against extravagant claims, and to prevent disputes as to the amount of damage.

If the company once elect to do so, they must reinstate, and cannot afterwards repudiate their election. And the con-. verse is also true, for the selection of one alternative constitutes an abandonment of the other.1

The election to restore or rebuild involves not only the rejection of the right to pay the cash value to the insured, but also the waiving of all those provisions of the contract having reference to that method of performance. From the time of such election the contract between the parties becomes an undertaking on the part of the insurers to build or repair the subject insured, and to restore it to its former condition, and the measure of damages for a breach of this substituted contract of building does not necessarily depend on the amount of damage inflicted by the peril insured against.2

If the insurers, in the attempt to restore the property, do more than their contract obligates them to do, they cannot claim allowance for the excess of value.3

If, without fault of the insured, the company either neglects to complete the work or is prevented from doing so by the interference of the public authorities, the loss will fall upon the insurers. So, also, if during the rebuilding or repairing the property is again burned; for here, too, through no fault of the insured, the insurers have failed to fulfill their contract.

Whether the work of repairing or rebuilding is done properly and within a reasonable time, must generally be a question. for the jury, and for any breach of their obligations the insurers will be held responsible, according to the ordinary rules of damage.

The rebuilding clause has been held to have no application to a mortgagee's policy.

The Massachusetts standard policy has a similar provision allowing the company to restore upon giving notice within

fifteen days after the proofs of loss are submitted, and the company is declared not liable for more than the sum insured with interest.

$ 135. This Entire Policy shall be Void.-Before this phrase was inserted in the policy, the better opinion was that the contract of insurance was severable in those cases where it covered several items of property which were insured in separate amounts either at separate rates or for a single premium which could be mathematically apportioned or approximately so, and provided the breach of warranty affected only a portion of the items.' But the phraseology of the standard policy admits of no ambiguity.2

The word "entire" is omitted from the similar clause of the Massachusetts form.

§ 136. Interest of the Insured not Truly Stated in the Policy.-Except for this requirement the insured might describe his interest in the most general terms, and if he had any insurable interest at all it would avail to sustain the contract.3

He might describe the property as his or say that he was the owner, and if that were true in any substantial sense he could recover to the extent of his insurable interest; 4 as, for example, where the insured called the property his but in reality had only a life estate."

But under this clause he is bound to disclose the character of his insurable interest; whether, for example, he is owner, trustee, consignee, factor, agent, mortgagee or lessee, and make sure that the description of his interest is truly noted in the policy. It is only right that the insurers should know the nature and extent of his insurable interest.

1 Loomis v. Rockford Ins. Co., 77 Wis. 87. Schuster v. Dutchess Co. Ins. Co., 102 N. Y. 260.

2 Smith v. Agricultural Ins. Co., 118 N. Y. 518. Geiss v. Franklin Ins. Co. 123 Ind. 172. 3 Buffum v. Bowditch Mut. Fire Ins. Co., 10 Cush. 540.

Dacey v. Agricultural Ins. Co., 21 Hun, 83. Trade Ins. Co. v. Barracliff, 45 N. J. Am. Rep. 792. Mut. Fire Ins. (1891).

Law 543; s. c., 46

Wainer v. Milford Co., 153 Mass. 335

Allen v. Charlestown Mut. Fire Ins. Co., 5 Gray, 384.

This clause, however, does not require him, unless particularly interrogated on the subject, to state the circumstances which relate to the value or permanency of his interest. For example, if the character of his title is a fee simple and the property is consequently described as his, he need not state that he is only a part owner; or that there are mortgages or other incumbrances outstanding upon his property;2 or that he has made an agreement to part with the title in the future; 3 or that his property has been seized on execution but not yet sold. Any obligation which may rest upon him to make such disclosures does not come by virtue of this particular clause.

3

The word "interest" has been appropriately used in the standard form in place of the words "title or possession," for the reason that there are some insurable rights, like that of mortgagee or surety or stockholder, to which the attributes of title and possession are not necessarily incident. But it is apprehended that the substitution of this broad word does not impose an obligation upon the insured to make any fuller or other disclosure in respect to his title or possession than is required by the other form of words, although the ruling in the following cases might lead to a different conclusion."

If the policy is made payable to one "as his interest may appear," the interest need not be stated. The written words overrule the requirement of the printed form.

This clause does not appear in the Massachusetts form.

§ 137. In Case of Any Fraud or False Swearing. -This provision is perhaps only the express declaration of a doctrine understood to be applicable to insurance contracts. But it makes clear the extension of the rule in full force to intentional misstatements made after the loss, as well as those

1 Peck v. New Lond. Co. Mut. Ins. Co., 22 Conn. 575. Turner v. Burrows, 5 Wend. 541.

2 Dolliver v. St. Joseph F. & M. Ins. Co., 128 Mass. 315; s. c., 35 Am. Rep. 378. Judge v. Conn. Fire Ins. Co., 132 Mass. 521. Carson v. Jersey City Fire Ins. Co., 43 N. J. L. 300; s. c., 39 Am. Rep. 584.

made to induce the insurers to accept the risk. In fact, it is by the statements contained in the proofs of loss that the insured, if unscrupulous, is most tempted to deviate from strict honesty in order to swell the amount of his recovery.

False swearing in the proofs of loss, to vitiate the policy, must be intentionally false, whether by a fraudulent overvaluation of the goods destroyed, or a statement of items which really have no existence, or by an undervaluation of what is saved, or in any other particulars. An innocent mistake,2 or

an innocent though exaggerated estimate of value, will not avoid the policy. The overvaluation, in order to work a forfeiture, must be so plain that it cannot be accounted for upon the principle that every man is naturally prone to put a favorable estimate upon the value of his own property.

The question of fraud or false swearing is generally for the jury, and the company does not receive much consideration at their hands unless a clear case of dishonesty is established. But if it appears by the plaintiff's own showing that his statement of value was knowingly and intentionally exaggerated, a forfeiture ought to be found by the court."

5

Where the discrepancy between the representation of the insured and the finding of the fact by the jury is very great, a limit will be reached where the court will intervene and decide as matter of law that the amount of the error is consistent only with bad faith.

To illustrate, where a house was valued at $1,400, and the evidence showed its value to be about $1,000, it was held that this difference did not establish as matter of law that there had been a breach of warranty against overvaluation.7

2 Thierolf v. Universal Fire Ins. 14 Vroom. 300; s. c., 39 Am. Rep. 584. Co., 110 Penn. St. 37.

Maher v. Hibernia Ins. Co., 67 N. Y. 283. Jersey City Ins. Co. v. Nichol, 35 N. J. Eq. 291; s. c., 40

American Ins. Co. v. Gilbert, 27 Mich. 429.

30.

Smith v. Home Ins. Co., 47 Hun,

Putting the value of $2,000 upon goods worth $1,200 was held not to prove a fraudulent intent. Also, where a value of $5,000 was given to property worth $2,000, a finding of no fraudulent intent was not set aside. But there was also a finding that the actual value of the property destroyed exceeded the amount of insurance. But in another case a rule nisi for a new trial was made absolute where the claim sworn to was £1,085, and the amount found by the jury was only £500, the court concluding that this finding of fact ought to be considered in effect a verdict for the defendant.3

And where the proofs made the loss three times as large as the amount found by the jury, and no reason being disclosed for supposing that the misstatement arose inadvertently, the court was of opinion that fraud was shown as matter of law and that the policy should be held forfeited, notwithstanding the jury's verdict for the plaintiff.*

It will be observed that in the matter of innocent misrepresentations of fact a clear distinction is made between those antecedent statements which, if material, form the inducement for the contract, and, whether material or not, are generally incorporated in the contract as warranties, and those statements, on the other hand, which are made after the loss, in an attempt to give to the insurers such information as may be available respecting the origin, character, and extent of the loss already accrued. But statements intentionally false in the proofs of loss amount to perjury.5

The corresponding clause in the Massachusetts standard policy is as follows: "This policy shall be void if any material fact or circumstance stated in writing has not been fairly represented by the insured." This does not refer to statements in the proofs of loss, but only to the inducing representations upon which the contract is based, and the wording of the clause makes the question of fairness one for the jury." The Massachusetts statute is also pertinent upon this point.

1 Behrens v. Germania Fire Ins. Co., 64 Iowa, 19.

Northwestern Nat. Ins.

? Dogge v. Co., 49 Wis. 501.

'Levy v. Baillie, 7 Bing. 349.

Sternfeld v. Park Fire Ins. Co., 50 Hun, 262.

Avery v. Ward, 150 Mass. 160 (1889).

Wainer v. Milford Mut. Fire Ins. Co., 153 Mass. 335 (1891).