called an "open" one. In a prominent case1 it was decided that "the agreement that the risk should run from the first day of August, 1885, to a day to be named by the defendant is in law an agreement as to the duration of the risk, and is equivalent in law to a contract for a certain time, because under the terms of agreement, the time can be rendered cerain." In fact, although the standard contract contemplates the insertion of the dates which mark the beginning and ending of the term, the weight of authority is to the effect that, should both be missing, the insurance should nevertheless be considered good "for a reasonable time." In one case the court declared, 2 "the making of the contract of insurance was not a mere idle thing. It had a substantial purpose and meaning. ... . . . Some meaning must be given to the insurance, and it must be regarded, we think, at least for a reasonable time."

Closely related to the term of the contract is the practice of renewal. The Standard Policy provides "that this policy may by a renewal be continued under the original stipulations, in consideration of premium for the renewed term, provided that any increase of hazard must be made known to this company at the time of renewal, or this policy shall be void." The renewing of a policy does not necessarily require the writing of a new policy. It is sometimes, though not frequently effected by the issuance of a renewal receipt, a cpy of which is herewith presented. (See Fig. 5.)

The essential thing to be noted about a renewal policy is that, while in all particulars it should resemble the original

1Imboden vs. Detroit, etc., Insurance Company, 31 Mo. App., 321 (1881).

2Illustrated by Schroeder vs. The Trade Insurance Company of Camden, 190 Illinois, 157.

contract, legally it is a new contract, which, unless expressed to the contrary, is subject to the terms of the original policy. Special privileges granted by the company under the original policy, but not part of the contract, cannot be demanded under the renewal. The case of Hartford Fire Insurance Company vs. Walsh, 54 Ill., 164, will serve as an illustration of what has been decided in many states. Here the owner

Policy No.........is hereby renewed and continued in force

insured a house under a one-year policy and renewed the insurance for two successive years. The building was destroyed by fire under the second renewal, and the company refused payment because the property had remained vacant and unoccupied for a longer time than allowed by the policy without the consent of the company. The owner admitted the fact, but argued that he had received verbal consent to a vacancy under the first renewal, and that, therefore, he had a right to expect the same treatment under the next renewal,

But the court refused to allow this claim, holding that "a renewal of a policy is in effect a new contract of assurance, and, unless otherwise expressed, on the same terms and conditions as were contained in the original policy. If, then, the property was occupied when the last renewal occurred, it, under the terms of the policy, became the duty of the assured to give the same notice that was required in the policy. There can be no pretense that there was a continuation of the former insurance, but it must be regarded as a new contract, under the same terms and conditions as entered into and formed the original contract of insurance."

Furthermore, the description of the property, where a policy is renewed, must apply to the property as it stands at the time of renewal; and any increase of hazard which is not disclosed will work an avoidance of the renewed policy. The risk (description of property) insured under the original policy expires when the policy expires, and each renewal must be considered as applying to a new risk. In accordance with the policy, "any increase of hazard must be made known to the company at the time of the renewal," and concealment or misrepresentation will avoid the policy. It may be here stated that authorities advise that where for any reason the original policy has been altered as to amount, location, etc., the renewal should be by a new policy and not by a "renewal receipt;" also that under no conditions should a "renewal receipt" be granted which materially changes the original contract.

With the exception of the description of the property, a renewal policy may be presumed by the holder to be in all respects like the original policy. Suppose, for example, that the original policy contained no coinsurance clause, but that the renewal policy did, and the policy-holder, relying on the good faith of the company, failed to read the renewal policy. Supposing a loss occurs, on what basis shall it be settledwith or without coinsurance? Justice would seem to dictate

1

that in such a case the insured should be allowed to maintain an action for a reformation of the contract. In a case involving the precise facts we assumed, the court permitted the reformation of the contract and declared "the plaintiffs could not be regarded as guilty of laches in not examining the policy and applying earlier for its correction."

CANCELLATION OF THE POLICY

The Right of Cancellation and Reasons For.-Unless reserved, the right of cancellation does not exist, except by mutual consent. Under the provisions of the Standard Policy, however, both parties to the contract may cancel, lines 51 to 55 of the policy providing that "this policy shall be cancelled at any time at the request of the insured; or by the company by giving five days' notice of such cancellation. If this policy shall be cancelled as herein before provided, or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except that when this policy is cancelled by this company by giving notice, it shall retain only the pro-rata premium." In several states, like Massachusetts, Minnesota, and New Hampshire, the company is required to give ten days' notice of cancellation, and in Wisconsin, although five days' notice on the part of the company is sufficient under ordinary circumstances, provision is made for sixty days' notice during times in which the hazard shall be increased solely by the act of God. In any case, the right of cancellation reserved by the company cannot be exercised under circumstances which would operate as a fraud on the insured, where, for example, the company would serve notice of cancellation at a time when the property is threatened by an approaching conflagration.

'Palmer vs. Hartford Fire Insurance Company, 54 Conn., 488.

Many reasons exist why the company should reserve the right to cancel the policy after giving due and timely notice. The company, subsequent to the issuance of the policy, may discover an undesirable moral hazard, or may become aware of a great increase in the physical hazard not considered in the original policy, such as changes in construction or processes of manufacture, or where a property is left vacant or in an unprotected condition. The company may desire to cancel a policy because it has been burned, lost, or mislaid, or because of non-payment of the premium by the policyholder. After a suspicious partial loss, the company may wish to relieve itself from further liability under the policy before a final settlement of the loss can be made; and in many cases where the adjustment of a loss, which does not involve all the property covered by the policy, is delayed, companies consider it important that, pending the settlement, they should promptly relieve themselves from further liability on the remaining property described in the policy. Or the company may decide to retire from business and desire to cancel all its policies. But whatever the reason for the cancellation of the policy, it is a well-established principle that neither the insured nor the company need offer any explanation for their decision to cancel.

Tender of the Unearned Premium.-To legally effect a cancellation of the policy on the part of the company, there must be an actual tender without conditions of the unearned premium for the unexpired term.1 It is true that the cancellation clause of the 'standard policy was purposely so worded as to make cancellation possible without tendering the unearned premium. But the courts have variously construed this clause, holding, in most instances, that a full tender of the premium is still necessary under the standard

'Lisdell vs. New Hampshire Fire Insurance Company, 155 N. Y., 163.