made and accepted with special reference, the real property, we need only consider to the application for insurance, and all whether the contract was divisible. Was conditions therein stated," etc. The by- the contract divisible? We are of the opinlaws also provide: "All applicants for in-ion that it was. The author of Briefs on surance shall state the amount of encumbrance on the premises whereon the property to be insured is situated. Should additional encumbrance be placed on said premises without the written consent of the secretary, such policy shall be void, and the company will not be liable for any loss under them," etc.

Plaintiff testified:

Q. What kind of chimneys were actually on the buildings that were burned? A. They were mossback chimneys.

the Law of Insurance, at the close of his examination of the subject, states his conclusion as follows: "Though in some jurisdictions the fact that the consideration for the policy is entire has led the courts to declare the contract entire, an examination of the cases justifies the statement that the rule established by the weight of authority is that, if the policy covers separate classes or items of property, separately valued and insured for separate amounts, the contract is divisible, and a breach of warranty or condition which affects only one of the

Q. A stopepipe running up through the classes or items covered will not avoid the hole?

A. Yes, sir; protected by iron.

Plaintiff also admitted that he placed $1, 500 encumbrance on the real estate, "on the premises where the property insured was located," without the knowledge of the company. The total insurance was $3,100. The premium was all paid as one sum, not divided as to real estate and personal, nor in any other way. Plaintiff's declaration was upon the common counts, and specially upon the policy of insurance, and treats the policy as an entirety, claims damages $3,100, being in full of the face of the policy. Plaintiff filed a bill of particulars stating that he sued "to recover the value of all property described in the several counts of declaration," etc. Defendant's plea gave special notice of the want of chimneys on the dwellings and of the placing of encumbrance on the premises, contrary to the by-laws, application, and charter. In the trial court the defendant contended that

there could be no recovery; that the policy was void. The court allowed plaintiff to recover for personal property, including that in log dwelling No. 1, but held the policy void as to real estate by reason of the encumbrance placed on the premises by plaintiff. In other words, the policy was held to be divisible, void in part, and valid as to other property. The burning of the prop erty insured was caused by the spreading of forest fires to plaintiff's premises.

insurance on the other classes or items. The fact that the policy contains a declaration breach of condition does not change the that the entire policy shall be void on a rule. Reason and justice require, however, that the rule should be modified when the various classes of property are so situated substantially the same on all, and in such in respect to each other that the risk is

case a breach of condition or warranty which increases the risk on one class or

item of the property insured should forfeit the whole insurance." 2 Cooley, Briefs on Ins. 1925. See also 19 Cyc. 674. Merrill v. Agricultural Ins. Co. 73 N. Y. 452, 29 Am. Rep. 184, is very similar on its icts to the the circuit judge. The case of Etna Ins. case before us, and supports the ruling of Co. v. Resh, 44 Mich. 55, 38 Am. Rep. 228, 6 N. W. 114, does not conflict with our conclusion. The facts of that case bring it within the modification proposed by Mr. Cooley.

In the present case it was not contemplated that the property should remain within the buildings insured except as to the household furniture, etc., in log dwelling No. 1. The other personal property was insured anywhere on the premises, and the live stock "anywhere in Charlevoix, Emmet, and Cheboygan counties." It was error, however, to authorize the inclusion of the personal property in log dwelling No. 1 in the verdict, and for this error the judgment must be reversed, unless the Defendant has brought the record to this court for review upon writ of error, chal- plaintiff shall remit the amount thereof lenging our attention to the following ques-ment will be affirmed for the remainder. within thirty days, in which event the judgtions: "(a) What is the effect upon this insurance of the misstatements contained in the application as to chimneys and encumbrance? (b) Was the entire policy rendered void by the assured placing encumbrance upon the premises unknown to defendant company?"

Ostrander, Ch. J., and Moore, Brooke, and Stone, JJ., concur with Blair, J.

Hooker, J., dissenting:

I am of the opinion that the plaintiff's Since the court held the policy void as to breach of warranty is fatal to his case. 2

Comp. Laws, § 5180, does not relieve him, | ers' Mut. F. Ins. Co. 137 Mich. 188, 194, if it can be said to be applicable to a breach 100 N. W. 442; King v. Concordia F. Ins. of warranty in any case (see Shelden v. Co. 140 Mich. 266, 103 N. W. 616, 6 Ann. Michigan Millers' Mut. F. Ins. Co. 124 Mich. Cas. 87; Brunswick-Balke-Collender Co. v. 303, 82 N. W. 1068), for the reason that Northern Assur. Co. 150 Mich. 315, 113 N. the fire occurred during the continuance of W. 1113. the defective condition. This statute has been held not to relieve an insured person where the breach of condition extended to the time of the fire in Boyer v. Grand Rapids F. Ins. Co. 124 Mich. 461, 83 Am. St. Rep. 338, 83 N. W. 124; A. M. Todd Co. v. Farmers' Mut. F. Ins. Co. 137 Mich. 188, 100 N. W. 442; King v. Concordia F. Ins. Co. 140 Mich. 266, 103 N. W. 616, 6 Ann. Cas. 87. The fact that the misrepresentation was innocent does not relieve the plaintiff from the consequences of the misrepresentation. The defendant could not have insured the dwelling under its articles and by-laws had the truth been stated, and the falsity of the representations avoided the policy under § 19, under which it was sufficient if the answer was false, whether it was fraudulent or not. It is said that we may hold this policy void as to the building, and not void as to the personal property. If that were so, in my opinion the doctrine should not be carried so far as to apply it to the contents of a building whose condition is such as to make the policy void. It is incredible that the parties could have intended or supposed that the policy would be void as to the building, and not as to its contents.

But, as some of the personal property was not in dwelling No. 1, either when the fire occurred or when the policy was written, we must examine the case further. We held in Shelden v. Michigan Millers' Mut. F. Ins. Co. supra, that the statute (§§ 5150, 5182, 5187) had no application to a breach of warranty which was involved in this case. See also McGannon v. Michigan Millers' F. Ins. Co. 127 Mich. 650, 54 L.R.A. 739, 89 Am. St. Rep. 501, 87 N. W. 601, for discussion of warranty. I consider this point conclusive unless the doctrine of divisibility is applicable to the case. There is another reason why it has no application. Were we to say that only a condition was violated, inasmuch as the breach continued up to and including the time of the fire, the case does not come within the statute. Niles v. Farmers' Mut. F. Ins. Co. 119 Mich. 252, 77 N. W. 933; Cronin v. Fire Asso. of Philadelphia, 123 Mich. 277, 82 N. W. 45; Shelden v. Michigan Millers' Mut. F. Ins. Co. supra; Boyer v. Grand Rapids F. Ins. Co. 124 Mich. 455, 83 Am. St. Rep. 338, 83 N. W. 124; McGannon v. Michigan Millers' Mut. F. Ins. Co. 127 Mich. 637, 54 L.R.A. 739, 89 Am. St. Rep. 501, 87 N. W. 67; A. M. Todd Co. v. Farm

Since writing the foregoing, my Brother Blair and I have been able to agree so far as dwelling house No. 1 and its contents are concerned, but, in view of his conclusions regarding the other property destroyed and the application of the doctrine of divisibility of the insurance contract to this case, I feel constrained to discuss that question, both for its effect on this cause and, in my opinion, its introduction of a new rule in this state. I am aware that it is no new thing for courts to apply different rules of construction to insurance contracts than are applied to other contracts. So far as such have become the established law of this state, we should certainly follow them, otherwise we should be sufficiently deliberate to be sure that such decisions are well grounded. The exact facts in this case are that this plaintiff procured insurance upon two frame dwellings, one frame barn, one or more log barns, one cow shed, and one pigpen, household furniture in dwelling No. 1, hay and other products, live stock, carriages, etc., in the barns or on the premises, each in separate amounts. Plaintiffs claimed the right to recover the entire amount of the policy. In his application he answered "Yes" to the question, "Are your chimneys secure?" By the terms of the application, the insurance was to issue "subject to the charter, by laws, and policies on the property specially described in this application and schedule." In by-law 8 the following appears: "This company may insure all farm buildings without special reference to the distance of each to the other, provided all buildings in which fire is used shall be provided with good and safe tile and brick chimney," etc. The policy states: "And it is hereby declared and mutually agreed be tween the assured and this company, that this policy of insurance is made and accepted with special reference to the application for insurance, and all conditions therein stated," etc. The by-laws also provide: "All applicants for insurance shall state the amount of encumbrance on the premises whereon the property to be insured is situated. . . . Should additional encum

brance be placed on said premises without the written consent of the secretary, such policy shall be void, and the company will not be liable for any loss under them," etc. There were no brick or tile chimneys at the time the policy was procured, nor have

there been such at any time since,-mere- | ten consent of the secretary, such policy ly stovepipes through the roof. shall be void." How can it be said that this

It is conceded that an additional encum-meant that only a part of the policy should brance of $1,500 has been placed on the be void, without doing violence to the exreal estate since, and was in force at the i plicit agreement of the parties to the contime of the fire, without the necessary con- trary? Again, by-law 19 provides: "False sent. The learned circuit judge held the Statements. Sec. 19. Any applicant who encumbrance to be a fatal obstacle to re-shall falsely or fraudulently answer any of covery for damage to the real estate, but the questions contained in the application, permitted recovery for destruction of the or who shall make any false or fraudulent personal property wherever situate. We representations regarding his losses in case agree that no recovery can be had for in- of fire, shall thereby forfeit all his rights jury to the real property or personal prop-under his policy." Is there a legitimate erty burned in the farm dwelling. We do distinction between a provision that a not agree upon the subject of the other personal property. I assume that the breach of warranty as to the chimneys is the ground upon which we agree as to the personal property destroyed in dwelling 1, for, if the contract is divisible upon the ground that the encumbrance is upon the realty merely, this household property would be protected because not covered by the encumbrance. I also think myself warranted in understanding that the claim to the application of the doctrine of divisibility of the contract as regards the personal property is based on the idea that only that portion in dwelling 1 would be affected by this warranty as to chimneys. It has been truly said that there is a want of harmony in the cases upon the question of divisibility of the contract.

We are not without some light on this question from our Own cases. See Etna Ins. Co. v. Resh, 40 Mich. 241; Id. 44 Mich. 55, 38 Am. Rep. 228, 6 N. W. 114. This doctrine seems to rest upon, and to be limited in its application to, cases where it is reasonably certain that the parties intended that the contract should be divisible, and while Mr. Justice Marston, apparently out of abundant caution, in view of the want of harmony which he mentioned, said "there may be cases where the contract would be divisible," he also said that "the case should be clear and free from all reasonable doubt to warrant a court in carving out separate and distinct contracts from one common whole." Again, as Mr. Roger Cooley says in his Briefs on the Law of Insurance, vol. 2, p. 1898, "it is, of course, conceded that the rule" -i. e. of divisibility-"may be rendered inapplicable by special provisions of the policy" citing Smith v. Agricultural Ins. Co. 118 N. Y. 518, 23 N. E. 883, where a policy declared that it should be void if the property insured or any part thereof be encumbered, and it was held that the doctrine of divisibility would not apply.

Our case is similar. The provision here is that, "should additional encumbrance be placed on said premises without the writ

policy should be void "if the property insured or any part thereof be encumbered," and a provision that "any applicant who shall falsely or fraudulently answer any of the questions contained in the application, or who shall make any false or fraudulent representations regarding his losses in case of fire, shall thereby forfeit all his rights under his policy?" Mr. Cooley's conclusions do not seem to be in accord with those of some others as to the better rule. Thus, 19 Cyc. 682, states the following: "A warranty must be literally complied with, and an unimportant breach will avoid the policy. The falsity of a statement or representation which is directly or impliedly affirmed in the policy itself, or by refer ence to some preliminary or collateral statement, renders the policy void from the beginning, or, if the statement is promissory, from the time of the breach." A discussion of this question of divisibility in which a cloud of cases are cited and discussed is to be found in Southern F. Ins. Co. v. Knight, 111 Ga. 622, 52 L.R.A. 70, 78 Am. St. Rep. 216, 36 S. E. 821, from which we quote: "The policy sued on in the present case insured both the stock of goods and the building in which it was contained. The premium due upon the policy was a gross sum. The question arises, therefore, whether the breach of a warranty relating solely to the goods, and which precluded a recovery for their loss, would also bar a recovery for the loss of the building. The stipulation prescribing that the insured must take an inventory of his stock provides that, in case of failure so to do, 'this policy shall be null and void.' What was the intention of the parties with respect to the question just above stated? If this intention is to be derived from the language used, and it must be, it would seem to be clear that the contract was entire and indivisible, and that the breach of a condition which would work a forfeiture would avoid the entire policy, and not simply a portion thereof. The parties contracted that 'the policy' should be void in case of failure to comply with the iron

safe clause. The policy embraces insurance, insurer; and there is neither reason nor upon both the building and its contents, equity in permitting the assured, after he and the premium is payable in a gross sum. has violated one of the conditions of the 'If the consideration to be paid is single policy as to a part of the risk, to turn and entire, the contract must be held to be around and say that this condition only entire, although the subject of the con- affected that portion of the risk to which tract may consist of several distinct and the breach related.' Mr. Ostrander, after wholly independent items.' 2 Parsons, an elaborate review of the decisions, Contr. *519. It was competent for the par- reaches the conclusion that those which ties to make two separate and distinct con- hold the contract to be entire announce tracts,-one covering the goods, and the the sounder and better rule. Ostrander, other the building,-but they did not see Fire Ins. §§ 23 et seq. See also 2 Joyce, proper to do this. They combined the two, Ins. § 1931; 1 May, Ins. § 277. In supand made the consideration moving towards port of the views herein announced, we find the insurer a gross sum. They further pro- the courts of last resort of Maine, Wisconvided that the contract, not a part of it, sin, Maryland, Minnesota, Virginia, New should be void under certain conditions. Hampshire, Massachusetts, Vermont, PennIt may perhaps seem to be unreasonable sylvania, New Jersey, Michigan, Indiana, that simply for a failure to take an in- Arkansas, Iowa, Alabama, and Connecticut. ventory of the stock of goods the plaintiffs It would not be profitable here to do more should be precluded from recovering the than cite the decisions of these courts. Revalue of the building. But this does not duced to their last analyses, they simply affect the question. The question is, What hold that the premium, being for a gross have they agreed upon? If there was any sum, evidences an intention on the part of room to doubt as to the intention of the the parties that the contract should be parties, that construction which is most treated as entire, and that the intention of reasonable and most consonant with justice the parties, when ascertained, must be enwould be applied. But there is none. The forced. See Richardson v. Maine Ins. Co. parties have deliberately chosen to enter 46 Me. 394, 74 Am. Dec. 459; Barnes v. into an agreement whereby the policy shall Union Mut. F. Ins. Co. 51 Me. 110, 81 Am. be forfeited if the insure fails to do cer- Dec. 562; Hinman v. Hartford F. Ins. Co. tain things, and he has failed to comply 36 Wis. 159 (syl. point 7); Burr v. Gerwith his agreement. In such a case there man Ins. Co. 84 Wis. 76, 36 Am. St. Rep. is but one thing for the courts to do, and 905, 54 N. W. 22; Associated Firemen's Ins. that is to enforce the agreement as made. Co. v. Assum, 5 Md. 165; Bowman v. FrankThe question as to whether a policy of in- lin F. Ins. Co. 40 Md. 620; Plath v. Minsurance such as is involved in the present nesota Farmers' Mut. F. Ins. Asso. 23 Minn. case constitutes a separable or an entire 479, 23 Am. Rep. 697; Moore v. Virginia contract is no new question. It has been F. & M. Ins. Co. 28 Gratt. 508, 26 Am. Rep. the subject of numerous decisions by the 373; Baldwin v. Hartford F. Ins. Co. 60 N. courts in this country, and they are in H. 422, 49 Am. Rep. 324; Friesmuth v. hopeless and irreconcilable conflict. The Agawam Mut. F. Ins. Co. 10 Cush. 587; weight of authority is to the effect that Lee v. Howard F. Ins. Co. 3 Gray, 583; the contract is entire, and that the breach Kimball v. Howard F. Ins. Co. 8 Gray, of a warranty which relates solely to one 33; McGowan v. People's Mut. F. Ins. Co. 54 class of property will avoid the entire policy Vt. 211, 41 Am. Rep. 843; Gottsman v. if the contract so provides. Text writers of Pennsylvania Ins. Co. 56 Pa. 210, 94 Am. great learning and ability have, after re- Dec. 55; Fire Asso. of Philadelphia v. Wilviewing the decisions on both sides of this liamson, 26 Pa. 196; Martin v. Insurance question, reached the conclusion that the Co. of N. A. 57 N. J. L. 623, 31 Atl. 213; contract is indivisible. We quote the fol- Etna Ins. Co. v. Resh, 44 Mich. 55, 38 lowing from 1 Wood, Fire Ins. p. 384: 'It Am. Rep. 228, 6 N. W. 114; McQueeny v. is difficult to understand how it can be Phoenix Ins. Co. 52 Ark. 257, 5 L.R.A. 744, held that these contracts are several, when 20 Am. St. Rep. 179, 12 S. W. 498; Garver a gross premium is paid for the entire in- v. Hawkeye Ins. Co. 69 Iowa, 202, 28 N. surance. The court cannot say as a mat- W. 555; Western Assur. Co. v. Stoddard, ter of law, neither can the fact be shown, 88 Ala. 606, 7 So. 379 (syl. point 5); Esthat the insurer would have been satisfied sex Sav. Bank v. Meriden F. Ins. Co. 57 to take the risk separately at the same pre- Conn. 335, 4 L.R.A. 759, 17 Atl. 930, 18 mium. By consenting to pay a gross pre- Atl. 324. It is true that none of the cases mium for the insurance, the assured has above cited dealt with a breach of the ironsignified his willingness to let the policy safe clause, but in many of them the constand as an entire contract, subject in all dition in the policy which was violated had its parts to the conditions imposed by the no more connection with the property for

tract should be void would be construed to mean the entire contract. That is the natural and popular meaning which our statute (1 Comp. Laws, § 50) says shall be the rule of construction as to statutes. Why not as to contracts? It would be difficult to suggest language that could safely be relied on to express such intent if that used here does not.

which a recovery was sought than does the iron-safe clause to the building insured by the policy herein involved. In principle the cases are exactly in point. Opposed to this view are decisions of the courts of last resort of Nebraska, Colorado, Kansas, and Missouri. See State Ins. Co. v. Schreck, 27 Neb. 527, 6 L.R.A. 524, 20 Am. St. Rep. 696, 43 N. W. 340; German Ins. Co. v. Fairbank, 32 Neb. 750, 29 Am. St. Rep. 459, 49 For the reasons above given, I am of the N. W. 711; Firemen's Fund Ins. Co. v. opinion that the judgment should be reBarker, 6 Colo. App. 535, 41 Pac. 513; Ger- versed with costs of both courts and withman Ins. Co. v. York, 48 Kan. 488, 30 Am. out a new trial; it being apparent that the St. Rep. 313, 29 Pac. 586; Kansas Farmers' plaintiff cannot recover a verdict on this F. Ins. Co. v. Saindon, 53 Kan. 623, 36 Pac. | policy. 983; Loehner v. Home Mut. Ins. Co. 17 Mo. 247; Trabue v. Dwelling House Ins. Co. 121 Mo. 75, 23 L.R.A. 719, 42 Am. St. Rep. 523, 25 S. W. 848. The courts of New York and Indiana seem to have been at different times on both sides of the question now under consideration. Smith v. Empire Ins. Co. 25 Barb. 497; Kiernan v. Agricultural Ins. Co. 81 Hun, 373, 30 N. Y. Supp. 892; Merrill v. Agricultural Ins. Co. 73 N. Y. 452, 29 Am. Rep. 184; Pratt v. Dwelling House Mut. F. Ins. Co. 130 N. Y. 206, 29 N. E. 117; Havens v. Home Ins. Co. 111 Ind. 90, 60 Am. Rep. 689, 12 N. E. 137; Phoenix Ins. Co. v. Pickel, 119 Ind. 155, 12 Am. St. Rep. 393, 21 N. E. 546." Our

own

case above cited is exactly in point. Mr. Justice Cobb concludes a learned and convincing opinion as follows: "Our conclusion is that where an insurance policy is issued in consideration of a gross premium, and provides that the policy shall be void in the event of a breach of a certain condition therein named, and this condition is broken, no recovery can be had on the policy, though separate classes of property are therein insured, and though the stipulation violated relates solely to a matter which could have connection with but one of these classes." And after all, when a policy provides that a breach of warranty shall render the policy void, what necessity or justification can there be for splitting hairs to make it a different contract than its unmistakable and unequivocal language clearly imports, thereby making a new contract for the parties; and especially can this be said in a case where, as in this, the parties have expressly said in writing that the entire policy shall be void. Will we apply the general rule of construction that a contract should be so construed as to give effect to all its language if it can be consistently done? And, if not, why not? What reason can be given for eliminating that word "all" from the contract? Indeed, the only reason for putting it in would seem to be to make assurance doubly sure, for ordinarily a provision that a written con

McAlvay, J., concurred with Hooker, J.

NEW YORK COURT OF APPEALS.

J. HEWITT MORGAN et al., Trustees, etc.,
of David P. Morgan, Deceased, Appts.,
UNITED STATES MORTGAGE & TRUST
COMPANY, Respt.

V.

(208 N. Y. 218, 101 N. E. 871.)

Bank - payment of forged check negligence in auditing account.

A bank depositor whose clerk has charge of the account is negligent in comparing only the vouchers returned to him when his account is balanced from time to time without looking at the check list or the balance in the pass book, so that, in case checks have been forged by his clerk, and the vouchers withdrawn from the package and destroyed before the genuine ones are delivered to him, which he does not discover, he canNote. Duty of a depositor having a checking account with a bank to examine pass book and vouchers upon their return from the bank.