Conditions against other Insurance

Conditions against Incumbrances and as to Ownership.

with the requirements of the by-law rendered the policy void. Hygum v. The Etna Insurance Company, 11 Iowa, 21.

(2) Condition against incumbrances and as to ownership.

36. The policy contained the condition that in case "an incumbrance fall, or be executed upon the property insured, the policy shall be void until consent of the company is had thereto." Ten days before the building was destroyed plaintiff executed a mortgage upon it, but at the time of the loss the mortgage had not been delivered; held, that as the mortgage had not been delivered it was not an incumbrance in any form. Judgment for plaintiff. Olmstead v. The Iowa Mutual Ins. Co., 24 Iowa 503.

37. Misrepresentation of title. Where the assured has purchased, though but partly paid for, the property insured, and is in possession thereof, and no lien for the purchase-money or incumbrance is held against it, he holds the "absolute and sole" ownership of the property within the meaning of the policy, though it has not been deeded to him. Bonham v. Iowa Central Ins. Co., 25 Iowa, 329.

38.

incumbrances.

The existence of a

32. A policy of insurance contained the following conditions: "That if the said assured or his assignees shall make any other insurance on the same property, and shall not, with reasonable diligence, give notice thereof to this company, and have the same indorsed on this instrument, or otherwise acknowledged by them in writing, this policy shall cease and be of no further effect." The assured thereafter obtained three different policies in three different companies, each of which was upon the condition that if the interest insured was a leasehold it should be so stated in the policy, otherwise it would be void. The interest of the assured in the lot upon which the insured property was situated was a leasehold, but that fact was not stated in either of said policies. After the loss these policies were treated as valid and paid by the companies which issued them. It was held, in an action on the policy containing the condidition above set out, that the subsequent policies, so far as the assured was concerned, were valid and binding, and that obtaining them without notice to the defendant was a violation of such condition, and rendered the policy void. David v. The Hartford Insurance Co., 13 Iowa, 69. 33. Breach renders policy merely voidable. The breach of a condition contained in a policy (3) Condition against change of interest. of insurance, to the effect that in case of other 39. Stipulations construed. A policy of insubsequent or prior insurance, without notice surance contained the following condition or to or consent thereof by the company, the polstipulation: "And in case of any sale, transfer icy shall be void, does not render the policy or change of title in the property insured *** absolutely void, but merely voidable at the such insurance shall be void and cease," etc. option of the company. Hubbard &Spencer v. Held, 1 (By two of the judges), that a merely The Hartford Fire Insurance Co., 33 Iowa, 325. nominal transfer, as collateral security for debts 34. Where additional insurance is invalid. which were subsisting liens on the property, In order to avoid a policy on the ground of a did not avoid the policy; 2 (By one of the breach of the condition respecting subsequent judges), that a transfer of the title of the asinsurance, it must appear that the policy creat-sured, absolute upon its face, avoided the policy ing such subsequent insurance was valid and ipso facto, without respect to the purpose for enforceable. If invalid the prior insurance is whichit was made; 3 (By three of the judges — not affected. Ibid. COLE, J., taking no part), that a transfer which would increase the temptation on the part of the assured to defend the underwriter, or lessen his interest in preventing a destruction by fire, would avoid the policy. Ayres v. The Hartford Fire Insurance Company, 17 Iowa, 176.

35. Estoppel. A notice by the assured to he company, in accordance with the terms of the policy, that there was subsequent insurance on the property in another company, would not estop him from claiming in an action against the first company, that such subsequent insurance was invalid. Ibid.

Vol. 2. -- 78

chattel mortgage on the property insured is not a breach of a condition in the policy to the effect that if the insured was not the "sole and unconditional owner" of the property, the policy should be void. Hubard & Spencer v. The Hartford Fire Ins. Co., 33 Iowa, 325.

40. Continuing interest. Where the assured, having an insurable interest at the time the

Condition against change of Interest

policy is issued, aliens the property and retains no interest therein, the policy, as to him, is at an end; but if an interest is still retained, the policy, in the absence of special stipulations to the contrary, will cover and protect that interest. Ibid.

- Misstatements in Application.

pass upon the risk in question, without submitting it to his principal, and failed to correctly take down the facts stated by the applicant, in ignorance of which the application was signed, in the absence of any stipulation in the policy to the contrary, the principal is estopped from A asserting that he has been misled by the representations of the application. Ayres v. The Hartford Fire Insurance Company, 17 Iowa, 176. 45. Omission or misstatement of agent. If an insurance agent has simply power to receive and forward applications to the company as the basis upon which it will decide in relation to issuing policies, and the applicant knows, or is bound to know this, and knows of the provision in the application which states that the foregoing is a correct description of the property, and on which the insurance will be predicated, and a warranty on his part," then he must see that the statements and representations contained in the application are not essentially untrue. Bartholomew v. Merchants' Ins. Co., 25 Iowa, 507.

41. Assignment as collateral security. policy of insurance provided that "in case of any sale, trasfer or change of title in property insured by this company, or of any undivided interest therein, such insurance shall be void and cease." Held, that an assignment as collateral security was not a 'sale, transfer or change of title within the meaning of the policy;" following S. C., 17 Iowa, 176. Ayres v. The Hartford Insurance Company, 21 Iowa, 193. 42. Evidence to explain assignment. In an action upon a policy of insurance, in which it was set up as a defense, that the insurable in terest of the policy holder was transferred to another, by an absolute assignment in writing, after the issuance of. the policy, and before the loss, it was held, that parol evidence was admissible to show that the assignment, absolute on its face, was in fact given for collateral security.

Ibid.

43. Assignment of title bond. A policy of insurance stipulated that the policy should be made void if the property shall be sold or conveyed, or the interest of the parties therein changed. Held, that a merely nominal conveyance without an actual change of interest would not avoid the policy; that an assignment of a title bond held by the insured to a lien holder to secure him for advancing the purchase-money stipulated to be paid to the obligor in the bond by the assured, and also to secure the payment of a judgment which was a lien upon the property older than the policy of insurance, if it did not increase the interest of such assignee and lien holder and decrease the interest of the party insuring, did not change the interest of such assured so as to defeat the policy. Ibid.

b. Misstatements in application.

44. Acts of agent. When the agent of an insurance company has authority only to receive and forward applications for insurance, parol evidence is not receivable to show that the agent failed, in writing the application, to take down the statements made by the applicant, or changed them. But if the agent is empowered to pass upon applications, and did

46. - fraud of agent. But if, on the other hand, the agent furnishes and undertakes to fill up the application, and if, in so doing, he is correctly informed respecting an incumbrance on the property, and if the assured is misled, by the acts and conduct of the his answers truly, and that the application is agent, into supposing the agent has taken down correct, and if, through the fault of the agent, he does not know the contrary, then the company, having received the premium, cannot successfully set up the existence of the incumbrance as a defense to an action on the policy.

application for insurance, through an agent, stated there was no incumbrance on the property, when, in fact, there was, of which the agent was afterward informed some days before plaintiff received the policy. The agent notified the defendant forth with of the incumbrance. Held, that plaintiff's right to recover was not defeated.

Argu. 1. Estoppel. If the company received notice of the incumbrance before it forwarded the policy, it became part of the application; if not, it should have returned the premium note and demanded surrender of the policy.

Argu. 2. Agency. The evidence showing that the agent acted within his authority, notice to him was notice to the company. Anson v. The Winnesheik Ins. Co., 23 Iowa, 85.

Other causes - Mutual Insurance Companies.

48. Special agent: case distinguished. If defendant's local agent had in fact no power to take and forward applications, then the rule in case of Ayers v. The Hartford Ins. Co., 17 Iowa, 176, would apply. Ibid.

c. Other causes.

49. Misdescription of interest. The interest insured is described in the policy as that of a mortgagee, which the parties supposed embraced a mechanics' lien, the actual interest which the insured held in the premises. Held, that in an action thereon conducted as a proceeding in chancery, it was competent for the insured to show the mistake as one of fact, and recover on the instrument as corrected. Code of 1851, paragraph 2401; Stout v. The City Fire Ins. Co. of New Haven, 12 Iowa, 371.

contract between the company and a third party indorsed on said policy; nor by an immaterial alteration of the plaintiff's own contract. Robinson v. Phonix Ins. Co., 25 Iowa, 430.

54. But if plaintiff intended by the alteration to claim for himself the whole amount of the losses sustained under the policy, this would be an attempt to enlarge his own contract, and hence would avoid the policy. Ibid.

55.

intent. An immaterial alteration is

not made material simply by the intent to give thereby to the policy a different effect, if such intent is not in fact effectuated by the alteration. Ibid.

56. Conditional consent to change of occupancy. Where the insurer consents to a change of occupancy of the insured building on condition that an iron door be put into it, but without specifying time, the assured is entitled to reasonable time to comply therewith. Therefore, where the door, though ordered, was not yet put up at the time of the fire, held, that the insurer was not discharged. Viele v. Germania Ins. Co.,

50. further illustration. Where application was made to an agent of an insurance company authorized to take risks, for a policy upon a mechanic's lien interest in real estate, and a policy was issued in which the interest of the assured was described as that of a inort-26 Iowa, 9. gagee, both parties believing that the description embraced the interest of a mechanic's lien, it was held, that the contract would be so re. formed in equity as to make it express the real intent of the parties. Longhurst v. The Star

Ins. Co., 19 Iowa, 364.

51. Over-valuation. An over-valuation of a building by the assured in his application, will not defeat his right to recover in case of loss where the policy limits the liability of the company to two-thirds of the actual cash value of the property at the time of loss. And it seems that the right of recovery would not be destroyed by such statement of over-valuation, though the policy contained no such limitation of the company's liability, if the over-valuation was thie result of a mere difference of opinion and the assured was guilty of no fraud. Bonham v. The Central Iowa Ins. Co., 25 Iowa, 328.

VII. MUTUAL INSURANCE COMPANIES.

57. Premium notes. The forfeiture of a policy of insurance by a mutual insurance company does not discharge the party whose property was thereby insured from his liability to pay the assessments already made upon his premium note executed to the company in consideration of such policy. The Inca State Ins. Co. v. Prossee, 11 Iowa, 115.

notes for an assessment made thereon, without alleging and proving that losses and expenses had actually occurred. The American Insurance Company v. Schmidt, 19 Iowa, 502.

52. Policy for heirs issued in name of ances-Held, that the company could not recover on the tor. Making the application and issuing the policy in the name of the ancestor will not, of itself, defeat a recovery by the heirs, they being owners of the property at the date of the application, policy and loss. Anson v. The Winnesheik Ins. Co., 23 Iowa, 84.

59. effect of forfeiture of policy. It would seem that the occurrence of matters which, by the express terms of a policy of insurance issued by a mutual insurance company, operated as forfeiture of the policy, would dis

Mutual Insurance Companies - Life Insurance.

charge the insured from any liability on his 64. In an action by a mutual insurance coinprevious notes on account of any loss occurring after such forfeitures. Keenan v. The Missouri State Mutual Insurance Company, and Ryder v. The Same, 12 Iowa, 126.

Life Insurance,

in respect to the business he is transacting. alone be regarded as warranties, and that the Miller v. The Mutual Benefit Life Insurance Co., statements of the person on whose life the in31 Iowa, 216. surance was effected were to be regarded as mere representations. Ibid.

70. Matters of warranty and representation. Matters of warranty constitute a part of the contract, and it is necessary that they should be exactly and literally complied with; but matters of representation are but collateral to the contract, and it is sufficient if they are substantially complied with. The distinction between warranties and representations pointed out by DAY, Ch. J. Ibid.

71. Warranties will not be created nor extended by construction. They must arise from the fair interpretation and clear intendment of the language used. Ibid.

72.

nature of application. The application is, in itself, merely collateral to the contract of insurance, and its statements are to be classified and construed as representations, unless, by force of a reference to the policy, they are converted into warranties, and the purpose is clearly manifest, from the papers thus connected, that the whole shall form one entire contract. Ibid.

73. In order to constitute words of reference

contained in an application, into a warranty, they must be such as, in legal effect, make it a part of the policy. Ibid.

74. rule applied. In the present case, which was an action on a policy based on an application for insurance on the life of another,

there were five separate papers connected with the application, viz.: one headed "particulars required from persons proposing to effect insurance on lives in this company;" another, "questions to be answered by the physician of the party applying for insurance;" another, "questions to be answered by the friend of the party applying for insurance;" another, "questions to be answered by the agent, if the applicant is not previously known to him;" and, lastly, one headed, "declaration to be made and signed by the person proposing to make insurance on the life of another." The policy contained the following reference: "It is understood and agreed by the assured to be the true intent and meaning hereof, that, if the declaration made by or for the assured, and upon the faith of which this agreement is made, shall be found in any respect untrue, then, and in such case, this policy shall be null and void." Held, that the statements contained in the declaration could

75. Materiality of representations: province of jury. While it is within the proper province of the jury to determine whether the statements made in an application for insurance are substantially, or in every material respect, true, it is not their province to determine the materiality of alleged misstatements contained in such application. Ibid.

76. Medical testimony: as to cause of death. The opinion of a physician is competent evidence as to the cause of death of a person whose life is insured; but the weight of such opinion is a question for the jury. Ibid.

77. Fraud: statements to be considered. In

determining the question of fraud regarding representations in respect to the health and habits of the person on whose life insurance was sought to be effected, not only the answers or statements of such person but those of his physician and of his friend should be considered by the jury. Ibid.

78. Intemperance. Where a policy of life insurance was sought to be avoided on the ground that the death of the party, on whose life insurance was effected, was caused by inif the death of such person was only contribtemperance, an instruction which charged that, uted to by the intemperate use of liquor, then

the defense in that respect was not made out, was held not erroneous. Ibid.

79. But in such an action, evidence that the party died from a cause occasioned or produced by his excessive use of intoxicating liquors, will support the defense that he died from intemperance. S. C., 34 Iowa, 222.

80. Thus, where the deceased having escaped from those having him in charge, while he was in a fit of delirium tremens, ran into the open air and through the streets, in inclement weather, without clothing, and it is shown that such exposure contributed to his death, it will be held, that these facts will support a defense of the character above stated. Ibid.

81. Payment of premiums. Where a policy of life insurance provided that if the premiums were not paid on or before the days mentioned in the policy for the payment thereof, at the office of the company in the city of New York,