SEC. 80. Hazardous-extra hazardous-specially hazardous.

SEC. 88. Company estopped from setting up breach of conditions, when.

SEC. 110.

SEC. 111.

Mortgagor's right to proceeds of policy assigned to mortgagee.
Promise to pay loss when not liable therefor.

SEC. 114.

Materials of which building is composed, not insured.

SEC. 119.

SEC. 120.

Changes subsequent to insurance must be noticed, when.
Prohibited uses.

SEC. 121.

SEC. 122.

SEC. 123.

SEC. 124.

Insured bound by acts of his agent.

Fraud of insurers; effect upon policy.

Assured may surrender policy for cancellation.
Effect of partial settlement of loss.

SEC. 125.

Right of insurer to recover back money paid for loss.

SEC. 126.

SEC. 127.

Property described without words limiting location of risk.
Policies in blank, or to whom it may concern.

SEC. 36. As has been seen, a contract of insurance to insure, as well as the renewal of a policy about to expire, or that has already expired, may be by parol,' and is equally as valid and binding as though it was in writing, unless by statute, it is required to be in writing, or executed in a particular manner. But, generally, contracts of this nature are evidenced by a writing, called a policy, executed by the proper officers of the company from which it issues. The person whose interest is insured under the policy, is the assured or insured, and the person or company taking the risk, is the insurer. Policies are either wager or interest, open or valued.

Wager policies.

SEC. 37. Wager policies are those covering a risk, interest or no interest, and which do not, in any measure, depend upon the pecuniary

'In Ludwig v. Jersey City Ins. Co., 48 N. Y. 379, the plaintiff's policy being about to expire, he applied to the defendants' agent to renew it. The policy insured his stock of goods at 29 Centre street, upon the first floor. Before the renewal was made they were removed to an upper floor, at the same number, and the plaintiff so informed the agent, and the agent also knew the fact from personal observation, as he called to see the plaintiff after his removal, and before the contract for renewal was made. The renewal receipt professed to renew the prior policy, but in the memorandum of location simply said, "Premises 39 Centre street, city of New York," omitting the words of the policy "contained in the first story." A loss having occurred, the defendants insisted that they were not liable because the goods were not, at the time of the loss, in the place where they were described to be, in the policy. But the court held that, as the defendants knew of the change of location before the contract was made, the presumption was that they intended to make a valid insurance, and to change the terms of the policy so as to cover the goods where they knew them to be when the contract was made, and where they knew the assured desired to have the policy cover them, and that the change. in this respect, might be shown by parol. See also, Trustees, etc., v. Brooklyn Fire Ins. Co., ante.

interest of the assured for their validity, but which are operative in the hands of a person who is a stranger to the title, or to any proprietary interest in the subject-matter insured. At common law, these policies, as applied to marine risks, have been recognized as valid, although a contrary doctrine has been held;' but the weight of authority is to the effect that, at common law, such policies are valid as applied to marine risks. But this doctrine has never been applied to fire insurance, and it is not believed that even though the stat. 19 George 2, c. 37, had not virtually put an end to such contracts, before questions of fire insurance had been much considered by the courts, that the doctrine would have been held applicable to them. The extreme jealousy with which such contracts were regarded, by both the courts and the people, and the dangerous tendencies which they were believed to involve, would undoubtedly have prevented the courts from applying the doctrine to this class of contracts." In any event, there is no warrant from the common law for wager policies of fire insurance. Partaking strongly of the nature of gambling contracts, they are generally discouraged, and are inoperative in those States where gambling contracts are prohibited by statute; but unless specially prohibited, it must, in order to fall within the provisions of a statute against gaming, amount to a mere wager or bet,' and is always a question of legal construction.

'In Godart v. Garnett, 2 Vernon, 269, heard in 1692, a bill was filed to compel the surrender of a policy, upon the ground that the assured had no interest in the subject-matter of the risk. The assured had loaned £300 upon bottomry upon the ship, and insured her for £450. The court directed the policy to be delivered up for cancellation, remarking, “The law is settled, that if a man has no interest and insures, the insurance is void, although it be expressed in the policy, interested or not interested; and the reason the law goes upon is, that insurances are made for the encouragement of trade, and not that persons unconcerned in trade, not interested in the ship, should profit by them." See the report of this case in Marshall on Insurance, 99.

2 Harman v. Van Hutton, 2 Vernon, 717; De Paiba v. Ludlow, 1 Com. Rep. 361; Good v. Elliott, 3 T. R. 693; Assinedo v. Cambridge, 10 Mod. 77; Dean v. Dicker, 2 Str. 1250; Goss v. Wither, Burr. 695; Crawford v. Hunter, 8 T. R. 23; St. John v. American Mut. Life Assurance Co., 2 Duer (N. Y.) 419; Miller v. Eagle, etc., Ins. Co., 2 E. D. S. (N. Y. C. P.) 268; Juhel v. Church, 2 John. Cas. (N. Y.) 333; Abbott v. Sebor, 3 id. 39; Buchanan v. Ocean Ins. Co., 6 Cow. (N. Y.) 318; Clendining v. Church, 3 Caines (N. Y.) 141.

In Pennsylvania this species of contract has been held void as being opposed to public policy, even as to marine risks. Pritchet v. Ins. Co. of N. America, 3 Yeates (Penn.) 461; Callamore v. Day, 2 Vt. 144; Lord v. Dall, 12 Mass. 115; Hoit v. Hodge, 6 N. H. 104; but in New York such contracts were held valid before prohibited by statute, as applied to marine risks, Jubel v. Church, 2 John. Cas. (N. Y.) 333.

Paterson v. Powell, 9 Bing. 339; St. John v. American Mut. Life Ins. Co., 13 N. Y. 31.

Dalton v. National Loan Fund Life Association, 22 Barb. N. Y. 9; Delonguemere v. Phoenix Ins. Co., 18 John. (N. Y.) 127; Potapsco Ins. Co. v. Coutler, 3 Peters (U. S.) 397; Pleasants v. Maryland Ins. Co., 8 Cr. (U. S.) 55; Kane v. Columbian Ins. Co., 8 John. (N. Y.) 229; French v. Ins. Co., 16 Pick. (Mass.) 439.

Interest or no interest.

SEC. 38. The words, "interest or no interest," used in a policy, do not necessarily convert it into a wager policy; the true test is, whether, at the time the policy issued, and at the time of the loss, the person to whom it was issued, or who claims under it, had an interest, legal or equitable, in the property insured, to the extent of the sum insured, or in trust for the real owner. A partial interest in the property insured, bearing a small proportion to the sums insured, if the policy is valued, does not save the policy from being a wager policy, unless the assured stands in such a relation to the property, that as to all the balance of the sum insured, he stands as a trustee for the owner. Otherwise, valued policies would be a mere cover for this species of gaming.'

Interest policies.

SEC. 39. All policies of fire insurance are interest policies, and in order to be valid, must be predicated upon an interest of the insured in the property covered.'

Open policies. Blanket policies, floating policies, etc.

SEC. 40. Open policies are those in which the value of the loss is not fixed, but is left open to be determined by the value of the property actually lost, or in which the subject-matter of the risk is indeterminate, changing, fluctuating, or contingent. Policies of the class last named, where the risk is constantly changing, cannot, in the nature of things, be valued. Often-indeed, generally-the property covered by such policies was not owned or possessed, by the assured, at the time when the policy issued, or, perhaps, was not in existence, and for this reason, are called floating policies. Thus, a policy issued to a merchant upon a stock of goods of a particular class, as dry goods, covers not merely the goods then on hand and owned by the assured, but goods of that class which he has on hand at the time of the loss. The goods which the insurer is called upon to pay for, in case of a loss, may not have been in existence when the contract was made. At that time, even the materials of which they are composed, may not have existed, and necessarily the value of the loss is left open for adjustment, according to the value of the goods actually destroyed. It may be said that in all cases where the policy contemplates that the risk is shifting, fluctuating, varying, and is applied to a class of

'Marshall on Insurance, 109; Lewis v. Rucker, 2 Burr. 1171; Kent v. Bird, Cowp. 583; Alsop v. Com. Ins. Co., 1 Sum. (U. S.) 451; Clark v. The Ocean Ins. Co., 20 Pick. (Mass.) 287; Robinson v. Ins. Co., 1 Met. (Mass.) 143. 'See chapter on INSURABLE INTEREST.

property, rather than to any particular article or thing, the policy is necessarily open, and all policies which, in terms, leave the value of the loss-in case of total loss-to adjustment, according to the value at the time of loss, are also open. Such policies are sometimes called blanket policies, among insurers, being intended as a species of catchall, to use a homely phrase, and indemnify the assured from loss upon a certain class of property, in which he may have an insurable interest at the time of loss, wherever situated, which is not otherwise covered by insurance. They are called blanket policies, because they are spread over property indiscriminately, and frequently over risks already fully covered by insurance, but which are fluctuating, and extended, at times, so that one day the policy may attach, and another day be useless. This species of policies are especially adapted to risks taken for merchants, manufacturers, carriers, railroad companies, etc., and all classes of risks where the policy is not intended to cover specific property, but rather property of the class named.

Valued policies.

SEC. 41. Valued policies are those in which both the property insured and the loss are valued, and which bind the insurer to pay the whole sum insured, in case of a total loss. They may be said to be policies, in which the insurer himself, at the time of making the policy, assesses the damages in case of a total loss, unless fraud, inducing an over-valuation on the part of the assured, is established. As a matter of course, these policies can only be applied to articles specifically insured, where the risk is fixed, and no diminution, increase or change therein is contemplated. Indeed, a policy is never strictly valued unless applied to specific articles, without the right of substitution, express or implied. Therefore, except as applied to fixed property, such as buildings, machinery, and fixtures, or specific articles, naming them, and not extending to others of the same class in lieu thereof, a policy is not, and cannot be treated as a valued policy, even though so appearing to be upon its face. It often happens that a policy may be mixed; that is, both an open and a valued policy-valued as to one class of property, and open as to another. Thus, for example, a policy is issued to A. as follows: "$500 upon his dwellinghouse, frame, slate roof, etc., valued at $500, and $500 upon his household furniture therein." Now, so far as the policy relates to the building, it is valued, and in case of a total loss, the sum insured must be paid; but, although all the household furniture is destroyed, the insurer is bound to pay no more than the value of the furniture