should be determined by the rates annexed, and if the risk should be increased as contemplated by a by-law annexed, the rates should be evidence of the additional risk. The by-law provided that if the insured devoted any part of the insured building, or one located by him near it, "to a more hazardous business," the policy should be immediately void. The insured for light introduced gasoline, named as increasing the risk; he afterward removed it; subsequently, the building was burned. The court held the policy was not void, and that the absence of a stipulation to that effect, the validity of the policy depended on the state of the premises at the time of the loss, and that lighting with gasoline was not devoting the building to a more hazardous business.

Representations need only be substantially true.

SEC. 192. If the representations made by the insured are substantially true, the insurer cannot avoid his liability upon the policy because they are not literally so. It is enough, if the variance is not such as materially affects the risk. Thus, where the insured represented the building as finished, it was held sufficient if it was substantially finished. Where the insured stated that there was a dwelling and cabinet shop within fifty feet, and in fact there was a cabinet shop within two feet, it was held not to avoid the policy.' Where the representation is a mere expression of an opinion, and the insurer ought to have known that it was no more than an expression of the judgment of the assured, unless fraudulent, the policy is not avoided, however erroneous his opinion may have been. Thus, where the assured, in describing the risk, stated that there was, on the east side of the building a small one-story shed, which could not endanger the building if they should burn, but, in fact the fire was communicated to the building by the burning of the sheds, the insurer was held liable under the policy. So, where the building is represented to be used for a certain purpose, the insurer is bound to know what is incident to such purpose or business, and cannot escape liability unless such use as is incident to the business is specially excepted. Thus, where the assured stated that the building was used for the manufacture of lead pipe only, but in fact, reels upon which to wind the pipe were also

1 Delonguemare v. Tradesman's Ins. Co., 2 Hall (N. Y.) 589; Williams v. N. E. Mut. F. Ins. Co., 31 Me. 219; Pawson v. Watson, Cowp. 785; Kentucky, etc., Ins. Co., v. Southard, 8 B. Mon. (Ky.) 634.

Allen v. Charlestown Ins. Co., 5 Gray (Mass.) 384.
Dennison v. Thomaston Ins. Co., 20 Me. 125.

made there; it was held that, as such use was incident to the manufacture of lead pipe, and necessary for carrying on the business, the insurers were liable.' In an Illinois case, the assured represented that

'Collins v. Charlestown Ins. Co., 10 Gray (Mass.) 155. In Sims v. State Ins. Co., 47 Mo. 54; 4 Am. Rep. 311, the assured stated in his application that the building was used for "tobacco-pressing, no manufacturing." In a shed adjoining, hogsheads were made in which to pack the tobacco, and the insurer claimed that this avoided the policy, but the court held otherwise. BLISS, J., in delivering the opinion of the court, said: "The insurance was upon plaintiff's tobacco, in a certain building in DeWitt, Carroll county. In the application for the insurance, and in answer to the question for what purpose the building was used,' the plaintiff replied, tobacco-pressing; no manufacturing.' The evidence shows that in a shed-an addition to the main building-the tobacco hogsheads were manufactured. This, it is claimed, was a concealment of the uses to which the building was put, was a breach of the warranty, and vitiated the policy. The plaintiff sought to prove that the business of making the hogsheads in which the tobacco was packed, was incident to and appertained to the business of pressing, and by general custom was included, and understood to be included, in the term tobacco-pressing,' without being specially mentioned. If such were the fact there was no false warranty, and it was no more necessary for the plaintiff to state that branch of the business than any other. The officers of the company, in issuing the policy, should be supposed to know all the incidents of the business of the insured, and if there was any branch of it considered extra-hazardous, and which they were unwilling to cover by their contract, it should have been specially provided against. The law upon this subject has been recently considered by us in Archer v. The Merchants' and Manufacturers' Ins. Co., 43 Mo. 434, and it is quite unnecessary to review the general doctrine. Whether the preparation of the hogsheads was such an incident to the business as to be included in it, was a question of fact, and we have only to see if the subject was fairly presented to the jury. The jury were instructed that the application was a warranty as to the condition and occupancy of the premises, that, if false, would make void the policy, and that the words quoted were an undertaking that there should be no manufacturing in the premises. But they were also further instructed in these words: No. 7. The jury will find for the plaintiff on the fourth ground of defense set up in defendant's answer, if they find that the business of tobaccopressing only was carried on in the building in which the insured property was contained, and that the only coopering done therein was that connected with, appertaining to, and incident to the business of tobacco-pressing, although the jury may believe that said use for setting up of hogsheads was an increase of the risk.' Does this instruction present the question to the jury fairly? It seems to It fails to present to their mind the true issue. First, for obscurity; the construction they might put upon it is, that the court supposes that there is a class of coopering incident to the business, and they are to inquire whether the coopering complained of belongs to that class. The court seems to take for granted the main question in dispute. The sentence is obscure, and may bear another interpretation, but it is so drawn that the jury, especially if inclined against the defendant, might very easily interpret it as assuming the chief proposition. Second, it does not give the jury to understand what facts they are to find in order to make any coopering incident to plaintiff's business. The inquiry should be, whether it is so generally customary for those engaged in the business of tobacco-pressing to prepare their own hogsheads, and in the building where the business is conducted, that such preparation can properly be called an incident to the business. The existence of such a custom is an affirmative proposition, and must be affirmatively found. To illustrate coopering is necessary for the manufacture of flour, whisky, powder, etc., and in a loose sense, is incident to the business. So box making is, in the same sense, incident to various kinds of manufacturing; but the making of flour or whisky barrels, or powder kegs, or boxes, cannot be said to be so incident to the manufacture of flour, whisky,

me not.

no open lights were used in the mill. It appeared, however, that one open kerosene lamp was used in the office of the mill, but not in the The court held that this was a substantial compliance

mill proper.
with the representation.'

Ashes, method of keeping.

2

SEC. 193. A representation in an application for insurance that ashes are kept in brick, iron or other safes or places of deposit, is met if they are kept in any other place equally safe; and if the application is made a part of the policy, this would equally be the rule, unless the statement can be regarded as a continuing warranty. If the ashes were kept as represented at the time when the application is made the warranty is met, if no increase of risk is created by a change in the mode of keeping them, unless the warranty is clearly continuing.'

Breaches of contract must be plead, or specially relied on at the trial.

SEC. 194. In order to avail himself of a breach of warranty in a contract of insurance, or of the falsity of representations made by the assured, the particular matters relied on must either be set forth in the pleadings, or specially relied on at the trial, otherwise they will be regarded as having been waived, and points in reference to which no question of law is raised in the lower court, cannot be raised on appeal.* The question as to whether there has been a breach of warranty, or whether certain representations are false in a substantive matter, is wholly for the jury, and their finding, unless clearly contrary to the evidence, cannot be disturbed."

powder or the articles to be packed in the boxes, as to be included in the general term applicable to such manufacture, unless by a general custom they are prepared in connection with and as a part of the business. If it be the custom among country millers to make their own flour barrels in the mill, then the term flour mill' or 'flour making' may be properly held to include the necessary coopering; but the existence of such custom should be clearly and distinctly put to the jury, and in no equivocal or ambiguous terms."

In Peoria M. & F. Ins. Co. v. Perkins, 16 Mich. 380, the plaintiff, in answer to inquiries in the application: "For what purposes used?" replied, "It is used for stores." "How many?" "Two." The building was in fact occupied as a boot and shoe store by the plaintiff, also as a newsroom, tobacco store, etc., and the upper story as sleeping rooms. The court held that the representation was substantially correct.

Underhill v. Agawam Mut. F. Ins. Co., 6 Cush. (Mass.) 440.

Underhill v. Agawam Ins. Co., ante.

Boos v. The World Mut. Life Ins. Co., 64 N. Y. 236.

Boos v. The World Life Ins. Co., ante.

SEC. 196.

SEC. 197.

MISREPRESENTATION AND CONCEALMENT.

SEC. 195. Concealment and misrepresentation defined.

Concealment of material facts-need not be fraudulent-illustrations.

Not bound to disclose facts which the insurer ought to know.

SEC. 202.

SEC. 203.

SEC. 204.

SEC. 205.

SEC. 206.

SEC. 207.

SEC. 208.

SEC. 209.

Interest need not be particularly stated, unless called for.
Concealment may be waived.

When facts are covered by warranty.

Rule when insurer knew the facts.

Misdescription, effect of.

Falso demonstratio non nocet-Bryce v. Lorillard Ins. Co.
Ionides v. Pacific F. & M. Ins. Co.

American Central Ins. Co. v. McLanathan.

SEC. 210. Policy can only attach according to its terms.

SEC. 215.

SEC. 216.

Actual fraud need not be shown.

No distinction between concealment and misrepresentation of facts.
Inquiries must be answered.

SEC. 195. A misrepresentation is the statement of something as fact which is untrue, and which the assured states, knowing it to be untrue, and with intent to deceive, or which he states positively as true, not knowing it to be true, and which has a tendency to mislead, such fact being in either case material to the risk; and concealment is the designed and intentional withholding of any fact material to the risk, which the assured

2

in honesty and good faith ought to communicate; and any fact is material, knowledge or ignorance of which would naturally influence the insurer in making the contract at all, or in estimating the degree and character of the risk, or in fixing the rate of insurance.' The insurer has a right to be informed of every circumstance which may fairly influence him in taking or rejecting the risk, or fixing the rate of premium therefor, and it is settled beyond all question that the suppression of a material fact relating to the risk, as well as a false representation relating thereto, avoids the policy.' Therefore, while it is for the jury to say, where there is any dispute as to the facts, whether a misrepresentation or concealment relates to a fact material to the risk, yet, as a matter of law, where the facts were such as, if the truth had been known, they would have influenced the insurer in accepting or rejecting the risk, or in fixing a higher rate of premium therefor, the policy is void. In determining this question, the jury are to say, not necessarily whether the particular insurer would have been influenced thereby, but whether a man of ordinary prudence, in business matters, would have been likely to have been influenced us stated. It follows, then, that facts relating to the construction, location, situation and uses of the risk are material, as well as its character and value.

Concealment of material facts. Need not be fraudulent.

SEC. 196. It is the duty of the assured to disclose to the insurer every such fact, even though he does not know that it would have the effect to influence his action in declining or accepting the risk, or in fixing the terms upon which it would be taken." The law implies

1 Daniels v. Hud. R. Ins. Co., 12 Cush. (Mass.) 416; Houghton v. Manufacturers' Ins. Co., 8 Met. (Mass.) 114; Locke v. N. American Ins. Co., 13 Mass. 97; Clark v. Union, etc., Ins. Co., 40 N. H. 333; Girard F. and M. Ins. Co. v. Stephenson, 37 Penn. St. 293; Protection Ins. Co. v. Harmer, 2 Ohio St. 452; Washington, etc., Ins. Co. v. Merchants', etc., Ins. Co., 1 Handy (Ohio) 408; Lexington Ins. Co. v. Powers, 1 Ohio, 324.

As that attempts have been made, or that rumors exist that an attempt has been made, to set fire to adjacent property, that would, if burned, seriously jeopardize the property sought to be insured. Walden v. Louisiana Ins. Co., 12 La.

134; 1 Ben. F. I. C. 668.

'Lindenau v. Desborough, 3 C. & P. 350; Wainwright v. Bland, 1 M. & W. 32. Fletcher v. Com. Ins. Co., 18 Pick. (Mass.) 419; Columbian Ins. Co. v. Lawrence, 10 Pet. (U. S.) 507.

Columbian Ins. Co. v. Lawrence, ante.

McLanahan v. Universal Ins. Co., 1 Pet. (U. S.) 170; Columbian Ins. Co. v. Laurence, 10 id. 507; 2 id. 25; Bunday v. Union Ins. Co., 2 Wash. C. C. (U. S.) 243; Vale v. Phenix Ins. Co., 1 id. 283. The same degree of diligence in disclosing matters affecting the risk, is not required in fire as in marine insurance, as the parties are differently situated in reference to the risk, and the insurer, in the case