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ises.1 So also where the policy of insurance described the property insured as being a two-story frame building used for winding and coloring yarn and for the storage of spun yarn, it did not warrant that such building was to continue to be thus used.2 But a warranty that a house was of stone when in reality it was partly stone and partly wood, or that the building insured was a dwelling house, or occupied as a dwelling, when in fact it was not, would avoid the policy. If the warranty were simply that the house was a dwelling, that would not necessarily mean that it was occupied as a dwelling at that time.1

In marine insurance the rule is particularly strict that any statement relating to the property insured appearing upon the face of the policy will be regarded as a warranty."

857. Questions unanswered or partially answered.—If a question in the application is not answered at all, or if the answer is not false in any respect, but upon its face is only incomplete, there is no breach of warranty, provided the insurer accepts the application without objection; for, if not satisfied, the company should demand fuller information. So, also, to avoid forfeiture, equivocal answers are construed most strongly against the company, but notwithstanding this, the applicant must answer in good faith and not attempt to evade, conceal or mislead."

$58. A Breach avoids though not Connected with the Loss.-Although the breach of warranty or the misrepresentation or intentional concealment of a material fact may not contribute to or cause the loss, nevertheless the policy is avoided, for the risk becomes a different one from that which the insurer undertook to bear."

1 Hosford v. Germania Fire Ins. Co., 127 U. S. 399.

2 Smith v. Mechanics and Traders Fire Ins. Co., 32 N. Y. 399.

3 Chase v. Hamilton Ins. Co., 20 N. Y. 52. Alexander v. Germania Fire Ins. Co., 66 N. Y. 464; s. c., 23 Am. Rep. 76. Browning v. Home Ins. Co., 71 N.

Y. 508.

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Thomson v. Weems, 9 App. Cas. N. Y. 45. Ripley v. Etna Ins. Co., 30 N. Y. 136; s. c., 86 Am. Dec. 362.

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§ 59. Breach avoids though only Temporary.— If a breach of warranty occurs during the life of a policy and continues temporarily only, by the weight of authority and reason it avoids and does not merely suspend the policy,1 unless the insurer or its duly authorized agents, with knowledge of the forfeiture, revive the contract by some unequivocal act of confirmation; as, for example, by the acceptance of a premium or assessment, or by the delivery of the policy or a renewal receipt, or by an express waiver of the forfeiture by consent.2

§ 60. To avoid Forfeiture, Contract made Severable.—Where several items of property are insured for separate amounts, either at separate rates or for a single premium, and the breach of warranty affects a portion of the items only, then, according to the weight of authority, the contract is severable unless it contains words as in the case of the New York standard fire policy, showing distinctly that the entire contract is to be avoided by the breach.3

§ 61. Void means Voidable.-Though the contract is said to be avoided by the violation on the part of the insured of any of the conditions or warranties inserted for the benefit of the insurers, this means that the contract is voidable at the option of the insurers."

$62. Election once made is Final.-If with knowl edge of the forfeiture the insurer elects to revive the contract, and evinces his election by an unequivocal and positive act of confirmation, he cannot thereafter insist upon the past breach.

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Ins. Co., 73 N. Y. 459; s. c., 29 Am.
Rep. 184. Contra Etna Ins. Co. v.
Resh, 44 Mich. 55; s. c., 83 Am. Rep.
228. See note at p. 230.

Shearman v. The Niagara Fire Ins. Co., 46 N. Y., 526; s. c., 7 Am. Rep. 380.

5 Masonic Mutual Benefit Asso. v. Beek, 77 Ind. 203; s. c., 40 Am. Rep. 295.

CHAPTER VI.

GENERAL PRINCIPLES-CONTINUED.

Waiver and Estoppel.

§ 63. Nature of Waiver and Estoppel.-Waiver is the voluntary relinquishment of a known right.1 Estoppel in pais is the bar which equity raises, in the interest of fair dealing, to prevent the one party from enforcing certain rights which it possesses under the letter of the contract to the detriment of the other party, where, by its declarations, agreement, or conduct, it has induced the other party to rest secure in the belief that such rights have been relinquished. While waiver, properly speaking, is the voluntary abandonment of a contract right, estoppel includes those cases where an abandonment is inferred or imposed by the court from the nature of the conduct of the party who would otherwise be entitled to the right. The words waiver and estoppel, however, are often used interchangeably by the courts.

The party that generally waives or is estopped in insurance. law is the insurer. To support the doctrine of waiver and estoppel it is not necessary that any new or specific consideration be exchanged, because, except for reliance upon the belief induced by the conduct of the insurer in question, it is to be presumed that the insured would have taken out other insur ance for his protection; but even in respect to the provisions of the contract to be performed by the assured after loss no new consideration need be shown to sustain a waiver or estoppel.

$ 64. What in General constitutes a Waiver or Estoppel.-Any unequivocal and positive act of the company

1 Finderson v. Metropole Fire Ins. Co., 57 Vt. 520.

2 Union Ins. Co. v. McGookey, 33 Ohio St. 555.

3

Prentice v. Knickerbocker Life Ins. Co., 77 N. Y. 483.

recognizing the policy as valid after a knowledge of its breach, or any act that puts the insured to unreasonable expense or trouble in the justifiable belief that the company still regards the policy as valid, will estop the company from taking advantage of the forfeiture.1

By the highest authority the rule is stated thus: "Any agreement, declaration, or course of action on the part of an insurance company which leads a party insured honestly to believe that by conforming thereto a forfeiture of his policy will not be incurred, followed by due conformity on his part, will and ought to estop the company from insisting upon the forfeiture, though it might be claimed under the express letter of the contract."

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65. What the Insured seeks to Accomplish by invoking this Doctrine.-As the question ordinarily arises in practice, the insured, when he claims a waiver or an estoppel, is not aiming at a reformation of the policy in equity, nor at a rescission for fraud or mistake, for generally it would be difficult for him to establish good grounds for a reformation in such cases, and after loss a rescission would afford inadequate relief and would not come within the jurisdiction of a jury. Therefore the insured ordinarily brings his action of contract upon the policy, and under the doctrine of waiver and estoppel may be allowed to recover, although upon the face of the written contract, in conjunction with the testimony of his own witnesses, no cause of action is established against the insurers.

§ 66. The Disturbance of Contract brought about by Parol Testimony.-This fact is of grave import, and upon it turn many of the difficult questions which arise in the application of the doctrine of waiver and estoppel to the insurance contract. Thus, to illustrate: The policy makes the statements of the written application warranties. The written application, vouched for by the insured, contains certain very important representations; for example, it states, perhaps, that Kenyon v. Knights Templar, 122 N. Y. 262.

1 Viele v. Germania Ins. Co., 26 Ia. 9; s. c., 96 Am. Dec. 83. Titus v. Glens Falls Ins. Co., 81 N. Y. 410.

3

Rowley v. Empire Ins. Co., 36 N. Y. 550. Van Schaick v. Niagara Fire

Ins. Co. v. Eggleston, 96 U. S. 572. Ins. Co., 68 N. Y. 434.

his age was thirty-five, or that he never had consumption, or that he has taken out no other insurance, but on the trial of the action brought by the insured against the company on its policy the uncontradicted testimony shows that his age was forty, or that he had been afflicted with consumption, or that he had taken out other insurance. Under the doctrine of waiver and estoppel, however, the plaintiff is permitted to show by oral testimony that the company or its agent, duly authorized, had knowledge of the truth of that which was misstated in the application, and issued the policy in full possession of such knowledge, or that the applicant made a true statement to the company or its representative, and is not responsible for the erroneous answers, which, he tells the jury, were errors of the company's agent in filling up the application. Or, again, the policy says that the contract shall be void if mechanics are employed in making repairs for more than fifteen days at any one time, or if the building remains unoccupied for more than ten days without written consent indorsed on the policy. These warranties are broken; but under the doctrine of this rule of waiver the plaintiff is allowed to testify orally in excuse for the breach of the written contract that, during the life of the policy and before he paid the last premium, he was told by the company or some one of its officials that he was relieved from the contract requirements as to these particulars.1

But the

The leading case of Plumb v. Cattaraugus Ins. Co. is said to have changed the law for New York. And this was conceded by the New York Court of Appeals in a later case.3 doctrine of oral waivers as adopted by New York received the high sanction of the Federal Supreme Court in the Wilkinson case, and has met with full approval in almost all of the States.

§ 67. Effect of this Doctrine on the Ordinary Rule of Evidence.-It is often said that the doctrine of waiver and estoppel does not contradict the terms of the policy, and is not repugnant to the rule that the written contract merges all

1 Plumb v. Cattaraugus Ins. Co., 18 N. Y. 392. Richmond v. Niagara Fire Ins. Co., 79 N. Y. 230. Ins. Co. v. Wilkinson, 13 Wall. 222. Baldwin v. Citizens' Ins. Co., 60 Hun. 389.

2 Dewees v. Manhattan Ins. Co., 6 Vroom. 374.

3

Rowley v. Empire Ins. Co., 36 N. Y. 550.

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