agent. That case also, as well as the Arff case, had to do with waiving the clause about other insurance. In Wilber v. Williamsburgh City Fire Ins. Co., 122 N. Y. 443 (1890), the court says: "It was entirely competent for the parties to agree that a third person participating in the negotiations should, for the purpose of procuring the policy, be deemed an agent of the assured." Such agent "should be deemed the agent of the assured until after the inception of the contract. Whether he thereafter represent the assured is dependent upon actual authority conferred otherwise than by the contract of insurance." From this language it must not be understood that the court really intended to commit itself unqualifiedly to the proposition that the actual authority of an insurance agent is to be considered as conferred by a policy of insurance, a contract subsisting between the company and a third party, or that a stipulation declaring in effect that all agents in the transaction are to be deemed agents of the assured would be conclusively binding upon the assured until he had seen the policy, and that after he had seen the policy it would not be binding upon him. Curiously enough, the courts of Pennsylvania and Dakota, and other courts, have adopted as applicable to a similar stipulation in the policy the precise converse of the rule which might seem to be indicated by the case last referred to, and have held that the stipulation or notice of restriction as to agency contained in the policy has no binding force at all until it is received by the insured.1 In Kenyon v. Knight Templars, 122 N. Y. 257 (1890), the court says: "The mere fact that the agent had knowledge or information of the manner the assured was then selling liquors, did not necessarily affect the right of the defendant to assert and make available the defense that there was a breach of warranty, if the answer was untrue. That was provided against by a provision in the contract. The cases in which knowledge of the agent through whom insurance is taken may operate to defeat the right of the company to avail itself of the fact so Kister v. Lebanon Mut. Ins. Co., 128 Pa. St. 553. Eilenberger v. Protective Mut. Fire Ins. Co., 89 Pa. St. 464. South Bend Toy Mfg. Co. v. Dakota F. & M. Ins. Co., 20 Ins. L. J. 871 (South Dak., 1891). known, at the time it is taken, are those in which there is no application signed by the assured, stating to the contrary of such existing fact, but rest upon a condition expressed in the policy merely. Then it may be presumed that the statement of it in the policy as required by the condition was omitted by mistake or waived. Such is not understood to be the rule when the alleged breach of warranty is founded upon a misstatement by the assured in the application made and subscribed by him." Here the court seems to think that it does make a difference, after all, whether the insured has had actual or only constructive notice of restrictions upon the agent's power; but, from the language of the court just quoted, it must not be inferred that a mere knowledge of forfeiture, without any positive act of confirmation, as, for example, delivery of policy or receipt of premium, will in any case avail to work a waiver of a breach of the policy; neither must it be inferred that a breach of a warranty contained in a policy may be waived by an agent where the policy says it cannot, but that a breach of a warranty contained in the application forming a part of the policy cannot be waived by any agent, no matter how broad his authority.2 1 Weed v. London & L. Fire Ins. Co. 116 N. Y. 118; Titus v. Glens Falls Ins. Co., 81 N. Y. 419. Ins. Co. v. Norton, 96 U. S. 240. McGurk v. Met. Life Ins. Co., 56 Conn. 528. Steen v. Niagara Fire Ins. Co., 89 N. Y. 315. Tubbs v. Dwelling House CHAPTER VII. GENERAL PRINCIPLES. Waiver and Estoppel-Continued. $72. What cannot be Waived.-Parties to a contract of insurance made within a State cannot avoid the provisions of a general statute of that State, unless the statute authorizes it.1 The State has the right to prescribe the conditions on which either foreign or domestic companies may do business within its jurisdiction, and hence may prescribe conditions of the contract with reference to certain particulars, or may establish a standard form of contract.2 A corporation cannot in general do an act ultra vires or beyond its corporate powers as defined by its charter, and every one dealing with the corporation is presumed to be cognizant of the nature and extent of such powers.3 Thus if a fire insurance company organized in New York should attempt to make a contract of life or ocean-marine insurance, the contract would be void." But any directions of the charter as to the internal management of the affairs of the corporation are not in general binding upon outsiders.5 Nor are charter provisions binding upon third persons which extend to the directors' discretionary powers to do a certain act; as, for example, where, by the regulations of the 6 1 St Paul F. & M. Ins. Co. v. Shafer, 76 Iowa, 282. Emery v. Piscataqua F. & M. Ins. Co., 52 Me. 322. Chamberlain v. N. H. Fire Ins. Co., 55 N. H. 249. 2 Continental Ins. Co. v. Chamberlain, 132 U. S. 304. Doyle v. Continental Ins. Co., 94 U. S. 535. Reilly v. Franklin Ins. Co., 43 Wis. 449. 3 Jemison v. Citizens Savings Bank, 122 N. Y. 140 (1890). * Re Arthur Average Assoc., 32 L. T. N. S. 525. In re Athenæum Life Assur. Co., 27 L. J. Ch. 829. 6 Ernest v Cases, 401 Nicholls, 6 H. of L. company, insurance is to be made only to three-fourths of the value of property, but the officers of the company are to decide what is the value.1 And, in general, for a deviation from the prescribed method of doing a valid corporate act, the corporation will not be discharged from liability to an innocent person, and therefore in such matters of informality or of inaccuracy, directions whether of the charter or by-laws may be waived.2 § 73. What can be Waived: Stock Companies.— Any forfeiture or any condition of the policy inserted for the benefit of the insurers, even those stipulations which provide that there shall be no waiver, or that no waiver shall be made except in a certain manner as by writing, or that certain classes of persons shall be deemed to have no authority to waive, may be waived by the insurers through such representatives as in fact have the requisite authority. This is put upon the ground that parties having power to make a contract have power by mutual consent to abrogate or alter it to any extent at their pleasure, unless restrained by statute.3 § 74. New Subject cannot be Introduced by Waiver.-The doctrine of waiver and estoppel is not to be applied so as to effect a change in the subject-matter of the contract. Thus if by the terms of the policy a designated house is the subject of insurance, the insured will not be permitted to show by parol that in consequence of the representations or conduct of the insurers another house ought to be substituted.' $75. Rule in Massachusetts and New Jersey.Massachusetts and New Jersey adhere more closely to the doctrine of the common law, and hold that a waiver of a forfeiture 1 Jones v. Bangor Mut. S. Ins. So., Co., 116 N. Y. 106. Insurance Co. v. 61 L. T. N. S. 727 (1890). 2 In re County Life Assur. Co., L. R., 5 Ch. App. 288. First Bapt. Church v. Brooklyn Fire Ins. Co., 19 N. Y. 205. Relief Ins. Co. v. Shaw, 94 U. S. 574. * Weed v. London & L. Fire Ins. Norton, 96 U. S. 240. Messelback v. Norman, 122 N. Y. 578. Armstrong v. Turquand. 9 Irish Com. Law, 32. Trustees of First Bapt. Ch. v. Brooklyn Fire Ins. Co., 19 N. Y. 305. Conover v. Mutual Ins. Co., 1 Comstock, 290. Sanders v. Cooper, 115 N. Y. 279. existing at the inception of the contract cannot be established by parol testimony of what transpired at or before the closing of the contract.1 But in those States also a waiver occurring after the incep tion of the contract may be shown by parol.2 § 76. What can be Waived: Mutual Companies. -By some courts, especially those of Massachusetts, it has been held that the officers and agents of a mutual insurance company have no authority to waive such of its charter regulations or by-laws as relate to the essential terms of the contract.3 This distinction is put upon the ground that policy holders in a mutual company are members of the company, and that the by-laws are binding upon all, and that the officers and other representatives of the company are special agents appointed to enforce the by-laws and mutual arrangements, and not to dis- . regard them in favor of one of the members as against his associates. Even in Massachusetts the limitation extends only to provisions that are of the essence of the contract. Technical requirements in regard to the form and the contents of the proofs of loss, or limitation of time to sue, may be waived." And the tendency among the courts seems to be to deny the distinction between mutual and stock companies altogether, in respect to the power of the officers and agents to waive conditions and estop the company from insisting upon forfeitures; for, as matter of fact, the applicant for insurance rarely knows anything about the charter or by-laws, and could hardly be expected to be acquainted with them at the time of making his application.5 1 Batchelder v. Queen's Ins. Co., 135 Mass. 449. Dewees v. Manhattan Ins. Co., 6 Vroom (N. J.), 366. 2 Oakes v. Manufrs. F. & M. Ins. Co., 135 Mass. 248. Metropolitan Life Ins. Co. v. McTague, 49 N. J. L. 587. Carson v. Jersey City Ins. Co., 43 N. J. Law, 300; s. c., 39 Am. Rep. 581. McCoy v. Metrop. Life Ins. Co., 133 Mass. 85. Brewer v. Chelsea Mut. Fire Ins. Co., 14 Gray, 203. Mulrey 3 |