total disability, or total disability to engage in his usual occupation, it is generally held that such total disability exists when the insured is so injured as to be incapable of safely and efficiently engaging in his usual employment. It necessarily follows, therefore, that the extent of the injury necessary to cause total disability will vary greatly with the character of the employment. Thus, where an active solicitor was so injured as to be confined to his room, so that he was unable personally to attend to the business of his clients, he was held to be totally disabled, although he was able to conduct his correspondence and to direct his clerks. So, a surgeon would be totally disabled by the loss of an arm, since it would be practically impossible for him to perform surgical operations without the use of both; but a druggist, having lost one arm, could carry on his business very well with the other, and therefore was not totally disabled.""

In order to be totally disabled it is not necessary that the insured should be wholly incapable of doing any acts at all in furtherance of his business interests. He might be capable of doing single, inconsiderable acts in connection with his business, and yet be wholly unable to conduct it efficiently.100 So, the insured will be held to be totally disabled if considerations of prudence would require him to refrain from carrying on his business, even though he might be physically capable of conducting it, though at the risk of his health.101

RIGHT TO AN AUTOPSY.

245. The right reserved in accident policies to the insurer to demand an autopsy in case of alleged accidental death is not absolute, but one to be exercised reasonably, with due consideration to all the circumstances of the case.

In order to avoid fraudulent claims, most accident policies contain a stipulation that, upon demand by the insurer, the body of the insured shall be subject to examination by the medical examiner of the insurer, and that, if demand is made, the insurer shall be permitted to hold an autopsy upon the body of the deceased insured. Such a provision is reasonable, and well calculated for the proper protection of the insurer. It will, therefore, be enforced, provided it is claimed

98 Hooper v. Insurance Co., 5 H. & N. 546, 7 Jur. (N. S.) 73. But an attorney is not totally disabled by losing the use of one hand. United States Mut. Acc. Ass'n v. Millard, 43 Ill. App. 148.

99 Smith v. Supreme Lodge, 62 Kan. 75, 61 Pac. 416.

100 Turner v. Fidelity & Casualty Co., 112 Mich. 425, 70 N. W. 898, 38 L. R. A. 529, 67 Am. St. Rep. 428; Lobdill v. Association, 69 Minn. 14, 71 N. W. 696, 38 L. R. A. 537, 65 Am. St. Rep. 542.

101 YOUNG v. INSURANCE CO., 80 Me. 244, 13 Atl. 896; Lobdill v. Association, 69 Minn. 14, 71 N. W. 696, 38 L. R. A. 537, 65 Am. St. Rep. 542.

under reasonable circumstances.102 The insurer, if desiring an autopsy, must make his demand within a reasonable time, and of the proper person. As a general thing, if he delays making such a demand until after the burial of the corpse, he will be deemed to have forfeited his right.103 Reasons, both of sentiment and public policy, would prohibit the insurer from making a tardy demand for an autopsy that could be complied with only by exhuming the buried body. If, however, circumstances awakening suspicion of fraud come to the knowledge of the insurer only after interment has taken place, it seems that he may insist upon the exhuming and dissection of the body, especially if the collateral proof of fraud is strong.104

102 See Tompkins v. Insurance Co., 53 W. Va. 479, 44 S. E. 439, 62 L. R. A. 489.

103 American Employers' Liability Ins. Co. v. Barr, 32 U. S. App. 444, 68 Fed. 873, 16 C. C. A. 51. In this case the demand was made several weeks after burial, and of the widow of the deceased, rather than of the beneficiary. Ewing v. Association, 55 App. Div. 241, 66 N. Y. Supp. 1056; Wehle v. Association, 153 N. Y. 116, 47 N. E. 35, 60 Am. St. Rep. 598.

104 Wehle v. Association, supra.

CHAPTER XVII.

GUARANTY, CREDIT, AND LIABILITY INSURANCE

Fidelity and Guaranty Insurance.

246.

In General.

247-248.
249-250.

251.

Liability of the Guaranty Insurer.
Credit Insurance.

252-253. Employers' Liability Insurance.

254. Rights of the Injured Person in the Insurance Fund.

IN GENERAL.

246. The rights of the parties to contracts for the special kinds of insurance recently developed are to be determined in accordance with the terms of each contract, construed in the light of the purpose for which it was made, and according to the general rules of insurance law.

Reference has already been made, in considering the development of the practice of insurance, to the remarkably rapid extension within recent times of the principles of insurance to almost every important commercial or industrial enterprise the conduct of which necessarily subjects those concerned in it to risk of loss from fortuitous causes. Thus special contracts are now made insuring against loss by lightning, hail, floods, tornado or other windstorm, or by failure of crops. Many of these special insurances have assumed sufficient importance to have received special names that are fast becoming familiar not only to the lawyer, but to the general public as well. Live stock insurance protects the owners of live stock against damage or loss by lightning or disease; boiler insurance, against the injurious consequences of boiler explosions; title insurance, against defects in or failure of title to real estate; rent insurance, against loss by reason of the failure of tenants to pay rent; burglar insurance, against loss by burglary; and plate-glass insurance against all the evils that may befall that fragile but costly kind of property. Probably the latest of these special forms of insurance is strike insurance, devised for the

1

1 Title insurance: The business of insuring titles of real estate to purchas ers or mortgagees has become very extensive, every considerable city having one or more title companies, which unite the business of examining titles with that of insuring them. The thoroughness that characterizes the work of these companies is attested by the remarkably small number of cases involv ing title insurance that are to be found in our reports. The usual terms and general scope of title insurance contracts may be seen in the following cases: Place v. Trust Co., 67 Minn. 126, 69 N. W. 706, 64 Am. St. Rep. 404; Stensgaard v. Insurance Co., 50 Minn. 429, 52 N. W. 910, 17 L. R. A. 575; Wheeler v. Trust Co., 160 Pa. 408, 28 Atl. 849.

purpose of protecting employers of labor from losses that may be caused by strikes among their employés.

But the special insurances which are most important and popular, as answering a more generally recognized need, are fidelity and guaranty insurance, intended to protect employers against the consequences of the dishonesty of employés; liability insurance, against liability incurred by masters or passenger carriers on account of personal injuries suffered by servants or passengers; and credit insurance, against loss to merchants from bad debts. Only these three forms last mentioned are of sufficient importance at the present time to justify special treatment in such a work as this. The oldest and most important kind of special insurance, accident insurance, has already been separately treated.

General Principles of Construction.

3

Contracts for these kinds of insurance often assume forms very different from that of the conventional insurance policy, and bear names suggestive of other commercial contracts. Thus a contract of fidelity or guaranty insurance may be set forth in an instrument bearing the form of an ordinary official bond, while another writing purporting to be a contract of conditional sale may prove to be a contract of credit 2 insurance or of crop insurance. But whatever be the outer form of such contracts, the courts always look to their inner nature, and if they are found in reality to be agreements "by which one party for a consideration promises to pay money or its equivalent, or to do some act of value to the assured, upon the destruction or injury of something in which the other party has an interest," they are declared to be contracts of insurance, and subject in their making to all the laws regulating insurance. Thus in a recent Massachusetts case a contract whereby one party agreed to purchase at a fixed price all the accounts which the other should have, during a designated period, against certain defined insolvent debtors, or judg

2 Claflin v. Credit System Co., 165 Mass. 501, 43 N. E. 293, 52 Am. St. Rep. 528; Shakman v. Credit System Co., 92 Wis. 366, 66 N. W. 528, 32 L. R. A. 383, 53 Am. St. Rep. 920; Robertson v. Credit System Co., 57 N. J. Law, 12, 29 Atl. 421.

3 See State v. Hogan, 8 N. D. 301, 78 N. W. 1051, 45 L. R. A. 166, 73 Am. St. Rep. 759. In this case it was held that a contract whereby a farmer, by the payment of a certain sum, purchased an option to sell the produce of certain described farm lands at $5 an acre, was one of guaranty insurance, and that the corporation engaged in making such contracts should comply with all the requirements of the state insurance laws.

4 This definition of a contract of insurance, first given in COMMONWEALTH v. WETHERBEE, 105 Mass. 149, 160, was adopted by the Massachusetts insurance act of 1887 (St. 1887, c. 214, § 3). And see Claflin v. Credit System Co..

supra.

ment debtors, against whom execution should have been returned unsatisfied, was held to be an insurance contract."

Being thus insurance contracts, these agreements are subject to the same general rules of law that have already been discussed as applicable to fire, marine, and life insurance, although there are to be found in the cases occasional intimations that the courts will be loath to apply to these new kinds of insurance the arbitrary technical rules that have so often operated to embarrass the courts and to defeat just claims under policies of insurance of the older kinds.

Contracts Construed in Favor of Insured.

Probably the most important general rule guiding the courts in the construction of insurance policies is that all doubt or uncertainty as to the meaning of the contract shall be resolved in favor of the insured. This rule, it is well settled, applies in full force to these contracts of special insurance,' which, unfortunately for both insurer and insured, are often filled with numerous conditions, the legal significance and economic purpose of which are alike uncertain, as was the case with life policies a quarter of a century ago. Such a contract was thus commented on by the North Carolina Supreme Court in a recent case: "One of these conditions is as follows: 'And, lastly, should the employé become a defaulter and seek refuge in any foreign country, he hereby agrees to the enforcement against him of the laws of such country, as they are now or may be hereafter enacted, relative to the commission of injuries or offenses against an employer resident in

8

5 Claflin v. Credit System Co., 165 Mass. 501, 43 N. E. 293, 52 Am. St. Rep. 528. The same contract was similarly construed in the other cases cited in note 1, supra.

6 Thus, in Guarantee Co. of North America v. Trust Co., 80 Fed. 766, 26 C. C. A. 146, it is said: "Marine, fire, or life insurance against the destructive forces of nature is not quite the same thing as an insurance against the dangers of dishonesty; and the courts must interpret the contracts in view of this difference, applying the words used to the purpose of covering the peculiarities of the risk assumed on the one hand, and on the other intended to be discarded or shifted to others. And if these new contracts, whatever their form, are to be turned into contracts of insurance, the courts will be careful not to again perplex themselves with regrettable technicalities of law, such as have sometimes crept into the older contracts of insurance, and have required statutes for their removal."

7 Mechanics' Sav. Bank & Trust Co. v. Guarantee Co. (C. C.) 68 Fed. 459; Shakman v. Credit System Co., 92 Wis. 366, 66 N. W. 528, 32 L. R. A. 383, 53 Am. St. Rep. 920; American Surety Co. v. Pauly, 170 U. S. 144, 18 Sup. Ct. 552, 42 L. Ed. 977; American Credit Indemnity Co. v. Cassard, 83 Md. 272, 34 Atl. 703. And see, especially, Bank of Tarboro v. Deposit Co., 126 N. C. 320, 35 S. E. 588, 83 Am. St. Rep. 682; s. c. on rehearing, 128 N. C. 366, 38 S. E. 908, 83 Am. St. Rep. 682.

8 Bank of Tarboro v. Deposit Co., 126 N. C. 320, 35 S. E. 588, 83 Am. St. Rep.