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cases where the building has been abandoned for its ordinary uses, whereas the term vacant implies not merely abandonment, but also removal of the furniture, implements, etc. Fire underwriters have thoroughly learned the lesson that vacant or unoccupied buildings are much more apt to burn than those which are inhabited and used. Not only is the moral hazard of such properties a bad one, because of their unproductivity, but the risk is greatly augmented because of the absence of any one to exercise a watchful care. Generally, however, the companies will give their consent to a vacancy by indorsing the following vacancy form:
NEW YORK STANDARD VACANCY PERMIT
In consideration of $ extra premium, permission is hereby
granted for the premises described herein to be vacant for the
period of days from this day of , 19...
to the ...: day of 19..., at 12 o'clock noon.
It is mutually understood and agreed between this company and the assured that the building shall be under the supervision and care of some competent person.
NOTE.—Use the above form when the contents have been removed from the building.
Attached to and forming part of Policy No of the
Many cases may arise where it becomes necessary to interpret the subject of vacancy or unoccupancy with reference to the use for which the property is intended. Churches and school houses, for example, are customarily vacant during the summer months, and this practice is presumed to have been understood by the insurer, so that although no vacancy permit has been secured by the insured, the policy is nevertheless considered to have been made with reference to the circumstances connected with this kind of property. The same rule has also been applied by many of the courts to country elevators, ice manufactories, saw-mills, farm barns, etc.
5. Another group of privileges which can be obtained only by indorsement on the policy refer to the title, possession or interest of the insured in the property. Thus the entire policy is declared to be null and void, unless otherwise agreed, where the ownership of the property is not sole and unconditional, or where there has been an assignment of the policy or a change in the title, possession, or interest of the same.
That part of the clause providing against the existence of a chattel mortgage against personal property applies only to voluntary incumbrances and not to involuntary liens, such as tax liens, etc. Moreover, that portion of the policy which declares the policy null and void, if, without the consent of the insurer and with the knowledge of the insured, foreclosure proceedings be commenced or notice given of the sale of the property because of a mortgage or trust deed, would seem to indicate that it is unnecessary to mention to the insurer the existence of a mortgage on the insured premises until the foreclosure proceedings are actually commenced; in other words, that the policy applies only to the future, and is not affected by mortgages which are pending when the policy is issued.
It should also be noted that the policy stipulates that it shall become null and void if, without the consent of the insurer, any change other than by the death of the insured takes place in the interest, title, or possession of the subject of insurance, etc. This provision, to say the least, is extremely broad, and simply declares that all such changes must be brought to the attention of the company in order to give it the opportunity of canceling the policy, if it so desires. Many cases will arise where the courts must pass upon the effectiveness of certain changes in the insured's title, possession, or interest, and in this connection their attitude has been heretofore that only material changes in the title or possession of the property will nullify the policy. Thus the appointment of a receiver is not considered such a change in the title or possession of the property as to lead to a forfeiture (136 U. S., 223), since receivers receive their authority from the act of the court, and the appointment is not made with a view to changing the title or right to possession, but to managing the property for the benefit of those ultimately entitled to the same. Nor will this provision be violated where there has been an execution of a contract of sale according to the terms of which the vendor retains the title until the purchaser has made all payments (142 111., 537).
It is a general rule, however, that the provision against the transfer or change of the insured's title is invalidated through the conveyance of an undivided interest in the property, although the amount of insurance happens to be considerably less than the remaining interest of the insured in the property (10 Mich., 279). In the case of the transfer of the property by and between partners, the ruling of the courts is by no means uniform, the rule in some states being that the policy provision is not invalidated by the sale of one partner's interest in the property to another (149 N. Y., 382; 57 Neb., 622). On the contrary, the courts of other states (47 Penna., 204) consider the sale of his interest by one partner to another as coming within the scope of this provision. In those states where a transfer of property by one partner to another is considered as not violating the policy, it is held that a change in the firm by which a third party becomes a member of the firm does constitute a violation of the policy and renders it void.1
1 So many cases may arise for adjudication under that provision of the policy which provides that it shall become null and void if, without the insurer's consent, "any change other than by death of the insured takes place in the interest, title, or possession of the INDORSEMENTS NOT SUGGESTED BY THE POLICY
In addition to the various indorsements just described, many other kinds of special agreements in the form of indorsements exist, which are not suggested by any of the provisions in the standard fire policy. Almost any kind of special agreement may be entered into by the parties to the contract, which, when indorsed on the policy will supersede anything to the contrary in the policy, and will constitute the latest agreement. Some of these clauses have already been mentioned in other chapters, and copies of nearly all can be easily obtained from the offices of any large insurance company or brokerage firm. Frequently many of these clauses are combined in the same "rider" which is attached to the policy, and in many instances the wording of given clauses varies materially in different localities, because they are prepared by different underwriters' associations or insurance exchanges. Briefly stated, practically all of the hundreds of special clauses in use which have not been mentioned already, can be listed under one of the following five groups:
1. Those indorsements providing for an extra premium" because of some deficiency in the risk, until the same has been remedied in a manner satisfactory to the company.
2. Permits for the use in certain places of certain prohibited articles, processes of manufacture, and methods of generating heat, light, and power. These permits in most cases are of a very detailed character, containing half a dozen warranties and a dozen or more "cautions" as to the proper use of the articles.
3. Prohibitory clauses, preventing the use of certain ar
subjectof insurance, etc.," that the reader is referred to the summary of cases decided by the Supreme Court of Pennsylvania and presented in Moise and Matlack's "The Law of Insurance in Pennsylvania."
tides and methods of generating heat, light, and power, which are not enumerated in the policy itself. As examples of such clauses in common use there may be mentioned the so-called "dynamo clause," which exempts the company from loss or damage to dynamos, switches, or other electrical appliances that may be caused by electrical currents, artificial or not, unless the same occur in consequence of fire outside of the machines themselves; the "bituminous coal clause" which exempte the company from liability for loss occasioned by the spontaneous combustion of bituminous coal on the premises of the insured; and the "consequential damage clause" which protects the company against indirect or consequential loss, including loss or damage caused by change of temperature occasioned by the destruction by fire of the refrigerating or cooling apparatus of the plant.
4. Clauses enumerating in detail the various groups of articles specifically insured under the policy, thus making unnecessary an elaborately written description of the property in the policy itself. These indorsements are usually very long, and go under captions such as "household furniture form," "automobile form," "merchandise form," "retail store form," "dwelling form," "stable form," "clothing form," "farm form," "form for building in process of construction,'' etc. Generally these various '' forms'' include other clauses which are applicable to the risk in question.
5. Special clauses according to which the company assumes extra liability, or makes a blanket policy specific with reference to certain items, or provides for the proper maintenance of fire-protection facilities, in view of which it has accepted a risk, or given a lower premium. By the so-called "cold-storage clause" the company, in consideration of an additional premium, assumes liability for loss and damage to the property within the described building caused by change of temperature resulting from the destruction or disablement of the cooling apparatus, connection or supply