amount of the policy, 
 leaving the company to prove if it can that a proper assess- 
 ment would not produce so much. This is the best doctrine, 
 though there are contra authorities both as to the form of suit 
 and the burden of proof. 
 A by-law may diminish the class assessable, or may require resort 
 to a superior body of the society before suit, but cannot cut 
 off final resort to the courts. 
 Numbering of certificates jjrima facie evidence of membership. 
 Lack of certificate fatal to suit. 
 § 564. Liability of directors for neglecting to assess. 
 
 § 548. Mutuality ; Membership ; Capital ; Lien. — We have 
 already had occasion to refer to some of the distinctions be- 
 tween mutual and stock insurance, especially with reference 
 to their respective powers to enter into contracts, and to 
 waive the provisions of their charters and by-laws.^ Some 
 further peculiarities of mutual insurance will be made the 
 subject of this chapter. The principle which lies at the 
 foundation of mutual insurance, and gives it its name, is 
 mutuality ; in other words, the intervention of each person 
 
 1 See ante, §§ 62, 146 et seq. 
 
 1248
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 548 
 
 insured in the management of the affairs of the company, and 
 the participation of each member in the profits and losses of 
 the business, in proportion to his interest. Each person in- 
 sured becomes a member of the body corporate, clothed with 
 the rights and subject to the liabilities of a stockholder.^ He 
 is at once insurer and insured. In New York companies 
 have been chartered to do business " on the mutual plan," 
 with authority to give the insured an option whether to pay 
 the whole premium in advance in cash, without further 
 liability to assessments, or to pay part in cash and part in an 
 assessable premium note. And it was contended that this 
 option was inconsistent with the principles of mutuality. 
 But the court held otherwise. The money they held to be 
 in lieu of the note, and subject to the same appropriation, 
 with the difference that it mu'st be first applied, and no part 
 of it can be withdrawn at the expiration of the policy, 
 although it may not have been all expended. The pi'inci- 
 ple of mutuality was said to consist not in the fact that 
 each member is an insurer as well as the insured, but in 
 the fact that he contributes to the common fund, — this 
 contribution being sufficient to constitute membership, and 
 may as well be represented by cash as by a note.^ And 
 an ordinary note may in such case be accepted as a substi- 
 tute for the cash payment.^ The fact that there is no fur- 
 ther liability on the part of the member, if the possible 
 extent of his liability is met by payment of cash in ad- 
 vance, does not militate against the principle of mutuality.* 
 
 1 [A contract by which one party promises to make a payment of indemnitj'^ 
 or towards it, upon the loss or destruction of sometiiing in wliich tlie other lias an 
 interest is a contract of insurance, and it makes no difference that tho promisor 
 is a corporation and the promisee becomes a member of it, and the sums 
 promised are to be paid by assessments. State v. Insurance Co., 30 Kans. 585.] 
 
 2 Mygatt V. N. Y. Prot. Ins. Co., 21 N. Y. 52 ; Ohio Mut. Ins. Co. v. Marietta 
 Woollen Co., 3 Ohio St. n. s. 348. [That a policy is for cash and on short time 
 does not make it a stock policy. State v. Manufacturers' Mut. Fire Ins, Co., 91 
 Mo. 811.] 
 
 3 Carey v. Nagle, 2 Abb. (U. S.) 15(5. 
 
 * Union Ins. Co. v. Hoge, 21 How. (U. S.) 35.' The four cases last cited, 
 and especially the first of them, are referred to as containing a very elaborate 
 discussion of the principles which underlie mutual insurance. But see contra, 
 Hart V. Achilles, 28 Barb. (N. Y.) 577. 
 
 1249
 
 § 549] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 And the premium notes so held are liable for losses under 
 cash policies.^ 
 
 The lien given by charter upon property insured is not 
 valid against a hona fide purchaser. ^ 
 
 § 549. Mutual Insurance ; Capital. — Although the members 
 of a mutual company are not usually denominated stock- 
 liolders, and are not stockholders in the usual sense of the 
 word, yet they are in point of fact stockholders, and in many 
 of the policies are recited to have taken a portion of the capi- 
 tal stock. This stock is usually taken by paying in a certain 
 amount of cash premium, and the balance in what are denomi- 
 nated premium notes ; that is, notes given for premiums, to 
 form the basis of assessments for losses and expenses, and 
 constituting the capital or funds of the company. The capi- 
 tal stock of a mutual insurance company usually consists in 
 its cash assets, its premium and deposit notes, assessable to 
 pay losses, which are usually denominated absolute funds, and 
 the liability to a fixed amount, by statute or charter, over and 
 beyond these, to be resorted to after the first arc exhausted, 
 and usually denominated conditional funds. Sometimes notes 
 given to the company in advance for premiums, called stock 
 or advance notes, and expressly made payable by insurance 
 from time to time, as the makers of the note may require, 
 constitute a portion of the capital stock. And between these 
 latter notes and the ordinary deposit notes, made payable 
 from time to time, as called for by assessments for losses, the 
 distinction is to be observed that whereas the former are 
 payable absolutely and at all events, without regard to the 
 question of loss,^ and are therefore subject to the Statute of 
 Limitations,* and are negotiable,^ the latter are only payable 
 at such times and in such portions as may be necessary to 
 
 1 Wliite V. Havens, 20 How. Pr. 177 ; Ohio Mut. Ins. Co. v. Marietta Wool- 
 len Co., supra. 
 
 ~ Kentucky v. Insurance Co., 7 Bush (Ky.), 23; McCulloch v. Indiana Mut., 
 &c. Ins. Co., 8 BLickf. (Ind.) 50. 
 
 3 Dana v. Munro, 38 Barb. (N. Y.) 528 ; Brown v. Crooke, 4 Comst. (N. Y.) 
 51 ; Maine Mut. Ins. Co. v. Scranton, 49 Me. 448. 
 
 * Savage v. Medbury, 19 N. Y. 32. 
 
 & Brookman v. Metcalf, 32 N. Y. 591. 
 
 1250
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 549 a 
 
 meet losses and expenses, are not ncg-otiablc, because payable 
 only upon a contingency which may never happen, and the 
 general Statute of Limitations docs not run in favor of the 
 note as a whole, but only u])on so much as may be called iov, 
 and from the time of the call.^ And a premium note, absolute 
 on its face, cannot be treated by the company or its receiver, 
 or by any one except a hona fide holder, as a stock or capital 
 note, so that the whole may be collected without regard to 
 losses or assessments.^ A note given in advance for premiums 
 to be earned, and by the terms of the charter not to be held 
 liable for any amount beyond the premiums earned, is a pre- 
 mium note, and not a subscription or capital stock note, and 
 is collectible only so far as premiums have been earned.-^ 
 Whether a note is a premium or stock note is a question of 
 evidence, with a presumption that it is a stock note if given 
 before the organization of the company.* And a note, in form 
 a premium note, may be shown to have been given as a sub- 
 scription or stock note, and used as such, with the consent of 
 the maker, in organizing the company ; in which case the whole 
 amount may be collected without assessment.^ 
 
 § 549 a. Mutual Insurance ; Absolute Funds. — In some forms 
 of mutual insurance the charter provides substantially that when 
 a person becomes a member he shall, in addition to the payment 
 of the premium, deposit his note for a like amount, as a part of 
 the capital stock of the company, to be assessed and collected 
 by the directors in sucli sums and at such times as they shall 
 deem expedient ; that all premiums and deposits thus made 
 shall be denominated the absolute funds, to be applied to the 
 payment of expenses, borrowed money, and losses ; and if 
 these funds should prove insufficient, then the member is to be 
 liable to be called upon to twice the amount of the premium 
 
 1 Savage v. Medbury, ul supra ; Howland v. Edmonds, 24 N. Y. 307, reversing 
 Bell V. Yates, 33 Barb. (N. Y.) 627, 628, contm ; Hope Ins. Co. v. Weed, 28 Conn. 
 51; Hope, &c. Ins. Co. v. Perkins, 2 Abb. (N. Y.) App. Cas. 383 ; Howland o. 
 Cuykendell, 40 Barb. (N. Y.) 320; Sinkler v. Indiana Turnp. Co., 3 Pa. 14'J. 
 
 2 Bell V. Shibley, 33 Barb. (N. Y.) 610 ; Melntire r. Preston, 5 Gilni. (111.) 48. 
 
 3 Elwell V. Crocker, 4 Bosw. (N. Y. Superior Ct.) 22. 
 
 4 Jackson v. Van Slyke, 52 N. Y. 645. 
 
 5 Sands v. St. Jolin, 36 Barb. (N. Y.) G28. 
 
 1251
 
 § 549 5] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 and deposit. In such case the deposit note is collectible at 
 the discretion of the directors, without assessment, and the 
 proceeds may be applied to the payment of losses accrued be- 
 fore the member became insured.^ 
 
 § 549 h. Mutual Fire Insurance ; Security Notes ; Insolvency. 
 — In other forms of mutual insurance the companies are 
 authorized, for the better security of dealers, to receive notes 
 for premiums in advance from persons intending to take out 
 policies, and to negotiate such notes for the purpose of paying 
 claims or otherwise in the course of its business ; and on such 
 portions of said notes as may exceed the amount of premiums 
 paid by the respective makers, and on new notes taken in ad- 
 vance from time to time, annually to allow a compensation of 
 a certain per cent for their use. These are termed security 
 notes, and are in addition to the notes given for premiums in 
 advance in the usual course of business, and to be resorted 
 to only in case of the insufficiency of the latter to meet the 
 claims against the company. Under such a proviso the notes 
 are negotiable by the president without a vote of the direc- 
 tors, under his general authority to transact the business of 
 the company, and may be transferred to a member of the 
 company in payment of a claim for loss,^ or for other purposes, 
 even before a loss or before any insurance has been effected.^ 
 And a transfer by act of law without indorsement is effectual ; * 
 but a promise by the president before its maturity, or at that 
 time, to give such a note up, is one which he has no authority 
 to make.^ Nor is a surrender by the directors without con- 
 sideration, binding upon the receiver.^ And neither the in- 
 solvency of the company, nor the fact that the note is overdue, 
 is a defence, if from an insufficiency of other funds it becomes 
 necessary to resort to this further security. Whether negoti- 
 ated before or after maturity, they are recoverable to their 
 full amount, less the premiums on policies taken out by the 
 
 1 Nashua Fire Ins. Co. v. Moore, 55 N. H. 48. 
 
 2 Aspinwall v. Meyer, 2 Ranclf.(N. Y. Superior Ct.) 180. 
 
 8 Brouwer v. Appleby, 1 Sandf. (N. Y. Superior Ct.) 158. 
 4 Brouwer t^. Hill, 1 Sandf. (N. Y. Superior Ct.) 629. 
 6 Ibid. 
 6 Ibid. 
 
 1252
 
 CH. XXXI.] OF MUTUAL INSURANCE, [§ 550 a 
 
 makers, and the interest due at the time of insolvency by the 
 company.! ^|j renewal notes, given for any outstanding bal- 
 ance of the original note, stand upon the same footing, and 
 are payable notwithstanding the company after failure refuse 
 an application for insurance.^ But if the renewal note be for 
 the same amount as the original note, without deduction of 
 premiums, which may have been debited duiing its currency, 
 these cannot afterwards be deducted in a suit by the receiver 
 to collect the note. The renewal of the note to the full 
 amount is to be regarded as an election to have the benefit of 
 the continued subscription to that amount, with the advan- 
 tage of the five per cent compensation, and the extended credit 
 for premiums which they might incur.^ If these notes are 
 taken subsequent to the organization of the company, it is a 
 question of fact whether they are given for premiums in ad- 
 vance in the usual course of business, or as security notes.^ 
 
 § 550. Mutual and Stock Companies. — In some instances 
 the stock and mutual plans of insurance are authorized by the 
 charter and practised by the same insurance company. When 
 this is the case, the insured, in the absence of any statement 
 in the contract in which category he is included, will be 
 deemed to be insured under the stock or mutual plan, accord- 
 ing to the circumstances or nature of the particular contract.^ 
 The premium notes in such case represent the capital stock, 
 and may be resorted to by all the cash policy-holders for their 
 indemnity.^ 
 
 § 550 a. Benevolent Associations. — There are certain or- 
 ganizations prevalent in this country and elsewhere, under tlie 
 name of relief, benefit, or benevolent societies, or some simi- 
 
 1 Hone V. Allen, 1 Sandf. (N. Y. Superior Ct.) 171, n. ; Merchants' Mut. Ins. 
 Co. V. Leeds, id. 183; Deraismes v. Merchants' Mut. Ins. Co., 1 Comst. (N. Y.) 
 371. 
 
 2 Hone V. Folger, 1 Sandf. (N. Y. Superior Ct.) 177. 
 
 3 Hone V. Ballin, 1 Sandf. (N. Y. Superior Ct.) 181. 
 
 * Merchants' Mut. Ins. Co. v. Rey, 1 Sandf. (N. Y. Superior Ct.) 184; Brouwer 
 V. Hill, 1 Sandf. (N. Y. Superior Ct.) 629. 
 
 5 Illinois Fire Ins. Co. v. Stanton, 67 111, 354. 
 
 6 Hays V. Lycoming, &c. Ins. Co., 98 Pa. St. 184; lO Ins. L. J. 507; Schimpf 
 r. Lehigh, &c. Ins. Co., 86 Pa. St. 373. 
 
 1253
 
 § 551] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 lar name, which generally have for their object aid to their 
 members, or to their widows and children after the decease of 
 their respective members, and in some cases having both ob- 
 jects. These associations, though not speculative, and not 
 based upon capital paid in as an investment, have neverthe- 
 less a general purpose of mutual protection, resorting to 
 assessments for the procurement of the funds to discharge the 
 mutual obligations of members, and are governed by by-laws 
 which limit and define these obligations. Their certificates 
 of membership often resemble, both in form and substance, 
 ordinary policies of life insurance ; and the courts have with 
 great uniformity treated them as substantially life insurance 
 companies, applying to them, and to the virtual relatives 
 of the members, the rules and principles applicable to the 
 contract of life insurance.^ 
 
 § 551. Mutual Life Insurance ; Guarantee Fund. — Under its 
 inherent powers, as incidental to its general power to issue 
 policies of insurance, a mutual life insurance company may, 
 by an agreement amongst its members, establish a guarantee 
 fund, consisting of the notes of the several members, upon 
 which they may receive a commission of a percentage per 
 annum, so long as the notes are held as a part of such fund. 
 And in case of insolvency of the company, these notes may be 
 assessed to pay losses to their full amount, the makers stand- 
 
 1 Commonwealth v. Wetherhee, 105 Mass. 149 ; Kentucky Masonic Ins. Co. 
 V. Miller, 13 Bush (Ky.), 489; Shunck v. Gegenseitiger, &c. Fund, 44 Wis. 370; 
 Dietrich v. Madison Relief Ass., 45 id. 79 ; Masons' Benevolent Soc. v. Win- 
 throp, 85 III. 537 ; State v. Merchants' Exch. Benev. Soc. (Mo.), 10 Ins. L. J. 
 59; Swift V. Railway, &c. Conductors' Mut. Aid, &c. Ass. (111.), id. 53 ; An- 
 cient Order of Mutual Workmen v. Moore (Ky.), 9 id. 539; Protection Life 
 Ins. Co., In re, C. Ct. (111.), id. 145. In this case the policies issued by tiie com- 
 pany provided that payment of death-losses should be made by assessment pro 
 rata upon the policy-holders, and further provided the manner of making such 
 assessment by the company, and that the assessment was to be made upon those 
 holding policies at the time of the assessment ; and it was held that an assess- 
 ment under these policies does not make the policy-liolders debtors to the com- 
 pany so as to authorize it to bring suit in case of neglect or refusal to pay, nor 
 can the assignee in bankruptcy of such company maintain sucli suit. Tiie 
 amount to be assessed is not an asset of the company, and, when collected, 
 does not belong to the company or its general creditors, but to the special class 
 of creditors, the beneficiaries, who could alone maintain this suit. 
 
 1251
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 552 
 
 ing in the position of general creditors as to their claims for 
 commission against the company. ^ If such a right be given 
 bv charter, the notes of persons not members cannot be sub- 
 stituted under this chartered privilege.^ "^ 
 § 552. Mutual Insurance ; Membership. — By the insured in 
 a mutual insurance policy is meant the person who owns the 
 property, applies for the insurance, pays the premium, and 
 signs the deposit note, and not another person to whom the 
 money may be made payable in case of loss.^ When a party 
 takes out a policy, and the contract is complete, he becomes a 
 member, and is bound by its rules and the provisions of the 
 charter, which he is presumed to know.* The records of the 
 
 1 Hope Mut. Life Ins. Co. v. Weed, 28 Conn. 51 ; Hope Mut. Life Ins. Co. v. 
 Perkins, 38 N. Y. 404, affirming s. c. 4 Robt. 18. 
 
 2 Mut. Ben. Life Ins. Co. v. Davis, 12 N. Y. (2 Ker.) 569. 
 
 " Sanford c. Mechanics' Mut. Fire Ins. Co., 12 Cush. (Mass.) 541. 
 
 4 Mitchell V. Lycoming Mut. Ins. Co., 51 Pa. St. 402; Coles v. Iowa State 
 Mut. Ins. Co., 18 Iowa, 426. Until the contract is complete, a mutual company- 
 has no other or better position with reference to the insured than a stock com- 
 pany. Eilenberger v. Protection Ins. Co., 89 Pa. 464. One previously insured 
 in a mutual company is, however, presumed to know its by-laws and business 
 routine. Fuller v. Madison, &c. Ins. Co., 36 Wis. 599. As to business routine, 
 contra, Walsh v. ^tna Life Ins. Co., 30 Iowa, 133. [The by-laws of the com- 
 pany' are part of the contract, and all members must take notice of them. Su- 
 preme Lodge, K. of P. V. Knight, 117 Ind. 489; Splawn v. Chew, 60 Tex. 532; 
 Treadway v. Hamilton Mut. Ins. Co., 29 Conn. 68 at 69 ; Simeral y. Dubuque Mut. 
 Fire Ins. Co., 18 Iowa, 319 at 322 (at least where the policy refers to tliem). 
 Sometimes a by-law provides that any policy issued on property mortgaged to 
 one-half its value shall be void, and that mortgaged property shall not be insured 
 so that the insurance and mortgage together shall exceed three-fourths of its 
 value. In such case the company is not bound to ascertain the value of the 
 property, the assured is bound to know the by-law and the value, and takes the 
 risk on himself when he signs the application. Such action amounts to a war- 
 ranty that the by-law is not violated. Van Buren v. St. Joseph Co. Village Fire 
 Ins. Co., 28 Mich. 398. It was held m New Jersey that a member of a mutual 
 company is presumed to know the by-laws, and a representation by the treas- 
 urer that they were all in the policy under the head of " conditions of insurance" 
 does not estop the company from setting up a by-law not m the policy. Miller 
 V. Hillsborough Mut. Fire Ins. Co., 42 N. J. Eq. 459. But on appeal the court 
 decided that although the constitution and by-laws were made a part of the 
 policy by words in the body of it, yet the annexation to the policy of a number 
 of by-laws called "conditions of insurance" justified the inference tiiat no 
 other by-law could affect the policy, and as there was no actual knowledge of 
 the by-law relied on by the company, the decree was reversed. 44 N. J. Eq. 224, 
 
 1255
 
 § 552] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 company are then his records, and evidence for or against 
 him ; ^ and the doings of the officers within the scope of their 
 authority are binding upon him.^ But he is not a member till 
 the negotiations are complete, and is not presumed to know 
 anything of the rules and by-laws pending the negotiations.^ 
 After he becomes a member he cannot deny its existence, or 
 avail himself collaterally of an irregularity in the proceedings 
 by which it became a corporation, or acquired its powers;* 
 nor can he deny collaterally the acceptance of an amendment 
 to the charter, after he has given a note in accordance with 
 the provisions of such amendment ; ^ nor can he set up a 
 want of insurable interest as a defence against assessments,^ 
 as under the principle of mutuality these deposit notes upon 
 which assessments are made constitute a fund which he has 
 no right to withdraw, it having been established for the benefit 
 of others as well as of himself. He is not, however, bound 
 by a by-law or other act of the company affecting his con- 
 tract or relation to the company, passed without his consent,'^ 
 
 227. A mutual company cannot by a subsequent by-law affect the rights of a 
 member : Northwestern Ben. & Mut. Aid Ass. r. Wanner, 24 Brad. 361 ; unless 
 of course there were an express agreement that subsequent by-laws should 
 enter the contract.] 
 
 1 Diehl V. Adams County Mut. Ins. Co, 58 Pa. St. 443. 
 
 2 Hackney v. Alleghany County Mut. Ins. Co., 4 Pa. St. 185. [If, however, 
 an officer violates his duty, as by wilfully refusing to make the required certifi- 
 cate that a member is sick, the latter may bring suit. Order of the Iron Hall 
 V. Stein, 19 Ins. L. J. 20 (Ind.) 1889.] 
 
 3 Columbia Ins. Co. v. Cooper, 50 Pa. St. 331. And see also Cumberland 
 County Mut. Prot. Co. v. Schell, 29 Pa. St. 31. These cases must be considered 
 as rejecting the contrary doctrine asserted by Gibson, C. J., in Susquelianna Ins. 
 Co. V. Perrine, 7 W. & S. (Pa.) 848. 
 
 4 Sands v. Hill, 42 Barb. (N. Y.) 651 ; Traders' Mut. Fire Ins. Co. v. Stone, 
 9 Allen (Mass.), 483 ; Appleton Mut. Ins. Co. v. Jesser, 5 id. 446 ; Citizens' Mut. 
 Ins. Co. V. Sortwell, 8 id. 217 ; Currie v. Mut. Ass. Soc , 4 H. & M. ( Va.) 315 ; 
 Cooper V. Shaver, 41 Barb. (N. Y.) 151 ; Nashua Fire Ins. Co. v. Moore, 55 N. H. 
 48; Prov. Fire & Mar. Ins. Co. v. Murphy, 8 R. I. 171; Brouwer v. Appleby, 
 1 Sandf. (N. Y.) 158; Judale v. American Ins. Co., 4 Ind. 333; Yard v. Pacific, 
 &c. Ins. Co., 2 Stockt. (N. J. Ch.) 480. 
 
 5 Fell V. McHenry, 42 Pa. St. 41 ; Hope Mut., &c. Ins. Co. v. Beckmann, 47 
 Mo. 93. 
 
 6 New England Mut. Fire Ins. Co. v. Belknap, 9 Cush. (Mass.) 140. See also 
 post, § 590. 
 
 ' New England Mut. Fire Ins. Co. v. Butler, 34 Me. 451 ; Hamilton Mut. Ins. 
 
 1256
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 553 
 
 especially if in contravention of the charter.^ And if he be 
 induced to become a member by fraudulent representations of 
 the insurers or their agents, the fraud vitiates the contract, 
 and relieves the insured from auy obligations towards the 
 insm'er under it.^ [A member of a society organized for the 
 benefit of wives, orphans, heirs, and devisees of deceased 
 members cannot derive profit from the society, and an agree- 
 ment to pay a member a certain sum at seventy years of age 
 is void.^ It is the duty of a mutual society to protect the 
 members and the funds in its hands from all invalid claims, 
 and it is error to exclude evidence of false representations in 
 procuring membership.* Where the safety fund is by the 
 terms of the contract to be applied for the benefit of members 
 of five years ' standing, claimants for death losses have as such 
 no rights in the fund.^ A company which after knowledge 
 of a breach continues to make calls, and votes to reinstate 
 the member, though not in all respects proceeding in con- 
 formity with the rules of the institution, is nevertheless es- 
 topped from denying that the deceased was a member in good 
 standing.^ A minor may be received as a member of a 
 mutual benefit association. Payment of assessments is not 
 compulsory on any one. If they are paid by the infant he is 
 entitled to the corresponding benefits. If they are not paid, 
 his membership ceases just as in the case of an adult."] 
 
 § 553. Forfeiture of Policy no Defence against Liability on 
 Note. — When membership is once established, its liabilities 
 
 Co. V. Hobart, 2 Gray (Mass.), 543; Insurance Co. v Connor, 17 Pa. St. 136; 
 Bradfield v. Union, &c. Ins. Co. (C. C. P. Pa.), 10 Ins. L. J. 551 ; Wallace v. In- 
 surance Co., 4 La. 289 ; Rosenberger v. Insurance Co., 6 Norris (Pa.), 267 ; Van 
 Slyke V. Trempealeau, &c. Ins. Co., 48 Wis. 683. 
 
 1 Great Falls Mut. Fire Ins. Co. v. Harvey, 45 N. H. 292. 
 
 2 Jones V. Dana, 24 Barb. (N. Y.) 895; Devendorf v. Beardsley, 23 id. 656; 
 Fogg V. Griffin, 2 Allen (Mass.), 1 ; Brown v. Donnell, 47 Me. 421 ; Sterling v. 
 Mer. Mut. Ins. Co., 32 Pa. St. 75 ; Salmon v. Richardson, 30 Conn. 3tiO ; ante, 
 § 133. 
 
 3 [Canton Masonic Mut. Ben. Soc. v. Rockliold, 26 Brad. 141.] 
 * [Mayer v. Equitable Life Ass., 42 Hun, 237.] 
 
 5 [Burdon v. Mass. Safety Fund Ass., 147 Mass. 360, 366.] 
 
 6 [Hoffman v. Supr. Council of Araer. Leg. of Honor, 35 Fed. Rep. 252 (Va.) 
 1888.] 
 
 T [Chicago Mut. Life Indem. Ass. v. Hunt, 127 111. 257.] 
 
 1257
 
 § 558] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 continue, although the member does some act which, by the 
 terms of the contract, avoids the policy, and although the 
 company declares the policy void, so that the right of the in- 
 sured to indemnity in case of loss no longer exists. And this 
 liability extends to all losses while the policy is in force and 
 the insured is a member,^ even after a total loss upon the 
 policy by which he becomes a member.^ 
 
 Acts of policy-holders, which might entitle the corporation 
 to defend against claims for losses, do not necessarily release 
 such parties from liability to assessment as members. They 
 cannot take advantage of want of insurable interest, whether 
 it existed originally, or was occasioned by destruction or re- 
 moval of the buildings insured, or by alienation ; nor of mis- 
 description of the property insured, or its mode of occupation ; 
 nor of a loss of the right to recover upon the policy by rea- 
 son of other insurance not assented to. Such parties are 
 members of the corporation, notwithstanding such ground of 
 defence to a suit for recovery of a loss. They cannot, by their 
 own act, negligence, or fraud, lay the foundations of their 
 exemption from liability. The assent of the other party to 
 the contract is necessary to the release ; or at least some such 
 recognition of the act, negligence, or fraud as amounts to an 
 assertion by the insurers of their election to treat the rela- 
 tionship by contract as at an end.^ 
 
 But members only are liable to assessment. Parties who 
 have neither taken their policy, nor signed any application 
 or deposit note, nor paid the premium, are not members, and 
 cannot properly be included in the assessment. Assignees 
 of policies, even with consent of the company, who have not 
 made themselves members by signing any agreement to be- 
 come so, or to pay what may become due upon the policy 
 or upon the deposit note, are not liable to assessment.* And 
 
 1 Iowa State Mut. Ins. Co. v. Prossee, 11 Iowa, 115 ; Commonwealth v. Union 
 Mut. Fire Ins. Co., 112 Mass. 116. 
 
 2 Swamscot Machine Co. i\ Partridge, 5 Post. (N. H.) 369. 
 
 3 Post § 554 ; Boot & Shoe, &c. Ins. Co. v. Melrose, 117 Mass. 1«9; Cumings 
 V. Sawyer, 117 Mass. 30; Columbia Ins. Co. v. Bnckley, 83 Pa. 29-3, 298. 
 
 * Commonwealth r. Union Mut. Ins. Co., vhi supra ; Philbrook r. New Eng- 
 land Mut. Ins. Co., 37 Me. 137 ; Gardiner v. Piscataquis Mut. Fire Ins. Co., 38 
 
 1258
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 553 
 
 where the policy is assigned by consent of the insurers, and 
 the assignee thereby becomes a new member, he is not liable 
 for an outstanding unpaid premium note given by the assignor, 
 unless so stipulated.^ 
 
 And if the policy by its terms stipulates that in case of 
 forfeiture by the act of the insured he shall not be re- 
 leased from the obligations of the deposit or premimn note 
 until he has complied with the conditions of the policy and 
 charter, requiring the payment of his proportion of all losses 
 and expenses that may have accrued prior to the surrender 
 of the policy or alienation of the property, the insured will 
 still remain liable upon his deposit note for losses occurring 
 after, as well as before, the alienation or act working the for- 
 feiture, until all assessments are paid and the policy surren- 
 dered. And this is so notwithstanding the policy provides 
 that the person becoming a member shall continue a member 
 so long as he is insured and no longer.^ But an assessment 
 after forfeiture of the policy, made with knowledge thereof, 
 actual or constructive, and for losses occurring afterwards, is 
 a waiver of the forfeiture, and gives to the insured the right 
 to indemnity for loss under the policy.^ It is otherwise, how- 
 
 Me. 439 ; Boynton v. Clinton Ins. Co., 16 Barb. (N. Y.) 254 ; New Hampshire, 
 &c. Ins. Co. V. Hunt, 30 N. H. 219 ; Cumings v. Hildretli, 117 Mass. 309. 
 
 1 Storms V. Canada Farmers' Mut. Ins. Co., 22 U. C. (C. P.) 75. 
 
 2 Hyatt V. Wait, 37 Barb. (N. Y.) 29; Neely v. Ononrlaga County Mut. Ins. 
 Co., 7 Hill (N. Y.), 49 ; Atlantic Ins. Co. v. Goodall, 85 N. H. 328. But see contra, 
 Wilson ;;. Trumbull County Mut. Ins. Co., 19 Pa. St. 372 ; Indiana, &c. Ins. Co. 
 V. Conner, 5 Port. (Ind.) 170, overruling Indiana, &c. Ins. Co. v. Coquillard, 2 
 Carter (Ind.), 645 ; Bersch v. Sinnissippi Ins. Co., 28 Ind. 64. But the obvious 
 distinction between mutual and stock insurance seems not to have been duly 
 considered in these cases. In fiict, it gives greater rights to one insured in a 
 mutual company than to one insured in a stock company. The latter cannot 
 recover back a premium after forfeiture by a voluntary alienation. Nor can 
 the former. The deposit note is but the premium paid ; and if he can avoid 
 his liability thereon, he practically thereby recovers back his premium. But 
 this he has placed at the disposition of others, and he cannot at his own pleas- 
 ure, and without their consent, withdraw it. He may forfeit his rights, but lie 
 cannot avoid his obligations to others without their consent. See Crawford 
 County Mut. Ins. Co. v. Cochran, 88 Pa. St. 230, which seems inconsistent witli 
 Wilson's case. 
 
 3 Sands v. Hill, 42 Barb. (N. Y.) 651 ; Insurance Co. v. Slockbower, 26 Pa. 
 St. 199; Tuttle v. Robinson, 33 N. H. 104; Viall v. Genesee, &c. Ins. Co., 19 
 
 1259
 
 § 554] INSURANCE : FIEE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 ever, if the assessment is made for a loss occurring before the 
 forfeiture, or be made without knowledge of the forfeiture.^ 
 And an assessment for losses occurring after forfeiture, made 
 by the company with knowledge of the forfeiture, cannot be 
 enforced.^ 
 
 § 554. Forfeiture ; Premium Note. — A successful defence to 
 an action on the policy for a loss, on the ground that the 
 policy became void because the insured procured other insur- 
 ance without notice, is in legal effect an adjudication between 
 the parties that the policy was void from and after the day 
 when the additional insurance was procured ; and from the 
 moment that the insurers thus elect to avoid the policy, the 
 premium note also becomes void, and without consideration 
 in respect to all future losses.^ A vote, however, to suspend 
 the operation of the policy, without authority of charter or 
 by-law, or the assent of the insured, is of no force or effect.^ 
 In Rhode Island, where a mortgagor insured under a policy, 
 void if the interest of the insured should be conveyed with- 
 out the consent of the insurers, made an assignment of 
 his interest without the knowledge of the insurers or the 
 mortgagee, and afterwards, but without knowledge of the 
 alienation, the insurers made an assessment and collected 
 it from the insured, in an action to recover the loss, with 
 a count for money had and received, it was held that 
 though the plaintiff could not recover for the loss by 
 reason of the alienation, and although the collection of an 
 assessment without knowledge of the forfeiture was no 
 waiver, yet the insured might recover back on his money 
 
 Barb. (N. Y.) 440; ante, § 505; Farmers', &c. Ins. Co. r. Bowen, 40 Mich. 147. 
 But see contra, Philbrook v. New England Mut. Ins. Co., 37 Me. 137 ; Neely v. 
 Onondago, &c. Ins. Co., sup?-a. 
 
 1 Allen V. Vermont Mut. Fire Ins. Co., 12 Vt. 306; Finley v. Lycoming 
 County Mut. Ins. Co., 30 Pa. St. 311 ; Smith v. Saratoga, &c. Ins. Co., 3 Hill 
 (N. Y.), 500, 508; Lyons v. Globe, &c. Ins. Co., 28 U. C. (C. P.) 62. 
 
 2 Tuckerman v. Bigler, 46 Barb. (N. Y.) 375- Smith v. Saratoga County Mut. 
 Ins. Co., 3 Hill (N. Y.), 500 ; Wilson v. Trumbull County Mut. Fire Ins. Cc , 19 
 Pa. St. 372. 
 
 3 Tuckerman v. Bigler, 46 Barb. (N. Y.) 375. 
 
 * New England Mut. Fire Ins. Co. v. Butler, 34 Me. 451. 
 1260
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 555 
 
 count what he had paid on the assessment, as money paid 
 by mistake.^ 
 
 § 555. Void Policy ; Surrender and Cancellation ; Insolvency. 
 
 — If the contract of insurance be invalid, as unauthorized by 
 law, or as prohibited unless under certain preliminary condi- 
 tions precedent, the premium note is also invalid ab initio.^ 
 So if the policy be delivered but is ineffectual because never 
 countersigned, the premium note is also invalid.^ And it has 
 been held that the surrender and cancellation of the policy 
 and premium note dissolves the membership, carries with it 
 the note, and releases the insured from further claims, whether 
 on account of past or future losses, as amounting to an adjust- 
 ment of mutual claims.^ So the insolvency of the maker of 
 the premium note, and his discharge from his dcl)ts, relieves 
 the company from any obligation towards him, and the receipt 
 of interest upon the premium note after the filing of the peti- 
 tion in bankruptcy, without actual knowledge, will not revive 
 the policy.^ Other authorities hold that in such cases the 
 
 1 Hazard v. Franklin Fire Ins. Co., 7 R. I. 429. In Indiana, it is said, obiter, 
 that where a pohcy becomes void by a sale and conveyance by the insured, he 
 is no longer liable to an assessment upon his premium note : Boland v. Whitman, 
 33 Ind. 64 ; though in a previous case, Indiana Mut. Ins. Co. ;>. Conner, 5 Ind. 
 170, the note was held to be collectible in proportion to the time the policy was 
 in force. And the liability is discharged whether the policy be actually sur- 
 rendered or not, tlie insured having paid all assessments and dues up to the time 
 of forfeiture. The insurance is the consideration upon which the note rests, and 
 that failmg, the note fails : Ibid. ; overruling McCullough v. Indiana Mut. Fire 
 Ins. Co., 8 Blackf. (Ind.) 50, and Indiana Mut. Fire Ins. Co. v. Coquillard, 2 Ind. 
 645, holding that an actual surrender of tlie policy is necessary. 
 
 2 Haverhill Ins. Co. v. Prescott, 42 N. H. 547 ; Ingrams v. Mut. Ass. Soc, 1 
 Rob. (Va.) 661. 
 
 3 Lynn v. Burgoyne, 13 B. Mon. (Ky.) 400. 
 
 * Wadsworth v. Davis, 13 Ohio St. 123; Hyde v. Lynde, 4 Comst. (N. Y.) 
 387 ; Campbell o. Adams, 38 Barb. (N. Y.) 1.32 ; York County Mut. Fire Ins. Co. 
 V. Turner, 53 Me. 225. It was so held in New York, though the premium note 
 was retained, assessments paid thereon, and the policy reassigned as collateral, 
 
 — the conveyance of the property, assignment, and reassignment of the policy 
 having been assented to by the insurers. Miner v. Judson, 2 Laiis. (N. Y.) 
 300. 
 
 5 Reynolds v. Mut. Fire Ins. Co., 34 Md. 280. It was said by Bradley, C. J., 
 in Frost v. Saratoga Mut. Fire Ins. Co., 5 Denio, 154, that if the policy is void 
 for false warranty, the premium note is void for want of consideration. But this 
 was not a point necessary to be decided in the case. 
 
 1261
 
 § 555] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 policy is merely voidable and not void, and the premium note 
 is therefore valid, at least till the insurers assert their right to 
 claim a forfeiture.^ But it is elsewhere held that neither the 
 surrender and cancellation, nor the expiration of the policy, 
 nor the insolvency of the company, releases the holder of a 
 policy from his liability to assessment for losses which occur 
 during his membership.^ The true doctrine doubtless is, that 
 if the surrender of the policy and of the premium note are in 
 pursuance of an adjustment which the company has a right to 
 make, there is no longer membership or liability.^ An unexe- 
 cuted agreement to cancel is no defence.^ Neither does tlie 
 destruction of the property and payment of the loss dissolre 
 the relations of the insured to the company. He is still in- 
 sured and liable on his deposit note during the currency of 
 the policy ; and during that period the company has a lien 
 upon the insured premises.^ Upon a vote of the directors, 
 authorized by the by-laws, that by reason of non-payment of 
 an assessment the policy shall be suspended till payment, the 
 liability of the insured to assessments for losses occurring 
 during the suspension continues, though his right to indem- 
 nity meantime is in abeyance.^ So, without a vote of the 
 directors, if the charter provides that neglect to pay an assess- 
 ment shall operate as a suspension of the liability.'' If a by- 
 law provide that upon alienation the insured may surrender 
 his policy, and receive a sum not exceeding his deposit money, 
 
 1 Huntley v. Verrj, 38 Barb. (N. Y.) 569, 571 ; Atlantic Ins. Co. v. Gooilall, 
 35 N. H. 328. And see ante, § "282. But see contra, Gardiner v. Piscataquis Mut. 
 Fire Ins. Co., 38 Me. 4.S9 ; Jackson v. Mass. Mut. Fire Ins. Co., 23 Pick. (Mass ) 
 418 ; Wilson v. Trumbull County Mut. Fire Ins. Co., 19 Pa. St. 372 ; ante, § 553. 
 
 2 Commonwealth v. Union Mut. Fire Ins. Co., 112 Mass. 116; St. Louis Mut. 
 Fire Ins. Co. v. Boeckler, 19 Mo. 135 ; Sterling v. Mer. Mut. Ins. Co., 32 Pa St. 
 75; Alliance Mutual Ins. Co. v. Swift, 10 Cush. (Mass.) 433; post, § 556. 
 
 3 Acker, Receiver, v. Hite (Pa.), 10 Ins. L. J. 20; Sands, Receiver, v. Hill, 55 
 N. Y. 18 ; Columbia Ins. Co. v. Buckley, 83 Pa. 293; New Hampshire, &c. Ins. 
 Co. V. Rand, 24 N. H. 428. 
 
 * Columbia Ins. Co. v. Stone, 3 Allen (Mass.), 385. 
 
 s Bangs v. Scidmore, 24 Barb. (N. Y.) 29 ; affirmed, 21 N. Y. 136 ; New Hamp- 
 shire Mut. Fire Ins. Co. v. Rand, 4 Fost. (N. H.) 428. 
 
 6 Coles V Iowa State Mut. Ins. Co., 18 Iowa, 425 ; Blanchard v. Atlantic Mut. 
 Fire Ins. Co., 33 N. H. 9. 
 
 1 Nash V. Union Mut. Ins. Co., 43 Me. 343. 
 1262
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 55G 
 
 the surrender is optional with the insured, and the payment 
 compulsory against the insurers, to the amount not legally 
 appropriated, or liable to be on account of causes already 
 accrued at the time of the surrender, which, as delay works 
 only to the prejudice of the insured, he may make at any time 
 after the alienation. ^ 
 
 § 556. Life Insurance ; Premium Note ; Liability after Lapse of 
 Policy. — The charter of a life insurance company provided 
 that all who insured with the company should be deemed 
 members while they continued so insured ; also, that the com- 
 pany might take the notes of the members, either in whole or 
 part payment of premium ; also, that if losses were sustained 
 by the company in excess of the funds on hand, the directors 
 might assess the deficiency ratably upon such members, the 
 assessment not to exceed the sum due on the notes, of which 
 sixty days' notice was to be given ; and if the amount assessed 
 was not paid within that time, the party in default was to 
 cease to be a member of the company, and forfeit all preced- 
 ing payments. It was also provided that if the premium in 
 any case should exceed fifty dollars, one-fourth of the amount 
 should be paid in cash, and the balance might be paid by a 
 secured note subject to assessment. 
 
 J. effected insurance with the company, paid one-quarter of 
 the first year's premium in cash, and gave his note for the 
 balance. At tlie expiration of the first year he paid one- 
 quarter in cash towards the second year's premium, and gave 
 his note for three-quarters of the total premium for the first 
 and second years, and took up his former note. The insured, 
 at the end of the second year, gave up his policy, withdrew 
 from the company, and ceased to be a member thereof. In 
 an action on the last note, after the policy had lapsed, it was 
 held that, in the absence of proof of any assessments to make 
 up deficiencies as provided in the charter, the company was 
 not entitled to recover, the note being regarded as a mere 
 security for the payment of losses, upon assessments made for 
 that purpose.^ 
 
 1 Sullivan v. Mass. Mut. Fire Ins. Co., 2 Mass. 318. 
 
 2 Mut. Ben. Life Ins. Co. v. Jarvis, 22 Conn. 133. There was a dissenting 
 VOL. II. — 36 1263
 
 § 557] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 § 557. Right to assess strictly construed. — All assessment 
 can only be valid when laid under the conditions stated in the 
 
 opinion by Ellsworth, J. The whole case is so instructive that we give it more 
 fully in this note. The action was upon the following promissory note and 
 guaranty : — 
 
 MiDDLETOWN, Octohef 7, 1848. 
 
 I promise to pay the Mutual Benefit Life Insurance Company, or to the 
 order of their treasurer, three hundred and sixty-seven j5_o^ dollars, for value 
 received, without defalcation or discount, with interest, at six per cent, payable 
 in twelve months after date, or sooner, if required to meet assessments hy the 
 company. Geo. O. Jarvis. 
 
 For value received, I guarantee the payment of the above note, and stand 
 security therefor till paid. William Jarvis. 
 
 MiDDLETOWN, Octobcr 7, 1848. 
 Received on the within note, as principal, twenty-seven j% dollars. No- 
 vember 29, 1848. 
 
 Hinman, J., for the majority of the court : " The plaintifi's charter makes 
 them in fact, as well as in name, a mutual benefit life insurance company. This 
 is the fundamental principle of their organization. It is implied in their name, 
 and is more fully expressed in the body of the charter, which gives them power 
 to insure the respective lives of their members, and denies them the power to 
 insure any others, by providing that all persons who shall at any time insure in 
 or with said association, shall, while they continue so insured, be deemed and 
 taken as members of the corporation ; and provides for an equal assessment upon 
 all the members, in proportion to each member's insurance, to pay for losses 
 which the company may not have funds on hand to discharge. 
 
 " The sixth section of the charter authorizes the company to take the notes 
 or obligations of their members for the amount, either in part or in whole, of 
 the premiums of insurance, in proportion to the amount insured ; and then in the 
 ninth section it is provided, that if it shall so happen that there shall be just 
 claims on the corporation for losses sustained, to a greater amount than they 
 havp funds on hand to discharge, the directors in such case shall proceed to 
 assess such deficiency, in a ratable proportion, on the members of the associa- 
 tion, or their lawful representatives, according to the amount of each member's 
 insurance, 'provided that such assessment shall not exceed the amount of the jwte or 
 obligation given by each member.' The section further provides, that if, on due 
 notice of his assessment, a member shall neglect to pay the same within sixty 
 days, he shall forfeit all claim to his policy, shall be no longer a member of the 
 association, and shall also be liable to the amount of such assessment in an action 
 of debt. The only provision in the charter relative to the payment of losses is 
 contained in this ninth section ; and as the funds of the company are all derived 
 from the payment of premiums by the members, on their respective policies, and 
 as the members are in no event liable to be assessed to any greater amount than 
 their respective notes or obligations, it is clear that the notes or obligations 
 referred to in the ninth section of the charter as liable to this assessment must 
 1264
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 557 
 
 charter. A general vote of the directors to assess to a certain 
 amount to pay the indebtedness of the company is no valid 
 
 be the notes or obligations which the company are authorized to take of its 
 members for the amount, either in part or in whole, of their respective premiums 
 of insurance ; or, as they are called in the rules and regulations of the company, 
 they are the premium notes of the members. The finding shows that the note 
 in snit was one of these premium notes ; and as the company has met with no 
 losses which make it necessary for them to collect it, and has made no assess- 
 ment to meet any loss, the question arises whether the defendant is liable upon 
 his note, except for the purpose of meeting a loss, and then only to the extent of 
 an assessment regularly made accordmg to the provisions of the ninth section 
 of the plaintiff's charter. The note is absolute and unconditional in its terms, 
 and as the time it had to run has expired, it appears to be due. If this was all 
 there was in the case, undoubtedly the plaintiffs could recover. It might have 
 been given for money, or it might have been given lor the premium, or the por- 
 tion of it that was, by the agreement of the parties, to be paid in cash, irrespec- 
 tive of any call for losses; and if such was the case it ought to be paid. The 
 finding, however, shows that such is not the case, and, on the contrary, that the 
 umlerstanding upon which this note was given was, that it was not to be paid 
 unless required to meet losses. It was given for a portion of the premium which, 
 by the regulations of the company, it was the intention should be met by the 
 profits of the business, unless required to meet losses. In the prospectus con- 
 taining the rules and regulations of the company, which was examined by the 
 defendant for the purpose of determining whether he would become a member 
 of the company, and was delivered to him for that purpose by the company's 
 agent, we find one of the first regulations to be that the premium, if over fifty 
 dollars, can be paid, one-fourth in cash and three-fourths in a secured note at 
 twelve months, bearing six per cent interest, and subject to assessment, if 
 required ; or it may be paid weekly, monthly, or quarterly. It was under this 
 regulation that the note in suit was given. It was in part a renewal of an origi- 
 nal note given for seventy-five per cent of a previous year's premium, and in 
 part for the same percentage on the then accruing year's premium. Under the 
 head of ' mode bf payments,' we find this rule repeated in these words : ' If the 
 annual premium is over fiftj' dollars, he can pay one-fourth in cash and three- 
 fourths in a secured note at twelve months, bearing interest at six per cent, wiiich 
 note is subject to assessment, if required by the directors, and of which sixty 
 days' notice will be given. At the end of the year, if the party so desires he 
 may renew the balance of the old note not then called for, by paying the'interest 
 and adding it to the next year's premium note, and paying his twenty-five per 
 cent in cash as at first.' Again, the company anticipated that the members 
 would receive back a large percentage of the amount paid, in annual dividends 
 of profits, to be declared upon the amount of premium ; and in order to equalize 
 the benefits to all their members, they provide that scr-'ip, bearing six per cent 
 nitcrest, shall be issued to those who pay their premiums in full, wliich interest 
 is to be paid annually; while those who give and renew their notes are not to 
 receive scrip, but their proportion of profits is carried to their credit, and draws 
 interest, being retained by the company as additional security for tiie notes. 
 
 1265
 
 § 557] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 assessment. It must appear that such a state of affairs 
 existed when the vote was passed as to authorize the vote 
 
 Again, the company say that by tlie system of payments adopted by them, it is 
 easy for all who are not paupers to protect their families from want ; they are 
 not required to pay from year to year in cash a portion of the premium, which is 
 to remain in the hands of the company as profits, but the profits, after a few 
 years, can be used by them to aid in the payment of their annual premium. It 
 is not necessary to allude further to the charter, and the rules and regulations 
 of the plaintiffs' company. Undoubtedly there are other parts of these docu. 
 nients which have a bearing upon the question under consideration. Indeed, the 
 whole tenor of them in connection with the circumstances under which the note 
 in question was executed, goes to show that the only object of the note was to 
 secure the company against losses which might be sustained while the msured 
 remained a member of the association. The charter authorizes the company to 
 take premium notes. It provides how the losses of the company shall be as- 
 sessed upon these notes. These two provisions are followed up in the regula- 
 tions of the company, which provide that the parties may renew at the end of 
 the year the balance of the old notes not called for or required by the directors. 
 If it be asked what power the directors had to call for assessments, the answer is 
 in the charter, ' to meet losses.' Indeed, in the argument of the case, counsel 
 seemed to admit that in regard to all who continued members of the company, 
 and chose to renew their notes from year to year, they had a right to do so. It 
 was the expectation of the company that the twenty-five per cent of the pre- 
 mium, which was required to be paid in cash, would be sufficient to meet the 
 ordinary expenses and pay the ordinary losses ; and the seventy-five per cent 
 would never be required to be paid, except perhaps a small balance which might 
 be due at the death of the insured, after deducting the proportion of profits that 
 might be earned by the company, and the balance was then only to be deducted 
 from the amount of the policy. In this way those who paid their premiums in 
 full, by receiving dividends of profits annually, would in the end be made equal 
 with those who only paid twenty-five per cent of their premiums in cash ; and 
 the company prominently held this out as an inducement to persons of limited 
 means to insure their lives in this association ; and it is this principle alone 
 which enables them to say in their prospectus that it is easy for all who are not 
 paupers to protect their families from want, by insuring their lives with them ; 
 and this makes between all the members that mutuality in regard to profits and 
 losses which was contemplated by the charter and the organization of the com- 
 pany. But if the company can collect just such notes as it pleases, without 
 first making an equal assessment upon all, it is clear that there is an end to any- 
 thing like mutuality. It is not pretended that they do collect the great mass of 
 their premium notes; but the broad ground is taken that they can collect, or 
 omit to collect, any or all, as the company pleases, thus destroying all mutuality, 
 and leaving the members who have taken their policies upon the faith that they 
 could renew their notes from time to time, unless required to meet losses to be 
 assessed upon all alike, at the mercy of the persons who may be oflScers of the 
 company for the time being. It is insisted, however, that the provisions of 
 the ninth section of the plaintiff's charter relate only to the members of the 
 1266
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 557 
 
 itself, as that losses and expenses had actually been incurred 
 beyond the available assets in hand, which could not be 
 
 association, and have no application to tlie defendant after he ceased to 
 be a member. But the defendant was a member when he gave the note, 
 and it was the act of giving it, and paying that jmrtion of tiie prcniiutn wliicii 
 is required to be paid in cash, tliat continued to liim his right as such member; 
 and we look in vain to tlie cliarter or regulations for any different rule or dis- 
 tinction between the notes of the members and tliose who iiave ceased to be 
 members. Tlie premium notes all stand upon the same footing ; and the char- 
 acter which tlie charter and the regulations of the association impressed upon 
 them at their inception must remain, unless there is something in the same doc- 
 uments to alter it. The difficulty under which the plaintiff's counsel labor 
 arises from their looking at the absolute terms in which the note itself is ex- 
 pressed. But if we take it in connection with the charter, and consider tliat it 
 was not an ordinary note, and was never delivered as such, but was delivered 
 as a premium note, under the cliarter and the regulations of the company, we 
 at once attacli to it all the conditions which are expressed in the charter and 
 regulations. By these conditions it appears that it was never an absolute 
 promise to pay, but was a mere security for losses, and merely subject to 
 assessments for losses, and for nothing else ; as a conditional security for losses, 
 there was a consideration for it, and to collect it for other purposes would operate 
 as a fraud upon the maker. Again, it is said that the consideration of the note 
 was the premium of insurance on the defendant's life for the year it had to run, 
 and that the defendant liad the benefit of the insurance for that year, and in 
 justice ought to pay for the risk. If this was so in fact, we do not see that it 
 would make him liable in any other way than is prescribed in the charter ; but 
 enough has been said to show that this is not so. By giving the note, he came 
 under an obligation to pay such assessment for losses, not exceeding its amount, 
 as might be regularly made by the directors : none such has been made, and so 
 there is no obligation to pay ; nor is tliis unjust in regard to the other members 
 of the association. By looking at the tables in the prospectus, it will be seen 
 that the real risk which the company ran, for the year previous to the 
 time the note fell due, was but a trifle over the twenty-five per cent of 
 tlie premium which was paid in cash. If he had insured for a single year, 
 the premium would have been at the rate of about two per cent on a hundred 
 dollars, whereas, by insuring for lite, they charged him nearly five per cent 
 annually. The additional charge undoubtedly arises from averaging the risk 
 among all the years that such a life is estimated to last. Still it is no less true 
 that he paid the compan}- in cash very nearly the full value of the risk the com- 
 pany ran before his policy became void by his withdrawal; and it is this fact 
 which enables the company safely to issue life policies upon the payment of so 
 small a proportion of the premium in cash. If the members withdraw from the 
 association, they have paid in cash the full or about tlie lull value of the risk which 
 the company had run before the withdrawal ; and if they do not withdraw when 
 the policy is paid, the company deduct the balance of the premium notes not 
 previously paid by a credit of profits from the sum insured in the policy. Upon 
 this system, the company, if it has correctly calculated the proportion of the 
 
 12G7
 
 § 557] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI, 
 
 met but by an assessment. The liability of a member of a 
 mutual insurance company on his premium note, left as a 
 
 premium which it will require to be paid in cash, is always safe. Indeed, it is 
 for its advantage, after the life policies have run a few years, that the members 
 should avoid their policies by withdrawal, and obviously becomes more and 
 more so by the lapse of time. Indeed, so obvious is this, that the regulations 
 say that the assured can, after a term of years, surrender the policy and receive 
 its equivalent in value ; and this seems to us a sufBcient answer to the sugges- 
 tion tliat it was a fraud upon the company to take the benefit of the policy for 
 the year before the withdrawal, and not pay the premium cliarged." 
 
 Ellswortli, J., dissented : "My reflections upon this case have brought me to 
 a different conclusion from that expressed by my brethren. Mr. Jarvis, the 
 defendant, applied to the plaintiffs for an insurance upon his life for .$5000, from 
 the 7th of October, 1847. From Carlisle's tables (which were used by the com- 
 pany to ascertain the proper annual premium to be paid by the defendant) it 
 appears, and it was agreed, it should be the sum of .§245 ; one-quarter of this 
 the defendant paid at the time, and gave his note for the remaining three-quar- 
 ters, payable at the end of the year, ' witliout default or discount,' with inter- 
 est. If, at the end of the year, he chose to continue a member of tlie company 
 by further insuring, he could at his request renew the insurance for another 
 year, by paying twenty-five per cent of the premium for another year, and giv- 
 ing a new note for the amount of the former note and interest and the three- 
 quarters of another $245, tiie premium for the second year ; so that the note 
 now in suit consists of premium and interest for two years' insurance. This 
 premium note fell due on the 7th of October, 1849, that being the date up to 
 which he had been insured, and after which he did not ask for further insur- 
 ance. It will thus be seen that the company had insured the defendant's life 
 for two years, at the stipulated premium ; and how the defendant is to get rid 
 of the payment of this earned money, by his own act simjily, I have not been 
 able to discover. The money, being earned, can be recovered on the common 
 counts as well as on the special count. 
 
 " By the terms of the charter, in the sixth section the company declare ' that 
 it shall and may be lawful for the officers of said corporation to take the 
 notes or obligations of the members for the amount, either in part or in whole, 
 of the premium of insurance, in proportion to the amount insured.' In pursu- 
 ance of this provision the directors passed a by-law, that, in all cases where the 
 premium was over fifty dollars, the insured might pa}' twenty-five per cent 
 down, and give his note for the balance, to be paid at the end of the year, with 
 interest, this being the termination of the risk ; and if possible to make this 
 obligation more clear and strong, it was to be paid witliout defalcation or dis- 
 count, and might in the mean time he called for, should the company need it to 
 pay losses. It would seem, therefore, that the note in question was under- 
 standingly given as an equivalent for the risk taken by the plaintiffs for the de- 
 fendant's life for the space of two years. So, from the note itself, it seems the 
 promise is absolute and positiue. The money is to be paid in twelve months after 
 date, and sooner, if required to meet assessments. 
 
 "It is said, however, that the note is not absolute, and is not to be paid, as 
 
 1268
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 557 
 
 deposit as the basis of an assessment should occasion arise, 
 is not an absolute liability to pay the whole amount of his 
 
 is written, without defalcation, but is to be paid only upon future assessments. 
 Here, I tliink, is the great mistake of tiie defendant's counsel. Tiie defendant, 
 by separating himself from the company, has deprived himself of the privi- 
 lege conten)phited by this provision of the bylaw, so that the hy-Iaw is not at 
 all applicable to the case of the defendant. The provision is intended for his 
 benefit while he remains a member; but he has forfeited that privilege by his 
 separation. When lie ceased to be a member he ceased to be a subject of as- 
 sessment, both by the charter and the by-laws ; for none but members can be assessed. 
 Were it indeed practicable to assess those who had been members, for what 
 losses could this be done 1 those that accrued during membersliip, or those 
 which may accrue at any future period, upon policies issued during the time 
 of membership ? 
 
 " It must be conceded that if the defendant is not liable in the present suit 
 lie is not liable at all, and yet he has been insured for tiie agreed premium of 
 1490, by paying only $122.50. In the same by-law, to which the defendant re- 
 fers for his deliverance from this note, we find what I am confident is the only 
 provision applicable to this case. It is this : ' At the end of the year, if the 
 party so desire, he may renew the balance of the old note, not then called for, 
 by paying the interest, adding the ne.xt year's premium, and paying twenty- 
 five per cent in cash, as at first.' This the defendant has not desired to do ; 
 but, on the other hand, has absolutely refused and neglected to do anything, 
 and yet insists he ought not to pay. He claims that he cannot be assessed, be- 
 cause he is not a member, and that he cannot be compelled to pay without as- 
 sessments. Thus he would avoid the payment of a note as fairly earned and 
 due as any that was ever presented in a court of justice. I am for iiolding 
 the defendant to his agreement. If he will not renew his note, nor pay the 
 stipulated twent\'-five per cent, nor find satisfactory security, he ought to pay 
 the note as it is written ; upon his own sliowing, the assessment provision has 
 nothing to do with the question. And furtlier, the note, under no circumstances, 
 is to be assessed. By the ninth section of the cliarter, in a ratable proportion 
 tlie members of the association (not the notes of the members) may be assessed. 
 The notes are held to be due and payable as written ; and, as I contend, are 
 absolutely payable wlien and because the members have enjoyed their insur- 
 ance, and cannot alter their obligations by withdrawing from the company. 
 
 " It must be further remembered that these notes, given for earned premi- 
 ums, constitute the fund of the company to which the public look for the pay- 
 ment of losses ; but they now discover that these notes mean nothing and 
 secure nothing. The consequence, too, is that a person may remain a member 
 of the company and be insured for any time, twenty or fifty years, until his 
 premium note shall amount to thousands of dollars, and then retire from the 
 company, repudiate his note, and, if dishonest enough, pursue the same course 
 with another company. 
 
 "I would inquire, what is the difference between the person who pays in 
 cash, when the annual premium is less than fifty dollars, and one who pays 
 partly in cash and partly in a promissory note where the premium is more 1 
 
 1269
 
 § 557] INSURANCE : FIRE. LIFE, ACCIDENT, ETC, [CH. XXXI. 
 
 note, but it is conditional, and depends upon the contingency 
 of the happening of losses and expenses to which he shall be 
 liable to contribute, which have been duly ascertained by the 
 directors, and which make necessary a resort to an assessment 
 thereon. It is a credit given for a |)art of the consideration 
 of the contract. The promise of the insured is to pay upon 
 such conditions ; and the existence of these conditions must 
 be established affirmatively before a call for the payment of 
 the note or any part thereof can be enforced.^ The receiver 
 of an insolvent company stands upon no better footing.^ 
 Though the premium note be absolute on its face, yet, being 
 given to pay losses, it is only assessable in case of loss.^ And 
 
 Upon the hypothesis of the defendant, the latter may pay one-quarter of his 
 premium and be as fully insured as if he had paid the whole. This is a gross 
 absurdity; and I cannot feel that it is at all in accordance with the understand- 
 ing of the parties, or the public, or with any principles of justice or law with 
 which I am acquainted. From the first breaking of this case I have been at a 
 loss to learn what could be urged by the defendant in favor of this defence. 
 
 " Something has been said about the want of mutuality and of consideration, 
 but no question of this kind can arise; for the defendant's life was insured for 
 two years at the price agreed, and that surely is mutuality and consideration 
 enough. And I insist that the defence is nothing but a barefaced attempt to 
 avoid the payment of a clear note of hand. The defendant was fairly and 
 fully insured; and had he died within the two years, his representatives would 
 have been entitled to the five thousand dollars. And yet he asserts tliat, though 
 he was so insured, he will not fulfil the contract as he made it. He will 
 neither renew nor pay his note, nor remain in a condition to be assessed ; and 
 in this defence he has succeeded, as I think, by the prostration of the plainest 
 principles of equity and justice." 
 
 1 Pacific Mut. Ins. Co. v. Guse, 49 Mo. 329 ; Long Pond Ins. Co. v. Hougii- 
 ton, 6 Gray (Mass.), 77; Commonwealth v. Dorchester Mut. Fire Ins. Co., 112 
 Mass. 142 ; Nashua Fire Ins. Co. v. Moore, 55 N. H. 48 ; Atlantic Ins. Co. v. 
 Fitzpatrick, 2 Gray (Mass.), 279; Thomas v. Whallon, 31 Barb. (N. Y.) 172; 
 Bangs V. Gray, 15 id. 264; American Ins. Co. v. Schmidt, 19 Iowa, 502; Savage 
 V. Medbury, 19 N. Y. 32 ; Bangs v. Duckinfield, 18 id. 592 ; Stow v. Wadley, 8 
 Johns. (N. Y.) 124; Bangs v. Gray, 2 Ker. (N. Y.) 477 ; Herkimer County Mut. 
 Ins. Co. V. Fuller, 14 Barb. (N. Y.) 373; Devendorf v. Beardsley, 2-3 id. 656; 
 Appleton Mut. Fire Ins. Co. v. Jesser, 5 Allen (Mass.), 446 ; Ohio Mut. Ins. Co. 
 V. Marietta Woollen Co., 3 Ohio St. 348 ; Atlantic Mut. Fire Ins. Co. v. Young, 
 88 N. H. 4-51. 
 
 2 .lackson v. Eoberts, 31 N. Y. 304; Emoree v. Shideler, 36 Ind. 423. 
 
 3 Insurance Co. v. Jarvis, 22 Conn. 133. It is said in Kelly v. Troy Fire Ins. 
 Co., 3 Wis. 229, 2-54, that an assessment may be made in anticipation of losses, as 
 otherwise great delay would be experienced in adjusting and pnjMng them. But 
 the objection urged in that case, that if assessments are made upon the pre- 
 
 1270
 
 CH. XXXI.] OF MUTUAL INSUBANCE. [§ 557 
 
 the assessment must be made in strict accordance with the 
 authority given. Even a more equitable mode than that 
 provided by the charter cannot be adopted.^ Wliere the 
 charter authorizes the directors to make an assessment, it 
 can be made by them only ; and if they vote to assess to a 
 certain amount, and thereupon refer the matter to a commit- 
 tee to make the assessment, who — a minority of the di- 
 rectors — assess a different and less sum, the assessment is 
 invalid ; so held in an action on a note to recover such an 
 assessment.2 And a by-law which authorizes an assessment 
 to a larger amount than is permitted by the charter is invalid ; 
 and an agreement signed by the secretary, without the au- 
 thority of the directors, not to assess.^ So is an assessment to 
 pay losses and expenses, the charter authorizing an assessment 
 only to pay losses.* So a vote to make an assessment, leaving 
 the per cent or amount in blank, is invalid ; ^ and so is a vote 
 to assess, passed by a board of directors, illegally elected ; *^ 
 although an assessment was held valid made by directors, out 
 of whom a president was to be chosen, though the president 
 was chosen before the directors were." And assessments can 
 only be laid by the corporation or a receiver, clothed with 
 such of its powers as may be necessary for winding up its 
 affairs, under the direction of the court. An assignee of tlie 
 corporation not in bankruptcy has no such power.^ And it is 
 of importance to observe that in some cases these different 
 classes of assessments may be provided for with penalties for 
 
 luium notes before losses have occurred, the right to withdraw, upon paynoent 
 of tlie share of losses assessable while the policy was in force, cannot be 
 availed of, because money to pay assessments will be taken when no loss has 
 occurred, may perhaps be entitled to more favor than was allowed in tiiat 
 case. 
 
 1 Slater Mut. Ins. Co. i'. Barstow, 8 R. I. 343. 
 
 2 Monmouth Mut. Fire Ins. Co. v. Lovell, 59 Me. 564 ; Farmers' Ins. Co. v. 
 Chase, 56 N. H. 341. 
 
 3 Nat. Mut. Fire Ins. Co. v. Yeomans, 8 R. I. 25. 
 * Bersch v. Sinnissippi Ins. Co., 28 Ind. 64. 
 
 5 St. Lawrence Mut. Ins. Co. v. Paige, 1 Hilton (N. Y.), 430. 
 
 6 People's Mut. Ins. Co. v. "Westcott, 14 Gray (Mass.), 440. 
 
 7 Currie v. Mut. Ass. Co., 4 H. & M. (Va.) 315, 318. 
 
 8 Hurlburt v. Carter, 21 Barb. (N. Y.) 221. 
 
 1271
 
 § 559] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 non-payment in one case, but not in the other. ^ [The rule of 
 assessment agreed on with the members of a mutual company 
 must be folio wed.^] 
 
 § 558. Slight Errors do not invalidate Assessments. — Slight 
 and unintentional errors, however, iu estimating the amount 
 which it may be necessary to assess, or in making up the lists 
 of those liable to assessment, will not vitiate the assessment, 
 the assessment being substantially correct, made in good faith, 
 and upon correct principles. Nor will assessments be inval- 
 idated by delay, not unreasonable, in making them ; nor by 
 variance at different times between the proportions of the cash 
 premium to the amount of the deposit note, as against mem- 
 bers suffering no injury thereby.^ Nor can an assessment be 
 resisted on the ground that claims for losses found due, allowed 
 by the directors, might have been successfully resisted on 
 technical grounds.* Nor need assessments be made literally 
 " forthwith " after every loss, nor separately for each loss. 
 Some reasonable and practicable rule approximating to it is 
 sufficient,^ and the whole amount of the note may be assessed, 
 though the insured have no interest in a part of the property 
 covered by the policy. And if losses occur at one and the 
 same time, sufficient to absorb all the company's resources 
 from premium notes, whether the notes be classified or not, 
 one assessment, or call for the whole, will be valid.^ And loss 
 by a subsequent fire cannot be paid, or any part of it, since the 
 entire fund is absorbed by the first fire.'^ 
 
 § 559. "What Assessments may include ; Insolvency ; Set-off. 
 — The intentional omission of members who are liable to any 
 considerable amount will vitiate the whole assessment." But 
 
 1 Rix V. Mut. Ins. Co., 20 N. H. 198. 
 
 2 [Susquelianna Mut. Fire Ins. Co. v. Gackenbach, 115 Pa. St. 492.] 
 8 Marblehead Mut. Ins. Co. v. Underwood, 3 Gray (Mass.), 210. 
 
 < Sands v. Hill, 42 Barb. (N. Y.) 651. 
 
 s New England Mut. Ins. Co. v. Belknap, 9 Cush. (Mass.) 140; Sliaughnessy 
 V. Rensselaer Ins. Co., 21 Barb. (N. Y.) 605. 
 
 6 Rhinehart v. Alleghany County Mut. Ins. Co., 1 Pa. Si. .359 ; Common- 
 wealth V. Mechanics' Mut. Ins. Co., Sup. Jud. Ct. Mass., March, 1873 ; Sands 
 V. Sanders, 28 N. Y. 416. 
 
 • Coston V. Alleghany County Mut. Ins. Co., 1 Barr (Pa.), 419. 
 
 8 Marblehead Mut. Fire Ins. Co. v. Hayward, 3 Gray (Mass.), 208; Herkimer 
 
 1272
 
 CH. XXXI. ] OF MUTUAL INSURANCE. [§ 559 
 
 the omission of a few adjusted and cancelled policies, so small 
 in amount as not materially to increase the assessment on llie 
 remainder, will not have this ei'lect.^ But in determining 
 whether there are earned premiums available to })ay losses, 
 uncollectible and worthless claims may be disregarded.^ In 
 fixing the amount to be assessed, interest on borrowed money, 
 probable failures in the collection, a reasonable sum for the 
 expense of collection, and a reasonable allowance by way of 
 discount for prompt payment, may be taken into account.^ 
 So may return premiums due on surrendered and cancelled 
 policies.* The amount of such overlay must be reasonable.'^ 
 Twenty-four per cent was held to be reasonable in People's 
 Equitable Mutual Fire Insurance Company, Petitioners ; ^ but 
 double the amount was held to be unreasonable and excessive, 
 in the absence of special circumstances shown to justify it, in 
 the case of the same company against Babbitt.'' Ninety-five 
 per cent " to meet estimated bad debts, interest, expenses, and 
 costs of collection " was held illegal, where the charter provided 
 
 County Mut. Ins. Co. v. Fuller, 14 Barb. (N. Y.) 373; People's Eq. Mut. Ins. Co. 
 V. Arthur, 7 Gray (Mass.), 267. 
 
 1 Fayette Mut. Fire Ins. Co. v. Fuller, 8 Allen (Mass.), 27. 
 
 2 Maine Mut. Mar. Ins. Co. v. Neal, 50 Me. 301. 
 
 3 Jones V. Sisson, 6 Gray (Mass.), 288; Bangs v. Gray, 2 Ker. (N. Y.) 477; 
 reversing s. c. 15 Barb. (N. Y.) 264. 
 
 * Fayette Mut. Fire Ins. Co. v. Fuller, 8 Allen (Mass.), 27. 
 
 ^ [An assessment should not be larger than necessary to meet existing claims 
 and reasonable expenses, and if unreasonably excessive it is void. People's 
 Eq. Mut., &c. V. Babbitt, 7 Allen, 235 at 238. The court cannot say how- 
 ever that an assessment by a receiver of 100 per cent in excess of liabilities is not 
 warranted, and made in good faith, without evidence that it is unreasonable and 
 excessive. Wardle v. Townsend, 75 Mich. 385. In this case it appeared tli;it 
 the receiver thought that the assessment of $50,000 would not bring in more tlian 
 $2.5,000, and he thought to save the expenses of a second assessment by going 
 high enough at first to cover his needs. And mere excess in the assess- 
 ment will not prevent the company from recovering it unless the excess is so 
 great as to satisfy the jury of fraud or gross mistake. Susquehanna Mut. Fire 
 Ins. Co. V. Gackenbach, 115 Pa. St. 492.] 
 
 « 9 Allen (Mass.), 319. 
 
 ■^ 7 Allen (Mass.), 2-35. This case was, however, overruled in Commonwealth 
 V. Dorchester, &c. Ins. Co., 112 Mass. 146, where the discretion of the directors 
 empowered to make the assessment was held to be decisive and final, the provi- 
 sions being to pay such sums as they should assess. The case seems, however, 
 to have been followed in Uosenberger v. Washington Ins. Co., 87 Pa. St. 207. 
 
 1273
 
 § 559] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 for " losses and other expenses." ^ Involuntary payments 
 made under a prior illegal assessment may be treated as a 
 portion of the just claims upon which to make the new assess- 
 ment, and in the collection of the latter each member is to be 
 credited with the amount of his payment under the illegal as- 
 sessment.2 In Indiana, however, it appears that the statute 
 pi'ohibits any overlay to cover expenses.^ Where the assess- 
 ments are to pay losses, and the premium on deposit notes is 
 made payable by instalments as shall from time to time, agree- 
 ably to the by-laws, be required by the directors, the directors 
 having ascertained that the company is liable for a loss, and 
 that the company have not sufficient available funds to pay 
 the loss, are first to ascertain who were members at the time of 
 the loss, and to assess upon each such proportion thereof as 
 his individual liability bears to the aggregate liability of all 
 the members. The length of time which may have elapsed 
 since membership began is not to be taken into account.* And 
 although assessments cannot be made for losses occurring 
 prior to membership, unless the parties so agree,^ the inclusion 
 of such losses will not invalidate the assessment as to those 
 who were members when the losses occurred.'' Where the 
 policies ran for one, three, and five years respectively, the 
 premiums for three years being at twice the rate for one, and 
 those for five years at three times the rate for one, and in 
 computing the amount to be assessed for each month's losses 
 a basis was found by taking the whole of the premium for 
 each yearly policy, one-third of that for each three years' 
 policy, and one-fifth of that for each five years' policy, the 
 court tliought there was no such inequality as to require the 
 assessment to be set aside.'' So where, after a former assess- 
 ment has been adjudged illegal, it is found that two years be- 
 
 1 York, &c. Ins. Co. v. Bowden, 57 Me. 280, 287. 
 
 2 People's Eq. Mut. Fire Ins. Co., 9 Allen (Mass.), 319, 
 
 3 Sinnissippi Ins. Co. v. Taft, 26 Ind. 240. 
 
 4 Herkimer County Mut. Ins. Co. v. Fuller, 14 Barb. (N. Y.) 373. 
 
 5 Commonwealth v. Mechanics' Mut. Ins. Co., 112 Mass. 192; Planters' Ins. 
 Co. V. Comfort, 50 Miss. 662. 
 
 6 Long Pond Mut. Fire Ins. Co. r. Houghton, 6 Gray (Mass.), 77. 
 
 7 Citizens' Mut. Fire Ins. Co. v. Sortwell, 10 Allen (Mass.), 110. 
 
 1274
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 559 
 
 fore a large debt was due from the company, and that many 
 of the members who paid the iUegal assessment have become, 
 by lapse of time, exempt from* a new assessment, so that, if 
 the debt should be assessed on policies which were in existence 
 when the several items of debt accrued and are still liable to 
 assessment, there would not be premium notes sufficient in 
 amount to pay all, the whole debt may be taken as a unit, and 
 assessed upon all the policies which were then outstanding, in 
 proportion to the time of their existence and the amount of 
 their premiums. And in making such assessment for just 
 claims which have accrued within two years, the aggregate of 
 the whole net expense, and of the sums received in payment 
 of the illegal assessment during each year, may be divided by 
 twelve to ascertain the average amount to be raised for each 
 month during that year ; to wliich may be added the losses in 
 each month. And the sum thus ascertained may be taken to 
 be the sum to be raised for each month, in proportion to the 
 amount of the premiums paid therefor applicable to that 
 month. 1 But the assessment must not include the amount of 
 a previous assessment for losses which have been paid ; "^ nor 
 a deficiency arising from uncollected assessments not made 
 during the existence of a policy.^ In Planters' Insurance 
 Company v. Comfort,* it was held that the assessment would 
 not be valid if it included a sum sufficient to pay prior assess- 
 ments during the currency of the policy, which the directors 
 had negligently suffered to remain uncollected. But their 
 negligence is his negligence. Their bad management is his 
 bad management, which he cannot set u{) in his own defence.^ 
 And a new assessment, calling for the whole amount due on a 
 note, is valid, although there is a prior assessment calling for 
 a part which is still uncollected.^ If the prior assessment be 
 
 1 People's Eq. Mut. Fire Ins. Co., Petrs., 9 Allen (Mass.), 319. 
 
 2 Cooper V. Shaver, 41 Barb. (N. Y.) 151. 
 
 3 Farmers' Mut. Ins. Co. v. Chase, 56 N. H. 341. 
 
 4 50 Miss. 662. 
 
 5 West Branch Ins. Co. v. Smith, C. C. P. (Pa.), 5 Ins. L. J. 319. 
 
 6 Sands v. Sweet, 44 Barb. (N. Y.) 108, overruling Campbell r. Atlams, 38 
 Barb. (N. Y.) 132, to the contrary. See also Jackson v. Van Slyke, 44 id. 116 
 note. 
 
 1275
 
 § 559] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 illegal, it may be disregarded, and if paid in part, the amount 
 paid may be included amongst the liabilities. ^ The liability 
 to assessment is fixed at any time only by the amount of losses 
 for which the company is at that time I'esponsiblc, and it is 
 not apportionable according to the ratio of time of the expired 
 and the unexpired term of the policy, provided the amount of 
 the losses is sufficient to absorb the whole.^ When this is the 
 case, the assessment cannot be reduced, or any part of it with- 
 held to provide future indemnity for members who have not 
 already suffered loss. Where the whole proceeds of the con- 
 ditional as well as the absolute funds — that is, cash, premium 
 notes, and statute liability to assessment — are pledged to sat- 
 isfy and make good the losses that have occurred, each one in 
 turn, who suffers loss, is entitled to the full benefit of this 
 pledge, according to the state of those funds when his loss oc- 
 curs. This forbids any reduction of the fund when the whole 
 is required to cover losses, either by apportionment, set-off, or 
 otherwise. The directors of the company are not bound to 
 provide for reinsurance either by reserving a fund therefor, or 
 by an allowance to policy-holders whose policies are cancelled ; 
 and they have no right to do so to the prejudice of the superior 
 claims of those who have suffered losses upon their policies. 
 
 And if in case of insufficiency, " a just average " is to be 
 made in such proportion as the loss sustained by each party 
 " bears to the whole amount of losses then remaining un- 
 paid," this rule, established by the contract of the corporation 
 with all its members alike, does not permit a set-off, even as 
 between the company and those who have claims for losses, 
 upon which they are entitled to a distributive share of the 
 proceeds of the assessment. 
 
 Accrued profits, although credited to the several policies 
 according to the share of each therein, remain as absolute 
 funds of the corporation pledged to the payment of losses, 
 until by expiration or cancellation of the policy its holder be- 
 comes entitled to withdraw the balance, after charging for 
 losses as the " dividend due to his policy." The members 
 
 1 People's Mut. Fire Ins. Co. v. Allen, 10 Gray, 297, 301. 
 - Commonwealth v. Union Mut. Ins. Co., 112 Mass. 116. 
 
 1276
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 560 
 
 are entitled to a dividend only of such profits as remain or 
 are shown upon a valuation of their policies at the termina- 
 tion of their membership. 
 
 If the payment of expenses arid losses and return premiums 
 are only provided for, the insured is not entitled to withhold, 
 or to have withlield for him, for his own future indemnity, 
 any part of the fund ; and, therefore, the loss of the unex- 
 pired term of his policy, whether by cancellation or by insol- 
 vency of the company, can give him no claim against the 
 corporation, either as a debt or by way of damages for non- 
 fulfilment of its contract with himself.^ In case of insolvency 
 there can be no assessment for the payment of interest, or for 
 the payment of the value of unexpired policies, or unearned 
 premiums.^ And if the assessment is to be in proportion to 
 premiums and deposits, no distinction of age in the policies 
 can be made,^ nor can any set-off be allowed on account of 
 any supposed value of the policy.* 
 
 § 560. Assessment ; Classification of Risks and Funds. — If 
 the charter clothes the directors with the power of classifying 
 policies under certain stated risks, and under this provision 
 a policy is placed in one of the classes, it will be valid al- 
 though in contravention of a by-law of the corporation. The 
 directors may waive the latter.^ When a classification of 
 risks is authorized by the charter, and the funds of one class 
 are set apart to pay the losses in that class, the losses in both 
 classes are payable by the company, and the assessment is in 
 form by the company, and not by the particular class. The 
 whole company acts for each particular class.^ But, though 
 the assessment be made by tlie company, the funds raised on 
 notes in one department only must first be appropriated to 
 pay the losses of that department. ^ The directors cannot, 
 however, classify risks and make different rates of assessment 
 
 1 Commonwealth v. Union Mat. Ins. Co., 112 Mass. 116. 
 
 2 Commonwealth v. Massachusetts Mut. Ins. Co., 112 Mass. 116. 
 
 3 Commonwealth v. Mechanics', &c. Ins. Co., 1x2 Mass. 192. 
 * North Carolina, &c. Ins. Co. v. Powell, 71 N. C. 389. 
 
 6 Union, &c. Ins. Co. v. Keyser, 32 N. H. 313. 
 
 6 Kelly V. Troy Fire Ins. Co., 3 Wis. 229, 254. 
 
 7 Allen V. Winne, 15 Wis. 113. 
 
 1277
 
 § 560 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXT. 
 
 without the authority of the charter, or a vote of the mem- 
 bers.i Nor can the assessment be by classes, when author- 
 ized, unless the amounts insured in the respective classes 
 have reached the required amount.^ And when assessment is 
 by classes, and the means of one class are insufficient to pay 
 the losses of that class, resort may be had to the other class, 
 if anything remains after paying the losses of that class. ^ If 
 a certain class of funds is to be resorted to in the first instance 
 for payment, these must be exhausted before others can be 
 availed of by assessment.'^ But if there is no such distinction, 
 all are to be assessed alike.^ And if the funds raised are to 
 be appropriated for the payment of certain claims in succes- 
 sive order, the first must be paid in toto before anything can 
 be appropriated for the payment in the next succeeding class, 
 as for return of premiums, for instance.^ 
 
 [§ 560 A. Extent of Liability to pay Assessments. — Where 
 a policy is to be suspended during default of payment of an- 
 nual interest the member may nevertheless remain liable for 
 losses. If such is the agreement there is no reason why it 
 should not be enforced.''' Where A. takes out a policy in a 
 mutual company, giving his note for a certain sum payable 
 in such amounts and at such times as the directors under the 
 charter and by-laws may determine, and a by-law provided that 
 in case of loss the company should retain the premium note and 
 such part of the funds called for by the loss, not exceeding the 
 amount still unpaid on the premium note, as would be suffi- 
 
 1 Thomas v. Achilles, 16 Barb. (N. Y.) 401 ; Currie v. Mut. Ass. Soc.,4 H. & 
 M. (Va.) 315; People's Eq. Mut. Ins. Co. v. Arthur, 7 Gray (Mass.), 267. 
 
 2 Augusta Mut. Ins. Co. v. French, -39 Me. 522. 
 
 8 White V. Ross, 15 Abb. Pr. (N. Y.) 66. In Massachusetts, by statute, where 
 the affairs of an insurance company have been placed in the hands of a re- 
 ceiver, an assessment may be made by him, which, being ratified by the court, 
 on a bill in equity, concludes all parties in interest ; and, upon decree of con- 
 firmation, executions may issue for the respective amounts against those upon 
 whom they are assessed. Hamilton Mut. Ins. Co. v. Parker, 11 Allen (Mass.), 
 574. 
 
 * Long Pond Ins. Co. v. Houghton, 6 Gray, 77. 
 
 6 Fayette Mut. Fire Ins. Co. v. Fuller, 8 Allen (Mass.), 27. 
 
 « Commonwealth v. Union Mut. Ins. Co., 112 Mass. 116 ; Commonwealth v. 
 Mass. Mut. Fire Ins. Co., id. 
 
 7 [Webb V. Mut. Fire Ins. Co., 63 Md. 213.] 
 
 1278
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 560 A 
 
 cient to secure the payment of assessments by the assured dur- 
 ing the continuance of his policy after said loss, it was held 
 that the company had a lien for assessments, subsequent to 
 the loss up to the expiration of the policy, on the money paid 
 into court upon a judgment on the policy for the payment of 
 the loss by the company .^ Where the insured is to be liable 
 for assessments during the term of his policy and this pro- 
 vides for its surrender in case the property is sold, the liability 
 for assessments continues during the term although the build- 
 ings are destroyed and the land sold, if no surrender is madc.^ 
 A by-law may lawfully make policies liable for assessments 
 though issued subsequently to the loss for which the assess- 
 ment is made.^ But an action cannot be brought to recover 
 quotas and requisitions accruing after the policy has become 
 void by other insurance.^ And an insurance company cannot 
 maintain an action for premiums, assessments, &c., on policies 
 which have never left their hands or been signed by the as- 
 sured, when all that the latter has done is to make written 
 application for the same, refusing on seeing them to take 
 them.^ The liability of members to pay their portion of 
 losses and liabilities under the organic law of the company 
 cannot be varied by agreement between the company and a 
 member.^ Where a member may by the organic law with- 
 draw and cancel his policy on payment o( his proportion of 
 losses and assessments then existing, subsequent assessments 
 to cover subsequent losses from failure to collect or other 
 cause cannot aft'ect himJ A member of a mutual company 
 is liable on an assessment to cover a loss occurring during his 
 membership, although the assessment be not levied until nine 
 years after his policy expired, and the company has six years 
 
 ^ [Appeal of Susquehanna Ins. Co., 105 Pa. St. 615.] 
 
 2 [Thropp V. Insurance Co., 125 Pa. St. 427.] 
 
 3 [Susquehanna Mut. Fire Ins. Co. v. Stauffcr, 125 Pa. St. 416. See Thropp 
 V. Insurance Co., id. 427.] 
 
 * [Mut. Ass. Soc. V. Holt, 29 Grat. 612 at 625.] 
 
 6 [Real Estate Mut. Fire Ins. Co v. Roessle, 1 Gray (Mass ), 336 at 337.] 
 6 [Russell V. Berry, 57 Mich. 287.] 
 
 '' [Union Mut. Fire Ins. Co. v. Spaulding, 61 Mich. 77 ; Tolford v. Church, 66 
 Mich. 431.] 
 
 VOL. II. — 37 1279
 
 § 560 B] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 after levy of the assessment in which to sue for it.^ The in- 
 sured may defend a suit for assessments on the ground of 
 fraudulent representations inducing him to contract with the 
 company .2 But where one signs an application without read- 
 ing it and receives a policy in accordance with it, which he re- 
 tains a long time without reading, he cannot then claim that 
 by a mutual mistake the application and policy were not of the 
 variety he wanted. Parol evidence of representations made by 
 the agent prior to the contract are inadmissible to enable the 
 insured to escape the liabilities imposed on him by the policy, 
 nor will returning the policy to the agent relieve the assured 
 from assessments. One cannot accept and retain the pro- 
 tection of a policy and then repudiate its liabilities.^ The 
 holder of a policy who has a chance to look at it before he 
 accepts it is held to have notice of its contents, in the absence 
 of fraud, and he cannot allege ignorance to excuse non-com- 
 pliance with conditions.^ Neither will a plea avail that the 
 term broken was cunningly hidden away among a mass of 
 fine print so as to be illegible and unintelligible, where it ap- 
 pears that, although fine, the print was legible. When the 
 assured accepts a policy without dissent the law presumes 
 that he knows and assents to its contents.^] 
 
 [§ 560 B. Forfeiture by Non-Payment of Assessment will 
 occur if such is the agreement, just as in the case of the non- 
 payment of any other premium. Sometimes default only 
 suspends the policy ,6 and a failure to pay an assessment fall- 
 ing due after loss is not fatal," unless so agreed,^ as where 
 the policy continues alive after a loss and will cover other and 
 subsequent losses. A member does not forfeit by neglecting 
 to pay an assessment not made in accordance with the pro- 
 visions of the constitution of the order, although it was in 
 
 1 [Smith V. Bell, 107 Pa. St. 352.] 
 
 2 [Lycoming Fire Ins. Co. v. Wright, 55 Vt. 526.] 
 
 8 [Susquehanna Mut. Fire Ins. Co. v. Swank, 102 Pa. St. 17.] 
 * [Morrison v. Insurance Co., 69 Tex. 353] 
 
 5 [Monitor Ins. Co. v. Buffum, 115 Mass. 343 at 345.] 
 
 6 [Lycoming Fire Ins. Co. i'. Rought, 97 Pa. St. 415.] 
 
 7 [Seyk V. Millers' Nat. Ins. Co., 74 Wis. 67.] 
 
 8 [See § 560 A.] 
 1280
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 560 B 
 
 accord with a custom of the order with which the member was 
 not shown to be acquainted. ^ An assessment unsigned and in- 
 complete^ or made by the wrong persons^ will not be sufficient 
 to base a forfeiture. If the company has gained profits for its 
 members, the share of a delinquent must be applied in satisfac- 
 tion of what is due from him, for example, interest on prem- 
 ium notes, to prevent a forfeiture.* In a mutual company every 
 member is interested in profits and involved in losses. The 
 essence of mutuality is, that those who contribute to produce 
 assets are interested in proportion to their contribution.^ And 
 the insured is entitled to know the amount of interest due after 
 deducting liis share of the profits, before a forfeiture for non- 
 payment of interest can be claimed.^ Where the by-laws pro- 
 vide that a policy suspended by non-payment of assessment may 
 be revived by payment of all dues within three months after 
 the forfeiture, such payment is all that is necessary, and the 
 usage of the society cannot attach other requisites to the con- 
 tract against the rights of a member.' Where a by-law gives 
 the board of directors power to reinstate a member on his pre- 
 senting a sufficient excuse for failure to pay an assessment 
 promptly, and making up the same, and the board impropei'ly 
 refuses to so reinstate a member on a proper excuse, because 
 he is in ill health (and he dies soon after), equity will deter- 
 mine the adequacy of the reason so offered, and in a proper 
 case compel the company to pay the insurance.^ Whether in- 
 ability by reason of a sudden calamity is a " valid reason" for 
 not paying an assessment on time is for the jury.^ The com- 
 pany's books are the best evidence of an assessment and of 
 forfeiture. The testimony of officers is secondary evidence.^"] 
 
 1 [Underwood v. Iowa Legion of Honor, 66 Iowa, 134.] 
 
 2 [Baker v. Citizens' Mut. Fire Ins. Co., 51 Mich. 243.] 
 8 [Bates V. Detroit Mut. Ben. Ass., 51 Midi. 587.] 
 
 * [Nortliwestern Mut. Life Ins. Co. v. Fort's Adm. 82 Ky. 277.] 
 6 [Carton v. Soutliern Mut. Ins. Co., 72 Ga. 371-373.] 
 
 6 [Eddy I'. Plioenix Mut. Life Ins. Co., 18 Ins. L. J. 804 (N. H.), March, 1889.] 
 T [Manson v. Grand Lodp^e, 30 Minn. 509.] 
 
 * [Van Houten v. Pine, 38 N. J. Eq. 72. (The money had been given to a 
 director to pay the assessment, but he forgot it.)] 
 
 ^ [Dennis v. Mass. Ben. Ass., 47 Hun, 338.] 
 w [Dial V. Valley Mut. Life Ass., 29 S. C. 5G0.] 
 
 1281
 
 § 561 A] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH XXXI. 
 
 S 561. Premium Notes, when recoverable to the Full Amount 
 without Assessment. — In some cases it is provided by the 
 charter or by-laws that, in case of neglect to pay an assess- 
 ment for a specified time, the whole amount of the deposit 
 note may be sued for and recovered. If, in such case, an as- 
 sessment has been paid, the whole amount recoverable is the 
 face of the note less the paid assessments,^ but without inter- 
 est, as the right to recover the whole amount is in the nature 
 of a penalty, which carries no interest.^ And the failure to 
 pay such an assessment excludes the insured from his right 
 to indemnity in case of loss,^ unless the by-laws treat the note 
 " as payment in advance " of the assessment,* in which case 
 the right will remain intact, although the charter provides 
 that if he neglect to pay an assessment he shall cease to have 
 his property insured until he pays. 
 
 [§ 561 A. What is a "Waiver of Forfeiture for Non-payment. 
 Where a course of dealing has induced a member to sup- 
 pose that assessments will be received after the time limited 
 the company is estopped to insist upon a forfeiture.^ But the 
 insured cannot take advantage of such a course of dealing when 
 it was not known to him, or known only by a few instances 
 in his own case.^ Forfeiture or suspension for non-payment of 
 assessments may be waived by any act recognizing the policy 
 as still existing.^ The failure to pay within the proper time 
 after the first notice is waived by sending a second notice af- 
 ter the expiration of such time.^ If a company makes an as- 
 sessment on a member after a former assessment is overdue and 
 unpaid, it waives the forfeiture for such non-payment.^ Col- 
 lecting any assessment waives the non-payment of prior assess- 
 ments.i*^ The levy and acceptance of an assessment without 
 
 1 Bangs V. Bailey, 37 Barb. (N. Y.) 630. 
 
 2 Ibid. ; Bangs v. Mcintosh, 23 Barb. (N. Y.) 591. 
 
 3 Beadle v. Chenango County Mut. Ins. Co., 3 Hill (N. Y.), 161. 
 * King V. Mut. Ins. Co., 20 N. H. 198. 
 
 s [Nat. Mut. Ben. Ass. v. Jones, 84 Ky. 110.] 
 
 6 [Bosworth V. Western Mut. Aid Soc, 75 Iowa, 582.] 
 
 7 [Olmstead v. Farmers' Mut. Fire Ins. Co., 50 Mich. 204.] 
 
 8 [Shay r. National Ben. Soc, 54 Hun, 109.] 
 
 9 [Stylow V. Wis. Odd Fellows Mut. Life Ins. Co., 69 Wis. 224.] 
 
 10 [Rowswell -;. Equitable Aid Union, 13 Fed. Rep. 840 (N. Y.), 1882.] 
 
 1282
 
 CH. XXXI.] OP MUTUAL INSURANCE. [§ 561 A 
 
 condition after the conditional acceptance of a prior overdue 
 payment, is a waiver of the right to avoid the certificate for 
 delay of payment. " An unconditional acceptance upon as- 
 sessment waives all former known grounds of forfeiture." ^ 
 If a branch of a benevolent institution advances to the parent 
 body an assessment due from a member, this waives the sus- 
 pension of such member provided for in the by-laws, and his fam- 
 ily is entitled to the usual benefit although the secretary may 
 have marked the member " suspended." ^ But where pay- 
 ments were overdue, and the secretary wrote the assured that 
 if they were made immediately the default would not be in- 
 sisted on, and twenty-four days after when the assured was 
 sick the money was sent, and receipts were returned by the 
 company, which provided in ]»rint that they should be valid 
 only in case the insured were alive and well at their date, and 
 the words "no default" were written across the face of each 
 receipt, it was held that there was no waiver. The written 
 words must be construed in connection with the print, and 
 meant that there was no default if the insured were alive and 
 well, which he was not.^ A certificate of membership in a 
 beneficiary association provided that failure to comply with 
 the rules of the association as to payment should render it 
 void, and a rule of the association provided that if an assess- 
 ment was not received within thirty days after mailing the no- 
 tice the party's contract with the association should be void, 
 but he might renew his connection as at first joining, or for valid 
 reasons might be reinstated on paying arrearages. C. was 
 habitually unpunctual, and many times the company received 
 assessments after they were due, makijig C. each time sign a 
 certificate that he was in good health. At last C. failed to 
 pay an assessment within the thirty days and died before pay- 
 ing it. It was held that the facts showed no waiver of the 
 rule of forfeiture by the company.*] 
 
 1 [Rice V. N. E. Mut. Aid Soc, 146 Mass. 248,252; Rindge v. N. E. Mut. Aid 
 Soc, 146 Mass. 286.] 
 
 2 [Schen v. Grand Lodge, &c. Ind. Forresters, 17 Fed. Rep. 214 (Oliio), 1883.] 
 
 3 [Servoss v. Western Mut. Aid Soc, 67 Iowa, 86.] 
 * [Grossman v. Mass. Ben. Ass., 143 Mass. 435.] 
 
 1283
 
 § 562] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 § 562. Notice of Assessment. — The insured is entitled to 
 notice of an assessment before suit is brought.^ But the 
 courts will be liberal in construing what amounts to proof and 
 notice.^ If the assessment be properly laid but improperly 
 notified, no forfeiture is incurred by failure to pay it.^ But if 
 the notice be properly sent, by mail for instance, its miscar- 
 riage, or failure to reach its destination, or the absence of the 
 insured, will not excuse non-payment within the prescribed 
 time.* Unless some special mode or form of notice of the 
 assessment be required by the charter or by-laws, personal 
 service will be sufficient publication.^ Nor need the notice 
 specify the amount due on each note.^ The rate per cent will 
 be sufficient, or any notice which will enable the insured to 
 determine by calculation the amount which he will be called 
 on to pay, and not incumbered by matter which misleads.''' 
 And notice required to be by mail or otherwise is sufficient, if 
 deposited in the post-office directed to the place of residence 
 indicated in the policy.^ And the " date of the notice " from 
 which is reckoned the time within which the assessment 
 must be paid will be not the date written in the notice, or the 
 day on which it is sent, but the date of its arrival at the post- 
 
 1 Columbia Ins. Co. v. Buckley, 83 Pa St. 293. 
 
 2 Williams ;;. German, &c. Ins. Co., G8 111. 387 ; Hollister v. Quincy Mut. Ins. 
 Co., 118 Mass. 478. 
 
 3 Frey r. Mutual Fire Ins. Co.. &c., 4-3 U. C. (Q. B.) 102. 
 * Greeley v. Iowa St. Ins. Co., 50 Iowa, 86. 
 
 ^ Jones V. Sisson, 6 Gray (Mass.), 288; York County Mut. Fire Ins. Co. v. 
 Knight, 48 Me. 75. 
 
 6 Atlantic Mut. Fire Ins. Co. v. Sanders, 36 N. H. 252. 
 
 "' Bangs ;;. Duckingfield, 18 N. Y. 592. 
 
 ^ [In general it is true that the company fulfils its duty b}' mailing notice of 
 the assessment, and if it fails to reach the assured by miscarriage or by his ab- 
 sence, non-pay nient of the assessment within the required time is not excused. 
 Weakly v. Northwestern Ben. & Mut. Aid Ass., 19 Brad. .327. And the holder of 
 an accident certificate is bound by a by-law of the company providing that no- 
 tice of an assessment put in the mail addressed to the last given address of 
 the member shall be legal notice, whether in fact received or not. Union Mut. 
 Ace. Ass. V. Miller, 26 Brad. 280. But if the charter provides that the mem- 
 bers shall be notified of assessments, mailing is not enough, the notice must be 
 actuall}' received : Castner ». Farmers' Mut. Fire Ins. Co., 50 Mich. 273 ; and it 
 must be notice of the assessment, not of forfeiture. Bates v. Detroit IMut. Ben. 
 Ass., 51 Mich. 587.] 
 
 1284
 
 CH. XXXI.] OP MUTUAL INSURANCE. [§ 562 
 
 office to which it is sent.^ A change of residence not made 
 known to the company is without effect upon them.'-^ If by 
 the terms of the by-laws notice of an assessment is to be 
 given, an action for recovery of the assessment cannot be 
 maintained by the company or its receiver without first giv- 
 ing the notice.^ [Wlien tlie charter requires that notice of 
 assessments shall be published and advertised, publication in a 
 newspaper is what is mcant.^] If publication of notice for 
 three weeks be required, and after assessment is made the com- 
 pany goes into the hands of the receiver, there being no com- 
 pany to give the required notice, actual notice by the receiver, 
 before action brought, will suffice.^ The notice should not be 
 given till the assessment is made.^ Notice of an intention to 
 assess is not necessary, unless required by the by-laws or char- 
 ter. Assessments at the regular meeting of the directors are 
 presumably a part of the business of the company, and no 
 notice is required. And as this is a part of the duty of the 
 directors, made so by statute, a by-law authorizing the direc- 
 tors to lay an assessment at a meeting called for that purpose, 
 neither restricts nor enlarges the power of the directors.'' The 
 notice, when required, should be given to the member of the 
 company insured, although there has been an assignment of 
 the policy with the consent of the company ; ^ unless by the 
 giving a new premium note, or assuming the liability on the 
 original, the assignee becomes a member; in which case he 
 should be notified, and not the original insured.^ [Unless no- 
 tice of assessment is sent reasonably soon after its date, the 
 time allowed for payment will not run from such date.^^ If 
 assessments are to be paid within thirty days after notice, in 
 
 1 Protection Life Ins. Co. v. Palmer, 81 III. 88. 
 
 2 Lothrop v. Greenfield Stock & Mut. Fire Ins. Co., 2 Allen (Mass.), 82. 
 
 3 Williams v. Babcock, 2.5 Barb. (X. Y.) 109. 
 
 * [Pennsylvania Training Scliool v. Independent Ins. Co., 127 Pa. St. 559.] 
 ^ Cooper u. Shaver, 41 Barb. (N. Y.) 151. 
 6 Bangs V. Mcintosh, 23 Barb. (N. Y.) 591. 
 
 ^ Bay State Mut. Fire Ins. Co. v. Sawyer, 12 Cush. 64 ; Fayette Mut. Fire 
 Ins. Co. V. Fuller, 8 Allen (Mass.), 27. 
 
 ^ Brannin v. Mercer County Mut. Ins. Co.. 4 Dutch. (N. J.) 92. 
 ^ Bowditch Mut. Fire Ins. Co. v. Winslow, 3 Gray (Mass.), 415. 
 1° [Stanley v. Northwestern Life Ass., 36 Fed. Rep. 75 (Ky.), 1887.] 
 
 1285
 
 § 563] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 the absence of notice no tender of annual or other assess- 
 ments is necessary to save forfeiture,^ and the notice must 
 conform to the agreement and not require the payment of 
 more than is thereby due.^] 
 
 § 563. Mutual Insurance ; Lien ; Contract with Parties out of 
 the State. — A mutual insurance company of New York, em- 
 powered to do business in a particular county, and having by 
 its charter a lien upon real estate insured by it upon filing 
 notice, it has been held in Canada, cannot make there a valid 
 contract with a citizen of Canada for the insurance of his 
 buildings. Such a contract is void ah initio. There could 
 be no mutuality in such a contract, and the insured could not 
 subject his property to the required lien.^ But in an action 
 against the same company, the New York courts held that the 
 company might lawfully make in New York a contract to in- 
 sure personal property situated in Canada and belonging to a 
 person residing there.* And it is well settled that as between 
 the States of the Union mutual insurance companies incor- 
 porated in one State may make in other States valid contracts 
 of insurance, both of the real and personal property of citi- 
 zens of other States, although doubtless without the permission 
 of the foreign State, no lien in such case will attach to the 
 real estate. The practice of mutual insurance companies to 
 insure both real estate and personal property upon which they 
 can have no lien is generally, if not universally, upheld. 
 
 The lien given by charter upon the property insured is inef- 
 fectual as against a bona fide purchaser,^ unless by express 
 provision it is made to run with the land.^ [A company may 
 still assert its lien for assessments on funds paid into court 
 by it in settlement of a loss, although in another suit it has 
 been determined that the company could not sue for the as- 
 
 1 [Covenant Mut. Ben. Ass. v. Spies, 114 111. 403.] 
 
 2 [Mutual Endowment Assess. Ass. v. Essender, 59 Md. 463.] 
 
 3 Genesee Mut. Ins. Co. v. Westman, 8 U. C. (Q. B.) 487. 
 
 * Western v. Genesee Mut. Ins. Co., 2 Ker. (N. Y.) 258 ; Columbia Fire Ins. 
 Co. V. Kinyon, 37 N. J. L. 33. 
 
 5 Kentucky, &c. Ins. Co. v. Mathers, 7 Bush (Ky.), 23 ; MoCulIoch v. Indiana, 
 &c. Ins. Co., 8 Blackf. (Ind.) 50. 
 
 6 Shirley v. Mut. Ass. Soc, 2 Rob. (Va.) 705. 
 
 1286
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 563 A 
 
 sessments because it had failed to give the proper notice of 
 them, nor is it estoppel to assert such lien by reason of hav- 
 ing sought to defend the suit of the assured by maintaining 
 that the policy was forfeited.^] 
 
 [§ 563 A. Suit against the Company on a Mutual Policy. — - 
 When the insured is to receive a sum equal to the amount re- 
 ceived from a death assessment, not exceeding $3000, after 
 proof of loss, satisfactory proof of loss constitutes a demand 
 of payment, and the company cannot excuse non-payment 
 on the ground that no assessment has been made; it is 
 its duty to make the assessment.^ And a suit may be 
 brought for the neglect to make an assessment.^ And an 
 action will be sustained on the policy for the maximum 
 amount it calls for, unless the company can show that an 
 assessment at the proper time would not produce so much. 
 This is the best doctrine, though as we shall see there is some 
 conflict. 
 
 In Iowa it has been held that the plaintiff must show that 
 an assessment had been made, and its amount, in order to re- 
 cover at law on a certificate promising the net amount of an 
 assessment not exceeding $3000. The dissent of J. Beck 
 is clearly the better law.^ The true remedy, the court say 
 later, is maiidamuH to compel an assessment.^ In Michigan, 
 on the contrary, mandamus does not lie to compel a mutual 
 company to levy an assessment and pay a loss. The proper 
 method is to bring suit on the contract.^ On the other side 
 stand New York, Minnesota, &c. A mutual certificate en- 
 titling a member to "the sum of one dollar for each con- 
 tributing member, not exceeding $2000," is an absolute 
 agreement to pay an amount to be determined by the number 
 of contributing members, and it is not necessary for the 
 
 1 [Appeal of Susquehanna Ins. Co., 105 Pa. St. 615.] 
 
 2 [Freeman v. National Ben. Soc, 42 Hun, 252.] 
 
 3 I Oriental Ins. Ass. c. Glancey, 70 Md. 101.] 
 
 ^ [Bailey v. Mut. Ben. Ass., 71 Iowa, 689, 692.] 
 
 s [Rainsbarger v. Union Mut. Aid Ass., 72 Iowa, 191 ; Newman v. Cove- 
 nant Mut. Ben. Ass., 72 Iowa, 242] 
 
 « [Burland v. Mut. Ben. Ass., 47 Midi. 424 ; Bates v. Detroit Mut. Ben. Ass., 
 id. 646.] 
 
 1287
 
 §^>63A] insurance: fire, life, accident, etc. [ch. xxxi. 
 
 plaintiff to allege an assessment and prove how much was 
 realized by it.^ Neither is it necessary to ask equity to compel 
 an assessment. A suit at law for damages for refusal to 
 assess is the proper remedy, the measure of damages being 
 the amount assessable on all insured, unless the defendant 
 alleges and proves that it should be less.^ In a suit against 
 a mutual company the plaintiff should recover a money judg- 
 ment. He is not obliged to proceed by mandajnus to compel 
 an assessment, but may give evidence of the amount that 
 would be realized by the assessment, and have a verdict ac- 
 cordingly .^ If a mutual policy is written for eiglity per cent 
 of an assessment not exceeding $5-4000, and the company re- 
 fuses to assess, it is not necessary to bring a bill for 
 specific performance. An action at law for substantial 
 damages may be maintained, and when the allegations ad- 
 mitted by demurrer claim tliat eighty per cent of an assess- 
 ment would realize $4000, it seems the recovery may be for 
 the whole sum.* If however the policy provides that the 
 company shall only be liable in a proceeding to compel 
 an assessment, the only remedy is suit in chancery for 
 specific performance.^ After a verdict and judgment against 
 a mutual company, it is improper for the court to restrict 
 the verdict and judgment to the assessments made or to 
 be made by the company, as this puts the payment in the 
 power of the company.^ 
 
 Amount of Recovery. — Where it is shown that if the assess- 
 ment had been made within the specified time the full amount 
 of the policy would liave been realized, the beneficiary is 
 entitled to judgment for that amount.''' It has been said that 
 there is no presumption that the assessments will amount to 
 or exceed the sum named as the limit of insurance in the 
 
 1 [Neskern v. Northwestern Endowment & Legacy Ass., 30 Minn. 408.] 
 
 2 [Bentz V. Northwestern Aid Ass., 40 Minn 203.] 
 
 2 [O'Brien v. Home Ben. Soc, 57 Hun. 495. See also Peck v. Eq. Ace. Ass. 
 82 Hun, 255. Darrow v. Family Fund Soc, 116 N. Y. 537.] 
 
 4 [Jackson v. Northwestern Mut. Rel. Ass., 73 Wis. 507, 511-513.] 
 
 5 [Fggleston v. Centennial Mut. Life Ins. Ass., 18 Fed. Rep. 14 (Mo.), 1883.] 
 
 6 [Seitzinger v. New Era Life Ass., Ill Pa. St. 557, 560.] 
 ■J [Life Ass. V. Lemke, 40 Ivans. 142.] 
 
 1288
 
 CH. XXXI.] OF MUTUAL INSURANCE. [§ 5G4 
 
 certificate. The burden is on the plaintiff to show that fact 
 if it exists.^ But other cases more justly liold that the burden 
 is on the company to show how much less than the two thou- 
 sand limit an assessment would raise.^ In the absence of 
 pleadings and proof that the sum should be reduced, tlie suit 
 should be for the maximum amount.^ The numbering of 
 the certificates is prhna facie evidence of the membership of 
 the society.* A change in the by-laws may by diminishing 
 the class from which the assessment is to be made reduce 
 the amount recoverable on a policy already issued. The 
 power to make by-laws is inherent and continuous, and the 
 courts will interfere with the directors only when there is 
 a manifest abuse of discretion.^ A member of a mutual 
 company must take notice of its by-laws,*^ and is bound by 
 one which requires an appeal to a superior body of the order 
 before suit in the courts.'^ But the order cannot by con- 
 stitution or by-law deprive a member of the right of final 
 resort to the courts.^ Lack of a certificate of membership 
 is fatal to a suit against a mutual company as a member.^ 
 Where the amount of recovery is not limited by the amount 
 of an assessment, an action may be maintained before any 
 assessment is made, and a mandamus to compel an assess- 
 ment may be had as auxiliary to the main action, ^'^'j 
 
 § 564. Liability of Directors for neglecting to assess, strictly 
 construed. — The insurance company, of which the appellees 
 were directors, issued a policy to the appellant upon his barn, 
 which was afterwards destroyed by fire. The company ad- 
 justed the loss and gave the appellant a note for one thousand 
 
 1 [O'Brien v. Home Ben. Soc, 46 Hun, 426] 
 
 2 [Supreme Lodge, K. of P. v. Knight, 117 Ind. 489; Elkhart Mat. Aid, 
 &c. Ass. V. Houghton, 103 Ind. 286 ; Protective Union v. Whitt, 36 Kans. 7G0.] 
 
 3 [Lueders v. Hartford Life, &c. Ins. Co., 11 Ins. L. J. 437 (Mo.), 1882 ] 
 * [Neskern v. Northwestern End. & Leg. Ass., 30 Minn. 407.] 
 
 & [Supreme Lodge, K. of P. v. Knight, 117 Ind. 489.] 
 
 6 [Gray v. Supreme Lodge, K. of H., 118 Ind. 293; Holland v. Taylor, 111 
 Ind. 121 ] 
 
 T [Bauer v. Samson Lodge, K. of P., 102 Ind. 202.] 
 
 8 [Supreme Council, &c. i-. Garrigus, 104 Ind. 133.] 
 
 9 [Bishop V. Empire Order of Mut. Aid, 43 Hun, 472.] 
 
 1" [Harl V. Pottawattamie County Mut. Fire Ins. Co., 74 Iowa, 39.] 
 
 1289
 
 § 564] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXI. 
 
 dollars, the amount of the loss, and received from him a writ- 
 ten receipt, discharging the company from all further claims 
 on account of the fire. This note the company afterwards 
 took up, paying part of the amount in cash, and giving a new 
 note for the remainder, upon which the appellant afterwards 
 brought suit and recovered a judgment. The directors failed 
 to satisfy the execution issued upon the judgment, or to 
 make an assessment. The statute touching insurance com- 
 panies provided that " whenever sufficient goods or estate of 
 any such corporation cannot be found to satisfy an execution 
 issued against them upon a judgment recovered on a policy 
 by them made, and the said corporation have goods or estate 
 to satisfy such execution, and the directors shall neglect or 
 refuse to pay the same ; or if the directors shall for thirty 
 days after the rendition of such judgment refuse or neglect to 
 make such an assessment as they may be authorized to make 
 therefor, and to deliver the same to the treasurer for collec- 
 tion, or fail to apply such assessment when collected toward 
 satisfying such execution, then, in eitlier of the cases afore- 
 said, the directors shall be personally liable for tlie whole 
 amount of such execution." This being in the nature of a 
 penal statute, inflicting upon the directors the penalty of a 
 personal liability for a failure to pay the execution, or to 
 make and properly apply the assessment, must therefore be 
 construed with some degree of strictness, and cannot be ex- 
 tended beyond the cases fairly within its terms, in order to 
 meet those that might be conceived to be withhi the spirit 
 and object of the law. And where the legislature provides 
 the personal remedy against the directors only in cases 
 where there has been a judgment against the corporation 
 on a policy, the court cannot extend the remedy to cases 
 where a judgment has been recovered on something else 
 than a policy .^ 
 
 1 Raber v. Jones, Sup. Ct. Ind., 2 Ins. L. J. 519. 
 1290
 
 ^ri. XXXII.] REMEDIES, EVIDENCE, ETC. 
 
 CHAPTER XXXII. 
 
 REMEDIES, EVIDENCE, PLEADING, INSOLVENCY. 
 
 Analysis. 
 
 REMEDIES. 
 
 Insured against insurers. 
 § 565. If the insurer refuses to deliver the policy in consequence of 
 
 a fire, &c., the insured may sue in equity for specific per- 
 formance or at law for damages, showing the contract 
 by other evidence. 
 §§ 566-566 B. Where the insured wishes to defend against the plea of false- 
 
 hood in the answers by showing that it is the ayent's fault, 
 he can in most States show the facts by parol and claim 
 waiver or estoppel. Where this is not possible he may 
 go into Equity and have the contract refurmed, or get 
 an injunction against the insurers setting up a fraudulent 
 defence. 
 
 Reformation will be granted upon clear and convincing evi- 
 dence that the actual policy, through mutual mistake, 
 or mistake on one side and fraud on the other, differs 
 from the agreement really made by the parties, un- 
 less the mistake was due to the negligence of the plain- 
 tiff, or he has been guilty of laches, or the action on the 
 policy if reformed would be barred, or the assured has 
 already sued at law and lost on the merits. 
 
 Equity will not aid one who rests for years on his policy, even 
 though he had very imperfect knowledge of English. 
 He should have sought the aid of others. 
 
 But if the policy is obscure the insured is not to blame for 
 not reading it, and if the facts calling for relief can be 
 made out clearl)', the court will not put out the excuse of 
 "laches" merely because the plaintitt' did not read the 
 policy. He has a right to presume it is all right. 
 
 There is no period short of the Statute of Limitations within 
 which a man must discover error or fraud. 
 
 If suit is brought on the policy within the time limited, a bill 
 for reformation may be brought after that time. 
 
 Equity will enjoin a suit at law after a bill has been dismissed, 
 § 566. 
 
 Cases in which equity will reform, § 566 A. 
 
 Cases in which equity will not reform, § 566 R. 
 
 No fraud or mutual mistake. Parties did not know 
 the facts at time of insurance, &c. Acceptance of 
 
 1291
 
 INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 policy with knowledge of error. An intent to 
 limit the right of a beneficiar}' (wife) iincommu- 
 nicated to the company at the time of insurance 
 Ls no ground for reformation. So where insured 
 stated goods to be in building A. when they were 
 in B. § 566 B. 
 § 566 C. Equity continued. 
 
 Bill for discovery. 
 
 Specific performance of agreement to insure. 
 Setting aside a judgment on the ground of new evidence. 
 Rescission, laches. 
 
 Cancellation not obtainable by one who has allowed 
 another to take out a policy on his life, though 
 without interest and hostile, there being no alle- 
 gation of danger. 
 Belief against forfeiture not imposed by statute. 
 Interpleader. 
 Jurisdiction. 
 § 567. Recovery of premiums (with interest) may be had if the policy 
 
 is void ah initio, or the risk never attaches, and there 
 is no agreement to the contiary, and no fraud or vio- 
 lation of morals by the plaiutitf. A mere mistaken 
 misrepresentation will not prevent his recovery. 
 In general, if the risk attaches for a single moment 
 on the whole property no part of the premium can 
 be recovered, but it is otherwise if the policy be- 
 comes illegal by statute after its issue. 
 Excess of premium paid bycreilitorin mistake of the law 
 
 for insurance beyond his debt may be recovered. 
 Agent's promises. Surrender. Premiums paid after 
 forfeiture. 
 § 568. After war suit lies to compel recognition of policy, or repay- 
 
 ment of premiums. 
 Compulsory renewal of policy. 
 § 569. Surrender of policy unfairly obtained, 
 
 "Wrongful refusal to deliver or continue policy or receive pre- 
 miums, or give a paid-up policy. Measure of damages. 
 § 569 A. Venue. 
 
 Action on policy transitory. 
 Stipulation limiting suits to home State void. 
 Foreign company may remove suits to United States 
 courts. 
 § 570, Remedy of insured against directors. 
 
 § 571. Stockholders may sue to compel correction of dividend. 
 
 § 572, On forfeiture company may recover all premiums earned while the 
 
 risk continued. 
 Equitable adjustment by directors after forfeiture. 
 
 Courts cannot interfere. Dividends, Profits. 
 Insurers against insured. 
 § 573. Recovery of policy obtained by fraud. Cancellation. Re- 
 
 scission. Injunction against suit at law on the policy. 
 § 574. Cancellation. Rescission. 
 
 1292
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. 
 
 § 575. Payment on loss of more than there is a legal obligation to 
 
 pay, under a mistake of fact pertaining to liability, may 
 be recovered, thougli the means of knowledge were at 
 hand, and even though the company had no right to do 
 business. 
 False representations of death. 
 
 § 576. Agents against insurers. Commissions. 
 
 § 577. Remedies by and against foreign insurance companies. 
 
 Recovery of premiums by or from a company that has not 
 conformed to the condition of doing business. Service 
 of process, &c. 
 Whether a policy issued by such company is void or not. 
 
 § 578. Right of foreign company to remove action to United States 
 
 courts. 
 
 § 578 a. Retaliatory legislation. A company does business in another 
 
 State only by comity, and any restrictions thought advis- 
 able mixy be put upon it, which it cannot overcome by 
 the provisions of the policy. A law affecting foreign 
 insurance companies may however be unconstitutional 
 as violating the uniformity of taxation. 
 
 EVIDENCE. 
 § 579. Burden of proof. Insurable interest. Title. 
 
 Neutrality. Former transactions. Identity of premises. Mis- 
 representation of "life" in former transaction of his own 
 cannot affect creditor's policy. Proofs as evidence. 
 Application. Other similar occasions. 
 Admissions of adjuster. 
 Physician's privilege waived. 
 
 Wrong admission of evidence not cured by telling jury to dis- 
 regard it. 
 § 579 A. Declarations of the "life" not admissible against the beneficiary 
 
 unless part of res gestce. 
 § 579 B. Parol evidence of what passed at insurance, 
 
 of error in policy, as to date or amount, 
 of meaning of "epidemic." 
 of meaning of "rags," "old metals." Usage, 
 that assignment was as collateral. 
 
 circular saying that thirty days grace would be given on 
 premiums, inadmissible. 
 §§580,581. Expert testimony. 
 
 § 582. Custom and usage. Particular custom must be known to insured. 
 
 General custom, as to charge more on unoccupied houses, 
 is admissible on question of increase of risk. So general 
 custom to give thirty days grace on premiums. 
 § 583. Wilful burning. A preponderance of evidence enough. 
 
 Contra,, a few cases. 
 Every circumstance that can throw light on motive is evi- 
 dence. Plaintiffs good character admissible. 
 § 584. Issue of policy. Signing application. Receipt of premium. Organ- 
 
 ization of company. 
 § 585. Disease. Health. Death. 
 
 § 586. Eff'ect of misrepresentation a question of law. 
 
 1293
 
 § 565] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 § 587. Suicide. Belief. Character. Fraud. Value of neighboring 
 
 property, 
 § 587 A. Variance. 
 § 587 B. Court aud Jury. 
 
 PLEADING, §§ 588-591 A. 
 R 589. Policy must be set out, and application if part of the policy. 
 
 Performance of conditions precedent to right of recovery must be 
 alleged, 
 general allegation sufficient, but it must be ^ated that the 
 
 period allowed the company for payment has expired, 
 must state that notice and proofs were furnished as agreed, 
 
 or were waived. 
 Proof of waiver of a condition is admissible under the allega- 
 tion of performance. 
 R 590. Allegations as to interest, assignment, value, description of 
 
 property, &c. 
 Plaintiff need not aver matters of defence, exceptions, condi- 
 tions subsequent, the right of the company to do business, 
 sufficiency of capital (§ 589), &c., nor that demand was made 
 before suit. 
 § 591. Matters in defence must be specially pleaded. Intentional injury. 
 
 Arbitration. Breach of warranty. 
 Misrepresentation. Other insurance. 
 
 Objections different from those raised before suit will not do. 
 False swearing. Fraud. 
 § 591 A. Ultra vires. See also § 577, and chap. iv. 
 
 § 591 B. New Trial. 
 
 BANKRUPTCY AND INSOLVENCY. 
 § 592. Conflict of laws. Assignment in domicil takes precedence of 
 
 attachment in another State. 
 § 593. Status of the company and powers of court. 
 
 K 594. Powers and duties of assignees and receivers. 
 
 Interest that passes to the receiver. 
 Status of policy-holder. 
 § 594 a. Distribution of assets. Priority of claims. The measure of 
 
 a policy-holder's claim. Death after insolvency. Paid- 
 up policies. Compensation of receiver. 
 
 § 595. Set-off. 
 
 § r,96 Pule on this subject as affected by insolvency. 
 
 § 597. Cessation of business. Selling out to another company. 
 
 § 565. Insured against Insurer ; Refusal to deliver Policy. — 
 It not unfrequently occurs that, the parties having come to 
 an agreement upon the terms of the contract before the de- 
 livery of the policy, a fire or some other event intervenes, and 
 the company refuses to deliver the policy or to admit its liabil- 
 ity. In such case two courses are open to the insured. He 
 may resort to a court of equity to compel the delivery of the 
 1294
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. . [§ 560 
 
 policy, when, in a proper case, the court, having jurisdiction 
 to compel specific performance, will, to avoid circuity of ac- 
 tion, decree payment for the loss, as if a policy had issued.^ 
 Or a suit at law will be sustained., upon competent and satis- 
 factory evidence, whether verbal or written, to show the terms 
 of the contract.^ 
 
 § 566. Insured against Insurer-, Reformation of Contract. — 
 Where the insured is likely to be met with the defence that 
 there is falsehood in his answers contained in the application, 
 and he would avail himself of the reply that he was misled by 
 the insurers or their agent, he will carefully consider how he 
 will seek his remedy. In some States the courts of law feel 
 obliged, under the strict rules of evidence which govern such 
 courts, to deny him the privilege of proving the facts, and so 
 he will fail in his suit ; while the same courts, perhaps, had 
 their aid been invoked in equity, would have found some 
 way in which the facts might have been available.^ In most 
 of the States, however, courts of law will apply the doctrines 
 of waiver and estoppel, or allow proof of mistake, so as to 
 enable the plaintiff to maintain his action for indemnity, 
 and not drive him to a court of equity.^ And where this is 
 not permitted, a court of equity may be applied to reform 
 the contract, if it does not conform to the agreement, as made 
 by mistake of law or fact, or procured by fraud, so that an 
 action at law can be maintained. And in this case, as in the 
 case of a bill in equity to enforce specific performance by de- 
 
 1 Baile i-. St. Joseph Ins. Co. (Mo), 10 Ins. L. J. 657, 66.3; Rhodes v. Railway 
 Passengers' Ins. Co., 5 Lans. (N. Y.) 71 ; Union Mut. Ins. Co. v. Com. Mut. Mar. 
 Ins. Co., 2 Curtis (C. Ct. U. S.),524; s. c. affirmed, 19 How. (U.S.) 318; Fried v. 
 Royal Ins. Co., 50 N. Y. 243 ; Franklin Fire Ins.Co. v. Hewitt, 3 B. Mon. (Ky.) 231. 
 
 2 Perkins v. Washington Ins. Co., 4 Cow. 645; Kentucky Mut. Ins. Co. v 
 Jenks, 5 Ind. 96; Hamilton v. Lycoming Ins. Co., 5 Pa. St. 339; Whittaker i'. 
 Farmers' Union Ins. Co., 29 Barb. (N. Y.) 312 ; City of Davenport v. Peoria 
 Mar. & Fire Ins. Co., 17 Iowa, 276; Commercial Ins. Co. r. Hallock, 3 Dutch. 
 (N. J.) 645, affirming s. c. 2 id. 268 ; Sussex County Mut. Ins. Co. v. Woodruff, 
 2 id. 541 ; Sheldon v. Conn. Mut. Life Ins. Co., 25 Conn. 207 ; Gerrish v. Ger- 
 man Ins. Co., 55 N. H. .355. And see also ante, § 23. 
 
 5 Holmes ef al. v. Charlestown Mut. Fire Ins. Co., 10 Met. (Mass.) 211 ; Bar- 
 rett et al. V. Union Mut. Fire Ins. Co , 7 Cush. (Mass.) 175. 
 
 * Wilson V. Conway Mut. Fire Ins. Co., 4 R. I. 141. And see ante, §§ 143, 
 144, 498 et seq. ; Gerrish v. German Ins. Co., 55 N. H. 355. 
 
 VOL. II.— 88 1295
 
 § 566 ] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH, XXXII. 
 
 livery of the contract, the court having jurisdiction to reform, 
 and for the same reason will decree damages.^ Evidence 
 showing that the insurer and insured meant to make a 
 certain contract, but by misconception of the effect of the 
 language used terms in the policy which defeated their inten- 
 tion, makes a proper case for its reformation.^ The evidence, 
 however, in such case must be clear.^ If there be substantial 
 doubt as to what was the statement of the applicant, or as to 
 the fairness of his claim to have been mistaken, or the agree- 
 ment of the parties, or a material conflict of testimony, the 
 court will not aid the plaintiff. The affirmative is upon him, 
 and he must show what statement he made, and what the 
 agreement was. The fact that the statement is not true, and 
 the presumption that he would not make a false statement, 
 the effect of which would be to invalidate the policy, are not 
 enough. It must also appear that the mistake was mutual,* 
 
 1 Oliver v. Mut. Com. Mar. Ins. Co., 2 Curtis (C. Ct. U. S.),277; Plioenix 
 Ins. Co. V. Hoffheimer, 46 Miss. 645; Collett v. Morrison, 12 Eng. L. «& Eq. 171 ; 
 Phoenix Insurance Co. v. Gurnee, 1 Paige (N. Y.), 278; Longhurst v. Star Ins. 
 Co., 19 Iowa, 364; Neville v. Merch. & Manuf. Ins. Co., 19 Oliio, 452; New York 
 Ice Co. V. Nortli West Ins. Co., 23 N. Y. 357, reversing s. c. 10 Abb. Pr. (N. Y.) 
 341 ; Stout V. Fire Ins. Co. of New Haven, 12 Iowa, 371 ; Perry v. Newcastle 
 Dist. Mut. Fire Ins. Co., 8 U. C. (Q. B.) 363 ; Harris v. Columbiana, &c. Ins. Co. 
 18 Ohio, 116; Hammel v. Queen Ins. Co., 50 Wis. 240. 
 
 •^ Maher v. Hibernia Ins. Co., 67 N. Y. 283. 
 
 3 [Andrews v. Essex Fire & Mar. Ins. Co., 3 Mason, 6 at 10 ; Bishop v. Clay- 
 Ins. Co., 49 Conn. 167. The proofs of mutual mistake in drawing up a policy 
 must be very clear and convincing. Blake Opera House Co. (;. Home Ins. Co., 
 73 Wis. 667 ; Elstner v. Cincinnati Eq. Ins. Co., 1 Dis. (Ohio) 412 at 419. Evi- 
 dence that the company knew the intention of the insured at the time of making 
 the policy must be very clear, before the instrument will be made to conform to 
 it. Graves v. Boston Mar. Ins. Co., 2 Cr. (U. S.) 418 at 444. A petition for 
 reformation of a policy must show by clear allegations that the petitioner ex- 
 pected a different protection from that afforded him, and that the company 
 agreed to it, but that by mistake or fraud such was not incorporated in the poli- 
 cy. Davega v. Crescent Mut. Ins. Co., 7 La. Ann. 228 at 229. It is not enough 
 to sliow that the insured applied for a certain policy, P., and that the company 
 issued one of different terms, Pi. it must also be shown that tliey agrrtd to issue 
 P. or mutual mistake is not made out. Durham v. Fire & Mar. Ins. Co., 22 Fed. 
 Kep. 468; 10 Sawy. 526 (Oregon) 1884.] 
 
 •» [McHugh V. Imperial Fire Ins. Co., 48 How. Pr. 230 ; Balen v. Hanover Fire 
 Ins. Co., 67 Mich. 179. Not merely from ignorance of the law and the real in- 
 tended contract must be evident. Kent v. Manchester, 29 Barb. (N. Y.) 595 at 
 1296
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 566 
 
 what was the contract, and that botli parties have done what 
 neither intended, or that it was the mistake of one party in- 
 duced by the fraud of the other, and this by the same clear 
 and distinct evidence, free from substantial doubt. ^ Or, 
 again, a court of equity will, in a proper case, enjoin the in- 
 surers from setting up a defence which would be fraudulent 
 or grossly inequitable and unjust.^ But a* court of equity will 
 not entertain a bill to reform a policy, upon which a suit 
 at law has been brought and failed. The insured, having 
 elected to sue upon the policy as it was, must abide the re- 
 sult.3 Equity will also enjoin a suit at law brought after a bill 
 in equity has been dismissed.* Where the mistake is due to 
 the negligence of the petitioner,^ or there has been laches in 
 bringing the suit, it will not interfere.'^ [If the insured ac- 
 
 597. A written instrument will be reformed on the ground of mistake, only when 
 the correction asked for expresses tlie understanding of both parties at tlie time 
 it was executed. Ledyard v. Hartford Fire Ins. Co., 24 Wis. 490. If the mistake 
 was not made by both parties, only rescission or cancellation will be ordered. 
 Diman v. Prov. &c. R. R. Co., 5 R. I. 1.30 at 137 ; Kent v. Manchester, 29 Barb. 
 595 at 597.] 
 
 1 Ibid.; Nat. Ins. Co. v. Crane, 16 Md. 260; Suydam v. Columbus Ins. Co., 
 18 Ohio, 459 ; Cooper v. Farmers' Mut. Fire Ins. Co., 50 Pa. St. 299 ; Tusson 
 V. Atlantic Mut. Ins. Co., 40 Mo. 33; Parsons v. Bignold, 15 L. J. n. s. (Ch) 
 379, per Lyndhurst, L. C. ; Van Tuyl v. Westchester Fire Ins. Co., 55 N. Y- 
 657; Solms v. Rutgers Fire Ins. Co., 8 Bosw. (N. Y.) 578; Moliere v. Penn, 
 &c. Ins. Co., 5 Rawle (Pa.), 343; Bryce v. Lorillard Fire Ins. Co., 55 N. Y. 
 240; Snell v. Atlantic Fire Ins. Co., 98 U. S. 85; Hay v. Star Fire Ins. Co., 
 13 Hun (N. Y.), 496; Hearne v. Marine Ins. Co., 20 Wall. (U.S.) 488, 490; 
 Brugger v. State, &c. Ins. Co., C. Ct. (Oregon), 8 Ins. L. J. 293; Patterson v. Ben 
 Franklin Ins. Co., 81* Pa. St. 454 ; Liverpool Ins. Co. v. Wyld, 1 Canada Sup. 
 Ct. Rep. 604; Billington v. Provincial Ins. Co., 2 Ont. App. Rep. 158; P\)wler v. 
 Scottish Eq. Ass., 28 L. J. (Ch.) 225; Mead v. Westchester Fire Ins. Co., 6t 
 N. Y. 453; Continental Ins. Co. r. Jenkins (Ky.), 5 Ins. L. J. 514; German, &c. 
 Ins. Co. V. Davis (Mass.), 10 Ins. L. J. 670; [Welles v. Yates, 44 N. Y. 525 at 
 529 ; Wyche v. Greene, 11 Ga. 159, 169]. 
 
 - Woodbury Sav. Bank v. Charter Oak Ins. Co., 31 Conn. 518. 
 
 '•^ Washburn v. Great Western Ins. Co., 114 Mass. 175; Steinbach v. Relief 
 Ins. Co., 12 Hun (N. Y.), 640. [But the dismissal of an action for damages, 
 witiiout determination on the merits, is no bar to a subsequent suit for reforma- 
 tion. Spurr V. Home Ins. Co., 18 Ins. L. J. 619 (Minn), May 1889.] 
 
 * Tredegar v. Windus, L. R. 19 Eq. 607. 
 
 6 Ryan v. World Life Ins. Co., 41 Conn. 168 ; Taylor v. Charter Oak, &c. Ins. 
 Co., C. C. P. (N. Y.), 10 Ins. L. J. 74; Pindar v. Resolute Ins. Co , 47 N. Y. 114 
 
 6 Markey v. Mutual Benefit Ins. Co., C. Ct. (Mass.), 6 Ins. L. J. 537. 
 
 1297
 
 § 556] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 cepts and acts on the policy for years his laches will prevent his 
 having it reformed to agree with his recollection of the terms 
 of the contract.! A bill to reform, filed more than six years 
 after knowledge of the ground on which liability is denied, 
 cannot be maintained in equity although jurisdiction of the 
 case is not conferred on the court until the six years had 
 passed, and immediately before the filing of the bill.^ If per- 
 sons knowing themselves to have an imperfect knowledge of 
 English, allow themselves to continue under an erroneous im- 
 pression for years without effort to supplement their imperfect 
 knowledge with the more perfect understanding of others, 
 equity will not aid them, where there is no fraud.^ Where 
 the insured thought by the representations of the agent that 
 he was getting a ten year paid up policy, but in reality his 
 policy was an ordinary one, after ten years' neglect to examine 
 the policy, equity would not aid him against his own gross 
 neglect.^ But where a policy-holder was induced to surrender 
 it and take a new one upon false representations that the new 
 policy was in its terms more favorable to him, laches were not 
 to be imputed to him for not reading the instrument and discov- 
 ering the fraud for five years, the new policy being so obscure 
 that only insurance experts could understand it.^ And in op- 
 position to the Georgia case where the plaintiff applied for a 
 renewal on the same terms as the old policy, and the defendant 
 promised to give it, and the plaintiff did not examine the new 
 policy until after loss, when he found it different from the old 
 one in a matter materially affecting his rights of recovery, it 
 was held that he was not guilty of laches, having a right to 
 presume the new policy to be like the old according to promise, 
 and tliat the policy should be reformed.*' The length of time 
 before the assured discovers the mistake in the policy is only 
 important as evidence of the existence of such a mistake. 
 
 1 [Zalle'e v. Conn. Mut. Life Ins. Co., 12 Mo. App. Ill ; Goldsmith i-. Union 
 Mut. Life Ins. Co., 2 How. Pr. n. s. 32. See however 18 Abb. U. C 325.] 
 
 2 [Dodge V. Essex Ins. Co., 12 Gray, 65 at 72 ] 
 
 8 [Steines v. Manhattan Life Ins. Co., .34 Fed. Rep. 441 (Mo.), 1888.] 
 4 [Massey v. Cotton States Life Ins. Co., 70 Ga. 794.] 
 s [Knauer ;•. Globe, &c. Ins. Co., 48 N. Y. Snper. 454.] 
 « [Palmer v. Hartford Ins. Co., 54 Conn. 488.] 
 1298
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 5GG A 
 
 There is no period short of the statute of limitations within 
 which a man must discover such error.i A plaintiff is not 
 by neglecting to 'read his policy, guilty of such laches as to 
 bar him from seeking to have the policy reformed to agree 
 with the contract he made.'-^ Where a suit on the policy has 
 been brought within the jicriod of limitation agreed on, a bill 
 for reformation in aid thereof may be brought after the limit. 
 Such a bill is not a suit on the policy.-^ A bill to reform will 
 not be entertained if action on the policy would be barred even 
 were it reformed.*] 
 
 [§ 566 A. When Equity will Reform. — An error in a policy 
 may be corrected by the memorandum of the agreement or by 
 the application marked " accepted " over the initials of an officer 
 of the company .5 If by mistake of the agent a policy is issued 
 in wrong form or with errors, equity will reform it even after 
 a loss.^ A mistake brought about by wrong information given 
 by the agent of the company, he being a lawyer, by which the 
 policy was issued in the name of the mortgagor instead of 
 the mortgagee, will ground a bill for reformation.^ Where the 
 agent fails to state the interest that is intended to be insured, 
 the policy will be reformed.^ If a policy differs from the 
 memorandum, the policy will, by equity, be made agreeable to 
 the memorandum.^ Where the policy omits the name of the 
 insured, and states sixty days as the term of insurance instead 
 of a year, as agreed upon by the parties in the verbal contract 
 which the policy was intended to embody, the policy will be 
 reformed. Upon " clear and convincing " evidence of mistake 
 by one party and fraud by the other, or of mutual mistake so 
 
 1 [Bidwell V. Astor Mut. Ins. Co., 16 N. Y. 264 at 206] 
 
 2 [Barnes v. Hekla Fire Ins. Co., 75 Iowa, ll.j 
 
 3 [Rosenbaum v. Council Bluffs Ins. Co., 37 Fed. Rep. 724 (Iowa), 1889.] 
 * [Thonnpson v. Phoenix Ins. Co., 25 Fed. Rep. 296 (Oregon), 1885.] 
 
 5 [Lippincott v. Insurance Co., 3 La. 546 at 549 ; Wylde v. Union Mar. Ins. 
 
 Co., 1 N. S. Eq. 203; Banks v. Wilson, id. 210; Equitable Ins. Co. v. Hearne, 20 
 
 Wail. 494 at 496.] 
 
 « [Bailey v. Amer. Cent. Ins. Co., 13 Fed. Rep. 250, 286 (Iowa), 1882.] 
 
 7 [Slas V. Roger Williams Ins. Co., 8 Fed. Rep. 183 (N. H.), 1881.] 
 
 » [Williams v. Nortb Germ. Ins. Co., 24 Fed. Rep. 625 (Iowa), 1885.] 
 
 ■' [Motteux y. London Ass. Co., 1 Atkins, 545 at 546 j Delaware Ins. Co. v. 
 
 Hogan, 2 Wash. 4, 6] 
 
 1299
 
 § 566 A] INSURANCE : fire, life, accident, etc. [cH. XXXII. 
 
 that the writing does not carry out the intention of either, 
 equity will reform. ^ When the insurer by mistake inserted 
 the name of another vessel than the one intended to be in- 
 sured, the policy was reformed after loss.^ A policy issued in 
 the wrong name, by mistake of the company's agent, may be 
 rectified after loss, although the said agent signed the applica- 
 tion with his own name for the applicant.^ When the insurer 
 by mistake indorsed " eight boxes " &c., on the policy from a 
 bill of lading given by the insured of a shipment, when in fact 
 it was eighteen, which was not discovered until after loss, the 
 policy was reformed. The rule that mistake must be mutual 
 does not prevail where there is bad faith on the part of the 
 defendant, or where confidence was reposed in him, and he 
 was intrusted with and assumed the preparation or com- 
 pletion of the instrument, in which wilfully or negligently he 
 has omitted what had been clearly stated to him as the intent 
 of the plaintiff, who relies on the defendant in the matter.* 
 When the insurance company was told that no charter of the 
 ship was at hand and the insured did not know just where she 
 would touch, but wanted a policy for the round trip which 
 would cover everything ; and when the company purported to 
 give such a policy, but in fact limited it in opposition to the 
 charter, when found, equity ordered a reformation of the con- 
 tract.^ When circumstances indicate that a policy was in- 
 tended to be issued for two months, and the premium was 
 paid for that time only, and the policy was written for a longer 
 time, equity will reform the policy on the company's request.^ 
 If a certificate for two thousand dollars is by mistake issued 
 upon an agreement for a one thousand dollar policy, the com- 
 pany is entitled to have the document reformed.'] 
 
 1 [Devereuxw. Sun Fire Office, 51 Hun, 147. The plaintiff did not discover 
 tlie defects in the poHcy until after loss. See Avery v. Equitable Life Ass. Soc, 
 62 Hun, 392] 
 
 2 [Bates V. Grabham, 2 Sulk. 444 at 444] 
 
 8 [Hill V. Millville Mut. Mar. & Fire Ins. Co , 39 N. J. Eq. 66.] 
 4 [Brioso )'. Pacific Mut Ins. Co., 4 Daly, 246 at 250] 
 6 [National Traders' Bank v. Ocean Ins. Co., 62 Me. 519 at 523.] 
 6 [North American Ins. Co. ?\ Whipjile, 2 Biss. 418.] 
 1 [Gray v. Supreme Lodge K. of H., 118 Ind. 293.] 
 1300
 
 CH. XXXII.] KEMEDIES, EVIDENCE, ETC. [§ 566 B 
 
 [§ 5G6 B. "When Equity will not Reform. — A policy which 
 does not state truly the interest of the assured cannot be 
 reformed after loss, where the agents of the company and of 
 the insured both testify that they did not know the true state 
 of the title. The element of mistake necessary to ground the 
 equity is absent.^ D. applied to G. for a certain kind of policy 
 he was unable to write in any of the companies he represented. 
 G. applied to A., a friend in the insurance business, and A. wrote 
 the policy in one of his companies. By mistake it did not 
 read as A. and G. intended and agreed, and G. knew this fact 
 but D. did not, and it was the very sort of policy he had applied 
 for. After loss it was held that G. was not D.'s agent as to 
 knowledge of the error, and that as D. had no actual knowledge 
 of it, it was not a mutual mistake, and equity could not reform 
 the contract.2 " When an application for insurance does not 
 attempt to set forth all the provisions which the policy shall 
 contain, and the agent with or without authority represents 
 that the policy will contain certain stipulations which are not 
 unlawful, then the policy must contain them or the insured 
 will not be obliged to accept it ; " ^ but if he elects to take it 
 he cannot afterwards set up the omission when sued on his 
 premium note. That a man has obtained a divorce from his 
 wife is no ground for reforming a policy in which she is a 
 beneficiary.* If he intended that the funds should not go to 
 her unless she continued to be his wife, but failed to communi- 
 cate this intent to the company at the time of insurance, there 
 is no mutual mistake.^ When the insured by mistake stated 
 that the tobacco insured was in building A. when in fact it was 
 in B., after a loss there could be no reformation of the policy.^ 
 That would not be to correct the policy to the terms agreed 
 on, but to make a new contract. The company never agreed 
 to insure goods in building 5.] 
 
 1 [Farmville Ins. &c. Co. v. Butler, 55 Md. 233.] 
 
 2 [St. Paul Fire & Mar. Ins. Co. v. Shaver, 76 Iowa, 282.] 
 8 [American Ins. Co. v. Neiberger, 74 Mo. 167 at 173] 
 
 * [Goldsmith v. Union Mut. Life Ins. Co., 2 How. Pr. n. s. 32.] 
 ** [Id. 17 Abb. N. C. 15. This case was however reversed on the ground that 
 there tvas evidence of mutual mistake in the matter. See 18 Abb. N. C. 325.] 
 ^ [Severance v. Continental Ins. Co., 5 Biss. 156 at 158.] 
 
 1301
 
 § 566 C] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 [§ 566 C. Other Matters in Equity. — A bill for discovery 
 will lie to compel the insured to answer interrogatories, mate- 
 rial in enabling the court to determine the question of misrep- 
 resentation. ^ It is not necessary in a bill for discovery to 
 allege that the complainant is not able to prove his case at 
 law without it. He is entitled to discovery of evidence to at- 
 tack and to rebut his adversary .^ Equity may enforce an 
 agreement to insure, and compel the execution of the policy, 
 and if loss has occurred, order payment therefor.^ Equity hav- 
 ing taken jurisdiction to enforce delivery of a policy, will, if 
 there has been a loss, retain it to decree payment on the 
 policy.^ There must be conclusive proof that a contract of 
 insurance was made in order to compel a company to issue a 
 policy.^ Equity will not usually relieve on accouut of mere 
 cumulative evidence, but where the defence was originally 
 imperfect for want of distinct proof, a judgment on a policy 
 may be set aside on the ground of newly discovered fraud 
 sufficient for a perfect defence.^ A. gave a note for the pre- 
 mium, and the policy was delivered to him in May. A month 
 after he discovered on looking at the policy that it was invalid 
 through an act of the agent, and when payment of the note 
 was demanded in August he refused to pay saying the policy 
 was " no good." In November suit was brought on the note, 
 and not until the next November did the insured ofi'er to re- 
 scind, which was held not to be within a reasonable time.'' 
 Where the insured relies on his policy for fifteen years, and 
 does not use the means at hand of testing the representations 
 of the agent as to the profits of the company being sufficient 
 to protect policy-holders against liability for loans, he cannot 
 go into equity and claim a rescission.^ One upon whose life 
 another has taken out a policy with his consent, cannot com- 
 
 1 [Union Mutual Life Ins. Co., v. Gilbert, 25 N. B. R. 221.] 
 
 ■■2 [Atlantic Ins. Co. v. Lunar, 1 Sand. Ch. 91.] 
 
 3 [Carpenter v. Mutual Safety Ins. Co., 4 Sandf. Ch. (N. Y.), 408 at 410.] 
 
 * [Hebert v. Mut. Life Ins. Co., 12 Fed. Rep. 807 ; 8 Sawy. 198 (Oregon), 1882.] 
 
 5 [McCann v. Mina. Ins. Co., 3 Neb. 198 at 206.] 
 
 6 [Ocean Ins. Co. v. Fields, 2 Story, 59 at 77.] 
 
 7 [Plympton v. Dunn, 148 Mass. 523.] 
 
 6 [Maclntyre v. Cotton States Life Ins. Co., 82 Ga. 478, 499.] 
 
 1302
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 567 
 
 pel its cancellation, on the ground that the beneficiary has no 
 insurable interest and is hostile to him, there being no alle- 
 gation of danger, altliough he offer to reimburse the pre- 
 miums.i Equity will not relieve against a forfeiture imposed 
 by statute.2 If a policy on the life of A., payable to B., is 
 surrendered without B.'s consent and a new policy issued pay- 
 able to C, the company cannot maintain a bill of interpleader 
 against B. and C, for it may be liable to each.^ Although 
 gross fraud, misrepresentation, and concealment in procuring 
 a policy were charged, the court of equity in South Carolina 
 held that it had no jurisdiction.^] 
 
 § 567. Recovery back of Premium. — If a policy be void ab 
 initio, or if the risk never attaches, and there is no actual 
 fraud on the part of the insured, and the contract is not 
 against law or good morals, though there may have been mis- 
 representation or breach of warranty, he may recover back all 
 the premiums he may have paid, either in an action for them 
 alone, or on a count for money had and received, coupled with 
 a count on the policy in an action for the loss.^ So, if he has 
 
 1 [Peckham v. Grindlay, 17 Abb. N. C. 18.] 
 
 2 [vVinchell v. Hancock Mut. Life Ins. Co., 8 Rep'r 549, 1st Cir. (Mass.) 
 1879.] 
 
 3 [National Life Ins. Co. v. Pingrey, 141 Mass. 411.] 
 
 * [Charleston Ins. Co. v. Potter, 3 Des. (S. C.) 6 at 7-8.] 
 
 3 Clark V. Manufacturers' Ins. Co., 2 Woodb. & Minot (C. Ct. U. S.), 472 ; 
 Mutual Ass. Co. v. Mahon, 5 Call (Va.), 517 ; Tyrie v. Fletcher, Cowp. 666, 668; 
 Fowler v. Scottish Eq. Life Ins. Co., 28 L. J. Ch. 225 ; Rochester Ins. Co. v 
 Martin, 13 Minn. 59; Foster v. U. S. Ins. Co., 11 Pick. (Mass.) 85; Mulvey v. 
 Gore Ins. Co., 25 U. C. (^ B.) 424; Delavigne v. U. S. Ins. Co., 1 Johns. (Ch.) 
 310. [Where the contract is not immoral or contrary to law, the assured may 
 in the absence of express agreement to the contrary, recover his premiums 
 where the risk has not commenced or the contract is void ab initio. iEtna Life 
 Ins. Co. V. Paul, 10 Brad. 431 ; Anderson v. Thornton, 8 Exch. 425 at 427. By 
 reason of a misrepresentation not fraudulent, for example. Feise v. Parknison, 
 4 Taunt. 640 at 642 ; Insurance Co. v. Pyle, 44 Ohio St. 19. Where a mort- 
 gagee obtained insurance, the policy being conditioned to be void if the interest 
 of the assured when other than the sole ownership was not expressed, it was 
 held that, the policy being void ab initio and there being no fraud on the part of 
 the insured, he could recover his premiums. Waller v. Northern Ass. Co., 64 
 Iowa, 101 ; Penson v. Lee, 2 B. & P. 3-30 at 333. And he may have interest on 
 his money for the time the insurers have had the use of the same. Waddington 
 V Insurance Co., 17 Johns. 23 at 24. When a ship illegally sailed four days 
 
 1303
 
 § 567] INSURANCE ; FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 been induced to accept a policy by false representations. ^ So 
 where the premium is applicable to two risks, and one never 
 attaches, the premium paid on the latter, if ascertainable, may 
 be recovered back.^ So if the insured, after alienation, has 
 the option to surrender his policy and take up his deposit note, 
 he may recover back so much of the premiums paid as may 
 not be required for the payment of losses up to the time of the 
 surrender.^ So he may recover back premiums paid on a 
 policy improperly cancelled, or a sum sufficient to procure new 
 insurance at the former rate.* And such, doubtless, would be 
 the case where premiums are paid after forfeiture of the 
 policy, in the belief that the forfeiture has been waived.^ But 
 if the policy be obtained by means of fraudulent misrepresen- 
 tation, for that reason, tliough the risk never attaches, the 
 ^ premium cannot be recovered back.^ So if the policy be an 
 illegal contract, neither party can have any remedy in the 
 courts against the other.^ But if the risk once attaches, the 
 premium is not apportionable.^ [There is in general no return 
 of premium where the policy attaches, though it be but for a 
 
 before the proper license was issued, it was held that the policy was void but 
 that the premium must be returned. Ilentig v. Staniforth, 5 M. & S. 122 at 124. 
 When the company acknowledges in the policy the receipt of the premium, 
 the unearned portion of it may be recovered in an action for money had and re- 
 ceived, even when it was paid by a promissory note and the note has not been 
 paid. Hemmenway v. Bradford, 14 Mass. 121 at 122.] 
 
 1 Martin v. iEtna Life Ins. Co. (Tenn.), 4 Ins. L. J. 899 ; Boland v. Whit- 
 man, .33 Ind. 64; United States Life Ins. Co. v. Wright (Oliio), 8 lus. L. J. 169. 
 
 2 Bunyon, Insurance, 95. 
 
 3 Sullivan v. Massachusetts Mut. Fire Ins. Co., 2 Mass. 318. 
 
 4 Braswell ?;. American Ins. Co., 75 N. C. 8. 
 
 5 McKee v. Phoenix Ins. Co., 28 Mo. 383. 
 
 B Friesmouth v. Agawam Mut. Ins. Co., 10 Cush. (Mass.) 587; Hoyt y. Gil- 
 man, 8 Mass. 3.36. [But upon a mere misrepresentation without actual fraud 
 where the risk never attached the premiums may be recovered. Feise v. Park- 
 nison, 4 Taunt. 640 at 641.] 
 
 ' Browning v. Morris, Cowp. 700; Andree r. Fletcher, 2 T. R. 161 ; Howson 
 V. Hancock, 8 T. R. 575; Russell v. De Grand, 15 Mass. 35; Campbell v. Allan' 
 9 Mor. Dec. (Scotch), Appendix, Ins. 13. [The courts will not interfere to give 
 a return of premium on an illegal policy except in cases of oppression. Lowry 
 V. Bourdieu, 2 Doug 468 at 470 ] 
 
 » Bermon v. Woodbridge, Doug. 781 ; Fulton v. Lancaster Ins. Co., 7 OhiO' 
 325; Merchants' Ins. Co. v. Clapp, 11 Pick. (Mass.) 56. 
 
 1304
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 567 
 
 single moment.^ But tlie rule that if the risk attaches the 
 right to the premium is indefeasible is not without excep- 
 tions. If a policy is legal when made but becomes subse- 
 quently illegal by statute, both parties are discharged ; the 
 insured loses his indemnity, and the insurer his premium.^ 
 A. chartered a ship to sail to the Spanish Main and bring 
 back a cargo of wines, and insured the profits of said cargo, 
 no other evidence of interest to be required than the policy, 
 and if the goods did not arrive he was to recover for a total 
 loss ; the ship did not take the cargo, and it was held that the 
 premium could not be recovered since the insurers had taken 
 the risk of the return of the ship. If she had not returned 
 the company would by the policy have had to pay whether 
 there were any goods on board or not, for the agreement was 
 that no other proof of interest should be required than the 
 policy. It was a wager contract.^ In a Pennsylvania case an 
 unjust rule was applied, the company being compelled to re- 
 turn the premiums without any allowance for carrying the risk 
 during the life of the contract, the court saying that as there 
 had been no loss the insured had received no substantial bene- 
 fit from the contract.* That seems queer reasoning. If the 
 carrying of a risk is no substantial benefit, why do so many 
 men pay so much money to some one to render them that 
 imaginary service ? The rule gives the assured the cost of 
 obtaining a new policy as good as the old one. Where a 
 policy was issued without examination of the insured by a 
 physician and afterward taken up by the company for that 
 cause, and the beneficiary who was without fault and had paid 
 in good faith a number of premiums was promised by the agent 
 that he should have the policy all right, or his money, the 
 company is liable in assumpsit.^] The promise of an agent of 
 a company at the time of the delivery of the policy, which was 
 objected to on certain grounds, but accepted and acted uj)on 
 
 1 [Waters v. Allen, 5 Hill, N. Y. 421 at 424 ; Moses i'. Pratt, 4 Camp. 297 at 
 298.] 
 
 2 [Gray v. Sims, 3 Wash. C. C 276 at 280.] 
 
 3 [.Julill V. Delonguemere, 2 Johns. Cas. N. Y. 333 at 334.] 
 
 4 [American L'fe Ins. Co. v. McAden, 109 Pa. St. 399.] 
 6 [Frain v. Life Ins. Co., 67 Mich. 527.] 
 
 1305
 
 § 568] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 by the payment of premiums, that the company would make 
 it all right, will not authorize a subsequent disaffirmance of 
 the contract and recovery back of the premium by the insured. ^ 
 But in such case the insured may compel the execution and 
 delivery of a valid policy .^ 
 
 In Leonard v. Washburn,^ an agent of a foreign insurance 
 company took the acceptance of the applicant for the pre- 
 mium to be paid, and agreed to procure and deliver a policy, 
 which he accordingly did, in the usual form of policies issued 
 by the office. The terms of the policy proving objectionable 
 to the applicant, a modification was obtained, but, being still 
 unsatisfactory, the applicant refused to accept it, and demanded 
 a return of his acceptance. But this had been negotiated, and 
 the proceeds forwarded to the company on the receipt of the 
 policy. The acts of the agent were in contravention of his 
 instructions as to the receipt of the premium ; but the policy 
 had been issued under such circumstances that it would be 
 valid. The applicant paid his acceptance at maturity, and 
 then brought suit against the agent to recover the amount. 
 But it was held that as the agent had done all he had agreed 
 to do, and the policy actually issued was a valid one, the ac- 
 tion could not be sustained. 
 
 Where the premium covers an illegal excess of insurance, as 
 wdiere a creditor insures the life of his debtor for more than 
 the amount of his debt, both parties being under mistake of 
 the law, the proportional excess of premium may be recovered 
 back by the insured.^ 
 
 § 568. Insured against Insurer ; Suit to revive Policy de- 
 clared forfeited, or to recover back Premiums paid. — Cohen v. 
 New York Mutual Life Insurance Company ^ presented the 
 
 ^ Mecke v. Life Ins. Co. of New York, 8 Phila. Rep. 6. 
 
 2 Perry v. Newcastle Dist. Mut. Fire Ins. Co., 8 U. C. (Q. B.) 363. And see 
 also ante, § 544. 
 
 3 100 Mass. 251. See also Perry v. Newcastle, &c. Ins. Co., 8 U. C. (Q. B.) 
 363. 
 
 * London, &c. Ins. Co. v. Lapierre, 1 Legal News, 506. 
 
 s 50 N. Y. 610, overruling the same case cited cmte, § 41, upon the point that 
 the failure to pay the premiums as tliey fell due worked a forfeiture. 2 Ins. 
 L. J. 426. This case must also be considered as overruling O'Reiley v. Mutual 
 
 1306
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 568 
 
 case of an insured, who, on the breaking out of the war, was 
 compelled thereby to suspend the payment of the annual pre- 
 miums as required by the policy, but on the termination of the 
 war tendered the whole amount due. The insurers refusing 
 to accept, the insured brought suit to compel acceptance and 
 to have the policy declared valid, or to compel the return of 
 premiums theretofore paid. The court upheld the action 
 against the objections of the defence. " The defendant also 
 objects," said the court, by Allen, J., " to the right of the 
 plaintiff to maintain an action at this time, there having been 
 no loss, and therefore no cause of action under the policy. 
 The allegations of the complaint are, that the plaintiff has 
 tendered the premiums due, and that the defendant refused 
 them, and declared the said policy cancelled and forfeited. 
 This is a peculiar case, and there are many reasons, unless 
 there is some rigid rule forbidding the court to entertain juris- 
 diction, why it should determine the matters in controversy 
 at this time. 1. There is an actual controversy existing, and 
 the only parties to it are before the court. There is not the 
 reason for declining jurisdiction that presented itself in some 
 of the cases cited by the defendant, as in Grove v. Bastard,^ 
 
 Life Ins. Co., 2 Abb. Pr. n. s. (N. Y. Superior Ct.) 167. See also Hancock v. 
 New York Life Ins. Co., U. S. C. Ct., East. Dist. Va., 2 Ins. L. J. 903, in which 
 a similar action was upheld on a policy for S5000, payable at the death of the 
 insured, and where the rule of damages was said to be the amount of the pol- 
 icy less the amount of premiums unpaid, and less also such a number of an- 
 nual premiums as the plaintiff's chance of life would probably require him to 
 pay. If he has suffered such a cliange in health that his life is not reinsurable, 
 be may recover full damages exceeding the amount of premiums paid, but not 
 exceeding the amount insured. Union Central Ins. Co. v. Poettker (Superior 
 Ct. Cincinnati), 5 Big. Life & Ace. Ins. Cas. 449. In Holdich's Case, L. R. 14 
 Eq. 72, the value of a current policy was held to be the sum which would buy 
 a similar policy in a safe office. 3 Big. Life & Ace. Ins. Cas. 272. The insured 
 has the right to sue in his own name an insurance company which has assumed 
 the liabilities of the company in which he is insured, the latter having trans- 
 ferred its assets and liabilities to it. Fischer v. Hope Ins. Co., 69 N. Y. 101. See 
 also Fletcher v. ^tna Ins. Co., Superior Court, Montreal, 4 Ins. L. J. 236, where 
 fraud in obtaining the policy was successfully set up in defence to an action to 
 recover it. A like defence will be effectual to an action to recover back pre- 
 miums paid. Trabandt v. Conn. Mut. Life Ins. Co. (Mass.), not yet reported; 
 Lewis V. Phoenix Ins. Co., 89 Conn. 100. 
 1 2 Ph. (Eng. Ch. 22), 619. 
 
 1307
 
 § 568] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 that all the parties in interest could not be heard and their 
 rights determined. 2. Present riglits under the policy, and 
 incident to it, are denied the plaintiff, Fler policy having 
 been declared forfeited and cancelled, she is excluded from the 
 privileges and denied the rights wliich belong to lier as a 
 member of the company. She is entitled, unless the claim of 
 the defendant is well grounded, at once and at all times to tlie 
 privileges of other policy-holders, and to be recognized as such. 
 3. The plaintiff is entitled, if the right to pay the premiums 
 and continue the policy still exists, to pay the arrearages and 
 stop the accruing of interest, and to make the future payments 
 as they accrue and become due, without interest, and relieve 
 herself as well of the risk and burden of retaining the money 
 which of right belongs to the defendant. 4. The contract of 
 insurance where the policy is to be kept alive by periodical 
 payments is peculiar ; and the duty to pay, and obligation to 
 receive, are mutual. It is somewhat different from a simple 
 obligation to pay money, a tender to perform wliich would bar 
 an action upon it. So, too, a receipt or acknowledgment of 
 the payment is customarily given, and is as essential as evi- 
 dence of the continuance of the contract as is the original 
 policy. The policy-holder is entitled to some evidence of the 
 performance of the condition on his part, if, as is believed, the 
 universal usage is for the insurers to certify in some way 
 the fact that the annual premiums are paid. 5. It is fit and 
 proper that both parties to the contract should know their 
 rights. Especially is it important to the plaintiff and the in- 
 sured that if this policy is avoided they may seek insurance 
 elsewhere, and if valid, that they may perform the conditions 
 of the policy. In ordinary cases courts will not, in ad- 
 vance of any present duty, obligation, or default, declare the 
 rights and obligations of suitors ; they will do it where pecu. 
 liar circumstances render it necessary to the preservation of 
 right. It was done in Baylies v. Payson." ^ In McKce v. 
 Phoenix Insurance Company,- where a wife insured the life of 
 her husband, and, after making several payments, obtained a 
 divorce, but continued to pay the annual premiums after the 
 
 1 5 Allen, 473. ^ 28 Mo. .383. 
 
 1308
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 569 
 
 divorce, until the company refused to receive them, on tlie 
 ground that she no longer had an insurable interest, it was 
 held that tlie refusal was wrongful, and the insured miglit, if 
 she chose, treat the contract as at an end, and recover back all 
 the premiums she had paid. In Girdlcstone v. North British 
 Mercantile Insurance Company ,i a bill was brought to compel 
 the insurers to reinstate the insured, in a policy which tlie in- 
 surers claimed had lapsed by the failure of the insured to pay 
 his premium. And tlie court, in aid of the bill, ordered the 
 defendants to answer certain interrogatories relative to the 
 plaintiff's case. 
 
 § 569. Same Subject. — So equity will compel the renewal 
 of a policy the surrender of which has been obtained unfairly ,2 
 as well as the surrender of a policy so obtained,^ or a suit 
 may be brought for damages for breach of the contract to con- 
 tinue the policy according to its terms,* as where one company 
 turns over its policies to another, and suspends business.^ 
 The declaration by an insurance company that a life policy 
 was void (on the ground that the insured had become of in- 
 
 i 11 L. R. (Eq.) 197; ante, § 356. 
 
 2 Tabor v. Mich. Mut. Life Ins. Co. (Mich.), 10 Ins. L. J. 97. 
 
 3 Fletcher v. ^tna Life Ins. Co. (Superior Ct., Montreal), 4 Ins. L. J. 236. 
 
 * [If no proper grounds exist for the refusal to continue the insurance, the 
 insured may recover all money he has paid under the policy. JEtna Life Ins. Co. 
 V. Paul, 10 Brad. 431. The measure of damages is the amount of premiums paid 
 with interest on each from the time of its payment. Ala. Gold Life Ins. Co. 
 V. Garmany, 74 Ga. 51. But in New York it is held that the measure of dam- 
 ages for the refusal to continue a valid policy is not the amount of premiums 
 paid with interest, but the difference between the present value of the premi- 
 ums the insured would have to pay on the policy during the life of the subject, 
 and the present value of what he would have to pay to secure equally good m- 
 surance elsewhere, and if the life-subject is not insurable the measure of dam- 
 ages is the value of the policy at the time of the breach. Speer v. Phoenix 
 Mut. Life Ins. Co., 36 Hun, 322. If the company fail to deliver the policy 
 as agreed, the premium may be recovered, although the parol contract binds 
 them and the plaintiff is really insured. Collier v. Bedell, -39 Hun, 238. But 
 where the risk attaches premiums paid cannot be recovered : Continental Life 
 Ins. Co. V. Houser, 111 Ind. 266, although the company afterwards wrong- 
 fully refuses a panl-up policy. Standley v. Northwestern Mut. Life Ins. Co., 9-') 
 Ind. 254, 258. The remedy is specific performance or suit for the value of the 
 policy.] 
 
 & Fischer v. Hope Mut. Ins. Co., 69 N. Y. 161. 
 
 1309
 
 § 570] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 temperate habits), and a refusal to receive further premiums, 
 does not make the policy presently payable. The policy- 
 holder has a threefold remedy : 1. To treat the policy as 
 rescinded, and sue for its present value. 2. To continue to 
 tender premiums, and, on the death of the insured, sue for 
 the sum insured. 3. To go into equity, and ask to have the 
 policy decreed in force.^ 
 
 [§ 569 A. Venue. — An action on a policy of insurance is 
 transitory and may be brought wherever the company can be 
 found, regardless of the location of the property or the place 
 where the agreement was made.^ A stipulation in a policy of 
 a foreign insurance company that suits on it should only be 
 brought in the State in which the company was incorporated, 
 is void, as against public policy, and in violation of the statutes 
 of Missouri.3 Xn insurance company doing business in one 
 State but organized and having its principal office iu another, 
 is entitled, on being sued in the former, to have the cause trans- 
 ferred to the United States Circuit Court.*] 
 
 §570. Insured against Directors; Premiums; Loss. — Direc- 
 tors and others making or permitting false statements as to 
 the condition and assets of an insurance company, whereby a 
 party is induced to insure in a worthless company, are person- 
 ally liable to him in an action at law for the deceit,^ although 
 no actual damage has been sustained beyond the payment of 
 the premiums.^ [Directors of a stock company who fraud- 
 ulently hold out to the public the promise of certain dividends, 
 
 1 Day V. Connecticut General Life Ins. Co., 45 Conn. 480. 
 
 2 [Mohr, &c. Distilling Co. v. Insurance Cos., 12 Fed. Rep. 474; 11 Ins. L. J. 
 546 ; 14 Repr. 109, 6tli Cir. (Ohio), 1882] 
 
 3 [Richard v. Manhattan Life Ins. Co., 31 Mo. 518 at 528.] 
 
 * [Stevens v. Phoenix Ins. Co., 41 N. Y. 149 at 154 ; Holden v. Putnam Fire 
 Ins. Co., 46 N. Y. 1 at 4 ; Hobbs v. Manhattan Ins. Co., 56 Me. 417, if all tiie 
 members of the company are citizens of the charter state and it is a legal pre- 
 sumption that they are so. Knorr v. Home Ins. Co. of New York, 25 Wis. 
 143 at 149, a suit by or against a corporation is a suit against a city of the 
 State under whose laws the company is organized, citing Ohio, &c. Ry. v. Wlieel- 
 er, 1 Black, 286.] 
 
 6 Salmon v. Richardson, 30 Conn. .360. 
 
 6 Pontifex v. Bignold, 3 M. & G. 42; Tebbetts v. Hamilton Mut. Ins. Co., 3 
 Allen (Mass.), 569. 
 
 1310
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 572 
 
 are personally liable on the failure of such guaranty.^] And 
 so, perhaps, is the secretary of a company who assures the ap- 
 plicant that he may "hold himself insured," when in fact 
 the negotiations have not arrived at such a stage as to make a 
 binding contract, the applicant thereby losing all benefit of 
 insurance by reliance upon the statement of the secretary .2 
 Where directors are made liable if they do not promptly 
 assess to pay losses, the liability will be strictly construed. 
 And if a loss be settled by the company by giving its note, a 
 failure to assess to pay the note is not within the liability.^ 
 
 §571. Mutual Insurance; Dividend. — Where a dividend 
 which has been made proves to be incorrectly computed, the 
 company may be compelled, at the suit of a stockholder, to 
 readjust and correct the same.^ 
 
 § 572. Forfeiture ; Equitable Adjustment ; Dividend ; Profits. 
 — [The insurer may on forfeiture of the policy recover all 
 premiums earned while he carried the risk.°] Where a pol- 
 icy becomes forfeited by violation of its terms, a clause pro- 
 viding that in such case " the party interested shall have the 
 benefit of such equitable adjustment as may from time to time 
 be provided by the board of directors," does not give the 
 courts the right to compel an adjustment, unless, perhaps, the 
 directors, having established general rules upon the subject, 
 might be held to abide by these rules in the particular case.^ 
 A provision of a charter of a mutual insurance company, that 
 if the holder of certificates of proportionate premiums shall 
 not, within five years of the publication of notice that they 
 will be redeemed, present them for payment, they shall be 
 cancelled on the books of the company, is not a forfeiture 
 against which equity will relieve, but a limitation which bars 
 a claim after the lapse of the time, whether the cancellation 
 
 1 [Gerhard v. Bates, 2 E. & B. 476.] 
 
 2 Christie v. North Brit. Ins. Co., 3 Ct. of Sess. Cas. (Scotch), 519. 
 
 3 Ante, § 564. 
 
 « Luling V. Atlantic Mat. Ins. Co., 45 Barb. (N. Y.) 510. 
 
 * [Hibernia Ins. Co. v. Blanks, 35 La. Ann. 1175.] 
 
 6 Nightingale v. State Mut. Life Ins. Co. of Worcester, 5 R. I. 38. Is not the 
 failure to establish rules negligence which they cannot set up to defeat the 
 rights of others "? 
 
 VOL. II. — 39 1311
 
 § 573] INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 on the books be made or not.^ But where the policy has been 
 suffered to lapse, the holder cannot claim dividends which be- 
 fore the lapse he might have appropriated, either in reduction 
 of premium or in the purchase of additional insurance.^ And 
 such profits as may be due, though not declared, may be recov- 
 ered in a suit for the loss.'*^ 
 
 § 573. Insurers against Insured; Policy obtained by Fraud. — 
 Equity will also interfere to compel the surrender of a policy 
 wrongfully obtained or delivered under a mistake of the facts 
 induced by the misrepresentation or concealment of the as- 
 sured. So it was decreed in a recent case,* even when the 
 policy had been assigned for value, without notice of the 
 concealment. The insured had made his proposal, which, 
 after the usual examination, was accepted, and he was duly 
 notified of the acceptance. He was at the same time notified 
 that until payment of the premium the company incurred no 
 risk, and that any alteration in the mean time in his health 
 would render the policy invalid, unless disclosed to the insur- 
 ers before the actual receipt of the premium. After this notice, 
 and before payment of the premium, the insured was told by 
 a special physician, whom he travelled a considerable dis- 
 tance to consult, that he was dangerously ill, his ordinary 
 medical attendant, however, advising him that he consid- 
 ered the appearances upon which the physician first con- 
 sulted predicated his opinion, as of a temporary character 
 only. After all these facts had transpired, the assured for- 
 warded his check for the amount of the premium, making no 
 mention of the facts about his health, but leaving this ques- 
 tion to stand upon his original answers that he was well, and 
 had always been well, and could not recollect that he ever 
 had any illness, and received his policy. But the court, in a 
 bill in equity, brought by the insurers against the assignee to 
 compel him to deliver up to them the policy, decreed for the 
 
 1 Lang V. Delaware Mut., &c. Ins. Co. (Pa.), 10 Ins. L. J. 226. 
 
 '^ Forrester v. Mut. Life Ins. Co. (Baltimore City Ct.), 4 Ins. L. J. 79. 
 
 3 Schlect V. World Ins. Co. (N. Y. Sup. Ct., 1875, not reported). See also 
 post, § 694; Belcher v. International, &c. Ins. Co., Cochran (Nova Scotia), 35. 
 
 4 The British Eq. Ass. Co. v. Tiie Great Western Railway Co., 20 L. T. n. s. 
 422. 
 
 1312
 
 CH. XXXII.] REMEDIKS, EVIDENCE, ETC. [§ o74 
 
 complainant, on the ground that the policy was void, both 
 because of the suppression of the facts transpiring after notice 
 of the acceptance of tbe proposal, and because the answers 
 contained in the policy, as to the health of the insured, wei-e 
 not true, as of the date when the premium was j)aid and tlie 
 policy issued.^ If a policy of insurance be obtained by fraud, 
 and with the intent to defraud, whicli gives an apparent cause 
 of action to the holder against the company, the court, on a 
 bill in equity, may order the policy to be delivered up and 
 cancelled ; ^ or restrain by an injunction an action at law on 
 the policy ;^ but some courts will not interfere, especially after 
 a loss, where the fraud may be set up in defence at law.* And 
 the party seeking to rescind must offer to return all he has 
 received under the contract.^ 
 
 Under such a bill in equity to cancel, a loss may be set up 
 as a counter-claim, and if the plaintiff fail, the defendant may 
 I'ecover on his counter-claim.^ 
 
 § 574. Right to cancel Policy strictly construed. — This right 
 can only be exercised within the limits of good faith. A sub- 
 stantial change in the circumstances increasing the risk is the 
 usual and sufficient ground on the part of the insurers. But 
 they cannot avail themselves of such a right in tbe face of a 
 fire actually threatening the destruction of the ])roperty in- 
 sured ; because, if this could be done, a policy of insurance 
 
 1 This was in affirmation of the judgment of Malins, V. C, in the same casp, 
 19 Law Times, n. s. 476 ; Equitable Life Ins. Co. v. Patterson, C. Ct. (Mass.), 10 
 Ins. L. J. 384; London Assurance v. Mansel, L. R. 11 Ch. D. 303. Upon the 
 question of jurisdiction the following cases were cited : Slim v. Croncher, 1 Do 
 G., F. & J. 518 ; Jones v. The Provincial Ins. Co., 3 C. B. n. s. 65 ; Fowkes v. 
 The Manchester & London Life Assur. Ass., 3 Best & Sm. 017 ; Trail v. Baring, 
 4 Giff. 485; Thornton v. Knight, IG Sim. 509; The Prince of Wales Ass. Co. v. 
 Palmer, 25 Beav. 605. 
 
 2 Commercial Ins. Co. v. McLoon, 14 Allen (Mass.), 351 ; French v. Connelly, 
 2 Anstruther, 454; Imperial Ins. Co. )'. Gunning, 81 111. 236. 
 
 3 National Life Ins. Co. v. Egan, 20 U. C. (Ch.) 469. 
 
 4 Phoenix Ins. Co. v. Bailey, 13 Wall. (U. S.) 616; New York, &c. Ins. Co. r. 
 Bangs (U. S.), 12 Reptr. 1 ; Home Ins. Co. v. Stanclifiehl, C. Ct. (Minn.), 2 Abb. 
 C. C. 6; Hoare v. Bremridge, L. R. 8 Ch. App. 22; Globe Ins. Co. v. Reals, 50 
 How. Pr. Rep. 237. 
 
 5 Harris v. Equitable Life Ins. Co., 64 N. Y. 106. 
 
 6 Revere Fire Ins. Co. v. Chamberlin (Iowa), 10 Ins. L. J. 397. 
 
 1313
 
 § 575] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXIL 
 
 would be in many cases worthless, since it would be possible, 
 in every case where fire approaches from without, to give 
 notice of cancellation, and thus escape all risk under the 
 policy.^ And the right can only be exercised by a strict com- 
 pliance with the terms and conditions upon which it is ad- 
 missible.^ If refunding the premium, or a portion of it, be 
 one of the terms, there must be a payment or tender. An 
 agreement with the insured tliat he shall return the policy 
 to be cancelled, and receive his premium, is no cancellation.^ 
 But if the agreement be that upon alienation the policy shall 
 be returned for cancellation, and a ratable proportion of the 
 premium shall be returned, the policy becomes void by the 
 alienation, and the premium is only to be paid on its return.* 
 The right to rescind depends upon placing, or the offer to 
 place, the insured in statu quoP 
 
 § 575. Loss paid or received by Mistake. — If a loss be paid 
 under a mistake of facts pertaining to the loss, as distinguished 
 from facts inducing the contract, which, if known to the in- 
 surers, would have enabled them to successfully resist the 
 claim, they may recover back the amount so paid on rede- 
 livery of the policy.^ In Columbus Insurance Company v. 
 Walsh,' where a loss had been paid in ignorance of the fact 
 that the policy had become void by subsequent insurance? 
 obtained without assent, and contrary to the provisions of the 
 policy, the insurers were allowed to recover it back. And it 
 has been said that this is so whether the company so paying 
 
 1 Home Ins. Co. v. Heck, 65 IIl.-lll. 
 
 2 Runkle v. Citizens' Ins. Co. (C. Ct., Ohio), 11 Reptr. 599; ante, §§ 67-69; 
 Cliase r. Phoenix, &c. Ins. Co., 67 Me. 85. 
 
 3 Hathorn v. Gerniania Ins. Co., 55 Barb. (N. Y.) 28. 
 * Buchanan v. Westchester Ins. Co., 61 N. Y. 611. 
 
 5 Peoria Fire & Mar. Ins. Co. v. Botto, 47 III. 516. See also Grace v. Ameri- 
 can, &c. Ins. Co. (C. Ct. N. Y.), 8 Ins. L. J. 731 ; International Ins. Co. v. Frank- 
 lin Ins. Co., 66N. Y. 119. 
 
 6 Mut. Life Ins. Co. v. Wager, 27 Barb. (N. Y.) .354; Hartford Live Stock 
 Ins. Co. V. Mattliews, 102 Mass. 221 ; North Western Ins. Co. v. Elliott, C. Ct. 
 (Oregon), 10 Ins. L. J. .333 ; North British, &c. Ins. Co. v. Stewart, 9 Ct. of Sess. 
 Cas., 3d series, 534 ; s. c. 3 Big. Life & Ace. Ins. Cas., 510 ; Berkshire Mut. Fire 
 Ins. Co. V. Sturgis, 13 Gray (Mass.), 177; McConnell v. Delaware Ins. Co., 18 
 111. 228 ; ante, § 442. 
 
 7 18 Mo. 229. 
 
 1314
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 575 
 
 has the means of knowing the facts or not,^ [If payment 
 of a policy is made with a knowledge by the company that a 
 defence is open to them, they cannot recover the amount back, 
 There must have been a belief in fact which turned out to 
 be untrue. If the company paid because it feared the elfect 
 that resisting tlie claim would have on its reputation, it can- 
 not afterward change its mind, and without showing fraud or 
 mistake of fact, recover the money .'-^ It makes no difference, 
 however, that the directors of the company ought to have 
 known that the policy was lapsed and void. It is no defence 
 in such an action to show that care would have discovered the 
 truth.3] But insurers cannot be permitted, in the absence of 
 fraud upon them, to reopen and try a case, upon a ground 
 which might have been presented and tried when the claim 
 was made under the policy for the loss ; as, for instance, that 
 the policy was void for misrepresentation, of which they were 
 aware at the time of payment of the loss, or might have been 
 upon due inquiry.* Nor can the insured, who has adjusted his 
 claim disadvantageously, under pressure not amounting to 
 fraud, maintain an action for a further recovery.^ But if either 
 party practises fraud in procuring the adjustment or payment, 
 the other may avail himself of it to open the matter, and re- 
 cover back the loss, if paid.^ In Trefz v. Knickerbocker Life 
 Insurance Company, a bill in equity to set aside a judgment at 
 law rendered against the insurers the year before,^ on the 
 ground that up to and until after the trial at law the fact that 
 
 1 De Halin v. Hartley, 1 T. R. 343 ; Kelly v. Solari, 9 M. & W. 54, 55. 
 
 2 [Nat. Life Ins. Co. v. Jones, 1 N. Y. Supr. Rep. 466 at 471.] 
 
 a [Kingston Bk. v. Eltinge, 40 N. Y. 391, and Union Nat. Bk. v. Sixth Nat. 
 Bk., 43 N. Y. 452 ; citing Kelly v- Solari, 9 M. & W. 54.] 
 
 < Mut. Life Ins. Co. v. Wager, 27 Barb. (N. Y.) 354; National Life Ins. Co. 
 V. Minch, 53 N. Y. 144; ante, § 442; Eagan v. ^tna Fire Ins. Co., 10 W. Va. 
 583 ; Smith v. Glens Falls Ins. Co , 62 N. Y. 85 ; American Ins. Co. v. Craw- 
 ford, 89 111. 62. 
 
 5 Mayhew v. Phoenix Ins. Co., 23 Mich. 105 ; ^tna Ins. Co. v. Reed, 33 
 Ohio St. 283. 
 
 '■ Johnson v. Continental Ins. Co., 39 Mich. 33 ; Northwestern Life Ins. Co. v. 
 Elliott, C. Ct. (Oregon), 11 Reptr. 325; Harris v. Equitable, &c. Ass. Co., 6 T. & 
 C. (N. Y.) 108; s. c. affirmed, 64 N. Y. 196. 
 
 7 6 Ins. L. J. 850. 
 
 1315
 
 § 575] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 the insured was a common drunkard, and had died of delirium 
 tremens^ which fact the defendant " took pains to conceal," 
 and the insurers, using due diligence, were unable to obtain 
 sufficient evidence of until after the judgment, was upheld, 
 as in the nature of an application for a new trial on the 
 ground of newly discovered evidence.^ [Where insurance 
 has been paid upon false representations of death it may be 
 recovered by the company in assumpsit or in an action for 
 fraud.'^ But a misrepresentation which was not really relied 
 on by the company or which does not result in making the loss 
 figure more than it really is, will not enable the company to 
 recover insurance money it has paid ; the company must have 
 relied on the statement to their damage.^ Fraud in obtaining 
 the policy or fraudulent representations made to obtain the 
 money, will base a claim of the company to a return of the 
 money if they did not know of the fraud at the time they paid 
 it.* But by paying the loss the company waive or settle all 
 questions of law or fact as to the validity of the original con- 
 tract (except fraud), which they had the means of raising 
 when they paid the loss. Even ignorance of a fact which 
 might have enabled the company to defend an action upon the 
 policy on account of a breach of warranty is not such a mistake 
 of fact as will enable it to recover the money. It will be pre- 
 sumed that the company either knew the fact or intended to 
 waive any such defence, and voluntarily paid the money. 
 Otherwise there would be no end to controversy and lit- 
 igation, and the insured would hold the money subject to a 
 lawsuit until the statute of limitations intervened.^ When one 
 part-owner insured more than his part, and recovered the 
 amount on loss, it was held that the insurer could recover 
 it back, although the insured intended the insurance to be 
 for himself and other co-owners, but neglected so to state 
 
 1 C. Ct. (N. J.), 10 Ins. L. J. 590. See also National Life Ins. Co. v. Mincli, 
 supra; ante, § 442; Hercules Ins. Co. r. Hunter, 14 Ct. of Sess. Cas. (Scotch), 
 147, 1137. 
 
 2 [Northwestern Mut. Life Ins. Co. v. Elliott, 10 Ins. L. J. 333 (Oregon), 1880.] 
 8 [Royal Ins. Co. v. Byers, 9 Ont. R. 120] 
 
 4 [Nat. Life Ins. Co. v. Minch, 53 N. Y. 144.] 
 6 [Ibid.] 
 
 1316
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 577 
 
 in the policy.^ Money paid by an underwriter with full knowl- 
 edge of facts but in ignorance of the law cannot be recovered 
 back. 2] 
 
 §576. Remedy ; Agents against Insurers ; Commissions. — An 
 insurance agent who has voluntarily left the service has no 
 claim to subsequently accruing commissions on policies he ob- 
 tained.3 And though, in the case last cited, the jury were 
 instructed that if the agent was dismissed without cause he 
 would have a claim, yet if the contract is for commissions on 
 premiums " collected and transmitted," and is terminable at 
 the pleasure of either party, the agent has no claim for such 
 commissions on premiums not actually collected by him, nor is 
 evidence that it is the custom of other companies to pay com- 
 missions on renewals admissible.'* But the form of the con- 
 tract may be such as to give a claim for renewals for a certain 
 time.^ In such cases, the rule of damages, where an agent 
 has been discharged during his engagement, is the amount he 
 has lost, less the amount he may have earned. And the tes- 
 timony of witnesses is competent to show the probable value 
 of renewals during the remainder of the term ; but an esti- 
 mate of his probable earnings after the discharge, based upon 
 the amount of his collections and commissions before the 
 trial, was held to be inadmissible as too speculative.*^ 
 
 § 577. Remedies by and against Foreign Insurance Companies. 
 — Where foreign insurance companies are prohibited by stat- 
 ute from entering into contracts of insurance until they have 
 complied with certain conditions, it is generally held that they 
 cannot recover on their premium notes until they have so 
 
 1 [Pearson v. Lord, 6 Mass. 81 at 85.] 
 
 '^ [Bilbie v. Lumley, 2 East, 469 at 472.] 
 
 3 Sliaw V. Home Life Ins. Co., 49 N. Y. 681 ; Myers v. Knickerbocker Life 
 Ins. Co., C. C. P. (Pa.), 2 Big. Life & Ace. Ins. Cas. 144. 
 
 * Spaulding v. New York, &c. Ins. Co., 61 Me. 329. See also Machette v. 
 N. E. Ins. Co., 1 Brewster, C. C. P. (Pa.), 313; Partridge v. Pliornix Ins. Co., 
 15 Wall. (U. S.) 573 ; Medcalf v. Brooklyn Life Ins. Co., 4 Big. Life & Ace. Ins. 
 Cas. 505. 
 
 5 Ensworth v. N. Y. Life Ins. Co., C. Ct. (Ohio), 1 Big. Life & Ace. Ins. Cas. 
 645. 
 
 6 Lewis V. Atlas, &c. Ins. Co., 61 Mo. 534. 
 
 1317
 
 § 577] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXTI. 
 
 complied.! And the rule applies to a suit against an agent 
 to recover premiums which he has collected.^ And the in- 
 sured is not so far in pari delictu as to prevent his recovering 
 back the premiums paid.^ But a compliance after the nego- 
 tiation of the contract will permit a recovery.* And a sub- 
 scription to stock, payable in instalments, is also recoverable. 
 The prohibition does not apply to stock notes given as part 
 of the capital in organizing the company ; nor is the taking of 
 such notes "doing business," within the meaning of a statute 
 which prohibits foreign insurance companies from doing busi- 
 ness except under certain conditions.^ In Missouri, it is held 
 that recovery may be had without such compliance.^ Policies 
 and premium notes issued under such circumstances are 
 generally held to be valid.'' And foreign insurance com- 
 
 1 Jones V. Smith, 3 Gray (Mass. ), 500 ; Wash. County Mut. Ins. Co. v. Dawes, 
 6 id. 376; Wasli. County Mut. Ins. Co. v. Hastings, 2 Allen (Mass.), 398; Gen- 
 eral Mut. Ins. Co. V. Phillips, 13 Gray (Mass.), 90; ^tna Ins. Co. v. Harvey, U 
 Wis. 394; Williams v. Cheney, 8 Gray (Mass.), 206; Cincinnati Mut. Health 
 Ass. Co. V. Rosenthal, 55 111. 85; Ford v. Buckeye State Ins. Co., 6 Bush (Ky.), 
 135; Columhia Ins. Co. v. Kmyon, 87 N. J. 83; American Ins. Co. v. Stoy, 41 
 Mich. 388. 
 
 2 Thorne v. Travelers' Ins. Co., 80 Pa. St. 15. 
 
 3 Union, &c. Ins. Co. v. Thomas, 46 Ind 44. 
 
 * National Mut. Fire Ins. Co. v. Pursell, 10 Allen (Mass.), 231 ; Atlantic, &c. 
 Ins. Co. V. Concklin, 6 Gray (Mass.), 73 ; American Ins. Co. v. Pettijohn, 62 Ind. 
 382; Daly v. National, &c. Ins. Co., 64 Ind. 1; Mut. Benefit Life Ins. Co. i-. 
 Charles, 0. Ct. (111.), 4 Ins. L. J. 265; United States Life Ins. Co. v. Hessberg, 
 27 Ohio St. 393. 
 
 5 Payson v. Withers, C Ct. (Ind.), 2 Ins. L. J. 599. 
 
 6 Clark V. Middleton, 19 Mo. 53; Columbus Ins. Co. i;. Walsh, 18 id. 229. 
 
 " Columbus Ins. Co. v. Walsh, ubi supra ; Leonard v. Washburn, 100 Mass. 
 251 ; Hartford Live Stock Ins. Co. v. Matthews, 102 id. 221 ; Ehrman v. Union 
 Central Ins. Co., C. Ct. (Ark.), 9 Ins. L. J. 347; Watertown Ins. Co. v. Simons, 
 96 Pa. St. 520 ; id. 597 ; American Ins. Co. v. Wellnian, 69 Ind. 413. See also 
 Behler v. German Ins. Co., 68 Ind. 347, where Slaughter's case, to the contrary, 
 20 Ind. 520, is overruled. [An innocent plaintiff may recover for a loss al- 
 though tlie company has not complied with the conditions of the law authoriz- 
 ing it to do business in the state. Ganser v. Fireman's Fund Ins. Co., 34 Minn. 
 372. A policy or a premium note is not rendered void because the company is a 
 foreign one, that has failed to comply with the law as to prerequisites of doing 
 business. Provincial Ins. Co. v. Lapsley, 15 Gray, 262, 263; Atlantic Mut. Ins. 
 Co. V. Concklin, 6 Gray, 73, 75 ; Union Mut. Life Ins. Co. v. McMillen, 24 Ohio 
 St. 67, 79 ; Insurance Co. v. Whipple, 61 N. H. 61 ; Conn. R. Mut. Fire Ins. Co. v. 
 Way, 62 N. H. 622 ; Ehrman i'. Teutonia Ins. Co., 1 Fed. Rep. 471 ; 9 Ins. L. J. 
 1318
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 577 
 
 panics doing business in a State without complying with the 
 statute of the State relative to the conditions upon which 
 such companies may do business therein, cannot set up their 
 own neglect to comj)ly with the statute as a defence to an 
 action against them for a loss, or to recovci- preuiiums paid on 
 an invalid policy.^ In Haverhill Insurance Company v. Pres- 
 cott,'^ the suit was on a note, and the question of the validity 
 of the policy did not arise. As against tiie State, the validity 
 of the certihcate of authority to transact business may be 
 inquired into. But whether, if the certificate be valid, the 
 authority conferred by it can be modified by subsequent legis- 
 lation is an open question.'^ The proliibition docs not apply 
 where the agent, having no authority to contract, merely 
 forwards the proposals and premium notes to his foreign 
 principal.* Nor do such statutes prevent suits in the Federal 
 courts of the State.^ [A foreign company may be served 
 with a summons by service on any one of its agents appointed 
 to transact its business in another State.^ Proof of service on 
 the insurance commissioner is good though he refuses to re- 
 ceive the papers.^ It has been said that it is questionable 
 
 393 (Ark.), 1880. Contra, a policy issued in Oregon by a company prohibited from 
 doing business in that State is null and void. Northwestern Mut. Life Ins. Co. 
 V. Elliott, 6 Sawy. 17 ; 10 Ins. L. J. 333. So in Franklin Ins. Co. v. Louisville, 
 &c. Packet Co., 9 Bush (Ky.), 500, 592, it was held that a policy issued by a 
 company that has not complied with the conditions of doing business, is void. 
 A premium note given for a policy in a foreign company which liad not com- 
 I)lied with the law, is held void. Hoffman v. Banks, 41 Ind. 1 at 7.] 
 
 1 Swan V. Watertown Fire Ins. Co., 96 Pa. St. 37 ; 10 Ins. L. J. 392 ; Daniels 
 V. Citizens' Ins. Co., C. Ct. (Ind.), 11 Reptr. 420; Union Central Ins. Co. v. 
 Thomas, 46 Ind. 44. 
 
 2 42 N. II. 547. 
 
 ^ Hartford Ins. Co. v. Kansas, 9 Kans. 210. 
 
 * Bowser v. Lamb, C. Ct. (Ind.), fi Ins. L. J. .37.5. See also antp, § 66 ; Clay 
 Fire Ins. Co. v. Huron, &c. Co., 31 Mich. 346; Columbia Fire Ins. Co. v. Kin- 
 yon, 37 N. J. 33. 
 
 5 Northwestern Ins. Co. r. Elliott, C. Ct. (Oregon), 10 Ins. L. J. 333. 
 
 6 [Johnson v. Hanover Fire Ins. Co., 15 Fed, Rep. 97; 11 Bi.ss. 452 (111 ), 
 1883 ; Moch v. Virginia Fire, &c. Ins. Co., 4 Hughes, 61 ; 10 Fed. Hep. 696 
 (Va.), 1882.] 
 
 ^ [Knapp, &c. Co. v. Nat. Mut. Fire Ins. Co., 30 Fed. Rep. 607 (Mo.), 
 1887.] 
 
 1319
 
 § 578 a] INSURANCE : fire, life, accident, etc. [CH. XXXII. 
 
 whetlier a suit to wind up a foreign company or interfere with 
 its affairs, can be maintained in New York. ^] 
 
 § 578. Foreign Insurance Company ; Right to remove Action. 
 — It was formerly held in several of the States that if a 
 foreign insurance company submits itself to the exclusive 
 jurisdiction of the courts of a State, as a condition of the 
 privilege of doing business in that State, it waives any riglit 
 it may possess as a quasi citizen of another State to remove to 
 the courts of the United States an action commenced in the 
 courts of such State, upon a cause of action accruing there. 
 But it has since been decided by the Supreme Court of the 
 United States that such submission is not a waiver if the 
 petition for removal be made before a final trial, which is held 
 to mean the last trial if successive trials are had.^ And the 
 rule applies to a British insurance company doing business In 
 one of the States of the Union.^ Now, under act of Congress, 
 March 3, 1875, State courts are held to have no authority to 
 pass upon the question of removal, or to consider the suffi- 
 ciency of the petition or bond.* If the petition or bond prove 
 defective, the case will be remanded.^ 
 
 § 578 a. Foreign Insurance Company ; Retaliatory Legislation, 
 &c. — In Alabama it was recently held that retaliatory legisla- 
 tion, by w^hich the same taxes, fines, penalties, and disabilities 
 imposed by other States respectively upon Alabama companies 
 should be imposed upon the companies from those States 
 doing business in Alabama, was unconstitutional, as conflict- 
 ing with the principle of uniformity of taxation.^ And so it 
 has been held in Indiana, and, it seems, in Georgia.'' [But a 
 State may place a tax on a foreign corporation as a price of 
 its doing business therein.^ And retaliation as to restrictions, 
 
 1 [Taylor v. Charter Oak Life Ins. Co., 8 Abb. N. C. .3-31.] 
 
 2 Insurance Co. v. Morse, 20 Wall. 44-5 ; Doyle v. Continental Ins. Co., 94 
 U. S. 5-35. See also State v. Doyle, 40 Wis. 175, criticising Morse's case ; Ten- 
 nessee (). Davis, 100 U. S. 257. 
 
 a Terry v. Imperial Ins. Co. (C. Ct., Kan.), 4 Ins. L. J. 824. 
 
 4 Osgood V. Chicago, &c. R.K.Co., Ch. Legal News, April 17, 1875; O'Malia 
 V. Home Ins. Co., C. C. P. (Pa.), 4 Ins. L. J. 719. 
 
 5 McMurily v. Conn. Ins. Co., C. Ct. (Pa.), 6 Ins. L. J. 6G6. 
 
 6 Clark V. Mobile (Ala.), 10 Ins. L. J. 357. ^ ibid., note. 
 8 [Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566 at 576.] 
 
 1320
 
 CH. XXXIL] REMP]I)IES, EVIDENCE, ETC. [§ 579 
 
 formalities, &c., is iiiiqucstionaljly lawful. It is only iipou the 
 question of taxation that the pica of unconstitutionality can 
 be made. For example, Iowa extends against companies of 
 any other State the same restrictions as arc imposed on Iowa 
 companies by the laws of that State. ^ A foreign corporation 
 has no right to do business in a State without that State's con- 
 sent, and then only subject to its conditions.^ A State statute 
 making certain provisions as to licensing and taking a bond 
 from foreign insurance companies, is not in condict with the 
 clause of the United States Constitution, as to" privileges and 
 immunities of citizens," nor with the one that " Congress has 
 power, &c., to regulate commerce." Furthermore, corpora- 
 tions arc not citizens outside of their own States.^ A company 
 doing business in another State than its home must be bound 
 by its laws, and its contracts are interpreted by those laws.* 
 A foreign company cannot withdraw itself from the operation 
 of the laws of the state in which it is doing business, by pro- 
 visions put in its policies.^ The " Fire Insurance Act " R. S. 
 0. ch. 162, is applicable to all companies, foreign or not, li- 
 censed to do business in the Dominion and taking risks on 
 property in Ontario.^] 
 
 § 579. Evidence. — The general rules of evidence, as laid 
 down in the special treatises on that subject, are applicable 
 to the contract of insurance as well as to other contracts. 
 [The burden of proving a loss from a cause and to an amount 
 for which the insurers are liable is upon the assured.'' When 
 the policy provided that the assurers should not be liable unless 
 the loss were at least 7| per cent, the onus is on the assured 
 to show that there was such a loss.^ If testimony as to a 
 
 1 [State V. Fidelity, &c. Co., 77 Iowa, 648 ; 18 Ins. L. J. 774.] 
 
 2 [N. Y. Life In.s. Co. v. Best, 23 Oliio St. 105 at 113, citintj Paul v. Virginia, 
 8 Wall. 168; Liverpool Ins. Co. v. Massachusetts, 10 Wall. 5G(3, 57().] 
 
 3 [Paul V. Virginia, 8 Wall. 168; Ducat v. Chicago, 10 Wall. 410. | 
 
 * [Queen Ins. Co. u. Jefferson Ice Co., 64 Tex. 578; Tliwing v. Insurance 
 Co., Ill Mass. 93; Cox i'. United States, 6 Pet. 172.] 
 
 5 [Fletcher v. N. Y. Life Ins. Co., 13 Fed. Kep. 526 (Mo.), 1882] 
 
 6 [Citizens', &c. Ins. Cos. v. Parsons, 4 Can. Supr. Ct. R. 215.] 
 
 T [Cory V. Boylston Ins. Co., 107 Mass. 140 at 147 ; Ileebner v. Eagle Ins. 
 Co., 10 Gray, 131 at 143.] 
 
 8 [Merchants' Mut. Ins. Co. v. Wilson, 2 Md. 217 at 244.] 
 
 1321
 
 § 579] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 disputed fact is equally balanced, he who affirms it must fail.^ 
 Where the insurable interest of the plaintiff is put directly in 
 issue by the pleadings he must prove title.^ In case of a war- 
 ranty that the subject-matter insured is neutral property, it is 
 usual at the trial to give general evidence of the truth of that 
 warranty, and leave it to the defendant to falsify it.^ Evi- 
 dence of former transactions between the parties is admissible 
 to prove the meaning of the parties in the matter in question.* 
 When a policy is made in the name of anotlier than the plain- 
 tiff, it is necessary for the plaintiff to show not only the policy, 
 but his interest therein, and there must be something to show 
 that the party effecting the policy in his own name intended 
 to embrace the interest of the person who sues thereon.^ Upon 
 a valued policy it is only necessary to prove, at law, a substan- 
 tial interest in a subject corresponding to and satisfying the 
 description in the policy.^ When the policy provides that it 
 shall be sufficient proof of interest in case of loss, — if there 
 is judgment against the company by default, the plaintiff in 
 the writ of inquiry needs only to prove the defendant's sub- 
 scription to the policy without proving interest therein.'^ The 
 proof of the description of the premises need not be as partic- 
 ular as in ejectment. Reasonable evidence that the house 
 burned was on the plaintiff's land is sufficient.^ Evidence of 
 conversation between the assured and the agent to prove that 
 the description is not the former's, is admissible.^ The mis- 
 representation of the " life " in a prior application of his own 
 cannot be imported into a subsequent transaction in which 
 a creditor insures the said life, and in his application leaves 
 blank the question wrongly answered by the " life " on the 
 previous occasion.^" A copy of the proofs of loss may be in- 
 
 1 [Rogers i'. Trarlers' Ins. Co., 6 Paige, 583. | 
 
 2 [Planters' Ins. Co. v. Diggs, 8 Baxter (Tenn.), 563 at 565.] 
 8 [Ludlow V. Union Ins. Co., 2 S. & R. 118 at 133.] 
 
 * [Bourne v. Gatliff, 11 CI. & F. 45 at 70.] 
 
 6 [De Bolle v. Penn Ins. Co., 4 Whart. (Tenn.) 68 at 69 ] 
 
 6 [Atlantic Ins. Co. v. Lunar, 1 Sandf. Cii. (N. Y.), 91 at 97.] 
 
 ^ [Thelluson v. Fletcher, Doug. 315 at 316.] 
 
 * [Breckinridge i'. Amer. Cent. Ins. Co., 87 Mo. 62.] 
 8 [Maher v. Hibernian Ins. Co., 6 Hun, 353 at 355.] 
 
 10 [Conn. Mat. Life Ins. Co. v. Luchs, 108 U. S. 498, 509.] 
 
 1322
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 579 A 
 
 troducod in showing compliance with the requirements of the 
 policy, but not to prove the loss.^ A written application for 
 a policy is the best evidence of what it contains, and secondary 
 evidence will not be received unless the impossibility of pro- 
 curing the best is shown.^ A company refused to receive an 
 overdue premium, the insured sued to recover the premiums 
 paid, averring the forfeiture unlawful and offering the policy in 
 evidence. On objection of the company, the policy was ex- 
 cluded. The defence was non-payment of premium. It was 
 held that in the absence of the policy, forfeiture for non-pay- 
 ment could not be presumed, and that the policy could not be 
 introduced by the defendant, after it had objected to such ad- 
 mission.^ When the action was on a policy for alleged dam- 
 age to blankets from sea-water, and the defence was that the 
 damage arose in manufacture and packing, evidence was held 
 admissible to prove that other bales of blankets from the 
 maker had sustained the same kind of damage.* The admis- 
 sions of an adjusting agent are competent against the com- 
 pany.^ The declarations of the company's agents while 
 adjusting a loss are admissible against the coni))any.^ The 
 physician's incompetency to testify of information received 
 from a patient may be waived by the latter, and his waiver in 
 liis application precludes all who claim under him.'^ The im- 
 proper admission of evidence is not cured by subsequent in- 
 structions to the jury to disregard it.^] 
 
 [§ 579 A. Declarations of the Life-subject are not admissible 
 against the beneficiary unless part of the res gestce. The declara- 
 tions of the " life " after issue of the policy are not competent 
 against the beneficiary.^ Evidence of declarations made by the 
 
 1 [Hiles V. Hanover Fire Ins. Co , 65 Wis. 585; People's Ace. Ass. v. Smitli, 
 126 Pa. St. 317; Commonwealth Ins. Co v. Sennet, 41 Pa. St. 161 ; Lycoming 
 Ins Co. V. Schreffler, 42 Pa. St. 188 1 
 
 2 [Lewis V. Hudmon, 56 Ala. 186] 
 
 3 [American Life Ins. Co. v. McAder, 109 Pa. St. 399 ] 
 
 * [Bradford v. Boylston Fire & Mar. Ins. Co., 11 Pick. 162 at 166.] 
 
 5 [Bartlett v. Fireman's Fund Ins. Co., 77 Iowa, 155.] 
 
 6 [Bowes V. National Ins. Co., 20 N. B. R. 438.] 
 
 •? [Adreveno v. Mut. Res. Fund Life Ass., 34 Fed. Rep. 870 (Mo ), 1888.) 
 
 8 [Lycoming Fire Ins. Co. v. Rubin, 79 III. 402 at 408.] 
 
 9 [Dial V. Valley Mut. Life Ass., 29 S. C. 560.] 
 
 1323
 
 § 579 B] insurance: fire, life, accident, etc. [cii. xxxii. 
 
 insured before insuring for the benefit of his wife, are not admis- 
 sible against her as inconsistent with his warranties, unless 
 thev had reference to his acts, or some fact connected with his 
 bodily condition.^ And even where so connected they are not 
 admissible unless part of the res gestce. Where C. and his 
 wife make joint application for a policy on C.'s life for the 
 sole benefit of the wife, evidence will not be admitted in a suit 
 by the wife to show that C.«liad made declarations at a time 
 prior to the application, that were contradictory to his answer 
 in the application concerning his health for years past. In 
 making the prior declarations he did not act as the agent of 
 his wife, they were the acts of a stranger and could not affect 
 her.2 If, however, the statements of the life-subject contra- 
 dictory to his representations in the application, as to his 
 health, for example, were made so near the time of the appli- 
 cation as to be part of the res gestce^ they are admissible 
 against the beneficiary ; otherwise not.^] 
 
 [§ 579 B. Parol evidence of what passed at the time of mak- 
 ing a policy is not admissible to restrain the effect of the 
 same.^ Parol evidence that " 27th " in the margin of a policy 
 should be " 20th " and that a memorandum so stating was left 
 with the underwriters, is inadmissible at law, though equity 
 might reform the contract.^ Evidence for the company to 
 show that the word " epidemics " included yellow fever by the 
 understanding of both parties, has been held inadmissible. 
 The agreement was in writing without ambiguity, and the 
 ordinary meaning of the words could not be varied or ex- 
 plained by oral evidence of the intent of the parties.^ Evi- 
 dence is admissible to show that by the usage of the junk 
 dealer's trade the words " rags " and "old metals" have a 
 broader meaning than commonly belongs to them. It was 
 shown that " rags " means all articles used in the manu- 
 facture of paper, and that the term " old metals " includes 
 
 1 [Terwilii^er r. Royal Arcanum, 49 Hun, 305.] 
 
 2 [Union Cent. Life Ins. Co. v. Cheever, 36 Ohio St. 208.] 
 
 8 [Schwarzbach v. Protective Union, 25 W. Va. 622, 646-647.] 
 
 « [Weston V. Ernes, 1 Taunt. 115 at 117] 
 
 5 [Ewer V. Washington Ins. Co., 16 Pick. 502 at 503 ] 
 
 6 [Pohalski v. Mut. Ins. Co., 45 How. Pr. R. 504 at 511.] 
 
 1324
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 580 
 
 old rubber and old glass.^ No usage of an insurance company 
 nor even the express agreement of the parties, whether made 
 previous to or at the time of the execution of the policy, can 
 be admitted to explain, modify, or control the written con- 
 tract.2 Evidence, outside of the policy, of facts and circum- 
 stances, to show the intention of the parties, is admissible, 
 when the policy is not clcar.^ Parol is admissible to sliow 
 that a policy written for |2000 was intended to be for itflOOO, 
 and that the rate was that appropriate to a $1000 j)olicy ;* and 
 to show that a written assignment of a policy was collateral 
 security for an obligation now settled.^ A circular issued by 
 the company stating that " thirty days' grace would be allowed 
 on all payments after the first " cannot be admitted to vary 
 the actual terms of the policy.^] 
 
 §580. Evidence; Experts. — In Joyce v. Maine Insurance 
 Company,'^ it was decided that an expert in insurance matters 
 could not be permitted to give his opinion whether "the rate 
 of premium for insurance would be increased by vacating a 
 dwelling-house." The condition, made part of the contract, 
 made the insurance void and of no effect if the risk should 
 be increased by any means whatever within the control of the 
 insured. It was said not to be a question of science or skill. 
 So it has been held, and for a like reason, that, under sul). 
 stantially similar terms of the contract, experts could not he 
 permitted to testify whether " leaving a dwelling-house unoc- 
 cupied for a considerable length of time " was an increase of 
 risk.*^ And generally their opinions as to the materiality of 
 certain facts to the risk are incompetent.^ But in Schenck 
 
 1 [Mooney v. Howard Ins. Co., 138 Mass. 375 ] 
 
 2 [111. Mut. Fire Ins. Co. v. O'Neile, 13 111. 89 at 03 ] 
 
 3 [Mauger v. Holyoke Mut. Fire Ins. Co., 1 Holmes (U. S. C. C), 287 at 289- 
 (The question was as to what ^oods were covered.)] 
 
 4 [^tna Life Ins. Co. v. Brodie, 5 Can. Supr. Ct. 1.] 
 
 6 [Summers v. U. S. Ins. Co., 13 La. Ann. 504 at 605.] 
 
 6 [Fowler v. Metropolitan Life Ins. Co., 116 N. Y. 389.] 
 
 7 45 Me. 168. 
 
 8 Luce V. Dorchester Mut. Fire Ins. Co., 105 Mass. 298; Cannell v. Phoenix 
 Ins. Co., 59 Me. 582. In Foy v. ^tna Ins. Co., 3 Allen (N. B.), 29, such evi- 
 dence was admitted without objection. 
 
 9 Jefferson Lis. Co. v. Cotheal, 7 Wend. (N. Y.) 72 ; Hartford Prot. Ins. Co. 
 
 1325
 
 § 580] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 V. Mercer County Mutual Insurance Compan},^ a fireman was 
 allowed to testify whether the risk of fire was increased by 
 certain alterations ; and it was decided in the case last cited 
 from Massachusetts that the question, whether such leaving a 
 dwelling-house unoccupied is material to the risk, might be 
 tested by the question whether underwriters generally would 
 in such case charge a higher premium.^ The first question 
 was said to be as to a subject within common knowledge, as 
 to which opinions were inadmissible, wliile the latter related 
 to a matter which was within the peculiar knowledge of per- 
 sons versed in the business of insurance. The distinction, 
 though fine, seems to be sound ; it is between an inadmissible 
 opinion and an admissible fact. The inference of increased 
 risk, based upon the fact known to him of a higher rate of 
 premium in such cases, cannot be stated by the witness ; but 
 he may state the fact, which is to liim a matter of special 
 knowledge, and from this the jury may draw the inference 
 of increased risk. That persons having this peculiar 
 knowledge may testify thereto is a well-settled rule of 
 evidence.^ But the insurer cannot be permitted to testify 
 that he would not have taken the risk had he known the 
 facts.^ [Whether or not a witness is entitled to be heard 
 as an "expert" is for the court in the first instance.^ An 
 expert witness may be impeached by showing that upon a 
 
 V. Harmer, 2 Ohio St. 452 ; Hill v. Lafayette Ins. Co., 2 Mich. 476. Contra, Kcrn 
 V. South St. Louis Mut. Fire Ins. Co., 40 Mo. 19. 
 
 1 4Zab. (N.J.) 447. 
 
 2 And see also Merriam v. Middlesex Ins. Co., 21 Pick. 162 ; Daniels r. Hud- 
 son River Fire Ins. Co., 12 Cush. (Mass.) 416; Hobby v. Dana, 17 Barb. (X. Y.) 
 
 111. 
 
 3 Webber v. Eastern Railroad Co., 2 Met. (Mass.) 147; Mulry v. Mohawk 
 Valley Ins. Co., 5 Gray (Mass.), 541 ; Hawes v. New England Ins. Co., 2 Curtis 
 (C. Ct.),229; Lyman v. State Ins. Co., 14 Allen (Mass ), 329; Hartman v. Key- 
 stone Ins. Co., 21 Pa. St. 4G6; Quin v. National Ass. Co., Jones & Cary (Irish), 
 316. 
 
 * Campbell v. Rickards, 5 B. & Ad. 840 ; Perkins v. Equitable Ins. Co., 4 
 Allen (N. B.), 562. In Martin v. Franklin Ins. Co., 42 N. J. 46, an insurance 
 agent was permitted to testify at wliat rate he could have procured insurance on 
 the property in question. 
 
 5 [Gulf City Ins. Co. v. Stephens, 51 Ala. 121 at 123-124.] 
 
 1326
 
 CH. XXXII.J REMEDIES, EVIDENCE, ETC. [§ 583 
 
 former occasion he had expressed a different extra-judicial 
 opinion.^] 
 
 § 581. Evidence ; Experts. — In life insurance, physicians 
 may give their opinion as to the causes of disease, and 
 whether a particular disease or infirmity or injury or habit is 
 the cause of death, or tends to shorten life ; 2 but neither thcv 
 nor experts in insurance can be allowed to give their opinion 
 upon tlie question whether the applicant was an insurable 
 subject, nor whether certain facts render the subject uninsur- 
 able.3 Nor can experts be permitted to testify what would 
 have been their opinion upon hypothetical facts. These 
 opinions must be based upon observation, or upon proved facts.'* 
 
 § 582. Evidence ; Custom. — Evidence of a particular custom 
 of the insurers, not brought home to the knowledge of the 
 insured, is inadmissible.^ But evidence of a general custom 
 of insurance companies, as, for instance, to charge a higher 
 rate of premium on unoccupied dwelling-houses, is admissible, 
 on the issue whether there is an increase of risk in a case 
 where a dwelling-house occupied at the time of insurance was 
 afterwards left unoccupied.^ So of a general custom of in- 
 surance companies to give thirty days' grace for the payment 
 of the annual premiums.' So the usage of life insurance 
 companies is competent evidence, in a question between them 
 and their agents, as to the nature and amount of interest the 
 latter may have in the policies they procure.^ 
 
 § 583. Evidence ; Wilful Burning. — Where the defence to 
 an action on a policy of insurance involves the proof of a 
 
 1 [Patchin v. Astor. Mut. Ins. Co., 3 Kern. 2G8 at 272 ; Sanderson v. Nashua, 
 44 N. H. 492.] 
 
 2 Miller v. Mut. Ben. Life Ins. Co., 31 Iowa, 216. 
 
 3 Rawls V. Am. Life Ins. Co., 36 Barb. 357 : s. c. affirmed, 27 N. Y. 282. 
 * Higbie v. Guardian Mut. Life Ins. Co., 53 N. Y. 603. 
 
 5 Adams v. Otterbach, 15 How. (U. S.) 539; Carter v. Boebm, 3 Bnrr. 1005; 
 Hartford Prot. Ins. Co. v. Harmer, 2 Ohio 8t. 452 ; Luce v. Dorchester Mut. Fire 
 Ins. Co., 105 Mass. 298 ; Taylor v. ^tna Life Ins, Co., 13 Gray (Mass.), 434. 
 
 ** Luce V. Dorchester Mut. Fire Ins. Co., 105 Mass. 298. 
 
 7 Heime v. Phila. Life Ins. Co., 61 Pa. St. 107. But see contra, Mut. Ben. Life 
 Ins Co V. Ruse, 8 Ga. 534. 
 
 8 Ensworth v. New York Life Ins. Co. (C. Ct. U. S.), North Dist. Ohio, 7 Am. 
 Law Reg. n. s. 332. But see contra, § 576. 
 
 VOL. 11. — 40 1327
 
 § 583] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 crime, as the wilful setting fire to the premises, or the design- 
 edly casting away a vessel, the authorities differ upon the 
 question of proof whether the rule in civil or criminal cases 
 shall be the guide. In Thurtell v. Beaumont,^ the jury were 
 instructed that they must be as clearly satisfied of the fact as 
 if the insured were on trial on the criminal charge. The rule 
 is the same in Scotland.^ And this rule was adopted in the 
 case of Shultz v. Pacific Insurance Company.^ And so it has 
 been apparently held on the authority of Thurtell v. Beau- 
 mont, in Illinois,* though the point was not much considered. 
 But reason and the weight of authority are the other way.^ 
 [It is not necessary to tell the jury that the evidence need not 
 be as strong as on a criminal suit. It is enough to state 
 the rules of evidence that do apply without stating those 
 which do not.^ Upon a charge that the plaintiff caused 
 or procured the fire, every circumstance that throws light 
 on the plaintiff's motives may be inquired into, such as, 
 over-insurance, excessive proof of loss, assignment of policy, 
 or disposition of goods in a manner aside from the usual 
 
 1 1 Bing. 339. 
 
 2 Hercules Ins. Co. v. Hunter, 15 Ct. of Sess. Cas. 800. 
 
 8 Sup. Ct. of Florida, 2 Ins. L. J. 495; [Kane v. Hibernia Mat. Fire Ins. Co., 
 38 N. J. 441 at 446. See, however, second note below.] 
 
 * McConnel v. Delaware Ins. Co., 18 111. 228; Gordon v. Parmelee, 15 Gray, 
 416. 
 
 5 Schmidt v. N. Y. Union Mut. Fire Ins. Co., 1 Gray (Mass.), 529; Washing- 
 ton Ins. Co. V. Wilson, 7 Wis. 169 ; Wightman r. West. Mar. & Fire Ins. Co., 8 
 Rob. (La.) 442 ; Hoffman ;;. West. Mar. & Fire Ins. Co , 1 La. Ann. 216; Scott v. 
 Home Ins. Co., 1 Dillon (C. Ct. U. S.), 105; Bayly v. Lancashire, &c. Ins. Co., 
 C. Ct. (La.), 4 Ins. L.J. 503; Ellis v. Buz/.ell, 60 Me. 209; Marshall v. Thames 
 Fire Ins. Co., 48 Mo. 586 ; Knowles v. Scribner, 57 Me. 495, 497 ; Matthews v. 
 Huntley, 9 N. H. 146, 150; Folsom v. Brawn, 5 Foster (N. H), 114, 122; Sibley 
 i>. St. Paul Ins. Co., C. Ct. (111.), 8 Ins. L. J. 461 , Kincade v. Bradshaw, 3 Hawk. 
 (N. C.) 63, 65 ; Blaeser v. Milwaukie, &c. Ins. Co., 37 Wis. 31 ; Howell v. Hart- 
 ford, &c. Ins. Co., C. Ct. (111.), 3 Ins. L. J. 649, 653. [A preponderance of evidence 
 is sufficient. Carlwitz v. Germania Fire Ins. Co., 12 Ins. L. J. 127 (N. J.), 1883 ; 
 Somerset County Mut. Fire Ins. Co. v. Usaw, 112 Pa. St. 80; Continental Ins. 
 Co. V. Jachnichen, 110 Ind. 59; Huchberger v. Merchants' Fire Ins. Co., 4 
 Biss. 265 at 266; Mack v. Lancashire Ins. Co., 2 McCrary, 211 at 215; JEtna. 
 Ins. Co. V. Johnson, 11 Bush (Ky.), 587 at 593; Regnier r. La. St. Ins. Co.. 12 
 La. 3-37 at .342 ; Simmons v. Insurance Co., 8 W. Va. 474 at 499.] 
 
 6 [Bayley v. Lond. & Life Ins. Co., 4 Ins. L. J. 503, 508 (U. S. C. C), 1875] 
 
 1328
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 584 
 
 course of business, &c.i Evidence of the plaintiff's good char- 
 acter is admissible.2 A suggestion by the assured that the 
 fire might have originated in some oiled shavings in the cellar 
 is no evidence of arson.-*^ It is error to cliarge that the 
 burden is on the plaintiff to show the loss an honest one. 
 There is no presumption that the insured burns his house 
 or is in fault, but a contrary presurpption.*] 
 
 § 584. Evidence ; Issue of Policy ; Signing Application ; 
 Receipt of Premium ; Organization of Company. — The recital 
 in a premium note that a policy has issued is prima facie evi- 
 dence of that fact against the maker of the note.^ So the 
 statement of the secretary that a policy has issued, in an ac- 
 tion of covenant on a lost policy, is sufficient evidence that 
 the policy was issued.^ The court were divided, in Foster v. 
 Mentor Life Assurance Company," on the question whether 
 the insured, having accepted a policy reciting that he had 
 signed the declaration, might show to the contrary, two judges 
 thinking the jury should decide the question of signature, and 
 two holding that the jury should be instructed that the recital 
 was prima facie proof of the signature. And by the weight of 
 authority the recital in a delivered policy of the receipt of 
 the premium is prima facie, and only prima facie, evidence 
 of the fact.^ But it is held to be conclusive in Illinois ^ and 
 
 1 [Dwyer i'. Continental Ins. Co , 63 Tex. 354-1 
 
 2 [Mosley v. Vt. Mut. Fire Ins. Co., 55 Vt. 142.] 
 
 3 [Farmers' Mut. Fire Ins. Co. v. Gargett, 42 Mich. 289 at 292.] 
 * [Dwyer v. Continental Ins. Co., 57 Tex. 181.] 
 
 5 New England Mut. Fire Ins. Co. v. Belknap, 9 Cusli. (Mass.) 140. 
 
 6 Sussex County Mut. Ins. Co. v. Woodruff, 2 Dutcli. (N. J.) 542; Harding v. 
 Carter, Park, Ins 5. 
 
 7 3 E. & B. 48 ; s. c. 24 Eng. L. & Eq. 10-3. 
 
 8 Siieldon V. Atlantic Fire & Mar. Ins. Co., 26 N. Y. 460; Insurance Co. of 
 Penn. v. Smith, 3 Whart. (Pa.) 520 ; Baker v. Union Mut. Life Ins. Co., 43 N. Y. 
 2-'3, reversing s. c. 6 Robt. .393; Bergson v. Builders' Ins. Co., 38 Cal. 541 ; Rob- 
 ert V. New England Mut. Life Ins. Co., 2 Disney (Ohio), 106; Pitt v. Berkshire 
 Life Ins. Co., 100 Mass. 500; Troy Fire Ins. Co. v. Carpenter, 4 Wis. 32; anlc, 
 § 359; Union Ins. Co. v. Grant, 68 Me. 229. A mere receipt is no contract. It is 
 a mere statement of a fact, and may always be contradi'.'ted. The Tuskar, 
 1 Sprague (U. S. Dist. Ct. Mass.), 71; Hildretli v. O'Brien, 10 Allen (Mass.), 
 104 ; 1 Greenl. Ev. § 305. 
 
 9 Prov. Life Ins. Co. v. Fennell, 49 111. 180. 
 
 1329
 
 § 586] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 in Maryland.^ The production of a premium note, signed by 
 the insured, is also prima facie evidence, as against him, that 
 the company is duly organized.^ 
 
 § 585. Evidence ; Chronic Disease ; State of Health ; Death. 
 — A post mortem examination, fifteen hours after death, in 
 New Orleans, in October, developing an inflammation and 
 ulceration of the intestines, which in the opinion of the physi- 
 cians had been of long standing, is not sufificient evidence of 
 chronic disease existing in June of the same year, in a climate 
 where fifteen hours of mortification may have made great rav- 
 ages, especially if at that time the insured appeared in perfect 
 health.^ In Schaible v. Washington Life Insurance Company, 
 a photograph of the deceased, taken a short time before the 
 insurance was effected, was permitted to go to the jury as evi- 
 dence of the physical appearance and condition of the assured 
 at that time.* The sudden disappearance of the insured, and 
 inability to find him after diligent search, under circumstances 
 where he could not well go long without discovery, he being 
 in such a physical and mental condition as to excite anxiety, 
 are sufficient to justify a finding of death.^ Letters testa- 
 mentary are not competent evidence of the death of the 
 person upon whose estate the letters are issued.^ Absence for 
 seven years without being heard from raises a presumption of 
 death ; but there is no presumption from this fact alone as to 
 the time of death during the period of absence. This must 
 depend upon other circumstances.'^ [Proofs of death fur- 
 nished by the plaintiffs to the company are admissible in favor 
 of the latter.^] 
 
 § 586. Evidence ; Effect of Misrepresentation. — In Wash- 
 ington Life Insurance Company v. Haney, the president of 
 
 1 Consolidated Ins. Co. v. Cashow, 41 Md. 59. 
 
 2 Williams v. Cheney, 3 Gray (Mass.), 215; Topping v. Bickford, 4 Allen 
 (Mass.), 120. 
 
 3 Murphy v. Mnt. Ben. Life Ins. Co., 6 La. Ann. 518. 
 * Leg. Int. vol. v. p. 232, July 18, 1873 
 
 6 John Hancock, &e. Ins. Co. v. Moore, 34 Mich. 41. 
 
 6 Mutual Benefit Ins. Co. v. TisJale, 1>1 U. S. 238, reversing s. c. 3 Ins. 
 L J. 59. 
 
 ^ Hancock i'. American Life Ins. Co., 62 Mo. 26. 
 8 [Goldschmidt v. Mut. Life Ins. Co., 33 Hun, 441.] 
 
 1330
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 587 A 
 
 the insurance company which issued the policy was not per- 
 mitted to testify that the policy was issued in the belief that 
 the statements in the application were true, and that no pol- 
 icy would have been issued had the company had any reason 
 to believe that the representations and answers were in anv 
 respect false. It is to be presumed that a policy is issued 
 upon the facts stated in the application ; and how far false 
 statements, if any there are in the application, affect the valid- 
 ity of the contract, is a question of law for the court, and not 
 one to be settled by the opinion or judgment of either party, 
 
 § 587. Evidence ; Intentional Suicide ; Fraud ; Character ; 
 Value. — A man's religious belief or unbelief al'furds no 
 ground upon which to infer whether he intentionally com- 
 mits suicide or not, and cannot be j)ut in evidence.^ And 
 j)roof of good character is inadmissible on an issue of fraud- 
 ulent overvaluation of loss.^ The value of other similar 
 neighboring properties is evidence of the value of the prop- 
 erty burned or lost.^^ 
 
 [§ 587 A. Variance. — In an action on a policy on a frame 
 dwelling-house the answer alleged that the assured used and 
 occupied the building insured, at the time he procured the pol- 
 icy, and afterward, as a boarding house and hotel, and that the 
 policy was thereby rendered void. No change in the occupa- 
 tion was alleged. Evidence that the building after the date of 
 the policy was occupied as a hotel without the consent of the 
 defendant was excluded as being a different defence from the 
 answer, and one requiring special pleading.* But an honest 
 mistake of the assured in his proofs of loss as to the man- 
 ner in which the fire originated may be corrected at the trial 
 by contradictory evidence, when such will not operate as a 
 surprise to the insurer.^ And when the pleadings allege the 
 proofs without averment of the mistake, the variance must be 
 
 1 Gibson v. Am. Mut. Life Ins. Co., 37 N. Y. 580. 
 ^ Fowler v. iEtna Fire Ins. Co., 6 Cow. (N. Y.) 673. 
 
 3 Iliiines V. Republic Fire Ins. Co., 52 N. H. 467 ; Howard i;. City Fire Ins. 
 Co., 4 Denio (N. Y.), 502. 
 
 * [Pierce v. Coliasset Ins. Co., 123 Mass. 572 at 57o.] 
 
 6 [W^aldeck v. Springfield Fire & Mar. Ins. Co., 63 Wis. 129 at 131.] 
 
 1331
 
 § f)89J INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 disregarded under § 2669 R. S. The fact that the plaintiff 
 states in his preliminary proofs under oath that the fire was 
 caused by X. does not preclude him in the absence of fraud 
 from showing at the trial that it was caused by Y} The in- 
 sured may show that the death was by accident, although she 
 has stated in her proofs of loss that it was by suicide.^] 
 
 [§ 587 B. Court and Jury. — Whether or not a misrepre- 
 sentation as to title and incumbrances is material or fraudu- 
 lent is for the jury, and must not be withdrawn from thcm.^ 
 Whether inquiries and answers in the application are material 
 or not is a question for the court.^ If all the evidence given 
 and inferences to be drawn are not legally sufficient to estab- 
 lish the fact in issue, it is not to be left to the jury to find the 
 fact.° The decisions of State courts, except upon points aris- 
 ing under a statute, are not binding on United States courts in 
 ascertaining the meaning and effect of an insurance contract. 
 But the law of the State will govern so far as the right to 
 maintain an action at common law is concerned.^ It is no 
 objection to a special juror being sworn, in an action against 
 a life insurance company, that he is a director in another com- 
 pany unless that company has granted an unpaid policy to the 
 same person as in this suitJ] 
 
 § 588. Pleading. — The rules of pleading, as well as of evi- 
 dence, are the same in their application to the contract of 
 insurance as to other contracts, though these are to a greater 
 extent modified by local laws. These modifications it is not 
 proposed to state. Nor is it proposed to consider the subject 
 of pleading generally, but only to state some general rules of 
 such frequent occurrence in practice as to make a statement 
 here specially convenient. 
 
 § 589. General Statement of Plaintiffs Case. — In declaring 
 upon a contract of insurance, it, or so much of it as will show 
 
 1 [Smiley i: Citizens' Fire, Mut. & Life Ins. Co., 14 W. Va. 33 at 40.] 
 
 2 [Keels V. Mut. Reserve Fund Ass., 29 Fed. Rep. 198 (S. C), 1886.] 
 8 [Bellatly v. Thomaston Mut. Fire Ins. Co., 61 Me. 414 at 417.] 
 
 4 [MuUin V. Vt. Mut. Fire Ins. Co., 54 Vt. 223.] 
 
 6 [Fay V. Alliance Ins. Co., 16 Gray, 455 at 461.] 
 
 6 [Sias V. Roger Williams Ins. Co., 9 Ins. L. J. 154, 1st Cir. N. Y. 1880.] 
 
 ' [Craig V. Fenn, 1 Car. & Mar. 43.] 
 
 1332
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 589 
 
 a right to recover, must be set out in terms or in substance. 
 The rule that obtains in dcclarinji; upon a penal bond at com- 
 mon law, where the plaintiff may simply count on the bond, 
 and leave the defendant to set up the condition and plead 
 performance, does not obtain here. [If the pleading is based 
 on an instrument required to be in writing, it will be subject 
 to demurrer unless a copy is attached. ^ The complaint must 
 exhibit the policy or a copy of it.^ If the apj)lication is set out 
 in hcec verba, as part of the declaration, the legal elfect is the 
 same as if every fact therein had been expressly averred in 
 the ordinary way.^ If the application is made part of the pol- 
 icy the policy is not admissible in evidence without the appli- 
 cation, if it is in the power of the party to produce it.^ In 
 Indiana and Michigan, however, there is authority that the ap- 
 plication need not be set out though made a part of the policy 
 by reference.^] As in cases of insurance the money is only 
 recoverable on the performance of certain acts by the insured 
 and the existence of certain facts, the performance of these 
 acts and the existence of these facts must be alleged.^ But 
 
 1 [King V. Enterprise Ins. Co., 45 Ind. 43 at 54.] 
 
 2 [Ind. Ins. Co. v. Hartwell, 100 Ind. 566.] 
 
 3 [Continental Life Ins. Co. v. Rogers, 119 111. 474.] 
 
 * [Lycoming Fire Ins. Co. v. Storrs, 97 Pa. St. 354; American Underwriter's 
 Ass. V. George, id. 238.] 
 
 5 [Continental Life Ins. Co. v. Kessler, 84 Ind. 310 ; Throop v. N. A. Fire Ins. 
 Co., 19 Mich. 428, 439, Christiancy, J., dissenting, because he rightly deemed it 
 as necessary for the plaintiff to establish his compliance with such warranties 
 as tlie application might contain as with any other warranties pertaining to the 
 contract.] 
 
 6 [It has been said that performance of conditions must be specijicnily averred. 
 Perry v. Phoenix Ass. Co., 8 Fed. Rep. 643, 1st Cir. (R. I.) 1881. It is not ne- 
 cessary, liowever, to set out the precise words of each condition and allege per- 
 formance in detail. Tripp & Bailey v. Insurance Co., 55 Vt. 100. And it is 
 usually held that a general averment that the plaintiff has performed all the 
 conditions of the policy is sufficient. Commercial Union Ins. Co. v. State, 113 
 Ind. 331; Amer. Cent. Ins. Co. v. Sweetser, 116 Ind. 370; Ferrer v. Home Mut. 
 Ins. Co., 47 Cal. 417 at 431 (statute). But when the policy provides that the 
 loss shall be paid sixty days after due notice and proof, it is not sufficient to 
 aver in the declaration that " all the conditions of the policy have been complied 
 with." This shows no cause of action. It must be averred that the sixty days 
 have elapsed. That is not one of the conditions of the contract within the 
 meaning of a statute permitting the general pleading of performance of all con- 
 
 1333
 
 § 589] INSURANCE : FIRE, LIFE, ACCIDENT, ETC, [CH. XXXII. 
 
 this applies only to conditions and facts precedent. Condi- 
 tions subsequent to the right of recovery, and all acts to be 
 done by the insurers in discharge of their liability, may be 
 omitted from the declaration, and left for the insurers to set 
 up in defence.^ And upon the same principle it has been held 
 that a covenant that the capital stock and funds of the com- 
 pany should be subject and liable to make good, and should be 
 applied to pay and make good, all such losses and damages 
 as might happen to the subject-matter of insurance within a 
 certain amount, and that the capital stock and funds of the 
 company should alone be liable, is an absolute covenant on 
 the part of the company to pay the sum insured when a loss 
 should happen ; and it is not necessary to aver in the declara- 
 tion the sufficiency of the capital stock and funds, that being 
 a "matter to be pleaded by the insurers, if a defence at all.^ 
 [It is a necessary part of the plaintiffs prhna facie case to 
 show that he furnished proofs of death to the company, as 
 required by the policy. He shows no right of recovery without 
 such evidence.^ The plaintiff must plead notice of loss and 
 proofs or waiver of them.^ The giving of notice and proofs 
 must be alleged and proved.^ Proof as to waiver of notice of 
 loss may be made without special averment in the pleading.^] 
 The weight of authority seems to be that, under an allegation 
 
 ditions. Doyle v. Phoenix Ins. Co., 44 Cal. 264 at 269 ; Carberry v. German Ins. 
 Co., 51 Wis. 605 at 609. Tlie petition must always aver the lapse of the time 
 necessary before action can be brought, — the sixty days after proof or other 
 time allowed for payment, &c. Von Geneciitin i-. Citizens' Ins. Co., 75 Iowa, 
 544 ; Cowan v. Phenix Ins. Co., 78 Cal. 181.] 
 
 1 Rockford Ins. Co. v. Nelson, 65 111. 415; Home Ins. Co. v. Duke, 43 Ind. 
 418; Phcenix Ins. Co. v. Perkey, 92 111. 164; Edgerly v. Farmers' Ins. Co., 48 
 Iowa, 644 ; Campbell v. American Pop. Life Ins. Co., 4 Am. Law Times (U. S.), 
 6 ; 8. c. 1 Big. Life & Ace. Ins. Cas. 16 ; Campbell v. New England Mut. Life Ins. 
 Co., 98 Mass. 381. A more general statement seems to be permissible in 
 Louisiana. Mason v, La. St. Mar. & Fire Ins, Co., 1 Rob. (La.) 192; Perry j;. 
 Phoenix Ass. Co., C. Ct. (U. I.), 12 Reptr. 584. 
 
 2 Sunderland Mar. Ins. Co. v. Kearney et al., 6 Eng. L. & Eq. 812. 
 
 3 [Schwarzbach v. Protective Union, 25 W. Va. 624, 667.] 
 
 * [Ind. Ins. Co. v. Capehart, 108 Ind. 270 ; East Texas Fire Ins. Co. v. 
 Dyches. 56 Tex. 565; Fire Ins. Ass. v. Miller, 2 Tex. Civ. Cas. § 334; McCor, 
 mack V. North Brit. Ins. Co., 78 Cal. 468.] 
 
 6 [Donalme v. Windsor Co. Mut. Fire Ins. Co., 56 Vt. 374.] 
 
 6 [Schultz V. Merchants' Ins. Co., 57 Mo. 331 at 336 (?).] 
 
 1334
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 590 
 
 of performance of a condition, proof of a waiver is admissible 
 without alleging the waiver.^ 
 
 § 590. Special Allegations ; Interest ; Survivorship ; Value ; 
 Compliance -with Statute Requirements ; Negative Allegations. — 
 The plaintiff must aver an insurable interest, or, if he has 
 not that, the grounds upon which he rests his right to sue.^ 
 [The ownership of the property both at the time of insur- 
 ance and of loss must be showii.^ In a declaration on a pol- 
 icy which on the face of it has no words to show it not to be 
 an interest policy, it is not necessary that the plaintiff should 
 aver an interest in order to recover.^ Insurable interest, being 
 an essential fact, must be alleged. Where the loss is payable to 
 a mortgagee " as his interest may appear " the complaint must 
 make his interest appear.^ There must be an insurable inter- 
 est at the time of insurance and at the time of loss, and the 
 plaintiff must show that he is entitled to assert that interest ; 
 but under the Alabama code it is not necessary that the com- 
 plaint should aver either of these facts.^] In Gilbert v. National 
 Insurance Company,'^ it was held that, as the statement in the 
 policy that the insured premises were the property of the 
 plaintiff did not amount to a warranty, the declaration need 
 not aver such ownership.^ Where the purchaser or assignee 
 of the " subject insured " is by the terms of the policy entitled 
 to sue, his declaration should show that he has the whole 
 interest. To allege that he has an interest is not sufficient.^ 
 An allegation by the plaintiff that " his " store was consumed 
 is a sufficient allegation of ownership after verdict ; and an 
 
 1 Levy V. Peabody Ins. Co., 10 W. Va. 560, and cases cited. [Where the 
 declaration averred tliat proofs were furnisiied, and the evidence showed a 
 waiver, it was held an inomaterial variance. Penn Fire Ins. Co. v. Dougherty, 
 102 Pa. St. 508.] 
 
 2 Freeman v. Fulton Ins. Co , ?S Barb. (N. Y.) 247. 
 
 3 [Phoenix Ins. Co. v. Benton, 87 Ind. 132.] 
 
 1 [Nantes v. Thompson, 2 East, 386 at 394.] 
 
 5 [Chrisman v. State Ins. Co., 16 Orepron, 283.] 
 
 6 [Commercial Fire Ins. Co. v. Cap. City Ins. Co., 81 Ala. 320.] 
 • 12 Irish Law, 143. 
 
 8 But see contra, Illinois Mut. Fire Ins. Co. v. Marseilles Manufacturing Co., 
 1 Gilm. (111.) 2:)6. 
 
 9 Granger v. Howard Ins. Co., 5 Wend (N. Y.) 200. 
 
 1335
 
 § 590] INSURAiNCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 omission to allege the value of the property lost cannot be 
 objected to ; ^ otherwise on demurrer.^ [The statement 
 that " the assured did sustain loss to the amount of $231.00 
 by reason of a fire in above described premises " is not a suf- 
 ficient averment on a policy of insurance. It should be 
 stated that the loss arose from injury to the goods insured.^] 
 An allegation that the defendant " insured the plaintiff to the 
 amount of three thousand dollars on ten thousand bushels of 
 oats," sufficiently states an insurable interest.* Nor need the 
 description of the property be more specific than that con- 
 tained in the policy.^ [The house burned must be identified 
 with the one insured, and the pleading must show an insurable 
 interest in the assured at the time of fire, and that the prem- 
 ises were occupied if there be a condition against vacancy, but 
 it will be presumed that the house was of some value.^j The 
 plaintiff need not allege that the defendants — a foreign in- 
 surance company — have complied with the statutes giving 
 them authority to transact business within the jurisdiction.' 
 And in an action by a foreign insurance company, non-com- 
 pliance will not be presumed, but must be set up in defence.^ 
 The plaintiff need not aver the truth of statements contained 
 in the application,^ nor the performance or non-performance 
 
 1 Lane v. Maine Mut. Fire Ins. Co., 12 Me. 44; Insurance Co. v. Seitz, 4 W. 
 & S. (Pa.) 273; New Hampshire Mat. Fire Ins. Co. v. Walker, 10 Fost. (N. H.) 
 ,324; Howard Fire Ins. Co. r. Cornick, 24 111. 455; Ferrer v. Home Mut. Ins. Co , 
 47 Cal.416. 
 
 2 Ibid. ; Fowler v. New York Ind. Ins. Co., 26 N. Y. 422, reversing s. c. 23 Barb. 
 (N. Y.) 143. [The value at the time of loss must be alleged. Phoenix Ins. Co. 
 V. Benton, 87 Ind. 132. But when the pleader sets out the policy which men- 
 tions in detail the articles insured and the several amounts thereon, and then 
 avers an interest to the value of said amounts and total loss, it is not necessary 
 to mention the specific articles lost or their value. Phoenix Ins. Co, v. Perkey, 
 92 III. 1G4 at 168.] 
 
 3 [Rodi V. Rutgers Ins. Co., 6 Bos. 23 at 24 ] 
 
 4 Rising Sun Ins. Co. v. Slaughter, 20 Ind. 520. 
 
 5 Aurora Fire Ins. Co. v. Jolmson, 46 Ind. 315. 
 
 6 [iEtna Ins. Co. v. Black, 80 Ind. 513 ; yEtna Ins. Co. v. Kittles, 81 Ind. 90 
 (insurnble interest).] 
 
 7 Fitzsimmons v. City Fire Ins. Co , 18 Wis. 234. 
 
 8 Williams r. Cheney, 3 Gray (Mass.), 215. 
 
 9 Herron v. Peoria Mar. & Fire Ins. Co., 28 111. 235; Germania Fire Ins. Co. 
 
 1336
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 591 
 
 of conditions subseiiuent,^ nor negative prohibited acts,^ or 
 allege that he is within the excepted risks.^ [It is not neces- 
 sary to aver demand of payment before suit brought,* nor to 
 allege that the loss did not occur through fraud or evil prac- 
 tice on the part of the plaintiff.^ An omission to state in 
 pleading that the company has power to make contracts of 
 insurance is not demurrable.^ When a condition in a policy 
 is void as opposed to statute law it is needless to set it forth 
 in the declaration or mention it in any way, and although the 
 stipulation is set out without referring to the statute, it 
 cannot be claimed that the plaintiff waived the benefit of the 
 law.' The assured is not bound to set forth and prove the 
 truth of his representations.^ When to a declaration on a pol- 
 icy of insurance, the defendants pleaded that a condition as 
 to going beyond certain limits (which condition was set forth 
 in the declaration) had been broken, the court refused to allow 
 the plaintiffs in replication to say that at the time of making 
 the policy certain places not mentioned therein were also ex- 
 cepted, to which the plaintiff might go. An equitable re])li- 
 cation can never be made where it would put the plaintiff in 
 a better position than if the matter had been set out in the 
 declaration.^] 
 
 § 591. Matters in Defence ; Breach of Warranty ; Misrepre- 
 sentation ; Other Insurance ; False Swearing ; Fraud. — Matters 
 
 V. Curran, 8 Kans. 9 ; ante, § 577 ; Pierlmnnt, &c. Ins. Co. v. Ewing, 92 U. S. 377 ; 
 Union Ins. Co. ;;. McGookey (Ohio), 8 Ins. L. J. 417. 
 
 1 Ketchum v. Prot. Ins. Co, 1 Allen (N. B.), 136 ; Forbes v. Am. Mut. Life 
 Ins. Co., 15 Gray (Mass.), 249; ^tna Ins. Co. v. Phelps, 27 111. 71 ; Kedman v. 
 JEtna. Ins. Co., 49 Wis. 431. [MaUers of defence, e. g., terms of the policy con- 
 stituting conditions subsequent, exceptions or prohibitions, need not be set out by 
 the plaintiff. East Tex. Fire Ins. Co. r. Dyches, 56 Tex. 505.] Ante, § 586. 
 
 2 Hunt V. Hudson River Fire Ins. Co., 2 Duer (N. Y. Superior Ct), 481 ; Troy 
 Fire Ins. Co. v. Carpenter, 4 Wis. 32. 
 
 3 Lounsbury v. Prot. Ins. Co., 8 Conn. 459 ; Ferrer v. Home Mut. Ins. Co., 47 
 Cal. 416. 
 
 * [Excelsior Mut. Aid Ass. v. Riddle, 91 Ind. 84, 86.] 
 
 6 [Bank v. German Anier. Ins. Co., 72 Wis. 535.] 
 
 6 [Feeney i: People's Fire Ins. Co., 2 Rob. 599 at 600.] 
 
 7 [Dolbier v. Agricultural Ins. Co., 67 Me. 180 at 183.] 
 
 8 [Herron v. Peoria Mar. & Fire Ins. Co., 28 111. 235 at 288.] 
 
 9 CRees V. Scottish, &c. Assn., 2 li. & N. 19 at 20.] 
 
 1337
 
 § 591] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 in defence cannot be availed of unless pleaded.^ [If it is 
 intended to show that death resulted from " intentional in- 
 juries," within an excepting clause, this defence must be 
 specially pleaded. It cannot be put in under an answer con- 
 taining merely a general denial. " Stipulations added to a 
 principal contract, which are intended to avoid the defendant's 
 promise by way of defeasance or excuse, must be pleaded in 
 defence." ^ A corporation when sued cannot plead md tiel 
 corporation unless in case of misnomer or dissolution.^ A 
 condition in a policy that '' no holder shall be entitled to main- 
 tain any action until he shall have oftercd to submit to a 
 reference " cannot be set up as a defence unless set forth in 
 the specifications.'* When a company is sued, it cannot make 
 any objections to paying losses which are different from or 
 additional to those named by it before suit.-^ A denial that 
 the plaintiff's loss exceeded $4000, as claimed by him, is not an 
 admission of any part of his claim.^ Irregularities in proceed- 
 ings caused by the company's wrongfully repudiating its 
 liability will not avail it as a defence.'] In setting forth the 
 grounds of defence it is not enough merely to negative the 
 trutli of a declaration or performance of a condition in the 
 application made by the insured. The particulars in which 
 the untruthfulness or breach consists should be set out as far 
 as can reasonably be done, that the plaintiff may have some 
 notice of what he is to meet. Thus, where the plaintiff in 
 his application stated that he had not had symptoms of gout, 
 " or any other complaint," the plea that he had had symptoms 
 
 1 Haskins v. Hamilton Mut. Ins. Co.. 5 Gray (Mass.), 432; New York Cen- 
 tral Ins. Co. V. Nat. Prot. Ins. Co., 20 Barb. (N. Y.) 468; Sussex County Mut. 
 Ins. Co. V. Woodruff. 2 Dutch. (N. J.) 541 ; Cassacia v. Phoenix Ins. Co., 28 Cal. 
 628; Devendorf v. Beardsley, 23 Barb. (N. Y.) 656; Mulrey v. Mohawk Ins. 
 Co., 5 Gray (Mass.), 541. So far as Phoenix Ins. Co. v. Lawrence, 4 Met. (Ky.) 
 9, is to the contrary, it is obiter. 
 
 2 [Coburn ;;. Travelers' Ins. Co., 145 Mass. 226, 229.] 
 
 3 [McCullough V. Talladega Ins. Co., 46 Ala. 376 at 377.] 
 
 * [Dyer v. Piscataqua Fire & Mar. Ins. Co., 53 Me. 118 at 110.] 
 
 5 [Castner v. Farmers' Mut. Fire Ins. Co., 50 Mich. 273 ; Richards v. "Wash- 
 ington Fire & Mar. Ins. Co , 60 Mich. 420.] 
 
 6 [Hiles V. Hanover Fire Ins. Co., 65 Wis. 585.] 
 
 7 [Shiells V. Scottish Ass. Corp., 26 Scot. L. R. 702.] 
 
 1338
 
 CH. XXXII.] REMEDIE.-^, EVIDENCE, ETC. [§ o91 
 
 of disease of the stomach was lield insufficient, as too vague ; 
 and it was said that while the court would not tie the defend- 
 ant down very strictly at the trial, he must honestly do his 
 best to furnish particulars. The particular symptoms should 
 be stated.^ So where misrepiesentation of title or breach 
 of warranty is alleged, facts from which the court can see 
 that there is misrepresentation or breach of warranty must Ix? 
 stated."^ So a plea of a defective fireplace should show in 
 what the defect consisted, and that it was material to the 
 risk.^ And a plea that the roof is defective does not open 
 the question of defects in other parts of the building.* A plea 
 of other insurance should state the particulars.'^ If fraud 
 is alleged in defence, it should show that the fraud was com- 
 mitted by the plaintiff or some party in interest,^ and in what 
 particulars.' [Wilful and intentional fraud in regard to a 
 material matter will avoid the contract.* A policy obtained 
 through fraud is void both in law and equity.^ But evidence of 
 fraud in an action on a policy can only be admitted if specially 
 pleaded.^^ If the assured fraudulently claims more than is due 
 him, he can recover nothing." When the company pleaded 
 that they had reason to sus{>ect the loss claimed to be fraud- 
 ulent, and that the goods claimed to be destroyed were not. all 
 letters appertaining to the motive of the insured and the posses- 
 sion of the goods at the time of loss are admissible.^^ When a 
 person is induced by fraud to accent a policy containing a certain 
 
 I Marshall v. Emperor Life Ass. Co.. Law Reports (1 Q. B. Cas.). 35. 
 
 - Ken. & Lou. Mut. Ins. Co. •:. Southard, 8 B. Mon. (Ky.) ii>U : Merch. & 
 Manuf. Mut. Ins. Co. v. Wash. Mut. Ins. Co.. 1 Handy (Ohio), 408 ; Aurora Fire 
 Ins. Co. V. Johnson, 46 Ind. 315. 
 
 3 Ibid. 
 
 * Newman r. Springfield Fire & Mar. Ins. Co., 17 Minn. 12-5. 
 
 5 Ramsay Woollen Cloth Manufacturing Co. r. Mutual Fire Ins. Co., 11 U. C. 
 (Q. B.) 516. 
 
 6 Ferriss r. North American Fire Ins. Co., 1 Hill (N. T.), 71. 
 ' Ibid ; Sterling v. Mercantile Mut. Ins. Co., 32 Pa. St. 75. 
 
 ^ [Insurance Co. r. Hughes, 10 Lea (Tenn), 401.] 
 9 [Wittingham r. Thornborough. 2 Vern. 206.] 
 1^ [Flynn c. Merch. Mut. Ins. Co., 17 La. Ann. 135 at 136.] 
 
 II [Britton r. Royal Ins. Co., 4 F. i F. 905 at 900 ; Huchberger r. Merchants' 
 Ins. Co., 4 Biss. 265 at 266.] 
 
 ^ [Brugnot r. La. St. Mar. & Fire Ins. Co., 12 La. 326 at 331.] 
 
 1339
 
 § 591] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 condition whose breach shall invalidate it, he cannot after such 
 a breach sue on the contract, on the failure of the company to 
 pay the proceeds to him.i A conspiracy to get insurance on 
 fictitious property will of course if shown avoid the policy.^ 
 An allegation of fraud in inducing the insured to surrender 
 his policy cannot be sustained where he had full opportunity 
 to ascertain the facts.^ A company's refusal to insure docs not 
 make it fraud to take a policy from its agent a few weeks later.* 
 Parol evidence is competent to show fraud on the agent's part, 
 inducing the plaintiff to insure, and keeping him in ignorance 
 of the conditions of the pohcy.^ One who in fraud buys the 
 assignment of an insurance policy knowing it to be a specu- 
 lative contract cannot, after failing to make the company pay, 
 come into court to recover the consideration he paid the fraud- 
 ulent assignor.^ It makes no difference whether one states 
 that which he knows to be false or asserts as truth that of which 
 he has no knowledge." Fraudulent representations of an agent 
 as to his abilities and work in previous companies is a good 
 defence to an action by him for his salary .^ But where the 
 company had examined the books of the agent showing his past 
 work, the jury is at liberty to infer that the company did not 
 act on the agent's representations, but on the examination.] 
 
 A plea of false swearing relates to the preliminary proof, and 
 must show where, and before whom, the oath was taken, and in 
 what particulars it is false.^ [Proof of false swearing may be 
 given under a plea of nil debet in an action of debt on a policy .i<' 
 False swearing must be proved affirmatively, and the proofs of 
 loss may be a part of such evidence. ^^ The plaintiff may testify 
 
 1 [Tebbetts v. Hamilton Mut. Fire Ins. Co., 3 Allen (Mass.), 569 at 569.] 
 
 2 [Plioenix Ins. Co. i-. Moog, 78 Ala. 284.] 
 
 3 [Hencken v. U. S. Life Ins. Co., 11 Daly, 282.] 
 * [Body 1-. Hartford Fire Ins. Co., 63 Wis. 157.] 
 
 5 [McKenzie v. Planter's Ins. Co., 9 Heisk. 261 at 267.] 
 
 6 [Blattenberger r. Holman, 103 Pa. St. 555, 558 (1883).] 
 
 7 [Evans v. Edmonds, 13 C. B. 777 at 785.] 
 
 8 [Barker r. Knickerbocker Life Ins. Co., 24 Wis. 630.] 
 
 9 Ketchum r. Prot. Ins. Co., 1 Allen (N. B.), 136 ; Clay Fire, &c. Ins. Co. v. 
 Wusterliausen, 75 111. 285. 
 
 w [Phoenix Ins. Co. v. Munday, 5 Cold. 547 at 554.] 
 
 11 [Phoenix Ins. Co. v. Munday, 5 Cold. (Tenn.) 547 at 552.] 
 
 1340
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 591 A 
 
 as to how much he tliinks his loss may be, and the fact that it 
 is proved to be one-half less is not presumptive evidence of false 
 swearing.^ A claim that property lost is the assured's when 
 in fact it belonged to other members of the family, if made 
 bona fide, is not '■ false swearing." ^ The fraud or false swear- 
 ing pleaded to defeat a policy must be alleged to be mate- 
 rial and wilful.^] 
 
 [§ 591 A. Ultra Vires.^ — A company is not estopped from 
 setting up the plea of ultra vires because its agent made the 
 insured believe that it was within the company's power. ^ 
 If the law prohibits town insurance companies from in- 
 suring school-houses without a majority vote of the members, 
 a policy without such vote is void, and a policy issued on 
 a dwelling-house becomes void if it is turned into a school- 
 house and no such vote is obtained.*^ When a company is 
 authorized to insure where the member has a fee simple or 
 a less estate specified in the policy, a violation of this pro- 
 vision by issuing a policy to a husband on his wife's realty 
 stated to be his in fee, makes the policy ultra vires and void 
 in its inception, and no assignment or waiver can render 
 it valid. 7 The " Hull and London Fire Insurance Company " 
 had general authority to transact marine insurance, but the 
 charter provided that in every policy the funds of the com- 
 pany alone should be liable. They started a marine branch 
 and had their policies headed "H. & L. Marine Co.," but 
 there was no stipulation in them that the funds of the com- 
 pany alone should be liable, and therefore even bona fide ship 
 insurers could not recover on their policies because they were 
 idtra vires the charter.^ But a company which knowingly 
 issues a policy to one under the age required by its by-laws 
 
 1 [linger v. People's Fire Ins. Co., 4 Daly, 96 at 98.] 
 
 2 [Farmers' Mut. Fire Ins. Co. v. Gargett, 42 Mich. 289 at 293] 
 
 8 [Sleeves v. Sovereign Fire Ins. Co., 20 U. B. R. 394 ; Insurance Co. v. Starr, 
 71 Tex. 733.] 
 
 * [See § 577, & ch. 4.] 
 
 5 [Webster ;■. Buffalo Ins. Co , 7 Fed. Rep. 399; 2 McCrary, 348 (Mo.), 1881.] 
 
 6 [Luthe V. Farmers' Mut. Fire Ins. Co., 55 Wis. 543.] 
 
 7 [Froehly v. North St. Life Ins. Co., 32 Mo. App. 302.] 
 
 8 [Hambro v. Hull, &c. Ins. Co., 3 H. & N. 789.] 
 
 1341
 
 § 592] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 cannot avail itself of such defence, i When a charter of an 
 insurance company gives the power of insuring to the direc- 
 tors, and provides that they divide all risks into four classes 
 and assign each policy to its proper class ; and where a by- 
 law defined the kind of property to be assigned to each class ; 
 and when with a full knowledge of the facts the directors 
 insured A in the third class when he properly belonged in the 
 fourth, — it was held that though the act was irregular on the 
 director's part, yet the policy was not void.^ Defects which 
 make a contract ultra vires cannot be waived by the officers 
 of the company. 3 But a member sued for an assessment can- 
 not set up the invalidity of the charter of the company, or 
 the ultra vires character of his contract.*] 
 
 [§ 591 B. New Trial. — If the Company discover new evi- 
 dence enabling them to prove that the insured died from de- 
 lirium tremens, they may maintain a bill in equity to set 
 aside the judgment and obtain a new trial. ^ Where the in- 
 sured endeavored to prove a waiver by showing against ob- 
 jection that they had sent to the company a registered letter 
 for a premium instalment falling due after the loss, and on 
 motion for a new trial it appeared that the company had 
 ])romptly returned the letter, but that this fact was unknown 
 to the company's attorney at the trial, it was held that a new 
 trial should have been granted. 6] 
 
 § 592. Bankruptcy and Insolvency ; Conflict of Laws. — An 
 insurance company is a "business or commercial corpora- 
 tion " within the meaning of the bankrupt laws of the United 
 States, and if it commits acts of bankruptcy, may be de- 
 clared bankrupt like a natural person." This case gave rise 
 to an interesting question of jurisdiction. After the act of 
 bankruptcy, the company was declared insolvent under the 
 
 1 [Gray v. National Ben. Ass , 111 Ind. 531.] 
 
 2 [Union Mut. Fire Ins. Co. v. Keyser, 32 N. H. 313 at 316.] 
 
 3 [Froelily v. North St. Life Ins. Co., 32 Mo. App. 302, 312.] 
 
 * [Freeland v. Pa. Cent. Ins. Co., 94 Pa. St. 504.] 
 
 5 [Trefz V. Knickerbocker Life Ins. Co., 10 Ins. L. J. 590 (N. J.), 1881.] 
 
 6 [Continental Ins. Co. v. Hillmer, 18 Ins. L. J. 691 (Ivans.), Jan. 5, 1889.] 
 
 • Reed v. Independent Ins. Co., Cir. Ct. U. S. Mass. Dist., 1872, Shepley, J.. 
 1 Ins. L. J. 735 ; Knickerbocker Ins. Co. v. Comstock, 16 WaU. (U. S.) 258. 
 
 1342
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 598 
 
 insolvent laws of Massachusetts, under proceedings in the 
 courts of that State, enjoined from further doing business, 
 and at a subsequent date a receiver vras appointed, and the 
 corporation itself adjudged and decreed to be dissolved. On 
 a petition in bankruptcy subsequently, it was claimed that 
 the corporation was defunct, and could not answer or be 
 dealt with. But the court held that the insolvent laws of 
 Massachusetts were suspended, after the passage of the bank- 
 rupt law, as to all matters to which the latter applied, and 
 therefore the proceedings in insolvency in the courts of 
 Massachusetts were ineffectual and nugatory; and that irre- 
 spective of those statutes, or of some other statute authority, 
 the courts of Massachusetts had no more right to annul the 
 existence of the corporation than they would have to take the 
 life of a natural person. ^ A mutual life insurance company 
 was also held to be a " business " corporation within the 
 meaning of that act in the United States District Court for 
 the Southern District of New York.^ [An assignment to a 
 receiver by order of the court of the domicil of the company 
 passes promissory notes of debtors residing in other States, 
 and takes priority over an attachment subsequently levied by 
 creditors in the State of the debtors.^] 
 
 § 593. Bankruptcy ; Status of the Company. — After adju- 
 dication of bankruptcy the court has exclusive jurisdiction 
 over the estate and assets of the bankrupt corporation, and 
 is vested with all the power and control previously vested in 
 either the chartered officers of the company or stockholders, 
 or both collectively, over the same, and can make any assess- 
 ment or call necessary for the collection of the assets as 
 fully as the stockholders or directors could have done. And 
 if the notes given by the stockholders, as and for the capital 
 stock, have not been paid, any balance remaining unpaid 
 
 1 The learned judge cited, amongst otiier cases, Folger v. Columbian Ins. 
 Co., 99 Mass. 267; Hayward v. Fulcher, Sir William Jones (folio), 166; Dean 
 and Chapter of Norwich, Coke, part 3, 75 a. The real question, however, in this 
 case was whether the insurance company was within the meaning of the Bank- 
 rupt Act of 1867. 
 
 - In re Hercules Mut. Life Ass. Soc, 1 Ins. L. J. 875. 
 
 3 [Taylor v. Life Ass. of Amer., 13 Fed. Rep. 493 (Tenn.), 1882.f 
 
 VOL. II.— 41 1343
 
 594"' INSUEANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 may be called in by order of court, notwithstanding, by the 
 terms of the subscription and by the certificate of stock, that 
 balance is to be paid on the call of the directors when or- 
 dered by the stockholders. And such call is conclusive as 
 to its amount and propriety, and cannot be questioned in a 
 collateral suit, or in a suit on the note. Nor can the defence 
 of false representation as to the character and prospects of 
 the company be set up as against the assignees who repre- 
 sent the creditors, though that might have been good had it 
 been availed of before the adjudication. Nor can it avail 
 that the directors voted to release the stockholders from the 
 payment of any outstanding balance due on their stock notes, 
 and caused them to be stamped unassessable. Such a vote 
 is inoperative as to creditors and those who insured in the 
 company without knowledge of the fact. And the purchaser 
 of a certificate, who surrenders it and has one issued to him- 
 self, succeeds to the rights and the liabilities of the holder 
 of the certificate which he purchased, and of an original 
 stockholder, and the acceptance of a partly unpaid certifi- 
 cate carries with it an implied obligation to pay the balance. 
 In making the call for an assessment it is discretionary with 
 the court whether to give notice, and the stockholders are 
 so far parties to the bankrupt proceedings as to be bound 
 thereby without notice. ^ But an insolvent company cannot 
 compel the payment of continued premiums for a protection 
 which it cannot give ; ^ and a renewal premium forwarded to 
 the agent but not paid over to the company may be recovered 
 from the agent. ^ 
 
 § 594. Bankruptcy and Insolvency ; Powers and Duties of 
 Assignee and Receivers ; Status of Policy-holder. — The bank- 
 ruptcy of an insurance company does not necessarily re- 
 lease the policy-holder from the obligations of his contract ; 
 and whatever remains incomplete at the time of the adjudi- 
 cation of bankruptcy passes over to be acted upon by the 
 
 1 Upton V. Hansbrongh, U. S. Dist. Ct, North Dist. 111., January Terra, 
 1873, 5 Chicago Legal News, "242. An elaborate and well-considered case. 
 
 2 Farmers', &c. Ins. Co. v. Smith, 53 111. 187. 
 
 3 Smith V. Binder, 75 111. 492. 
 
 1344
 
 CH. XXXII.] REMEDIES, ETIDENCE, ETC. [§ 594 
 
 court which represents the company and succeeds generally 
 to its rights. The member of a mutual insurance company 
 may still be liable to assessments on his premium notes, and 
 the member of a stock company to assessments on his stock. 
 The assignee has not the original powers of the company. 
 He is an officer of the court and a trustee of the creditors, 
 and cannot waive the performance of conditions, whether 
 limiting time within which action may be brought or other- 
 wise, which the company might have done. And it is his 
 duty, where proofs have been furnished and losses adjusted 
 before adjudication, to revise the same, if he has reason to 
 believe there is any equitable ground for such revision, and 
 he may affirm what appears clearly to have been done or ac- 
 cepted by the company in the way of adjustment or proof of 
 loss. But if that which has been done would not have con- 
 cluded the company, he can give it no additional force by his 
 affirmance. 1 Nor can the corporation or receiver pay losses 
 arising after injunction and sequestration.^ Several of the 
 States have passed special statutes relative to the insolvency 
 of insurance companies, differing in particulars, but substan- 
 tially alike. In New York, the receiver, who is an officer 
 of the court placed in charge of the property, may sue in his 
 own name. In Massachusetts, the corporation is not dis- 
 solved merely by the insolvency proceedings, and the receiver 
 sues in the name of the company. In New York, — and the 
 same is doubtless true of other States, — the receiver takes 
 the place of the directors in the settlement of the affairs of 
 the company, under the direction of the court, and all his 
 acts must have the sanction of the court. Both he and the 
 creditors are under the jurisdiction and control of the court. ^ 
 
 1 In re Fireman's Ins. Co., U. S. Dist. Ct., North Dist. 111., January, 1873, 5 
 Chicago Legal News, 253; Upton v. Jackson (C. Ct. Mich.), 4 Ins. L.J. 189. 
 See also Com. v. Mass. Mut. Ins. Co., 112 Mass. 116 ; Com. v. Dorcliester Mat. 
 Ins. Co., 112 Mass. 142 ; s. c. 3 Ins. L. J. 1 ; Michenor v. Payson, C. Ct. (Pa.), 
 5 id. 116 ; Upton v. Tribilcock, 91 U. S. 45 ; s. c. 5 Ins. L. J. 96 ; Sanger v. Up- 
 ton, C. Ct. (111.), 6 id. 618 ; Atty.-Gen. v. N. A. Ins. Co. (N. Y.), 9 id. 849 ; Upton 
 V. Englehart, C. Ct. (Iowa), 3 id. 743; Hone c. Allen, 1 Sandf. (N. Y.) 171, n. ; 
 s. c. and others, 2 Ben. Fire Ins. Cas. 597 et seq. 
 
 - Commonwealth r. Mass. Mut. Ins. Co., nbi supra. 
 
 3 Rinn v. Astor Fire Ins. Co., 59 N. Y. 143. 
 
 1345
 
 § 594] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 In making assessments, however, he must show the existence 
 of the same facts and circumstances which would authorize 
 an assessment by the directors if the company were not in- 
 solvent. He derives no additional powers from the fact of 
 insolvency, and can maintain suits and recover thereon as 
 and only as the directors might have done.i Although, in 
 general, he has no greater power than the directors had, yet 
 he may call in the unpaid stock for the benefit of creditors, 
 to pay all debts and legal liabilities, if necessary, even 
 though the company, had it not been thrown into bankruptcy, 
 might have been able under its charter to collect only so 
 much as might be necessary to pay " losses " proper, as dis- 
 tinguished from liabilities. 2 Nor, when bankruptcy proceed- 
 ings have commenced, can creditors, in equity or at law, 
 enforce their claims against the stockholders individually. 
 Their remedy, whether for the payment of their claims or 
 against unjust assessments, is in the bankruptcy court, where 
 the estate of the company is, and where all questions between 
 the respective parties in interest are to be determined. ^ Be- 
 ing an officer of court, he is not suable at law in any process, 
 judgment wherein would effect the custody of the property. 
 The receiver's possession is the possession of the court, and 
 any disturbance of that possession would be a contempt of its 
 authority. 4 As we have just seen that in bankruptcy the 
 
 1 Savage v. Medbury, 19 N. Y. 32 ; Devendorf v. Beardsley, 23 Barb. (N. Y.) 
 656; Thomas v. Whallon, 31 id. 172; Shaughnessy v. Rensselaer Ins. Co., 21 
 id. 605 ; Sands v. Hill, 42 id. 651 ; Furniss v. Sherwood, 3 Sandf . (N. Y. Supe- 
 rior Ct.) 521; Brouwer i-. Hill, 1 Sandf. (N. Y. Superior Ct.) 629; In re Globe 
 Ins. Co., 6 Paige (N. Y.), Ch. 102. 
 
 2 Payson, Ass., v. Stoever (U. S. C. Ct. Dist. of Minn), 2 Ins. L. J. 733; 
 Ogilvie V. Knox Ins. Co., 22 How. (U. S.) 380. 
 
 3 Payson, Ass., v. Stoever, ubi supra. In this case, it was held that a stock- 
 holder, who had ignorantly subscribed to stock which was illegally issued, but 
 was afterwards legalized by legislative enactment, was held to be liable to as- 
 sessment thereon, it appearing that he received dividends, and that at a regular 
 annual meeting of tlie stockholders, at which he might have been present, it 
 was voted further to increase the capital stock, although he had in fact no pre- 
 vious knowledge of the illegality, nor of the legislative action thereto, prior to 
 the suit brought to enforce the claim against him. And see also Payson v. With- 
 ers, U. S. C. Ct., Dist. of Ind., 2 Ins. L. J. 599 ; s. c. 5 Chicago Legal News, 445. 
 
 * Spinning v. Ohio Life, &c. Co., 2 Dist. Sup. Ct. Cincinnati, 336. 
 
 13-46
 
 CH, XXXII.] REMEDIES, EVIDENCE, ETC. [§ 594 a 
 
 assignees have not the full discretionary powers of the direc- 
 tors, so in insolvency the receiver, being a trustee, has no 
 right to waive proofs of loss, and, upon the same grounds, 
 doubtless no right to waive the Statute of Limitations, or 
 other legal defence. ^ An assignment by the act of the parties 
 clothes the assignee with no powers not rightfully given by 
 the deed of assignment ; and this does not include the power 
 to make assessments, and the like powers held by the corpo- 
 ration. Such powers are not transferable. '^^ [The only in- 
 terest in a life policy that passes to the assignee of a bankrupt 
 is the surrender value of the policy at the time of the bank- 
 ruptcy.^ The right of an insolvent debtor in a life policy 
 payable if he survives, at a day certain after the day of publi- 
 cation of notice, passes to the assignee in insolvency.* If a 
 policy for five years is issued on payment of the first year's 
 premium and a note payable in yearly instalments for the 
 rest, and the company fails in a few months, the note cannot 
 be enforced, for the consideration of it fails. ^ The receiver 
 of an insolvent company who continues to use the premises 
 formerly occupied by the company is liable for the rent.^j 
 
 § 594 a. Insolvency ; Distribution of Assets ; Priority of 
 Claims. — [The receiver is entitled to compensation for labor 
 and expenses, and the rest of the assets go to the creditors.^] 
 
 1 Evans v. Trimountain Mut. Fire Ins. Co , 9 Allen (Mass.), 329 ; In re Fire- 
 man's Ins. Co., ub'i supra; MeEvers v. Lawrence, Hoffman (N. Y.), Ch. 172. 
 
 2 Hurlbut V. Carter, 21 Barb. (N. Y.) 221. 
 
 3 [In re MoKinney, 15 Fed. Rep. 535 (N. Y.), 1883.] 
 
 4 [Bassett v. Parsons, 140 Mass. 169.] 
 
 s [Home Ins. Co. v. Daubenspeck, 115 Ind. 306] 
 
 6 [People V. Universal Life Ins. Co., 30 Hun, 142] 
 
 ^ [On the question of compensation of receivers of msolvent life insurance 
 companies, see act of 1869, c. 902, § 13; Attorney-General v. North Am. Life 
 Ins. Co., 89 N. Y. 94 ; People v. McCall, 94 N. Y. 587 ; Attorney-General v. North 
 Am. Life Ins. Co., 26 Hun, 294 ; In re Security Life Ins. & Annuity Co., 31 Hun, 
 oG ; People v. Knickerbocker Life Ins. Co., 31 Hun, 622; Attorney General v. 
 Continental Life Ins. Co., .32 Hun, 223; In re Commonwealth Ins. Co., 32 Hun, 
 78 ; Attorney-General v. Guardian Life Ins. Co., 93 N. Y. 631. A referee ap- 
 pointed to take proofs and report upon the claims of a receiver for compensation 
 and expenses, may himself be compensated out of the company's funds, in the 
 discretion of the court. Attorney-General v. Continental Life Ins. Co., 93 N. Y. 
 45. Policy-holders intervening to reduce the compensation claimed by the re- 
 
 1347
 
 §594 a] insurance: fire, life, accident, etc. [ch. xxxii. 
 
 The creditors of an insolvent company all stand alike, each 
 without priority of claim over the other, without reference 
 to the date when the claims accrue, unless before the insol- 
 vency there is a lien on or a specific appropriation of funds 
 for the payment of a particular claim, i Unless there is such 
 an appropriation to pay a declared dividend, stockholders 
 must forego it, and go in with the general creditors. 2 The 
 policy-holders in an insolvent stock company are not part- 
 ners, but creditors, with claims for damages for a breach of 
 their several contracts. These damages are the net value 
 of the policies, without regard to the health of the holders, 
 less outstanding premium notes. And it was also held, in 
 the same case, that unmatured paid-up policies should fare no 
 better than the others ; that death claims maturing prior to 
 the insolvency were entitled to no preference ; and that losses 
 
 ceiver of an insolvent company cannot be allowed expenses and counsel fees 
 out of the assets. Attorney-General v. North Am. Life Ins. Co., 91 N. Y. 57. But 
 wlien an insurance company is served with an order to show cause why a receiver 
 should not be appointed, if the officers have reasonable grounds to believe the 
 company solvent, it is their duty to oppose such order, and reasonable expenses 
 incurred are to be allowed them in the discretion of the court, but services of an 
 attorney to the company after the appointment of a receiver constitute no le- 
 gal clami against the receiver or the funds in his hands. Barnes v. Newcomb, 
 89 N. Y. 108. Creditors of an insolvent company intervening in proceedings 
 instituted by the receiver, cannot have their counsel fees out of the assets. 
 Attorney-General v. Continental Life Ins. Co., 27 llun, 195.] 
 
 ' [A lien or priority among policy-holders can only arise by statute by-law, 
 or contract. Taylor v. Life Ass. of Am., 13 Fed. Hep. 493 (Tenn.), 1882. Claim- 
 ants of unearned premiums and surrender values stand on an equality with gen- 
 eral creditors. Carr v. Union Mat. Fire Ins. Co., 33 Mo. App. 291. Claims 
 founded on losses occurring before dissolution have no priority above policies 
 running at that time. Kelfe v. Columbia Life Ins. Co., 76 Mo. 594. Funds 
 arising on a general contract of re-insurance are to be distributed among all 
 the creditors of the re-insured company' if it is insolvent. A particular con- 
 tract of re-insurance may be made for the indemnity of the individuals whose 
 risks are re-insured, but if the agreement is general, all the creditors come in 
 for a share of the proceeds. Goodrich's Appeal, 109 Pa. St. 523. The assets 
 of a mutual company are a trust fund to pay mortuary benefits, and where tliere 
 is sucli a purpose to which tliey may be applied, the directors cannot apply them 
 to cover advances made by tliemselves upon a prior death-claim for wliich they 
 might have made an assessment. As to such advances they come in as ordi- 
 nary creditors. Wilber v. Forgeson, 24 Brad. 119.] 
 
 2 Lowene v. Am. Fire Ins. Co., 6 Paige (N. Y.), Ch. 482 ; DePeyster v. Am. 
 Fire Ins. Co., id. 486. 
 1348
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 594 a 
 
 happening prior to the expiration of the time for the pre- 
 sentation of claims were entitled to be treated as matured. ^ 
 [Policy-holders are entitled to claim the surrender value of 
 their policies calculated according to the American Tables 
 of Mortality, of which the courts will take judicial notice. ^ 
 Where old policies have been surrendered and new ones taken 
 in their places, if the company becomes insolvent, the hold- 
 ers are to be allowed the value of the new, not of the old 
 policies.^ Where a company becomes insolvent and during 
 the proceedings before the report of the actuary is confirmed 
 a person insured dies, the beneficiary is entitled to have the 
 policy valued, not as a continuing insurance, but on the basis 
 of death.* But where the death does not occur until after 
 the valuation is complete and confirmed by the court, the 
 policy will not be revalued.^ Where after expiration of the 
 time for presentation of claims against an insolvent company 
 a policy-holder whose claim has been presented and allowed, 
 dies, the court may direct a revaluation of the policy.^ The 
 contingent interests of children to whom an endowment policy 
 is payable if the insured die before the endowment period is 
 out, become fixed by intervening insolvency of the company, 
 and are to be calculated by the ordinary tables."] 
 
 In a purely mutual company, however, claims founded on 
 policies matured before insolvency are to be preferred to 
 claims on policies not matured. The termination of the risk 
 changes the status of the holder of the policy. Prior to the 
 change he was entitled, as between himself and the other 
 members, to his share of the revenue fund. After the change 
 the claim becomes a debt due from the company to a stranger. 
 
 1 People V. Securitj', &c. Ass. Co., 78 N. Y. 114; Guy v. Globe Ins. Co. (Cir- 
 cuit Ct. Richmond, Va.), 9 Ins. L. J. 467. See also Holdich's Case, L. R. 14 
 Eq. 72 ; s. c. 3 Big. Life & Ace. Ins. Cas. 272, citing and commenting upon 
 Lancaster's (3 Big. Life & Ace. Ins. Cas. 272) and Bell's (L. R. 9 Eq. 706) cases. 
 
 2 [McDonnell v. Ala. Gold Life Ins. Co., 85 Ala. 401.] 
 
 3 [Attorney-General v. Continental Life Ins. Co., 91 N. Y. 647.] 
 * [People V. Knickerbocker Life Ins. Co., 34 Hun, 476.] 
 
 5 [People V. Knickerbocker Life Ins. Co., 38 Hun, 601.] 
 
 6 [Attorney-General v. Continental Life Ins. Co., 88 N. Y. 77.] 
 
 7 [Carr v. Hamilton, 129 U. S. 252.J 
 
 1349
 
 § 594 a] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH- XXXII. 
 
 He stands towards the company as an outside creditor of a 
 firm stands to the firm, — to be preferred before a member of 
 the firm.i 
 
 Where a dividend has been declared out of a clear surplus, 
 and the checks therefor made out and signed, after notice of 
 time and place of payment, this is an equitable appropriation 
 of the funds to the stockholders ; and as against the receiver 
 and creditors they will be entitled to the funds so appropri- 
 ated, though insolvency intervene before the actual delivery 
 of the checks.^ 
 
 If there is no privity of contract between a reinsurer and 
 the original insured, the latter, in case of the insolvency of 
 his insurer, has no better claim upon the money paid by the 
 insurer than the other creditors. Whatever may be paid by 
 the reinsurer on his contract with the reinsured becomes a 
 common fund, for the benefit of all the creditors.^ 
 
 In Alabama, foreign insurance companies are required to 
 make certain deposits with the State treasurer, for " the pro- 
 tection of the policy-holders " in that State. The appellants, 
 unable to pay their losses, made a general assignment, and 
 gave notice to policy-holders to return their policies for can- 
 cellation, when they would receive certificates for unearned 
 premiums, which they could present to the assignee for set- 
 tlement. The defendant, a resident agent of the company, 
 without any special authority from the company, cancelled 
 all the policies issued by him, reinsuring some, and paying 
 out of his own pocket the unearned premiums to others, with 
 the understanding that he should be reimbursed out of the 
 proceeds of the deposited security. He then brought his bill 
 in equity to subject the deposited bonds to the reimbursement 
 of these claims, and also to recover a balance of his personal 
 account. It was held that, though the agent could not cancel 
 
 1 Mayer v. Attorney-General (N. J.), 9 Ins. L. J. 671, referring to and distin- 
 guishing the case of the Security Company, supra. See also Commonwealth v. 
 Mass. Mut. Ins. Co., supra ; Vanatta v. N. J. Mut. Life Ins. Co , 31 N. J. (Eq.) 
 15, Runyon, Chancellor. 
 
 2 Le Roy v. Globe Ins. Co., 2 Edw. (N. Y.) Ch. 657. 
 
 '•> Herckenrath v. Am. Mut Ins. Co., 3 Barb. (N. Y.) Ch. 63 ; Carrington v. 
 Com. Fire & Mar. Ins. Co , 1 Bosw. (N. Y.) 152. 
 1350
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 595 
 
 the policies by virtue of his general authority to act for the 
 interest of the company, yet the transaction between him 
 and the policy-holders subrogated him to their rights against 
 the deposit, as to the claims of the policy-holders transferred 
 to him, but not as to his personal account. ^ 
 
 § 595. Bankruptcy and Insolvency ; Set-off. — In general, a 
 set-off of a liquidated debt due the corporation is allowable 
 against an unliquidated debt due from them; and this ex- 
 tends to all mutual credits arising ex contractu between the 
 original parties. ^ When an insurance company becomes in- 
 solvent, the court will sustain the claim of holders of a policy 
 under which they are entitled to recover for a loss, to have 
 a note given by them prior to the insolvency, and purchased 
 by the insurance company, applied in part payment of the 
 loss, although the note has been sold, if the sale be subse- 
 quent to the insolvency and to the happening of the loss.^ 
 So where the insurance company had loaned money directly 
 to the assured, who afterwards sustained a loss, it was held 
 that the loan might be set off in the adjustment of the claim 
 for the loss.^ If, however, the assured has before the loss 
 assigned his policy with the assent of the insurer, and after 
 the loss surrenders the policy and takes a negotiable certifi- 
 cate of the amount of the loss, which is indorsed to the as- 
 signee of the policy in lieu thereof, the original insured 
 
 1 United States Fire & Mar. Ins. Co. v. Tardy (Ala.), 2 Ins. L. J. 673. 
 
 2 Holbrook v. American Fire Ins. Co., 6 Paige (N. Y.), Cli. 220. 
 
 8 Commonwealth v. Shoe & Leather Dealers' Ins. Co., 112 Mass. 131. In 
 Straus V. Eagle Insurance Company, 5 Ohio St. 59, it was held that insurers 
 having no right to invest their money in promissory notes could not set off the 
 notes of a policy-holder against his claim for a loss. But in Hovey v. Home 
 Insurance Company, C. Ct. (Ohio), 3 Ins. L. J. 815, the court, after a careful 
 review of the cases, were evidently not satisfied with this doctrine, and held 
 that reinsurers, on the insolvency of the reinsured company, might set off at 
 their face value policies which they had bouglit at a discount against the claims 
 of the assignee of tlie insolvent company for loss. 
 
 * Receivers of Globe Ins. Co., 2 Edw. (N. Y.) Ch. 625; Osgood v. De Groot, 
 36 N. Y. 348. [When the holder of a life policy borrows money from tlie in- 
 surer it will he prima facie presumed that he does so on faith of the insurance, 
 which possibly may meet his obligation, and if the company becomes insol- 
 vent the debt would be set off against the amount due on the policy. Carr v, 
 Hamilton, 129 U. S. 252.] 
 
 1351
 
 § 595] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXIT. 
 
 cannot set off the amount due for such loss against a debt 
 due from him to the insurer ; but he must pay such debt in 
 full, and take a dividend on his loss, if the company is in- 
 solvent. ^ In Drake v. Rollo, Assignee,^ it was held that 
 where a person borrowed money of an insurance company, 
 payable partly in three and partly in five years, and before 
 the payment the company became insolvent and was adjudi- 
 cated a bankrupt, he can, under the twentieth section of the 
 bankrupt law, providing that mutual debts and credits may 
 be set off, set off the debt for claims he has for loss on poli- 
 cies against the company, though the effect would be to give 
 him a preference over other creditors. The rights of the par- 
 ties are to be determined by the state of facts at the time of 
 the loss. And if in such case the money borrowed is not due 
 when the loss becomes payable, and the company is bankrupt 
 and insolvent, the borrower may maintain his bill in equity 
 against the company or its assignee to enforce the set-off. 
 If, however, the claim against the company for loss be pro- 
 cured with full knowledge of their insolvency, though prior 
 to any legal declaration of the fact, it cannot be set off, as 
 this would be a perversion of the statute for the benefit of 
 one creditor to the prejudice of another, and against its 
 spirit. If a court of equity could not interpose in such a 
 case, though it be not one of the claims excepted from the 
 right of set-off, a person might borrow the whole capital of an 
 insurance company, and on learning of its insolvency, in- 
 stead of paying the debt, might use a part of it in buying up 
 the depreciated claims against the company to the amount of 
 his debt, and keep the rest in his pocket. ^ [When the pol- 
 icy insured A. "for whom it might concern," an indorsement 
 thereon showing that A., B., and C. were the assured, it was 
 held that all might join in an action, and that the company 
 could not set off against B. and C. a debt due them from A.^'\ 
 
 1 Swords I'. Blake, 3 Edw. (N. Y.) Ch. 112. 
 
 2 U. S. C. ex., North. Dist. 111., 6 Chicago Legal News, 9. 
 
 3 Hitchcock I'. Rollo, Ass., id., disapproving In re The City Bank of Gur- 
 ney, 4 Legal News, 81 U. S. Dist. Ct. Cal. ; Smith v. Hill, 8 Gray (Mass.), 672. 
 
 * [Williams v. Ocean Ins. Co., 2 Met. 303 at 30G-307.] 
 1352
 
 CH. XXXII.] REMEDIES, EVIDENCE, ETC. [§ 596 
 
 § 596. Rule as to Set-off when Company is solvent different 
 from the Rule when Company is insolvent. — The right of set- 
 off is affected by the question whether the company is solvent 
 or insolvent. Thus, where the insured still owes an unpaid 
 balance of his subscription or stock note, this balance is a 
 fund in trust for the benefit of creditors, and a claim for loss 
 cannot be set off against it so long as the losses are unpaid 
 in full. In a solvent company, able to pay all its losses, the 
 claims might be deemed mutual, and subject to set-off, each 
 against the other. But insolvency changes the rule.^ Nor 
 are holders of claims for losses entitled in mutual insurance 
 companies to set off their claims in actions on their premium 
 notes. They must pay those notes to the amount required, 
 and then, if the assets prove insufficient to pay the whole 
 amount of the losses, they can only receive the same percent- 
 age of their losses that the other members receive ; otherwise, 
 the holder of a claim offsetting the whole or a portion of it 
 against the company's claim on his premium note would 
 receive more than his just proportion of loss.^ Nor can a 
 claim for loss assigned to the maker of a premium note be 
 set off in an action on the premium note, except to the 
 amount to which he would be entitled as a dividend on the 
 claim. 3 In payment of losses, the insurers are entitled to 
 set off all sums due on the premium note, and for the claim- 
 ant's just proportion of losses up to the time of payment of 
 the loss; or, if the company is trusteed, up to the time 
 of the service of process.* [When a company goes into in- 
 solvency the amount due on an endowment policy should be 
 set off against a mortgage debt due the company from the 
 holder of the policy.^ But one who is indebted to an insol- 
 
 1 Scammon v. Kimball, 5 Biss. (U. S. C. Ct.) 431 ; Jenkins v. Armour (U. S. 
 C. Ct.), 14 N. B. R. 276 ; Sawyer v. Hoag, 17 Wall. (U. S.) 610. 
 
 2 Lawrence v. Nelson, 4 Bosw. (N. Y. Superior Ct.) 240; s. c. affirmed, 21 
 N. Y. 158; Hillier v. AUegliany County Mut. Ins. Co., 3 Barr (Pa.), 470. And 
 see also Lawrence v. McCready, 6 Bosw. (N. Y.) 329. 
 
 8 Long V. Penn Ins. Co., 6 Pa. St. 421. 
 
 * Swamscot Mach. Co. v. Partridge, 5 Fost. (N. H.) 369; Nevins v. Rocking- 
 ham Fire Ins. Co., id. 22. 
 
 5 [Carr v. Hamilton, 129 U. S. 252.] 
 
 1353
 
 § 597] INSURANCE : FIRE, LIFE, ACCIDENT, ETC. [CH. XXXII. 
 
 vent company cannot set off the reserve value of an endow- 
 ment policy held by him, payable to his wife in case of his 
 death before a time named or to him if then living, i] 
 
 [§ 597. Cessation of Business ; Selling out to Another Com- 
 pany. — Where a life company has practically ceased to do 
 business, equity will entertain a bill by the policy-holders to 
 enforce the termination of their contracts, and the payment 
 of their present value. ^ Unless prevented by an express con- 
 tract an insurance company may transfer its funds to another 
 company who take all liabilities.^ And payment of premi- 
 ums to the new company releases the old one on the policy.* 
 Where the receiver of an insolvent company (N. ) enters into a 
 contract with the C. Company by which C. agrees to assume 
 the liabilities of N., and some of N. 's policy-holders sur- 
 rendered them to C, receiving its policies in exchange, it was 
 held that C. did not by such surrender become a policy-holder 
 in the N. Company, and could not claim a share in the dis- 
 tribution of its funds. Policy-holders in N. who paid pre- 
 miums to C. but did not surrender their policies were held 
 entitled to a share in the assets of N.^J 
 
 1 [Newcomb v. Almy, 96 N. Y. 308] 
 
 2 [Inpersoll v. Mo. Val. Life Ins. Co., 37 Fed. Rep. 530 (Kans.), 1889.] 
 8 [King V. Ace. Life Fund, &c., 3 C. B. n. s. 151 at 162.] 
 
 4 [Re Nat. Prot. Life Ass. Soc.,9 Law Rep. Eq. Cas. 306 at 315 ; Re Internat. 
 Life Ass. See. & Hercules Soc, 9 Law Rep. Eq. Cas. 316 at 324 ; Re Times 
 Life Ass. & Guarantee Soc, 9 Law Rep. Ch. Ap. 381 at 396.] 
 
 5 [Reese v. Smyth, 95 N. Y. 645.] 
 
 1354
 
 INDEX. 
 
 [the references are to the sections.] 
 
 A. 
 
 > ^NDONMENT, notice of, need not be given to reinsurer, 11 (Zj). 
 rule as to, not applicable in fire insurance, 421 a. 
 ABSOLUTE FUNDS, what, 549 a. 
 
 ACCEPTANCE of application imports agreement to issue a policy, 
 43, 44. 
 once accepted not to be arbitrarily rejected, 54 C. 
 
 of contract, what constitutes, 53. 
 
 subject to approval, 57, 58. 
 ACCIDENT. See Insurance, 1. 
 
 insurance ticket, 70. 
 
 agents of accident companies, 155. 
 
 definition of, 514. 
 
 from injury causing death, 514. 
 
 from sprain, 514. 
 
 from strain or sprain, 514. 
 
 accidental means, 515 a. 
 
 by gymnastic exercise, 515 a. 
 
 by overdose of opium, 515 a. 
 
 external sign of, 516. 
 
 by outward and visible means, .516. 
 
 by external and material cause, 518. 
 
 obvious risk, 530. 
 
 in violating law, 530. 
 
 rupture from jumping, 515, 515 a. 
 
 drowning, 516, 517. 
 
 secondary cause of, 516, 518. 
 
 cause of, arising within the system, 518. 
 
 sunstroke, 519. 
 
 to carriages, 538. 
 
 robbery, 520. 
 
 notice of, 539. 
 
 railway, 521. 
 
 1355
 
 INDEX. 
 [The references are to the sections.^ 
 
 ACCIDENT — continued. 
 
 total disability from, 522, 523. 
 
 by conveyance, travelling, alighting, on foot, limit of journey, negli- 
 gence, 524, 525, 528, 530. 
 
 negligence, wilful exposure, 530. 
 
 condition to be careful, 531. 
 
 increase of risk, change of occupation, 532, 533. 
 
 extent of risk, 534. 
 
 form and completion of contract in, 537. 
 
 amount of loss, insurable interest, 585. 
 ACCUMULATION of hazards is fatal, 237. 
 ACKNOWLEDGMENT of notice, 371. 
 ACT OF GOD, whether it excuses default, 335, 352. 
 ACTION by original assured directly against reinsurer, 12, note. 
 
 in case of double insurance the insured may sue one company or all, 
 13, and note. 
 
 may be brought, on the memorandum, if no policy has been issued, 
 22 A. 
 
 right of, suspended by war, 36, 37, 39, 39 A, 41. 
 
 parties to, where there is change of interest, 281, 445-447. 
 
 when it may be brought, 476, 478. 
 
 right to remove, 578. 
 ADDITIONAL USE avoids policy, 237. 
 
 ADJUSTMENT. See Loss. 
 
 equitable, after forfeiture, 572, 693. 
 by general agent, 138. 
 after forfeiture, 496. 
 
 ADMINISTRATOR, insurable interest of, 80, 91. 
 
 claims to proceeds of life policy as against creditor, 390. 
 on fire policy, as against heirs, 445. 
 
 AGE, representation as to, 188 A, 305. 
 
 AGENCY, how affected by war. See analysis, chap. iii. 6. 
 
 proof of, 126, 138, 138 A. 
 AGENT. See general analysis, chap, vii; see also Signature; Coun- 
 tersignature; Insured Mutual Companies. 
 
 authority to issue policy need not be proved by insured, 16. 
 
 to make subsequent oral agreement modifying policy inferred from 
 course of dealing, 24 A. 
 
 held not to cover a parol insurance intended to be final and not look- 
 ing to a policy, 23 D. 
 
 powers of, how affected by late civil war, 40. 
 
 provision that no agent can bind company by agreement, 62. 
 
 agreement with, to renew, 70 B. 
 
 knowledge of removal of property at time of renewal estops com- 
 pany, 70 a. 
 
 rights, powers, and duties generally, 118, 155. 
 
 1356
 
 INDEX. 
 [The references are to the sections.] 
 
 AGENT — continued. 
 
 powers ill soliciting risks, 119, 
 powers in taking application, 120. 
 in receiving premiums, 121, 
 of the insured, 122, 124. 
 how far person referred to is, 123, 
 is responsible for negligence, 124. 
 must be disinterested, 125. 
 authority of, what it appears to be, 125. 
 general and local, 125, 
 of stock and mutual companies, 127, 
 may bind the company by parol contract, 24, 127. 
 general, of stock company, 129. 
 may insure property out of his disti ict, 130, 
 may bind company by expression of opinion, 131. 
 and by his mistake, 131, 143. 
 
 knowledge of, imputable to principal, 131, 132, 143, 152. 
 representations and torts of, 133. 
 authority of, as to premiums, 134, 135, 
 may waive forfeiture, 136. 
 
 limitation of authority of, by terms of policy, 137. 
 authority after negotiations are concluded, 138. 
 of mutual insurance company, 139, 145, 149. 
 of company, whether agent of applicant, 140. 
 estoppel and waiver by act of, 141, 143, 150, 
 knowledge and mistakes those of principal, 142. 
 general, with unlimited powers, 151, 
 notice to, notice to principal, when, 152, 153. 
 sub and clerks, 154. 
 of accident insurance company, 155. 
 concealment by, imputable to principal, 213. 
 by the life insured, 214. 
 waiver of forfeiture by, 498-500, 
 acting in violation of instructions, 509. 
 collusion between, and insured, 513. 
 claim of, for commissions, 576. 
 of company, 
 V. the company, 
 
 discretion in cancellation as to time, 67 L. 
 
 cannot delegate discretion, 67 L. 
 
 responsible to company for giving notice of cancellation to 
 broker instead of assured, 67 L. 
 custom to do so will not protect him, 67 L, 
 
 commissions only on premiums earned, 67 L. 
 neglect of, 
 
 not prejudice assured, 67. 
 mistake of, 
 
 in notice of cancellation as to date not material, 68. 
 
 1357
 
 INDEX. 
 [The references are to the section8.i 
 
 AGENT — continued. 
 of assured, 
 
 power to cancel policy, 67 B. 
 
 to procure insurance not necessarily authorized to cancel, 67 B. 
 or to receive notice of cancellation, 67 G, 67 H. 
 broker, 67 H, 67 I, 67 L. 
 
 AGREEMENT for insurance, condition as to prepayment of premium 
 not implied, 22. 
 so as to indorsements, 23. 
 terms of, when not specified, 23. 
 when complete, 43. 
 to insure aud policy distinguished, 22, 23, 45. 
 
 ALEATORY CONTRACT defined, 5. 
 
 ALIENATION, 264-282. 
 1. defined, 264. 
 
 temporary, 101, 265. 
 entry for foreclosure not, 269. 
 by mortgagor, effect of , 276. 
 clauses in policies, 282 a. 
 conditional sale, not, 272. 
 by levy of execution, 274. 
 
 Change of title by sale, gift, marriage settlement, devise, any way 
 but by descent, 266. 
 is an alienation, and avoids the policy unless the insurers consent 
 to it expressly, or by implication from usage and the nature of 
 the case, as with a stock of goods ; see 265, 278. 
 absolute alienation suspends policy, and destroys it if title is out of 
 the insured at time of loss, whether there is an express stipula- 
 tion to that effect or not, 264. 
 a provision that the policy shall be "void" for alienation means 
 
 voidable, 264. 
 even descent is fatal if the policy is to be void for change of title 
 " by operation of law," 266. 
 if the alienation is only executory, or is without authority, or in any 
 way incomplete or a failure, the policy is not affected, 267 ; see 
 268-269 a. 
 so long as a scintilla of interest remains in the assured the policy is 
 good, 268. 
 unless the legal estate is retained on purpose to defeat the condi- 
 tions, 267. 
 executory agreement not, 267. 
 
 unconditional delivery of personal property is an alienation, 268. 
 the object of provision against transfer is to prevent diminution of 
 the interest which tends to prevent the insured from carelessness 
 or fraud, 273. 
 any change that substantially increases the motive to burn the prop- 
 erty is a violation of the provision, 273. 
 
 1358
 
 INDEX. 
 [The references are to the sections.] 
 ALIENATION — continued. 
 
 a change that increases the assured's motive for vigilance does not 
 avoid the policy though contrary to its letter, 275. 
 an alienation by a mortgagor after assignment of the policy with 
 consent of the insurers does not avoid the contract, 276. 
 2. A mortgage before complete and valid foreclosure, whether on real. 
 269, or personal, 270, estate, is not an alienation, 269, note, 269 
 at end, and 276 C. Contra, Indiana and Michigan, 269. 
 mere entry or commencement of foreclosure proceedings not fatal 
 276 C, 269 a. 
 unless expressly so agreed, 269 a, 276 C. 
 and even then knowledge of the agent may estop the company, 
 
 and entry of foreclosure between the application and the issue of 
 the policy may not be covered by its terms, 276 C. 
 foreclosure sale under valid mortgage is an alienation, 273. 
 
 not so under an invalid mortgage, 269 a. 
 if the period of redemption expires, consent of the mortgagee next 
 
 day to extend it cannot save the policy, 2713 C. 
 fire before foreclosure sale, though on same day, company liable 
 
 276 C. .7 r J , 
 
 pending foreclosure, insurance in favor of mortgagee and assigns, 
 
 company bound, 276 C. 
 foreclosure sale without deed or report of sale, not a transfer, 276 C. 
 "judgment in foreclosure" to avoid must be one that of itself 
 
 effects a transfer, 276 C. 
 mortgage held an "alteration of ownership" and an "alienation in 
 
 part," 271. 
 
 3. Conditional sale no alienation, nor, in equity, is an absolute sale if 
 
 intended only as security for debt, 272 ; and .see 264. 
 it is not necessary to have a defeasance dehors the deed recorded, 272. 
 
 unless it is re(iuired by statute, 272. 
 conveyance and reconveyance on trust for assured, not an aliena- 
 tion, neither is a lease, 272. 
 transfer from husband to wife through B. not fatal, 273 ; contra, 273. 
 
 4. Partners. Sale or mortgage or other transactions between partners or 
 
 joint owners not an alienation, accordmg to the best view, 279- 
 281 ; contra, 280. 
 no new interest or element of carelessness is introduced, 279. 
 but when this is done, as by taking in a new partner, the policy is 
 
 avoided, 279. 
 a renewal after the change is good, however, although the company 
 
 did not know of it, 279. 
 in such cases there is apt to be trouble about the proper parties to 
 the action, and it is best on change of partnership property to 
 assign the policy with assent of the insurers, 281. 
 transfer between co-tenants not fatal, 280; contra, 280. 
 levy of execution, 274. 
 VOL. 11.-42 1359
 
 INDEX. 
 [The references are to the sections.] 
 
 ALIENATION — continued. 
 
 5. alienation must be by the one having the insured interest, 267, end, 
 
 and 276. 
 transfer of one of several distinct parcels, 278. 
 " change of possession." 
 
 change of tenants not, 273 A. 
 nor possession under a revocable license, 273 A. 
 refers to "right of possession," 273 A. 
 a contract to sell, though with delivery and part payment, no aliena- 
 tion, 267, note, 276 B, and contra, 267, note, 
 sale, see next two heads. 
 
 6. Fatal Cases: 
 
 transfer in bankruptcy on insolvency, 264, 276 A. 
 
 sale on credit, 276 A. 
 
 sale and mortgage back, though vendor keeps possession, 276 A. 
 
 deed absolute and return deed giving life-right of occupancy to 
 
 vendor, 276 A. 
 sale to mortgagee, 276 A. 
 
 7. Cases not fatal: • 
 
 trust-deed, 276 B, or deed with trust back, 272, 
 
 a lease, 272, 276 B. 
 
 selling off a stock of goods, 265, 278. 
 
 sale by trustee to himself or for his benefit, 276 B. 
 
 sale after cause of loss though before actual loss, 276 B. 
 
 sale of part interest, 276 B. 
 
 sale of land under insured buildings. 276 B. 
 
 ultra vires sale by school committee, 276 B. 
 
 sham sale to cheat creditors, 276 B. 
 
 foreclosure ; see 276 C, and above under " Mortgage." 
 
 8. Entire Contract. Where the premium is entire, alienation or other 
 
 breach of condition in respect to a part of the property vitiates 
 
 the contract as to all, 277. 
 other cases hold however that a misrepresentation, sale, or other 
 
 breach of condition affecting only a part of the property merely 
 
 avoids the policy pro tanto, 278 
 true test, see 277, first note, 
 if each has its specific premium the policy really includes several 
 
 contracts, and the avoidance of one may not affect the others, 277. 
 and the same rule should apply where the premium is apportionable 
 
 on a clear and just principle, 277, note. 
 if the assured has acted in good faith he should not lose his whole 
 
 insurance by a breach as to part, unless such is the clear intent of 
 
 the agreement, or a just division of the contract is impossible. 
 
 9. Waiver, 282-282 B. 
 
 assent to conveyance cures all preceding, 282, but not subsequent 
 
 transfers, 282 A. 
 in general, assent of agent sufficient, 282 A. 
 
 not if policy requires indorsement, 282 A; contra, 282 A. 
 
 1360
 
 INDEX. 
 [The references are to the sections.] 
 
 ALIENATION — continued. 
 
 payment of dividend to partner after transfer to him is a, 282 A. 
 consent to corresponding assignment of policy is a, 282 A. 
 but indorsement " payable to" not, 282 A. 
 unless with knowledge of the facts, 282 A. 
 levy waived, 282 A. 
 and sale of land under house, 282 A. 
 knowledge of the agent and his omission of proper indorsement 
 
 estops company in case of ignorant applicant, 282 B. 
 parol evidence that policy was to be drawn to cover intended trans- 
 fer not admissible; suit should be for reformation, 282 B, New 
 York. 
 ALTERATION, known to assured before completion of the contract and 
 not disclosed is fatal, 43 G. 
 in machinery not a forfeiture, 178. 
 of circumstances pending negotiations, 190. 
 increasing and decreasing risk, 222-230. 
 in surrounding circumstances, 244. 
 extent permissible, 224. 
 materiality and extent of, 223, 224. 
 by strangers, 227. 
 at risk of insured, 227. 
 in modes of use, 230. 
 of ownership, 271. 
 
 an alteration may or may not be material, e. g. the substitution of 
 slate for shingles would not increase the risk, 222, while adding a 
 story to a house would, 257. 
 property removed ceases to be insured until replaced, 222 ; see also 
 
 188 A. 
 unless the change is so slight as to be unimportant, as from first floor 
 
 to basement, 222. 
 materiality of, 223 ; see also 225, 230, 261. 
 
 repairs necessary to the use of the i)roperty, and acts of ordinary 
 ownership such as are sanctioned by usage do not violate the con- 
 dition against alteration or increase of risk, 224. 
 the materiality of an alteration may be taken out of the region 
 
 of debate by agreement of the parties, 223. 
 substantial fid Jilmenl of the warranty sufficient, 223. 
 the opening of a new door, making a new closet, putting in a brick 
 floor, or an iron grate, changes tlie identity of the property, chamjes 
 the risk but does not materially increase the risk, 224. 
 if part of the change increases and another part decreases risk the 
 
 jury may strike the balance, 226. 
 a material alteration by a tenant or agent without knowledge of the 
 insured is fatal unless the terms of the policy otherwise express, as 
 where the increase is to be by "means within the control of the 
 assured," 227. 
 "premises" means building, 228; see also, 243, 239 B. 
 
 1361
 
 INDEX. 
 [The references are to the sections.] 
 
 ALTERATION — continued. 
 
 " alteration at risk of insured," 229. 
 
 a statement of present use not a warranty of its continuance, 231 ; 
 
 see also, 247, 248, 250-252, 157, 191. 
 an enlarged use for a permitted purpose does not avoid, 231. 
 AMALGAMATION OF COMPANIES. See Consolidation. 
 AMBIGUITY, in answers, 166. 
 
 AMOUNT OF RECOVERY from reinsurer, 11, 11 (z), 12, note. 
 ANSWER, question and, conclusive as to materiality, 185. 
 to special and general questions distinguished, 300. 
 equivocal, 212. 
 APPLICATION, what, 29. 
 
 when part of the policy, 29, 29 A, 29 C, 31, 159. 
 statutes requiring annexation of, to policy, 29 C. 
 diagram on back of, held not part of, on facts, 29 A. 
 only a proposal not a contract, 43 II. 
 
 delay in acting on it will not turn it into a contract, 43 H. 
 acceptance of, implies agreement to issue policy, 43, 44. 
 once accepted cannot be arbitrarily rejected, 54 C. 
 agent's knowledge of error in, 142 F; 133, 133 A; 133 B; 144, 
 141, &c. 
 see chap. vii. anal. 4, 5. 
 none is necessary, 167. 
 may modify policy, 168, 169. 
 oral statements subsequent to, 192. 
 as evidence, 579. 
 APPORTIONMENT, of insurance in first policy, destroyed by renewal 
 in gross, 70 a, note, 
 of loss, 427. 
 APPROVAL of application, 57, 58. 
 
 as a condition precedent to a completed contract, 43 F, 54-54 C. 
 notice of disapproval, 69. 
 ARBITRATION, condition as to, before suit on original policy no effect 
 on reinsurance, 12 B. 
 between a reinsurer who is liable to the assured and other reinsurers, 
 
 distributing the loss does not affect the assured, 12 note, 
 agreement to refer generally invalid, 492. 
 agreement to refer special matter valid, 493. 
 when provided for in charter, 494. 
 condition precedent, when, 495. 
 
 upon the written request of either party, 493 A (see 295, end). 
 equitable adjustment after forfeiture, 496. 
 discretion of directors, 496. 
 fraud, 496 a. 
 
 company may sometimes deny liability after award, 496 a. 
 waiver or estoppel by refusal to pay any sura, or proceeding to re- 
 pair, or bad faith, 496 B. 
 
 1362
 
 INDEX. 
 [The references are to the sections.] 
 
 ARBITRATION — continued. 
 
 award void if arbitrators exceed their powers, or do not conform to 
 
 conditions, 496 B. 
 arbitration upheld as an appraisement, 496 B. 
 
 if arbitrators first selected fail, a new selection should be made, 
 496 B. 
 ASHES, representations as to care of, 255. 
 
 ASSENT to assignment, 386, 377, 379, 378, 378 A, 382-385 A, 387. 
 See Assignment. 
 
 to contract. See Consummation. 
 ASSESSMENT. See Mutual Insurance, 2. 
 
 bond to pay, not necessary to complete contract, 43 C. 
 
 cannot be escaped by member of insolvent company by cancellation 
 of his policy, 67 A. 
 otherwise cancellation ends liability for future, 69 B. 
 
 condition allowing cancellation for nonpayment of, means legal as- 
 sessment, 67. 
 
 of deposit note not an incumbrance, 291, 292. 
 
 right of, strictly construed, 557. 
 
 slight errors in, do not invahdate, 558. 
 
 may include what, 559. 
 
 set-off against, 559. 
 
 in cases of insolvency, 559. 
 
 classification of risks and funds, 560. 
 
 notice of, 562. 
 ASSIGNEE, insurable interest of, 110. 
 
 rights under policy, 378, 379. 
 ASSIGNMENT. See Assignment after Loss and Assignment be- 
 fore Loss. 
 
 of policy and transfer of property, 72. 
 
 agent cannot consent to assignment of his own policy, 137. 
 
 mere soliciting agent cannot assent to, 138. 
 
 of policy, at common law, 377. 
 
 modes and effect of, 378. 
 
 what is, and what is not, 379, 389, 395. 
 
 in whole or in part, 380, 399. 
 
 of interest in policy, 381. 
 
 of interest of the assured, 381 a. 
 
 by consent, 382. 
 
 assent to, and approval of, 383, 385. 
 
 by insurer binds reinsurer, 12 B. 
 
 waiver of forfeiture by, 383, 384. 
 
 assent to, procured by fraud, invalid, 385, 397. 
 
 vitiated by fraud or undue influence, 385, 397. 
 
 condition against, does not apply after loss, 386. 
 
 nor to an assignment in bankruptcy, 386. 
 
 arbitrary refusal of assent to, 387. 
 
 limitation as to time, 387. 
 
 1363
 
 INDEX. 
 
 [The references are to the sections.] 
 
 ASSIGNMENT — continued. 
 
 of life policy, more favored than fire, 388. 
 requisites to, valid, 389. 
 of life policy by wife, effect of, 391. 
 delivery and possession of policy evidence of, 395. 
 notice of, 396. 
 
 to party without interest, void, 398. 
 of part, invalid, 399. 
 ASSIGNMENT AFTER LOSS — 
 is only an assignment of a debt, and 
 is always good in equity, subject to claims in set-off, &c,, against the 
 
 assignor before notice, 386. 
 the assignee stands in the shoes of the assignor as to breach of con- 
 dition also, 386. 
 of the ivhole amount is good without acceptance, 386. 
 is not a violation of the clause against transfer, although it reads 
 
 " before or after loss," 386. 
 nor within condition requiring assent, 386. 
 a prohibition of, is illegal, 386. 
 specific performance of, 386. 
 
 good without record or delivery against garnishment, 386. 
 ASSIGNMENT BEFORE LOSS. 
 1. Insurance other than Life. 
 
 the common law would not permit the assignment of a chose in 
 
 action; equity however upheld the transaction, 377. 
 if the debtor assents to the assignment and agrees to pay the 
 
 assignee, a new contract arises, 377. 
 the peculiar nature of insurance brings an element into the 
 problem of transfer not existing in most cases. A policy in 
 a contract of indemnity for the loss of a valuable interest, and 
 subject to avoidance by the violation of any one of numerous 
 conditions. 
 
 (1) Now if the policy is assigned without a transfer of the in- 
 terest it protects, it is clear that, even though the company 
 may assent, there is no complete transfer, as in case of the 
 assignment of a note, 379. 
 
 the assignor is still the person assured, for he is the one who 
 
 possesses the insurable interest, 378. 
 the " assignment " so called is a mere designation of the 
 
 payee. He may have an interest in the property or not, 
 
 but he has not the interest that was insured, 382, 378 A. 
 as between the parties to the assignment, however, it creates 
 
 an equitable lien on the funds, 380. 
 although the transfer is only as collateral, before loss, and to 
 
 one without interest, 386. 
 
 (2) If the interest insured, as well as the policy, is ti'ansferred 
 to the assii^nee^ with assent of the company, a new contract 
 is formed with the assignee, 378, 378 A. 
 
 1364
 
 INDEX. 
 [The references are to the sections.] 
 
 ASSIGNMENT BEFORE LOSS — continued. 
 
 and any subsequent breach of condition on the part of the 
 
 assignor will not aft'ect the assignee, 378, IJTb A. 
 
 and he can sue in his own name, o8l. See also o83-38t. 
 
 it has even been held that an assignment as collateral, witli 
 assent, to one waiving a lien on the goods, will not be af- 
 fected by fraud of the assignor, 378 A. 
 
 in marine insurance custom allows the transfer of a policy 
 ■with the subject-matter without special assent of the com- 
 pany, 377. 
 
 2, Life Insurance. 
 
 a man may take out a policy on his own life, and make it pay- 
 able to any person he chooses as beneficiary, 112. 
 there is, however, a strong dispute on this question of assign- 
 ment to one without interest in the "life," some authorities 
 maintaining that assignment to one without interest is 
 " open to all the objections that can be raised against the 
 original taking out of insurance by one with uo interest," 
 398, and note. 
 if the transfer is to one with an interest, 398, and is free from 
 
 fraud, 397, it is good, 388. 
 if the company waives the want of interest, the assignor can- 
 not object, 398 A; but an heir may object that the assign- 
 ment is invalid in form, 399 B. 
 What is .an assignment? 379, 395. 
 
 a transfer that will be upheld and will carry rights to the trans- 
 feree is not always held to be a transfer that will avoid the 
 policy under the clause against assignment, 379. 
 an intent to transfer is not an assignment, 379 note. 
 a part transfer as collateral not fatal, 379 note. 
 a provision against assignment as collateral means ivithout trans- 
 ferring the property, 379 note, 
 assignment of all property to creditors does not carry a policy, 
 379, 391 B, 386. 
 
 contra, 379 note. 
 indorsement " pay to A. B." not a fatal assignment, 379 note. 
 3. Consent, 382-385, 385 A., 387. 
 in writing. Indorsement. 
 
 attesting by agent sufficient, 385 A. 
 paper attached by wafer sufficient indorsement, 385 A. 
 assent to assignment of policy after transfer of property suf- 
 ficient, 385 A. 
 oral promise to indorse not enforceable after loss, where in- 
 sured neglected to take policy for indorsement before loss, 
 385 A. 
 receipt as assessments from assignee no waiver of condition 
 as to written assent, 385 A. 
 
 1365
 
 INDEX. 
 [The references are to the sections.] 
 
 ASSIGNMENT BEFORE LOSS — continued. 
 
 consent of no avail if facts are withheld that might have 
 
 prevented assent, 385 A. 
 company cannot arbitrarily refuse, contrary to the spirit of 
 the policy, 387. 
 4. General. 
 
 Assignment in whole or part, 380. 
 
 assignment as collateral is fatal if policy provides against 
 
 assignment in whole or any interest under it, 380. 
 the intent to transfer the whole chose must be manifested 
 by action appropriate to the circumstances, i. e., delivery 
 of the document securing it, to the assignee or to some 
 one for him if it is possible, 389. 
 assignment of part without assent invalid, 399. 
 disposition of proceeds, creditoi's, children, wife, heirs, admin- 
 istrator, conflict of claims, 390. 
 assignment by married woman, rights of children, 391. See 
 
 also 392. 
 if the interest of the insured is transferred to C, and then 
 the policy to B., the latter cannot recover, even though the 
 company consented, and B. was a mortgagee ; his own in- 
 terest was not insured by the consent, and the old interest 
 back of the policy was divorced from it, 378 note, 
 so an assignment after the assignor's lease has expired will not 
 
 bind the company to pay the assignee, 378 note 
 a defective assignment may take effect as a designation to pay, 
 
 378 note, 
 possession, delivery, &c., 395. 
 
 delivery to another for the donee is sufficient, 378 note, 
 when the " life " may assign, 391. 
 husband and wife, 391 A., 390-394. 
 creditors, 391 B, 390-394. 
 beneficiaries, 390-394, and next chapter. 
 in whose name suit is to be brought, 393, 381, 378. 
 
 one may have the right to sue, but not to use proceeds, 393. 
 a policy may be drawn payable to A. or his assignees, 399 A« 
 assignee causing death, 399 A. 
 notice of transfer, 396 (life). 
 
 one may be held as a trustee in respect to a policy, 393, 399 A. 
 assignment as collateral gives equitable lien on proceeds with- 
 out regard to assent, 380, 386. 
 assignor of collateral must pay premiums, 399 A. 
 
 they may be added to mortgage, 399 A. 
 assignee in bankruptcy can recover from the bankrupt only the 
 value of the policy, and not what the company may have paid 
 him, 399 B. 
 fraud, 385, 397. 
 violation of conditions by assignor, 378 A., 379, 381, 386, 452 D. 
 
 136G
 
 INDEX. 
 
 [The references are to the sections.] 
 
 ASSIGNMENT BEFORE LOSS — continued. 
 
 measure of damages he must pay assignee, 399 B. 
 
 damages for breach of agreement to assign, ;]99 B. 
 
 bequest, devise, donatio causa mortis, &c., o99 C, 392. 
 
 transfer of assured's interest, 381, 381 a. 
 ASSIGNOR, defaults of, imputable to assignee, 379. 
 ASSURED, mistake as to identity of, not fatal, 43 D. 
 
 agent of. See Agent and Agents. 
 ATTACHMENT, may be an incumbrance, 291. 
 ATTENDANT medical, 304. 
 ATTENDING PHYSICIAN, 467. 
 AUTHORITY. See Agent, 7. 
 
 AVERAGE, general, rule as to, not applicable in fire insurance, 421 a, 
 
 438. 
 
 AWARD. See Arbitration. 
 
 B. 
 
 BAILEE, insurable interest of, 80, 81, 95. 
 BANKRUPT has insurable interest, when, 187. 
 
 BANKRUPTCY AND INSOLVENCY, does not deprive wife and chil- 
 dren of proceeds of policy, 451. 
 
 conflict of laws. Assignment in domicil takes precedence of attach- 
 ment in another State, 592. 
 
 status of the company and powers of court, 593. 
 
 powers and duties of assignees and receivers, 594. 
 interest that passes to receiver, 594. 
 status of the policy holder, 594. 
 
 distribution of assets, 594 a. 
 
 priority of claims, 594 a. 
 
 the measure of a policy holder's claim, 594 a. 
 
 death after insolvency, 594 a. 
 
 paid-up policies, 594 a. 
 
 compensation of receiver, 594 a. 
 
 set-off, 595, 59n. 
 
 rule on this subject as affected by insolvency, 596. 
 
 cessation of business, 597. 
 
 selling out to another company, 597. 
 BARRATRY, 411 A. 
 BAWDY HOUSE, 245. 
 
 BELIEF, expression of, no warranty, 161, 188 D, 296. 
 BELLIGERENT FORCES, death by, 332. 
 BELLIGERENTS, power to contract, 36-41. 
 
 1367
 
 INDEX. 
 [The references are to the sections.] 
 
 BENEFICIARIES. 
 
 1. General. 
 
 insurable interest of, 112, 113. 
 
 consent of, necessary to a valid cancellation, 67, 67 C. 
 
 indorsement " loss payable to B." is equivalent to an assignment 
 
 with assent, 399 D. 
 if A. agrees to insure for B.'s benefit, equity will protect B. to 
 
 the extent of his interest, and alter notice the company will 
 
 pay A. at its peril, 399 D. 
 two or more named as beneficiaries take equally, 399 D. 
 one of several may assign to extent of his interest, 399 D. 
 right of action, 399 D. 
 
 2. Designation. 
 
 in the absence of provision to the contrary, any person may be 
 named as beneficiary whether interested in the life or 
 not, 399 E. 
 although the charter describes the company to be for the 
 benefit of widows and orphans, 399 E. 
 a policy for the benefit of one not a relative nor interested in the 
 life is not against »mW(c policy, 399 E. 
 
 contra, 399 E. ; and see Mich, case, 399 F. 
 and if it were, only the insurer could object, 399 E. 
 sometimes express permission is given to designate any person 
 
 whatever, 399 E. 
 if the charter and by-laws limit the right of designation, or express 
 the method of doing it, the provision must be conformed 
 to, 399 F. 
 in some cases, however, only the company can object, 399 F. 
 subsequent marriage revokes designation ('?), 399 H. 
 if the insured makes no successful designation, the fund goes to 
 fulfil the Jirst purpose named in the charter (widow), 
 399 F, 390. 
 if no specific purpose is so named, the fund belongs to the 
 company, 399 F. 
 courts are liberal in upholding a designation, 390, 399 I, 399 O. 
 administrators of assignee and of creditor, 390. 
 child, 399 F., 390, dying in life of father, 399 N. 
 
 under the words " my wife Mary and children," a child 
 by former wife takes, 399 G. 
 but not jNIary's child by another, 399 G. 
 " child " will not include grandchild, 399 G. 
 
 contra, 399 G. 
 except to keep funds from escheating to company, 399 G. 
 may mean adopted child, 399 G. 
 dependants, 399 E. 
 
 family, 399 N, may include housekeeper, 399 F. 
 " friends," invalid designation, 399 H. 
 grandchild, 399 E, 399 G. 
 
 1368
 
 INDEX. 
 [The references are to the sections.] 
 
 BENEFICIARIES — continued. 
 
 heirs, 399 H. 
 
 mother, 399 H. 
 
 uncle, 399 H. 
 
 widow, 399 F, 899 H. 
 
 wife, 399 M, 390, 391, dying in life of husband, 399 N. 
 Form of designation. 
 
 by indorsement required by charter, 399 F. 
 
 by will, 399 J, 399 F, 399 O. 
 
 bv entry on records, 399 F, 399 I. 
 
 the substance will be looked to, 399 I. 
 
 and a parol designation may be sustained, 399 I. 
 
 but not to show that the declarant meant to keep the benefit for 
 himself, 399 I. 
 
 a transfer to the wife recorded is the same as an original desig- 
 nation, 399 I. 
 
 direction on back of policy sufficient, 399 1. 
 
 error in naming not material if not misleading, 399 K. 
 Possession of policy and receipt of a relative may be a defence to 
 company against beneficiary if so provided, 399 K. 
 
 3. The Interest of the beneficiary is a vested one the moment the 
 
 policy is issued, unless the agreement contains a provision 
 inconsistent with such a construction, and neither the person 
 procuring the insurance nor the company, nor both, can by 
 deed, will, or other act divert that interest (390, 391, 392, 
 399 L, 399 P, 399 Q; contra, slight authority, 391). 
 
 except by breach of condition without collusion, 399 L. 
 
 nor change it without consent of the beneficiary, at least so long 
 as he lives, 399 L. 
 
 some cases hold the interest is his not only irrevocably for his 
 life, but in such sense as to pass to his heirs or representatives, 
 though he die before the assured, 390. 
 
 admissions of the assured are not those of the beneficiary, 399 L. 
 
 only the beneficiary can surrender the policy, or put a charge on 
 it, 390, 399 P. 
 
 the beneficiary holds against creditors of the assured, 390. 
 
 the company cannot set up the rights of creditors, 390. 
 
 where the contract expressly permits change of beneficiary, there 
 is no vested interest until the death of the assured, 399 M. 
 
 4. Death of beneficiary before the assured, 399 N; (see also 391). 
 
 revokes appointment, and a new one may be made, 399 N. 
 
 unless the contract gives the benefit to the heirs or representa- 
 tives of the first beneficiary, 399 N. 
 
 or otherwise provides for the contingency, 399 N". 
 
 share of tlie deceased goes to other beneficiaries, 399 N. 
 
 the terms of the contract govern, 399 N. 
 
 if the beneficiary is dead at the issue of the policy, the appoint- 
 ment is a nullity, 399 N. 
 
 1369
 
 INDEX. 
 [The references are to the sections.] 
 
 BENEFICIARIES — continued. 
 
 5. Chauge of beneficiary, 399 O; (see also 390.) 
 
 retaiuiug possession of thie policy is evidence that the trust was 
 revocable, 399 O. 
 
 unless the assured is one of the contingent beneficiaries ; then 
 his keeping it is natural, 399 Q. 
 
 the method prescribed by the charter or the policy must be fol- 
 lowed, 399 O. 
 
 but the courts will not let tliird persons take advantage of slight 
 informalities (Iowa contra), 399 O. 
 
 equity will relieve where the assured has done all he could, 399 O. 
 
 and will even complete the chauge after his death, 399 O. 
 
 the company may waive defects, and their own neglect to com- 
 plete the formalities will not protect them, 399 O. 
 
 •where the reason for naming the first beneficiary has ceased, 399 O. 
 
 ■where the certificate demanded by the company was lost, 399 O. 
 
 the rule requiring surrender of the certificate does not apply 
 when it is lost, 399 O. 
 
 6. Surrender of the policy without assent of the beneficiary, and even 
 
 non-payment of the premiums after such surrender, cannot 
 affect the beneficiary where he has a vested interest, and he 
 can follow a policy substituted for the old one, 399 P. 
 
 7. Husband and Wife, 399 Q; see also 390, 391, 391 A, 394. 
 
 assignment of policy by wife, 399 Q ; see also 390, 391. 
 
 N. Y. laws, 399 Q. 
 
 receiving part of fund from assignee a ratification, 399 Q. 
 
 ratification by wife of policy taken in her name by husband 
 
 without authority, 394. 
 Georgia, 399 Q. 
 Tennessee, 391. 
 BENEVOLENT ASSOCIATIONS, when insurance companies, 550 a. 
 BENZINE, included in stock of county store, 233, note. 
 BEQUEST, of policy, 392, 399 C. 
 BETROTHED, insurable interest in life of person to whom she is 
 
 engaged, 107. 
 BILL IN EQUITY, to reform policy. See Equity. 
 BINDING BOOK, 44, 59. 
 BLANKS may be left in policy for name of insured and filled any time, 
 
 27. 
 BLOOD-SPITTING, 298. 
 
 " BOARD " understood to be " Brick " no contract, 43 F. 
 BOND, for support, not an incumbrance, 292. 
 contra, 292, note, 
 nor bond to convey, 292, 
 BROKER, as agent to receive notice of cancellation, 67 H, 67 I, 67 L. 
 how far agent, 123, 124 A. 
 to procure assurance is agent of assured, 213. 
 
 1370
 
 INDEX. 
 [The references are to the sections.] 
 
 BROKER — continued. 
 
 but cannot receive notice of cancellation for assured, 67 H, (57 L. 
 unless usage so determines, 67, 07 I, fi7 L. 
 or the policy so declares (?), 67 I, 67 II. 
 BRONCHITIS, chronic, representation as to, 298. 
 BROTHER, sister's interest in life of, 103. 
 BUILDING, description of, as brick, 262. 
 
 what it includes, 420. 
 BURNING, threats of, or attempts at, 208, 209. 
 
 wilful, evidence of, 583. 
 BY-LAWS. See Charter. 
 
 and charter, effect of, on rights of parties, 62-64. 
 
 how far may be waived by officers of company, 146-147. 
 
 c. 
 
 CANCELLATION — 
 
 requires agreement, reserved right, or some fact on which equity can 
 act, 67, 67 A, 67 M. 
 abandonment by the assured not assented to, no effect, 67. 
 
 1. By agreement distinct from the policy 
 
 a compromise involving surrender and cancellation terminates 
 
 the contract, 67 A. 
 a receipt acknowledging, may be rebutted if without considera- 
 tion, 67 A. 
 member of a mutual company cannot escape assessments by can- 
 cellation after the company is insolvent, 67 A. 
 may be affected by agent of assured, 67 B. 
 
 partner's assent to, conclusive on firm, 67 B. 
 agent cannot keep such policy alive for himself, 67 B. 
 an agent to procure insurance does not necessarily have 
 authority to consent to cancellation, 67 B. 
 assent of beneficiary necessary, 67, 67 C. 
 
 2. Under conditions named in the contract, 
 
 construction of these is strict, 67, 69. 
 the right must be exercised before loss, 67. 
 by bringing suit, 67. 
 Notice : 
 
 must be reasonable, 67 D, 67 L. 
 
 must be unconditional demand, not a mere expression of 
 desire, 67 D. 
 
 must be in present tense, 67, 67 D. 
 
 length of time before cancellation, 68. 
 
 to the company's agent to cancel is operative as soon as the 
 assured knows of it, 67 E. 
 
 1371
 
 INDEX. 
 [The references are to the sections.] 
 
 CANCELLATION — continued. 
 
 and a subsequent agreement with the agent to continue the 
 
 policy is void, 67 E. 
 by mail, 67. 
 by bringing suit, 67. 
 mistake in, not fatal, 68. 
 
 3. To whom notice must be given, 
 
 assured or his authorized agent, 67 F. 
 
 finding notice among assured's papers after his death not suffi- 
 cient, 67 F. 
 notice to general agent of assured sufficient, 67 F. 
 
 although same person was agent for company, 67 F. 
 notice to special agent for procuring the insurance not good, 67 G. 
 
 e. g. broker, 67 H, 67 L. 
 unless custom makes broker agent to receive notice, 67, 67 I ; 
 see 67 L. 
 or the policy declares he shall be deemed the agent of as- 
 sured (?), 671, 67 H. 
 to one of two persons severally interested does not affect the 
 other, 67. 
 
 4. Return of the unearned premium is also usually a condition of can- 
 
 cellation, 67, 67 J. 
 if a premium was paid to the company, actual tender of the 
 
 return premium is necessarj^, 67 J. 
 except where the cancellation is by agreement, 67 K. 
 a credit unassented to is insufficient, 67 J. 
 but if no premium was paid, as where credit was given, no 
 
 return is necessary, 67 K. 
 if only a note was given the return premium is a credit on it, 
 
 67 K. 
 agent retaining premium after notice of disapproval, with assent 
 of assured, will not save the insurance, 69. 
 For non-payment of premium must be before tender of the premium; 
 
 Canada statute, 67. 
 For refusal to pay assessment, means legal assessment. 
 
 5. The company versux its agent, 67. 
 
 where the time to be allowed the assured to get new insurance 
 
 is left to the agent and he allows three days, there is no such 
 
 abuse of discretion as will make him liable to the company, 
 
 67 L. 
 
 but delay of five days in communicating with assured, agent 
 
 responsible, 67 L. 
 agent cannot delegate discretion of cancellation, 67 L. 
 agent is responsible to company if he gives notice to broker, 
 instead of assured, and .so fails to cancel, 67 L. 
 and evidence of a custom to do so, will not be received in 
 
 his favor, 67 L. 
 agent has commission only on premiums earned, 67 L. 
 
 1372
 
 INDEX. 
 [The references are to the sections.] 
 
 CANCELLATION — continued. 
 
 6. Of policy will be decreed in equity, 
 
 wliere the assured had no interest, 67 M. 
 
 where the policy was obtained by fraud, 67 M.^ 
 
 but not for intemperance, 07 M., the assured may reform. 
 
 7. Mistake of agent in notice in designating date of cancellatiou not 
 
 material, 68. 
 neglect of agent not prejudice assured, 67. 
 
 cancellation of interim receipt, or contract, subject to approval, 
 69. 
 agreement with agent after notice of disapproval to the as- 
 sured, will not save the contract, though the agent retains 
 the premium, 69. 
 an agreement without consideration, subsequent to delivery 
 of a policy, will not turn it into a contract, taking effect 
 only on approval, 69. 
 by general agent, 138. 
 effect of, on premium note, .555. 
 right of, strictly construed, 573, 574. 
 
 not obtainable by one who has allowed another to take out a policy 
 on his life, 566 C. 
 CAPTOR has insurable interest, 80. 
 CARE of premises insured, representation as to, 250-255. 
 CARPENTERS, repairs by, 240. 
 CARRIER, insurable interest of, 80, 94, 94 A. 
 
 right of subrogation. See Subrogation, 3. 
 CASUALTY of war, death by, 396. 
 CAUSE, PROXIMATE, of death, 301. 
 
 of loss by fire, 403, 412, 415, 416, 418, 419, 459. 
 of loss by explosion, 413. 
 of loss by collision, 416, 417. 
 CERTAINTY necessary in terms of insurance and renewal, chap, iii., and 
 
 70 B. 
 CERTIFICATE of magistrate, necessary when, in preliminary proof, 466. 
 
 of secretary, evidence of contract, 24. 
 CESTUI QUE TRUST, insurable interest, 82. 
 CHANCERY. See Equity. 
 CHANGE. See Alteuation. 
 
 of circumstances, &c., during negotiations, 190, 218. 
 
 after contract, 157, 191, 208, 231, 244, 247, 248, 250-252. 
 of beneficiary. See Benkficiary, 5. 
 CHARTER AND BY-LAWS, effect of, on rights of parties, 66. 
 
 though only mentioning written contracts may not exclude parol, 15. 
 even though charter prohibits parol contracts they may not be void, 
 
 15, 23, 23 D. 
 formalities omitted, lo, 16, 17, 23, 23 D. 
 
 1373
 
 INDEX. 
 [The references are to the sections.] 
 
 CHARTER AND BY-LAWS — conti7iued. 
 
 requiring wiitten policy does not affect the usual preliminary oral 
 
 agreements, 23 D. 
 ought not to be deemed known to the general public, 23 D. 
 effect of, on completion of the contract, 62-64 A. 
 violation of, by over insurance not fatal, 376. 
 effect upon method of designating beneficiary, 399 F. 
 CHILD, insurable interest in life of parent, 106, 107. 
 rights in life policy of parent, 391, 302, 393. 
 as beneficiary, 390, 399 F, 399 G, 399 N. 
 CIVIL COMMOTION, loss by, 433. 
 CLASSIFICATION, of risks, 232, 560. 
 
 of funds, 560. 
 CLERKS AND SUB-AGENTS, powers of, 154. 
 COLD is not sickness, 178. 
 
 COLLATERAL, assignment as, 380,386, 399 A. 
 COLLISION, loss by, 417. 
 COMMISSION, goods held on, 421, 424. 
 
 COMMISSIONS, only on premiums earned, not on what is returned in 
 case of cancellation, 67 L. 
 right of agents to, 576. 
 COMMISSION MERCHANT, insurable interest of, 95 A. 
 COMMON CARRIER has insurable interest, 80. 
 COMPANY. See Insurer. 
 
 must be designated or no contract is made, 43 F. 
 COMPANY V. AGENT. 
 
 Company may recover difference between premium charged, and 
 what ought to have been charged if agent had disclosed facts, 
 138 B. 
 agent no claim because his term of office is broken by insolvency of 
 
 company, 138 B. 
 agent exonerated by honestly adopting one of two possible inter- 
 pretations of an order from company, 138 B. 
 Cessation of agency : 
 
 when company goes out of business, 138 C. 
 
 proofs sent to one who has ceased to be agent good if assured no 
 
 notice, 138 C. 
 promise to renew by such agent only makes him personally lia- 
 ble, 138 C. 
 annual license to company in name of agent gives him no right 
 to hold to end of year, 138 C. 
 Agent's authority may be limited by the terms of the application and 
 the policy, 137. See 140. 
 COMPLETION OF CONTRACT. See Consummation. 
 COMPROMISE, 
 
 involving surrender and cancellation, 67 A. 
 
 1374
 
 INDEX. 
 [The references are to the sections.) 
 
 CONCEALMENT, by reinsured, 11 (z). 
 of the cliaracter of the assured, ll(z)- 
 of double insurance. 11 (z). 
 
 disclosure ia general terms not enough, the information must be spe- 
 cific, ll(z). 
 dissent, ll(z) 
 
 1. Effect of change of circumstances pending negotiations, and after, 
 
 190, 191. 
 defined, 200. 
 
 when fact is unknown, 201, 202. 
 or not believed to be material, 202. 
 general statement of facts sufficient, 209. 
 what facts must be disclosed, 208, 215. 364. 
 answers to equivocal interrogatories, 210-212. 
 of symptoms of disease, or habits tending to shorten life, 295-300. 
 the burden of proof as to mateiiality is on the company, and the 
 question is for the jury, 200. 
 expert may be asked if the fact would increase the premium, 
 200, note. 
 if truth and fulness are warranted the questions of intent, inadver- 
 tence or ignorance do not arise, 201, 206. 
 the knowledge of his agent of a fact unknown to the insured 
 
 has been imputed to him to avoid such a policy, 201, 206. 
 where the agent does not act in the transaction to which the 
 notice relates his knowledge is not imputed to the principal, 
 122, note, 
 the better opinion does not hold the insured for lack of stating 
 what he without fault does not know, or what he has a right 
 to believe immaterial, presuming him to know and believe 
 what men of ordinary intelligence know and believe under 
 similar circumstances, 203. 
 knowledge of the insured a question for the jury, 202. 
 cases harmonized on their facts, 203, 205. 
 
 2. Facts known to the insurer or his agent or which ought to be known to 
 
 him, and facts which lessen or do not increase the risk and re- 
 motely connected details not inquired about, need not be 
 stated, 207. See also 215 B. 
 
 if inquiry is made, concealment is fatal though the fact is not 
 material, 207. 
 
 the knowledge of the company must be as definite as that of the 
 assured to excuse non-disclosure, 207. 
 
 if a fact concealed comes to company's knowledge before issue of 
 policy it is bound by the issue, 207. 
 
 if no inquiries are made the insured's intent is an essential ques- 
 tion, 207. 
 
 less strictness in fire than in marine insurance, 207. 
 threats of burning or attempts to set on fire the house insured, or a 
 neighboring one, must be disclosed, 208. 
 VOL. II. - 43 1375
 
 INDEX. 
 [The references are to the sections.] 
 
 CONCEALMEXT — continued. 
 
 informing the agent is sufficient if no questions are asked in the 
 
 application, 208. 
 facts occurring after issue of a policy, 208. 
 a general statement of the facts sufficient to put the insurers on 
 
 inquiry is enough, 209. 
 mere idle talk not worthy of the regard of a prudent person 
 
 need not be communicated, 209. 
 
 3. When there is room for opinion, an honest view such as a man of 
 
 ordinary prudence and intelligence would take under the cir- 
 cumstances, though an erroneous one as it may afterward 
 prove, is no misrepresentation, especially if the company's 
 agent arrived at a similar judgment, 210, 211. 
 as "What houses endanger the one insured?" or "Is there a 
 livery-stable in vicinity ? " or " Have you had any serious ill- 
 ness? " or "one tending to shorten life ? " 210, 211. 
 an equivocal answer, or statement of only part of the truth may be a 
 
 concealment, 210, 212. 
 agent's concealment imputed to principal, 213. 
 
 but one simply referred to by the insured, who merely states his 
 belief in their truth, cannot prejudice him by misrepresenta- 
 tions or concealment unknown to him, 213. 
 broker to procure is agent of assured; one insurance agent going 
 to another of his own notion, not, 213. 
 Where A. insures the life of B., statements concerning his health 
 by the person whose life is insured (B.) may be admissible as a 
 part of the res geslce, 214. 
 ordinary diligence in sending information is all that is required, 
 though a special message might have saved the company, 215 D. 
 
 4. Matters not material, unless made so by agreement or inquiry, 207, 
 
 21.5 C, 364. 
 prior insurance, 207. 
 
 threat of burning some months before during election excite- 
 ment, 208. 
 
 idle talk. 209. 
 character of tenants, 207. 
 
 or of adjoining buildings, 207. 
 erection of new building, 207. 
 personal dislike to insured, 207, 215 B. 
 pending litigation, 207. 
 
 how building is heated or lighted, 207, 215 B. 
 void tax title, 207. 
 damaged goods on board, 207. 
 minor details, 207. » 
 
 matters open to general observation, 208. 
 insured's opinion as to derangement of functions, 215. 
 incumbrance in case of insurance in stock company, 215. 
 insured insolvent, 215 B. 
 
 1376
 
 INDEX. 
 [The references are to the sections.] 
 
 CONCEALMENT — continued. 
 
 risk in same block declined, 215 B. 
 
 agreement between mortgagor and mortgagee as to payment of 
 
 premium, 215 B. 
 brick oven, 215 C. 
 fact decreasing risk, 215 C. 
 sensations, apprehensions, 215 C. 
 opinions, 210, 211. 
 
 disclosure of fact in reference to which there is a warranty, is 
 unnecessary, 215 C. 
 Material facts : 
 
 threats of burning in general or attempts to set the house or a 
 neighboring one on fire, 208 ; but see 207. 
 idle talk not material, 209. 
 single woman had child year or two before (?) 215. 
 pregnancy, 215. 
 
 incumbrance in case of mutual insurance, 215. 
 prior applications, 215, but see 188 C. 
 warehouse erected within forty-one feet, 215 A. 
 benzine in adjoining building, where policy prohibits, 215 A. 
 probable loss of vessel, 215 A. 
 Materiality a quest ion for jury: 
 
 carpenter work going on, 207. 
 double occupancy of house, 207. 
 assured in prison, 215. 
 insane twenty years before, 215. 
 release of carrier from liability, 215 A. 
 in France, where concealment not sufficient to avoid policy the com- 
 pany may deduct the additional premium that would have been 
 charged if the truth had been known, 215 B. 
 CONCUSSION, loss by, 411. 
 CONDITION. See Arbitration ; Limitation. 
 how affected by war; see analysis chap. iii. 5. 
 as to prepayment of premium, when not implied, 22. 
 as to indorsements, when not implied, 23. 
 of cancellation, see chap. v. anal. 2 et seq. 
 surrender on, incomplete till condition is fulfilled, 69 B. 
 precedent, what amounts to, 161, 188, note, 495. 
 to be careful, 531. 
 
 working forfeiture construed strictly, 162, 170, 171, 175. 
 statutory modifications of, 180 a. 
 reasonable, what, 180 a. 
 presumption of knowledge of, 216. 
 
 breach of condition renders the contract voidable not void, 216, 365. 
 two classes of stipulations, those relating t6 matters prior to loss 
 and determining the risk, and those relating to matters arising 
 after the loss, and relating to its establishment, adjustment, and 
 recovery, 217. 
 
 1377
 
 INDEX. 
 [The references are to the sections.] 
 
 CONDITION — continued. 
 Watchman, 250-252. 
 
 no implied obligation to keep watch in a vacant house, 248. 
 absence of watch at meals, 251. 
 one who sleeps not a " watchman," 252. 
 
 warranty of " watchman on premises " is fulfilled if he is on ad- 
 joining premises in better position to watch than if in the mill, 
 252. 
 working of mills, hours of running, 253. "Constantly worked" 
 means during ordinary hours, 253. " Worked by day," no 
 breach if engine works at night, 253. 
 stoppage for repairs, 253. 
 condition a<;ainst ceasing operations not broken by stop because of 
 epidemic, or permitted repairs, nor by suspension of part of 
 the business, unless the condition expressly and undoubtedly 
 includes such stoppage, 253 A. 
 agent's knowledge before issue of policy that a factory or dis- 
 tillery is run at night, &c., estops the company to set up the 
 condition against such running, 253 B. {Contra, Massachu.setts 
 and probably some other States , see 145 et se<].) 
 but agent's knowledge of, or even company's verbal assent to, an 
 intention to do an act in the future, will not estop it. 253 B. 
 " mill examined after work." At what time work ceases question 
 
 for jury, 254. 
 warming , care of stoves ; ashes to be put on brick not wood ; iron 
 
 shutters, 255. 
 covenant to keep books in safe at night means after business hours, 
 ^63 A. 
 adjuster may waive the covenant, 263 A. 
 agreement to keep stock up, failure not fatal if stock gets below the 
 
 insurance, for the company is benefited, 2G3 A. 
 agreement not to question application after death excludes evidence 
 
 of fraud, or misrepresentation, 263 A. 
 policy to be void if building falls, not void by part falling, 263 A. 
 substantial compliance with conditions is sufficient, 263 B. 
 company estopped if performance is prevented by itself, 263 B. 
 failure of collateral agreement to give company all his insurance, not 
 
 fatal unless so expressed, 263 B. 
 condition valid though ill worded, 263 B. 
 
 no expert evidence as to matter of common experience, 263 C. 
 custom will not determine question of increase of risk, 263 C. 
 burden of proving breach is on company, 263 C. 
 in Canada standard conditions are fixed by statute, 263 D. 
 the Massachusetts Public Statutes provide a very good standard 
 policy. Such statute conditions may however be varied by the 
 parties, 263 E. 
 CONDITIONS PRECEDENT. See Coxsumm.\tion 
 CONDITIONAL sale no alienation, 272. 
 
 1378
 
 INDEX. 
 
 [The references are to the sections.] 
 
 CONSENT of directors to other insurance, how signified, 371. 
 
 CONSIGNEE, has insurable interest, 80, 95 A. 
 has ckxim for loss, 521, 520. 
 
 CONSOLIDATION, 
 
 new company taking all risks of an old one, 12. 
 
 CONSTRUCTION. See chap. viii. anal. 3, 4. 
 liberal to secure indemnity, 2. 
 what law governs, 66, 66 A. 
 
 of right to cancel by notice is generally strict, 67, 69. 
 rules of, 172-180. 
 
 favorable to object of contract, 174. 
 of language against those using it, 175. 
 of condition against other insurance, 367. 
 
 CONSUMMATION OF THE CONTRACT, 
 
 1. the minds of the parties must meet on the terms and all conditions 
 
 precedent be fulfilled, 43-43 H, 44-45 a, 50-52. 
 terras may be fixed by past dealings, 43 B. 
 
 the contract may be complete without payment of premium or giving 
 bond to pay assessments, 43 C. 
 and in spite of mistake in the name of vessel, 43 D. 
 or error of agent as to identity of insured, 43 D. 
 
 or by charging less premium than he ought, 43 E. 
 an agreement to give policy on a contingency is good, 43 E. 
 
 2. when contract not complete, 43 F. 
 
 bad writing, " board " looks like " brick " and so taken, 43 F. 
 apportionment of insurance indeterminate, 43 F. 
 amount of premium not fixed, 43 F. 
 no designation of the company, 43 F. 
 
 or of the property, 43 F. 
 necessary approval not given, 43 F, 54, 54 C. 
 a loss or alteration known to insured before completion, is fatal, 
 
 43 G. 
 the application is only a proposal, 43 H. 
 
 delay in acting on it will not turn it into a contract, 43 H. 
 accepted application or a renewal receipt implies agreement to issue 
 
 policy, 43, 44. 
 witness must state facts, not his opinion that the contract was com- 
 plete, 43 A. 
 binding book, 44. 
 
 policy issued after loss in pursuance of an agreement before loss, is 
 good, 45, 45 a. 
 the unpaid premium is a credit on the amount recoverable on 
 such policy, 45 a. 
 negotiations by mail, 46-49. 
 8. acceptance what constitutes, 53. 
 
 approval, and agreements subject to, 54-54 C. 
 approval, meaning of, 54 A. 
 
 1379
 
 INDEX. 
 
 [The references are to the sections.] 
 
 CONSUMMATION OF THE CONTRACT — continued. 
 notice of disapproval, 54 B 
 
 an applicafciou ouce approved by the company cannot be arbitrarily 
 rejected afterward, 54 C- 
 
 4. policy held for payment of premium on approval of applicant, 55. 
 
 neither illness or death excuses the agent in not delivering on 
 
 tender of preiniuia, 55. 
 delivery and payment of premium as conditions precedent, 43, 55 A, 
 
 56-58, 60. 
 what constitutes delivery, 60. 
 manual possession only prima facie evidence, 56. 
 delivery not essential unless so agreed, 55 A. 
 if neither delivery nor prepayment /)r»;wyac/e no contract, 56. 
 but delivery and prepayment together are not conclusive that 
 
 there is a contract, 56 
 if there is a condition for prepayment of the premium, delivery 
 
 does not waive it, 56 
 neglect of the agent preventing completion makes the company 
 
 responsible, 58, 64. 
 interim receipts, 59. 
 
 5. obligations are mutual, 61. 
 
 if one may demand a policy, the other may demand a premium. 
 
 effect of charter and by-lav\'s, 62-64 A. 
 
 See chap. iv. anal. 5, and chap. ii. anal. 1. 
 
 countersip;nature as a condition precedent, 65. 
 
 place of contract, 66, 66 A. 
 CONSUMPTION, statement about, 295, 297, 298. 
 CONTRACT, of reinsurance. See Reinsurance. 
 
 for a year, not within Statute of Frauds, 13. 
 
 form of, 14, 27, 28, 44. 
 
 oral, valid, when, 14 et seq. See Pahol Contract. 
 
 non-compliance with statutory requisitions as to form not fatal, 15-20. 
 
 provisions in charter as to form directory, 15, 16, 17. 
 
 certificate of secretary, evidence of, 24. 
 
 oral agreement to extend, valid, 24. 
 
 stamp acts, effect of, 25. 
 
 consummation and completion of, 43-65. See Consummation. 
 
 terms of, fixed by past dealings, 43 B. 
 
 to give policy on a contingency good, 43 E. 
 
 with agent after absolute delivery of policy will not turn it into an 
 agreement on approval, 69, no consideration. 
 
 after notice of disapproval will not save the insurance, though the 
 agent retains the premium, 69. 
 
 completion of, after loss, 44, 45 a. 
 
 completion of, by correspondence, 46-49. 
 
 none, unless all the terms agreed upon, 50-52. 
 
 acceptance of terms of, 49, 53, 57, 58. 
 
 negotiation of, through agents, 54. 
 
 1380
 
 INDEX. 
 [The references are to the sections.] 
 
 CONTRACT — continued. 
 
 prima facie incomplete, when, 56. 
 effect of provisions of charter and policy on, 62-64. 
 place of, 66, 66 A. 
 
 existing, not affected by division of state, 66 A. 
 cancellation of, 67-69. 
 subject-matter of, 71-117. 
 what constitutes part of, 158, 161. 
 
 of insurance interpreted by same rules as other contracts', 172. 
 liberally construed in favor of its object, 174. 
 most strongly construed in favor of insured, 175, 176. 
 written words in, prevail over printed, 177. 
 when entire, avoided by breach of condition as to part, 277. 
 waiver of agreement for, 492. 
 CONTRACTOR, insurable interest of, 93, 95 A, 109. 
 CONTRIBUTION to loss by several insurers, 13, 434-440. 
 
 where there is double insurance a company paying more than its 
 share of the loss is entitled to have the rest contribute, 13, and 
 note, 
 where several insurers protect the same interest in the same property, 
 as there is only one loss and can be but one indenmity, they must 
 share proportionally up to the limit of liability, 434. 
 if one company has restricted its liability and another has not, the 
 latter may have to pay more than its proportional share according 
 to the rates specified for apportionment in the policies, 435, 438. 
 double insurance, 435. 
 identity of risk, 435. See also 436 a, 437. 
 floating policy, specific insurance, 436-436 a. 
 average, 438. 
 reinsurance, 439. 
 
 void policy, 439. 
 generally a life may be insured any number of times, but where 
 the interest in it has an ascertainable value the above rules ap- 
 ply, 440. 
 life and accident insurance combined, 441. 
 
 payment of life policy in mistaken belief of death may be recov- 
 ered, 442. 
 fraudulent overvaluation of property is a complete defence, 443. 
 lost policy. No bond of indemnity can be required by the com- 
 pany, 444. 
 CONTRIBUTORY NEGLIGENCE, 530, 538. 
 CONVEYANCE, public, what is travelling by, 524-529. 
 COPARTNER, interest of, insurable, 99. 
 CORRESPONDENCE, negotiations by, 46-49. / 
 COSTS of suit against reinsured borne by reinsurer after notice unless 
 
 unreasonable, 11 (z^). 
 COTENANTS, transfer between, as an alienation, 280. 
 
 1381
 
 INDEX. 
 [The references are to the sections.] 
 
 COUGH, statements about, 297. 
 
 COUNTERSIGNATURE by agent, as a condition precedent, 65. 
 
 by secretary required by ctiarter, 15, and notes 2 and 7. 
 
 may be waived, 65. 
 
 determines place of contract, 66. 
 COUNTRY STORE, " goods usually kept in." See Risk, 2. 
 COURSE OF DEALING may show authority of agent to make subse- 
 quent oral contract modifying policy, 24 A. 
 
 may show that credit for the premium was given, 27. 
 
 may fix terms of contract, 43 B. 
 CREDITOR interested in life of debtor, 8, 83, 95, 102 A, 108, 
 
 when debt is tliat of an infant, 103. 
 
 or is barred by Statute of Limitations, 103. 
 
 claims to proceeds of life policy as against administrator, 390, 398. 
 
 claim to proceeds of fire policy, 449. 
 
 right of subrogation, 456, 4-52 A. 
 CREDITORS, extent of a creditor's claim on the proceeds of insurance 
 made to secure the debt, 459 A. 
 
 creditors v. beneficiaries, 459 B. 
 
 statutes, 459 C. 
 
 creditor may recover though the debt is paid, 459 D. 
 
 creditor to whom policy payable as his interest may appear has no 
 right of action on the policy, 459 D. 
 
 creditor not a " dependant," 459 D. 
 
 homestead exempt, and so are proceeds, 459 D. 
 
 proceeds of other exempt property not so, 459 D. 
 
 ordinary life policy vests in heirs, not subject to debts. Endow- 
 ment policy otherwise, 459 D. 
 
 insolvency, 459 E. 
 
 garnishment, 459 F. 
 
 proofs if not waived must be furnished by insured or by credi- 
 tor, before the latter can trustee the company, 459 G. 
 when creditor cannot garnishee, 459. 
 CURTESY, tenant by, how he should state title, 287, 289. 
 
 if contingent not an incumbrance, 292. 
 CUSTOM. See Usage. 
 
 in aid of interpretation, 179, 180. 
 
 as to payment of premium, 356. 
 
 evidence of, 582. 
 CY PRiJS PERFORMANCE, 357. 
 
 D. 
 
 DAMAGES, for refusal to renew policy, 429. 
 
 for failure to keep original policy alive, reinsurer may be liable, 12, 
 note. 
 
 See Loss; Measure of Damages; Rebuilding. 
 
 1382
 
 INDEX. 
 
 [The references are to the sections.] 
 
 DAYS OF GRACE, for payment of premium, 346, 353-357. 
 
 usage as to allowing, 346. 
 DEALINGS. See Coukse of Dealing. 
 DEATH, by intemperance, 301. 
 
 by one's own hand, 307, 311, 313-319. See Suicide. 
 in consequence of a duel, 311. 
 in violation of law, 327, 327 A, 328, 329, 331. 
 by the hands of justice, 326. 
 
 by violence in every form, covered by policy, 330. 
 in military service, by casualty of war, or belligerent forces, 332-334. 
 proof of, 465. 
 
 time of, how reckoned, 400. 
 representations of, 575, 
 evidence of, 585. 
 of beneficiary, effect of, 399 N. 
 DEBT, of infant, insurable, 108. 
 
 barred by statute, insurable, 108. 
 DEBTOR, interested in proceeds of insurance by creditor, when he pays 
 the premium, 8. 
 insurable interest in property attached, 95. 
 right of subrogation, 456. 
 DECLARATION. See Pleading. 
 what, 29. 
 
 must set out oral agreement subsequent to policy if relied on, 24 A. 
 DE FACTO. See Officers. 
 DEFINITION of insurance, 1. 
 DELAY. See Laches. 
 
 in acting on an application does not turn it into a contract, 43 H. 
 DELEGATION. See Agents, Sub-Agents, &c. 
 
 of discretion given agent, 67 L. 
 DELIRIUM TREMENS, 299. 
 
 DELIVERY OF POLICY as an element incompleting the contract of 
 insurance. See Consummation, 4. 
 not necessary, 55 A, 62. 
 
 policy good from time left with agent for, 62. 
 
 does not waive prepayment of the premium according to condi- 
 tion, 56. 
 re-delivery of surrendered policy by agent after he knows of a loss, 
 
 note 9, 69 B. 
 what constitutes, 56, 60. 
 in case of assignment, 378, note, 395. 
 DEPOSIT NOTE^. See Premium Note. 
 DESCRIPTION, when representation, 256. 
 when warranty, 247, 257. 
 
 of surroundings, boundaries, buildings, 258-261. 
 usage as evidence of truth of, 262. 
 of person, 259. 
 
 1383
 
 INDEX. 
 
 [The references are to the sections.] 
 
 DESIGN, loss by, 407. 
 
 DESIGNATION of beneficiary. See Beneficiary, 2. 
 
 DIRECTLY, defined, 53. 
 
 DIRECTORS, liable to stockholders for negligence, 17. 
 
 liability of, for not making assessments, 504. 
 
 liable to insured for misrepresentation, 570- 
 DISABILITY, to contract, 36, 37. 
 
 of belligerents, 36, 37 
 
 total, 522, 523. 
 DISCOVERY, bill for, 566 C. 
 
 DISCRETION of agent in cancellation as to time to be allowed assured, 
 67 L. 
 
 cannot be delegated, 67 L. 
 
 DISEASE. See Health. 
 local, 296. 
 
 representations as to, 297, 298. 
 subject to or afflicted with, 297. 
 requiring confinement, 297. 
 chronic, 585. 
 DISSEISOR, insurable interest of, 81. 
 
 DISSOLUTION of company by sale to another company which rein- 
 sures all risks. 12. 
 surplus in treasury of a mutual company goes to all policy-holders 
 past and present who helped to create it, 12 C. 
 DISTANCE from other buildings, 284. 
 DIVIDEND, when, payment of premium, 345 a. 
 
 in mutual insurance. 571, 572. 
 DIVISION OF STATE does not affect existing contracts, 66 A. 
 DO^IICIL, as affecting the insurance of the lives and property of public 
 
 enemies, see chap. iii. anal 4, 
 DONOR, no insurable interest, 76 A. 
 
 DOUBLE INSURANCE, 13, 440. See Other Insurance. 
 means more than one insurance of the same interest, 13. 
 
 insurance by shipper and carrier of same goods, not double, 13, 
 note, 
 insured can recover no more than his loss, 13. 
 liability of insurers proportional, 13. 
 
 one paying more than his share may call on the others for contribu- 
 tion, 13. 
 insured may elect whether to sue one company for the whole, or each 
 
 company for its share of the loss, 13, and note, 
 concealment of, by reinsured, fatal, 11 (z). 
 DRINKING. See Intemperance. 
 DROWNING, death by, 516-517. 
 1384
 
 INDEX. 
 
 [The references are to the sections.] 
 
 DRUNKENNESS. See Habits. 
 
 is a breach of the warranty, " no habit obviously tending to shorten 
 life," 296. 
 DUTIES AND IMPOSTS, whether included in loss, 421 
 DWELLING-HOUSE, what, 2i7. 
 
 occupancy of, 247, 248. 
 DYSPEPSIA, 295. 
 
 E. 
 
 EARNINGS, future, insurable interest in, 104. 
 
 EMPLOYER AND EMPLOYEE, insurable interest of, 104, 109 c, 
 
 ENCUMBRANCE, known to agent, 133 A. 
 
 what is, and what is not, 290-294. 
 ENDORSEMENTS on application and policy, effect of, 29 A. 
 ENDOWMENT POLICY, the words " non-forfeiture endowment pol- 
 icy " in the margin, held not a part of the policy, 29 A. 
 
 non-forfeitable, when, 344 ft, 
 
 loss under, 452. 
 ENEMY, property and life of, when insurable, 37, 37 (s), 42 (s). 
 ENGINE running at night is not running the mill, 178. 
 ENTIRE CONTRACT, what, 277, 278. 
 
 how affected by alienation of part of the subject-matter, 277-278. 
 ENTHIE, unconditional, &c., owner. See Title, 4. 
 ENTRY for foreclosure, whether alienation, 269, 269 a. 
 EQUITABLE ADJUSTMENT after forfeiture, 572. 
 EQUITABLE TITLE gives insurable interest, 84. 
 EQUITY, will decree cancellation, 67 M. 
 
 will reform policy, when, 565. 
 
 will decree loss, when, 506. 
 
 will revive policy, when, 568. 
 
 will compel delivery up of policy obtained by fraud, when, 573. 
 EQUIVOCAL, statements, 193, 210, 212, 250-256, 
 ERROR of agent, see chap. vii. anal. 3. 
 ESTOPPEL. See Relinquishment, W^aiver, &c. 
 
 by knowledge of agent of removal of property, 70 a. 
 
 by retaining overpayment, 70 C. 
 
 reviving dead policy, 70 C. 
 
 by act of agent, 141-146, 497, 500, .509, 513. 
 
 by knowledge of untruth of statement, 143, 263, 500, 294 E. 
 See Agent, and Incumbrance, 6. 
 
 in matters of description, 263. 
 
 where facts arise pending negotiations, .501. 
 
 where facts arise during the currency of the policy, 502. 
 
 defined, 502. 
 
 1385
 
 INDEX. 
 
 [The references are to the sections.] 
 
 ESTOPPEL — continued. 
 
 if act required is known to be impossible, 503. 
 whei'e facts arise after loss, 505. 
 what acts or omissions amount to, 505. 
 none, if facts are not known, 506. 
 none, where insured is not prejudiced, 507. 
 whether silence amounts to, 508. 
 where act is prohibited by charter, 510. 
 by notice from stranger, 512. 
 EVIDENCE of completion of contract. See Consummation, 4. 
 
 custom competent as to nature of parol agreement as a final insur- 
 ance or for a policy, 23 B. 
 of general agency, 126. 
 of usage, 173, 179, 262. See below, 
 statements at medical examination, 303. 
 of payment of premium, 359. 
 of other insurance, 372 F. 
 of filing preliminary proof, 472. 
 burden of proof, 579. 
 
 insurable interest, 579. 
 title, 579. 
 neutrality, 579. 
 
 former transactions, 579. 
 identity of premises, 579. 
 misrepresentation of " life " in former transaction of his own cannot 
 affect creditor's policy, 579. 
 proofs as evidence, 579. 
 application, 579. 
 
 other similar occasions, 579. 
 admissions of adjuster, 579. 
 physician's privilege waived, 579. 
 wrong admission of evidence not cured by telling jury to disregard 
 
 it, 579. 
 declarations of the "life " not admissible against the beneficiary un- 
 less part of res gestce, 579 A. 
 parol evidence of what passed at insurance, 579 B. 
 of error in policy, as to date or amount, 579 B. 
 of meaning of " epidemic," 579 B. 
 of meaning of "rags," "old metals." Usage, 579 B. 
 that assignment was as collateral, 579 B. 
 
 circular saying that 30 days grace would be given on premiums, 
 inadmissible, 579 B. 
 expert testimony, 580, 581. 
 custom and usage, 582. 
 
 particular custom must be known to insured, 582. 
 general custom as to charge more on unoccupied houses, is inad- 
 missible on question of increase of risk, 582. 
 so general custom to give 30 days grace on premiums, 582 
 
 1386
 
 INDEX. 
 [The references are to the pactions.] 
 
 EVIDENCE — continued. 
 wilful burning, 583. 
 
 a preponderance of evidence enough, 583. 
 contra, a few cases, 583. 
 every circumstance that can throw light on motive is evidence, 583. 
 
 plaintiff's good character admissible, 583. 
 issue of policy, 584. 
 
 signing application, 584. 
 receipt of premium, 584. 
 organization of company, 584. 
 disease, 585. 
 
 health, 585. 
 death, 585. 
 effect of misrepresentation a question of law, 586. 
 suicide, 587. 
 belief, 587. 
 character, 587. 
 fraud, 587. 
 
 value of neighboring property, 587. 
 variance, 587 A. 
 court and jury, 587 B. 
 EXAMINATION, of premises, after work, 276. 
 
 on oath, as part of preliminary proof, what, and when, 466, 476. 
 when option of, permitted, but not exercised, 502 a. 
 EXCUSE for non-payment of premium. See Premium, 9. 
 for overvaluation, 373 A, 373 B. 
 for failing to sue in time limited, 484-488. 
 EXECUTION, levy of, as an alienation, 274. 
 
 sale or seizure on, is an incumbrance, 291. 
 EXECUTOR has insurable interest, 80. 
 EXPECTED PROFITS insurable, 79. 
 EXPERT, testimony of, 580, 581. 
 EXPLOSION, loss by, 413-416. 
 of gunpowder, 413. 
 of steam, 415. 
 of gas, 416. 
 definition of, 508. 
 
 FACTOR, insurable interest of, 80, 95 A. 
 
 FALSE PRETENCE, when misrepresentation, 197. 
 
 FALSE SWEARING, what, 477. 
 
 FAMILY as beneficiary, 399 F, 399 N. 
 
 FAMILY PHYSICIAN, who is, 304. 
 
 name of, to be given in preliminary proof, when, 467. 
 
 1387
 
 INDEX. 
 [The references are to the sections.] 
 
 FATHER, interest in life of child, 104-107. 
 FEE-SIMPLE, 289. 
 
 FEME SOLE, under contract of marriage, insurable interest of, 107. 
 FIRE, what is loss by, 402, 406, 412, 413. 
 
 FIRE INSURANCE, attempted distinction between fire and life insur- 
 ance, 7. 
 a valuable interest must exist in each, 7 
 FIREWORKS, when included in ri.sk, 233, 233, note, 239 B. See 
 
 Risk, 2. 
 FITS, subject to or affected with, 297. 
 
 fainting, not epileptic, 297. 
 FIXTURES, 420. 
 
 FLOATING POLICY, loss under, 436, 436 a. 
 
 FORECLOSURE OF MORTGAGE as an alienation. See Aliena- 
 tion, 2. 
 FOREIGN COMPANIES, remedies by and against, 577. 
 policies of, valid, when, 577. 
 right to remove action, 578. 
 retaliatory legislation against, 578 a. 
 state of, evidence of, 585. 
 FORFEITURE. See Alienation, Condition, Incumbrance, Pre- 
 mium, Title, 11. 
 not favored, 170, 367. 
 equitable adjustment after, 572. 
 equitable relief against, 56G C. 
 surrender after, no return of premium, 69 B. 
 FORM. See Policy. 
 FORTHWITH, meaning of, 462. 
 FRAUD, and misconduct, loss from, 407, 410,411. 
 and false swearing, what, 477. 
 in arbitration, 496 a. 
 
 equity will cancel policy obtained by, 67 M. 
 FRAUDS, STATUTE OF, policy of reinsurance not within, 13. 
 
 policy for a year, not within, 18. 
 FRAUDULENT CONVEYANCE, title by, insurable interest, 86. 
 FRAUDULENT REPRESENTATIONS. See Representations. 
 FRIENDS as beneficiaries, 399 H. 
 
 G. 
 
 GAMING POLICY, void, 74. 
 GARNISHMENT of company, 459, 459 F, 459 G. 
 GAS, loss by explosion of, 416, 
 GASOLENE, agent knows of its keeping, 133 A. 
 when included in risk, 239 A. See Risk, 2. 
 
 1388
 
 INDEX. 
 [The references are to the sections.! 
 
 GENERAL AGENT. See Agent, 7 
 GOOD HEALTH, warranty of, 295. 
 GOODS IN TRUST, and on commission, 421, 424. 
 GOUT, 295, 297. 
 GRACE, days of, 424-429. 
 GRANDCHILD, as beneficiary, 399 E, 399 G. 
 GROCERIES, stock of, 420. 
 GUARANTEE INSURANCE, 540-547 a. 
 of fidelity of servant, 511 a. 
 warranty and i-epresentation in, 542-543 a. 
 
 against carelessness, dishonesty, &c., is a contract of suretyship, 540. 
 the insurers will be subrogated to the rights of the insui-ed 
 
 against the person in fault, 540. 
 services of insured to this end, 540. 
 warranties, representations, form, 540. 
 only a percentage of loss paid, 540. 
 advantages of such insurance, 541. 
 its union with life insurance, 541, 
 diligence of clerk, 541 a. 
 
 condition that employer shall prosecute, 541 a. 
 statement in application that clerk's accounts would be examined 
 by finance committee every fortnight not a guarantee, 542 ; see 
 543. 
 misrepresentation as to the amount of money to be in employee's 
 
 hands fatal, 543. 
 representation of a third person not a warranty, 543. 
 Insurance against loss in trade by bankruptcy of purchasers, 544. 
 " of the prompt payment of a note, 545. 
 •' against the birth of issue, 546. 
 " of rents, titles, and lives of cattle, and insurance against 
 
 theft, 547. 
 " against hail, 547, 547 a. 
 " due at marriage, 547 B. 
 GUARANTOR, insurable interest of, 82, 97. 
 GUNPOWDER. See Risk, 2. 
 loss by, 413. 
 
 H. 
 
 HABITS See Health. 
 
 representation as to, 299, 300. 
 
 of intemperance, 299, 300-302. 
 
 of opium eating, 299. 
 HAIL, insurance against, 547 a. 
 HAZARDOUS. See Risk, 2. 
 
 articles, 232, 235. 
 
 trades, 236. 
 
 use and trades, 236, 237. 
 
 1389
 
 INDEX. 
 [The references are to the sections.] 
 
 HEALTH, condition of, known to agent, 133 A. 
 
 1. " Good health " and " sound health " mean reasonable, not perfect 
 
 health, 295. 
 
 a healthy life is one insurable at ordinary rates. Freedom from 
 serious disease is sufficient, 295 
 
 slight dyspepsia no breach of the warranty, but Bright's disease 
 or drunkenness fatal, 295. 
 
 tendency to shorten life means substantial tendency ; all disor- 
 ders do so in some degree, 295. 
 
 wound affecting bladder, spasms, gout, dyspepsia, 295. 
 
 consumption, 295. 
 
 honest answers liberally construed, 295 
 "tendency to shorten life ; " drunkenness a breach of the warranty 
 
 " no habit obviously tending to shorten life," 296. 
 serious illness or injury is one that permanently impairs the consti- 
 tution and increases the risk, 296. 
 
 no absolute test is possible, 296 
 
 it has been said that an honest belief in the truth of the answer is 
 all that is required; but there is authority that due care must 
 be exercised in forming the belief (see also next section), 29G 
 
 failure to speak of illnesses so slight as to be beyond the reason- 
 able contemplation of the parties, is of no effect, 296. 
 
 " hereditary disease," "local disease," " disease requiring con- 
 finement," 296. 
 
 malaria, rupture, tubercles, sunstroke, pneumonia, 296. 
 
 company must show not only insanity in ancestor, but also that 
 it is hereditary, 296. 
 the insured must answer in good faith and according to the knowl- 
 edge he has, or as an ordinarily intelligent man should have, 
 about himself, 297. 
 
 knowledge of the life-subject is imputable to the assured if he 
 undertake for the truth of the " life's " statements, 297. 
 
 fits, gout, vertigo, 297. 
 false answer to a specific question avoids the policy, though the matter 
 was not material, otherwise with a mere want of fulness, oOO 
 " afilicted with disease." Consumption, spitting of blood, &c., 298. 
 fits, diseases of liver or throat, 298. 
 
 2. If death by intemperance is to avoid the contract, the death must be 
 
 traced clearly to intemperance as Me jorox/rna^e cause, 301. 
 
 neither intemperance combined with other causes, nor as a pre- 
 disposing cause, will avoid the policy, 301 . 
 
 if delirium tremens with care and skill might not have been mor- 
 tal, but by overdoses of morphine the man died, intemperance 
 is not the proximate cause of death, 301 
 
 if excess of liquor not taken by medical advice impairs tlie health 
 or causes death though without delirium, the policy is void, 
 though the insured was not habitually intemperate, or had 
 even been habitually temperate up to the fatal debauch, 301. 
 
 1390
 
 INDEX. 
 
 [The references are to the sections ] 
 
 HEALTH — continued. 
 3. Medical Examination. 
 
 statements in regard to applicant's wealth, &c , made at such 
 
 examination may be material, 303. 
 if examiner misleads assured into making a wrong answer, or 
 writes a- false one without assured's knowledge, the company- 
 is estopped, 303. 
 the applicant is not bound by the doctor's opinions, 303. 
 if the company issues a policy knowing the examiner is the bene- 
 ficiary, he will not have to prove the transaction fair and iust 
 303. ^ 
 
 "family physician," " medical attendance," &c., 304. 
 
 a warranty that insured had not consulted a physician is broken 
 by a consultation, though only for a cold, 304. 
 HEALTHY LIFE, warranty of, 295. 
 HEAT, loss by, 402. 
 HEIRS as beneficiaries, 399 H. 
 HIRER, insurable interest of, 82. 
 HOLDER OF NOTE, insurable interest, 97. 
 HOUSE or building, embraces what, 420. 
 HUSBAND, insurable interest of, in property of wife, 81. 
 insurable interest of, in life of wife, 107, 107 C. 
 right of, to assign or devise proceeds of policy for benefit of children 
 
 391-394. 
 transfer from husband to wife as an alienation, 273. 
 no right to call wife's property " his," 289. See 294 E. 
 HUSBAND AND WIFE as beneficiaries. See Beneficiary, 7. 
 
 I. 
 
 IDENTITY, of interest, 366, 436, 436 a. 
 of risk, 437. 
 
 IGNITION, whether necessary to constitute loss by fire, 402. 
 
 ILLEGAL PRACTICES, risk from, 405. 
 
 ILLNESS, serious, 296 
 
 IMPLIED WARRANTY. See Warranty. 
 
 INCENDIARISM, of third person, 407 A. 
 
 INCUMBRANCE. See Title. 
 
 1. the object of inquiring about incumbrances is to aid in determining 
 the motive of the assured to preserve the property, and in case of 
 mutual companies to know the value of their lien for premiums 
 290. 
 the same thing may be an incumbrance or not according to circum- 
 stances and the disposition of the court, 291-294. 
 
 VOL. II. _ u, 139X
 
 INDEX. 
 [The references are to the sections.] 
 
 INCUMBRANCE — continued. 
 
 and the language of the policy may make it void, only for bur- 
 dens put on the property by consent of the assured, 292, end, 
 292 A (as where the condition runs against incumbrances 
 "without consent of the company," for the assured could not 
 get assent for a lien put on by some one else, perhaps without 
 his knowledge, 292). 
 
 or it may be void for any burden though placed by the law, and 
 even unknown to the assured, 291 A. 
 
 an " incumbrance on the property" means on the whole prop- 
 erty insured, and an incumbrance on part of it will not be 
 fatal, 291 (strict construction), 
 what is an incumbrance, 291, 291 A. 
 
 2. What is not, 292, 292 A. 
 
 assessment of deposit note (?), 291, 292. 
 
 attachment may be, 291. 
 
 bond for support not, 292 ; contra, 292, note. 
 
 nor bond to convey where the time named has passed, 292. 
 
 curtesy, if contingent, not, 292. 
 
 power, if contingent, not, 292. 
 
 judgment, see Lien. 
 
 lease for years not, 292 A. 
 
 lien may be, 291 ; or not, 292, 292 A. 
 
 for taxes may be, 291 ; or not, 292 A. 
 not, if assessment is illegal, 292 A. 
 
 for purchase-money may be, 291; or not, 292. 
 
 of a judgment may be, 291, 291 A; or not, 292. 
 
 not if paid though undischarged of record, 291, note. 
 
 by collateral deposit of deeds, 291. 
 
 mechanics' lien may be, 291. 
 mortgage is, 291, 292 B. 
 
 though fraudulent and unrecorded, 291. 
 
 so partner's mortgage to outsider, 291 A. 
 
 but not if paid, though undischarged of record, 292. 
 
 the presumption is that a mortgage is not paid, 294. 
 
 nor if barred by statute of limitations, 292. 
 
 house on blocks held incumbered by mortgage on land, 
 294 F. 
 sale on execution is, 291. 
 seizure on execution is, 291. 
 
 but not levy of goods left with debtor, 291, note, 
 tax title that is a constructive trust not, 292. 
 
 3. Misrepresentation or concealment of an incumbrance will be fatal 
 
 when the application questions, or the policy or the organic 
 law rerjuires disclosure 292 B. 
 a requirement in the by-laws not a part of the policy, and un- 
 known to the assured, would not probably be sufficient; see 
 294 a. 
 
 1392
 
 INDEX. 
 [The references are to the sectious.] 
 
 INCUMBRANCE — continued. 
 
 where the questions asked are fairly and honestly answered by 
 the assured, a condition as to disclosure in the after-coming 
 policy ought not to affect him; see 292 A; 123 Pa. St. 
 where the assured says there is no incumbrance, which is true, 
 but he believes there is, not knowing that a mortgage has been 
 paid, his bad faith avoids the policy, 292 B. Tke moral haz- 
 ard is the same as If the mortgage was good, 
 materiality for jury, 292 B. 
 misstatements as to incumbrances on other land not material 
 
 292 B. 
 if the representation is substantially true and in good faith, tak- 
 ing into account all the equities and even parol agreements 
 void under the Statute of Frauds, the policy will be upheld, 
 292 B. A stranger to the agreement cannot raise such a plea, 
 stating that there is an incumbrance without the amount, suffi- 
 cient, 292 B. 
 omission not fatal if all company's questions are truly answered, 
 292 B. 
 4. Subsequent incumbrance, 294. 
 
 if paid before loss policy good, 294. 
 paying off old incumbrance and a new one arising, 294, end. 
 
 if the total incumbrance is le.ss than at the time of insurance 
 
 the policy ought not to be void, unless the express provisions 
 
 are inconsistent with any other construction, 294, end, and 
 
 291 A. 
 
 if the policy permits incumbrance only to a certain amount, 
 
 going beyond it is fatal, 291 A. 
 
 5. Notice of incumbrance : 
 
 must be given if required, 294 a. 
 
 delay of fifty days unreasonable, 294 a. 
 
 indorsement " loss payable to mortgagee," is notice, 294 a. 
 
 putting in mail is prima facie, 294 a. 
 
 provision for, in by-laws alone not sufficient, 294 a. 
 
 6. Waiver (and estoppel) : 
 
 of statement of title, 
 
 by insurance " as interest may appear," 294 C. 
 by soliciting agent, 294 C. 
 of condition as to sole ownership, 
 
 cannot make policy cover goods of strangers, 294 C. 
 of incumbrance, 
 
 by indorsing policy payable to moi-tgagee, 294 C. 
 assent to substituted mortgage waives old one, 294 C. 
 neglect of agent to ask any question about incumbrance 
 estops company in case of one ignorant of English ; signing 
 application agent said was all right, 294 C ; in general, 
 such neglect is not a waiver of the " sole," &c., condition 
 in the policy, 294 G. 
 
 1393
 
 INDEX. 
 [The references are to the sections.] 
 
 INCUMBRANCE — continued. 
 
 if answer or omission is bona fide made by advice of agent, com- 
 pany estopped to object to it, 291 h. 
 if the description is inconsistent with absolute ownership, or 
 shows that required facts are omitted, or in any way the com- 
 pany has notice, issue of a policy is a waiver, '294 D, 294 h. 
 by adjustment of loss by agent with knowledge of facts, 294 b. 
 or neglect to endorse or make proper statement, 294 b. 
 knowledge of the agent at the time of insurance or before issue 
 of a policy that there is a lien or mortgage or other incum- 
 brance, or that the insured is not the sole owner, &c., is 
 a waiver, if the assured acted in good faith, although the 
 policy declares that there shall be no waiver except in writ- 
 ing, and sole ownership, &c , is warranted, 294 E. 
 but otherwise if the assured actually knows of the warranty or 
 
 erroneous information that goes to the company, 294 E. 
 and failure at trial to prove the truth of the facts stated to 
 the agent is fatal, 294 E. 
 contra, it has been held that one signing a document must know 
 
 its contents, 294 F. 
 and if policy says " no waiver by agent " there can be none, 294 F. 
 no waiver or estoppel — 
 
 by admission of a director or by vote of directors authorizing 
 settlement, if assured has not changed his position in conse- 
 sequence, 294 (1. 
 by sending adjuster before company knows facts, 294 G. 
 by a verbal agreement (before policy, but left out of it) to allow 
 insured to mortgage, 294 G. 
 INDEBTEDNESS to company, what, 344 c. 
 INDEMNITY, insurance is a contract of, 2, 115, 116. 
 
 life insurance the same, though some cases contra, 7, 8. 
 reinsurance a contract of, and no more, 11. 
 INDORSEMENTS, waived on agreement to insure, 23. 
 INDORSER, insurable interest of, 82. 
 INFANT, not bound by his contract of insurance, 35 A. 
 
 debt of, gives insurable interest, 108. 
 INFORMALITY not necessarily fatal to policy, 15, 17, 23, 23 D. 
 seal, 16, 17, 27. 
 
 policy, issued without order of directors is good, 17. 
 INJUNCTION, 5GG, 566 A. See Remedies. 
 
 against suit at law, 573. 
 INJURY, serious, 296. 
 causing death, 514. 
 by accident, notice of, 539. 
 INNKEEPER, insurable interest of, 80. 
 
 INQUIRY, conclusive as to materiality of subject of, 185-186. 
 INSANE suicide. See Suicide. 
 
 1394
 
 INDEX. 
 [The references are to the sections.] 
 
 INSANITY, company must show it is hereditary, 296. 
 not presumed I'rom suicide, 319. 
 impulsive, o20. 
 must be proved by party vpho alleges, 325. 
 
 INSOLVENCY of reinsured no defence for reinsurer, ll(z), 11 A. 
 
 even where he is liable only in same time and manner as the re- 
 insured, ll(z). 
 nor does it give the original assured any direct claim against the 
 reinsurer, 12. 
 in fact, prevents member of mutual company from cancelling his 
 
 policy, 67 A. 
 no defence against premium note, 555. 
 assessments in case of, 559. 
 status of company and insured under, 590-592. 
 
 INSOLVENT, insurable interest of, 81, 92, note. 
 INSURABLE INTEREST. See Interest. 
 
 1. Necessity of, 74. If none Equity will cancel the policy, 67 M. 
 
 wager policies (i.e. policies without interest) not now sustained, 75. 
 but reprobated, 75 A. 
 " interest or no interest," 75. 
 
 a policy that is to " be proof of interest " is a wager, 75. 
 bets on sex, 75 A. 
 on life, 75 B. 
 on marriage, 75 B. 
 
 policy of ^3000 to cover a debt of |70, 75 B, 108. 
 policy taken out by a man on his own life, payable to any 
 one he may desire, is not a wager, 75 B. 
 
 2. What constitutes. See chap. vi. anal. 2. 2. 
 
 " interest " does not imply " property " in the thing insured, 
 
 74, note, 
 interest in a life need not be capable of pecuniary estimate, 
 
 102 A. 
 strong ties of blood, 102 A. 
 marriage, 102 A. 
 
 any reasonable probability of present or future pecuniary advan- 
 tage is enough, 76. 
 that one may suffer loss of something they have some claim to 
 
 look for in the natural course of things is sufficient, 80. 
 contingent right sufficient, 77. 
 profits or advantages that would come in the ordinary course of 
 
 things may be insured, 76, 79, 80. 
 but a mere Jwpe without a scintilla of present interest is not 
 
 enough. One has no right to indemnity because he does not 
 
 receive a gift he expects, 78. 
 a present interest in the property or enterprise out of which llie profit 
 
 is to come is necessary, 77. 
 and when the interest in the goods ceases the policy decays, 79. 
 
 1395
 
 INDEX, 
 
 [The references are to the sections.] 
 
 INSURABLE INTEREST — continued. 
 
 any benefit reasonably certain to come from the continued exis- 
 tence of the property or life is sufficient, 80, (life) 102 A. 
 liability for loss of the property if destroyed is sufficient, com- 
 mon carrier, &c., 83, 94, 94 A, 95. 
 even though a debt is that of an infant or the Statute of 
 Limitations has run on it the creditor may insure it, 108. 
 interest of an insurer, 98. 
 possession under a claim of ownership sufficient, 80, 84, 87 A. 
 possession under contract of purchase, 87. 
 
 possession under contract that may ripen into ownership is suffi- 
 cient, whetlier purchase-money is paid or not, 87 A. 
 possession under contract of purchase is sufficient though the 
 vendee is in default, and even after an agreement to rescind 
 the contract of purchase, 87 A. 
 defect in title will not avail the company, 87 A. 
 possession under a deed voidable for fraud is sufficient, 87 A. 
 
 or voidable for want of title in grantor, 87 A. 
 equitable title sufficient. 8(j. 
 
 3. What is not an insurable interest. (See wager policies above, in 1.) 
 
 in life. (See below at the end of 5.) 
 in property 
 
 unlawful enterprise, 71. 
 lotteries, 71. 
 prohibited voyage, 71. 
 goods intended for illegal sale, 71. 
 mere hope, 78. 
 expectation of a gift, 78. 
 donor or voluntary contributor no insurable interest in the 
 
 object, 76 A. 
 voluntary repairs on vessel give none, 76 A. 
 no insurance of bills payable on a contingency, 76 A. 
 posse.s.sion under a married woman's agreement to convey is 
 not sufficient to create an insurable interest in a State 
 where such agreement is void, 87 A. 
 possession by vendor after delivery of goods not sufficient, 97. 
 a claim of title under a fictitious deed, without actual pos- 
 session, is not sufficient, 87 A. 
 mere intrusion on land, 89. 
 
 right under contract not enforceable is not insurable, 96. 
 vendee's interest under a contract void by statute of 
 
 frauds, 96. 
 verbal contract for purchase of real estate, 96. 
 mortgage by one having no right to give it, 96. 
 
 4. Who may have an insurable interest. 
 
 In property : 
 
 any one who is charged with the protection of the property, 
 80. 
 
 1396
 
 INDEX. 
 
 [The references are to the sections.] 
 
 INSURABLE 11:JTEKEST — continued. 
 
 or has a right to protect it, 80. 
 
 or will receive a benefit from its continued existence, 80. 
 
 or be liable to loss by its destruction, 83, 94, 94 A, 95. 
 
 son none in father's property, 76 A. 
 
 administrators, 80. 
 
 bailee, 80, 81, 95. 
 
 a bailee if interested or responsible for loss may insure 
 in his own name, and if not he may still insure for 
 whom it may concern, 95 A. 
 bailee will hold the funds in trust for owner, 95 A. 
 builder under contract, 93, 95 A. 
 captors, 80. 
 cestui que ti-ust, 82. 
 common carriers, 80, 94, 94 A. 
 
 though using vessel of another, 94 A. 
 commission merchant, 95 A. 
 consignees, 80, 95 A. 
 contractor, 93, 95 A, 109. 
 creditor, 83, 95, 108. 
 debtor in property attached, 95. 
 disseizor has, 81. 
 executors, 80, 
 factor, 80, 95 A. 
 guarantor, 82, 97. 
 hirer, 82. 
 holder of note, 97. 
 husband in wife's property, 81. 
 husband in homestead, 81. 
 indorser, 82. 
 innkeeper, 80. 
 insolvent has, even in goods concealed from creditors, 81, 
 
 92, note, 
 intruder, 89. 
 
 landlord in goods of tenant liable to distress for rent, 84. 
 lessee, 84. 
 lessor, 84, 85. 
 master of ship, 94 A. 
 mortgagee, 80, 82, 83, 96. 
 
 mortgagor has, though property mortgaged to full value, if 
 he is liable for the debt, even after he has sold the equity 
 of redemption, 82. 
 forfeiture of the pi-operty for violation of law or unlawful 
 
 foreclosure will not avail the company, 82, note, 
 one having a lien for advances or otherwise, 82, 93. 
 one having a claim in the nature of a lien, 93. 
 one having an equitable lien with possession, 93 A. 
 
 1397
 
 INDEX. 
 
 [The references are to the sections.] 
 
 INSURABLE INTEREST — twi^nuef/. 
 
 one having an equitable interest, 86, 93 A. 
 
 one having possession under claim of title, 87, 87 A. 
 
 part-owner responsible for whole, 94 A. 
 
 pledgee, 80, 82, 93 A. 
 
 pledgor, 82. 
 
 railroad liable for destruction by sparks, 94. 
 
 stockholder, 90. 
 
 surety, 82. 
 
 tenant in common, 81. 
 
 trustee, 80, 83, 111. 
 
 vendee in possession, 83 a, 87, 88, 96. 
 
 vendor before delivery or complete sale has, 83 a, 88, 97. 
 
 vendor may insure in name of vendee though the goods are 
 
 not separated, 83 a, note, 
 warehouseman, 80, 95 A. 
 wharfinger, 80, 95 A. 
 5. In life : 
 
 betrothed girl in life of future husband, 107 a. 
 creditor may insure life of debtor, 102 A, 108, 109. 
 only entitled to indemnity, 108. 
 but he has been allowed to hold tlie excess, 108. 
 has interest even when debtor is an infant, 108. 
 or Statute of Limitations has run against the debt, 108. 
 insurance far beyond the debt will be void, 108. 
 employee in employer's life, 109 c. 
 father, in life of son or daughter, 104-107. 
 husband in wife's life, 107, 107 C. 
 master in sei'vant's life, 109 c. 
 mother in life of son, 107 (t). 
 
 one having reasonable expectation of pecuniary advantage 
 from the continuance of the life, 102 A. 
 as in case of one contracting to do work, 109 b. 
 parent in life of child, 102 A, 103-107. 
 partner in copartner, 109 a. 
 sister in brother (i/i loco parentis), 103-107. 
 surety, 102 A. 
 trustee, 111. 
 
 wife in life of husband, 107 b. 
 one related by strong ties of blood, 102 A-107. 
 relationship not sufficient. 
 
 brother in life of brother as such, no, 107 (s). 
 daughter in life of mother, no, 103 A. 
 granddaughter in life of grandfather, no, 103 A. 
 nephew in uncle, no, 107 (s). 
 
 in aunt, no, 103 A. 
 son-in-law in life of mother-in-law, no, 103 A. 
 
 1398
 
 INDEX. 
 
 [The references are to the sections.] 
 
 INSURABLE mTEREST — continued. 
 
 6. Duration : 
 
 general rule, an interest at time of insurance and at loss both 
 
 necessary, 100, 100 A. 
 cessation of interest before loss generally destroys the right of 
 recovery, 79, 100, 100 A. 
 but there may be cases where the company should be held, 
 
 100 A. 
 this is especially likely to happen in case of life insurance, 
 as where a creditor insures the life of the debtor, and the 
 debt is paid before the debtor dies, 100 A, 108, 115-117. 
 English rule. See 115-116, lOS, 100 A; and also chap. vi. 
 
 anal. 6. 
 in Massachusetts, if the interest in the insured life terminates 
 after payment of two annual premiums, the policy becomes 
 payable at a fair surrender value. Public Statutes, 719. 
 interest acquired after insurance, but before loss, should sustain 
 policy if company treats it as valid after knowing facts, 100 A, 
 authority conti-a, 100 A. 
 subsequently acquired goods, may certainly be covered, 100, 101. 
 
 7. Continuity of interest is not necessary. In the absence of express 
 
 stipulation an interruption that ends before loss is not fatal, 101. 
 
 8. Miscellaneous : 
 
 insurance of good and bad interests or interest, and no interest, 
 in same policy good pro tanto, 74. 
 unless the contract is expressly or by its nature entire, 74. 
 insurable interest a question of law, on the facts proved, 76, note, 
 company's knowledge of no interest immaterial, 81, note, 
 assignee of life policy, 110. 
 
 beneficiarv, 112; his name must appear on the policy in Eng- 
 land, 113. 
 one without interest cannot take out a policy on the life of 
 another, but a man may take out a policy on his own life 
 and make it payable to w'hom he pleases, or assign it to 
 any one, 110, notes, 112; contra, 110, notes, 
 life policy uxualbj a valued one, 114. 
 INSURANCE. See Fire Ixsuraxce, Life Ixsuraxce. 
 
 (For Accident Insurance see below, at division 2 of the treatment of 
 this head. See also Accidext.) 
 1 . General : 
 defined, 1. 
 
 contract of indemnity, 2, 7, 8, 11, 114. 
 to what ai)plied, 2, 71-73, 544-547 a. 
 nature of the contract, 3, 7. 
 a conditional contract; when no risk attaches no premium is earned, 4- 
 
 Italian writers contra, 4, 
 an aleatory contract, 5. 
 a personal contract, 6. 
 
 1399
 
 INDEX. 
 
 [The references are to the sections.] 
 
 INSURANCE — continued. 
 
 does not run with the subject-matter, unless so agreed in the policy, 
 
 6, 72. 
 attempted distinction between life and other insurances, 7. 
 a valuable interest must always exist, 7-8. 
 contract of indemnity, as between debtor and creditor, 8. 
 reinsurance, 9-12 C. See Reinsurance. 
 other, over, and double, 9-13, 364-376. 
 double, wiiat, 13. 
 
 guarantee. See Guarantee Insurance. 
 may be by parol, \\ et seq. 
 who may insure, 27, 35, 35 A. 
 in general, 35. 
 infants, 35 A. 
 unlicensed merchant, 35 A. 
 enemies. See War. 
 how affected by war. See War. 
 consummation of the contract, 43-65. 
 terms fixed by past dealings, 43 B. 
 when not complete. See Con.summation, 2. 
 accident, ticket, 70. See Accident. 
 ticket, 70. 
 illegal, 71. 
 
 what may be subject-matter of, 72-118. 
 modes of life, 109. 
 insurable interest in, 202-227. 
 proceeds of, who may sue for, 383. 
 assignment of policy of, 388. 
 right of creditor in proceeds of, 390. 
 right of wife to assign policy of, 391. 
 proceeds of, to whom they belong, 393. 
 right of wife and children in proceeds of, 393. 
 time of, 400. 
 specific, 436. 
 guarantee, 540. 
 solvency, 514, 545. 
 against birth of issue, 546. 
 
 of rents, titles, against theft, storms, and upon the lives of cattle, 547, 
 547 a. 
 2. Accident. See Accident. 
 
 definition of accident, 514. (See also 519, 520, and notes. The idea 
 of the first case in 515 is not sustainable.) 
 pitchfork slipping out of worker's hand and injuring his bowels 
 is an accident, so sprain by lifting heavy weights, 514. 
 rupture caused by voluntarily jumping from cars held not an acci- 
 dent 515. 
 rupture of blood-vessel by striking Indian clubs against a stove, acci- 
 dent, 515 a. 
 
 1400
 
 INDEX. 
 
 [The references are to the sections.] 
 
 INSURANCE — con^mwef/. ., , , ■,• . • 
 
 death by drowning may or may not be accidental, accordmg to cir- 
 cumstances, 516; see also 517, 518, 518 A. 
 " outward and visible means," 516, 517. 
 if a wound causing a fall into water and consequent drowning, there 
 
 is an accidental death. Drowning, 517. 
 " External, Violent, and Accidental" means, 517 A. 
 exertion of holding a runaway horse. Charbon poison, 517 A. 
 " cause of death arising within the system," 518. 
 disease, epileptic fit, and drowning, company liable, 518 A. 
 death by poison, 518 B. 
 sunstroke not accident (?), 519. Some violence, casualty, or vi. 
 
 major must be involved (V), 519. See 529. 
 death by robbers probably accidental, 520. „ .^^ . 
 
 " intentional injuries inflicted by assured or others, o20 A. _ 
 a railway accident is one occurring in the course of, and arismg out 
 
 of, the fact of a railway journey, 521.^ 
 total disability for usual occupation, 522-523. 
 act not incident to the occupation described m the policy, 52d A. 
 death from fits plus accident, accident plus a cold, 523 A. 
 " inhalino- eras " held to mean only voluntary inhaling, 523 A. 
 condition°that death must occur within ninety days after the acci- 
 dent, 523 A. 
 travelling, 521. 
 
 on foot, .524, 528, 529. 
 conveyance, 524, 525, 526, 528, 529. 
 engineer, 526, 527. 
 alighting, 524, 525. 
 
 getting on a moving train, 524 A, 529. 
 standing on car platform, 524 A. 
 limit of journey, 525. 
 negligence, 524 A, 525, 530. 
 condition to be careful, 531. 
 ■wilful exposure, 530. 
 
 voluntary exposure to unnecessary danger, 531 A. 
 obvious risk, 530. 
 violation of law, 530. 
 intoxication, 531. 
 increase of risk, 532. 
 change of occupation, 532. 
 classification of risk, 533. 
 extent of risk, 534. 
 
 insurable interest, 535. Amount of loss, 535. 
 notice of death or injury, 536. 
 preliminary proof, .536 (see also 530).^^ 
 form and completion of the contract, 537. 
 accidents to carriages, 538. 
 INSURED, must have an interest, 74.
 
 INDEX. 
 
 [The references are to the sections.] 
 
 IXSCRED — continued. 
 ageuts of, 
 
 principal bound by acts of his agent, 122. 
 
 if same person is agent of insured and the company, no- 
 tice of cancellation to him is good, 122. 
 one recovering insurance money may show, when sued for it, that 
 
 he was the agent of one who had an insurable interest, 122. 
 persons referred to by the applicant become his agents for the 
 
 purposes covered by the reference doctors, broiler, 123. 
 responsible for ordinary care. One having general authority to 
 insui'e for another may not choose a mutual compan}', 124. 
 effecting insurance with irresponsible persons is negligence, 
 124. 
 measure of damages in such case, 124. 
 that agency gratuitous no defence, 124. 
 assured may ratify contracts made for his benefit but witli- 
 out authority, 122 A. 
 full knowledge of facts necessary to valid ratification, 
 
 122 A. 
 constructive knowledge sometimes held sufficient, 122 A. 
 acceptance of policy ratifies agent's act in giving a pre- 
 mium note, 122 A. 
 agent to procure insurance no power to cancel, 138. 
 
 INSURER, subrogation of, to rights of assured against third parties. See 
 Subrogation. 
 
 INTEMPP2RAXCE, equity will not caucel policy because of, for insured 
 may reform, 67 ^I. 
 habits of, 296, 299, 300. 
 death by, 301, 418. 
 " tends to shorten life," 296. 
 proximate cause of death, 301, 419. 
 
 INTEREST. See Insurable Intkrest. 
 of beneficiary. See Benkficiauy, 3. 
 insurable, e.ssential to the contract, 7t 
 amount of, how fixed, and when, 7. 
 whether e-^sential at time of loss, 8, 9, 115, 117. 
 of assured known to agent, 133 A. 
 what constitutes. 71-109, 548, 581, 671. 
 must be lawful, 74, 75. 
 in expected profits, 79. 
 who may have, 80 
 
 of executors and administrators, 80, 91. 
 of trustees, 80. 
 of sheriffs, 80. 
 of consignees, 80. 
 of common carriei-s, 80. 
 of supercargoes, 80. 
 
 1402
 
 INDEX. 
 [The references are to the sections.! 
 
 INTEREST — continued. 
 of captors, 80. 
 
 ceases by stoppage in transihi, 80. 
 of pledgees, innkeepers, &c., 81. 
 whether mere posse.ssion gives, 81. 
 divers interests in same subject-matter, 81. 
 of tenants by curtesy and dower, 81. 
 of assignee of bond, for deed of real estate, 81. 
 of disseisor, 82. 
 
 of mortgagee and mortgagor, pledgor, guarantor, 82. 
 of mortgagee and creditor, 83, 95. 
 of vendor and vendee, 83 a. 
 of lessor and lessee, 84. 
 of donor inter vivos, 8.5. 
 of stockholder in corporate property, 85. 
 under equitable title, 8G-88. 
 of fraudulent grantee, 88. 
 of intruder, 89. 
 of bankrupt, 92. 
 of insolvent, 92. 
 of mechanic, for lien, 93. 
 of parties liable for loss, 94. 
 of debtor in property attached, 95. 
 of bailee of attached property, surety, 95= 
 of vendor and vendee, 96, 97. 
 of holder of promissory note, 97. 
 of reinsurer, 98. 
 of copartners, 99. 
 duration of, 100. 
 continuity of, 101. 
 in life insurance, 102, 127. 
 of sister iu life of brother, 103. 
 of child in life of parent, 103. 
 of father in life of son, 104-109. 
 oi feme s^ole under contract of marriage, 107. 
 of married sister in life of brother, 107. 
 of nephew in life of uncle, 107. 
 of mistress and betrothed, 107 a, 107 h. 
 of vyife in life of husband, 107 h. 
 of creditor in life of debtor, 108. 
 of partner in life of copartner, 109. 
 of employer in life of employee, 109. 
 of contractors, 109. 
 valuation of, 109. 
 
 of employee \\\ life of employer, 109. 
 of assignee, 110. 
 of trustee, 111. 
 of payee or beneficiary, 112, 113. 
 
 1403
 
 INDEX. 
 [The references are to the sections.] 
 
 INTEREST — continued. 
 
 ownersliip, title, 265. 
 
 absolute, 1288. 
 
 ■when recoverable, 448. 
 
 as damage,s, 530, 705. 
 
 every cue has, in his own life, 535. 
 
 in accident insurance, 585. 
 INTEREST POLICY, what, 30, 31. 
 INTERIM RECEIPT, 57-59. 
 
 contract without seal good as an, 17. 
 
 notice to cancel. 69. 
 INTERPLEADER, 566 c. 
 INTERPRETATION. See chap. viii. anal. 4. 
 
 rules of. See Construction. 
 
 what law governs, 66, 66 A. 
 
 usage in aid of, 173-179. 
 INTERROGATORY, equivocal, 210, 211. 
 INTRUDER has no insurable interest, 89. 
 
 J. 
 
 JOINT INSURANCE, several persons may take out a policy together 
 
 on the same or different property, 35 A. 
 JOINT OWNERS, change of title among, 280. 
 JUSTICE, death by the hands of. See Death. 
 
 K. 
 
 KEEPING, means habitual keeping, 241. See 243. 
 
 of prohibited goods, 239-243, 245. 
 
 illegal, 246. 
 KEROSENE, when allowed, 239 A. See Risk, 2. 
 KNOWLEDGE of agent imputable to principal, 131, 132. 
 
 of condition, when presumed, 216. 
 
 L. 
 
 LACHES, 566 B, .566 C. See Remedies, 1. 
 LAMPS " to be filled by daylight," 239 A. 
 LANDLORD, in goods of tenant, 84. 
 LAPSED POLICY, effect on premium note, 556. 
 
 suit to revive, 568. 
 LAW, death in violation of. See Death. 
 1404
 
 INDEX. 
 [The references are to the sections.] 
 
 LEASE, no alienation, 265, 272, 276 B. 
 
 not an incuinbrciiice, 292 A. 
 LESSEE, insurable interest of, 84, 288. 
 
 claim of, for loss, 424, 450, 456, 456 a. 
 LESSOR, insurable interest of, 84. 
 
 claim for loss, 424, 450, 456. 
 LIABILITY 
 
 of reinsurer co-extensive with that of insurer, 11 (z). 
 measure of, 11 A. 
 
 not affected by insolvency of insurer, 11 A, 11 (z), 12. 
 "liable in same time and manner as reinsured," has no refer- 
 ence to insolvency, 11 (z). 
 to assured, 12, note. i* 
 
 not affected by arbitration with other reinsurers, 12, note, 
 for damages incurred by insurer failing to keep the policy alive, 
 12, note. 
 pro rata in reinsurance, 11 (z). 
 
 in double insurance, 13 
 for loss of goods constitutes an insurable interest, 83, 94, 94 A, 95. 
 general denial of, waiver of preliminary proof, when, 469. 
 LICENSE to travel or reside abroad, 332-338. 
 
 an unlicensed trader cannot recover on a policy on his business, 35 A. 
 
 LIEN, mechanic's, insurable, 93, 288. 
 so equitable lien, 93 A. 
 lien for advances, 82, 93. 
 
 may be an incumbrance, 291, or not, 292, 292 A. 
 for taxes may be, 291, or not, 292 A. 
 
 not if assessment is illegal, 292 A 
 for purchase-money may be, 291, or not, 292 
 of a judgment may be, 291, 291 A, or not, 292. 
 
 not if paid, though undischarged of record, 291, note, 
 by collateral deposit of deeds, 291. 
 mechanic's lien may be, 291. 
 of mutual insurance companies, 548. 
 LIFE INSURANCE. See Insurance. 
 involves the principle of indemnity, 7-8. 
 an attempted distinction of, from fire insurance, &c., 7. 
 every contract of insurance must be based on a valuable interest, 8. 
 
 this IS what distinguishes insurance from a wager, 33, 74. 
 how affected by war. See War. 
 insurable interest in. See Interest. 
 warranty of health, 295. See Health. 
 LICHTNING, loss by, 406. 
 
 LIMITATION OF SUIT, condition as to, in original policy does not 
 affect reinsurance, 12 B. 
 extended by war, 39 A. 
 place, 490, 491. 
 
 1405
 
 INDEX. 
 
 [The references are to the sections ] 
 
 LIMITATION OF SUIT — continued. 
 time: 
 
 a condition that suit must be brought within a certain time is 
 valid even against minor beneficiaries, 478 A. 
 miless unreasonable, 482, 
 it controls the general Statute of Limitations, 478 A. 
 limitation in by-law, 478 A. 
 such conditions do not apply to a suit to recover premiums. 
 
 478 A. 
 a condition that no suit shall be brought until defendant 
 does some act is void, 478 A, also 479. 
 the period begins to run from the time the loss becomes due and 
 payable, and the right of action accrues, 479. 
 there is no right of action until the sixty days or ninety 
 
 days after proof allowed the company for payment, 479. 
 wherefore the limitation does not begin to run until that 
 time has expired, although the language of the policy 
 is emphatic that it shall run from the time of the tire, 479. 
 contra, 479, and note. 
 Canada statutes, 479. 
 if sixty days are given for payment they run from the 
 
 time of proof, 479. 
 if the last day is Sunday, suit on following day sufficient, 
 479. 
 limitation of the issuing of execution against the company is 
 
 valid, 480. 
 reinsurance under a policy containing time limitations, 481. 
 a new promise will not revive a cause of action once dead under 
 
 a clause of limitation, 482. 
 non-suit or arrest of judgment in suit brought within time will 
 not permit a new suit after time, nor will a suit in a court 
 without jurisdiction stop the running of the period, 483. 
 but an amendment in the name of the defendant may be made 
 after the time has expired, or a new party may be added, 48o. 
 excuse for failing to sue within the time, 484-488. 
 fault of insurer is an excuse, 484, 488. 
 
 negotiations in bad faith or other action lulling the insured into 
 security, 488. 
 otherwise if the negotiations are in good faith, or cease before 
 the limitation expires, 48."3. 
 refusal to pay does not waive the terminal limitation of suit, 
 but does waive the initial limitation, i. e. the sixty or ninety 
 days allowed the company for payment, 488. 
 demanding proofs, or otherwise recognizing the policy after the 
 
 period has expired, is a waiver, 488. 
 clause requiring icriting for a waiver, 488. 
 
 payment to mortgagee does not waive the limit as to the mort- 
 gagor. 488. 
 
 140G
 
 INDEX. 
 
 [The references are to the sections.] 
 
 LIMITATION OF SUIT — con/mw^/. 
 
 arrest for arson not at instance of company no excuse, 488. 
 
 intervening war may excuse, 486. 
 
 other conditions inconsistent with the time limit, 487. 
 
 absence of defendant, 484. 
 
 inconsistent conditions, 487. 
 
 waiver of, 488. 
 LIMITS, settled, 337. 
 
 LOSS AND ITS ADJUSTMENT. See Rebuilding and Contri- 
 bution. 
 1. Contribution by several insurers, 13, 434-440. 
 
 covered by policy, 31, 402-459. 
 
 known to assured before completing contract and not disclosed fatal, 
 43 G. 
 
 when there are several causes of, 301. 
 
 conflicting claims to, creditor, administrator, 390. 
 
 by usurped power, civil conmiotion, mobs, and riots, 403. 
 
 by theft, injury by water, removal, 404. 
 
 by lightning, smoking, illegal practices, 405, 406. 
 
 by negligence, misconduct, and fraud, 407-411. 
 
 by wilful destruction and exposure, 409-411. 
 
 by design, 410 
 
 by explosion, 414-416. 
 
 by collision, 417. 
 
 total loss of a building is destruction not of the materials but of their 
 specific character as a building, 421 a. 
 
 if cost of removal of ruins preparatory to rebuilding is more than 
 their value, or cost of repairs more than value when repaired, there 
 is a total loss, 421 a. 
 
 broken leg necessitating destruction of horse, total loss, 421 a. 
 
 plaintiff may recover for partial loss proved, though he sued for 
 a total loss, 421 a. 
 
 loss occurs at the time of the fire, 421 a. 
 
 in a life policy the estimate of the value of what is lost is made by the 
 parties beforehand, 422 
 
 in case of a creditor the estimate should coincide substantially with 
 the debt, 422. 
 
 valued policies, 422 A. 
 
 if only part of property put at risk recovery is only pro rata, 422 A. 
 
 statutes making conclusive, as to real estate, the value named in the 
 policy, 422 B. 
 
 in difire policy unvalued the object is indemnification, and the meas- 
 ure of damages is the vahie of the property lost, not the cost of re- 
 placement, 423-424. 
 
 remote damages from interruption of business, loss of prospective 
 rent, &c , cannot be recovered unless specifically insured, 423 et scq. 
 
 method of estimating value and loss. Cost, statements in application, 
 
 proofs, &c., 423 A. 
 vor.. II.- 45 1407
 
 INDEX. 
 [The references are to the sections.] 
 
 LOSS AND ITS ADJUSTMENT — cori^mwer/, 
 
 evidence as to amount of loss. Witnesses, admissions, &c., 423 B, 
 
 428. 
 evidence of fraud, 423 C. 
 
 burden of proof on amount of loss, 423 C. 
 
 temporary depression of value not to be taken into account, 424. 
 amount recoverable, Lessee, Mortgagor and :Mortgagee, 424. 
 impost and excise duties, 424. 
 
 creditor's recovery not limited to amount of debt, 424. 
 goods in trust, 424. 
 bailment, 424. 
 
 goods sold but not removed, 424. 
 partner, 424. 
 part-owner, 424. 
 
 person having several interests, 424. 
 policy running with the property, 424. 
 extent of damage, not extent of title, the test, 424 A. 
 insured may recover for all interests represented by him, 424 A. 
 ambiguity resolved against the company, 424 A. 
 rent, usage, 424 A. 
 
 plaintiff not estopped by proofs repudiated by company, 424 A. 
 insurance on one item cannot be diverted to another, 424 A. 
 if the interest has diminished the insured can in general only re- 
 cover for the interest he still has, 424 A. 
 limitation by special provision, 425. 
 
 partial loss below the proportion necessary to bring the policy 
 
 into action, 425. 
 that liability is incurred beyond charter limit no defence to 
 
 company, 425. See, however, 430. 
 pro rating " without reference to liability of other companies," 
 
 425. 
 company only to be liable for what prior insurance does not 
 cover, 425 
 repeated losses, 426. 
 transfer of claim for damages, 426. 
 apportionment of loss and expenses, 427. 
 interest, 428. 
 mode of payment, 428. 
 set-off, 428." 
 
 for improper refusal to receive premiums, or renew, or to pay a loss, 
 damages may be had, 429. 
 2. Who may sue, 445-452. 
 
 nominal and real claimants, 445. 
 
 A. insuring in his own name the property of B. for B.'s benefit. 
 
 extrinsic evidence as to where proceeds should go, 445. 
 
 heir, 445. 
 
 administrator, 445, 448. 
 
 unless the heirs are named, only the executor can sue, 447 B. 
 
 1408
 
 INDEX. 
 
 [The references are to the sections.] 
 
 LOSS AND ITS ADJUSTMENT — continued. 
 payable in case of loss to B, 446-447. 
 beneficiary sue in his own name, 446. 
 in case of assignment, 447, 448. 
 
 agent. Policy on goods " in trust" or "for whom it may con- 
 cern." Real party in interest must sue in Iowa, 448. 
 mortgagor and mortgagee, 44!j. 
 
 claim on proceeds, and which may sue, 449. 
 creditor cannot sue on policy payable to him "as his interest 
 may appear," 447 A, unless his interest is more than the in- 
 surance, 449, for the action cannot be split. 
 too many plaintiffs, 447 A. 
 
 policy to A. and B., real interest all in A., 447 A. 
 only the person named in the policy can sue, unless it imports 
 the assurance of others, as by the phrase, " whom it may con- 
 cern," &c., 447 B. 
 only the covenantee can sue on a policy under seal, 447 B. 
 dismissal of suit because in wrong name no bar to another, 
 447 B. 
 • suit against president and secretary sufficient, 447 B. 
 3. To WHOM THE piiOCEEDS BELONG, 449-452 B. See chap. xx. 
 general ru'e. See middle of, 456. 
 creditor must account for proceeds beyond debt and expenses, if 
 
 premiums came out of debtor, 449. See 456, near end. 
 vendor and vendee, 450, 456. 
 
 mortgagor and mortgagee, 449, 452 B-452 D, 456, 457 C. See 
 chap, xxiii. and anal. A, 4. 
 mortgagee no claim on mortgagor's insurance, 449. 
 covenant to insure for mortgagee's benefit, 452 C. 
 policy payable to mortgagee, how affected by acts of moit- 
 
 gagor, 452 D. See 373 A, 379, 381, 386. 
 insurance by 'mortgagee is for indemnity, and after debt 
 is satisfied the excess goes to the mortgagor, 452 B. 
 Contra, 449. 
 landlord and tenant, 450. 
 lessor and lessee, 456. 
 carrier's right to claim proceeds, 457 A, 457 B. See chap, xxiii. 
 
 and anal. A, 4. 
 wife insuring her life for husband, or children, 451. 
 endowment policy payable in alternative, 452. 
 payment of premiums gives no right to proceeds, 4.52 A. 
 insured is to retain no more of the fund than covers his interest, 
 
 452 A. 
 loss after succession goes to heir or devisee. 
 
 administrator recovers as trustee, 452 A. 
 wife's life estate by marriage contract not a "succession," 452 A. 
 equitable owner against garnishment of legal owner, 452 A. 
 
 1409
 
 INDEX, 
 [The references are to the sections.] 
 
 LOSS AND ITS ADJUSTMENT — con/mwe^/. 
 
 oue interested may recover from another who has received the 
 whole fund, unless it is primarily for the latter's benefit and no 
 more than covers his own interest, 452 A. 
 holder of mechanic's lien, 456, note, 
 builder no claim on buildee's insurance before house is complete, 
 
 452 A. 
 equity will secure vendor the purchase-money out of vendee's in- 
 surance, 452 A. 
 vendee's claim, on completing purchase after fire, 450. 
 tenant in common, 452 A. 
 legatee no claim, where testator and goods perish at sea, it being 
 
 unknown which went first, 452 A. 
 *' for owners," or 
 " ichnm it vwy concern,'''' 452 E. 
 4. Adjusting Claim, Compromise., ^-c, 452 F. 
 
 adjustment fairly made conclusive, if the facts were actually 
 known (English case contra), though tlie parties mistook their 
 legal rights, 452 F. 
 facts not considered may afterward avail, unless merely cumula- 
 tive in an unimportant degree, 452 F. 
 if the assured knowing his rights is frightened into an unjust 
 
 settlement, there is no help for him, 452 F. 
 yielding part of claim is sufficient consideration for promise to 
 pay the rest, 452 F. 
 but is not binding on the assured unless the claim is doubt- 
 ful, 452 F. 
 or there is some consideration for reducing his claim, 452 F. 
 performing conditions prescribed is a good consideration for the 
 
 promise attached to them, 452 F. 
 fraud vitiates the adjustment, 452 F. 
 notice, proof, account, and payment of, 400-477. 
 
 general denial of liability to, waiver of preliminary proof, when, 4G9. 
 payment of, procured by fraud or mistake, 477, 575. 
 
 M. 
 
 MAGISTRATE'S CERTIFICATE, when necessary, as preliminary 
 
 proof, 466. 
 MAIL, negotiations for insurance by, 46-49. 
 MAILING notice as to premium is sufficient, 356 A. 
 MARGIN of policy, effect of notes on, 29 A. 
 MARRIAGE revokes designation of beneficiary (?), 399 II. 
 MARRIED WOMAN, insurable interest of, in life of husband, 107. 
 rights in life policy for benefit of, and children, 391. 
 
 1410
 
 INDEX. 
 [The references are to the sections.] 
 
 MASTER OF SHIPS, insurable interest of, 94 A. 
 MATERIALITY. See Repkesentatiox and Concealment, 4. 
 
 not an open question in warranties, 184. 
 
 an open one in representations, 184. 
 
 and concealment, 184. 
 
 ■when question for the jury, 184, 187. 
 
 question and answer conclusive as to, 184-188. 
 
 when for the court, 18.3-188. 
 
 MEASURE OF DAMAGES, indemnity is the limit, 2, 7, 8, 11. 
 
 in reinsurance the insurer cannot recover beyond his own liability, 
 11, 11 A. 
 and if he settles for less than the original policy he can recover 
 
 from the insurer no more than he settled for, 11, 11 A. 
 if he has not settled his own liability is the measure of that of 
 the reinsurer, 11 A. 
 MEDICAL ATTENDANT, usual, 304. 
 
 object of reference to, 304. 
 MEDICAL EXAMINATION. See Health, 3. 
 
 MEDICAL EXAMINER, statement of, as evidence, 123, 303. 
 
 examination, object of, 303. 
 
 how far agent, 303. 
 MEMBERSHIP of mutual insurance company, 648-552. 
 MEMORANDUM, what, 29. 
 MERGER OF TITLE, when an alienation, 269 a. 
 
 MILITARY SERVICE, of the enemy, death in, not insurable, 37. 
 
 what is, 37, 333, 334. 
 
 deatli in, 332. 
 
 entering, 334. 
 
 voluntary or involuTitary, 334. 
 MILL, machinery, included in loss of, 520. 
 MILLS. See Conuitions. 
 
 working of, 276. 
 
 MISCONDUCT, loss by, 407, 411. 
 
 defined and distinguished from negligence, 411. 
 
 MISREPRESENTATION. See Representation, Brief Index and 
 Full Analysis, 
 defined, 181. 
 
 by agent. Chap. vii. anal. 3. 
 if doubtful, insured to have benefit of doubt, 193. 
 in original policy may not avail a reinsurer, ll(z2). 
 as to title or incumbrance. See Incumbrance, 3. 
 as to other insurance, 372 E. 
 as to use, 247. 
 
 as to part of property insured, 277. 
 as to title, 287. 
 
 1411
 
 INDEX, 
 
 [The references are to the sections. ] 
 
 MISREPRESENTATION — continued. 
 
 as to incumbrance, 290. 
 
 ■waiver of, 500. 
 
 in guarantee insurance, 543. 
 
 of "life," 579. 
 MISTAKE, in name of vessel insured not fatal, 43 D. 
 
 in identity of assured not fatal, 43 D. 
 
 in charging too little premium, 43 E. 
 
 MOBS AND RIOTS, loss by, 403. 
 
 MORTGAGE, assent to, by insurer does not release reinsurer, 12 B. 
 
 as an alienation. See Alienation. 
 
 is an incumbrance, 291, 292 B. 
 
 though fraudulent and unrecorded, 291. 
 
 before foreclosure, no alienation, 269. 
 
 but is an alteration of ownership and change of interest, 271. 
 MORTGAGEE, interest independent of mortgagor, 6. 
 
 insurable interest, 80, 82, 83, 96. 
 
 title in respect to insurance, 287. 
 
 what he may insure, 116. 
 
 state of his account with mortgagor no concern of the insurer, 116. 
 
 claim of, for loss, 424, 449. 
 
 right of subrogation, 456, 457. 
 MORTGAGOR, when not interested in proceeds of insurance by mort- 
 gagee, 6. 
 
 insurable interest, 82. 
 
 must state title if called for, 287. 
 
 alienation by, effect of, on mortgagee, 276. 
 
 title of, in personal property, 288. 
 
 claim of, for loss, 424, 449. 
 
 right of subrogation, 456, 457. 
 MOTHER, insurable interest in life of son, 107 (t). 
 
 as beneficiary, 399 H. 
 
 MUTUAL COMPANIES, 548. 
 
 may make parol contract, 23 A. See Parol Contract. 
 
 may contract with parties out of the State, 563. 
 agents of, 
 
 governed by much the same principles as agents of stock com- 
 panies, 139. 
 
 the agent acts in the negotiations only as agent of the company 
 and not of the assured, 131. 
 
 an agent's overestimate of value binds the company, 140. 
 
 where agent neglects to state an incumbrance mentioned by the 
 insured, 140. 
 
 the law construes the powers of agents of mutual companies 
 more strictly than those of stock company agents, 127. 
 
 and in Massachusetts the decisions are very strict, 145, 146. 
 
 1412
 
 INDEX. 
 [The references are to the sections.] 
 
 MUTUAL COMPANIES — continued. 
 
 agents there cannot bind the company contrary to by-laws, 145, 
 
 146. 
 but by-laws not of the essence of the contract may be waived, 
 
 147'. 
 in Pennsylvania also the distinction between mutual and stock 
 
 companies is emphasized, 14b, 149. 
 see on this subject also the whole text from 139 to 151. 
 secretary as agent of directors, 139. 
 directors may appoint president to indorse, 139. 
 liability of directors, 504. 
 MUTUAL INSURANCE, 548. See Assessment. 
 
 effect of war on, same as with other insurance, 39 (s). 
 
 1. Membership, 548-552. 
 capital, 548-551. 
 
 guaranty and other funds, 549-551. 
 life, 551. 
 
 lien on real estate, 563. 
 
 directors, when liable for neglect to assess, 564. 
 
 each person insured becomes a stockholder, and is at once insured 
 and insurer, 548 
 
 the whole premium may be paid in advance, and no after lia- 
 bility attach, 548. 
 
 charter lien, 548. 
 the capital consists of cash, premium and deposit notes, 549, 549 a, 
 549 b. 
 
 and the liability of members to a fixed amount beyond these, 
 549. 
 mutual and stock business done by same company, 550. 
 benevolent associations treated as life insurance companies, 550 a. 
 mutual life insurance guarantee fund, 551. 
 membership, 552. 
 
 how far members bound by the by-laws, 552. 
 
 applicants not bound by them until the contract is complete, 
 and contra, 552. 
 
 acts of officers, 552. 
 
 safety fund, .552. 
 
 diversion of funds from purpose of charter, 552. 
 
 false representations in procuring membership, 552. 
 
 estoppel to deny membership, 552. 
 
 a minor may be a member, 552. 
 forfeiture of policy as a defence on note, 553, 554. 
 surrender and cancellation of policy, 555; see also 556. 
 
 insolvency of maker of premium note, 555, 
 
 2. Assessments, 557. 
 
 right to assess strictly construed. The assessment must con- 
 form to the charter, and the agreement must be by the proper 
 officers, 557. 
 
 1413
 
 INDEX. 
 [The references are to the sections] 
 
 MUTUAL INSURANCE — continued. 
 
 slight errors do uot invalidate assessments, 558. 
 what they may include. Insolvency. Set-off, 559. 
 
 how the amount for which the assessment is to be made is 
 
 estimated, 559. 
 it must not be larger than necessary to meet existing 
 
 charges, or intentionally omit stockholders, 559. 
 but an assessment may be made to cover losses by bad in- 
 vestments, or prior assessment illegal in form, and mere 
 excessiveness if uot gross will not be fatal, 559. 
 classification of risks and funds, 560. 
 extent of liability to pay, 560 A. See also, 561. 
 
 fraud inducing member to join is a defence, 560 A. 
 but neglect to read the policy, which turns out to be 
 different from what the insured wanted is no defence, 
 560 A. 
 forfeiture or suspension by non-payment, 560 B. (Liability in spite 
 of; see 560 A.) 
 not if assessment is invalid, 560 B. 
 or assured's share of company profits will satisfy the assessment 
 
 on him, 560 B. 
 or the policy is revived, or there is an excuse for non-payment 
 
 which the company ought to recognize, 560 B. 
 evidence of forfeiture, 560 B. 
 company's books the best, 560 B. 
 
 sometimes the whole amount of the deposit note becomes due 
 upon a single default, 561. 
 waiver, 561 A. 
 
 by course of dealing, 561 A. 
 
 any subsequent recognition of the policy as valid, 561 A. 
 sending a second notice after the expiration of the time for pay- 
 ment, 561 A. 
 subsequent levy or collection of an assessment, unless qualified, 
 561 A. 
 notice of assessment, 562, 
 mail, 562. 
 by-law, 562. 
 charter provision, 562. 
 publication, 562. 
 date, 562. 
 
 time allowed for payment after, 562. 
 contract with parties out of the State, 563. 
 
 lien, .563. See also .560 A. 
 remedy to compel assessment, &c., 563 A. 
 
 company must make an assessment within a reasonable time, and 
 pay a loss, 563 A. 
 if it does not remedy by mandamus, 563 A. 
 or suit for damages, 563 A. 
 
 1414
 
 INDEX. 
 [The references are to the sections.] 
 
 MUTUAL mSURANCE — continued. 
 
 a by-law may diminish the class assessable, or may require resort to 
 a superior body of the society before suit, but cauuot cut off final 
 resort to the courts, 563 A. 
 numbering of certificates /jn'ma/ac/e evidence of membership, 503 A. 
 
 lack of certificate fatal to suit, 563 A. 
 liability of directors for neglecting to assess, 564. 
 MUTUAL MISTAKE, ground for reformation, 27. See also Remedies. 
 
 N. 
 
 NEGLTGENCE, loss by, 409-411. See Risk, 4. 
 
 of agent, see chap. vii. anal. 3. 
 
 as to mere personal undertaking, no effect to bind company, 64. 
 
 in company's business, company responsible, 43 D, 43 E, 58, 64. 
 See Consummation, 1. 
 
 contributory, no defence, 409, 530, 538. 
 
 gross, 410. 
 NEW PR():\nSE does not avoid limitation of suit, 482. 
 NON-FORFEITABLE policy, 344 6, 363 a. 
 NON-PAYMENT OF PREMIUM. See Premium. 
 NOTE, premium. See Premium, 2 
 NOTICE. See Proofs, 1. 
 
 of loss to reinsurer, 1 1 (z). 
 
 of abandonment need not be given to reinsurer, 11 (zg). 
 
 of loss, time and mode, 11, 216, 460, 461. 
 
 may be given within a reasonable time after war ceases, 39 A. 
 
 of charter and by-laws ought not to be attributed to the public, 23 D. 
 
 to agent notice to principal, when, 1.32, 153. See Agent, 4, 5, 6; 
 Incumbu.ance, 6. 
 
 to agent of applicant's age, &c estops company, 305. 
 
 as a condition of cancellation, see chap. v. anal. 2, 3. 
 
 of other insurance, wliat, and when, 216, 368-372. 
 
 of assignment of policy, 216, 396. 
 
 of incumbrance, 216, 294 a. 
 
 of increase of risk, 221-225. 
 
 of nonpayment of premium. See Premium, 8. 
 
 of other insurance in writing, 363. 
 
 forthwith, &c., 462. 
 
 by whom and to whom given, 463, 465. 
 
 waiver of, 464. 
 
 by stranger, effect of, 512. 
 
 of death, .536. 
 
 of assessment, 562. 
 
 H15
 
 INDEX. 
 [The references are to the sections.] 
 
 o. 
 
 OCCUPANCY, 247-249. See Vacancy. 
 OCCUTATIOX, representation as to, 306. 
 
 at time of application must be given, 188 A, 306. 
 
 change of, 5o2. 
 OFFICERS. See Agknt, Agents, Mutual Companies, &c. 
 
 of mutual insurance company, power of, 146-148. 
 
 (le facto signature to policy good, 27. 
 OIL, provision against storing, 778. 
 OMISSION, to answer question in application, 1G6. 
 ONE-THIRD, difference between new and old, not allowed, 423. 
 OPEN POLICY. See Policy. 
 OPINION, of agents, how far binding principal, 131. 
 
 no warranty, 296. 
 
 of witness, 325. 
 OPIUiNI EATING, representations as to habit of, 299, 300. 
 
 ORAL, insurance, valid, 14. 
 
 representation prior to application, effect of, 192. 
 OTHER INSURANCE, 364-376. See Double Lnsurance, and for 
 fuller analysis see chap, xviii at 364. 
 
 means reinsurance, when, 12. 
 
 known to apent, 133 A. 
 
 understated, 188 A. 
 
 of part, entire contract. 301. 
 
 Bimultaneous policies, 365 a. 
 
 identity of interest not necessary, 366, 436, 436 a. 
 
 notice of, what, and when, 308. 
 
 notice of, in writing, 369. 
 
 notice of, by indorsement, 369. 
 
 consent to, in writing, 370. 
 
 approval of and consent to, 371. 
 
 waiver of forfeiture for; 375. 
 
 in life insurance, 440. 
 OVER-INSURANCE. See Other Insurance. 
 OVP^RPAYMENT, retained by company, applied by law to revive dead 
 
 policies, 70 C. 
 OVERVALUATION. See Valuation. 
 
 is frequently stipulated against because it influences the assured 
 against the preservation of the property, 373. 
 
 evidence of value, 373. 
 
 sometimes is held that the overvaluation must be intentional to be 
 fatal, 373, 373 A. 
 1416
 
 INDEX. 
 
 [The references are to the sections ] 
 
 OVERVALUATION — continued. 
 
 but best view is a wilful ueglect of tlie means of information will 
 avoid the policy, even though there is no intended fraud, 373, note, 
 373 A. 
 and a mistake has been held fatal, 373, 373 A. 
 
 it is said tiiat only a gross and clear overvaluation will be fatal, 373. 
 and this whether there is any condition on the subject or not, 373. 
 others hold a substantial excess sufficient, 373 A. 
 want of education is no excuse, 373 A. 
 a claim more than double the truth is prima facie fraudulent, 373 A. 
 
 but not 20 per cent, nor 75 per cent excess, 373 A. 
 a warranty shuts out the question of intent, 373 A. 
 
 unless other parts of the policy qualify it, 373 A. 
 of part of the property does not affect the rest, 373 B. 
 that is known to the company, or ought to be known, is waived by 
 rejecting the claim on other grounds, 373 B. 
 but not if it is a fraud and the fact is unknown, 373 B. 
 nor will knowledge of the agent be sufficient if assured knows 
 the company is being deceived, 373 B. 
 under the Maine statute the question is whether the risk is increased, 
 
 373 B 
 when overvaluation at the time of insurance is immaterial. 373 B. 
 the rule of this topic does not apply to a changing stock of goods, 374. 
 nor in any case where the insurer is only liable for a percentage of the 
 
 actual loss, 374. 
 in case of renewal, a depreciation since the first insurance does not 
 
 give rise to a fraudulent overvaluation, 375. 
 a violation of the charter, by insuring for too large a percentage of 
 the real value, does not avoid the policy between the parties, 376. 
 OWNER, who is, in respect to insurance. See Title 1, 2, 3, 4, 5. 
 
 " sole, unconditional," &c. See Title 4. 
 OWNERSHIP, mortgage, alteration of, 271. 
 change of, effect on right of action, 281. 
 interest, title, 285. 
 
 PAPERS referred to in policy when part of contract, 158-160. 
 PARENT, interest of, in life of child, 102 A, 103-107. 
 PAROL, transactions prior to or contemporaneous with policy, effect of, 
 2f)B. 
 modification of a written policy is good, 24, 24 A. 
 PAROL CONTRACT. See Contract. 
 of insurance, 
 
 terms of, 23. 
 
 must be fixed by specification, prior course of dealing, or other- 
 wise. 27. 
 prepayment of premium not necessary, 22 A. 
 
 1417
 
 INDEX. 
 [The references are to the sections.] 
 
 PAROL CONTRACT — continued. 
 
 will be specifically enforced, 23 A. 
 
 not ordiuarily within the Statute of Frauds, 23 C. 
 
 if one peril is within the statute and one not, the contract is good 
 
 as to the latter, 23 C. 
 effect of charter and by-laws, 14-25, 23 D. 
 and see cliap. iv anal. 5. 
 renewal, 21. See Renewal, or clnip. v. anal. C. 
 some doubt if the long usage to give written contracts has not the 
 
 force of law and makes parol insufficient, 14. 
 great weight of authority and reason holds it good, 14-2.5. 
 
 if the insurer is a private person the common-law riglit to make 
 oral contracts of insurance is clear, 18, 19, 23 I). 
 whether the contract is intended to be final or looks to the 
 issue of a policy, 22, 23 A, 23 D. 
 if the insurer is a corporation the first question is whether its or- 
 ganic law gives it power to make oral insurance, 23 D. 
 and the second question is whether when it exceeds its power 
 the contract may not still be good between the parties, 14, 
 23 D. 
 legislative intent, 23 P. 
 one who retains the benefit of a transaction cannot repudiate 
 
 it, 23 I), 
 an innocent person who has given value will be protected, 
 
 23 D. 
 mere informality will not avoid the contract unless the legis- 
 lative intent is clear to that effect, 23 D. 
 in any case the preliminary oral contract is valid though the 
 charter require a written policy ever so peremptorily, 23 J), 
 custom is evidence to show whether the contract was final or looked 
 to the issue of a policy, 23 B. 
 
 PAROL EVIDENCE See Evidence. 
 
 admissible to show that a policy is really one of reinsurance, 12 D. 
 not admissible to show that a renewal receipt absolute on its face, is 
 really conditional, 70 a. 
 
 PARTICULAR account of loss, what, and when required, 460, 474, 475. 
 
 See Pkoofs, 3. 
 PARTIES to contract, who may be, 35, 35 A. 
 
 in general, 27, 35. 
 
 infants, 35 A. 
 
 unlicensed merchant, 35 A. 
 
 enemies. See War. 
 
 two or more joining, 35 A. 
 
 PARTNERS, insurable interest of, in property of copartnership, 91,424. 
 insurable interest of, in life of copartners, 109 A. 
 transfer between, no alienation, 279-2S1. 
 contra, 280. 
 
 1418
 
 INDEX. 
 
 [The references are to the Beetions,] 
 
 PART-OWNERS, insurable interest of, 99. 
 
 PAYMP]NT, what constitutes payment of premium, 345-348. See Pre- 
 mium, 1. 
 evidence of, 359. 
 in work and board, &c., 347. 
 by promise of officer of insurers, .348. 
 of premium, when it becomes due on Sunday, 349. 
 waiver of payment of premium, 360. 
 PERiMlT, to reside abroad, 332. 
 
 to travel, 335. 
 PETROLEUM, when included in risk, 239 A. See Risk, 2. 
 PHYSIC IAN, family, 304. 
 
 PLACE, reinsurance of risks in New York does not include policies 
 issued in New York on property elsewhere, 12 A. 
 for payment of premium. See Prejiium, 6. 
 of contract, 66, 66 A 
 
 where goods must be to be covered by the risk. See Risk, 3. 
 when statement of, a warranty, 2.")7. 
 PLEADING, what parties must allege and prove, 183. 
 general statement of plaintiff's case, 588-590. 
 value, 590. 
 
 compliance with statutes, 590. 
 negative allegations, 590. 
 
 policy must be set out, and application if part of policy, 589. 
 performance of conditions precedent to right of recovery must be 
 alleged, 589. 
 general allegation sufficient, but it must be stated that the period 
 
 allowed the company for payment has expired, 589. 
 must state that notice and proofs were furnished as agreed, or 
 were waived, 589. 
 proof of waiver of a condition is admissible under the allegation of 
 
 performance, 589. 
 allegations as to interest, assignment, value, description of property^ 
 
 &c . 590. 
 plaintiff need not aver matters of defence, exceptions, conditions 
 subsequent, the right of the company to do business, sufficiency of 
 capital, 589, &c., nor that demand was made before suit, 590. 
 matters in defence must be specifically pleaded, 591, 
 intentional injury, 591. 
 arbitration, 591. 
 breach of warranty, .591. 
 misrepresentation, 591. 
 other insurance, 591. 
 
 objections different from those raised before suit will not do, 591. 
 false swearing, 591. 
 fraud, 591. 
 
 ultra vires, 591. See also 577, and chap. iv. 
 new trial, 591 B. 
 
 1419
 
 INDEX. 
 [The references are to the sections.] 
 
 PLEDGEE, insurable interest. 80, 82, 93 A. 
 PLEDGOR, insurable interest, 82, 288. 
 PNEUM0XL4, 29G. 
 
 POLICY, life, generally a valued one, 7. 
 form of, 
 
 charter form not exclusive, 15. 
 
 contra, 15, note, 
 seal not requisite, 16, 27. 
 
 unless the law expressly so provide?, 16, note, 
 and even then the contract may be good without seal as an 
 interim receipt, 17. 
 issued without order of directors good, 17. 
 insured need not prove officer's actual autliority, 16. 
 signature of president and secretary, 15 and note, 27. 
 
 of de facto officers sufficient, 27. 
 may be left blank and name of insured filled in. 27. 
 universal custom to give written policy, embodying terms and con- 
 ditions, 14, 29. 
 what is part of the policy, 
 
 the application when, 29, 29 A, 20 C, 31. 
 
 statutes requiring its annexation to policy, 29 C. 
 endorsements and marginal notes, 29 A. 
 
 parol transactions prior to or contemporaneous with the policy, 
 29 B. 
 agreement to give, on a contingency good, 43 E. 
 issued after loss, 45, 45 a. 
 what law governs, 66, 66 A. 
 termination of, see chap. v. anal, 
 cancellation of, see chap. v. anal, 
 surrender of, see chap. v. anal, 
 renewal of, see chap. v. anal, 
 revival of, see chap. v. anal, 
 provisions of, 
 
 " no agent can bind company by any agreement," 62. 
 under seal not continued in force by parol, 70 B. 
 issued by a foreign compan}', wlicn void, 577. 
 a lax and informal instrument, 26. 
 different modes of execution, 27, 28. 
 contents of, 29. 
 
 kinds of, open, valued, wager, interest, time, and voyage, 30 to 34, 
 114. 
 open and valued, 30, 31. 
 statutes declaring a policy to be valued, 31 A. 
 policy may be valued as to one article and open as to another, 32. 
 parties to, who may be, 35. 
 distinffui.shed from agreement to insure, 45. 
 cancellation of, 67-69. 
 
 1420
 
 INDEX. 
 [The references are to the sections .T 
 
 POLICY — continued. 
 surrender, 69 a. 
 suspension of, 101, 215, 3i3. 
 valuation in life, 109. 
 alteration of, 1-50 A. 
 
 may be modified by application, 168, 169. 
 what is par£ of the, 158. See chap. viii. anal. 2. 
 how affected by alienation of the property. See Alienation. 
 simultaneous policies, 365 a. 
 endowment, 344 b. 
 non-forfeitable, 344 b, 363 a. 
 assignment of, 377 et seq. See Assignment. 
 lapse of, effect on premium note, 556. 
 refusal to deliver, remedy for. 56.5. 
 suit to revive, 568, 569. 
 obtained by fraud, suit to cancel, 573. 
 
 POSSESSION, of insured, effect of change in, 249. 
 as a basis of insurable interest, 80, 84, 87, 87 A. 
 
 POWER, if contingent, is not an incumbrance, 292. 
 
 PRELIMIXARY PROOF. See Proofs, 2. 
 
 of loss, 11,460. 
 
 who may furnish, 463, 465. 
 
 time and form, due notice, 465-467. 
 
 form and mode. 465-467. 
 
 waiver of, 468-471, 473. 
 
 evidence of filing, 472. 
 
 when suit may be brought after, 476. 
 
 of death, 536. 
 
 PREMISES defined, 228, 243. 
 
 PREMIUM, 
 
 A. Brief index, see fuller analysis below at B. 
 
 may be recovered back when risk does not attach, 4. 
 
 condition as to prepayment of, has no reference to the preliminary 
 
 parol contract, 22 A. 
 war is a valid excuse for non-payment of, 40, 350. See War. 
 may be paid to resident agent of an alien enemy company, 40, 30 A. 
 
 such agent must receive the tender, 40, note. 
 
 payment in confederate money good (?), 30 A. 
 
 tender and refusal of one premium sufficient, subsequent pre- 
 miums need not be offered, 40, note. 
 date premium is due may be fixed by agent's interpretation, 131. 
 neglect of agent to forward, 135. 
 agent's waiver of non-payment, 136. 
 time of payment of, Sunday, 310. 
 when failure to pay works forfeiture, 341, 344, 363 a. 
 what constitutes payment of, 345, 345 a. 
 
 1421
 
 INDEX. 
 [The references are to the sections.] 
 
 PRFMIU:^! — continued. 
 
 parol agreemeiat to pay, 34i». 
 
 days of grace for, 346, 353, 357. 
 
 may be paid in work, or board, or goods, 347. 
 
 agreement by officer of insurers to pay, or see it paid, 348. 
 
 intervening death, 350. 
 
 payment of, after death, 352-355. 
 
 excuse for non-payment, prospectus, custom, notice, 355, 356. 
 
 payment of, c;i pres performance, 3.57. 
 
 insolvency excuses non-payment, 358. 
 
 payment of, evidence, 359, 584. 
 
 waiver of prepayment of. 3G0-363. 
 
 acceptance of part payment of, policy declared forfeited, extension of 
 
 time, change of agency, course of business, 362. 
 recovery back of, 567, 568, 569, 577. 
 thirty days grace on, 582. 
 credit for, 
 
 course of dealing as evidence of. 27. 
 place where paid may determine place of contract, 66, 66 A. 
 return of, as condition of cancellation. See Cancellation, 4, or 
 chap. v. anal. 4. 
 none in case of surrender after forfeiture, 69 B. 
 prepayment of, 
 
 when necessary as a condition precedent to a complete con- 
 tract, 43 C, 5.5, 55 A, 56-.58. 
 
 delivery does not waive condition for prepayment, 56. 
 
 charter requirement wa'ved, 62 ; see 63. 
 mistake of officer charging too little not fatal, 43 E. 
 amount of, not fixed, no contract, 43 F. 
 unpaid is credit on policy issued after loss, 45 a. 
 
 B. Fuller Analyi^is. 
 
 payment of, usually made a condition of the completion of the 
 contract, 340. 
 1. What is Payment ? 
 
 check, note, any mo'le agreed on, 34-5, 345 B, 345 E. 
 if no mode is fixed the agent may use his discretion, 345 
 may be in depreciated funds if such is the usage, 315. 
 may be in dividends, nnitual accounts, &c., 345 a. 
 
 but profits not yet declared as dividends will not be 
 applied to pay premiums to save a forfeiture, 345 a. 
 may be by advertising, board, &c., 347. 
 
 may be by order on a third penson, 345 B. 
 a marginal provision that premium is payable, part in cash 
 
 and part by note, is good, 345 B. 
 an offer of payment by a banker, the agent saying he will 
 leave it in bank, is equivalent to a deposit of the amount, 
 345 B. 
 
 1422
 
 INDEX. 
 
 [The references are to the sections.] 
 
 PREMIUM — continued. 
 
 a credit on the books of the company by a general agent is, 
 
 345 B. 
 payment to agent is good though he converts it to his own 
 
 use, 345 B. 
 an agreement to pay in groceries, good (N. J.), 345 B. 
 in professional services, not good (N. Y.), 345 B. 
 evidence that agent had no authority to receive anything 
 but cash, 345 B. 
 •where such is the case, setting off debts between agent 
 and insured does not bind the company, 345 B. 
 part-payment will not save the policy, even pro tanto, 345 C. 
 tender is sufficient if made every time a premium comes due, 345 
 D, 315. 
 
 2. Premium Notes, 345 A, 345 E-H. 
 
 are loans, 345 A. 
 
 may constitute payment, 345 E. 
 
 authority to a company to issue policies is authority to take 
 
 premium notes, 345 E. 
 may be good though the company was insolvent at their 
 
 execution, 345 E. 
 non-payment of, fatal if so agreed, 345 E. 
 
 but a stipulation in the note alone is not sufficient, 
 345 E. 
 unless taken for a premium in default, 344 D. 
 if the company claims forfeiture for non-payment of 
 note, it must surrender the note, 345 E. 
 though invalid (married woman's), do not avoid policy ah 
 
 initio, 345 E. 
 void if risk never attaches, 345 E. 
 may be written to mature at loss, 345 E. 
 no presentment, demand, or notice necessary, 345 F. 
 the company cannot claim the note and repudiate the rest 
 
 of the transaction, 345 G. 
 misrepresentation of agent, a defence to suit on, 345 G. 
 but not informality in filing copy of charter with State 
 auditor, 345 G. 
 
 3. Recoi'ery by the company. 
 
 on a note, though the policy is suspended by its non-pay- 
 ment, 345 H. 
 even after loss in the period of suspension, 345 H. 
 and the whole unpaid premium may become due and 
 be recovered on failure to pay one instalment, 
 345 H. 
 the company may deduct unpaid premium from the amount 
 due on the loss. 345 H. 
 even though the Statute of Limitations has run on the 
 note, 345 H. 
 
 vol.. ir. — 46 1423
 
 INDEX. 
 
 [The references are to the sections.! 
 
 PREMIUM — continued. 
 
 4. By whom payment may be made. 
 
 any one may pay premiums, but there will be no lien on the 
 insurance money for them except by contract, trust, sub- 
 rogation, or right of a mortgagee to add charges, even to 
 preserve the property, 349 A. 
 
 contract to pay, good as to minor beneficiary, 349 A. 
 
 5. To whom payment is to be made. 
 
 must be to authorized agent 349 B. 
 
 or actually come to company's hands, 
 correspondence admissible to show authority, 349 B. 
 handing over a policy for delivery gives said authority, 
 
 349 B. 
 payment to apparent agent, good, 349 B. 
 facts may hold company in spite of a provision in by-laws, 
 
 which are part of policy, that the agent must be appointed 
 
 by seal, 349 B. 
 authority to receive first premium does not authorize receipt 
 
 of after dues, 349 B. 
 if an agent receives payment from himself after forfeiture of 
 
 his policy, it is a fraud, 349 B. 
 
 6. Place. 
 
 payment at wrong, not good, 348 A. 
 
 parol admissible to show understanding as to, 348 A. 
 
 7. Time of Payment. 
 
 the premium is paid when it is d(!livered to express, 340. 
 must be at or before midnight on the day it is due, 349. 
 if it falls on Sunday, the following business day is sufficient, 
 
 349. 
 days of grace, 353-355, 357. 
 payment after death, 353-355. 
 the time named in the notice may be waived by a previous 
 
 course of dealing, 356 A. 
 
 8. NOTICK 
 
 of non-payment of an order on a third person taken as pay- 
 ment, must be given before the company can claim a for- 
 feiture, 345 B. 
 
 the company need not give notice that a premium or note 
 will soon be due, 356, 341, unless 
 
 1. it is necessary to inform the insured of the amount 
 due, as where he shares the profits, 345 A, 356, or 
 
 2. a course of dealing leads the insured to rely on it, 
 356, 356 A, or 
 
 3. usage has made it a part of the contract, 356, 
 356 A. 
 
 and where there is such usage, if no notice is sent, payment 
 in a reasonable time is sufficient, ;)56 A. 
 
 1424
 
 INDEX. 
 
 [The references are to the sections.] 
 
 PREMIUM — continued. 
 
 but it is held in some courts that a habit or usage of this 
 kind may be discontinued by the company at any time, 
 356 A, 352 A. 
 and no evidence of such usage will be received to save for- 
 feiture unless it is shown that in the particular case in 
 question it was withheld on purpose to obtain a forfeiture, 
 356 A, 352 A. 
 in New York the notice must state that in default of pay- 
 ment the policy will be forfeit, 356 A. 
 the law applies to policies issued before it was passed, 
 
 356 A. 
 and the burden of proving notice is on the company, 
 356 A. 
 mailing the notice is sufficient, whether it ever arrives or 
 not, 356 A. 
 9. Excuse for non-pa ijinent. 
 
 the act of God, or of obligee is, 350, 350 A. 
 so an act of government, 350, 350 A. 
 as war. 
 
 premiums may be paid at the agency in the enemy's 
 
 country, 350. 
 which agency should be continued by the company, 
 
 350. 
 it has, however, been held that war abrogates a con- 
 tract of insurance, 350 A. 
 the instired, however, can recover the value of the 
 
 premiums paid, 350 A. 
 if the right to pay the premiums remains, so also does 
 the right in the company to recover them, 351. 
 insolvency of insurer, 358. 
 
 ceasing to do business, or selling out to another compa- 
 ny, 358. 
 extension of time, 358. 
 change of agency, 358. 
 
 failure of the company to give the notice required by a 
 course of business or usage, 358; see also 356, 356 A. 
 No excuse. 
 
 failure to receive notice that a premium is due, is no excuse, 
 
 341, 352 A; .see 3.56, 35G A. 
 nor paralysis, insanity, or other disease, 352, 352 A. 
 nor a mere suspicion of insolvency, 3.52 A. 
 nor failure to find the agent, by calling several times, 
 
 352 A. 
 nor the agent's assurance that the dividends will be suffi- 
 cient, 352 A. 
 nor a personal agreement with the agent that the latter 
 would pay, 352 A. 
 
 1425
 
 INDEX. 
 
 [The references are to the sectioDS.] 
 
 PREMIUM — continued. 
 
 nor does the death of the agent excuse payment of pre- 
 miums due at the home office, 352 A. 
 
 10. Suspension of the policy. 
 
 during default is sometimes agreed upon, 343. 
 it revives on payment, even on a judgment, 343. 
 
 but a part payment is not sufficient. 343. 
 in the period of suspension the company is not liable, and 
 
 earns no premiums. 343. 358. 
 but if they accept premiums for that period they cannot 
 
 escape liability, 358. 
 
 11. FORFEITCRE for non-payment, 341. 
 
 only occurs when the policy stipulates for it, 343, 314. 
 
 condition construed strictly against company, 342, 363 A. 
 
 non-payment of a note at maturity may not be fatal, 342. 
 
 may be optional with tlie company, 312. 
 
 occurs at once on non-payment without any entry on the 
 company's books, protest of bill, or other act, 342 A. 
 
 beneficiaries cannot avoid effect of non-payment, 342 A. 
 
 failure to pay interest on a loan (i. e. a note), is not failure 
 to pay premiums, 342 A. 
 
 non-payment of a note taken for a premium is not fatal un- 
 less expressly so agreed, 342 A, 
 sometimes the policy is conditioned to revive on payment of 
 
 overdue premiums, 341 A, 343. 
 non-forfeitable, endowment, and paid-up policies, 344 a. 
 
 Massachu.'5etts statutes, 344 b, 344 c. 
 
 paid-up policy by agreement, 344 D. 
 
 continuation of original policy, 344 D. 
 
 not affected by repeal of laws under which the original 
 policy was made, 314 D. 
 
 not liable to execution, 344 D. 
 
 tontine company not a trustee of any particular fund for a 
 policy-holder, 314 D. 
 
 after indorsement as a paid-up policy, going to torrid zone 
 not fatal, 344 D. 
 
 when the original policy is to be void for non-payment of 
 premium or interest, and provides for i.ssue of a paid-up 
 policy after two premiums have been paid, 344 E. 
 contra, 344 E. 
 
 if demand for a paid-up policy is expressly to be made with- 
 in thirty days after forfeiture, the <n/i^^is .not of the 
 essence, 344 F. ' ^ 
 
 contra, 344 F. 
 
 nothing is due until denth, 3!4 F. 
 
 policy may be non-forfeitable by estoppel, 344 G. 
 as by representations of agent, 344 G. 
 contra, 344 G. 
 
 1426
 
 INDEX. 
 
 [The references are to the sections.] 
 
 PREMIUM — continued. 
 
 the amouut of a i^aid-up policy, or damages for its refusal, 
 is estimated according to clear mathematical prin- 
 ciples, subject to the wording of the contract, 
 344 H. 
 insured not entitled to the whole sum he has paid un- 
 less so agreed, 844 H. 
 alteration of original contract from non-forfeitable to for- 
 feitable, by terms of a new policy or a note taken for a 
 premium in default, 344 I. 
 parol agreement subsequent to policy tliat it should not fail by 
 non payment, is good, 340. 
 but a mere personal promi.se of an agent that he will see the 
 premium paid is not, 348. 
 
 12. WAIVER AND E.STOPPEL — 
 
 of prepayment. 
 
 by delivery of policy without payment, 360 A, 360 B. 
 
 sending policy by mail, 360 A. 
 by course of dealing between the parties, 360 A. 
 by usage generally, 360 A. 
 
 assurance by agent that it makes no difference, 360. 
 any circum.^^tances showing that the company does not 
 
 intend to insist on the condition, 360, 360 A. 
 giving credit expressly or impliedly, 360 B. 
 
 agents' authority to waive the rule in regard to 
 cash payment, 360 B, 360 D. 
 in general. 
 
 by agent's wrong information as to date premium is 
 
 due, 360 C. 
 by circular issued by company, 360 C. 
 agent may waive immediate payment, 360 A, B, C, D. 
 
 contra, 360 F. 
 the method of waiver specified in the policy must be 
 
 pursued, 360 C 
 waiver of breach by payment of a less this month, will 
 not compel the company to pay another loss next 
 month, 360 C. 
 a course of dealing, usage, or custom, to accept overdue 
 premiums binds the company in spite of a clause 
 I in the policy declaring such acts to be mere 
 
 courtesies, 361, 363. 
 < even a general usage is sufficient without showing 
 
 that the company adopted it, 361, note, contra, 
 360 F. 
 an honest and prudent belief induced by the com- 
 pany that premiums will betaken after date is 
 sufficient, 361, note. 
 
 1427
 
 INDEX. 
 [The references are to the sections. J 
 
 PREMIUM — continued. 
 
 but receiving overdue premiums alwajs with an inquiry 
 as to health, does not estop the company in future, 
 361, note, 
 acceptance of an overdue premium waives the forfeiture 
 for Us non-payment, unless the policy gives tlie 
 company a right to it in spite of forfeiture, ^(52. 
 otherwise with a mere offer to receive or a demand 
 (even by suit) without actual payment, 3U2. 
 •where it is provided that past payment will be received 
 on proof of continued health, receiving the premium 
 without such proof waives it, but does vol waive the 
 fact of death unknown to both parties, 353. 
 no estoppel unless the plaintiff' is injured, 360 E. 
 no waiver unless the facts are known, 360 E. 
 decisions adverse to waiver, 360 F. 
 
 failure of the company to give accustomed notice 
 no estoppel, 360 F. 
 waiver of statute provisions, making policies non-for- 
 feitable, 360 G. 
 13. A prospectus may qualify the policy, 355-356. 
 cy prh performance, 357. 
 evidence of payment, 359. 
 
 a receipt is not conclusive but may be contradicted by oral 
 
 evidence, 359. 
 the company cannot deny receipt of a premium acknowl- 
 edged in the policy in order to defeat the contract, but 
 may deny it in order to recover the money, 359. 
 Wrongful refusal to receive premiums. 
 
 insured may sue for amount necessary to get another policy 
 as good, 363 B. 
 or for what he has paid in, 363 B. 
 recovery of premiums by insured, see 567. 
 PREMIUM NOTE. See Pkkmium, B. 2. 
 participation in, 363 A. 
 
 forfeiture of policy no defence against, 553, .554. 
 eiTeot of surrender and cancellation of policy on, 555. 
 insolvency no defence against, 555. 
 liability on, after lapse of policy, 556. 
 when and how assessable, 557-561. 
 PRESIDENT, signature to policy required by charter, 15 and note, 27. 
 PROCEEDS, to whom they belong. See Loss, 3. 
 PROFITS, expected, insurable interest in, 79. 
 participation in, 363 n. 
 in mutual insurance. 571, 572 
 PROOF AT TRIAL, in reinsurance, same as in suit on original policy, 
 11. 
 
 1428
 
 INDEX. 
 
 [The references are to the sections.] 
 
 PROOF OF AGENCY, 126, 138, 138 A. 
 PROOFS OF LOSS. See Preliminaky Proofs. 
 
 1. By reinsured, 11 (z.^). 
 
 within reasonable time after war ceases is sufficient, 39 A. 
 cannot be waived by mere soliciting agent, 129. 
 notice and proofs necessary, 460. 
 
 proofs may be notice, but notice cannot dispense with proofs, 
 460. 
 
 a second proof is to be taken with the first, 460. 
 
 assured not bound to apportion loss in his proofs, 460. 
 
 time, place, and mode of notice, 401. 
 
 mail, 4ol. 
 
 mere silence no waiver of time limit, 461. 
 
 "forthwith," "soon as possible," " immediately," mean within 
 a reasonable time under all the circumstances, 462. 
 
 by whom and to whom notice is to be given, 463. 
 
 waiver of notice, 464; see also, 461. 
 
 even defects in violation of statute may be waived, for the pro- 
 vision is for the company's benefit, 464. 
 
 receiving and acting on an oral notice waive a written one, 
 464. 
 
 silence when notice is not given in time is no waiver, for speak- 
 ing could not aid the insured to cure the defect, 464. 
 
 2. Preliminary proofs, 465; see also, 460. 
 
 who may furnish and receive, 465. 
 
 time and waiver of it, 465. 
 
 mail, 465. 
 
 form, 465; see also, 466. 
 
 due notice and proof of death, 465. 
 
 waiver of it, 465. 
 
 presumption of death in case of absence, 465. 
 
 in wliat part of the seven years death is to be supposed, to have 
 
 taken place, 465. 
 two persons perishing, which first, 465. 
 excuse. Loss of policy is not, nor instantaneous death (?) ; but 
 
 insanity, or absence, or act of company may be, and notice of 
 
 total loss may make further proof unnecessary except to show 
 
 value, 465. 
 liberal construction to save forfeiture, 465. 
 books, invoices, and vouchers, excuses for not furnishing, 465. 
 sworn appraisement as part of proof, 465. 
 proofs as evidence, 465, also, 460. 
 honest mistakes not fatal, 465. 
 insured may recover more than the value named in proofs, 
 
 465. 
 certificate of magistrate, examination on oath, 466. 
 proof of death 467: see also, 465. 
 family physician, 460. 
 
 1429
 
 INDEX. 
 
 [The references are to the sections.] 
 
 PROOFS OF LOSS — continued. 
 
 waiver of preliminary proof, 4tj8— 171. 
 
 refusal to pay oii other grounds, or general denial of liability 
 without giving reasons waives the furnishing of proofs, or de- 
 fects in them if they have been furnished, 409. 
 defects are waived lay omission to notify the assured of them 
 promplhj and specijicallij, so as to give him opportunity for cor- 
 rection. A mere general statement that the proofs are imper- 
 fect is not sufficient. It has been held, however, that rejecting 
 the proofs and demanding others " in exact accoidance with 
 the conditions of the policy '' is a sufficient specification, 4G0 B. 
 especially will any act recognizing the policy without mentioning 
 
 defects be a waiver, 469 B, 473. 
 payment of money into court admits cause of action, 
 proceeding to investigate loss, make adjustment, &c., any act 
 leading insured to supposed proofs would be useless, waives 
 them, 4G9 C, 469 B, 409, even though required by statute, 469 C. 
 who may waive, 469 D. 
 
 provision in the policy or in bj'-law that no condition shall be 
 waived except in writing or by indorsement on policy, will not 
 prevent waiver by voice or act, 473, 473 A. 
 particular defects pointed out waives others, 470. 
 what is not a waiver, 471. 
 
 mere silence not enough to waive furnishing proofs, &c,, 471. 
 waiver of notice is not waiver of proofs, 471. 
 evidence of preliminary proof, 472. 
 false swearing in, see 477. 
 3. Particular account, 474 (see 465). and what is required in it, 475. 
 
 loss of books excuses, except so far as memory or other means 
 
 serve, 476. 
 ■waiver of it, 475; .see also 465. 
 time of rendering it, 475. 
 when suit may be brought, 476. 
 personal examination, &c., 476. 
 fraud and false swearing in preliminary proof, 477. 
 payment by mistake may be recovered, 477. 
 
 proofs may be notice, but notice will not dispense with proofs, 477 A. 
 a second proof is to be taken with the first, 477 A. 
 PROPERTY INSURED, transfer of title to, does not carry insurance 
 unless so agreed in the policy, 6. 
 what it includes. See Risk, 5. 
 PROSPECTUS, effect on contract, 29 B, 3.5.3-3.36. 
 PROXIMATE CAUSE, 459. See Cause. 
 
 QUESTION, conclusive as to materiality, 185-188. 
 
 1430
 
 INDEX. 
 [The references are to the sections.] 
 
 R. 
 
 RAILWAY ACCIDENT, what is, 521. 
 
 REASONABLE NOTICE, what is, when for court and when for jury, 
 
 3G8. 
 REBUILDINCx, or replacement, 430-433. 
 
 sometimes tliere is a provision for rebuilding in the option of the 
 company, 430. 
 
 or for paying a portion of the expense of rebuilding, 423, 426. 
 
 no right to replace exists unless expressly provided for, 430. 
 
 the election must be within a reasonable time, 430. 
 
 company cannot replace in part and pay in part, 430. 
 
 the additional value of the new over the old is to be deducted, 431. 
 
 removal, 432. 
 
 equity, 432. 
 
 refusal to permit, 432. 
 
 refusal to perform, 433. 
 
 company may have to replace more than once, 426. 
 
 partial rebuilding, 433. 
 
 if public authorities interfere so that company cannot rebuild, it 
 must pay the loss, 433. 
 
 measure of damages for failure to replace properly, 432, 433, 433 A. 
 
 depreciation of property before fire, 433 A, 431. 
 
 right of reversioner or life tenant to have insurance applied to repair, 
 433 A. 
 
 order of incumbrances not changed by using insurance to repair, 
 433 A. 
 
 assent to an order to pay to assignee in case of loss does not deprive 
 the company of the option to rebuild, 447. 
 RECEIPT, for insurance, effect of, 59, 69, 359. 
 
 acknowledging cancellation may be rebutted if without considera- 
 tion, 67 A. 
 
 contract by intermediate, 69. 
 
 for premium open to explanation, 359. 
 RECITAL, in policy of receipt of premium, prima facie proof, 359. 
 
 in premium note that policy has issued, prima facie evidence, 584. 
 REFEREE, statements of, 123. 
 REFERENCE, to third persons for information, 123. 
 
 in policy to application, effect of, 162-169. 
 REFORMATION. See Rkmkdiks, 1. 
 
 mutual mistake in omitting seal is ground for, 27. 
 
 of contract in equity, 566. 
 REFUSAL, to assent to assignment, 158-164. 
 
 to receive premiums, 363 B. 
 
 to approve pi'oposal, ;)87. 
 
 to renew policy, damages for, 429. 
 
 1431
 
 INDEX. 
 [The references are to the sections.] 
 
 REINSURANCE, what, 9-12. 
 contract oli indemnity, 9, 11. 
 
 may be for less than the original risk, but not more, 11. 
 if the insurer sues the reinsurer after he has made a final settlement 
 
 with the assured he recovers no more tlian he has paid, 11, 11 A. 
 if he sues befure a final settlement with assured, the measure of tlie 
 reinsurer's liability is the Uabtlity of the insurer and not his ahiiity, 
 11 A. 
 if the insurer is not liable on the original policy, he cannot recover ot 
 
 the reinsurer, 11 A, 12. 
 risk begins when the risk on the original policy begins, unless other- 
 wise specified, 12 D. 
 parol admissible to show that a contract is one of reinsurance, 12 D. 
 rights and liabilities of reinsurer and reinsured, 9, 11, 12. 
 reinsurer's liability co-extensive with that of the insurer, ll(z). 
 reinsured may proceed against reinsured without first paying the in- 
 sured, ll(z). 
 insolvency of reinsured does not affect the liability of the reinsurer, 
 
 ll(z), il A, 12. 
 effect of local usage, ll(z). 
 reinsurer held for costs of defending suit against reinsured unless 
 
 unnecessarily incurred, 11 (zj). 
 costs of defending suit against reinsured, ll(Zi). 
 concealment and representation, ll(zj. 
 notice and proof of lo.ss, 11 (22)- 
 construction of /;;-o rata clause, 11 (z). 
 subject of reinsurance is the risk of the first insurer, 12, 
 ordinarily the insured cannot sue the reinsurer, 12. 
 even though the insurer is insolvent, 12. 
 
 but sometimes the contract gives the assured the right to sue the 
 
 reinsurer directly, 12, note. 
 
 and if so the assured is not affected by an arbitration of the 
 
 reinsurer, who is liable to him with other leinsurers, 12, 
 
 note. 
 
 not affected by condition in original policy as to limitation of suit or 
 
 award before suit, 12 B. 
 reinsurer bound by assent of insurer to assignment or mortgage, 
 
 12 B. 
 reinsurer bound by waiver of insurer, 12 B. 
 of all risks in another company, surplus fund and its distribution, 
 
 12 c. 
 place of the risk, 12 C 
 
 proliibited in England, but allowed elsewhere, 10, 08. 
 not within Statute of Frauds, 12 A. 
 not ullrn rlref! when permitted by general law, though not specified 
 
 in cliarter, 12 A. 
 contribution to loss in, 4o9. 
 under policy containing time limitations, 481. 
 
 1432
 
 INDEX. 
 
 [The refereoces are to the sections.] 
 
 REINSURED, concealment by, 11. 
 representation by, 11. 
 
 REINSURER, liberated by increase of risk, 218. 
 
 RELATIONSHIP, as ground of insurable interest, 102 A, 107. 
 
 representation as to, o05. 
 RELINQUISHMENT, or waiver and estoppel. See chap, xxviii. anal. 
 
 1. General rides, 497. 
 
 any conduct recognizing the policy as valid after breach of con- 
 dition, or any act that puts the insured to expense and trouble 
 on the justifiable belief that the company still regard the 
 policy as good, will be sufficient, 497. 
 
 waiver must be pleaded. It is a question for the court if facts 
 are admitted, otherwise for jury, 497. 
 
 2. Waiver or estoppel may be by the act of an agent within his author- 
 
 ity, 498. 
 
 wheVe the agent makes the survey which is signed by the appli- 
 cant relying on the agent's assurance that it is all right, 498. 
 
 where an" applicant signed a blank application stating to the 
 agent that there was a mortgage, and the agent afterward 
 fitling iu the answers stated that there was no incumbrance, 
 498.° 
 
 a company cannot through its agent write representations of 
 which the assured knows nothing, and then hold him to them, 
 499. 
 
 it is always a question of fact whether the agent in any given 
 matter acted for the insurer or for the insured, 500. 
 
 3. Estoppel by facts ari.-ing during negotiations, .501. 
 
 issue of policy upon application containing an ambiguous answer, 
 or no answer to certain questions, waives them, unless the 
 omission signifies the affirmance of a certain state of facts, 
 
 501 
 
 prepayment, change of location, kc, waived, 501. 
 
 issue or renewal with knowledge of facts is a waiver generally, 
 but not as to want of insurable interest, 501. 
 
 where insurer knows the undertaking of the assured is impos- 
 sible, he cannot insist upon it, .503. 
 
 4. Estoppel by facts arising during currency of the policy, 502. 
 
 after knowledge of the facts, any recognition of the validity of 
 
 the policy or conduct that misleads the assured to his prejudice 
 
 amounts to a waiver, 502. 
 agent's knowledge of a cause of forfeiture and receipt of after- 
 
 mnturinq premium or assessment is a waiver unless there is aa 
 
 understanding to the contrary, 502. 
 courts will find a waiver on slight evidence, 502. 
 notice, .502 a. 
 
 option, 502 rt; see also 512. 
 notice from stranger, 5U2 a. 
 
 1433
 
 INDEX, 
 [The references are to the sections.] 
 
 RELINQUISHMENT — continued. 
 
 5. Estoppel by facts arising after loss, 504-505. 
 
 same principles as above. 
 
 any overlooking of known forfeiture properly relied on by tlie 
 
 assured to his prejudice is a waiver or estoppel, 504. 
 entering negotiations for settlement, adjusting loss, promising 
 
 to i)jl\, payment, &c., 505. 
 refusal to pay on one ground waives others, 504 A. 
 demanding proofs (or even allowing assured to go to the expense 
 
 of making them (?) ) waives a known cause of forfeiture, 
 
 504 A. Contra, 504 A. 
 
 6. There is no estoppel 
 
 where the facts are not known, 506. 
 nor where the insured has not been prejudiced, 507. 
 silence usually no estoppel, 508. 
 
 the act constituting a waiver must be intentional, and not a 
 mere mistake, 508. 
 
 7. Agent acting under undisclosed instructions, 509. 
 
 stipulation agaiust waiver. Limitation of agent's authority, 511. 
 
 opinions vary as to the effect of conditions against waiver by 
 agent, or requiring all waivers to be in writing, or in- 
 dorsed on the policy. It is lield — 
 that such provisions are valid, 511. 
 that they are null and void, 511. 
 
 that they do not apply to matters connected with the crea- 
 tion of the contract, 511. 
 ajid that they apply only to such matters, 511. 
 the courts in many instances show a tendency to repudiate the 
 
 condition as unreasonable, 511. 
 on the facts most of the cases are fair, and the consideration that 
 these conditions may themselves he waived as well as any others 
 goes far to harmonize the decisions, 511. 
 collusion between agent and insured, 513. 
 REMEDIES. 
 
 1. Insured against insurers. 
 
 where insurer re/uses to deliver the policy in consequence of a fire, 
 
 &c., 565. 
 the insured may sue in equity for specific performance 565. 
 or at law for damages, showing the contract by other evidence, 
 
 565. 
 falsehood in tlie answers agent's fault, 566. 
 reformation, 566, 566 A, 566 B. 
 injunction, 506, 566 A. 
 laches, 566, .566 B, 566 C. 
 
 but if the policy is obscure the insured is not to blame for not 
 reading it, and if the facts calling for relief can be made out 
 clearly, the court will put out the excuse of " laches " merely 
 because the plaintiff did not read the policy. 
 
 1434
 
 INDEX. 
 
 [The references are to the sections.] 
 
 REMEDIES — continued. 
 
 there is no period short of the Statute of Limitations within 
 
 which a man must discover error or fraud, 506. 
 if suit is brought on the policy within time limited, a bill for 
 
 reformation may be brought after that time, 5G6 
 equity will enjoin a suit at law alter a bill has been dismissed, 566. 
 cases in which equity will reform, 566 A. 
 cases in which equity will not reform, 506 B. 
 
 no fraud or mutual mistake. Parties did not know the 
 facts at time of insurance, &c. Acceptance of policy with 
 knowledge of error. An intent to limit the right of a 
 beneficiary (wife) uncommunicated to the company at 
 the time of insurance is no cause for reformation. So 
 where insured stated goods to be in building A. when they 
 were in B., 560 B. 
 2. Equity continued, 566 C. 
 
 bill for discovery, 566 C. 
 
 specific performance of agreement to insure, 566 C. 
 
 setting aside a judgment on the ground of new evidence, 
 566 C. 
 
 rescission, lachps, 566 C. 
 
 cancellation not obtainable by one who has allowed another 
 to take out a policy on his life, though without interest 
 and hostile, there being no allegation of danger, 566 C. 
 
 relief against forfeiture, not if imposed by statute, 506 C. 
 
 interpleader, 566 C. 
 
 jurisdiction, 566 C. 
 
 recovery of premiums (with interest) may be had if the 
 policy is void ab initio, or the risk never attaches, and 
 there is no agi'eement to the contrary, and no fraud or vio- 
 lation of morals by the plaintiff. A mere mi.staken repre- 
 sentation will not prevent his recovery, 507. 
 
 in general if the risk attaches for a single moment on the 
 wJiole property no part of the premium can be recovered, 
 but it is otherwise if the policy becomes illegal by statute 
 after its issue, 567. 
 
 excess of premium paid by creditor in excess of the law for 
 insurance beyond his debt may be recovered, 567. 
 
 agent's promises, 5G7. 
 
 surrender, 507. 
 
 premiums paid after forfeiture, 567. 
 
 after war suit lies to compel recognition of policy or repay- 
 ment of premiums, 508. 
 
 compulsory renewal of policy, 568. 
 
 surrender of policy unfairly obtained, 560. 
 
 wrongful refusal to deliver or continue policy, or premiums, 
 or give a paid-up policy, 569. 
 
 measure of damages, 509. 
 
 1435
 
 INDEX. 
 [The references are to the sections.] 
 
 REMEDIES — continued. 
 venue, 509 A. 
 
 action on policy transitory, 569 A. 
 stipulation limiting suits to home State void, 5G9 A. 
 foreign company may remove suits to United States court, 
 569 A. 
 remedy of insured against directors, 570. 
 stockholders may compel correction of dividend, 571. 
 on forfeiture company may recover all dividends earned while 
 
 the risk continued, 572. 
 equitable adjustment by directors after forfeiture, 572. 
 courts cannot interfere. Dividends. Profits, 572. 
 msurei's against insured. 
 
 recovery of policy obtained by fraud, 573. 
 cancellation, .573. 
 rescission, 573. 
 
 injunction against suit at law on the policy, 573. 
 cancellation. Rescission, 574. 
 
 payment on loss of more than there is a legal obligation to 
 pay, under a mistake of fact pertaining to liability may be 
 recovered, though the means of knowledge were at hand, 
 and even though the company had no right to do business, 
 575. 
 false representations of death, 575. 
 agents against insurers. Commissioners, 576. 
 remedies by and against foreign insurance companies, 577. 
 
 recovery of premiums by or from a company that has not 
 
 conformed to the conditions of doing business. Service 
 
 of process, &c., 577. 
 
 whether a policy issued by such company is void or not, 577. 
 
 ri"ht of foreign company to i-emove action to United States 
 
 courts, 578. 
 retaliatory legislation. 578 a. 
 
 a company does business in another State only by comity. 
 Any restrictions thought advisable may be put upon it, 
 and it cannot overcome them by the provisions of the 
 policy, 578 a. 
 a law affecting foreign insurance companies may however 
 be unconstitutional as violating the uniformity of taxa- 
 tion, 578 a. 
 
 REMOVAL of goods, 70, 401 a, 401. 
 
 of property with knowledge of agent before renewal estops company, 
 
 70 n. 
 from 2:»remises or dwelling. See Vacancy. 
 
 RENEWAL, upon changing stock, 16, 375. 
 by parol, good, 21. 
 of contract, 71. 
 
 1436
 
 INDEX. 
 [The references are to the sections.] 
 
 RENEWAL — continued. 
 what constitutes: 
 
 parol renewal tjood even though the original policy stipulates 
 
 otherwise, 70 B. 
 but a policy under seal cannot be continued in force by parol, 70 B. 
 the suit would have to be on the parol contract, not on the 
 policy of, 70 B. 
 if a parol agreement to renew is indeterminate, or a mere agree- 
 ment with the agent that when the time comes he will make a 
 renewal, it is very well not to hold the company, 70 B. 
 but a present parol contract of renewal or revival, or a contract 
 to issue a policy iu renewal at the proper time ought to be 
 binding under similar circum-<tances and to the same extent, 
 as a parol agreem^-nt with the same agent for an original 
 policy, and the authorities countenance this view, 70 B. 
 care must be taken as to tlie form of the suit. If there is any doubt 
 about the renewal, suit should not be on the old policy but on the 
 parol agreement to renew. Attention to this point, and to the 
 special facts of each case, brings the decisions all into harmony. 
 (See chap. li. anal. 1.) 
 terms of ; 
 
 same as original contract, if not modified by a new application, 
 
 or by circumstances, 70 n, and notes. 
 period covered. Parol not admissible to show receipt absolute 
 
 on face is conditional, 
 renewal to one of two original parties in a gross sum destroys 
 
 apportioned insurance of first policy, 
 removal of property with consent or knowledge of agent at time 
 of renewal binds the company and modifies the contract, 70 a, 
 and notes, 
 receipt of renewal imports agreement to issue a policy, 43, 44. 
 receipt for premium, effect of, 359. 
 refusal of, damages for^ 429. 
 
 RENTS AND PROFITS, insurable. 79, 81, 547. 
 
 REPAIRS, how far permissible, 221, 210. 
 
 payment of loss by, 42G. See REBrn.DiNG. 
 
 REPRESENTATION. For fuller analysis of the fundamental points 
 under this head, see chap. xvii. at 181. 
 by reinsured, 11. 
 
 by assured true at time of application, but false at time of reinsur- 
 ance, no effect, 11 (z.,) 
 of agent, 133. See chap. vii. anal 3. 
 inferred, rather than warranty, in case of doubt, 161. 
 construed strictly as to its scope, 171, 186-188. 
 defined. 181. 
 
 affirmative and promissory, 182, 194. 
 distinguished from warranty, 183. 
 
 1437
 
 INDEX. 
 
 [The references are to the sections.! 
 
 REPRESENTATION — continued. 
 not part of contract, 183. 
 may be by parol, 183. 
 materiality of, 184, 185. 
 
 substantial compliance with, only required, 184-188. 
 in part true and in part false, 189. 
 must be true at time when contract is completed, 190. 
 subsequent change of circumstances immaterial, 191. 
 oral, prior to application, immaterial, 192. 
 equivocal, 193. 
 false pretence may be, 197. 
 
 substantial compliance with, equivalent, 198, 199. 
 literal compliance with, insufficient, 199. 
 good faith required, 109. 
 material, though not relating to risk, 206. 
 
 misdescription of ownership or of the property or its occupancy will not 
 in general avoid the policy unless so expressly stipulated, 2'S. 
 
 clerk slept in store, mere representation not warranty, 256. 
 
 " filled in with brick " held a warranty, 257; see effect of usage, 
 261. 
 
 two-story house changed to a three-story after application and 
 before issue of policy, fatal alteration, 257. 
 
 omission of outbuildings, 258; see also 260. 
 
 distance of buildings " contiguous." Diagrams, 258. 
 
 " how bounded; " "situation ; " distance of other houses, 259. 
 
 if the description is on its face imperfect, 260, 
 
 or if the company or its agents in any way know of the 
 imperfection, 262, the company cannot set up the fault. 
 See chap. vii. anal. 4; 207, 197. 
 misrepresentation of relationship to the life-subject fatal, 263. 
 as to health, symptoms of disease and physical condition, 295-304. 
 as to habits, 299. 
 
 answers to special and general questions distinguished, 300. 
 as to age, residence, relationship, 305. 
 of death, 575. 
 
 RESCISSION, 566 C, 573, 574. 
 
 RESIDENCE, representation as to, 305. 
 
 change of, known to agent when he receives premium estops com- 
 pany, 136. 
 abroad, permit, 332. 
 restrictions upon, 335-339. 
 
 REVIVAL, of policy, 70 C. 
 
 only by new contract or by estoppel, 70 C, see 69 B. 
 retaining overpayment applied by law to revive by estoppel, 70 B. 
 representations in revival certificate part of contract, 70 C. 
 re-delivery of surrendered policy after agent knows of loss cannot 
 revive it, 69 B. 
 
 1438
 
 INDEX. 
 
 [The references are to the sections.] 
 
 RIOTS, loss by, 403. 
 
 RISK. See Consummation, chap, iv; Policy; Termination, chap. v. 
 A. Brief Analysis , see B. below for fuller analysis of the topic, 
 where none attaches, premium may be recovered back, 4. 
 suspended and revised, 101. 
 increase of, 216-262. 
 notice of, to general agent, 150. 
 generally, 218. 
 by ordinary use, 219. 
 by improvements and repairs, 220-224. 
 by alteration, 222-224, 226-228. 
 by change in surroundings, 225, 244. 
 by enlargement, 225. 
 and decrease, 226. 
 by act of stranger, 227. 
 classification of, 232. 
 increase of, by change of use, 239. 
 increase of, by unlawful use, 246. 
 limitation of, watch, care, 250 
 
 warming, stoves, ashes, shutters, 255. 
 
 alienation, 264-282. 
 duration and extent of, 400, 401. 
 
 begins in case of reinsurance at time original risk begins unless 
 otherwise specified, 12 D. 
 what it includes, fire, 402. 
 
 injury by mobs, usurped power, civil commotion, 403. 
 injury by water and removal, 404. 
 
 theft, 404. 
 
 smoking, illegal practices, 405. 
 
 misconduct, fraud, suicide, 407, 410, 411. 
 
 negligence, 408-441. 
 
 wilful exposure, 409. 
 
 falling of walls, 412. 
 
 spontaneous combustion, explosion, 413. 
 
 intemperance, wound, 419. 
 property included in, 420, 421. 
 identity of, 435. 
 injury by lightning, 506. 
 
 B. Fuller (mali/sis of risk. 
 
 1. When the risk begins, 400. 
 
 time is of the essence of the contract, 400. 
 day of date included, 400. 
 
 a risk cannot attach before the organization of the company 
 is completed so far as to authorize it to take the risk, 400. 
 
 2. When it terminates, 401. 
 
 time in remote part of the world must be reduced to the 
 time at place of contract, 401. 
 VOL. II. — 47 1439
 
 INDEX. 
 [The references are to the sections.] 
 
 RISK — continued. 
 
 fire breaking out before expiration of policy but actual 
 
 loss afterward, recovery, 401. 
 injury within time causing death after expiration of the 
 
 pohcy, or after ninety days from accident, no recovery, 401. 
 last day named included, 401. 
 if no duration is specified, a reasonable time is understood, 
 
 401. 
 while drying hops, suspension during burning of forests 
 
 " for ten days piior to shipment," terminates in ten days 
 
 or on shipment, 401. 
 "until landed," 401. 
 
 3. Place is often material, 401 a. 
 
 it may always be made so by explicit language, 401 C, 
 
 and the description of goods as at a certain place is fre- 
 quently held a continuing warranty, 401 B. 
 
 but the nature and use of the property is to be considered, 
 401 C. 
 
 and the insurance will not fail because goods are away for 
 repairs, or a team is in pasture or field instead of barn, 
 401 C. 
 
 insurance of goods on shipboard covers them while on the 
 steam launch, 401 C. 
 
 property in ordinary use away from place of deposit is pro- 
 tected. See also 420. 
 
 4. The Risk and icTiat it includes, 402. 
 
 in the absence of specification, loss by fire, accident, death, 
 or any other cause insured agamst, is within the policy, 
 whatever the manner of loss, 402. 
 
 e. g., ignition is not necessary to claim under a fire policy, 
 402. 
 
 insurers not liable for loss by an excessive use of heat pur- 
 posely applied, as in over-roasting coffee, 402, and note. 
 
 insurance against statute liability does not cover common- 
 law liability, 402. 
 
 ice included in river perils in spite of parol understanding 
 to the contrary (?). 
 
 wind, 402. 
 
 hail, 402. 
 
 capture, 402. 
 
 insuring a ship for voyage A. does not cover voyage B., 402. 
 
 " usurped power." " Civil commotion," 403. 
 mobs. Riots. Proximate cause, 403. 
 " resistance to authority " held not to include action of 
 a group of escaping convicts, 403. 
 
 injury by water and removal or theft in consequence of 
 bona fde and prudent efforts to save from fire, are within 
 policy, 404. 
 
 1440
 
 INDEX. 
 
 [The references are to the sections.] 
 
 RISK — continued. 
 
 smoking. Goods illegally kept for sale, 405. 
 
 lightning policy. Loss by tornado and lightning covered, 
 
 406. 
 misconduct. Fraud. Suicide. AVilful destruction of prop- 
 erty fatal to claim under the policy unless loss was certain 
 any way, 407. See also 411. 
 if loss is caused by wrongful act of third person or by as- 
 sured while insane, the company is liable, 407 A. 
 company liable, 407 A. 
 
 violation of orders by guests, 407 A. 
 neglect of captain to register goods, 407 A. 
 incendiarism, 407 A. 
 by stranger, 407 A. 
 by wife,"407 A. 
 
 by assured while insane, 407 A. 
 negligence, 408. 
 
 mere negligence, however great, if short of fraud, is 
 
 covered by the policy, 408. See also 410. 
 and if only the remote cause of loss is no defence even 
 when the policy expressly excepts loss by negligence, 
 408. 
 wilful exposure, 409. 
 
 exposure to obvious and unnecessary danger, 409 A. 
 going along railroad track at night is, 409 A. 
 crossing in daytime may be, 409 A. 
 going to rescue of wrecked crew not, 409 A. 
 "design." Gross negligence not fraud, though it may be 
 evidence of it, 410. 
 misconduct avoids a policy, 411. 
 
 it differs from negligence, 411. 
 marine Insurance, Negligence, Barratry, Theft, 411 A. 
 if after a fire is out the weakened walls fall and crush an adjoining 
 building, this loss is within a policy against damage by fire, 412. 
 otherwiseif seven days after the fire a gale blows the walls down, 
 or walls fall from inherent weakness before there is any fire, 412. 
 spontaneous combustion (413) is within a fire policy (contra, 
 413, note), and an explosion would seem also within 
 it, 413, but is frequently excepted, 415. 
 explosion incident to a fire not within the exception, 416. 
 
 nor one resulting from the business insured, 415. 
 concussion not within a fire policy, 414. (Distinction rather 
 
 fine.) 
 there are numerous cases, in some of which the insured was 
 injured by explosion following fire, and in others by fire 
 following an explosion, and conditions and opinions are 
 various, 413-416. See also 418. 
 bursting of boilers, 415. 
 
 1441
 
 INDEX. 
 [The references are to the sections.] , 
 
 RISK — continued. 
 
 collision, 417. 
 
 it is sometimes difficult to tell how far to carry the rule ex- 
 cluding a remote cause. See 417, 417 A, 419. 
 intemperance. Accident, &c. Proximate cause, 419. 
 intemperance causing acts of exposure which produce death, is 
 
 the cause of death, 419. 
 rules of company against intemperance must be obeyed, 419 A. 
 "sober and intemperate " does not imply total abstinence, 
 
 419 A. 
 
 "seriously impair health " means his health ; evidence that 
 he drank enough to impair ordinary health not suffi- 
 cient, 419 A. 
 
 excessive drinking violates warranty against pernicious habit 
 obviously tending to shorten life, 419 A. 
 evidence. Beneficiary not estopped by doctor's statements, 419 A. 
 agent's knowledge may prevent company from insisting on con- 
 dition against intemperance, 419 A. 
 
 and yet death from intoxication may avoid the policy, 419 A. 
 5. What property is covered. 
 
 doubt resolved against company, 420. 
 
 wearing apparel, 420. 
 
 linen, stock, furniture, fixtures, jewelry, merchandise, plate, 
 refined oil, house, ship-yard, cars, unfinished house or 
 boat, lumber, mill, factory, machinery, tools, grain, cat- 
 tle, 420. 
 
 stock of hair, iron, corn, rice, fur, freight, 420 A. 
 
 additions, goods in outbuildings or on a hired vessel, 420 B. 
 
 what is covered, question for jury, 420 A. 
 
 evidence admissible to show what was meant to be included, 
 420, 420 A. 
 
 misdescription disregarded if sufficient to identify, 420 A. 
 
 usage received in favor of assured, 420 A. 
 
 after-acquired stock covered, 420 B. 
 
 " lost or not lost," 420 B. 
 
 goods included by mistake, company not liable, 420 B. 
 
 other goods shipped m place of tliose described, not covered, 
 
 420 B ; premium recovered. 
 
 indorsement of specific goods, secretary cannot waive the 
 
 condition, 420 B. 
 New York mutual companies may insure foreign residents 
 
 and property, 420 B. 
 goods in trust and bailments, 420. 
 6. Increase of. See Alteration, Conditions, Occupancy, 
 express and implied provisions against, 218. 
 any hazardous use, whether among those enumerated in the 
 policy or not, avoids it, under the general stipulation against 
 increase of ri.sk, 218. 
 
 1442
 
 INDEX. 
 
 [The references are to the sections.] 
 
 RISK — continued. 
 
 a mere intent to violate a condition, however, is not fatal, 
 though steps have been taken toward its execution, 218 ; 
 see 236. 
 sometimes the policy provides that it shall only be suspended 
 
 during the increase, 218 ; see also 2-15. 
 a reinsurer is liberated by increase of risk, though the insurer 
 
 consent to it, 218. 
 increase between application and issue of policy fatal, 218. 
 such slight variations of risk as are incident to the ordinary uses 
 of the property are not fatal, 219. 
 otherwise with the erection of an oven, new buildings, or 
 machinery, moving a steam-engine, &c., 220. 
 it is immaterial under the usual clause whether the loss teas caused 
 
 by the increase or not, 220. 
 if the insured has two policies from the same office, a per- 
 mission to increase the risk under one policy saves the other, 
 220. 
 Notice to and assent by the insurer, 221 ; see also 222-225. 
 both must be within a reasonable time, 221. 
 no notice necessary of a change not increasing the risk, 221. 
 agent may waive written assent, 221. 
 
 ordinary diligence in giving notice is sufficient, 221; see 215 D. 
 7. Classification of Risks. 
 
 goods are often classified into hazardous, extra-hazardous, 
 memorandum articles not insurable at all or only on special 
 conditions, 232. 
 and a policy insuring one class will be avoided if a more 
 hazardous class is kept in stock or mixed with the stock 
 insured, 232. 
 where there is no bad faith, however, a rule similar to that 
 spoken of in 215 B, as prevailing in France, might 
 be applied with advantage. 
 goods "usually kept in a country store," 233, 238, 239. 
 may include benzine, saltpetre, gunpowder, &c. 
 233, note. 
 " stock of f/roceries " includes saltpetre, 2.33, note, 
 "stock of confectioner)/ store'''' includes fireworks, but 
 
 groceries, liquors, and tobacco does not, 233. 
 but if a special clause allows a reasonable quantity, 
 
 more will be fatal, in spite of usage, 233, note. 
 if the " usually kept," clause is followed by " except as 
 hereinafter provided, the " printed conditions govern, 
 233, note. 
 a permissive clause is strictly construed, whether express or 
 
 implied, 234; see also 239. 
 hazardous goods are those which increase the risk of fire, 
 235. 
 
 1443
 
 INDEX, 
 [The references are to the sections.] 
 
 RISK — continued. 
 
 hazardous trades, 236. 
 
 by reason of the context a permission of " extra-hazar- 
 dous " construed to permit "specially hazardous" 
 trades, 236. 
 an additional use of the same grade of hazard as those per- 
 mitted avoids the policy (as putting in one more stove, 
 see 220, note). An accumulation of hazards increases the 
 risk, 237. 
 •where a stock of goods or property used in business, &c., is 
 described as insured, without qualification, this written 
 description controls inconsistent printed conditions, 239 ; 
 (see also 233 and general rule, 177). 
 all that is properly incidental to the business insured is 
 also insured, 239. 
 Gasoline, petroleum, &c. 
 
 under a policy on a factory prohibiting petroleum it may be 
 
 used as a lubricator, if such is the custom, 239 A. 
 "only sperm-oil and lard as lubricator" not broken by 
 
 using petroleum mixture if as good and safe, 239 A. 
 " lamps to be filled by daylight," 239 A. 
 " kerosene allowed for light in dwelling,'''' clerk sleeping in 
 
 store will not make it a " dwelling," 239 A. 
 court not judicially notice that gin and turpentine are in- 
 flammable, 239 A. 
 Gunpowder, fireworks, nitroglycerine. &c. 
 
 "75 lbs. allowed," mere casual presence of more not fatal, 
 
 it not appearing to have caused the loss, 239 B. 
 policy on goods, to be void if powder kept on "premises in- 
 sured," not void for powder in buildings not insured, 
 though insured goods are there. Premises means real 
 estate, 239 B ; see also, 228. 
 prohibition of gunpowder does not keep out fireworks, 239 B. 
 " yankee notions" covers fireworks, but " groceries, liquors, 
 and tobacco," do not, 239 B. 
 the hiring of carpenters to make constantly needed repairs does 
 not avoid a policy, though the working of carpenters is stated 
 in the printed conditions to be fatal ; otherwise with extensive 
 alterations, 240. 
 " use," "keeping," &c., when stipulated against, mean habitual 
 use, keeping, &c., ?41. 
 the condition is not violated by casual use, 241. 
 but a single use, if it is the cause of loss, is fatal (note), 241. 
 " storing " means keeping to redeliver as received, 242. 
 
 if company knows premises may be used to store cotton 
 and provides for additional premium, the storing is not 
 fatal, 242. 
 "keeping," "premises," means real estate, 243. 
 
 1444
 
 INDEX. 
 
 [The references are to the sections.] 
 
 RISK — continued. 
 
 change in surrounding circumstances, 24.4. 
 
 change of use from that described is not necessarily fatal, 244. 
 
 suspension of policy follows temporary increase of risk, 245; (see 
 
 also 222) ; and an increase Jnay be fatal though removed before 
 
 the fire, 245. 
 
 a Jiabit of breaking conditions is of no consequence if there is 
 
 none at the time of loss, 245. 
 smoking, bar-room, bawdy-house, bowling-alley, after expiration 
 
 of license, 245 (note). 
 *• unlawful use " not a single misdemeanor, or a casual use, 246. 
 that A., whose life is insured by B., goes on an illegal voyage 
 without B.'s knowledge is immaterial, there being no pro- 
 hibition in the policy, 246. 
 knowledge by president of addition made under verbal assent 
 
 estops company, 246 A. 
 if company knew buildings have been or are to be used as ex- 
 hibition buildings, it cannot object, 246 A. 
 parol admissible to show agent's knowledge of increase of 
 risk, 246 A. 
 permission to keep kerosene, left out of policy by mistake, 
 &c., 246 A. 
 if agent of insured to renew knows of ihcrease of risk failure to 
 disclose is fatal, 246 A. 
 RUPTURE, warranty as to, 296, 297. 
 accidental, 515. 
 
 S. 
 
 SALE. See Alienation, 3, 5, 6, 7. 
 
 conditional, no alienation, 272. See 264. 
 of part, when not an alienation, 365. 
 SALTPETRE, when included in risk. See Risk, 2, 
 SALVAGE, rule as to, not applicable in fire insurance, 421 a. 
 SEAL not necessary in policy unless organic law so provides, 16, note. 
 
 and even then an unsealed policy may be good as an interim re- 
 ceipt, 17. 
 policy under, not continued in force by parol, 70 B. 
 
 SECRETARY, countersignature of policy required by charter, 15 and 
 
 note, 27. 
 SERIOUS ILLNESS, 296. 
 SET-OFF, 546, .592, 593. 
 
 against assessment, 559. 
 SETTLED LIMITS, 3.37. 
 SEVERABLE CONTRACT, where a contract insures against fire and 
 
 also against a peril within the Statute of Frauds, 23 C. 
 
 1445
 
 INDEX. 
 [The references are to the sections.] 
 
 SHERIFF has insurable interest, 80. 
 SHIP-YARD, what, 420. 
 SHORTEN LIFE, tendency to, 296. 
 SICKNESS. See Health. 
 
 cold is not, 178. 
 SIGNATURE of president and secretary to policy, 15, and note. 
 
 of de facto officers sufficient, 27. 
 SILENCE, when waiver, 508. 
 
 SISTER, insurable interest in life of brother, 103-107. 
 SITUATION of insured premises, statement as to, 259. 
 SMOKING, loss by, 245, 405. 
 SOLE OWNER. See Title, 4. 
 SPASMS, 295. 
 
 SPECIFIC INSURANCE, loss under, 436. 
 SPECIFIC PERFORMANCE. See Remedies. 
 
 of parol contract, of insurance, 23 A. 
 
 of agreement to insure, 566 C. 
 SPITTING BLOOD, representation as to, 187, 298. 
 SPONTANEOUS COMBUSTION, loss by, 413. 
 SPRAIN, accidental, 514. 
 STAMP ACTS, effect of, 25. 
 STATEMENT OF LOSS, 568-570. 
 STATUTE, requiring annexation of application to policy, 29 C. 
 
 declaring policy to be " valued " as to real estate in case of total loss, 
 31 A. 
 STATUTE OF FRAUDS, not applicable to reinsurance, 12 A. 
 
 or to insurance for a year, 18. 
 
 or more, 23 C. 
 
 usage cannot import a new clause into, 18. 
 
 if one of two perils insured against is within the statute, the con- 
 tract is good as to the other, 23 C. 
 STEAM, loss by, 415. 
 STOCK IN TRADE, what included in, 233, 420. 
 
 STOCK COMPANIES, powers of officers less restricted than in mutual, 
 146. 
 
 STOCKHOLDER in corporate property, insurable interest of, 88, 90. 
 
 must state title if called for, 287. 
 STORING defined, 242. 
 STOVES, care of, 255. 
 STRAIN, accident by, 514. 
 SUB-AGENTS and clerks, power of, 154. 
 
 general agent may appoint sub-agents, local agent cannot, 126, 
 154 A. 
 
 any sub-agent or clerk appointed by an agent with consent or recog- 
 nition of the company may bind it, 154. 
 
 1446
 
 INDEX. 
 
 [The references are to the sections.] 
 
 SUB-AGENTS — continued. 
 
 agent has implied power of delegation, 154. 
 knowledge of, binds company, 132, 140, 154 A. 
 agent's responsibility for, question for jury, 154 A. 
 
 SUBJECT-MATTER. See Insurable Interest. 
 insurance does not run with the property, 6. 
 
 enemy's life, property, when insurable. See War, orch. iii. analysis, 
 mistake in describing (name of vessel) not fatal, 43 D. 
 but if there is no designation of the property there is no contract, 
 
 43 F. 
 what property is covered. See Risk, 5. 
 may include any lawful interest, 71. 
 
 having an appreciable pecuniary value, 72. 
 
 though no market value, 72. 
 
 nor even actual existence, 72. 
 the thing or life is not insured, but some person in respect to it, 72. 
 life, health, liberty, solvability, fidelity, property, profits, &c., 73. 
 
 SUBJECT TO or afflicted with disease, 297. 
 
 SUBROGATION, right of, 453-458. 
 insurer's right of, by contract, 458. 
 A. Of insurer to remedies of assured. 
 
 1. None at common law as against whose negli^fence or wrongful 
 
 act caused the loss, especially in case of felony, 453. 
 
 the true doctrine is that a wrongdoer ought to make 
 
 good the direct loss caused by his act, great or small, 
 
 454. 
 
 the injured person may sue the wrongdoer first, and 
 
 if he recovers, the insurer is released, 454. 
 or he may sue the company first, and then the company 
 may pursue the wrongdoer, in the name of the as- 
 sured or his representatives, 454. 
 equity will restrain the assured from releasing the 
 
 wrongdoer, 454. 
 the company is treated as a surety, 454. 
 che right of subrogation exi.sts, although the company 
 
 was not legally bound to pay the loss, 454. 
 but does not arise until full payment has been made 
 by the company, except in case of abandonment or 
 express agreement to assign remedies to the insurer, 
 454. 
 payment by a mere stranger, or volunteer, however, 
 gives him no right of subrogation, 456. 
 nor does such a payment release the insurer, 456. 
 liability of town for acts of mob, 454. 
 
 or defect of hi eh way, 455. 
 railroad liable to company for loss by sparks, 454. 
 carrier's negligence, 454. 
 
 1417
 
 INDEX. 
 
 [The references are to the sections.] 
 
 SUBROGATIOX — continued. 
 
 the party liable for the wrong cannot take advantage of 
 the payment of the loss by the company to reduce 
 damages, 455. 
 
 2. Creditor. 456. 
 
 though company pays the creditor, he may still sue 
 tlie debtor for his debt (V), 45(3. See however, 456 a, 
 449, 452 A. 
 company may recover insurance from lessee if lessor repairs 
 under the lease, 456 a. 
 
 so the insurer will be subrogated to the right of a ven- 
 dor against a vepdee who has paid only part of the 
 price, 456 a, 457. 
 
 and may use any lien that the insm-ed possesses, to the 
 extent of the insurance paid by them, 456 a, 457. 
 
 if the sale is not complete at the time of loss, so that 
 the loss is the vendor's, of course there is no room 
 for subrogation, 457. 
 the company cannot recover if the assured cannot, 457. 
 
 except in some cases of special agreement; see 457 C. 
 
 uor can it recover more than it has paid, 457. 
 
 and the suit must be in the name of the assured, 454, 
 457. 
 
 3. Carrier, 457 A, 457 B. 
 
 insurer of goods lost by carrier is subrogated at common 
 law to insured's remedies against carrier, 457 A. 
 and may recover the full value of the goods and 6 
 per cent interest, 457 A. 
 
 although the insurer may have waived a valid defence 
 against the assured, 457 A. 
 
 the insurer is not entitled to commissions on sales of 
 abandoned goods, 457 B. 
 
 where the policy says, " This insurance shall not inure to 
 the benefit of the carrier," if the insured agrees with 
 the carrier to give him the benefit of the insurance, 
 neither of them can sue the insurer, 457 A. 
 
 in the absence of fraud or of such a stipulation in the 
 pojicy, the assured may release the carrier, or agree 
 that he shall have the benefit of the insurance, and 
 this defeats the subrogation of the insurer, 457 B. 
 
 the carrier has no claim on the insurance except by 
 express agreement, 457 B. 
 
 4. Mortgagor and Mortgagee, 456, 457 C, 458. 
 
 insurer paying moitgagee is subrogated to his rights at 
 common law, 457 C (N. Y.). Contra, 456, unless 
 there is an express agreement. 
 
 the mortgagee may recover from insurer and debtor 
 both, 456. 
 1448
 
 INDEX. 
 
 [The references are to the sections.] 
 
 SUBROGATION — continued. 
 
 if the mortgagor procured the insurance, though mak- 
 ing it payable to the mortgagee, or if he ultimately 
 pays tlie premiums, the insurance is for his benefit, 
 and the iusurer cannot rely on the mortgage, 457 C, 
 456. 
 there is often a " mortgagee clause," stipulating that 
 acts of tlie mortgagor shall not vitiate the policy, and 
 that the company may on payment of the loss require 
 an assignment of the mortgage to that extent, or en- 
 tirely on payment of the mortgage debt, 457 C. 
 the election in tL •. latter case must be made withia a 
 reasonable time, 457 C. 
 B. Of one person to rights of another against the insurer, or the in- 
 surance funds, see Carkiek, above in this analysis, 
 and chap. sxii. anal. 5. 
 ultimate title to proceeds, as between mortgagor and 
 
 mortgagee, 456. 
 vendor and vendee, 456. 
 lessor and lessee, 456. 
 debtor and creditor. 456. 
 5. Proximate Caui^e. Sparks flying from a locomotive. 459. 
 
 car running over fire hose and severing it so that build- 
 ing burns, railroads responsible, 459. 
 fire running from A.'s land to B.'s, 459. 
 town tearing down building to stop fire, 459. 
 SUICIDE, 307-325, 407. 
 
 for fuller analysis, see head of chap at 307. 
 raises no presumption of insanity, 319. 
 sane or insane, 322. 
 
 unless excepted, does not avoid policy, 323. 
 insurance against, void as against public policy, 323. 
 bona fide assignee, or beneficiary, protected against by express pro- 
 vision, 324. 
 if doubtful, presumption against, 325 
 no presumption of, from religious views, 325 
 not provable by opinion of unprofessional witness, 325. 
 voluntary, not covered by policy, 407. * 
 
 loss by, 407. 
 SUIT, limitation of, 478-489. 
 meaning of, 489. 
 
 who may bring, 544. See Loss, 2. 
 to revive policy, 568. 
 SUNDAY, premium falling due on, 349. 
 SUNSTROKE, death by, 519 ; see 296. 
 SUPERCARGO has insurable interest, 80. 
 SURETY, insurable interest, 82. 
 
 1449
 
 INDEX. 
 
 [The references are to the sections.] 
 
 SURPLUS in treasury on dissolution of a mutual company, goes to all 
 
 policy-holders that helped to create it, 12 C. 
 SURRENDER of policy, 69 a. 
 
 meeting of minds, and delivery of policy, with intent to surrender 
 
 it, terminates it, 69, 69 B. 
 if in a mutual company the member is no longer liable for assess- 
 ments, 69 B. 
 unless the company was insolvent at time of surrender, 67 A. 
 re-delivery by the agent after knowledge of a loss cannot revive the 
 
 policy, 69 B. 
 on condition, is incomplete until condition is fulfilled. 69 B. 
 after forfeiture, assured can recover no premiums, 69 B. 
 without assent of beneficiary, 399 P. 
 unfairly obtained, 569, 507. 
 SURROUNDINGS, statements as to, 225, 244, 259. 
 SURVEY, what, and when part of contract, 159. 
 SUSPENSION, of risk, 101. 
 
 of policy, 101, 245, 343. See Premium, 10. 
 
 TAVERN-KEEPING, 245. 
 
 TAX-TITLE, as an incumbrance, 292. 
 
 TAXES, lien for, as an incumbrance, 291, 292 A. 
 
 TENANT, insurable interest of, 84. 
 
 TENANT IN COMMON, insurable interest of, 81. 
 
 TENDENCY to shorten life, 296. 
 
 TERMINATION. See chap. v. anal. 
 
 TEXAS, statute declaring policies on real estate to be " valued " in case 
 
 of total loss, 31 A. 
 THEFT, loss by, 404. 
 TICKET, accident insurance, 70. 
 TIME, of insurance, computation of, 400, 401. 
 
 if none specified a reasonable time is intended, 216, 225. 
 
 to pay premium. See Premium, 7. 
 
 parts of a day taken into account to determine which policy issued 
 first, 365 a. 
 
 beginning of risk. See Risk, 1. 
 
 end of risk. See Risk, 2. 
 TIME POLICY, what, 34. 
 TITLE. See Incumbrance. 
 
 A. Brief A nab/sis ; see B. below for a fuller one. 
 
 insurance does not run with title to the property, 6. 
 
 equitable and incomplete, insurable interest in, 86, 89. 
 
 1450
 
 INDEX. 
 [The references are to the sections.] 
 
 TITLE — continued. 
 transfer of, 267. 
 
 change of, as an alienation. See chap. xii. anal, 
 mortgage not change of, 269. 
 and property distinguished, 283. 
 misrepresentation as to, 283-289. 
 what constitutes, 283-294. 
 true, 287. 
 
 ownership, interest, 285. 
 sole and unconditional owner, 286. 
 absolute and leasehold interests, 288. 
 perfect and unincumbered, 289. 
 fee-simple, 289. 
 B. Fuller Analysis. 
 
 1. "Property" means the thing insured; " title," the right to or in- 
 terest in it, 283. 
 the title is no part of the description of the property, or its 
 condition, situation, value, or risk, 283. 
 Unless inquiry is made the title need not be stated, it being suf- 
 ficient if in fact the assured has an iasui'able inter- 
 est, 284, 285. 
 and where such is the case, there is a strong tendency 
 to hold the company if the assured's representations 
 can be made to fit the facts either substantially or 
 literally, 284. 
 no misrepresentation that does not diminish the risk 
 
 will be fatal, 287, note, 
 it is sufficient if the title is actually good though it 
 appears defective on the records, 285, note. 
 Where no inquiry is made calling the property " his " or him- 
 self the " oiLmer" is right, if in any substantial sense 
 it is his, although (285) — 
 it is on the land of another, 285. 
 or attached, 285. 
 or he is only tenant for life, 285. 
 or for years, 285. 
 or joint owner, 285. 
 or vendee with deed passed to third person for him, 
 
 285. 
 or possessor under a contract of purchase, 285, 287 
 
 (even though parol). 
 or holder of a claim enforceable in equity, 285, and 
 notes. 
 it is not misrepresentation for the equitable 
 owner to claim full title, 285, note. 
 or vendor before deliveiy, 285. 
 or judgment creditor to whom the property has 
 been set off subject to mortgage, 287. 
 
 1451
 
 INDEX. 
 [The references are to the sections.] 
 
 TITLE — continued. 
 
 or purchaser at foreclosure or sheriff's sale before 
 
 deed acknowledged or passed, 287. 
 or grantor with defeasance back unrecorded, 285, 
 
 note. 
 or mortgagor before redemption expires, 285, note, 
 otherwise ujler. 
 •whether holder of title-bond from one "who was suing in 
 equity to perfect his title, is owner, for the jury to 
 decide, 284. 
 a sheriff's sale before insurance and annulled afterwards 
 does not aifect the ownership, 285. 
 particular interest need not be stated; the insurance may be 
 genera], and recovery according to the interest proved, 
 285, note, 
 except in reassurance, bottomry, and freight, profits, &c., 
 in some cases, 285, note. 
 2. If the " true title " is called for it must be stated with substantial 
 accuracy, 287. 
 it will not do to call the property ^^ his" when he is only a 
 tenant by curtesy, 287, 289. 
 part owner, 287. 
 stockholder, 287. 
 mortgagee, 287. 
 mortgagor, 287. 
 if the charter requires statement of title if less than a fee- 
 simple, an omission to state title is a warranty of a fee- 
 simple, 287. 
 individual may insure his property under his trade name 
 though it makes the insurer think it is corporate prop- 
 erty, 287. 
 ♦' good and perfect unincumbered title," mortgage paid but 
 not discharged of record is a breach, 289. 
 3. Fee-simple, " if title less than, it must be stated," 289. 
 
 verbal gift cannot create, and though deed made and de- 
 livered before lo.ss, policy void, 289. 
 mortgagee under absolute deed may so state his title, 289, 
 
 end. 
 fee of undivided portion of land under buildings not suf- 
 ficient, 289. 
 husband cannot call wife's property " his " when charter 
 requires fee-simple, 289. 
 see, where agent knows the facts, 294 E. 
 ■warranty of fee-simple true if he can enforce specific per- 
 formance of a bond to convey, 289. 
 if several persons are insured in respect to the same 
 property, the condition applies to the sum of their in- 
 terests, 289. 
 
 1452
 
 INDEX. 
 [The references are to the sections.] 
 
 TITLE — continued. 
 
 4. " Sole and unconditional owner : " 
 mortgagor of chattels is, 286. 
 " entire, unconditional, and sole owner : " 
 valid condition, 287 A. 
 breach fatal, 287 A. 
 
 so is failure to disclose true title if not as required by 
 policy, though no question asked at time of application, 
 287 A. 
 mortgagor in possession in some States is, 287. 
 in general a mortgage must be stated, 287. 
 contra, 287 C, even as to absolute deed intended as a 
 mortgage. 
 vendee though giving mortgage for price, 287 C. 
 
 or allowing the vendor to retain the legal title as se- 
 curity, 287 C. 
 a lien does not affect, 287 C. 
 nor a conditional sale, 287 C. 
 
 nor an agreement to give clerk a share of profits, 287 C. 
 nor a dry legal title iu another, 287 C. 
 sole beneficial right siifficient, 287 C. 
 equitable owner is, iu respect to insurance, 287 C. 
 one in possession under a valid contract of purchase is, 
 287 C. 
 though he has assigned his contract as collateral, 287 C. 
 but mere verbal promises to convey are not sufficient, 
 
 287 C. 
 if the description says " held in trust " or otherwise, the 
 company has notice, the condition does not apply, 
 
 287 C. 
 
 not entire, unconditional, and sole owner. 
 
 if there is any outstanding right, legal or equitable, 287. 
 
 as tax-title, &c., 287, end. 
 stockholder as to corporate property though pledged to 
 
 him, 287, note, 
 holder under quitclaim from second mortgagee, 287 B. 
 leasehold and contract of purchase of personalty, price 
 
 unpaid, 287 B. 
 surviving partner, 287 B. 
 life tenant, 287 B. 
 5. Leasehold interest. Absolute interest : 
 
 interest and title are not synonymous, 288. 
 
 if the loss would fall on A. his interest is absolute, 288. 
 
 possessor under contract of purchase with part-payment, 
 
 288 (absolute) (?), 288. 
 pledgor, 288. 
 
 lessee owning building to be left on land at end of lease, 
 not leasehold, 288. 
 
 1453
 
 INDEX. 
 [The references are to the sections.] 
 
 TITLE — continued. 
 
 mechanic's lien, 288. 
 
 not stating leasehold when required by policy, fatal, 
 though no question asked at application, 288. 
 TORNADO, loss by, covered, 40G. 
 TORT, of third person causing loss, 407 A. 
 
 of agent. See Agents, 3. 
 TOTAL DISABILITY from accident, 522, 523. 
 TOTAL LOSS, constructive notice of abandonment need not be given 
 
 to reinsurer, 11 (Zj). 
 TRADES, hazardous, 230-240. 
 TRANSFER OF TITLE, what, 267, 272, 273, 275. 
 
 to the property insured does not carry the insurance unless so agreed 
 in the policy, 6. 
 TRAVELLING, permit for, 335. 
 restrictions upon, 335-339. 
 waiver of, 339. 
 what is, 524, 529. 
 in a conveyance, 525, 529. 
 TRIAL. See Proof. 
 
 TRUST-DEED not an alienation, 272, 276 B. 
 TRUSTEE, insurable interest of, 80, 83, 111. 
 
 U. 
 
 ULTRA VIRES, reinsurance not, if permitted by statute though no 
 permission in charter, 12 A. 
 parol insurance not necessarily invalid, 15, 23, 23 D, 
 
 a policy issued without order of the directors good, 17. See 
 Informality. 
 UNCLE as beneficiary, 399 H. 
 " UNCONDITIONAL " OWNER. See Title, 4. 
 UNLAWFUL ENTERPRISES not insurable, 71. 
 UNTRUE STATEMENT. See Representation. 
 USAGE, as evidence. See 582. 
 
 in aid of interpretation, 11, 173, 179, 180. See chap. viii. anal. 4. 
 
 to limit liability of reinsurer not admissible, 11 (z). 
 
 to make insurance contracts in writing does not render parol invalid, 
 
 14, 18, 29, 
 competent to show whether a parol agreement is final or looks to the 
 
 issue of a policy, 23 B. 
 as to stock of country store, &c., 233, 238, 239. 
 " usually kept." See chap. xi. anal. 4. 
 as to keeping watchmen, 250. 
 as evidence of truth of description, 262. 
 
 1454
 
 INDEX. 
 [The references are to the sections.] 
 
 USE, change in mode of, 230. 
 
 additional or cumulative is fatal, 237. 
 
 otherwise as to an enlarged use, 231. 
 
 means habitual use, 241 
 
 prohibited, 23i, 241-243, 245. 
 
 of prohibited articles, 239. 
 
 meaning of, 241-243, 247. 
 
 unlawful, 246 
 USURPED POWER, loss by, 403. 
 
 VACANCY, 
 
 1. In absence of express provision on the subject of vacancy, 
 
 description of premises as a " dwelling" or as occupied by a par- 
 ticular person, no warranty again.st vacancy, 217 
 representation of present status not an agreement for its continu- 
 ance, 247. 
 change of tenants immaterial, 247. 
 
 " to be occupied by a tenant " is only an expression of expecta- 
 tion, 248. 
 unless the time is fixed within which the house is to become 
 occupied, 248. 
 temporary vacancy between tenants is not fatal, 249 B. 
 nor on a vi-sit; see 248, 249 D. 
 nor .stoppage of mill for repairs, &c., 248 
 nor even complete, permanent vacancy, unless in bad faith 
 or such as to increase the risk materially, 248, 249 B. 
 
 2. An express provision against vacancy is necessary, 247, 248, 249 B. 
 
 unless the premises are purposely left vacant in bad faith, 248. 
 or the vacancy is of such character as to come under the increase 
 
 of risk clause, 248. 
 ordinarily it is not an increase of risk, 249 B. 
 
 but if a house is left by the owner and an intruder opens a 
 saloon, the risk will be increased, not by the vacancy, but 
 by what happened in consequence, 249 B. 
 an oral promise insufficient, 248 
 if there is no "vacancy clause," good faith and the " increase of 
 
 risk provision" are the tests, 247-249 B. 
 if there is a vacancy clause, its special words, if not too unrea- 
 sonable to be sustained, 249 G, must be added to the tests, 247- 
 219 B 
 "vacant " means empty of all but air, 249 A. 
 unoccupied means no one in actual n.se or possession, 249 A. 
 terms must be construed with reference to the subject-matter, 
 249 A. 
 
 VOL. II. — 48 1455
 
 INDEX. 
 
 [The references are to the sections] 
 
 VAC AXCY — conhnved. 
 
 the condition in a policy on a hog house refers to the human 
 
 occupation of the dwelling on the premises, not to the hog;>, 
 
 249 A. 
 
 requires practical use, 249 (shop) ; but see 249 D (grain-elevators). 
 
 requires use as a customary place of abode, 249 A (dwelling). 
 
 not uninterruptedly, but the place of habitual return and 
 
 stoppage, 248, note, 
 leaving in charge of one living near, not sufficient. 249 A. 
 purpose to move into a house though partly executed is not 
 
 enough, 249 A, 249 C; but see 249 D. 
 occupation of the land is not enough, the houite must be 
 occupied, 249 C. 
 the condition applies to all the buildings on the premises, 249 A. 
 
 it is distributive, 249 A. 
 diligence of the insured does not enter the question unless so 
 agreed, as by the words "vacancy ^A•ithin assured's con- 
 trol," 249 F. 
 then insured must show it was beyond control, 249 F. 
 in general, removal by tenant, though before lease is out 
 and without knowledge of assured, is fatal, 249 F. 
 false answer as to occupancy fatal, 249 G. 
 
 policy once voided for vacancy not revived by reoccupation, 249 G. 
 unreasonable condition, which would avoid the policy if the 
 
 premises were used or not, is void, 249 G. 
 by-law as to, subsequent to policy, no effect, 249 G. 
 JMaiue statute, 249 G. 
 3. Vacancy may be waived • 
 
 expressly by writing, 249 H. 
 
 or orally even though tlie policy requires writing, 249 H. 
 
 or declares that no agent can waive, 249 J. 
 a general agent may waive this last requirement as well 
 as the other, 249 H, 249 J. 
 impliedly by knowledge of the agent. 
 
 state of premises as to occupancy at time of insurance, 
 if occupation at loss is same as known to agent at 
 time of insurance, company estopped, 249 I. 
 although the applicant ignorantly signed an 
 erroneous application filled up by the agent, 
 249 T. 
 but if house once becomes occupied after in- 
 surance the condition takes effect, 249 I. 
 vacancy occurring after insurance: 
 
 if agent tells assured it will be fatal, no Maiver, 
 
 249 I. 
 so if he is merely silent, 249 I. 
 knowing that vacancy is likely to occur in future, 
 no waiver, 249 I. Tenement, summer-house, &c. 
 
 1456
 
 INDEX. 
 
 [The references are to the sections.] 
 
 VACANCY — continued. 
 
 general agent may modify contract so as to cover future 
 vacancies, 2i9 H. 
 if the policy says unoccupied buildings must be insured as such, 
 
 they must be, '248. 
 no implied obligation to keep a watch in a vacant house, 248. 
 mere going out of one tenant is not a " change of tenants " till 
 
 new one comes in, 249. 
 a vacancy is not " an alteration of use," 249. 
 4. What is a vacancy: 
 
 vessel left alone, 249 C. 
 
 moving in just begun, 249 C, 249 A ; but see 249 D. 
 leaving a few articles in house, and non-delivery of key to owner 
 not sufficient, 249 C. 
 nor supervision by one not living in house, 249 A, 249 C. 
 What is not a vacancy: 
 
 absence on a visit, 248. 
 or a funeral, 249 D. 
 leaving summer-house in winter, 248; see however, 2491. 
 temporary suspension of a mill, 248. 
 
 for repairs, or because of low water, 248. 
 casual absence on night of fire, 249 D. 
 moving in nearly complete, 249 U. 
 sleeping in adjoining house not fatal, 249 D. 
 if any one of the " family " remains it is sufficient, 249 D. 
 
 or if part of a tenement house is occupied, 249 D 
 grain elevator not vacant if owner keeps his papers there and is 
 in and out, 249 D. 
 notice of vacancy: 
 
 must be given if required by the policy, 248. 
 temporary vacancy between tenants not fatal as an increase of risk, 
 219 B. 
 but is under the vacancy clause, 249 B. 
 
 even though the fire was smouldering unnoted before the tenant 
 left, 249 B. 
 " vacant and so remain , " 
 
 means vacant until loss, 249 E. 
 
 agent's knowledge of vacancy at time of consenting to transfer 
 does not waive the condition as to remaining, 249 E. 
 VACATION OF PREMISES, 217-249. 
 Valuation. See Overvaluation. 
 
 over, what is, and effect of, in valued policy, 30, 373-376, 443. 
 what avoids the policy, 30, 373-375. 
 by reference, 31. 
 renewal of changing stock, 375. 
 restriction of, in charter and by-laws, 476. 
 VALUE. See Ovfrvaluation. 
 
 statement of, not generally a warranty, 3. 188 C. 
 
 1457
 
 INDEX. 
 
 [The references are to the sections.] 
 
 VALUED POLICY, uhat, 30, 31, 31 A. 
 
 how distinguished from open, 30. 
 
 may be open, and valued, 31, 32. 
 
 statute declaring policy to be valued in certain cases, 31 A. 
 VENDEE, insurable interest of, 83 a, 87, 87 A, 88, 96. 
 
 title in respect to insurance, 285, 287. 
 
 claim for loss, 549-556. 
 VENDOR, insurable interest of, S3 a, 88, 97. 
 
 claim for loss, 549, 550. 
 
 venue, 569 A. 
 VIOLATION OF LAW, death by, what, 530. See Death. 
 VOYAGE POLICY, 34. 
 
 W. 
 
 WAGER POLICY^ what, 33. 
 unlawful, 74, 75. 
 
 See Insurable Interest. 
 WAIVER. See Relinquishment. 
 
 by insurer of a breach by assured does not release reinsurer, 12 B. 
 
 of vacancy. See Vacancy, 3. 
 
 of paynient of premium, 62, 300-363. 
 
 of counter-signature of agent, 05. 
 
 of .sealed instrument by parol good, 24 A. 
 
 receipt of premium by book-keeper does not waive, 136 A. 
 
 by agent authorized to take premiums after knowledge waives a 
 change of residence, 136. 
 or forfeiture for non-payment, 136. 
 secretary may waive breach, 1;j6. 
 by usage, 137. 
 
 by usual course of business, of condition as to written assent to assign- 
 ment, 139. 
 no waiver — • 
 
 of written assent to increase of rfsk, 137 A. 
 
 or removal, 137 A. 
 of non-payment when policy provides that agent cannot vary 
 
 it, 137 A 
 if policy restricts right to waive to home office, 137 A 
 or declares that the agent is not to vary the policy, 137 A. 
 
 such provisions valid as to waivers attempted a/ie/- i.ssue, 
 
 137 A. 
 not as to those before issue unless brought to notice of 
 
 assured, 137 A. 
 usage mav overcome the provision entirely, 137 A. 
 of proofs of fo'-feiture by adju.ster, 138. 
 by act of agent, 143, 144, 498-500, 509, 513. 
 
 1458
 
 INDEX. 
 
 [The references are to the sections.] 
 
 WAIVER — continued. 
 
 of answer to question, 166. 
 
 of forfeiture by increase of risk, 263. 
 
 by alienation, 282-282 B. 
 
 by incumbrance, 294 6-294 G. See Incumbrance, 6. 
 
 by non-payment of premium, 360. See Premium, 12. 
 
 by other insurance. See Other Insurance, 4. 
 
 by consent to assessment, 384. 
 breach of license to reside abroad, 338. 
 of restrictions on residence and travel, 339. 
 of notice of loss, 464. 
 of preliminary proof, 468-471, 473. 
 of preliminary proof, when, 469, 470. 
 of defects in preliminary proof, when, 470. 
 of limitation of suit, 488 
 of agreement for arbitration, 492. 
 and estoppel, 497-518. 
 pending negotiations, 501. 
 during currency of policy, 502. 
 if act is known to be impossible, 503. 
 after loss, 505. 
 
 none when facts are not known, 506. 
 none when insured not prejudiced, 507. 
 by silence and intent, 508 
 of acts prohibited by charter, 510. 
 effect of express stipulation against, 511. 
 of assessment, 461 A. 
 
 See Estoppel. 
 WALLS, falling of, 412. 
 
 V/AR, effect of — 
 
 on contract, 36-42. 
 
 1. The thought at the basis of the subject, 42 A. 
 
 private interests must yield to public, but are to be interfered 
 with only so far as the public purposes positively require, 
 42 A. 
 
 no subject can do anything detrimental to the interests of his 
 country, 30, voluntary submission to the enemy, receivinr/ Jiis pro- 
 tection, or any act or contract which tends to increase his resour- 
 ces, as transmission of money or goods or any kind of trading 
 or commercial dealing between the two countries, is unlawful, 
 42. 
 
 2. During the war 
 
 a contract of insurance cannot be made across the line of hostili- 
 ties, 36. 
 such a contract is void, 37. 
 an enemy's property in general cannot be insured, and the disa- 
 bility extends to subjects dealing in enemy's property, 37. 
 
 1459
 
 INDEX. 
 [The references are to the sections.] 
 
 ' WAR — continued. 
 
 and insurance of the life or health of one in the enemy's ser- 
 vice is void, 37 (s). 
 the life and property of an alien enemy domiciled here may be 
 insured, 42 (s). 
 
 3. A contract made before the war 
 
 is only suspended until the conflict is over, 37, and then revives, 
 39, 41, 43. 
 except that no recovery can be had for loss of property 
 
 by capture or otherwise, in consequence of the fight, 36. 
 unless the property was exempt from hostilities, 39 (s). 
 nor for any loss of life or health in the enemy's service, 37 (s). 
 is good as to property and lives exempt from belligei-ent power, 
 39 (s), 42 (s): 
 e. g the life of a neuti-al domiciled in the enemy's country, 
 39 (s). 
 may be kept alive by paying premiums to resident agent. 40. 
 
 4. Domicil of the owner in the enemy's country is the genei'al test as 
 
 to property, 38, 42 (s). 
 
 and the line of demarcation is that claimed and held by the bel- 
 ligerent power, 38. 
 
 if the United States were at w^ar with Spain, a Spaniard domi- 
 ciled here could contract and sue here like a citizen, 42 (s). 
 
 in respect to life, hostile nationality must be combined with 
 domicil in the enemy's country to avoid the insurance, 39 (s). 
 
 5. Conditions of the policy 
 
 as to premium and forfeiture for non-payment of it do not apply 
 
 to -war, 39 A. 
 payment to agent here good, 39 A, 40. 
 payment to agent in South, in Confederate money, good (?), 
 
 39 A. 
 tender and refusal of one premium makes tender of subsequent 
 
 dues unnecessary, 40, note, 
 notice and proof after the war sufficient, 39 A, limitation of 
 
 suit extended by war, 39 A. 
 
 6. An agency in a hostile country (Spain, for example) of a company 
 
 located here, 
 could not be created during a war between the countries, 30, 
 
 42 (s). 
 but, if previously created, it would not be revoked or sus- 
 pended, except as to the taking of new risks and the 
 transmission of premiums, 40. 
 premiums accruing on contracts made before the war could 
 be and muft be received bj' the agent, but not forw arded 
 till after the conflict, 40, note, 42 (s). 
 of an English company would be neutral although he was a sub- 
 agent appointed by an agent of the English company who was 
 resident here, 40. 
 
 1460
 
 INDEX. 
 
 [The references are to tlie sections.] 
 
 WAR — continued. 
 
 7. When war begins so as to affect insurance, 38. 
 in civil war tlie rules are the same, 38. 
 mutual companies same rules, 39 (s). 
 it excuses non-payment of premium, 350, 350 A, 351. See 
 
 Premium, 9. 
 it excuses failure to sue, 483. 
 
 WAREHOUSEMAN, insurable interest, 80, 95 A. 
 
 has claim for loss, 42i. 
 WARMING, representations as to mode of, 255. 
 
 WARRANTY, 156-181. 
 defined, 156, 166. 
 must be strictly true, 156. 
 
 no particular form necessary to constitute, 156. 
 no warranty if not intended, 156, 104, 165. 
 two kinds of, 157. 
 affirmative and promissory, 157. 
 statement by reference made part of the policy not necessarily a, 
 
 158-161, 164, 165, 169. See chap. viii. anal. 2. 
 how ambiguous questions affect, 166. 
 warranties not favored, 158. 
 
 courts lean to make statements representations, 162 (and tliey 
 
 ought to lean a little harder than some of them do), 
 general rule, a reference to application in policy makes its state- 
 ments warranties, 159. 
 but reference in mere general terms is not enough, 159. 
 it must be stipulated that the statements are warranties or con- 
 ditions, 159. 
 the words " on condition " may not be enough, 162. 
 if there is room for doubt, they are representations, 159, 162, 
 
 160-165, 170, 171. 
 so if any other purpose of the reference appears, 159. 
 
 or if the purpose does not appear, 184. 
 a statement though written on the policy itself may not be a 
 
 warranty, 164. 
 what the parties call representations cannot be made warranties 
 
 by being made part of the policy, 165. 
 question not answered is a nonentity, 166. 
 
 if company issues policy, on the omission the question is 
 waived, 166. 
 part answer, warranty can go no further than the answer, 166. 
 the application, survey, or other statements oral or written, if not 
 referred to in the policy, are merely representations, 159; see 
 also 160. 
 if written or oral statements are referred to in the fwlicy they 
 may be proved by parol, 159. 
 
 1401
 
 INDEX. 
 
 [The references are to the sections.] 
 
 WARRANTY — continued. 
 
 qualified statement or reference, knowledge, assertion of belief, not of 
 absolute truth. The several stipulations in the policy, appli- 
 cation, &c., must be carefully compared, for something may 
 appear inconsistent with holding statements to be warranties, 
 161, 168, 169. 
 or showing that they are warranties only as to some particulars 
 
 and representations as to others, 160. 
 " so far as known," 161, 166. 
 " in all respects true," followed by " to best of my knowledge," 
 
 no warranty, 161. 
 other qualifying clauses, 160, 161. 
 
 it is a question for the jury whether the assured did answer ac- 
 cording to his best knowledge, 161. 
 construction of, see chap. viii. anal. 3, 4. 
 substantial fulfilment, see chap. ix. anal. 18-1. 
 
 distinction between warranty and representation. See Representa- 
 tion, 2. 
 superfluous answer no, 166. 
 not implied, unless material, 170. 
 construed strictly as to their scope, 171. 
 construed strictly against insurer, 178. 
 modified by statute, 180 a. 
 distinguished from representation, 183. 
 a part of the contract, 183. 
 distinction between, and representations as to pleading and evidence, 
 
 183. 
 promissory, not condition precedent, 188, note, 
 colorable compliance with, 199. 
 against alteration, 223. 
 as to place, 2.57. 
 
 statement of present use not, 231. 
 of good health, 295. 
 WATCH, what constitutes, 188, 250-252. 
 WATCHMAN. See Conditions. 
 when mill not in use, 188. 
 absence of, 252. 
 WATER, injury by, 404. 
 WEARING APPAREL, 420. 
 WHARFINGER, insurable interest, 80, 95 A. 
 WIDOW, rights as beneficiary, 391, 399 F, 399 H. 
 WIFE, insurable interest in life of husband, 107 h. 
 
 rights in policy for benefit of her and children, 391. 
 insurance of life of, for benefit of husband, 451. 
 WILFUL BURNING, what, 583. 
 WILFUL EXPOSURE, loss by, 409, 530. 
 1462
 
 INDEX. 
 
 [The references are to the sections ] 
 
 WITNESS, must state facts not opinion as to completion of contract, 43 A. 
 
 AVORK, examination after, 254. 
 
 WORKING of mills, 253. 
 
 WOUND, proximate cause of death by, 419. 
 
 WRITING prevails over print, 177, 239. 
 
 WRONG-DOER, no right of subrogation, 554. 
 
 1463 
 
 University Press : John Wilson and Son, Cambri<l,f^e.
 
 fiSa^^^ 
 
 AA 
 
 ilBRAFlY 
 
 000 755 
 
 a^ClLlTY 
 
 374