died of fever, at the age of forty. The application was duly signed by Mrs. W. In an action to recover on the contract, the insurance company alleged that this representation was untrue. The plaintiff then proposed to show, by parol, that Mrs. W., an ex-slave, had told the agent of the insurer that she knew nothing about the time or cause of her mother's death. This evidence evidently contradicted part of the written contract. The court, however, held the evidence admissible and declared that the principle on which their decision was based was not that such oral testimony varies or contradicts that which is in writing, "but it goes upon the idea that the writing offered in evidence was not the instrument of the party whose name is signed to it; that it was procured under such circumstances by the other side as estops that side from using it or relying upon its contents; not that it may be contradicted by oral testimony but that it may be shown by such testimony, that it cannot be lawfully used against the party whose name is signed to it." The Northern Assurance case. This very liberal rule in favor of persons insured, though adopted without a dissent, was shaken thirty years later by a decision from which three justices, including the chief justice, dissented. In this case, the policy upon which the action was based contained a clause making the policy void if other insurance upon the property should exist at the time of the issuance of the policy without the consent of the defendant insurance com 3 Northern Assurance Co. v. Grand View Bldg. Assn., 183 U. S. 308, LEADING ILLUSTRATIVE CASES. pany endorsed on the policy. The plaintiff proposed to show that the insurance company's agent knew of the existence of other insurance when the policy was delivered, though the endorsement did not appear on the policy. The Supreme Court, reversing the decision of the circuit court of appeals and of the circuit court, held the evidence inadmissible. The court did not overrule the Wilkinson case, in express language, but declared that parol evidence was properly admitted in that case to deny the execution of the statement upon which the insurer relied. From what we have learned in this section we might have concluded that the evidence in the Northern Assurance case should have been admitted because the risk did not attach under the terms of the policy. However, the United States Supreme Court appears to have rejected this rule. That the question is not free from difficulty is evidenced by the holdings of the lower courts and opinions of the dissenting judges in the case. It may be interesting to learn that the insured finally obtained his money from the Northern Assurance Company. The state court in Nebraska subsequently decreed a reformation of the policy and the United States Supreme Court refused to disturb the decree.* 31. Same subject-Waiver subsequent to the delivery of the policy. We find, from our study of Blackstone, that there is no such a thing as an irrepealable law. "When you repeal the law itself, you 4 Northern Assur. Co. v. Grand View Bldg. Assn., 72 Nebr. 149, 102 N. W. 246, 203 U. S. 106. at the same time repeal the prohibitory clause, which guards against such repeal." 995 This same principle applies to nearly all contracts. Though persons who marry cannot give up their relationship by mutual consent, probably no commercial contract can be drawn up in such a manner that the parties to the contract cannot agree to abandon or modify it, unless the rights of third parties be involved or the new contract be objectionable on grounds of public policy. Accordingly, it is well settled that the parol evidence rule does not prevent the introduction of parol testimony to prove that after the delivery of the policy, a subsequent agreement modifying the agreement as evidenced by the policy, has been made. A provision in the policy that all future waivers must be in writing is like an irrepealable law. The insurer may waive this clause which guards against such a waiver. Suppose that A, a generous man, donates breakfast to T, a tramp, at the door of A, at eight every morning for three months, or even for twenty-five years. Has T thus acquired a right to receive his breakfast thereafter, gratuitously, from A? Though, in England, the doctrine of "corodies" might assist T, it is clear, in this country, that T has acquired no legal right against A. Let us compare this with what is, apparently, a similar case in insurance. The policy requires the insured to pay his premiums on February first, of 5 Cicero, as quoted in Blackstone's Comm. I, 90. • Blackstone's Comm. I, 283. each year, without notice or demand from the company. For several years, the company voluntarily sends a notice to the insured when each premium falls due. Should such generosity bind the company to do this every time in the future when a premium falls due? It does, by the weight of authority." The reason for this rule is that the insurance company by its conduct has made an implied agreement to give the notice and that this agreement supersedes or waives the provision on this question in the policy. 32. Extent of the doctrine of waiver.-Certain rights of the insured and of the insurer cannot be waived. For example, the insurer cannot waive the right to defend on the ground that the insured had no insurable interest. By reason of public policy, insurance contracts in which the insured has no insurable interest in the property or life insured are illegal and void. To allow such a waiver would take us back to the days of "interest or no interest" policies.8 Rights given by statute. In many states, there are "valued policy" laws which require the insurer to pay the full amount of the policy in case of total loss, unless there has been depreciation in the value of the property. It has been held that the insured cannot waive his rights under the statute, on the theory that such a statute rests upon grounds of public policy." 7 Mayer v. Mutual Life Ins. Co., 38 Iowa 304, 18 Am. Rep. 34. 8 See chapter on "Insurable Interest." Reilly v. Franklin Ins. Co., 43 Wis. 449. Prescribed form of policy. In several states the exact form of an insurance policy is prescribed by statute. Such forms appear to be, not two-edged, but one-edged swords, and cut only in the direction. of the insurance companies. Though the insured cannot, by a waiver of his part, lessen his rights against the insurer,1o the company may waive clauses designed to protect itself and thus increase the rights of the insured.11 33. Incontestable policies.-To avoid the charge, made justly at times, and unjustly at other times, that the insurance companies always take advantage of every technicality to defeat recovery on the policy, several life insurance companies have adopted a form of policy containing what is known as an incontestable clause. This clause provides that the policy shall be incontestable either from date of issue, or, generally, after the lapse of one, two, or three years, except for the non-payment of premiums. Such a provision is annexed to all life insurance contracts by statute in certain states. Such a comprehensive provision in regard to waiver does not prevent the insurer from showing, in defense, a lack of insurable interest. However, by the weight of authority, fraud perpetrated against the insurer in procuring the insurance cannot be shown. Can the insurance company defend on the ground that the one whose life was insured is still alive? Clearly, it may. The incontestable clause, it seems, 10 Wild Rice Lumber Co. v. Royal Ins. Co., 99 Minn. 190, 108 N. W. 871. 11 Wood v. American Fire Ins. Co., 149 N. Y. 382, 44 N. E. 80. |