the ship, which was then at Lisbon, was to sail in a few days, and the ship did not in fact sail for a month, Lord Ellenborough held that this statement, though material to the risk, but made by the owner of the goods, who had no control over the time of the ship's sailing, must be regarded merely as the expression of a probable expectation, which, as it appeared to have been made bona fide, would not avoid the policy.1 § 50. Test of Materiality.-The materiality of a concealment or representation of fact depends not on the ultimate influence of the fact upon the risk or its relation to the cause of loss, but on the immediate influence upon the party to whom. the communication is made or is due in forming his judgment at the time of effecting the contract. The party thus sought to be influenced is generally the insurance company. Though the loss should arise from causes totally disconnected with the material fact concealed or misrepresented, the policy is void, because a true disclosure of the fact might have led the company to decline the insurance altogether or to accept it only at a higher premium.2 3 § 51. Refers to what Time.-The closing of the contract is the time to which a misrepresentation or concealment must be presumed to refer, and any material facts coming to the knowledge of either party pending the negotiations must be communicated, even after the written proposals have been submitted, and the customary methods of rapid transmission of news must be employed. Until the completion of the contract, representations may be withdrawn or qualified, but not afterwards without consent. In England, after the terms of the contract have been virtually settled by the execution of the slip, subsequently acquired knowledge need not be communicated before execution of the policy, although a marine insurance is not valid by their law until the policy is executed.3 1 Bowden v. Vaughan, 10 East, 415. 3 Snow v. Mer. M. Ins. Co., 61 N. Y. 160. 2 Curell v. Miss. M. & F. Ins. 4 Freeland v. Glover, 7 East, 462. Co., 9 La. 163; s. c., 5 29 Am. Dec. Ionides v. Pacific Ins. Co., L. R., 439. 6 Q. B. 685. CHAPTER V. GENERAL PRINCIPLES- -CONTINUED. Warranties. § 52. What is a Warranty.-An express warranty is a statement of fact or promise of performance, relating to the subject of insurance or to the risk, inserted in the policy itself, or by reference expressly made a part of it, which must be literally true or strictly complied with, or else the contract is avoided.1 A representation, as has been observed, is a collateral inducement outside the contract, and need be only substantially complied with; that is to say, if it is immaterial in the judgment of the jury its falsity will not constitute a forfeiture. The warranty may be inserted in the body, margin, or at the foot of the policy, but it must appear somewhere upon its face. An indorsement upon the back is not sufficient, unless it is expressly made a part of the contract.3 No particular form of words is necessary to create a warranty, and it may relate to the past, present, or future. Warranties form the basis of the insurers' obligation, and it is only upon condition of their complete fulfillment that they promise to make payment. § 53. Warranty must be Strictly Performed.—In case of a condition or warranty, it is of no consequence whether the fact stated or the act stipulated for be material to the risk or not, or whether the insured acted in good faith or not: the warranty must be strictly and literally performed. 1 Thomson v. Weems, 9 App. Cas. 671. Cushman v. U. S. Life Ins. Co., 63 N. Y. 404 Clark v. Union Mut. Ins. Co., 40 N. H. 333; s. c., 77 Am. Dec. 721. Wood v. Hartford Ins. Co., 13 Fitch v. American Popular Life Thus a broker, in offering a risk to the underwriter, showed the latter his written instructions, which comprised a statement respecting the vessel, that "she mounts twelve guns and twenty men:" in point of fact, the vessel had not this precise force on board; but she had an armament of guns and swivels, with a crew of men and boys, which in both particulars were equivalent to, though not identical with, the force specified. It was held that the statement made to the underwriter, being a representation, was satisfied by the substantial fulfillment, though had it been a warranty nothing less than a strict and literal fulfillment would have sufficed.1 In another case, the words "in port 20th July, 1776," were written in the margin of the policy. The ship was proved to have sailed on the 18th of July, and Lord Mansfield held this to be a breach of warranty, though the discrepancy of two days might not make any material difference in the risk.2 In another case, the description of the vessel as "the good American ship called the Rodman" was held a warranty that the vessel was American.3 So if the insured by his fire policy warrants that there is no other insurance upon the property, the statement, if untrue, will avoid the policy, though made by the insured in ignorance of the fact, and though wholly immaterial in influencing the insurers. So, also, if he omit to state one of the incumbrances upon his property, in answer to a question in the application calling for them, the policy will be vitiated if the answer is warranted to be full, although the jury find the fact to be immaterial. And if by his contract of life insurance he warrants that he was not engaged in selling liquor, the validity of the policy will depend upon the truth of the statement. If, however, the insured warrants that his building is "used for the storage of ice," that may be quite true, although at the time of the commencement of the risk there is no ice there.? Many illustrations of this doctrine will be considered in connection with the clauses of the policies. 1 Pawson v. Watson, Cowp. 785. Bean v. Stupart, Doug. 12 (note). Bowditch Mut. Ins. Co. v. Winslow 3 Gray (Mass.), 415. 6 "Barker v. Phoenix Ins. Co., 8 Johnson, 307. 4 Allen v. German-Am. Ins. Co., 123 N. Y. 6. Dwight v. Germania Life Ins. Co., 103 N. Y. 341; s. c., 57 Am. Rep. 229. 'Dolliver v. St. Joseph's Fire and Marine Ins. Co., 131 Mass. 45. Warranties are in effect made representations by statutory provisions in some of the States, as shown in the appendix. It ought to be observed, however, that in making practical application of the doctrine of warranty, it sometimes happens that the alleged breach consists in honest errors or misstatements in their character so trivial and irrelevant to the risk as to fall within the rule de minimis non curat lex. The court, perhaps, relied upon this maxim with more regard to common sense and justice than to the letter of the law in the following case, where a vessel was registered as captained by A, in order to comply with the requirements of the registry laws which forbid an alien to register; but in point of fact the vessel was really under the management of another person, B, who was an alien, but a competent and experienced captain, whereas A had had no nautical experience: it was held that the representation of A's captaincy contained in the registry would not avoid the contract.1 Similarly, in another case, the same court held that a fire policy was not avoided by the existence of a small building within seventy-five feet of the storehouse insured, which did not affect the risk, although the insured had warranted that the storehouse was detached at least one hundred feet on the east side of Lake Champlain." $ 54. Inability to Perform the Contract no Excuse. The inability of the insured to comply with the requirements of his warranties offers no excuse, unless the insurers are in some way responsible for the omission. 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.3 This rule is applicable to the payment of premiums when made a condition precedent, and also to all the other warranties in the policy. But the requirements of the policy regarding the form and particularity of the proofs of loss, while 1 Draper v. Com. Ins. Co., 21 N. Y. 378. "Burleigh v. Gebhard Fire Ins. Co., 90 N. Y. 220. Baldwin v. Citizens Fire Ins. Co., 60 Hun. 389 (1891). * School District v. Dauchy, 25 Conn. 530. Evans v. U. S. Life Ins. Co., 64 N. Y. 304. imposing an absolute obligation upon the insured to furnish proofs unless the company excuses it, are held to mean only such reasonable proofs as the circumstances of the case will permit.1 2 Sickness, insanity, death, and, according to some authorities, even wars 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 them until the war is terminated. However reasonable this rule may be, considered logically, it is inconvenient and difficult to apply, and the life policy may furnish some exception.* Various classes of statutes which have been passed by the legislatures of different States to relieve from technical forfeitures are given in the appendix. $55. Papers Referred to in the Policy.-A statement in a paper merely referred to in the policy is not a warranty; but if the policy, as it almost invariably does, makes the application plan or survey a part of the contract, then the statements of fact therein contained, whether relating to the past, present, or future, become warranties." § 56. Statement of Present Use.-A statement of the nature of the present use of the property, if it does not go to the essential nature of the subject of insurance, is not generally considered a warranty of continuance. For example, in a late case the United States Supreme Court were of opinion that a warranty in a contract of fire insurance, that smoking was not allowed on the premises, if true when the representation was made, would not be broken though the assured or others smoked afterwards on the prem 1 Bumstead v. Dividend Mut. İns. Wall. 158. Cohen v. Mut. Life Ins. Co., 12 N. Y. 81. Co., 50 N. Y. 610. N. Y. Life Ins. Co. v. Statham, 93 U. S. 24. 2 Thompson v. Ins. Co., 104 U. S. 252. Carpenter v. Centennial Mut. Life Ins. Co., 68 Iowa, 453. Howell v. Knickerbocker Life, 44 N. Y. 277. Worthington v. Charter Oak Life Ins. Co., 41 Conn, 401. 3 Cushman v. U. S. Life Ins. Co., 63 N. Y. 404. Fitch v. Amer. Popular Life Ins. Co., 59 N. Y. 557; s. c., 17 Am. Rep. 372. Dwight v. Germania Life Ins. Co., 103 N. Y. 341; s. c., 57 Semmes v. Hartford Ins. Co., 13 Am. Rep. 729. |