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Of necessity, the standard fire-insurance policy was prepared with reference to a general situation. Yet many situations will arise where special circumstances make a modification or elimination of existing policy provisions highly desirable, or require the incorporation of new agreements not suggested in the printed portion of the policy. Such agreements take the form of printed or written indorsements on the policy, sometimes called "clauses" or "riders." When attached to the policy such indorsements take precedence over any provisions in the policy, although they may be in conflict with the same, since, being of an even or later date than the policy, they are assumed to represent the latest meeting of the minds, and thus constitute the last agreement of the parties to the contract.

Such special agreements by indorsement on the policy may, roughly speaking, be divided into two classes, viz.: (1) those especially suggested by the policy; and (2) that large variety of clauses which may be agreed upon by the parties to the contract, but which are not mentioned in the policy itself.


Concerning the first class, the standard fire policy contains the following very important provision (lines 11 to 30, inclusive):

"This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the insured now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy; or if the subject of insurance be a manufacturing establishment and it be operated in whole or in part at night later than 10 o'clock, or if it cease to be operated for more than ten consecutive days; or if the hazard be increased by any means within the control or knowledge of the insured; or if mechanics be employed in building, altering, or repairing the withindescribed premises for more than fifteen days at any one time; or if the interest of the insured be other than unconditional and sole ownership; or if the subject of insurance be a building on ground not owned by the insured in fee-simple; or if the subject of insurance be personal property and be or become incumbered by a chattel mortgage; or if, with the knowledge of the insured, foreclosure proceedings be commenced or notice given of sale of any property covered by this policy by virtue of any mortgage or trust deed; or if any change, other than by the death of an insured, take place in the interest, title, or possession of the subject of insurance (except change of occupants without increase of hazard), whether by legal process or judgment or by voluntary act of the insured, or otherwise; or if this policy be assigned before a loss; or if illuminating gas or vapor be generated in the described building (or adjacent thereto) for use therein; or if (any usage or custom of trade or manufacture to the contrary notwithstanding) there be kept, used, or allowed on the above-described premises, benzine, benzole, dynamite, ether, fireworks, gasoline, greek fire, gunpowder exceeding twenty-five pounds in quantity, naphtha, nitroglycerin or other explosives, phosphorus, or petroleum or any of its products of greater inflammability than kerosene oil of the United States standard (which last may be used for lights and kept for sale according to law, but in quantities not exceeding five barrels, provided it be drawn and lamps filled by daylight or at a distance not less than ten feet from artificial light); or if a building herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied and so remain for ten days."

The foregoing policy provision enumerates various important privileges, which, if the insured wishes to enjoy them, must be indorsed on the policy. Many of these privileges require no elucidation, while that pertaining to "other insurance" is fully discussed in another chapter. Some of these privileges, however, are variously interpreted when considered in relation to varying circumstances, and require a brief explanation. Briefly explained, they are:

1. The policy provides that the entire contract becomes void if a manufacturing establishment is operated at night later than ten o'clock, or if it ceases to be operated for more than ten consecutive days, unless expressly provided to the contrary by indorsement on the policy. This provision must be construed with reference to the nature of the business under consideration; and, according to the general ruling of the courts, will not lead to a forfeiture where there has been a temporary suspension of the business, owing to unusual and unavoidable interruptions, such as the cessation of water-power or failure to receive raw materials for manufacture.

2. The second privilege which can only be obtained by special indorsement on the policy relates to an increased hazard caused by any means within the control or knowledge of the insured. Innumerable methods of increasing the hazard subsequent to the issuance of the policy may be mentioned, such as the introduction of new customs and processes, or the discontinuance of fire-prevention precautions. This section of the policy, however, is meant to include only changes in the hazard which are of a durable rather than of a temporary character. Nor does this provision of the policy refer to changes or an increase in the hazard of adjacent buildings, since these are not within the insured's control.

3. Another very important privilege which can only be enjoyed by having it indorsed on the policy has reference to keeping within the insured premises one or more of a large number of prohibited articles, "any usage or custom of trade or manufacture to the contrary notwithstanding." This particular phraseology was adopted in order to overcome court decisions, which held that certain of these prohibited articles were, by usage and custom, to be considered as constituting a part of a designated trade, and that the policy was issued in view of such usage and custom. Nothing could seem less ambiguous than the clause as it now stands; yet despite the qualifying phrase "any usage or custom of trade or manufacture to the contrary notwithstanding,'' there has been no change in the decisions of the courts in a large number of states. Three interpretations of this particular portion of the policy now prevail. In some states the provision is strictly enforced, but in other states the insertion of this qualifying phrase has no effect whatever, since the courts have held1 that, when issuing a policy, the insurer does so with full knowledge of what constitutes a particular class of merchandise and what articles are, by custom, essential to the operation of a given business. Thus where a company (24 Ind. App., 86) insured certain described articles and "such other merchandise as is usually kept for sale in a hardware store,'' and provided that the entire policy should be void, "any usage or custom of trade or manufacture to the contrary notwithstanding,'' if there was allowed on the premises dynamite, etc., the court upheld the validity of the policy, although the property was destroyed partially by the explosion of fifty pounds of dynamite, contained on the premises, on the ground that by usage and custom dynamite was included as a part of the stock of merchandise usually kept for sale in a hardware store. In another case (111 Cal., 103) the court reasoned as follows: "A contract of insurance is to be interpreted by the same rules as is any other contract. It must be so interpreted as to give effect to the mutual intention of the parties, as it existed at the time of contracting, so far as the same is ascertainable. If it is reduced to

1Phoenix Ins. Co. vs. Walters, 24 Ind. App., 86, 1900, and Yock vs. Home Mutual Ins. Co., Ill Cal., 503, 18»5.

writing, the intention of the partiea is to be ascertained from the writing alone. If possible, the whole contract is to be taken together; when it is partly printed and partly written, the written parts control the printed parts, and if there is any repugnancy between the two*, the printed part must be disregarded. In case of uncertainty, it is to be interpreted most strongly against the party which caused the uncertainty to exist. Applying these rules to the contract in the present case, it must be held that it was the intention of the defendant to insure gasoline, for it is an article usually kept in such stores. When the defendant agreed to insure a stock of merchandise, "such as is usually kept in country stores," it must be presumed to have known the character of merchandise usually kept there.''

As contrasted with the foregoing, may be mentioned the interpretation given to this clause by the supreme court of Pennsylvania. Here the attitude is not to enforce the clause in all cases, nor to give it an extremely liberal interpretation, but to take a middle position. In Pennsylvania the court has held that if the prohibited article is essential to the conduct of the business, the insurer is assumed to have knowledge of the fact, and a forfeiture of the policy will not result. On the contrary, if the evidence is such as to show that while the prohibited article is by custom and usage considered a part of a general stock of goods, but is not essential to the operation of the business, its presence on the premises will lead to a forfeiture.

4. Another privilege which the insured can only obtain by indorsement on the policy relates to the unoccupancy and vacancy of a dwelling. As observed, the standard fire policy provides that the policy becomes null and void if the dwelling, whether occupied by owner or tenant, becomes vacant or unoccupied for ten days. This is a most important provision of the policy, and it was made expressly to read, "vacant or unoccupied,'' the word unoccupied referring to those

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