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concerning matters pertaining to the insurance which comes to the agent subsequent to the issuance of the policy will not be considered as the company's knowledge, the company being held responsible only for the knowledge of the agent at and preceding the issuance of the policy.
The many important instances where the courts have considered the agent's knowledge the knowledge of the company, makes an understanding of this particular phase of the law of insurance agency especially desirable. Thus in case no misrepresentations are made by the insured as to his interest in the property, any incorrect statement of the same in the policy by the agent on his own knowledge prevents the company from claiming that the insured did not truly state his insurable interest. If the agent has knowledge of the uses to which the insured premises are applied, this will prevent the company from declaring a forfeiture of the policy because of provisions in the policy prohibiting such uses. An agent's knowledge will also bind the company and prevent a forfeiture of the policy, regardless of its provisions to the contrary, if he has knowledge of the true condition of the insured's title to the property, or if he knows that there has been a transfer of the title or foreclosure proceedings have been commenced against the property prior to the issuance of the policy. Similarly, if the agent knows when issuing the policy that the insured's ownership was not sole and unconditional, or that the personal property was mortgaged or the realty incumbered, this knowledge will operate as a waiver of the conditions in the policy which avoid it for any of these reasons. In all these instances, however, it is essential that the insured did not actually misrepresent the facts when applying for the insurance.
If, when writing the policy, an agent has knowledge of another policy to be obtained, the courts have declared that this knowledge will waive the provision in the policy providing against other insurance without the consent of the company. Or if the agent has been notified by the insured that other insurance has been taken, and he raises no objection,' the company cannot claim the policy forfeited because of the "other insurance" clause. Knowledge on thepartof the agent of prior insurance will also protect the insured against a forfeiture, even though the policy stipulates that the company must give its consent to such other insurance.
The company is also held responsible for any errors of the agent, which he may commit in making indorsements on the policy, when the correct- information was given him •by the insured. When the premises were vacant at the time of the issuance of the policy, and the agent has knowledge of this fact, such knowledge will constitute a waiver of the vacancy clause in the policy. An agent's statement to the insured that a requested vacancy permit had been indorsed on the policy will prevent a forfeiture of the policy in case this has not been done, because the agent's statement is considered the statement of the company and the insured had a right to rely upon the same. Nor is a fire-insurance policy avoided by any increase in the hazard, although the policy so declares, if such increase is known to the local agent of the company.
The foregoing illustrations are a few of the many important instances where the knowledge of the agent is considered the knowledge of the company.1 It will be observed that in nearly all cases the company's responsibility is limited to the acts or knowledge of the agent at or before the time when the policy was issued. No liability, however, rests on the company for any knowledge of the agent acquired in the course of employment not connected with such agency. Nor is knowledge of a broker to be considered the knowledge of the company. In the case of East Texas Fire Insurance Co.
1For a detailed enumeration of examples and citation of cases see Wolff's "Law of Insurance Agency."
vs. Brown, 82 Tex., 631, it was held that "the knowledge of a broker, acquired in effecting insurance, is not the knowledge of the company that issued the policy, even though the risk was secured at the request of such company.''
Liability of the Company for the Acts or Knowledge of Sub-Agents and Clerks.—While there is not a unanimity in all the decisions, the weight of authority is to the effect that the insurer is liable not only for the acts of its agents, but also for the acts and knowledge of the sub-agents and employees to whom it has delegated authority. In insurance it is a common practice, and is frequently found necessary, for the agents to employ others to assist them in their work, and having delegated their authority to them, the courts have regarded it as "just and reasonable that insurance companies should be held responsible not only for acts of their agents, but also for the acts of the agents employed within the scope of their agents' authority." While it may be argued that the company has not authorized its agents to delegate their authority to others, and that it would therefore be an unreasonable extension of the company's liability, it must be remembered that agents are employed by the companies in accordance with the usages and necessities of the business. While the company may not expressly have authorized its agents to delegate their authority, it did know or should have known that according to the general usage or necessity of the business, these agents would be obliged to employ others to assist them in their work.
Wolff, in his '' Law of Insurance Agency,'' states the principle as follows: "A clerk who is authorized by the agent of a fire-insurance company to solicit insurance, -is sufficiently the agent of the company so that notice to him of a material fact connected with the risk is notice to the company."1
1Wolff's "Law of Insurance Agency," p. 135. Also see many legal citations mentioned on this page.
Again he states, as decided by the Supreme Courts of Illinois and New York,1 "a clerk of an insurance agent, who keeps his books, conducts his correspondence, receives and collects premiums, solicits business and fills in blank policies (without signing them) may bind the company by consenting to the premises insured being vacant.''
THE DESCRIPTION OF THE PROPERTY INSURED
Three sections of the Standard fire policy refer to the description of the property which is covered by the policy. The first of these refers to the description of the nature and location of the property; the second relates to the effect upon the validity of the policy of concealment or misrepresentation in any matter pertaining to the insurance; and the third provides that any application, plan, or description of the property shall be a warranty and constitute a part of the contract.
1. With reference to the description of the character and location of the risk, the standard policy provides that the
company insures "to an amount not exceeding $ to the
following described property while located and contained as described herein, and not elsewhere, to wit;" and then follows a blank space of considerable size in which may be written the description of the property insured. Nothing could seem more definite than the above statement, and one would anticipate but little controversy as to its proper meaning. The importance in fire insurance of the location of the property is well recognized, and it is a well-established doctrine that an insurance policy covering property in a certain specified place will not follow the property on its removal to a different location. Yet some courts have qualified this general doctrine, and, while admitting that the location of the property is an essential feature in the contract, hold that it must always be viewed with reference to the character of the property, the primary object for which insurance was