Part 16

An insurance policy may be assigned, though it usually contains a clause that the consent of the insurer is needful. When the policy contains this clause and the insurer without valid reason refuses to consent to an assignment, "the assignee acquires the same right as though consent had been given."

Consent to an assignment may be given by the president of the company, without formal vote by the directors. It may also be given by the secretary or by any other agent duly authorized.

When can a policy be canceled? Unless this right is reserved in the contract, or given by statute, the insurer cannot cancel the contract without the consent of the insured. It often is reserved, and if exercised, this must be done before a loss occurs, and a cancellation made afterwards, though without knowledge of it, is void. The motive for making it is not important. If, as a condition of cancellation, the unearned portion of the premium is to be returned, the failure to return it renders the cancellation worthless. Nor is this effective until notice has been given to the insured.

A court of equity will reform a contract of insurance on the ground of accident, fraud, and mistake. Oral evidence is admissible to prove the fraud or mistake; it must, however, be clear before a court will grant relief. If mistake is the ground for asking relief, the insured must not have been guilty in causing it, and must act promptly after his discovery. This rule does not prevent him from seeking relief when the agent of the insurer has been negligent. Furthermore it may be granted even after the happening of a loss.

Should there be a conflict between the written and printed portions of a policy, the written portion will be presumed to represent the intent of the parties. If, therefore, the printed portion excludes certain articles from the risk, and the written portion covers them, they are included. Conditions also written or printed on the margin or back of the policy are regarded as portions of it, and these too will control the printed portions. Besides, the written application is usually considered a part of the contract and the policy is construed or interpreted in connection with it. This is especially so where the proposals and conditions are attached to the policy. If the intent of the policy is not clear from the language used, the surrounding circumstances may be shown for the purpose of ascertaining the intent of the parties. The known usage of trade may also be taken into account in construing the language of a policy.

The language of the policy should be so construed as to cover the property within the intention of the parties, and support, if possible, the contract of indemnity. Mere clerical errors or mistakes in describing it may be corrected even after it has been destroyed. The location is an essential element, and the policy will not be stretched to cover property not within the description. If a building is described this does not include separate structures used in connection with it, nor fixtures constituting no part of the structure. Unless expressly excepted, however, insurance covers those things which have been so annexed as to become a part of the realty but none others. The term store fixtures covers fittings, fixtures, furniture used in the course of trade, whether they are part of the realty or not. Likewise the term "stock" used in a mercantile business includes everything usually kept for sale, in that business, but nothing more; while household furniture includes all articles necessary and convenient for housekeeping. With respect to future additions these are covered by the policy unless it is so drawn as to show a clear intent to exclude them.

The risk usually begins with the date of the policy, unless it is effected by a preliminary contract. In such a case the risk begins from the date of the preliminary contract, and continues for the period fixed in the policy, or, if none has been fixed, for a reasonable time.

A misrepresentation voids a policy generally. It must not only be false in fact, but the insured must have known that it was false when making it in a substantial and material respect. The misstatement of an agent of the insured will have the same effect. Indeed, any fraud of the insured in procuring the policy has the effect of voiding it if the insurer chooses to do so. Of course, the wrongful facts or acts of the insured possess a varied character. His conduct in concealing facts that ought to have been made known to the insurer may have that effect. Thus to conceal a fact of which the insured had knowledge, and which, if known by the insurer the risk probably would not have been taken, is a fraud rightly available to the insurer.

The parties to an insurance contract may agree that the questions put by the insurer and the answers given by the insured shall become a warranty. This, as experience has shown, is a simpler way of effecting a policy of insurance. When this is done a misrepresentation constitutes a breach of warranty and the contract becomes void.

The modern policy provides that it shall be void if the insured "now has or shall hereafter make or procure any other contract of insurance, whether valid or not, on property covered in whole or in part by this policy." If the insured effects other insurance he must not forget to obtain consent of the insurer, and should he forget his good intention will not preserve his policy. Nor can the insured protect himself by canceling the prior policy if he breaks the condition. Nor does its expiration revive the subsequent policy. An overstatement of existing insurance under an express warranty will also violate the policy. While forgetfulness or good intention will not save the insured in such cases, insurance obtained by a third person without the knowledge of the insured on the same property will not endanger his rights under his policy.

If a fire occurs and a loss results, this may be total or partial. In every case of loss fire must be the proximate cause of the loss. What loss is covered by a policy has been the subject of frequent controversy. Damage by water used to extinguish a fire is usually covered; also damage to or loss of goods removed to prevent their destruction from fire in the insured or another building. Likewise the loss caused by blowing up a building to check a fire, likewise damage from an explosion which is the direct result of a fire, "but an explosion due to the ignition of a match or spark of an explosive substance, no fire resulting, is not within the terms of an ordinary fire policy." The standard policies contain a clause relieving the insured from liability to pay for property stolen during the progress of a fire, or during the removal of property necessitated by fire.

An exception of liability from lightning, unless followed by fire, excludes recovery unless there is loss from burning, but it is quite common to insure against loss from lightning as well as fire.

Unless there is a stipulation in the policy the insurer is not relieved from liability by mere negligence or carelessness of the insured or his servants though directly contributing to the loss; on the other hand, the insured who does not take reasonable care to avoid loss from his negligence or that of his servants may defeat recovery under his policy. This rule is not easy of application, cases of clearly proved negligence are numerous, also cases free from negligence, a third class of a doubtful nature. The field of the law is open in every direction to these.

For a total loss the insurer is liable for the entire value of the property to the limit covered by the insurance. Thus the loss of a building is total though some of the walls remain standing, but not when the remnant can be restored. In some states the statutes provide that in case of total loss the insurer shall be liable for the full amount of insurance, and shall not be allowed to show that the property was of less value than the amount insured.

When the loss is partial the insurer is liable only for the amount of the loss, not exceeding the insurance. The policy may limit the amount of recovery to the cost of restoring or replacing the property, and in such cases this is often done instead of paying the loss in money. If each of several classes or items is separately valued, thereby separating the liability for them, the recovery for any one class or item is limited to the damage to the same.

Lastly, in fixing the loss the distinction between open and valued policies must be explained. A fire policy is generally written in such a way that the liability of the insurer depends on the amount of the loss to be determined after the loss has occurred. When this is done, the valuation of the property in the application for a policy or in the policy, does not fix the liability of the insurer, even though the loss be total. This is called an open policy. On the other hand the loss may be fixed by a stipulation in the policy, and which binds the insurer to pay the whole sum insured in case of total loss. This is called a valued policy. A policy is regarded as an open one, unless it appears to have been the intention of the parties on a fair and reasonable construction of its terms, to value the loss and so fix by contract the amount that may be recovered.

=Fixtures.=--A fixture is something annexed to land either temporarily or permanently. Different rules apply to persons in different relations. The law favors removal by a tenant presuming that he does not put in things for the landlord's benefit, unless there is an agreement to that effect between them. On the other hand a different rule applies between the seller and purchaser of real estate. As between them the law presumes that the seller intended to keep the things affixed to the house, especially ranges and the like. On the other hand a somewhat different rule applies between mortgagor and mortgagee. The former is favored, but not so much as the tenant. Suppose the mortgagor was a nurseryman, and the land was taken for the debt by the mortgagee, would it include the trees and shrubs that had been planted for sale? The courts have given an affirmative answer.

The facts that are of special value in finding out whether a thing is a fixture or not are: (1) the actual annexation of the article to the realty; (2) the immediate object or purpose of the annexation; (3) the adaptability for permanent or mere temporary use; (4) and whether the article can be removed without material injury to the property to which it is annexed. See Lease.

=Garage Keeper.=--The garage has been said to be the modern substitute for the ancient livery stable. A garage man who receives the automobile of another to keep or repair--a service for which the owner is to pay a compensation--is a bailee for hire. While this relation of bailor and bailee exists, the owner is not ordinarily responsible for the negligence of the garageman or his servants in the care or operation of the automobile.

A public garage is not a nuisance. Even the storage of gasoline in suitable tanks set down in the earth is not a nuisance. Yet the business may become a nuisance when conducted in some localities, or in an improper manner. The operation of a public garage may therefore be enjoined in a purely residential section within a short distance of large churches, a parochial school and houses. Likewise the odors, the noise, and the fire hazard, which are occasioned by the construction and management of a garage, create a situation which justifies public regulation.

A garage keeper is generally allowed a lien on an automobile for storage and repairs. If no price has been fixed in advance, the garage keeper is entitled to recover of the owner the reasonable value of the services and materials furnished. When the automobile is brought to the garage by a chauffeur, the garage keeper should assure himself of the chauffeur's authority to order repairs, especially those of a permanent nature.

The garage keeper when storing a car for another for compensation must exercise reasonable care and prudence. If negligent he is liable for the damage. It is said that the liability of a garage keeper for hire is not affected by reason of the knowledge of the owner as to the place where the property is kept. Its acceptance by the garageman imposes on him the duty of exercising due care for its safety and protection. But he is not an insurer of the property; and therefore is not liable for loss by fire unless he has been negligent. Generally, in such a case the burden of proof is on the owner of the machine to show that the fire was caused by the negligence of the garageman. Sometimes one keeps a car for another for accommodation, receiving no compensation therefor. One who thus serves another is liable only for gross negligence.

The garage keeper must protect the property from theft. If he permits a machine to remain in an alley when it ought to have been inside his garage, he is liable. In one case a motorcyclist left his machine with a garage keeper to be kept over night, and also gave permission for its inspection by any one whom he might send around. A person appeared with a permit to inspect it who, under the permission, stole it and rode away. The garage keeper was rightfully held not liable.

If a garage keeper or his servant negligently runs a machine left in his custody for storage or repairs, the garageman is liable for the damage resulting to the owner. At the expiration of the bailment he must deliver the machine to the owner or person authorized by him to receive it, and is liable if neglecting or refusing. He is also liable if delaying unreasonably to make repairs, or for making them unskillfully. Lastly, if the car is driven by the garageman's servant while the bailment continues, the bailee, and not the owner, is responsible for any injury done to a third person by the servant's negligence. Of course, if the driver was acting outside the scope of his authority, and was using the car for personal purposes, neither the garageman nor the owner would be responsible for whatever happened. See Automobile: Chauffeur.

=Homestead.=--A legal homestead is the home or residence of a family land owner, and includes a specific area varying in the several states. By the more general rule the land must be connected in a single piece, though in some states the pieces may be distinct. Though divided by a highway this does not effect a separation, as the land therein belongs to the owner subject to the public rights to pass and repass and also use to keep the highway in repair. The peculiarity about a homestead is, it is protected by law from seizure by the owner's creditors.

One of the most important questions relating to a homestead is, the meaning of the head of a family. The term is not limited to a man having a wife and children. It includes an unmarried man with whom his widowed sister and children reside; or a man who supports his mother; likewise an unmarried woman with whom the children of a deceased sister are living. Nor need they live under the same roof, the essential thing is the relation and dependence existing between them. On the death of a husband owning a homestead the right survives to the widow, and usually to the minor children. Some statutes give her the absolute estate, others a life interest; in some states she loses the homestead by a subsequent marriage. In most states the rights of surviving children end on attaining their majority. In many states the surviving husband is entitled to the homestead right, even though there be no children. A husband does not lose his homestead when his wife withdraws from the family under a decree of divorce. Non-residents as a rule are not within the privilege of the homestead laws.

On the dissolution of a marriage by divorce, as the wife ceases to be a member of the husband's family, she loses her rights to the homestead. The decree of divorce may, in the dissolution of the marriage, reserve to her the right, and if she is the owner of the homestead she may continue to occupy it as one. The mere desertion of husband or wife by the other spouse will not, in itself, destroy the character of the homestead although an entire dissolution of the family will have that effect.

By the federal law every head of a family, or a person twenty-one years old and a citizen, or intended citizen, of the United States, if not the owner elsewhere in the United States of one hundred and sixty acres of land and has not previously obtained a federal homestead, is entitled to a quarter section or less of the public land. Three things are necessary: (1) An affidavit showing that the applicant comes under the law; (2) a formal application; (3) payment of the land office charges. When these things are done, the certificate of entry is delivered to the applicant and the entry is made. Then the entryman must actually reside on and cultivate the land for three years, and at the end of that period, he is entitled to a patent. The lands thus acquired are not liable for any debts contracted prior to the issuing of the patent.