Universally it is held that the acceptance of an assessment or premium by the home office is a waiver by the company of all former grounds of forfeiture known by it.1

877. What amounts to a Waiver.-Any unequivocal and positive act by the insurers, or their duly authorized agent, recognizing the policy as valid-as, for example, the receipt of a premium or assessment, the delivery of the policy or a renewal receipt, or the levying of an assessment-constitutes a waiver of all former known grounds of forfeiture, and the company is said to be estopped from setting them up in defense.2

But it is very important to notice that an oral consent or promise made to the insured at or before the execution of the contract, to the effect that he may in future violate the terms of the policy, is not binding, and cannot be shown by parol, because the oral promise becomes merged in the contract.3 Thus an antecedent promise by an agent, that a premium note need not be paid when due, cannot be shown by parol.4

An oral consent by the insurers or their duly authorized agent, given to the insured after the execution of the contract, permitting him to deviate from the requirements of the policy, will operate as a waiver if the insured has relied upon it in such a way that he would sustain injury in case the consent were repudiated by the insurers, and no new consideration need be shown to support the waiver. The consent of the insurers may

128 Pa. St. 553. Conover v. Mutual Ins. Co., 1 Comstock, 290. Natl. Mut. Ben. Asso. v. Jones, 84 Ky. 110. Miller v. Hillsborough Mut. Fire Assur. Asso., 44 N. J. Equity, 224. Eilenberger v. Protective Mut. Fire Ins. Co., 89 Pa. St. 464. Olmstead v. Farmers' Mut. Fire Ins. Co., 50 Mich. 204. Shay v. Natl. Ben. Society, 54 Hun. 109. Stylow v. Wis. Odd Fellows' Mut. Life Ins.. Co., 69 Wis. 224.

Rice v. New Eng. Mut. Aid Soc., 146 Mass. 248. Rindge v. New Eng. Mut. Aid Soc., 146 Mass. 286. McGurk v. Metropolitan Life Ins. Co., 56 Conn. 528. Bouton v. Am. Mut. Life Ins. Co., 25 Conn. 542. Phoenix

Life Ins. Co. v. Raddin, 120 U. S. 183.

2 Morrison v. Universal Marine Ins. Co., L. R., 8 Exch. 40. Weed v. London & L. Fire Ins. Co., 116 N. Y. 106. Bevin v. Conn. Mut. Life Ins. Co., 23 Conn. 244. Rathbone v. City Fire Ins. Co., 31 Conn. 194. Armstrong v. Turquand, 9 Irish C. L. 32. Jones v. Bangor Mut. Life Ins. Co., 61 L. T. N. S. 727 (1890).

3 Walton v. Agricultural Ins. Co., 116 N. Y. 317. Ins. Co. v. Mowry, 96 U. S. 544. Ins. Co. v. Lyman, 15 Wall. 664.

also sometimes be inferred from their prior course of dealing with the insured.1

$78. Knowledge of Breach: when a Waiver.— If at the time of closing the contract the insurers have knowledge of the existence of a cause of forfeiture which would invalidate the policy from the time of its inception, they are held, by accepting the premium or delivering the policy, or by any other positive act amounting to an acknowledgment of its validity, to waive the forfeiture. The reason for this construction is that it would be imputing to them a fraudulent intent to presume that they designed to mislead the insured into the acceptance of a worthless piece of paper instead of a contract of insurance. Massachusetts and New Jersey, however, as has been observed in another connection, have adopted the rule that parol evidence of such knowledge on the part of the insurers or their representatives at the time of effecting insurance is not admissible to disturb the letter of the written contract.3 But the mere knowledge by the insurers of the existence of the breach of contract does not of itself amount to a waiver or an estoppel.1

If it did, the company could never take advantage of a forfeiture, for the moment it became aware of it, it would be debarred from insisting upon it. There must exist in addition to a knowledge of the breach some positive act of confirmation upon which, in connection with the knowledge, a waiver may be predicated, and by force of which the broken contract may be said to be revived.5

$79. Silence is not a Waiver.-Mere silence on the part of the company after knowledge of a forfeiture by the insured will not operate as a waiver. Such cases as the Texas Dewees v. Manhattan Ins. Co., 6 Vroom, 366. Franklin Fire Ins. Co. v. Martin, 40 N. J. L. 568.

1 Spæri v. Mass. Mut. Life Ins. Co., 39 Fed. Rep. 752. Pechner v. Ins. Co., 65 N. Y. 195.

Van Schoick v. Niagara Fire Ins. Co., 68 N. Y. 434.

McCluskey v. Providence Washington Ins. Co.. 126 Mass. 306. Barrett v. Union Mut. Fire Ins. Co., 7 Cush. 175. Putnam Tool Co. v. Fitchburg Mut. Fire Ins. Co., 145 Mass. 268.

4 Adreveno v. Mut. Reserve Fund Life Asso., 38 Fed. Rep. 806.

Weed v. London & Lan. Ins. Co., 116 N. Y. 118.

Adreveno v. Mut. Reserve Fund Life Asso., 38 Fed. R. 806. Titus v. Glens Falls Ins. Co., 81 N. Y. at 419.

case, imposing upon the company the burden of affirmative action upon learning of a breach, are clearly unreasonable.1

The company has not contracted and is not obligated to make search for its policy holders before they present any claim, to inform them that the legal consequences will follow their default. A clear distinction must be made between a positive act of ratification and an omission to act. Silence in such a case cannot be converted into fraud.

$80. Proofs of Loss: Technicalities.-Technical requirements as to the form and contents of the proofs of loss, or time of their service, or time for bringing suit, will more readily be held to be waived than essential elements of the contract which more vitally affect the risk."

§ 81. Denial of all Liability.-A positive denial by the insurer of all liability under the policy relieves the insured of the duty of furnishing proofs of loss or submitting to a personal examination or to an appraisal under the terms of the policy.3

If the insurer declares the policy annulled upon other grounds, the insured need not go to the unnecessary trouble and expense of a further compliance with the terms of the contract intended to supply the insurer with evidence of the nature and extent of its liability.

§ 82. Demanding Proofs of Loss.-If the company, believing or suspecting the existence of a sufficient ground of forfeiture, but desiring in good faith to avail itself of its contract privileges to examine into the claims of the insured, allows or even requests the insured to furnish the usual proofs of loss, this should not be held to amount to a waiver or to an estoppel.1

1 Morrison v. Ins. Co., 69 Tex. nings v. Metropolitan Life Ins. Co., 363.

? Searle v. Dwelling House Ins. Co., 152 Mass. 263 (1890). Goodwin v. Mass. Mut. Life Ins. Co., 73 N. Y. 480. Cleaver v. Traders' Ins. Co., 40 Fed. Rep. 711. Eastern RR. Co. v. Relief Ins. Co., 105 Mass. 570. Jen

148 Mass. 61.

"Knickerbocker Life Ins. Co. v. Pendleton, 112 U. S. 696.

Ronald v. Mut. Reserve Ins. Co., 23 Abb. N. C. 271; N. Y. Supreme Court, by Barrett, J. Boyd v. Vanderbilt Ins. Co., 20 Ins. L. J. 652 (Tenn., May, 1891).

The language adopted by the court in Titus v. Glens Falls Ins. Co., 81 N. Y. 410, and approved by other courts, and recently by the same court,1 is too broad. The company ought to be permitted to postpone the exercise of its right of election until it has gained a reasonable acquaintance with the facts. Such an investigation is not inconsistent with an ultimate repudiation of the contract, and the insured cannot complain that he is misled meanwhile into a neglect to take out other insurance. The argument, that the company ought not to put the insured to any further trouble if the contract is to be forfeited, is quite offset by the consideration that a rule of construction ought not to be applied to the contract which may result in depriving the company of some of its contract rights in the event that it shall decide to confirm the contract. If calling for proofs of loss amounted to a waiver of forfeiture, the company, through fear of waiving its rights, might be restricted to such information concerning the character and extent of the loss as it could acquire without any assistance from the insured. The tendency of this would be to induce a reckless settlement of losses, and to encourage fraud and arson on the part of unscrupulous persons, and the inevitable result would be to force the insurers into an illiberal policy in the adjustment of all claims whether honest or dishonest. Calling for the production of books of account in verification of the claim of the assured is not a waiver of a forfeiture according to the California court.2

The New York standard fire policy provides that to require the fulfillment of the provisions of the policy relating to proofs of loss shall not constitute a waiver.

§ 83. Taking Part in Adjustment.-Similarly, if the company sends its adjuster to investigate the facts and to take part in an effort to ascertain the extent and nature of the loss before determining the proper course to pursue, the court ought not to be eager to infer a waiver of forfeiture, although the insured may have been put to some slight trouble or expense in connection with the investigation.

1 Roby v. American Cent. Ins. Co., 120 N. Y. 510 (1890).

McCormick v. Orient Ins. Co., 86 Cal. 260 (1890).

3

Pettengill v. Hincks, 9 Gray, 169.

The ultimate disposition of claims against insurance companies must often be submitted to a loss committee or other high official whose consideration and decision of the matter ought to follow rather than to precede the investigation made by the adjuster.

The doctrine of the Michigan case, and others like it, is not to be approved.1

The New York standard policy provides that such acts shall not be deemed a waiver.

§ 84. Company may Defend on other Grounds than those first Named.-For a company to refuse after loss to make payment upon some specified ground of supposed but mistaken exemption from liability ought not to estop it from setting up other grounds of defense in the action."

The trouble and expense of a law-suit to the unsuccessful litigant constitute an insufficient excuse for depriving the other party of contract rights. Insurance companies are not infal lible. Oftentimes by the knavery of the insured they are ignorant of the most material and important facts pertaining to their defense until after the conclusion of a painstaking and expensive investigation. There would seem to be about as much reason for allowing them to make this expense their sole ground of defense as to allow the insured to construct a cause of action out of the expense of the law-suit in which he estab lishes no right of action.

The language in the Michigan and other similar cases is unreasonable.3

§ 85. A Retention of Proofs Waives Defects that might have been Remedied.-For the insurers to retain the proofs of loss or death, without pointing out any objection. to their form or contents within a reasonable time, constitutes a waiver of such mistakes and defects in the proofs as the insured could have remedied upon notice. Here is a clear ground of estoppel.

1 Liverpool, London & Globe Insurance Co. v. Verdier, 33 Mich. 138.

9 Castner v. Farmers Mut. Ins. Co., 50 Mich. 273.

Keeney v. Home Ins. Co., 71 N. Y.

Devens v. Mech. & Traders Ins. 396. Jennings v. Metropolitan Life, Co., 83 N. Y. 168.

148 Mass. 61 (1888).