provision is found in nearly all of the other standard forms of policies) was to avoid the rule announced in these cases.

Or by interruption of business, manufacturing processes or otherwise; nor for any greater proportion of the value of plate glass, frescoes and decorations than that which the policy shall bear to the whole insurance on the building described. The first part of this clause-to-wit: "By interruption of business, manufacturing processes or otherwise"-relates to consequential losses, and separate policies are used against this risk. This entire provision is wholly ambiguous, and no cases are reported where the company has been held liable contrary to its terms.

If an application, survey, plan or description of property be referred to in this policy, it shall be a part of this contract and a warranty by the insured.

The effect of this provision is to make the statements in any application, survey or plan a warranty, and also the description of the risk in the written or printed form a warranty. The difference between a warranty and representation is that the things warranted must be strictly true and that their materiality or immateriality are not open to question. While a representation need be only substantially true, and if the misrepresentation concerns a matter not material to the risk, the contract is not affected thereby.

As said in Wetherill v. Maine Ins. Co., 49 Me. 200: "Warranties in a policy of insurance or in the application, when made a part of the policy, must be fully kept and performed, without reference to the question whether they are material to the risk or not."

As the business of fire insurance is at present conducted, an application is rarely taken for the policy, and the cases construing this provision nearly all arise on a question of misdescription of the risk and its occupancy in the written or printed form.

The following are a few of the cases construing this provision which are applicable to the present mode of conducting the business:

Aurora Fire Ins. Co. v. Eddy, 49 Ill. 106, where the insured agreed to keep eight buckets filled with water on the first floor and four in the basement. The court held that the insured was bound to show that the required number of buckets, in serviceable condition, were at the designated places, ready for instant

use.

Sarsfield v. Metropolitan Ins. Co. (N. Y.), 61 Barb. 479, where the building was described as a "dwelling house" and part of it was used as a billiard room and part as a restaurant. The court held that there was a breach of warranty, avoiding the policy.

Baker v. German Fire Ins. Co., 124 Ind. 419, where the building was described as "occupied as a hotel, with bar and billiard room attached," and the evidence showed that the building was occupied as a saloon. The court held the company not liable.

McKenzie v. Scottish Union and National Ins. Co., 112 Cal.

548, where the insured agreed to keep a watchman, and failed to do so at all times.

Scottish Union and National Ins. Co. v. Stubbs, 98 Ga. 754, where the insured agreed to keep books and inventories in an iron safe, and failed to do so.

Home Ins. Co. v. Cary, 9 Tex. C. A. 300.

American Fire Ins. Co. v. Center (Tex.), 33 S. W. 554, where the court held that the agreement to keep books and inventories in an iron safe was a warranty.

It is held, however, that the description of the occupancy of the insured premises is not a continuing warranty, but if true at the time the policy is issued, change of occupancy thereafter without an increase of the risk is not a breach of the warranty and does not avoid the policy.

Joyce v. Maine Ins. Co., 45 Me. 168.

Cumberland Land Valley Co. v. Douglas, 58 Pa. St. 419.

Somerset County Mut. Fire Ins. Co. v. Usaw, 112 Pa. St. 80.

In the case of King Brick Manufacturing Co. v. Phoenix Ins. Co., 154 Mass. 291, the court held that this provision of the policy refers to some paper outside of the policy, and does not constitute words within the policy a warranty.

To even collect and cite the cases concerning warranties, without any reference as to what each case concerns, would require more than an hour's time to read their titles. The cases above cited will be sufficient, I believe, to inform you as to the general rule announced by the courts in construing this provision of the policy, which is all that is intended to be done by this series of lectures.

Many of the States have a statutory provision against warwaranties, and providing that a misrepresentation or breach of warranty must be as to a matter material to the risk in order to avoid the policy. Such is the provision in California, Georgia, Iowa, Kentucky, Maine, Massachusetts, New Hampshire, North Dakota, Oklahoma, South Dakota.

In any matter relating to this insurance, no person, unless duly authorized, in writing, shall be deemed the agent of this company.

The question of agency is entirely one of fact, and the company can not by any provision make its agent the agent of the insured.

See annotation, collecting all cases to that date, in 20 L. R. A. 277.

Gans v. St. Paul Ins. Co., 43 Wis. 108.

Eilenberger v. Protective Mut. Ins. Co., 89 Pa. 464.
Whited v. Germania Fire Ins. Co., 76 N. Y. 415.

Sullivan v. Phoenix Ins. Co., 34 Kans. 170.

North B. and M. Ins. Co. v. Crutchfield, 108 Ind. 518.

Where a broker acting on behalf of the insured procures the insurance for him, such broker is the agent of the insured.

Wilber v Williamsburgh City Fire Ins. Co., 122 N. Y. 439.

A broker may, however, be the agent of the company. It depends on who pays him for his services. If the company allows a broker a commission on all business brought to it by him, then in all such transactions the broker is the agent of the company. Nearly all the States regulate the question of agency by statute. The statute of Illinois is as follows:

"The term 'agent' or 'agents' used in this section shall include an acknowledged agent, surveyor, broker or any other person or persons who shall in any manner aid in transacting the insurance business of any insurance company not incorporated by the laws of this State."

The provision, therefore, that "no person, unless duly authorized, in writing," shall be deemed an agent, may be construed as a nullity.

This is the only provision of the policy to which the courts have refused recognition according to its terms.

This policy may by a renewal be continued under the original stipulations in consideration of premuim for the renewed term, provided that any increase of hazard must be made known to this company at the time of renewal, or this policy shall be void.

The effect of a renewal receipt under this provision is to revive the contract and continue it in force for another term. If a loss occurs within the new term, a recovery can only be had under the terms and conditions of the original contract.

New England Fire and M. Ins. Co. v. Wetmore, 32 Ill. 221.
Pitney v. Glens Falls Ins. Co. 65 N. Y. 6.

Aurora Fire Ins. Co. v. Kranich, 36 Mich. 289.

Hay v. Star Fire Ins. Co., 77 N. Y. 235.

A verbal agreement to renew the policy, and the receipt of premium in the same amount which was paid on the original policy, establishes a valid contract; and the law presumes such renewal to be for one year.

Scott v. Home Ins. Co., 53 Wis. 238; 11 Ins. L. J. 177.

The mere promise by the company's agent to renew, the premium being neither paid nor tendered, can not be regarded as a contract of renewal.

Croghan v. Underwriters' Agency, 53 Ga. 109.

A contract to renew can not be established by a mere negotiation; the minds of the parties must have met upon terms well understood by each of them.

King v. Hekla Fire Ins. Co., 58 Wis. 508; 13 Ins. L. J. 146.
O'Reilly v. London Assur. Corporation, 101 N. Y. 575; 15
Ins. L. J. 830.

In the case of Hartford Fire Ins. Co. v. Walsh, 54 Ill. 164, the court held that the renewal of a policy is in effect a new contract on the same terms and conditions as in the original policy; and a clause in the policy, requiring notice and consent in case of vacancy of the premises for over thirty days, is still in force under the renewal; and a verbal consent by the agent under the policy itself can not operate as a consent under the new contract,

for the latter does not differ from a new policy under a new application.

A notice of increase of hazard subsequent to the issuance of the original policy and before the renewal need not be in writing. The stipulation for notice is satisfied by an oral communication to the company or its agent.

Liddle v Market Fire Ins. Co., 29 N. Y. 184.

The failure of the insured to give any notice of an increase of the risk on renewal of the policy has the effect to avoid the renewal, and there can be no recovery.

Peoria Sugar Refinery v. People's Fire Ins. Co., 15 Ins.
L. J. 52.

Cole v. Germania Fire Ins. Co., 99 N. Y. 36; 14 Ins. L.
J. 453.

The same care should be exercised upon the renewal of a policy, to ascertain the condition of the risk and other matters pertaining thereto, which is or should be exercised in issuing an original policy. It is neither fair to the company nor to the insured, to issue a renewal without taking some action to ascertain if there has been any change in the condition of the original risk.

This policy shall be canceled at any time at the request of the insured; or by the company by giving five days' notice of such cancellation. If this policy shall be canceled as hereinbefore provided, or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except that when this policy is canceled by this company by giving notice, it shall retain only the pro rate premium.

The proper construction of this section of the policy has been many times before the courts, and while there is a seeming conflict in the decisions, a careful reading of them will show perfect harmony in the minds of the courts as to what constitutes a legal cancellation of the policy. The facts in each individual case must necessarily vary from the facts in other cases, and it is this variance in the facts that makes a seeming conflict in the decisions.

The provision for cancellation must be strictly followed, unless insured has waived his right to insist upon the five days' notice for cancellation. The insured may, of course, waive the five days' notice, provided for in the policy, and accept immediate notice of cancellation. It will not be my purpose to discuss what will constitute a waiver of the five days' notice by the insured, but will treat the question as though there had been no such waiver.

Where there has been no waiver of the five days' notice, the cancellation does not become effectual until the five days have expired.

Healy et al. v. Ins. Co. of the State of Pennsylvania, 63
N. Y. Supp. 1055.

In that case the agent served notice on the insured, Septem. ber 19, to the effect that the company desired to cancel the policy. On November 3 the agent wrote that the policy "has been marked off the books of this company. * * * Kindly return the policy to this office." The fire occurred November 7. The court held that the letter of September 19 was not a notice of cancellation, but that such notice dated from the sending of the letter of November 3, and that the fire having occurred within five days of that date, the company was liable.

There is seeming conflict in the authorities as to whether it is necessary to tender the unearned premium to the insured at the time the notice of cancellation is given. The determination of this question depends upon the wording of the policy. Under the provisions of the New York standard form-to-wit: "The unearned portion shall be returned on surrender of this policy," the New York Supreme Court has held that such tender is not necessary, and that the unearned portion of the premium need not be returned until the policy is surrendered.

Backus et al. v. Exchange Fire Ins. Co., 49 N. Y. Supp. 677.

In that case the company notified the insured of cancellation of the policy, and that "the pro rata unearned premium thereon will be paid upon proper demand and surrender of policy." The insured claimed that the policy had not been canceled according to law, for the reason that the unearned premium had not been returned or tendered to him, relying upon the Tisdell case, in the New York Court of Appeals. The court, in passing on this question, says:

"No demand was made upon the insurance company for this premium, nor was the policy or last renewal ever surrendered, nor did the company make any further tender of the unearned premium mentioned in this letter. No point is made by the appellants of the sufficiency of this notice to cancel the policy, or of the sufficiency of this letter as a notice that the defendant intended to exercise its option that the policy should be canceled. The only claim made is that an actual or a formal tender of the unearned premium was essential to the cancellation of the policy by the company. The clause in the policy provides that it may be canceled at any time by the company giving five days' notice of such cancellation. This notice by the company to the plaintiffs did give five days' notice of the cancellation, and, under the provisions of the policy, by such notice the policy was canceled. The further provision that the unearned portion of the premium should be returned on surrender of the policy or last renewal did not require the repayment of the unearned premium as a condition precedent to the cancellation of the policy. The pro rata premium was only returned on surrender of the policy or last renewal. That surrender of the policy was an act to be performed by the insured. It can not be enforced by the insurance company, as it is in the possession of the insured. All that the defendant could do was to notify the insured that the policy was canceled and offer to pay the pro rata unearned premium upon the surrender of the policy. It then became the duty of the insured to offer to surrender the policy or last renewal, and then the obligation of the insurance company to pay the pro rata premium would arise. If a surrender of the policy had been tendered by the insured and the insurance company had then refused to pay the pro rata unearned premium, it might be that the obligation of the company under the policy would revive and the policy continue in force; but, under the form of this clause providing for the cancellation, it seems to me quite clear that the policy was canceled by a service of the notice, with an offer then to return the pro rata unearned premium upon the surrender of the policy.