his authority. But where the error in the application was solely the act of the company's agent, the assured being unable to read and having given true answers to the agent orally, it was held that the company could not set up the breach of warranty in defense, although the application contained the warranty that the answers of the applicant were full, complete, and true, whether written by his own hand or not.2 § 95. Commissioned Agents: Fire-The comtais. sioned agents of fire insurance companies are more properly general agents, and except as restrictions upon their authority are inserted in the application or policy, or otherwise made known to the fasured, they are held to have power to waive conditions and forfeitures. This conclusion is based upon the fact that they have authority to make, cancel, and renew contracts, being furnished with blanks for that purpose. The principles laid down in the last two sections are also applicable to the representatives of fire and marine companies as well as to life. The fire policy, however-and this is true of the marine policy also does not ordinarily make the payment of the premium a condition precedent to the validity of the contract, and a general agent may of course extend credit to the insured, or not, as he chooses. The general custom where credit is given is for the agent to do so on his own responsibility. But in case the agent should make default in accounting to the company the policy will nevertheless be valid. And though the policy provide that it shall not take effect until the premium is paid in cash, the general agent has power to waive the provision, and will be held to have waived it if he delivers the policy without enforcing payment. If at the time of receiving the premium or delivering the policy the general agent has knowledge of a ground of forfeit 1 Ins. Co. v. Wolff, 95 U. S. 329. Messelbach v. Norman, 122 N. Y. 578. Ins. Co. v. Norton, 96 U. S. 240. Wilkens v. Mutual Reserve Fund Life Asso., 54 Hun, 294. Wa'sh v. Hartford Fire Ins. Co., 73 N. Y. 5. 3 Walsh v. Hartford Fire Ins. Co., 73 N. Y. 5. Bodine v. Exchange Fire Ins. Co., 51 N. Y. 117. Boehen v. Williamsburgh City Ins. Co., 35 N. Y. 131. Walsh v. Hartford Fire Ins. Co., 73 2 O'Brien v. Home Benefit Soc., 117 N. Y. 11. N. Y. 310. ure already incurred, the company will be held to have waived. it, because it would not be right for the company to accept a premium in return for a contract which it knew would be worthless to the other party.1 A stipulation that the commissioned agent has no authority to waive except by written agreement is binding, unless the insured is able to show that the commissioned agent had an actual authority, either by instructions or recognized practice, to waive orally, and this it is not so easy to do as before the adoption of the standard fire policy. 8.96. Special Soliciting Agents: Fire.-They have no authority to waive conditions or forfeitures, but only to receive proposals and forward them. If they are intrusted with the closing of a contract of insurance, and allowed to make a delivery of the policy, it has been held that they have implied authority to determine how the premium shall be paid, and if they give credit the policy will still be binding, though in contradiction to its terms. 97. Other Special Agents.-A special agent appointed to investigate or adjust a loss has no implied authority to waive an essential condition of the contract or a forfeiture.1 The authority of clerks of agents or of insurers is, as a rule, limited to the performance of ministerial and clerical acts, and they are not to be allowed to disturb or alter the terms of the policy, unless such a result is naturally involved in the proper performance of the particular act which they are employed to do.5 1 Bennett v. North British & M. Ins. 16. "Tate v. Citizens Mut. Ins. Co., 13 Gray, 79. Lohnes v. Ins. Co. of N. A., 121 Mass. 439. Bodine v. Exchange Fire Ins. Co., 51 N. Y. 117. Boehen v. Williamsburgh City Ins. Co., 35 N. Y. 131. Weed v. London & L. Fire Ins. Co., 116 N. Y. 106. Marvin v. Universal Life Ins. Co., 85 N. Y. 278. Waldman v. North British & M. Ins. Co., 91 Ala. 170. CHAPTER IX. GENERAL PRINCIPLES-CONTINUED. Marine Insurance. THE law of marine insurance is in so many particulars peculiar to that branch of insurance that it will be convenient to present by themselves some of the principles relating to it. The subjects of insurable interest, concealment, and representations have already been touched upon. $ 98. What is Marine Insurance.-Marine insurance is an insurance against risks, connected with navigation, to which a ship, cargo, freight, profits, or other insurable interest in movable property may be exposed during a certain voyage or a fixed period of time. 99. Implied Warranties.-There are three warranties which are understood in every contract of marine insurance, and are as efficacious as though they were written upon the face of the policy. These are in respect to seaworthiness, deviation, and the legality of the adventure. § 100. Warranty of Seaworthiness.- In every voyage policy upon ship, freight, cargo, or other interest a warranty is implied that the ship is seaworthy at the time of the commencement of the risk. After much discussion it has been settled by the English courts that no warranty of seaworthiness is to be implied in a time policy. This distinction is placed by those courts upon the ground that the warranty of 1 Dixon v. Sadler, 5 M. and W. 405. Richelieu Nav. Co. v. Boston Ins. Co., 136 U.S. 408 (1889). Walsh v. Washington Ins. Co., 32 N. Y. 427. 2 Gibson v. Small, 24 Eng. Law and Eq. 17. Thompson v. Hopper, 34 Eng. Law and Eq. 266. Dudgeon v. Pembroke, L. R., 2 App. Cas. 284. seaworthiness attaches, if at all, at the time of the commencement of the risk, and that to imply such a warranty in a time policy, which might begin to run when the vessel was in midocean, would be inconvenient and unreasonable. But if the assured knowingly send the vessel to sea in an unseaworthy condition, and she is lost in consequence thereof, the loss will not be recoverable under the policy, though directly occasioned by a peril insured against, because it resulted from the wrongful act of the assured.1 In the United States a warranty of seaworthiness is always implied in a voyage policy, but with reference to time policies. the decisions of the different courts are not in harmony. The Connecticut court has decided for that State that no distinction exists between the two classes of marine policies," but the opinion of the court in that case can hardly be said to have considered or disposed of all the difficulties attaching to such a rule. By the weight of opinion in this country, the warranty is at any rate to be implied in those cases where the vessel insured by the time policy is, at the time of the commencement of the risk, at a port where repairs could be made. This is the conclusion at which the Massachusetts court arrived in an ably considered case, beyond which the court was not willing to commit itself at that time. In a more recent case, however, the Illinois court has decided to abide by the English rule.* In a still later case, the Federal Supreme Court uses the following language with regard to this subject: "In the insurance of a vessel by a time policy, the warranty of seaworthiness is complied with if the vessel be seaworthy at the commencement of the risk; and the fact that she subsequently sustains damage, and is not properly refitted at an intermediate port, does not discharge the insurer from subsequent risk or loss, provided such loss be not the consequence of the omission. A defect of seaworthiness arising after the commencement of the risk, and permitted to continue from bad faith or want of ordinary prudence or diligence on the part of the insured or his agents, discharges the in 1 Thompson v. Hopper, 6 El. & B. 172, 937. 2 Hoxie v. Home Ins. Co., 32 Conn. 21 (1864). So, also, Merchants Mut. Ins. Co. v. Sweet, 6 Wis. 670. Hoxie v. Pacific Mutual Ins. Co., 7 Allen, 211 (1863), by Bigelow, C. J. 'Merchants Ins. Co. v. Morrison, 62 Ill. 242. (1871). surer from liability for any loss which is the consequence of such bad faith or want of prudence or diligence, but does not affect the contract of insurance as to any other risk or loss covered by the policy and not caused or increased by such particular defect. The effect of this rule, if indeed it was intended to define an implied warranty, would seem to make our law in substance not very different from the English law, after all, except in the matter of classification; for, so far as the general obligation of the insured to refrain from misconduct is concerned, the English court was of opinion in one case, that, if a vessel insured under a time policy should sail in an unseaworthy state, and incur loss in consequence of such unseaworthiness, without the intervention of a peril insured against as the direct cause of the loss, such loss would not be recoverable under the policy." But it would seem that the English classification is better than that of the United States Supreme Court, because the fundamental notion of a warranty is that it imports an obligation of such a character that a breach of it will cause an absolute avoidance of the whole contract irrespective of its relation to the loss. It is in harmony with the general purpose of insurance to make a contract of insurance, as far as may be, one of absolute indemnity against loss by the specified perils, regardless of unintentional negligence on the part of the assured or his agents, and this doctrine has received the high sanction of the Federal Supreme Court itself.3 The New York court, without however citing any of the late cases, has recently stated the rule in the following words: "In every case of marine insurance by a general policy covering all perils of the sea, where the vessel insured is in port, there is an implied warranty that the vessel is seaworthy at the inception of the policy. It is a condition precedent to the risk, and if the vessel is not seaworthy the policy does not attach. In an action to recover for a loss upon such a policy, where the fact of seaworthiness at the time of issuing the policy is shown, it is immaterial what the vessel's condition is 1 Union Ins. Co. v. Smith, 124 U. S. 405 (1887), Blatchford, J. 192. Fawcus v. Sarsfield, 6 El. &. Bl. 3 Orient Ins. Co. v. Adams, 123 U. S. 67 (1887). |