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Entered according to Act of Congress, in the year 1888, by

In the office of the Librarian of Congress, at Washington.











1279. Components Parts of a Contract of Insurance. 1280. Insurable Interest. 1281. Waiver of Conditions to the Issuance of a Policy, 1282. Waiver as to Conditions Subsequent during Life of a Policy. 1283. Waiver after Policy has Matured. 1284. Waiver of Proofs of Loss — Appraisement, etc. 1285. General Observations. 1286. Representations and Warranties. 1287. Authority of Agents. 1288. Conditions Subsequent as to Keeping Policy in Force. 1289. Exercise of Diligence or Negligence. 1290. Whether Change of Circumstances increases the Risk. 1291. Descriptive Terms as Question of Fact. 1292. Cause and Proximate Cause of Loss - Voluntary Exposure to

Danger. 1293. Whether Insured was Sane or Insane at Suicide. 1294. Reasonable Time for Giving Notice of Loss. 1295. Sufficiency of Preliminary Proofs of Loss. 1296. Waiver of Limitation for bringing Action and Vexatious Defense. 1297. Waiver of a Condition against Transfer of Policy. 1298. Failure to Mention Specific Articles of Merchandise. 1299. Identity of the Articles Destroyed. 1300. Mutual Insurance — Data for Correct Assessment 1301. Habitual Intemperance.

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§ 1279. Component parts of a contract of Insurance. The ordinary contract of insurance, whether life, fire, accident, guaranty or marine, culminates in a policy of insurance, which is based upon representations of the applicant therefor. If the representations as well as the policy are in writing, the general principle obtains, that they are for interpretation by the court. And whether all or only a part of the contract is in writing, yet if it is clear of what words, the written, as well as the oral, contract consists, the like principle obtains. The exception as to written words lies in ambiguity and

to spoken words in their uncertainty both as being ambiguous and as to what they actually are. These questions have been considered already.

$1280. Insurable Interest.-Insurance in its most comprehensive description is a contract of indemnity. Where there is a total absence of that which is the essence of the contract, the contract necessarily fails. These contracts are also generally denominated wagering policies, if there does not exist, at inception, in the contingency insured against, that which is commonly termed an insurable interest,* or if it does not exist to such an appreciable extent, as would take away from insurance contracts the characteristics of a wagering policy, all of which are absolutely void, as against public policy. This rule has been applied so severely in a case lately decided in Kentucky Court of Appeals, that the administrator of an insured, who participated in the fraud of the beneficiary in obtaining such insurance based on his statement that beneficiary was his creditor, was not permitted to recover what was paid by the insurer to the beneficiary sought to be charged as trustee, the principle of in pari delicto being applied. As extinguishment of the indemnity, which constituted insurable interest when insurance was effected, is dependent upon matters dehors the contract, this is a question of fact, and may or not, according to circumstances, be determined by the court where the facts are clear? or a mixed question of law and fact, to be decided by the jury under instructions of the court. And so as to the existence of an insurable interest when the insurance was obtained.9

1 Chs. 33, 34 and 35, ante.

2 Spare v. Home Mut. Ins. Co., 15 Fed. (C. C.) 707.

3 Baker v. Monumental S. & L. Assn., 58 W. Va. 408, 52 S. E. 403; Bennett v. Mut. Fire Ins. Co., 100 Md. 337, 60 Atl. 99.

4 Locher v. Kuechenmiester, 120 Mo. App. 701, 98 S. W. 92; Trinity College v. Travellers Ins. Co., 113 N. C. 244, 18 S. E. 175, 22 L. R. A. 291.

3 Hays v. Lapege, 48 La. Ann. 749, 19 South. 821, 35 L. R. A. 647; Mowry v. Home L. Ins. Co., 9 R. I. 346.

6 Howe's Exr. v. Griffin's Admr.,

31 Ky. Law Rep. 784, 103 S. W. 714. Generally it is ruled that the beneficiary collecting the policy is a trustee for the estate of insured. See Riner v. Riner, 166 Pa. 617, 31 Atl. 347, 45 Am. St. Rep. 693; Cheeves v. Andrews, 87 Tex. 287, 25 S. W. 321, 47 Am. St. Rep. 107.

7 Clark v. Dwelling House Ins. Co., 81 Mo. 373, 17 Atl. 303; Lindner v. St. Paul F. & M. Co., 93 Wis. 526, 67 N. W. 1125; Maloney V. State Ins. Co., 133 Iowa, 570, 110 N. W. 1041, 9 L. R. A. (n. s.) 490.

8 Benninger v. Phoenix Ins. Co., 57 Cal. 644; Chandler v. St. Paul F.

§ 1281. Waiver of Conditions to the Issuance of Policy - Where the conditions precedent to the issuance of a valid policy of insurance do not relate to that which the law condemns as against public policy, as is true of a wagering contract, they may be waived either expressly or by implication, generally in the way of an estoppel. Thus an insurer is estopped from claiming invalidity of a policy in respect of a false representation, when it or its authorized agent knew at the time the truth in respect to the matter misrepresented. 10 Whether the insurer or its agent so knew of the existence of that which would prevent issuance of policy depends on conflicting evidence, and is a question for the jury.11

§ 1282. Waiver as to Conditions Subsequent during Life of a Policy.—This kind of waiver, being based on a consideration in payment of premiums necessary to keep a policy in force, the principle of estoppel makes it effective, where knowledge accompanies the receipt or retention of that which is paid to continue the insurance.1? In such case the only question that could be in dispute would be the fact of notice or knowledge of the fact causing forfeiture, and this would be a question for the jury.13

$ 1283. Waiver after Policy has Matured. The principle underlying decision in cases holding waiver to be effective, after liability upon a policy is claimed to be absolute, will also be found to

& M. Ins. Co., 21 Minn. 85, 18 Am. Rep. 385.

9 Batcheller v. Com'l U. Assur. Co., 143 Mass. 495, 10 N. E. 321; Oakland Home Ins. Co. v. Bank of Commerce, 47 Neb. 717, 66 N. W. 646, 36 L. R. A. 673; Ozark Ins. Co. v. Hopson (Ark.), 101 S. W. 171.

10 See also Thompson v. Piedmont Mut. Ins. Co., 77 S. C. 486, 58 S. E. 341; Fishblate v. Fidelity & Cas. Co., 140 N. C. 589, 53 S. E. 354; Re Millers & M. Ins. Co., 197 Minn. 98, 106 N. W. 485; Pearlstine v. Phænix Ins. Co., 74 S. C. 246, 54 S. E. 372; Fludd v. Assur. Co., 75 S. C. 315, 55 S. E. 762.

11 Perry V. John Hancock M. L. Ins. Co., 143 Mich. 290, 106 N. W.

860; Aetna Ins. Co. v. Johnson, 127 Ga. 491, 56 S. E, 643, 9 L. R. A. (N. s.) 667.

12 Continental Cas. Co. v. Jen. nings, 45 Tex. Civ. App. 14, 99 S. W. 423; McKinney y. Fire Ins. Soc., 89 Wis. 653, 62 N. W. 413, 46 Am. St. Rep. 861; Industrial Mut. In: dem. Co. v. Thompson (Ark.), 104 S. W. 200; McNichol v. Prudential Ins. Co., 191 Mass. 304, 63 Atl. 211; North British & M. Ins. Co. v. Stei. ger, 124 Ill. 81, 16 N. E. 95.

13 Wilson v. Mut. F. Ins. Co., 174 Pa. 554, 34 Atl. 122; Mich. v. Equi. table F. & M. Co., 2 Colo. App. 484, 31 Pac. 389; Riley v. Am. Cent. Ins. Co., 117 Mo. App. 229, 92 S. W. 1127.

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