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quently occur as to the interpretation which shall be given to the general provisions of the policy when unexpected circumstances surround the particular loss. Forfeitures are viewed with disfavor by the courts, because the sums involved are usually large. Wherever possible, it is the desire of the court to consider the policy in the light of existing circumstances, and to enforce it for the benefit of the insured, unless, of course, such action would be contrary to the definitely expressed terms of the contract. "In their interpretation, according to Judge Ostrander, "the courts are without any infallible rule to guide them, and necessarily often differ in their judgment of the law, and thus there has come to exist a good deal of conflict among authorities." But, however great this conflict of authority has become, there are certain legal principles which underlie the application and interpretation of all fire-insurance contracts, and which are constantly kept in mind by the courts to assist them in their efforts to enforce the contract. Briefly summarized, these principles are the following:

1. When the wording of any provision in the policy lends itself to more than one construction, the court will give the benefit of the doubt to the insured, and will reject that construction which limits the liability of the company. In Liverpool Insurance Company vs. Kearney, 180 U. S., 132, the court explained this rule in the following words: "To the general rule there is an apparent exception in the case of contracts of insurance, namely, that where a policy of insurance is so framed as to leave room for two constructions, the words used should be interpreted most strongly against the insurer. This exception rests upon the ground that the company's attorneys, officers, or agents prepared the policy, and it is its language that must be interpreted."

Contending that this should be the general rule in all cases where the company is free to adopt the policy form, what shall be said of the application of this rule where the

policy form is prescribed by statute law and made compulsory for all companies writing insurance in the state? If the policy is a statute, should its terms not be equally binding upon both parties, or shall the insured still receive the benefit of the doubt? The question was decided favorably to the insured in the case of Matthews vs. American Central Ins. Co., 154 N. Y., 449. "The policy," the court declared, "although of the standard form, was prepared by the insurers, who are presumed to have had their own interests primarily in view, and hence, when the meaning is doubtful, it should be construed most favorably to the insured, who had nothing to do with the preparation thereof. Moreover, when a literal construction would lead to manifest injustice to the insured and a liberal but still reasonable construction would prevent injustice by not requiring an impossibility, the latter should be adopted because the parties presumed, when the language used by them permits, to have intended a reasonable and not an unreasonable result."

2. Since insurance policies are general in character and not prepared for particular cases, it follows that special or written agreements must frequently be endorsed on the policy with a view to modifying the original terms of the policy form. Whenever there is a difference in meaning between such indorsements and the policy form itself, it is a universally recognized principle that the superimposed parts of the contract, whether written or stamped or printed, control the regular provisions of the policy. This principle is based on the theory that anything indorsed on the policy must be later in date than the policy itself, and thus represents the latest agreement between the parties. If any ambiguity exists in the wording of any such indorsement, the insured must again be given the benefit of the doubt.

3. Every insurance policy must be regarded as an independent contract, the interpretation of which depends upon its own terms, and should not depend upon or be affected

by the terms of any policy which preceded it. This is an important principle in its application to the renewing of policies, and will be discussed at greater length under that subject.

4. By the weight of authority, a violation of the conditions of the policy will cause a forfeiture only during the time that the violation continues. If, after a violation, the conditions of the policy are again complied with, the policy revives, even though the company never consented to the violation. Unfortunately the courts of the various states have rendered conflicting opinions on this important question of the effect which a violation of its terms will have upon the life of a policy. Thus in New York and Pennsylvania, if a policy-holder vacates his building contrary to the policy and without the consent of the company, the act at once works a forfeiture during the period of vacancy, but if afterward the building is again occupied and a loss then occurs the company will be held liable, because the policy is considered to have revived when the violation was discontinued. In other states, however, such a violation nullifies the policy, and the policy once void will always remain so, unless the insurer consents to its restoration.

Development of the Standard Policy.-Having stated the general principles which govern the interpretation of fireinsurance contracts, let us now trace the evolution of the standard policy. At first fire insurance was written almost entirely by individual underwriters whose operations were few in number, and generally confined to risks with which they were personally acquainted. The policy was brief in its terms, and included merely the description of the property, the amount of insurance, the term, and the premium. Soon, however, individual underwriting proved inadequate for the needs of the business community. A prime requisite in insurance is the financial strength of the insurer; and, as business developed in size, larger and larger sums of capi

tal were necessary to furnish the security demanded by the public. Hence it came about that corporations everywhere began to supplant individuals as underwriters.

At first these corporations solicited insurance directly from their home office. But with the growth of competition between the many companies that were springing up in all the leading Eastern cities, greater and greater reliance had to be placed upon the agency system. Representatives of the companies had to be stationed in the various towns so as to be easily and promptly accessible to property owners. The result was that with the spread of its underwriting activities over a larger geographic area, the company was exposed on the one hand to possible dishonesty or incompetency on the part of the local agent, and, on the other, to an increased moral hazard on the part of the insured. With the creation of agencies in all business communities it was only natural that the company should seek to protect itself and the public against the wilful destruction of property by those who could not now be carefully watched. Many promissory and restrictive provisions had to be incorporated in the policy which would lessen the insured's motive for the destruction of his property. It was essential that the policy should now contain a full description of the property, and, on penalty of forfeiture, prevent concealment of facts prior to the issuance of the policy, and wrongful conduct in the maintenance and care of the property after the owner had secured the policy.

The incorporation of such restrictive provisions tended at this time not only to make the fire-insurance policy a very voluminous contract, but all semblance of uniformity in the wording of different policies seemed to disappear. Each company had a policy of its own. In fact, the policy was local in character, one form prevailing in Boston, another in Philadelphia, and still another in New York. No cooperation of importance existed between the several companies, and the problem was made worse on the one hand, by the

desire of some companies to enhance their business by the issuance of attractive special policies, and, on the other, by the desire of a certain number of companies to defraud the insured of his rightful claim by the strict application of a skilfully drawn policy. The multifarious character of policy forms at this time is well described in a court decision in the following words: 1

This utter lack of uniformity in fire policies proved to be exceedingly unfortunate for both insured and insurer. The

'Delancy vs. Rockingham Farmers Mutual Fire Insurance Co., 52 N. H., 581. This decision is also very extensively quoted on pages 182-83 of the “Annals of the American Academy,” September, 1905.

"Forms of applications and policies (like those used in this case), of a most complicated and elaborate structure, were prepared and filled with covenants, exceptions, stipulations, provisos, rules, regulations, and conditions, rendering the policy void in a great number of contingencies. These provisions were of such bulk and character that they would not be understood by men in general, even if subjected to a careful and laborious study; by men in general they were sure not to be studied at all. The study of them was rendered particularly unattractive by a profuse intermixture of discourses on subjects in which a premium payer would have no interest. The compound, if read by him, would, unless he were an extraordinary man, be an inexplicable riddle, a mere flood of darkness and confusion. Some of the most material stipulations were concealed in a mass of rubbish on the back side of the policy and the following page, where few would expect to find anything more than a dull appendix and where scarcely anyone would think of looking for information so important as that the company claimed a special exemption from the operation of the general law of the land relating to the only business in which the company professed to be engaged. As if it were feared that notwithstanding these discouraging circumstances, some extremely eccentric person might attempt to examine and understand the meaning of the involved and intricate net in which he was to be entangled, it was printed in such small type and in lines so long and so crowded, that the perusal of it was made physically difficult, painful, and injurious."

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