When Consummated. He did not disclose the fact that prop- vere insurance. Massasoit Steam Mills v. erty was burned when he received the Western Assur. Co., 125 Mass. 110. - policy, and the defendant was ignorant 27. When an application for insurof that fact. Held, that when defend-ance is accepted and the policy mailed in ant accepted the premium and delivered a certain state the contract must be adthe policy the agreement to insure was judged to have been made in that state, complete and ratified as of the 10th day and the contract is completed when the of January, 1871. The plaintiff had the offer of the insured is accepted and the right to rely on the agreement, and was policy deposited in the postoffice by the not bound to voluntarily inform the company, properly addressed to the incompany of the fire. Baldwin v. Chou-sured. Northampton Mutual Ins. Co. v. teau Ins. Co., 56 Mo. 151. Tuttle, 11 Vroom, 476 (N. J.) 25.— If assured leaves policy in the hands of the agents of the company, subject to the order and control of a third person, it is sufficient delivery, although such third party has not actually called for or received it. Home Ins. Co. v. Curtis, 32 Mich. 402. 24. When agent accepts policy sent 28. An insurance broker was in the to him by company, and charges himself habit of obtaining insurance in defendwith the premium, the contract of insur-ant, for which one Swinson was the agent. ance is consummated, and company is The course of business was for the former liable. Lungstrass v. German Ins. Co., to accept the risk, take the premium, and 57 Mo. 107. subsequently obtain a policy from the latter as of date when risk was accepted. On 3d of November, 1876, plaintiff obtained insurance on his property from the broker, and paid him the premium. Same day latter sent risk to Swinson. On the 6th Swinson sent policy to broker, who delivered it to plaintiff. Property 26.- Application was made to agents was destroyed by fire on the 4th. All who had authority to issue policies of the parties were ignorant of this until after Revere Company, and to temporarily policy was delivered. Held, that the inbind the defendant. Without knowl-surance took effect on 3d of November, edge of the assured they wrote a policy in by ratification of defendant's agent. Colthe Revere, and notified the home office. lins v. Phonix Ins. Co., 14 Hun, 534 (N. This was on November 1st, 1875. On the Y.) following day the Revere declined the risk, of which notice was received by the agents by letter about six o'clock in the evening. They immediately decided to place the risk at once in defendant, and memorandum was duly made and entered to that effect. The Revere policy was not then delivered. Fire occurred between 11 and 12 o'clock, night of November 2d. The Revere policy was subsequently delivered to assured by clerk of 30.- If an application for insurance company's agents in their absence. It filled up and sent in by a special agent to appeared that by an arrangement with the general agent for approval is accepted the Revere, that plaintiff only claimed to by the general agent before a loss occurs, hold one of the companies. The Revere it, together with the receipt for premium, policy contained usual clause as to cancel-constitute a contract for insurance which lation on notice, etc. Held, that the Re- is binding on the company. * Welsh v. vere policy became a binding contract Continental Ins. Co., 47 Hun, 598 (N. Y.) upon its execution, and that it could not be terminated without notice to the assured, and that it was therefore liable for the loss, and defendant was discharged from liability, because its contract was to take effect only on termination of the Re 29.- Evidence that the premium was paid to the company by the agent who took the risk, though the agent received from assured only a part of the premium and retained the policy in his hands until the time of the loss, will warrant a finding in an action on the policy that it was duly issued and delivered. Wheeler v. Watertown F. Ins. Co., 131 Mass. 1. 31.- Policy may be effective as a contract if left for delivery in hands of company's agent, when there is evidence of a waiver of prepayment of premium in cash. Bragdon v. Appleton Ins. Co., 42 Me. 259. When not Consummated. 38.- The formal execution and delivery of an insurance policy may be subsequent to the contract or agreement, and, if done as of the date of the contract, it will relate back as having taken effect on that date. *Bennett v. Connecticut F. Ins. Co., 27 Ohio L. J. 15 (Cin. Super. Ct.) 32.- The agents of a company orally man Fire Ins. Co. v. Laggart, 21 Ins. L. agreed to insure from the date of a writ-J. 374; 47 Kans. 663. ten application made by a broker for the applicant provided the company was not already on the risk. The premium was not paid, but in an action on the contract it appeared that it was the custom to extend credit to the broker for the premium to the end of the month. Held, there was a complete and valid contract from the date of the oral agreement. * Ruggles v. American Central Ins. Co., 114 N. Y. 415. 39. When not consummated. The president of an insurance company made an agreement by parol, with a firm owning some chemical works, for the insurance of 33. Upon the agreement between the $5000 on their property, to be apportioned parties on the subject matter of the in- as follows: $3000 on stock, $1000 on fixsurance and the premium to be paid, the tures, and $1000 on buildings, and told apcontract is complete; and the delivery of plicants that the insurance should comthe policy and the payment of the pre-mence on that day. Upon the return of the mium may be made then or at some sub-president to the office of the company he sequent time, and in the latter case the policy relates back and takes effect from the date of the contract. * Brownfield v. Phoenix Ins. Co., 35 Mo. App. 54. 34.— Where a policy is delivered to the assured and returned to the agent to be kept in his safe with other papers of the assured, the delivery is complete notwithstanding it remains in the safe of such agent until after loss. *Phoenix Ins. Co., v. Meier, 44 N. W. Rep. 97; 28 Neb. 124. 35.— An agreement by an insurance agent, upon issuing and delivering a policy, to deduct the premium out of money in his possession belonging to the assured, and apply it on the premium, is a receipt of such premium, and is binding upon the company. Id. 36.- Evidence that a special agent of an insurance company stated to an applicant for insurance that the general agent had asked for the insurance and informed the special agent that he could take care of the whole line, and that it would cover from the time of the application, justifies a finding of a contract of insurance by the company, and authority of the special agent to make it. * Harron v. London F. Ins. Co., 88 Cal. 16; 25 Pac. Rep. 982; 20 Ins. L. J. 713. made a memorandum of the agreement 40.- Where a sub-agent or surveyor forwarded an application for insurance on his own property to a general agent empowered to issue policies in behalf of the defendant company, and the property was destroyed before the receipt of the application by such general agent, who 37.- Possession of policy by the in- was also informed of the loss before taking sured, together with receipt by the com- any action upon such application, and pany of application and of a note for the afterwards made out, and delivered a premium, creates a presumption of due policy to such sub-agent, it was held that execution and delivery without formal there was no contract at the time of the proof of countersigning by agent. *Ger- loss, nor any before the loss was known When not Consummated. to the agent, and that such agent had no authority to enter into agreements to pay for losses already occurred. Bently v. Columbia Ins. Co., 17 N. Y. 421. Aff'g 19 Barb. 595. agent as a substitute for an outstanding policy, and the property is destroyed by fire before its delivery, is not a valid contract of insurance, the insured having no knowledge of its existence until after the fire. Stebbins v. Lancashire Ins. Co., 13 Ins. L. J. 698; 60 N. H. 65. 41.- Insurance was applied for by agent of the assured, who, upon receipt of the policy from a messenger from office 45.- When a policy is written and of the local agent of the company, sent placed in hands of a third party to hold back a memorandum that he would look until the agent who wrote it can ascertain into the standing of the company, and whether the company will accept the after he was satisfied about it he would risk, and a fire occurs before the company settle. He said, also, that he doubted notifies the agent of its rejection, there is the standing of the company. In half an no contract, even if the premium has hour after he received the policy he de- been paid, if paid with understanding livered it over to the assured, who knew that it should be returned if risk not nothing of what had transpired between accepted. Brown v. American Central him and the company's agent. This was Ins. Co., 16 Ins. L. J. 236; 70 Iowa, 390. on the 13th of November, 1872. A week 46. The question whether changed later the mill covered by the policy was possession of a policy is a delivery bindtotally destroyed by fire. The policying the parties is a question of knowledge provided that it should not be liable un- and intention. Accordingly where a policy til the premium was paid, and it con- was written and placed by the company tained an acknowledgment in usual form in the desk of a soliciting agent authorof its receipt. After the fire both the as-ized by applicant to receive and forward sured and his agent tendered the pre-a policy to him, but without the knowlmium to the company's agent, which was edge of such agent and policy is withdeclined. Held, that there was no ac-drawn by the company without his knowlceptance of the policy prior to the fire sufficient to make a valid contract of the insurance, and that the condition for prepayment of the premium remained in force, and the company was entitled to notice of acceptance and prepayment of the premium before the contract of insurance was complete. And where there had been no waiver, as in this case, policy cannot be accepted and the premium tendered after a fire. Millville Ins. Co. v. Collerd, 9 Vroom 480 (N. J.) edge, held, that there was no contract. Morrison v. Ins. Co. of N. A., 16 Ins. L. J. 966; 3 N. Eng. Rep. 160; 64 N. H. 137. 47.- An application for insurance accompanied by premium, made to an agent authorized only to solicit insurance, and a return by him to the applicant of a receipt containing the clause subject to the approval of the general agent of said company" will not constitute a contract binding upon the company when the application is promptly rejected by the company and the premium returned. Rowland v. Springfield, etc., Ins. Co., 18 Ill. App. 601. 42.- Contract not consummated when apportionment or division of insurance as to several buildings not agreed upon. Bishop of Chatham v. Western Assur. 48. A policy on plaintiff's application Co., 22 N. B. 242. was sent to plaintiff's address, to be deliv43.- When agent is not authorized to ered on payment of premium, but plaintissue policies, and party makes applica-iff having left town it was sent to his tion with the understanding that it is to agent, who returned it to the company, be sent to the company for acceptance or saying he had no advice on the subject. rejection, rejection terminates the con- A bill for premium was sent to plaintiff's tract if any; retention of premium by the address, stating the policy was held subagent under arrangement that a re-appli- ject to his order. Plaintiff did nothing in cation was to be made, makes no differ- the matter, and some months afterwards ence. Otterbein v. Iowa State Ins. Co., the property was destroyed by fire, and a 11 Ins. L. J. 75; 57 Iowa, 274. few days thereafter plaintiff tendered 44.- Policy written and intended by an premium and gave notice of loss. Held, General Rules. there never was a point of time when defendant could have compelled payment of premium by action; that there was no delivery to plaintiff's agent; that efforts to give plaintiff opportunity to pay were nothing more than a desire to treat him with courtesy and liberality, and that judgment for plaintiff must be reversed. Anderson v. Continental Ins. Co., 8 Cent. Rep. 755; 105 N. Y. 666; 106 N. Y. 661; 12 N. East. Rep. 793. IX. INSURABLE INTEREST. General rules. When it does not exist. Landlord and tenant. Mortgagor and mortgagee. Executors and administrators. 1.- Distinction between the existence of an insurable interest, to sustain the legality of the contract and the necessity of its disclosure or statement as required by express conditions of the policy. See section four, subd. Statement of interest, and section five, subd. Interest of insured. cial Ins. Co., 17 La. 365. 49. The fact that a general insurance agent who refused to accept without the company's approval an application for fire insurance submitted to him by an insurance solicitor failed to give notice of the company's prompt rejection of the risk to the solicitor, or to the applicant, who knew of such refusal and that the solicitor had no authority to bind the company, will not render the latter liable on an implied contract, although the premium had in the mean time, without the knowledge 2. General rules. The bare possibileither of the company or the general ity that a right to property might hereagent, been paid by the applicant to after arise, cannot be considered as an the solicitor. *More v. New York Bow-insurable interest. Macarty v. Commerery F. Ins. Co., 21 Ins. L. J. 228; 42 N. Y. S. Rep. 543; 29 N. East. Rep. 757; 130 N. Y. 537. 3.- The record of proceedings in 50.- No contract of insurance is com- equity, in another state, under which the pleted by an application forwarded to an | legal title to real estate was decreed to the insurance company through a broker not equitable owner, is admissible in an action connected therewith, not stating the time on an insurance policy as evidence of the from which the policy was to run, and re-existence of an insurable interest in the jected by it, notwithstanding a parol con- party insured at the date of the policy, versation was had by the broker with an although the proceedings were not comagent of the company not authorized to menced until after the loss had occurred make contracts of insurance, and the lat-on which the action was founded. Courter wrote in the name of the secretary, sin v. Pennsylvania Ins. Co., 46 Pa. enclosing a blank application to be filled out, and agreeing to send a policy upon its receipt, when the names of the persons desiring insurance and the character of the risk were not known to the company or the agent at the time. *Faughner v. Manufacturers' Mut. F. Ins. Co., 49 N. W. Rep. 643; 21 Ins. L. J. 154; 86 Mich. 536. 51. Cross references. Section one. Subd. VII. Parol contract. No.1 et seq. Section four. 323. 4.- It is not necessary to have an absolute vested ownership or property in that which is insured; it is sufficient to have a right in the thing insured of such a nature that the party insuring may have benefit from its preservation and prejudice from its destruction. Cumberland Bone Co. v. Andes Ins. Co., 64 Me. 466. 5. If there be a right in or against the property, which a court will enforce, a right so closely connected with it, and so much dependent for value upon the con Subd. V. Fraud and false swearing, tinued existence of it alone, so that a loss No. 55. of the property will cause pecuniary Section ten. Agent. Nos. 40, 45, 121, damage to the holder of the right against 195, 196. it, he has an insurable interest. RohrSection twelve. Cancellation. No. 95. bach v. Germania Fire Ins. Co., 62 N. Y. Necessity of. 47; Butler v. Standard Fire Ins. Co., 4 whether of insurance by a valued policy Tupper, 391 (Can.) 6. To defeat an insurable interest, a forfeiture provided for by the terms of a lease must be strictly construed. Ins. Co. v. Diggs, 8 Baxt. 563 (Tenn.) 7. An executory contract of sale does not destroy an insurable interest. People's Ins. Co. v. Straehle, 2 Cin. Supr. Ct. 186. 8. No right of property in the thing insured is required to sustain an insurable interest; it is sufficient if party is so situated as to be liable to loss if it should be destroyed by peril insured against. Harvey v. Cherry, 76 N. Y. 436; Agricultural Ins. Co. v. Clancey, 9 Brad. 137 (Ill.); North Alabama Protection Co. v. Caldwell, 85 Ala. 607; 5 So. Rep. 338. 9. In an action by a contractor and builder upon a policy insuring his interest as such it is no defense that he failed to continue proceedings under the mechanics' lien law after filing notice and commencement of an action. Royal Ins. Co. v. Stinson, 10 Ins. L. J. 687; 103 U. S. 25. 10. When complaint alleges assured to be the owner of the insured property, and the policy describes it as his, the latter is prima facie sufficient evidence of insurable interest, and casts the burden upon the company of showing that in fact he had no interest. Canfield v. Watertown Fire Ins. Co., 12 Ins. L. J. 111; 55 Wis. 419. 11. The fact that a policy was made out in the name of a married woman and that she was in the possession of the goods insured at the time of the fire, is in a suit by her on the policy prima facie evidence as against the company of her ownership. Western Assurance Co. v. Ackerman, 2 Pennypacker 144 (Pa.) where the insured has no interest, or the purchase of stocks or other commodities, without the intention to deliver or receive | them, is unlawful in this state. Waugh v. Beck, 5 Cent. Rep. 536; 114 Pa. 422. 16.- A person has an insurable interest in property if he will suffer pecuniary loss by its destruction. *Wainer v. Milford Mut. F. Ins. Co., 11 L. R. A. 598; 26 N. East. Rep. 877; 153 Mass. 335. 17.- One having an oral contract for real property in his possession has an insurable interest therein,-especially where he has fully executed the contract on his part and paid the entire purchase money. Id. 18. Necessity of. To recover, the insured must have had an interest at the time of procuring insurance, and at the time of loss. In this case the insured took policy for seven years on a leasehold interest, which expired before the end of the seven years, and the fire occurred after the term of the lease was up, and, afterwards, the insured assigned the policy. Held, that insured had no interest at the time of the fire, and that plaintiff could not recover. Sadlers Co. v. Badcock, 1 Wilson, 10; 2 Atkyn's, 554 (Eng.) -- 20. In an action upon a fire insurance policy for the amount of a loss, the complaint must allege that the plaintiff had an interest in the thing insured at the 12. A direct pecuniary interest in a time of the loss; unless the claim was building so as to be damaged by its de-assigned to him afterwards, or unless he struction constitutes an insurable interest.sues as trustee of an express trust. FreeMutual Fire Ins. Co. v. Wagner, 15 Ins. man v. Fulton Fire Ins. Co., 38 Barb. 247; L. J. 704 (Pa.) 13. If the insured was owner of the property at the time of the loss it is sufficient, whether he was such at the time of his application or not. Lingenfelter v. Phoenix Ins. Co., 1 West. Rep. 695; 19 Mo. App. 252. 14 Abb. 398 (N. Y.) Murdock v. Chenango Ins. Co., 2 N. Y. 210. 21.- Where the insured has no interest in the property at the time of the loss, the policy is void, although the loss is by the terms of the policy made payable to a third person, and such third person at the 14. And see authorities cited and dis- time of the loss has an interest in the cussed. property. Tallman v. Atlantic Fire & 15. Every species of gaming contract, Marine Ins. Co., 29 How. 71 (N. Y.) Id. |