w

Jury charged that of must have known this to avoid pool. Held error. "His busi wad, &c bunden is upon him to pee & premises are n used in such manner as to avoid epal. The unsures to atliberty to select character, rest he well assume the is In leable except on prov of closs occurred wir termusic pol. The uns cannot commit the WESTCHESTER FIRE INS. CO. v. PIER CO. [CHAP. V

106

Pol.

WESTCHESTER FIRE INS. CO. v. OCEAN VIEW PLEASURE PIER
CO. ET AL.

SUPREME COURT OF APPEALS OF VIRGINIA, 1907. 106 Va. 633

Effect of acts of a tenant of the insured without the knowledge of the insured.

ACTION on a policy of fire insurance issued to the plaintiff, the owner of the insured building, located upon a pier in Chesapeake Bay. The owner had rented the building to one Livingstone who had subrented a portion to Ingleman. A day or two before the fire, one Otto Wells approached Ingleman and asked for permission to set off fireworks upon the pier, and Ingleman told him he had no right to grant him the permission, but that he would see Livingstone about it, which he did, and Livingstone told him that Wells might use the pier for that purpose, if he would be careful. In pursuance of this permission Wells caused the fireworks to be set off from the pier on the 4th day of July, 1904, and the pier caught fire and was destroyed. The owner of the building had no knowledge that fireworks were to be used upon the pier.

KEITH, P. It is provided that the policy shall be void "if (any usage or custom of trade or manufacture to the contrary notwithstanding) there be

of Cat59-6, kept, used, or allowed on the above described premises, benzine, benzole,

dynamite, ether, fireworks, gasoline, Greek fire, gunpowder," etc.

The defendant in error insists that this condition has not been violated for two reasons: First, because the defendant in error is not responsible for the act of its tenant in permitting fireworks to be exhibited upon the pier; and, secondly, because the exhibition of fireworks upon the pier was not a violation of the condition that fireworks were not to be "kept, used or allowed" on the premises.

With respect to the first proposition, if authority be needed, the case of Liverpool & London & Globe Ins. Co. v. Gunther, 116 U. S. 113, 6 Sup. Ct. 306, 29 L. Ed. 575, would seem to be conclusive.

The fact that the defendant in error had no knowledge that fireworks were to be used upon the pier is of no consequence. In Fire Assn. v. Williamson, 26 Pa. St. 196, it is said: "Neither is it material that the landlord did not know that his tenant kept gunpowder. His contract with the insurance company was that it should not be kept without permission, and it was his business to see that his tenants did not violate the contract in this respect."

There is no doubt that in this case the condition was broken, and that its breach was the direct cause of the loss, and under the authorities just cited, we think there is equally as little doubt that the defendant in error was responsible for the act of its tenant in permitting the prohibited articles to be used upon the premises. It was not only permitted by the tenant, but per

swise premises to anomer

havens whether premises are recupied zy 'se or a

pro waarn: he is presumed to "cela 122/595; 98/184

recupieszy se or a tenant" cely

CHAP. V] SNYDER V. FARMERS' INS. & LOAN Co.

107

mitted with actual knowledge that he had no right to grant the permission,
and only after he had taken, as he thought, due precautions for his own pro-
tection from loss.

Reliance is placed by defendant in error, also, upon London, etc., F. Ins.
Co. v. Fischer, 92 Fed. 500, 34 C. C. A. 503, in which the opinion was de-
livered by Judge Taft. In that case, the condition of the policy was that it
should be void if "there be kept, used, or allowed gasoline" on the premises.
It was held that the word "allowed" was to be construed as meaning "al-
lowed to be kept or used," and that the condition was not violated by per-
mitting gasoline to be carried through the building on the premises. But
here the prohibited article was carried on the premises, not through them,
and was used upon the premises, and the prohibited use was the sole cause
of the loss sustained. It was a lawful condition clearly expressed and reck-
lessly violated, and if it be not sufficient to protect the insurance company
against loss, it would seem to be an idle task to write conditions into a policy.
We are of the opinion that the judgment should be reversed.

2605 Every expressur. made at or by cax", a pol must be contar conversed. 1 Reversed. pol se, or manotty, paper instrument signed by tusured, referred to makga

370

pal as

SNYDER v. THE FARMERS' INSURANCE & LOAN COMPANY

SUPREME COURT OF NEW YORK, 1834. 13 Wend. 92

What reference to an extraneous paper will avail to incorporate it into the con

Mogmore

tract as a warranty? of more particulary described in appl: survey.

THE plaintiff was insured $4,000 on his stock of merchandise contained "in the stone building with shingle roof, occupied by himself and others,

1 INABILITY TO FULFILL NO EXCUSE.-The inability of the insured to comply with Sec 260 Jan

the requirements of his warranties offers no excuse, unless the insurers are in some
way responsible for the omission, Johnson v. Casualty Co., 73 N. H. 259, 262, 60 Atl.
1009. The insurers have promised to pay only upon condition that the insured shall
fulfill the contract upon his part, not upon condition that he shall find it convenient
or possible to do so, School District v. Dauchy, 25 Conn. 530. Sickness, insanity,
death, Thompson v. Ins. Co., 104 U. S. 252; Carpenter v. Centennial Mut. Life Assn.,
68 Ia. 453; and according to some authorities, even war, Worthington v. Charter Oak
Life Ins. Co., 41 Conn. 401, will furnish no excuse for the violation of a condition in
the policy. But the United States Supreme Court and other courts have adopted the
rule, that a war overrides the ordinary obligations of the policy, and simply suspends 609
them until the war is terminated, N. Y. Life Ins. Co. v. Statham, 93 U. S. 24; Cohen
v. Mut. Life Ins. Co., 50 N. Y. 610. As regards the provisions of the policy applicable
to proceedings after the capital event insured against has occurred, the strictness of
the rule is somewhat modified. It is presumed that in such a case the parties did not
intend to require impossibilities, Ins. Cos. v. Boykin, 12 Wall. (U. S.) 433, 20 L. Ed.
442; Sergent v. L. & L. & G. Ins. Co., 155 N. Y. 349, 355, 49 N. E. 935; Evans v. Craw-
ford Co., etc., Ins. Co. 130 Wis. 189, 109 N. W. 952. Only substantial compliance
with the iron-safe clause, used in the south, is required by certain courts, Sneed v.
British-Am. Ins. Co., 73 Miss. 279; McMillan v. Ins. Co., 78 S. C. 433, 58 S. E. 1020.
But the warranty must be reasonably fulfilled, Arkansas Ins. Co. v. Luther (Ark.,
1908), 109 S. W. 1022.

Wr based on platints inappl" sell 289-40

1. Sno did tell abt acces! we creado dye.' dien tuon for 2 with it was gerious? dedy on left later that his father had mo! him when he told father he was perrong hunt father recalled, insofold sonoget 2 Ins had from his note for prem. Pel provided in such va for forks fuste in podat matunt. falalle, al & non compos at date mature Held live payt. frem to ma Ant payt orgular ust constituale lifersonel,.

situated at, etc., more particularly described in application and survey furnished by himself, filed No. 928, in this office," i. e., the office of the defendants. The property was insured for one year, and within the term the building mentioned in the policy, with its contents of merchandise, was burnt and destroyed by fire. The survey mentioned in the policy was in these words: "Survey of a building at Bolton, etc., 56 by 35 feet, built of stone, shingled roof, one story high, garret over the whole, thick stone partition running lengthwise through the building to the roof; one part occupied by Alexander Snyder, the other part by Charles M'Inty as a storeroom." It was proved on the part of the defendants that the gable ends of the building were of stone, that the roof was on the building lengthwise, coming down to the side walls, which rose about five feet above the chamber floor, and on them the eaves of the roof rested. There was a stone partition lengthwise through the store, dividing it into two apartments, one of 18, and the other of 16 feet, one of which was occupied by Snyder; this partition did not extend higher than the chamber floor, and on the partition the beams of the chamber floor rested, and there was no partition in the garret. The judge charged the jury that the survey was not a part of the policy so as to become a warranty; that the misdescription of the building in regard to the partition wall was not in itself a bar to the action; that it would be for the jury to determine whether there was any fraudulent misrepresentation or concealment in respect to the survey, or whether the risk or hazard was increased by the facts or circumstances in regard to which the building was misdescribed, and that if they should find either of those points in the affirmative, the verdict should be for the defendant, otherwise for the plaintiff. The jury found for the plaintiff, and assessed his damages at $3,452. The defendants, having excepted to the charge of the judge, moved for a new trial.

By the Court, SAVAGE, CH. J. The only question in this case is, whether the survey furnished by the plaintiff is to have the effect of a warranty, or of a representation. This question must be considered as settled on authority in this court. It arose and was decided in The Jefferson Ins. Co. v. Cotheal, 7 Wend. 72. That cause came into this court by writ of error, and the opinion of the court was given by Mr. Justice Sutherland, who examined the cases on the point, and came to the conclusion that a warranty is never to be created by construction-must appear on the face of the policy, that there may be unequivocal evidence of a stipulation, the noncompliance with which is to have the effect of avoiding the contract. The only exception to the generality of this proposition is, that the proposals and conditions attached to the policy form part of the contract. In the case of Dow v. Whetton, 8 Wendell, 166, the chancellor says, the policy itself is the only legal evidence of the agreement between the parties. Vice Chancellor M'Coun has also clearly stated the difference between a warranty and a representation. The former is the affirmation of a fact asserted in the policy, and forming a condition which must be strictly complied with; the latter the statement of some collateral circumstances not embodied in the policy, though made before

the contract was completed, 1 Edwards, 74. This subject has been much
considered in the Superior Court of the city of New York, 2 Hall, 608, 627,
628. Chief Justice Jones says, it is a general rule that a representation, to
have the effect of a warranty, must be contained in the deed or policy itself.
And Mr. Justice Oakley says, "In determining what shall constitute a war-
ranty, and what shall be a representation merely, the general principle seems
to be well settled that an express warranty must appear on the face of the
policy, and that any instructions for insurance, unless inserted in the instru-
ment itself, do not amount to a warranty." Again: "the insurers having a
description of the property in their possession, are presumed to insert in the
policy itself as much of that description as they deemed material; and by
omitting any part of it, they showed that they are content to take such part
as a representation merely, and to look to it only for estimating the risk."
It is not necessary to deny that a separate paper may by express stipulation
be made part of the policy; but there is no such reference in the present
policy as to authorize the court to give the survey the force of a warranty;
indeed, from the manner of referring to it, it would seem that the defendants
were satisfied to look to it only for the purpose of estimating the risk. The
only question which we decide now is, that the survey referred to in the
policy must be considered a representation merely, and not a warranty.

New trial denied.1

ALABAMA GOLD LIFE INS. CO, v. JOHNSTON

then pal void

for dis" declared in pal, (basis. If many part in any respect untrue or any untrue os frok

SUPREME COURT OF ALABAMA, 1886. 80 Ala. 467

Rep: Pot issued in crads, rep? made in appl? No express inclus", appl" bood discuss? of Maro. 389-91 Warranties contrasted with representations. informati

me pol. Appl aup

wis hasn withheld any material une or
SOMERVILLE, J. The question of most importance which is raised by the
rulings of the court in this case is, whether the answers made by the assured

1

1 Especially in cities the brief written application for fire insurance usually is not made part of the contract. Applications for life insurance almost always are incorporated into the contract. A warranty may be inserted on the margin of the policy, or across the lines, Wood v. Hartford Ins. Co., 13 Conn. 533, 35 Am. Dec. 92; McLaughlin v. Atlantic Mut Ins. Co., 57 Me. 170; Patch v. Phoenix Ins. Co., 44 Vt. 481; or on a slip attached to the policy, Home Ins. Co. v. Cary, 10 Tex. Civ. App. 300, 31 S. W. 321; or on a separate paper expressly referred to in the policy, and made part thereof, Wood v. Hartford Fire Ins. Co., 13 Conn. 533, 545, 35 Am. Dec. 92. The words 'see back" will not avail to incorporate the indorsement on the back of a policy, The Majestic, 166 U. S. 375, 17 S. Ct. 597. Where an application for life insurance was described as "part of the contract," the answers were held to be incorporated into the contract as warranties, Cushman v. U. S. Life Ins. Co., 63 N. Y. 104, so also where policy described the application as "the basis of the contract," Bobbitt v. L. & L. & G. Ins. Co., 60 N. C. 70, 8 Am. Rep. 494; Anderson v. Fitzgerald, 4 H. L. Cas. 484.

NO SPECIAL FORM NECESSARY.-To constitute a warranty no particular form of = words is necessary. Neither the presence nor the absence of the word "warranted" is at all conclusive. Thus the phrase "warranted free of capture" in a marine policy indicates simply an exception to the underwriters' liability. It does not mean that

2604-30

to the questions contained in the application for insurance are to be construed as absolute warranties, or in the nature of mere representations.

The distinction between a warranty and a representation in insurance is frequently a question of difficulty, especially in the light of more recent decisions, which recognize the subject as one of growing importance in its relations particularly to life insurance. As a general rule it has been laid down that a warranty must be a part and parcel of the contract of insurance, so as to appear, as it were, upon the face of the policy itself, and is in the nature of a condition precedent. It may be affirmative of some fact or only promissory. It must be strictly complied with, or literally fulfilled, before the assured is entitled to recover on the policy. It need not be material to the risk, for whether material or not its falsity or untruth will bar the assured of any recovery on the contract, because the warranty itself is an implied stipulation that the thing warranted is material. It further differs from a representation in creating on the part of the assured an absolute liability whether made in good faith or not.

A representation is not, strictly speaking, a part of the contract of insurance, or of the essence of it, but rather something collateral or preliminary, and in the nature of an inducement to it. A false representation, unlike a false warranty, will not operate to vitiate the contract or avoid the policy, unless it relates to a fact actually material, or clearly intended to be made material by the agreement of the parties. It is sufficient if representations be substantially true. They need not be strictly or literally so. A misrepresentation renders the policy void on the ground of fraud; while a noncompliance with a warranty operates as an express breach of the contract.

The mere fact that a statement is referred to or even inserted in the policy itself, so as to appear on its face, is not alone now considered as conclusive of its nature as a warranty, although it was formerly considered otherwise. Whether such statement shall be construed as a warranty or a representation depends rather upon the form of expression used, the apparent purpose of the insertion and its connection or relation to other parts of the application and policy, construed together as a whole, where legally these papers constitute one entire contract, as they most frequently do, Bliss on Insurance, §§ 43 et seq.; Price v. Phoenix Mut. Ins. Co. (17 Minn. 497), s. c., 10 Amer. Rep. 166.

In construing contracts of insurance, there are some settled rules of construction bearing on this subject which we may briefly formulate as follows: (1) The courts being strongly inclined against forfeitures, will construe all the conditions of the contract, and the obligations imposed, liberally in favor of the assured and strictly against the insurer.

(2) It requires the clearest and most unequivocal language to create a warranty and every statement or engagement of the assured will be construed to be a representation and not a warranty, if it be at all doubtful in meaning, or the contract contains contradictory provisions relating to the the insurance in other respects will be vitiated, but only that the underwriter will not be responsible for a loss occasioned by that cause.