to be regarded as a warranty by the insured, but merely as a license or permission of the insurers that the premises may be kept in a certain way; for example, the statement that a dwelling-house "is to be hereafter occupied as a tavern. ̈

20. A representation differs from a warranty in this respect that it is not a part of the contract. Of course, when made after the signing of the policy, or the completion of the contract for insurance, the contract is not affected. When made before the contract and for the purpose of effecting insurance, a false and material representation, though forming no part of the contract, avoids the policy. The true answer to a question of this kind is whether or not the contract would have been made, and in the same terms if the statement had not been made to the insurers. If the answer is that they would have declined to make such a contract, then the statement is material, otherwise it is not.

21. Concealment is the opposite of representation. The insured is bound to state all that he knows himself, and all that the insurer ought to know for the purpose of estimating correctly the risk assumed. A suppression of the truth has the same effect as expressing what is false. Insurers must be understood as knowing all those matters of common information that are as much within their reach as that of the insured; these therefore need not be especially stated. But special circumstances, for example, that many fires had taken place in the neighbourhood, and the probability or belief that incendiaries were at work, should be made known; and any questions asked must be answered as fully and

precisely as they require. Concealment in an answer to a specific question can rarely be justified by showing that it was not material.

22. At the time of insuring the property must be in existence and not on fire, nor exposed to a dangerous fire in the immediate neighbourhood, because the insurer assumes that no unusual risk exists at that time. Insurers are not liable if the property be destroyed or injured by the indirect effect of excessive heating, or by any effect which stops short of fire or combustion. But if there be an actual ignition, or lighting, they are liable for the immediate consequence; for example, for the injury from water used to extinguish a fire. In some instances policies require that the insured shall use all possible diligence to preserve his goods; such a clause would strengthen his claim for insurance, should they be destroyed after making an effort to save them by removal. So the insurers are liable for the injury or loss sustained by the blowing up of buildings to arrest the progress of fire. As lightning is not fire, if property be destroyed thereby, the insurers are not liable unless there was ignition. An explosion caused by gunpowder is a loss by fire, but not an explosion caused by steam. In science it might be difficult to distinguish between these two causes, but the law makes distinctions of its own.

23. Whether, when the negligence of the insured or his servant is regarded as the sole or direct cause of the fire or loss, the insurers can be held has been already considered. A loss caused by the negligence of the insured himself, so extreme and gross, as to strongly indicate the conclusion that he was guilty of fraud, would be an

effective defence. A fire caused by the insanity of the insured would be no defence.

24. Mutual companies are usually forbidden by their charters to insure more than a certain proportion of the value of a building. Of course, the insured can never be held to pay more than the sum mentioned in the policy. But the charter or by-laws permits a company to insure only a certain proportion of the value, three-fourths, for example, and if more than that sum is insured, it is not required to pay more than the threefourths; and the person insured cannot show that the building was really worth more than the additional onefourth. On the other hand, the valuation, if honestly made, is binding on the insurer and he cannot prove that the building is worth less. Sometimes a policy reserves to the insurers the right to have a new valuation made in the event of loss. In such a case, if a lower valuation is made, the insurers are required to pay only the same proportion of the new valuation which they had insured of the former valuation.

25. The sum that insurers of goods must pay is their value at the time of the loss; and a fair sale at auction is generally taken as a correct valuation, provided the insurers had reasonable notice or knowledge that the auction was to take place.

26. Policies against fire are personal contracts and do not pass to any other party without the consent of the insurers. Of course, assignments are Imade with the consent of the insured. In all cases the rules or usages of the insurers in this respect must be regarded.

27. When a policy requires a certificate of the loss this must be presented to obtain the insurance money. If the policy requires notice to be given forthwith there must be no unreasonable or unnecessary delay. In fire policies, as the premises are supposed to be always open to the inspection of the agents of the insurers, a general notice of fire will probably suffice. Of course, the insurers may waive their right of notice wholly or partly, and they may do this expressly, or by any acts fairly indicating to the insured that they accept an imperfect notice given to them, or that they have taken the matter into their own hands and have made inquiries and obtained all the information desired. And a refusal to settle the claim in any way has been regarded as a good excuse for not giving a notice.

28. Insurers against fire are not held to pay for losses of profits, gains of business or other remote consequences. Most of the fire policies used in this country give the insurers the right to rebuild or repair premises injured by fire instead of paying the amount of the loss. If, under this power, insurers rebuild a house, for example, that has been insured, at less cost than the amount specified in the policy, they are nevertheless the insurers of the new building for the difference between the cost and the amount they had insured during the unexpired period covered by the policy. And if repairs are made by the insurers they must be begun within a reasonable time, which is a question of fact to be determined in the same manner as every other whenever the parties are unable to answer it themselves.

§ 13. CONTRACT OF LIFE AND ACCIDENT INSURANCE

1. How life insurance is effected. 2. How the premium is paid.

3. Who are the beneficiaries. a.-What children.

b. What relation.

c. When insurance may be paid to widow of insured.

d. When policy is payable to legal representa

tives, who are meant.

e.-Policy payable to an estate.

f.-Policy payable to wife and children.

4. Beneficiary has a fixed or vested interest in the policy. 5. Rule does not apply to certificates issued by mutual benefit associations.

6. Beneficiary may pledge his interest in the policy. 7. Insured may reserve the right to change the beneficiary.

8. Payment of the premium.

9. Insured need not read the policy.

10. Beneficiary must have an interest in the life insured. 11. Restriction in policy.

12. Policy may be assigned.

13. Notice of assignment must be given to the company. 14. What is a good assignment.

15. Assignment by holder of policy as collateral security.

16. Warranty, representation and concealment.

17. Good faith must always be observed.

18. Statements concerning occupation.

19. Habits. Use of liquors.