gagee, the mortgagor is entitled to the benefit of the insurance. although effected in the name of the mortgagee. The test of his right in this respect is, whether, by agreement between him and the mortgagee, he is liable for the premium paid.'

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laube is no discharge of their liability for the loss arising under their policy. The case of Carter v. Rockett, 8 Paige, 437, is against the construction of the law assumed and acted upon by the company. That case is a full authority for the claim made by Cromwell. This claim does not operate as an assignment of the policy, against which the company, by a condition of that instrument, stipulated. They become by reason of the facts, and the notice given by Cromwell, trustees of a fund which they were equitably bound to pay to the party justly entitled. The party entitled in this case was the plainiff, and the payment to Eichenlaube is no discharge. In Waring v. Loder, 53 N. Y. 581, this question arose, and was decided as stated in the text. ANDREWS, J., in delivering the opinion of the court, said: "The Lycoming Insurance Company, in respect to the right to enforce the judgment against the defendant Loder for the deficiency on the foreclosure sale, stands in the place of Waring, their assignor. The assignee of a judgment takes it subject to the equities of the judgment debtor, and if the judgment could not have been enforced by Waring at the time of the assignment, the company hold it subject to the same disability. Douglass v. White, 3 Barb. Ch. 621. The insurance in the Lycoming Insurance Company was effected by Minor, the mortgagee, under the authority contained in the mortgage. This is conclusively established, as against the plaintiff, by the record in the foreclosure suit. The complaint alleges that the premium paid is a part of the indebtedness secured by the mortgage. It was included in the amount reported by the referee to be due, and the judgment for the deficiency is increased by the amount of the cost of the insurance. The import of the transaction is, that the insurance was additional collateral security for the mortgage debt, furnished by the mortgagor at his expense, and procured by the mortgagee, acting as his agent and by his authority. The general rule, that the proceeds of collateral securities in the hands of the creditor are to be applied, when received by him, in the reduction of the debt (SHAW, J., in King v. The State Mut. Ins. Co., 7 Cush. 1), would require that the insurance money, when collected by the plaintiff, should be applied upon the judgment, and, if sufficient to pay it. should extinguish it. Nor do we see any ground for taking this case out of the operation of the rule. The mortgagee, it is true, owed no duty to the mortgagor to insure the property, and he could, in the absence of any agreement with the mortgagor, have insured the debt simply, so that the mortgagor in case of loss could have claimed no benefit from the insurance. But the mortgagor had an insurable interest. When the mortgage was given he had the legal title to the land on which the insured building stood. When he sold the land, he had still an interest in the preservation of the property, in order that his debt might be paid out of it, the land as between him and his grantee being primarily charged with its payment. And this was, we think, an insurable interest within the cases. Crawford v. Hunter, 2 B. & P. (N. R.) 269; Herkimer v. Rice, 27 N. Y. 163. The authority given in the mortgage was an authority to the mortgagee to procure an insurance for the benefit of both parties. This is its fair interpretation. It was immaterial to the mortgagor whether the insurance was in his name or in the name of the mortgagee, if the avails of it in case of loss should apply in reduction of the debt. The mortgagee had no interest to procure an insurance limited to his own protection merely, where the expense was to be paid by the other party and was secured on the land. It has been held in several cases that insurance procured by a mortgagee upon the request or at the expense of the mortgagor is held by the mortgagee for the protection of both interests, and the implied obligation arising is, that the insurance money when paid to the former shall apply upon the mortgage debt. Holbrook v. American Ins. Co., 1 Curtis, 193; PRATT, J., in Buffalo Steam Engine Works v. Sun Mut. Ins. Co., 17 N. Y. 406; Clinton v. Hope Ins. Co., 45 id. 467. The loss by fire occurred intermediate the commencement of the foreclosure and the rendition of the judgment. The plaintiff received from the underwriter, after the judgment was entered, an amount sufficient to pay it, and upon the

The same rule prevails in case of an agreement between the vendor and vendee of land where no deed has been executed.'

receipt the law giving effect to the contract between the mortgagor and the mortgagee applied it in payment of the debt. The plaintiff then had no further claim under the judgment. It was extinguished, and he had nothing to assign to the underwriter. It is immaterial, so far as the plaintiff's rights are concerned, that the assignment of the judgment was made a condition of the payment, by the company, of the loss on the policy. The company and the plaintiff could not by their agreement qualify the effect of the receipt, by the mortgagee, of the insurance money, as between the plaintiff and defendant. It becomes unnecessary to consider whether the underwriter was, by the form of the contract of insurance, entitled to be subrogated (in the absence of any agreement between the mortgagor and mortgagee) to the mortgage security and to the claim against the mortgagor, or whether the company could have defended an action to recover for the loss, on the ground that the right of subrogation had been defeated by the act of the assured. Kernochan v. New York Bowery F. Ins. Co., 17 N. Y. 428. Those questions are between other parties. The plaintiff received the insurance money, and the defendant by his contract with the mortgagee is entitled to have it applied upon the judgment."

'In Wood v. N. Western Ins. Co., 46 N. Y. 422, a policy was issued containing the following restrictions and conditions: “Camphene, spirit gas or burning fluid, phosgene or any other inflammable liquid, when used in stores, warehouses, shops or manufactories as a light, subjects the goods therein to an additional charge, and permission for such use must be indorsed in writing on the policy. A claim against this company by the assignee or mortgagee, or other person or persons holding this policy as collateral security, shall not be payable until payment of such portion of the debt shall have been enforced, as can be collected out of the original security to which this policy may be held as collateral, and this company shall then only be held liable to pay such sum, not exceeding the sum insured, as cannot be collected out of such primary security." The policy was renewed annually; the last renewal was in December, 1865. The premiums were, with the knowledge and assent of Campbell'f agent, deducted from the payments made by him on the contract. On the 29th November, 1866, the property was destroyed by fire. After the fire, Campbell, who had not performed the contract, declined to make furthor payments, and at his request plaintiff took the property, and the contract was canceled. The value of the machinery destroyed was $2,200; the total loss $3,800. The referee gave judgment for the amount of the policy and interest.

FOLGER, J., said: "It appears by the findings of the referee, that Campbell, the vendee of the property insured, by the contract of sale, agreed to pay the expense of insuring the factory and saw-mill; that the plaintiff did insure the property, and pay the premiums therefor, and charge the same to Campbell; and that by so much was lessened the amount paid by him on the purchase-price. It appears from the testimony, that though Campbell did not know of this, yet that his brother, who acted for him with the plaintiff in adjusting, from time to time the payments and indorsing them on the contract, did settle the dealings which included these items of expense for insurance; so that the premiums of insurance were in fact paid by Campbell, under an agreement so to do. It follows, then, that the iusurance was really one for the benefit of Campbell. Holbrook v. Am. Ins. Co., 1 Curtis C. C. 193, and cases cited. In such case, the defendants had no right of subrogation, even if they issued the policy, without notice of the contract of sale. Benjamin v. Saratoga Ins. Co., 17 N. Y. 415; Kernochan v. N. Y. Bowery Ins. Co., id. 428. Though the plaintiff's especial insurable interest was that of vendor, holding an equitable lien on the property for the security of the purchase-money, yet he held also the legal title, and this made it competent for him to cover, not only his especial interest in the property, but the property itself. Holbrook v. Am. Ins. Co., supra; see also, Tyler v. Etna Ins. Co., 12 Wend. 507; S. C., 16 id. 385; 1 Phillips on Ins. 347, sub-sect. 640; Angell on Ins., §§ 67, 185, 186, and note. And this insurable interest existed in the machinery as well as in the buildings; for though there was a contract of sale, it was executory. The title had not passed, and though Campbell went into possession about two years after the policy was issued, he had no right to remove

Conditons in policy must be strictly complied with unless waived.

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SEC. 135. All the provisions of a policy, relating to the risk, are conditions precedent, and, unless waived, must be strictly complied with, such as promissory warranties,' or conditions relating to increase or alteration of risk; to the giving of notice, and presenting proofs of loss; the production of builders, citizens or magistrates certificate of loss; as to the giving notice of other insurance; and indeed, each and every condition of the policy must be fully and strictly performed, before an action can be maintained for a loss under the policy. When the policy requires pre-payment of the premium as a condition precedent to the vitalizing of the policy, unless pre-payment is waived, the policy does not attach until payment is made. As to what constitutes a waiver, or giving of credit for the premium, or a payment of the same, see Sec. 28, page 65.

Sending premium by mail.

SEC. 136. When the by-laws of a mutual company provide that the policy shall be void, if the policy-holder shall neglect, for the period of thirty days, to pay his premium note or any assessment thereon, when requested to do so by mail or otherwise, a policy becomes void, unless payment is made within that time, after notice is duly mailed to him postpaid and properly directed, whether the insured received the notice or not upon the ground that, where by an agreement between the parties the mails are to be trusted for any purpose, all that the parties are required to do under the contract, is to place the matter in the mails in such a way that, so far as any laches on their part is concerned, there is no reason why it should not reach the other party."

the machinery without the consent of Wood. There was never such a delivery of it to Campbell as gave him title. Wood still retained on it a lien for purchasemoney, and a right, on non-payment to resume exclusive possession. He had. then, an insurable interest in it. Clinton v. Hope Ins. Co., decided in this court 4th April, 1871; see also, Burt v. Dutcher, 34 N. Y. 493; Tallman v. Atlantic Ins. Co., 3 Keyes, 87.

Murdock v. Chenango Co., etc., Ins. Co., 2 N. Y. 210; Couch v. City F. Ins. Co., 38 Conn. 181; Coolidge v. Blake, 15 Mass. 429; Thatcher v. Bellows, 13 id.

111.

2 Diehl v. Adams, etc., Ins. Co., 58 Penn. St. 443; Appleby v. Fireman's Ins. Co., 54 N. Y. 253; Harris v. Columbian Ins. Co., 4 Ohio St. 285; Gardiner v. Piscatiqua, etc., Ins. Co., 38 Me. 439; Lyman v. State, etc., Ins. Co., 14 Allen (Mass.) 327; Francis v. Somerville, etc., Ins. Co., 25 N. J. 78.

Bottaile v. Merchants' Ins. Co., 3 Rob. (La.) 384. See chapter on PROOFS of

Loss.

Worsley v. Wood, 6 T. R. 710. See chapter on PROOFS OF Loss.

'See chapter on OTHER INSURANCE.

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Lathrop v. Greenfield, etc., Ins. Co., 2 Allen (Mass.) 82.

"Shed v. Brett, 1 Pick. (Mass.) 401; Kington v. Kington, 11 M. & W. 233; Warwick v. Noakes, 1 Peake, 67; Hawkins v. Rutt, id. 186.

SEC. 137. When application is part of policy.

SEC. 138. Stipulation in application does not make it warranty.

SEC. 139.

Description of risk a warranty.

SEC. 140.

Examination of risk by insurer or its agent.

SEC. 141.

SEC. 142.

When knowledge of agent is not knowledge of insurer.
Waiver by agent-Mechler v. Phoenix Ins. Co.

SEC. 152.

SEC. 153.

SEC. 154.

SEC. 155.

SEC. 156.

Void in part, void in toto-Exceptions.

Concealment or misrepresentation of matters known to insurer.

Oral applications.

Incumbrances.

Representations or warranties.

Application, when a part of policy. Other papers, when part of contract. When only representations.

SEC. 137. When the policy refers to the application or other papers connected with the risk, and adopts them as a part of the contract of insurance, all the statements of the assured contained therein relative to the situation, use, care or character of the property, are warranties

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on his part that must be strictly complied with, whether material to the risk or not, and herein lies the principal distinction between a warranty and a representation. But in order to form a part of the contract, the policy must not only refer to, but must, either in express terms or by necessary implication, adopt such documents as a part of the contract, and a mere reference thereto does not make the paper or papers referred to a part of the contract, nor its statements warranties. But it seems that, when the policy refers to papers, dehors the policy, and makes them, in terms, the basis of future action in every respect, or a guide as to what is to be, or may be done; they are to be treated as a part of the contract, although, in express terms, not so provided. So, where a paper

'GROVER, J., in First Nat'l Bank v. Ins. Co. of N. America, 50 N. Y. 47; Le Roy v. The Market Ins. Co., 39 N. Y. 91, also 45 N. Y. 80; Ripley v. Ætna Ins. Co., 30 N. Y. 136; Garcelon v. Hampden, etc., Ins. Co., 50 Me. 580; Draper v. Charter Oak Ins. Co., 2 Allen (Mass.) 569; Tibbetts v. Hamilton, etc., Ins. Co., 1 Allen (Mass.) 305; Bersche v. St. Louis, etc., Ins. Co., 31 Mo. 555; Bartholomew v. Merchants' Ins. Co., 25 Iowa, 507; Olmstead v. Iowa, etc., Ins. Co., 24 id. 503; Battles v. York, 41 Me. 208; Brown v. Peoples' Ins. Co., 11 Cush. (Mass.) 280; Treadway v. Hamilton Ins. Co., 29 Conn. 68; Richardson v. Maine Ins. Co., 46 Me. 394; Gahagan v. Union, etc., Ins. Co., 43 N. H. 176; Lawrence v. St. Marks, etc., Ins. Co., 43 Barb. (N. Y.) 479; Kelsey v. Universal Ins. Co., 35 Conn. 225. The application in such cases must truly represent the risk, and must be true in all respects, whether material or not. Marshall v. Columbian, etc., Ins. Co., 27 N. H. 157. But the part of it relating to the risk, its situation, etc., is not, in the absence of words or circumstances making it so, a warranty that the risk shall remain as described. Thus, where, in the application, the assured in answer to a question whether the lamps

An application on file in another office, may be incorporated into a policy by proper words, but a mere reference thereto, and stating where it may be found, does not have that effect. Com. Ins. Co. v. Monninger, 18 Ind. 352.

Newcastle F. Ins. Co. v. MacMorran, 3 Dow. 255; Ben. F. I. C. 45.

The Farmers' Ins. Co. v. Snyder, 16 Wend. (N. Y.) 48; Com. Ins. Co. v. Monninger, 18 Ind. 352; Delonguemare v. Tradesmen's Ins. Co., 2 Hall (N. Y. S. C.) 589; Sheldon v. Hartford Ins. Co., post; Jefferson Ins. Co. v. Cotheal, 7 Wend. (N. Y.) 72; Wall v. Howard Ins. Co., 14 Barb. (N. Y.) 338.

'Jennings v. Chenango Ins. Co., 2 Den. (N. Y.) 75; First Nat'l Bank v. Ins. Co. of N. America, ante; Le Roy v. Market Ins. Co., 39 N. Y. 90, also 40 N. Y. 80, In Com. Ins. Co. v. Monninger, 18 Ind. 352, the policy referred to the application and the place where it might be found, but the court held that this did not make the application a part of the contract. Wall v. Howard Ins. Co., 14 Barb. (N. Y.) 383; Denny v. Conway F. Ins. Co., 13 Gray (Mass.) 492; Columbia Ins. Co. v. Cooper, 50 Penn. St. 331.

In Simreal v. Dubuque Ins. Co., 18 Iowa, 319, by the terms of a policy, the assured undertook to pay "assessments, made pursuant to the articles of association and by-laws," and the company agreed to pay and settle any losses that might arise under the policy, "according to the provisions of said articles," and it was held that the articles of association and by-laws were to be regarded as a part of the policy, as much as though written therein.

In Sheldon v. Hartford F. Ins. Co., 22 Conn. 235, reference was made in the policy to a survey, in these words: "Reference is had to survey No. 83, on file in the office of the Protection Insurance Company." The survey consisted of answers given by the insured, to questions proposed by the insurers. Some of the questions were intended to draw forth a minute description of the premises to be insured, and others, to enable the insurers to estimate the degree and extent of